Document:

Word 8.0 Generic Normal Template, rev. 4/1/97, The Legal MacPac

Exhibit

10.10.5

 

 

DECRANE

AIRCRAFT HOLDINGS, INC.

SECOND AMENDMENT

TO THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

This SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT

AGREEMENT (this “Amendment”) is dated as of March 19, 2002

and entered into by and among DeCrane Aircraft Holdings, Inc., a Delaware

corporation (“Company”), the financial institutions listed on the signature

pages hereof (“Lenders”), Credit Suisse First Boston (as successor to DLJ

Capital Funding, Inc.), as syndication agent for Lenders (“Syndication Agent”), and Bank

One, NA, as administrative agent for Lenders (“Administrative Agent”), and

is made with reference to that certain Third Amended and Restated Credit

Agreement, dated as of May 11, 2000, as amended by a First Amendment to Third

Amended and Restated Credit Agreement (the “First

Amendment”), dated as of June 30, 2000, and as further amended by an

Increased Commitments Agreement to Third Amended and Restated Credit Agreement

(“Increased Commitments Agreement”),

dated as of April 27, 2001 (the “Credit Agreement”), by and among Company,

the lenders listed on the signature pages thereof, Syndication Agent and

Administrative Agent.  Capitalized terms

used herein without definition shall have the same meanings herein as set forth

in the Credit Agreement.

RECITALS

WHEREAS, Company and Lenders desire to amend the

Credit Agreement to (i) consolidate the Working Capital Loans and Acquisition

Loans into one tranche of Revolving Loans, (ii) increase the interest rate

margins applicable to the Loans, (iii) modify the financial covenants in

certain respects and (iv) make certain other amendments as set forth below:

NOW,

THEREFORE, in

consideration of the premises and the agreements, provisions and covenants

herein contained, the parties hereto agree as follows:

Section 1.              AMENDMENTS TO THE CREDIT AGREEMENT

1.1          Amendments to Section

1:  Definitions

A.    Subsection 1.1 of the Credit Agreement is hereby amended by

adding thereto the following definitions, which shall be inserted in proper

alphabetical order:

“Acquired

Business” has the

meaning set forth in subsection 7.6C.

“Acquired

Business EBITDA” has the meaning set forth in subsection 7.6C.

“Revolving Lender” means a Lender having a Revolving Loan

Commitment.  Each Acquisition Lender and

Working Capital Lender shall be deemed to be a Revolving Lender as of the

Second Amendment Closing Date.

“Revolving Loan Commitment” means the commitment of a Revolving Lender to make

Revolving Loans to Company pursuant to subsection 2.1A(iii), and “Revolving

Loan Commitments” means such commitments of all Revolving Lenders in

the aggregate.  Each Lender’s

Acquisition Loan Commitment and each Lender’s Working Capital Loan Commitment,

in the aggregate, shall be deemed to be a single Revolving Loan Commitment of

such Lender as of the Second Amendment Closing Date.

 

 

 

“Revolving Loan Commitment Termination Date” means the Working Capital Loan

Commitment Termination Date.

“Revolving Loan Exposure” means, with respect to any Revolving Lender as of any

date of determination (i) prior to the termination of the Revolving Loan

Commitments, that Revolving Lender’s Revolving Loan Commitment and (ii) on

and after the termination of the Revolving Loan Commitments, the sum of

(a) the aggregate outstanding principal amount of the Revolving Loans of

that Revolving Lender plus (b) in the event that Revolving Lender

is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all

Letters of Credit issued by that Revolving Lender (in each case net of any

participations purchased by other Revolving Lenders in such Letters of Credit

or any unreimbursed drawings thereunder) plus (c) the aggregate

amount of all participations purchased by that Revolving Lender in any

outstanding Letters of Credit or any unreimbursed drawings under any Letters of

Credit plus (d) in the case of Swing Line Lender, the aggregate

outstanding principal amount of all Swing Line Loans (net of any participations

therein purchased by other Revolving Lenders) plus (e) the

aggregate amount of all participations purchased by that Revolving Lender in

any outstanding Swing Line Loans.

“Revolving Loans” means the Loans made by Revolving Lenders to Company

pursuant to subsection 2.1A(iii). 

Acquisition Loans and Working Capital Loans shall be deemed to be

Revolving Loans as of the Second Amendment Closing Date.

“Revolving Notes” means (i) the promissory notes of Company issued

pursuant to subsection 2.1D and (ii) any promissory notes issued by

Company in connection with assignments of the Revolving Loan Commitments and

Revolving Loans of any Revolving Lenders, in each case substantially in the

form of Exhibit XXXIII annexed hereto, as they may be amended,

supplemented or otherwise modified from time to time.

“Second Amendment Closing Date” means the date of the Second Amendment

to Third Amended and Restated Credit Agreement.

“Second Amendment to Third Amended and Restated Credit

Agreement” means

that certain Second Amendment to Third Amended and Restated Credit Agreement,

dated as of March 19, 2002, as it may be amended, supplemented or

otherwise modified from time to time.

“Third Amended and Restated Credit Agreement” means that

certain Third Amended and Restated Credit Agreement dated as of May 11,

2000, as it may be amended, supplemented or otherwise modified from time to

time.

 “Total Utilization of Revolving Loan Commitments”

means, as at any date of determination, the sum of (i) the aggregate

principal amount of all outstanding Revolving Loans plus (ii) the

aggregate principal amount of all outstanding Swing Line Loans plus

(iii) the Letter of Credit Usage.

B.    Subsection 1.1 of the Credit Agreement is hereby amended by

deleting the definitions of “Consolidated Excess Cash Flow,” “Issuing Lender,”

“Loan,” “Notes,” “Pro Rata Share,” and “Requisite Lenders,” and inserting the

following definition in lieu thereof, which shall be inserted in proper

alphabetical order:

 

2

 

“Consolidated Excess Cash Flow” means, for any period, an amount (if

positive) equal to (i) the sum, without duplication, of the amounts for

such period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital

Adjustment minus (ii) the sum, without duplication, of the amounts

for such period of (a) mandatory and scheduled repayments of the Loans and

scheduled, mandatory and optional repayments of other Consolidated Total Debt

(excluding repayments of Working Capital Loans, Acquisition Loans and Revolving

Loans except to the extent the Working Capital Loan Commitments, Acquisition

Loan Commitments or Revolving Loan Commitments, as the case may be, are

permanently reduced in connection with such repayments) in each case to the

extent actually made during such period, (b) Consolidated Capital

Expenditures paid in cash (without duplication, net of any proceeds of any

related financings with respect to such expenditures), (c) Consolidated

Interest Expense paid in cash, (d) the amount of taxes based on income of

Company and its Subsidiaries paid or payable in cash during such period, (e)

the amount paid for Permitted Acquisitions permitted and actually made under

subsection 7.7(viii) and Investments permitted and actually made under

subsection 7.3(xiii) but only to extent paid in cash from Company’s or its

Subsidiaries cash balances; (f) any payments with respect to Earn-Outs actually

paid during such period, (g) gains on any sale, lease, conveyance, or other

disposition of any asset (other than in the ordinary course of business), and

(h) any distributions with respect to minority interests made during such

period.

“Issuing Lender” means, First Chicago in its capacity as issuer of a

Letter of Credit or, if First Chicago declines to issue such Letter of Credit

in accordance with subsection 3.1B(ii), then any other Revolving Lender that at

the request of Company agrees to issue a Letter of Credit pursuant to

subsection 3.1B(ii).

“Loan” or “Loans” means one or more of the Tranche A Term Loans, Tranche

B Term Loans, Tranche D Term Loans, Swing Line Loans or Revolving Loans or any

combination thereof.

“Notes” means one or more of the Tranche A Term Notes, Tranche B Term Notes,

Tranche D Term Notes, Swing Line Notes or Revolving Notes or any combination

thereof.

“Pro Rata Share” means (i) with respect to all payments,

computations and other matters relating to the Tranche A Term Loan Commitments

or the Tranche A Term Loan of any Lender, the percentage obtained by dividing

(x) the Tranche A Term Loan Exposure of that Lender by (y) the

aggregate Tranche A Term Loan Exposure of all Lenders, (ii) with respect to all

payments, computations and other matters relating to the Tranche B Term Loan

Commitments or the Tranche B Term Loan of any Lender, the percentage obtained

by dividing (1) the Tranche B Term Loan Exposure of that Lender by

(2) the aggregate Tranche B Term Loan Exposure of all Lenders, (iii) with

respect to all payments, computations and other matters relating to the Tranche

D Term Loan Commitment or the Tranche D Term Loan of any Lender, the percentage

obtained by dividing (x) the Tranche D Term Loan Exposure of that

Lender by (y) the aggregate Tranche D Term Loan Exposure of all

Lenders, (iv) with respect to all payments, computations and other matters

relating to the Revolving Loan Commitment or the Revolving Loans of any Lender

or any Letters of Credit issued or participations therein purchased by any

Lender or any participations in any Swing Line Loans purchased or deemed

purchased by any Revolving Lender, the percentage obtained by dividing

(x) the Revolving Loan Exposure of that Lender by (y) the

aggregate Revolving Loan Exposure of all Lenders, and (v) for all other

purposes with respect to each Lender, the percentage obtained by dividing

(x) the sum of the Tranche A Term Loan Exposure of that Lender plus

the Tranche B Term Loan Exposure of that Lender plus the Tranche D Term

 

3

 

Loan Exposure of that Lender plus the Revolving

Loan Exposure of that Lender by (y) the sum of the aggregate

Tranche A Term Loan Exposure of all Lenders plus the aggregate Tranche B

Term Loan Exposure of all Lenders plus the aggregate Tranche D Term Loan

Exposure of all Lenders plus the aggregate Revolving Loan Exposure of

all Lenders, in any such case as the applicable percentage may be adjusted by

assignments permitted pursuant to subsection 10.1.

“Requisite Lenders” means on any date, Lenders having or holding more

than 50% of the sum of (i) the aggregate Tranche A Term Loan Exposure of

all Lenders plus (ii) the aggregate Tranche B Term Loan Exposure of all

Lenders plus (iii) the aggregate Tranche D Term Loan Exposure of all

Lenders plus (iv) the aggregate Revolving Loan Exposure of all

Lenders, in each case on such date.

C.    Subsection 1.1 of the Credit Agreement is hereby further amended

by inserting the following at the end of the first paragraph of the definition

of the term “Permitted Acquisition”:

; and provided  further that the sum of

the cash consideration paid for any Acquired Business and the maximum amount of

any potential Earn-outs (notwithstanding the provisions of clause (ii) below)

on and after the Second Amendment Closing Date shall not exceed the sum of (1)

the Net Securities Proceeds of any equity Securities issued by Company that are

not required to be used to prepay the Loans pursuant to subsection 2.4B and (2)

an amount equal to the lower of (a) 3.5 and (b) the then applicable maximum Net

Senior Debt Ratio (as set forth in subsection 7.6E) times an amount

equal to the Acquired Business EBITDA calculated for the Acquired Business.

 

1.2          Amendments

to Section 2: Amounts and Terms of Commitments and Loans

A.    The first paragraph of subsection 2.1A of the Credit Agreement is

hereby amended by deleting it in its entirety and substituting the following

therefor:

A.            Commitments.  Subject to the terms and conditions of this

Agreement and in reliance upon the representations and warranties of Company

herein set forth, each Tranche A Term Loan Lender hereby severally agrees to

make the Tranche A Term Loans described in subsection 2.1A(i), each Tranche B

Term Loan Lender hereby severally agrees to make the Tranche B Term Loans

described in subsection 2.1A(ii), each Revolving Lender hereby severally agrees

to make the Revolving Loans described in subsection 2.1A(iii), Swing Line

Lender hereby agrees to make the Swing Line Loans described in subsection

2.1A(iv) and each Tranche D Term Loan Lender hereby severally agrees to make

the Tranche D Term Loans described in subsection 2.1A(vi).

B.    Subsection 2.1A(iii) of the Credit Agreement is hereby amended by

deleting it in its entirety and substituting the following therefor:

(iii)          Revolving Loans.  Each Revolving Lender severally agrees,

subject to the limitations set forth below with respect to the maximum amount

of Revolving Loans permitted to be outstanding from time to time, to lend to

Company from time to time during the period from the Second Amendment Closing

Date to but excluding the Revolving Loan Commitment Termination Date an

aggregate amount not exceeding its Pro Rata Share of the aggregate amount of

the Revolving Loan Commitments to be used for the purposes identified in

subsections 2.5B.  The original amount

of each Revolving Lender’s Revolving Loan

 

4

 

Commitment equals the

amount of the Revolving Lender’s Working Capital Loan Commitment plus its

Acquisition Loan Commitment immediately prior to the Second Amendment Closing

Date and the aggregate original amount of the Revolving Loan Commitments is

$50,000,000; provided that the Revolving Loan Commitments of the

Revolving Lenders shall be adjusted to give effect to any assignments of the

Revolving Loan Commitments pursuant to subsection 10.1B; and provided  further

that the amount of the Revolving Loan Commitments shall be reduced from time to

time by the amount of any reductions thereto made pursuant to subsection

2.4B(ii).  Each Revolving Lender’s

Revolving Loan Commitment shall expire on the Revolving Loan Commitment

Termination Date and all Revolving Loans and all other amounts owed hereunder

with respect to the Revolving Loans and the Revolving Loan Commitments shall be

paid in full no later than that date. 

Amounts borrowed under this subsection 2.1A(iii) may be repaid and, at

any time to but excluding the Revolving Loan Commitment Termination Date,

reborrowed.

Anything contained in

this Agreement to the contrary notwithstanding, in no event shall the Total

Utilization of Revolving Loan Commitments at any time exceed the Revolving Loan

Commitments then in effect.

On the Second Amendment Closing Date, (i) each

Revolving Lender shall be deemed to have made to Company a Revolving Loan in a

principal amount equal to the aggregate principal amount of the Acquisition

Loans and the Working Capital Loans of such Lender outstanding immediately

prior to the Second Amendment Closing Date and (ii) each such Acquisition Loan

and Working Capital Loan shall be deemed to have been repaid in full (and

Company shall not be obligated to make any payments under Section 2.6D with

respect to such repayment).

C.    Subsection 2.1A(iv) of the Credit Agreement is hereby amended by

deleting the proviso phrase in the penultimate sentence of the first paragraph,

which reads “; provided that the Swing Line Loan Commitment shall expire

immediately and without further action on October 31, 1998, if the Tranche B Term

Loans are not made on or before that date,” and by deleting the references to

‘Working Capital Lender’ each time such phrase appears therein and substituting

the phrase ‘Revolving Lender’ in lieu thereof, by deleting the references to

‘Working Capital Lender’s’ each time such phrase appears therein and

substituting the phrase ‘Revolving Lender’s’ in lieu thereof, by deleting the

references to ‘Working Capital Loan Commitment’ each time such phrase appears

therein and substituting the phrase ‘Revolving Loan Commitment’ in lieu

thereof, by deleting the references to ‘Working Capital Loan Commitments’ each

time such phrase appears therein and substituting the phrase ‘Revolving Loan

Commitments’ in lieu thereof, by deleting the references to ‘Working Capital Loan

Commitment Termination Date’ each time such phrase appears therein and

substituting the phrase ‘Revolving Loan Commitment Termination Date’ in lieu

thereof, by deleting the references to ‘Working Capital Lenders’ each time such

phrase appears therein and substituting the phrase ‘Revolving Lenders’ in lieu

thereof, by deleting the references to ‘Working Capital Note’ each time such

phrase appears therein and substituting the phrase ‘Revolving Note’ in lieu

thereof, by deleting the references to ‘Working Capital Loan’ each time such

phrase appears therein and substituting the phrase ‘Revolving Loan’ in lieu

thereof,  and by deleting the references

to ‘Working Capital Loans’ each time such phrase appears therein and substituting

the phrase ‘Revolving Loans’ in lieu thereof.

D.    Subsection 2.1A of the Credit Agreement is further amended by

deleting clause (v) thereof.

 

5

 

E.     The first paragraph of subsection 2.1B of the Credit Agreement

is hereby amended by deleting references to “Working Capital Loans’ each time

such phrase appears therein and substituting the phrase ‘Revolving Loans’ in

lieu thereof.

F.     The first paragraph of subsection 2.1C of the Credit Agreement

is hereby amended by deleting it in its entirety and substituting the following

therefor:

C.            Disbursement

of Funds.  All Loans (other than Swing

Line Loans) under this Agreement shall be made by Lenders simultaneously and

proportionately to their respective Pro Rata Shares of the Tranche A Term Loan

Commitment, the Tranche B Term Loan Commitment, the Tranche D Term Loan

Commitment and the Revolving Loan Commitment, as the case may be, it being

understood that no Lender shall be responsible for any default by any other

Lender in that other Lender’s obligation to make a Loan requested hereunder nor

shall the Commitment of any Lender to make the particular type of Loan

requested be increased or decreased as a result of a default by any other

Lender in that other Lender’s obligation to make a Loan requested

hereunder.  Promptly after receipt by

Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or

telephonic notice in lieu thereof), Administrative Agent shall notify each

Lender or Swing Line Lender, as the case may be, of the proposed

borrowing.  Each Lender shall make the

amount of its Loan available to Administrative Agent not later than

1:00 P.M. (Chicago time) on the applicable Funding Date, in each case in

same day funds in Dollars, at the Funding and Payment Office.  Except as provided in subsection 2.1A(iv) or

subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing

Line Loans or to reimburse any Issuing Lender for the amount of a drawing under

a Letter of Credit issued by it, upon satisfaction or waiver of the conditions

precedent specified in subsections 4.1 (in the case of Loans made on the

Closing Date), 4.2 (in the case of Loans made on the Merger Date), 4.3 (in the

case of Revolving Loans) and 4.4 (in the case of all Loans (other than Tranche

A Term Loans made on the Merger Date)), Administrative Agent shall make the

proceeds of such Loans available to Company on the applicable Funding Date by

2:00 P.M. (Chicago time), by causing an amount of same day funds in Dollars

equal to the proceeds of all such Loans received by Administrative Agent from

Lenders or Swing Line Lender, as the case may be, to be credited to the account

of Company at the Funding and Payment Office.

G.    Subsection 2.1D of the Credit Agreement is hereby amended by

adding the following paragraph at the end of such subsection:

Company shall execute and deliver on and after the

Second Amendment Closing Date to each Revolving Lender (or to Administrative

Agent for that Lender) that has so requested, upon return to Company of the

Acquisition Note and Working Capital Note of such Lender, a Revolving Note

substantially in the form of Exhibit XXXIII annexed hereto to

evidence that Lender’s Revolving Loans, in the principal amount of that

Lender’s Revolving Loan Commitment and with other appropriate insertions.  Each Acquisition Note and each Working

Capital Note of a Lender shall be deemed to be the Revolving Note of such

Lender as of the Second Amendment Closing Date, and shall represent the

Revolving Loan Commitment of such Lender and the obligation of Company to repay

Revolving Loans to the holder of such Notes as provided herein, it being

understood that on and after the Second Amendment Closing Date the Acquisition

Note and the Working Capital Note of each Revolving Lender shall each evidence

the one and same obligation of Company to repay the Revolving Loans of such

Revolving Lender and that upon repayment in full of such Revolving Loans and

the termination of the Revolving Commitment of such Revolving Lender Company

shall have no obligations under the Acquisition Note and the Working Capital

Note of such Lender. A Revolving

 

6

 

Lender may, but is not

required to, exchange its Acquisition Note or its Working Capital Note for a

Revolving Note at any time on or after the Second Amendment Closing Date.

H.    Subsection 2.2A of the Credit Agreement is hereby amended by

deleting it in its entirety and substituting the following therefor:

A.            Rate

of Interest.  Subject to the

provisions of subsection 2.6, each Loan shall bear interest on the unpaid

principal amount thereof from the date made through maturity (whether by

acceleration or otherwise) at a rate determined by reference to the Base Rate

or the Adjusted Eurodollar Rate.  Each

Swing Line Loan shall bear interest on the unpaid principal amount thereof from

the date made through maturity (whether by acceleration or otherwise) at a rate

determined by reference to the Base Rate. 

The applicable basis for determining the rate of interest with respect

to any Loan shall be selected by Company initially at the time a Notice of

Borrowing is given with respect to such Loan pursuant to subsection 2.1B, and

the basis for determining the interest rate with respect to any Loan may be

changed from time to time pursuant to subsection 2.2D.

(i)            (a)           Subject

to the provisions of subsection 2.2E, the Tranche A Term Loans and the

Revolving Loans shall bear interest through maturity as follows:

(1)                   if a Base Rate Loan, then at

the sum of the Base Rate plus the Base Rate Margin set forth in the

table below opposite the Consolidated Leverage Ratio as set forth in the most

recent Margin Determination Certificate delivered pursuant to subsection

6.1(iv); or

(2)                   if a Eurodollar Rate Loan,

then at the sum of the Adjusted Eurodollar Rate for the Interest Period

applicable to such Loan plus the Eurodollar Rate Margin set forth in the

table below opposite the Consolidated Leverage Ratio as set forth in the most

recent Margin Determination Certificate delivered pursuant to subsection 6.1(iv):

 

	

  Consolidated

  Leverage Ratio

  	

   

  	

  Applicable Eurodollar

  Rate Margin

  	

   

  	

  Applicable Base

  Rate Margin

  	

   

  
	

  Greater than or

  equal to 5.00:1.00

  	

   

  	

  3.75

  	

  %

  	

  2.50

  	

  %

  
	

  Greater

  than or equal to 4.50:1.00

  but less than 5.00:1.00

  	

   

  	

  3.50

  	

  %

  	

  2.25

  	

  %

  
	

  Greater

  than or equal to 4.00:1.00

  but less than 4.50:1.00

  	

   

  	

  3.25

  	

  %

  	

  2.00

  	

  %

  
	

  Greater

  than or equal to 3.50:1.00

  but less than 4.00:1.00

  	

   

  	

  2.75

  	

  %

  	

  1.50

  	

  %

  
	

  Greater

  than or equal to 3.00:1.00

  but less than 3.50:1.00

  	

   

  	

  2.50

  	

  %

  	

  1.25

  	

  %

  
	

  Less

  than 3.00:1.00

  	

   

  	

  2.00

  	

  %

  	

  0.75

  	

  %

  

 

7

 

provided that until the

First Amendment Closing Date, the applicable margin for Tranche A Term Loans,

Working Capital Loans and Acquisition Loans that are Eurodollar Rate Loans

shall be 2.25% per annum and for Tranche A Term Loans, Working Capital Loans,

Swing Line Loans and Acquisition Loans that are Base Rate Loans shall be 1.00%

per annum; provided  further that from the First Amendment Closing

Date until the delivery of the first Margin Determination Certificate pursuant

to subsection 6.1(iv) after the six-month anniversary of the First Amendment

Closing Date, the applicable margin for Tranche A Term Loans, Working Capital

Loans and Acquisition Loans that are Eurodollar Rate Loans shall be 2.75% per

annum and for Tranche A Term Loans, Working Capital Loans, Swing Line Loans and

Acquisition Loans that are Base Rate Loans shall be 1.50% per annum; provided

further that from the Third Amended and Restated Credit Agreement Closing

Date until delivery of the first Margin Determination Certificate pursuant to

subsection 6.1(iv) after the six-month anniversary of the Third Amended and

Restated Credit Agreement Date, the applicable margin for Tranche A Term Loans,

Working Capital Loans and Acquisition Loans that are Eurodollar Rate Loans shall

be the greater of (A) 3.00% per annum or (B) the Applicable Eurodollar Rate

Margin as shown in the preceding table, and the applicable margin for Tranche A

Term Loans, Working Capital Loans, Swing Line Loans and Acquisition Loans that

are Base Rate Loans shall be the greater of (A) 1.75% per annum or (B) the

Applicable Base Rate Margin as shown in the preceding table.

Changes in the applicable

margin for Tranche A Term Loans and Revolving Loans resulting from a change in

the Consolidated Leverage Ratio shall become effective as provided in

subsection 2.3C.

If at any time a Margin

Determination Certificate is not delivered at the time required pursuant to

subsection 6.1(iv), from the time such Margin Determination Certificate was

required to be delivered until delivery of such Margin Determination

Certificate, such applicable margins shall be the maximum percentage amount for

the relevant Loan set forth above.

(b)           Subject to the provisions of

subsection 2.2E, the Tranche B Term Loans shall bear interest through maturity

as follows:

(1)   if a Base Rate Loan, then (A) from the Third

Amended and Restated Credit Agreement Closing Date until the Second Amendment

Closing Date, at the sum of the Base Rate plus 2.25% per annum and (B)

from the Second Amendment Closing Date until maturity, at the sum of the Base

Rate plus 2.75% per annum; or

(2)   if a Eurodollar Rate Loan, then (A) from the

Third Amended and Restated Credit Agreement Closing Date until the Second

Amendment Closing Date, at the sum of the Adjusted Eurodollar Rate for the

Interest Period applicable to such Loan plus 3.50% per annum and (B)

from the Second Amendment Closing Date until maturity, at the sum of the

Adjusted Eurodollar Rate for the Interest Period applicable for such Loan plus

4.00% per annum;

 

8

 

(c)           Subject to the provisions of

subsection 2.2E, the Tranche D Term Loans shall bear interest through maturity

as follows:

(1)   if a Base Rate Loan, then (A) from the Third

Amended and Restated Credit Agreement Closing Date until the Second Amendment

Closing Date, at the sum of the Base Rate plus 2.75% per annum and (B)

from the Second Amendment Closing Date until maturity, at the sum of the Base

Rate plus 3.25% per annum; or

(2)   if a Eurodollar Rate Loan, then (A) from the

Third Amended and Restated Credit Agreement Closing Date until the Second

Amendment Closing Date, at the sum of the Adjusted Eurodollar Rate for the

Interest Period applicable to such Loan plus 4.00% per annum and (B)

from the Second Amendment Closing Date until maturity, at the sum of the

Adjusted Eurodollar Rate for the Interest Period applicable to such Loan plus

4.50% per annum.

(ii)           Subject to the provisions of

subsection 2.2E, the Swing Line Loans shall bear interest through maturity at

the sum of the Base Rate plus the Base Rate Margin for Revolving Loans

minus the commitment fee percentage then in effect for Revolving Loans as

determined pursuant to subsection 2.3A(i).

I.      Subsection 2.2B(v) of the Credit Agreement is hereby amended by

deleting it in its entirety and substituting the following therefor:

(v)           no Interest Period

with respect to any portion of the Tranche A Term Loans shall extend beyond

September 30, 2004, no Interest Period with respect to any portion of the

Tranche B Term Loans shall extend beyond September 30, 2005, no Interest

Period with respect to any portion of the Tranche D Term Loans shall extend

beyond December 17, 2006 and no Interest Period with respect to any portion of

the Revolving Loans shall extend beyond the Revolving Loan Commitment

Termination Date;

J.     Subsection 2.2B(vii) of the Credit Agreement is hereby amended

by deleting it in its entirety and substituting the following therefor:

(vii)         there shall be outstanding at any time

no more than four Interest Periods with respect to the Tranche A Term Loans,

four Interest Periods with respect to the Tranche B Term Loans, four Interest

Periods with respect to the Tranche D Term Loans and six Interest Periods with

respect to the Revolving Loans; and

K.    Subsection 2.2C of the Credit Agreement is hereby amended by

deleting it in its entirety and substituting the following therefor:

C.            Interest Payments. 

Subject to the provisions of subsection 2.2E, interest on each Loan

shall be payable in arrears on and to each Interest Payment Date applicable to

that Loan, upon any prepayment of that Loan (to the extent accrued on the

amount being prepaid) and at maturity (including final maturity); provided

that in the event any Swing Line Loans or Revolving Loans that are Base Rate

Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such

Swing Line Loans or Revolving Loans through the date of such prepayment shall

be payable on the next succeeding Interest Payment Date applicable to Base Rate

Loans (or, if earlier, at final maturity).

 

9

 

L.    Subsection 2.2E of the Credit Agreement is hereby amended by

deleting references to ‘Working Capital Loans’ each time such phrase appears

therein and substituting the phrase ‘Revolving Loans’ in lieu thereof.

M.   Subsection 2.3A of the Credit Agreement is further amended by

deleting clause (i) and inserting the following in lieu thereof:

(i)            Revolving Commitments.  Company agrees to pay to Administrative

Agent, for distribution to each Revolving Lender in proportion to that Lender’s

Pro Rata Share of the Revolving Loan Commitments, commitment fees for each day

during the period from and including the Second Amendment Closing Date to and

excluding the Revolving Loan Commitment Termination Date (or, if earlier, the

date of termination of the Revolving Loan Commitments in their entirety) on the

excess on such day of the Revolving Loan Commitments over the sum of (i) the

aggregate principal amount of outstanding Revolving Loans on such day plus (ii)

the Letter of Credit Usage (but not including any outstanding Swing Line Loans)

on such day at a rate per annum equal to the commitment fee percentage set

forth below opposite the Consolidated Leverage Ratio as set forth in the most recent

Margin Determination Certificate delivered pursuant to subsection 6.1(iv),

depending on utilization of the Revolving Loan Commitments (i.e., if the Total

Utilization of Revolving Loan Commitments exceeds 50% of the Revolving Loan

Commitments as of any date, the commitment fee percentage will be the lower of

the two rates per annum set forth below opposite the relevant Consolidated

Leverage Ratio):

	

   

  	

   

  	

  Revolving Loan

  Commitment Fee Percentage

  	

   

  
	

  Consolidated Leverage Ratio

  	

   

  	

  Utilization

  Less Than or Equal to

  50%

  	

   

  	

  Utilization

  Greater Than 50%

  	

   

  
	

  Greater than or equal to 5.00:1.00

  	

   

  	

  0.750

  	

  %

  	

  0.500

  	

  %

  
	

  Greater than or equal to 4.00:1.00

  but less than 5.00:1.00

  	

   

  	

  0.625

  	

  %

  	

  0.375

  	

  %

  
	

  Greater than or equal to 3.00:1.00

  but less than 4.00:1.00

  	

   

  	

  0.550

  	

  %

  	

  0.300

  	

  %

  
	

  Less than 3.00:1.00

  	

   

  	

  0.500

  	

  %

  	

  0.250

  	

  %

  

such commitment

fees to be calculated on the basis of a 360-day year and the actual number of

days elapsed and to be payable quarterly in arrears on each Quarterly Date of

each year, commencing on the first such date to occur after the Second

Amendment Closing Date, and on the Revolving Loan Commitment Termination

Date.  Changes in the applicable

commitment fee rate for Revolving Loan Commitments resulting from a change in

the Consolidated Leverage Ratio shall become effective as provided in

subsection 2.3C. In the event that Company fails to deliver a Margin

Determination Certificate timely in accordance with the provisions of

subsection 6.1(iv), from the time such Margin Determination Certificate was

required to be delivered until such date as such a Margin Determination

Certificate is actually delivered, the applicable commitment fee percentage

shall be the maximum percentage amount set forth above per annum.

 

10

 

N.    Subsection 2.3A of the Credit Agreement is further amended by

deleting clause (ii) and inserting the following in lieu thereof:

The commitment fees for

Acquisition Loan Commitments and Working Capital Loan Commitments shall be

payable by Company for all periods prior to the Second Amendment Closing Date

as set forth in the Agreement as in effect immediately prior to the Second

Amendment Closing Date.

O.    Subsection 2.3C of the Credit Agreement is hereby amended by

deleting the first sentence thereof in its entirety and substituting the

following therefor:

Subject to the last sentence of subsection

2.2A(i)(a), the last sentence of subsection 2.3A(i) and the last sentence of

subsection 2.3A(ii), the Consolidated Leverage Ratio used to compute the

applicable margin for Tranche A Term Loans and Revolving Loans for purposes of

subsection 2.2A(i) and subsection 3.2 and the applicable commitment fee rates

for the Revolving Loan Commitments for purposes of subsection 2.3A (such

applicable margins and commitment fee rates being referred to in this

subsection 2.3C as the “Applicable Margins”) for any day shall be

the Consolidated Leverage Ratio set forth in the Margin Determination

Certificate most recently delivered by Company to Administrative Agent on or

prior to such day pursuant to subsection 6.1(iv).

P.    Subsection 2.4B of the Credit Agreement is hereby amended by

deleting clauses (ii), (iii) and (iv) thereof in their entirety and

substituting the following therefor:

 (ii)          Voluntary

Reductions of Loan Commitments. 

Company may, upon not less than one Business Day’s prior written or

telephonic notice confirmed in writing to Administrative Agent (which original

written or telephonic notice Administrative Agent will promptly transmit by

telefacsimile or telephone to each Revolving Lender), at any time and from time

to time terminate in whole or permanently reduce in part, without premium or

penalty, the Revolving Loan Commitments in an amount up to the amount by which

the Revolving Loan Commitments exceed the Total Utilization of Revolving Loan

Commitments at the time of such proposed termination or reduction; provided

that any such partial reduction shall be in an aggregate minimum amount of

$1,000,000 and multiples of $100,000 in excess of that amount.  Company’s notice to Administrative Agent

shall designate the date (which shall be a Business Day) of such termination or

reduction and the amount of any partial reduction, and such termination or

reduction of the Revolving Loan Commitments, as the case may be, shall be

effective on the date specified in Company’s notice and shall reduce the

Revolving Loan Commitments of each Revolving Loan Lender proportionately to its

Pro Rata Share.

(iii)          Mandatory Prepayments and Mandatory

Reductions of Loan Commitments.  The

Loans shall be prepaid and/or the Revolving Loan Commitments shall be

permanently reduced in the amounts and under the circumstances set forth below,

all such prepayments and/or reductions to be applied as set forth below or as

more specifically provided in subsection 2.4B(iv):

(a)           Prepayments and Reductions From

Net Asset Sale Proceeds.  No later

than 30 calendar days following the date of receipt by Company or any of its

Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset Sale

consummated after the consummation of the Merger (other than any

 

11

 

Asset Sale permitted

under subsections 7.7(iv) and 7.7(x) or an Asset Sale to Company or a

Subsidiary Guarantor), Company shall prepay the Loans and/or the Revolving Loan

Commitments shall be permanently reduced in an aggregate amount equal to such

Net Asset Sale Proceeds; provided that if Company states in the

Officers’ Certificate delivered pursuant to subsection 2.4B(iii)(e) that

Company or the applicable Subsidiary intends to apply, within 365 days after

the receipt of such Net Asset Sale Proceeds, all or a portion (as specified in

such Officers’ Certificate) of such Net Asset Sale Proceeds to a Property

Reinvestment Application Company shall not be required to prepay the Loans

and/or the Revolving Loan Commitments shall not be reduced by such amount to be

applied to a Property Reinvestment Application; provided further that to the

extent such amount of Net Asset Sale Proceeds is not applied to a Property

Reinvestment Application within such 365-day period, Company shall, on the last

day of such 365-day period prepay the Loans and/or the Revolving Loan

Commitments shall be permanently reduced by the aggregate amount equal to such

amount of Net Asset Sale Proceeds not so applied to Property Reinvestment

Application.

(b)           Prepayments and Reductions from

Net Insurance/Condemnation Proceeds. 

No later than the first Business Day following the date of receipt by

Administrative Agent or by Company or any of its Subsidiaries after the Merger

Date of any Net Insurance/Condemnation Proceeds in excess of $250,000 with

respect to any loss or taking or series of related losses or takings, Company

shall prepay the Loans and/or the Revolving Loan Commitments shall be

permanently reduced in an aggregate amount equal to the amount of such Net

Insurance/Condemnation Proceeds; provided, however, that (i) no

such prepayment and/or reduction shall be required to the extent under the

terms of any lease or other agreement existing on the date hereof such Net

Insurance/Condemnation Proceeds are required to be used to replace, rebuild or

repair the asset so damaged, destroyed or taken and (ii) if Company states in

the Officers’ Certificate delivered pursuant to subsection 2.4B(iii)(e) that

Company or the applicable Subsidiary intends to apply, within 365 days after

the receipt of such Net Insurance/Condemnation Proceeds, all or a portion (as

specified in such Officers’ Certificate) of such Net Insurance/Condemnation

Proceeds to a Property Reinvestment Application, Company shall not be required

to prepay Loans and/or the Revolving Loan Commitments shall not be reduced by

such amount to be applied to a Property Reinvestment Application; provided

further that to the extent such amount of Net Insurance/Condemnation

Proceeds is not applied to a Property Reinvestment Application within such

365-day period, Company shall, on the last day of such 365-day period prepay

the Loans and/or the Revolving Loan Commitments shall be permanently reduced by

the aggregate amount equal to such amount of such Net Insurance/Condemnation

Proceeds not so applied to a Property Reinvestment Application.

(c)           Prepayments and Reductions Due to

Issuance of Debt or Equity Securities. 

On the date of receipt by Parent, Company or any of its Subsidiaries of

the cash proceeds (any such cash proceeds, net of underwriting discounts and

commissions and other reasonable costs and expenses associated therewith,

including investment banking, legal,

 

12

 

brokerage, accounting

fees and expenses, being “Net Securities

Proceeds”), from the issuance of equity Securities of Parent,

Company or any of its Subsidiaries after the Merger Date (other than Excluded

Equity Proceeds) or of debt Securities of Company or any of its Subsidiaries

after the Merger Date (other than the proceeds of the issuance of Indebtedness

permitted by subsection 7.1 (including without limitation the proceeds from the

sale of the Senior Subordinated Notes)), Company shall prepay the Loans and/or

the Revolving Loan Commitments shall be permanently reduced in an aggregate

amount equal to such Net Securities Proceeds in the case of the proceeds of

debt Securities and in an aggregate amount equal to 50% of such Net Securities

Proceeds in the case of the proceeds of equity Securities; provided the

amount of such prepayment hereunder in respect of Net Securities Proceeds

constituting the proceeds of the issuance and sale of equity Securities shall

be limited to the amount necessary to reduce the amount of Indebtedness

included in the calculation of the Consolidated Leverage Ratio to the amount

that would result, on a pro forma basis after giving effect to such prepayment,

in a Consolidated Leverage Ratio of 3.50:1.00 or less at the end of the Fiscal

Quarter then most recently ended and (ii) no such prepayment in respect of Net

Securities Proceeds constituting the proceeds of the issuance and sale of

equity Securities shall be required to be made at such times as the

Consolidated Leverage Ratio at the end of the most recent Fiscal Quarter (as

evidenced by a Margin Determination Certificate delivered to Administrative

Agent pursuant to subsection 6.1(iv)) is equal to or less than 3.50:1.00.

(d)           Prepayments and Reductions from

Consolidated Excess Cash Flow.  In

the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year

(commencing with the Fiscal Year ending December 31,1999), Company shall,

no later than the fifth Business Day after the delivery of financial statements

for such Fiscal Year, prepay the Loans and/or the Revolving Loan Commitments

shall be permanently reduced in an aggregate amount equal to 75% of such

Consolidated Excess Cash Flow less the aggregate amount of all voluntary

prepayments of Term Loans actually made in such Fiscal Year pursuant to

subsection 2.4B(i); provided that (i) the amount of such prepayment

hereunder in respect of Excess Cash Flow shall be limited to the amount

necessary to reduce the amount of Indebtedness included in the calculation of

the Consolidated Leverage Ratio to the amount that would result, on a pro forma

basis after giving effect to such prepayment, in a Consolidated Leverage Ratio

of 3.50:1 or less at the end of the Fiscal Quarter then most recently ended and

(ii) if as of the last day of such Fiscal Year, the Consolidated Leverage Ratio

(as evidenced by a Margin Determination Certificate delivered to Administrative

Agent pursuant to subsection 6.1(iv)) is equal to or less than 3.50:1.00, no

prepayments of any Loans and no reduction of the Revolving Loan Commitments or

amount of Consolidated Excess Cash Flow need be made.

(e)           Calculations of Net Proceeds

Amounts; Additional Prepayments and Reductions Based on Subsequent Calculations.  Concurrently with any prepayment of the

Loans and/or reduction of the Revolving Loan Commitments pursuant to

subsections 2.4B(iii)(a)-(d) and on the date any such prepayment and/or

reduction would have been required to

 

13

 

be made pursuant to

subsections 2.4B(iii)(a) or 2.4B(iii)(b) but for the application of the

provisos to such subsections, Company shall deliver to Administrative Agent an

Officer’s Certificate demonstrating the calculation of the amount (the “Net

Proceeds Amount”) of the applicable Net Asset Sale Proceeds or Net

Insurance/Condemnation Proceeds, or Net Securities Proceeds (as such term is

defined in subsection 2.4B(iii)(c)), or the applicable Consolidated Excess Cash

Flow, as the case may be (and which, in the case of Consolidated Excess Cash Flow,

may be the Officer’s Certificate delivered pursuant to subsection 6.1(iii) with

respect to the financial statements for the Fiscal Year to which such excess

cash flow relates if such Officer’s Certificate contains the required

information).  In the event that Company

shall subsequently determine that the actual Net Proceeds Amount was greater

than the amount set forth in such Officer’s Certificate, Company shall promptly

make an additional prepayment of the Loans (and/or, if applicable, the Revolving

Loan Commitments shall be permanently reduced) in an amount equal to the amount

of such excess, and Company shall concurrently therewith deliver to

Administrative Agent an Officer’s Certificate demonstrating the derivation of

the additional Net Proceeds Amount resulting in such excess.

(f)            Company shall not be required to

make any prepayment of Loans otherwise required by subsections 2.4B(iii)(a),

(b), (c) or (d) (and no reduction of the Revolving Loan Commitments shall take

effect) unless and until the aggregate principal amount of the Loans to be

prepaid and/or the Revolving Loan Commitments to be reduced is at least equal

to $250,000.

(iv)          Application of

Prepayments.

(a)           Application of Voluntary

Prepayments by Type of Loans and Order of Maturity.  Any voluntary prepayments pursuant to

subsection 2.4B(i) shall be applied to the Loans as specified by Company in the

applicable notice of prepayment; provided that in the event Company

fails to specify the Loans to which any such prepayment shall be applied, such

prepayment shall be applied first to repay outstanding Swing Line Loans

to the full extent thereof, second to repay outstanding Term Loans to

the full extent thereof and third to repay outstanding Revolving Loans

to the full extent thereof.  Any

voluntary prepayments of the Term Loans pursuant to subsection 2.4B(i) (whether

the application thereof is specified by Company or not) shall be applied to

prepay the Tranche A Term Loans, the Tranche B Term Loans, and the Tranche D

Term Loans on a pro rata basis (in accordance with the respective outstanding

principal amounts thereof) and to reduce the scheduled installments of

principal of the Tranche A Term Loans, the Tranche B Term Loans, and the

Tranche D Term Loans set forth in subsection 2.4A(i), 2.4A(ii) and 2.4A(iii) in

forward order of maturity.

(b)           Application of Mandatory

Prepayments by Type of Loans.  Any

amount (the “Applied Amount”)

required to be applied as a mandatory prepayment of the Loans and/or a

reduction of the Revolving Loan Commitments pursuant to subsections

2.4B(iii)(a)-(d) shall be applied first to prepay the Term Loans to the

full extent thereof, and second, to the extent of any remaining portion

of the Applied Amount, to prepay the Swing Line

 

14

 

Loans and thereafter to

prepay Revolving Loans to the full extent thereof and permanently to reduce the

Revolving Loan Commitments by the amount of such prepayment.

(c)           Application of Mandatory

Prepayments of Term Loans to Tranche A Term Loans, Tranche B Term Loans and

Tranche D Term Loans and the Scheduled Installments of Principal Thereof.  Any mandatory prepayments of the Term Loans

pursuant to subsection 2.4B(iii) shall be applied to prepay the Tranche A Term

Loans, the Tranche B Term Loans and the Tranche D Term Loans on a pro rata

basis (in accordance with the respective outstanding principal amounts thereof)

and to reduce the scheduled installments of principal of the Tranche A Term

Loans, the Tranche B Term Loans and the Tranche D Term Loans set forth in

subsections 2.4A(i), 2.4A(ii) and 2.4A(iii) in forward order of maturity.  Notwithstanding the foregoing, in the case

of any mandatory prepayment of the Tranche B Term Loans and the Tranche D Term

Loans, Company may elect to offer the Tranche B Term Loan Lenders and/or the

Tranche D Term Loan Lenders the option to waive the right to receive the amount

of such mandatory prepayment of the Tranche B Term Loans or the Tranche D Term

Loans, as applicable.  If any Tranche B

Term Loan Lender or Lenders or any Tranche D Term Loan Lender or Lenders, as

applicable, elect to waive the right to receive the amount of such mandatory

prepayment, 50% of the amount that otherwise would have been applied to

mandatorily prepay the Tranche B Term Loans or the Tranche D Term Loans, as

applicable, of such Lender or Lenders shall be applied instead to the further

prepayment of the Tranche A Term Loans (and any such prepayment shall reduce

scheduled installments of principal of the Tranche A Term Loans set forth in subsection

2.4A(i) in forward order of maturity), to the extent any are then outstanding

and the remaining amount shall be retained by Company.

(d)           Application of Prepayments to Base

Rate Loans and Eurodollar Rate Loans. 

Considering Tranche A Term Loans, Tranche B Term Loans, Tranche D

Term Loans and Revolving Loans being prepaid separately, any prepayment thereof

shall be applied as specified by Company to Administrative Agent on or prior to

the date of the relevant prepayment or, absent such specification, first to

Base Rate Loans to the full extent thereof before application to Eurodollar

Rate Loans, in each case in a manner which minimizes the amount of any payments

required to be made by Company pursuant to subsection 2.6D.

Q.    Subsection 2.5 of the Credit Agreement is hereby amended by

deleting subsections 2.5B and 2.5C in their entirety and substituting the

following in lieu of subsection 2.5B:

B.            Revolving Loans; Swing Line Loans.  The proceeds of the Revolving Loans

and any Swing Line Loans may be applied by Company for working capital and

general and other corporate purposes, including the making of advances to DAH

as described below.  The proceeds of the

Revolving Loans may also be applied by Company to finance directly or

indirectly the costs of Permitted Acquisitions.

 

15

 

1.3          Amendments

to Section 3:  Letters of Credit

A.    Subsection 3.1A of the Credit Agreement is hereby amended by

deleting it in its entirety and substituting the following therefor:

A.            Letters of Credit. 

In addition to Company requesting that Revolving Lenders make Revolving

Loans pursuant to subsection 2.1A(iii) and that Swing Line Lender make Swing

Line Loans pursuant to subsection 2.1A(iv), Company may request, in accordance

with the provisions of this subsection 3.1, from time to time during the period

from the Closing Date to but excluding the Revolving Loan Commitment

Termination Date, that Issuing Lender issue Letters of Credit for the account

of Company or any of its Subsidiaries (provided that Company shall be deemed to

be the account party hereunder and shall be fully liable under this Section 3

with respect to all Letters of Credit issued for the account of its

Subsidiaries) for the purposes specified in the definitions of Standby Letters

of Credit and Trade Letters of Credit. 

Subject to the terms and conditions of this Agreement and in reliance

upon the representations and warranties of Company herein set forth, Issuing

Lender shall, subject to subsection 3.1B(ii), issue such Letters of Credit in

accordance with the provisions of this subsection 3.1; provided that

Company shall not request that Issuing Lender issue (and Issuing Lender shall

not issue):

(i)            any Letter of Credit if, after

giving effect to such issuance, the Total Utilization of Revolving Loan

Commitments would exceed the Revolving Loan Commitments then in effect;

(ii)           any Letter of Credit if, after giving

effect to such issuance, the Letter of Credit Usage would exceed $5,000,000;

(iii)          any Standby Letter of Credit having an

expiration date later than the earlier of (a) the Revolving Loan

Commitment Termination Date and (b) the date that is one year from the

date of issuance of such Standby Letter of Credit; provided that the

immediately preceding clause (b) shall not prevent Company from requesting and

any Issuing Lender from agreeing that a Standby Letter of Credit will

automatically be extended for one or more successive periods not to exceed one

year each unless such Issuing Lender elects not to extend for any such

additional period (such Issuing Lender hereby agreeing that it shall only elect

not to extend such Standby Letter of Credit if, but only if, it has knowledge

that an Event of Default has occurred and is continuing); or

(iv)          any Letter of Credit denominated in a

currency other than Dollars.

B.    Subsections 3.1B, 3.2, 3.3, 3.4 and 3.6 of the Credit Agreement

are hereby amended by deleting the references to ‘Working Capital Lender’ each

time such phrase appears therein and substituting the phrase ‘Revolving Lender’

in lieu thereof, by deleting the references to ‘Working Capital Lender’s’ each

time such phrase appears therein and substituting the phrase ‘Revolving

Lender’s’ in lieu thereof, by deleting the references to ‘Working Capital

Lenders’ each time such phrase appears therein and substituting the phrase

‘Revolving Lenders’ in lieu thereof and by deleting the references to ‘Working

Capital Loans’ each time such phrase appears therein and substituting the

phrase ‘Revolving Loans’ in lieu thereof.

1.4          Amendment to Section 4:  Condition to Loans and Letters of Credit

 

Subsection

4.3 of the Credit Agreement is hereby amended by deleting it in its entirety

and substituting the following therefor:

 

16

 

4.3  Conditions to

Revolving Loans to Finance the Costs of Permitted Acquisitions. 

The obligation of Revolving Lenders to make Revolving Loans on each

Funding Date for the purpose of financing directly or indirectly a Permitted

Acquisition is subject to the following further condition precedent that

Company delivers a Permitted Acquisition Compliance Certificate and is

otherwise in compliance with subsection 7.7(vi).

1.5          Amendments

to Section 7:  Company’s Negative

Covenants

A.    Subsection 7.3(xii) of the Credit Agreement is hereby amended by

deleting the reference therein to ‘Acquistion Loan Commitments’ and

substituting ‘Revolving Loan Commitments’ in lieu thereof.

B.    Subsection 7.6B of the Credit Agreement is hereby amended by

deleting it in its entirety and substituting the following therefor:

B.            Maximum Leverage Ratio.  Company shall not permit the Consolidated Leverage Ratio as

of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending

March 31, 2002, occurring during any period set forth below to exceed the

correlative ratio indicated:

	

  Period

  	

   

  	

  Maximum

  Consolidated

  Leverage Ratio

  	

   

  
	

  4th

  Fiscal Quarter, 2001

  	

   

  	

  4.50 x

  	

   

  
	

  1st

  Fiscal Quarter, 2002

  	

   

  	

  5.10 x

  	

   

  
	

  2nd

  Fiscal Quarter, 2002 through 3rd Fiscal Quarter, 2002

  	

   

  	

  5.50 x

  	

   

  
	

  4th

  Fiscal Quarter, 2002

  	

   

  	

  5.40 x

  	

   

  
	

  1st

  Fiscal Quarter, 2003

  	

   

  	

  5.00 x

  	

   

  
	

  2nd

  Fiscal Quarter, 2003

  	

   

  	

  4.75 x

  	

   

  
	

  3rd

  Fiscal Quarter, 2003

  	

   

  	

  4.60 x

  	

   

  
	

  4th

  Fiscal Quarter, 2003

  	

   

  	

  4.40 x

  	

   

  
	

  1st

  Fiscal Quarter, 2004 through 3rd Fiscal Quarter, 2004

  	

   

  	

  3.50 x

  	

   

  
	

  4th

  Fiscal Quarter, 2004 and thereafter

  	

   

  	

  3.00 x

  	

   

  

C.    Subsection 7.6C of the Credit Agreement is

hereby amended by deleting it in its entirety and substituting the following

therefor:

B.            Minimum Consolidated EBITDA.  Company shall not permit Consolidated EBITDA for the

consecutive four-Fiscal-Quarter period ending on the last day of any Fiscal

Quarter, beginning with the Fiscal Quarter ending March 31, 2002, occurring

during any period set forth below to be less than the correlative amount (the “Minimum EBITDA Amount”) indicated:

 

17

 

	

  Quarter

  Ended

  	

   

  	

  Minimum EBITDA Amount

  	

   

  
	

  4th Fiscal Quarter, 2001

  	

   

  	

  $74,783,200

  	

   

  
	

  1st Fiscal Quarter, 2002

  	

   

  	

  74,783,000

  	

   

  
	

  2nd Fiscal Quarter, 2002 through 4th

  Fiscal Quarter, 2002

  	

   

  	

  69,783,000

  	

   

  
	

  1st Fiscal Quarter, 2003

  	

   

  	

  74,783,000

  	

   

  
	

  2nd Fiscal Quarter, 2003

  	

   

  	

  76,283,000

  	

   

  
	

  3rd Fiscal Quarter, 2003

  	

   

  	

  77,283,000

  	

   

  
	

  4th Fiscal Quarter, 2003

  	

   

  	

  78,783,000

  	

   

  
	

  1st Fiscal Quarter, 2004 and thereafter

  	

   

  	

  82,783,200

  	

   

  

; provided

that

(x)            the

Minimum EBITDA Amount for the consecutive four-Fiscal-Quarter period ending at

the last day of any Fiscal Quarter during any period set forth above shall be

increased by an amount equal to 80% of the Acquired Business EBITDA of each

Acquired Business whose Acquired Business Date falls during the period from and

including the day following the Third Amended and Restated Credit Agreement

Closing Date to and including the last day of such Fiscal Quarter; and

(y)           to

the extent the amount of Consolidated EBITDA for the immediately preceding consecutive

four-Fiscal-Quarter period exceeds the amount of EBITDA required to be

maintained for such consecutive four-Fiscal-Quarter period pursuant to this

subsection, an amount equal to 50% of such excess amount may be carried forward

to (but only to) the then current Fiscal Quarter (any such amount to be

certified to Administrative Agent in the Compliance Certificate delivered for

the last Fiscal Quarter of such consecutive four-Fiscal-Quarter period).

For purposes of this

subsection 7.6C, the following terms have the following meanings:

“Acquired Business” means any business

acquired (whether through the purchase of assets or shares of capital stock) by

Company or any of its Subsidiaries after the Second Amended and Restated Credit

Agreement Closing Date.

“Acquired Business Date” means, with respect

to any Acquired Business, the date of consummation of the acquisition thereof

by Company or any of its Subsidiaries.

“Acquired

Business EBITDA” means, with respect to any Acquired Business, (x)

the consolidated net income of such Acquired Business for the consecutive

four-Fiscal-Quarter period ended on or most recently prior to its Acquired

Business Date and with respect to which financial statements are available on

the Acquired Business Date plus (y) to the extent deducted in

determining such consolidated net income for such period, the sum of (i)

consolidated interest expense, (ii) income taxes, (iii) depreciation, (iv)

amortization, (v) any extraordinary or non-recurring losses, and (vi) any

non-cash items minus (z) to the extent included in such consolidated net

income, extraordinary gains.

D.    Subsection 7.6D of the Credit Agreement is hereby amended by

deleting it in its entirety and substituting the following therefor:

 

18

 

D.            Minimum Interest Coverage Ratio.  Company shall not permit the

Consolidated Interest Coverage Ratio as of the last day of any Fiscal Quarter,

beginning with the Fiscal Quarter ending March 31, 2002, occurring during any

period set forth below to be less than the correlative ratio indicated:

	

  Period

  	

   

  	

  Minimum

  Interest Coverage

  Ratio

  	

   

  
	

  4th

  Fiscal Quarter, 2001 through 1st Fiscal Quarter, 2002

  	

   

  	

  2.25 x

  	

   

  
	

  2nd

  Fiscal Quarter, 2002 through 3rd Fiscal Quarter, 2002

  	

   

  	

  2.10 x

  	

   

  
	

  4th

  Fiscal Quarter, 2002

  	

   

  	

  2.15 x

  	

   

  
	

  1st

  Fiscal Quarter, 2003 through 4th Fiscal Quarter, 2003

  	

   

  	

  2.30 x

  	

   

  
	

  1st

  Fiscal Quarter, 2004 through 3rd Fiscal Quarter, 2004

  	

   

  	

  2.75 x

  	

   

  
	

  4th

  Fiscal Quarter, 2004 and thereafter

  	

   

  	

  3.00 x

  	

   

  

E.     Subsection 7.6E of the Credit Agreement is

hereby amended by deleting it in its entirety and substituting the following

therefor:

E.             Maximum Net Senior Debt Ratio.  Company shall not permit the Net

Senior Debt Ratio as of the last day of any Fiscal Quarter, beginning with the

Fiscal Quarter ending March 31, 2002, occurring during any period set forth

below to be less than the correlative ratio indicated:

	

  Period

  	

   

  	

  Maximum

  Net Senior Debt

  Ratio

  	

   

  
	

  4th

  Fiscal Quarter, 2001

  	

   

  	

  3.50 x

  	

   

  
	

  1st

  Fiscal Quarter, 2002

  	

   

  	

  3.80 x

  	

   

  
	

  2nd

  Fiscal Quarter, 2002 through 3rd Fiscal Quarter, 2002

  	

   

  	

  4.10 x

  	

   

  
	

  4th

  Fiscal Quarter, 2002

  	

   

  	

  4.00 x

  	

   

  
	

  1st

  Fiscal Quarter, 2003

  	

   

  	

  3.60 x

  	

   

  
	

  2nd

  Fiscal Quarter, 2003

  	

   

  	

  3.40 x

  	

   

  
	

  3rd

  Fiscal Quarter, 2003

  	

   

  	

  3.30 x

  	

   

  
	

  4th

  Fiscal Quarter, 2003

  	

   

  	

  3.10 x

  	

   

  
	

  1st

  Fiscal Quarter, 2004 and thereafter

  	

   

  	

  3.00 x

  	

   

  

 

F.     Subsection 7.8(i) of the Credit Agreement is hereby amended

by:  (i) deleting the phrase ‘plus

an additional aggregate amount equal to $10,000,000 in the aggregate for all

such Consolidated Capital Expenditures made after the Closing Date’; and (ii)

deleting the reference to  ‘Article 7’

and inserting ‘subsection 7.7’ in lieu thereof.

 

19

 

1.6          Amendment

to Section 8:  Events of Default

Section

8 of the Credit Agreement is hereby amended by deleting the references to

‘Working Capital Lenders’ each time such phrase appears therein and

substituting the phrase ‘Revolving Lenders’ in lieu thereof.

1.7          Amendments

to Section 10:  Miscellaneous

A.    Subsection 10.1 of the Credit Agreement is hereby amended by deleting

the references to ‘Working Capital Lender’ each time such phrase appears

therein and substituting the phrase ‘Revolving Lender’ in lieu thereof, by

deleting the references to ‘Working Capital Loan Commitment’ each time such

phrase appears therein and substituting the phrase ‘Revolving Loan Commitment’

in lieu thereof and by deleting the references to ‘Working Capital Loans’ each

time such phrase appears therein and substituting the phrase ‘Revolving Loans’

in lieu thereof.

B.    Subsection 10.1B(i) of the Credit Agreement hereby amended by

deleting references to ‘Exhibit VI’ and ‘or Exhibit VIII’ and

adding ‘Exhibit XXXI, Exhibit XXXII or Exhibit XXXIII’

after the phrase ‘Exhibit VII’  in the last sentence thereof.

1.8          Addition

and Modification of Exhibit and Schedule

A.    Exhibit XXXIII. 

The Exhibits are hereby amended by adding the information contained in Annex

A to this Amendment as Exhibit XXXIII to the Credit Agreement.

B.    Schedule 2.1. 

Schedule 2.1 is hereby amended by deleting the tables evidencing Working

Capital Loan Commitments and Acquisition Loan Commitments and by adding the

table for Revolving Loan Commitments attached as Annex B to this

Amendment.

Section 2.              CONDITIONS TO EFFECTIVENESS

The amendments referred to in Section 1 are subject to

the satisfaction on or prior to March 19, 2002 of all of the following

conditions precedent and the conditions set forth in Section 5E hereof (the

date of satisfaction of such conditions being referred to herein as the “Second

Amendment  Effective Date”):

A.    On or before the Second Amendment Effective Date, Company shall

deliver to Lenders (or to Administrative Agent for Lenders with sufficient

originally executed copies, where appropriate, for each Lender and its counsel)

the following, each, unless otherwise noted, dated the Second Amendment

Effective Date:

1      Resolutions of its Board of Directors

approving and authorizing the execution, delivery, and performance of this

Amendment, certified as of the Second Amendment Effective Date by its corporate

secretary or an assistant secretary as being in full force and effect without

modification or amendment;

2      Signature and incumbency certificates of

its officers executing this Amendment; and

3      Executed originals of this Amendment,

executed by Company and by each Subsidiary Guarantor.

 

20

 

B.    Lenders shall have received originally executed copies of one or

more favorable written opinions of Davis Polk & Wardwell, Spolin &

Silverman and other counsel reasonably acceptable to the Agents, each counsel

for Company, in form and substance reasonably satisfactory to Administrative

Agent and its counsel, dated as of the Second Amendment Effective Date and

setting forth, collectively, substantially the matters in the opinions designated

in Annex C to this Amendment.

C.    Administrative Agent shall have received on behalf of each Lender

that executes and delivers this Second Amendment an amendment fee equal to .15%

of the aggregate of such Lender’s Tranche A Term Loan Exposure, Tranche B Term

Loan Exposure, Tranche D Term Loan Exposure and Revolving Loan Exposure (after

giving effect to this Second Amendment).

D.    All documents executed or submitted in connection with the

transactions contemplated hereby by or on behalf of Company or any of its

Subsidiaries shall be reasonably satisfactory in form and substance to Agents

and their counsel; Agents and their counsel shall have received all

information, approvals, opinions, documents or instruments that Agents or their

counsel shall have reasonably requested.

Section

3.              COMPANY’S REPRESENTATIONS

AND WARRANTIES

In order to induce Lenders to enter into this

Amendment and to amend the Credit Agreement in the manner provided herein,

Company represents and warrants to each Lender that the following statements

are true, correct and complete on and as of the Second Amendment Effective

Date:

A.    Corporate Power and Authority.  Each of Company and each of its Subsidiaries has all requisite

corporate power and authority to enter into this Amendment and to carry out the

transactions contemplated by, and perform its obligations under, the Credit

Agreement as amended by this Amendment (the “Amended Agreement”).

B.    Authorization of Agreements; Company Preferred Stock.  The execution and delivery of this Amendment

and the performance of the Amended Agreement have been duly authorized by all

necessary corporate action on the part of each of Company and each of its

Subsidiaries.

C.    No Conflict.  The

execution, delivery and performance by each of Company and each of its

Subsidiaries of this Amendment, and the performance by Company of the Amendment

Agreement do not and will not (i) violate any provision of (x) any law or

any governmental rule or regulation applicable to Company or any of its

Subsidiaries where such violations in the aggregate have had or could

reasonably be expected to have a Material Adverse Effect, (y) the Certificate

or the Articles of Incorporation or Bylaws of Parent, Company or any of

Company’s Subsidiaries or (z) any order, judgment or decree of any court or

other agency of government binding on Company or any of Company’s Subsidiaries

where such violations in the aggregate have had or could reasonably be expected

to have a Material Adverse Effect, (ii) conflict with, result in a breach

of or constitute a default under any Contractual Obligation of Parent, Company

or any of its Subsidiaries where such conflict, breach or default in the

aggregate have had or could reasonably be expected to have a Material Adverse

Effect, (iii) result in or require the creation or imposition of any Lien

upon any of the properties or assets of Company or any of Company’s

Subsidiaries (other than Liens created under any of the Loan Documents in favor

of Administrative Agent on behalf of Lenders), or (iv) require any

approval of or consent of any Person under any Contractual Obligation of

Parent, Company or

 

21

 

any

of Company’s Subsidiaries, except for such approvals or consents the failure of

which to obtain has not had and could not reasonably be expected to have a

Material Adverse Effect.

D.    Governmental Consents. 

The execution, delivery and performance by each of Company and each of

its Subsidiaries of this Amendment and the performance by Company of the Amended

Agreement do not and will not require any registration with, consent or

approval of, or notice to, or other action to, with or by, any federal, state

or other governmental authority or regulatory body other than any such

registrations, consents, approvals, notices or other actions (x) that have

been made, obtained or taken on or prior to the date on which such

registrations, consents, approvals, notices or other actions are required to be

made, obtained or taken, as the case may be, and are in full force and effect

or (y) the failure of which to make, obtain or take has not had and could

not reasonably be expected to have a Material Adverse Effect.

E.     Binding Obligation. 

Each of this Amendment and the Amended Agreement has been duly executed

and delivered by each Loan Party that is a party thereto and is the legally

valid and binding obligation of such Loan Party, enforceable against such Loan

Party in accordance with its respective terms, subject to bankruptcy,

insolvency, fraudulent conveyance, reorganization, moratorium and other similar

laws relating to or affecting creditors’ rights generally, general equitable

principles (whether considered in a proceeding in equity or at law) and an

implied covenant of good faith and fair dealing.

F.     Incorporation of Representations and Warranties From Credit

Agreement.  The representations and

warranties contained in Section 5 of the Credit Agreement are and will be

true, correct and complete in all material respects on and as of the Second

Amendment Effective Date to the same extent as though made on and as of that

date, except to the extent such representations and warranties specifically

relate to an earlier date, in which case they were true, correct and complete

in all material respects on and as of such earlier date.

G.    Absence of Default. 

No event has occurred and is continuing or will result from the

consummation of the transactions contemplated by this Amendment that would

constitute an Event of Default or a Potential Event of Default.

Section 4.              ACKNOWLEDGEMENT AND CONSENT

Each of Parent and the Subsidiary Guarantors (each a “Guarantor”) is a party to a Guaranty and

each such Guarantor has guarantied the Obligations.

Each Guarantor hereby acknowledges that it has

reviewed the terms and provisions of the Credit Agreement and this Amendment

and consents to the amendment of the Credit Agreement effected pursuant to this

Amendment.  Each Guarantor hereby

confirms that the Guaranty to which it is a party or otherwise bound will

continue to guaranty to the fullest extent possible the payment and performance

of all “Guarantied Obligations” as such term is defined in the applicable

Guaranty, including without limitation the payment and performance of all such

“Guarantied Obligations” in respect of the Obligations of Company now or

hereafter existing under or in respect of the Amended Agreement.

Each Guarantor (a) acknowledges and agrees that the

Guaranty to which it is a party or otherwise bound shall continue in full force

and effect and that all of its obligations thereunder shall be valid and

enforceable and shall not be impaired or limited by the execution or

effectiveness of this Amendment;  (b)

represents and warrants that all representations and warranties contained in

the Amended Agreement and in the Guaranty to which it is a party or otherwise

bound are true, correct

 

22

 

and complete in all material respects on and as of the

Second Amendment Effective Date to the same extent as though made on and as of

that date, except to the extent such representations and warranties

specifically relate to an earlier date, in which case they were true, correct

and complete in all material respects on and as of such earlier date; and (c)

acknowledges and agrees that (i) notwithstanding the conditions to

effectiveness set forth in this Amendment, such Guarantor is not required by

the terms of the Credit Agreement or any other Loan Document to consent to the

amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing

in the Credit Agreement, this Amendment or any other Loan Document shall be

deemed to require the consent of such Guarantor to any future amendments to the

Credit Agreement.

Section 5.              MISCELLANEOUS

A.    Effect of Amendment. 

Reference to and effect on the Credit Agreement and the other Loan

Documents.

(i)            On and after the Second Amendment

Effective Date, each reference in the Credit Agreement to “this Agreement”,

“hereunder”, “hereof”, “herein” or words of like import referring to the Credit

Agreement, and each reference in the other Loan Documents to the “Credit

Agreement”, “thereunder”, “thereof” or words of like import referring to the

Credit Agreement shall mean and be a reference to the Amended Agreement.

(ii)           On and after the Second Amendment

Effective Date, each reference in the other Loan Documents to the “Lenders,”

“Commitments,” or words of like import shall mean and be a reference to the

Lenders and Commitments as amended by this Agreement.

(iii)          Except as specifically amended by this

Amendment, the Credit Agreement and the other Loan Documents shall remain in

full force and effect and are hereby ratified and confirmed.

(iv)          The execution, delivery and

performance of this Amendment shall not, except as expressly provided herein,

constitute a waiver of any provision of, or operate as a waiver of any right,

power or remedy of Agents or any Lender under, the Credit Agreement or any of

the other Loan Documents.

B.    Fees and Expenses. 

Company acknowledges that all costs, fees and expenses as described in

subsection 10.2 of the Credit Agreement incurred by Agents and their counsel

with respect to this Amendment and the documents and transactions contemplated

hereby shall be for the account of Company.

C.    Headings.  Section

and subsection headings in this Amendment are included herein for convenience

of reference only and shall not constitute a part of this Amendment for any

other purpose or be given any substantive effect.

D.    Applicable Law. 

THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER

SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,

THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION

SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),

WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

23

 

E.     Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and

by different parties hereto in separate counterparts, each of which when so

executed and delivered shall be deemed an original, but all such counterparts

together shall constitute but one and the same instrument; signature pages may

be detached from multiple separate counterparts and attached to a single

counterpart so that all signature pages are physically attached to the same

document.  This Amendment (other than

the provisions of Section 1 hereof, the effectiveness of which is governed

by Section 2 hereof) shall become effective upon the execution of a counterpart

hereof by Company, Requisite Lenders, Syndication Agent and the Guarantors and

receipt by Company and Agents of written or telephonic notification of such

execution and authorization of delivery thereof.

 

24

 

IN WITNESS

WHEREOF, the

parties hereto have caused this Amendment Agreement to be duly executed and

delivered by their respective officers thereunto duly authorized as of the date

first written above.

	

  DECRANE

  AIRCRAFT HOLDINGS, INC., a Delaware corporation

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  AEROSPACE

  DISPLAY SYSTEMS, INC., a Delaware corporation (for purposes of Section 4 only) as a

  Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  AUDIO

  INTERNATIONAL, INC., an Arkansas corporation (for purposes of Section 4 only) as a

  Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  AVTECH

  CORPORATION, a

  Washington corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  

 

S-1

 

	

  BOOTH

  ACQUISITION, LLC,

  a Delaware limited liability corporation (for purposes of Section 4 only) as

  a Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  CORY

  COMPONENTS, INC.,

  a California corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  DETTMERS

  INDUSTRIES, INC.,

  a Delaware corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  ELSINORE

  AEROSPACE SERVICES, INC., a California corporation (for purposes of Section

  4 only) as a Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  

 

S-2

 

	

  ELSINORE ENGINEERING, INC., a California corporation (for

  purposes of Section 4 only) as a Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  HOLLINGSEAD

  INTERNATIONAL, INC., a California corporation (for purposes of Section 4 only) as a

  Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  TRI-STAR

  ELECTRONICS INTERNATIONAL, INC., a California corporation (for purposes of Section

  4 only) as a Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  PATS,

  INC., a

  Maryland corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  

 

S-3

 

	

  PATS AIRCRAFT AND ENGINEERING

  CORPORATION, a

  Maryland corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  FLIGHT

  REFUELING, INC.,

  a Maryland corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  PATRICK

  AIRCRAFT TANK SYSTEMS, INC., a Maryland corporation (for purposes of Section 4

  only) as a Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  PATS

  SUPPORT, INC.,

  a Maryland corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  

 

S-4

 

	

  PPI

  HOLDINGS, INC.,

  a Kansas corporation(for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  PRECISION PATTERN, INC., a Kansas corporation (for purposes of

  Section 4 only) as a Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  CUSTOM WOODWORK & PLASTICS,

  INC., a

  Delaware corporation (for purposes of Section 4 only) as a Subsidiary

  Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  INTERNATIONAL CUSTOM INTERIORS,

  INC., a Florida

  corporation (for purposes of Section 4 only) as a Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  

 

S-5

 

	

  PCI

  ACQUISITION CO., INC., a Delaware corporation (for purposes of Section 4 only) as a

  Subsidiary Guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Senior Vice President and Chief Financial Officer

  
	

   

  
	

   

  
	

  DECRANE

  HOLDINGS CO., a

  Delaware corporation (for purposes of Section 4 only) as a guarantor

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Richard J. Kaplan

  
	

   

  	

  Title:

  	

  Assistant Secretary

  

 

S-6

 

	

  CREDIT

  SUISSE FIRST BOSTON (successor to DLJ Capital Funding, Inc.), as a Lender and as Syndication Agent

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

  Paul J. Corona

  
	

   

  	

  Title:

  	

  Director

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  

 

S-7

 

	

  BANK

  ONE, NA, as a

  Lender and as Administrative Agent

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  

 

S-8

 

	

                                                    

  , as a

  Lender

  
	

   

  
	

  By:

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  

 

S-9

 

ANNEX A

EXHIBIT

XXXIII

FORM OF

REVOLVING NOTE

DECRANE

AIRCRAFT HOLDINGS, INC.

PROMISSORY

NOTE DUE SEPTEMBER 30, 2004

$(1)                                                                                                                                                                                                  

                                                                                                                                                                                                         

FOR VALUE

RECEIVED, DECRANE

AIRCRAFT HOLDINGS, INC., a Delaware corporation (“Company”),

promises to pay to(2) (“Payee”) or its registered assigns, on September 30, 2004, the

lesser of (x)(3)

($[1]) and (y) the unpaid principal amount of all advances made by Payee

to Company as Revolving Loans under the Credit Agreement referred to below.

 

(1)           Insert amount of Lender’s Revolving

Loan Commitment in numbers.

(2)           Insert Lender’s name in capital

letters.

(3)           Insert

amount of Lender’s Revolving Loan Commitment in words.

Company also promises to pay interest on the unpaid

principal amount hereof, from the date hereof until paid in full, at the rates

and at the times which shall be determined in accordance with the provisions of

that certain Third Amended and Restated Credit Agreement dated as of May 11,

2000, as amended by a First Amendment to Third Amended and Restated Credit

Agreement (the “First Amendment”)

dated as of June 30, 2000, an Increased Commitments Agreement to Third Amended

and Restated Credit Agreement (“Increased

Commitments Agreement”), dated as of April 27, 2001 and a Second

Amendment to Third Amended and Restated Credit Agreement (the “Second Amendment”), dated as of March     , 2002, by and among Company, the lenders

listed on the signature pages thereof, Syndication Agent and Administrative

Agent (said Credit Agreement, as it may be amended, supplemented or otherwise

modified from time to time, being the “Credit Agreement”, the terms defined

therein and not otherwise defined herein being used herein as therein defined).

This Note is one of Company’s “Revolving Notes” (as

defined in the Credit Agreement) and is issued pursuant to and entitled to the

benefits of the Credit Agreement, to which reference is hereby made for a more

complete statement of the terms and conditions under which the Revolving Loans

evidenced hereby were made and are to be repaid.

All payments of principal and interest in respect of

this Note shall be made in lawful money of the United States of America in same

day funds at the Funding and Payment Office or at such other place as shall be

designated in writing for such purpose in accordance with the terms of the

Credit Agreement.  Unless and until an

Assignment Agreement effecting the assignment or transfer of this Note shall

have been accepted by Administrative Agent as provided in subsection 10.1B(ii)

of the Credit Agreement, Company and Administrative Agent shall be entitled to

deem and treat Payee as the owner and holder of this Note and the Loans

evidenced hereby.  Payee hereby agrees,

by its acceptance hereof, that before disposing of this Note or any part hereof

it will make a notation hereon of all principal payments previously made

hereunder and of the date to which interest hereon has been paid; provided,

however, that the failure to make a notation of any payment made on this

Note shall

 

A-1

 

not limit or otherwise affect the obligations of

Company hereunder with respect to payments of principal of or interest on this

Note.

Whenever any payment on this Note shall be stated to

be due on a day which is not a Business Day, such payment shall be made on the

next succeeding Business Day and such extension of time shall be included in

the computation of the payment of interest on this Note.

This Note is subject to prepayment at the option of

Company as provided in subsection 2.4B(i) of the Credit Agreement.

THIS

NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE

GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE

INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL

OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS

PRINCIPLES.

Upon the occurrence of an Event of Default, the unpaid

balance of the principal amount of this Note, together with all accrued and

unpaid interest thereon, may become, or may be declared to be, due and payable

in the manner, upon the conditions and with the effect provided in the Credit

Agreement.

The terms of this Note are subject to amendment only

in the manner provided in the Credit Agreement.

This Note is subject to restrictions on transfer or

assignment as provided in subsections 10.1 and 10.16 of the Credit Agreement.

No reference herein to the Credit Agreement and no

provision of this Note or the Credit Agreement shall alter or impair the

obligations of Company to pay the principal of and interest on this Note at the

place, at the respective times, and in the currency herein prescribed.

Company promises to pay all costs and expenses,

including reasonable attorneys’ fees, all as provided in and subject to

subsection 10.2 of the Credit Agreement, incurred in the collection and

enforcement of this Note.  Company and

any endorsers of this Note hereby consent to renewals and extensions of time at

or after the maturity hereof, without notice, and hereby waive diligence,

presentment, protest, demand and notice of every kind and, to the full extent

permitted by law, the right to plead any statute of limitations as a defense to

any demand hereunder.

 

A-2

 

IN WITNESS WHEREOF, Company has caused this Note to be

duly executed and delivered by its officer thereunto duly authorized as of the date

and at the place first written above.

	

  DECRANE AIRCRAFT HOLDINGS, INC.

  
	

   

  
	

  By:

  	

   

  
	

  Name:

  
	

  Title:

  

 

A-3

 

TRANSACTIONS

ON

REVOLVING NOTE

 

 

	

  Date

  	

   

  	

  Type of

  Loan Made  This Date

  	

   

  	

  Amount of

  Loan Made This Date

  	

   

  	

  Amount of

  Principal Paid This Date

  	

   

  	

  Outstanding

  Principal Balance This Date

  	

   

  	

  Notation

  Made By

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

A-4

 

ANNEX B

SCHEDULE

2.1 — REVOLVING LOAN COMMITMENTS

 

B.  WORKING

CAPITAL LOANS AND ACQUISITION LOANS*

 

	

  Lender

  	

   

  	

  Revolving Loan Commitment

  	

   

  	

  Pro Rata Share

  	

   

  
	

  PB Capital Corp

  NY

  	

   

  	

  $

  	

  5,000,000

  	

   

  	

  10.00

  	

  %

  
	

  US Bank National

  Association

  	

   

  	

  10,882,352.93

  	

   

  	

  21.76

  	

   

  
	

  Union Bank of

  California

  	

   

  	

  8,823,529.42

  	

   

  	

  17.65

  	

   

  
	

  City National

  Bank

  	

   

  	

  5,000,000.00

  	

   

  	

  10.00

  	

   

  
	

  Bank One NA

  	

   

  	

  8,823,529.41

  	

   

  	

  17.65

  	

   

  
	

  Highland Legacy

  Ltd

  	

   

  	

  2,941,176.48

  	

   

  	

  5.88

  	

   

  
	

  Banque Paribas

  	

   

  	

  8,529,411.76

  	

   

  	

  17.06

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Total

  	

   

  	

  $

  	

  50,000,000.00

  	

   

  	

  100.00

  	

  %

  

 

*Measures total commitments (not necessarily actual

outstanding amounts) as of the Second Amendment Closing Date (March    , 2002).

 

B-1

 

ANNEX C

MATTERS

TO BE COVERED IN OPINION OF COUNSEL TO COMPANY

 

1.             Company

has been duly incorporated, and is validly existing in good standing under the laws

of the State of Delaware with corporate power to own its properties and assets,

to enter into the Amendment and to perform its obligations under the Amendment.

2.             The

execution, delivery and performance of the Amendment by Company have been duly

authorized by all necessary corporate action on the part of Company, the

Amendment has been duly executed and delivered by Company, and the Amendment

and the Amended Credit Agreement constitute the legally valid and binding

obligations of Company, enforceable against Company in accordance with their

respective terms except as may be limited by bankruptcy, insolvency,

reorganization, moratorium or similar laws relating to or affecting creditors’

rights generally (including, without limitation, fraudulent conveyance laws)

and by general principles of equity including, without limitation, concepts of

materiality, reasonableness, good faith and fair dealing and the possible

unavailability of specific performance or injunctive relief, regardless of

whether considered in a proceeding in equity or at law.

3.             Company’s

execution and delivery of the Amendment and the consummation of the

transactions contemplated by the Amendment do not and will not (i) violate

the Certificate of Incorporation or By-laws of Parent or of Company,

(ii) violate, breach or result in a default under any existing obligation

of Parent or of Company under any other agreement, (iii) breach or

otherwise violate any existing obligation of Company under any order, judgment

or decree of any New York, California or federal court or Governmental

Authority binding on Company or (iv) violate any New York, California or

federal statute or regulation.

5.             No

governmental consents, approvals, authorizations, registrations, declarations

or filings are required by Company in connection with the execution and

delivery by Company of the Amendment and the performance by Company of the

Amended Credit Agreement.

 

C-1Exhibit 4

 

Exhibit 4.3.2

 

DeCrane Holdings Co.

 

Warrants to Purchase

155,000 Shares of Common Stock

 

Warrant Agreement

 

Dated as of October 5, 1998

 

State Street Bank And Trust Company

 

Warrant Agent

 

 

WARRANT AGREEMENT, dated as of October 5, 1998,

between DeCrane Holdings Co., a Delaware corporation (the “Company”), and State

Street Bank and Trust Company, as warrant agent (the “Warrant Agent”).

 

WHEREAS, the Company proposes to issue warrants (the “Warrants”) to

initially purchase up to an aggregate of 155,000 shares of Common Stock, par

value $.01 per share (the “Common

Stock”), of the Company (the Common Stock issuable on exercise

of the Warrants being referred to herein as the “Warrant Shares”), in connection with

the offering (the “Offering”) by DeCrane Aircraft Holdings, Inc. (“DeCrane”) of 100,000

Units (the “Units”),

each consisting of $1,000 principal amount at maturity of DeCrane’s 12% Senior

Subordinated Notes due 2008 (the “Notes”) and one Warrant, each Warrant

initially representing the right to purchase 1.55 Warrant Shares.

 

WHEREAS, the Company desires the Warrant Agent to act

on behalf of the Company, and the Warrant Agent is willing so to act in

connection with the issuance of Warrant Certificates (as defined) and other

matters as provided herein.

 

NOW, THEREFORE, in consideration of the premises and

the mutual agreements herein set forth, the parties hereto agree as follows:

 

SECTION 1.         CERTAIN DEFINITIONS.

 

As used in this Agreement, the following terms shall

have the following respective meanings:

 

“144A Global Warrant” means a global

Warrant substantially in the form of Exhibit A hereto bearing the Global

Warrant Legend and the Private Placement Legend and deposited with or on behalf

of, and registered in the name of, the Depositary or its nominee.

 

“Affiliate” of any Person means any

other Person directly or indirectly controlling or controlled by or under

direct or indirect common control with such Person. For purposes of this

definition, “control” (including, with correlative meanings, the terms “controlling,”

“controlled by” and “under common control with”), as used with respect to any

Person shall mean the possession, directly or indirectly, of the power to

direct or cause the direction of the management or policies of such specified

Person, whether through the ownership of voting securities, by agreement or

otherwise; provided that

beneficial ownership of 10% or more of the voting securities of a Person shall

be deemed to be control.

 

“Applicable Procedures” means, with

respect to any transfer or exchange of or for beneficial interests in any

Global Warrant, the rules and procedures of the Depositary, Euroclear and Cedel

Bank that apply to such transfer or exchange.

 

“Business Day” means any day other

than a Legal Holiday.

 

“Cedel Bank” means Cedel Bank, SA.

 

“Closing Date” means the date hereof.

 

“Commission” means the Securities and

Exchange Commission.

 

“Depositary” means, with respect to

the Warrants issuable or issued in whole or in part in global form, the Person

specified in Section 3.3 hereof as the Depositary with respect to the Warrants,

and any and all successors thereto appointed as Depositary hereunder and having

become such pursuant to the applicable provision of the Indenture.

 

2

 

“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.

 

“Global Warrants” means, individually

and collectively, each of the Restricted Global Warrants and the Unrestricted

Global Warrants, substantially, in the form of Exhibit A hereto issued in

accordance with Section 3.1(b) and 3.5 hereof.

 

“Global Warrant Legend” means the

legend set forth in Section 3.5(g)(ii), which is required to be placed on all

Global Warrants issued under this Warrant Agreement.

 

“Holder” means a person who is listed

as the record owner of Registrable Securities.

 

“IAI Global Warrant” means the global

Warrant substantially in the form of Exhibit A hereto bearing the Global

Warrant Legend and the Private Placement Legend and deposited with or on behalf

of and registered in the name of the Depositary or its nominee.

 

“Indenture” means the indenture, dated

the date hereof, between the DeCrane and State Street Bank and Trust Company,

as trustee relating to the Notes.

 

“Indirect Participant” means a Person

who holds a beneficial interest in a Global Warrant through a Participant.

 

“Initial Purchaser” means Donaldson,

Lufkin & Jenrette Securities Corporation.

 

“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, which is not also a QIB.

 

“Legal Holiday” means a Saturday, a

Sunday or a day on which banking institutions in the City of New York 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.

 

“Non-U.S. Person” means a Person who

is not a U.S. Person.

 

“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.

 

“Opinion of Counsel” means an opinion

from legal counsel who is reasonably acceptable to the Warrant Agent in form

and substance reasonably acceptable to the Warrant Agent. The counsel may be an

employee of or counsel to the Company, any subsidiary of the Company or the

Warrant Agent.

 

“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).

 

“Person” means any individual,

corporation, partnership, joint venture, association, joint-stock company,

trust, unincorporated organization or government or any agency or political

subdivision

 

3

 

thereof, including any subdivision or ongoing business of any such

entity or substantially all of the assets of any such entity, subdivision or

business.

 

“Private Placement Legend” means the

legend set forth in Section 3.5(g)(i) to be placed on all Warrants issued under

this Warrant Agreement except where otherwise permitted by the provisions of

this Warrant Agreement.

 

“QIB” means a “qualified institutional

buyer” as defined in Rule 144A.

 

“Registrable Securities” shall mean

the Warrants, the Warrant Shares and any other securities issued or issuable

with respect to the Warrants or the Warrant Shares by way of a stock dividend

or stock split or in connection with a combination of shares, recapitalization,

merger, consolidation or other reorganization; provided that a security ceases

to be a Registrable Security when it is no longer a Transfer Restricted

Security. The Registrable Securities are entitled to the benefits of the

Warrant Registration Rights Agreement.

 

“Regulation S” means Regulation S

promulgated under the Securities Act.

 

“Regulation S Global Warrant” means a

global Warrant in the form of Exhibit A hereto bearing the Global Warrant

Legend, the Private Placement Legend and the Regulation S Legend and deposited

with or on behalf of and registered in the name of the Depositary or its

nominee.

 

“Regulation S Legend” means the legend

set forth in Section 3.5(g)(iv) to be placed on all Registrable Securities

issued pursuant to Regulation S.

 

“Restricted Definitive Warrant” means

a Definitive Warrant bearing the Private Placement Legend.

 

“Restricted Global Warrant” means a

Global Warrant bearing the Private Placement Legend.

 

“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

under the Securities Act.

 

“Securities Act” means the Securities

Act of 1933, as amended.

 

“Separation Date” means the earliest

of (i) 180 days after the closing of the Offering, (ii) the date on which a

registration statement with respect to a registered exchange offer for the

Notes is declared effective under the Securities Act, (iii) the date a shelf

registration statement with respect to the Notes is declared effective under

the Securities Act, (iv) such date as Donaldson, Lufkin & Jenrette

Securities Corporation in its sole discretion shall determine and (v) the

occurrence of a Change of Control (as defined in the Indenture).

 

“Transfer Restricted Securities” shall

mean (a) each Warrant and Warrant Share held by an Affiliate of the Issuer and

(b) each other Warrant and Warrant Share until the earlier to occur of (i) the

date on which such Warrant or Warrant Share (other than any Warrant Share

issued upon exercise of a Warrant in accordance with a Registration Statement

(as defined in the Warrant Registration Rights Agreement has been disposed of

in accordance with a Registration Statement and (ii) the date on which 

 

 

4

 

such Warrant or Warrant Share (or the related Warrant) is distributed

to the public Pursuant to Rule 144 under the Act.

 

“Trustee” means the trustee under the

Indenture.

 

“Unrestricted Global Warrant” means a

global Warrant substantially in the form of Exhibit A attached hereto that

bears the Global Warrant Legend and that has the “Schedule of Exchanges of

Interests in the Global Warrant” attached thereto, and that is deposited with

or on behalf of and registered in the name of the Depositary, representing a

series of Warrants that do not bear the Private Placement Legend.

 

“Unrestricted Definitive Warrant”

means one or more Definitive Warrants that do not bear and are not required to

bear the Private Placement Legend.

 

“U.S. Person” means a U.S. Person as

defined in Rule 902(o) under the Securities Act.

 

“Warrant Registration Rights Agreement”

means the registration rights agreement, dated as of October S, 1998, by and

among the Company and the Initial Purchaser relating to the Warrants and the

Warrant Shares.

 

SECTION 2.         APPOINTMENT OF WARRANT AGENT.

 

The Company hereby appoints the Warrant Agent to act

as agent for the Company in accordance with the instructions set forth

hereinafter in this Agreement and the Warrant Agent hereby accepts such

appointment.

 

SECTION 3.         ISSUANCE OF WARRANTS; WARRANT CERTIFICATES.

 

3.1.         Form And

Dating.

 

(a)          General.

 

The Warrants shall be substantially in the form of

Exhibit A hereto (the “Warrant

Certificates”). The Warrants may have notations, legends or

endorsements required by law, stock exchange rule or usage. Each Warrant shall

be dated the date of the countersignature.

 

The terms and provisions contained in the Warrants

shall constitute, and are hereby expressly made, a part of this Warrant

Agreement. The Company and the Warrant Agent, by their execution and delivery

of this Warrant Agreement, expressly agree to such terms and provisions and to

be bound thereby. However, to the extent any provision of any Warrant conflicts

with the express provisions of this Warrant Agreement, the provisions of this

Warrant Agreement shall govern and be controlling.

 

(b)          Global Warrants.

 

Warrants issued in global form shall be substantially

in the form of Exhibit A attached hereto (including the Global Warrant Legend

thereon and the “Schedule of Exchanges of Interests in the Global Warrant”

attached thereto). Warrants issued in definitive form shall be substantially in

the form of Exhibit A attached hereto (but without the Global Warrant Legend

thereon and without the “Schedule of Exchanges of Interests in the Global

Warrant” attached thereto). Each Global Warrant shall represent such of the

outstanding Warrants as shall be specified therein and each shall provide that

it shall represent the number of outstanding Warrants from time to time

endorsed thereon and that the number of outstanding Warrants represented

thereby may from time to time be reduced or increased, as appropriate, to

reflect exchanges and redemptions. Any endorsement of a Global Warrant to

reflect the amount of any increase or

 

5

 

decrease in the number of outstanding Warrants represented thereby

shall be made by the Warrant Agent in accordance with instructions given by the

Holder thereof as required by Section 3.5 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 Warrant that are held by Participants through Euroclear or Cedel Bank.

 

3.2.         Execution.

 

An Officer shall sign the Warrants for the Company by

manual or facsimile signature.

 

If the Officer whose signature is on a Warrant no

longer holds that office at the time a Warrant is countersigned, the Warrant

shall nevertheless be valid.

 

A Warrant shall not be valid until countersigned by

the manual signature of the Warrant Agent. The signature shall be conclusive

evidence that the Warrant has been properly issued under this Warrant

Agreement.

 

The Warrant Agent shall, upon a written order of the

Company signed by an Officer (a “Warrant Countersignature Order”), countersign Warrants

for original issue up to the number stated in the preamble hereto.

 

The Warrant Agent may appoint an agent acceptable to

the Company to countersign Warrants. Such an agent may countersign Warrants

whenever the Warrant Agent may do so. Each reference in this Warrant Agreement

to a countersignature by the Warrant Agent includes a countersignature by such

agent. Such an agent has the same rights as the Warrant Agent to deal with the

Company or an Affiliate of the Company.

 

3.3.         Warrant

Registrar.

 

The Company shall maintain an office or agency where

Warrants may be presented for registration of transfer or for exchange (“Warrant Registrar”).

The Warrant Registrar shall keep a register of the Warrants and of their

transfer and exchange. The Company may appoint one or more co-Warrant

Registrars. The term “Warrant Registrar” includes any co-Warrant Registrar. The

Company may change any Warrant Registrar without notice to any holder. The

Company shall notify the Warrant Agent in writing of the name and address of

any agent not a party to this Warrant Agreement. If the Company fails to

appoint or maintain another entity as Warrant Registrar, the Warrant Agent

shall act as such. The Company or any of its subsidiaries may act as Warrant

Registrar.

 

The Company initially appoints The Depository Trust

Company (“DTC”)

to act as Depositary with respect to the Global Warrants.

 

The Company initially appoints the Warrant Agent to

act as the Warrant Registrar with respect to the Global Warrants.

 

3.4.         Holder

Lists.

 

The Warrant Agent 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. If the Warrant Agent is not the Warrant

Registrar, the Company shall promptly furnish to the Warrant Agent at such

times as the Warrant

 

6

 

 Agent may request in writing, a

list in such form and as of such date as the Warrant Agent may reasonably

require of the names and addresses of the Holders.

 

3.5.         Transfer

And Exchange.

 

(a)          Transfer and Exchange of Global

Warrants.

 

A Global Warrant 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, or by the

Depositary or any such nominee to a Successor Depositary or a nominee of such

successor Depositary. All Global Warrants will be exchanged by the Company for

Definitive Warrants if (i) the Company delivers to the Warrant Agent 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 Company within 120 days after the date of such notice from the Depositary

or (ii) the Company in its sole discretion determines that the Global Warrants

(in whole but not in Pan) should be exchanged for Definitive Warrants and

delivers a written notice to such effect to the Warrant Agent. Upon the

occurrence of either of the preceding events in (i) or (ii) above, Definitive

Warrants shall be issued in such names as the Depositary shall instruct the

Warrant Agent. Global Warrants also may be exchanged or replaced, in whole or

in pan, as provided in Sections 3.6 and 3.7 hereof. A Global Warrant may not be

exchanged for another Warrant other than as provided in this Section 3.5(a),

however, beneficial interests in a Global Warrant may be transferred and

exchanged as provided in Section 3.5(b), (c) or (f) hereof.

 

(b)          Transfer and Exchange of Beneficial

Interests in the Global Warrants.

 

The transfer and exchange of beneficial interests in

the Global Warrants shall be effected through the Depositary, in accordance

with the provisions of this Warrant Agreement and the Applicable Procedures.

Beneficial interests in the Restricted Global Warrants 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

Warrants 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 Warrant. Beneficial interests in any Restricted Global Warrant

may be transferred to Persons who take delivery thereof in the form of a

beneficial interest in the same Restricted Global Warrant in accordance with

the transfer restrictions set forth in the Private Placement Legend. Beneficial

interests in any Unrestricted Global Warrant may be transferred to Persons who

take delivery thereof in the form of a beneficial interest in an Unrestricted

Global Warrant. No written orders or instructions shall be required to be

delivered to the Warrant Registrar to effect the transfers described in this

Section 3.5(b)(i).

 

(ii)           All

Other Transfers and Exchanges of

Beneficial Interests in Global Warrants. In connection with all

transfers and exchanges of beneficial interests that are not subject to Section

3.5(b)(i) above, the transferor of such beneficial interest must deliver to the

Warrant 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 Warrant 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 Warrant in an amount equal to the beneficial interest to be

 

7

 

transferred or exchanged and (2) instructions given by

the Depositary to the Warrant Registrar containing information regarding the

Person in whose name such Definitive Warrant shall be registered. Upon

effectiveness of the Registration Statement (as defined in the Warrant

Registration Rights Agreement) by the Company in accordance with Section 3.5(f)

hereof, the requirements of this Section 3.5(b)(ii) shall be deemed to have

been satisfied upon receipt by the Warrant Registrar of a certification

required by the Company in connection with such Registration Statement

delivered by the Holder of such beneficial interests in the Restricted Global

Warrants. Upon satisfaction of all of the requirements for transfer or exchange

of beneficial interests in Global Warrants contained in this Agreement and the

Warrants or otherwise applicable under the Securities Act, the Warrant Agent shall

adjust the principal amount of the relevant Global Warrant(s) pursuant to

Section 3.5(h) hereof.

 

(iii)          Transfer

of Beneficial Interests to Another Restricted Global Warrant. A

beneficial interest in any Restricted Global Warrant may be transferred to a

Person who takes delivery thereof in the form of a beneficial interest in

another Restricted Global Warrant if the transfer complies with the

requirements of Section 3.5(b)(ii) above and the Warrant Registrar receives the

following:

 

(A)          if the transferee will take delivery

in the form of a beneficial interest in the 144A Global Warrant, then the

transferor must deliver a certificate in the form of Exhibit B hereto,

including the certifications in item (1) thereof;

 

(B)           if the transferee will take delivery

in the form of a beneficial interest in the Regulation S Global Warrant, 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 transferee will take delivery

in the form of a beneficial interest in the IAI Global Warrant, then the

transferor must deliver a certificate in the form of Exhibit B hereto,

including the certifications and certificates and Opinion of Counsel required

by item (3) thereof, if applicable.

 

(iv)          Transfer

and Exchange of Beneficial Interests in a Restricted Global Warrant for

Beneficial Interests in the Unrestricted Global Warrant. A

beneficial interest in any Restricted Global Warrant may be exchanged by any

holder thereof for a beneficial interest in an Unrestricted Global Warrant or

transferred to a Person who takes delivery thereof in the form of a beneficial

interest in an Unrestricted Global Warrant if the exchange or transfer complies

with the requirements of Section 3.5(b)(ii) above and:

 

(A)          such transfer is effected pursuant to

the Registration Statement in accordance with the Warrant Registration Rights

Agreement; or

 

(B)           the Warrant Registrar receives the

following:

 

(1)           if the holder of such beneficial

interest in a Restricted Global Warrant proposes to exchange such beneficial

interest for a beneficial interest in an Unrestricted Global Warrant, a

certificate from such holder in the form of Exhibit C hereto, including the

certifications in item (1)(a) thereof; or

 

8

 

(2)           if the holder of such beneficial

interest in a Restricted Global Warrant 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 Warrant, 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

(B), if the Warrant Registrar so requests or if the Applicable Procedures so

require, an Opinion of Counsel in form reasonably acceptable to the Warrant

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.

 

If any such transfer is effected pursuant to

subparagraph (B) above at a time when an Unrestricted Global Warrant has not

yet been issued, the Company shall issue and, upon receipt of an Warrant

Countersignature Order in accordance with Section 3.2 hereof, the Warrant Agent

shall countersign one or more Unrestricted Global Warrants in the number equal

to the number of beneficial interests transferred pursuant to subparagraph (B)

above.

 

(c)           Transfer and Exchange of Beneficial

Interests for Definitive Warrants.

 

(i)            Beneficial

Interests in Restricted Global Warrants to Restricted Definitive Warrants.

If any holder of a beneficial interest in a Restricted Global Warrant proposes

to exchange such beneficial interest for a Restricted Definitive Warrant or to

transfer such beneficial interest to a Person who takes delivery thereof in the

form of a Restricted Definitive Warrant, then, upon receipt by the Warrant

Registrar of the following documentation:

 

(A)          if the holder of such beneficial

interest in a Restricted Global Warrant proposes to exchange such beneficial

interest for a Restricted Definitive Warrant, 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;

 

 

9

 

(F)           if such beneficial interest is being

transferred to the Company 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 Warrant Agent shall cause, in accordance with the

standing instructions and procedures existing between the Depositary and the

Warrant Agent, the number of Warrants represented by the Global Warrant to be

reduced by the number of Warrants to be represented by the Definitive Warrant

pursuant to Section 3.5(h) hereof, and the Company shall execute and the

Warrant Agent shall countersign and deliver to the Person designated in the

instructions a Definitive Warrant in the appropriate amount. Any Definitive

Warrant issued in exchange for a beneficial interest in a Restricted Global

Warrant pursuant to this Section 3.5(c) shall be registered in such name or

names as the holder of such beneficial interest shall instruct the Warrant

Registrar through instructions from the Depositary and the Participant or

Indirect Participant. The Warrant Agent shall deliver such Definitive Warrants

to the Persons in whose names such Warrants are so registered. Any Definitive

Warrant issued in exchange for a beneficial interest in a Restricted Global

Warrant pursuant to this Section 3.5(c)(i) shall bear the Private Placement

Legend and shall be subject to all restrictions on transfer contained therein.

 

(ii)           Beneficial Interests in Restricted

Global Warrants to Unrestricted Definitive Warrants. A holder of a beneficial

interest in a Restricted Global Warrant may exchange such beneficial interest

for an Unrestricted Definitive Warrant or may transfer such beneficial interest

to a Person who takes delivery thereof in the form of an Unrestricted Definitive

Warrant only if:

 

(A)          such transfer is effected pursuant to

the Registration Statement in accordance with the Warrant Registration Rights

Agreement; or

 

(B)           the Warrant Registrar receives the

following:

 

(1)           if the holder of such beneficial

interest in a Restricted Global Warrant proposes to exchange such beneficial

interest for a Definitive Warrant 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 Warrant proposes to transfer such beneficial

interest to a Person who shall take delivery thereof in the form of a

Definitive Warrant 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

(B), if the Warrant Registrar so requests or if the Applicable Procedures so

require, an Opinion of Counsel in form reasonably acceptable to the Warrant

Registrar to the effect that such exchange or transfer is in compliance with

the Securities Act and that the restrictions on transfer

 

10

 

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 Warrants to Unrestricted Definitive Warrants.

If any holder of a beneficial interest in an Unrestricted Global Warrant

proposes to exchange such beneficial interest for a Definitive Warrant or to

transfer such beneficial interest to a Person who takes delivery thereof in the

form of a Definitive Warrant, then, upon satisfaction of the conditions set

forth in Section 3.5(b)(ii) hereof, the Warrant Agent shall cause the amount of

the applicable Global Warrant to be reduced accordingly pursuant to Section

3.5(h) hereof, and the Company shall execute and the Warrant Agent shall

countersign and deliver to the Person designated in the instructions a

Definitive Warrant in the appropriate principal amount. Any Definitive Warrant

issued in exchange for a beneficial interest pursuant to this Section

3.5(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 Warrant Registrar through instructions from the Depositary and the

Participant or Indirect Participant. The Warrant Agent shall deliver such

Definitive Warrants to the Persons in whose names such Warrants are so

registered. Any Definitive Warrant issued in exchange for a beneficial interest

pursuant to this Section 3.5(c)(iii) shall not bear the Private Placement Legend.

 

(d)          Transfer and Exchange of Definitive

Warrants for Beneficial Interests.

 

(i)            Restricted

Definitive Warrants to Beneficial Interests in Restricted Global Warrants. If

any Holder of a Restricted Definitive Warrant proposes to exchange such Warrant

for a beneficial interest in a Restricted Global Warrant or to transfer such

Restricted Definitive Warrants to a Person who takes delivery thereof in the

form of a beneficial interest in a Restricted Global Warrant, then, upon

receipt by the Warrant Registrar of the following documentation:

 

(A)          if the Holder of such Restricted

Definitive Warrant proposes to exchange such Warrant for a beneficial interest

in a Restricted Global Warrant, 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 Warrant

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 Warrant

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 Restricted Definitive Warrant

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 Restricted Definitive Warrant

is being transferred to an Institutional Accredited Investor in reliance on an

exemption from the

 

 

11

 

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 Restricted Definitive Warrant

is being transferred to the Company 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 Restricted Definitive

Warrant 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 Warrant Agent shall cancel the Restricted

Definitive Warrant, increase or cause to be increased the amount of, in the

case of clause (A) above, the appropriate Restricted Global Warrant, in the

case of clause (B) above, the 144A Global Warrant, in the case of clause (C)

above, the Regulation S Global Warrant, and in all other cases, the IAI Global

Warrant.

 

(ii)           Restricted

Definitive Warrants to Beneficial Interests in Unrestricted Global Warrants.

A Holder of a Restricted Definitive Warrant may exchange such Warrant for a

beneficial interest in an Unrestricted Global Warrant or transfer such

Restricted Definitive Warrant to a Person who takes delivery thereof in the

form of a beneficial interest in an Unrestricted Global Warrant only if:

 

(A)          such transfer is effected pursuant to

the Registration Statement in accordance with the Registration Rights

Agreement; or

 

(B)           the Warrant Registrar receives the

fo1lowing:

 

(1)           if the Holder of such Definitive

Warrants proposes to exchange such Warrants for a beneficial interest in the

Unrestricted Global Warrant, 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

Warrants proposes to transfer such Warrants to a Person who shall take delivery

thereof in the form of a beneficial interest in the Unrestricted Global

Warrant, 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

(D), if the Warrant Registrar so requests or if the Applicable Procedures so

require, an Opinion of Counsel in form reasonably acceptable to the Warrant

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.

 

Upon satisfaction of the conditions of any of the

subparagraphs in this Section 3.5(d)(ii), the Warrant Agent shall cancel the

Definitive Warrants and increase or cause to be increased the aggregate

principal amount of the Unrestricted Global Warrant.

 

 

12

 

(iii)          Unrestricted Definitive Warrants to

Beneficial Interests in Unrestricted Global Warrants. A Holder of an

Unrestricted Definitive Warrant may exchange such Warrant for a beneficial

interest in an Unrestricted Global Warrant or transfer such Definitive Warrants

to a Person who takes delivery thereof in the form of a beneficial interest in

an Unrestricted Global Warrant at any time. Upon receipt of a request for such

an exchange or transfer, the Warrant Agent shall cancel the applicable

Unrestricted Definitive Warrant and increase or cause to be increased the

amount of one of the Unrestricted Global Warrants.

 

If any such exchange or transfer from a Definitive

Warrant to a beneficial interest is effected pursuant to subparagraphs (ii)(B)

or (iii) above at a time when an Unrestricted Global Warrant has not yet been

issued, the Company shall issue and, upon receipt of an Warrant

Countersignature Order in accordance with Section 3.2 hereof, the Warrant Agent

shall countersign one or more Unrestricted Global Warrants in the number equal

to the number of beneficial interests of Definitive Warrants so transferred.

 

(e)           Transfer and Exchange of Definitive

Warrants for Definitive Warrants.

 

Upon request by a Holder of Definitive Warrants and

such Holder’s compliance with the provisions of this Section 3.5(e), the

Warrant Registrar shall register the transfer or exchange of Definitive

Warrants. Prior to such registration of transfer or exchange, the requesting

Holder shall present or surrender to the Warrant Registrar the Definitive

Warrants duly endorsed or accompanied by a written instruction of transfer in

form satisfactory to the Warrant Registrar duly executed by such Holder or by

its 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

3.5(e).

 

(i)            Restricted

Definitive Warrants to Restricted Definitive Warrants. Any Restricted

Definitive Warrant may be transferred to and registered in the name of Persons

who take delivery thereof in the form of a Restricted Definitive Warrant if the

Warrant 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; or

 

(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 Warrants to Unrestricted Definitive Warrants. Any

Restricted Definitive Warrant may be exchanged by the Holder thereof for an

Unrestricted Definitive Warrant or transferred to a Person or Persons who take

delivery thereof in the form of an Unrestricted Definitive Warrant if:

 

(A)          any such transfer is effected pursuant

to the Registration Statement in accordance with the Warrant Registration

Rights Agreement; or

 

13

 

(B)           the Warrant Registrar receives the

following:

 

(1)           if the Holder of such Restricted

Definitive Warrants proposes to exchange such Warrants for an Unrestricted

Definitive Warrant, 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 Warrants proposes to transfer such Warrants to a Person who shall

take delivery thereof in the form of an Unrestricted Definitive Warrant, 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

(B), if the Warrant Registrar so requests, an Opinion of Counsel in form

reasonably acceptable to the Company 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 Warrants to Unrestricted

Definitive Warrants. A Holder of Unrestricted Definitive Warrants

may transfer such Warrants to a Person who takes delivery thereof in the form

of an Unrestricted Definitive Warrant Upon receipt of a request to register

such a transfer, the Warrant Registrar shall register the Unrestricted Definitive

Warrants pursuant to the instructions from the Holder thereof.

 

(f)            Registration Statement.

 

Upon the effectiveness of the Registration Statement

and sales of Warrants in connection therewith in accordance with the Warrant

Registration Rights Agreement, the Company shall issue and, upon receipt of a

Warrant Countersignature Order in accordance with Section 3.2, the Warrant

Agent shall countersign (i) one or more Unrestricted Global Warrants in an

amount equal to the amount of the beneficial interests in the Restricted Global

Warrants sold under such Registration Statement and (ii) Definitive Warrants in

an amount equal to the amount of the beneficial interests of the Restricted

Definitive Warrants sold under such Registration Statement. Concurrently with the

issuance of such Warrants, the Warrant Agent shall cause the amount of the

applicable Restricted Global Warrants to be reduced accordingly, and the

Company shall execute and the Warrant Agent shall countersign and deliver to

the Persons designated by the Holders of Definitive Warrants so accepted

Definitive Warrants in the appropriate amount.

 

(g)           Legends.

 

The following legends shall appear on the face of all

Global Warrants and Definitive Warrants issued under this Warrant Agreement

unless specifically stated otherwise in the applicable provisions of this

Warrant Agreement.

 

(i)            Private

Placement Legend.

 

(A)          Except as permitted by subparagraph

(B) below, each Global Warrant and each Definitive Warrant (and all Warrants

issued in exchange therefor or substitution thereof) shall bear the legend in

substantially the following form:

 

14

 

“THIS SECURITY (OR ITS

PREDECESSOR) AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE HAVE 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 SECURITY 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)(l), (2), (3) OR

(7) OF REGULATION D UNDER THE SECURITIES ACT (AN “IAI”),

 

(2)           AGREES THAT IT WILL NOT RESELL OR

OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY 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 TRANSATION

MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURTIES ACT, (E) TO AN IAI

THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE WARRANT AGENT A SIGNED LETTER

CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF

THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE WARRANT AGENT) AND,

IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITY

LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY 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 COMPANY) 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,

 

(3)           AGREES NOT TO ENGAGE IN HEDGING

TRANSACTIONS UNLESS IN COMPLIANCE WITH THE SECURITIES ACT AND

 

(4)           AGREES THAT IT WILL DELIVER TO EACH

PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE

SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

15

 

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 WARRANT AGREEMENT

CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO REFUSE TO REGISTER ANY

TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.”

 

(B)           Notwithstanding the foregoing, any

Global Warrant or Definitive Warrant issued pursuant to subparagraphs (b)(iv),

(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section

3.5 (and all Warrants issued in exchange therefor or substitution thereof)

shall not bear the Private Placement Legend.

 

(ii)           Global

Warrant Legend. Each Global Warrant shall bear a legend in

substantially the following form:

 

“THIS GLOBAL WARRANT IS

HELD BY THE DEPOSITARY (AS DEFINED IN THE WARRANT AGREEMENT GOVERNING THIS

WARRANT) 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 WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED

PURSUANT TO SECTION 3.5 OF THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY

BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(A) OF THE WARRANT

AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE WARRANT AGENT FOR

CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT AGREEMENT AND (IV) THIS

GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR

WRI1TEN CONSENT OF THE COMPANY.”

 

(iii)          Unit

Legend Each Warrant issued prior to the Separation Date shall bear a

legend in substantially the following form:

 

“THE WARRANTS EVIDENCED

BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE

“UNITS”), EACH OF WHICH CONSIST OF $1,000 PRINCIPAL AMOUNT AT MATURITY OF THE

12% SENIOR SUBORDINATED NOTES DUE 2008 OF DECRANE AIRCRAFT HOLDINGS, INC. (THE

“NOTES”) AND ONE WARRANT (THE “WARRANTS”) INITIALLY ENTITLING THE HOLDER

THEREOF TO PURCHASE 1.55 SHARES, PAR VALUE $0.01 PER SHARE, OF DECRANE HOLDINGS

CO.

 

PRIOR TO THE EARLIEST TO

OCCUR OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING OF THE UNITS, (II) THE

DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO A REGISTERED EXCHANGE

OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (III) THE

DATE A SHELF REGISTRATION STATEMENT WITH RESPECT TO THE NOTES IS DECLARED

EFFECTIVE UNDER THE SECURITIES ACT, (IV) SUCH DATE AS DONALDSON, LUFKIN &

JENRETTE SECURITIES CORPORATION IN ITS SOLE DISCRETION SHALL DETERMINE AND (V)

THE OCCURRENCE OF A CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE GOVERNING

THE NOTES), THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED

OR EXCHANGED SEPARATELY

 

16

 

FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY

TOGETHER WITH, THE NOTES.”

 

(iv)          Regulation

S. Legend. Each Warrant that is a Registrable Security and issued

pursuant to Regulation S shall bear the following legend on the fact thereof:

 

“THIS WARRANT AND THE

SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE

SECURITIES ACT AND THE WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S.

PERSON UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE

“SECURITIES ACT”) OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. IN ORDER

TO EXERCISE THIS WARRANT, THE HOLDER MUST FURNISH TO THE COMPANY AND THE

WARRANT AGENT EITHER (A) A WRITTEN CERTIFICATION THAT IT IS NOT A U.S. PERSON

AND THE WARRANT IS NOT BEING EXERCISED ON BEHALF OF A U.S. PERSON OR (B) A WRITTEN

OPINION OF COUNSEL TO THE EFFECT THAT THE SECURITIES DELIVERED UPON EXERCISE OF

THE WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OR THAT THE DELIVERY

OF SUCH SECURITIES IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE

SECURITIES ACT. TERMS IN THIS LEGEND HAVE THE MEANINGS GIVEN TO THEM BY

REGULATION S UNDER THE SECURITIES ACT.”

 

(h)          Cancellation and/ or Adjustment of

Global Warrants.

 

At such time as all beneficial interests in a

particular Global Warrant have been exercised or exchanged for Definitive

Warrants or a particular Global Warrant has been exercised, redeemed,

repurchased or canceled in whole and not in part, each such Global Warrant

shall be returned to or retained and canceled by the Warrant Agent in

accordance with Section 3.8 hereof. At any time prior to such cancellation, if

any beneficial interest in a Global Warrant is exercised or exchanged for or

transferred to a Person who will take delivery thereof in the form of a

beneficial interest in another Global Warrant or for Definitive Warrants, the

amount of Warrants represented by such Global Warrant shall be reduced

accordingly and an endorsement shall be made on such Global Warrant by the

Warrant Agent or by the Depositary at the direction of the Warrant Agent 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 Warrant, such other Global Warrant shall

be increased accordingly and an endorsement shall be made on such Global

Warrant by the Warrant Agent or by the Depositary at the direction of the

Warrant Agent to reflect such increase.

 

(i)            General Provisions Relating to Transfers and

Exchanges.

 

(i)            To permit registrations of transfers

and exchanges, the Company shall execute and the Warrant Agent shall

countersign Global Warrants and Definitive Warrants upon the Company’s order or

at the Warrant Registrar’s request.

 

(ii)           No service charge shall be made to a

holder of a beneficial interest in a Global Warrant or to a holder of a

Definitive Warrant for any registration of transfer or exchange, but the

Company may require payment of a sum sufficient to cover any transfer tax or

similar governmental charge payable in connection therewith.

 

(iii)          All Global Warrants and Definitive

Warrants issued upon any registration of transfer or exchange of Global

Warrants or Definitive Warrants shall be the duly authorized, executed and

issued warrants for Common Stock of the Company,

 

17

 

not subject to any preemptive rights, and entitled to

the same benefits under this Warrant Agreement, as the Global Warrants or

Definitive Warrants surrendered upon such registration of transfer or exchange.

 

(iv)          Prior to due presentment for the

registration of a transfer of any Warrant, the Warrant Agent, and the Company

may deem and treat the Person in whose name any Warrant is registered as the

absolute owner of such Warrant for all purposes and none of the Warrant Agent,

or the Company shall be affected by notice to the contrary.

 

(v)           The Warrant Agent shall countersign

Global Warrants and Definitive Warrants in accordance with the provisions of

Section 3.2 hereof.

 

(j)            Facsimile Submissions to Warrant

Agent.

 

All certifications, certificates and Opinions of

Counsel required to be submitted to the Warrant Registrar pursuant to this

Section 3.5 to effect a registration of transfer or exchange may be submitted

by facsimile.

 

Notwithstanding anything herein to the contrary, as to

any certificates and/or certifications delivered to the Warrant Registrar

pursuant to this Section 3.5, the Warrant Registrar’s duties shall be limited

to confirming that any such certifications and certificates delivered to it are

in the form of Exhibits B and C attached hereto. The Warrant Registrar shall

not be responsible for confirming the truth or accuracy of representations made

in any such certifications or certificates. As to any Opinions of Counsel

delivered pursuant to this Section 3.5, the Warrant Registrar may rely upon,

and be fully protected in relying upon, such opinions.

 

3.6.         Replacement

Warrants.

 

If any mutilated Warrant is surrendered to the Warrant

Agent or the Company and the Warrant Agent receives evidence to its

satisfaction of the destruction, loss or theft of any Warrant, the Company

shall issue and the Warrant Agent, upon receipt of a Warrant Countersignature

Order, shall countersign a replacement Warrant if the Warrant Agent’s

requirements are met. If required by the Warrant Agent or the Company, an

indemnity bond must be supplied by the Holder that is sufficient in the

judgment of the Warrant Agent and the Company to protect the Company, the

Warrant Agent, any Agent and any agent for purposes of the countersignature

from any loss that any of them may suffer if a Warrant is replaced. The Company

may charge for its expenses in replacing a Warrant.

 

Every replacement Warrant is an additional warrant of

the Company and shall be entitled to all of the benefits of this Warrant Agreement

equally and proportionately with all other Warrants duly issued hereunder.

 

3.7.         Temporary

Warrants.

 

Until certificates representing Warrants are ready for

delivery, the Company may prepare and the Warrant Agent, upon receipt of a

Warrant Countersignature Order, shall issue temporary Warrants. Temporary

Warrants shall be substantially in the form of certificated Warrants but may

have variations that the Company considers appropriate for temporary Warrants

and as shall be reasonably acceptable to the Warrant Agent. Without

unreasonable delay, the Company shall prepare and the Warrant Agent shall

countersign definitive Warrants in exchange for temporary Warrants.

 

Holders of temporary Warrants shall be entitled to all

of the benefits of this Warrant Agreement.

 

18

 

3.8.         Cancellation.

 

Subject to Section 3.5(h) hereof, the Company at any

time may deliver Warrants to the Warrant Agent for cancellation. The Warrant

Registrar and Warrant Paying Agent shall forward to the Warrant Agent any

Warrants surrendered to them for registration of transfer, exchange or

exercise. The Warrant Agent and no one else shall cancel all Warrants

surrendered for registration of transfer, exchange, exercise, replacement or

cancellation and shall destroy canceled Warrants (subject to the record

retention requirement of the Exchange Act). Certification of the destruction of

all canceled Warrants shall be delivered to the Company. The Company may not

issue new Warrants to replace Warrants that have been exercised or that have

been delivered to the Warrant Agent for cancellation.

 

SECTION

4.                            SEPARATION

OF WARRANTS; TERMS OF WARRANTS; EXERCISE OF WARRANTS.

 

(a)           The

Notes and Warrants will not be separately transferable until the Separation

Date. Subject to the terms of this Agreement, each Warrant holder shall have

the right, which may be exercised during the period commencing at the opening

of business on the Separation Date and until 5:00 p.m. New York City time on

September 30, 2008 (the “Exercise

Period”), to receive from the Company the number of fully paid

and nonassessable Warrant Shares which the holder may at the time be entitled

to receive on exercise of such Warrants and payment of the exercise price (the “Exercise Price”) (i)

by tendering Notes having an aggregate principal amount at maturity, plus

accrued and unpaid interest, if any thereon to the date of exercise or (ii) in

cash, by wire transfer or by certified or official check payable to the order

of the Company, in each case, equal to the Exercise Price then in effect for

such Warrant Shares; provided that holders shall be able to exercise their

Warrants only if a registration Statement relating to the Warrant Shares is

then in effect, or the exercise of such Warrants is exempt from the

registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and such securities

are qualified for sale or exempt from qualification under the applicable

securities laws of the states in which the various holders of the Warrants or

other persons to whom it is proposed that the Warrant Shares be issued on

exercise of the Warrants reside. Each Warrant not exercised prior to 5:00 p.m.,

New York City time, on September 30, 2008 (the “Expiration Date”) shall become void and

all rights thereunder and all rights in respect thereof under this agreement

shall cease as of such time. No adjustments as to dividends will be made upon

exercise of the Warrants.

 

(b)           In

order to exercise all or any of the Warrants represented by a Warrant

Certificate, the holder thereof must deliver to the Warrant Agent at its

corporate trust office set forth in Section 15 hereof the Warrant Certificate

and the form of election to purchase on the reverse thereof duly filled in and

signed, which signature shall be medallion guaranteed by an institution which

is a member of a Securities Transfer Association recognized signature guarantee

program, and upon payment to the Warrant Agent for the account of the Company

of the Exercise Price, which is set forth in the form of Warrant Certificate

attached hereto as Exhibit A, as adjusted as herein provided, for the number of

Warrant Shares in respect of which such Warrants are then exercised. Payment of

the aggregate Exercise Price shall be made (i) in cash, by wire transfer or by

certified or official bank check payable to the order of the Company or (ii) by

tendering Notes in the manner provided in Section 4(a) hereof.

 

(c)           Subject

to the provisions of Section 5 hereof, upon compliance with clause (b) above,

the Warrant Agent shall deliver or cause to be delivered with all reasonable

dispatch, to or upon the written order of the holder and in such name or names

as the Warrant holder may designate, a certificate or certificates for the

number of whole Warrant Shares issuable upon the exercise of such Warrants or

other securities or property to which such holder is entitled hereunder,

together with cash as provided in Section 9 hereof; provided that if any

consolidation, merger or lease or sale of assets is proposed to be effected by

the Company as described in Section 8(m) hereof, or a tender offer or an

exchange offer for shares of Common Stock shall be made, upon such surrender of

Warrants and payment of the Exercise Price as aforesaid, the Warrant Agent shall,

as soon as possible, but in any event not later than two business days

 

19

 

thereafter, deliver or cause to be delivered the full number of Warrant

Shares issuable upon the exercise of such Warrants in the manner described in

this sentence or other securities or property to which such holder is entitled

hereunder, together with cash as provided in Section 9 hereof. Such certificate

or certificates shall be deemed to have been issued and any person so designated

to be named therein shall be deemed to have become a holder of record of such

Warrant Shares as of the date of the surrender of such Warrants and payment of

the Exercise Price.

 

(d)           The

Warrants shall be exercisable, at the election of the holders thereof, either

in full or from time to time in part. If less than all the Warrants represented

by a Warrant Certificate are exercised, such Warrant Certificate shall be

surrendered and a new Warrant Certificate of the same tenor and for the number

of Warrants which were not exercised shall be executed by the Company and

delivered to the Warrant Agent and the Warrant Agent shall countersign the new

Warrant Certificate, registered in such name or names as may be directed in

writing by the holder, and shall deliver the new Warrant Certificate to the

Person or Persons entitled to receive the same.

 

(e)           All

Warrant Certificates surrendered upon exercise of Warrants shall be cancelled

by the Warrant Agent. Such cancelled Warrant Certificates shall then be

disposed of by the Warrant Agent in a manner satisfactory to the Company. The

Warrant Agent shall account promptly to the Company with respect to Warrants

exercised and concurrently pay to the Company all monies received by the

Warrant Agent for the purchase of the Warrant Shares through the exercise of

such Warrants.

 

(f)            The

Warrant Agent shall keep copies of this Agreement and any notices given or

received hereunder available for inspection by the holders during normal

business hours at its office. The Company shall supply the Warrant Agent from

time to time with such numbers of copies of this Agreement as the Warrant Agent

may request.

 

SECTION 5.         PAYMENT OF TAXES.

 

The Company will pay all documentary stamp taxes

attributable to the initial issuance of Warrant Shares upon the exercise of

Warrants; provided that the Company shall not be required to pay any tax or

taxes which may be payable in respect of any transfer involved in the issue of

any Warrant Certificates or any certificates for Warrant Shares in a name other

than that of the registered holder of a Warrant Certificate surrendered upon

the exercise of a Warrant, and the Company shall not be required to issue or

deliver such Warrant Certificates unless or until the person or persons

requesting the issuance thereof shall have paid to the Company the amount of

such tax or shall have established to the satisfaction of the Company that such

tax has been paid.

 

SECTION 6.         RESERVATION OF WARRANT SHARES.

 

(a)           The

Company will at all times reserve and keep available, free from preemptive

rights, out of the aggregate of its authorized but unissued Common Stock or its

authorized and issued Common Stock held in its treasury, for the purpose of

enabling it to satisfy any obligation to issue Warrant Shares upon exercise of

Warrants, the maximum number of shares of Common Stock which may then be

deliverable upon the exercise of all outstanding Warrants.

 

(b)           The

Company or, if appointed, the transfer agent for the Common Stock (the “Transfer Agent”) and

every subsequent transfer agent for any shares of the Company’s capital stock

issuable upon the exercise of any of the rights of purchase aforesaid will be

irrevocably authorized and directed at all times to reserve such number of

authorized shares as shall be required for such purpose. The Company will keep

a copy of this Agreement on file with the Transfer Agent and with every

subsequent transfer agent for any shares of the Company’s capital stock

issuable upon the exercise of the rights of purchase represented by the Warrants.

The Warrant Agent is hereby irrevocably authorized to requisition from time to

time from such Transfer Agent the stock certificates required to honor

outstanding Warrants

 

20

 

upon exercise thereof in accordance with the terms of this Agreement.

The Company will supply such Transfer Agent with duly executed certificates for

such purposes and will provide or otherwise make available any cash which may

be payable as provided in Section 9 hereof. The Company will furnish such

Transfer Agent a copy of all notices of adjustments, and certificates related

thereto, transmitted to each holder pursuant to Section 11 hereof.

 

(c)           Before

taking any action which would cause an adjustment pursuant to Section 8 hereof to

reduce the Exercise Price below the then par value (if any) of the Warrant

Shares, the Company will take any corporate action which may, in the opinion of

its counsel (which may be counsel employed by the Company), be necessary in

order that the Company may validly and legally issue fully paid and

nonassessable Warrant Shares at the Exercise Price as so adjusted.

 

(d)           The

Company covenants that all Warrant Shares which may be issued upon exercise of

Warrants will, upon issue, be fully paid, nonassessable, free of preemptive

rights and free from all taxes, liens, charges and security interests with

respect to the issuance thereof.

 

SECTION

7.                            OBTAINING

STOCK EXCHANGE LISTINGS.

 

The Company will from time to time take all action

which may be necessary so that the Warrant Shares, immediately upon their

issuance upon the exercise of Warrants, will be listed on the principal

securities exchanges, automated quotation systems or other markets within the

United States of America, if any, on which other shares of Common Stock are

then listed, if any.

 

SECTION

8.                            ADJUSTMENT

OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES ISSUABLE.

 

The Exercise Price and the number of Warrant Shares

issuable upon the exercise of each Warrant are subject to adjustment from time

to time upon the occurrence of the events enumerated in this Section 8. For

purposes of this Section 8, “Common Stock” means shares now or hereafter authorized

of any class of common stock of the Company and any other stock of the Company,

however designated, that has the right (subject to any prior rights of any

class or series of preferred stock) to participate in any distribution of the

assets or earnings of the Company without limit as to per share amount.

 

(a)          Adjustment for Change in Capital

Stock.

 

If the Company (i) pays a dividend or makes a

distribution on its Common Stock in shares of its Common Stock, (ii) subdivides

its outstanding shares of Common Stock into a greater number of shares, (iii)

combines its outstanding shares of Common Stock into a smaller number of

shares, (iv) makes a distribution on its Common Stock in shares of its capital

stock other than Common Stock or (v) issues by reclassification of its Common

Stock any shares of its capital stock, then the Exercise Price in effect

immediately prior to such action shall be proportionately adjusted so that the

holder of any Warrant thereafter exercised may receive the aggregate number and

kind of shares of capital stock of the Company which he would have owned

immediately following such action if such Warrant had been exercised

immediately prior to such action.

 

The adjustment shall become effective immediately

after the record date in the case of a dividend or distribution and immediately

after the effective date in the case of a subdivision, combination or

reclassification. If, after an adjustment, a holder of a Warrant upon exercise

of it may receive shares of two or more classes of capital stock of the

Company, the Company shall determine, in good faith, the allocation of the

adjusted Exercise Price between the classes of capital stock. After such

allocation, the exercise privilege and the Exercise Price of each class of

capital stock shall thereafter be subject to adjustment on terms comparable to

those applicable to Common Stock in this Section 8. Such adjustment shall be

made successively whenever any event listed above shall occur.

 

21

 

(b)          Adjustments for Rights Issue.

 

If the Company distributes any rights, options or

warrants to all holders of its Common Stock entitling them for a period

expiring within 45 days after the record date mentioned below to purchase

shares of Common Stock at a price per share less than the Fair Value (as

defined herein) per share on that record date, the Exercise Price shall be

adjusted in accordance with the formula:

	

   

  	

  O +

  	

  N x P 

  
	

  E’  = 

  E    x

  	

   

  	

  M

  
	

   

  	

  O + N

  

 

where:

 

E’            =              the

adjusted Exercise Price.

 

E              =              the

current Exercise Price.

 

O             =              the

number of shares of Common Stock outstanding on the record date.

 

N                                       =              the number of additional shares of

Common Stock issued pursuant to such rights, options or warrants.

 

P              =              the

aggregate price per share of the additional shares.

 

M            =              the

Fair Value per share of Common Stock on the record date.

 

The adjustment shall be made successively whenever any

such rights, options or Warrants are issued and shall become effective

immediately after the record date for the determination of stockholders

entitled to receive the rights, options or Warrants. If at the end of the

period during which such rights, options or Warrants are exercisable, not all

rights, options or Warrants shall have been exercised, the Exercise Price shall

be immediately readjusted to what it would have been if “N” in the above

formula had been the number of shares actually issued.

 

(c)           Adjustment for Other Distributions.

 

If the Company distributes to all holders of its

Common Stock any of its assets or debt securities or any rights or Warrants to

purchase debt securities of the Company, the Exercise Price shall be adjusted

in accordance with the formula:

 

	

  E’  = 

  E   x

  	

  M - F

  
	

   

  	

  M

  

 

where:

 

E’            =              the adjusted Exercise Price.

 

E              =              the current Exercise Price.

 

M            =              the Fair Value per share of Common

Stock on the record date mentioned below.

 

22

 

F                                         =              the fair market value on the

record date of the assets, securities, rights or warrants to be distributed  in respect of one share of Common Stock as

determined in good faith by the Board of Directors of the Company (the “Board of Directors”).

 

The adjustment shall be made successively whenever any

such distribution is made and shall become effective immediately after the

record date for the determination of stockholders entitled to receive the

distribution.

 

This Section 8(c) does not apply to cash dividends or

cash distributions paid out of consolidated current or retained earnings as

shown on the books of the Company prepared in accordance with generally

accepted accounting principles. Also, this Section 8(c) does not apply to

rights, options or warrants referred to in Section 8(b) hereof.

 

(d)          Adjustment for Common Stock Issue.

 

If the Company issues shares of Common Stock for a

consideration per share less than the Fair Value per share on the date the

Company fixes the offering price of such additional shares, the Exercise Price

shall be adjusted in accordance with the formula:

	

   

  	

   

  	

   

  	

  P

  
	

  E’  = 

  E  x

  	

  O

  	

  +

  	

  M

  
	

   

  	

  A

  

 

where:

E’            =              the adjusted Exercise Price.

 

E              =              the then current Exercise Price.

 

O             =              the number of shares outstanding

immediately prior to the issuance of such additional shares.

 

P              =              the aggregate consideration

received for the issuance of such additional shares.

 

M            =              the Fair Value per share on the

date of issuance of such additional shares.

 

A             =              the number of shares outstanding

immediately after the issuance of such additional shares.

 

The adjustment shall be made successively whenever any

such issuance is made, and shall become effective immediately after such

issuance.

 

This subsection (d) does not apply to:

 

(1)           any

of the transactions described in: subsections (a), (b) and (c) of this Section

8,

 

(2)           the

exercise of Warrants, or the conversion or exchange of other securities

convertible or exchangeable for Common Stock the issuance of which caused an

adjustment to be made under Section 8(e),

 

23

 

(3)           Common

Stock issued to the Company’s employees (or employees of its subsidiaries)

under bona fide employee benefit plans adopted by the Board of Directors and

approved by the holders of Common Stock when required by law, if such Common

Stock would otherwise be covered by this subsection (d) (but only to the extent

that the aggregate number of shares excluded hereby and issued after the date

of this Warrant Agreement shall not exceed 5% of the Common Stock outstanding

at the time of the adoption of each such plan, exclusive of anti-dilution

adjustments thereunder),

 

(4)           Common

Stock issued to shareholders of any Person which merges into the Company, or

with a subsidiary of the Company, in proportion to their stock holdings of such

person immediately prior to such merger, upon such merger, provided that if

such person is an Affiliate of the Company, the Board of Directors shall have

obtained a fairness opinion from a nationally recognized investment banking,

appraisal or valuation firm, which is not an Affiliate of the Company, stating

that the consideration received in such merger is fair to the Company from a

financial point of view, or

 

(5)           the

issuance of shares of Common Stock pursuant to rights, options or warrants

which were originally issued in a Non-Affiliate Sale (as defined below)

together with one or more other securities as part of a unit at a price per

unit.

 

(e)           Adjustment

for Convertible Securities Issue.

 

If the Company issues any securities convertible into

or exchangeable for Common Stock (other than securities issued in transactions

described in subsections (b) and (c) of this Section 8) for a consideration per

share of Common Stock initially deliverable upon conversion or exchange of such

securities less than the Fair Value per share on the date of issuance of such

securities, the Exercise Price shall be adjusted in accordance with this

formula:

 

	

   

  	

   

  	

   

  	

  P

  
	

  E’  = 

  E  x

  	

  O

  	

  +

  	

  M

  
	

   

  	

  O + D

  

 

where:

 

	

  E’

  	

   

  	

  =

  	

   

  	

  the adjusted Exercise Price.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  E

  	

   

  	

  =

  	

   

  	

  the then current Exercise Price.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  O

  	

   

  	

  =

  	

   

  	

  the number of shares outstanding immediately prior

  to the issuance of such securities.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  P

  	

   

  	

  =

  	

   

  	

  the aggregate consideration received for the

  issuance of such securities.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  M

  	

   

  	

  =

  	

   

  	

  the Fair Value per share on the date of issuance of

  such securities.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  D

  	

   

  	

  =

  	

   

  	

  the maximum number of shares deliverable upon

  conversion or in exchange for such securities at the initial conversion or

  exchange rate.

  

 

The adjustment shall be made successively whenever any

such issuance is made, and shall become effective immediately after such

issuance.

 

If all of the Common Stock deliverable upon conversion

or exchange of such securities have not been issued when such securities are no

longer outstanding, then the Exercise Price shall promptly

 

24

 

be readjusted to the Exercise Price which would then be in effect had

the adjustment upon the issuance of such securities been made on the basis of

the actual number of shares of Common Stock issued upon conversion or exchange

of such securities.

 

This subsection (e) does not apply to convertible

securities issued to shareholders of any person which merges into the Company,

or with a subsidiary of the Company, in proportion to their stock holdings of

such person immediately prior to such merger, upon such merger, provided that

if such person is an Affiliate of the Company, the Board of Directors shall

have obtained a fairness opinion from a nationally recognized investment banking,

appraisal or valuation firm, which is not an Affiliate of the Company, stating

that the consideration received in such merger is fair to the Company from a

financial point of view.

 

(f)            Consideration Received.

 

For purposes of any computation respecting

consideration received pursuant to subsections (d), and (e) of this Section 8,

the following shall apply:

 

(1)           in

the case of the issuance of shares of Common Stock for cash, the consideration

shall be the amount of such cash, provided that in no case shall any deduction

be made for any commissions, discounts or other expenses incurred by the

Company for any underwriting of the issue or otherwise in connection therewith;

 

(2)           in

the case of the issuance of shares of Common Stock for a consideration in whole

or in part other than cash, the consideration other than cash shall be deemed

to be the fair market value thereof as determined in good faith by the Board of

Directors (irrespective of the accounting treatment thereof), whose

determination shall be conclusive, and described in a Board resolution which

shall be filed with the Warrant Agent;

 

(3)           in

the case of the issuance of securities convertible into or exchangeable for

shares, the aggregate consideration received therefor shall be deemed to be the

consideration received by the Company for the issuance of such securities plus

the additional minimum consideration. if any, to be received by the Company

upon the conversion or exchange thereof (the consideration in each case to be

determined in the same manner as provided in clauses (1) and (2) of this

subsection); and

 

(4)           in

the case of the issuance of shares of Common Stock pursuant to rights. options

or warrants which rights, options or warrants were originally issued together

with one or more other securities as part of a unit at a price per unit, the

consideration shall be deemed to be the fair value of such rights. options or

warrants at the time of issuance thereof as determined in good faith by the

Board of Directors whose determination shall be conclusive and described in a

Board resolution which shall be filed with the Warrant Agent plus the

additional minimum consideration, if any, to be received by the Company upon

the exercise, conversion or exchange thereof (as determined in the same manner as

provided in clauses (1) and (2) of this subsection).

 

(g)          Fair Value.

 

In Sections 8(d) and (e) hereof, the “Fair Value” per

security at any date of determination shall be (1) in connection with a sale by

the Company to a party that is not an Affiliate of the Company in an

arm’s-length transaction (a “Non-Affiliate Sale”), the price per security at which

such security is sold and (2) in connection with any sale by the Company to an

Affiliate of the Company, (a) the last price per security at which such security

was sold in a Non-Affiliate Sale within the three-month period preceding such

date of determination (it being understood that the sale of Common Stock of the

Company to DLJ Merchant Banking Partners II, L.P. and its Affiliates on August

28, 1998 was a sale to a party not then an Affiliate of the Company and

therefore a Non-Affiliate Sale) or (b) if clause (a) is not applicable, the

fair

 

25

 

market value of such security determined in good faith by (i) a

majority of the Board of Directors, including a majority of the Disinterested

Directors, and approved in a Board resolution delivered to the Warrant Agent or

(ii) a nationally recognized investment banking, appraisal or valuation firm,

which is not an Affiliate of the Company, in each case, taking into account,

among all other factors deemed relevant by the Board of Directors or such

investment banking, appraisal or valuation firm, the trading price and volume

of such security on any national securities exchange or automated quotation

system on which such security is traded. Notwithstanding the foregoing, any

sale to Donaldson, Lufkin & Jenrette Securities Corporation (or any

successor thereto) pursuant to an underwritten public offering registered under

the Securities Act shall be deemed to be and treated as a Non-Affiliate Sale.

 

In Sections 8(b) and (c) hereof, the “Fair Value” per

security at any date of determination shall be (a) the last price per security

at which such security was sold by the Company in a Non-Affiliate Sale within

the three-month period preceding such date of determination or (b) if clause

(a) is not applicable, the fair market value of such security determined in

good faith by (i) a majority of the Board of Directors, including a majority of

the Disinterested Directors, and approved in a Board resolution delivered to

the Warrant Agent or (ii) a nationally recognized investment banking, appraisal

or valuation firm, which is not an Affiliate of the Company, in each case,

taking into account, among all other factors deemed relevant by the Board of

Directors or such investment banking,' appraisal or valuation firm, the trading

price and volume of such security on any national securities exchange or

automated quotation system on which such security is traded.

 

For purposes of this Section 8(g), “Disinterested

Director” means, in connection with any issuance of securities that gives rise

to a determination of the Fair Value thereof, each member of the Board of

Directors who is not an officer, employee, director or other Affiliate of the

party to whom the Company is proposing to issue the securities giving rise to

such determination.

 

For purposes of this Section 8(g), “Affiliate” of any

specified Person means (A) any other Person directly or indirectly controlling

or controlled by or under direct or indirect common control with such specified

Person and (B) any director, officer or employee of such specified Person.  For purposes of this definition “control” (including,

with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”)

as used with respect to any Person, shall mean the possession, directly or

indirectly, of the power to direct or cause the direction of the management or

policies of such Person, whether through the ownership of voting securities, by

agreement or otherwise.

 

(h)          When De Minimis Adjustment May Be

Deferred

 

No adjustment in the Exercise Price need be made

unless the adjustment would require an increase or decrease of at least 1% in the

Exercise Price. Any adjustments that are not made shall be carried forward and

taken into account in any subsequent adjustment. All calculations under this

Section 8 shall be made to the nearest cent or to the nearest 1/100th of a

share, as the case may be, it being understood that no such rounding shall be

made under subsection (p).

 

(i)           When No Adjustment Required.

 

No adjustment need be made for a transaction referred

to Section 8(a), (b), (c), (d), (e) or (f) hereof, if Warrant holders are to

participate (without being required to exercise their Warrants) in the

transaction on a basis and with notice that the Board of Directors determines

to be fair and appropriate in light of the basis and notice on which holders of

Common Stock participate in the transaction. No adjustment need be made for (i)

rights to purchase Common Stock pursuant to a Company plan for reinvestment of

dividends or interest, (ii) a change in the par value or no par value of the

Common Stock or (iii) the issuance by the Company of warrants to DLJ Merchant

Banking Partners II, L.P. and certain of its Affiliates on or about October 5,

1998. To the extent the Warrants become convertible into cash, no adjustment

need be made thereafter as to the cash. Interest will not accrue on the cash.

 

26

 

(j)            Notice of Adjustment.

 

Whenever the Exercise Price is adjusted, the Company

shall provide the notices required by Section 10 hereof.

 

(k)          Notice of Certain Transactions.

 

If (i) the Company takes any action that would require

an adjustment in the Exercise Price pursuant to Section 8(a), (b), (c), (d),

(e) or (f) hereof and if the Company does not arrange for Warrant holders to

participate pursuant to Section 8(i) hereof, (ii) the Company takes any action

that would require a supplemental Warrant Agreement pursuant to Section 8(l)

hereof or (iii) there is a liquidation or dissolution of the Company, then the

Company shall mail to Warrant holders a notice stating the proposed record date

for a dividend or distribution or the proposed effective date of a subdivision,

combination, reclassification, consolidation, merger, transfer, lease,

liquidation or dissolution. The Company shall mail the notice at least 15 days

before such date. Failure to mail the notice or any defect in it shall not

affect the validity of the transaction.

 

(l)           Reorganization of Company.

 

Immediately after the date hereof, if the Company

consolidates or merges with or into, or transfers or leases all or

substantially all its assets to, any person, upon consummation of such

transaction the Warrants shall automatically become exercisable for the kind

and amount of securities, cash or other assets which the holder of a Warrant

would have owned immediately after the consolidation, merger, transfer or lease

if the holder had exercised the Warrant immediately before the effective date

of the transaction. Concurrently with the consummation of such transaction, the

corporation formed by or surviving any such consolidation or merger if other than

the Company, or the person to which such sale or conveyance shall have been

made, shall enter into (i) a supplemental Warrant Agreement so providing and

further providing for adjustments which shall be as nearly equivalent as may be

practical to the adjustments provided for in this Section 8(1) and (ii) a

supplement to the Warrant Registration Rights Agreement providing for the

assumption of the Company’s obligations thereunder. The successor Company shall

mail to Warrant holders a notice describing the supplemental Warrant Agreement

and Warrant Registration Rights Agreement. If the issuer of securities

deliverable upon exercise of Warrants under the supplemental Warrant Agreement

is an affiliate of the formed, surviving, transferee or lessee corporation,

that issuer shall join in the supplemental Warrant Agreement and Warrant

Registration Rights Agreement. If this Section 8(l) applies, Sections 8(a),

(b), (c), (d), (e) and (f) hereof do not apply.

 

(m)          Company Determination Final.

 

Any determination that the Company or the Board of

Directors must make pursuant to Section 8(a), (c), (d), (e), (f), (g), (h) or

(i) hereof is conclusive.

 

(n)          Warrant Agent’s Disclaimer.

 

The Warrant Agent has no duty to determine when an

adjustment under this Section 8 should be made, how it should be made or what

it should be. The Warrant Agent has no duty to determine whether any provisions

of a supplemental Warrant Agreement under Section 8(l) hereof are correct. The

Warrant Agent makes no representation as to the validity or value of any

securities or assets issued upon exercise of Warrants. The Warrant Agent shall

not be responsible for the Company’s failure to comply with this Section 8.

 

27

 

(o)          When Issuance or Payment May Be

Deferred

 

In any case in which this Section 8 shall require that

an adjustment in the Exercise Price be made effective as of a record date for a

specified event, the Company may elect to defer until the occurrence of such

event (i) issuing to the holder of any Warrant exercised after such record date

the Warrant Shares and other capital stock of the Company, if any, issuable

upon such exercise over and above the Warrant Shares and other capital stock of

the Company, if any, issuable upon such exercise on the basis of the Exercise

Price and (ii) paying to such holder any amount in cash in lieu of a fractional

share pursuant to Section 10 hereof; provided that the Company shall deliver to

such holder a due bill or other appropriate instrument evidencing such holder’s

right to receive such additional Warrant Shares, other capital stock and cash

upon the occurrence of the event requiring such adjustment.

 

(p)          Adjustment in Number of Shares.

 

Upon each adjustment of the Exercise Price pursuant to

this Section 8, each Warrant outstanding prior to the making of the adjustment

in the Exercise Price shall thereafter evidence the right to receive upon

payment of the adjusted Exercise Price that number of shares of Common Stock

(calculated to the nearest hundredth) obtained from the following formula:

 

	

  N’

  	

   

  	

  =

  	

   

  	

  N

  	

   

  	

  x

  	

   

  	

  E

  
	

  E’

  

 

where:

	

  N’

  	

   

  	

  =

  	

   

  	

  the adjusted number of Warrant Shares issuable upon

  exercise of a Warrant by payment of the adjusted Exercise Price.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  N

  	

   

  	

  =

  	

   

  	

  the number or Warrant Shares previously issuable

  upon exercise of a Warrant by payment of the exercise Price prior to

  adjustment.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  E’

  	

   

  	

  =

  	

   

  	

  the adjusted Exercise Price.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  E

  	

   

  	

  =

  	

   

  	

  the Exercise Price prior to adjustment.

  

 

(q)          Form Of Warrants.

 

Irrespective of any adjustments in the Exercise Price

or the number or kind of shares purchasable upon the exercise of the Warrants,

Warrants theretofore or thereafter issued may continue to express the same

price and number and kind of shares as are stated in the Warrants initially

issuable pursuant to this Agreement.

 

SECTION 9.         FRACTIONAL INTERESTS.

 

The Company shall not be required to issue fractional

Warrant Shares on the exercise of Warrants. If more than one Warrant shall be

presented for exercise in full at the same time by the same holder, the number

of full Warrant Shares which shall be issuable upon the exercise thereof shall

be computed on the basis of the aggregate number of Warrant Shares purchasable

on exercise of the Warrants so presented. If any fraction of a Warrant Share

would, except for the provisions of this Section 9, be issuable on the exercise

of any Warrants (or specified portion thereof), the Company shall pay an amount

in cash equal to the Fair Value per Warrant Share, as determined on the day

immediately preceding the date the Warrant is presented for exercise,

multiplied by such fraction, computed to the nearest whole U.S. cent.

 

28

 

SECTION 10.       NOTICES TO WARRANT HOLDERS.

 

(a)           Upon

any adjustment of the Exercise Price pursuant to Section 8 hereof, the Company

shall promptly thereafter (i) cause to be filed with the Warrant Agent a

certificate of a firm of independent public accountants of recognized standing

selected by the Board of Directors of the Company (who may be the regular

auditors of the Company) setting forth the Exercise Price after such adjustment

and setting forth in reasonable detail the method of calculation and the facts

upon which such calculations are based and setting forth the number of Warrant

Shares (or portion thereof) issuable after such adjustment in the Exercise

Price, upon exercise of a Warrant and payment of the adjusted Exercise Price,

which certificate shall be conclusive evidence of the correctness of the

matters set forth therein, and (ii) cause to be given to each of the registered

holders of Warrants at the address appearing on the Warrant register for each

such registered holder written notice of such adjustments by first-class mail,

postage prepaid. Where appropriate, such notice may be given in advance and

included as a part of the notice required to be mailed under the other

provisions of this Section 10.

 

(b)           In

case:

 

(i)            the Company shall authorize the

issuance to all holders of shares of Common Stock of rights, options or

warrants to subscribe for or purchase shares of Common Stock or of any other

subscription rights or warrants;

 

(ii)           the Company shall authorize the

distribution to all holders of shares of Common Stock of evidences of its

indebtedness or assets (other than dividends or cash distributions paid out of

consolidated current or retained earnings as shown on the books of the Company

prepared in accordance with generally accepted accounting principles or

dividends payable in shares of Common Stock or distributions referred to in Section

10(a) hereof);

 

(iii)          of any consolidation or merger to

which the Company is a party and for which approval of any stockholders of the

Company is required, or of the conveyance or transfer of the properties and

assets of the Company substantially as an entirety, or of any reclassification

or change of Common Stock issuable upon exercise of the Warrants (other than a

change in par value, or from par value to no par value, or from no par value to

par value, or as a result of a subdivision or combination), or a tender offer

or exchange offer for shares of Common Stock;

 

(iv)          of the voluntary or involuntary

dissolution, liquidation or winding up of the Company; or

 

(v)           the Company proposes to take any

action (other than actions of the character described in Section 8(a) hereof)

which would require an adjustment of the Exercise Price pursuant to Section 8

hereof;

 

then the Company shall cause to be filed with the

Warrant Agent and shall cause to be given to each of the registered holders of

Warrants at his address appearing on the Warrant register, at least 20 days (or

10 days in any case specified in clauses (i) or (ii) above) prior to the

applicable record date hereinafter specified, or promptly in the case of events

for which there is no record date, by first-class mail, postage prepaid, a

written notice stating (x) the date as of which the holders of record of shares

of Common Stock to be entitled to receive any such rights, options, Warrants or

distribution are to be determined, (y) the initial expiration date set forth in

any tender offer or exchange offer for shares of Common Stock, or (z) the date

on which any such consolidation, merger, conveyance, transfer, dissolution,

liquidation or winding up is expected to become

 

29

 

effective or consummated, and the date as of which it

is expected that holders of record of shares of Common Stock shall be entitled

to exchange such shares for securities or other property, if any, deliverable

upon such reclassification, consolidation, merger, conveyance, transfer,

dissolution, liquidation or winding up. The failure to give the notice required

by this Section 11 or any defect therein shall not affect the legality or

validity of any distribution, right, option, warrant, consolidation, merger,

conveyance, transfer, dissolution, liquidation or winding up, or the vote upon

any action.

 

(c)           Nothing

contained in this Agreement or in any of the Warrant Certificates shall be

construed as conferring upon the holders of Warrants the right to vote or to

consent or to receive notice as stockholders in respect of the meetings of

stockholders or the election of directors of the Company or any other matter,

or any rights whatsoever as stockholders of the Company.

 

SECTION

11.       MERGER, CONSOLIDATION OR CHANGE

OF NAME OF WARRANT AGENT.

 

(a)           Any

corporation into which the Warrant Agent may be merged or with which it may be

consolidated, or any corporation resulting from any merger or consolidation to

which the Warrant Agent shall be a party, or any corporation succeeding to the

business of the Warrant Agent, shall be the successor to the Warrant Agent

hereunder without the execution or filing of any paper or any further act on

the part of any of the parties hereto, provided that such corporation would be

eligible for appointment as a Successor Warrant agent under the provisions of

Section 13 hereof. In case at the time such successor to the Warrant Agent

shall succeed to the agency created by this Agreement, and in case at that time

any of the Warrant Certificates shall have been countersigned but not

delivered, any such successor to the Warrant Agent may adopt the

countersignature of the original Warrant Agent; and in case at that time any of

the Warrant Certificates shall not have been countersigned, any successor to

the Warrant Agent may countersign such Warrant Certificates either in the name

of the predecessor Warrant Agent or in the name of the successor to the Warrant

Agent; and in all such cases such Warrant Certificates shall have the full

force and effect provided in the Warrant Certificates and in this Agreement.

 

(b)           In

case at any time the name of the Warrant Agent shall be changed and at such

time any of the Warrant Certificates shall have been countersigned but not

delivered, the Warrant Agent whose name has been changed may adopt the

countersignature under its prior name, and in case at that time any of the

Warrant Certificates shall not have been countersigned, the Warrant Agent may

countersign such Warrant Certificates either in its prior name or in its

changed name, and in all such cases such Warrant Certificates shall have the

full force and effect provided in the Warrant Certificates and in this

Agreement.

 

SECTION 12.       WARRANT AGENT.

 

The Warrant Agent undertakes the duties and obligations

imposed by this Agreement upon the following terms and conditions, by all of

which the Company and the holders of Warrants, by their acceptance thereof,

shall be bound:

 

(a)           The

statements contained herein and in the Warrant Certificates shall be taken as

statements of the Company and the Warrant Agent assumes no responsibility for

the correctness of any of the same except such as describe the Warrant Agent or

action taken or to be taken by it. The Warrant Agent assumes no responsibility

with respect to the distribution of the Warrant Certificates except as herein

otherwise provided.

 

(b)           The

Warrant Agent shall not be responsible for any failure of the Company to comply

with any of the covenants contained in this Agreement or in the Warrant Certificates

to be complied with by the Company.

 

30

 

(c)           The

Warrant Agent may consult at any time with counsel satisfactory to it (who may

be counsel for the Company) and the Warrant Agent shall incur no liability or

responsibility to the Company or to any holder of any Warrant Certificate in

respect of any action taken, suffered or omitted by it hereunder in good faith

and in accordance with the opinion or the advice of such counsel.

 

(d)           The

Warrant Agent shall incur no liability or responsibility to the Company or to

any holder of any Warrant Certificate for any action taken in reliance on any

Warrant Certificate, certificate of shares, notice, resolution, waiver,

consent, order, certificate, or other paper, document or instrument believed by

it to be genuine and to have been signed, sent or presented by the proper party

or parties.

 

(e)           The

Company agrees to pay to the Warrant Agent reasonable compensation for all

services rendered by the Warrant Agent in the execution of this Agreement, to

reimburse the Warrant Agent for all expenses, taxes and governmental charges

and other charges of any kind and nature incurred by the Warrant Agent in the

execution of this Agreement The Company shall indemnify the Warrant Agent

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 Warrant Agreement, including the costs and expenses of enforcing this

Warrant Agreement against the Company and defending itself against any claim

(whether asserted by the Company 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 Warrant Agent shall

notify the Company promptly of any claim for which it may seek indemnity.

Failure by the Warrant Agent to so notify the Company shall not relieve the Company

of its obligations hereunder. The Company shall defend the claim and the

Warrant Agent shall cooperate in the defense. The Warrant Agent may have

separate counsel and the Company shall pay the reasonable fees and expenses of

such counsel. The Company need not pay for any settlement made without its

consent, which consent shall not be unreasonably withheld.

 

(f)            The

Warrant Agent shall be under no obligation to institute any action, suit or

legal proceeding or to take any other action likely to involve expense unless

the Company or one or more registered holders of Warrants shall furnish the

Warrant Agent with reasonable security and indemnity for any costs and expenses

which may be incurred, but this provision shall not affect the power of the

Warrant Agent to take such action as it may consider proper, whether with or

without any such security or indemnity. All rights of action under this

Agreement or under any of the Warrants may be enforced by the Warrant Agent

without the possession of any of the Warrant Certificates or the production

thereof at any trial or other proceeding relative thereto, and any such action,

suit or proceeding instituted by the Warrant Agent shall be brought in its name

as Warrant Agent and any recovery of judgment shall be for the ratable benefit

of the registered holders of the Warrants, as their respective rights or

interests may appear.

 

(g)           The

Warrant Agent, and any stockholder, director, officer or employee of it, may

buy, sell or deal in any of the Warrants or other securities of the Company or

become pecuniarily interested in any transaction in which the Company may be

interested, or contract with or lend money to the Company or otherwise act as

fully and freely as though it were not Warrant Agent under this Agreement. Nothing

herein shall preclude the Warrant Agent from acting in any other capacity for

the Company or for any other legal entity.

 

(h)           The

Warrant Agent shall act hereunder solely as agent for the Company, and its

duties shall be determined solely by the provisions hereof. The Warrant Agent

shall not be liable for anything which it may do or refrain from doing in

connection with this Agreement except for its own negligence or bad faith.

 

(i)            The

Warrant Agent shall not at any time be under any duty or responsibility to any

holder of any Warrant Certificate to make or cause to be made any adjustment of

the Exercise Price or number of the Warrant Shares or other securities or

property deliverable as provided in this Agreement, or to determine whether any

facts exist which may require any of such adjustments, or with respect to the

31

 

nature or extent of any such adjustments, when made, or with respect to

the method employed in making the same. The Warrant Agent shall not be

accountable with respect to the validity or value or the kind or amount of any

Warrant Shares or of any securities or property which may at any time be issued

or delivered upon the exercise of any Warrant or with respect to whether any

such Warrant Shares or other securities will when issued be validly issued and

fully paid and nonassessable, and makes no representation with respect thereto.

 

SECTION 13.       CHANGE OF WARRANT AGENT.

 

If the Warrant Agent shall become incapable of acting

as Warrant Agent, the Company shall appoint a successor to such Warrant Agent

If the Company shall fail to make such appointment within a period of 30 days

after it has been notified in writing of such incapacity by the Warrant Agent

or by the registered holder of a Warrant Certificate, then the registered

holder of any Warrant may apply to any court of competent jurisdiction for the

appointment of a successor to the Warrant Agent Pending appointment of a

successor to such Warrant Agent, either by the Company or by such a court, the

duties of the Warrant Agent shall be carried out by the Company. The holders of

a majority of the unexercised Warrants shall be entitled at any time to remove

the Warrant Agent and appoint a successor to such Warrant Agent Such successor

to the Warrant Agent need not be approved by the Company or the former Warrant

Agent. After appointment the successor to the Warrant Agent shall be vested

with the same powers, rights, duties and responsibilities as if it had been

originally named as Warrant Agent without further act or deed; provided that

the former Warrant Agent shall deliver and transfer to the successor to the

Warrant Agent any property at the time held by it hereunder and execute and

deliver any further assurance, conveyance, act or deed necessary for the

purpose. Failure to give any notice provided for in this Section 13, however,

or any defect therein, shall not affect the legality or validity of the

appointment of a successor to the Warrant Agent.

 

SECTION 14.       REPORTS.

 

(a)           Whether

or not required by the rules and regulations of the Commission, so long as any

Warrants or the Warrant Shares are outstanding, the Company shall furnish to

the Warrant Agent and the holders of Warrants or Warrant Shares (i) 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 Company

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 Company’s certified

independent accountants and (ii) all current reports that would be required to

be filed with the Commission on Form 8-K if the Company were required to file

such reports. In addition, whether or not required by the rules and regulations

of the Commission, the Company shall file a copy of all such information and

reports with the Commission for public availability (unless the Commission

shall not accept such a filing) and make such information available to

securities analysts and prospective investors upon request.

 

(b)           The

Company shall provide the Warrant Agent with a sufficient number of copies of

all such reports that the Warrant Agent may be required to deliver to the

holders of the Warrants and the Warrant Shares under this Section 14.

 

 

32

 

SECTION 15.       NOTICES TO COMPANY AND WARRANT AGENT.

 

Any notice or demand authorized by this Agreement to

be given or made by the Warrant Agent or by the registered holder of any

Warrant to or on the Company shall be sufficiently given or made when received

if deposited in the mail, first class or registered, postage prepaid, addressed

(until another address is filed in writing by the Company with the Warrant

Agent) as follows:

 

DeCrane Holding

Co.

c/o DLJ Merchant

Banking Partners

277 Park Avenue

New York, New York 10172

Telecopier No.:

(212) 892-7272

Attention: Timothy

White

 

With a copy to:

 

Davis Polk &

Wardwell

450 Lexington Avenue

New York, New York

10017

Telecopier No.:

(212) 450-4800

Attention: Richard

Truesdell, Jr., Esq.

 

In case the Company shall fail to maintain such office

or agency or shall fail to give such notice of the location or of any change in

the location thereof, presentations may be made and notices and demands may be

served at the principal office of the Warrant Agent.

 

Any notice pursuant to this Agreement to be given by

the Company or by the registered holder(s) of any Warrant to the Warrant Agent

shall be sufficiently given when and if deposited in the mail, first-class or

registered, postage prepaid, addressed (until another address is filed in

writing by the Warrant Agent with the Company) to the Warrant Agent as follows:

 

State Street Bank

and Trust Company

225 Asylum Street,

23rd Floor

Hartford,

Connecticut 06103

Telecopier No.:

860-244-1889

Attention:

Corporate Trust Department

 

SECTION 16.       SUPPLEMENTS AND AMENDMENTS.

 

The Company and the Warrant Agent may from time to

time supplement or amend this Agreement without the approval of any holders of

Warrants in order to cure any ambiguity or to correct or supplement any

provision contained herein which may be defective or inconsistent with any

other provision herein, or to make any other provisions in regard to matters or

questions arising hereunder which the Company and the Warrant Agent may deem

necessary or desirable and which shall not in any way adversely affect the

interests of the holders of Warrants. Any amendment or supplement to this

Agreement that has an adverse effect on the interests of the holders of

Warrants shall require the written consent of the holders of a majority of the

then outstanding Warrants (excluding Warrants held by the Company or any of its

affiliates). The consent of each holder of Warrants affected shall be required

for any amendment pursuant to which the Exercise Price would be increased or

the number of Warrant Shares purchasable upon exercise of Warrants would be

decreased (other than pursuant to adjustments provided in this Agreement).

 

33

 

SECTION 17.       SUCCESSORS.

 

All the covenants and provisions of this Agreement by

or for the benefit of the Company or the Warrant Agent shall bind and inure to

the benefit of their respective successors and assigns hereunder.

 

SECTION 18.       TERMINATION.

 

This Agreement shall terminate at 5:00 p.m., New York

City time on September 30, 2008. Notwithstanding the foregoing, this Agreement

will terminate on any earlier date if all Warrants have been exercised. The

provisions of Section 12 shall survive such termination.

 

SECTION 19.       GOVERNING LAW.

 

This Agreement and each Warrant Certificate issued

hereunder shall be deemed to be a contract made under the laws of the State of

New York and for all purposes shall be construed in accordance with the

internal laws of said State.

 

SECTION 20.       BENEFITS OF THIS AGREEMENT.

 

Nothing in this Agreement shall be construed to give

to any person or corporation other than the Company, the Warrant Agent and the

registered holders of Warrants any legal or equitable right, remedy or claim

under this Agreement; but this Agreement shall be for the sole and exclusive

benefit of the Company, the Warrant Agent and the registered holders of

Warrants.

 

SECTION 21.       COUNTERPARTS.

 

This Agreement may be executed in any number of

counterparts and each of such counterparts shall for all purposes be deemed to

be an original, and all such counterparts shall together constitute but one and

the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused

this Agreement be duly executed, as of the day and year first above written.

 

	

   

  	

  DeCrane Holdings Co.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/ 

  	

  Timothy White

  	 

	

   

  	

  Name: Timothy

  White

  	

   

  
	

   

  	

  Title: Vice

  President and Secretary

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  State Street Bank and Trust Company,

  	

   

  
	

   

  	

  as Warrant Agent

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

  /s/

  	

  Steven Cimalore

  	 

	

   

  	

  Name: Steven

  Cimalore

  	

   

  
	

   

  	

  Title: Vice

  President

  	

   

  
							

 

 

34

 

EXHIBIT A

 

[Form of Warrant Certificate]

 

[Face]

 

Unit

Legend. Each Warrant issued prior to the Separation Date

shall bear the following legend (the “Unit Legend”) on the face thereof:

 

THE WARRANTS EVIDENCED BY THS CERTIFICATE ARE INITIALLY ISSUED AS PART

OF AN ISSUANCE OF UNITS (THE “UNITS”), EACH OF WHICH CONSIST OF $1,000

PRINCIPAL AMOUNT AT MATURITY OF THE 12% SENIOR SUBORDINATED NOTES DUE 2008 OF

DECRANE AIRCRAFT HOLDINGS, INC. (THE “NOTES”) AND ONE WARRANT (THE “WARRANTS”)

INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE 1.55 SHARES, PAR VALUE $0.01

PER SHARE, OF DECRANE HOLDINGS CO.

 

PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE CLOSING OF THE

OFFERING OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH

RESPECT TO A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE

UNDER THE SECURITIES ACT, (III) THE DATE A SHELF REGISTRATION STATEMENT WITH

RESPECT TO THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (IV) SUCH

DATE AS DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION IN ITS SOLE

DISCRETION SHALL DETERMINE AND (V) THE OCCURRENCE OF A CHANGE OF CONTROL (AS

DEFINED IN THE INDENTURE GOVERNING THE NOTES), THE WARRANTS EVIDENCED BY THIS

CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE

TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.

 

Private

Placement Legend: Each Warrant issued pursuant to an

exemption from the registration requirements of the Securities Act shall bear

the following legend (the “Private

Placement Legend”) on the face thereof:

 

THIS SECURITY (OR ITS PREDECESSOR) AND THE WARRANT

SHARES TO BE ISSUED UPON ITS EXERCISE HAVE 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 SECURITY 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)(l), (2),

(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN “IAI”),

 

(2)           AGREES

THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE

COMPANY 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 TRANSATION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURTIES

ACT, (E) TO AN IAI

 

A-1

 

THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE WARRANT AGENT A SIGNED

LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE

TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE WARRANT

AGENT) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF

SECURITY LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY

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 COMPANY) 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,

 

(3)           AGREES

NOT TO ENGAGE IN HEDGING TRANSACTIONS UNLESS IN COMPLIANCE WITH THE SECURITIES

ACT AND

 

(4)           AGREES

THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY 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 WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING THE

WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION

OF THE FOREGOING.

 

	

  No. _______

  	

   

  	

  ________Warrants

  
	

  CUSIP No.

  _______

  	

   

  	

   

  

 

Warrant Certificate

 

DECRANE HOLDINGS CO.

 

This Warrant Certificate certifies that Cede &

Co., or its registered assigns, is the registered holder of Warrants expiring

September 30, 2008 (the “Warrants”)

to purchase Common Stock, par value $.01 (the “Common Stock”), of DeCrane Holdings

Co., a Delaware corporation (the “Company”). Each Warrant entitles the

registered holder upon exercise at any time from 9:00 a.m. on the Separation

Date referred to below (the “Exercise Date”) until 5:00 p.m. New York City Time on

September 30, 2008, to receive from the Company 1.55 fully paid and

nonassessable shares of Common Stock (the “Warrant Shares”) at the initial exercise

price (the “Exercise

Price”) of $23.00 per share payable upon surrender of this

Warrant Certificate and payment of the Exercise Price at the office or agency

of the Warrant Agent, but only subject to the conditions set forth herein and

in the Warrant Agreement referred to on the reverse hereof. The Exercise Price

and number of Warrant Shares issuable upon exercise of the Warrants are subject

to adjustment upon the occurrence of certain events set forth in the Warrant

Agreement.

 

No Warrant may be exercised after 5:00 p.m., New York

City Time on September 30, 2008, and to the extent not exercised by such time

such Warrants shall become void.

 

A-2

 

Reference is hereby made to the further provisions of

this Warrant Certificate set forth on the reverse hereof and such further

provisions shall for all purposes have the same effect as though fully set

forth at this place.

 

This Warrant Certificate shall not be valid unless

countersigned by the Warrant Agent, as such term is used in the Warrant

Agreement.

 

This Warrant Certificate shall be governed by and

construed in accordance with the internal laws of the State of New York.

 

IN

WITNESS WHEREOF, DeCrane Holdings Co. has caused this Warrant

Certificate to be signed below.

 

Dated: October 5, 1998

 

	

   

  	

  DeCrane Holdings Co.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  
	

   

  	

  Title:

  

 

Countersigned:

 

	

  State Street Bank and Trust Company,

  	

   

  
	

  as Warrant Agent

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  
	

   

  	

  Authorized

  Signature

  
			

 

A-3

 

[Reverse of Warrant Certificate]

 

The Warrants evidenced by this Warrant Certificate are

part of a duly authorized issue of Warrants expiring at 5:00 p.m. New York City

time on September 30, 2008 entitling the holder on exercise to receive shares

of Common Stock, and are issued or to be issued pursuant to a Warrant Agreement

dated as of October 5, 1998 (the “Warrant Agreement”), duly executed and

delivered by the Company to State Street Bank and Trust Company, as Warrant

agent (the “Warrant

Agent”), which Warrant Agreement is hereby incorporated by

reference in and made a part of this instrument and is hereby referred to for a

description of the rights, limitation of rights, obligations, duties and

immunities thereunder of the Warrant Agent, the Company and the holders (the

words “holders” or “holder” meaning the registered holders or registered

holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the

holder hereof upon written request to the Company.

 

Warrants may be exercised at any time on or after the

Separation Date and on or before 5:00 p.m. New York City time on September

30,2008; provided that holders shall be able to exercise their Warrants only if

a registration statement relating to the Warrants Shares is then in effect, or

the exercise of such Warrants is exempt from the registration requirements of

the Securities Act of 1933, as amended (the “Securities Act”), and such securities

are qualified for sale or exempt from qualification under the applicable

securities laws of the states in which the various holders of the Warrants or

other persons to whom it is proposed that the Warrant Shares be issued on

exercise of the Warrants reside. In order to exercise all or any of the

Warrants represented by this Warrant Certificate, the holder must deliver to

the Warrant Agent at its New York corporate trust office set forth in Section

19 of the Warrant Agreement this Warrant Certificate and the form of election

to purchase on the reverse hereof duly filled in and signed, which signature

shall be medallion guaranteed by an institution which is a member of a

Securities Transfer Association recognized signature guarantee program, and

upon payment to the Warrant Agent for the account of the Company of the

Exercise Price, as adjusted as provided in the Warrant Agreement, for the

number of Warrant Shares in respect of which such Warrants are then exercised.

No adjustment shall be made for any dividends on any Common Stock issuable upon

exercise of this Warrant.

 

The Warrant Agreement provides that upon the

occurrence of certain events the Exercise Price set forth on the face hereof

may, subject to certain conditions, be adjusted. If the Exercise Price is

adjusted, the Warrant Agreement provides that the number of shares of Common

Stock issuable upon the exercise of each Warrant shall be adjusted. No

fractions of a share of Common Stock will be issued upon the exercise of any

Warrant, but the Company will pay the cash value thereof determined as provided

in the Warrant Agreement.

 

The Company has agreed pursuant to a Warrant

Registration Rights Agreement dated as of October 5, 1998 (the “Warrant Registration Rights

Agreement”) to file within 120 days after the issuance of the

Warrants and use its reasonable best efforts to make effective on or before 180

days after such date a shelf registration Statement on the appropriate form

under the Securities Act, and to use its reasonable best efforts to keep such

registration statement continuously effective under the Securities Act in order

to permit the resale of the Warrants and Warrant Shares by the holders thereof

for the period of time referred to in the immediately preceding sentence.

 

Warrant Certificates, when surrendered at the office

of the Warrant Agent by the registered holder thereof in person or by legal

representative or attorney duly authorized in writing, may be exchanged, in the

manner and subject to the limitations provided in the Warrant Agreement, but

without payment of any service charge, for another Warrant Certificate or

Warrant Certificates of like tenor evidencing in the aggregate a like number of

Warrants.

 

Upon due presentation for registration of transfer of

this Warrant Certificate at the office of the Warrant Agent a new Warrant

Certificate or Warrant Certificates of like tenor and evidencing in the

aggregate a like number of Warrants shall be issued to the transferee(s) in

exchange for this Warrant

 

A-4

 

Certificate, subject to the limitations provided in the Warrant

Agreement, without charge except for any tax or other governmental charge

imposed in connection therewith.

 

The Company and the Warrant Agent may deem and treat

the registered holder(s) thereof as the absolute owner(s) of this Warrant

Certificate (notwithstanding any notation of ownership or other writing hereon

made by anyone), for the purpose of any exercise hereof, of any distribution to

the holder(s) hereof, and for all other purposes, and neither the Company nor

the Warrant Agent shall be affected by any notice to the contrary. Neither the

Warrants nor this Warrant Certificate entitles any holder hereof to any rights

of a stockholder of the Company.

 

A-5

 

[Form of Election to Purchase]

 

(To Be Executed Upon Exercise Of Warrant)

 

The undersigned hereby irrevocably elects to exercise

the right, represented by this Warrant Certificate, to receive __________

shares of Common Stock and herewith tenders payment for such shares to the

order of DECRANE HOLDINGS CO., in the amount of $__________ in accordance with

the terms hereof. The undersigned requests that a certificate for such shares

be registered in the name of ____________________, whose address is

____________________ and that such shares be delivered to ____________________,

whose address is ____________________. If said number of shares is less than

all of the shares of Common Stock purchasable hereunder, the undersigned

requests that a new Warrant Certificate representing the remaining balance of

such shares be registered in the name of ____________________, whose address is

____________________, and that such Warrant Certificate be delivered to whose

address is ____________________.

 

	

   

  	

   

  
	

   

  	

  Signature

  
	

   

  	

   

  
	

  Date:

  	

   

  
	

   

  	

   

  
	

   

  	

  Signature

  Guaranteed

  

 

Signatures must be guaranteed by an “eligible guarantor institution”

meeting the requirements of the Warrant Agent, which requirements include

membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such

other “signature guarantee program” as may be determined by the Warrant Agent

in addition to, or in substitution for, STAMP, all in accordance with the

Securities Exchange Act of 1934, as amended.

 

A-6

 

SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANTS

 

The following exchanges of a part

of this Global Warrant have been made:

 

	

  Date of Exchange

  	

   

  	

  Amount of

  decrease in Number of warrants in this Global Warrant

  	

   

  	

  Amount of

  increase in Number of Warrants in this Global Warrant

  	

   

  	

  Number of

  Warrants in this Global Warrant following such decrease or increase

  	

   

  	

  Signature of

  authorized officer of Warrant Agent

  

 

A-7

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

DeCrane Holdings Co.

c/o DLJ Merchant Banking Partners

277 Park Avenue

New York, New York 10172

 

State Street Bank and Trust Company

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

 

Re: Warrants

 

Reference is hereby made to the Warrant Agreement,

dated as of October 5, 1998 (the “Warrant Agreement”), between DeCrane

Holdings Co., as issuer (the “Company”), and State Street Bank and Trust Company, as

warrant agent. Capitalized terms used but not defined herein shall have the meanings

given to them in the Warrant Agreement.

 

____________________, (the “Transferor”) owns

and proposes to transfer the Warrant(s) or interest in such Warrant(s)

specified in Annex A hereto, in the principal amount at maturity of $__________

in such Warrant(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 APPL Y]

 

1.     o    Check if Transferee will take delivery of a beneficial

interest in the 144A Global Warrant or a Definitive Warrant 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 Warrant is being transferred to a Person that the

Transferor reasonably believed and believes is purchasing the beneficial

interest or Definitive Warrant 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 die United States. Upon consummation of the proposed Transfer

in accordance with the terms of the Warrant Agreement, the transferred

beneficial interest or Definitive Warrant will be subject to the restrictions

on transfer enumerated in the Private Placement Legend printed on the 144A

Global Warrant and/or the Definitive Warrant and in the Warrant Agreement and

the Securities Act.

 

2.     o    Check if Transferee will take delivery of a beneficial

interest in the Regulation S Global Warrant or a Definitive Warrant 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 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

 

B-1

 

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

Warrant Agreement, the transferred beneficial interest or Definitive Warrant

will be subject to the restrictions on Transfer enumerated in the Private

Placement Legend printed on the Regulation S Global Warrant and/or the

Definitive Warrant and in the Warrant Agreement and the Securities Act.

 

3.     o    Check

and complete if Transferee will take delivery of a beneficial interest in the

IAI Global Warrant or a Definitive Warrant 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 Warrants and Restricted Definitive

Warrants 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 Company 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 Warrant or Restricted Definitive

Warrants 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 Warrant Agreement and (2) if the Company requests, 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 Warrant Agreement, the

transferred beneficial interest or Definitive Warrant will be subject to the

restrictions on transfer enumerated in the Private Placement Legend printed on

the IAI Global Warrant and/or the Definitive Warrants and in the Warrant

Agreement and the Securities Act.

 

4.     o    Check if Transferee will take delivery of a beneficial

interest in an Unrestricted Global Warrant or of an Unrestricted Definitive

Warrant.

 

(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 Warrant Agreement and any

applicable blue sky securities laws of any state of the United States and (ii)

the restrictions on transfer contained in the Warrant Agreement 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

 

B-2

 

Warrant Agreement,

the transferred beneficial interest or Definitive Warrant will no longer be

subject to the restrictions on transfer enumerated in the Private Placement

Legend printed on the Restricted Global Warrants, on Restricted Definitive

Warrants and in the Warrant Agreement.

 

(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 Warrant Agreement and any applicable blue sky securities laws

of any state of the United States and (ii) the restrictions on transfer

contained in the Warrant Agreement 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

Warrant Agreement, the transferred beneficial interest or Definitive Warrant

will no longer be subject to the restrictions on transfer enumerated in the

Private Placement Legend printed on the Restricted Global Warrants, on

Restricted Definitive Warrants and in the Warrant Agreement.

 

(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 Warrant Agreement and any applicable blue sky securities laws of any

State of the United States and (ii) the restrictions on transfer contained in

the Warrant Agreement 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 Warrant Agreement, the

transferred beneficial interest or Definitive Warrant will not be subject to

the restrictions on transfer enumerated in the Private Placement Legend printed

on the Restricted Global Warrants or Restricted Definitive Warrants and in the

Warrant Agreement.

 

This certificate

and the statements contained herein are made for your benefit and the benefit

of the Company.

 

	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  [Insert Name of Transferor]

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Date:

  	

   

  	

   

  	

   

  	

   

  

 

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 Warrant, or

 

(ii)           o            Regulation

S Global Warrant, or

 

(iii)          o            IAI Global Warrant; or

 

(b)           o            a Restricted Definitive Warrant.

 

2.             After

the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)           o            a beneficial interest in the:

 

(i)            o            144A Global Warrant, or

 

(ii)           o            Regulation S Global Warrant, or

 

(iii)          o            IAI Global Warrant, or

 

(iv)          o            Unrestricted Global Warrant; or

 

(b)           o            a Restricted Definitive Warrant; or

 

(c)           o            an Unrestricted Definitive Warrant,

 

in accordance with

the terms of the Warrant Agreement.

 

B-4

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

DeCrane Holdings Co.

c/o DLJ Merchant Banking Partners

277 Park Avenue

New York, New York 10172

 

State Street Bank and Trust Company

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

 

Re: Warrants

 

(CUSIP __________)

 

Reference is

hereby made to the Warrant Agreement, dated as of October 5, 1998 (the “Warrant Agreement”), between DeCrane

Holdings Co., as issuer (the “Company”),

and State Street Bank and Trust Company, as Warrant agent. Capitalized terms

used but not defined herein shall have the meanings given to them in the

Warrant Agreement.

 

____________________

(the “Owner”) owns and proposes to

exchange the Warrant(s) or interest in such Warrant(s) specified herein, in the

amount of $_______________ in such Warrant(s) or interests (the “Exchange”). In connection with the

Exchange, the Owner hereby certifies that:

 

1. Exchange of Restricted Definitive Warrants or

Beneficial Interests in a Restricted Global Warrant for Unrestricted Definitive

Warrants or Beneficial Interests in an Unrestricted Global Warrant

 

(a)   o    Check if

Exchange is from beneficial interest in a Restricted Global Warrant to

beneficial interest in an Unrestricted Global Warrant.  In connection with the Exchange of the

Owner’s beneficial interest in a Restricted Global Warrant for a beneficial

interest in an Unrestricted Global Warrant 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 Warrants 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 Warrant Agreement 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

Warrant 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 Warrant to

Unrestricted Definitive Warrant. In connection with the Exchange of the

Owner’s beneficial interest in a Restricted Global Warrant for an Unrestricted

Definitive Warrant, the Owner hereby certifies (i) the Definitive Warrant 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 Warrants and pursuant to and in accordance with the

Securities Act, (iii) the restrictions on transfer contained in the Warrant

Agreement and the Private Placement Legend are not required in order to

maintain compliance with the Securities Act and (iv) the Definitive Warrant is

being acquired in compliance with any applicable blue sky securities laws of

any state of the United States.

 

C-1

 

(c)   o    Check if

Exchange is from Restricted Definitive Warrant to beneficial interest in an

Unrestricted Global Warrant. In connection with the Owner’s Exchange of a

Restricted Definitive Warrant for a beneficial interest in an Unrestricted

Global Warrant, 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 Warrants and pursuant to and in accordance with the

Securities Act, (iii) the restrictions on transfer contained in the Warrant

Agreement 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 Warrant to Unrestricted Definitive Warrant.

In connection with the Owner’s Exchange of a Restricted Definitive Warrant for

an Unrestricted Definitive Warrant, the Owner hereby certifies (i) the

Unrestricted Definitive Warrant 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 Warrants and pursuant

to and in accordance with the Securities Act, (iii) the restrictions on

transfer contained in the Warrant Agreement and the Private Placement Legend

are not required in order to maintain compliance with the Securities Act and

(iv) the Unrestricted Definitive Warrant is being acquired in compliance with

any applicable blue sky securities laws of any state of the United States.

 

2. Exchange of Restricted Definitive Warrants or

Beneficial Interests in Restricted Global Warrants for Restricted Definitive

Warrants or Beneficial Interests in Restricted Global Warrants

 

(a)   o    Check if

Exchange is from beneficial interest in a Restricted Global Warrant to

Restricted Definitive Warrant. In connection with the Exchange of the

Owner’s beneficial interest in a Restricted Global Warrant for a Restricted

Definitive Warrant in a number equal to the number of beneficial interests

exchanged, the Owner hereby certifies that the Restricted Definitive Warrant is

being acquired for the Owner’s own account without transfer. Upon consummation

of the proposed Exchange in accordance with the terms of the Warrant Agreement,

the Restricted Definitive Warrant issued will continue to be subject to the

restrictions on transfer enumerated in the Private Placement Legend printed on

the Restricted Definitive Warrant and in the Warrant Agreement and the

Securities Act.

 

(b)   o    Check if Exchange is from Restricted Definitive Warrant to

beneficial interest in a Restricted Global Warrant. In connection with the

Exchange of the Owner’s Restricted Definitive Warrant for a beneficial interest

in the [CHECK ONE] o

144A Global Warrant, o Regulation S

Global Warrant, o IAI Global

Warrant in a number equal to the number of beneficial interests exchanged, 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 Warrants 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 Warrant Agreement, the beneficial interest issued will be

subject to the restrictions on transfer enumerated in the Private Placement

Legend printed on the relevant Restricted Global Warrant and in the Warrant

Agreement and the Securities Act.

 

C-2

 

This certificate

and the statements contained herein are made for your benefit and the benefit

of the Company.

 

	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  [Insert Name of Transferor]

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Date:

  	

   

  	

   

  	

   

  	

   

  

 

C-3

 

EXIDBIT D

 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

DeCrane Holdings Co.

c/o DLJ Merchant Banking Partners

277 Park Avenue

New York, New York 10172

 

State Street Bank and Trust Company

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

 

Re: Warrants

 

Reference is

hereby made to the Warrant Agreement, dated as of October 5, 1998 (the “Warrant Agreement”),

between DeCrane Holdings Co., as issuer (the

“Company”), and State

Street Bank and Trust Company, as warrant agent. Capitalized terms used but not

defined herein shall have the meanings given to them in the Warrant Agreement.

 

In connection with

our proposed purchase of $ _______________ amount of:

 

(a)   o    a

beneficial interest in a Global Warrant, or

 

(b)   o    a

Definitive Warrant,

 

we confirm that:

 

1.             We understand that any subsequent

transfer of the Warrants or any interest therein is subject to certain restrictions

and conditions set forth in the Warrant Agreement and the undersigned agrees to

be bound by, and not to resell, pledge or otherwise transfer the Warrants 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 Warrants have not been registered under the Securities Act, and

that the Warrants 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 Warrants or any interest therein, we will do so only (A) to the

Company 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 Company a signed letter substantially in the

form of this letter and, if requested by the Company, an Opinion of Counsel in

form reasonably acceptable to the Company 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 provide to any person purchasing the Definitive Warrant or beneficial

interest in a Global Warrant 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.

 

D-1

 

3.             We understand that, on any proposed

resale of the Warrants or beneficial interest therein, we will be required to

furnish to you and the Company such certifications, legal opinions and other

information as you and the Company may reasonably require to confirm that the

proposed sale complies with the foregoing restrictions. We further understand

that the Warrants purchased by us will bear a legend to the foregoing effect.

 

4.             We are an institutional “accredited

investor” (as defined in Rule 501(a)(l), (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 Warrants, 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 Warrants 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.

 

We agree not to

engage in any hedging transactions with regard to the Warrants unless such

hedging transactions are in compliance with the Securities Act.

 

You and the

Company 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 Transferor]

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

   

  	

   

  	

  Title:

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Date:

  	

   

  	

   

  	

   

  	

   

  

 

D-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00035-of-00352.parquet"}]]