8-K

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------
                                    FORM 8-K

                                 CURRENT REPORT

                        PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                               November 14, 1997
                                 Date of Report
                       (Date of earliest event reported)

                             ----------------------

                        DECRANE AIRCRAFT HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)


        Delaware                         0-22371                 34-1645569
(State or other jurisdiction      Commission File Number)     (I.R.S. Employer
    of incorporation)                                        Identification No.)


              2361 Rosecrans Avenue, Suite 180, El Segundo, CA 90245
          (Address, including zip code, of principal executive offices)

                                (310) 725-9123
              (Registrant's telephone number, including area code)

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               155 Montrose West Avenue, Suite 210, Copley, OH 44321
                                 (330) 668-3061
(Former address and telephone number of principal executive offices, if changed
                                since last report)

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ITEM 2.   ACQUISITION OR DISPOSITION OF ASSETS.

Acquisition of Audio International, Inc.
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     On November 3, 1997, the Company announced that it signed a definitive
agreement to purchase all of the outstanding stock of Audio International, Inc.
("Audio International"). The purchase was consummated on November 14, 1997.
Audio International, located in Little Rock, Arkansas, provides premium,
customized aircraft entertainment and cabin management products and systems for
the high-end corporate jet market.
     
     The purchase price consists of $24,000,000 in cash paid at closing plus
contingent consideration aggregating a maximum of $6,000,000 payable over two
years based on future attainment of defined performance criteria. The
acquisition was funded with borrowings under the Company's revolving credit
facility. In conjunction with the acquisition, the revolving credit facility was
amended to increase the permitted maximum borrowings by $20 million to $60
million, effective with the closing of the acquisition.
     
     The transaction will be accounted for as a purchase and the difference
between the purchase price and the fair value of the net assets acquired will be
recorded as goodwill and amortized on a straight-line basis over thirty years.
     
     A copy of the press releases issued by the Company on November 3 and 14,
1997 with respect to the acquisition are attached hereto as Exhibit 99.1 and
Exhibit 99.2, respectively, and are incorporated herein by reference.
     
     
     
ITEM 7.   FINANCIAL STATEMENTS AND EXHIBITS.

a.     Financial statements of businesses acquired.

     Audited consolidated financial statements of Audio International, prepared
in conformity with Regulation S-X, are not available at this time. The
independent accountants of Audio International are conducting their examination
of the consolidated financial statements for the periods required. The Company
expects to file the required financial statements as soon as practicable as an
amendment to this report, but in no event later than January 28, 1998.
     
     
b.     Pro forma financial information.

     It is impracticable to provide pro forma financial information prepared in
conformity with Regulation S-X at this time. Appropriate pro forma financial
information and explanatory notes will be filed as soon as practicable as an
amendment to this report, but in no event later than January 28, 1998.


c.     Exhibits.
       Exhibit
          No.                      Exhibit Description 
       ---------  --------------------------------------------------------
          2.1       Stock Purchase and Sale Agreement by and among Robert
                    S. Brown, Rick Marsh and Wayne Richie, the shareholders
                    of Audio International, Inc. and DeCrane Aircraft
                    Holdings, Inc., including Exhibit 1.2.2, Form of the
                    Earnout Agreement *

          10.1      Consent and Amendment No. 1 to Loan and Security
                    Agreement dated as of October 21, 1997 among DeCrane
                    Aircraft Holdings, Inc., Bank of America National Trust
                    and Savings Association, successor-by-merger to Bank of
                    America Illinois, as agent and lender, and Comerica
                    Bank - California, Mellon Bank, N.A. and Sumitomo Bank
                    of California, as lenders *

          10.2      Covenant Not to Compete Agreement between DeCrane
                    Aircraft Holdings, Inc., Audio International, Inc. and
                    Robert S. Brown *


                                           -2-




          10.3      Covenant Not to Compete Agreement between DeCrane
                    Aircraft Holdings, Inc., Audio International, Inc. and
                    Rick Marsh *

          10.4      Covenant Not to Compete Agreement between DeCrane
                    Aircraft Holdings, Inc., Audio International, Inc. and
                    Wayne Richie *

          10.5      Employment Agreement dated November 14, 1997 between
                    Audio International, Inc. and Robert S. Brown *

          10.6      Employment Agreement dated November 14, 1997 between
                    Audio International, Inc. and Rick Marsh *

          99.1      Press release issued by DeCrane Aircraft Holdings, Inc.
                    on November 3, 1997 **

          99.2      Press release issued by DeCrane Aircraft Holdings, Inc.
                    on November 14, 1997 *

          99.3      Consolidated financial statements of Audio
                    International, Inc. and subsidiary, including notes
                    thereto and auditors' report thereon, incorporated by
                    reference in Item 7(a) of this report ***

          99.4      Unaudited pro forma consolidated financial information
                    and explanatory notes thereto, incorporated by
                    reference in Item 7(b) of this report ***

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*    -    Filed herewith
**   -    Previously filed on Form 8-K dated November 3, 1997.
***  -    To be filed by amendment as soon as practicable, but in no event later
          than January 28, 1998.



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                 DECRANE AIRCRAFT HOLDINGS, INC.
                                            (Registrant)




November 24, 1997           By:  /s/ Robert A. Rankin
                                 -----------------------------------------------
                                 Name:     Robert A. Rankin
                                 Title:    Chief Financial Officer and Secretary


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                                 EXHIBIT INDEX

        Exhibit
          No.                       Exhibit Description 
        -------     -------------------------------------------------------
           2.1      Stock Purchase and Sale Agreement by and among Robert
                    S. Brown, Rick Marsh and Wayne Richie, the shareholders
                    of Audio International, Inc. and DeCrane Aircraft
                    Holdings, Inc., including Exhibit 1.2.2, Form of the
                    Earnout Agreement *

          10.1      Consent and Amendment No. 1 to Loan and Security
                    Agreement dated as of October 21, 1997 among DeCrane
                    Aircraft Holdings, Inc., Bank of America National Trust
                    and Savings Association, successor-by-merger to Bank of
                    America Illinois, as agent and lender, and Comerica
                    Bank - California, Mellon Bank, N.A. and Sumitomo Bank
                    of California, as lenders *

          10.2      Covenant Not to Compete Agreement between DeCrane
                    Aircraft Holdings, Inc., Audio International, Inc. and
                    Robert S. Brown *

          10.3      Covenant Not to Compete Agreement between DeCrane
                    Aircraft Holdings, Inc., Audio International, Inc. and
                    Rick Marsh *

          10.4      Covenant Not to Compete Agreement between DeCrane
                    Aircraft Holdings, Inc., Audio International, Inc. and
                    Wayne Richie *

          10.5      Employment Agreement dated November 14, 1997 between
                    Audio International, Inc. and Robert S. Brown *

          10.6      Employment Agreement dated November 14, 1997 between
                    Audio International, Inc. and Rick Marsh *

          99.1      Press release issued by DeCrane Aircraft Holdings, Inc.
                    on November 3, 1997 **

          99.2      Press release issued by DeCrane Aircraft Holdings, Inc.
                    on November 14, 1997 *

          99.3      Consolidated financial statements of Audio
                    International, Inc. and subsidiary, including notes
                    thereto and auditors' report thereon, incorporated by
                    reference in Item 7(a) of this report ***

          99.4      Unaudited pro forma consolidated financial information
                    and explanatory notes thereto, incorporated by
                    reference in Item 7(b) of this report ***

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*    -    Filed herewith
**   -    Previously filed on Form 8-K dated November 3, 1997.
***  -    To be filed by amendment as soon as practicable, but in no event later
          than January 28, 1998.


                                        -4-

EX-2.1

                          STOCK PURCHASE AND SALE AGREEMENT

     This Stock Purchase and Sale Agreement ("Agreement") is made and entered 
into by and among Robert S. Brown, Rick Marsh and Wayne Richie, the 
shareholders (the "Shareholders") of Audio International, Inc. ("AI") and 
DeCrane Aircraft Holdings, Inc. ("DAH"), based on the following facts:

     Shareholders own all of the outstanding stock of AI (the "Stock"); and 
desire to sell 100% of the Stock to DAH; 

     DAH desires to purchase 100% of the Stock from the Shareholders on the 
terms and conditions of this Agreement.

     Based on the foregoing facts and circumstances, the parties hereby agree 
as follows (capitalized terms being used herein as defined where noted in 
Schedule A):

     1.   STOCK TO BE PURCHASED AND SOLD; PURCHASE PRICE.

          1.1  PURCHASE AND SALE OF STOCK.  At the Closing, DAH shall purchase 
from the Shareholders 100% of the Stock for the amount specified in Section 
1.2. Attached as Exhibit 1.1 is a list of the Shareholders which reflects the 
percentage of the aggregate payments to be made pursuant to Sections 1.2.1 and 
1.2.2 to each of the Shareholders.  Each of the Shareholders, jointly and 
severally, hereby agrees to indemnify and hold DAH harmless from any and all 
loss, damage, claim or expense, resulting from any claim by any Shareholder or 
the successor or heir of any Shareholder that the percentage received by the 
Shareholder or such successor or heir is not correct as a percentage of the 
aggregate amount paid.

          1.2  PURCHASE PRICE OF THE STOCK.

               1.2.1     At the Closing, DAH shall make federal funds and wire 
transfers to each of the Shareholders, to accounts designated by the 
Shareholders on Exhibit 1.2.1 hereto the aggregate sum of $24 million;

               1.2.2     On March 31, 1999 and March 31, 2000, the Shareholders 
shall receive such additional payments as are required pursuant to the Earnout 
Agreement, attached as Exhibit 1.2.2.


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     2.   REPRESENTATIONS AND WARRANTIES.

          2.1  BY DAH.  Except as set forth on Schedule 2.1, the 
representations and warranties of DAH, contained in this Agreement, including 
those contained in this Section 2.1, are correct and complete as of the date of 
this Agreement and will be correct and complete as of the Closing Date.  DAH 
hereby represents and warrants to the Shareholders the following:

               2.1.1     ORGANIZATION.  DAH is a corporation duly organized, 
validly existing and in good standing under the laws of the State of Delaware, 
and has all requisite corporate power and authority to own, lease and operate 
its properties and conduct its business as now being conducted. DAH is duly 
qualified to do business and in good standing in Delaware and California. 
Except as set forth on Schedule 2.1.1, DAH has not received any written notice 
or assertion within the last three years from any governmental official of any 
jurisdiction to the effect that DAH is required to be qualified or otherwise 
authorized to do business in any other jurisdiction, in which DAH, has not 
qualified or obtained such authorization.  Attached hereto as Exhibit 2.1.1 are 
complete and correct copies of DAH's certificate of incorporation and by-laws 
as in effect on the date hereof, and DAH is not in default in the performance, 
observation or fulfillment of any provision of its articles of incorporation or 
by-laws.

               2.1.2     AUTHORIZATION.  DAH has all requisite corporate power 
and authority to enter into this Agreement and the other Transaction Documents 
to which DAH is a party, perform its obligations hereunder and thereunder and 
consummate the transactions contemplated hereby and thereby. All necessary 
corporate action has been taken by DAH with respect to the execution and 
delivery of this Agreement and the other Transaction Documents to which DAH is 
a party, the consummation of the transactions contemplated by this Agreement 
and the other Transaction Documents to which DAH is a party, constitute valid 
and binding obligations of DAH, enforceable against DAH, in accordance with 
their respective terms, subject to applicable bankruptcy, insolvency, 
reorganization, fraudulent conveyance and moratorium laws and other laws of 
general application affecting the enforcement of creditors' rights generally.

               2.1.3     LITIGATION.  There is no claim, litigation, action, 
suit, proceeding, investigation or inquiry, administrative or judicial, pending 
or, to the knowledge of DAH, threatened against DAH, at law or in equity, 
before any federal, state or local court or regulatory agency, or other 
governmental authority, which might have an adverse effect on DAH's ability to 
perform any of its obligations under this Agreement or upon the consummation of 
the transactions contemplated by this Agreement.

               2.1.4     BROKERS AND FINDERS.  Except as disclosed in Schedule 
2.1.4, neither DAH nor any of its officers, directors or employees, has engaged 
any broker or finder or incurred any liability for any brokerage fees, 
commissions, finders' fees or similar fees or expenses and no broker or finder 
has acted directly or indirectly for DAH in connection with this Agreement or 
the transactions contemplated hereby.


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               2.1.5     SEC REPORTS, FINANCIAL STATEMENTS OBLIGATIONS AND 
LIABILITIES.  Since April 16, 1997, DAH has filed all required forms, reports 
and documents with the Securities and Exchange Commission (the "SEC") required 
to be filed by it pursuant to the federal securities laws and the SEC rules and 
regulations thereunder, all of which forms, reports and documents have complied 
in all material respects as of the respective filing dates, or, in the case of 
the S-1 Registration Statement effective April 16, 1997 as of such date (the 
"Registration Statement"), with all applicable requirements of the Securities 
Act of 1933 (the "Securities Act") and the Securities and Exchange Act of 1934 
(the "Exchange Act"), and the rules and regulations promulgated thereunder. 
None of such forms, reports or documents, including without limitation, any 
exhibits, financial statements or schedules included therein, at the time 
filed, contained any untrue statement of a material fact or omitted to state a 
material fact required to be stated therein or necessary in order to make the 
statements therein, in light of the circumstances in which they were made, not 
misleading. DAH's forms, reports and documents filed by DAH with the SEC under 
the Exchange Act since April 16, 1997 are hereinafter collectively referred to 
as the "DAH 34 Act Reports."

     The "DAH Financial Statements" means the consolidated financial statements 
of DAH and its subsidiaries included in the Registration Statement and the DAH 
34 Act Reports.  Each of the consolidated balance sheets of DAH in the DAH 
Financial Statements (including the related notes and schedules) fairly present 
the consolidated financial position of DAH and its consolidated subsidiaries as 
of their respective dates and each of the consolidated statements of income, 
stockholders' equity and the cash flows of DAH and its consolidated 
subsidiaries in the DAH Financial statements (including the related notes and 
schedules) fairly present the results of operations, shareholders' equity and 
cash flows of DAH and its consolidated subsidiaries (subject, in the case of 
unaudited statements to normal year-end audit adjustments which would not be 
material in amount or effect), in each case in accordance with generally 
accepted accounting principles consistently applied during the periods 
involved, except as may be noted therein.

     DAH, on a consolidated basis, does not have any material debt, liability, 
or obligation (whether accrued, absolute, contingent, by guarantee, indemnity, 
or otherwise, and whether due or to become due) nor has there been any 
occurrence which involves material liability of a type required to be disclosed 
in the DAH Financial Statements or the notes thereto, except those (i) 
disclosed in the DAH Financial Statements, the Registration Statement or the 
DAH 34 Act Reports, or (ii) incurred in the ordinary course of business since 
December 31, 1996.

               2.1.6     ABSENCE OF CERTAIN EVENTS.  Except as disclosed in 
Schedule 2.1.7 and in the DAH 34 Act Reports, since December 31, 1996, there 
has not been any event, circumstance or condition that has had or is reasonably 
likely to have a DAH Material Adverse Effect, and (iii) DAH and its 
subsidiaries have not introduced any principle or practice of accounting.


                                      3


               2.1.7     COMPLETE DISCLOSURE  No representation or warranty 
made by DAH in this Agreement, and no exhibit, schedule, statement, certificate 
or other writing furnished to the Shareholders by or on behalf of DAH pursuant 
to this Agreement or in connection with the transactions contemplated hereby or 
thereby, contains or will contain, any untrue statement of a material fact or 
omits or will omit to state a material fact necessary to make the statements 
contained herein and therein not misleading.

          2.2  THE SHAREHOLDERS.  Except as set forth on Schedule 2.2, the 
representations and warranties of the Shareholders, contained in this 
Agreement, including those contained in this Section 2.2, are correct and 
complete as of the date of this Agreement and will be correct and complete as 
of the Closing Date.  The Shareholders represent and warrant to DAH the 
following:

               2.2.1     CORPORATE ORGANIZATION.  AI is a corporation duly 
organized, validly existing and in good standing under the laws of the State of 
Arkansas, and has all requisite corporate power and authority to own, lease and 
operate its properties and conduct its business as now being conducted.  AI is 
duly qualified to do business and in good standing in each jurisdiction listed 
on Schedule 2.2.1, and neither the nature of the business conducted by it nor 
the property it owns, leases or operates requires it to qualify to do business 
as a foreign corporation in any other jurisdiction.  Except as set forth on 
Schedule 2.2.1, AI has not received any written notice or assertion within the 
last three years from any governmental official of any jurisdiction to the 
effect that AI is required to be qualified or otherwise authorized to do 
business therein, in which AI has not qualified or obtained such authorization. 
Attached as Schedules 2.2.1 are complete and correct copies of AI's articles of 
incorporation and by-laws as in effect on the date hereof, and AI is not in 
default in the performance, observation or fulfillment of any provision of 
either of its articles of incorporation or by-laws.

               2.2.2     CAPITALIZATION AND SECURITY HOLDERS.  The authorized 
capital stock of AI consists solely of 1,000 shares of Common Stock, $1.00 par 
value ("AI Common Shares"); AI has issued and outstanding 129 AI Common Shares, 
constituting all of the issued and outstanding shares of capital stock of any 
class of AI; all outstanding AI Common Shares have been validly issued and are 
fully paid and non-assessable and free of preemptive rights; there are no 
outstanding subscriptions' options, warrants, puts, calls, agreements, 
understandings, or other commitments or rights of any type relating to the 
issuance, sale or transfer by AI of any securities of AI, nor are there 
outstanding any securities which are convertible into or exchangeable for any 
shares of capital stock of AI; and AI has no obligation of any kind to issue 
any additional securities.  Schedule 2.2.2 accurately sets forth the names and 
addresses of, the number of AI Common Shares held at the date of this Agreement 
of record and/or beneficially by, and any AI Common Shares to be issued, sold 
or otherwise transferred at or prior to the Closing Date to, each and every 
shareholder of AI. All of such AI Common Shares are owned free and clear of all 
liens, charges, claims, encumbrances, pledges, security interests, equities and 
restrictions whatsoever.


                                      4


               2.2.3     AUTHORIZATION OF THE SHAREHOLDERS.  Each of the 
Shareholders has all requisite power, authority and legal capacity and is 
competent to execute and deliver this agreement, and the other Transaction 
Documents to which he is a party, perform his obligations hereunder and 
thereunder and consummate the transactions contemplated hereby.  This Agreement 
constitutes, and the other Transaction Documents to which the Shareholders are 
parties when executed and delivered by the Shareholders will constitute, valid 
and binding obligations of the Shareholders, enforceable against the 
Shareholders in accordance with their respective terms, subject to applicable 
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium 
laws and other laws of general application affecting the enforcement of 
creditors' rights generally.

               2.2.4     FINANCIAL STATEMENTS.  Attached hereto as Schedule 
2.2.4 are (i) the balance sheets of AI as at December 31, 1996, 1995 and 1994 
and September 30, 1997, (ii) the related statements of income for the years 
ended December 31, 1996, 1995 and 1994 and the nine months ended September 30, 
1997, and (iii) the related statements of retained earnings and cash flows for 
the years ended December 31, 1996 and 1995 (all of such documents referred to 
collectively as the "Financial Statements").  The 1996 Financial Statements 
reflect all year-end adjustments reflected in the audited consolidated 
financial statements of AI.  The Financial Statements (i) are true, correct and 
complete in all material respects, (ii) have been prepared from and are in 
accordance with the books and records of AI, (iii) have been prepared using an 
accrual basis method and FIFO inventory cost flow assumptions, (iv) are in 
conformity with generally accepted accounting principles applied on a 
consistent basis for such periods, and (v) fairly present the financial 
position of AI as of the dates stated and the results of operations and cash 
flows of AI for the periods then ended in accordance with such practices. On 
the date of this Agreement, AI does not have any material contingent 
liabilities, liabilities for taxes, unusual forward or long-term commitments or 
unrealized or anticipated losses from any unfavorable commitments, except as 
referred to or reflected or provided for in the balance sheets in the Financial 
Statements. Since September 30, 1997, there has been no material adverse change 
in the financial condition, operations, business or prospects taken as a whole 
of AI from that set forth in the Financial Statements dated as of September 30, 
1997.

               2.2.5     ABSENCE OF CERTAIN CHANGES IN EVENTS.  Except as set 
forth on Schedule 2.2.5, since December 31, 1996, there has not been:

                    (a)  Any material adverse change in the business 
operations, assets, properties or rights, prospects or condition (financial or 
otherwise) of AI or, any occurrence, circumstance, or combination thereof which 
reasonably could be expected to result in any such material adverse change (a 
"Material Adverse Effect");


                                      5


                    (b)  Any material increase in amounts payable by AI to or 
for the benefit of, or committed to be paid by AI:  (A) to or for the benefit 
of (x) any person listed on Schedule 2.2.5(b) (each a "Restricted Employee") or 
(y) in the aggregate, all shareholders, directors, officers, partners, 
consultants, agents and employees, in any capacity, of AI who are not listed on 
Schedule 2.2.5(b) (the "Non-Restricted Employees") or (B) in any benefits 
granted under any bonus, stock option, profit sharing, pension, retirement, 
deferred compensation, insurance, or other direct or indirect benefit plan, 
payment or arrangement made to, for the benefit of, or with (x) any Restricted 
Employee or (y) in the aggregate, all Non-Restricted Employees;

                    (c)  Any transaction entered into or carried out by AI 
other than in the ordinary and usual course of business;

                    (d)  Any borrowing or agreement to borrow funds; any 
incurring of any assumption, guarantee or other obligation or liability, 
contingent or otherwise except current liabilities incurred in the usual and 
ordinary course of business or those not exceeding at any one time outstanding 
$50,000;

                    (e)  Any material change made by AI in the methods of doing 
business, or other than such changes required by GAAP, any change in the 
accounting principles or practices of AI with respect to the Financial 
Statements or the method of application of such principles or practices;

                    (f)  Other than those which are involuntary and in amounts 
which are not material, any mortgage, pledge, lien, security interest, 
hypothecation, charge or other encumbrance imposed or agreed to be imposed on 
or with respect to the real (the "Real Property") or tangible or intangible 
personal property of AI (the "Personal Property") (collectively the "Property");

                    (g)  Any sale, lease or other disposition of or any 
agreement to sell, lease or otherwise dispose of any of the material properties 
or assets of AI, other than sales of finished goods in the usual and ordinary 
course of business for AI's scheduled prices;

                    (h)  Any purchase of or any agreement to purchase capital 
assets for an amount in excess of $50,000 for any one such purchase or $100,000 
for all such purchases made by AI on behalf of AI or any lease or any agreement 
to lease, as lessee, any capital assets with payments over the term thereof to 
be made by AI exceeding an aggregate of $50,000 for any one lease or $100,000 
in the aggregate;

                    (i)  Any loan or advance made by AI to any individual, 
firm, corporation or other entity except for advances not material in amount 
made in the usual and ordinary course of business to employees;


                                      6


                    (j)  Any modification, waiver, change, amendment, release, 
rescission or termination of, or accord and satisfaction with respect to, any 
material term, condition or provision of any material contract, agreement, 
license or other instrument to which AI is a party, other than any satisfaction 
by performance in accordance with the terms thereof in the usual and ordinary 
course of business;

                    (k)  Any delay or postponement (beyond normal practice) by 
AI on behalf of AI of the payment of material Accounts Payable or other 
material liabilities of AI; or

                    (l)  Any other event or condition of any character which 
has had a Material Adverse Effect or may reasonably be expected to result in a 
Material Adverse Effect.

               2.2.6     UNDISCLOSED LIABILITIES.  Except as disclosed on 
Schedule 2.2.6, AI has no material liability or obligation of any nature 
(whether liquidated, unliquidated, accrued, absolute, known or unknown, 
contingent or otherwise and whether due or to become due) except:

                    (a)  those set forth or reflected in the September 30, 1997 
Balance Sheet which have not been paid or discharged since the date thereof;

                    (b)  those arising under agreements or other commitments 
expressly identified in any Schedule hereto; and

                    (c)  current liabilities incurred in or as a result of the 
conduct of its business in the ordinary and usual course consistent with past 
practice since September 30, 1997, which are completely and accurately 
reflected on its books and records and which are not inconsistent with the 
other representations, warranties and agreements of AI and the Shareholders, 
set forth in this Agreement or in the other Transaction Documents.

               2.2.7     TAXES.  Except as set forth on Schedule 2.2.7, AI has 
filed all Federal, State and local tax returns.  AI has filed, when due, all 
federal, state and local tax returns; all amounts payable pursuant to such 
returns by AI for taxes through the Closing Date have been or will be paid or 
adequately provided for as reserves in the financial statements of AI.  No 
deficiency for any material amount of tax has been asserted or assessed by a 
taxing authority against AI.  Except as reserved for in the Closing Date 
Balance Sheet, there will not be any amount owing for taxes, penalties or 
interest.


                                      7


               2.2.8     COMPLIANCE WITH LAW.

                    (a)  Each of AI and the Shareholders, is in compliance in 
all material respects (with respect to the business of AI) with all applicable 
laws, statutes, orders, rules, regulations, policies or guidelines promulgated, 
or judgments, decisions or orders entered, by any federal, state, local or 
foreign court or governmental authority or instrumentality relating to AI or 
any of its businesses or properties.

                    (b)  AI is in compliance in all material respects with all 
federal, state and local laws, ordinances, rules and regulations pertaining to 
environmental matters, including solid waste disposal, toxic substances, 
hazardous substances, hazardous materials, hazardous waste, toxic chemicals, 
pollutants, contaminants and air or water pollution and to the storage, use, 
handling, transportation, discharge and disposal (including spills and leaks) 
of gaseous, liquid, semi-solid or solid materials.  AI has not, and to the best 
knowledge of AI and the Shareholders, no third party has, disposed or 
discharged any chemicals, oil or solid wastes on any part of the Real Property 
or any other any property owned, operated, leased or used by AI.  There are no 
underground storage tanks located on any part of the Real Property or any other 
property owned, operated, leased or used by AI.

                    (c)  Schedule 2.2.8(c) contains a complete copy of the 
repair station approval.  AI maintains all franchises, licenses, permits, 
consents, authorization, approvals, and certificates of any regulatory, 
administrative or other agency or body, to the extent reasonably necessary to 
conduct the business of AI (collectively, the "Permits"). Each of the Permits 
is currently valid and in full force and effect and, to the best knowledge of 
AI and its Shareholders, closing of and the transactions contemplated by this 
Agreement will not result in the termination of any Permit.  AI is not in 
material violation of any of the Permits and there is no pending or, to the 
knowledge of AI and its Shareholders, threatened proceeding which could result 
in the revocation, cancellation or inability of AI to renew or transfer any 
Permit.

                    (d)  To the best of the knowledge of AI and the 
Shareholders, except as set forth in Schedule 2.2.8(d), the business of AI) has 
not been charged with, or given notice of any material violation of, any 
applicable law.

               2.2.9     PROPRIETARY RIGHTS.  AI has full right, title and 
interest to all patents, patent applications, trademarks, tradenames, service 
marks, copyrights, trade secrets, inventions, know-how and other similar rights 
("Intellectual Property") which are material to the operation of the business 
of AI.  AI conducts its business without conflict or infringement with any 
intellectual property claimed or held by others.


                                      8


               2.2.10    RESTRICTIVE DOCUMENTS OR LAWS.  With the exception of 
the matters listed on Schedule 2.2.10, AI, (with respect to the business of 
AI), is not a party to or bound under any certificate, mortgage, lien, lease, 
agreement, contract, instrument, vote, which materially adversely affects, (i) 
the condition, financial or otherwise, of AI or the Property; (ii) the 
continued operation by DAH of the business of AI after the Closing Date on 
substantially the same basis as said business was theretofore operated; or 
(iii) the consummation of the transactions contemplated in this Agreement.

               2.2.11    INSURANCE.  AI has been and is insured with respect to 
its property and the conduct of its business in such amounts and against such 
risks as are sufficient for compliance with law and as it in good faith deems 
to be adequate to protect its properties and businesses in accordance with 
normal industry practice. Schedule 2.2.11 is a true, correct and complete list 
of all insurance policies and bonds in force in which AI is named as an insured 
party, as respects the business of AI, or for which AI has been charged or has 
paid any premiums.  Except as disclosed in Schedule 2.2.11, all such policies 
or bonds are currently in full force and AI has not received any notice from 
any such insurer with respect to the cancellation of any such Insurance.  AI 
will continue all of such insurance in full force and effect up to and 
including the Closing Date.  All premiums due and payable on such policies have 
been paid.  AI is not a co-insurer under any term of any Insurance policy.

               2.2.12    BANK ACCOUNTS, DEPOSITORIES AND POWERS OF ATTORNEY. 
Schedule 2.2.12 is a true, correct and complete list of the names and locations 
of all banks or other depositories in which AI maintains accounts or safe 
deposit boxes, and the names of the persons authorized to draw thereon, borrow 
therefrom or have access thereto. No person or entity holds a power of attorney 
on behalf of AI.

               2.2.13    REAL PROPERTY.  Except as set forth in Schedule 
2.2.13, and except with respect to real property leased pursuant to the Real 
Property Leases listed on Schedule 2.2.13, AI has no real property. The 
Property which is real property constitutes all of the Real Property now used 
in and necessary for the conduct of the business of AI as presently conducted.  
All such properties are held free and clear of all mortgages, pledges, liens, 
security interests, encumbrances and restrictions of any nature whatsoever.  
Schedule 2.2.13 contains a complete and accurate legal description of each 
parcel of Real Property owned or used by AI in the conduct of its business. 
Except as set forth in Schedule 2.2.13; all real property, buildings and 
structures owned or used by AI and material to the operation of its business is 
suitable for the purpose or purposes for which it is being used, and is in such 
condition and repair as to permit the continued operation of said businesses.  
To the best knowledge of AI and the Shareholders none of the Real Property, 
buildings or structures is in need of material maintenance or repairs except 
for ordinary, routine maintenance and repairs.  To the best knowledge of AI and 
the Shareholders, there are no material structural defects in the exterior 
walls or the interior bearing walls, the foundation or the roof of any plant, 
building, garage or other such structure owned,


                                      9


leased or used by AI and the electrical, plumbing and heating systems, and the 
air conditioning system, if any, of any such plant, building, garage or 
structure are in reasonable operating condition in light of their age and prior 
use.  The utilities servicing the real property owned, leased or used by AI are 
adequate to permit the continued operation of the business of AI and to the 
best knowledge of AI and the Shareholders there are no pending or threatened 
zoning, condemnation or eminent domain proceedings, building, utility or other 
moratoria, or injunctions or court orders which would materially effect such 
continued operation.  Schedule 2.2.13 lists, and AI have furnished or made 
available to DAH copies, if any of, all engineering, geologic and environmental 
reports prepared by or for AI with respect to the Real Property owned, leased 
or used by AI.

               2.2.14    PERSONAL PROPERTY.  Except as set forth in Schedule 0, 
and except with respect to personal property leased pursuant to the Personal 
Property Leases listed on Schedule 0, AI has good, valid and marketable title 
to all of its assets and properties which are Personal property of every kind, 
nature and description, tangible or intangible wherever located, including all 
property and assets which are personal property shown or reflected on the 
September 30, 1997 Balance Sheet.  The Personal Property constitutes all of the 
personal property now used in and necessary for the conduct of the business of 
AI as presently conducted, and is held free and clear of all mortgages, 
pledges, liens, security interests, encumbrances and restrictions of any nature 
whatsoever.  Except as set forth in Schedule 2.2.14 no financing statement 
naming AI as debtor has been filed in any jurisdiction, and AI is not a party 
to or bound under any agreement or legal obligation authorizing any party to 
file any such financing statement.  Schedule 0 contains a complete and accurate 
description of all tangible Personal Property having an individual value of 
$5,000 or more owned or used by AI in the conduct of its business.  Schedule 0 
contains a complete and accurate description of all machinery, equipment, 
tooling, parts, furniture, supplies and other tangible Personal Property having 
an individual value of $5,000 or more owned or used by AI.  Schedule 0 contains 
a complete and accurate description of all automobiles, trucks and other 
vehicles owned or used by AI.  Except as noted on Schedule 0 as unsuitable, all 
machinery and equipment and tangible personal property owned or used by AI and 
material to the operation of the business is suitable for the purpose or 
purposes for which it is being used, and is in such condition and repair as to 
permit the continued operation of said business. None of such machinery or 
equipment is in need of material maintenance or repairs except for ordinary, 
routine maintenance and repairs.

               2.2.15    ENVIRONMENTAL MATTERS.  Except as set forth on 
Schedule 2.2.15, the operations of AI are in material compliance with all 
occupational health and safety acts and all environmental laws and regulations 
of all federal, state and local governmental or regulatory bodies having 
jurisdiction over AI. Without limiting the generality of the foregoing, and by 
way of example only, except as set forth on Schedule 2.2.15:


                                     10


                    (a)  There has not been, and is not occurring, any Release 
of any Hazardous Substance on any real property owned or used by AI. For 
purposes of this Agreement, the terms "Release" and "Hazardous Substance" shall 
have the same meanings as those terms are given in the Comprehensive 
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 
Section 9601 ET SEQ. ("CERCLA"), except that for purposes of this Agreement 
petroleum (including crude oil or any fraction thereof) shall be deemed a 
Hazardous Substance. 

                    (b)  AI has never sent a Hazardous Substance to a site 
which, pursuant to CERCLA or any similar state law, (A) has been placed, or is 
proposed to be placed, or, to the best knowledge of AI or Shareholders, may in 
the future be placed, on the "National Priorities List" of hazardous waste 
sites or on any similar list of any federal, state or local governmental 
agency, including the Comprehensive Environmental Response, Compensation and 
Liability System list for potential hazardous waste sites, or (B) is subject to 
a claim, an administrative order or other request to take "removal" or 
"remedial" action (as defined under CERCLA) or to pay for any costs relating to 
such site.

                    (c)  AI has never been or is currently in violation of any 
provision of the Toxic Substances Control Act or the regulations promulgated 
thereunder.

                    (d)  AI is not involved in any suit or has received notice 
of any claim relating to personal injuries from exposure to Hazardous 
Substances.

               2.2.16    BROKERS, FINDERS.  Except as set forth on Schedule 
2.2.16, the transactions contemplated herein were not submitted to AI by any 
broker or other person entitled to a commission or finder's fee thereon, and 
were not with the consent of AI submitted to DAH by any such broker or other 
person.  Except as set forth on Schedule 2.2.16, neither AI nor any of its 
offices, directors or employees has engaged any broker or finder or incurred or 
taken any action which may give rise to any liability against itself or the 
Property for any brokerage fees, commissions, finders fees or similar fees or 
expenses and no broker or finder has acted directly or indirectly for AI in 
connection with this Agreement or the transactions contemplated hereby.  No 
investment banking, financial advisory or similar fees have been incurred or 
are or will be payable by AI in connection with this Agreement or the 
transactions contemplated hereby.

               2.2.17    LEGAL PROCEEDINGS. ETC.  Except as set forth on 
Schedule 2.2.17, there is no claim, litigation, action, suit or proceeding, 
administrative or judicial, filed, pending or, to the knowledge of AI and the 
Shareholders, threatened against AI or the Shareholders or involving the 
Property, this Agreement or the transactions contemplated hereby, at law or in 
equity, before any federal, state or local court or regulatory agency, or other 
governmental authority, including any unfair labor practice or grievance, 
proceedings or claim.  Except as disclosed in Schedule 2.2.17, neither the 
Shareholders nor AI is subject to any judgment, order or decree, or, to the 
best knowledge of the Shareholders, any governmental restriction applicable to 
AI, the Shareholders, or AI which has a reasonable probability of having a 
Material Adverse Effect, or which materially adversely affects the ability of 
AI to conduct business in any area.


                                     11


               2.2.18    NO CONFLICT OR DEFAULT.  Neither the execution and 
delivery of this Agreement or any other Transaction Document, nor compliance 
with the terms and provisions hereof or thereof, including the consummation of 
the transactions contemplated hereby and thereby, will (a) violate in any 
material respect any statute, regulation or ordinance of any governmental 
authority, or (b) conflict with or result in the breach of any term, condition 
or provision of the articles of incorporation or bylaws of AI or of any 
agreement, deed, contract, mortgage, indenture, writ, order, decree, legal 
obligation or instrument (with respect to the business of AI) to which AI or 
any of the Shareholders, is a party or by which AI or any of the Shareholders 
or any part of the Property is or may be bound, or (c) constitute a material 
default (or an event which with the lapse of time or the giving of notice, or 
both, would constitute a material default) thereunder, or (d) result in the 
creation or imposition of any material lien, charge, encumbrance, or 
restriction of any nature whatsoever with respect to any part of the Property, 
or (e) give to others any interest or rights, including rights of termination, 
acceleration or cancellation in or with respect to any part of the Property or 
the business of AI.

               2.2.19    LABOR RELATIONS.  Schedule 2.2.19 sets forth all 
collective bargaining or other labor agreements to which AI is bound and the 
Shareholders have previously delivered to DAH true, correct and complete copies 
of each such agreement.  There is no labor strike, dispute, slowdown or 
stoppage, or any union organizing campaign, or petition for certification 
actually pending or, to the best knowledge of the Shareholders, threatened 
against or involving AI. Schedule 2.2.19 sets forth all pending grievances and 
arbitration proceedings against AI arising out of or under a collective 
bargaining or other labor agreement.  No collective bargaining or other labor 
agreement is currently being negotiated by AI.  AI has not experienced any work 
stoppage or other material labor difficulty over the past three years.  No such 
agreement which is binding on AI restricts it from relocating or closing any or 
all of its operations.

               2.2.20    EMPLOYEE BENEFIT PLANS.

                    (a)  Except as set forth in Schedule 2.2.20, AI does not
currently sponsor, maintain or contribute, or has within the past 3 years
sponsored, maintained or contributed to, to any pension, retirement,
profit-sharing, deferred compensation, bonus, stock option or other incentive
plan, or any other employee benefit program, arrangement, agreement or
understanding, or medical, vision, dental or other health plan, or life
insurance or disability plan, or any other employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), whether or not any such employee benefit plan is otherwise exempt
from the provisions of ERISA, and whether or not formal or informal, written or
oral, and whether or not legally binding.  All such plans, funds or programs
sponsored, maintained or contributed to by AI currently or within the past 3
years, whether or not listed on Schedule 2.2.20, are hereinafter referred to as
the "Employee Benefit Plans").  For the purpose of this Section 2.2.20, the term
"AI" shall include all "affiliates" of AI, whether or not incorporated, as such
term is used in Section 407(d)(7) of ERISA.


                                     12


                    (b)  Full payment has been made of all amounts which AI is 
required, under applicable law or under any Employee Benefit Plan or any 
agreement relating to any Employee Benefit Plan to which it is a party, to have 
paid as contributions to or benefits under any Employee Benefit Plan as of the 
last day of the most recent fiscal year of such Employee Benefit Plan ended 
prior to the date hereof.  AI has made adequate provision in its financial 
statements for liabilities to meet current contributions or benefit payments.

                    (c)  AI has performed all obligations required to be 
performed by it under the Employee Benefit Plans.  AI has not engaged in any 
transaction with respect to the Employee Benefit Plans which would subject AI 
or DAH to a tax, penalty or liability for a prohibited transaction under 
section 406, 407 or 502(i) of ERISA or Section 4975 of the Code, nor have 
either of AI's or AI' directors, officers, partners, employees or agents, to 
the extent they or any of them are fiduciaries with respect to such Employee 
Benefit Plans, breached any of their responsibilities or obligations imposed 
upon fiduciaries under Title I of ERISA or which would result in any claim 
being made under or by or on behalf of any such Employee Benefit Plans by any 
party with standing to make such claim. AI will not have any plan or 
commitment, whether formal or informal, written or oral, and whether or not 
legally binding, to modify or change any Employee Benefit Plan in any material 
manner prior to the Closing Date.  AI and any "administrator(s)" (as described 
in Section 3(16)(A) of ERISA) of the Employee Benefits Plans have complied in 
all material respects with the applicable requirements of ERISA, the Code and 
all other statutes, orders, rules or regulations, specifically including 
material compliance with all reporting and disclosure requirements of Part 1 of 
Title 1 of ERISA and of the Code in a timely and accurate manner, and no 
penalties have been or will be imposed, nor is AI, AI or any administrator 
liable for any penalties imposed, under ERISA, the Code or otherwise with 
respect to the Employee Benefit Plans or any related trusts of AI.  AI is not 
delinquent in the payment of any federal, state or local taxes with respect to 
the Employee Benefit Plans. There is no pending litigation, arbitration, or 
disputed claim, settlement adjudication or proceeding with respect to the 
Employee Benefit Plans, and none of AI, AI or any administrator is aware of any 
threatened litigation, arbitration or disputed claim, adjudication proceeding, 
or any governmntal or other proceeding, or investigation with respect to the 
Employee Benefit Plans or with respect to any fiduciary or administrator 
thereof (in their capacities as such), or any party-in-interest thereto (with 
respect to their relationship as such). There is no "defined benefit plan" 
within the meaning of Section 414(j) of the Code or Section 3(35) of ERISA to 
which AI has been a party or has been required to make any contributions at any 
time during the last ten (10) years. There is no multiemployer plan to which AI 
has been a party or has been required to make any contributions at any time 
during the last ten (10) years.


                                     13


                    (d)  The Shareholders have delivered or caused to be 
delivered to DAH prior true, accurate and complete copies of (A) all Employee 
Benefit Plans and any related trust agreements, custodial agreements, 
investment management agreements, insurance contracts or policies, and 
administrative service contracts, all as in effect, together with all 
amendments thereto which will become effective at a later date; (B) the latest 
Summary Plan Description and any modifications thereto for each Employee 
Benefit Plan requiring same under ERISA; (C) the Summary Annual Report for the 
current and prior fiscal years for each Employee Benefit Plan requiring same 
under ERISA; (D) each Form 5500 and/or Form 990 series filing (including 
required schedules and financial statements) for the current and prior fiscal 
years for each Employee Benefit Plan required to file such form; and (E) the 
most recent actuarial evaluation, analysis or other report issued with respect 
to any Employee Benefit Plan.  None of AI or any officer, partner, employee 
representative or agent of either of them, has made any written or oral 
representations or statements to any current or former employees, dependents, 
participants or beneficiaries or other persons which are inconsistent in any 
material manner with the provisions of these documents.

                    (e)  With respect to any of AI's employee welfare plans (as 
defined in Section 3(1) of ERISA and including those Employee Benefits Plans 
which qualify as such) which are "group health plans" under Section 162(k) or 
Section 4980B of the Code and Section 607(1) of ERISA and related regulations 
(relating to the benefit continuation rights imposed by the Consolidated 
Omnibus Budget Reconciliation Act of 1986 ("COBRA"), as amended to date), there 
has been timely compliance in all material respects with all requirements 
imposed thereunder, as and when applicable to such plans, so that AI has (or 
will incur any) loss, assessment, penalty, loss of federal income tax deduction 
or other sanction, arising on account of or in respect of any failure to comply 
with any COBRA benefit continuation requirement, which is capable of being 
assessed or asserted directly or indirectly against AI, or against DAH or DAH 
or any of their respective subsidiaries or other member of DAH's corporate 
control group, with respect to any such plan.

               2.2.21    CONTRACTS AND COMMITMENTS.  Schedule 2.2.21 is a list 
of all contracts, agreements, contract rights, leases, license agreements, 
franchise rights and agreements, policies, purchase and sales orders, 
quotations and executory commitments, instruments, guaranties, 
indemnifications, arrangements, obligations and understandings (written or 
oral) to which AI is a party and which involve the payment by or to AI in the 
aggregate of $100,000 or more during any year (the "Material Contracts"). The 
Material Contracts are valid and binding, in full force and effect and 
enforceable against AI in accordance with their respective provisions.  AI has 
not assigned, mortgaged, pledged, encumbered, or otherwise hypothecated any of 
its right, title or interest under any Real Property Lease, any Personal 
Property Lease, or any Material Contract.  AI is not in violation of, in 
default in respect of, nor has there occurred an event or condition which, with 
the passage of time of giving of notice (or both) would constitute a violation 
or default of any Material Contract; and, there are no facts or circumstances 
which would reasonably indicate that AI (or any other party) will be or may be 
in violation of or in default in respect of any Material Contract, subsequent 
to the date hereof. No notice has been received by 


                                     14


AI claiming any such default by AI or indicating the desire or intention of any 
other party thereto to amend, modify, rescind or terminate the same.
 
               2.2.22    ACCOUNTS RECEIVABLE.  All of the accounts and notes 
receivable, investments, deposits and prepaid expenses of AI as of September 
30, 1997 are set forth on Schedule 2.2.22.  All such accounts receivable, 
arising between the date hereof and the Closing Date (in each case net of 
allowances for doubtful accounts as disclosed on such Schedule, (a) are or will 
be valid and subsisting, (b) represent or will represent sales actually made, 
(c) arose or will arise in the ordinary and usual course of the business of AI 
and (d) to the extent not collected prior to the Closing Date, will be 
collectible according to their terms within 180 days after the date of the 
Closing Date.

               2.2.23    INVENTORIES.  Schedule 2.2.23 completely and 
accurately lists of all raw materials, supplies, parts, work-in-process, and 
finished goods inventory and other inventory owned by AI and the accurate cost 
of such inventory as of September 30, 1997.  Except as set forth in Schedule 
2.2.23, the inventories except for amounts which in the aggregate are not 
material, of AI (i) consist of a quality and quantity usable and saleable in 
the ordinary and usual course of business, except for items of obsolete 
materials and materials of substandard quality, all of which have been written 
off or written down on the books of AI to net realizable value prior to 
September 30, 1997 and (ii) have been priced at the lower of cost or market on 
a FIFO basis.   The quantities of all material portions of each type of 
inventory (whether raw materials, work-in-process, or finished goods) are not 
excessive, but are reasonable and warranted in the present circumstances of AI; 
and all material portions of work-in-process and finished goods inventory is 
free of any material defect or other deficiency.  Notwithstanding the 
foregoing, quantities of raw materials, work in process and finished goods may 
be present which, in the aggregate, are not material in the dollar amount for 
which said items are carried on the books and which items cannot be used as a 
result of specification changes of which AI has not been notified by AI's 
customer.

               2.2.24    BACKLOG.  All unfilled orders to purchase goods of AI 
as of September 29, 1997 are set forth in Schedule 2.2.24 and are firm and 
binding commitments (subject to cancellation rights set forth therein) of the 
respective purchasers (assuming that such purchaser has properly authorized by 
all requisite corporate or, if not a corporation, by all other requisite action 
and has properly executed and delivered such purchase order, which, is the 
case) to purchase the goods indicated.

               2.2.25    BOOKS OF ACCOUNT: RECORDS.  Except as disclosed in 
Schedule 2.2.25, the general ledgers, books of account and other financial 
records of AI are complete and correct, have been maintained in accordance with 
generally accepted accounting principles and practices and the matters 
contained therein are appropriately and accurately reflected in the Financial 
Statements in all material respects.


                                     15


               2.2.26    OFFICERS, PARTNERS. EMPLOYEES AND COMPENSATION. 
Schedule 2.2.26 sets forth the name of all directors, partners and officers of 
AI, their respective terms of office, the total salary, bonus payments, fringe 
benefits and perquisites each received in each of the last 3 fiscal years ended 
December 31, 1996, and changes to the foregoing which have occurred since 
December 31, 1996; such Schedule also lists and describes the current base 
salary, bonus payments, fringe benefits and perquisites of any other employee, 
agent or representative of AI whose total current salary, bonus or other 
compensation exceeds $50,000 annually during any of the last 3 fiscal years 
ended December 31, 1996, and changes to the foregoing since December 31, 1996. 
There are no other material forms of compensation paid to any such director, 
officer or employee of AI. The provisions for wages and salaries accrued on the 
September 30, 1997 Balance Sheet are adequate for salaries and wages, including 
accrued vacation pay, for the period up through the date thereof, and AI has 
accrued on its books and records all obligations for wages and salaries and 
other compensation to its employees, including, but not limited to, vacation 
pay and sick pay, and all commissions and other fees payable to agents, 
salesmen and representatives.  AI will file any and all payroll tax returns due 
through the Closing Date and pay or reserve on the Closing Date Balance Sheet 
all payroll taxes due for any and all AI employees.

                    Except as set forth on Schedule 2.2.26, AI has not become 
obligated, directly or indirectly, to any shareholder, director, officer or 
partner of AI or any member of their families, except for current liability for 
employment compensation.  Except as set forth on Schedule 2.2.26, no 
shareholder, director, officer, partner, agent or employee of AI holds any 
position or office with or has any financial interest, direct or indirect, in 
any supplier, customer or account of, or other outside business which has 
transactions with AI.  AI, nor, any third party, has taken any action with 
respect to any shareholder, director, officer, partner, employee or 
representative of AI to attempt to induce or which would influence any such 
person not to become associated with DAH from and after the Closing Date or 
from serving DAH in a capacity similar to the capacity presently held.  To the 
best of the knowledge of the Shareholders, no employee of AI has a present 
intention to leave the employ of AI or has taken any action directed towards 
leaving the employ of AI.  Except as set forth on Schedule 2.2.26, no former 
employee of AI is currently or intends to enter into competition with the 
business of AI.

               2.2.27    CREDIT TERMS: PRODUCT WARRANTIES.  The aggregate 
amount of losses and expenses incurred by reason of allowances, customer 
dissatisfaction or liabilities arising under AI's warranties and guarantees 
during the three years ended December 31, 1996 are completely accounted for in 
the financial statements of AI for such years and there has been no materially 
adverse change in that experience since said date.  Except as set forth on 
Schedule 2.2.27, AI has conducted all qualification inspections and quality 
conformance inspections required by the specifications for products of AI 
included on qualified products lists in material compliance with the 
requirements of such specifications, and all products shipped have been in 
material conformance with such specifications.


                                     16


               2.2.28    CONTRACTS WITH AFFILIATES.  Any contract, commitment, 
lease, permit or other instrument, agreement, understanding or obligation (each 
a "Commitment") between AI and any affiliate including each Shareholder), is 
the equivalent of an "arms-length" transaction with a third party, and each 
such Commitment is described on Schedule 2.2.28 hereto.

               2.2.29    GOVERNMENT CONTRACTS.  AI is not a party to, nor is it 
bound, nor does it have any liability, with respect to any Government 
Contracts. For purposes of this Section 2.2.29, the term "Government" means any 
agency, division, subdivision, audit group, or procuring office of the federal 
government, including the employees or agents thereof; the term "Transferor" 
means AI and its subsidiaries, divisions, affiliates, joint venturers, agents, 
employees, officers and directors; the term "Government Contract" means any 
prime contract, subcontract, basic ordering agreement, letter contract, 
purchase order or delivery order of any kind, including all amendments, 
modifications and options thereunder or relating thereto, between the 
Transferor and any of the Government, any prime contractor of the Government, 
any subcontractor of such a prime contractor or any subcontractor of another 
subcontractor, however far removed from the prime contractor such subcontractor 
may be, (A) currently in force; (B) which, within the three years preceding the 
date of this Agreement, expired or were terminated; or (C) for which final 
payment was received within the three years preceding the date of this 
Agreement; and the term "Bid" means any outstanding quotation, bid or proposal 
submitted by Transferor to the Government, any proposed prime contractor of the 
Government, or any proposed subcontractor.

               2.2.30    SOLVENCY.  The total assets of each of the 
Shareholders exceed their respective total liabilities; each of the 
Shareholders are able to perform their respective financial obligations as 
performance thereof becomes due.

               2.2.31    NO STRATEGIC ALLIANCES.  Except as disclosed in 
Schedule 2.2.31, no agreement or understanding has been entered into between AI 
and any company which is an arrangement with any other person which involves 
equity investment or ownership, a joint venture or revenue or profit sharing a 
"Strategic Alliance."

                    An arrangement for a preferred supplier relationship which 
does not have any of the characteristics described in the foregoing sentence is 
not a strategic alliance.

               2.2.32    PAYMENTS AND EXPENDITURES.  Except as set forth in 
Schedule 2.2.32 since June 30, 1997, AI has not made (i) any payment or 
incurred any liability on behalf of any Shareholder, (ii) made any payment to 
or on behalf of any Shareholder except for the Shareholder's salary and expense 
reimbursements made in the ordinary course of business, (iii) not paid any 
amount not in the ordinary course of AI's business, or (iv) not made any 
capital expenditure in excess of $100,000 in the aggregate.

               2.2.33    COMPLETE DISCLOSURE  No representation or warranty 
made by AI or any of the Shareholders in this Agreement, and no exhibit, 
schedule, statement, certificate or other writing furnished to DAH by or on 
behalf of AI or any of the


                                     17


Shareholders pursuant to this Agreement or in connection with the transactions 
contemplated hereby or thereby, contains or will contain, any untrue statement 
of a material fact or omits or will omit to state a material fact necessary to 
make the statements contained herein and therein not misleading.  Without 
limiting the foregoing, to the extent applicable, no representation or warranty 
made in any of Sections 2.2.4 through 2.2.32 would differ in any material 
respect if the representation contained information concerning AI's wholly 
owned subsidiary, Audio International Sales, Inc.

     3.   COVENANTS.

          3.1  COVENANTS OF THE SHAREHOLDERS.

               3.1.1     COVENANT AGAINST DISCLOSURE.  Other than in the 
ordinary course of business of AI and except for professional advisors 
(including attorneys, accountants and investment bankers) who agree to maintain 
the confidentiality of such information, each of the Shareholders agree not to 
(a) disclose to any person, association, firm, corporation or other entity 
(other than DAH) or those designated in writing by DAH) in any manner, directly 
or indirectly, any information or data relevant to the business of AI, whether 
of a technical or commercial nature, or (b) use, permit or assist, by 
acquiescence material or otherwise, any person, association, firm corporation 
or other entity (other than DAH or those designated in writing by DAH) to use, 
in any manner, directly or indirectly, any such information or data, excepting 
only use of such data or information as is at the time generally known to the 
public and which did not become generally known through any breach of any 
provision of this Section 4.2.2.

               3.1.2     COVENANT AGAINST HIRING.  Each of the Shareholders 
understands that it is essential to the successful operation of the business to 
be acquired hereunder that DAH retain substantially unimpaired AI's operating 
organization.  Each of the Shareholders agrees not to purposefully take any 
action which would induce any current employee or representative of AI not to 
become or continue as an employee.  Without limiting the generality of the 
foregoing, the Shareholders shall not, whether directly or indirectly through 
any subsidiary or affiliate, employ, whether an employee, officer, director, 
agent, consultant or independent contractor, or enter into any partnership, 
joint venture or other business association with, any current employee, 
partner, representative, or manager of AI, for a period of the 12 months, after 
such person ceases or has ceased, for any reason, to be an employee, 
representative, partner, or manager of AI; provided, however, that Wayne Richie 
may hire any person (i) who is terminated by AI or (ii) who prior to being 
solicited for employment by Wayne Richie, voluntarily terminates his or her 
employment with AI.


                                     18


               3.1.3     INJUNCTIVE RELIEF.  Each of the Shareholders 
acknowledges and agrees that DAH's remedy at law for any breach of any of such 
Shareholders obligations under Subsections 3.1.1 and 3.1.2 hereof would be 
inadequate, and agrees and consents that temporary and permanent injunctive 
relief may be granted in a proceeding which may be brought to enforce any such 
provision without the necessity of proof of actual damage.  The rights and 
remedies conferred upon DAH under this Section, or by any instrument or law 
shall be cumulative and may be exercised singularly or concurrently.

               3.1.4     CONDUCT OF BUSINESS OF AI PRIOR TO CLOSING DATE.  Each 
of the Shareholders agrees that on and after the date hereof and prior to the 
Closing Date:

                    (a)  The business and operations, activities and practices 
of AI shall be conducted only in the ordinary course of business and consistent 
with past practice;

                    (b)  No change shall be made in the articles of 
incorporation or bylaws of AI, except as is necessary to comply with Section 
7.2(a) hereof;

                    (c)  No change shall be made in the number of shares of 
authorized or issued capital stock of AI; nor shall any option, warrant, call, 
right, commitment or agreement of any character be granted or made by AI 
relating to its equity;

                    (d)  No dividend shall be declared or paid or other 
distribution (whether in cash, stock, property or any combination thereof) or 
payment declared or made in respect of the AI Common Shares by AI nor shall AI 
purchase, acquire, redeem or split, combine or reclassify any shares of the 
capital stock of AI;

                    (e)  The Shareholders shall, directly or indirectly, 
solicit or encourage (including by way of furnishing any non-public information 
concerning the business, properties or assets of AI), or enter into any 
negotiations or discussions concerning, any Acquisitions Proposal (as defined 
below).  Any Shareholder will notify DAH promptly by telephone, and thereafter 
promptly confirm in writing, if any such information is requested from, or any 
Acquisition Proposal is received by AI or Shareholder.  As used in this 
Agreement, "Acquisition Proposal" shall mean any proposal received by AI or any 
Principal Shareholder prior to the Closing Date for a merger or other business 
combination involving AI or for the acquisition of, or the acquisition of a 
substantial equity interest in, or a substantial portion of the assets of AI 
other than the one contemplated by this Agreement.


                                     19


                    (f)  Except as set forth in Schedule 3.1.4(f),  Shareholder 
will not permit AI to:

                         (A)  incur, become subject to, or suffer, or agree to 
incur, become subject to or suffer, any obligation or liability (absolute or 
contingent) except current liabilities incurred, and obligations entered into 
in the ordinary course of business;

                         (B)  discharge or satisfy any lien or encumbrance or 
pay any obligation or liability (absolute or contingent) other than liabilities 
payable in the ordinary course of business;

                         (C)  mortgage, pledge or subject to lien, charge or 
any other encumbrance, any of the Property or agree so to do;

                         (D)  sell or transfer or agree to sell or transfer any 
of its assets, or cancel or agree to cancel any debt or claim, except in each 
case in the ordinary course of business; 

                         (E)  consent or agree to a waiver of any right of 
substantial value; 

                         (F)  enter into any transaction other than in the 
ordinary course of its business; 

                         (G)  increase the rate of compensation payable or to 
become payable by it to any Restricted Employee over the rate being paid to 
such Restricted Employee at September 30, 1997; 

                         (H)  increase the rate of compensation payable or to 
become payable by it to any officer, partner, employee or agent of AI not 
listed on Schedule 2.2.5(b) (a "Non-Restricted Employee") over the rate being 
paid to such Non-Restricted Employee at September 30, 1997, other than in the 
ordinary course of business and in accordance with AI's past practice; 

                         (I)  terminate any material contract, agreement, 
license or other instrument to which it is a party; 

                         (J)  through negotiation or otherwise, make any 
commitment or incur any liability or obligation of a material nature to any 
labor organization; 

                         (K)  make or agree to make any accrual or arrangement 
for or payment of bonuses or special compensation of any kind to any Restricted 
Employee;

                         (L)  make or agree to make any accrual or arrangement 
for or payment of bonuses or special compensation of any kind to any 
Non-Restricted Employee, other than in the ordinary course of business and in 
accordance with AI's practice; 


                                     20


                         (M)  directly or indirectly pay or make a commitment 
to pay any severance or termination pay to any Restricted Employee;

                         (N)  directly or indirectly pay or make a commitment 
to pay any severance or termination pay to any Non-Restricted Employee, other 
than in the ordinary course of business and in accordance with AI's past 
practice; 

                         (O)  introduce any new method of management, operation 
or accounting with respect to its business or any of the assets, properties or 
rights applicable thereto other than changes required by GAAP;

                         (P)  offer or extend more favorable prices, discounts 
or allowances than were offered or extended regularly on and prior to September 
30, 1997, other than in the ordinary course of business; and 

                         (Q)  make capital expenditures in excess of $100,000 
in the aggregate, or make any commitments for such capital expenditures.

                         (R)  Enter into any Strategic Alliance.

               (g)  Each of the Shareholders will use their respective 
reasonable efforts to preserve AI's business organization materially intact, to 
keep available to AI the present service of AI's employees; and to preserve for 
AI the good will of its suppliers, customers and others with whom business 
relationships exist; and

               (h)  None of the Shareholders will take, agree to take or permit 
to be taken any action or do or permit to be done anything in the conduct of 
the business of AI, or otherwise, which would be contrary to or in breach of 
any of the terms or provisions of this Agreement or which would cause any of 
the representations or warranties of AI or the Shareholders contained herein to 
be or become untrue in any material respect.

               3.1.5     INSPECTION OF BOOKS AND RECORDS.  From the date of 
this Agreement until the Closing Date, AI shall make or cause to be made 
available to DAH for examination the Property and all corporate records, minute 
books, share records, treasury shares, tax returns, books of account, contract, 
agreements, commitments, records and its documents of every character relating 
to AI and its business and shall permit DAH and its representatives, attorneys, 
accountants and agents to have access to and to copy, at DAH's expense, the 
same at all reasonable times, so as to allow DAH to confirm compliance with 
covenants and satisfaction of conditions hereunder.

               3.1.6     FURTHER ASSURANCES.  On and after the Closing Date, 
the Shareholders shall prepare, execute and deliver, at DAH's expense, such 
further instruments of conveyance, sale, assignment or transfer, and shall take 
or cause to be


                                     21


taken such other or further action as DAH shall reasonably request at any time 
or from time to time in order to perfect, confirm or evidence in DAH title to 
all or any part of the Stock or to consummate, in any other manner, the terms 
and conditions of this Agreement.

               3.1.7     PRESS RELEASES AND ANNOUNCEMENTS.  Neither AI, any 
Principal Shareholder, DAH nor DAH shall issue any press release or 
announcement relating to the subject matter of this Agreement without the prior 
written approval of the other parties hereto; PROVIDED, HOWEVER that DAH may 
make any public disclosure it believes in good faith is required by law (in 
which case he or it will advise the other parties hereto prior to making the 
disclosure).

               3.1.8     BANKRUPTCY.  Neither AI nor any Principal Shareholder 
shall commence any case, proceeding or other action (A) under any existing or 
future law of any jurisdiction, domestic or foreign, relating to bankruptcy, 
insolvency, reorganization or relief of debtors, seeking to have an order for 
relief entered with respect to either of them or seeking to adjudicate either 
of them bankrupt or insolvent, or seeking reorganization, arrangement, 
adjustment, winding-up, liquidation, dissolution, composition or other relief 
with respect to either of them or for all of any substantial part of either of 
their assets; (ii) neither AI nor any Shareholder shall make a general 
assignment for the benefit of its creditors; (iii) no case, proceeding or other 
action of a nature referred to in clause (i) above shall be commenced by any 
person which (A) results in the entry of an order for relief or any such 
adjudication or appointment or (B) remains undismissed or discharged  for a 
period of 60 days; (iv) no case, proceeding or other action shall be commenced 
by any person seeking issuance of a warrant of attachment, execution distraint 
or similar process against all or any substantial part of either of their 
respective assets which results in the entry of an order for any such relief; 
and (v) neither AI nor any Shareholder shall take any action in furtherance of, 
or indicating its consent to, approval of, or acquiescence in, any of the acts 
set forth in clause (i), (ii), (iii), or (iv) above.

               3.1.9     LANDLORD'S CONSENTS, ETC..  The Shareholders agree 
that if the terms of any Agreement relating to the right to use AI's Real 
Property requires they shall obtain, on or prior to the Closing Date, all 
consents required from any person whatsoever to effect the transfer to DAH, 
free and clear of all mortgages, pledges, liens, security interest, 
encumbrances, restrictions and claims of any nature whatsoever.

               3.1.10    DELIVERY OF FINANCIAL STATEMENTS.  As soon as 
reasonably practicable but no later than 10 business days prior to the Closing, 
the Shareholders shall deliver to DAH the balance sheet of AI as at October 31, 
1997 and the related statements of income, retained earnings and cash flows for 
the period then ended, which shall be true, correct and complete, shall have 
been prepared from and are in accordance with the books and records of AI and 
shall have been prepared in conformity with generally accepted accounting 
principles applied on a consistent basis for such periods using an accrual 
basis method, and fairly present the financial condition of AI as of the dates 
stated and the results of operations of AI for the periods then ended in 
accordance with such practices.  Such October 31, 1997 Financial Statements 
(including all notes accompanying such statements) shall not disclose any event 
or circumstance materially adversely affecting AI


                                     22


or its businesses.  The October 31, 1997 Financial Statements shall upon 
delivery to DAH become part of the Financial Statements as defined herein for 
all purposes hereof.

               3.1.11    COOPERATION OF SHAREHOLDERS.  The Shareholders shall 
cooperate and shall use their best efforts to have AI's independent certified 
public accountant deliver to DAH on or before 45 days following the Closing 
Date, the audited financial statements of AI for periods which are presently 
unaudited and for which DAH will become obligated to include such statements in 
DAH's filings with the Securities and Exchange Commission pursuant to the 
Securities Exchange Act of 1934, as amended.

               3.1.12    CLOSING DATE BALANCE SHEET.  The Shareholders will 
cause a balance sheet as of the Closing Date to be delivered to DAH within a 
reasonable time after the Closing Date (the "Closing Date Balance Sheet") which 
shall be true, correct and complete, shall have been prepared from and are in 
accordance with the books and records of AI and shall have been prepared in 
conformity with generally accepted accounting principles applied on a 
consistent basis for such periods using an accrual basis method, and fairly 
present the financial condition of AI as of the date stated on such dates in 
accordance with such practices.

          3.2  COVENANTS OF DAH.  On or prior to the Closing Date, DAH 
covenants shall deliver to the Shareholders, all duly and properly executed, 
the following:

               3.2.1     LEGAL OPINION.  The legal opinion referred to in 
Section 6.2(a).

               3.2.2     PAYMENT.  The Payment pursuant to Section 1.2.1.

               3.2.3     FURTHER ASSURANCES.  On and after the Closing Date, 
DAH shall prepare, execute and deliver, at its expense, such further 
instruments of conveyance, sale, assignment or transfer, and shall take or 
cause to be taken such other or further action as the Shareholders shall 
reasonably request at any time or from time to time in order to perfect, 
confirm or evidence in DAH title to all or any part of the Stock or to 
consummate, in any other manner, the terms and conditions of this Agreement.

               3.2.4     CONFIDENTIALITY AGREEMENTS.  Between the date of this 
Agreement and the Closing Date, DAH shall continue to be bound by its 
obligations pursuant to the written confidentiality agreements to which DAH and 
AI are parties.


                                     23


     4.   INDEMNIFICATION.

          4.1  The Shareholders, with full recourse, hereby indemnify and hold 
DAH harmless from any and all claim, loss, damage or expense (including 
attorneys' fees) ("losses") as a result of any breach of any warranty or 
representation made in this Agreement by the Shareholders.  Anything in Section 
4.3 to the contrary notwithstanding, no claim may be asserted nor may any 
action be commenced against the Shareholders for breach of any representation 
or warranty contained herein, unless written notice of such claim or action is 
received by the Shareholders describing in detail the facts and circumstances 
with respect to the subject matter of such claim or action or prior to the date 
on which the representation or warranty on which such claim or action is based 
ceases to survive as set forth in Section 4.3, irrespective of whether the 
subject matter of such claim or action shall have occurred before or after such 
date.

          4.2  Without limiting the generality of the foregoing, the 
Shareholders agree to pay to DAH in immediately available funds within 10 days 
after notice from DAH to pay, the following amounts: 

               4.2.1     On or before 180 days following the Closing Date, an 
amount equal to (i) 100% of any Accounts Receivable of AI owing on the Closing 
Date which have not been collected on or before 180 days after the Closing 
Date, less (ii) the amount for doubtful accounts on the Closing Date Balance 
Sheet of AI.  With respect to any such Accounts Receivable, DAH will cause AI, 
without warranty or recourse,  to assign all of its right title and interest in 
such accounts to the Shareholders in the percentages specified in Exhibit 1.1.  

               4.2.2     On or before two years and three months following the 
Closing Date, an amount equal to 100% of the value on the Closing Date Balance 
Sheet (or if acquired subsequent to the Closing Date at cost) of any Inventory 
of AI owned by AI on both the Closing Date and the date two years following the 
Closing Date.  With respect to any such Inventory, DAH will cause AI, without 
warranty or recourse, to transfer all of its right title and interest in such 
Inventory to the Shareholders in the percentages specified in Exhibit 1.1. 
Notwithstanding the foregoing, the Shareholders shall not be responsible for 
indemnification of quantities of raw materials, work in process and finished 
goods may be present which, in the aggregate, are not material in the dollar 
amount for which said items are carried on the books and which items cannot be 
used as a result of specification changes of which AI has not been notified by 
AI's customer.

               4.2.3     On or before each of April 30, 1999 and 2000, an 
amount equal to 100% of the amount by which the cost to AI for performing 
warranty work and providing replacement parts and equipment to customers for 
sales made prior to the Closing Date, PROVIDED, HOWEVER, that no such 
indemnification shall be required to be made by the Shareholders if adjusted 
EBIT (as defined in the Earnout Agreement) is equal to or greater than $4 
million in each of such years and, FURTHER PROVIDED, that for purposes of this 
subsection, "warranty work" shall not be deemed to include immaterial 
expenditures made in connection with product refinement.


                                     24


               4.2.4     Any amounts not paid by the Shareholders pursuant to 
this Section 4 when due shall bear interest at the highest rate permitted by 
law.

               4.2.5     Subject to the other terms and provisions of this 
Agreement and the Earnout Agreement, the representations and warranties of the 
parties hereto contained in Section 2 herein shall survive the Closing and 
shall remain in full force and effect, regardless of any investigation made by 
or on behalf of the Shareholders or DAH until April 30, 2000.

               4.2.6     The indemnification obligations of the Shareholders 
hereto shall not be effective until the aggregate dollar amount of all Losses 
which would otherwise be indemnifiable pursuant to this Section 4.2 exceeds 
$250,000 (the "Threshold Amount"), and then only to the extent such aggregate 
amount exceeds the Threshold Amount.  In addition, no claim may be made against 
the Shareholders for indemnification with respect to any individual item of 
Loss (except for multiple losses which result from breach of the 
representations the subject matter of each such loss being substantially 
similar in nature), unless such item exceeds $5,000, nor shall any such item be 
applied to or considered part of the Threshold Amount.  The Indemnification 
obligations of the Shareholders pursuant to this Section 4.2 shall be effective 
only until the dollar amount paid, by the Shareholders individually, in respect 
of the Losses (including those related to all representations and warranties, 
except as provided below, and those for Sections 4.2.1, 4.2.2, and 4.2.3) 
indemnified against an amount equal to $500,000 as respects to each Shareholder 
provided, however that the limitation of the amount of the indemnity if the 
indemnification results from (i) with respect to the financial statements, any 
untrue statement of a material fact or failure to state a material fact 
required to be stated therein or (ii) the breach of any provision in Section 
2.2.15 shall be $1,700.000 for each Shareholder, severally and not jointly.  In 
the event of any obligation by the Shareholders to DAH resulting from a 
determination of actual fraud, there shall be no limitation of dollar amount.  
Without limiting DAH's rights pursuant to this Section 4, DAH may offset such 
amounts, if any, as may be owing to the Shareholders pursuant to Sections 
1.2.2, 1.2.3 or 1.2.4.

     5.   CONDITIONS PRECEDENT TO OBLIGATIONS.

          5.1  CONDITIONS TO OBLIGATIONS OF DAH.  Each and every obligation of 
DAH to be performed at the Closing Date shall be subject to the satisfaction as 
of or before the Closing Date of the following conditions (unless waived in 
writing by DAH):

               5.1.1     CONSENTS.  AI shall have obtained and delivered to DAH 
all consents set forth on Schedule 5.1.

               5.1.2     OPINION OF COUNSEL.  The Shareholders shall have 
delivered or caused to be delivered to DAH an opinion of counsel for the 
Shareholders, addressed to DAH and dated the Closing Date, in the form of 
Exhibit C attached hereto.


                                     25


               5.1.3     DELIVERY OF CERTAIN AGREEMENTS BY SHAREHOLDERS.  
Robert S. Brown and Rick Marsh shall have executed and delivered Employment 
Agreements to DAH in the form to be agreed upon between DAH and Robert S. Brown 
and DAH and Rick Marsh.  Robert S. Brown and Rick Marsh shall have executed and 
delivered Covenants Not to Compete to DAH in the form of Exhibit 5.1.3(A) and 
Wayne Richie shall have executed and delivered a Covenant Not to Compete to DAH 
in the form of Exhibit 5.1.3(B).

               5.1.4     DELIVERY OF STOCK AND RECEIPT OF PAYMENT THEREFOR.  
The Shareholders shall deliver the stock certificates of AI duly endorsed for 
transfer by assignments separate from certificates, endorsed in blank with 
signatures guaranteed by a national bank or member firm of the New York Stock 
Exchange.

               5.1.5     TRADE SECRETS AND CONFIDENTIAL INFORMATION.  At the 
Closing, the Shareholders shall deliver to DAH, reduced to writing as 
reasonably practical, all trade secret information or other know how of a 
business or technical nature, which is currently used for the present or then 
anticipated future business of AI.

               5.1.6     EARNOUT AGREEMENT.  The Shareholders shall each 
execute and deliver the Earnout Agreement to DAH.

          5.2  CONDITIONS TO OBLIGATIONS OF AI AND THE SHAREHOLDERS.  Each and 
every obligation of the Shareholders, to be performed on or before the Closing 
Date shall be subject to the satisfaction as of or before such time of the 
following conditions (unless waived in writing by the Shareholders).

               5.2.1     OPINION OF COUNSEL.  DAH shall have delivered or 
caused to be delivered to the Shareholders an opinion of counsel for DAH, 
addressed to the Shareholders and dated the Closing Date, in form of Exhibit H 
attached hereto.

               5.2.2     DELIVERY OF CERTAIN AGREEMENTS BY DAH.  DAH shall 
cause AI to have executed and delivered Employment Agreements to Robert S. 
Brown and Rick Marsh in the form to be agreed upon between DAH and Robert S. 
Brown and DAH and Rick Marsh.  DAH shall and shall cause AI to have executed 
and delivered Covenants Not to Compete in the form of Exhibit 4.1.3(a) to 
Robert S. Brown and Rick Marsh and the form of Exhibit 4.1.3(b) to Wayne Richie.

               5.2.3     PAYMENT.  DAH shall have made the payment required 
pursuant to Section 1.2.1.

               5.2.4     EARNOUT AGREEMENT.  DAH shall have executed and 
delivered the Earnout Agreement to each of the Shareholders.


                                     26


     6.   MISCELLANEOUS PROVISIONS.

          6.1  NOTICE.  All notices and other communications required or 
permitted under this Agreement shall be deemed to have been duly given and 
made, if in writing, and (i) if served by personal delivery to the party for 
whom intended (which shall include overnight delivery by Federal Express or 
similar service), (ii) or 3 business days after being deposited, postage 
prepaid, certified or registered mail, return receipt requested, in the United 
States mail bearing the address shown in this Agreement for, or such other 
address as may be designated by writing hereafter by, such party, or (iii) if 
sent by telecopy to the number showing in this Agreement for, or such other 
number as may be designated in writing hereafter by, such party and immediately 
confirmed by sending a copy of such notice by either method described in clause 
(i) or (ii) above.

     If to Shareholders:      Robert S. Brown
                              14 Longfellow
                              Little Rock, Arkansas  72207
                              Telephone:  (501) 664-8668

                              Rick Marsh
                              4149 Pangeburn Road
                              Heber Springs, Arkansas  72543
                              Telephone:  (501) 362-0029

                              Wayne Richie
                              15 Ridgehaven Court
                              Little Rock, Arkansas  72211
                              Telephone:  (501) 224-5252
                              Fax Number:  (501) 228-7311

     with copies to:          Joseph S. Mowery
                              Giroir, Gregory, Holmes and
                              Hoover, PLC
                              111 Center Street, Suite 1900
                              Little Rock, AR 72201
                              Tel:  (501) 372-3000
                              Fax:  (501) 374-2380


     If to DAH:               DeCrane Aircraft Holdings, Inc.
                              2361 Rosecrans Avenue, Suite 180
                              El Segundo, California  90245
                              Telephone:  (310) 725-9123
                              Fax: (310) 643-0746


                                     27


     and a copy to:           Spolin & Silverman 
                              100 Wilshire Boulevard, Suite 940
                              Santa Monica, California   90401
                              Attention:  Stephen A. Silverman, Esq.
                              Telephone:  (310) 576-1221
                              Fax Number:  (310) 576-4844


          6.2  ENTIRE AGREEMENT.  This Agreement, the Exhibits and Schedules 
hereto, and the documents refereed to herein and therein embody the entire 
agreement and understanding of the parties hereto with respect to the subject 
matter hereof, and supersede all prior and contemporaneous agreements and 
understandings, oral or written, relative to said subject matter.

          6.3  BINDING EFFECT; ASSIGNMENT.  This Agreement and the rights and 
obligations arising hereunder shall inure to the benefit of and be binding upon 
AI, its DAH, its successors and permitted assigns, and the Shareholders, their 
heirs, legal representative and permitted assigns.  Neither this Agreement nor 
any of the rights, interest or obligations hereunder shall be transferred or 
assigned (by operation of law or otherwise) by any of the parties hereto 
without the prior written consent of the other party or parties except that DAH 
shall have the right to assign, in whole or in part, its rights hereunder to 
one or more affiliates of DAH, which in each case shall be a wholly-owned 
subsidiary of DAH.  Any transfer or assignment of any of the rights, interests 
or obligations hereunder in violation of the terms hereof shall be void and of 
no force or effect.

          6.4  CAPTIONS.  This Agreement and Section headings of this Agreement 
are inserted for convenience only and shall not constitute a part of this 
Agreement in construing or interpreting any provision hereof.

          6.5  WAIVER; CONSENT.    This Agreement may not be changed, amended, 
terminated, augmented, rescinded or discharged (other than by performance), in 
whole or in part, except by a writing executed by the parties hereto, and no 
waiver of any of the provisions or conditions of this Agreement or any of the 
rights of a party hereto shall be effective or binding unless such waiver shall 
be in writing and signed by the party claimed to have given or consented 
thereto.  Except to the extent that a party hereto may have otherwise agreed in 
writing, no waiver by that party of any condition of this Agreement or breach 
by the other party of any of its obligations or representations hereunder or 
thereunder shall be deemed to be a waiver of any other condition or subsequent 
or prior breach of the same or any other obligation or representation by the 
other party, nor shall any forbearance by the first party to seek a remedy for 
any noncompliance or breach by the other party be deemed to be a waiver by the 
first party of its rights and remedies with respect to such noncompliance or 
breach.


                                     28


          6.6  NO THIRD PARTY BENEFICIARIES.  Nothing herein, expressed or 
implied, is intended or shall be construed to confer upon or give to any 
person, firm, corporation or legal entity, other than the parties hereto, any 
rights, remedies or other benefits under or by reason of this Agreement.

          6.7  COUNTERPARTS AND FACSIMILE SIGNATURES.  This Agreement may be 
executed simultaneously in multiple counterparts, each of which shall be deemed 
an original, but all of which taken together shall constitute one and the same 
instrument.  The signature page of this Agreement when transmitted by facsimile 
shall be effective execution and delivery of this Agreement.

          6.8  GENDER.  Whenever the context requires, words used in the 
singular shall be construed to mean or include the plural and vie versa, and 
pronouns of any gender shall be deemed to include and designate the masculine, 
feminine or neuter gender.

          6.9  GOVERNING LAW.  This Agreement shall in all respects be 
constructed in accordance with and governed by the laws of the State of 
Delaware.

     7.   TERMINATION.  This Agreement may be terminated by the parties and the 
contemplated transactions abandoned at any time prior to closing, as follows:

          (a)  By the written consent of DAH and a majority of the Shareholders;

          (b)  By either DAH or a majority of the Shareholders, upon written 
notice of all other parties of this Agreement, at any time after December 15, 
1997 if the Closing Date shall not have occurred by such date; provided, 
however, that the right to terminate this Agreement under this paragraph (b) 
shall not be available to any party which has intentionally breached this 
Agreement or whose failure to comply with its covenants and agreements set 
forth in this Agreement shall have been the primary cause of the Closing not 
occurring.


- -------------------------------
Robert S. Brown


- -------------------------------
Rick Marsh


- -------------------------------
Wayne Richie


                                     29


DeCrane Aircraft Holdings, Inc.


- -------------------------------
By:


                                     30


                                  SCHEDULE A 

                      TO STOCK PURCHASE AND SALE AGREEMENT


                                  DEFINITIONS

"Agreement".............................................................Preamble
"AI Common Shares".........................................................2.2.2
"AI"....................................................................Preamble
"AI"....................................................................Preamble
"Bid".....................................................................2.2.29
"CERCLA"..................................................................2.2.15
"COBRA"...................................................................2.2.20
"Commitment"..............................................................2.2.28
"DAH"...................................................................Preamble
"Employee Benefit Plan"...................................................2.2.20
"ERISA"...................................................................2.2.20
"Government"..............................................................2.2.29
"Hazardous substance".....................................................2.2.15
"Material Adverse Effect"..................................................2.2.5
"Non-Restricted Employees" ................................................2.2.5
"Permits"..................................................................2.2.8
"Principal Shareholders"................................................Preamble
"Real Property Leases"....................................................2.2.13
"Real Property"...........................................................2.2.13
"Release".................................................................2.2.15
"Restricted Employee"......................................................2.2.5
"Transferor"..............................................................2.2.29
"Financial Statements".....................................................2.2.4
"Government Contract".....................................................2.2.29


                                     31


                                EXHIBIT "1.2.2"

                         FORM OF THE EARNOUT AGREEMENT

     THIS EARNOUT AGREEMENT (this "Agreement") is entered into as of November 
14, 1997, by and among DeCrane Aircraft Holdings, Inc. ("DAH") and Robert S. 
Brown, Rick Marsh and Wayne Richie (collectively, the "Shareholders").

                                    RECITALS

     WHEREAS, pursuant to a Stock Purchase Agreement dated as of October 31, 
1997 , by and among DAH and the Shareholders (the "Purchase Agreement"), 
whereby DAH is acquiring all of the stock of Audio International, Inc.

     WHEREAS, the Purchase Agreement provides that it is a condition precedent 
to the obligations of the Shareholders to consummate the transactions 
contemplated by the Purchase Agreement that the parties thereto and hereto 
shall have entered into one or more counterparts of this Agreement; and

     WHEREAS, the parties hereto intend that any capitalized terms used in this 
Agreement and not otherwise defined herein shall have the meanings scribed 
thereto in the Purchase Agreement.

                                   AGREEMENT

     NOW, THEREFORE, in consideration of the premises and the mutual covenants 
and agreements contained herein and subject to the conditions contained herein, 
the parties hereto agree as follows:

     1.   DEFINITIONS.

     "ACTUAL EBIT" means the dollar amount equal to the sum of AI's earnings 
before interest and federal, state and local income taxes for the applicable 
periods based on the Reviewed Financial Statements.

     "ADJUSTED EBIT" means the dollar amount equal to the Actual EBIT plus (+), 
or minus (-) the adjustments described and detailed on Schedule 1 attached 
hereto.

     "BUSINESS DAY" means any day, other than Saturday, Sunday or a federal 
holiday, and shall consist of the time period from 12:01 a.m. through 12:00 
midnight eastern time.

     "EARNOUT PAYMENT" means the aggregate dollar amount owed and to be paid to 
the Shareholders by DAH pursuant to Section 1.2.2 of the Purchase Agreement in 
accordance with  Section 2 below.
     "CERTIFICATE" means the certificate to be delivered by DAH reflecting the 
Earnout Payment and the applicable calculations relating thereto.


                                      1


     "DETERMINATION DATE" means the date, which shall be as soon as 
practicable, that DAH receives the Reviewed Financial Statements.

     "GAAS" means United States generally accepted auditing standards.

     "REVIEWED FINANCIAL STATEMENTS" means for AI: (i) the balance sheets as of 
December 31, 1998 and 1999; (ii) the income statement for the twelve (12) month 
periods ended December 31, 1998 and 1999; (iii) the statement of changes in 
stockholders' equity for the twelve (12) month periods ended December 31, 1998 
and 1999; and (iv) the statement of changes in cash flows for the twelve (12) 
month periods ended December 31, 1998 and 1999; as applicable, all of which 
will be prepared in accordance with GAAP applied consistently with the past 
practice of AI for the year ended December 31, 1996 and which are the subject 
of a "Limited Review," as that term is defined under GAAS, by DAH's independent 
accountants.

     2.   VESTING AND PAYMENT OF THE EARNOUT PAYMENT.

     (a)  On March 31, 1999, based on the amount of AI's Adjusted EBIT for 
calendar year 1998 set forth in Column A, the Shareholders shall receive, in 
the aggregate, the Earnout Payment amount in Column B:

          Column A                                     Column B
          --------                                     --------
          $5.0 million to $5.09 million                   $240,000
          $5.1 million to $5.19 million                   $480,000
          $5.2 million to $5.29 million                   $720,000
          $5.3 million to $5.39 million                   $960,000
          $5.4 million to $5.49 million                 $1,200,000
          $5.5 million to $5.59 million                 $1,500,000
          $5.6 million to $5.69 million                 $1,800,000
          $5.7 million to $5.79 million                 $2,100,000
          $5.8 million to $5.89 million                 $2,400,000
          $5.9 million to $5.99 million                 $2,700,000
          $6.0 million to or more                  $3,000,000

     (b)  On March 31, 2000, based on the amount of AI's Adjusted EBIT for 
calendar year 1999 set forth in Column A, the Shareholders shall receive, in 
the aggregate, the Earnout Payment amount in Column B:

          Column A                                     Column B
          --------                                     --------
          $6.0 million to $6.09 million                   $240,000
          $6.1 million to $6.19 million                   $480,000
          $6.2 million to $6.29 million                   $720,000


                                      2


          $6.3 million to $6.39 million                   $960,000
          $6.4 million to $6.49 million                 $1,200,000
          $6.5 million to $6.59 million                 $1,500,000
          $6.6 million to $6.69 million                 $1,800,000
          $6.7 million to $6.79 million                 $2,100,000
          $6.8 million to $6.89 million                 $2,400,000
          $6.9 million to $6.99 million                 $2,700,000
          $7.0 million to or more                  $3,000,000

     (c)  In the event that AI's Adjusted EBIT for calendar year 1998 is an 
amount less than $6.0 million but is at least $5.0 million, on March 31, 2000, 
in addition to the amounts payable pursuant to paragraph (b) of this Section 2, 
based on the amount of AI's Adjusted EBIT for calendar 1999 set forth in Column 
A, the Shareholders shall receive, in the aggregate, the lesser of the Earnout 
Payment amount in Column B or an Earnout Payment equal to the difference 
between $3.0 million and the Earnout Payment amount received pursuant to 
paragraph (a):

          Column A                                     Column B
          --------                                     --------
          $7.0 million to $7.19 million                   $300,000
          $7.2 million to $7.29 million                   $600,000
          $7.3 million to $7.39 million                   $900,000
          $7.4 million to $7.49 million                 $1,200,000
          $7.5 million or more                          $1,500,000

     3.   PAYMENT AND REVIEW PROCEDURES.

     (a)  DELIVERY OF THE CERTIFICATE AND THE REVIEWED FINANCIAL
     STATEMENTS.  On or before the date that is five (5) Business Days
     following the Determination Date, DAH will deliver the following items
     to the Shareholders:

          (i)   the Certificate; and

          (ii)  a copy of the Reviewed Financial Statements from which 
                the    calculations in the Certificate were derived.

     (b)  PAYMENT WITHOUT OBJECTION.  If the Shareholders do not
          object to any of the calculations in the Certificate or the
          Reviewed Financial Statements from which such calculations
          were derived in accordance with the objection procedures in
          subsection (c) below on or before the tenth Business Day
          following the receipt of the items in subsection (a) above,
          then DAH will deliver to each of the Shareholders, as
          applicable, for receipt on March 31 of the applicable year a
          bank cashier's check representing the Earnout Payment.


                                      3


     (c)  OBJECTION PROCEDURES.  If the Shareholders have any
          objection to the calculation of  the Certificates or the
          Reviewed Financial Statements from which such calculation
          was derived, then they shall deliver a detailed statement
          describing their objections to DAH within ten (10) Business
          Days after receiving the Certificate.  DAH and the
          Shareholders will use reasonable efforts to resolve any such
          objections themselves.  If the parties do not obtain a final
          resolution within ten (10) Business Days after DAH has
          received the statement of objections, DAH and the
          Shareholders will select an accounting firm mutually
          acceptable to them to resolve any remaining objections (the
          "Referee").  If DAH and the Shareholders are unable to agree
          on the choice of a Referee, they will immediately select a
          nationally-recognized accounting firm by lot , (after
          excluding their respective regular outside accounting firms)
          as the Referee.  The determination of any Referee so
          selected will be set forth in writing within thirty (30)
          days of submission thereto and will be conclusive and
          binding upon the Parties.  Thereafter, DAH will immediately
          revise the Certificates and make payment to the Shareholders
          as appropriate to reflect the resolution of any objections
          thereto pursuant to this Section 3 (c).

     (d)  REVIEW OF MATERIALS.  DAH will make the work papers and
          back-up materials used in preparing the Certificate
          available to the Shareholders and their accountants and
          other representatives at reasonable times and upon
          reasonable notice at any time during (i) the preparation by
          DAH of the Certificate, (ii) the review by the Shareholders
          of the Certificate; and (iii) the resolution by the parties
          of any objection thereto.

     4.   Operation of Business.  From the date of this Agreement until the 
later of (i) the payment of all amounts due hereunder or (ii) the date that it 
is finally determined that no payment  is required by DAH hereunder, DAH will:

     (a)  maintain the books, records and financial statements of AI
          on an unconsolidated basis;

     (b)  not, without the consent of the Shareholders, alter the
          scope or type of business to be  conducted by AI in a manner
          that is inconsistent with the business conducted by AI prior
          to the date of this Agreement;     

     (c)  not sell, liquidate or dissolve AI or transfer any of
          the assets of AI, except in the ordinary course of business
          consistent with  AI's past practice; 

     (d)  provide adequate working capital to AI;

     (e)  maintain adequate liquid assets and/or financing so as to
          ensure its ability to meet its payment obligations
          hereunder; and


                                      4


     5.   TERMINATION OF  OBLIGATION AND RESPONSIBILITIES.  DAH's and the 
Shareholder's obligations, responsibilities, covenants, agreements and 
liabilities pursuant to this  Agreement shall terminate on the earlier of 
either of the following situations: (i) completion of all payments in 
accordance with Sections 2 and 3(b) above; (ii) delivery of the letter by DAH 
denoting that no further payment is due with respect to the Earnout Payment and 
no objection by the Shareholders pursuant to Section 3(c) above; or (iii) 
resolution of objections to the Certificate regarding calendar year 1999 by the 
Referee in accordance with Section 3(c) above and settlement of the obligations 
determined thereby.

     6.   MISCELLANEOUS.

     (a)  NO THIRD PARTY BENEFICIARIES.  This Agreement shall not
          confer any rights or remedies upon any Person other than the
          parties named herein and their respective successors and
          permitted assigns.

     (b)  ENTIRE AGREEMENT.  This Agreement, together with the
          Purchase Agreement (and the Exhibits and Schedules thereto),
          and any certificate or other documents delivered thereunder,
          supersede all prior agreements, understandings or
          representations by or among the parties hereto, written or
          oral, that may have related in any way to the subject matter
          thereof.

     (c)  SUCCESSION AND ASSIGNMENT.  This Agreement shall be binding
          upon and insure to the benefit of the parties named herein
          and their respective successors and permitted assigns.  No
          party may assign either this Agreement or any of its rights,
          interest, or obligations hereunder without the prior written
          approval of the other party.

     (d)   COUNTERPARTS.  This Agreement may be executed in one or
          more counterparts (including execution by facsimile), each
          of which shall be deemed an original but all of which
          together will constitute one and the same instrument.

     (e)  HEADINGS.  The section headings contained in this Agreement
          are inserted for convenience only and shall not affect in
          any way the meaning interpretation  of this Agreement.

     (f)  NOTICES.  Notices shall be delivered to the parties at the
          addresses set forth in the Purchase Agreement.

     (g)  GOVERNING LAW.  This Agreement shall be governed by and
          construed in accordance with the domestic laws of the State
          of Delaware.

     (h)  AMENDMENTS AND WAIVERS.  No amendments of any provision of
          the Agreement shall be valid unless the same shall be in
          writing and signed


                                      5


          by all of the parties hereto.  No waiver by any party of any 
          covenant or agreement hereunder shall be deemed to extend to 
          any prior or subsequent default or breach of covenant or 
          agreement hereunder or affect in any way any rights arising 
          by virtue of any prior or subsequent such occurrence.

     (i)  SEVERABILITY.  Any term of this Agreement that is invalid or
          unenforceable in any situation in any jurisdiction shall not
          affect the validity or enforceability of the remaining terms
          and provisions hereof or the validity or enforceability of
          the offending term or provision in any other situation or in
          any other jurisdiction.

     (j)  EXPENSES.  DAH and the Shareholders will share the fees and
          expenses of the Referee equally.

     (k)  SPECIFIC PERFORMANCE.  Each of the parties acknowledges and
          agrees that the other parties would be damaged irreparably
          in the event any of the provisions of this Agreement are not
          performed in accordance with their specific terms or
          otherwise are breached.  Accordingly, each of the parties
          agrees that the other parties shall be entitled to an
          injunction or injunctions to prevent breaches of the
          provisions of this Agreement and to enforce specifically
          this Agreement and the terms and provisions hereof in any
          action instituted in any court of the United States or any
          state thereof having jurisdiction over the parties and the
          matter (subject to the provisions set forth in Section 6(n)
          below) in addition to any other remedy to which they may be
          entitled, at law or in equity.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the date first above written.


                                     DeCrane Aircraft Holdings, Inc.


                                     By:
                                        ----------------------------
                                     Name:
                                          --------------------------
                                     Title:
                                           -------------------------

                                     Shareholders:


                                     -------------------------------


                                      6


                                     Robert S. Brown


                                     -------------------------------
                                     Rick Marsh


                                     -------------------------------
                                     Wayne Richie


                                      7


                                     SCHEDULE 1

                       Adjustments to Ascertain Adjusted EBIT


     Capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Earnout Agreement to which this Schedule 1 is a part
thereof.

     Calculation of Adjusted EBIT is provided as follows:

     Description                                            Amount
     -----------                                            ------
1.   Actual EBIT                                            $

2.   Adjustments:

     1.   Subtract any gain or add any loss from any sale,
          exchange or other disposition of assets other than in the
          ordinary course of business consistent with past practice;

     2.   subtract any extraordinary gain or add any
          extraordinary loss as defined by GAAP;  

     3.   add any additional depreciation, amortization or other
          expenses resulting from the write-up of any asset and any
          amortization of goodwill or other intangibles relating to
          the acquisition of AI by DAH;  

     4.   add any expenses directly or indirectly incurred in
          connection with the financing of the acquisition of AI or
          any financing of such indebtedness or any other financing,
          except for financing used to expand the existing business, 
          not reflected in the December 31, 1996, or September 30,
          1997, Financial Statements as presented in Schedule 2.2.4;

     5.   the effect of valuing inventories on a method not
          consistent with current practices, as long as current
          practices are in accordance with GAAP;  

     6.   subtract any gain or income or add any loss or expense
          resulting from a change in AI's accounting methods,
          principles or practices or a change in GAAP or any GAAP
          election or treatment not made or utilized by AI in its
          audited financial statements for its fiscal year ended
          December 31, 1996 and the September 30, 1997 unaudited
          statements;  

     7.   add any intercompany charges between AI or any AI
          subsidiary and DAH which have not been approved by a
          majority of the Shareholders,


                                       


          excluding charges for legal, audit, tax return preparation 
          and insurance provided for AI; 

     8.   add any employee termination or other costs arising out
          of a consolidation of services or facilities or other
          rationalization of AI subsequent to the acquisition by DAH
          of AI other than in the ordinary course of business
          consistent with past practice;  

     9.   add any employment related costs associated with
          personnel required by DAH to be employed by AI that AI would
          not otherwise have employed;  

     10.  add any expenses directly or indirectly incurred in
          connection with the acquisition of AI by DAH; and  

     11.  add or subtract any reserves or adjustments to reserve
          which are not consistent with past practices of AI as long
          as the past practices are in accordance with GAAP.  

3.   Adjusted EBIT                                          $

EX-10.1

                            CONSENT AND AMENDMENT NO. 1 TO
                             LOAN AND SECURITY AGREEMENT

          This Consent and Amendment No. 1 to Loan and Security Agreement (this
"Amendment") is made as of October 21, 1997, among DeCrane Aircraft Holdings,
Inc., a Delaware corporation ("Borrower"), Bank of America National Trust and
Savings Association, successor-by-merger to Bank of America Illinois,
individually as a lender ("BoA") and as agent ("Agent"), Comerica Bank -
California ("Comerica"), Mellon Bank, N.A. ("Mellon"), and Sumitomo Bank of
California ("Sumitomo"; Sumitomo, BoA, Comerica and Mellon being collectively
referred to as "Lenders").

          Reference is made to that certain Loan and Security Agreement dated as
of April 15, 1997 among Borrower, Agent and Lenders (the "Loan Agreement";
capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Loan Agreement).

          Borrower has requested that Requisite Lenders consent to the
acquisition (the "AII Acquisition") by Borrower of all of the outstanding
capital stock of Audio International, Inc. ("AII").  Absent the written consent
of Requisite Lenders, consummation of the AII Acquisition would cause a breach
of each of SECTIONS 5.11 and 5.17 of the Loan Agreement. 

          Borrower has also requested that all of the Lenders agree to amend the
Loan Agreement in certain respects.

          NOW, THEREFORE, Agent, Lenders and Borrower agree as follows:

          1.   CONSENT.  Subject to the conditions precedent set forth in
Section 2 of this Amendment, Lenders hereby consent to the consummation of the
AII Acquisition.  This consent shall not constitute (a) a modification or
alteration of the terms, conditions or covenants of the Loan Agreement or any
document entered into in connection therewith, or (b) a waiver, release or
limitation upon the exercise by Agent or any Lender of any of its rights, legal
or equitable, hereunder.  Except as set forth above, Agent and each Lender
reserves any and all rights and remedies which it has had, has or may have under
the Loan Agreement.

          2.   AII ACQUISITION CONDITIONS PRECEDENT.  The consent of the Lenders
to the consummation of the AII Acquisition shall become effective as of the date
of this Amendment upon the satisfaction of the following conditions precedent:

          2.1. Borrower shall have delivered to Agent a manually executed
original of this Agreement;

          2.2. The terms of the AII Acquisition shall be no less favorable to
the Borrower from those set forth in a certain proposal letter concerning the
AII Acquisition dated September 12, 1997, delivered by the Borrower to AII and
the current shareholders of AII.  In furtherance, and not by way of limitation,
of the foregoing:

          2.2.1.    The aggregate purchase price, including deferred
     purchase price, of the AII Acquisition shall not exceed $30,000,000;




          2.2.2.    The cash purchase price paid by the Borrower at the
     closing of the AII Acquisition shall not exceed $24,000,000;

          2.2.3.    The AII Acquisition shall be consummated on or prior to
     December 5, 1997;

          2.3. No Event of Default or Unmatured Event of Default shall be in
existence at the time of the consummation of the AII Acquisition, or would be
caused after giving effect thereto;

          2.4. Agent and Lenders shall have completed an environmental due
diligence review of AII and its Subsidiaries, and shall be satisfied with the
results thereof;

          2.5. Agent and Lenders shall have received an executed copy of the
purchase agreement between the Borrower and the current shareholders of AII (the
"Purchase Agreement"), and Agent and Lenders shall be satisfied with the terms
and conditions thereof, including without limitation the representations,
warranties and indemnities made therein in favor of the Borrower.

          2.6. Agent shall have received (i) executed copies of all additional
agreements, documents and instruments pertaining to the consummation of the AII
Acquisition (collectively with the Purchase Agreement, the "AII Acquisition
Documents") and (ii) a collateral assignment executed by the Borrower, in form
and substance acceptable to Agent, of all representations, warranties, covenants
and other agreements (including indemnification agreements) made in favor of the
Borrower under the AII Acquisition Documents, for the benefit of the Agent, the
Lenders and the Issuer;

          2.7. Agent, for the benefit of itself, Issuer and the Lenders, shall
have received (i) guaranties executed by AII and each Subsidiary of AII, each in
form substantially similar to guaranties previously executed by the presently
existing Subsidiaries of the Borrower in connection with the execution of the
Loan Agreement, (ii) first priority Liens on the stock and assets of AII and
each Subsidiary of AII, granted pursuant to security agreements and pledge
agreements, each in form substantially similar to security agreements and pledge
agreements previously executed by the presently existing Subsidiaries of the
Borrower in connection with the execution of the Loan Agreement and (iii) such
opinions of legal counsel, stock certificates, insurance certificates, insurance
endorsements and assignments, certificates, articles of incorporation, good
standing certificates and other agreements, instruments and documents as
reasonably requested by Agent, each in form and substance reasonable acceptable
to Agent;

          2.8. The boards of directors of AII and each Subsidiary of AII shall
have approved the consummation of the AII Acquisition;

          2.9. Agent shall have received a certificate from Borrower's chief
executive officer, president or chief financial officer (i) certifying that all
of conditions precedent set forth in Section 2 of this Amendment have been
satisfied and (ii) containing a computation of, and showing compliance with,
each of SECTIONS 5.24, 5.25, 5.26, 5.27 and 5.28 of the Loan Agreement after
giving effect to the AII Acquisition and the amendments set forth herein,
together with such financial information as Requisite Lenders shall request to
verify such compliance;


                                    -2-


          2.10.     There shall not have been instituted or threatened any
litigation or proceeding in any court or administrative forum adversely
concerning or affecting the consummation of the AII Acquisition;

          2.11.     Agent shall have received evidence reasonably acceptable to
Agent that the Borrower has received all permits, consents and regulatory
approvals necessary to consummate the AII Acquisition;

          2.12.     AII and its Subsidiaries shall have incurred no material
liabilities, contingent or otherwise, other than as disclosed on AII's most
recently audited financial statements, copies of which have been delivered to
Agent;

          2.13.     Between the date of this Amendment and the consummation of
the AII Acquisition, no event, circumstance or condition shall have occurred or
exist which has a Material Adverse Effect; and

          2.14.     Between December 31, 1996 and the consummation of the AII
Acquisition, no event, circumstance or condition shall have occurred or exist
which has a material adverse effect upon the condition (financial or otherwise),
operations, performance or properties of AII or any Subsidiary of AII.

          3.   AMENDMENTS TO LOAN AGREEMENT. Subject to the conditions precedent
set forth in Section 4 of this Amendment, the Loan Agreement is hereby amended
as follows:

          3.1. The clause "Forty Million Dollars ($40,000,000)" set forth in the
definition of the term "Revolving Credit Amount" in SECTION 1.1 of the Loan
Agreement is hereby amended and restated to read "Sixty Million Dollars
($60,000,000)".

          3.2. The clause "Two Hundred Fifty Thousand Dollars ($250,000)" set
forth in SECTION 5.14(h) of the Loan Agreement is hereby amended and restated to
read "One Million Dollars ($1,000,000)".

          3.3. The word "and" immediately preceding clause (e) of SECTION 5.15,
is hereby deleted, and SECTION 5.15(e) of the Loan Agreement is hereby amended
and restated as follows:

          "(e) Liens on (i) real estate owned by Audio International,
          Inc., an Arkansas corporation and a Subsidiary of Borrower
          ("AII"), and (ii) machinery and equipment owned by AII
          constituting legal fixtures to such real estate, securing
          Indebtedness in an aggregate amount not to exceed Seven
          Hundred Fifty Thousand Dollars ($750,000); and (f) Liens
          consented to in writing by Requisite Lenders.

          3.4. The clause "Four Million Dollars ($4,000,000)" set forth twice in
SECTION 5.24 of the Loan Agreement is hereby amended and restated in each
instance to read "Four Million Five Hundred Thousand Dollars ($4,500,000)".


                                        -3-


          3.5. The word "or" immediately preceding clause (iv) set forth in
SECTION 10.11 of the Loan Agreement is hereby deleted, and said clause (iv) is
hereby amended and restated as follows: 

          "(iv) if approved, authorized or ratified in writing by
          Agent at the direction of Requisite Lenders, PROVIDED, that
          the then existing fair market value of the Collateral to be
          released in any single or series of related transactions
          does not exceed ten percent (10%) of the then existing fair
          market value of all Collateral, or (v) if approved,
          authorized or ratified in writing by Agent at the direction
          of all Lenders."

          
          3.6. The Maximum Revolving Loan Amount of each Lender shall be amended
and restated as set forth on the signature pages to this Amendment.

          4.   AMENDMENT CONDITIONS PRECEDENT.  The amendments to the Loan
Agreement set forth in Section 3 of this Amendment shall become effective as of
the date of this Amendment upon the satisfaction of the following conditions
precedent:

          4.1. The AII Acquisition shall have been consummated on or prior to
December 5, 1997, and in accordance with the terms of the AII Acquisition
Documents and applicable law;

          4.2. Borrower shall have executed and delivered to Agent for
distribution to the Lenders amended and restated Revolving Credit Notes in form
and substance substantially similar to Revolving Credit Notes previously
executed by the Borrower in connection with the execution of the Loan Agreement,
each in an amount equal to each Lender's Maximum Revolving Loan Amount;

          4.3. The Subsidiaries of Borrower (other than AII and its
Subsidiaries) shall have executed and delivered a certain Reaffirmation of
Guaranties, in the form of EXHIBIT A to this Amendment;

          4.4. No Event of Default or Unmatured Event of Default shall have
occurred and be continuing;

          4.5. Borrower shall have delivered to Agent a certificate in form and
substance satisfactory to Agent of Borrower's Secretary or an Assistant
Secretary as to Borrower's certificate of incorporation and by-laws, the
incumbency of Borrower's officers and corporate resolutions adopted by
Borrower's board of directors with respect to this Amendment;

          4.6. Agent shall have received an opinion of Borrower's legal counsel,
in form and substance substantially similar to a legal opinion delivered by such
counsel to Agent in connection with the execution and delivery of the Loan
Agreement; and

          4.7. Agent shall have received, for the benefit of the Lenders based
on each Lender's pro rata share of the increase in the Revolving Credit Amount
pursuant to the terms of this Amendment, an amendment fee in the amount of
$20,000.


                                    -4-


          5.    MISCELLANEOUS.

          5.1.  EXPENSES.  Borrower agrees to pay on demand all costs and
expenses of Agent (including Attorneys' Fees) in connection with the
preparation, negotiation, execution, delivery and administration of this
Amendment and all other instruments or documents provided for herein or
delivered or to be delivered hereunder or in connection herewith.  In addition,
Borrower agrees to pay, and save Agent and each Lender harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution or delivery of this Amendment, the borrowings under the Loan
Agreement, as amended hereby, and the execution and delivery of any instruments
or documents provided for herein or delivered or to be delivered hereunder or in
connection herewith.  All obligations provided in this SECTION 5.1 shall survive
any termination of this Amendment or the Loan Agreement as amended hereby.

          5.2.  GOVERNING LAW.  This Amendment shall be a contract made under 
and governed by the internal laws of the State of Illinois.

          5.3.  COUNTERPARTS.  This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Amendment.

          5.4.  REFERENCE TO LOAN AGREEMENT.  Except as herein amended, the Loan
Agreement shall remain in full force and effect and is hereby ratified in all
respects.  On and after the effectiveness of the amendments to the Loan
Agreement accomplished hereby, each reference in the Loan Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import, and each
reference to the Loan Agreement in any note and in any Related Agreements, or
other agreements, documents or other instruments executed and delivered pursuant
to the Loan Agreement, shall mean and be a reference to the Loan Agreement, as
amended by this Amendment.

          5.5.  SUCCESSORS.  This Amendment shall be binding upon Borrower, each
Lender, Agent and their respective successors and assigns, and shall inure to
the benefit of Borrower, each Lender, Agent and their respective successors and
assigns.


                                     -5-


          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized and delivered
at Chicago, Illinois as of the date first above written.

                                    DECRANE AIRCRAFT HOLDINGS, INC., as
                                    Borrower


                                    By
                                      ----------------------------------------
                                    Its
                                       ---------------------------------------


                                    BANK OF AMERICA NATIONAL TRUST AND
                                    SAVINGS ASSOCIATION, successor-by-merger
                                    to Bank of America Illinois, as Agent


                                    By
                                      ----------------------------------------
                                    Its
                                       ---------------------------------------


                                    BANK OF AMERICA NATIONAL TRUST AND
                                    SAVINGS ASSOCIATION, successor-by-merger
                                    to Bank of America Illinois, as a Lender

                                    By
                                      ----------------------------------------
                                    Its  
                                       ---------------------------------------

                                    Maximum Revolving Loan Amount:  $24,000,000




                                        -6-




                                    COMERICA BANK - CALIFORNIA, as a Lender


                                    By
                                      ----------------------------------------
                                    Its  
                                       ---------------------------------------

                                    Maximum Revolving Loan Amount:  $12,000,000


                                      -7-




                                    MELLON BANK, N.A., as a Lender


                                    By
                                      ----------------------------------------
                                    Its  
                                       ---------------------------------------

                                    Maximum Revolving Loan Amount:  $12,000,000



                                        -8-




                                    SUMITOMO BANK OF CALIFORNIA, as a Lender


                                    By
                                      ----------------------------------------
                                    Its  
                                       ---------------------------------------

                                    Maximum Revolving Loan Amount:  $12,000,000


                                           -9-


                                     EXHIBIT A
                            REAFFIRMATION OF GUARANTIES


                                               October 21, 1997

Bank of America National Trust
  and Savings Association, individually
  and as agent ("Agent")
Comerica Bank -- California
Mellon Bank, N.A.
Sumitomo Bank of California

Ladies and Gentlemen:

          Each of the undersigned has executed and delivered to Agent, for your
collective benefit, a certain Guaranty dated as of April 15, 1997 (each, a
"Guaranty"). Each of the undersigned acknowledges receipt of copies of (i) that
certain Consent and  Amendment No. 1 to Loan and Security Agreement of even date
herewith between you and DeCrane Aircraft Holdings, Inc. (the "Amendment") and
(ii) each additional instrument, agreement and document required to be delivered
to any of you pursuant to the terms of the Amendment (the "Additional
Documents").  Each of the undersigned hereby reaffirms the validity of the
Guaranty executed by such entity and its obligations thereunder, in each case
after giving effect to the execution and delivery of the Amendment and the
Additional Documents, and the consummation of the transactions contemplated
thereby.

                                    AEROSPACE DISPLAY SYSTEMS, INC.
                                    CORY COMPONENTS, INC.
                                    CORY HOLDINGS, INC.
                                    ELSINORE AEROSPACE SERVICES, INC.
                                    ELSINORE ENGINEERING, INC.
                                    HOLLINGSEAD INTERNATIONAL, INC.
                                    TRI-STAR ELECTRONICS INTERNATIONAL, INC.
                                    TRI-STAR HOLDINGS, INC.
                                    TRI-STAR TECHNOLOGIES, INC.

                                    Each By   
                                           ---------------------------------
                                    Its  
                                       -------------------------------------


                                     -10-

EX-10.2

                               COVENANT NOT TO COMPETE

    This Covenant Not to Compete ("Covenant") is between DeCrane Aircraft 
Holdings, Inc. ("Buyer"), Audio International, Inc. ("AI") and Robert S. Brown 
("Seller").

    A.   Concurrent with the execution of this Covenant, Seller and the other 
shareholders of Audio International, Inc. are selling to Buyer all of the stock 
of AI pursuant to a Stock Purchase and Sale Agreement (the "Agreement").  If 
Seller were not entering into this Covenant, Buyer would not purchase the stock 
of AI for the purchase price specified in the Agreement.

    B.   Seller, together with the other selling shareholders, has owned and 
controlled AI and Seller has knowledge of AI's business, AI's prospects, AI's 
customers, needs of the customers for AI's products, product specifications for 
AI's products, key employees of AI, each of which (if not otherwise known to 
the public or other persons) Seller acknowledges is either a trade secret 
("Trade Secret") or confidential information ("Confidential Information") of 
AI; and that to the extent that any such Trade Secret or Confidential 
Information is a secret or is confidential, it is owned by and belongs to AI.

    C.   If Seller was to compete with the business of AI, Seller's competition 
is likely to cause material harm to AI and diminish the value of the stock of 
AI being sold by Seller to Buyer pursuant to the Agreement and thereby also 
likely to cause material harm to Buyer.

    D.   The business of AI is worldwide; AI's sales occur throughout the 
United States and in many foreign countries.  If this Covenant were limited to 
the State of Arkansas, its scope would not be sufficient to protect the 
interest of AI.

    Based on the foregoing facts and for good and valuable consideration, 
receipt of which is hereby acknowledged, Seller and Buyer agree as follows:

    1.   TERM OF THIS COVENANT.

         As used in this Covenant, the "Term of this Covenant" shall mean a 
period commencing upon the Closing of the Agreement (the "Closing Date") and 
expiring on four years after the Closing Date.


                                      1


    2.   COVENANT NOT TO COMPETE.

         For the Term of this Covenant, Seller shall not directly or indirectly 
engage in the design, engineering, manufacture, sale or servicing of those 
products and services presently listed in AI's sales catalogue for use in 
executive or head of state aircraft. 

    3.   COVENANT NOT TO HIRE.

         For the Term of this Covenant, Seller will not directly or indirectly, 
hire or associate in business with any person who is currently employed by AI 
at the level of supervisor or above.

    4.   COVENANT NOT TO USE TRADE SECRETS.

         Seller will not use for the benefit of himself or any other person or 
entity any Trade Secret or Confidential Information of AI, except as otherwise 
known to the public at the time of such use, or except to the extent that such 
Confidential Information or Trade Secret constitutes a general body of 
knowledge about the business.

    5.   RECITALS.

         The recitals are a part of this Covenant and shall be used in 
construing and interpreting it.

    6.   IRREPARABLE INJURY.

         Seller acknowledges that (i) the violation by Seller of any of the 
provisions of Sections 2, 3 and 4 of this Covenant will result in irreparable 
injury to Buyer and that Buyer shall be entitled to (i) the issuance of a 
temporary restraining order, (ii) a preliminary injunction and (iii) a 
permanent injunction to prohibit either the continuation or another breach of 
Sections 2, 3 or 4 of this Covenant.

    7.   MONETARY DAMAGES.

         Notwithstanding any provision of this Covenant, Buyer may seek and 
obtain monetary damages according to proof for any breach of this Covenant by 
Seller.


                                      2


     8.  JURISDICTION AND VENUE.

         The Buyer and Seller have chosen the law of the State of Delaware to 
resolve any disputes pursuant to the Agreement.  Accordingly, the Buyer, Seller 
and AI hereby agree that any dispute for breach of, arising under, or to 
interpret this Covenant, shall be brought exclusively in state or federal 
counts in the State of Delaware.  Seller, AI and Buyer hereby consent to the 
jurisdiction and venue of the state and federal courts in the State of Delaware 
for all purposes in connection with matters arising in connection with this 
Covenant.

    9.  NOTICES.

         All notices, requests, demands, deliveries and other communications 
hereunder shall be in writing and, except as otherwise specifically provided in 
this Covenant, shall be given by commercial courier service providing proof of 
delivery to the parties at the following addresses (all such notices shall be 
effective upon receipt):

      If to Buyer:       DeCrane Aircraft Holdings, Inc.
                         2361 Rosecrans Avenue, Suite 180
                         El Segundo, California  90245
                         Telephone:  (310) 725-9123
                         Fax: (310) 643-0746

      and a copy to:     Spolin & Silverman 
                         100 Wilshire Boulevard, Suite 940
                         Santa Monica, California   90401
                         Attention:  Stephen A. Silverman, Esq.
                         Telephone:  (310) 576-1221
                         Fax Number:  (310) 576-4844


      If to AI:          Audio International, Inc. 
                         7300 Industry Drive
                         North Little Rock, Arkansas  72117
                         Attention:  President
                         Telephone:  (510) 955-2929
                         Fax: (510) 955-2588


                                      3


     and a copy to:      Spolin & Silverman 
                         100 Wilshire Boulevard, Suite 940
                         Santa Monica, California   90401
                         Attention:  Stephen A. Silverman, Esq.
                         Telephone:  (310) 576-1221
                         Fax Number:  (310) 576-4844

     and                 DeCrane Aircraft Holdings, Inc.
                         2361 Rosecrans Avenue, Suite 180
                         El Segundo, California  90245
                         Attention:  R. Jack DeCrane, Chief Executive Officer
                         Telephone:  (310) 725-9123
                         Fax: (310) 643-0746


     If to Seller:       Robert S. Brown
                         14 Longfellow
                         Little Rock, Arkansas  72207
                         Telephone:  (501) 664-8668

     With a copy to:     Joe Mowery
                         Giroir, Gregory, Holmes & Hoover
                         111 Center Street, Suite 1900
                         Little Rock, Arkansas  72201
                         Telephone: (501) 372-3000
                         Fax:  (501) 374-2380

Any of the parties hereto may, from time to time, change its address for 
receiving notices by giving written notice thereof in the manner outlined above.

    10.  COSTS AND ATTORNEYS' FEES.

         If any action, suit or other proceeding is instituted concerning or 
arising out of this Covenant, the party in whose favor judgment is rendered 
shall recover such party's reasonable costs and attorneys' fees incurred in 
connection with such action.

    11.  GOVERNING LAW.

         This Agreement shall in all respects be construed in accordance with 
and governed by the substantive law of the State of Delaware without regard to 
Delaware law governing choice of law.


                                      4


    12.  HEADINGS.

         The section and paragraph headings contained in this Covenant are for 
convenience only and shall not control or affect the meaning or construction of 
any of the provisions of this Agreement.

    13.  ASSIGNMENT.

         This Covenant may be assigned to any successor of Buyer.

    14.  COUNTERPARTS.

         This Covenant may be executed in any number of counterparts, each of 
which shall be deemed an original, but all of which together shall constitute 
one and the same instrument.

"Buyer"

DeCrane Aircraft Holdings, Inc.


- ----------------------------------------
By: R. Jack DeCrane, 
    Chief Executive Officer


Audio International, Inc.


- ----------------------------------------
By: R. Jack DeCrane, 
    Chief Executive Officer


"Seller"


- ----------------------------------------
Robert S. Brown


                                      5

EX-10.3

                               COVENANT NOT TO COMPETE

     This Covenant Not to Compete ("Covenant") is between DeCrane Aircraft 
Holdings, Inc. ("Buyer"), Audio International, Inc. ("AI") and Rick Marsh 
("Seller").

     A.   Concurrent with the execution of this Covenant, Seller and the other 
shareholders of Audio International, Inc. are selling to Buyer all of the stock 
of AI pursuant to a Stock Purchase and Sale Agreement (the "Agreement").  If 
Seller were not entering into this Covenant, Buyer would not purchase the stock 
of AI for the purchase price specified in the Agreement.

     B.   Seller, together with the other selling shareholders, has owned and 
controlled AI and Seller has knowledge of AI's business, AI's prospects, AI's 
customers, needs of the customers for AI's products, product specifications for 
AI's products, key employees of AI, each of which (if not otherwise known to 
the public or other persons) Seller acknowledges is either a trade secret 
("Trade Secret") or confidential information ("Confidential Information") of 
AI; and that to the extent that any such Trade Secret or Confidential 
Information is a secret or is confidential, it is owned by and belongs to AI.

     C.   If Seller was to compete with the business of AI, Seller's 
competition is likely to cause material harm to AI and diminish the value of 
the stock of AI being sold by Seller to Buyer pursuant to the Agreement and 
thereby also likely to cause material harm to Buyer.

     D.   The business of AI is worldwide; AI's sales occur throughout the 
United States and in many foreign countries.  If this Covenant were limited to 
the State of Arkansas, its scope would not be sufficient to protect the 
interest of AI.

     Based on the foregoing facts and for good and valuable consideration, 
receipt of which is hereby acknowledged, Seller and Buyer agree as follows:

     1.   TERM OF THIS COVENANT.

          As used in this Covenant, the "Term of this Covenant" shall mean a 
period commencing upon the Closing of the Agreement (the "Closing Date") and 
expiring on four years after the Closing Date.


                                      1


     2.   COVENANT NOT TO COMPETE.

          For the Term of this Covenant, Seller shall not directly or 
indirectly engage in the design, engineering, manufacture, sale or servicing of 
those products and services presently listed in AI's sales catalogue for use in 
executive or head of state aircraft. 

     3.   COVENANT NOT TO HIRE.

          For the Term of this Covenant, Seller will not directly or 
indirectly, hire or associate in business with any person who is currently 
employed by AI at the level of supervisor or above.

     4.   COVENANT NOT TO USE TRADE SECRETS.

          Seller will not use for the benefit of himself or any other person or 
entity any Trade Secret or Confidential Information of AI, except as otherwise 
known to the public at the time of such use, or except to the extent that such 
Confidential Information or Trade Secret constitutes a general body of 
knowledge about the business.

     5.   RECITALS.

          The recitals are a part of this Covenant and shall be used in 
construing and interpreting it.

     6.   IRREPARABLE INJURY.

          Seller acknowledges that (i) the violation by Seller of any of the 
provisions of Sections 2, 3 and 4 of this Covenant will result in irreparable 
injury to Buyer and that Buyer shall be entitled to (i) the issuance of a 
temporary restraining order, (ii) a preliminary injunction and (iii) a 
permanent injunction to prohibit either the continuation or another breach of 
Sections 2, 3 or 4 of this Covenant.  

     7.   MONETARY DAMAGES.

          Notwithstanding any provision of this Covenant, Buyer may seek and 
obtain monetary damages according to proof for any breach of this Covenant by 
Seller.


                                      2


     8.   JURISDICTION AND VENUE.

          The Buyer and Seller have chosen the law of the State of Delaware to 
resolve any disputes pursuant to the Agreement.  Accordingly, the Buyer, Seller 
and AI hereby agree that any dispute for breach of, arising under, or to 
interpret this Covenant, shall be brought exclusively in state or federal 
counts in the State of Delaware.  Seller, AI and Buyer hereby consent to the 
jurisdiction and venue of the state and federal courts in the State of Delaware 
for all purposes in connection with matters arising in connection with this 
Covenant.

     9.   NOTICES.

          All notices, requests, demands, deliveries and other communications 
hereunder shall be in writing and, except as otherwise specifically provided in 
this Covenant, shall be given by commercial courier service providing proof of 
delivery to the parties at the following addresses (all such notices shall be 
effective upon receipt):

     If to Buyer:        DeCrane Aircraft Holdings, Inc.
                         2361 Rosecrans Avenue, Suite 180
                         El Segundo, California  90245
                         Telephone:  (310) 725-9123
                         Fax: (310) 643-0746

     and a copy to:      Spolin & Silverman 
                         100 Wilshire Boulevard, Suite 940
                         Santa Monica, California   90401
                         Attention:  Stephen A. Silverman, Esq.
                         Telephone:  (310) 576-1221
                         Fax Number:  (310) 576-4844


     If to AI:           Audio International, Inc. 
                         7300 Industry Drive
                         North Little Rock, Arkansas  72117
                         Attention:  President
                         Telephone:  (510) 955-2929
                         Fax: (510) 955-2588


                                      3


     and a copy to:      Spolin & Silverman 
                         100 Wilshire Boulevard, Suite 940
                         Santa Monica, California   90401
                         Attention:  Stephen A. Silverman, Esq.
                         Telephone:  (310) 576-1221
                         Fax Number:  (310) 576-4844

     and                 DeCrane Aircraft Holdings, Inc.
                         2361 Rosecrans Avenue, Suite 180
                         El Segundo, California  90245
                         Attention:  R. Jack DeCrane, Chief Executive Officer
                         Telephone:  (310) 725-9123
                         Fax: (310) 643-0746


     If to Seller:       Rick Marsh
                         4149 Pangeburn Road
                         Heber Springs, Arkansas  72543
                         Telephone:  (501) 362-0029

     With a copy to:     Neil Deininger
                         1405 Pike Avenue
                         North Little Rock, Arkansas  72114      
                         Telephone:  (501) 372-3843
                         Fax:  (501) 375-6298

Any of the parties hereto may, from time to time, change its address for 
receiving notices by giving written notice thereof in the manner outlined above.

     10.  COSTS AND ATTORNEYS' FEES.

          If any action, suit or other proceeding is instituted concerning or 
arising out of this Covenant, the party in whose favor judgment is rendered 
shall recover such party's reasonable costs and attorneys' fees incurred in 
connection with such action.

     11.  GOVERNING LAW.

          This Agreement shall in all respects be construed in accordance with 
and governed by the substantive law of the State of Delaware without regard to 
Delaware law governing choice of law.


                                      4


     12.  HEADINGS.

          The section and paragraph headings contained in this Covenant are for 
convenience only and shall not control or affect the meaning or construction of 
any of the provisions of this Agreement.

     13.  ASSIGNMENT.

          This Covenant may be assigned to any successor of Buyer.

     14.  COUNTERPARTS.

          This Covenant may be executed in any number of counterparts, each of 
which shall be deemed an original, but all of which together shall constitute 
one and the same instrument.

"Buyer"

DeCrane Aircraft Holdings, Inc.


- ----------------------------------------
By:  R. Jack DeCrane, 
     Chief Executive Officer


Audio International, Inc.


- ----------------------------------------
By:  R. Jack DeCrane, 
     Chief Executive Officer


"Seller"


- ----------------------------------------
Rick Marsh


                                      5

EX-10.4

                               COVENANT NOT TO COMPETE

    This Covenant Not to Compete ("Covenant") is between DeCrane Aircraft 
Holdings, Inc. ("Buyer"), Audio International, Inc. ("AI") and Wayne Richie 
("Seller").

    A.   Concurrent with the execution of this Covenant, Seller and the other 
shareholders of Audio International, Inc. are selling to Buyer all of the stock 
of AI pursuant to a Stock Purchase and Sale Agreement (the "Agreement").  If 
Seller were not entering into this Covenant, Buyer would not purchase the stock 
of AI for the purchase price specified in the Agreement.

    B.   Seller, together with the other selling shareholders, has owned and 
controlled AI and Seller has knowledge of AI's business, AI's prospects, AI's 
customers, needs of the customers for AI's products, product specifications for 
AI's products, key employees of AI, each of which (if not otherwise known to 
the public or other persons) Seller acknowledges is either a trade secret 
("Trade Secret") or confidential information ("Confidential Information") of 
AI; and that to the extent that any such Trade Secret or Confidential 
Information is a secret or is confidential, it is owned by and belongs to AI.

    C.   If Seller was to compete with the business of AI, Seller's competition 
is likely to cause material harm to AI and diminish the value of the stock of 
AI being sold by Seller to Buyer pursuant to the Agreement and thereby also 
likely to cause material harm to Buyer.

    D.   The business of AI is worldwide; AI's sales occur throughout the 
United States and in many foreign countries.  If this Covenant were limited to 
the State of Arkansas, its scope would not be sufficient to protect the 
interest of AI.

    Based on the foregoing facts and for good and valuable consideration, 
receipt of which is hereby acknowledged, Seller and Buyer agree as follows:

    1.   TERM OF THIS COVENANT.

         As used in this Covenant, the "Term of this Covenant" shall mean a
period commencing upon the Closing of the Agreement (the "Closing Date") and
expiring on two years after the Closing Date.


                                      1


    2.   COVENANT NOT TO COMPETE.

         For the Term of this Covenant, Seller shall not directly or indirectly 
engage in the design, engineering, manufacture, sale or servicing of those 
products and services presently listed in AI's sales catalogue for use in 
executive or head of state aircraft. 

    3.   COVENANT NOT TO HIRE.

         For the term of this Covenant, Seller may hire any employee of AI 
under only the following circumstances:  (i) for a business from which Seller 
is not restricted pursuant to paragraph 2 of this Covenant and (ii) if such 
person has been terminated by AI prior to the date such person is solicited to 
be hired by Seller or any person who has voluntarily terminated his or her 
employment with AI if such solicitation takes place, after such person has 
voluntarily terminated his or her employment with AI.

    4.   COVENANT NOT TO USE TRADE SECRETS.

         Seller will not use for the benefit of himself or any other person or 
entity any Trade Secret or Confidential Information of AI, except as otherwise 
known to the public at the time of such use, or except to the extent that such 
Confidential Information or Trade Secret constitutes a general body of 
knowledge about the business.

    5.   RECITALS.

         The recitals are a part of this Covenant and shall be used in 
construing and interpreting it.

    6.   IRREPARABLE INJURY.

         Seller acknowledges that (i) the violation by Seller of any of the 
provisions of Sections 2, 3 and 4 of this Covenant will result in irreparable 
injury to Buyer and that Buyer shall be entitled to (i) the issuance of a 
temporary restraining order, (ii) a preliminary injunction and (iii) a 
permanent injunction to prohibit either the continuation or another breach of 
Sections 2, 3 or 4 of this Covenant.


                                      2


    7.   MONETARY DAMAGES.

         Notwithstanding any provision of this Covenant, Buyer may seek and 
obtain monetary damages according to proof for any breach of this Covenant by 
Seller.

    8.   JURISDICTION AND VENUE.

         The Buyer and Seller have chosen the law of the State of Delaware to 
resolve any disputes pursuant to the Agreement.  Accordingly, the Buyer, Seller 
and AI hereby agree that any dispute for breach of, arising under, or to 
interpret this Covenant, shall be brought exclusively in state or federal 
counts in the State of Delaware.  Seller, AI and Buyer hereby consent to the 
jurisdiction and venue of the state and federal courts in the State of Delaware 
for all purposes in connection with matters arising in connection with this 
Covenant.

    9.   NOTICES.

         All notices, requests, demands, deliveries and other communications 
hereunder shall be in writing and, except as otherwise specifically provided in 
this Covenant, shall be given by commercial courier service providing proof of 
delivery to the parties at the following addresses (all such notices shall be 
effective upon receipt):

     If to Buyer:        DeCrane Aircraft Holdings, Inc.
                         2361 Rosecrans Avenue, Suite 180
                         El Segundo, California  90245
                         Telephone:  (310) 725-9123
                         Fax: (310) 643-0746

     and a copy to:      Spolin & Silverman 
                         100 Wilshire Boulevard, Suite 940
                         Santa Monica, California   90401
                         Attention:  Stephen A. Silverman, Esq.
                         Telephone:  (310) 576-1221
                         Fax Number:  (310) 576-4844


                                      3


     If to AI:           Audio International, Inc. 
                         7300 Industry Drive
                         North Little Rock, Arkansas  72117
                         Attention:  President
                         Telephone:  (510) 955-2929
                         Fax: (510) 955-2588

     and a copy to:      Spolin & Silverman 
                         100 Wilshire Boulevard, Suite 940
                         Santa Monica, California   90401
                         Attention:  Stephen A. Silverman, Esq.
                         Telephone:  (310) 576-1221
                         Fax Number:  (310) 576-4844

     and                 DeCrane Aircraft Holdings, Inc.
                         2361 Rosecrans Avenue, Suite 180
                         El Segundo, California  90245
                         Attention:  R. Jack DeCrane, Chief Executive Officer
                         Telephone:  (310) 725-9123
                         Fax: (310) 643-0746


     If to Seller:       Wayne Richie
                         15 Ridgehaven Court
                         Little Rock, Arkansas  72211
                         Telephone:  (501) 224-5252
                         Fax Number:  (501) 228-7311

     With a copy to:     John B. Peace
                         Dover & Dickson
                         425 W. Capitol Avenue, Suite 3700
                         Little Rock, Arkansas  72201
                         Telephone:  (501) 375-9151
                         Fax:  (501) 375-6484

     and                 Neil Deininger
                         1405 Pike Avenue
                         North Little Rock, Arkansas  72114
                         Telephone:  (501) 372-3843
                         Fax:  (501) 375-6298

Any of the parties hereto may, from time to time, change its address for 
receiving notices by giving written notice thereof in the manner outlined above.


                                      4


    10.  COSTS AND ATTORNEYS' FEES.

         If any action, suit or other proceeding is instituted concerning or 
arising out of this Covenant, the party in whose favor judgment is rendered 
shall recover such party's reasonable costs and attorneys' fees incurred in 
connection with such action.

    11.  GOVERNING LAW.

         This Agreement shall in all respects be construed in accordance with 
and governed by the substantive law of the State of Delaware without regard to 
Delaware law governing choice of law.

    12.  HEADINGS.

         The section and paragraph headings contained in this Covenant are for 
convenience only and shall not control or affect the meaning or construction of 
any of the provisions of this Agreement.

    13.  ASSIGNMENT.

         This Covenant may be assigned to any successor of Buyer.  

    14.  COUNTERPARTS.

         This Covenant may be executed in any number of counterparts, each of 
which shall be deemed an original, but all of which together shall constitute 
one and the same instrument.

"Buyer"

DeCrane Aircraft Holdings, Inc.


- ----------------------------------------
By: R. Jack DeCrane, 
    Chief Executive Officer


                                      5


Audio International, Inc.


- ----------------------------------------
By: R. Jack DeCrane, 
    Chief Executive Officer


"Seller"


- ----------------------------------------
Wayne Richie


                                      6

EX-10.5

                                 EMPLOYMENT AGREEMENT


    This Employment Agreement ("Agreement") is made and entered into as of
November 14, 1997 (the "Effective Date") by and between Audio International,
Inc. ("Company") and Robert S. Brown ("Executive"), based on the following
facts:

    A.   Executive has been an employee and has served as Chief Executive
Officer of the Company since 1996.  

    B.   This Employment Agreement is being entered into concurrent with the
closing of a purchase agreement between Company and DAH.

    C.   The Company shall recommend to the Board of Directors of DAH to make a
stock option grant of 8,500 shares of the Common Stock of DAH to Executive on
the terms and conditions of the DAH Stock Option Plan.

    Based on the foregoing facts and circumstances, the Company and Executive
agree as follows:

    1.   EMPLOYMENT.

         1.1  Company hereby employs Executive on a full time basis to perform
all the duties currently performed by Executive in all capacities in which he
currently serves and to serve as Chief Executive Officer of Company, together
with such other duties as may be reasonably assigned by the Board of Directors. 
Company shall cause the Board of Directors of Company to appoint Executive as
Chief Executive Officer of Company.  

         1.2  Executive shall conduct his activities at the Company's offices
at such locations as the Board of Directors may reasonably authorize.

         1.3  Executive shall report to the Chairman of the Company and shall
be subject to the general supervision of the Chairman of the Company. 

         1.4  Executive shall perform his duties on a full time basis and shall
render his services to the Company in a faithful, diligent and competent manner.
During the term of employment, Executive shall not perform services for, or earn
compensation other than income from passive investments from, any other Person. 
As used herein, "Person" shall mean any corporation, partnership, limited
liability company, natural person, government, or any other business entity,
domestic or foreign.  Notwithstanding the foregoing, and subject to the prior
written approval (which approval shall not be unreasonably withheld) of the
Chairman of the


                                      1


Company, Executive may serve as a member of the Board of Directors of other 
companies so long as such activity does not interfere with the Executive's 
obligations pursuant to this Agreement.

    2.   TERM OF EMPLOYMENT.

         2.1  This Agreement shall become effective on the Closing Date. Unless 
sooner terminated pursuant to the provisions of Section 2 of this Agreement, 
Company shall employ Executive commencing on the Effective Date which term 
shall continue until March 31, 2000.

         2.2  The term of employment shall be terminated by the death or 
disability of Executive.  Disability shall mean the inability of Executive to 
provide the services specified in Section 1 for a period of three (3) 
consecutive months.

         2.3  On or before the date six (6) months prior to the date specified 
in Section 2.1, the Company shall give notice to the Executive if the Company 
intends to renew the Executive's employment after the term specified in Section 
2.1.  Any renewal of this Employment Agreement shall be on such terms as are 
agreed between Executive and Company.

    3.   COMPENSATION AND EXPENSES.

         3.1  As full compensation, other than fringe benefits for all services 
rendered by Executive to Company, Executive shall receive an annual salary of 
$225,000.00, paid on the regular pay dates of Company during the period of his 
employment pursuant to Sections 2.1 and 2.2.

         3.2  Company shall withhold from the compensation payable to 
Executive, amounts for taxes and similar matters as required by applicable law, 
rules or regulation of any appropriate government authority.

         3.3  Upon presentation of properly completed expense statements on the 
Company's expense forms, Company shall pay or reimburse Executive for all 
reasonable expenses incurred or paid by him during his employment pursuant to 
this Agreement.  As used in this Section 3.3, the term "reasonable" shall mean 
that such expenses are consistent with those of executives in comparable 
positions with the operating companies of DAH.


                                      2


          3.4  Except for compensation (which is limited to the payments 
specified in Section 3.1), Executive shall be entitled to the same benefits as 
other executives in comparable positions with the operating companies of DAH, 
including medical and health benefits, paid vacation and such other benefits as 
Company in its sole discretion may provide to Executive, or as DAH shall 
provide to executives in comparable positions with the operating companies of 
DAH.

         3.5  The Chairman of the Company shall recommend to the Board of 
Directors of DAH to make a stock option grant of 8,500 shares of the Common 
Stock of DAH to Executive on the terms and conditions of the DAH Stock Option 
Plan and shall make recommendations in future year(s) consistent with (i) other 
executives in comparable positions with operation companies of DAH and (ii) 
comparable performance.

         3.6  During the term of this Agreement, Executive shall retain his
Company automobile.  

    4.   PROTECTION OF CONFIDENTIAL INFORMATION.

         4.1  Executive acknowledges that his employment by Company gives him
knowledge of confidential and proprietary information about the Company, which
may include matters involving costs, markets, customer identification and
contacts, information about customers and vendors, plans for future products and
development, potential patents and methods of operation, which information is
not readily available to and not known by the public (such matters are referred
to herein as "Company Confidential Information").  With respect to Company
Confidential Information:

              (a)  Executive will keep secret and not use or permit any other
                   Person to use for the benefit of any person other than the
                   Company or any of its affiliates any Company Confidential
                   Information.

              (b)  Concurrent with the termination of the employment of
                   Executive, Executive shall deliver to Company all writings
                   in the possession of, or under the control of, the Executive
                   relating to the business of the Company. 

         4.2  In the event of a material breach of any portion of this Section 4
by Executive, the Company shall have the right to have this Section 4 
specifically enforced and to obtain an injunction against Executive.

         4.3  All inventions (including any contribution, improvement, ideas and


                                      3


discoveries, whether or not subject to patent protection) made by Executive 
during his employment by Company, and which are related to the business of 
Company, shall belong to Company.  Executive shall promptly disclose such 
inventions to Company and perform all actions (without expense to Executive) 
reasonably requested by Company in support of his invention and of the 
ownership thereof by the Company.

    5.   NOTICES.

         All notices, requests, consents and other communications required or 
permitted to be given hereunder, shall be in writing and shall be deemed to 
have been duly given if delivered personally or sent by confirmed facsimile and 
mailed first-class, postage prepaid, by registered or certified mail, as 
follows (or to such other address as either party shall designate by notice in 
writing to the other party in accordance herewith):

         If to Company:

              Audio International, Inc.
              c/o DeCrane Aircraft Holdings, Inc.
              2361 Rosecrans Avenue, Suite 180
              El Segundo, California  90245
              Attention: R. Jack DeCrane, Chairman
              Fax: (310) 643-0746

         with a copy to:

              Stephen A. Silverman, Esq.
              c/o Spolin & Silverman
              100 Wilshire Boulevard, Suite 940
              Santa Monica, California  90401
              Fax: (310) 576-4844


         If to Executive:

              Robert S. Brown
              14 Longfellow
              Little Rock, Arkansas 72207
              Telephone: (501) 664-5668


                                      4


         with a copy to:

              Joe S. Mowery
              Giroir, Gregory, Holmes & Hoover
              111 Center Street, Suite 1900
              Little Rock, Arkansas 72201
              Facsimile: (501) 374-2380

    6.   GENERAL.

         6.1  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         6.2  COSTS AND ATTORNEYS' FEES.  If any action, suit or other
proceeding is instituted concerning or arising out of this Agreement, the party
in whose favor judgment is rendered shall recover such party's reasonable costs
and attorneys' fees incurred.

         6.3  HEADINGS.  The section and paragraph headings contained in this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any of the provisions of this Agreement.

                                  "Company"

                                  Audio International, Inc.



                                  --------------------------------------
                                  By:  R. Jack DeCrane,
                                       Chairman


                                  "Executive"


                                  --------------------------------------
                                  Robert S. Brown


                                      5

EX-10.6

                                 EMPLOYMENT AGREEMENT


     This Employment Agreement ("Agreement") is made and entered into as of 
November 14, 1997 (the "Effective Date") by and between Audio International, 
Inc. ("Company") and Rick Marsh ("Executive"), based on the following facts:

     A.   Executive has been an employee and has served as President of the 
Company since 1987.

     B.   This Employment Agreement is being entered into concurrent with the 
closing of a purchase agreement between Company and DAH.

     C.   The Company shall recommend to the Board of Directors of DAH to make 
a stock option grant of 8,500 shares of the Common Stock of DAH to Executive on 
the terms and conditions of the DAH Stock Option Plan.

     Based on the foregoing facts and circumstances, the Company and Executive 
agree as follows:

     1.   EMPLOYMENT.

          1.1  Company hereby employs Executive on a full time basis to perform 
all the duties currently performed by Executive in all capacities in which he 
currently serves and to serve as President of Company, together with such other 
duties as may be reasonably assigned by the Board of Directors.  Company shall 
cause the Board of Directors of Company to appoint Executive as President of 
Company.  

          1.2  Executive shall conduct his activities at the Company's offices 
at such locations as the Board of Directors may reasonably authorize.

          1.3  Executive shall report to the Chairman of the Company and shall 
be subject to the general supervision of the Chairman of the Company. 

          1.4  Executive shall perform his duties on a full time basis and 
shall render his services to the Company in a faithful, diligent and competent 
manner. During the term of employment, Executive shall not perform services 
for, or earn compensation other than income from passive investments from, any 
other Person. As used herein, "Person" shall mean any corporation, partnership, 
limited liability company, natural person, government, or any other business 
entity, domestic or foreign.  Notwithstanding the foregoing, and subject to the 
prior written approval (which approval shall not be unreasonably withheld) of 
the Chairman of the


                                      1


Company, Executive may serve as a member of the Board of Directors of other 
companies so long as such activity does not interfere with the Executive's 
obligations pursuant to this Agreement.

     2.   TERM OF EMPLOYMENT.

          2.1  This Agreement shall become effective on the Closing Date. 
Unless sooner terminated pursuant to the provisions of Section 2 of this 
Agreement, Company shall employ Executive commencing on the Effective Date 
which term shall continue until March 31, 2000.

          2.2  The term of employment shall be terminated by the death or 
disability of Executive.  Disability shall mean the inability of Executive to 
provide the services specified in Section 1 for a period of three (3) 
consecutive months.

          2.3  On or before the date six (6) months prior to the date specified 
in Section 2.1, the Company shall give notice to the Executive if the Company 
intends to renew the Executive's employment after the term specified in Section 
2.1.  Any renewal of this Employment Agreement shall be on such terms as are 
agreed between Executive and Company.

     3.   COMPENSATION AND EXPENSES.

          3.1  As full compensation, other than fringe benefits for all 
services rendered by Executive to Company, Executive shall receive an annual 
salary of $225,000.00, paid on the regular pay dates of Company during the 
period of his employment pursuant to Sections 2.1 and 2.2.

          3.2  Company shall withhold from the compensation payable to 
Executive, amounts for taxes and similar matters as required by applicable law, 
rules or regulation of any appropriate government authority.

          3.3  Upon presentation of properly completed expense statements on 
the Company's expense forms, Company shall pay or reimburse Executive for all 
reasonable expenses incurred or paid by him during his employment pursuant to 
this Agreement.  As used in this Section 3.3, the term "reasonable" shall mean 
that such expenses are consistent with those of executives in comparable 
positions with the operating companies of DAH.


                                      2


          3.4  Except for compensation (which is limited to the payments 
specified in Section 3.1), Executive shall be entitled to the same benefits as 
other executives in comparable positions with the operating companies of DAH, 
including medical and health benefits, paid vacation and such other benefits as 
Company in its sole discretion may provide to Executive, or as DAH shall 
provide to executives in comparable positions with the operating companies of 
DAH.

          3.5  The Chairman of the Company shall recommend to the Board of 
Directors of DAH to make a stock option grant of 8,500 shares of the Common 
Stock of DAH to Executive on the terms and conditions of the DAH Stock Option 
Plan and shall make recommendations in future year(s) consistent with (i) other 
executives in comparable positions with operation companies of DAH and (ii) 
comparable performance.

          3.6  During the term of this Agreement, Executive shall retain his 
Company automobile.  

     4.   PROTECTION OF CONFIDENTIAL INFORMATION.

          4.1  Executive acknowledges that his employment by Company gives him 
knowledge of confidential and proprietary information about the Company, which 
may include matters involving costs, markets, customer identification and 
contacts, information about customers and vendors, plans for future products 
and development, potential patents and methods of operation, which information 
is not readily available to and not known by the public (such matters are 
referred to herein as "Company Confidential Information").  With respect to 
Company Confidential Information:

               (a)  Executive will keep secret and not use or permit any other
                    Person to use for the benefit of any person other than the
                    Company or any of its affiliates any Company Confidential
                    Information.

               (b)  Concurrent with the termination of the employment of
                    Executive, Executive shall deliver to Company all writings
                    in the possession of, or under the control of, the Executive
                    relating to the business of the Company. 

          4.2  In the event of a material breach of any portion of this Section 
4 by Executive, the Company shall have the right to have this Section 4 
specifically enforced and to obtain an injunction against Executive.

          4.3  All inventions (including any contribution, improvement, ideas 
and


                                      3


discoveries, whether or not subject to patent protection) made by Executive 
during his employment by Company, and which are related to the business of 
Company, shall belong to Company.  Executive shall promptly disclose such 
inventions to Company and perform all actions (without expense to Executive) 
reasonably requested by Company in support of his invention and of the 
ownership thereof by the Company.

     5.   NOTICES.

          All notices, requests, consents and other communications required or 
permitted to be given hereunder, shall be in writing and shall be deemed to 
have been duly given if delivered personally or sent by confirmed facsimile and 
mailed first-class, postage prepaid, by registered or certified mail, as 
follows (or to such other address as either party shall designate by notice in 
writing to the other party in accordance herewith):

          If to Company:

               Audio International, Inc.
               c/o DeCrane Aircraft Holdings, Inc.
               2361 Rosecrans Avenue, Suite 180
               El Segundo, California  90245
               Attention: R. Jack DeCrane, Chairman
               Fax: (310) 643-0746

          with a copy to:

               Stephen A. Silverman, Esq.
               c/o Spolin & Silverman
               100 Wilshire Boulevard, Suite 940
               Santa Monica, California  90401
               Fax: (310) 576-4844


          If to Executive:

               Rick Marsh
               4149 Pangeburn Road
               Heber Springs, Arkansas  72543
               Telephone:  (501) 362-0029


                                      4


          with a copy to:

               Joe S. Mowery
               Giroir, Gregory, Holmes & Hoover
               111 Center Street, Suite 1900
               Little Rock, AR 72201
               Facsimile: (501) 374-2380

     6.   GENERAL.

          6.1  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          6.2  COSTS AND ATTORNEYS' FEES.  If any action, suit or other
proceeding is instituted concerning or arising out of this Agreement, the party
in whose favor judgment is rendered shall recover such party's reasonable costs
and attorneys' fees incurred.

          6.3  HEADINGS.  The section and paragraph headings contained in this
Agreement are for convenience only and shall not control or affect the meaning
or construction of any of the provisions of this Agreement.

                                   "Company"

                                   Audio International, Inc.



                                   ---------------------------------------
                                   By:  R. Jack DeCrane,
                                        Chairman


                                   "Executive"



                                   ---------------------------------------
                                   Rick Marsh


                                      5

EX-99.2

                                                 DECRANE AIRCRAFT HOLDINGS, INC.
                                                 2361 Rosecrans Ave., Suite 180
                                                 El Segundo, CA 90245
                                                 TRADED:   NASDAQ:  DAHX



AT THE COMPANY:             AT THE FINANCIAL RELATIONS BOARD:
Robert A. Rankin            Karen Taylor             Moira Conlon
Chief Financial Officer     General Information      Investor/Analyst Contact
(310) 725-9123              (310) 442-0599           (310) 442-0599

- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
NOVEMBER 14, 1997

                DECRANE AIRCRAFT HOLDINGS ACQUIRES AUDIO INTERNATIONAL

EL SEGUNDO, CALIFORNIA, NOVEMBER 14, 1997 -- DeCrane Aircraft Holdings (NASDAQ: 
DAHX), a leading manufacturer of avionics components and an avionics systems 
integrator for the commercial aircraft industry, today announced the closing of 
their previously announced acquisition of Audio International Inc. ("Audio"). 
Terms of the transaction were undisclosed.  

Chairman and Chief Executive Officer, R. Jack DeCrane, stated, "Today's 
announcement represents a milestone in our Company's development and further 
demonstrates our ability to enhance our growth through acquisitions that 
complement our existing systems integration and components operations.  Among 
other strategic and financial benefits, with this purchase we are able to 
expand into the $6 billion corporate business jet services market and, 
simultaneously, add such "blue chip" customers like Bombardier, Dassault, 
Raytheon, Jet Aviation and K-C Aviation to our roster of clients."

Audio International, an Arkansas-based privately held firm founded in 1986, is 
the nation's largest and leading independent provider of premium, customized 
aircraft entertainment and cabin management products and systems for the 
high-end corporate jet market.  With in-house engineering, development and 
manufacturing capabilities, Audio's range of products and services include 
stereo systems, video monitors, amplifiers, chimes and paging devices, 
headphone systems and all passenger switch and other controls, like cabin light 
and climate, used in the aircraft cabin. 


                                    -more-


DECRANE AIRCRAFT HOLDING, INC.
ADD 1

Except for historical information contained herein, this document contains 
forward-looking statements within the meaning of the Private Securities 
Litigation Reform Act of 1995.  These statements involve known and unknown 
risks and uncertainties that may cause the Company's actual results or outcomes 
to be materially different from those anticipated and discussed herein.  
Further, the Company operates in an industry sector where securities values may 
be volatile and may be influenced by regulatory and other factors beyond the 
Company's control.  Important factors that the Company believes might cause 
such differences are discussed in the cautionary statements accompanying the 
forward-looking statements in the Company's Prospectus, dated April 16, 1997, 
filed with the Securities and Exchange Commission and subsequent filings.  In 
assessing forward-looking statements contained herein, readers are urged to 
read carefully all cautionary statements contained in those filings with the 
Securities and Exchange Commission.

DeCrane Aircraft Holdings, Inc. is a leading manufacturer of avionics 
components and a provider of avionics systems integration services in certain 
niche markets of the commercial aircraft industry.  The Company's products and 
services typically are utilized to provide an interface between an aircraft and 
its avionics systems.

For more information about DeCrane Aircraft Holdings, Inc. via facsimile simply 
call 1-800-PRO-INFO and dial client code "DAHX".


                                     # # #