Document:

Exhibit
4.7.2

 

AMENDMENT
NO. 2 TO SENIOR PREFERRED STOCK

REGISTRATION RIGHTS AGREEMENT

 

This Amendment (the “Amendment”) dated as of July 23, 2004
to the Senior Preferred Stock Registration Rights Agreement dated as of
June 30, 2000, and as subsequently amended by Amendment No. 1 dated as of
October 6, 2000, among DeCrane Aircraft Holdings, Inc. (the “Company”)
and the holders of the Senior Preferred Stock named therein.

 

W
I T N E S S E T H:

 

WHEREAS, the parties hereto are parties to the Senior Preferred Stock
Registration Rights Agreement dated as of June 30, 2000, as amended (the “Registration
Rights Agreement”); and

 

WHEREAS, the parties hereto desire to amend the Registration Rights
Agreement as provided herein.

 

NOW, THEREFORE, intending to be legally bound, the parties hereto agree
as follows:

 

SECTION 1.         Definitions; References.  Unless otherwise specifically defined
herein, each term used herein which is defined in the Registration Rights
Agreement shall have the meaning assigned to such term in the Registration
Rights Agreement.  Each reference to
“hereof”, “hereunder”, “herein”, and hereby and each other similar reference
and each reference to “this Agreement” and each other similar reference
contained in the Registration Rights Agreement shall from and after the date
hereof refer to the Registration Rights Agreement as amended hereby.

 

SECTION 2.         Amendment to Definition of Senior Preferred Stock.  The definition of Senior Preferred Stock in
the Registration Rights Agreement is amended to be the Senior Redeemable
Exchangeable Preferred Stock of the Company, as amended from time to time.

 

SECTION 3.         Governing Law.  This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to the conflicts of
laws rules of such state.

 

SECTION 4.         Counterparts; Effectiveness.  This Amendment may be executed in any number
of counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.  This Amendment shall become
effective when this Amendment or a counterpart hereto has been executed by the
Company (with the approval of

 

 

the board of directors of the Company) and Stockholders holding at
least 75% of the outstanding Registrable Securities.

 

SECTION 5.         Effect of Amendment.  Except as expressly set forth herein, the
amendments contained herein shall not constitute an amendment of any term or
condition of the Registration Rights Agreement, and all such terms and conditions
shall remain in full force and effect and are hereby ratified and confirmed in
all respects.

 

[Remainder of page intentionally left blank; next page
is signature page]

 

2

 

IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first above written.

 

 

	
   

  	
  DECRANE AIRCRAFT
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. JACK DECRANE

  	
   

  
	
   

  	
   

  	
  Name:  R. Jack DeCrane

  
	
   

  	
   

  	
  Title:  Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  DLJ INVESTMENT PARTNERS II, INC. on
  behalf of:

  DLJ
  INVESTMENT PARTNERS II, L.P.

  DLJ INVESTMENT PARTNERS, L.P.

  DLJIP II HOLDINGS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ JOHN M. MORIARTY, JR.

  	
   

  
	
   

  	
   

  	
  Name:  John M. Moriarty, Jr.

  
	
   

  	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  PUTNAM INVESTMENT MANAGEMENT, LLC on
  behalf 

  of:

  
	
   

  	
  PUTNAM VARIABLE TRUST– PUTNAM VT HIGH

  YIELD FUND

  
	
   

  	
  PUTNAM HIGH YIELD TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ MICHAEL E. DEFAO

  	
   

  
	
   

  	
   

  	
  Name:  Michael E. DeFao

  
	
   

  	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  NEON CAPITAL
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ PAUL COPE

  	
   

  
	
   

  	
   

  	
  Name:  Paul Cope

  
	
   

  	
   

  	
  Title:  DirectorExhibit 4.8

 

 

 

DECRANE
AIRCRAFT HOLDINGS, INC.

 

17% SENIOR DISCOUNT NOTES DUE 2008

 

Guaranteed to the extent set forth herein by each of the Guarantors
listed on the signature pages hereof

 

 

INDENTURE

 

Dated as of July 23, 2004

 

 

U.S. BANK NATIONAL ASSOCIATION

 

TRUSTEE

 

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310 (a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312 (a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  11.03

  
	
  (iv)(c)

  	
   

  	
  11.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.06; 7.07

  
	
  (v)(c)

  	
   

  	
  7.06; 11.02

  
	
  (vi)(d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03; 11.02

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.04

  
	
  (c)(2)

  	
   

  	
  11.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (vii)(e)

  	
   

  	
  11.05

  
	
  (f)

  	
   

  	
  NA

  
	
  315 (a)

  	
   

  	
  7.01

  
	
  (b)

  	
   

  	
  7.05, 11.02

  
	
  (c)

  	
   

  	
  7.01

  
	
  (d)

  	
   

  	
  7.01

  
	
  (e)

  	
   

  	
  6.11

  
	
  316 (a)(last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  2.12

  
	
  317 (a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318 (a)

  	
   

  	
  11.01

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  11.01

  

 

N.A. means not
applicable.

*This Cross-Reference
Table is not part of the Indenture.

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1. DEFINITIONS AND INCORPORATION
  BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DEFINITIONS.

  	
   

  
	
  SECTION 1.02.

  	
  OTHER DEFINITIONS.

  	
   

  
	
  SECTION 1.03.

  	
  INCORPORATION OF TIA PROVISIONS.

  	
   

  
	
  SECTION 1.04.

  	
  RULES OF CONSTRUCTION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2. THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  FORM AND DATING.

  	
   

  
	
  SECTION 2.02.

  	
  EXECUTION AND AUTHENTICATION.

  	
   

  
	
  SECTION 2.03.

  	
  REGISTRAR AND PAYING AGENT.

  	
   

  
	
  SECTION 2.04.

  	
  PAYING AGENT TO HOLD MONEY IN TRUST.

  	
   

  
	
  SECTION 2.05.

  	
  HOLDER LISTS.

  	
   

  
	
  SECTION 2.06.

  	
  TRANSFER AND EXCHANGE.

  	
   

  
	
  SECTION 2.07.

  	
  REPLACEMENT NOTES.

  	
   

  
	
  SECTION 2.08.

  	
  OUTSTANDING NOTES.

  	
   

  
	
  SECTION 2.09.

  	
  TREASURY NOTES.

  	
   

  
	
  SECTION 2.10.

  	
  TEMPORARY NOTES.

  	
   

  
	
  SECTION 2.11.

  	
  CANCELLATION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3. REDEMPTION AND PREPAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  NOTICES TO TRUSTEE.

  	
   

  
	
  SECTION 3.02.

  	
  SELECTION OF NOTES TO BE REDEEMED.

  	
   

  
	
  SECTION 3.03.

  	
  NOTICE OF REDEMPTION.

  	
   

  
	
  SECTION 3.04.

  	
  EFFECT OF NOTICE OF REDEMPTION.

  	
   

  
	
  SECTION 3.05.

  	
  DEPOSIT OF REDEMPTION PRICE.

  	
   

  
	
  SECTION 3.06.

  	
  NOTES REDEEMED IN PART.

  	
   

  
	
  SECTION 3.07.

  	
  OPTIONAL REDEMPTION.

  	
   

  
	
  SECTION 3.08.

  	
  MANDATORY REDEMPTION.

  	
   

  
	
  SECTION 3.09.

  	
  OFFER TO PURCHASE BY APPLICATION OF EXCESS
  PROCEEDS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4.
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  PAYMENT OF NOTES.

  	
   

  
	
  SECTION 4.02.

  	
  MAINTENANCE OF OFFICE OR AGENCY.

  	
   

  
	
  SECTION 4.03.

  	
  REPORTS.

  	
   

  
	
  SECTION 4.04.

  	
  COMPLIANCE CERTIFICATE.

  	
   

  
	
  SECTION 4.05.

  	
  TAXES.

  	
   

  
	
  SECTION 4.06.

  	
  STAY, EXTENSION AND USURY LAWS.

  	
   

  
	
  SECTION 4.07.

  	
  RESTRICTED PAYMENTS.

  	
   

  
	
  SECTION 4.08.

  	
  DIVIDEND AND OTHER PAYMENT RESTRICTIONS
  AFFECTING RESTRICTED SUBSIDIARIES.

  	
   

  
	
  SECTION 4.09.

  	
  INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
  PREFERRED STOCK.

  	
   

  
	
  SECTION 4.10.

  	
  ASSET SALES

  	
   

  
	
  SECTION 4.11.

  	
  TRANSACTIONS WITH AFFILIATES.

  	
   

  
	
  SECTION 4.12.

  	
  LIENS.

  	
   

  
	
  SECTION 4.13.

  	
  CORPORATE EXISTENCE.

  	
   

  
	
  SECTION 4.14.

  	
  OFFER TO REPURCHASE UPON CHANGE OF
  CONTROL.

  	
   

  

 

i

 

	
  SECTION 4.15.

  	
  SALE AND LEASEBACK TRANSACTIONS.

  	
   

  
	
  SECTION 4.16.

  	
  ACCOUNTS RECEIVABLE FACILITY

  	
   

  
	
  SECTION 4.17.

  	
  ADDITIONAL NOTE GUARANTEES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5.
  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  MERGER, CONSOLIDATION, OR SALE OF ASSETS.

  	
   

  
	
  SECTION 5.02.

  	
  SUCCESSOR CORPORATION SUBSTITUTED.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6.
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  EVENTS OF DEFAULT.

  	
   

  
	
  SECTION 6.02.

  	
  ACCELERATION.

  	
   

  
	
  SECTION 6.03.

  	
  OTHER REMEDIES.

  	
   

  
	
  SECTION 6.04.

  	
  WAIVER OF PAST DEFAULTS.

  	
   

  
	
  SECTION 6.05.

  	
  CONTROL BY MAJORITY.

  	
   

  
	
  SECTION 6.06.

  	
  LIMITATION ON SUITS.

  	
   

  
	
  SECTION 6.07.

  	
  RIGHTS OF HOLDERS OF NOTES TO RECEIVE
  PAYMENT.

  	
   

  
	
  SECTION 6.08.

  	
  COLLECTION SUIT BY TRUSTEE.

  	
   

  
	
  SECTION 6.09.

  	
  TRUSTEE MAY FILE PROOFS OF CLAIM.

  	
   

  
	
  SECTION 6.10.

  	
  PRIORITIES.

  	
   

  
	
  SECTION 6.11.

  	
  UNDERTAKING FOR COSTS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7.
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  DUTIES OF TRUSTEE.

  	
   

  
	
  SECTION 7.02.

  	
  RIGHTS OF TRUSTEE.

  	
   

  
	
  SECTION 7.03.

  	
  INDIVIDUAL RIGHTS OF TRUSTEE.

  	
   

  
	
  SECTION 7.04.

  	
  TRUSTEE’S DISCLAIMER.

  	
   

  
	
  SECTION 7.05.

  	
  NOTICE OF DEFAULTS.

  	
   

  
	
  SECTION 7.06.

  	
  REPORTS BY TRUSTEE TO HOLDERS OF THE
  NOTES.

  	
   

  
	
  SECTION 7.07.

  	
  COMPENSATION AND INDEMNITY.

  	
   

  
	
  SECTION 7.08.

  	
  REPLACEMENT OF TRUSTEE.

  	
   

  
	
  SECTION 7.09.

  	
  SUCCESSOR TRUSTEE BY MERGER, ETC.

  	
   

  
	
  SECTION 7.10.

  	
  ELIGIBILITY; DISQUALIFICATION.

  	
   

  
	
  SECTION 7.11.

  	
  PREFERENTIAL COLLECTION OF CLAIMS AGAINST
  ISSUER.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8.
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  OPTION TO EFFECT LEGAL DEFEASANCE OR
  COVENANT DEFEASANCE.

  	
   

  
	
  SECTION 8.02.

  	
  LEGAL DEFEASANCE AND DISCHARGE.

  	
   

  
	
  SECTION 8.03.

  	
  COVENANT DEFEASANCE.

  	
   

  
	
  SECTION 8.04.

  	
  CONDITIONS TO LEGAL OR COVENANT
  DEFEASANCE.

  	
   

  
	
  SECTION 8.05.

  	
  DEPOSITED MONEY AND GOVERNMENT SECURITIES
  TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.

  	
   

  
	
  SECTION 8.06.

  	
  REPAYMENT TO ISSUER.

  	
   

  
	
  SECTION 8.07.

  	
  REINSTATEMENT.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9.
  AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  WITHOUT CONSENT OF HOLDERS OF NOTES.

  	
   

  
	
  SECTION 9.02.

  	
  WITH CONSENT OF HOLDERS OF NOTES.

  	
   

  
	
  SECTION 9.03.

  	
  COMPLIANCE WITH TRUST INDENTURE ACT.

  	
   

  
	
  SECTION 9.04.

  	
  REVOCATION AND EFFECT OF CONSENTS.

  	
   

  
	
  SECTION 9.05.

  	
  NOTATION ON OR EXCHANGE OF NOTES.

  	
   

  

 

ii

 

	
  SECTION 9.06.

  	
  TRUSTEE TO SIGN AMENDMENTS, ETC.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10.
  NOTE GUARANTEES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  GUARANTEE.

  	
   

  
	
  SECTION 10.02.

  	
  LIMITATION ON GUARANTOR LIABILITY.

  	
   

  
	
  SECTION 10.03.

  	
  EXECUTION AND DELIVERY OF NOTE GUARANTEE.

  	
   

  
	
  SECTION 10.04.

  	
  GUARANTORS MAY CONSOLIDATE, ETC., ON
  CERTAIN TERMS.

  	
   

  
	
  SECTION 10.05.

  	
  RELEASES FOLLOWING SALE OF ASSETS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11.
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  TRUST INDENTURE ACT CONTROLS.

  	
   

  
	
  SECTION 11.02.

  	
  NOTICES.

  	
   

  
	
  SECTION 11.03.

  	
  COMMUNICATION BY HOLDERS OF NOTES WITH
  OTHER HOLDERS OF NOTES.

  	
   

  
	
  SECTION 11.04.

  	
  CERTIFICATE AND OPINION AS TO CONDITIONS
  PRECEDENT.

  	
   

  
	
  SECTION 11.05.

  	
  STATEMENTS REQUIRED IN CERTIFICATE OR
  OPINION.

  	
   

  
	
  SECTION 11.06.

  	
  RULES BY TRUSTEE AND AGENTS.

  	
   

  
	
  SECTION 11.07.

  	
  NO PERSONAL LIABILITY OF DIRECTORS,
  OFFICERS, EMPLOYEES AND STOCKHOLDERS.

  	
   

  
	
  SECTION 11.08.

  	
  GOVERNING LAW.

  	
   

  
	
  SECTION 11.09.

  	
  NO ADVERSE INTERPRETATION OF OTHER
  AGREEMENTS.

  	
   

  
	
  SECTION 11.10.

  	
  SUCCESSORS.

  	
   

  
	
  SECTION 11.11.

  	
  SEVERABILITY.

  	
   

  
	
  SECTION 11.12.

  	
  COUNTERPART ORIGINALS.

  	
   

  
	
  SECTION 11.13.

  	
  TABLE OF CONTENTS, HEADINGS, ETC.

  	
   

  

 

	
  EXHIBITS

  	
   

  	
   

  
	
  EXHIBIT
  A:

  	
  FORM
  OF NOTE

  	
   

  
	
  EXHIBIT B:

  	
  FORM OF
  CERTIFICATE OF TRANSFER

  	
   

  
	
  EXHIBIT C:

  	
  FORM OF
  CERTIFICATE OF EXCHANGE

  	
   

  
	
  EXHIBIT D:

  	
  FORM OF
  CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

  	
   

  
	
  EXHIBIT E:

  	
  FORM OF
  SUPPLEMENTAL INDENTURE

  	
   

  

 

iii

 

INDENTURE dated as
of July 23, 2004, by and among DeCrane Aircraft Holdings, Inc., a Delaware
Corporation (the “Issuer”), each of the Guarantors party hereto and U.S. Bank
National Association, as trustee (the “Trustee”).

 

The Issuer, the
Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the Issuer’s 17%
Senior Discount Notes
due 2008 (together with the any Additional Notes, the “Notes”).

 

ARTICLE 1.

DEFINITIONS AND INCORPORATION BY
REFERENCE

 

SECTION 1.01.    DEFINITIONS.

 

“144A Global
Note” means the form of the Notes initially sold to QIBs.

 

“Accounts
Receivable Subsidiary” means an Unrestricted Subsidiary of the
Issuer to which the Issuer or any of its Restricted Subsidiaries sells any of
its accounts receivable pursuant to a Receivables Facility.

 

“Accreted
Value” means in respect of the Notes, as of any date (the “Specified
Date”), the amount provided below for each $1,000 principal amount
at maturity of Notes:

 

(1)     if the Specified Date occurs on one of the
following dates (each, a “Semi-Annual Accrual Date’’), the Accreted
Value will equal the amount set forth below for such Semi-Annual Accrual Date:

 

	
  Semi-Annual Accrual Date

  	
   

  	
  Accreted
  Value

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  520.67

  	
   

  
	
  March 30, 2005

  	
   

  	
  $

  	
  564.93

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  612.95

  	
   

  
	
  March 30, 2006

  	
   

  	
  $

  	
  665.05

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  721.57

  	
   

  
	
  March 30, 2007

  	
   

  	
  $

  	
  782.91

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  849.46

  	
   

  
	
  March 30, 2008

  	
   

  	
  $

  	
  921.66

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  1,000

  	
   

  

 

(2)     if the Specified Date occurs before the first
Semi-Annual Accrual Date, the Accreted Value will equal the sum of (A) the
original issue price of a Note of $504.70 per $1,000 principal amount at
maturity and (B) an amount equal to the product of (x) the Accreted Value for
the first Semi-Annual Accrual Date less such original issue price multiplied by
(y) a fraction, the numerator of which is the number of days from the Issue
Date to the Specified Date, using a 360-day year of twelve 30-day months, and
the denominator of which is the number of days elapsed from the Issue Date to
the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day
months; or

 

(3)     if the Specified Date occurs between two
Semi-Annual Accrual Dates, the Accreted Value will equal the sum of (A) the
Accreted Value for the Semi-Annual Accrual Date immediately

 

1

 

preceding such Specified Date and (B) an amount equal to the product of
(x) the Accreted Value for the immediately following Semi-Annual Accrual Date
less the Accreted Value for the immediately preceding Semi-Annual Accrual Date
multiplied by (y) a fraction, the numerator of which is the number of days from
the immediately preceding Semi-Annual Accrual Date to the Specified Date, using
a 360-day year of twelve 30-day months, and the denominator of which is 180.

 

“Acquired
Indebtedness” means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (b) Indebtedness secured by a Lien
encumbering an asset acquired by such specified Person at the time such asset
is acquired by such specified Person.

 

“Additional
Notes” means additional Notes (other than the Initial Notes) issued
under this Indenture in accordance with Sections 2.02 and 4.09 hereof.

 

“Affiliate”
of any specified Person means any other Person which, directly or indirectly,
controls, is controlled by or is under direct or indirect common control with,
such specified Person. For purposes of this definition, “control,” when used
with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

 

“Agent”
means any Registrar, Paying Agent or co-registrar.

 

“Applicable
Procedures” means, with respect to any transfer or exchange of or
for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.

 

“Asset Sale”
means (a) the sale, lease, conveyance, disposition or other transfer (a
“disposition”) of any properties, assets or rights (including, without
limitation, by way of a sale and leaseback) (provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Issuer and its Subsidiaries taken as a whole will be governed by Sections
4.14 and/or 5.01 and not by Section 4.10), and (b) the issuance, sale or
transfer by the Issuer or any of its Restricted Subsidiaries of Equity
Interests of any of the Issuer’s Restricted Subsidiaries, in the case of either
clause (a) or (b), whether in a single transaction or a series of related
transactions (i) that have a fair market value in excess of $5.0 million
or (ii) for net proceeds in excess of $5.0 million. Notwithstanding the
foregoing, the following items shall not be deemed to be Asset Sales: (a)
dispositions in the ordinary course of business; (b) a disposition of
assets by the Issuer to a Restricted Subsidiary or by a Restricted Subsidiary
to the Issuer or to another Restricted Subsidiary; (c) a disposition of
Equity Interests by a Restricted Subsidiary to the Issuer or to another
Restricted Subsidiary; (d) the sale and leaseback of any assets within 90
days of the acquisition thereof; (e) foreclosures on assets; (f) any
exchange of like property pursuant to Section 1031 of the Internal Revenue
Code of 1986, as amended, for use in a Permitted Business; (g) any sale of
Equity Interests in, or Indebtedness or other securities of, an Unrestricted
Subsidiary; (h) a Permitted Investment or a Restricted Payment that is
permitted by Section 4.07 hereof; and (i) sales of accounts
receivable, or participations therein, in connection with any Receivables
Facility.

 

“Attributable
Indebtedness” in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the

 

2

 

lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).

 

“Bankruptcy
Law” means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.

 

“Board of
Directors” means the Board of Directors of the Issuer, or any
authorized committee of the Board of Directors.

 

“Bridge Notes”
means the $100.0 million of Senior Subordinated Increasing Rate Notes issued by
DeCrane Finance Co. to DLJ Bridge Finance, Inc.

 

“Business Day”
means any day other than a Legal Holiday.

 

“Capital
Expenditure Indebtedness” means Indebtedness incurred by any Person
to finance the purchase or construction or any property or assets acquired or
constructed by such Person which have a useful life or more than one year so
long as (a) the purchase or construction price for such property or assets
is included in “addition to property, plant or equipment” in accordance with
GAAP, (b) the acquisition or construction of such property or assets is
not part of any acquisition of a Person or line of business and (c) such
Indebtedness is incurred within 90 days of the acquisition or completion of
construction of such property or assets.

 

“Capital
Lease Obligation” means, at the time any determination thereof is to
be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance
with GAAP.

 

“Capital
Stock” means (a) in the case of a corporation, corporate stock, (b)
in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

 

“Cash
Equivalents” means (i) Government Securities, (ii) any
certificate of deposit maturing not more than 365 days after the date of
acquisition issued by, or demand deposit or time deposit of, an Eligible
Institution or any lender under the Senior Credit Facility,
(iii) commercial paper maturing not more than 365 days after the date of
acquisition of an issuer (other than an Affiliate of the Issuer) with a rating,
at the time as of which any investment therein is made, of “A-3” (or higher)
according to S&P or “P-2” (or higher) according to Moody’s or carrying an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease publishing ratings of investments, (iv) any
bankers acceptances of money market deposit accounts issued by an Eligible
Institution and (v) any fund investing exclusively in investments of the
types described in clauses (i) through (iv) above and (vi) in
the case of any Subsidiary organized or having its principal place of business
outside the United States, investments denominated in the currency of the
jurisdiction in which such Subsidiary is organized or has its principal place
of business which are similar to the items specified in clauses
(i) through (v) above (including without limitation any deposit with
any bank that is a lender to any such Subsidiary).

 

“Cedel”
means Cedel Bank, société anonyme.

 

3

 

“Change of
Control” means the occurrence of any of the following: (a) the sale,
lease, transfer, conveyance or other disposition (other than by way of merger
or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Issuer and its Subsidiaries, taken as a
whole, to any “person” or “group” (as such terms are used in Section 13(d)
of the Exchange Act), other than the Principals and their Related Parties; (b)
the adoption of a plan for the liquidation or dissolution of the Issuer; (c)
the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any “person” or “group” (as such
terms are used in Section 13(d) of the Exchange Act), other than the
Principals and their Related Parties, becomes the “beneficial owner” (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly
or indirectly through one or more intermediaries, of 50% or more of the voting
power of the outstanding voting stock of the Issuer;  or (d) the first day on which a majority of the members of the
board of directors of the Issuer are not Continuing Members.

 

“Commission”
means the Securities and Exchange Commission.

 

“Consolidated
Cash Flow” means, with respect to any Person for any period, the
Consolidated Net Income of such Person and its Restricted Subsidiaries for such
period plus, to the extent deducted in computing Consolidated Net Income,
(a) an amount equal to any extraordinary or non-recurring loss plus any
net loss realized in connection with an Asset Sale, (b) provision for
taxes based on income or profits of such Person and its Restricted Subsidiaries
for such period, (c) Fixed Charges of such Person for such period,
(d) depreciation, amortization (including amortization of goodwill and
other intangibles) and all other non-cash charges (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that
was paid in a prior period), including charges related to non-cash minority
interests of such Person and its Restricted Subsidiaries for such period,
(e) net periodic post-retirement benefits, (f) other income or
expense net as set forth on the face of such Person’s statement of operations,
and (g) any non-capitalized transaction costs incurred in connection with
actual or proposed financings, acquisition or divestitures, in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, the Fixed
Charges of, and the depreciation and amortization and other non-cash charges
of, a Restricted Subsidiary of a Person shall be added to Consolidated Net
Income to compute Consolidated Cash Flow only to the extent (and in the same
proportion) that Net Income of such Restricted Subsidiary was included in
calculating the Consolidated Net Income of such Person.

 

“Consolidated
Interest Expense” means, with respect to any Person for any period,
the sum of, without duplication, (a) the interest expense of such Person
and its Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP (including amortization of original issue
discount, non-cash interest payments, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Indebtedness, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers’ acceptance financings, and
net payments, if any, pursuant to Hedging Obligations; provided that in no event
shall any amortization of deferred financing costs be included in Consolidated
Interest Expense); and (b) the consolidated capitalized interest of such
Person and its Restricted Subsidiaries for such period, whether paid or
accrued; provided,
however, that Receivables Fees shall be deemed not to constitute Consolidated
Interest Expense. Notwithstanding the foregoing, the Consolidated Interest
Expense with respect to any Restricted Subsidiary that is not a Wholly Owned
Restricted Subsidiary shall be included only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income.

 

“Consolidated
Net Income” means, with respect to any Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP; provided
that (a) the Net Income (or loss) of any Person that is not a Restricted

 

4

 

Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (b) the Net Income (or loss) of any Restricted Subsidiary other
than a Subsidiary organized or having its principal place of business outside
the United States shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary of
that Net Income (or loss) is not at the date of determination permitted without
any prior governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary, (c) the Net Income
(or loss) of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded and (d) the
cumulative effect of a change in accounting principles shall be excluded.

 

“Continuing Members”
means, as of any date of determination, any member of the board of directors of
the Issuer who (a) was a member of such board of directors immediately after
consummation of the acquisition of the Issuer by Holdings in 1998 or (b) was
nominated for election or elected to such board of directors with the approval
of, or whose election to the board of directors was ratified by, at least a
majority of the Continuing Members who were members of such board of directors
at the time of such nomination or election or any successor Continuing Members
appointed by such Continuing Members (or their successors).

 

“Corporate
Trust Office of the Trustee” shall be at the address of the Trustee
specified in Section 11.02 hereof or such other address as to which the Trustee
may give notice to the Issuer.

 

“Credit
Facilities” means, with respect to the Issuer and its Restricted
Subsidiaries, one or more debt facilities (including the Senior Credit Facility
and Second Lien Credit Facility), commercial paper facilities, note purchase
agreements or indentures providing for revolving credit loans, term loans,
notes, or other financing or letters of credit, or other credit facilities, in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.

 

“Custodian”  means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

 

“Default”
means any event that is or with the passage of time or the giving of notice or
both would be an Event of Default.

 

“Definitive
Note” means a certificated Note registered in the name of the Holder
thereof and issued in accordance with Section 2.06 hereof, in the form of
Exhibit A-1 hereto except that such Note shall not bear the Global Note Legend
and shall not have the “Schedule of Exchanges of Interests in the Global
Note” attached thereto.

 

“Depositary”
means The Depository Trust Company.

 

“Designated
Noncash Consideration”  means the fair market value of non-cash
consideration received by the Issuer or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers’ Certificate, setting forth the basis of
such valuation, executed by the principal executive officer and the principal
financial officer of the Issuer, less the amount of cash or Cash Equivalents
received in connection with a sale of such Designated Noncash Consideration.

 

5

 

“Disqualified
Stock” means any Capital Stock that, by its terms (or by the terms
of any security into which it is convertible, or for which it is exchangeable),
or upon the happening of any event (other than any event solely within the
control of the issuer thereof), matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, is exchangeable for Indebtedness
(except to the extent exchangeable at the option of such Person subject to the
terms of any debt instrument to which such Person is a party) or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
on which the Notes mature; provided that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Issuer to repurchase such Capital Stock upon the occurrence of a
Change of Control or an Asset Sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Issuer may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07 hereof; and provided further
that, if such Capital Stock is issued to any plan for the benefit of employees
of the Issuer or its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by the Issuer in order to satisfy applicable
statutory or regulatory obligations.

 

“DLJMB”
means DLJ Merchant Banking Partners II, L.P. and its Affiliates.

 

“Domestic
Subsidiary” means a Subsidiary that is organized under the laws of
the United States or any State, district or territory thereof other than Audio
International Sales, Inc., a U.S. Virgin Islands corporation.

 

“Eligible
Institution” means a commercial banking institution that has
combined capital and surplus not less than $100.0 million or its equivalent in
foreign currency, whose short-term debt is rated “A-3” or higher according to
Standard & Poor’s Ratings Group (“S&P”) or “P-2” or higher according to
Moody’s Investor Services, Inc. (“Moody’s”) or carrying an equivalent rating by
a nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of investments.

 

“Equity
Interests” means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

 

“Euroclear”
means Morgan Guaranty Trust Company of New York, Brussels office, as operator
of the Euroclear system.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Exchange
Notes” means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.

 

“Exchange
Offer” has the meaning set forth in the Registration Rights
Agreement.

 

“Exchange
Offer Registration Statement” has the meaning set forth in the
Registration Rights Agreement.

 

“Exchanged
Senior Subordinated Notes” means the Senior Subordinated Notes
exchanged for the Notes pursuant to an exchange agreement by and among the
Issuer, the Guarantors and the Holders dated July 23, 2004.

 

6

 

“Existing
Indebtedness” means Indebtedness of the Issuer and its Restricted
Subsidiaries (other than Indebtedness under the Senior Credit Facility, the Second
Lien Credit Facility the and Senior Subordinated Notes) in existence on the
date of this Indenture, until such amounts are repaid.

 

 “Fixed Charges” means, with respect to any
Person for any period, the sum, without duplication, of (a) the Consolidated
Interest Expense of such Person for such period and (b) all dividend payments
on any series of preferred stock of such Person (other than dividends payable
solely in Equity Interests that are not Disqualified Stock), in each case, on a
consolidated basis and in accordance with GAAP.

 

“Fixed Charge
Coverage Ratio” means, with respect to any Person for any period,
the ratio of the Consolidated Cash Flow of such Person for such period
(exclusive of amounts attributable to discontinued operations, as determined in
accordance with GAAP, or operations and businesses disposed of prior to the
Calculation Date (as defined)) to the Fixed Charges of such Person for such
period (exclusive of amounts attributable to discontinued operations, as
determined in accordance with GAAP, or operations and businesses disposed of
prior to the Calculation Date). In the event that the referent Person or any of
its Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other
than revolving credit borrowings) or issues or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation
Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock and the use of
the proceeds therefrom, as if the same had occurred at the beginning of the
applicable four-quarter reference period. In addition, for purposes of making
the computation referred to above, acquisitions that have been made by the
Issuer or any of its Subsidiaries, including all mergers or consolidations and
any related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be calculated
to include the Consolidated Cash Flow of the acquired entities on a pro forma
basis after giving effect to cost savings resulting from employee terminations,
facilities consolidations and closings, standardization of employee benefits
and compensation practices, consolidation of property, casualty and other
insurance coverage and policies, standardization of sales and distribution
methods, reductions in taxes other than income taxes and other cost savings
reasonably expected to be realized from such acquisition, as determined in good
faith by the principal financial officer of the Issuer (regardless of whether
such cost savings could then be reflected in pro forma financial statements
under GAAP, Regulation S-X promulgated by the Commission or any other
regulation or policy of the Commission) and without giving effect to clause
(c) of the proviso set forth in the definition of Consolidated Net Income.

 

“Foreign
Restricted Subsidiary” means any Restricted Subsidiary other than a
Domestic Subsidiary.

 

“GAAP”
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, which
are in effect on December 22, 2003.

 

“Global Notes”
means, individually and collectively, each of the Restricted Global Notes and
the Unrestricted Global Notes, in the form of Exhibit A hereto issued in
accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.

 

7

 

“Global Note
Legend” means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.

 

“Government
Securities” means direct obligations of, or obligations guaranteed
by, the United States of America, and the payment for which the United States
pledges its full faith and credit.

 

“GTP”
means Global Technology Partners, LLC and its Affiliates.

 

“GTP
Investment” means the sale by Holdings to GTP of its common stock,
preferred stock or warrants to purchase common stock, the purchase price of
which will be partially financed by the GTP Loan, and the granting by Holdings
to GTP of options to purchase shares of its common stock.

 

“GTP Loans”
means one or more loans by the Issuer or Holdings to GTP to finance GTP’s
purchase of common stock, preferred stock or warrants to purchase common stock
of Holdings; provided, however, that the aggregate principal amount of all such
GTP Loans outstanding at any time shall not exceed $2 million.

 

“Guarantee”
means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any
manner (including, without limitation, letters of credit or reimbursement
agreements in respect thereof), of all or any part of any Indebtedness.

 

“Guarantors”
means (i) each of the Domestic Subsidiaries of the Issuer that is a Wholly
Owned Restricted Subsidiary on the date of the Indenture and (ii) any other
Subsidiary that executes a Note Guarantee in accordance with the provisions of
this Indenture.

 

“Hedging
Obligations” means, with respect to any Person, the obligations of
such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates and (c) agreements or arrangements designed to protect such Person
against fluctuations in exchange rates.

 

“Holder”
means a Person in whose name a Note is registered.

 

“Holdings”
means DeCrane Holdings, Inc., a Delaware corporation, the corporate parent of
the Issuer, or its successors.

 

“Indebtedness”
means, with respect to any Person, any indebtedness of such Person in respect
of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker’s acceptances or representing Capital Lease Obligations or
the balance deferred and unpaid of the purchase price of any property or
representing any Hedging Obligations, except any such balance that constitutes
an accrued expense or trade payable, if and to the extent any of the foregoing
Indebtedness (other than letters of credit and Hedging Obligations) would
appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, as well as all Indebtedness of others secured by a Lien
on any asset of such Person (whether or not such Indebtedness is assumed by
such Person) and, to the extent not otherwise included, the guarantee by such
Person of any Indebtedness of any other Person, provided that Indebtedness
shall not include the pledge by the Issuer of the Capital Stock of an
Unrestricted Subsidiary of the Issuer to secure Non-Recourse Debt of such
Unrestricted Subsidiary. The amount of any Indebtedness outstanding as of any
date shall be (a) the accreted value thereof (together with any interest
thereon that is more than 30 days past due), in the case of any Indebtedness that
does not require current payments of interest, and (b) the principal
amount thereof, in the case of any other

 

8

 

Indebtedness; provided that the principal amount of any
Indebtedness that is denominated in any currency other than United States
dollars shall be the amount thereof, as determined pursuant to the foregoing
provision, converted into United States dollars at the Spot Rate in effect on
the date that such Indebtedness was incurred (or, if such indebtedness was
incurred prior to the date of the Indenture, the Spot Rate in effect on the
date of this Indenture).

 

“Indenture”
means this Indenture, as amended or supplemented from time to time.

 

“Indirect
Participant” means a Person who holds a beneficial interest in a
Global Note through a Participant.

 

“Institutional
Accredited Investor” means an institution that is an “accredited
investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act, who are not also QIBs.

 

“Investments”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the forms of direct or indirect loans
(including guarantees by the referent Person of, and Liens on any assets of the
referent Person securing, Indebtedness or other obligations of other Persons),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP, provided
that an investment by the Issuer for consideration consisting of common equity
securities of the Issuer shall not be deemed to be an Investment. If the Issuer
or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Issuer
such that, after giving effect to any such sale or disposition, such Person is
no longer a Subsidiary of the Issuer, the Issuer shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Restricted Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of
Section 4.07 hereof.

 

“Legal
Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or the city in which the principal
corporate trust office of the Trustee is located, or at a place of payment, are
authorized by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a place
of payment, payment may be made at that place on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue on such payment for the
intervening period.

 

“Letter of
Transmittal” means the letter of transmittal to be prepared by the
Issuer and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.

 

“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

 

“Management
Loans” means one or more loans by the Issuer or Holdings to officers
and/or directors of the Issuer and any of its Restricted Subsidiaries to finance
the purchase by such officers and directors of common stock of Holdings; provided,
however, that the aggregate principal amount of all such Management Loans
outstanding at any time shall not exceed $5.0 million.

 

9

 

“Net Income”
means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of
preferred stock dividends, excluding, however, (a) any gain (or loss),
together with any related provision for taxes on such gain (or loss), realized
in connection with (i) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) or (ii) the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (b) any extraordinary or nonrecurring gain (or loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (or loss).

 

“Net Proceeds”
means the aggregate cash proceeds received by the Issuer or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of, without
duplication, (a) the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees, and sales
commissions, recording fees, title transfer fees and appraiser fees and cost of
preparation of assets for sale) and any relocation expenses incurred as a
result thereof, (b) taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (c) amounts required to be applied to the repayment of
Indebtedness (other than revolving credit Indebtedness incurred pursuant to the
Senior Credit Facility) secured by a Lien on the asset or assets that were the
subject of such Asset Sale and (d) any reserve established in accordance
with GAAP or any amount placed in escrow, in either case for adjustment in
respect of the sale price of such asset or assets until such time as such
reserve is reversed or such escrow arrangement is terminated, in which case Net
Proceeds shall include only the amount of the reserve so reversed or the amount
returned to the Issuer or its Restricted Subsidiaries from such escrow
arrangement, as the case may be.

 

“Non-Recourse
Debt” means Indebtedness (i) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Issuer or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and (ii) as to which the lenders have been notified in writing
that they will not have any recourse to the stock (other than the stock of an
Unrestricted Subsidiary pledged by the Issuer to secure debt of such
Unrestricted Subsidiary) or assets of the Issuer or any of its Restricted
Subsidiaries; provided that in no event shall Indebtedness of any
Unrestricted Subsidiary fail to be Non-Recourse Debt solely as a result of any
default provisions contained in a guarantee thereof by the Issuer or any of its
Restricted Subsidiaries if the Issuer or such Restricted Subsidiary was
otherwise permitted to incur such guarantee pursuant to this Indenture.

 

“Non-U.S.
Person” means a Person who is not a U.S. Person.

 

“Note
Custodian” means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.

 

“Note
Guarantee” means the Guarantee by each Guarantor of the Issuer’s
payment obligations under this Indenture and the Notes, including any
subsequent Guarantees executed pursuant to the provisions of this Indenture.

 

“Notes”
has the meaning assigned to it in the preamble to this Indenture.

 

“Obligations”  means
any principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness.

 

10

 

“Offering”
means the offering of the Notes by the Issuer.

 

“Officer”
means, with respect to any Person, the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.

 

“Officers’
Certificate” means a certificate signed on behalf of the Issuer by
two Officers of the Issuer, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Issuer, that meets the requirements of Sections 11.04
and 11.05 hereof.

 

“Opinion of
Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Sections 11.04 and
11.05 hereof.  The counsel may be an
employee of or counsel to the Issuer, any Subsidiary of the Issuer or the
Trustee.

 

“Pari Passu
Indebtedness” means Indebtedness of the Issuer that ranks pari passu
in right of payment to the Notes.

 

“Participant”
means, with respect to the Depositary, Euroclear or Cedel, a Person who has an
account with the Depositary, Euroclear or Cedel, respectively (and, with
respect to The Depository Trust Company, shall include Euroclear and Cedel).

 

“Permitted
Business” means the avionics manufacturing industry and any business
in which the Issuer and its Restricted Subsidiaries are engaged on the date of
this Indenture or any business reasonably related, incidental or ancillary
thereto.

 

“Permitted
Investments” means (a) any Investment in the Issuer or in a Restricted
Subsidiary of the Issuer, (b) any Investment in cash or Cash Equivalents,
(c) any Investment by the Issuer or any Restricted Subsidiary of the
Issuer in a Person, if as a result of such Investment (i) such Person
becomes a Restricted Subsidiary of the Issuer or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Issuer or a
Wholly Owned Restricted Subsidiary of the Issuer, (d) any Investment made
as a result of the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with Section 4.10 hereof, (e) any
Investment acquired solely in exchange for Equity Interests (other than
Disqualified Stock) of the Issuer, (f) any Investment in a Person engaged in a
Permitted Business (other than an Investment in an Unrestricted Subsidiary)
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (f) that are at that time
outstanding, not to exceed 15% of Total Assets at the time of such Investment
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value), (g) Investments
relating to any special purpose Wholly Owned Subsidiary of the Issuer organized
in connection with a Receivables Facility that, in the good faith determination
of the board of directors of the Issuer, are necessary or advisable to effect
such Receivables Facility and (h) the Management Loans and GTP Loans.

 

“Permitted
Liens” means: (i) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Issuer or any
Restricted Subsidiary, provided that such Liens were not incurred
in contemplation of such merger or consolidation and do not secure any property
or assets of the Issuer or any Restricted Subsidiary other than the property or
assets subject to the Liens prior to such merger or consolidation;
(ii) Liens existing on the date of this Indenture; (iii) Liens
securing Indebtedness consisting of Capitalized Lease Obligations, purchase
money Indebtedness, mortgage financings, industrial revenue

 

11

 

bonds or other monetary obligations, in each case incurred solely for
the purpose of financing all or any part of the purchase price or cost of
construction or installation of assets used in the business of the Issuer or
its Restricted Subsidiaries, or repairs, additions or improvements to such assets,
provided
that (A) such Liens secure Indebtedness in an amount not in excess of the
original purchase price or the original cost of any such assets or repair,
additional or improvement thereto (plus an amount equal to the reasonable fees
and expenses in connection with the incurrence of such Indebtedness),
(B) such Liens do not extend to any other assets of the Issuer or its
Restricted Subsidiaries (and, in the case of repair, addition or improvements
to any such assets, such Lien extends only to the assets (and improvements
thereto or thereon) repaired, added to or improved), (C) the Incurrence of
such Indebtedness is permitted by Section 4.09 hereof and (D) such
Liens attach within 365 days of such purchase, construction, installation,
repair, addition or improvement; (iv) Liens to secure any refinancings,
renewals, extensions, modification or replacements permitted under
Section 4.09 (collectively, “refinancing”) (or successive refinancings),
in whole or in part, of any Indebtedness secured by Liens referred to in the
clauses above so long as such Lien does not extend to any other property (other
than improvements thereto); (v) Liens securing letters of credit and
surety bonds entered into in the ordinary course of business and consistent
with past business practice; (vi) Liens on and pledges of the capital
stock of any Unrestricted Subsidiary securing Non-Recourse Debt of such
Unrestricted Subsidiary; (vii) Liens securing Indebtedness permitted under
Section 4.09 (including all Obligations) under the Senior Credit Facility
and the Second Lien Credit Facility; (viii) other Liens securing
Indebtedness that is permitted by the terms of this Indenture to be outstanding
having an aggregate principal amount at any one time outstanding not to exceed
$27.5 million; (ix) Liens securing Indebtedness of any Restricted
Subsidiary that is not a Guarantor permitted to be incurred by
Section 4.09 (and all Obligations in respect thereof); (x) Liens
constituting “Permitted Encumbrances” under the Second Lien Credit Facility as
in effect on the date of the Indenture; and (xi) Liens securing Hedging
Obligations otherwise permitted under the Indenture.

 

“Permitted
Refinancing Indebtedness” means any Indebtedness of the Issuer or
any of its Restricted Subsidiaries issued within 60 days after repayment of, in
exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund other Indebtedness of the Issuer or any of
its Restricted Subsidiaries; provided that (a) the principal
amount (or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount of (or accreted value, if
applicable), plus premium, if any, and accrued interest on the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of reasonable expenses incurred in connection therewith), (b) such
Permitted Refinancing Indebtedness has a final maturity date no earlier than
the final maturity date of, and has a Weighted Average Life to Maturity equal
to or greater than the Weighted Average Life to Maturity of, the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded, and
(c) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the
Notes on terms at least as favorable, taken as a whole, to the Holders of Notes
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.

 

“Person”
means any individual, corporation, partnership, limited liability company,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or agency or political subdivision thereof
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).

 

“Principals”
means DLJMB.

 

“Private
Placement Legend” means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture
except where otherwise permitted by the provisions of this Indenture.

 

12

 

“Public
Equity Offering” means any issuance of common stock by the Issuer
(other than to Holdings and other than Disqualified Stock) or common stock or
preferred stock by Holdings (other than Disqualified Stock) registered pursuant
to the Securities Act, other than issuances registered on Form S-8 and
issuances registered on Form S-4, excluding issuances of common stock pursuant
to employee benefit plans of Holdings or the Issuer or otherwise as
compensation to employees of the Issuer or Holdings.

 

“Qualified
Proceeds” means any of the following or any combination of the
following: (i) cash; (ii) Cash Equivalents; (iii) assets that are used or
useful in a Permitted Business; and (iv) the Capital Stock of any Person
engaged in a Permitted Business if, in connection with the receipt by the
Issuer or any Restricted Subsidiary of the Issuer of such Capital Stock, (A)
such Person becomes a Restricted Subsidiary of the Issuer or any Restricted
Subsidiary of the Issuer or (B) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Issuer or any Restricted Subsidiary of
the Issuer.

 

“QIB”
means a “qualified institutional buyer” as defined in Rule 144A.

 

“Receivables
Facility” means one or more receivables financing facilities, as
amended from time to time, pursuant to which the Issuer or any of its
Restricted Subsidiaries sells its accounts receivable to an Accounts Receivable
Subsidiary.

 

“Receivables
Fees” means distributions or payments made directly or by means of
discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Facility.

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated as
of July 23, 2004, by and among the Issuer and the other parties named on
the signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time, and, with respect to any Additional Notes, one
or more registration rights agreements between the Issuer and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from
time to time, relating to rights given by the Issuer to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.

 

“Regulation S”
means Regulation S promulgated under the Securities Act.

 

“Regulation S
Global Note” means a permanent global Note in the form of Exhibit
A-1 hereto bearing the Global Note Legend, and deposited with or on behalf of
and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount at maturity of the Notes
initially sold in reliance on Rule 903 of Regulation S.

 

“Related
Party” means, with respect to any Principal, (i) any controlling
stockholder or partner of such Principal on the date of this Indenture, or (ii)
any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding (directly or
through one or more Subsidiaries) a 51% or more controlling interest of which
consist of the Principals and/or such other Persons referred to in the
immediately preceding clauses (i) or (ii).

 

“Responsible
Officer,” when used with respect to the Trustee, means any officer
within the Corporate Trust Administration of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

 

13

 

“Restricted
Definitive Note” means a Definitive Note bearing the Private
Placement Legend.

 

“Restricted
Global Note” means a Global Note bearing the Private Placement
Legend.

 

“Restricted
Investment” means an Investment other than a Permitted Investment.

 

“Restricted
Period” means the 40-day distribution compliance period as defined
in Regulation S.

 

“Restricted
Subsidiary” of a Person means any Subsidiary of the referent Person
that is not an Unrestricted Subsidiary.

 

“Rule 144”
means Rule 144 promulgated under the Securities Act.

 

“Rule 144A”
means Rule 144A promulgated under the Securities Act.

 

“Rule 903”
means Rule 903 promulgated under the Securities Act.

 

“Rule 904”
means Rule 904 promulgated the Securities Act.

 

“Second Lien
Credit Facility” means that certain Credit Agreement, dated as of
December 22, 2003 among the Issuer, various financial institutions party
thereto, and Credit Suisse First Boston, as administrative agent, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and, in each case, as amended, modified,
renewed, refunded, replaced or refinanced from time to time, including any
agreement (i) extending or shortening the maturity of any Indebtedness incurred
thereunder or contemplated thereby, (ii) adding or deleting borrowers or
guarantors thereunder, (iii) increasing the amount of Indebtedness incurred
thereunder or available to be borrowed thereunder, provided that on the date
such Indebtedness is incurred it would not be prohibited by Section 4.09
hereof or (iv) otherwise altering the terms and conditions thereof.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Senior
Credit Facility” means that certain Third Amended and Restated
Credit Agreement, dated as of May 11, 2000 among the Issuer, various financial
institutions party thereto, DLJ Capital Funding, Inc., as syndication agent,
and Bank One, N.A., as administrative agent, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and, in each case, as amended, modified, renewed,
refunded, replaced or refinanced from time to time, including any agreement
(i) extending or shortening the maturity of any Indebtedness incurred
thereunder or contemplated thereby, (ii) adding or deleting borrowers or
guarantors thereunder, (iii) increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder, provided
that on the date such Indebtedness is incurred it would not be prohibited by
Section 4.09 hereof or (iv) otherwise altering the terms and conditions
thereof.

 

“Senior
Subordinated Notes” means the 12% Senior Subordinated Notes issued
pursuant to the Indenture dated as of October 5, 1998 by and among the
Issuer, certain guarantors named therein and U.S. Bank National Association, as
successor trustee to State Street Bank and Trust Company.

 

“Shelf
Registration Statement” means the Shelf Registration Statement as
defined in the Registration Rights Agreement.

 

14

 

“Significant
Subsidiary” means any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

 

“Spot Rate”
means, for any currency, the spot rate at which such currency is offered for
sale against United States dollars as determined by reference to the New York
foreign exchange selling rates, as published in The Wall Street Journal on such
date of determination for the immediately preceding business day or, if such
rate is not available, as determined in any publicly available source of
similar market data.

 

“Stated
Maturity” means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

 

“Subsidiary”
means, with respect to any Person, (a) any corporation, association or
other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person (or a combination thereof)
and (b) any partnership or limited liability company (i) the sole
general partner or the managing general partner or managing member of which is
such Person or a Subsidiary of such Person or (ii) the only general
partners or managing members of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).

 

“Tax Sharing
Agreement” means any tax sharing agreement or arrangement between
the Issuer and Holdings, as the same may be amended from time to time; provided
that in no event shall the amount permitted to be paid pursuant to all such
agreements and/or arrangements exceed the amount the Issuer would be required
to pay for income taxes were it to file a consolidated tax return for itself
and its consolidated Restricted Subsidiaries as if it were a corporation that
was a parent of a consolidated group.

 

“TIA”
means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as
in effect on the date on which this Indenture is qualified under the TIA.

 

“Total Assets”
means the total consolidated assets of the Issuer and its Restricted
Subsidiaries, as shown on the most recent balance sheet (excluding the
footnotes thereto) of the Issuer prepared in accordance with GAAP.

 

“Trustee”
means the party named as such above until a successor replaces it in accordance
with the applicable provisions of this Indenture and thereafter means the
successor serving hereunder.

 

“Unrestricted
Global Note” means a permanent global Note in the form of Exhibit
A-1 attached hereto that bears the Global Note Legend and that has the
“Schedule of Exchanges of Interests in the Global Note” attached thereto,
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.

 

“Unrestricted
Definitive Note” means one or more Definitive Notes that do not bear
and are not required to bear the Private Placement Legend.

 

“Unrestricted
Subsidiary” means any Subsidiary that is designated by the board of
directors as an Unrestricted Subsidiary pursuant to a board resolution, but
only to the extent that such Subsidiary: (a) has no

 

15

 

Indebtedness other than Non-Recourse Debt; (b) is not party to any
agreement, contract, arrangement or understanding with the Issuer or any
Restricted Subsidiary of the Issuer unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Issuer or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Issuer; (c) is a Person with respect to
which neither the Issuer nor any of its Restricted Subsidiaries has any direct
or indirect obligation (i) to subscribe for additional Equity Interests
(other than Investments described in clause (g) of the definition of
Permitted Investments) or (ii) to maintain or preserve such Person’s financial
condition or to cause such Person to achieve any specified levels, of operating
results; and (d) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Issuer or any of its
Restricted Subsidiaries. Any such designation by the board of directors shall
be evidenced to the Trustee by filing with the Trustee a certified copy of the
board resolution giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 4.07 hereof. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Issuer as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date
under Section 4.09 hereof, the Issuer shall be in default of such
covenant). The board of directors of the Issuer may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Issuer of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under Section 4.09 hereof and (ii) no
Default or Event of Default would be in existence following such designation.

 

“U.S. Person”
means (i) any individual resident in the United States, (ii) any
partnership or corporation organized or incorporated under the laws of the
United States, (iii) any estate of which an executor or administrator is a
U.S. Person (other than an estate governed by foreign law and of which at least
one executor or administrator is a non-U.S. Person who has sole or shared
investment discretion with respect to its assets), (iv) any trust of which
any trustee is a U.S. Person (other than a trust of which at least one trustee
is a non-U.S. Person who has sole or shared investment discretion with respect
to its assets and no beneficiary of the trust (and no settler, if the trust is
revocable) is a U.S. Person), (v) any agency or branch of a foreign entity
located in the United States, (vi) any non-discretionary or similar
account (other than an estate or trust) held by a dealer or other fiduciary for
the benefit or account of a U.S. Person, (vii) any discretionary or similar
account (other than an estate or trust) held by a dealer or other fiduciary
organized, incorporated or (if an individual) resident in the United States
(other than such an account held for the benefit or account of a non-U.S.
Person), (viii) any partnership or corporation organized or incorporated
under the laws of a foreign jurisdiction and formed by a U.S. person
principally for the purpose of investing in securities not registered under the
Securities Act (unless it is organized or incorporated and owned, by
“accredited investors” within the meaning of Rule 501(a) under the
Securities Act who are not natural persons, estates or trusts); provided that
the term “U.S. Person” shall not include (A) a branch or agency of a U.S.
Person that is located and operating outside the United States for valid
business purposes as a locally regulated branch or agency engaged in the
banking or insurance business, (B) any employee benefit plan established
and administered in accordance with the law, customary practices and
documentation of a foreign country and (C) the international organizations
set forth in Section 902(o)(7) of Regulation S under the Securities
Act and any other similar international organizations, and their agencies,
affiliates and pension plans.

 

“Weighted
Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (ii) the number of
years (calculated to the nearest one-twelfth)

 

16

 

that will elapse between such date and the making of such payment, by
(b) the then outstanding principal amount of such Indebtedness.

 

“Wholly Owned
Subsidiary” of any Person means a Subsidiary of such Person all of
the outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares) shall at the time be owned by such Person or by
one or more Wholly Owned Subsidiaries of such Person.

 

“Wholly Owned
Restricted Subsidiary” of any Person means a Restricted Subsidiary
of such Person all the outstanding Capital Stock or other ownership interests
of which (other than directors’ qualifying shares) shall at the time be owned
by such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person or by such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.

 

SECTION 1.02.    OTHER DEFINITIONS.

 

	
  Term

  	
   

  	
  Defined in

  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  	
   

  
	
  “Asset Sale”

  	
   

  	
  4.10

  	
   

  
	
  “Asset Sale Offer”

  	
   

  	
  3.09

  	
   

  
	
  “Authentication Order”

  	
   

  	
  2.02

  	
   

  
	
  “Bankruptcy Law”

  	
   

  	
  4.01

  	
   

  
	
  “Change of Control Offer”

  	
   

  	
  4.14

  	
   

  
	
  “Change of Control Payment”

  	
   

  	
  4.14

  	
   

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.14

  	
   

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  	
   

  
	
  “incur”

  	
   

  	
  4.09

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “Offer Amount”

  	
   

  	
  3.09

  	
   

  
	
  “Offer Period”

  	
   

  	
  3.09

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Permitted Indebtedness”

  	
   

  	
  4.09

  	
   

  
	
  “Purchase Date”

  	
   

  	
  3.09

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Restricted Payments”

  	
   

  	
  4.07

  	
   

  

 

SECTION 1.03.    INCORPORATION OF TIA PROVISIONS.

 

Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.

 

The following TIA
terms used in this Indenture have the following meanings:

 

“indenture
securities” means the Notes;

 

“indenture
security Holder” means a Holder of a Note;

 

17

 

“indenture to
be qualified” means this Indenture;

 

“indenture
trustee” or “institutional trustee” means the Trustee;
and

 

“obligor”
on the Notes and the Note Guarantees means the Issuer and the Guarantors,
respectively, and any successor obligor upon the Notes and the Note Guarantees,
respectively.

 

All other terms
used in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by Commission rule under the TIA have the meanings
so assigned to them.

 

SECTION 1.04.    RULES OF CONSTRUCTION.

 

Unless the context
otherwise requires:

 

(1)     a term has the meaning
assigned to it;

 

(2)     an accounting term not
otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3)     “or” is not exclusive;

 

(4)     words in the singular include
the plural, and in the plural include the singular;

 

(5)     provisions apply to
successive events and transactions; and

 

(6)     references to sections of or
rules under the Securities Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the Commission from time
to time.

 

ARTICLE 2.

THE NOTES

 

SECTION 2.01.    FORM AND DATING.

 

(a)         General. 
The Notes and the Trustee’s certificate of authentication shall be
substantially in the form of Exhibit A hereto. 
The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage.  Each Note
shall be dated the date of its authentication. 
The Notes shall be in denominations of $1,000 and integral multiples
thereof.

 

The terms and
provisions contained in the Notes shall constitute, and are hereby expressly
made, a part of this Indenture and the Issuer, the Guarantors and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby. 
However, to the extent any provision of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.

 

(b)           Global
Notes.  Notes issued in global form shall be
substantially in the form of Exhibit A-1 attached hereto (including the Global
Note Legend thereon and the “Schedule of Exchanges of Interests in the
Global Note” attached thereto).  Notes
issued in definitive form shall be substantially in the form of Exhibit A-1
attached hereto (but without the Global Note Legend thereon and without the
“Schedule of

 

18

 

Exchanges of Interests in the Global Note” attached thereto).  Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time
to time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.

 

(c)           Euroclear and Cedel Procedures Applicable. 
The provisions of the “Operating Procedures of the Euroclear System” and
“Terms and Conditions Governing Use of Euroclear” and the “General Terms and
Conditions of Cedel Bank” and “Customer Handbook” of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Global
Notes that are held by Participants through Euroclear or Cedel Bank.

 

SECTION 2.02.    EXECUTION AND AUTHENTICATION.

 

One Officer shall
sign the Notes for the Issuer by manual or facsimile signature.  The Issuer’s seal may be reproduced on the
Notes and may be in facsimile form.

 

If an Officer
whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note shall nevertheless be valid.

 

A Note shall not
be valid until authenticated by the manual signature of the Trustee.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.

 

The Trustee shall,
upon a written order of the Issuer signed by one Officer (an “Authentication
Order”), authenticate Notes for original issue up to the aggregate
principal amount at maturity stated in paragraph 4 of the Notes.  The aggregate principal amount at maturity
of Notes outstanding at any time may not exceed such amount, plus (i) any Additional
Notes permitted to be issued pursuant to Section 4.09 hereof and (ii)
except as provided in Section 2.07 hereof.

 

The Trustee may
appoint an authenticating agent acceptable to the Issuer to authenticate
Notes.  An authenticating agent may
authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. 
An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Issuer.

 

SECTION 2.03.    REGISTRAR AND PAYING AGENT.

 

The Issuer shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (“Registrar”) and an office or agency where
Notes may be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the Notes and of their
transfer and exchange.  The Issuer may
appoint one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any
co-registrar and the term “Paying Agent” includes any additional paying
agent.  The Issuer may change any Paying
Agent or Registrar without notice to any Holder.  The Issuer shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture.  If the Issuer fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such.  The Issuer or any of their respective
Subsidiaries may act as Paying Agent or Registrar.

 

19

 

The Issuer
initially appoints The Depository Trust Company (“DTC”) to act as Depositary
with respect to the Global Notes.

 

The Issuer
initially appoints the Trustee to act as the Registrar and Paying Agent and to
act as Note Custodian with respect to the Global Notes.

 

SECTION 2.04.    PAYING AGENT TO HOLD MONEY IN
TRUST.

 

The Issuer shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal or premium, if any,
on the Notes, and will notify the Trustee of any default by the Issuer in
making any such payment.  While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Issuer at any time may require a Paying Agent to pay
all money held by it to the Trustee. 
Upon payment over to the Trustee, the Paying Agent (if other than the
Issuer or a Subsidiary) shall have no further liability for the money.  If the Issuer or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Issuer, the Trustee shall serve as
Paying Agent for the Notes.

 

SECTION 2.05.    HOLDER LISTS.

 

The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of all Holders and shall otherwise
comply with TIA § 312(a).  If the
Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times
as the Trustee may request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of the Holders
of Notes and the Issuer shall otherwise comply with TIA § 312(a).

 

SECTION 2.06.    TRANSFER AND EXCHANGE.

 

(a)           Transfer
and Exchange of Global Notes.  A Global
Note may not be transferred as a whole except by the Depositary to a nominee of
the Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.  All Global Notes will be exchanged by the Issuer for Definitive
Notes if (i) the Issuer delivers to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Issuer within 90 days after the
date of such notice from the Depositary; (ii) the Issuer in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee; or (iii) there shall have occurred and be continuing a default or an
Event of Default and the Trustee receives a request from the Depositary to
issue Definitive Notes.  Upon the
occurrence of any of the preceding events in (i), (ii) or (iii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee.  Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof.  Every Note authenticated
and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10
hereof, shall be authenticated and delivered in the form of, and shall be, a
Global Note.  A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b), (c) or (f) hereof.

 

20

 

(b)           Transfer
and Exchange of Beneficial Interests in the Global Notes. 
The transfer and exchange of beneficial interests in the Global Notes shall
be effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. 
Beneficial interests in the Restricted Global Notes shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. 
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well
as one or more of the other following subparagraphs, as applicable:

 

(i)            Transfer of Beneficial Interests in the
Same Global Note.  Beneficial
interests in any Restricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set forth in the
Private Placement Legend.  Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note.  No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(i).

 

(ii)           All Other Transfers and Exchanges of
Beneficial Interests in Global Notes.  In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive Note in
an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above.  Upon consummation of an Exchange Offer by
the Issuer in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes.  Upon satisfaction
of all of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount at
maturity of the relevant Global Note(s) pursuant to Section 2.06(h)
hereof.

 

(iii)          Transfer of Beneficial Interests to
Another Restricted Global Note. 
A beneficial interest in any Restricted Global Note may be transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements
of Section 2.06(b)(ii) above and the Registrar receives the following:

 

(A)  if the transferee will take
delivery in the form of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof.

 

(iv)          Transfer and Exchange of Beneficial
Interests in a Restricted Global Note for Beneficial Interests in the
Unrestricted Global Note.  A
beneficial interest in any Restricted

 

21

 

Global Note may be
exchanged by any holder thereof for a beneficial interest in an Unrestricted
Global Note or transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:

 

(A)  such exchange or transfer is
effected pursuant to the Exchange Offer in accordance with the Registration
Rights Agreement and the holder of the beneficial interest to be exchanged, in
the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the
Issuer;

 

(B)   such transfer is effected
pursuant to an effective registration statement; or

 

(C)   the Registrar receives the
following:

 

(1)     if the holder of such
beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or

 

(2)     if the holder of such
beneficial interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note, a certificate from such
holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof;

 

and, in each such case set forth in this subparagraph (C), if the
Registrar so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the Securities Act;
or

 

(D)  if the transferee will take
delivery in the form of a beneficial interest in the Regulation S Global
Note, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof.

 

If any such
transfer is effected pursuant to subparagraph (B) or (C) above at a time when
an Unrestricted Global Note has not yet been issued, the Issuer shall issue
and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount at maturity equal to
the aggregate principal amount at maturity of beneficial interests transferred
pursuant to subparagraph (B) or (C) above.

 

Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.

 

(c)         Transfer or Exchange of Beneficial Interests for Definitive
Notes.

 

22

 

(i)            Beneficial Interests in Restricted
Global Notes to Restricted Definitive Notes.  If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:

 

(A)  if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item (2)(a)
thereof;

 

(B)   if such beneficial interest is
being transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;

 

(C)   if such beneficial interest is
being transferred to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item (2)
thereof;

 

(D)  if such beneficial interest is
being transferred pursuant to an exemption from the registration requirements
of the Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;

 

(E)   if such beneficial interest is
being transferred to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;

 

(F)   if such beneficial interest is
being transferred to the Issuer or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or

 

(G)   if such beneficial interest is
being transferred pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,

 

the Trustee shall cause
the aggregate principal amount at maturity of the applicable Global Note to be
reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer
shall execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount at maturity.  Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.

 

23

 

(ii)           Beneficial Interests in Restricted
Global Notes to Unrestricted Definitive Notes.  A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:

 

(A)  such exchange or transfer is
effected pursuant to the Exchange Offer in accordance with the Registration
Rights Agreement and the holder of the beneficial interest to be transferred,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the
Issuer;

 

(B)   such transfer is effected
pursuant to an effective registration statement; or

 

(C)   the Registrar receives the
following:

 

(1)     if the holder of such
beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or

 

(2)     if the holder of such
beneficial interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery thereof in the form of
a Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (C), if the
Registrar so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the restrictions
on transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

(iii)          Beneficial Interests in Unrestricted
Global Notes to Unrestricted Definitive Notes.  If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for a
Definitive Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon satisfaction of
the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall
cause the aggregate principal amount at maturity of the applicable Global Note
to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Issuer shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount at maturity; provided that no such transfer from the
Regulation S Global Note shall be permitted during the Restricted Period.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant.  The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are

 

24

 

so
registered.  Any Definitive Note issued
in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.

 

(d)         Transfer and Exchange of Definitive Notes for Beneficial
Interests.

 

(i)            Restricted Definitive Notes to
Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:

 

(A)  if the Holder of such Restricted
Definitive Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;

 

(B)   if such Restricted Definitive
Note is being transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;

 

(C)   if such Restricted Definitive
Note is being transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;

 

(D)  if such Restricted Definitive
Note is being transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;

 

(E)   if such Restricted Definitive
Note is being transferred to the Issuer or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or

 

(F)   if such Restricted Definitive
Note is being transferred pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,

 

the Trustee shall cancel
the Restricted Definitive Note, increase or cause to be increased the aggregate
principal amount at maturity of, in the case of clause (A) above, the
appropriate Restricted Global Note, in the case of clause (B) above, the 144A
Global Note, and in the case of clause (c) above, the Regulation S Global Note.

 

(ii)           Restricted Definitive Notes to
Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Restricted Definitive Note to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note only if:

 

25

 

(A)  such exchange or transfer is
effected pursuant to the Exchange Offer in accordance with the Registration
Rights Agreement and the Holder, in the case of an exchange, or the transferee,
in the case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuer;

 

(B)   such transfer is effected
pursuant to an effective registration statement; or

 

(C)   the Registrar receives the
following:

 

(1)     if the Holder of such
Definitive Notes proposes to exchange such Notes for a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(c) thereof; or

 

(2)     if the Holder of such
Definitive Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;

 

and, in each such
case set forth in this subparagraph (C), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act; or

 

(E)   if such Restricted Definitive
Note is being transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in item
(2) thereof;

 

Upon satisfaction
of the conditions of any of the subparagraphs in this Section 2.06(d)(ii),
the Trustee shall cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount at maturity of the Unrestricted Global
Note.

 

(iii)          Unrestricted Definitive Notes to
Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time.  Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate principal
amount at maturity of one of the Unrestricted Global Notes.

 

If any such
exchange or transfer from a Definitive Note to a beneficial interest is
effected pursuant to subparagraphs (ii)(B), (ii)(C) or (iii) above at a time
when an Unrestricted Global Note has not yet been issued, the Issuer shall
issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount at maturity equal to
the principal amount at maturity of Definitive Notes so transferred.

 

26

 

(e)           Transfer
and Exchange of Definitive Notes for Definitive Notes. 
Upon request by a Holder of Definitive Notes and such Holder’s
compliance with the provisions of this Section 2.06(e), the Registrar
shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. 
In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.06(e).

 

(i)            Restricted Definitive Notes to
Restricted Definitive Notes. 
Any Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:

 

(A)  if the transfer will be made
pursuant to Rule 144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the certifications
in item (1) thereof;

 

(B)   if the transfer will be made
pursuant to Rule 903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications in
item (2) thereof; and

 

(C)   if the transfer will be made
pursuant to any other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.

 

(ii)           Restricted Definitive Notes to
Unrestricted Definitive Notes. 
Any Restricted Definitive Note may be exchanged by the Holder thereof
for an Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:

 

(A)  such exchange or transfer is
effected pursuant to the Exchange Offer in accordance with the Registration
Rights Agreement and the Holder, in the case of an exchange, or the transferee,
in the case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuer;

 

(B)   such transfer is effected
pursuant to an effective registration statement; or

 

(C)   the Registrar receives the
following:

 

(1)     if the Holder of such
Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or

 

(2)     if the Holder of such
Restricted Definitive Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;

 

27

 

and, in each such
case set forth in this subparagraph (C), if the Registrar so requests, an
Opinion of Counsel in form reasonably acceptable to the Issuer to the effect
that such exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.

 

(iii)          Unrestricted Definitive Notes to
Unrestricted Definitive Notes. 
A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note.  Upon receipt of a request to register such a
transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof.

 

(f)            Exchange
Offer.  Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Issuer shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount at maturity equal to the principal amount at
maturity of the beneficial interests in the Restricted Global Notes tendered
for acceptance by Persons that certify in the applicable Letters of Transmittal
that (x) they are not broker-dealers, (y) they are not participating in a
distribution of the Exchange Notes and (z) they are not affiliates (as defined
in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer and
(ii) Definitive Notes in an aggregate principal amount at maturity equal to the
principal amount at maturity of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. 
Concurrently with the issuance of such Notes, the Trustee shall cause
the aggregate principal amount at maturity of the applicable Restricted Global
Notes to be reduced accordingly, and the Issuer shall execute and the Trustee
shall authenticate and deliver to the Persons designated by the Holders of
Definitive Notes so accepted Definitive Notes in the appropriate principal
amount at maturity.

 

(g)           Legends. 
The following legends shall appear on the face of all Global Notes and
Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture.

 

(i)            Private Placement
Legend.

 

(A)  Except as permitted by
subparagraph (B) below, each Global Note and each Definitive Note (and all
Notes issued in exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:

 

“THIS NOTE (OR ITS
PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1)
REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT HAS ACQUIRED THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT
OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)
(1), (2), (3) OR (7) OR REGULATION D UNDER THE SECURITIES ACT (AN “IAI”)), (2)
AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
THE ISSUER OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER

 

28

 

REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER) OR (G) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.  AS USED
HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.”

 

(B)   Notwithstanding the foregoing,
any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this
Section 2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.

 

(ii)           Global Note Legend.  Each Global Note shall bear a
legend in substantially the following form:

 

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

 

(h)           Cancellation
and/or Adjustment of Global Notes.  At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11
hereof.  At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who will

 

29

 

take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount at maturity of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the beneficial
interest is being exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note,
such other Global Note shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such increase.

 

(i)          General
Provisions Relating to Transfers and Exchanges.

 

(i)            To permit registrations
of transfers and exchanges, the Issuer shall execute and the Trustee shall
authenticate Global Notes and Definitive Notes upon the Issuer’s order or at
the Registrar’s request.

 

(ii)           No service charge shall
be made to a holder of a beneficial interest in a Global Note or to a Holder of
a Definitive Note for any registration of transfer or exchange, but the Issuer
may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or transfer
pursuant to Sections 3.06, 3.09, 4.10 and 4.14 hereof).

 

(iii)          The Registrar shall not
be required to register the transfer of or exchange any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being redeemed
in part.

 

(iv)          All Global Notes and
Definitive Notes issued upon any registration of transfer or exchange of Global
Notes or Definitive Notes shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.

 

(v)           The Issuer shall not be
required (A) to issue, to register the transfer of or to exchange any Notes
during a period beginning at the opening of business 15 days before the day of
any selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, or (B) to register the
transfer of or to exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.

 

(vi)          Prior to due presentment
for the registration of a transfer of any Note, the Trustee, any Agent and the
Issuer may deem and treat the Person in whose name any Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of such Notes and for all other purposes, and none of the Trustee,
any Agent or the Issuer shall be affected by notice to the contrary.

 

(vii)         The Trustee shall
authenticate Global Notes and Definitive Notes in accordance with the
provisions of Section 2.02 hereof.

 

(viii)        All certifications,
certificates and Opinions of Counsel required to be submitted to the Registrar
pursuant to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.

 

30

 

SECTION 2.07.    REPLACEMENT NOTES.

 

If any mutilated
Note is surrendered to the Trustee or the Issuer and the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, the
Issuer shall issue and the Trustee, upon receipt of an Authentication Order,
shall authenticate a replacement Note if the Trustee’s requirements are
met.  If required by the Trustee or the
Issuer, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced.  The
Issuer may charge for its expenses in replacing a Note.

 

Every replacement
Note is an additional obligation of the Issuer and shall be entitled to all of
the benefits of this Indenture equally and proportionately with all other Notes
duly issued hereunder.

 

SECTION 2.08.    OUTSTANDING NOTES.

 

The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding.  Except
as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Issuer or an Affiliate of the Issuer holds the Note;
however, Notes held by the Issuer or a Subsidiary of the Issuer shall not be
deemed to be outstanding for purposes of Section 3.07 hereof.

 

If a Note is replaced
pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser.

 

If the principal
amount of any Note is considered paid under Section 4.01 hereof, it ceases
to be outstanding and the accretion of principal ceases.

 

If the Paying
Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof)
holds, on a redemption date or maturity date, money sufficient to pay Notes
payable on that date, then on and after that date such Notes shall be deemed to
be no longer outstanding and shall cease to accrete principal.

 

SECTION 2.09.    TREASURY NOTES.

 

In determining
whether the Holders of the required principal amount at maturity of Notes have
concurred in any direction, waiver or consent, Notes owned by the Issuer, or by
any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Issuer, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned shall be so disregarded.

 

SECTION 2.10.    TEMPORARY NOTES.

 

Until certificates
representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon
receipt of an Authentication Order, shall authenticate temporary Notes.  Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary
Notes and as shall be reasonably acceptable to the Trustee.  Without unreasonable delay, the Issuer shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes.

 

31

 

Holders of
temporary Notes shall be entitled to all of the benefits of this Indenture.

 

SECTION 2.11.    CANCELLATION.

 

The Issuer at any time may deliver Notes to the
Trustee for cancellation.  The Registrar
and Paying Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. 
The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy canceled Notes (subject to the record retention requirement of
the Exchange Act).  Certification of the
destruction of all canceled Notes shall be delivered to the Issuer. 
The Issuer may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.

 

ARTICLE 3.

REDEMPTION AND PREPAYMENT

 

SECTION 3.01.    NOTICES TO TRUSTEE.

 

If the Issuer
elects to redeem Notes pursuant to the optional redemption provisions of
Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but
not more than 60 days before a redemption date, an Officers’ Certificate
setting forth (i) the clause of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the Accreted Value and principal
amount at maturity of Notes to be redeemed and (iv) the redemption price.

 

SECTION 3.02.    SELECTION OF NOTES TO BE REDEEMED.

 

If less than all
of the Notes are to be redeemed at any time, selection of Notes for redemption
will be made by the Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed,
or, if the Notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate; provided that no Notes of
$1,000 principal amount at maturity or less shall be redeemed in part.

 

The Trustee shall
promptly notify the Issuer in writing of the Notes selected for redemption and,
in the case of any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes and portions of Notes selected shall be in
amounts of $1,000 principal amount at maturity or whole multiples of $1,000
principal amount at maturity; except that if all of the Notes of a Holder are
to be redeemed, the entire outstanding amount of Notes held by such Holder,
even if not a multiple of $1,000 principal amount at maturity, shall be
redeemed.  Except as provided in the preceding sentence, provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.

 

SECTION 3.03.    NOTICE OF REDEMPTION.

 

Subject to the
provisions of Section 3.09 hereof, notices of redemption shall be mailed
by first class mail at least 30 but not more than 60 days before the redemption
date to each Holder of Notes to be redeemed at its registered address.  If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Note. Notes called for
redemption become due on the date fixed for redemption. On and after the
redemption date, principal ceases to accrete on Notes or portions of them
called for redemption.

 

The notice shall
identify the Notes to be redeemed and shall state:

 

32

 

(a)         the redemption date;

 

(b)         the redemption price;

 

(c)         if any Note is being redeemed in part, the portion of
the principal amount at maturity of such Note to be redeemed and that, after
the redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;

 

(d)         the name and address of the Paying Agent;

 

(e)         that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;

 

(f)          that, unless the Issuer defaults in making such
redemption payment, the principal of the Notes called for redemption ceases to
accrete on and after the redemption date;

 

(g)         the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and

 

(h)         that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.

 

At the Issuer’s
request, the Trustee shall give the notice of redemption in the Issuer’s name
and at the Issuer’s expense; provided, however, that the Issuer shall
have delivered to the Trustee, at least 45 days prior to the redemption date,
an Officers’ Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.

 

SECTION 3.04.    EFFECT OF NOTICE OF REDEMPTION.

 

Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called
for redemption become irrevocably due and payable on the redemption date at the
redemption price.  A notice of
redemption may not be conditional.

 

SECTION 3.05.    DEPOSIT OF REDEMPTION PRICE.

 

One Business Day
prior to the redemption date, the Issuer shall deposit with the Trustee or with
the Paying Agent money sufficient to pay the redemption price of all Notes to
be redeemed on that date.  The Trustee or the Paying Agent shall promptly
return to the Issuer any money deposited with the Trustee or the Paying Agent
by the Issuer in excess of the amounts necessary to pay the redemption price of
all Notes to be redeemed.

 

If the Issuer
complies with the provisions of the preceding paragraph, on and after the
redemption date, no accretion of principal amount of the Notes or the portions
of Notes called for redemption shall occur. 
If any Note called for redemption shall not be so paid upon surrender
for redemption because of the failure of the Issuer to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption date until such principal is paid, at the rate provided in the Notes
and in Section 4.01 hereof.

 

33

SECTION 3.06.    NOTES REDEEMED IN PART.

 

Upon surrender of a Note
that is redeemed in part, the Issuer shall issue and, upon the Issuer’s written
request, the Trustee shall authenticate for the Holder at the expense of the
Issuer a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.

 

SECTION 3.07.    OPTIONAL REDEMPTION.

 

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

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2004

  	
   

  	
  104.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  102.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2006 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)         Any redemption pursuant to this Section
3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06
hereof.

 

SECTION 3.08.    MANDATORY REDEMPTION.

 

The Issuer is not
required to make mandatory redemption of, or sinking fund payments with respect
to, the Notes.

 

SECTION 3.09.    OFFER TO PURCHASE BY APPLICATION
OF EXCESS PROCEEDS.

 

In the event that,
pursuant to Section 4.10 hereof, the Issuer shall be required to commence an
offer to all Holders to purchase Notes (an “Asset Sale Offer”), it shall follow the
procedures specified below.

 

The Asset Sale Offer
shall remain open for a period of 20 Business Days following its commencement
and no longer, except to the extent that a longer period is required by
applicable law (the “Offer Period”).  No later than five Business Days after the termination of the
Offer Period (the “Purchase Date”), the Issuer shall purchase
the principal amount of Notes required to be purchased pursuant to Section 4.10
hereof (the “Offer Amount”) or, if less than the Offer Amount has been
tendered, all Notes tendered in response to the Asset Sale Offer.

 

Upon the commencement of
an Asset Sale Offer, the Issuer shall send, by first class mail, a notice to
the Trustee and each of the Holders, with a copy to the Trustee.  The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer.  The Asset Sale Offer
shall be made to all Holders.  The
notice, which shall govern the terms of the Asset Sale Offer, shall state:

 

(a)         that the Asset Sale Offer is being made
pursuant to this Section 3.09 and Section 4.10 hereof and the length of
time the Asset Sale Offer shall remain open;

 

34

 

(b)         the Offer Amount, the purchase price and
the Purchase Date;

 

(c)         that any Note not tendered or accepted
for payment shall continue to accrete principal;

 

(d)         that, unless the Issuer defaults in
making such payment, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrete principal after the Purchase Date;

 

(e)         that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer may only elect to have all of such
Note purchased and may not elect to have only a portion of such Note purchased;

 

(f)          that Holders electing to have a Note
purchased pursuant to any Asset Sale Offer shall be required to surrender the
Note, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, or transfer by book-entry transfer, to the
Issuer, a depositary, if appointed by the Issuer, or a Paying Agent at the
address specified in the notice at least three days before the Purchase Date;

 

(g)         that Holders shall be entitled to
withdraw their election if the Issuer, the Depositary or the Paying Agent, as
the case may be, receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount at maturity of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Note purchased;

 

(h)         that, if the Accreted Value of Notes
surrendered by Holders exceeds the Offer Amount, the Issuer shall select the Notes
to be purchased on a pro rata basis (with such adjustments as
may be deemed appropriate by the Issuer so that only Notes in denominations of
$1,000 principal amount at maturity, or integral multiples thereof, shall be
purchased); and

 

(i)          that Holders whose Notes were purchased
only in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred by book-entry
transfer).

 

On or before the Purchase
Date, the Issuer shall, to the extent lawful, accept for payment, on a pro rata
basis to the extent necessary, the Offer Amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has
been tendered, all Notes tendered, and shall deliver to the Trustee an
Officers’ Certificate stating that such Notes or portions thereof were accepted
for payment by the Issuer in accordance with the terms of this Section
3.09.  The Issuer, the Depositary or the
Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering
Holder an amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Issuer for purchase, and the Issuer shall promptly
issue a new Note, and the Trustee, upon written request from the Issuer shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount at maturity equal to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly
mailed or delivered by the Issuer to the Holder thereof.  The Issuer shall publicly announce the
results of the Asset Sale Offer on the Purchase Date.

 

Other than as
specifically provided in this Section 3.09, any purchase pursuant to this
Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

 

35

 

ARTICLE 4.

COVENANTS

 

SECTION 4.01.    PAYMENT OF NOTES.

 

The Issuer shall pay or
cause to be paid the principal of, and premium, if any, on the Notes on the
dates and in the manner provided in the Notes. 
Principal and premium, if any, shall be considered paid on the date due
if the Paying Agent, if other than the Issuer or a Subsidiary thereof, holds as
of 10:00 a.m. Eastern Time on the due date money deposited by the Issuer in
immediately available funds and designated for and sufficient to pay all
principal and premium, if any, then due.

 

The Issuer shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at a rate equal to 18% per annum to the
extent lawful.

 

SECTION 4.02.    MAINTENANCE OF OFFICE OR AGENCY.

 

The Issuer shall maintain
in the Borough of Manhattan, the City of New York, an office or agency (which
may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. 
The Issuer shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency.  If at any time the Issuer shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.

 

The Issuer may also from
time to time designate one or more other offices or agencies where the Notes
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes.  The
Issuer shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

 

The Issuer hereby
designates the Corporate Trust Office of the Trustee as one such office or
agency of the Issuer in accordance with Section 2.03 hereof.

 

SECTION 4.03.    REPORTS.

 

Whether or not required
by the rules and regulations of the Commission, so long as any Notes are
outstanding, the Issuer will furnish to the Holders of Notes (a) all quarterly
and annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Issuer were required
to file such Forms, including a “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and, with respect to the annual
information only, a report thereon by the Issuer’s certified independent
accountants (provided that the Issuer may deliver financial information
with respect to its (direct or indirect) parent if the Issuer delivers to the
Trustee an Officer’s Certificate certifying that such financial information is
substantially equivalent to the financial information with respect to the
Issuer) and (b) all current reports that would be required to be filed with the
Commission on Form 8-K if the Issuer were required to file such reports, in
each case, within the time periods specified in the Commission’s rules and
regulations. In addition, the Issuer and the Guarantors have agreed that, for
so long as any Notes remain outstanding, they will furnish to the Holders and
to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

 

36

 

SECTION 4.04.    COMPLIANCE CERTIFICATE.

 

(a)         The Issuer and each Guarantor (to the
extent that such Guarantor is so required under the TIA) shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers’
Certificate stating that a review of the activities of the Issuer and its
Subsidiaries during the preceding fiscal year have been made under the
supervision of the signing Officers with a view to determining whether the
Issuer and each Guarantor have kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Issuer
or such Guarantor has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions of this Indenture
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Issuer is taking or proposes to take with respect thereto).

 

(b)         So long as not contrary to the then
current recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to
Section 4.03(a) above shall be accompanied by a written statement of the
Issuer’s independent public accountants (which shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Issuer has violated any provisions of Article 4
or Article 5 hereof or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any failure
to obtain knowledge of any such violation.

 

(c)         The Issuer shall, so long as any of the
Notes are outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers’ Certificate
specifying such Default or Event of Default and what action the Issuer is
taking or proposes to take with respect thereto.

 

SECTION 4.05.    TAXES.

 

The Issuer shall pay, and
shall cause each of its Subsidiaries to pay, prior to delinquency, all material
taxes, assessments, and governmental levies except such as are contested in
good faith and by appropriate proceedings or where the failure to effect
such payment is not adverse in any material respect to the Holders of the
Notes.

 

SECTION 4.06.    STAY, EXTENSION AND USURY LAWS.

 

The Issuer and each of
the Guarantors covenant (to the extent that they may lawfully do so) that they
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Issuer and each of the Guarantors
(to the extent that they may lawfully do so) hereby expressly waive all benefit
or advantage of any such law, and covenant that they shall not, by resort to
any such law, hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power
as though no such law has been enacted.

 

37

 

SECTION 4.07.    RESTRICTED PAYMENTS.

 

The Issuer shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
(a) declare or pay any dividend or make any other payment or distribution on
account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests
(other than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Issuer or dividends or distributions payable to the
Issuer or any Wholly Owned Restricted Subsidiary of the Issuer); (b) purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the
Issuer, any of its Restricted Subsidiaries or any other Affiliate of the Issuer
(other than any such Equity Interests owned by the Issuer or any Restricted
Subsidiary of the Issuer); (c) make any principal payment on or with respect
to, or purchase, redeem, defease or otherwise acquire or retire for value, any
Indebtedness of the Issuer that is subordinated in right of payment to the
Notes, except in accordance with the mandatory redemption or repayment
provisions set forth in the original documentation governing such Indebtedness
(but not pursuant to any mandatory offer to repurchase upon the occurrence of
any event); or (d) make any Restricted Investment (all such payments and other
actions set forth in clauses (a) through (d) above being collectively referred
to as “Restricted
Payments”).

 

The foregoing provisions
will not prohibit:

 

(a)         the payment of any dividend within 60
days after the date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Indenture;

 

(b)         (i) the redemption, repurchase,
retirement, defeasance or other acquisition of any subordinated Indebtedness or
Equity Interests of the Issuer (the “Retired Capital Stock”) in exchange for,
or out of the net cash proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Issuer) of, other Equity Interests of the Issuer
(other than any Disqualified Stock) (the “Refunding Capital Stock”), provided
that the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (iii)(B) of the preceding paragraph;

 

(c)         the defeasance, redemption, repurchase,
retirement or other acquisition of subordinated Indebtedness with the net cash
proceeds from an incurrence of, or in exchange for, Permitted Refinancing
Indebtedness;

 

(d)         the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Issuer or
Holdings held by any member of Holdings’ or the Issuer’s (or any of its
Restricted Subsidiaries’) management pursuant to any management equity
subscription agreement or stock option agreement and any dividend to Holdings
to fund any such repurchase, redemption, acquisition or retirement, provided
that (i) the aggregate price paid for all such repurchased, redeemed, acquired
or retired Equity Interests shall not exceed (x) $4.0 million in any calendar
year (with unused amounts in any calendar year being carried over to succeeding
calendar years subject to a maximum (without giving effect to the following
clause (y)) of $7.0 million in any calendar year), plus (y) the aggregate cash
proceeds received by the Issuer during such calendar year from any reissuance
of Equity Interests by the Issuer or Holdings to members of management of the
Issuer and its Restricted Subsidiaries and (ii) no Default or Event of Default
shall have occurred and be continuing immediately after such transaction;

 

(e)         the payment of dividends or the making of
loans or advances by the Issuer to Holdings not to exceed $3.0 million in any
fiscal year for costs and expenses incurred by Holdings in its capacity as a
holding company or for services rendered by Holdings on behalf of the Issuer;

 

(f)          payments or distributions to Holdings
pursuant to any Tax Sharing Agreement;

 

38

 

(g)         the payment of dividends by a Restricted
Subsidiary on any class of common stock of such Restricted Subsidiary if (i)
such dividend is paid pro rata to all holders of such class of common stock and
(ii) at least 51% of such class of common stock is held by the Issuer or one or
more of its Restricted Subsidiaries;

 

(h)         the repurchase of any class of common
stock of a Restricted Subsidiary if (i) such repurchase is made pro rata with
respect to such class of common stock and (ii) at least 51% of such class of
common stock is held by the Issuer or one or more of its Restricted
Subsidiaries;

 

(i)          any other Restricted Investment made in a
Permitted Business which, together with all other Restricted Investments made
pursuant to this clause (i) since the date of this Indenture, does not exceed
$25.0 million (in each case, after giving effect to all subsequent reductions
in the amount of any Restricted Investment made pursuant to this clause (i),
either as a result of (i) the repayment or disposition thereof for cash or (ii)
the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary
(valued proportionate to the Issuer’s equity interest in such Subsidiary at the
time of such redesignation) at the fair market value of the net assets of such
Subsidiary at the time of such redesignation), in the case of clause (i) and
(ii), not to exceed the amount of such Restricted Investment previously made
pursuant to this clause (i); provided that no Default or Event of
Default shall have occurred and be continuing immediately after making such
Restricted Investment;

 

(j)          the declaration and payment of dividends
to holders of any class or series of Disqualified Stock of the Issuer or any
Restricted Subsidiary issued on or after the date of this Indenture in
accordance with Section 4.09 hereof; provided that no Default or Event of
Default shall have occurred and be continuing immediately after making such
Restricted Payment;

 

(k)         repurchases of Equity Interests deemed to
occur upon exercise of stock options if such Equity Interests represent a
portion of the exercise price of such options;

 

(l)          the payment of dividends or distributions
on the Issuer’s common stock, following the first public offering of the
Issuer’s common stock or Holdings’ common stock after the date of this
Indenture, of up to 6.0% per annum of (i) the net proceeds received by the
Issuer from such public offering of its common stock or (ii) the net proceeds
received by the Issuer from such public offering of Holdings’ common stock as
common equity or preferred equity (other than Disqualified Stock), other than,
in each case, with respect to public offerings with respect to the Issuer’s
common stock or Holdings’ common stock registered on Form S-8; provided
that no Default or Event of Default shall have occurred and be continuing
immediately after any such payment of dividends or distributions;

 

(m)        the pledge by the Issuer of the Capital
Stock of an Unrestricted Subsidiary of the Issuer to secure Non-Recourse Debt
of such Unrestricted Subsidiary;

 

(n)         the purchase, redemption or other
acquisition or retirement for value of any Equity Interests of any Restricted
Subsidiary issued after the date of this Indenture, provided that the aggregate
price paid for any such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed the sum of (i) the amount of cash and Cash
Equivalents received by such Restricted Subsidiary from the issue or sale
thereof and (ii) any accrued dividends thereon the payment of which would be
permitted pursuant to clause (j) above;

 

(o)         any Investment in an Unrestricted
Subsidiary that is funded by Qualified Proceeds received by the Issuer on or
after the date of the Indenture from contributions to the Issuer’s capital or
from the issue and sale on or after the date of this Indenture of Equity
Interests of the Issuer or of Disqualified Stock or convertible debt securities
to the extent they have been converted into such Equity Interests (other than
Equity Interests, Disqualified Stock or convertible debt securities sold to a
Subsidiary of the Issuer and other

 

39

 

than Disqualified Stock or
convertible debt securities that have been converted into Disqualified Stock)
in an amount (measured at the time such Investment is made and without giving
effect to subsequent changes in value) that does not exceed the amount of such
Qualified Proceeds;

 

(p)         distributions or payments of Receivables
Fees; and

 

(q)         the repurchase of any Subordinated Debt
at a purchase price not greater than 101% of the principal amount (or accreted
value, as applicable) thereof in the event of (x) a Change of Control or (y) an
Asset Sale; provided that, in each case, prior to the repurchase, the Issuer
has made an offer to purchase the Notes pursuant to the Indenture and has
repurchased all Notes that were validly tendered for payment in connection with
the offer to purchase.

 

The board of directors of
the Issuer may designate any Restricted Subsidiary to be an Unrestricted
Subsidiary if such designation would not cause a Default. For purposes of
making such designation, all outstanding Investments by the Issuer and its
Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary
so designated will be deemed to be made at the time of such designation.  All such outstanding Investments will be
deemed to constitute Investments in an amount equal to the greater of (i) the
net book value of such Investments at the time of such designation and (ii) the
fair market value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Investment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.

 

The amount of (i) all
Restricted Payments (other than cash) shall be the fair market value on the
date of the Restricted Payment of the asset(s) or securities proposed to be
transferred or issued by the Issuer or such Restricted Subsidiary, as the case
may be, pursuant to the Restricted Payment and (ii) Qualified Proceeds (other
than cash) shall be the fair market value on the date of receipt thereof by the
Issuer of such Qualified Proceeds. The fair market value of any non-cash
Restricted Payment shall be determined by the board of directors of the Issuer
whose resolution with respect thereto shall be delivered to the Trustee. Not
later than the date of making any Restricted Payment, the Issuer shall deliver
to the Trustee an Officers’ Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.

 

SECTION 4.08.    DIVIDEND AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES.

 

The Issuer shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to
(a)(i) pay dividends or make any other distributions to the Issuer or any of
its Restricted Subsidiaries (A) on its Capital Stock or (B) with respect to any
other interest or participation in, or measured by, its profits, or (ii) pay
any Indebtedness owed to the Issuer or any of its Restricted Subsidiaries, (b)
make loans or advances to the Issuer or any of its Restricted Subsidiaries or
(c) transfer any of its properties or assets to the Issuer or any of its
Restricted Subsidiaries. However, the foregoing restrictions will not apply to
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of this Indenture, (b) the Senior Credit
Facility and the Second Lien Credit Facility as in effect as of the date of
this Indenture, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof, (c)
this Indenture and the Notes, (d) applicable law and any applicable rule,
regulation or order, (e) any agreement or instrument of a Person acquired by
the Issuer or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent created in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or

 

40

 

assets of any Person, other
than the Person, or the property or assets of the Person, so acquired, provided
that, in the case of Indebtedness, such Indebtedness was permitted by the terms
of this Indenture to be incurred, (f) customary non-assignment provisions in
leases and contracts entered into in the ordinary course of business and
consistent with past practices, (g) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (e) above on the property so acquired, (h) contracts
for the sale of assets, including, without limitation, customary restrictions
with respect to a Subsidiary pursuant to an agreement that has been entered into
for the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary, (i) Permitted Refinancing Indebtedness, provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are, in the good faith judgment of the Issuer’s board
of directors, not materially less favorable, taken as a whole, to the Holders
of the Notes than those contained in the agreements governing the Indebtedness
being refinanced, (j) secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 4.09 and 4.12 hereof that limit the right of the debtor to
dispose of the assets securing such Indebtedness, (k) restrictions on cash or
other deposits or net worth imposed by customers under contracts entered into
in the ordinary course of business, (l) other Indebtedness or Disqualified
Stock of Restricted Subsidiaries permitted to be incurred subsequent to the
Issuance Date pursuant to the provisions of Section 4.09 hereof, (m) customary
provisions in joint venture agreements and other similar agreements entered
into in the ordinary course of business, and (n) restrictions created in
connection with any Receivables Facility that, in the good faith determination
of the board of directors of the Issuer, are necessary or advisable to effect
such Receivables Facility.

 

SECTION 4.09.    INCURRENCE OF INDEBTEDNESS AND
ISSUANCE OF PREFERRED STOCK.

 

(a)         The Issuer shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively, “incur”)
any Indebtedness (including Acquired Indebtedness), (b) the Issuer will not,
and will not permit any of its Restricted Subsidiaries to, issue any shares of
Disqualified Stock and (c) the Issuer will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock.

 

The provisions of the
first paragraph of this Section 4.09 will not apply to the incurrence of any of
the following items of Indebtedness (collectively, “Permitted Indebtedness”):

 

(i)          the incurrence by the Issuer and its
Restricted Subsidiaries of Indebtedness under (a) the Senior Credit Facility; provided
that the aggregate principal amount of all Indebtedness (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Issuer and such Restricted Subsidiaries thereunder) then
classified as having been incurred in reliance upon this clause (i) (a) that
remains outstanding under the Senior Credit Facility after giving effect to
such incurrence does not exceed an amount equal to $114.5 million plus the Net
Senior Ratio Debt Amount (as defined in the Second Lien Credit Facility in effect
of the date of the Indenture); (b) the Second Lien Credit Facility; provided
that the aggregate principal amount of Indebtedness then classified as having
been incurred in reliance upon this clause (i)(b) that remains outstanding
under the Second Lien Credit Facility after giving effect to such incurrence
does not exceed an amount equal to (1) $80.0 million plus (2) any additional
amounts representing payment of interest thereon in kind and (c) any Credit
Facility; provided
that the aggregate principal amount of Indebtedness then classified as having
been incurred in reliance upon this clause (i)(c) that remains outstanding
under Credit Facilities after giving effect to such incurrence does not exceed
an amount equal to $20.0 million and provided further that such incurrence
under this clause (c) is permitted by Section 6.1(x) of the Second Lien Credit
Facility as in effect on the Issue Date;

 

(ii)         the incurrence by the Issuer and its
Restricted Subsidiaries of Existing Indebtedness;

 

41

 

(iii)        the
incurrence by the Issuer of Indebtedness represented by the Notes and this
Indenture and by the Guarantors of Indebtedness represented by the Note
Guarantees;

 

(iv)        the incurrence by Foreign Restricted
Subsidiaries of Indebtedness in an aggregate principal amount (or accreted
value, as applicable) not to exceed $10.0 million outstanding after giving
effect to such incurrence;

 

(v)         the incurrence by the Issuer or any of
its Restricted Subsidiaries of Indebtedness represented by Capital Expenditure
Indebtedness, Capital Lease Obligations or purchase money obligations, in each
case, incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or equipment
used in the business of the Issuer or such Restricted Subsidiary, in an
aggregate principal amount (or accreted value, as applicable) not to exceed
$7.5 million outstanding after giving effect to such incurrence;

 

(vi)        Indebtedness arising from agreements of
the Issuer or any Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Restricted Subsidiary
for the purpose of financing such acquisition; provided that (A) such
Indebtedness is not reflected on the balance sheet of the Issuer or any
Restricted Subsidiary (contingent obligations referred to in a footnote or
footnotes to financial statements and not otherwise reflected on the balance
sheet will not be deemed to be reflected on such balance sheet for purposes of
this clause (A)) and (B) the maximum assumable liability in respect of such
Indebtedness shall at no time exceed the gross proceeds including non-cash
proceeds (the fair market value of such non-cash proceeds being measured at the
time received and without giving effect to any subsequent changes in value)
actually received by the Issuer and/or such Restricted Subsidiary in connection
with such disposition;

 

(vii)       the
incurrence by the Issuer or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred;

 

(viii)      the
incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Issuer and/or any of its Restricted
Subsidiaries; provided that (i) if the Issuer is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Notes, (ii) the
aggregate principal amount (or accreted value, as applicable) of such
Indebtedness of Foreign Restricted Subsidiaries owed to the Issuer or any
Domestic Subsidiary, plus the aggregate amount of outstanding
Investments (valued at the time made, without taking into account subsequent
changes in value) by the Issuer and its Domestic Subsidiaries in Foreign
Restricted Subsidiaries pursuant to clause (a) of the definition of “Permitted
Investments” shall not exceed at any time $10.0 million and (iii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Issuer or a Restricted
Subsidiary thereof and (B) any sale or other transfer of any such Indebtedness
to a Person that is not either the Issuer or a Restricted Subsidiary thereof
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Issuer or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (viii);

 

(ix)         the incurrence by the Issuer or any of
its Restricted Subsidiaries of Hedging Obligations that are incurred for the
purpose of fixing or hedging (A) interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this Indenture to
be outstanding and (B) exchange rate risk with respect to agreements or
Indebtedness of such Person payable denominated in a currency other than U.S.

 

42

 

dollars, provided that such
agreements do not increase the Indebtedness of the obligor outstanding at any
time other than as a result of fluctuations in foreign currency exchange rates
or interest rates or by reason of fees, indemnities and compensation payable
thereunder;

 

(x)          the guarantee by the Issuer or any of its
Restricted Subsidiaries of Indebtedness of the Issuer or a Restricted
Subsidiary of the Issuer that was permitted to be incurred by another provision
of this Section 4.09;

 

(xi)         the incurrence by the Issuer or any of
its Restricted Subsidiaries of Acquired Indebtedness in an aggregate principal
amount (or accreted value, as applicable) not to exceed $5.0 million
outstanding after giving effect to such incurrence;

 

(xii)        obligations
in respect of performance and surety bonds and completion guarantees provided
by the Issuer or any Restricted Subsidiary in the ordinary course of business;

 

(xiii)       the
incurrence by the Issuer or any of its Restricted Subsidiaries of additional
Indebtedness in an aggregate principal amount (or accreted value, as
applicable) outstanding after giving effect to such incurrence, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xiii), not to exceed $10.0
million; and

 

(xiv)      the
incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness under
the Senior Subordinated Notes in an aggregate principal amount of (a) $100
million minus
(b) the aggregate principal amount of Exchanged Senior Subordinated Notes.

 

For purposes of
determining compliance with this Section 4.09, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted
Indebtedness described in clauses (i) through (xiv) above, the Issuer shall, in
its sole discretion, classify such item of Indebtedness in any manner that
complies with this Section 4.09 and such item of Indebtedness will be treated
as having been incurred pursuant to only one of such clauses. In addition, the
Issuer may, at any time, change the classification of an item of Indebtedness
(or any portion thereof) to any other clause provided that the Issuer
would be permitted to incur such item of Indebtedness (or such portion thereof)
pursuant to such other clause at such time of reclassification. Accrual of
interest, accretion or amortization of original issue discount will not be
deemed to be an incurrence of Indebtedness for purposes of this Section 4.09.

 

SECTION 4.10.    ASSET SALES

 

The Issuer shall not, and
shall not permit any of its Restricted Subsidiaries to, consummate an Asset
Sale unless (a) the Issuer or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
fair market value (evidenced by a resolution of the board of directors set
forth in an Officers’ Certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of and (b) at least 75%
of the consideration therefor received by the Issuer or such Restricted
Subsidiary is in the form of (i) cash or Cash Equivalents or (ii) property or
assets that are used or useful in a Permitted Business, or the Capital Stock of
any Person engaged in a Permitted Business if, as a result of the acquisition
by the Issuer or any Restricted Subsidiary thereof, such Person becomes a
Restricted Subsidiary; provided that the amount of (x) any
liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most
recent balance sheet), of the Issuer or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any guarantee thereof) that are assumed by the transferee of any
such assets pursuant to a customary novation agreement that releases the Issuer
or such Restricted Subsidiary from further liability, (y) any securities, notes
or other obligations received by the Issuer or any such Restricted Subsidiary
from such transferee that are contemporaneously (subject to

 

43

 

ordinary settlement periods)
converted by the Issuer or such Restricted Subsidiary into cash or Cash
Equivalents (to the extent of the cash or Cash Equivalents received), and (z)
any Designated Noncash Consideration received by the Issuer or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate fair market
value, taken together with all other Designated Noncash Consideration received
pursuant to this clause (z) that is at that time outstanding, not to exceed 15%
of Total Assets at the time of the receipt of such Designated Noncash
Consideration (with the fair market value of each item of Designated Noncash
Consideration being measured at the time received and without giving effect to
subsequent changes in value), shall be deemed to be cash for purposes of this
Section 4.10; and provided further that the 75% limitation referred to in
clause (b) above will not apply to any Asset Sale in which the cash or Cash
Equivalents portion of the consideration received therefrom, determined in
accordance with the foregoing proviso, is equal to or greater than what the
after-tax proceeds would have been had such Asset Sale complied with the
aforementioned 75% limitation.

 

Within 365 days after the
receipt of any Net Proceeds from an Asset Sale, the Issuer or any such
Restricted Subsidiary shall apply such Net Proceeds, at its option (or to the
extent the Issuer is required to apply such Net Proceeds pursuant to the terms
of the Senior Credit Facility or Second Lien Credit Facility), to (a) repay or
purchase Pari Passu Indebtedness of the Issuer or any Indebtedness of any
Restricted Subsidiary, provided that, if the Issuer shall so
repay or purchase Pari Passu Indebtedness of the Issuer (other than secured
Indebtedness), it will equally and ratably reduce Indebtedness under the Notes
if the Notes are then redeemable, or, if the Notes may not then be redeemed,
the Issuer shall make an offer (in accordance with the procedures set forth
below for an Asset Sale Offer) to all Holders of Notes to purchase at a
purchase price equal to 100% of the Accreted Value of the Notes, the Notes that
would otherwise be redeemed or (b) an investment in property, the making
of a capital expenditure or the acquisition of assets that are used or useful
in a Permitted Business, or Capital Stock of any Person primarily engaged in a
Permitted Business if (i) as a result of the acquisition by the Issuer or
any Restricted Subsidiary thereof, such Person becomes a Restricted Subsidiary
or (ii) the Investment in such Capital Stock is permitted by clause
(f) of the definition of Permitted Investments. Pending the final
application of any such Net Proceeds, the Issuer may temporarily reduce
Indebtedness or otherwise invest such Net Proceeds in any manner that is not
prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not
applied or invested as provided in the first sentence of this paragraph will be
deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Issuer shall be required to make an offer to all
Holders of Notes (an “Asset Sale Offer”) to purchase the maximum principal
amount at maturity of Notes that may be purchased out of the Excess Proceeds,
at an offer price in cash in an amount equal to 100% of the Accreted Value
thereof, in accordance with the procedures set forth in this Indenture. To the
extent that any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Issuer may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes
surrendered by Holders thereof in connection with an Asset Sale Offer exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased
as set forth in Section 3.02 hereof. Upon completion of such offer to purchase,
the amount of Excess Proceeds shall be reset at zero.

 

The Issuer shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Indenture
relating to such Asset Sale Offer, the Issuer will comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations described in this Indenture by virtue thereof.

 

44

 

SECTION 4.11.    TRANSACTIONS WITH AFFILIATES.

 

The Issuer shall not, and
shall not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate of the Issuer (each of the
foregoing, an “Affiliate Transaction”), unless (a) such Affiliate
Transaction is on terms that are no less favorable to the Issuer or such
Restricted Subsidiary than those that would have been obtained in a comparable
transaction by the Issuer or such Restricted Subsidiary with an unrelated
Person and (b) the Issuer delivers to the Trustee, with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $7.5 million, either (i) a resolution of
the board of directors set forth in an Officers’ Certificate certifying that
such Affiliate Transaction complies with clause (a) above and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the board of directors or (ii) an opinion as to the fairness to the
Holders of such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national standing.

 

Notwithstanding the
foregoing, the following items shall not be deemed to be Affiliate
Transactions:

 

(a) customary directors’
fees, indemnification or similar arrangements or any employment agreement or
other compensation plan or arrangement entered into by the Issuer or any of its
Restricted Subsidiaries in the ordinary course of business (including ordinary
course loans to employees not to exceed (i) $5.0 million outstanding in the
aggregate at any time and (ii) $2.0 million to any one employee) and consistent
with the past practice of the Issuer or such Restricted Subsidiary; (b)
transactions between or among the Issuer and/or its Restricted Subsidiaries;
(c) payments of customary fees by the Issuer or any of its Restricted
Subsidiaries to DLJMB and its Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures which are approved by a majority of the board of
directors in good faith; (d) any agreement as in effect on the date of this
Indenture or any amendment thereto (so long as such amendment is not
disadvantageous to the Holders of the Notes in any material respect) or any
transaction contemplated thereby; (e) payments and transactions in connection
with the Senior Credit Facility and the Second Lien Credit Facility, and the
payment of the fees and expenses with respect thereto; (f) Restricted Payments
that are permitted by Section 4.07 hereof and any Permitted Investments; (g)
payments and transactions in connection with the GTP Investment, and the
payment of fees and expenses with respect thereto; and (h) sales of accounts
receivable, or participations therein, in connection with any Receivables
Facility.

 

SECTION 4.12.    LIENS.

 

The Issuer shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, assume or suffer to exist any Lien, other than a Permitted Lien,
that secures obligations under any Pari Passu Indebtedness or subordinated
Indebtedness of the Issuer or any Restricted Subsidiary on any asset or
property now owned or hereafter acquired by the Issuer or any of its Restricted
Subsidiaries, or any income or profits therefrom or assign or convey any right
to receive income therefrom, unless the Notes are equally and ratably secured
with the obligations so secured until such time as such obligations are no
longer secured by a Lien; provided that, in any case involving a
Lien securing subordinated Indebtedness of the Issuer, such Lien is
subordinated to the Lien securing the Notes to the same extent that such
subordinated Indebtedness is subordinated to the Notes.

 

SECTION 4.13.    CORPORATE EXISTENCE.

 

Subject to Article 5
hereof, the Issuer shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) the corporate, partnership or
other existence of itself and each of its

 

45

 

Subsidiaries, in accordance
with the respective organizational documents (as the same may be amended from time
to time) of the Issuer or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Issuer and its Subsidiaries; provided,
however, that the Issuer shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence
of itself and any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Issuer and its Subsidiaries, taken as a whole, and that
the loss thereof is not adverse in any material respect to the Holders of the
Notes.

 

SECTION 4.14.    OFFER TO REPURCHASE UPON CHANGE OF
CONTROL.

 

(a)         Upon the occurrence of a Change of
Control, each Holder of Notes will have the right to require the Issuer to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder’s Notes pursuant to the offer described below (the “Change of
Control Offer”) at an offer price in cash equal to 101% of the
aggregate Accreted Value thereof (the “Change of Control Payment”).  Within 60 days following any Change of
Control, the Issuer will (or will cause the Trustee to) mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes on the date specified in such notice,
which date shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed (the “Change of Control Payment Date”), pursuant
to the procedures required by this Indenture and described in such notice. The
Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of the
Notes as a result of a Change of Control. To the extent that the provisions of
any securities laws or regulations conflict with the provisions of this
Indenture relating to such Change of Control Offer, the Issuer shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached their obligations described in this Indenture by virtue thereof.

 

On the Change of Control
Payment Date, the Issuer shall, to the extent lawful, (a) accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, (b) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions thereof so tendered and
(c) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers’ Certificate stating the aggregate Accreted Value and
principal amount at maturity of Notes or portions thereof being purchased by
the Issuer. The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book-entry) to
each Holder a new Note equal in principal amount at maturity to any unpurchased
portion of the Notes surrendered, if any; provided that each such new Note will be
in a principal amount at maturity of $1,000 or an integral multiple
thereof.  Prior to complying with the
provisions of this Section 4.14, but in any event within 90 days following a
Change of Control, the Issuer shall either repay all outstanding Indebtedness
or obtain the requisite consents, if any, under all agreements governing
outstanding Indebtedness to permit the repurchase of Notes required by this
Section 4.14. The Issuer shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.

 

(b)         Notwithstanding anything to the contrary
in this Section 4.14, the Issuer will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Issuer and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.

 

46

 

SECTION 4.15.    SALE AND LEASEBACK TRANSACTIONS.

 

The Issuer shall not, and
shall not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction; provided that the Issuer or any Restricted
Subsidiary may enter into a sale and leaseback transaction if (a) the Issuer or
such Restricted Subsidiary, as the case may be, could have (i) incurred
Indebtedness in an amount equal to the Attributable Indebtedness relating to
such sale and leaseback transaction pursuant to Section 4.09 herein and (ii)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof,
(b) the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the board of
directors and set forth in an Officers’ Certificate delivered to the Trustee)
of the property that is the subject of such sale and leaseback transaction and
(c) the transfer of assets in such sale and leaseback transaction is permitted
by, and the Issuer applies the proceeds of such transaction in compliance with,
Section 4.10 hereof.

 

SECTION 4.16.    ACCOUNTS RECEIVABLE FACILITY

 

No Accounts Receivable
Subsidiary will incur any Indebtedness if immediately after giving effect to
such incurrence the aggregate outstanding Indebtedness of all Accounts
Receivable Subsidiaries (excluding any Indebtedness owed to the Issuer or any
Restricted Subsidiary) would exceed $60.0 million.

 

SECTION 4.17.    ADDITIONAL NOTE GUARANTEES

 

If the Issuer acquires or
creates any new Domestic Subsidiary, then such Domestic Subsidiary shall become
a Guarantor by executing a Supplemental Indenture in the form attached hereto
as Exhibit E and deliver an Opinion of Counsel to the Trustee to the effect
that such Supplemental Indenture has been duly authorized, executed and
delivered by such Subsidiary and constitutes a valid and binding obligation of
such Subsidiary, enforceable against such Subsidiary in accordance with its
terms (subject to customary exceptions).

 

ARTICLE 5.

SUCCESSORS

 

SECTION 5.01.    MERGER, CONSOLIDATION, OR SALE OF
ASSETS.

 

The Issuer may not
consolidate or merge with or into (whether or not the Issuer is the surviving
corporation), or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person unless (a) the Issuer is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than the Issuer) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a corporation organized
or existing under the laws of the United States, any state thereof or the
District of Columbia, (b) the Person formed by or surviving any such
consolidation or merger (if other than the Issuer) or the Person to which such
sale, assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Issuer under the Registration Rights
Agreement, the Notes and this Indenture pursuant to a supplemental indenture in
a form reasonably satisfactory to the Trustee, (c) immediately after such
transaction no Default or Event of Default exists and (d) the Issuer or the
Person formed by or surviving any such consolidation or merger (if other than
the Issuer), or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made (i) will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at
the beginning of the applicable four-quarter period, have a Fixed Charge
Coverage Ratio of at least 2.0 to 1 or (ii) would (together with its Restricted
Subsidiaries) have a higher Fixed Charge Coverage Ratio immediately after such
transaction (after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period) than the Fixed
Charge Coverage Ratio of the Issuer and its Restricted Subsidiaries immediately
prior to such transaction. The foregoing clause (d) will

 

47

 

not prohibit (a) a merger
between the Issuer and a Wholly Owned Subsidiary of Holdings created for the
purpose of holding the Capital Stock of the Issuer, (b) a merger between the
Issuer and a Wholly Owned Restricted Subsidiary or (c) a merger between the
Issuer and an Affiliate incorporated solely for the purpose of reincorporating
the Issuer in another State of the United States so long as, in each case, the
amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not
increased thereby.  The Issuer shall not
lease all or substantially all of its assets to any Person.

 

SECTION 5.02.    SUCCESSOR CORPORATION SUBSTITUTED.

 

Upon any consolidation or
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Issuer in accordance
with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Issuer is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the “Issuer” shall refer instead to
the successor corporation and not to the Issuer), and may exercise every right
and power of the Issuer under this Indenture with the same effect as if such
successor Person had been named as the Issuer herein; provided, however, that the
predecessor Issuer shall not be relieved from the obligation to pay the
principal of the Notes except in the case of a sale of all of the Issuer’s
assets that meets the requirements of Section 5.01 hereof.

 

ARTICLE 6.

DEFAULTS AND REMEDIES

 

SECTION 6.01.    EVENTS OF DEFAULT.

 

Each of the following
constitutes an Event of Default:

 

(a)         default in payment when due of the
principal of or premium, if any, on the Notes;

 

(b)         failure by the Issuer or any of its
Restricted Subsidiaries for 30 days after receipt of notice from the Trustee or
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with Sections 4.07, 4.09, 4.10, 4.14 or Article 5 hereof;

 

(c)         failure by the Issuer for 60 days after
notice from the Trustee or the Holders of at least 25% in principal amount of
the Notes then outstanding to comply with any of its other agreements in this
Indenture or the Notes;

 

(d)         default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Issuer or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Issuer or
any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, which default (i) is
caused by a failure to pay Indebtedness at its stated final maturity (after
giving effect to any applicable grace period provided in such Indebtedness) (a
“Payment
Default”) or (ii) results in the acceleration of such Indebtedness
prior to its stated final maturity and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10.0 million or more;

 

(e)         failure by the Issuer or any of its
Restricted Subsidiaries to pay final judgments aggregating in excess of $10.0
million (net of any amounts with respect to which a reputable and creditworthy
insurance

 

48

 

company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days;

 

(f)          except as permitted by this Indenture,
any Note Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Note Guarantee; and

 

(g)         the Issuer or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, pursuant to or
within the meaning of Bankruptcy Law:

 

(i)            commences
a voluntary case,

 

(ii)           consents
to the entry of an order for relief against it in an involuntary case,

 

(iii)          consents to the appointment of a Custodian of
it or for all or substantially all of its property,

 

(iv)          makes
a general assignment for the benefit of its creditors, or

 

(v)           generally
is not paying its debts as they become due; or

 

(h)         a court of competent jurisdiction enters
an order or decree under any Bankruptcy Law that:

 

(i)            is
for relief against the Issuer or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary case;

 

(ii)           appoints
a Custodian of the Issuer or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or substantially
all of the property of the Issuer or any of its Restricted Subsidiaries that is
a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary; or

 

(iii)          orders the liquidation of the Issuer or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary;

 

and the order or decree
remains unstayed and in effect for 60 consecutive days.

 

SECTION 6.02.    ACCELERATION.

 

If any Event of Default
(other than an Event of Default specified in clause (g) or (h) of Section 6.01
hereof with respect to the Issuer, any Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount at maturity of the
then outstanding Notes may declare the Accreted Value of all the Notes to be
due and payable immediately.  Upon any
such declaration, the Accreted Value of the Notes shall become due and payable
immediately.  Notwithstanding the
foregoing, if an Event of Default specified in clause (g) or (h) of Section
6.01 hereof occurs with respect

 

49

 

to the Issuer, any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, the Accreted Value of all outstanding Notes shall become due and
payable immediately without further action or notice.  The Holders of a majority in aggregate principal amount at
maturity of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest or premium
that has become due solely because of the acceleration) have been cured or
waived, provided
that, in the event of a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the acceleration
of any Indebtedness described in clause (d) of Section 6.01 hereof, the
declaration of acceleration of the Notes shall be automatically annulled if the
holders of any Indebtedness described in clause (d) have rescinded the
declaration of acceleration in respect of such Indebtedness within 30 days of
the date of such declaration and if (i) the annulment of the acceleration
of the Notes would not conflict with any judgment or decree of a court of
competent jurisdiction and (ii) all existing Events of Default, except
non-payment of principal or interest on the Notes that became due solely
because of the acceleration of the Notes, have been cured or waived.

 

SECTION 6.03.    OTHER REMEDIES.

 

If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal, or premium, if any, on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain
a proceeding even if it does not possess any of the Notes or does not produce
any of them in the proceeding.  A delay or omission by the Trustee or any
Holder of a Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. 
All remedies are cumulative to the extent permitted by law.

 

SECTION 6.04.    WAIVER OF PAST DEFAULTS.

 

Holders of not less than
a majority in aggregate principal amount at maturity of the then outstanding
Notes by notice to the Trustee may on behalf of the Holders of all of the Notes
waive an existing Default or Event of Default and its consequences hereunder,
except a continuing Default or Event of Default in the payment of the principal
of, and premium on, the Notes (including in connection with an offer to
purchase) (provided,
however, that the Holders of a majority in aggregate principal
amount at maturity of the then outstanding Notes may rescind an acceleration
and its consequences, including any related payment default that resulted from
such acceleration).  Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.

 

SECTION 6.05.    CONTROL BY MAJORITY.

 

Holders of a majority in
principal amount at maturity of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.

 

50

 

SECTION 6.06.    LIMITATION ON SUITS.

 

A Holder of a Note may
pursue a remedy with respect to this Indenture or the Notes only if:

 

(a)         the Holder of a Note gives to the Trustee
written notice of a continuing Event of Default;

 

(b)         the Holders of at least 25% in principal
amount at maturity of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;

 

(c)         such Holder of a Note or Holders of Notes
offer and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;

 

(d)         the Trustee does not comply with the
request within 60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and

 

(e)         during such 60-day period the Holders of
a majority in principal amount at maturity of the then outstanding Notes do not
give the Trustee a direction inconsistent with the request.

 

A Holder of a Note may
not use this Indenture to prejudice the rights of another Holder of a Note or
to obtain a preference or priority over another Holder of a Note.

 

SECTION 6.07.    RIGHTS OF HOLDERS OF NOTES TO
RECEIVE PAYMENT.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of principal, and premium, if any, on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.

 

SECTION 6.08.    COLLECTION SUIT BY TRUSTEE.

 

If an Event of Default
specified in Section 6.01 (a) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Issuer for the whole amount of principal of, and premium and
interest on overdue principal and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel.

 

SECTION 6.09.    TRUSTEE MAY FILE PROOFS OF CLAIM.

 

The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Issuer (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee,
and in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof.  To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such

 

51

 

proceeding, shall be denied for
any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.  Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.

 

SECTION 6.10.    PRIORITIES.

 

If the Trustee collects
any money pursuant to this Article 6, it shall pay out the money in the
following order:

 

First:  to the Trustee, its agents and
attorneys for amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;

 

Second:  to Holders of
Notes for amounts due and unpaid on the Notes for principal, premium and
interest, if any, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal, premium
and interest, if any, respectively; and

 

Third:  to the Issuer or to such party
as a court of competent jurisdiction shall direct.

 

The Trustee may fix a
record date and payment date for any payment to Holders of Notes pursuant to
this Section 6.10.

 

SECTION 6.11.    UNDERTAKING FOR COSTS.

 

In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section does not
apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
at maturity of the then outstanding Notes.

 

ARTICLE 7.

TRUSTEE

 

SECTION 7.01.    DUTIES OF TRUSTEE.

 

(a)         If an Event of Default has occurred and
is continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in its
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.

 

(b)         Except during the continuance of an Event
of Default:

 

(i)            the
duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are
specifically set forth in this

 

52

 

Indenture and no others,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and

 

(ii)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture.  However, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.

 

(c)         The Trustee may not be relieved from
liabilities for its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:

 

(i)            this
paragraph does not limit the effect of paragraph (b) of this Section 7.01;

 

(ii)           the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and

 

(iii)          the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.

 

(d)         Whether or not therein expressly so
provided, every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (e) and (f) of this Section
7.01 and Section 7.02 hereof.

 

(e)         No provision of this Indenture shall
require the Trustee to expend or risk its own funds or incur any
liability.  The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability
or expense.

 

(f)          The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Issuer.  Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.

 

SECTION 7.02.    RIGHTS OF TRUSTEE.

 

(a)         The Trustee may conclusively rely upon
any document believed by it to be genuine and to have been signed or presented
by the proper Person.  The Trustee need not investigate any fact or matter
stated in the document.

 

(b)         Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate or an Opinion of Counsel or
both.  The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate or Opinion of Counsel.  The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

 

(c)         The Trustee may act through its attorneys
and agents and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.

 

53

 

(d)         The Trustee shall not be liable for any
action it takes or omits to take in good faith that it believes to be
authorized or within the rights or powers conferred upon it by this Indenture.

 

(e)         Unless otherwise specifically provided in
this Indenture, any demand, request, direction or notice from the Issuer shall
be sufficient if signed by an Officer of the Issuer.

 

(f)          The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.

 

(g)         Except with respect to Section 4.01
hereof, the Trustee shall have no duty to inquire as to the performance of the
Issuer’s covenants in Article 4 hereof. 
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.01(a) and 4.01 or (ii) any Default or Event of Default of which
the Trustee shall have received written notification or obtained actual
knowledge.

 

(h)         The Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee may, in its discretion, make such
further inquiry or investigation into such facts or matters as it may see fit
and if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer personally or by agent or attorney.

 

SECTION 7.03.    INDIVIDUAL RIGHTS OF TRUSTEE.

 

The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or any Affiliate of the Issuer with the same
rights it would have if it were not Trustee.  However, in the event that
the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as trustee
or resign.  Any Agent may do the same
with like rights and duties.  The
Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

SECTION 7.04.    TRUSTEE’S DISCLAIMER.

 

The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Issuer’s use
of the proceeds from the Notes or any money paid to the Issuer or upon the
Issuer’s direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital herein or any statement in the Notes or any other document in
connection with the sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.

 

SECTION 7.05.    NOTICE OF DEFAULTS.

 

If a Default or Event of
Default occurs and is continuing and if it is known to the Trustee, the Trustee
shall mail to Holders of Notes a notice of the Default or Event of Default
within 90 days after it occurs.  Except in the case of a Default or Event
of Default in payment of principal of, or premium, if any, on any Note, the
Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.

 

54

 

SECTION 7.06.    REPORTS BY TRUSTEE TO HOLDERS OF
THE NOTES.

 

Within 60 days after each
March 15 beginning with the March 15 following the date of this Indenture, and
for so long as Notes remain outstanding, the Trustee shall mail to the Holders
of the Notes a brief report dated as of such reporting date that complies with
TIA § 313(a) (but if no event described in TIA § 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted).  The Trustee also shall comply with TIA § 313 (b)(2).  The Trustee shall also transmit by mail all
reports as required by TIA § 313(c).

 

A copy of each report at
the time of its mailing to the Holders of Notes shall be mailed to the Issuer
and filed with the Commission and each stock exchange on which the Notes are
listed in accordance with TIA § 313(d).  The Issuer shall promptly
notify the Trustee when the Notes are listed on any stock exchange.

 

SECTION 7.07.    COMPENSATION AND INDEMNITY.

 

The Issuer shall pay to
the Trustee from time to time reasonable compensation for its acceptance of
this Indenture and services hereunder.  The Trustee’s compensation shall
not be limited by any law on compensation of a trustee of an express
trust.  The Issuer shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services.  Such expenses shall include
the reasonable compensation, disbursements and expenses of the Trustee’s agents
and counsel.

 

The Issuer shall
indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Issuer (including this Section
7.07) and defending itself against any claim (whether asserted by the Issuer or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith.  The Trustee shall notify the
Issuer promptly of any claim for which it may seek indemnity.  Failure by
the Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder.  The Issuer shall
defend the claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel and
the Issuer shall pay the reasonable fees and expenses of such counsel. 
The Issuer need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.

 

The obligations of the
Issuer under this Section 7.07 shall survive the satisfaction and discharge of
this Indenture.

 

To secure the Issuer’s
payment obligations in this Section, the Trustee shall have a Lien prior to the
Notes on all money or property held or collected by the Trustee, except that
held in trust to pay principal and interest on particular Notes.  Such Lien shall survive the satisfaction and
discharge of this Indenture.

 

When the Trustee incurs
expenses or renders services after an Event of Default specified in
Section 6.01(g) or (h) hereof occurs, the expenses and the compensation
for the services (including the fees and expenses of its agents and counsel)
are intended to constitute expenses of administration under any Bankruptcy Law.

 

The Trustee shall comply
with the provisions of TIA § 313(b)(2) to the extent applicable.

 

55

 

SECTION 7.08.    REPLACEMENT OF TRUSTEE.

 

A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee’s acceptance of appointment as provided in this
Section.

 

The Trustee may resign in
writing at any time and be discharged from the trust hereby created by so
notifying the Issuer.  The Holders of
Notes of a majority in principal amount at maturity of the then outstanding
Notes may remove the Trustee by so notifying the Trustee and the Issuer in
writing.  The Issuer may remove the
Trustee if:

 

(a)         the Trustee fails to comply with Section
7.10 hereof;

 

(b)         the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to the Trustee under
any Bankruptcy Law;

 

(c)         a Custodian or public officer takes
charge of the Trustee or its property; or

 

(d)         the Trustee becomes incapable of acting.

 

If the Trustee resigns or
is removed or if a vacancy exists in the office of Trustee for any reason, the
Issuer shall promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount at maturity of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Issuer.

 

If a successor Trustee
does not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Issuer, or the Holders of Notes of at least
10% in principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee, after
written request by any Holder of a Note who has been a Holder of a Note for at
least six months, fails to comply with Section 7.10 hereof, such Holder of
a Note may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Issuer.  Thereupon, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of
its succession to Holders of the Notes.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. 
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuer’s obligations under Section 7.07 hereof
shall continue for the benefit of the retiring Trustee.

 

SECTION 7.09.    SUCCESSOR TRUSTEE BY MERGER, ETC.

 

If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.

 

56

 

SECTION 7.10.    ELIGIBILITY; DISQUALIFICATION.

 

There shall at all times
be a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition.

 

This Indenture shall always
have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and
(5).  The Trustee is subject to TIA § 310(b).

 

SECTION 7.11.    PREFERENTIAL COLLECTION OF CLAIMS
AGAINST ISSUER.

 

The Trustee is subject to
TIA § 311(a), excluding any creditor relationship listed in TIA
§ 311(b).  A Trustee who has resigned or been removed shall be
subject to TIA § 311(a) to the extent indicated therein.

 

ARTICLE 8.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

SECTION 8.01.    OPTION TO EFFECT LEGAL DEFEASANCE
OR COVENANT DEFEASANCE.

 

The Issuer may, at
the option of its Board of Directors evidenced by a resolution set forth in an
Officers’ Certificate, at any time, elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article 8.

 

SECTION 8.02.    LEGAL DEFEASANCE AND DISCHARGE.

 

Upon the Issuer’s
exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, the Issuer and the Guarantors shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes and
Notes Guarantees on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”). 
For this purpose, Legal Defeasance means that the Issuer shall be deemed
to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be “outstanding” only
for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Issuer, shall execute proper instruments
acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder:

 

(a)         the rights of Holders of outstanding
Notes to receive payments in respect of the principal of, premium, if any, on
such Notes when such payments are due from the trust referred to below,

 

(b)         the Issuer’s obligations with respect to
the Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust,

 

(c)         the rights, powers, trusts, duties and
immunities of the Trustee, and the Issuer’s obligations in connection therewith
and

 

(d)         the Legal Defeasance provisions of this
Indenture.

 

57

 

SECTION 8.03.    COVENANT DEFEASANCE.

 

Upon the Issuer’s
exercise under Section 8.01 hereof of the option applicable to this Section
8.03, the Issuer and each Guarantor shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be released from their obligations
under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11,
4.12, 4.14, 4.15, 4.16 and 4.17 hereof with respect to the outstanding Notes on
and after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be
deemed not “outstanding” for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Issuer may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. 
In addition, upon the Issuer’s exercise under Section 8.01 hereof of the
option applicable to this Section 8.03 hereof, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through
6.01(f) hereof shall not constitute Events of Default.

 

SECTION 8.04.    CONDITIONS TO LEGAL OR COVENANT
DEFEASANCE.

 

The following shall be
the conditions to the application of either Section 8.02 or 8.03 hereof to
the outstanding Notes:

 

In order to exercise
either Legal Defeasance or Covenant Defeasance,

 

(a)         the Issuer must irrevocably deposit with
the Trustee, in trust, for the benefit of the Holders of the Notes, cash in
U.S. dollars, non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the Accreted Value of, and
premium, if any, on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Issuer must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;

 

(b)         in the case of Legal Defeasance, the
Issuer shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (i) the Issuer has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, subject to customary
assumptions and exclusions, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred;

 

(c)         in the case of Covenant Defeasance, the
Issuer shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to

 

58

 

federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred;

 

(d)         no Default or Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit) or, insofar as Events of Default from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 123rd day after the date
of deposit;

 

(e)         such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a default
under, any material agreement or instrument (other than this Indenture) to
which the Issuer or any of its Subsidiaries is a party or by which the Issuer
or any of its Subsidiaries is bound;

 

(f)          the Issuer must have delivered to the
Trustee an Opinion of Counsel to the effect that, subject to customary
assumptions and exclusions, after the 123rd day following the deposit, the
trust funds will not be subject to the effect of Section 547 of the United
States Bankruptcy Code or any analogous New York State law provision or any
other applicable federal or New York bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally;

 

(g)         the Issuer must deliver to the Trustee an
Officers’ Certificate stating that the deposit was not made by the Issuer with
the intent of preferring the Holders of Notes over the other creditors of the
Issuer with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuer or others; and

 

(h)         the Issuer must deliver to the Trustee an
Officers’ Certificate and an Opinion of Counsel (which opinion may be subject
to customary assumptions and exclusions), each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

 

SECTION 8.05.    DEPOSITED MONEY AND GOVERNMENT
SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.

 

Subject to
Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”)
pursuant to Section 8.04 hereof in respect of the outstanding Notes shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Notes and this Indenture, to the payment, either directly or through
any Paying Agent (including the Issuer acting as Paying Agent) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, and premium, if any, but such money need not
be segregated from other funds except to the extent required by law.

 

The Issuer shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the cash or non-callable Government Securities deposited
pursuant to Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.

 

Anything in this Article
8 to the contrary notwithstanding, the Trustee shall deliver or pay to the
Issuer from time to time upon the request of the Issuer any money or
non-callable Government Securities held by it as provided in Section 8.04
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee (which may be the opinion delivered under Section 8.04(a)
hereof), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

59

 

SECTION 8.06.    REPAYMENT TO ISSUER.

 

Any money deposited with
the Trustee or any Paying Agent, or then held by the Issuer, in trust for the
payment of the principal of, or premium, if any, on any Note and remaining unclaimed
for two years after such principal, and premium, if any, has become due and
payable shall be paid to the Issuer on its request or (if then held by the
Issuer) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Issuer for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Issuer as trustees thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuer cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer.

 

SECTION 8.07.    REINSTATEMENT.

 

If the Trustee or Paying
Agent is unable to apply any United States dollars or non-callable Government
Securities in accordance with Section 8.02 or 8.03 hereof, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Issuer’s obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or
8.03 hereof until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 or 8.03 hereof, as
the case may be; provided, however, that, if the Issuer makes any payment of
principal of and premium, if any, on any Note following the reinstatement of
its obligations, the Issuer shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

 

ARTICLE 9.

AMENDMENT, SUPPLEMENT AND WAIVER

 

SECTION 9.01.    WITHOUT CONSENT OF HOLDERS OF
NOTES.

 

Notwithstanding Section
9.02 of this Indenture, the Issuer, the Guarantors and the Trustee may amend or
supplement this Indenture, the Note Guarantees or the Notes without the consent
of any Holder of a Note:

 

(a)         to cure any ambiguity, defect or inconsistency;

 

(b)         to provide for uncertificated Notes in
addition to or in place of certificated Notes or to alter the provisions of
Article 2 hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;

 

(c)         to provide for the assumption of the
Issuer’s or Guarantor’s obligations to the Holders of the Notes by a successor
to the Issuer or a Guarantor pursuant to Article 5 or Article 10 hereof;

 

(d)         to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
materially adversely affect the legal rights hereunder of any Holder of the
Note;

 

(e)         to comply with requirements of the
Commission in order to effect or maintain the qualification of this Indenture
under the TIA;

 

60

 

(f)          to provide for the issuance of Additional
Notes in accordance with the limitations set forth in this Indenture as of the
date hereof; or

 

(g)         to allow any Guarantor to execute a
supplemental indenture and/or a Note Guarantee with respect to the Notes.

 

Upon the request of the
Issuer accompanied by a resolution of their Board of Directors authorizing the
execution of any such amended or supplemental Indenture, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee
shall join with the Issuer in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.

 

SECTION 9.02.    WITH CONSENT OF HOLDERS OF NOTES.

 

Except as provided below
in this Section 9.02, the Issuer and the Trustee may amend or supplement this
Indenture (including Section 3.09, 4.10 and 4.14 hereof), the Note Guarantees
and the Notes with the consent of the Holders of at least a majority in
principal amount at maturity of the Notes (including Additional Notes, if any)
then outstanding voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of
the principal of, and premium, if any, on the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture, the Note Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount at maturity
of the then outstanding Notes (including Additional Notes, if any) voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes).  Notwithstanding the foregoing, any amendment to or waiver of
Sections 4.10 and 4.14 hereof will require the consent of the Holders of at
least two-thirds in aggregate principal amount at maturity of the Notes then
outstanding if such amendment would materially adversely affect the rights of
Holders of Notes.  Section 2.08 hereof
shall determine which Notes are considered to be “outstanding” for purposes of
this Section 9.02.

 

Upon the request of the
Issuer accompanied by a resolution of its Board of Directors authorizing the
execution of any such amended or supplemental Indenture, and upon the filing
with the Trustee of evidence satisfactory to the Trustee of the consent of the
Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Issuer in the
execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture directly affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.

 

It shall not be necessary
for the consent of the Holders of Notes under this Section 9.02 to approve the
particular form of any proposed amendment or waiver, but it shall be sufficient
if such consent approves the substance thereof.

 

After an amendment,
supplement or waiver under this Section 9.02 becomes effective, the Issuer
shall mail to the Holders of Notes affected thereby a notice briefly describing
the amendment, supplement or waiver.  Any failure of the Issuer to mail
such notice, or any defect therein, shall not, however, in any way

 

61

 

impair or affect the validity
of any such amended or supplemental Indenture or waiver.  Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in aggregate principal amount at maturity of the
Notes (including Additional Notes, if any) then outstanding voting as a single
class may waive compliance in a particular instance by the Issuer with any
provision of this Indenture or the Notes. 
However, without the consent of each Holder affected, an amendment or
waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):

 

(a)         reduce the principal amount at maturity
of Notes whose Holders must consent to an amendment, supplement or waiver,

 

(b)         reduce the Accreted Value of or change
the fixed maturity of any Note or alter the provisions with respect to the
redemption of the Notes (other than Sections 4.10 and 4.14 hereof),

 

(c)         waive a Default or Event of Default in
the payment of principal of or premium, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount at maturity of the Notes and a waiver of the payment
default that resulted from such acceleration),

 

(d)         make any Note payable in money other than
that stated in the Notes,

 

(e)         make any change in the provisions of this
Indenture relating to waivers of past Defaults,

 

(f)          waive a redemption payment with respect
to any Note (other than Sections 4.10 and 4.14 hereof,

 

(g)         release any Guarantor from its
obligations under its Note Guarantee or this Indenture, except in accordance
with the terms of this Indenture, or

 

(h)         make any change in the foregoing amendment
and waiver provisions.

 

SECTION 9.03.    COMPLIANCE WITH TRUST INDENTURE
ACT.

 

Every amendment or
supplement to this Indenture or the Notes shall be set forth in an amended or
supplemental Indenture that complies with the TIA as then in effect.

 

SECTION 9.04.    REVOCATION AND EFFECT OF CONSENTS.

 

Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note
is a continuing consent by the Holder of a Note and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. 
An amendment, supplement or waiver becomes effective in accordance with
its terms and thereafter binds every Holder.

 

SECTION 9.05.    NOTATION ON OR EXCHANGE OF NOTES.

 

The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated.  The Issuer in exchange for all Notes may issue
and the Trustee shall, upon

 

62

 

receipt of an Authentication
Order, authenticate new Notes that reflect the amendment, supplement or waiver.

 

Failure to make the
appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.

 

SECTION 9.06.    TRUSTEE TO SIGN AMENDMENTS, ETC.

 

The Trustee shall sign
any amended or supplemental Indenture authorized pursuant to this Article 9 if
the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee.  The Issuer may not sign an
amendment or supplemental Indenture until its Board of Directors approves
it.  In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject
to Section 7.01 hereof) shall be fully protected in relying upon, in addition
to the documents required by Section 11.04 hereof, an Officer’s Certificate and
an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture.

 

ARTICLE 10.

NOTE GUARANTEES

 

SECTION 10.01.  GUARANTEE.

 

Subject to this Article
10, each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Issuer hereunder or thereunder, that:  (a) the Accreted Value of the
Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal on
the Notes, if any, if lawful, and all other obligations of the Issuer to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.  Failing payment when due
of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantors shall be jointly and severally obligated to pay the same
immediately.  Each Guarantor agrees that this is a guarantee of payment
and not a guarantee of collection.

 

The Guarantors hereby
agree that their obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Issuer, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.  Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Issuer, any right to require a proceeding first against
the Issuer, protest, notice and all demands whatsoever and covenant that this
Note Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.

 

If any Holder or the
Trustee is required by any court or otherwise to return to the Issuer, the
Guarantors or any custodian, trustee, liquidator or other similar official
acting in relation to either the Issuer or the Guarantors, any amount paid by
either to the Trustee or such Holder, this Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.

 

63

Each Guarantor agrees
that it shall not be entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until payment in full
of all obligations guaranteed hereby.  Each Guarantor further agrees that,
as between the Guarantors, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article 6 hereof for the purposes of this
Note Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any acceleration of such obligations as provided
in Article 6 hereof, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of
this Note Guarantee.  The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Guarantee.

 

SECTION 10.02.  LIMITATION ON GUARANTOR LIABILITY.

 

Each Guarantor, and by
its acceptance of Notes, each Holder, hereby confirms that it is the intention
of all such parties that the Note Guarantee of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Note Guarantee.  To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor under its Note Guarantee and this Article 10
shall be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that
are relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
this Article 10, result in the obligations of such Guarantor under its Note
Guarantee not constituting a fraudulent transfer or conveyance.

 

SECTION 10.03.  EXECUTION AND DELIVERY OF NOTE
GUARANTEE.

 

To evidence its Note
Guarantee set forth in Section 10.01, each Guarantor hereby agrees that this
Indenture shall be executed on behalf of such Guarantor by one of its officers.

 

If an Officer whose
signature is on this Indenture no longer holds that office at the time the
Trustee authenticates the Note, the Note Guarantee shall be valid nevertheless.

 

The delivery of any Note
by the Trustee, after the authentication thereof hereunder, shall constitute
due delivery of the Note Guarantee set forth in this Indenture on behalf of the
Guarantors.

 

In the event that the
Issuer creates or acquires any new Subsidiaries subsequent to the date of this
Indenture, if required by Section 4.17 hereof, the Issuer shall cause such
Subsidiaries to execute supplemental indentures to this Indenture in accordance
with Section 4.17 hereof and this Article 10, to the extent applicable.

 

SECTION 10.04.  GUARANTORS MAY CONSOLIDATE, ETC.,
ON CERTAIN TERMS.

 

No Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:

 

(a)         subject to Section 10.05 hereof, the
Person formed by or surviving any such consolidation or merger (if other than a
Guarantor or the Issuer) unconditionally assumes all the obligations of such

 

64

 

Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, this Indenture and the Note Guarantee on the terms
set forth herein or therein;

 

(b)         immediately after giving effect to such
transaction, no Default or Event of Default exists; and

 

(c)         the Issuer would, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at
the beginning of the applicable four-quarter period, have a Fixed Charge
Coverage Ratio of at least 2.0 to 1.

 

In case of any such
consolidation or merger, and upon the assumption by the successor Person, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor.  All the Note Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Note Guarantees theretofore and thereafter issued in accordance with the terms
of this Indenture as though all of such Note Guarantees had been issued at the
date of the execution hereof.

 

Except as set forth in
Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b) above,
nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Issuer or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Issuer or
another Guarantor.

 

SECTION 10.05.  RELEASES FOLLOWING SALE OF ASSETS.

 

In the event of a sale or
other disposition of all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
capital stock of any Guarantor, then such Guarantor (in the event of a sale or
other disposition, by way of merger, consolidation or otherwise, of all of the
capital stock of such Guarantor) or the corporation acquiring the property (in
the event of a sale or other disposition of all or substantially all of the
assets of such Guarantor) will be released and relieved of any obligations
under its Note Guarantee; provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.10
hereof.  Upon delivery by the Issuer to
the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Issuer in accordance with
the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Guarantor from its obligations under
its Note Guarantee.

 

Any Guarantor not
released from its obligations under its Note Guarantee shall remain liable for
the full amount of Accreted Value of the Notes and for the other obligations of
any Guarantor under this Indenture as provided in this Article 10.

 

ARTICLE 11.

MISCELLANEOUS

 

SECTION 11.01.  TRUST INDENTURE ACT CONTROLS.

 

If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA §
318(c), the imposed duties shall control.

 

65

 

SECTION 11.02.  NOTICES.

 

Any notice or
communication by the Issuer, any Guarantor or the Trustee to the others is duly
given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others’ address.

 

If to the Issuer and/or
Guarantor:

 

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite 180

El Segundo, California 90245

Telecopier No.:

Attention: Chief Financial Officer

 

With a copy to:

 

Davis Polk & Wardwell

450 Lexington Avenue

New York, New York 10017

Telecopier No.: (212) 450-4800

Attention: Michael Kaplan, Esq.

 

If to the Trustee:

 

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

Telecopier No.: 860-244-1889

Attention: Corporate Trust Administration

 

(a)           The Issuer, any Guarantor or the Trustee, by notice to
the others may designate additional or different addresses for subsequent
notices or communications.

 

All notices and
communications (other than those sent to Holders) shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.

 

Any notice or
communication to a Holder shall be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing
next day delivery to its address shown on the register kept by the
Registrar.  Any notice or communication shall also be so mailed to any
Person described in TIA § 313(c), to the extent required by the TIA.  Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.

 

If a notice or
communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.

 

If the Issuer mails a
notice or communication to Holders, it shall mail a copy to the Trustee and
each Agent at the same time.

 

66

 

SECTION 11.03.  COMMUNICATION BY HOLDERS OF NOTES
WITH OTHER HOLDERS OF NOTES.

 

Holders may communicate
pursuant to TIA § 312(b) with other Holders with respect to their rights
under this Indenture or the Notes.  The Issuer, the Trustee, the Registrar
and anyone else shall have the protection of TIA § 312(c).

 

SECTION 11.04.  CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT.

 

Upon any request or
application by the Issuer to the Trustee to take any action under this
Indenture, the Issuer shall furnish to the Trustee:

 

(a)         an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the opinion of
the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and

 

(b)         an Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the opinion of
such counsel, all such conditions precedent and covenants have been satisfied.

 

SECTION 11.05.  STATEMENTS REQUIRED IN CERTIFICATE
OR OPINION.

 

Each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture (other than a certificate provided pursuant to TIA
§ 314(a)(4)) shall comply with the provisions of TIA § 314(e) and
shall include:

 

(a)         a statement that the Person making such
certificate or opinion has read such covenant or condition;

 

(b)         a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

 

(c)         a statement that, in the opinion of such
Person, he or she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and

 

(d)         a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been satisfied.

 

SECTION 11.06.  RULES BY TRUSTEE AND AGENTS.

 

The Trustee may make
reasonable rules for action by or at a meeting of Holders.  The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.

 

SECTION 11.07.  NO PERSONAL LIABILITY OF
DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS.

 

No member, director,
officer, employee, incorporator or stockholder of the Issuer or any Guarantor,
as such, shall have any liability for any obligations of the Issuer or such
Guarantor under the Notes, the Note Guarantees or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation (it being understood that such waiver is not intended to waive any
claims with respect to applicable

 

67

 

fiduciary duties owed to the
Holders or fraud). Each Holder of Notes by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Notes.

 

SECTION 11.08.  GOVERNING LAW.

 

THE INTERNAL LAW OF THE
STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES
AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

 

SECTION 11.09.  NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.

 

This Indenture may not be
used to interpret any other indenture, loan or debt agreement of the Issuer or
its Subsidiaries or of any other Person.  Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.

 

SECTION 11.10.  SUCCESSORS.

 

All agreements of the
Issuer in this Indenture and the Notes shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successors.

 

SECTION 11.11.  SEVERABILITY.

 

In case any provision in
this Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

 

SECTION 11.12.  COUNTERPART ORIGINALS.

 

The parties may sign any
number of copies of this Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement.

 

SECTION 11.13.  TABLE OF CONTENTS, HEADINGS, ETC.

 

The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.

 

[Signatures on
following page]

 

68

 

SIGNATURES

 

	
  Dated as of July 23,
  2004

  	
   

  
	
   

  	
   

  
	
   

  	
  DECRANE AIRCRAFT HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/  R. JACK DECRANE

  	
   

  
	
   

  	
   

  	
  Name:  R. Jack DeCrane

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  AUDIO INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  CARL F. BOOTH & CO., LLC

  
	
   

  	
   

  
	
   

  	
  CUSTOM WOODWORK & PLASTICS, LLC

  
	
   

  	
   

  
	
   

  	
  DAH-IP HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  DAH-IP INFINITY, INC.

  
	
   

  	
   

  
	
   

  	
  DECRANE AIRCRAFT SEATING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  DECRANE CABIN INTERIORS-CANADA, INC.

  
	
   

  	
   

  
	
   

  	
  DECRANE CABIN INTERIORS, LLC

  
	
   

  	
   

  
	
   

  	
  HOLLINGSEAD INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  PATS AIRCRAFT, LLC

  
	
   

  	
   

  
	
   

  	
  PCI NEWCO, INC.

  
	
   

  	
   

  
	
   

  	
  PPI HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  PRECISION PATTERN, INC.

  
	
   

  	
   

  
	
   

  	
  THE INFINITY PARTNERS, LTD.

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/  R. JACK DECRANE

  	
   

  
	
   

  	
   

  	
  Name:  R. Jack DeCrane

  
	
   

  	
   

  	
  Title:  Authorized Signatory

  

 

69

 

	
  U.S. Bank National
  Association

  as Trustee

  
	
   

  
	
   

  
	
  BY:

  	
  /S/ CAUNA M. SILVA

  	
   

  
	
   

  	
  Name:  Cauna M. Silva

  
	
   

  	
  Title:  Vice President

  

 

70

 

EXHIBIT A-1

(Face of Note)

 

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

 

CUSIP
            

 

17% Senior
Discount Notes due 2008

 

	
  No. 1

  	
   

  	
  $[                   ]

  

 

DECRANE AIRCRAFT HOLDINGS, INC. (THE “ISSUER”)

 

promises to pay to
[           ], or
registered assigns, the principal sum of
                      
Dollars
($                   )
on September 30, 2008.

 

 

	
   

  	
  Dated: 
              ,
  200 

  
	
   

  	
   

  
	
   

  	
  DECRANE AIRCRAFT HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

This is one of the

Notes referred to in the

within-mentioned Indenture:

 

	
  U.S. BANK NATIONAL
  ASSOCIATION

  as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

A-1-1

 

(Back of Note)

 

17% Senior
Discount Notes due 2008

 

[THIS GLOBAL NOTE
IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS
NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT DECRANE AIRCRAFT HOLDINGS, INC.](1)

 

[THIS NOTE (OR ITS
PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1)
REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT HAS ACQUIRED THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT
OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)
(1), (2), (3) OR (7) OR REGULATION D UNDER THE SECURITIES ACT (AN “IAI”), (2)
AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
THE ISSUERS OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT AT MATURITY OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUERS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  AS USED HEREIN, THE

 

(1)          This should be included only if the Note is
being issued in global form.

 

A-1-2

 

TERMS “OFFSHORE TRANSACTION”
AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.]

 

Capitalized terms used
herein shall have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated.

 

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

 

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

 

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

 

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

 

5.             OPTIONAL
REDEMPTION.

 

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

 

A-1-3

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2004

  	
   

  	
  104.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  102.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  2006 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

6.             MANDATORY
REDEMPTION.

 

Except as set forth in
paragraph 7 below, the Issuer is not required to make mandatory redemption
of, or sinking fund payments with respect to, the Notes.

 

7.             REPURCHASE
AT OPTION OF HOLDER.

 

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

 

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

 

8.             NOTICE OF
REDEMPTION.  Notice of any redemption or offer to
purchase will be mailed at least 30 days but not more than 60 days before the
redemption or purchase date to each Holder of Notes to be redeemed or purchased
at such Holder’s registered address. 
Notes in denominations larger than $1,000 principal amount at maturity
may be redeemed in part but only in whole multiples of $1,000 principal amount
at maturity, unless all of the Notes held by a Holder are to be redeemed.

 

9.             DENOMINATIONS,
TRANSFER, EXCHANGE. 
The Notes are in registered form without coupons in denominations of $1,000
principal amount at maturity and integral multiples thereof.  The transfer
of Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Issuer may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.  The Issuer need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part.  Also, the
Issuer need not exchange or register the transfer of any Notes for a period of
15 days before a selection of Notes to be redeemed.

 

10.           PERSONS
DEEMED OWNERS. 
The registered Holder of a Note may be treated as its owner for all purposes.

 

A-1-4

 

11.           AMENDMENT,
SUPPLEMENT AND WAIVER. Subject to certain exceptions set forth in the Indenture, the
Indenture, the Note Guarantees or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount at
maturity of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount at maturity of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes).  Notwithstanding the foregoing, without the consent of any Holder
of Notes, the Issuer, the Guarantors and the Trustee may amend or supplement
the Indenture, the Note Guarantees or the Notes to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the assumption of the Issuer’s
obligations to Holders of Notes in the case of a merger or consolidation or
sale of all or substantially all of the Issuer’s assets, to make any change that
would provide any additional rights or benefits to the Holders of Notes or that
does not materially adversely affect the legal rights under the Indenture of
any such Holder, or to comply with requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act or to provide for additional Note Guarantees of the Notes.

 

12.           DEFAULTS
AND REMEDIES.

 

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

 

A-1-5

 

(b) In the event of a
declaration of acceleration of the Notes because an Event of Default has
occurred and is continuing as a result of the acceleration of any Indebtedness
described in clause (d) of the preceding paragraph, the declaration of
acceleration of the Notes shall be automatically annulled if the holders of any
Indebtedness described in clause (d) have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 days of the date of such
declaration and if (i) the annulment of the acceleration of the Notes would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, except non-payment of principal or
interest on the Notes that became due solely because of the acceleration of the
Notes, have been cured or waived.

 

13.           NOTE
GUARANTEES. The
payment of principal of, premium, and interest and Liquidated Damages, if any,
on the Notes are unconditionally guaranteed, jointly and severally, by the
Guarantors.

 

14.           ADDITIONAL
RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES.  In addition
to the rights provided to Holders of Notes under the Indenture, Holders of
Restricted Global Notes shall have the rights set forth in the Registration
Rights Agreement dated as of July 23, 2004, among the Issuer, the
Guarantors and the parties named on the signature pages thereof (the “Registration
Rights Agreement”).

 

15.           TRUSTEE
DEALINGS WITH ISSUER.  The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuer or its Affiliates, and may otherwise deal with Issuer or its Affiliates,
as if it were not the Trustee.

 

16.           NO
RECOURSE AGAINST OTHERS.  A director, officer, employee, incorporator or stockholder, of
the Issuer, as such, shall not have any liability for any obligations of the
Issuer under the Notes or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Notes.

 

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

 

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

 

19.           CUSIP
NUMBERS.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuer has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.

 

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

 

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite 180

El Segundo, California  90245

Attention: Chief Financial Officer

 

A-1-6

 

ASSIGNMENT FORM

 

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

 

	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. no.)

  
	
   

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address and zip code)

  

 

and irrevocably
appoint                                                                                                                                                                   to
transfer this Note on the books of the Issuer.  The agent may substitute
another to act for him.

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your
  Signature:

  	
   

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  
	
   

  
	
   

  	
  Signature
  Guarantee:

  
							

 

A-1-7

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

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

 

o Section 4.10                 o Section 4.14

 

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

 

 

	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign
  exactly as your name appears on the Note)

  
	
   

  	
   

  
	
   

  	
  Tax
  Identification No:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  
										

 

A-1-8

 

[SCHEDULE OF EXCHANGES OF INTERESTS IN THE
GLOBAL NOTE](2)

 

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

 

	
  Date of
  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount

  of this

  Global Note

  	
   

  	
  Amount of

  increase in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Principal
  Amount

  of this Global Note

  following such

  decrease (or increase)

  	
   

  	
  Signature
  of

  authorized officer

  of Trustee or

  Note Custodian]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(2)          This should be included only if the Note is
being issued in global form.

 

A-1-9

 

EXHIBIT B

 

FORM
OF CERTIFICATE OF TRANSFER

 

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite
180

El Segundo, California  90245

 

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, CT  06103

 

Re:          17%
Senior Discount Notes due 2008 of DeCrane Aircraft Holdings, Inc., a Delaware
corporation

 

Reference is hereby made
to the Indenture, dated as of July 23, 2004 (the “Indenture”), among DeCrane
Aircraft Holdings, Inc. (the “Issuer”), the guarantors party thereto and
U.S. Bank National Association, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

                   ,
(the “Transferor”)
owns and proposes to transfer the Note[s] or interest in such Note[s] specified
in Annex A hereto, in the principal amount at maturity of
$              
in such Note[s] or interests (the “Transfer”), to
             (the “Transferee”),
as further specified in Annex A hereto. 
In connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.             o  Check if Transferee will take delivery of a beneficial
interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the United States Securities Act of
1933, as amended (the “Securities Act”), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is
a “qualified institutional buyer” within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States.  Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.

 

2.             o  Check if Transferee will take delivery of a beneficial
interest in the Temporary Regulation S Global Note, the Regulation S Global
Note or a Definitive Note pursuant to Regulation S.  The Transfer is being effected pursuant to
and in accordance with Rule 903 or Rule 904 under the Securities Act and,
accordingly, the Transferor hereby further certifies that (i) the Transfer is
not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf

 

B-1

 

reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore Securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, (iii) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). 
Upon consummation of the proposed transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
be subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note, the Temporary Regulation S
Global Note and/or the Definitive Note and in the Indenture and the Securities
Act.

 

3.             o  Check and complete if Transferee will take delivery of
a beneficial interest in a Definitive Note pursuant to any provision of the
Securities Act other than Rule 144A or Regulation S.  The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any
state of the United States, and accordingly the Transferor hereby further
certifies that (check one):

 

(a)           o  such Transfer is being effected pursuant to
and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)           o  such Transfer is being effected to the
Issuer or a subsidiary thereof;

 

or

 

(c)           o  such Transfer is being effected pursuant to
an effective registration statement under the Securities Act and in compliance
with the prospectus delivery requirements of the Securities Act;

 

or

 

(d)           o  such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D under
the Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) if such Transfer is in respect
of a principal amount at maturity of Notes at the time of transfer of less than
$250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Definitive Notes and
in the Indenture and the Securities Act.

 

B-2

 

4.             o  Check if Transferee will take delivery of a
beneficial interest in an Unrestricted Global Note or of an Unrestricted
Definitive Note.

 

(a)           o  Check if Transfer is pursuant to Rule 144.  (i) The Transfer is being effected pursuant
to and in accordance with Rule 144 under the Securities Act and in compliance
with the transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(b)           o  Check if Transfer is Pursuant to Regulation S.  (i) The Transfer is being effected pursuant
to and in accordance with Rule 903 or Rule 904 under the Securities Act and in
compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any state of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act.  Upon consummation of
the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.

 

(c)           o  Check if Transfer is Pursuant to Other Exemption.  (i) The Transfer is being effected pursuant
to and in compliance with an exemption from the registration requirements of
the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance
with the transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

This certificate and the
statements contained herein are made for your benefit and the benefit of the
Issuer.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of
  Transferor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:          ,     

  	
   

  
				

 

B-3

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.             The Transferor owns and proposes to transfer the
following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)           o  a beneficial interest in the:

 

(i)            o  144A Global Note (CUSIP
             ),
or

 

(ii)           o  Regulation S Global Note (CUSIP
             );
or

 

 (b)          o 
a Restricted Definitive Note.

 

2.             After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)           o  a beneficial interest in the:

 

(i)            o  144A Global Note (CUSIP
             ),
or

 

(ii)           o  Regulation S Global Note (CUSIP
             ),
or

 

(iii)          o  Unrestricted Global Note (CUSIP
             );
or

 

(b)           o a
Restricted Definitive Note; or

 

(c)           o
an Unrestricted Definitive Note,

 

in accordance
with the terms of the Indenture.

 

B-4

 

EXHIBIT C

FORM OF
CERTIFICATE OF EXCHANGE

 

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite
180

El Segundo, California  90245

 

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, CT  06103

 

Re:          17%
Senior Discount Notes due 2008 of DeCrane Aircraft Holdings, Inc., a Delaware
corporation.

 

(CUSIP:               )

 

Reference is hereby made
to the Indenture, dated as of July 23, 2004 (the “Indenture”), among DeCrane
Aircraft Holdings, Inc. (the “Issuer”), the guarantors party thereto and
U.S. Bank National Association, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

                 ,
(the “Owner”)
owns and proposes to exchange the Note[s] or interest in such Note[s] specified
herein, in the principal amount at maturity of
$              
in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner hereby certifies that:

 

1.           Exchange of Restricted Definitive Notes or Beneficial
Interests in a Restricted Global Note for Unrestricted Definitive Notes or
Beneficial Interests in an Unrestricted Global Note

 

(a)           o            Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global Note. 
In connection with the Exchange of the Owner’s beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global Note
in an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner’s own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the
United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

 

(b)           o            Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Definitive Note. 
In connection with the Exchange of the Owner’s beneficial interest in a
Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner’s own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the

 

C-1

 

Securities Act and (iv) the
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

 

(c)           o            Check if Exchange is from Restricted Definitive Note
to beneficial interest in an Unrestricted Global Note. 
In connection with the Owner’s Exchange of a Restricted Definitive Note
for a beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.

 

(d)           o            Check if Exchange is from Restricted Definitive Note
to Unrestricted Definitive Note.  In
connection with the Owner’s Exchange of a Restricted Definitive Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner’s own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

 

2.           Exchange of Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes for Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes

 

(a)           o            Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Definitive Note. 
In connection with the Exchange of the Owner’s beneficial interest in a
Restricted Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note is being
acquired for the Owner’s own account without transfer.  Upon consummation of the proposed Exchange
in accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.

 

(b)           o            Check if Exchange is from Restricted Definitive Note
to beneficial interest in a Restricted Global Note. 
In connection with the Exchange of the Owner’s Restricted Definitive
Note for a beneficial interest in the [CHECK ONE]  ̈ “144A Global Note,”
“Regulation S Global Note,” with an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner’s own
account without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange
in accordance with the terms of the Indenture, the beneficial interest issued
will be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.

 

C-2

 

This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuer.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of
  Owner]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:          ,     

  	
   

  
				

 

C-3

 

EXHIBIT D

 

FORM
OF CERTIFICATE FROM

ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR

 

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite
180

El Segundo, California  90245

 

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, CT  06103

 

Re:          17%
Senior Discount Notes due 2008 of DeCrane Aircraft Holdings, Inc., a Delaware
corporation.

 

(CUSIP:
                )

 

Reference is hereby made
to the Indenture, dated as of July 23, 2004 (the “Indenture”), among DeCrane
Aircraft Holdings, Inc. (the “Issuer”), the guarantors party thereto and
U.S. Bank National Association, as trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

In connection with our
proposed purchase of
$                   
aggregate principal amount at maturity of a Definitive Note:

 

we confirm that:

 

1.             We understand that any subsequent transfer of the Notes
or any interest therein is subject to certain restrictions and conditions set
forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes or any interest therein except
in compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the “Securities Act”).

 

2.             We understand that the offer and sale of the Notes
have not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the
following sentence.  We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell the Notes or any interest therein, we will do so
only (A) to the Issuer or any subsidiary thereof, (B) in accordance with Rule
144A under the Securities Act to a “qualified institutional buyer” (as defined
therein), (c) to an institutional “accredited investor” (as defined below)
that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to you and to the Issuer a signed letter substantially in
the form of this letter and, if such transfer is in respect of a principal
amount at maturity of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Issuer to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to

 

D-1

 

provide to any person
purchasing the Definitive Note or beneficial interest in a Global Note from us
in a transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.

 

3.             We understand that, on any proposed resale of the
Notes or beneficial interest therein, we will be required to furnish to you and
the Issuer such certifications, legal opinions and other information as you and
the Issuer may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions.  We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.  We further understand
that any subsequent transfer by us of the Notes acquired by us must be effected
through one of the Placement Agents.

 

4.             We are an institutional “accredited investor” (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.

 

5.             We are acquiring the Notes or beneficial interest
therein purchased by us for our own account or for one or more accounts (each
of which is an institutional “accredited investor”) as to each of which we
exercise sole investment discretion.

 

You and the Issuer are
entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered
hereby.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of
  Accredited Investor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:                                 ,     

  	
   

  
					

 

D-2

 

EXHIBIT
E

 

FORM OF
SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

 

SUPPLEMENTAL INDENTURE
(this “Supplemental
Indenture”), dated as of
          , 200 ,
among 
                   
(the “Guarantor”),
a subsidiary of DeCrane Aircraft Holdings, Inc. (or its permitted successor), a
Delaware corporation (the “Issuer”), the other Guarantors (as defined
in the Indenture referred to herein) and U.S. Bank National Association, as
trustee under the Indenture referred to below (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Issuer has
heretofore executed and delivered to the Trustee an indenture (the “Indenture”),
dated as of July 23, 2004, providing for the issuance of 17% Senior Discount
Notes due 2008 (the “Notes”);

 

WHEREAS, the Indenture
provides that under certain circumstances the Guarantor shall execute and
deliver to the Trustee a supplemental indenture pursuant to which the Guarantor
shall unconditionally guarantee all of the Issuer’s Obligations under the Notes
and the Indenture on the terms and conditions set forth herein (the “Note
Guarantee”); and

 

WHEREAS, pursuant to
Section 9.06 of the Indenture, the Trustee is authorized to execute and deliver
this Supplemental Indenture.

 

NOW THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the Guarantor and the Trustee
mutually covenant and agree for the equal and ratable benefit of the Holders of
the Notes as follows:

 

1.             CAPITALIZED TERMS.  Capitalized
terms used herein without definition shall have the meanings assigned to them
in the Indenture.

 

2.             AGREEMENT TO GUARANTEE.  The
Guarantor hereby agrees as follows:

 

(a)           Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Notes or
the obligations of Issuer hereunder or thereunder, that:

 

(i)            the Accreted Value of the Notes will be promptly paid
in full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of the Notes, if any, if lawful, and all
other obligations of the Issuer to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and

 

(ii)           in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by

 

E-1

 

acceleration or otherwise.  Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately.

 

(b)           The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or the
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against Issuer, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.

 

(c)           The following is hereby waived: diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Issuer, any right to require a proceeding first
against the Issuer, protest, notice and all demands whatsoever.

 

(d)           This Note Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.

 

(e)           If any Holder or the Trustee is required by any court
or otherwise to return to the Issuer, the Guarantors, or any Custodian,
trustee, liquidator or other similar official acting in relation to either the
Issuer or the Guarantors, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.

 

(f)            The Guarantor shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.

 

(g)           As between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6
of the Indenture for the purposes of this Note Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (y) in the event of any
acceleration of such obligations as provided in Article 6 of the Indenture,
such obligations (whether or not due and payable) shall forthwith become due
and payable by the Guarantors for the purpose of this Note Guarantee.

 

(h)           The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Guarantee.

 

(i)            Pursuant to Section 10.02 of the Indenture, after
giving effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy or fraudulent
conveyance laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under Article
10 of the Indenture shall result in the obligations of such Guarantor under its
Note Guarantee not constituting a fraudulent transfer or conveyance.

 

3.             EXECUTION AND DELIVERY.  Each
Guarantor agrees that the Note Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.

 

E-2

 

4.             GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

 

(a)           No Guarantor may consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Guarantor
unless:

 

(i)            subject to Section 5(a) hereof, the Person formed by
or surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee, under
the Notes, the Indenture and the Registration Rights Agreement;

 

(ii)           immediately after giving effect to such transaction,
no Default or Event of Default exists; and

 

(iii)          Issuer would, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at
the beginning of the applicable four-quarter period, have a Fixed Charge
Coverage Ratio of at least 2.0 to 1;

 

provided that, the requirements of clause (iii) of
this Section 4(a) will not apply in the case of a consolidation with or merger
with or into the Issuer or another Guarantor.

 

(b)           In case of any such consolidation or merger, and upon
the assumption by the successor Person, by supplemental indenture executed and
delivered to the Trustee in the form of Exhibit E to the Indenture or otherwise
satisfactory in form to the Trustee, of the Note Guarantee and the due and
punctual performance of all of the covenants and conditions of the Indenture to
be performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor.  All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of
the Indenture as though all of such Note Guarantees had been issued at the date
of the execution hereof.

 

(c)           Except as set forth in Articles 4 and 5 of the
Indenture, and notwithstanding clauses (a) and (b) above, nothing contained in
the Indenture or in any of the Notes shall prevent any consolidation or merger
of a Guarantor with or into the Issuer or another Guarantor, or shall prevent
any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Issuer or another Guarantor.

 

5.             RELEASES.

 

(a)           In the event of a sale or other disposition of all of
the assets of any Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the capital stock of any Guarantor, such
Guarantor (in the event of a sale or other disposition, by way of such a
merger, consolidation or otherwise, of all of the capital stock of such
Guarantor) or the corporation acquiring the property (in the event of a sale or
other disposition of all of the assets of such Guarantor) will be released and
relieved of any obligations under its Note Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of the Indenture, including without limitation Section
4.10 of the Indenture.  Upon delivery by
the Issuer to the Trustee of an Officers’ Certificate and an Opinion of Counsel
to the effect that such sale or other disposition was made by the Issuer in
accordance with the applicable provisions of the Indenture, including, without
limitation,

 

E-3

 

Section 4.10 of the Indenture,
the Trustee shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Note
Guarantee.

 

(b)           Any Guarantor not released from its obligations under
its Note Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under the
Indenture as provided in Article 10 of the Indenture.

 

6.             NO
RECOURSE AGAINST OTHERS.  No past, present or future director, officer, employee,
incorporator, stockholder or agent of the Guarantor, as such, shall have any
liability for any obligations of the Issuer or any Guarantor under the Notes,
any Note Guarantees, the Indenture or this Supplemental Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder of the Notes by
accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes. 
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.

 

7.             NEW YORK
LAW TO GOVERN.  THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

8.             COUNTERPARTS 
The parties may sign any number of copies of this Supplemental
Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement.

 

9.             EFFECT OF
HEADINGS.  The Section headings herein are for
convenience only and shall not affect the construction hereof.

 

10            THE
TRUSTEE.  The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guarantor and the Issuer.

 

E-4

 

IN WITNESS WHEREOF, the parties hereto have
caused this Supplemental Indenture to be duly executed as of the date first
above written.

 

 

	
   

  	
  [Guarantor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DECRANE AIRCRAFT HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [EXISTING GUARANTORS]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-5

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