10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2004

Commission File Number 000-22371

DECRANE AIRCRAFT HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	34-1645569
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer 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)
(Not Applicable)
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ýYes   o No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  o Yes   ý No

The number of shares of Registrant’s Common Stock, $.01 par value, outstanding as of November 8, 2004 was 100 shares.

Table of Contents

Part I – Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003
	Consolidated Statements of Operations for the three months and nine months ended September 30, 2004 and 2003
	Consolidated Statements of Stockholder’s Equity (Deficit) for the nine months ended September 30, 2004
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2004 and 2003
	Condensed Notes to Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Results of Operations
	Performance Measures
	Changes in Accounting Principles
	Three months ended September 30, 2004
	Nine months ended September 30, 2004
	Restructuring, Asset Impairment and Other Related Charges
	Liquidity and Capital Resources
	Disclosure of Contractual Obligations and Commitments
	Disclosure About Off-Balance Sheet Commitments and Indemnities
	Recent Accounting Pronouncements
	Special Note Regarding Forward Looking Statements and Risk Factors
Item 3.	Quantitative and Qualitative Disclosure About Market Risk
Item 4.	Controls and Procedures
Part II – Other Information
Item 1.	Legal Proceedings
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.	Exhibits
Signatures

PART I – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

DECRANE AIRCRAFT HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share data)	September 30, 2004			December 31, 2003
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,774		$	6,936
Accounts receivable, net	21,842			21,455
Inventories	55,699			42,981
Prepaid expenses and other current assets	1,254			1,082
Total current assets	81,569			72,454
Property and equipment, net	29,420			30,900
Goodwill	162,430			162,430
Other assets, principally intangibles, net	33,172			38,092
Total assets	$	306,591		$	303,876
Liabilities, Mandatorily Redeemable Preferred Stock and Stockholder’s Equity (Deficit)
Current liabilities:
Short-term borrowings and current portion of long-term debt	$	6,339		$	1,198
Accounts payable	17,147			15,462
Accrued liabilities	18,132			17,890
Income taxes payable	63			—
Total current liabilities	41,681			34,550
Long-term debt	288,890			268,208
Mandatorily redeemable preferred stock	47,303			—
Other long-term liabilities	8,346			5,464
Commitments and contingencies (Note 10)
Mandatorily redeemable preferred stock	—			40,835
Stockholder’s equity (deficit):
Common stock, $.01 par value, 1,000 shares authorized and 100 shares issued and outstanding as of September 30, 2004 and December 31, 2003	—			—
Additional paid-in capital	112,991			112,987
Notes receivable for shares sold	(1,321		)	(1,268		)
Accumulated deficit	(191,163		)	(156,632		)
Accumulated other comprehensive loss	(136		)	(268		)
Total stockholder’s equity (deficit)	(79,629		)	(45,181		)
Total liabilities, mandatorily redeemable preferred stock and stockholder’s equity (deficit)	$	306,591		$	303,876

The accompanying notes are an integral part of the consolidated financial statements.

1

DECRANE AIRCRAFT HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2004			2003			2004			2003
	(Unaudited)
Revenues	$	50,645		$	44,273		$	154,059		$	130,286
Cost of sales	37,645			34,494			121,801			102,086
Gross profit	13,000			9,779			32,258			28,200
Operating expenses:
Selling, general and administrative expenses	7,811			4,787			22,836			21,696
Research and development expenses	1,681			2,211			5,863			7,062
Impairment of goodwill	—			—			—			34,000
Amortization of intangible assets	913			912			2,738			2,738
Total operating expenses	10,405			7,910			31,437			65,496
Income (loss) from operations	2,595			1,869			821			(37,296		)
Other expenses:
Interest expense	9,555			6,546			27,007			18,883
Mandatorily redeemable preferred stock dividends	478			—			4,011			—
Loss on debt and preferred stock restructuring	3,898			—			3,898			—
Other expenses, net	143			134			346			880
Loss from continuing operations before provision for income taxes	(11,479		)	(4,811		)	(34,441		)	(57,059		)
Provision for income (taxes) benefit	(30		)	(143		)	(90		)	10,487
Loss from continuing operations	(11,509		)	(4,954		)	(34,531		)	(46,572		)
Discontinued operations and change in accounting principle:
Loss from discontinued operations, net of tax	—			—			—			(5,650		)
Cumulative effect of change in accounting principle	—			—			—			(13,764		)
Net loss	(11,509		)	(4,954		)	(34,531		)	(65,986		)
Accrued preferred stock dividends	—			(1,601		)	—			(4,621		)
Preferred stock redemption value accretion	—			(117		)	—			(351		)
Net loss applicable to common stockholder	$	(11,509	)	$	(6,672	)	$	(34,531	)	$	(70,958	)

The accompanying notes are an integral part of the consolidated financial statements.

2

DECRANE AIRCRAFT HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statement of Stockholder’s Equity (Deficit)

(In thousands, except share data)	Common Stock			Additional Paid-in Capital		Notes Receivable For Shares Sold			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
	Shares	Amount
Balance, December 31, 2003	100	$	—	$	112,987	$	(1,268	)	$	(156,632	)	$	(268	)	$	(45,181	)
Comprehensive income (loss):
Net loss	—	—		—		—			(34,531		)	—			(34,531		)
Unrealized gain on interest rate swap contract	—	—		—		—			—			132			132
															(34,399		)
Capital contribution	—	—		4		—			—			—			4
Notes receivable interest accrued	—	—		—		(53		)	—			—			(53		)
Balance, September 30, 2004 (Unaudited)	100	$	—	$	112,991	$	(1,321	)	$	(191,163	)	$	(136	)	$	(79,629	)

The accompanying notes are an integral part of the consolidated financial statements.

3

DECRANE AIRCRAFT HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

	Nine Months Ended September 30,
(In thousands)	2004			2003
	(Unaudited)
Cash flows from operating activities:
Net loss	$	(34,531	)	$	(65,986	)
Adjustments to reconcile net loss to net cash used for operating activities:
Cumulative effect of change in accounting principles	—			13,764
Loss from discontinued operations	—			5,650
Depreciation and amortization	9,188			9,401
Mandatorily redeemable preferred stock dividends	4,011			—
Loss on debt and preferred stock restructuring	3,898			—
Long-term debt interest accretion	3,880			—
Noncash portion of restructuring, asset impairment and other related charges	3,073			37,664
Preferred stock redemption value accretion	264			—
Deferred income taxes	—			(11,654		)
Other, net	(12		)	228
Changes in assets and liabilities:
Accounts receivable	(387		)	950
Inventories	(15,669		)	(6,961		)
Prepaid expenses and other assets	(10		)	(734		)
Accounts payable	1,685			1,159
Accrued liabilities	374			(14,902		)
Income taxes payable	161			276
Other long-term liabilities	2,882			3,620
Net cash used for operating activities	(21,193		)	(27,525		)
Cash flows from investing activities:
Net proceeds from sale of Specialty Avionics Group	—			132,800
Capital expenditures	(2,740		)	(3,090		)
Cash paid for acquisition contingent consideration	—			(600		)
Net cash provided by (used for) investing activities	(2,740		)	129,110
Cash flows from financing activities:
Debt borrowings:
Revolving line of credit, net	17,800			17,400
Short-term promissory notes	5,000			—
Debt repayments:
First-lien term debt	—			(129,275		)
Other secured long-term debt	(892		)	(1,600		)
Deferred financing costs	(2,137		)	—
Net cash provided by (used for) financing activities	19,771			(113,475		)
Net cash provided by discontinued operations	—			2,194
Net decrease in cash and cash equivalents	(4,162		)	(9,696		)
Cash and cash equivalents at beginning of period	6,936			12,421
Cash and cash equivalents at end of period	$	2,774		$	2,725

The accompanying notes are an integral part of the consolidated financial statements.

4

DECRANE AIRCRAFT HOLDINGS, INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements

(Unaudited)

Note 1.Summary of Significant Accounting Policies

Basis of Presentation

These consolidated interim financial statements are unaudited.  The Company believes the interim financial statements are presented on a basis consistent with the audited financial statements and include all adjustments necessary for a fair presentation of the financial condition, results of operations and cash flows for such interim periods.  All of these adjustments are normal recurring adjustments.

Preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

The results of operations for interim periods do not necessarily predict the operating results for any other interim period or for the full year.  The consolidated balance sheet as of December 31, 2003 has been derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America as permitted by interim reporting requirements.  These consolidated interim financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited financial statements and related notes included in the Company’s 2003 Form 10-K.  Reclassifications have been made to the financial statements for prior periods to conform to the current year presentation.

Changes in Accounting Principles

SFAS No. 150 Adopted January 1, 2004

Effective January 1, 2004, the Company adopted SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.”  SFAS No. 150 establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity.  SFAS No. 150 requires classification of financial instruments within its scope as a liability, including financial instruments issued in the form of shares that are mandatorily redeemable, because those financial instruments are deemed to be, in essence, obligations of the issuer.  As a result of adopting SFAS No. 150 on January 1, 2004, the 16% mandatorily redeemable preferred stock was reclassified as a liability and the quarterly dividends and redemption value accretion are reflected as charges against pre-tax income.  In periods prior to January 1, 2004, these charges were deducted in arriving at the net income or loss applicable to the Company’s common stockholder.

The following table summarizes the results of operations for the three months and nine months ended September 30, 2003 as if SFAS No. 150 had been in effect as of the beginning of 2003.

	Three Months Ended September 30, 2003						Nine Months Ended September 30, 2003
(In thousands)	As Reported			Pro Forma			As Reported			Pro Forma
	(Unaudited)
Loss from continuing operations	$	(4,954	)	$	(6,672	)	$	(46,572	)	$	(51,544	)
Net loss	(4,954		)	(6,672		)	(65,986		)	(70,958		)

5

The pro forma data reflects preferred stock dividends and redemption value accretion totaling $1,718,000 for three months ended September 30, 2003 and $4,972,000 for the nine months ended September 30, 2003 as charges against income during the periods.

Discontinued Use of Program Accounting Commencing January 1, 2003

As more fully described in “Note 1—Change in Accounting Principle” to the audited financial statements included in the Company’s 2003 Form 10-K, the Company elected to discontinue the use of program accounting for the costs of products manufactured for delivery under production-type contracts.  As a result, certain deferred program costs are no longer included in inventory commencing January 1, 2003.

This change in accounting policy was made after concluding the 2003 fiscal year but was applied retroactively to the beginning of the year, January 1, 2003, as required by generally accepted accounting principles.  As a result of the change, program-related product development costs are now classified as a component of research and development expenses in the consolidated financial statements rather than classified as a component of inventory cost.  The Company restated its results of operations by charging previously inventoried costs totaling $2,211,000 and $7,062,000 for the three months and nine months ended September 30, 2003, respectively, to research and development expense and recording a $13,764,000 charge as of January 1, 2003 to reflect the cumulative effect of the change in accounting principle.

Stock Option Plan

The Company has one stock-based employee compensation plan, which is more fully described in the notes to its audited financial statements.  As permitted under SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company measures compensation expense related to the employee stock option plan utilizing the intrinsic value method as prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations.  No stock-based employee compensation cost is reflected in net income (loss), as all options granted under the plan had an exercise price equal to the value of the underlying common stock on the date of grant.

The following table illustrates the effect on net loss if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.

	Three Months Ended September 30,							Nine Months Ended September 30,
(In thousands)	2004			2003				2004				2003
	(Unaudited)
Net loss, as reported	$	(11,509	)	$	(4,954		)	$		(34,531	)	$	(65,986		)
Less total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects	(81		)	(94			)	(243			)	(282			)
Pro forma net loss	$	(11,590	)	$		(5,048	)	$	(34,774		)	$		(66,268	)

The effect of applying SFAS No. 123 may not be representative of the pro forma effect in future years since additional options may be granted during those future years.

6

Note 2.Restructuring, Asset Impairment and Other Related Charges

During the three months and nine months ended September 30, 2004 and 2003, the Company recorded restructuring, asset impairment and other related charges as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2004		2003		2004		2003
	(Unaudited)
Nature of charges:
Operational Realignment and Facilities Restructuring	$	405	$	—	$	7,306	$	—
Seating Product Line and Furniture Manufacturing Facilities Restructuring	—		—		—		7,132
Goodwill impairment charges	—		—		—		41,500
Total pre-tax charges	$	405	$	—	$	7,306	$	48,632
Business segment recording the charges:
Cabin Management	$	73	$	—	$	1,701	$	41,132
Systems Integration	75		—		5,348		—
Corporate	257		—		257		—
Total charged to continuing operations	405		—		7,306		41,132
Specialty Avionics (discontinued operations)	—		—		—		7,500
Total pre-tax charges	$	405	$	—	$	7,306	$	48,632
Charged to operations:
Cost of sales	$	147	$	—	$	6,230	$	6,573
Selling, general and administrative expenses	258		—		1,076		559
Impairment of goodwill	—		—		—		34,000
Total charged to continuing operations	405		—		7,306		41,132
Charged to discontinued operations	—		—		—		7,500
Total pre-tax charges	$	405	$	—	$	7,306	$	48,632
Components of charges:
Noncash charges	$	95	$	—	$	3,073	$	37,664
Cash charges	310		—		4,233		3,468
Total charged to continuing operations	405		—		7,306		41,132
Charged to discontinued operations (noncash)	—		—		—		7,500
Total pre-tax charges	$	405	$	—	$	7,306	$	48,632

7

Operational Realignment and Facilities Consolidation

During the second quarter of fiscal 2004, the Company adopted plans to restructure the operations of its Cabin Management and Systems Integration groups.  The restructuring plan for Cabin Management involves the realignment of production between its manufacturing facilities and the relocation and consolidation of the group’s headquarters to Wichita, Kansas.  The plan for Systems Integration involves combining the manufacturing activities of two facilities into a single facility and eliminating some product offerings and service capabilities resulting in a partial downsizing of certain operations.  These actions are designed to reduce engineering, production and inventory carrying costs by supporting fewer manufacturing locations and product offerings.  In connection with these actions, the Company recorded pre-tax charges to operations totaling $7,306,000 through September 30, 2004, including $405,000 during the third quarter, comprised of the following:

•Lease Termination and Related Charges.  Lease termination and other related charges are comprised of the net losses expected to be incurred under the existing long-term lease agreements for facilities permanently vacated.  The losses have been reduced by the expected sublease income.  These expected losses were based on estimated current market rates and anticipated dates that these facilities are subleased.  If market rates decrease or should it take longer than expected to sublease these facilities, the actual loss could exceed these estimates.  Other related charges include the write-off of leasehold improvements related to the vacated facilities.

•Write-Down of Surplus Inventory.  Inventory was written down to reflect its net realizable value for quantities on hand exceeding current and forecast order backlog requirements related to the curtailed product offerings.

•Severance and Other Compensation Costs.  The Company’s total workforce will be reduced by 25 employees, or 2%, from December 31, 2003 levels when the restructuring is completed during the fourth quarter of fiscal 2004.

•Other Restructuring Charges.  Other charges pertain to legal, travel and relocation costs.

The Company expects to incur additional restructuring-related expenses of approximately $1,600,000 during the fourth quarter of fiscal 2004 to complete the restructuring plans.  These expenses, which are primarily relocation and travel costs, will be expensed as incurred.

The components of the restructuring, asset impairment and other related charges are as follows:

(In thousands)	Total Charges								Balance at September 30, 2004
			Amounts Incurred
			Noncash			Cash
	(Unaudited)
Lease termination and other related charges	$	3,044	$	(102	)	$	(113	)	$	2,829
Excess inventory write-downs	2,906		(2,906		)	—			—
Severance and other compensation costs	538		—			(81		)	457
Other restructuring charges	818		(65		)	(502		)	251
Total	7,306		$	(3,073	)	$	(696	)	$	3,537
Other restructuring-related charges to be incurred	1,578
Total expected restructuring charges	$	8,884

Future cash payments, which will extend to 2013 because of lease termination costs, will be funded from existing cash balances and internally generated cash from operations.

8

Seating Product Line and Furniture Manufacturing Facilities Restructuring

During the second quarter of fiscal 2003, the Company consolidated its seating product line offerings and adopted a restructuring plan to down-size a furniture manufacturing facility in response to continuing weakness in the business, VIP and head-of-state aircraft market.  These actions were designed to reduce engineering, production and inventory carrying costs by supporting fewer product offerings and achieve profitability at the furniture manufacturing facility based on its lower production levels.  In connection with these actions, the Company recorded pre-tax charges to operations totaling $7,132,000, comprised of the following:

•Lease Termination and Related Charges.  Lease termination charges reflect lease cancellation costs for the facilities vacated and possession returned to the lessor in connection with down-sizing a furniture manufacturing facility.  Other related charges include the write-off of leasehold improvements related to the vacated facilities.

•Excess Inventory Write-Downs.  Inventory was written down by $3,073,000 to reflect its net realizable value for quantities on hand exceeding current and forecast order backlog requirements related to the curtailed seating product offerings.

•Severance and Other Compensation Costs.  The Company reduced its total workforce at the down-sized facility by 49 employees, or 37%, from December 31, 2002 levels.

The components of the restructuring, asset impairment and other related charges are as follows:

(In thousands)	Total Charges								Balance at December 31, 2003
			Amounts Incurred
			Noncash			Cash
Lease termination and other related charges	$	3,876	$	(591	)	$	(3,285	)	$	—
Excess inventory write-downs	3,073		(3,073		)	—			—
Severance and other compensation costs	183		—			(183		)	—
Total	$	7,132	$	(3,664	)	$	(3,468	)	$	—

The restructuring activities were completed during 2003.

Goodwill Impairment Charges

As a result of the weakness in the business, VIP and head-of-state aircraft market in 2003 and the decision to down-size a furniture manufacturing facility, the goodwill associated with the furniture manufacturing reporting unit was tested for recoverability in June 2003 and found to be impaired.  As a result, $34,000,000 of goodwill associated with the reporting unit was written off and charged to operations during the three months ended June 30, 2003.

As described in Note 3, on March 14, 2003, the Company entered into a definitive agreement to sell its equity interests in the subsidiaries comprising its Specialty Avionics Group for $140,000,000 in cash.  Based upon the fair value of the group implied in the definitive agreement, the Company determined that the carrying value of the group’s net assets was not fully recoverable.  As a result, the Company recorded a goodwill impairment charge of $7,500,000 during the three months ended March 31, 2003 to reduce the carrying value to estimated net realizable value.

9

Note 3.Disposition of Specialty Avionics Group

On May 23, 2003, the Company consummated the sale of the subsidiaries comprising its Specialty Avionics Group for $140,000,000 in cash.  Based upon the fair value of the group implied in the definitive agreement which was signed during the first quarter of fiscal 2003, the Company determined that the carrying value of the group’s net assets was not fully recoverable.  As required by SFAS No. 142, the Company recorded a goodwill impairment charge of $7,500,000 during the first quarter of fiscal 2003 to reduce the carrying value to the estimated net realizable value established by the definitive agreement.  The Company recorded a modest gain on the sale, based on the actual financial position of the group on the date of sale.  As a result of the sale, the Specialty Avionics Group is presented as a discontinued operation in the accompanying consolidated financial statements.

In accordance with the Financial Accounting Standards Board’s Emerging Issues Task Force Issue No. 87-24, “Allocation of Interest to Discontinued Operations,” as amended, interest expense includes interest on debt that was assumed by the buyer as well as interest on the $130,723,000 of debt that was required to be repaid as a result of the sale.  Interest expense was based on the historical interest rates charged during each of the periods.  In addition, and also in accordance with EITF 87-24, costs and expenses exclude the allocation of general corporate overhead.

The following tables summarize the results of operations and cash flows of the Specialty Avionics Group for the five months ended May 23, 2003, the date of sale.

(In thousands)	Five Months Ended May 23, 2003
	(Unaudited)
Revenues	$	36,595
Operating expenses:
Costs and expenses	30,128
Impairment of goodwill	7,500
Amortization of intangible assets	878
Total operating expenses	38,506
Loss from operations	(1,911		)
Other expenses:
Interest expense:
Debt required to be repaid with proceeds from sale	2,952
Debt obligations assumed by the buyer	270
Other expenses, net	153
Pre-tax income (loss)	(5,286		)
Provision for income taxes	1,053
Loss from operations, net of tax	(6,339		)
Gain on sale, net of tax	689
Net loss from discontinued operations	$	(5,650	)

10

(In thousands)	Five Months Ended May 23, 2003
	(Unaudited)
Cash Flows Provided By (Used For):
Operating activities	$	3,760
Investing activities	(902		)
Financing activities	(649		)
Net increase in cash and cash equivalents	(13		)
Effect of foreign currency translation on cash	(2		)
Net cash provided by discontinued operations	$	2,194

Note 4.Inventories

Inventories are comprised of the following as of September 30, 2004 and December 31, 2003:

(In thousands)	September 30, 2004		December 31, 2003
	(Unaudited)
Raw materials	$	28,683	$	30,414
Work-in-process	21,045		6,817
Finished goods	2,130		1,693
Costs and estimated earnings in excess of billings on uncompleted contracts	3,841		4,057
Total inventories	$	55,699	$	42,981

Total costs and estimated earnings on all uncompleted contracts as of September 30, 2004 and December 31, 2003 are comprised of the following:

(In thousands)	September 30, 2004			December 31, 2003
	(Unaudited)
Costs incurred on uncompleted contracts	$	17,229		$	71,824
Estimated earnings recognized	855			77,782
Total costs and estimated earnings	18,084			149,606
Less billings to date	(14,355		)	(145,661		)
Net	$	3,729		$	3,945
Balance sheet classification:
Asset – Costs and estimated earnings in excess of billings	$	3,841		$	4,057
Liability – Billings in excess of costs and estimated earnings (Note 6)	(112		)	(112		)
Net	$	3,729		$	3,945

11

Note 5.Other Assets, Principally Intangibles

Other assets are comprised of the following as of September 30, 2004 and December 31, 2003:

(In thousands)	September 30, 2004		December 31, 2003
	(Unaudited)
Identifiable intangible assets with finite useful lives	$	22,717	$	25,455
Deferred financing costs	9,910		11,812
Other non-amortizable assets	545		825
Total other assets	$	33,172	$	38,092

In connection with the debt restructuring described in Note 7, the Company recorded a noncash charge of $1,705,000 during the three months ended September 30, 2004 to write-off deferred financing costs associated with the portion of the existing notes exchanged for new notes.

Identifiable Intangible Assets with Finite Useful Lives

Identifiable intangible assets with finite useful lives are comprised of the following as of September 30, 2004 and December 31, 2003:

	September 30, 2004 (Unaudited)							December 31, 2003
(In thousands)	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
FAA certifications	$	22,272	$	(7,336	)	$	14,936	$	22,272	$	(6,222	)	$	16,050
Engineering drawings	7,645		(2,668		)	4,977		7,645		(2,286		)	5,359
Other identifiable intangibles	11,345		(8,541		)	2,804		11,345		(7,299		)	4,046
Total identifiable intangibles	$	41,262	$	(18,545	)	$	22,717	$	41,262	$	(15,807	)	$	25,455

Estimated annual amortization expense for all identifiable intangible assets with finite useful lives for the five-year period ending December 31, 2008 is as follows: 2004 – $3,644,000; 2005 – $3,477,000; 2006 – $2,275,000; 2007 – $2,175,000; and 2008 – $2,171,000.

Note 6.Accrued Liabilities

Accrued liabilities are comprised of the following as of September 30, 2004 and December 31, 2003:

(In thousands)	September 30, 2004			December 31, 2003
	(Unaudited)
Salaries, wages, compensated absences and payroll related taxes	$		5,185	$	4,017
Accrued interest	3,724			4,969
Current portion of accrued product warranty obligations	2,492			2,064
Customer advances and deposits	2,337			3,147
Billings in excess of costs and estimated earnings on uncompleted contracts	112			112
Other accrued liabilities	4,282			3,581
Total accrued liabilities	$	18,132		$	17,890

12

Note 7.Short-Term Borrowings and Long-Term Debt

Short-term borrowings and long-term debt is comprised of the following amounts as of September 30, 2004 and December 31, 2003:

(In thousands)	September 30, 2004				December 31, 2003
	(Unaudited)
Short-term borrowings:
13.5% senior unsecured promissory notes payable to related parties	$		5,000		$	—
Long-term debt:
First-lien credit facility:
Term debt	80,521				80,521
Revolving line of credit	17,800				—
Second-lien term debt	81,902				80,067
17% senior discount notes	67,045				—
Capital lease obligations and other debt, secured by property and equipment	7,961				8,818
12% senior subordinated notes	35,000				100,000
Total short-term borrowings and long-term debt	295,229				269,406
Less short-term borrowings and current portion of long-term debt	(6,339			)	(1,198			)
Long-term debt, less current portion	$	288,890			$		268,208

During the third quarter of fiscal 2004, holders of $65,000,000 of the Company’s 12% senior subordinated notes due September 30, 2008 (the “existing notes”) exchanged their notes for new 17% senior discount notes due September 30, 2008 (the “new notes”).  The new notes do not bear cash interest and have an initial accreted value equal to the principal amount of the notes exchanged.  The new notes accrete in value at a 17% annual rate and will have a $128,772,000 aggregate accreted principal value at maturity.  The new notes are senior unsecured obligations of the Company and are guaranteed by its subsidiaries.  Except for the changes in the interest rate, payment and ranking described above, the new notes have terms substantially identical to those contained in the existing notes, although covenants limiting the incurrence of indebtedness, the granting of liens and the making of restricted payments are more restrictive.

In addition to the interest accretion on the 17% senior discount notes, a portion of the interest charged on the second-lien term debt is also pay-in-kind or “accreted” interest, payable at maturity.  An additional $2,667,000 and $3,880,000 of interest accreted to the principal balances of the notes and term debt during the three months and nine months ended September 30, 2004, respectively.

In September 2004, the Company received the proceeds from the issuance of 13.5% senior unsecured promissory notes in the aggregate principle amount of $5,000,000 to DLJ Merchant Banking Partners II, L.P. and affiliated funds, who are also stockholders of DeCrane Holdings and, as a result, related parties (see Note 16 to the audited financial statements included in the Company’s 2003 Form 10-K for additional information on the related party relationship).  Unless extended, the notes, plus accrued interest, are due on November 29, 2004.  The notes contain covenants identical to those in the new 17% notes.

As of September 30, 2004, the Company had irrevocable standby letters of credit in the amount of $318,000 issued and outstanding under the first-lien credit facility, which reduces borrowings available under the $24,000,000 revolving line of credit.

13

Note 8.Mandatorily Redeemable Preferred Stock

As more fully described in “Note 1—Changes in Accounting Principles,” the Company adopted the provisions of SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” as of January 1, 2004.

The table below summarizes the increase in mandatorily redeemable preferred stock during the nine months ended September 30, 2004.

(In thousands, except share and per share data)	Number of Shares	Mandatory Redemption Value		Unamortized Issuance Discount			Net Book Value
Balance, December 31, 2003	432,919	$	43,292	$	(2,457	)	$	40,835
Preferred stock dividends	40,113	4,011		—			4,011
Redemption value accretion	—	—		264			264
Write-off of unamortized discount	—	—		2,193			2,193
Balance, September 30, 2004 (Unaudited)	473,032	$	47,303	$	—		$	47,303
Per share liquidation value as of September 30, 2004 (Unaudited)		$	100.00

During the third quarter of fiscal 2004, the Company amended the terms of its 16% senior preferred stock.  The amended terms provide that further preferred stock dividends, if any, accrue at rates dependent on a specified financial ratio or if certain triggering events occur.  All dividends accrued through the amendment date and future dividends, if any, are not payable until redemption.  The amendment accelerates the mandatory redemption date from March 31, 2009 to December 31, 2008 and also adds several restrictive covenants.

The holders of the preferred stock were issued 348,945 shares of DeCrane Holdings common stock in connection with the amendment.  The common stock had a nominal fair market value on the issuance date and was therefore recorded at its $0.01 per share par value.  In connection with preferred stock restructuring, the Company recorded a noncash charge of $2,193,000 during the three months ended September 30, 2004 to write-off the unamortized issuance discount associated with the initial issuance of the preferred stock.

Preferred Stock Dividends

Future preferred stock dividends, if any, are dependent, in part, upon a defined leverage ratio the Company achieves as of each quarterly testing date.  Depending on the ratio achieved, and provided certain triggering events have not occurred, dividends for the succeeding quarter accrue at a 0%, 4% or 16% annual rate.  If certain triggering events occur, such as failure to discharge any mandatory redemption obligations or comply with certain restrictive covenants and the like, dividends accrue at a 16% annual rate.  Based upon the leverage ratio achieved as of September 30, 2004, no dividends will accrue on the preferred stock from the amendment date through December 31, 2004.

14

Note 9.Income Taxes

The components of income (loss) before income taxes and cumulative effect of change in accounting principle and the provisions for income tax benefit are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2004			2003			2004			2003
	(Unaudited)
Pre-tax income (loss) reported by:
Continuing operations	$	(11,479	)	$	(4,811	)	$	(34,441	)	$	(57,059	)
Discontinued operations	—			—			—			(5,286		)
Consolidated pre-tax loss	$	(11,479	)	$	(4,811	)	$	(34,441	)	$	(62,345	)
Total provision for income taxes (benefit):
Income tax benefit based on pre-tax loss	$	(5,521	)	$	(1,188	)	$	(12,664	)	$	(23,821	)
Net deferred tax assets valuation allowance	5,551			1,331			12,754			14,387
Net provision for income taxes (benefit)	$	30		$	143		$	90		$	(9,434	)
Allocation of total provision:
Continuing operations	$	30		$	143		$	90		$	(10,487	)
Discontinued operations	—			—			—			1,053
Net provision for income taxes (benefit)	$	30		$	143		$	90		$	(9,434	)

For the three months and nine months ended September 30, 2004, the provision for income taxes, based on the reported consolidated pre-tax loss, differs from the amount determined by applying the applicable U.S. statutory federal rate to the pre-tax loss primarily due to the effects of state and foreign income taxes and non-deductible expenses, principally mandatorily redeemable preferred stock dividends due to the adoption of SFAS No. 150 effective January 1, 2004 (Note 1).

For the three months and nine months ended September 30, 2003, the provision for income taxes, based on the reported consolidated pre-tax loss, differs from the amount determined by applying the applicable U.S. statutory federal rate to the pre-tax loss primarily due to the effects of state and foreign income taxes and non-deductible expenses, principally the non-deductible portion of goodwill impairment charges.

As more fully described in Note 11 to the audited financial statements included in the Company’s 2003 Form 10-K, the Company had a net deferred tax asset of $19,528,000 fully offset by a valuation allowance of the same amount as of December 31, 2003.

As required by SFAS No. 109, the Company evaluated its deferred tax assets for expected recoverability based on the nature of the item, the associated taxing jurisdictions, the applicable expiration dates and future taxable income forecasts that would impact utilization.  Since there is no loss carry back potential and the Company does not have any tax planning strategies to assure recoverability, the only possibility for recovery of the net deferred assets is future taxable income.  Since there have been prior year losses, the Company believes it was not prudent to rely on future taxable income as the means to support the carrying value of the net deferred tax assets.  Based upon the results of operations for the nine months ended September 30, 2004, the Company determined that an additional $12,754,000 valuation allowance was required as of that date, $5,551,000 of which is applicable to the three-month period.

15

Note 10.Commitments and Contingencies

Litigation

Raytheon Aircraft Company (“Raytheon”) has filed a complaint against the Company and one of its subsidiaries in the state court of Kansas with respect to alleged product liability related to certain aircraft seats sold to Raytheon by the Company’s subsidiary.  The complaint does not specify the amount of damages claimed by Raytheon, but the amount could be material.

This action has just been served on the Company and no discovery has commenced; accordingly, management has not had an opportunity to determine the likely outcome of this claim.  However, based on the allegations in the complaint and the facts currently available, management does not know of a basis which would result in this action having a material adverse effect on the Company’s business, consolidated financial position, results of operations or cash flows.  Further, the Company’s subsidiary may be indemnified by the entity from which it acquired the seat product line.

The Company and its subsidiaries are also involved in other routine legal and administrative proceedings incident to the normal conduct of business.  Management believes the ultimate disposition of all such matters will not have a material adverse effect on the Company’s business, consolidated financial position, results of operations or cash flows.

Funding of DeCrane Holdings Preferred Stock Obligations

The Company is a wholly owned subsidiary of DeCrane Holdings whose capital structure also includes mandatorily redeemable preferred stock.  Since the Company is DeCrane Holdings’ only operating subsidiary and source of cash, the Company may be required to fund DeCrane Holdings’ preferred stock dividend and redemption obligations in the future.

Preferred stock dividends, if any, are dependent upon the leverage ratio (as defined) achieved as of each quarterly testing date.  Depending on the ratio achieved, dividends for the succeeding quarter accrue at a 0%, 3.5% or 14% annual rate.  Based upon the leverage ratio as of September 30, 2004, no dividends will accrue on the preferred stock during the three months ending December 31, 2004.  All future dividends, if any, are not payable until September 30, 2009, the mandatory preferred stock redemption date.  The DeCrane Holdings preferred stock has a total redemption value of $77,172,000 as of September 30, 2004, including accumulated dividends.

16

Note 11.Business Segment Information

The Company supplies products and services to the business, VIP and head-of-state aircraft market within the aerospace industry.  The Company’s subsidiaries are organized into two groups, each of which is a strategic business that develops, manufactures and sells distinct products and services.  The groups and a description of their businesses are as follows:

•Cabin Management – manufactures interior cabin components, including cabin interior furnishings, cabin management systems, seating and composite components;

•Systems Integration – manufactures auxiliary fuel systems and auxiliary power units, provides system integration services, provides aircraft completion and refurbishment services and is a Boeing Business Jet authorized service center.

In prior periods, the Company’s Specialty Avionics Group was a third strategic business for which segment information was provided.  As a result of the sale of the Specialty Avionics Group, this group is reflected as a discontinued operation and segment information for prior periods has been restated.

Management utilizes more than one measurement to evaluate group performance and allocate resources; however, management considers Adjusted EBITDA, as defined, to be the primary measurement of a group’s overall core economic performance and return on invested capital.  Management also uses Adjusted EBITDA in the Company’s annual budget and planning process for future periods, as one of the decision-making criteria for funding discretionary capital expenditures and product development programs and as the measure in determining the value of acquisitions and dispositions.  The board of directors uses Adjusted EBITDA as one of the performance metrics for determining the amount of bonuses awarded pursuant to the Company’s cash incentive bonus plan and as an indicator of enterprise value used in determining the exercise price of stock options granted and the acceleration of stock option vesting pursuant to the Company’s incentive stock option plan.

Management defines Adjusted EBITDA as earnings, determined using program accounting for product development costs, before interest, income taxes, depreciation and amortization, restructuring, asset impairment and other related charges, acquisition related charges not capitalized and other noncash and nonoperating charges.  Management believes the presentation of this measure is relevant and useful to investors because it allows investors and analysts to view group performance in a manner similar to the method used by management, helps improve their ability to understand the Company’s core segment performance, adjusted for items management believes are unusual, and makes it easier to compare the Company’s results with other companies that have different financing, capital structures and tax rates.  In addition, management believes these measures are consistent with the manner in which its lenders and investors measure the Company’s overall performance and liquidity, including its ability to service debt and fund discretionary capital expenditure and product development programs.

The financial measure Adjusted EBITDA, as defined, excludes certain charges reflected in the Company’s financial statements which are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  However, the Company’s presentation of Adjusted EBITDA is in accordance with the GAAP requirements of SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” which requires the Company to report the primary measure of segment performance used by management to evaluate and manage its businesses.  The Company’s method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance GAAP, such as net income (loss), the nearest comparable GAAP financial measure.  A reconciliation of Adjusted EBITDA to net income (loss) is included herein to clarify the differences between these financial measures.

17

The accounting policies of the groups are substantially the same as those described in the summary of significant accounting policies in Note 1 to the audited financial statements included in the Company’s 2003 Form 10-K.  Some transactions are recorded at the Company’s corporate headquarters and are not allocated to the groups, such as most of the Company’s cash and cash equivalents, debt and related net interest expense, corporate headquarters costs and income taxes.

The tables below summarize selected financial data by business segment.

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2004			2003			2004			2003
	(Unaudited)
Revenues:
Cabin Management	$	39,429		$	29,655		$	114,757		$	89,910
Systems Integration	12,221			13,807			42,132			40,657
Inter-group elimination (1)	(1,005		)	811			(2,830		)	(281		)
Consolidated totals	$	50,645		$	44,273		$	154,059		$	130,286
Adjusted EBITDA (as defined):
Cabin Management	$	7,675		$	3,909		$	17,297		$	12,769
Systems Integration	1,784			3,698			7,212			10,035
Corporate (2)	(1,738		)	(1,133		)	(3,944		)	(4,640		)
Inter-group elimination (3)	1			(1		)	2			111
Consolidated totals	7,722			6,473			20,567			18,275
Reconciling items (4)	(19,231		)	(11,427		)	(55,098		)	(84,261		)
Net loss	$	(11,509	)	$	(4,954	)	$	(34,531	)	$	(65,986	)

(In thousands)	September 30, 2004			December 31, 2003
	(Unaudited)
Total assets (as of period end):
Cabin Management	$	239,575		$	224,116
Systems Integration	52,763			58,395
Corporate (5)	14,283			21,456
Inter-group elimination (6)	(30		)	(91		)
Consolidated totals	$	306,591		$	303,876

(1)Inter-group sales are accounted for at prices comparable to sales to unaffiliated customers, and are eliminated in consolidation.

(2)Reflects the Company’s corporate headquarters costs and expenses not allocated to the groups.

(3)Reflects elimination of the effect of inter-group profits in inventory.

18

(4)Adjusted EBITDA (as defined) excludes the following income and (expenses) reflected in the Company’s financial statements which are prepared in accordance with generally accepted accounting principles:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2004			2003			2004			2003
	(Unaudited)
Depreciation and amortization of long-lived assets (a)	$	(2,247	)	$	(2,383	)	$	(6,850	)	$	(7,350	)
Adjustment to reflect program costs as research and development expenses and nonrecurring program start-up costs (b)	(2,445		)	(2,211		)	(5,542		)	(7,062		)
Restructuring, asset impairment and other related charges	(405		)	—			(7,306		)	(41,132		)
Acquisition related charges not capitalized	(30		)	(10		)	(48		)	(27		)
Interest expense	(9,555		)	(6,546		)	(27,007		)	(18,883		)
Mandatorily redeemable preferred stock dividends	(478		)	—			(4,011		)	—
Loss on debt and preferred stock restructuring	(3,898		)	—			(3,898		)	—
Other expenses, net	(143		)	(134		)	(346		)	(880		)
Provision for income (taxes) benefit	(30		)	(143		)	(90		)	10,487
Income (loss) from discontinued operations	—			—			—			(5,650		)
Cumulative effect of change in accounting principle	—			—			—			(13,764		)
Total reconciling items	$	(19,231	)	$	(11,427	)	$	(55,098	)	$	(84,261	)

(a)Reflects depreciation and amortization of long-lived assets but excludes amortization of deferred financing costs, which are classified as a component of interest expense, as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2004		2003		2004		2003
	(Unaudited)
Depreciation and amortization of long-lived assets	$	2,247	$	2,383	$	6,850	$	7,350
Amortization of deferred financing costs	757		676		2,338		2,051
Consolidated depreciation and amortization	$	3,004	$	3,059	$	9,188	$	9,401

(b)Under program accounting, which the Company is required to use for determining covenant compliance under its credit agreements, certain product development and nonrecurring program start-up costs incurred in connection with specific contracted programs are deferred and charged to cost of sales as revenues related to the program are recognized.  For financial reporting purposes, these costs are charged to expense as incurred.  This adjustment reflects the net difference between these two methods of accounting.

(5)Reflects the Company’s corporate headquarters assets, excluding investments in and notes receivable from subsidiaries.

(6)Reflects elimination of inter-group receivables and profits in inventory as of period end.

19

Note 12.Supplemental Condensed Consolidating Financial Information

In conjunction with the 12% and 17% notes described in Note 7, the following condensed consolidating financial information is presented segregating the Company, as the issuer, and the guarantor and non-guarantor subsidiaries.  The accompanying financial information in the guarantor subsidiaries column reflects the financial position, results of operations and cash flows for those subsidiaries guaranteeing the notes.  The non-guarantor subsidiaries are companies within the Specialty Avionics Group which was sold in May 2003 and are therefore classified as a component of discontinued operations.

The guarantor subsidiaries are wholly-owned subsidiaries of the Company and their guarantees are full and unconditional on a joint and several basis.  There are no restrictions on the ability of the guarantor subsidiaries to transfer funds to the issuer in the form of cash dividends, loans or advances.  Separate financial statements of the guarantor subsidiaries are not presented because management believes that such financial statements would not be material to investors.  Investments in subsidiaries in the following condensed consolidating financial information are accounted for under the equity method of accounting.  Consolidating adjustments include the following:

(1)Elimination of investments in subsidiaries.

(2)Elimination of intercompany accounts.

(3)Elimination of equity in earnings of subsidiaries.

20

Balance Sheets

	September 30, 2004 (Unaudited)
(In thousands)	Issuer				Guarantor Subsidiaries					Consolidating Adjustments					Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$		1,915		$	859				$			—		$	2,774
Accounts receivable, net	—				21,842					—					21,842
Inventories	—				55,699					—					55,699
Other current assets	75				1,179					—					1,254
Total current assets	1,990				79,579					—					81,569
Property and equipment, net	793				28,627					—					29,420
Other assets, principally goodwill	11,500				184,102					—					195,602
Investments in subsidiaries	78,555				—					(78,555				)(1)	—
Intercompany receivables	228,878				55,209					(284,087				)(2)	—
Total assets	$	321,716			$	347,517				$		(362,642		)	$		306,591
Liabilities and Stockholder’s Equity (Deficit)
Current liabilities:
Current portion of long-term debt	$		5,046		$		1,293			$		—			$		6,339
Other current liabilities	7,967				27,375					—					35,342
Total current liabilities	13,013				28,668					—					41,681
Long-term debt, less current portion	282,327				6,563					—					288,890
Mandatorily redeemable preferred stock	47,303				—					—					47,303
Intercompany payables	55,209				228,878					(284,087				)(2)	—
Other long-term liabilities	3,357				4,989					—					8,346
Stockholder’s equity (deficit):
Paid-in capital	111,670				151,492					(151,492				)(1)	111,670
Retained earnings (deficit)	(191,163			)	(72,937				)	72,937				(1)	(191,163				)
Accumulated other comprehensive loss	—				(136				)	—					(136				)
Total stockholder’s equity (deficit)	(79,493			)	78,419					(78,555				)	(79,629				)
Total liabilities and stockholder’s equity (deficit)	$	321,716			$			347,517		$	(362,642			)	$			306,591

21

	December 31, 2003
(In thousands)	Issuer			Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$	6,540		$	396		$	—		$	6,936
Accounts receivable, net	—			21,455			—			21,455
Inventories	—			42,981			—			42,981
Other current assets	254			828			—			1,082
Total current assets	6,794			65,660			—			72,454
Property and equipment, net	1,047			29,853			—			30,900
Other assets, principally goodwill	13,615			186,907			—			200,522
Investments in subsidiaries	85,668			—			(85,668		)(1)	—
Intercompany receivables	261,631			100,642			(362,273		)(2)	—
Total assets	$	368,755		$	383,062		$	(447,941	)	$	303,876
Liabilities, Mandatorily Redeemable Preferred Stock and Stockholder’s Equity (Deficit)
Current liabilities:
Current portion of long-term debt	$	11		$	1,187		$	—		$	1,198
Other current liabilities	8,532			24,820			—			33,352
Total current liabilities	8,543			26,007			—			34,550
Long-term debt, less current portion	260,654			7,554			—			268,208
Intercompany payables	100,642			261,631			(362,273		)(2)	—
Other long-term liabilities	2,994			2,470			—			5,464
Mandatorily redeemable preferred stock	40,835			—			—			40,835
Stockholder’s equity (deficit):
Paid-in capital	111,719			151,492			(151,492		)(1)	111,719
Retained earnings (deficit)	(156,632		)	(65,824		)	65,824		(1)	(156,632		)
Accumulated other comprehensive loss	—			(268		)	—			(268		)
Total stockholder’s equity (deficit)	(44,913		)	85,400			(85,668		)	(45,181		)
Total liabilities, mandatorily redeemable preferred stock and stockholder’s equity (deficit)	$	368,755		$	383,062		$	(447,941	)	$	303,876

22

Statements of Operations

	Three Months Ended September 30, 2004 (Unaudited)
(In thousands)	Issuer			Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	—		$	50,645		$	—		$		50,645
Cost of sales	—			37,645			—			37,645
Gross profit	—			13,000			—			13,000
Operating and other expenses (income):
Selling, general and administrative expenses	2,121			5,690			—			7,811
Research and development expenses	—			1,681			—			1,681
Amortization of intangible assets	—			913			—			913
Interest expense	9,348			207			—			9,555
Mandatorily redeemable preferred stock dividends	478			—			—			478
Loss on debt and preferred stock restructuring	3,898			—			—			3,898
Intercompany charges	(5,630		)	5,630			—			—
Equity in loss of subsidiaries	690			—			(690		)(3)	—
Other expenses, net	126			17			—			143
Provision for income taxes (benefit)	478			(448		)	—			30
Total operating and other expense, net	11,509			13,690			(690		)	24,509
Net loss	$	(11,509	)	$	(690	)	$	690		$	(11,509		)

	Three Months Ended September 30, 2003 (Unaudited)
(In thousands)	Issuer			Guarantor Subsidiaries				Non-Guarantor Subsidiaries			Consolidating Adjustments				Consolidated Total
Revenues	$	—		$		44,273		$	—		$	—			$	44,273
Cost of sales	—			34,494				—			—				34,494
Gross profit	—			9,779				—			—				9,779
Operating and other expenses (income):
Selling, general and administrative expenses	313			4,474				—			—				4,787
Research and development expenses	—			2,211				—			—				2,211
Amortization of intangible assets	—			912				—			—				912
Interest expense	6,419			127				—			—				6,546
Intercompany charges	(6,690		)	6,690				—			—				—
Equity in loss of subsidiaries	4,045			—				—			(4,045			)(3)	—
Other expenses (income), net	(553		)	687				—			—				134
Provision for income taxes (benefit)	1,420			(1,277			)	—			—				143
Total operating and other expenses, net	4,954			13,824				—			(4,045			)	14,733
Net loss	$	(4,954	)	$	(4,045		)	$		—	$		4,045		$	(4,954	)

23

	Nine Months Ended September 30, 2004 (Unaudited)
(In thousands)	Issuer			Guarantor Subsidiaries				Consolidating Adjustments				Consolidated Total
Revenues	$	—		$	154,059			$	—			$	154,059
Cost of sales	—			121,801				—				121,801
Gross profit	—			32,258				—				32,258
Operating and other expenses (income):
Selling, general and administrative expenses	4,543			18,293				—				22,836
Research and development expenses	—			5,863				—				5,863
Amortization of intangible assets	—			2,738				—				2,738
Interest expense	26,439			568				—				27,007
Mandatorily redeemable preferred stock dividends	4,011			—				—				4,011
Loss on debt and preferred stock restructuring	3,898			—				—				3,898
Intercompany charges	(16,509		)	16,509				—				—
Equity in loss of subsidiaries	7,113			—				(7,113			)(3)	—
Other expenses, net	340			6				—				346
Provision for income taxes (benefit)	4,696			(4,606			)	—				90
Total operating and other expense, net	34,531			39,371				(7,113			)	66,789
Net loss	$	(34,531	)	$		(7,113	)	$		7,113		$		(34,531	)

	Nine Months Ended September 30, 2003 (Unaudited)
(In thousands)	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	—		$	130,286		$	—		$	—		$	130,286
Cost of sales	—			102,086			—			—			102,086
Gross profit	—			28,200			—			—			28,200
Operating and other expenses (income):
Selling, general and administrative expenses	5,217			16,479			—			—			21,696
Research and development expenses	—			7,062			—			—			7,062
Impairment of goodwill	—			34,000			—			—			34,000
Amortization of intangible assets	—			2,738			—			—			2,738
Interest expense	18,535			348			—			—			18,883
Intercompany charges	(18,265		)	18,265			—			—			—
Equity in loss of subsidiaries	51,013			218			—			(51,231		)(3)	—
Other expenses, net	33			847			—			—			880
Provision for income taxes (benefit)	9,453			(19,940		)	—			—			(10,487		)
Loss from discontinued operations	—			5,432			218			—			5,650
Change in accounting principle	—			13,764			—			—			13,764
Total operating and other expenses, net	65,986			79,213			218			(51,231		)	94,186
Net loss	$	(65,986	)	$	(51,013	)	$	(218	)	$	51,231		$	(65,986	)

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Statements of Cash Flows

	Nine Months Ended September 30, 2004 (Unaudited)
(In thousands)	Issuer				Guarantor Subsidiaries				Consolidating Adjustments				Consolidated Total
Cash flows from operating activities:
Net loss	$	(34,531		)	$	(7,113		)	$	7,113			$	(34,531	)
Noncash adjustments:
Equity in loss of subsidiaries	7,113				—				(7,113			)(3)	—
Other noncash adjustments	14,625				9,677				—				24,302
Changes in working capital	(12,487			)	1,523				—				(10,964		)
Net cash provided by (used for) operating activities	(25,280			)	4,087				—				(21,193		)
Cash flows from investing activities:
Capital expenditures	(1			)	(2,739			)	—				(2,740		)
Net cash used for investing activities	(1			)	(2,739			)	—				(2,740		)
Cash flows from financing activities:
Debt borrowings:
Revolving line of credit, net	17,800				—				—				17,800
Short-term promissory notes	5,000				—				—				5,000
Debt repayments:
Other secured long-term debt	(7			)	(885			)	—				(892		)
Deferred financing costs	(2,137			)	—				—				(2,137		)
Net cash provided by (used for) financing activities	20,656				(885			)	—				19,771
Net increase (decrease) in cash and equivalents	(4,625			)	463				—				(4,162		)
Cash and equivalents at beginning of period	6,540				396				—				6,936
Cash and equivalents at end of period	$		1,915		$		859		$		—		$	2,774

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	Nine Months Ended September 30, 2003 (Unaudited)
(In thousands)	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Cash flows from operating activities:
Net loss	$	(65,986	)	$	(51,013	)	$	(218	)	$	51,231	(3)	$	(65,986	)
Loss from discontinued operations	—			5,432			218			—			5,650
Noncash adjustments:
Change in accounting principle	—			13,764			—			—			13,764
Equity in loss of subsidiaries	51,013			218			—			(51,231		)(3)	—
Other noncash adjustments	(9,168		)	44,807			—			—			35,639
Changes in working capital	(5,350		)	(11,242		)	—			—			(16,592		)
Net cash provided by (used for) operating activities	(29,491		)	1,966			—			—			(27,525		)
Cash flows from investing activities:
Net proceeds from sale of Specialty Avionics Group	132,800			—			—			—			132,800
Capital expenditures	(26		)	(3,064		)	—			—			(3,090		)
Cash paid for acquisitions	(600		)	—			—			—			(600		)
Net cash provided by (used for) investing activities	132,174			(3,064		)	—			—			129,110
Cash flows from financing activities:
Debt borrowings:
Revolving line of credit, net	17,400			—			—			—			17,400
Debt repayments:
First-lien term debt	(129,275		)	—			—			—			(129,275		)
Other secured long-term debt	(618		)	(982		)	—			—			(1,600		)
Net cash used for financing activities	(112,493		)	(982		)	—			—			(113,475		)
Net cash provided by discontinued Operations	—			2,194			—			—			2,194
Net increase (decrease) in cash and equivalents	(9,810		)	114			—			—			(9,696		)
Cash and equivalents at beginning of period	12,343			78			—			—			12,421
Cash and equivalents at end of period	$	2,533		$	192		$	—		$	—		$	2,725

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussions should be read in conjunction with our financial statements and accompanying notes included in this report.

Results of Operations

Performance Measures

The following discussion of our results of operations includes discussions of financial measures and operating statistics that we use to evaluate the performance of, and trends in, our businesses.  We believe the presentation of these measures and statistics are relevant and useful to investors because it allows them to view performance and trends in a manner similar to the methods we use.  These measures and statistics, and why they are important to us and could be of interest to you, are described below.

Adjusted EBITDA.  Our discussion of the results of operations includes discussions of financial measures determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as well as the financial measure Adjusted EBITDA, which excludes certain charges reflected in our GAAP basis financial statements.  Our presentation of Adjusted EBITDA is in accordance with the GAAP requirements of SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” which requires us to report the primary measure of segment performance we use to evaluate and manage our businesses.

We utilize more than one measurement to evaluate segment performance and allocate resources among our operating segments; however, we consider Adjusted EBITDA, as defined below, to be the primary measurement of overall operating segment core economic performance and return on invested capital.  We also use Adjusted EBITDA in the annual budgeting and planning for future periods, as one of the decision-making criteria for funding discretionary capital expenditure and product development programs and as the measure for determining the value of acquisitions and dispositions.  Our board of directors uses Adjusted EBITDA as one of the performance metrics for determining the amount of bonuses awarded pursuant to the cash incentive bonus plan and as an indicator of enterprise value used in determining the exercise price of stock options granted and the acceleration of stock option vesting pursuant the incentive stock option plan.

We define Adjusted EBITDA as earnings, determined using program accounting for product development costs, before interest, income taxes, depreciation and amortization, restructuring, asset impairment and other related charges, acquisition related charges not capitalized and other noncash and nonoperating charges.  We believe the presentation of this measure is relevant and useful to investors because it allows investors and analysts to view group performance in a manner similar to the method we use, helps improve their ability to understand our core segment performance, adjusted for items we believe are unusual, and makes it easier to compare our results with other companies that have different financing, capital structures and tax rates.  In addition, we believe these measures are consistent with the manner in which our lenders and investors measure our overall performance and liquidity, including our ability to service debt and fund discretionary capital expenditure and product development programs.

Our method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance GAAP, such as net income (loss), the nearest comparable GAAP financial measure.  Adjusted EBITDA should not be viewed as substitutes for or superior to net income (loss), cash flow from operations or other data prepared in accordance with GAAP as a measure of our profitability or liquidity.  The notes to our financial statements include information about our operating segments, including Adjusted EBITDA, and should be read in conjunction with the discussions presented herein.  The notes to our financial statements

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also include a reconciliation of Adjusted EBITDA to net income (loss) to clarify the differences between these financial measures.

Bookings and Backlog.  Bookings and backlog are operating statistics we use as leading trend indicators of future demand for our products and services.  Bookings and backlog are based upon the value of purchase orders received from our customers, which will result in revenues, if and when such orders are filled.

Bookings represent the total invoice value of purchase orders received during the period and backlog represents the total invoice value of unfilled purchase orders as of the end of a period.  Orders may be subject to change or cancellation by the customer prior to shipment.  The level of unfilled orders at any given date during the year will be materially affected by the timing of our receipt of orders and the speed with which those orders are filled.

Changes in Accounting Principles

Adoption of SFAS No. 150.  Effective January 1, 2004, we adopted SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.”  SFAS No. 150 establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity.  SFAS No. 150 requires classification of financial instruments within its scope as a liability, including financial instruments issued in the form of shares that are mandatorily redeemable, because those financial instruments are deemed to be, in essence, obligations of the issuer.  As a result of adopting SFAS No. 150 on January 1, 2004, the 16% mandatorily redeemable preferred stock was reclassified as a liability and the quarterly dividend and redemption value accretion are reflected as charges against pre-tax income.  In periods prior to January 1, 2004, these charges were deducted in arriving at the net income or loss applicable to our common stockholder.

The following table summarizes the results of operations for the three months and nine months ended September 30, 2003 as if SFAS No. 150 had been in effect as of the beginning of 2003.

	Three Months Ended September 30, 2003						Nine Months Ended September 30, 2003
(In millions)	As Reported			Pro Forma			As Reported			Pro Forma
Loss from continuing operations	$	(5.0	)	$	(6.7	)	$	(46.6	)	$	(51.6	)
Net loss	(5.0		)	(6.7		)	(66.0		)	(71.0		)

The pro forma data reflects preferred stock dividends and redemption value accretion totaling $1.7 million for three months ended September 30, 2003 and $5.0 million for the nine months ended September 30, 2003 as charges against income during the periods.

Change in Accounting for Product Development Costs.  In addition, and as more fully described in “Note 1—Change in Accounting Principle” to the audited financial statements included in the Company’s 2003 Form 10-K, we elected to discontinue the use of program accounting for the costs of products manufactured for delivery under production-type contracts.  As a result, certain deferred program costs are no longer included in inventory commencing January 1, 2003.

This change in accounting policy was made after concluding the 2003 fiscal year but was applied retroactively to the beginning of the year, January 1, 2003, as required by generally accepted accounting principles.  As a result of the change, program-related product development costs are now classified as a component of research and development expenses in the consolidated financial statements rather than classified as a component of inventory cost.  We have restated the results of operations by charging previously inventoried costs totaling $2.2 million and $7.1 million for the three months and nine months ended September 30, 2003, respectively, to research and development expense and recording a $13.8 million charge as of January 1, 2003 to reflect the cumulative effect of the change in accounting principle.

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Restructuring, Asset Impairment and Other Related Charges

Our results of operations for 2003 and 2004 have been affected by restructuring, impairment and other related charges pertaining to a series of restructuring activities.  These charges, which affect the comparability of our reported results of operations between periods, are more fully described in “—Restructuring, Asset Impairment and Other Related Charges” below.

Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003

Revenues.Revenues increased $6.3 million, or 14.4%, to $50.6 million for the three months ended September 30, 2004 from $44.3 million for the three months ended September 30, 2003.  By segment, revenues changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	9.7		33.0	%
Systems Integration	(1.6		)	(11.5	)
Increase in inter-group elimination	(1.8		)
Total	$	6.3

Cabin Management.  Revenues increased by $9.7 million, or 33% compared to the prior year, due to a higher volume of business, VIP and head-of-state jet production by aircraft manufacturers.  The increase consisted of the following:

•an $8.5 million increase in aircraft furniture and related products revenues;

•a $1.1 million increase in cabin management and entertainment systems revenues; and

•a $1.2 million increase in seating products revenues; offset by

•a $1.1 million decrease in other product and services revenues.

Systems Integration.  Revenues decreased by $1.6 million, or 11.5% compared to the prior year, due to:

•a $4.9 million decrease resulting from lower production of auxiliary fuel systems pursuant to our supply contract with Boeing Business Jet (“BBJ”); and

•a $1.5 million decrease in service center revenues; offset by

•a $4.5 million increase in completion revenues; and

•a $0.3 million increase in revenues from integration kits and related services for commercial aircraft.

BBJ has exercised its option to convert the supply contract to a “requirements” contract, from a guaranteed “take-or-pay” contract, commencing January 1, 2005.  Production under the “take-or-pay” portion of the contract for 2004 was completed during the second quarter of fiscal 2004 and no new orders have been placed pursuant to the new “requirements” contract.  Based upon the number of auxiliary fuel systems BBJ has in its inventory, we believe we may not receive any orders for additional systems until fiscal 2005.  During the three months ended September 30, 2004, auxiliary fuel systems revenues were $0.8 million compared to $5.7 million for the same period last year.

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Gross profit.  Gross profit increased $3.2 million, or 32.9%, to $13.0 million for the three months ended September 30, 2004 from $9.8 million for the same period in the prior year.  By segment, gross profit changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	4.5		88.9	%
Systems Integration	(1.3		)	(26.4	)
Total	$	3.2

Cabin Management.  Gross profit increased by $4.5 million, or 88.9% compared to the prior year, primarily due to:

•a $4.8 million increase related to higher volume for our aircraft furniture and related products;

•a $0.8 million increase in gross profit related to higher volume for our cabin management and entertainment systems; and

•a $0.4 million increase in gross profit related to our other products; offset by

•$1.4 million of program start-up costs related to the interior of a customer’s recently introduced new model aircraft, a portion of which are nonrecurring; and

•a $0.1 million increase in restructuring charges incurred in 2004 compared to those incurred during the same period in 2003 related to our furniture and seating operations.

Systems Integration.  Gross profit decreased by $1.3 million, or 26.4% compared to the prior year, primarily due to:

•a $1.6 million decrease resulting from lower revenues from auxiliary fuel systems and a change in product delivery mix to lower margin products; and

•$0.1 million of restructuring charges incurred in 2004 related to the reorganization of our manufacturing operations; offset by

•a $0.4 million increase resulting from the increase in revenue commercial aircraft integration kits and a change in delivery mix to higher margin products.

Selling, general and administrative expenses.  Selling, general and administrative expenses increased $3.0 million, or 63.2%, to $7.8 million for the three months ended September 30, 2004, from $4.8 million for the same period in the prior year.  By segment, SG&A expenses changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount		Percent
Cabin Management	$	1.6	71.6	%
Systems Integration	0.6		49.3
Corporate	0.8
Total	$	3.0

Cabin Management.  SG&A expenses increased by $1.6 million, or 71.6% compared to the prior year, primarily due to:

•a $1.4 million increase attributable to a change in corporate allocations for insurance and incentive compensation; and

•$0.2 million of program start-up costs related to the interior of a customer’s recently introduced new model aircraft, a portion of which are nonrecurring.

30

Systems Integration.  SG&A expenses increased by $0.6 million, or 49.3% compared to the prior year, primarily as a result of higher sales and marketing activities associated with the aircraft completion portion of our business and to changes in corporate allocations for insurance and incentive compensation.

Corporate.  SG&A expenses increased by $0.8 million compared to the prior year due principally to higher costs pursuant to the incentive compensation plan and $0.2 million of restructuring charges incurred in 2004 related to the reorganization of our manufacturing operations.

Research and development expenses.  Research and development expenses decreased $0.5 million, or 24.0%, to $1.7 million for the three months ended September 30, 2004 compared to $2.2 million in the prior year.  By segment, research and development expenses changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	(0.8	)	(51.6	)%
Systems Integration	0.3			42.9
Total	$	(0.5	)

Cabin Management.  R&D expenses decreased $0.8 million, or 51.6% compared to the prior year.  The decrease is primarily related to the near completed development of our new single-design seat technology and design of new interior furnishing components for a major customer’s recently introduced new model aircraft.

Systems Integration.  R&D expenses increased $0.3 million, or 42.9% compared to the prior year.  The increase is principally due to the ongoing development of our cockpit door video surveillance system for different models of commercial aircraft and a design modification to an existing product.

Depreciation and amortization of intangibles.  Depreciation and amortization expense decreased $0.2 million to $2.2 million for the three months ended September 30, 2004 from $2.4 million for the same period in the prior year.  The decline is attributable to reduced capital expenditures and a lower depreciable base resulting from restructuring charges.  Depreciation and amortization changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Depreciation charged to:
Cost of sales	$	(0.1	)	(3.1	)%
Selling, general and administrative expense	(0.1		)	(20.0	)
Amortization of intangible assets	0.0
Total	$	(0.2	)

Adjusted EBITDA.  We define Adjusted EBITDA as earnings, determined using program accounting for product development costs, before interest, income taxes, depreciation and amortization, restructuring, asset impairment and other related charges, acquisition related charges not capitalized and other noncash and nonoperating charges.  As described above in “—Performance Measures—Adjusted EBITDA,” we use this financial measure to evaluate the core economic performance of our operating segments.  The notes to our financial statements include additional information about Adjusted EBITDA, and should be read in conjunction with the discussions presented herein.  The notes to our financial statements also include a reconciliation of Adjusted EBITDA to net income (loss), a GAAP financial measure, to clarify the differences between these two measures.

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Cabin Management.  Adjusted EBITDA increased by $3.8 million, or 96.3%, to $7.7 million for the three months ended September 30, 2004 compared to $3.9 million for the same period in the prior year.  Adjusted EBITDA as a percent of revenues improved to 19.5 % for the three months ended September 30, 2004 compared to 13.2% for the same period last year.  The $3.8 million increase is comprised of:

•a $2.5 million increase from improved margins which result, in part, from fixed costs being absorbed over a higher revenue base; and

•a $1.3 million increase resulting from a 33.0% revenue increase.

Our furniture and seating operations contributed $3.5 million of the increase and our cabin management and entertainment systems contributed $0.3 million of the increase.

Systems Integration.  Adjusted EBITDA decreased by $1.9 million, or 51.8%, to $1.8 million for the three months ended September 30, 2004 compared to $3.7 million for the same period in the prior year.  Adjusted EBITDA as a percent of revenues declined to 14.6 % for the three months ended September 30, 2004 compare to 26.8% for the same period last year.  The $1.9 million decrease is comprised of:

•a $1.5 million decrease resulting from the change in margin between periods; and

•a $0.4 million decrease resulting from an 11.5% revenue decrease.

The decline in margin is attributable to a change in product delivery mix, principally resulting from auxiliary fuel systems revenues being replaced with revenues from lower margin products and services.  A $2.0 million decline in auxiliary fuel tank, service center and aircraft completion margins was partially offset by a $0.1 million increase in the margins for integration kits and related services for commercial aircraft.

Operating income.  Operating income increased $0.7 million, or 39.0%, to $2.6 million for the three months ended September 30, 2004, from $1.9 million for the same period in the prior year.  By segment, the operating loss changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	3.7		474.1	%
Systems Integration	(2.2		)	(88.8	)
Corporate	(0.8		)
Total	$	0.7

Cabin Management.  Operating income increased by $3.7 million, or 474.1% compared to the prior year, due to:

•a $4.8 million increase in gross profit, primarily due to lower revenues related to our furniture and seating operations;

•a $0.8 million increase in gross profit related to higher volume for our cabin management and entertainment systems;

•a $0.8 million decrease in research and development expenses; and

•a $0.4 million increase in gross profit related to other products; offset by

•$1.6 million of program start-up costs incurred in 2004, a portion of which are nonrecurring;

•a $1.4 million increase in SG&A spending; and

•a $0.1 million increase in restructuring charges incurred in 2004.

32

Systems Integration.  Operating income decreased by $2.2 million, or 88.8% compared to the prior year, due to:

•a $1.3 million decrease resulting from reduced gross profit on lower revenues;

•a $0.6 million increase in SG&A spending; and

•a $0.3 million increase in research and development expenses.

Interest expense.  Interest expense increased $3.1 million, or 46.0%, to $9.6 million for the three months ended September 30, 2004 compared to $6.5 million for the same period in the prior year.  The increase is attributable to:

•a $3.1 million increase attributable to $80.0 million of second-lien term debt issued in December 2003;

•a $0.6 million net increase in interest expense resulting from the exchange of $65.0 million of 12% senior subordinated notes for 17% senior discount notes; and

•a $0.2 million increase in other interest expense; offset by

•a $0.8 million decrease in our first-lien interest expense due to lower principal balances outstanding resulting from the repayment with the proceeds from our second-lien debt financing in December 2003, offset, in part, by a 1.5% increase in interest rate margins charged by our lenders based on our consolidated debt leverage ratio.

Mandatorily redeemable preferred stock dividends.  Dividends on our 16% mandatorily redeemable preferred stock totaled $0.5 million for the three months ended September 30, 2004.  As more fully described in “—Changes in Accounting Principles” above, effective January 1, 2004 we adopted SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.”  As a result of adopting SFAS No. 150, the 16% quarterly preferred stock dividends are reflected as a charge against pre-tax income.  In periods prior to January 1, 2004, preferred stock dividends were deducted in arriving at the net income or loss applicable to our common stockholder and amounted to $1.6 million for the three months ended September 30, 2003.  The $1.1 million decrease in dividends between the periods is a result of an amendment to the terms of the preferred stock.

During the third quarter of fiscal 2004, the terms of the 16% preferred stock were amended to provide that further preferred stock dividends, if any, accrue at rates dependent on a specified financial ratio or if certain triggering events occur.  Future preferred stock dividends, if any, are dependent, in part, upon a defined leverage ratio achieved as of each quarterly testing date.  Depending on the ratio achieved, and provided certain triggering events have not occurred, dividends for the succeeding quarter accrue at a 0%, 4% or 16% annual rate.  If certain triggering events occur, dividends accrue at a 16% annual rate.  Based upon the leverage ratio achieved as of September 30, 2004, no dividends will accrue on the preferred stock from the amendment date through December 31, 2004.  See “—Liquidity and Capital Resources–Debt and Preferred Stock Restructuring” for additional information.

Loss on debt and preferred stock restructuring.  The loss on debt and preferred stock restructuring of $3.9 million for the three months ended September 30, 2004 reflects the write-off of deferred financing costs attributable to the $65.0 million of 12% senior subordinated notes exchanged for 17% senior discount notes and the write-off of the remaining unamortized original issuance discount related to our 16% preferred stock.  See “—Liquidity and Capital Resources–Debt and Preferred Stock Restructuring” for additional information.

33

Provision for income taxes.  The provision for income taxes is comprised of the following:

	Three Months Ended September 30,
(In millions)	2004			2003
Income tax (benefit) based on reported pre-tax loss	$	(5.5	)	$	(1.2	)
Net deferred tax asset valuation allowance	5.5			1.3
Net prevision for income taxes	$	—		$	0.1

For the three months ended September 30, 2003, the provision for income taxes, based on the reported consolidated pre-tax loss, differs from the amount determined by applying the applicable U.S. statutory federal rate to the pre-tax loss primarily due to the effects of state and foreign income taxes and non-deductible expenses, principally the non-deductible portion of goodwill impairment charges.

For the three months ended September 30, 2004, the provision for income taxes, based on the reported consolidated pre-tax loss, differs from the amount determined by applying the applicable U.S. statutory federal rate to the pre-tax loss primarily due to the effects of state and foreign income taxes and non-deductible expenses, principally mandatorily redeemable preferred stock dividends due to the adoption of SFAS No. 150 effective January 1, 2004, as described above.

As more fully described in Note 11 to the audited financial statements included in our 2003 Form 10-K, there were net deferred tax asset of $19.5 million fully offset by a valuation allowance of the same amount as of December 31, 2003.  Based upon the results of operations for the nine months ended September 30, 2004, we determined that an additional $14.4 million valuation allowance was required as of that date, $5.5 million of which is applicable to the three-month period.

Loss from continuing operations and net loss.  The loss from continuing operations and net loss increased $6.5 million to a loss of $11.5 million for the three months ended September 30, 2004 compared to a loss of $5.0 million for the same period in the prior year, primarily due to:

•a $3.9 million loss on our debt and preferred stock restructuring;

•a $3.0 million increase in interest and other expenses (net); and

•$0.5 million of preferred stock dividends resulting from the adoption of SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” as described above; offset by

•a $0.7 million increase in operating income; and

•a $0.1 million decrease in income tax expense.

Net loss applicable to common stockholder.  Net loss applicable to DeCrane Holdings, our common stockholder, increased $4.8 million to a net loss of $11.5 million for the three months ended September 30, 2004 compared to a net loss of $6.7 million for the same period in the prior year.  The increase in the net loss applicable to our common stockholder is attributable to:

•a $6.5 million increase in our net loss; offset by

•a $1.7 million decrease in preferred stock dividends and redemption value accretion resulting from the January 1, 2004 adoption of SFAS No. 150 which requires preferred stock dividends be deducted from the net income or loss for the period.

Bookings and Backlog.  Bookings increased $27.1 million, or 77.6%, to $61.9 million for the three months ended September 30, 2004 compared to $34.8 million for the same period in the prior year.  Backlog increased $25.6 million to $83.6 million as of September 30, 2004 compared to $58.0 million as of December 31, 2003.  By segment, bookings and backlog changed as follows:

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	Increase (Decrease) From 2003
(In millions)	Amount		Percent
Bookings:
Cabin Management	$	12.4	42.1	%
Systems Integration	14.7		267.6
Total	$	27.1
Backlog:
Cabin Management	$	16.0	47.4	%
Systems Integration	9.6		39.6
Total	$	25.6

Cabin Management’s bookings and backlog increase is a result of the increase in our customers’ aircraft production schedules during the period.  Systems Integration’s bookings and backlog increase is a result of booking an order for an aircraft completion during the quarter as well as an increase in orders for our cockpit door video surveillance system.

Nine months ended September 30, 2004 Compared to Nine months ended September 30, 2003

Revenues.Revenues increased $23.8 million, or 18.2%, to $154.1 million for the nine months ended September 30, 2004 from $130.3 million for the nine months ended September 30, 2003.  By segment, revenues changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	24.8		27.6	%
Systems Integration	1.5			3.6
Increase in inter-group elimination	(2.5		)
Total	$	23.8

Cabin Management.  Revenues increased by $24.8 million, or 27.6% compared to the prior year due to a higher volume of business, VIP and head-of-state jet production by aircraft manufacturers.  The increase consisted of the following:

•a $20.3 million increase in aircraft furniture and related products revenues;

•a $3.4 million increase in cabin management and entertainment systems revenues; and

•a $3.0 million increase in seating products revenues; offset by

•a $1.9 million decrease in other product and services revenues.

Systems Integration.  Revenues increased by $1.5 million, or 3.6% compared to the prior year, due to:

•a $6.2 million increase in completion and service center revenues; and

•a $2.3 million increase in revenues from integration kits and related services for commercial aircraft; offset by

•a $7.0 million decrease resulting from lower production of auxiliary fuel systems pursuant to our supply contract with BBJ.

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BBJ has exercised its option to convert the supply contract to a “requirements” contract, from a guaranteed “take-or-pay” contract, commencing January 1, 2005.  Production under the “take-or-pay” portion of the contract for 2004 is complete and no new orders have been placed pursuant to the new “requirements” contract.  Based upon the number of auxiliary fuel systems BBJ has in its inventory, we believe we may not receive any orders for additional systems until fiscal 2005.  During the nine months ended September 30, 2004, auxiliary fuel systems revenues were $12.7 million compared to $19.7 million for the same period last year.  During the year ended December 31, 2003, BBJ auxiliary fuel systems provided approximately $26.4 million, or 15.5%, of our consolidated revenues.

Gross profit.  Gross profit increased $4.1 million, or 14.4%, to $32.3 million for the nine months ended September 30, 2004 from $28.2 million for the same period in the prior year.  By segment, gross profit changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	12.3		96.6	%
Systems Integration	(8.2		)	(53.4	)
Total	$	4.1

Cabin Management.  Gross profit increased by $12.3 million, or 96.6% compared to the prior year, primarily due to:

•a $5.7 million increase related to higher volume in aircraft furniture and related products revenues;

•a $5.7 million decrease in restructuring charges incurred in 2004 compared to those incurred during the same period in 2003 related to our furniture and seating operations;

•a $2.2 million increase in gross profit related to higher volume for our cabin management and entertainment systems; and

•a $0.1 million increase in gross profit related to other products; offset by

•$1.4 million of program start-up costs related to the interior of a customer’s recently introduced new model aircraft, a portion of which are nonrecurring.

Systems Integration.  Gross profit decreased by $8.2 million, or 53.4% compared to the prior year, primarily due to:

•$5.3 million of restructuring charges incurred in 2004 related to the reorganization of our manufacturing operations;

•a $3.6 million decrease resulting from reduced auxiliary fuel system revenues; and

•a $0.3 million decrease resulting from the change in product delivery mix; offset by

•a $1.0 million increase resulting from the increase in revenues from integration kits and related services for commercial aircraft.

Selling, general and administrative expenses.  Selling, general and administrative expenses increased $1.1 million, or 5.3%, to $22.8 million for the nine months ended September 30, 2004, from $21.7 million for the same period in the prior year.  By segment, SG&A expenses changed as follows:

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	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	1.9		18.4	%
Systems Integration	(0.1		)	(2.4	)
Corporate	(0.7		)
Total	$	1.1

Cabin Management.  SG&A expenses increased by $1.9 million, or 18.4% compared to the prior year due to:

•a $1.1 million increase in SG&A spending in support of higher production levels and new programs;

•a $0.3 million increase in restructuring charges incurred in 2004 versus the same period last year;

•a $0.3 million increase attributable to a change in corporate allocations for insurance and incentive compensation; and

•$0.2 million in program start-up costs related to the interior of a customer’s recently introduced new model aircraft, a portion of which are nonrecurring.

Systems Integration.  SG&A expenses decreased by $0.1 million, or 2.4% compared to the prior year, due to lower labor and employee benefit costs resulting from workforce reductions as well as other cost reduction efforts offset by an increase in sales and marketing activities associated with the aircraft completion portion of our business and a $0.1 million increase in the corporate allocations for insurance.

Corporate.  SG&A expenses decreased by $0.7 million compared to the prior year due to:

•a $0.5 million decrease resulting from cost reduction measures;

•a $0.4 million decrease in insurance expense resulting from higher allocations to the operating groups; offset by

•$0.2 million of 2004 restructuring charges.

Research and development expenses.  Research and development expenses decreased $1.2 million, or 17.0%, to $5.9 million for the nine months ended September 30, 2004 compared to $7.1 million in the prior year.  By segment, research and development expenses changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	(2.4	)	39.9	%
Systems Integration	1.2			122.9
Total	$	(1.2	)

Cabin Management.  R&D expenses decreased $2.4 million, or 39.9% compared to the prior year.  The decrease is primarily related to the near completed development of our new single-design seat technology and the design and engineering of new interior furnishing components for a major customer’s recently introduced new model aircraft.

Systems Integration.  R&D expenses increased $1.2 million, or 122.9% compared to the prior year.  The increase is principally due to the ongoing development of our cockpit door video surveillance system for different models of commercial aircraft and a design modification to an existing product.

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Depreciation and amortization of intangibles.  Depreciation and amortization expense decreased $0.6 million to $6.8 million for the nine months ended September 30, 2004 from $7.4 million for the same period in the prior year.  The decline is attributable to reduced capital expenditures and a lower depreciable base resulting from restructuring charges.  Depreciation and amortization changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Depreciation charged to:
Cost of sales	$	(0.3	)	(5.6	)%
Selling, general and administrative expense	(0.3		)	(20.5	)
Amortization of intangible assets	0.0
Total	$	(0.6	)

Adjusted EBITDA.  We define Adjusted EBITDA as earnings, determined using program accounting for product development costs, before interest, income taxes, depreciation and amortization, restructuring, asset impairment and other related charges, acquisition related charges not capitalized and other noncash and nonoperating charges.  As described above in “—Performance Measures—Adjusted EBITDA,” we use this financial measure to evaluate the core economic performance of our operating segments.  The notes to our financial statements include additional information about Adjusted EBITDA, and should be read in conjunction with the discussions presented herein.  The notes to our financial statements also include a reconciliation of Adjusted EBITDA to net income (loss), a GAAP financial measure, to clarify the differences between these two measures.

Cabin Management.  Adjusted EBITDA increased by $4.5 million, or 35.5%, to $17.3 million for the nine months ended September 30, 2004 compared to $12.8 million for the same period in the prior year.  Adjusted EBITDA as a percent of revenues improved to 15.1 % for the nine months ended September 30, 2004 compared to 14.2% for the same period last year.  The $4.5 million increase is comprised of:

•a $3.5 million increase resulting from a 27.6% revenue increase; and

•a $1.0 million increase from improved margins which result, in part, from fixed costs being absorbed over a higher revenue base.

Our furniture and seating operations contributed $3.3 million of the increase and our cabin management and entertainment systems contributed $1.2 million of the increase.

Systems Integration.  Adjusted EBITDA decreased by $2.8 million, or 28.1%, to $7.2 million for the nine months ended September 30, 2004 compared to $10.0 million for the same period in the prior year.  Adjusted EBITDA as a percent of revenues declined to 17.1 % for the nine months ended September 30, 2004 compare to 24.7% for the same period last year.  The $2.8 million decrease is comprised of:

•a $3.2 million decrease resulting from the change in margin between periods; offset by

•a $0.4 million increase resulting from a 3.6% revenue increase.

The decline in margin is attributable to a change in product delivery mix, principally resulting from auxiliary fuel systems revenues being replaced with revenues from lower margin products and services.  A $3.7 million decline in auxiliary fuel tank, service center and aircraft completion margins was partially offset by a $0.9 million increase in the margins for integration kits and related services for commercial aircraft.

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Impairment of goodwill.  During the nine months ended September 30, 2003, a $34.0 million charge was recorded to reflect the impairment of goodwill in connection with the impairment testing provision of SFAS No. 142, “Goodwill and Other Intangible Assets.”  See “—Restructuring, Asset Impairment and Other Related Charges.”

Operating income (loss).  Operating income increased $38.1 million, or 102.2%, to income of $0.8 million for the nine months ended September 30, 2004, compared to a loss of $37.3 million for the same period in the prior year.  By segment, the operating loss changed as follows:

	Increase (Decrease) From 2003
(In millions)	Amount			Percent
Cabin Management	$	46.8		119.3	%
Systems Integration	(9.3		)	(131.6	)
Corporate	0.6
Total	$	38.1

Cabin Management.  The operating income increased by $46.8 million, or 119.3% compared to the prior year, primarily due to:

•a $34.0 million decrease in impairment charges;

•a $5.7 million increase in gross profit, primarily due to lower revenues related to our furniture and seating operations;

•a $5.4 million decrease in restructuring charges incurred in 2004 as compared to 2003;

•a $2.4 million decrease in research and development expenses; and

•a $2.2 million increase in gross profit related to higher volume for our cabin management and entertainment systems; offset by

•$1.6 million in program start-up costs related to the interior of a customer’s recently introduced new model aircraft, a portion of which are nonrecurring; and

•a $1.6 million increase in SG&A spending.

Systems Integration.  The operating income decreased by $9.3 million, or 131.6% compared to the prior year, due to:

•$5.4 million of restructuring charges incurred in 2004;

•a $4.3 million decrease resulting from reduced gross profit; and

•a $1.2 million increase in research and development expenses; offset by

•a net $1.5 million increase resulting from the conversion of a major customer supply contract to a requirements-only contract;

•a $0.1 million decrease in SG&A spending.

Interest expense.  Interest expense increased $8.1 million, or 43.0%, to $27.0 million for the nine months ended September 30, 2004 compared to $18.9 million for the same period in the prior year.  The increase is attributable to:

•a $9.0 million increase attributable to $80.0 million of second-lien term debt issued in December 2003;

•a $0.6 million net increase in interest expense resulting from the exchange of $65.0 million of 12% senior subordinated notes for 17% senior discount notes; and

•a $0.5 million increase in other interest expense; offset by

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•a $2.0 million decrease in our first-lien interest expense due to lower principal balances outstanding resulting from the repayment with the proceeds from our second-lien debt financing in December 2003, offset, in part, by a 1.5% increase in interest rate margins charged by our lenders based on our consolidated debt leverage ratio.

Mandatorily redeemable preferred stock dividends.  Dividends on our 16% mandatorily redeemable preferred stock totaled $4.0 million for the nine months ended September 30, 2004.  As more fully described in “—Changes in Accounting Principles” above, effective January 1, 2004 we adopted SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.”  As a result of adopting SFAS No. 150, the 16% quarterly preferred stock dividends are reflected as a charge against pre-tax income.  In periods prior to January 1, 2004, preferred stock dividends were deducted in arriving at the net income or loss applicable to our common stockholder and amounted to $4.6 million for the nine months ended September 30, 2003.  The $0.6 million decrease in dividends between the periods is a result of an amendment to the terms of the preferred stock.

During the third quarter of fiscal 2004, the terms of the 16% preferred stock were amended to provide that further preferred stock dividends, if any, accrue at rates dependent on a specified financial ratio or if certain triggering events occur.  Future preferred stock dividends, if any, are dependent, in part, upon a defined leverage ratio achieved as of each quarterly testing date.  Depending on the ratio achieved, and provided certain triggering events have not occurred, dividends for the succeeding quarter accrue at a 0%, 4% or 16% annual rate.  If certain triggering events occur, dividends accrue at a 16% annual rate.  Based upon the leverage ratio achieved as of September 30, 2004, no dividends will accrue on the preferred stock from the amendment date through December 31, 2004.  See “—Liquidity and Capital Resources–Debt and Preferred Stock Restructuring” for additional information.

Loss on debt and preferred stock restructuring.  The loss on debt and preferred stock restructuring of $3.9 million for the nine months ended September 30, 2004 reflects the write-off of deferred financing costs attributable to the $65.0 million of 12% senior subordinated notes exchanged for 17% senior discount notes and the write-off of the remaining unamortized original issuance discount related to our 16% preferred stock.  See “—Liquidity and Capital Resources–Debt and Preferred Stock Restructuring” for additional information.

Provision for income tax benefit.  The provision for income taxes is comprised of the following:

	Nine months ended September 30,
(In millions)	2004			2003
Income tax (benefit) based on reported pre-tax loss	$	(12.7	)	$	(24.8	)
Net deferred tax asset valuation allowance	12.8			14.4
Net provision for income tax (benefit)	$	0.1		$	(10.4	)

For the nine months ended September 30, 2003, the provision for income taxes, based on the reported consolidated pre-tax loss, differs from the amount determined by applying the applicable U.S. statutory federal rate to the pre-tax loss primarily due to the effects of state and foreign income taxes and non-deductible expenses, principally the non-deductible portion of goodwill impairment charges.

For the nine months ended September 30, 2004, the provision for income taxes, based on the reported consolidated pre-tax loss, differs from the amount determined by applying the applicable U.S. statutory federal rate to the pre-tax loss primarily due to the effects of state and foreign income taxes and non-deductible expenses, principally mandatorily redeemable preferred stock dividends due to the adoption of SFAS No. 150 effective January 1, 2004, as described above.

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As more fully described in Note 11 to the audited financial statements included in the Company’s 2003 Form 10-K, there were net deferred tax asset of $19.5 million fully offset by a valuation allowance of the same amount as of December 31, 2003.  Based upon the results of operations for the nine months ended September 30, 2004, we determined that an additional $14.4 million valuation allowance was required as of that date.

Loss from continuing operations.  The loss from continuing operations decreased $12.1 million to a loss of $34.5 million for the nine months ended September 30, 2004 compared to a loss of $46.6 million for the same period in the prior year, primarily due to:

•a $38.1 million operating income increase; offset by

•a $10.6 million decrease in income tax benefit;

•a $7.5 million increase in interest and other expenses (net);

•$4.0 million of preferred stock dividends resulting from the adoption of SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” as described above; and

•a $3.9 million loss on our debt and preferred stock restructuring.

Loss from discontinued operations.  The loss from discontinued operations was $5.6 million for the nine months ended September 30, 2003 and reflects the results of operations of our Specialty Avionics Group for the period from January 1, 2003 through May 22, 2003, the date on which it was sold.

Cumulative effect of change in accounting principle.  As more fully described in “—Changes in Accounting Principles” above, the $13.8 million charge in 2003 was to reflect the cumulative effect of the change in accounting for product development costs as of January 1, 2003.

Net loss.  Net loss decreased $31.5 million to a net loss of $34.5 million for the nine months ended September 30, 2004 compared to a net loss of $66.0 million for the same period in the prior year.  The decrease is attributable to:

•a decrease in cumulative effect of change in accounting principle of $13.8 million;

•a decrease in loss from continuing operations of $12.1 million; and

•a decrease in the loss from discontinued operations of $5.6 million.

Net loss applicable to common stockholder.  Net loss applicable to DeCrane Holdings, our common stockholder, decreased $36.5 million to a net loss of $34.5 million for the nine months ended September 30, 2004 compared to a net loss of $71.0 million for the same period in the prior year.  The decrease in the net loss applicable to our common stockholder is attributable to:

•a $31.5 million decrease in our net loss; and

•a $5.0 million decrease in preferred stock dividends and redemption value accretion resulting from the January 1, 2004 adoption of SFAS No. 150 which requires preferred stock dividends be deducted from the net income or loss for the period.

Bookings.  Bookings increased $51.5 million, or 40.2%, to $179.7 million for the nine months ended September 30, 2004 compared to $128.2 million for the same period in the prior year.  By segment, bookings changed as follows:

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	Increase (Decrease) From 2003
(In millions)	Amount		Percent
Cabin Management	$	37.2	41.0	%
Systems Integration	14.3		38.2
Total	$	51.5

Cabin Management’s bookings increased as a result of the increase in our customers’ aircraft production schedules during the period.  Systems Integration’s bookings increase is a result of booking an order for an aircraft completion during the quarter as well as an increase in orders for our cockpit door video surveillance system.

Restructuring, Asset Impairment and Other Related Charges

The following discussion should be read in conjunction with Note 2 accompanying our financial statements included in this report.

During the three months and nine months ended September 30, 2003 and 2004, we recorded restructuring, asset impairment and other related pre-tax charges related to a series of restructuring activities.  These charges, and the effect these charges had on our reported results of operations, are summarized below.

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2004		2003		2004		2003
Nature of charges:
Operational Realignment and Facilities Restructuring	$	0.4	$	—	$	7.3	$	—
Seating Product Line and Furniture Manufacturing
Facilities Restructuring	—		—		—		7.1
Goodwill impairment charges	—		—		—		41.5
Total pre-tax charges	$	0.4	$	—	$	7.3	$	48.6
Business segment recording the charges:
Cabin Management	$	0.1	$	—	$	1.7	$	41.1
Systems Integration	0.1		—		5.4		—
Corporate	0.2		—		0.2		—
Total charged to continuing operations	0.4		—		7.3		41.1
Specialty Avionics (discontinued operations)	—		—		—		7.5
Total pre-tax charges	$	0.4	$	—	$	7.3	$	48.6
Charged to operations:
Cost of sales	$	0.1	$	—	$	6.2	$	6.5
Selling, general and administrative expenses	0.3		—		1.1		0.6
Impairment of goodwill	—		—		—		34.0
Total charged to continuing operations	0.4		—		7.3		41.1
Charged to discontinued operations	—		—		—		7.5
Total pre-tax charges	$	0.4	$	—	$	7.3	$	48.6
Components of charges:
Noncash charges	$	0.1	$	—	$	3.1	$	37.6
Cash charges	0.3		—		4.2		3.5
Total charged to continuing operations	0.4		—		7.3		41.1
Charged to discontinued operations (noncash)	—		—		—		7.5
Total pre-tax charges	$	0.4	$	—	$	7.3	$	48.6

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Operational Realignment and Facilities Restructuring

During the second quarter of fiscal 2004, we adopted plans to restructure the operations of our Cabin Management and Systems Integration groups.  The restructuring plan for Cabin Management involves the realignment of production between its manufacturing facilities and the relocation and consolidation of the group’s headquarters to Wichita, Kansas.  The plan for Systems Integration involves combining the manufacturing activities of two facilities into a single facility and eliminating some product offerings and service capabilities resulting in a partial downsizing of certain operations.  These actions are designed to reduce engineering, production and inventory carrying costs by supporting fewer manufacturing locations and product offerings.  In connection with these actions, we recorded pre-tax charges to operations totaling $7.3 million during the second and third quarters of fiscal 2004, of which $3.1 million were noncash charges.

The charges are comprised of the write-down of surplus inventory, lease termination and related charges, and severance and other compensation costs.  We also expect to incur additional restructuring-related expenses of approximately $1.6 million during the fourth quarter of fiscal 2004 to complete the restructuring plans.  These expenses, which are primarily relocation and travel costs, will be expensed as incurred.  Future cash payments, which will aggregate approximately $5.1 million through 2013 because of lease termination costs, will be funded from existing cash balances and internally generated cash from operations.

Seating Product Line and Furniture Manufacturing Facilities Restructuring

During the second quarter of fiscal 2003, we consolidated our seating product line offerings and adopted a restructuring plan to down-size a furniture manufacturing facility in response to continuing weakness in the business, VIP and head-of-state aircraft market.  These actions were designed to reduce engineering, production and inventory carrying costs by supporting fewer product offerings and achieve profitability at the furniture manufacturing facility based on its lower production levels.  In connection with these actions, we recorded pre-tax charges to operations totaling $7.1 million during the second quarter of fiscal 2003, of which $3.6 million were noncash charges.  The charges are comprised of the write-off of excess and obsolete inventory costs related to the discontinued product offerings, lease termination and related charges, and severance and other compensation costs.  These restructuring activities were completed by the end of fiscal 2003.

Goodwill Impairment Charges

As a result of the weakness in the business, VIP and head-of-state aircraft market in 2003 and the decision to down-size a furniture manufacturing facility, the goodwill associated with the furniture manufacturing reporting unit was tested for recoverability in June 2003 and found to be impaired.  As a result, $34.0 million of goodwill associated with the reporting unit was written off and charged to operations during the three months ended June 30, 2003.

In March 2003, we entered into a definitive agreement to sell our equity interests in the subsidiaries comprising the Specialty Avionics Group for $140.0 million in cash.  Based upon the fair value of the group implied in the definitive agreement, we determined that the carrying value of the group’s net assets was not fully recoverable.  As a result, we recorded a goodwill impairment charge of $7.5 million during the three months ended March 31, 2003 to reduce the carrying value to estimated net realizable value.

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Liquidity and Capital Resources

Our principal cash needs are for debt service, working capital, capital expenditures and possible strategic acquisitions, as well as to provide DeCrane Holdings with cash to finance its needs, which consists primarily of funding its preferred stock redemption and accrued dividend payment obligations on September 30, 2009.  Our principal sources of liquidity are expected to be cash flow from operations, potential capital market transactions and third party borrowings, principally under our first-lien credit facility.

Cash Flows During the Nine months ended September 30, 2004

Net cash used for operating activities was $21.2 million for the nine months ended September 30, 2004 and consisted of $10.2 million of cash used by operations after adding back depreciation, amortization, preferred stock dividends, noncash restructuring charges, interest accretion and other noncash items, $13.8 million used for working capital and a $2.8 million increase in other liabilities.  The following factors contributed to the $13.8 million working capital increase:

•a $15.6 million increase in inventory commensurate with higher revenues and order backlog; and

•a $0.4 million increase in accounts receivables due to higher revenues; offset by

•a $2.2 million increase in accounts payable, accrued expenses and income taxes payable.

The $2.8 million increase in other liabilities is principally a result of accruing lease termination costs in connection with our 2004 operation realignment and facilities restructuring.

Net cash used for investing activities consisted of capital expenditures of $2.7 million for the nine months ended September 30, 2004.  We anticipate spending approximately $3.0 to $5.0 million for capital expenditures in 2004.

Net cash provided by financing activities was $19.8 million for the nine months ended September 30, 2004 and consisted of:

•$17.8 million of net borrowings under our revolving line of credit;

•$5.0 million of proceeds from the issuance of 13.5% senior unsecured promissory notes; offset by

•$0.9 million of other secured long-term debt repayments; and

•$2.1 million of financing costs related to our debt and preferred stock restructuring.

Debt and Preferred Stock Restructuring

During the third quarter of 2004, holders of $65.0 million of our 12% senior subordinated notes due September 30, 2008 (the “existing notes”) exchanged their notes for new 17% senior discount notes due September 30, 2008 (the “new notes”).  The new notes do not bear cash interest and have an initial accreted value equal to the principal amount of the notes exchanged.  The new notes accrete in value at a 17% annual rate and will have a $128.8 million aggregate accreted principal value at maturity.  The new notes are senior unsecured obligations and are guaranteed by our subsidiaries.  Except for the changes in the interest rate and payment and ranking described above, the new notes have terms substantially identical to those contained in the existing notes, although covenants limiting the incurrence of indebtedness, the granting of liens and the making of restricted payments are more restrictive.  The exchange will help conserve working capital by reducing our cash interest expense by $7.7 million annually through September 2008.

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Concurrent with the note exchange, we amended the terms of our 16% senior preferred stock.  DeCrane Holdings, our parent, also amended the terms of its 14% preferred stock as well.  The amended terms provide that further dividends do not accrue on the preferred stock, except if a leverage ratio (as defined) falls below certain specified levels or if certain triggering events occur, such as failure to discharge any mandatory redemption obligations or comply with certain restrictive covenants and the like.  Depending upon the future leverage ratio achieved, and provided that certain triggering events have not occurred, dividends accrue at a 0%, 4% or 16% annual rate on the 16% preferred stock and 0%, 3.5% or 14% on the 14% preferred stock.  If certain triggering events occur, dividends accrue at the 16% and 14% annual rates.  Based upon the leverage ratio achieved as of September 30, 2004, no dividends will accrue on either the 16% or 14% preferred stock from the amendment dates through December 31, 2004.

All dividends accrued through the amendment date and future dividends, if any, are not payable until redemption.  The amendment for the 16% preferred stock accelerates the mandatory redemption date from March 31, 2009 to December 31, 2008 while the September 30, 2009 mandatory redemption date for the 14% preferred stock remained unchanged.  The amendment to the 16% preferred stock also adds several restrictive covenants.  The holders of the 16% preferred stock were issued 348,945 shares of DeCrane Holdings common stock in connection with the amendment.

Short-Term Borrowings

In September 2004, we received the proceeds from the issuance of 13.5% senior unsecured promissory notes in the aggregate principle amount of $5.0 million to DLJ Merchant Banking Partners II, L.P. and affiliated funds, who are also stockholders of DeCrane Holdings and, as a result, related parties (see Note 16 to the audited financial statements included in our 2003 Form 10-K for additional information on the related party relationship).  Unless extended, the notes, plus accrued interest, are due on November 29, 2004.  The notes may be extended for up to three thirty-day periods, at the option of the noteholders.  While we believe the noteholders would extend the notes beyond the current due date if requested, they are under no obligation to do so.  The notes contain covenants identical to those in the new 17% notes.

Future Liquidity Improvements

We continue to explore transactions that would improve our liquidity and reduce our cash needs.  We have not entered into any commitments to do so and cannot assure you that we will be able to do so in the future.

For example, as disclosed in a Current Report on Form 8-K furnished on July 20, 2004, we engaged in discussions with some of the holders of the remaining 12% senior subordinated notes that did not participate in exchange for the 17% notes.  We proposed that such holders exchange their existing 12% senior subordinated notes for new senior notes that would bear interest at an annual rate of 2% in cash and 10% in kind.  We have terminated all such discussions with the noteholders and no letters of intent or definitive agreements with respect to such proposal were executed.

Debt Obligations and Capital Resources as of September 30, 2004

As of September 30, 2004, first-lien credit facility borrowings and second-lien term debt totaling $108.3 million are at variable interest rates based on defined margins over the current prime rate or LIBOR.  We also had $71.9 million of 15% second-lien term debt, $67.0 million of 17% senior discount notes, $35.0 million of 12% subordinated notes, $8.0 million of other secured indebtedness, and $5.0 million of 13.5% senior unsecured promissory notes outstanding as of September 30, 2004.  In addition, our 16% mandatorily redeemable preferred stock, which has characteristics of both a liability and equity, had a $47.3 million mandatorily redemption value as of September 30, 2004.

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As of September 30, 2004, we had $39.9 million of working capital and $5.9 million of borrowings available under our $24.0 million revolving line of credit, which expires in March 2006.

Financial Condition and Liquidity

We believe our expected operating cash flows, together with borrowings under our first-lien credit facility ($5.9 million of which was available as of September 30, 2004, the commitment for which expires in March 2006), will be sufficient to meet our operating expenses, working capital requirements, capital expenditures and debt service obligations for the next twelve months.  However, our working capital needs generally increase as our order backlog and revenues increase, particularly with respect to orders where we must incur development costs and build inventory but we may not receive full payment until delivery.  Any significant delay in payments could increase our working capital needs beyond our expectations.  Further, our ability to comply with our debt financial covenants, pay principal or interest and satisfy such cash obligations will depend on our future operating performance as well as competitive, legislative, regulatory, business and other factors beyond our control.  Although we cannot be certain, we expect to be in compliance with the revised financial covenants through the end of the year based on our current operating plan.  See “Special Note Regarding Forward-Looking Statements and Risk Factors.”

Disclosure of Contractual Obligations and Commitments

The following table summarizes our known contractual obligations to make future cash payments as of September 30, 2004, as well an estimate of the periods during which these payments are expected to be made.

	Years Ending December 31,
(In millions)	Total		2004		2005 and 2006		2007 and 2008		2009 and Beyond
Short-term borrowings:
13.5% senior unsecured promissory notes (a)	$	5.0	$	5.0	$	—	$	—	$	—
Long-term debt (b):
First-lien credit facility (c):
Term debt	80.5		—		15.0		65.5		—
Revolving line of credit	17.8		—		17.8		—		—
Second-lien term debt (d)	81.9		—		—		81.9		—
17% senior discount notes (e)	67.0		—		—		67.0		—
12% subordinated notes (f)	35.0		—		—		35.0		—
Capital lease obligations (g)	3.1		0.2		0.9		0.6		1.4
Other indebtedness (g)	4.9		0.2		1.7		0.6		2.4
Total short-term borrowings and long-term debt	295.2		5.4		35.4		250.6		3.8
Mandatorily redeemable preferred stock (h)	47.3		—		—		47.3		—
Other long-term liabilities	8.3		—		5.5		2.4		0.4
Operating lease obligations	9.8		0.7		3.4		2.1		3.6
Total obligations as of September 30, 2004	$	360.6	$	6.1	$	44.3	$	302.4	$	7.8

(a)Excludes interest of $0.1 million payable at maturity.

(b)Generally excludes interest payments, which are described in the following notes.

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(c)The first-lien credit facility bears interest at variable rates and therefore the amount of future interest payments are uncertain.  The debt bears interest based on a margin over, at our option, the prime rate or LIBOR.  As of September 30, 2004, the current prime rate was 4.75% and the current LIBOR was 2.12%.  The margins applicable to portions of amounts borrowed vary depending on our consolidated debt leverage ratio.  Currently, the applicable margins are 4.00% to 4.75% for prime rate borrowings and 5.25% to 6.00% for LIBOR borrowings.  The weighted-average interest rate on all first-lien debt was 7.37% as of September 30, 2004.

(d)The second-lien term debt is comprised of $70.0 million of fixed rate debt and $10.0 million of variable rate debt.  The fixed rate debt bears interest at 15%; 12% payable quarterly in cash and 3% pay-in-kind or “accreted” interest, payable at maturity.  The variable rate debt bears cash interest, at our option, at the prime rate plus 7.5% or LIBOR plus 8.5%, plus 3% pay-in-kind interest payable at maturity.  The weighted-average interest rate on all second-lien debt was 14.77% as of September 30, 2004.  All of the second-lien debt matures on June 30, 2008, at which time the cash payment obligation will be $91.7 million, including the 3% pay-in-kind interest obligation.

(e)The 17% senior discount notes do not bear cash interest expense but instead accrete in value at a 17% annual rate until maturity on September 30, 2008.  The notes will have a $128.8 million aggregate accreted principal value at maturity.

(f)Interest on the 12% subordinated notes is payable semiannually.

(g)Interest is generally payable monthly.

(h)Dividends do not accrue on the preferred stock unless a defined leverage ratio falls below certain specified levels as of each quarterly testing date or if certain triggering events occur.  Depending on the future leverage ratio achieved, and provided certain triggering events have not occurred, dividends accrue at a 0%, 4% or 16% annual rate for the succeeding quarter.  If certain triggering events occur, such as failure to discharge any mandatory redemption obligations or comply with certain restrictive covenants and the like, dividends accrue at a 16% annual rate.  Based on the leverage ratio achieved as of September 30, 2004, no dividends will accrue on the preferred stock through December 31, 2004.  Future dividends, if any, are not payable until redemption.  The mandatory redemption date is December 31, 2008.  Our debt instruments restrict our ability to make payments on our preferred stock.

Disclosure About Off-Balance Sheet Commitments and Indemnities

We are a wholly-owned subsidiary of DeCrane Holdings, whose capital structure also includes mandatorily redeemable preferred stock.  Since we are DeCrane Holdings’ only operating subsidiary and source of cash, we may be required to fund DeCrane Holdings’ redemption obligation in the future, subject to significant limitations contained in our first-lien credit agreement, second-lien term notes and the senior discount notes and subordinated notes indentures.  The DeCrane Holdings preferred stock has a total redemption value of $77.2 million as of September 30, 2004 and the preferred stock is mandatorily redeemable on September 30, 2009.

During our normal course of business, we have entered into agreements containing indemnities pursuant to which we may be required to make payments in the future.  These indemnities are in connection with facility leases and liabilities for specified claims arising from investment banking services our financial advisors provide to us.  The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite.  Substantially all of these indemnities provide no limitation on the maximum potential future payments we could be obligated to make and is not quantifiable.  We have not recorded any liability for these indemnities since no claims have been asserted to date.

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In connection with the sale of the Specialty Avionics Group, we made indemnities to the buyer with respect to a number of customary, and certain other specific, representations and warranties.  Our indemnities with respect to some of these matters are limited in terms of duration with the maximum of potential future payments capped at $14.0 million and our indemnities with respect to specified environmental matters will expire not later than October 2010 and provides for a maximum liability of $5.0 million, while others will have no limitations.

As of September 30, 2004, we also had irrevocable standby letters of credit in the amount of $0.3 million issued and outstanding under our first-lien credit facility.

Recent Accounting Pronouncements

Accounting Pronouncements Adopted January 1, 2004

As more fully described in Note 1 accompanying our financial statements included in this report and “—Changes in Accounting Principles” above, effective January 1, 2004 we adopted the provisions of SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.”

Special Note Regarding Forward-Looking Statements and Risk Factors

All statements other than statements of historical facts included in this report, including statements about our future performance and liquidity and future industry performance, are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are subject to known and unknown risks, uncertainties and other factors, which are difficult to predict.  We are vulnerable to a variety of factors that affect many businesses, such as:

•fuel prices and general economic conditions that affect demand for aircraft and air travel, which in turn affect demand for our products and services;

•acts, and ongoing threats, of global terrorism, military conflicts and health epidemics that affect demand for aircraft and air travel, which in turn affect demand for our products and services;

•our reliance on key customers and the adverse effect a significant decline in business from any one of them would have on our business;

•our reliance on large projects, where unanticipated needs to incur development costs and acquire inventory or delays in payment could increase our working capital needs;

•changes in prevailing interest rates and the availability of financing to fund our plans for continued growth;

•competition from larger companies;

•Federal Aviation Administration prescribed standards and licensing requirements, which apply to many of the products and services we provide;

•inflation, and other general changes in costs of goods and services;

•price and availability of raw materials, component parts and electrical energy;

•liability and other claims asserted against us that exceeds our insurance coverage;

•the ability to attract and retain qualified personnel;

•labor disturbances; and

•changes in operating strategy, or our acquisition and capital expenditure plans.

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Some of the more significant factors listed above are further described in our 2003 Annual Report on Form 10-K and should be read in conjunction with this report.  Changes in such factors could cause our actual results to differ materially from those contemplated in such forward-looking statements.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.  We undertake no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.  You should not rely on our forward-looking statements as if they were certainties.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including interest rates and changes in foreign currency exchange rates.  Market risk is the potential loss arising from adverse changes in prevailing market rates and prices.  From time to time, we use derivative financial instruments to manage and reduce risks associated with these factors.  We do not enter into derivatives or other financial instruments for trading or speculative purposes.

Interest Rate Risk.  A significant portion of our capital structure is comprised of long-term variable and fixed-rate debt.

Market risk related to our variable-rate debt is estimated as the potential decrease in pre-tax earnings resulting from an increase in interest rates.  The interest rates applicable to variable-rate debt are, at our option, based on defined margins over the current prime rate or LIBOR.  As of September 30, 2004, the current prime rate was 4.75% and the current LIBOR was 2.12%.  Based on $108.3 million of variable-rate debt outstanding as of September 30, 2004, a hypothetical one percent rise in interest rates, to 5.75% for prime rate borrowings and 3.12% for LIBOR borrowings, would reduce our pre-tax earnings by $1.1 million annually.

To limit a portion of our exposure related to rising interest rates, we have entered into an interest rate swap contract to effectively convert our variable-rate industrial revenue bonds to 4.2% fixed-rate debt until maturity in 2008.  The contract is considered to be a hedge against changes in the amount of future cash flows associated with interest payments on this portion of our variable-rate debt.  Market risk related to this interest rate swap contract is estimated as the potential higher interest expense we will incur if the variable interest rate decreases below the 4.2% fixed rate.  Based on the $3.0 million of variable-rate debt converted to fixed-rate debt outstanding as of September 30, 2004, a hypothetical one percent decrease in the variable interest rate to 3.2%, would reduce our pre-tax earnings by less than $0.1 million annually.

The estimated fair value of our recently issued $67.0 million of 17% fixed-rate long-term senior discount notes was $48.9 million as of September 30, 2004.  Market risk related to our fixed-rate debt is deemed to be the potential increase in fair value resulting from a decrease in interest rates.  For example, a hypothetical ten percent decrease in the interest rates, from 17.0% to 15.3%, would increase the fair value of our fixed-rate debt by approximately $3.1 million.

The estimated fair value of our $35.0 million of 12% fixed-rate long-term debt increased $7.0 million, or 44.3%, to approximately $22.8.0 million as of September 30, 2004 from $15.8 million as of December 31, 2003.  Although we cannot be certain, we believe the increase may be a result of the recovery of the business, VIP and head-of-state aircraft market in 2004 and the exchange of $65.0 million of 12% notes for 17% senior discount notes with interest payable at maturity.  Market risk related to our fixed-rate debt is deemed to be the potential increase in fair value resulting from a decrease in interest rates.  For example, a hypothetical ten percent decrease in the interest rates, from 12.0% to 10.8%, would increase the fair value of our fixed-rate debt by approximately $1.3 million.

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Foreign Currency Exchange Rate Risk.  Our foreign customers are located in various parts of the world, primarily Canada, the Far and Middle East and Western Europe, and we have a subsidiary with manufacturing facilities in Mexico.  To limit our foreign currency exchange rate risk related to sales to our customers, orders are almost always valued and sold in U.S. dollars.  We have entered into forward foreign exchange contracts in the past, primarily to limit exposure related to foreign inventory procurement and operating costs.  While we have not entered into any such contracts since 1998, we may do so in the future depending on the volume of non-U.S. dollar denominated transactions and our assessment of future foreign exchange rate trends.

ITEM 4.CONTROLS AND PROCEDURES

The management of DeCrane Aircraft Holdings, Inc. (the “Company”), under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the Company’s “disclosure controls and procedures” (as defined in Exchange Act Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this report.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

There was no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

See Note 10 to the consolidated financial statements included in this report.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

As part of our 16% preferred stock restructuring, the preferred stockholders were issued 348,945 shares of DeCrane Holdings common stock.  No cash proceeds were received from this issuance.

ITEM 6.EXHIBITS

3.2.1.2Certificate of Amendment of Certificate of Incorporation of DeCrane Aircraft Holdings, Inc. dated July 23, 2004 *

4.5.1DeCrane Aircraft Holdings, Inc. 17% Senior Discount Notes Due 2008 (Note No. 1 dated July 23, 2004)*

4.5.1.1DeCrane Aircraft Holdings, Inc. 17% Senior Discount Notes Due 2008 (Note No. 2 dated September 9, 2004)*

4.6.2Certificate of Amendment to Certificate of Designations, Preferences and Rights of 16% Senior Redeemable Exchangeable Preferred Stock Due 2009 (now designated as Senior Redeemable Exchangeable Preferred Stock Due 2008) of DeCrane Aircraft Holdings, Inc. dated July 23, 2004 *

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4.7.2Amendment No. 2 to the Senior Preferred Stock Registration Rights Agreement dated as of June 30, 2000 among DeCrane Aircraft Holdings, Inc. and the holders of Senior Preferred Stock dated July 23, 2004 *

4.8Indenture dated July 23, 2004 between DeCrane Aircraft Holdings, Inc. and U.S. Bank National Association for 17% Senior Discount Notes Due 2008 *

4.8.1First Supplemental Indenture dated September 9, 2004 between DeCrane Aircraft Holdings, Inc. and U.S. Bank National Association for 17% Senior Discount Notes Due 2008 *

10.2.1Amendment No. 1 to the Amended and Restated Investors’ Agreement dated as of October 6, 2000 by and among DeCrane Holdings Co., DeCrane Aircraft Holdings, Inc. and the stockholders named therein dated December 31, 2001 *

10.2.2Amendment No. 2 to the Amended and Restated Investors’ Agreement dated as October 6, 2000 by and among DeCrane Holdings Co., DeCrane Aircraft Holdings, Inc. and the stockholders named therein dated July 23, 2004 *

10.10.8Fifth Amendment to the Third Amended and Restated Credit Agreement dated as of June 9, 2004 among DeCrane Aircraft Holdings, Inc., the lenders listed therein and Credit Suisse First Boston, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as syndication agent and administrative agent for the lenders *

10.10.9Sixth Amendment to the Third Amended and Restated Credit Agreement dated as of July 16, 2004 among DeCrane Aircraft Holdings, Inc., the lenders listed therein and Credit Suisse First Boston, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as syndication agent and administrative agent for the lenders *

10.12.1First Amendment to the Credit Agreement dated as of December 22, 2003 among DeCrane Aircraft Holdings, Inc., the lenders listed therein and Credit Suisse First Boston, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as syndication agent and administrative agent for the lenders dated June 9, 2004 *

10.12.2Second Amendment to the Credit Agreement dated as of December 22, 2003 among DeCrane Aircraft Holdings, Inc., the lenders listed therein and Credit Suisse First Boston, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as syndication agent and administrative agent for the lenders dated July 16, 2004 *

10.13Exchange Agreement dated as of July 23, 2004, among DeCrane Aircraft Holdings, Inc., the affiliates of DeCrane Aircraft set forth on the signature pages hereto as Guarantors, and certain holders of DeCrane Aircraft’s 12% Senior Subordinated Notes due 2008 (the “Old Notes”) set forth on the signature pages hereto *

10.13.1Exchange Agreement dated as of September 9, 2004, among DeCrane Aircraft Holdings, Inc., the affiliates of DeCrane Aircraft set forth on the signature pages hereto as Guarantors, and certain holders of DeCrane Aircraft’s 12% Senior Subordinated Notes due 2008 (the “Old Notes”) set forth on the signature pages hereto *

10.1416% Senior Preferred Stock Amendment Agreement dated as of July 23, 2004, among DeCrane Aircraft Holdings, Inc., DeCrane Holdings Co., and the other persons set forth on the signature pages hereto *

21.1List of Subsidiaries of Registrant *

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31.1Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

31.2Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

32Chief Executive Officer and Chief Financial Officer Certifications Pursuant to Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *

*Filed herewith

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 12, 2004	By:	/s/ RICHARD J. KAPLAN
	Name:	Richard J. Kaplan
	Title:	Senior Vice President, Chief Financial Officer, Secretary, Treasurer and Director

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EX-3.2.1.2

Exhibit 3.2.1.2

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
DECRANE AIRCRAFT HOLDINGS, INC.

DECRANE AIRCRAFT HOLDINGS, INC., a Delaware corporation (the “Corporation”) does hereby certify that:

1.  The amendment to the Corporation’s Certificate of Incorporation set forth below was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware (“DGCL”) and has been consented to in writing by the shareholders of the Corporation, and written notice has been given, in accordance with Section 228 of the DGCL.

2.  Article FOURTH of the Corporation’s Certificate of Incorporation is amended in its entirety as follows:

“FOURTH:  The aggregate number of shares of all classes of which the Corporation shall have authority to issue is as follows:

(i) 1,000 shares of Common Stock, with par value of $0.01 per share (the “Common Shares”); and

(ii) 700,000 shares of Senior Redeemable Exchangeable Preferred Stock with par value of $0.01 per share (the “Senior Preferred Stock”).  The Board of Directors is hereby authorized pursuant to the General Corporation Law of the State of Delaware to fix or alter from time to time the designations, powers, preferences and relative, participatory, optional or other rights, if any, and the qualifications, limitations or restrictions of the shares of the Senior Preferred Stock.”

IN WITNESS WHEREOF, DECRANE AIRCRAFT HOLDINGS, INC. has caused this Certificate of Amendment to be executed by its duly authorized officers on this 23 day of July, 2004.

DECRANE AIRCRAFT HOLDINGS, INC.,		Attest:
By:	/S/ R. JACK DECRANE	By:	/S/ JAMES E. MANN
	R. Jack DeCrane, Chairman		James E. Mann, Vice President

EX-4.5.1

Exhibit 4.5.1

(Face of Note)

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

CUSIP 243662 AE3

17% Senior Discount Notes due 2008

No. 1 $127,771,000

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

promises to pay to CEDE & CO., or registered assigns, the principal sum of One Hundred and Twenty Seven Million, Seven Hundred and Seventy-One Thousand Dollars ($127,771,000) on September 30, 2008.

Dated: July 23, 2004
DECRANE AIRCRAFT HOLDINGS, INC.
By:	/s/  RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title:  Chief Financial Officer

This is one of the
Notes referred to in the
within-mentioned Indenture:

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:	/S/  CAUNA M. SILVA
	Name:	Cauna M. Silva
	Title:	Vice President

(Back of Note)

17% Senior Discount Notes due 2008

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

THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OR REGULATION D UNDER THE SECURITIES ACT (AN “IAI”), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUERS OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.

2

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

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

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

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

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

5.OPTIONAL REDEMPTION.

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

Year	Percentage
2004	104.000	%
2005	102.000	%
2006 and thereafter	100.000	%

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6.MANDATORY REDEMPTION.

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

7.REPURCHASE AT OPTION OF HOLDER.

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

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

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

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

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

11.AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions set forth in the Indenture, the Indenture, the Note Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount at maturity of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount at maturity of the then outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).  Notwithstanding the foregoing, without the consent of any Holder of Notes, the Issuer, the Guarantors and the Trustee may amend or supplement the

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Indenture, the Note Guarantees or the Notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Issuer’s obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Issuer’s assets, to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not materially adversely affect the legal rights under the Indenture of any such Holder, or to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act or to provide for additional Note Guarantees of the Notes.

12.DEFAULTS AND REMEDIES.

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

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

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

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

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

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

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

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

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

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

DeCrane Aircraft Holdings, Inc.
2361 Rosecrans Avenue, Suite 180
El Segundo, California  90245
Attention: Chief Financial Officer

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ASSIGNMENT FORM

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

(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Issuer.  The agent may substitute another to act for him.
Date:
	Your Signature:
			(Sign exactly as your name
		appears on the face of this Note)
	Signature Guarantee:

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OPTION OF HOLDER TO ELECT PURCHASE

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

o Section 4.10o Section 4.14

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

Date:	Your Signature:
	(Sign exactly as your name appears on the Note)
	Tax Identification No:
	Signature Guarantee:

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

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

Date of Exchange Amount of decrease
in
Principal Amount
of this
Global Note Amount of
increase in
Principal
Amount of this
Global Note Principal Amount
of this Global Note
following such
decrease (or increase) Signature of
authorized officer
of Trustee or
Note Custodian

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EX-4.5.1.1

Exhibit 4.5.1.1

(Face of Note)

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

CUSIP 243662 AE3

17% Senior Discount Notes due 2008

No. 2 $1,001,000

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

promises to pay to CEDE & CO., or registered assigns, the principal sum of One Million and One Dollars ($1,001,000) on September 30, 2008.

Dated: September 9, 2004
DECRANE AIRCRAFT HOLDINGS, INC.
By:	/s/  RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title:  Chief Financial Officer

This is one of the
Notes referred to in the
within-mentioned Indenture:

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:	/S/  CAUNA M. SILVA
	Name:	Cauna M. Silva
	Title:	Vice President

(Back of Note)

17% Senior Discount Notes due 2008

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

THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OR REGULATION D UNDER THE SECURITIES ACT (AN “IAI”), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUERS OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.

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

1.INTEREST.  No interest shall accrue on this Note.  Instead, the Accreted Value of the Note will accrete at a rate of 17% from the date of issuance, compounded semiannually on each March 30 and September 30 (commencing September 30, 2004), to an aggregate Accreted Value of $1,001,000, the full principal amount at maturity, on September 30, 2008.  The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate of 18% per annum.

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

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

4.INDENTURE   The Issuer issued the Notes under an Indenture dated as of July 23, 2004, among the Issuer, the Guarantors and the Trustee, as supplemented by the First Supplemental Indenture dated as of September 9, 2004 among the Issuer, the Guarantors and the Trustee (“Indenture”).  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb).  The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.  The Notes are obligations of the Issuer initially limited to $1,001,000 in aggregate principal amount at maturity.  Subject to limits in the Indenture, the Issuer may issue Additional Notes constituting the same series as the Initial Notes.

5.OPTIONAL REDEMPTION.

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

Year	Percentage
2004	104.000	%
2005	102.000	%
2006 and thereafter	100.000	%

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6.MANDATORY REDEMPTION.

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

7.REPURCHASE AT OPTION OF HOLDER.

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

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

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

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

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

11.AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions set forth in the Indenture, the Indenture, the Note Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount at maturity of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or compliance with any provision of the Indenture or

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

12.DEFAULTS AND REMEDIES. 

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

(b) In the event of a declaration of acceleration of the Notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in clause (d) of the preceding paragraph, the declaration of acceleration of the Notes shall be automatically annulled if the holders of any Indebtedness described in clause (d) have rescinded the declaration of acceleration in respect of such Indebtedness within 30 days of the date of such declaration and if (i) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent

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jurisdiction and (ii) all existing Events of Default, except non-payment of principal or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

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

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

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

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

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

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

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

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

DeCrane Aircraft Holdings, Inc.
2361 Rosecrans Avenue, Suite 180
El Segundo, California  90245
Attention: Chief Financial Officer

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ASSIGNMENT FORM

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

(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Issuer.  The agent may substitute another to act for him.
Date:
	Your Signature:
			(Sign exactly as your name
		appears on the face of this Note)
	Signature Guarantee:

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OPTION OF HOLDER TO ELECT PURCHASE

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

o Section 4.10o Section 4.14

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

Date:	Your Signature:
	(Sign exactly as your name appears on the Note)
	Tax Identification No:
	Signature Guarantee:

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

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

Date of Exchange Amount of decrease
in
Principal Amount
of this
Global Note Amount of
increase in
Principal
Amount of this
Global Note Principal Amount
of this Global Note
following such
decrease (or increase) Signature of
authorized officer
of Trustee or
Note Custodian

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EX-4.6.2

Exhibit 4.6.2

CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF 16% SENIOR REDEEMABLE EXCHANGEABLE
PREFERRED STOCK DUE 2009
(NOW DESIGNATED AS SENIOR REDEEMABLE EXCHANGEABLE
PREFERRED STOCK DUE 2008)

of

DECRANE AIRCRAFT HOLDINGS, INC.

Pursuant to Section 242 of the General Corporation Law
of the State of Delaware

DeCrane Aircraft Holdings, Inc., a Delaware corporation (the “Corporation”), hereby certifies as follows:

A.The undersigned, R. Jack DeCrane, is the duly elected Chief Executive Officer of the Corporation.

B.Pursuant to Article Fourth of the Corporation’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Board of Directors of the Corporation (the “Board”) is authorized to fix the powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions (collectively, “Rights and Preferences”), of a series of the Corporation’s 700,000 shares of preferred stock, $0.01 par value per share (the “Preferred Stock”).

C.Pursuant to a Certificate of Designations, Preferences and Rights of 16% Senior Redeemable Exchangeable Preferred Stock Due 2009, as amended by the filing of that certain Certificate of Amendment to the Certificate of Designations, Preferences and Rights of 16% Senior Redeemable Exchangeable Preferred Stock Due 2009 (the “Senior Preferred Stock Certificate of Designations”), the Board fixed the Rights and Preferences of the Corporation’s 16% Senior Redeemable Exchangeable Preferred Stock Due 2009.

D.The Board, in accordance with the provisions of Section 141(f) and Section 242 of the General Corporation Law of the State of Delaware, has (a) declared advisable that the Senior Preferred Stock Certificate of Designations be amended and restated as set forth in this Certificate of Amendment to Certificate of Designations (the “Certificate of Amendment”), (b) recommended that the Certificate of Amendment be approved and adopted by the Corporation’s stockholders, including the holders of the

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Corporation’s 16% Senior Redeemable Exchangeable Preferred Stock Due 2009, and (c) submitted the Certificate of Amendment to such stockholders for approval and adoption.

E.The Corporation’s stockholders have duly approved and adopted this Certificate of Amendment in accordance with the provisions of Section 228 and Section 242 of the General Corporation Law of the State of Delaware, to amend and restate the provisions of the Senior Preferred Stock Certificate of Designations as set forth herein.

F.Pursuant to the foregoing resolutions of the Board and the Corporation’s stockholders, in accordance with Sections 103 and 242 of the General Corporation Law of the State of Delaware, the Corporation hereby amends and restates the Senior Preferred Stock Certificate of Designations in its entirety, with the effect that, effective immediately upon the filing of this Certificate of Amendment with the Secretary of State of Delaware, each outstanding share of 16% Senior Redeemable Exchangeable Preferred Stock Due 2009 of the Corporation shall have the powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a share of Senior Redeemable Exchangeable Preferred Stock Due 2008 as set forth below:

1.Number and Designation.  700,000 shares of the Preferred Stock of the Corporation shall be designated as Senior Redeemable Exchangeable Preferred Stock Due 2008 (the “Senior Preferred Stock”).

2.Rank.  The Senior Preferred Stock shall, with respect to dividend rights, if any, and rights on liquidation, dissolution and winding up, rank prior to all classes of or series of common stock of the Corporation, including the Corporation’s common stock, par value $0.01 per share (“Common Stock”), and each other future class of capital stock of the Corporation, the terms of which provide that such class shall rank junior to the Senior Preferred Stock or the terms of which do not specify any rank relative to the Senior Preferred Stock.  All equity securities of the Corporation to which the Senior Preferred Stock ranks prior (whether with respect to dividends or upon liquidation, dissolution, winding up or otherwise), including the Common Stock, are collectively referred to herein as the “Junior Securities.”  All equity securities of the Corporation with which the Senior Preferred Stock ranks on a parity (whether with respect to dividends or upon liquidation, dissolution, winding up or otherwise) are collectively referred to herein as the “Parity Securities.”  The respective definitions of Junior Securities and Parity Securities shall also include any rights or options exercisable for or convertible into any of the Junior Securities and Parity Securities, as the case may be (other than convertible debt securities).  The Senior Preferred Stock shall be subject to the creation of Junior Securities and Parity Securities.

3.Dividends.  (a) Dividends on each share of Senior Preferred Stock shall accrue from and after July 23, 2004 (the “Amendment Date”), but shall not be payable (except to the extent accrued dividends increase the Liquidation Value (as defined below) payable hereunder), for each period beginning on the day after each Quarterly Date (as defined below) (or, in the case of the Quarterly Period (as defined below) ending on

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September 30, 2004, beginning on the Amendment Date and ending on the next Quarterly Date at a rate equal to:

(A) except as provided in clause (C) below, 0% per annum if the Consolidated EBITDA Ratio (as defined below) as of the Quarterly Date immediately prior to the beginning of such period is greater than or equal to 6.0;

(B) except as provided in clause (C) below, 4% per annum (computed on the basis of a 360 day year) of the Liquidation Value if the Consolidated EBITDA Ratio (as defined below) as of the Quarterly Date immediately prior to the beginning of such period is less than 6.0 but greater than or equal to 5.0;

(C) 16% per annum (computed on the basis of a 360 day year) of the Liquidation Value (i) if the Consolidated EBITDA Ratio as of such first Quarterly Date is less than 5.0 or (ii) if and for so long as a Triggering Event shall have occurred and be continuing.

Such 0%, 4% or 16% rate, as applicable, is referred to herein as the “Dividend Rate”.  If the Corporation is unable or shall fail to discharge its obligation to redeem all outstanding shares of Senior Preferred Stock pursuant to Section 5(b) or 5(c) hereof (including by operation of the proviso to Section 5(b)) (each, a “Mandatory Redemption Obligation”), the Dividend Rate shall increase by .25 percent per quarter (each, a “Default Dividend”) for each quarter or portion thereof following the date on which such redemption was required to be made until cured; provided that the aggregate increase shall not exceed 5%.  Such dividends, if any, shall accrue in the manner set forth above quarterly from and after the Amendment Date on March 31, June 30, September 30 and December 31 of each year (unless such day is not a business day, in which event on the next succeeding business day) (each of such dates being a “Quarterly Date” and each such quarterly period being a “Quarterly Period”).  Such dividends shall be cumulative from the date of issue, whether or not in any Quarterly Period or Periods there shall be funds of the Corporation legally available for the payment of such dividends.

As used herein, (i) “Consolidated EBITDA Ratio” means, on any Quarterly Date, the ratio of (a) Consolidated Total Debt plus the aggregate Liquidation Value of all outstanding shares of Senior Preferred Stock as of such Quarterly Date to (b) Consolidated Cash Flow (as defined in the Indenture referenced below) for the four consecutive Quarterly Periods ending on such Quarterly Date; (ii) “Consolidated Total Debt” means, as at any date of determination, the total amount of Indebtedness (as defined in the Indenture) of the Corporation and its Restricted Subsidiaries (as defined in the Indenture), determined on a consolidated basis in accordance with generally accepted accounting principles; (iii) “Consolidated Cash Flow” has the meaning set forth in the Indenture; (iv) “Indenture” means the Indenture dated as of July 23, 2004 among the Corporation, as issuer, each of the guarantors party thereto and U.S. Bank National Association, as trustee, as in effect on the Amendment Date); and (v) “Triggering Event” means any of the following events:  (i) the Corporation is unable or shall fail to discharge any Mandatory Redemption Obligation (including by operation of the proviso

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to Section 5(b)); (ii) the Corporation shall fail to comply with its obligations under Sections 3(c), 3(d), 8(c), 9, 10, 11 or 12 hereof; (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that either (A) any “person” or “group” (as such terms are used in Section 13(d) of the Exchange Act), other than the Principals (as defined in the Indenture) and their Related Parties (as defined in the Indenture), becomes the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of 20% or more of the outstanding common stock of the Corporation or (B) the beneficial ownership of the Principals and their Related Parties immediately following the effective date of such transaction of securities of the Corporation represents less than 80% of the percentage beneficial ownership of the Principals and their Related Parties of the outstanding common stock of the Corporation on the Amendment Date; or (iv) the consummation of an Initial Public Offering (as defined in the Investors’ Agreement (as defined below) as such agreement is in effect on the Amendment Date) by DeCrane Holdings.

(b)Holders of shares of Senior Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of the cumulative dividends, as herein provided, on the Senior Preferred Stock.  Except as provided in this Section 3, no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Senior Preferred Stock that accrue.

(c)So long as any shares of the Senior Preferred Stock are outstanding, no dividends shall be declared or paid or set apart for payment on Parity Securities for any period.

(d)(i)  So long as any shares of the Senior Preferred Stock are outstanding, no dividends (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase Shares of, Junior Securities) shall be declared or paid or set apart for payment or other distribution declared or made upon Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (all such dividends, distributions, redemptions or purchases being hereinafter referred to as a “Junior Securities Distribution”) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such stock) by the Corporation, directly or indirectly (except by conversion into or exchange for Junior Securities).

(ii)Section 3(d)(i) will not prohibit:

(A)the repurchase, redemption or other acquisition or retirement for value of any capital stock and all warrants or other rights to acquire capital stock (collectively, “Equity Interests”) of the Corporation or DeCrane Holdings Co. (“Holdings”) held by any member of the Corporation’s or Holdings’ or any of the Corporation’s subsidiaries’ management pursuant to any management equity subscription agreement or stock option agreement and any dividend to Holdings to fund any such

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repurchase, redemption, acquisition or retirement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed:

(x)$2.0 million in the aggregate; plus

(y)the aggregate cash proceeds received by the Corporation since the Amendment Date from any issuance of Junior Securities by the Corporation or capital stock by Holdings to members of management of the Corporation and its subsidiaries;

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

(C)payments or distributions to Holdings pursuant to any tax sharing agreement or arrangement between the Corporation and Holdings, as the same may be amended from time to time; provided that in no event shall the amount permitted to be paid pursuant to all such agreements and/or arrangements exceed the amount the Corporation would be required to pay for income taxes were it to file a consolidated tax return for itself and its consolidated subsidiaries as if it were a corporation that was a parent of a consolidated group; and

(D)the redemption, repurchase, retirement, defeasance or other acquisition of any Equity Interests of the Corporation in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a subsidiary of the Corporation) of, other Equity Interests of the Corporation (other than any Disqualified Stock).

4.Liquidation Preference.  (a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Junior Securities, each holder of a share of Senior Preferred Stock shall be entitled to receive an amount equal to the Liquidation Value of such share.  “Liquidation Value” on any date means, with respect to any share of Senior Preferred Stock, the sum of (1) $189.21 per share and (2) all dividends, if any, accrued but unpaid on such share from and after the Amendment Date to such date in accordance with Section 3.  Except as provided in the preceding sentences, holders of shares of Senior Preferred Stock shall not be entitled to any distribution in the event of liquidation, dissolution or winding up of the affairs of the Corporation.  If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of the shares of Senior Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on

5

any Parity Securities, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Senior Preferred Stock and any such other Parity Securities ratably in accordance with the respective amounts that would be payable on such shares of Senior Preferred Stock and any such other stock if all amounts payable thereon were paid in full.  For the purposes of this Section 4, (i) a consolidation or merger of the Corporation with one or more corporations, or (ii) a sale or transfer of all or substantially all of the Corporation’s assets, shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Corporation.

(b)Subject to the rights of the holders of any Parity Securities, after payment shall have been made in full to the holders of the Senior Preferred Stock, as provided in this Section 4, any other series or class or classes of Junior Securities shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Senior Preferred Stock shall not be entitled to share therein.

5.Redemption.

(a)Redemption at the Option of the Corporation.  At any time, to the extent the Corporation shall have funds legally available for such payment, the Corporation may, at its option, redeem shares of Senior Preferred Stock, at any time in whole but not in part, at redemption prices per share in cash set forth in the table below:

Year Beginning July 1,	Percentage of Liquidation Value on Date of Redemption
Prior to 2005	116	%
2005	108	%
2006	106	%
2007	104	%
2008	102	%

(b)Redemption in the Event of a Change of Control.  In the event of a Change of Control, the Corporation shall, to the extent it shall have funds legally available for such payment, offer to redeem all of the shares of Senior Preferred Stock then outstanding, and shall redeem the shares of Senior Preferred Stock of any holder of such shares that shall consent to such redemption, upon a date no later that 30 days following the Change of Control, at a redemption price per share equal to 101% of Liquidation Value; provided that the Corporation shall not repurchase any Senior Preferred Stock pursuant to this Section 5(b) to the extent that such repurchase is prohibited by Section 4.07 of the Indenture or Section 4.07 of the Indenture dated as of October 15, 1998 by and among the Corporation, the guarantors party thereto and State Street Bank and Trust Company, as trustee, as in effect on the date hereof, but notwithstanding such prohibition, any such failure to repurchase any Senior Preferred Stock shall constitute a Triggering Event as defined in Section 3 hereof for so long as such failure shall continue.

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“Change of Control” means the occurrence of any of the following:  (a) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Corporation and its subsidiaries, taken as a whole, to any “person” or “group” (as such terms are used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than the Principals and their Related Parties; (b) the adoption of a plan for the liquidation or dissolution of the Corporation; (c) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” or “group” (as such terms are used in Section 13(d) of the Exchange Act), other than the Principals and their Related Parties, becomes the “beneficial owner” (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly through one or more intermediaries, of 50% or more of the voting power of the outstanding voting stock of the Corporation; or (d) the first day on which a majority of the members of the board of directors of the Corporation are not Continuing Members.

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

(c)Mandatory Redemption.  To the extent the Corporation shall have funds legally available for such payment, on December 31, 2008, if any shares of the Senior Preferred Stock shall be outstanding, the Corporation shall redeem all outstanding shares of the Senior Preferred Stock, at a redemption price equal to the aggregate Liquidation Value, in cash, to the date of redemption, without interest.

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

(e)Failure to Redeem.  If the Corporation is unable or shall fail to discharge its Mandatory Redemption Obligation, the Corporation shall use commercially reasonable efforts to obtain financing for such purpose and such Mandatory Redemption Obligation shall be discharged as soon as the Corporation is able to discharge such Mandatory Redemption Obligation.  If and so long as any Mandatory Redemption Obligation with respect to the Senior Preferred Stock shall not be fully discharged, the

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Corporation shall not (i) directly or indirectly, redeem, purchase, or otherwise acquire any Parity Security or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Parity Securities (except in connection with a redemption, sinking fund or other similar obligation to be satisfied pro rata with the Senior Preferred Stock) or (ii) notwithstanding Section 3(d), declare or make any Junior Securities Distribution (except as permitted by Section 3(d)(ii)(C)), or, directly or indirectly, discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of the Junior Securities.

(f)All redemptions of Senior Preferred Stock shall be made on a pro rata basis.

6.Procedure for Redemption.  (a) In the event the Corporation shall redeem shares of Senior Preferred Stock pursuant to Section 5(a) or 5(c), notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than 10 days nor more than 20 days prior to the redemption date, to each holder of record of the shares to be redeemed at such holder’s address as the same appears on the stock register of the Corporation; provided that neither the failure to give such notice nor any defect therein shall affect the validity of the giving of notice for the redemption of any share of Senior Preferred Stock to be redeemed except as to the holder to whom the Corporation has failed to give said notice or except as to the holder whose notice was defective.  Each such notice shall state: (i) the redemption date; (ii) the number of shares of Senior Preferred Stock to be redeemed; (iii) the redemption price; (iv) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (v) that dividends, if any, on the shares to be redeemed will cease to accrue on such redemption date.

(b)In the case of any redemption pursuant to Sections 5(a) or 5(c) hereof, notice having been mailed as provided in Section 6(a) hereof, from and after the redemption date (unless default shall be made by the Corporation in providing money for the payment of the redemption price of the shares called for redemption), dividends, if any, on the shares of Senior Preferred Stock so called for redemption shall cease to accrue, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the redemption price) shall cease.  Upon surrender in accordance with said notice of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such share shall be redeemed by the Corporation at the redemption price aforesaid.  In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.

(c)In the case of a redemption pursuant to Section 5(b) hereof, notice of such redemption shall be given by first class mail, postage prepaid, mailed not more than 20 days following the occurrence of the Change of Control and not less than 10 days prior to the redemption date, to each holder of record of the shares to be redeemed at such holder’s address as the same appears on the stock register of the Corporation; provided

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that neither the failure to give such notice nor any defect therein shall affect the validity of the giving of notice for the redemption of any share of Senior Preferred Stock to be redeemed except as to the holder to whom the Corporation has failed to give said notice or except as to the holder whose notice was defective.  Each such notice shall state: (i) that a Change of Control has occurred; (ii) the redemption date; (iii) the redemption price; (iv) that such holder may elect to cause the Corporation to redeem all or any of the shares of Senior Preferred Stock held by such holder; (v) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (vi) that dividends, if any, on the shares the holder elects to cause the Corporation to redeem will cease to accrue on such redemption date.

Upon receipt of such notice, the holder shall, within 5 business days of receipt thereof, return such notice to the Corporation indicating the number of shares of Senior Preferred Stock such holder shall elect to cause the Corporation to redeem, if any.

(d)In the case of a redemption pursuant to Section 5(b) hereof, notice having been mailed as provided in Section 6(c) hereof, from and after the redemption date (unless default shall be made by the Corporation in providing money for the payment of the redemption price of the shares called for redemption), dividends, if any, on such shares of Senior Preferred Stock as the holder elects to cause the Corporation to redeem shall cease to accrue, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the redemption price) shall cease.  Upon surrender in accordance with said notice of the certificates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such share shall be redeemed by the Corporation at the redemption price aforesaid.  In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.

7.Exchange.  (a) Subject to the provisions of this Section 7, the Corporation may, at its option, at any time and from time to time on any Quarterly Date, exchange, to the extent it is legally permitted to do so, all, but not less than all, outstanding shares (and fractional shares) of Senior Preferred Stock for Exchange Debentures; provided that (i) no event of default under the indenture (as defined in such indenture) governing the Exchange Debentures shall have occurred and be continuing; (ii) no shares of Senior Preferred Stock are held on such date by the DLJIP Entities (as defined in the Investors’ Agreement), or any of their Affiliates, or any of their Permitted Transferees and (iii) such exchange is permitted by the terms of all debt instruments to which the Corporation is subject.  The principal amount of Exchange Debentures deliverable upon exchange of a share of Senior Preferred Stock, adjusted as hereinafter provided, shall be determined in accordance with the Exchange Ratio (as defined below).

In no event shall the Corporation issue Exchange Debentures in denominations other than $1,000 or in an integral multiple thereof.  Cash will be paid in lieu of any such fraction of an Exchange Debenture which would otherwise have been issued (which shall be determined with respect to the aggregate principal amount of Exchange Debentures to

9

be issued to a holder upon any such exchange).  Interest will accrue on the Exchange Debentures from the date of exchange.

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

The Exchange Ratio shall be, as of any Quarterly Date, $1.00 (or fraction thereof) of principal amount of Exchange Debenture for each $1.00 of Liquidation Value per share of Senior Preferred Stock held by a holder on the applicable exchange date.

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

“Exchange Debentures” means Junior Subordinated Exchange Debentures due 2008 of the Corporation, accruing interest at the rates established for dividends as provided herein but providing that such interest shall not be payable in cash until the maturity date on December 31, 2008, to be issued pursuant to an indenture between the Corporation and a trustee, containing customary terms and conditions approved by the Board of Directors (which terms shall be substantially the same as in the Indenture but shall provide that the Corporation shall not repurchase any Exchange Debentures pursuant to the asset sale or change of control provisions thereof in violation of Section 4.07 of the Indenture and which shall be subordinated to all existing indebtedness except indebtedness expressly made pari passu to the Exchange Debentures).

“Investors’ Agreement” means the Amended and Restated Investors’ Agreement dated as of October 6, 2000 among DeCrane Holdings Co., DeCrane Aircraft Holdings, Inc., DLJ Merchant Banking Partners II, L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners II, C.V.,  DLJ Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A, L.P., DLJMB Funding II, Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, L.P., DLJ First ESC L.P., DLJ ESC II L.P., DLJ Investment Partners, L.P., DLJ Investment Partners II, L.P., DLJ Investment Funding II, Inc. and certain other stockholders named therein, as the same may be amended from time to time.

“Permitted Transferees” shall have the meaning ascribed to such term in the Investors’ Agreement.

(b)Procedure for Exchange.  (i) In the event the Corporation shall exchange shares of Senior Preferred Stock, notice of such exchange shall be given by first class mail, postage prepaid, mailed not less than 30 days nor more than 60 days prior to the exchange date, to each holder of record of the shares to be exchanged at such holder’s address as the same appears on the stock register of the Corporation; provided that neither the failure to give such notice nor any defect therein shall affect the validity of the giving of notice for the exchange of any share of Senior Preferred Stock to be exchanged except

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as to the holder to whom the Corporation has failed to give said notice or except as to the holder whose notice was defective.

Each such notice shall state:  (A) the exchange date; (B) the number of shares of Senior Preferred Stock to be exchanged; (C) the Exchange Ratio; (D) the place or places where certificates for such shares are to be exchanged for notes evidencing the Exchange Debentures to be received by the exchanging holder; and (E) that dividends, if any, on the shares to be exchanged will cease to accrue on such exchange date.

(ii)Prior to giving notice of intention to exchange, the Corporation shall execute and deliver with a bank or trust company selected by the Corporation an indenture containing customary terms and conditions.  The Corporation will cause the Exchange Debentures to be authenticated on the Quarterly Date on which the exchange is effective, and will pay interest on the Exchange Debentures at the rate and on the dates specified in such indenture from the exchange date.

The Corporation will not give notice of its intention to exchange under Section 7(b)(i) hereof unless it shall file at the place or places (including a place in the Borough of Manhattan, The City of New York) maintained for such purpose an opinion of counsel (who may be an employee of the Corporation) to the effect that (i) the indenture has been duly authorized, executed and delivered by the Corporation, has been duly qualified under the Trust Indenture Act of 1939 (or that such qualification is not necessary) and constitutes a valid and binding instrument enforceable against the Corporation in accordance with its terms (subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and subject to such other qualifications as are then customarily contained in opinions of counsel experienced in such matters), (ii) the Exchange Debentures have been duly authorized and, when executed and authenticated in accordance with the provisions of the indenture and delivered in exchange for the shares of Senior Preferred Stock, will constitute valid and binding obligations of the Corporation entitled to the benefits of the indenture (subject as aforesaid), (iii) neither the execution nor delivery of the indenture or the Exchange Debentures nor compliance with the terms, conditions or provisions of such instruments will result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or agreement or instrument, known to such counsel, to which the Corporation or any of its subsidiaries is a party or by which it or any of them is bound, or any decree, judgment, order, rule or regulation, known to such counsel, of any court or governmental agency or body having jurisdiction over the Corporation and such subsidiaries or any of their properties, (iv) the Exchange Debentures have been duly registered for such exchange with the Securities and Exchange Commission under a registration statement that has become effective under the Securities Act of 1933 (the “Act”) or that the exchange of the Exchange Debentures for the shares of Senior Preferred Stock is exempt from registration under the Act, and

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(v) the Corporation has sufficient legally available funds for such exchange such that such exchange is permitted under applicable law.

(iii)Notice having been mailed as aforesaid, from and after the exchange date (unless default shall be made by the Corporation in issuing Exchange Debentures in exchange for the shares called for exchange), dividends, if any, on the shares of Senior Preferred Stock so called for exchange shall cease to accrue, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the Exchange Debentures and any rights such holder, upon the exchange, may have as a holder of the Exchange Debenture) shall cease.  Upon surrender in accordance with said notice of the certificates for any shares so exchanged (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such share shall be exchanged by the Corporation for the Exchange Debentures at the Exchange Ratio.  In case fewer than all the shares represented by any such certificate are exchanged, a new certificate shall be issued representing the unexchanged shares without cost to the holder thereof.

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

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

(c)The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of notes evidencing Exchange Debentures on exchange of the Senior Preferred Stock pursuant hereto; provided that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of Exchange Debentures in a name other than that of the holder of the Senior Preferred Stock to be exchanged and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

8.Voting Rights.  (a) The holders of record of shares of Senior Preferred Stock shall not be entitled to any voting rights except as hereinafter provided in this Section 8 or as otherwise provided by law.

(b)If and whenever (i) for any reason (including the reason that funds are not legally available for a redemption), the Corporation shall have failed to discharge any Mandatory Redemption Obligation (including a redemption in the Event of a Change of

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Control pursuant to Section 5(b) hereof), (ii) the Corporation shall have failed to provide the notice required by Section 6(c) hereof within the time period specified in such section or (iii) the Corporation shall have failed to comply with Sections 3(c), 3(d), 8(c), 9, 10, 11 or 12 hereof, the number of directors then constituting the Board of Directors shall be increased by two and the holders of a majority of the outstanding shares of Senior Preferred Stock, together with the holders of shares of every other series of preferred stock ranking prior to, or on parity with the Senior Preferred Stock and upon which like rights have been conferred and are exercisable (resulting from either the failure to pay dividends or the failure to redeem) (any such series is referred to as the “Preferred Shares”), voting as a single class regardless of series, shall be entitled to elect the two additional directors to serve on the Board of Directors at any annual meeting of stockholders or special meeting held in place thereof, or at a special meeting of the holders of the Senior Preferred Stock and the Preferred Shares called as hereinafter provided.  Whenever (i) the Corporation shall have fulfilled its Mandatory Redemption Obligation, (ii) the Corporation shall have fulfilled its obligation to provide notice as specified in Section 6(c) hereof, or (iii) the Corporation shall have complied with Sections 3(c), 3(d), 8(c), 9, 10, 11 or 12 hereof, as the case may be, then the right of the holders of the Senior Preferred Stock to elect such additional two directors shall cease (but subject always to the same provisions for the vesting of such voting rights in the case of any similar future (i) failure to fulfill any Mandatory Redemption Obligation, (ii) failure to fulfill the obligation to provide the notice required by Section 6(c) hereof within the time period specified in such section or (iii) failure to comply with Section 3(c), 3(d), 8(c), 9, 10, 11 or 12) and the terms of office of all persons elected as directors by the holders of the Senior Preferred Stock shall forthwith terminate and the number of the Board of Directors shall be reduced accordingly.  At any time after such voting power shall have been so vested in the holders of shares of Senior Preferred Stock and the Preferred Shares, the secretary of the Corporation may, and upon the written request of any holder of Senior Preferred Stock (addressed to the secretary at the principal office of the Corporation) shall, call a special meeting of the holders of the Senior Preferred Stock and of the Preferred Shares for the election of the two directors to be elected by them as herein provided, such call to be made by notice similar to that provided in the Bylaws of the Corporation for a special meeting of the stockholders or as required by law.  If any such special meeting required to be called as above provided shall not be called by the secretary within 20 days after receipt of any such request, then any holder of shares of Senior Preferred Stock may call such meeting, upon the notice above provided, and for that purpose shall have access to the stock books of the Corporation.  The directors elected at any such special meeting shall hold office until the next annual meeting of the stockholders or special meeting held in lieu thereof if such office shall not have previously terminated as above provided.  If any vacancy shall occur among the directors elected by the holders of the Senior Preferred Stock and the Preferred Shares, a successor shall be elected by the Board of Directors, upon the nomination of the then-remaining director elected by the holders of the Senior Preferred Stock and the Preferred Shares or the successor of such remaining director, to serve until the next annual meeting of the stockholders or special meeting held in place thereof if such office shall not have previously terminated as provided above.

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(c)Without the written consent of a majority of the outstanding shares of Senior Preferred Stock or the vote of holders of a majority of the outstanding shares of Senior Preferred Stock at a meeting of the holders of Senior Preferred Stock called for such purpose, the Corporation will not (i) amend, alter or repeal any provision of the Certificate of Incorporation (by merger or otherwise) so as to adversely affect the preferences, rights or powers of the Senior Preferred Stock; provided that any such action that decreases the dividend payable on, redemption prices for or the Liquidation Value of or changes the mandatory redemption date of the Senior Preferred Stock provided in Section 5(b) or 5(c) hereof shall require the affirmative vote of holders of each share of Senior Preferred Stock at a meeting of holders of Senior Preferred Stock called for such purpose or written consent of the holders of each share of Senior Preferred Stock; or (ii) create, authorize or issue any class of stock ranking prior to, or on a parity with, the Senior Preferred Stock with respect to dividends or upon liquidation, dissolution, winding up or otherwise, or increase the authorized number of shares of any such class or series, or reclassify any authorized stock of the Corporation into any such prior or parity shares or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such prior or parity shares, except that the Corporation may, without such approval, create, authorize and issue Parity Securities for the purpose of utilizing the proceeds from the issuance of such Parity Securities for the option or repurchase of all outstanding shares of Senior Preferred Stock in accordance with the terms hereof.

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

9.Incurrence of Indebtedness.  Without the written consent of a majority of the outstanding shares of Senior Preferred Stock or the vote of holders of a majority of the outstanding shares of Senior Preferred Stock at a meeting of the holders of Senior Preferred Stock called for such purpose, the Corporation will not, and will not permit any of its Restricted Subsidiaries (as defined in the Indenture) to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Indebtedness (as defined in the Indenture)), (b) the Corporation will not, and will not permit any of its Restricted Subsidiaries to, issue any shares of Disqualified Stock (as defined in the Indenture) and (c) the Corporation will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock, in each case other than Permitted Indebtedness (as defined in the Indenture).

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For purposes of determining compliance with this Section 9, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (xiii) of the definition thereof in the Indenture, the Corporation shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with such definition and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses.  In addition, the Corporation may, at any time, change the classification of an item of Indebtedness (or any portion thereof) to any other clause; provided that the Corporation would be permitted to incur such item of Indebtedness (or such portion thereof) pursuant to such other clause at such time of reclassification.  Accrual of interest, accretion or amortization of original issue discount will not be deemed to be an incurrence of Indebtedness for purposes of this Section 9.

10.Asset Sales.

(a)Without the written consent of a majority of the outstanding shares of Senior Preferred Stock or the vote of holders of a majority of the outstanding shares of Senior Preferred Stock at a meeting of the holders of Senior Preferred Stock called for such purpose, the Corporation will not, and will not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:

(i)the Corporation or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value, evidenced by a resolution of the board of directors set forth in an officers’ certificate delivered to holders of the Senior Preferred Stock, of the assets or Equity Interests issued or sold or otherwise disposed of, and

(ii)at least 75% of the consideration therefor received by the Corporation or such Restricted Subsidiary is in the form of cash or Cash Equivalents (as defined in the Indenture) or property or assets that are used or useful in a Permitted Business, or the capital stock of any person engaged in a Permitted Business if, as a result of the acquisition by the Corporation or any Restricted Subsidiary thereof, such Person becomes a Restricted Subsidiary.  The foregoing 75% requirement will not apply to any Asset Sale in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the next succeeding sentence, is equal to or greater than what the after-tax proceeds would have been had such Asset Sale complied with that 75% rule.  The following types of assets will be deemed cash in applying that 75% test:

(1)any liabilities as shown on the Corporation’s most recent consolidated balance sheet that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Corporation or such Restricted Subsidiary of the Corporation from further liability;

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(2)any securities, notes or other obligations received by the Corporation or any such Restricted Subsidiary from such transferee that are contemporaneously converted by the Corporation or such Restricted Subsidiary into cash or cash equivalents, to the extent of the cash or cash equivalents received; and

(3)any Designated Noncash Consideration received by the Corporation or any of its subsidiaries in such Asset Sale having an aggregate fair market value, taken together with all other Designated Noncash Consideration received pursuant to this clause (3) that is at that time outstanding, not to exceed 15% of Total Assets at the time of the receipt of such Designated Noncash Consideration, with the fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value.

(b)Definitions.  For purposes hereunder:

“Asset Sale” means:

(i)the sale, lease, conveyance, disposition or other transfer (a “disposition”) of any properties, assets or rights; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole will be governed by Sections 5(b) and 11 and not by this Section 10;

(ii)the issuance, sale or transfer by the Corporation or any of its subsidiaries of Equity Interests of any of the Corporation’s Restricted Subsidiaries;

in either case, whether in a single transaction or a series of related transactions that either have a fair market value in excess of $5.0 million or are for net proceeds in excess of $5.0 million.

However, the following items shall not be deemed to be Asset Sales:

(i)dispositions in the ordinary course of business;

(ii)a disposition of assets by the Corporation to a subsidiary of the Corporation or by a subsidiary to the Corporation or to another subsidiary of the Corporation;

(iii)a disposition of Equity Interests by a subsidiary of the Corporation or to another subsidiary of the Corporation;

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(iv)the sale and leaseback of any assets within 90 days of the acquisition thereof;

(v)foreclosures on assets;

(vi)any exchange of like property pursuant to Section 1031 of the Internal Revenue Code of 1986, for use in a Permitted Business;

(vii)a Restricted Payment or Permitted Investment (as defined in the Indenture) permitted by the Indenture; and

(viii)sales of accounts receivable, or participations therein, in connection with any receivables financing facility, pursuant to which the Corporation or any of its subsidiaries sells its accounts receivable to another subsidiary of the Corporation (a “Receivables Facility”).

“Designated Noncash Consideration” means the fair market value of non-cash consideration received by the Corporation or one of its subsidiaries in connection with an Asset Sale that is so designated as Designated Noncash Consideration pursuant to an officers’ certificate delivered to the holders of Senior Preferred Stock, setting forth the basis of such valuation, executed by the principal executive officer and the principal financial officer of the Corporation, less the amount of cash or cash equivalents received in connection with a sale of such Designated Noncash Consideration.

“Permitted Business” means the avionics manufacturing industry and any business in which the Corporation and it subsidiaries are engaged on the date hereof or any business reasonably related, incidental or ancillary thereto.

“Total Assets” means the total consolidated assets of the Corporation and its subsidiaries, as shown on the most recent balance sheet, excluding the footnotes of the Corporation, prepared in accordance with generally accepted accounting principles, as in effect on December 22, 2003.

11.Merger, Consolidation or Sale of Assets.  Without the written consent of a majority of the outstanding shares of Senior Preferred Stock or the vote of holders of a majority of the outstanding shares of Senior Preferred Stock at a meeting of the holders of Senior Preferred Stock called for such purpose, the Corporation may not consolidate or merge with or into (whether or not the Corporation is the surviving corporation), or sell, assign, lease, transfer, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another person unless:

(a)the Corporation is the surviving corporation, or the other person formed by or surviving any such consolidation or merger (if other than the Corporation) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; and

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(b)the person formed by or surviving any such consolidation or merger (if other than the Corporation) or the person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of the Corporation under the Senior Preferred Stock and the Registration Rights Agreement dated June 30, 2000 among the Corporation and the holders of Senior Preferred Stock party thereto, as the same may be amended from time to time; and

(c)after giving effect to such transaction, the Corporation shall be in compliance with Section 5.01 of the Indenture.

12.Transactions With Affiliates.  Without the written consent of a majority of the outstanding shares of Senior Preferred Stock or the vote of holders of a majority of the outstanding shares of Senior Preferred Stock at a meeting of the holders of Senior Preferred Stock called for such purpose, the Corporation will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Corporation (each, an “Affiliate Transaction”), unless:

(a)such Affiliate Transaction is on terms that are no less favorable to the Corporation or such Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Corporation or such Restricted Subsidiary of the Corporation with an unrelated person; and

(b)the Corporation delivers to the holders of Senior Preferred Stock, with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $7.5 million, either:

(i)a resolution of the board of directors set forth in an officers’ certificate certifying that such Affiliate Transaction complies with clause (a) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the board of directors; or

(ii)an opinion as to the fairness to the holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

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

(a)customary directors’ fees, indemnification or similar arrangements or any employment agreement or other compensation plan or arrangement entered into by the Corporation or any of its subsidiaries in the ordinary course of business, including ordinary course loans to employees not to exceed (i) $5.0 million outstanding in the

18

aggregate at any time, and (ii) $2.0 million to any one employee and consistent with the past practice of the Corporation or such Restricted Subsidiary of the Corporation;

(b)transactions between or among the Corporation and/or its subsidiaries;

(c)payments of customary fees by the Corporation or any of its subsidiaries to DLJ Merchant Banking II, Inc. and its Affiliates made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which are approved by a majority of the board of directors in good faith;

(d)           any agreement as in effect on the date hereof or any amendment thereto which such amendment is not disadvantageous to the holders of the Senior Preferred Stock in any material respect, or any transaction contemplated thereby;

(e)           Restricted Payments and Permitted Investments permitted under the Indenture;

(f)            payments and transactions in connection with the Global Technology Investment (as defined in the Indenture), and the payment of fees and expenses with respect thereto; and

(g)           sales of accounts receivable, or participation therein, in connection with any Receivables Facility.

13.Reports and Notices.

(a)           So long as any of the Senior Preferred Stock is outstanding, the Corporation will furnish the holders thereof with the quarterly and annual financial reports that the Corporation is required to file with the Securities and Exchange Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 or, in the event the Corporation is not required to file such reports, reports containing the financial information as would be required in such reports.

(b)           The Corporation shall provide written notice, by first class mail, postage prepaid, to each holder of record of shares of Senior Preferred Stock at such holder’s address as the same appears on the stock register of the Corporation, promptly following its receipt of any written consent or vote of a majority of the outstanding shares of Senior Preferred Stock obtained pursuant to Section 8(c), 9, 10(a), 11 or 12.

14.General Provisions.  (a) The term “Person” as used herein means any corporation, limited liability company, partnership, trust, organization, association, other entity or individual.

(b)           The term “outstanding”, when used with reference to shares of stock, shall mean issued shares, excluding shares held by the Corporation or a subsidiary of the Corporation.

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(c)           The headings of the Sections, subsections, clauses and subclauses used herein are for convenience of reference only and shall not define, limit or affect any of the provisions hereof.

(d)           Each holder of Senior Preferred Stock, by acceptance thereof, acknowledges and agrees that payments of dividends, interest, premium and principal on, and exchange, redemption and repurchase of, such securities by the Corporation are subject to restrictions on the Corporation contained in certain credit and financing agreements; provided, however, that this provision will not apply with respect to indebtedness not outstanding on the Amendment Date.

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IN WITNESS WHEREOF, DeCrane Aircraft Holdings, Inc. has caused this Certificate of Amendment to Certificate of Designations to be signed and attested by the undersigned this 23 day of July, 2004.

DECRANE AIRCRAFT HOLDINGS, INC.
By:	/S/ R. JACK DECRANE
	Name:R. Jack DeCrane
	Title:Chief Executive Officer

ATTEST:
By:	/S/ JAMES E. MANN
	Name:James Mann
	Title:Vice President

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EX-4.7.2

Exhibit 4.7.2

AMENDMENT NO. 2 TO SENIOR PREFERRED STOCK
REGISTRATION RIGHTS AGREEMENT

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

W I T N E S S E T H:

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

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

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

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

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

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

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

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

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

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

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

DECRANE AIRCRAFT HOLDINGS, INC.
By:	/s/ R. JACK DECRANE
	Name:  R. Jack DeCrane
	Title:  Chief Executive Officer
DLJ INVESTMENT PARTNERS II, INC. on behalf of: DLJ INVESTMENT PARTNERS II, L.P. DLJ INVESTMENT PARTNERS, L.P. DLJIP II HOLDINGS, L.P.
By:	/S/ JOHN M. MORIARTY, JR.
	Name:  John M. Moriarty, Jr.
	Title:  Managing Director
PUTNAM INVESTMENT MANAGEMENT, LLC on behalf of:
PUTNAM VARIABLE TRUST– PUTNAM VT HIGH YIELD FUND
PUTNAM HIGH YIELD TRUST
By:	/S/ MICHAEL E. DEFAO
	Name:  Michael E. DeFao
	Title:  Senior Vice President
NEON CAPITAL LIMITED
By:	/S/ PAUL COPE
	Name:  Paul Cope
	Title:  Director

EX-4.8

Exhibit 4.8

DECRANE AIRCRAFT HOLDINGS, INC.

17% SENIOR DISCOUNT NOTES DUE 2008

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

INDENTURE

Dated as of July 23, 2004

U.S. BANK NATIONAL ASSOCIATION

TRUSTEE

CROSS-REFERENCE TABLE*

Trust Indenture Act Section	Indenture Section
310 (a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	7.10
(b)	7.10
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312 (a)	2.05
(b)	11.03
(iv)(c)	11.03
313(a)	7.06
(b)(1)	N.A.
(b)(2)	7.06; 7.07
(v)(c)	7.06; 11.02
(vi)(d)	7.06
314(a)	4.03; 11.02
(b)	N.A.
(c)(1)	11.04
(c)(2)	11.04
(c)(3)	N.A.
(vii)(e)	11.05
(f)	NA
315 (a)	7.01
(b)	7.05, 11.02
(c)	7.01
(d)	7.01
(e)	6.11
316 (a)(last sentence)	2.09
(a)(1)(A)	6.05
(a)(1)(B)	6.04
(a)(2)	N.A.
(b)	6.07
(c)	2.12
317 (a)(1)	6.08
(a)(2)	6.09
(b)	2.04
318 (a)	11.01
(b)	N.A.
(c)	11.01

N.A. means not applicable.

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

TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.	DEFINITIONS.
SECTION 1.02.	OTHER DEFINITIONS.
SECTION 1.03.	INCORPORATION OF TIA PROVISIONS.
SECTION 1.04.	RULES OF CONSTRUCTION.
ARTICLE 2. THE NOTES
SECTION 2.01.	FORM AND DATING.
SECTION 2.02.	EXECUTION AND AUTHENTICATION.
SECTION 2.03.	REGISTRAR AND PAYING AGENT.
SECTION 2.04.	PAYING AGENT TO HOLD MONEY IN TRUST.
SECTION 2.05.	HOLDER LISTS.
SECTION 2.06.	TRANSFER AND EXCHANGE.
SECTION 2.07.	REPLACEMENT NOTES.
SECTION 2.08.	OUTSTANDING NOTES.
SECTION 2.09.	TREASURY NOTES.
SECTION 2.10.	TEMPORARY NOTES.
SECTION 2.11.	CANCELLATION.
ARTICLE 3. REDEMPTION AND PREPAYMENT
SECTION 3.01.	NOTICES TO TRUSTEE.
SECTION 3.02.	SELECTION OF NOTES TO BE REDEEMED.
SECTION 3.03.	NOTICE OF REDEMPTION.
SECTION 3.04.	EFFECT OF NOTICE OF REDEMPTION.
SECTION 3.05.	DEPOSIT OF REDEMPTION PRICE.
SECTION 3.06.	NOTES REDEEMED IN PART.
SECTION 3.07.	OPTIONAL REDEMPTION.
SECTION 3.08.	MANDATORY REDEMPTION.
SECTION 3.09.	OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
ARTICLE 4. COVENANTS
SECTION 4.01.	PAYMENT OF NOTES.
SECTION 4.02.	MAINTENANCE OF OFFICE OR AGENCY.
SECTION 4.03.	REPORTS.
SECTION 4.04.	COMPLIANCE CERTIFICATE.
SECTION 4.05.	TAXES.
SECTION 4.06.	STAY, EXTENSION AND USURY LAWS.
SECTION 4.07.	RESTRICTED PAYMENTS.
SECTION 4.08.	DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES.
SECTION 4.09.	INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
SECTION 4.10.	ASSET SALES
SECTION 4.11.	TRANSACTIONS WITH AFFILIATES.
SECTION 4.12.	LIENS.
SECTION 4.13.	CORPORATE EXISTENCE.
SECTION 4.14.	OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

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SECTION 4.15.	SALE AND LEASEBACK TRANSACTIONS.
SECTION 4.16.	ACCOUNTS RECEIVABLE FACILITY
SECTION 4.17.	ADDITIONAL NOTE GUARANTEES
ARTICLE 5. SUCCESSORS
SECTION 5.01.	MERGER, CONSOLIDATION, OR SALE OF ASSETS.
SECTION 5.02.	SUCCESSOR CORPORATION SUBSTITUTED.
ARTICLE 6. DEFAULTS AND REMEDIES
SECTION 6.01.	EVENTS OF DEFAULT.
SECTION 6.02.	ACCELERATION.
SECTION 6.03.	OTHER REMEDIES.
SECTION 6.04.	WAIVER OF PAST DEFAULTS.
SECTION 6.05.	CONTROL BY MAJORITY.
SECTION 6.06.	LIMITATION ON SUITS.
SECTION 6.07.	RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
SECTION 6.08.	COLLECTION SUIT BY TRUSTEE.
SECTION 6.09.	TRUSTEE MAY FILE PROOFS OF CLAIM.
SECTION 6.10.	PRIORITIES.
SECTION 6.11.	UNDERTAKING FOR COSTS.
ARTICLE 7. TRUSTEE
SECTION 7.01.	DUTIES OF TRUSTEE.
SECTION 7.02.	RIGHTS OF TRUSTEE.
SECTION 7.03.	INDIVIDUAL RIGHTS OF TRUSTEE.
SECTION 7.04.	TRUSTEE’S DISCLAIMER.
SECTION 7.05.	NOTICE OF DEFAULTS.
SECTION 7.06.	REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
SECTION 7.07.	COMPENSATION AND INDEMNITY.
SECTION 7.08.	REPLACEMENT OF TRUSTEE.
SECTION 7.09.	SUCCESSOR TRUSTEE BY MERGER, ETC.
SECTION 7.10.	ELIGIBILITY; DISQUALIFICATION.
SECTION 7.11.	PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01.	OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
SECTION 8.02.	LEGAL DEFEASANCE AND DISCHARGE.
SECTION 8.03.	COVENANT DEFEASANCE.
SECTION 8.04.	CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
SECTION 8.05.	DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
SECTION 8.06.	REPAYMENT TO ISSUER.
SECTION 8.07.	REINSTATEMENT.
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01.	WITHOUT CONSENT OF HOLDERS OF NOTES.
SECTION 9.02.	WITH CONSENT OF HOLDERS OF NOTES.
SECTION 9.03.	COMPLIANCE WITH TRUST INDENTURE ACT.
SECTION 9.04.	REVOCATION AND EFFECT OF CONSENTS.
SECTION 9.05.	NOTATION ON OR EXCHANGE OF NOTES.

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SECTION 9.06.	TRUSTEE TO SIGN AMENDMENTS, ETC.
ARTICLE 10. NOTE GUARANTEES
SECTION 10.01.	GUARANTEE.
SECTION 10.02.	LIMITATION ON GUARANTOR LIABILITY.
SECTION 10.03.	EXECUTION AND DELIVERY OF NOTE GUARANTEE.
SECTION 10.04.	GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
SECTION 10.05.	RELEASES FOLLOWING SALE OF ASSETS.
ARTICLE 11. MISCELLANEOUS
SECTION 11.01.	TRUST INDENTURE ACT CONTROLS.
SECTION 11.02.	NOTICES.
SECTION 11.03.	COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
SECTION 11.04.	CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
SECTION 11.05.	STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
SECTION 11.06.	RULES BY TRUSTEE AND AGENTS.
SECTION 11.07.	NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS.
SECTION 11.08.	GOVERNING LAW.
SECTION 11.09.	NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
SECTION 11.10.	SUCCESSORS.
SECTION 11.11.	SEVERABILITY.
SECTION 11.12.	COUNTERPART ORIGINALS.
SECTION 11.13.	TABLE OF CONTENTS, HEADINGS, ETC.

EXHIBITS
EXHIBIT A:	FORM OF NOTE
EXHIBIT B:	FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C:	FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D:	FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
EXHIBIT E:	FORM OF SUPPLEMENTAL INDENTURE

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

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

ARTICLE 1.

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.DEFINITIONS.

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

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

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

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

Semi-Annual Accrual Date	Accreted Value
September 30, 2004	$	520.67
March 30, 2005	$	564.93
September 30, 2005	$	612.95
March 30, 2006	$	665.05
September 30, 2006	$	721.57
March 30, 2007	$	782.91
September 30, 2007	$	849.46
March 30, 2008	$	921.66
September 30, 2008	$	1,000

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Cedel” means Cedel Bank, société anonyme.

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

“Commission” means the Securities and Exchange Commission.

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

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

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

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

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

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

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

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

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

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

“Depositary” means The Depository Trust Company.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Principals” means DLJMB.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 1.02.OTHER DEFINITIONS.

Term	Defined in Section
“Affiliate Transaction”	4.11
“Asset Sale”	4.10
“Asset Sale Offer”	3.09
“Authentication Order”	2.02
“Bankruptcy Law”	4.01
“Change of Control Offer”	4.14
“Change of Control Payment”	4.14
“Change of Control Payment Date”	4.14
“Covenant Defeasance”	8.03
“Event of Default”	6.01
“Excess Proceeds”	4.10
“incur”	4.09
“Legal Defeasance”	8.02
“Offer Amount”	3.09
“Offer Period”	3.09
“Paying Agent”	2.03
“Permitted Indebtedness”	4.09
“Purchase Date”	3.09
“Registrar”	2.03
“Restricted Payments”	4.07

SECTION 1.03.INCORPORATION OF TIA PROVISIONS.

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

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

“indenture securities” means the Notes;

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

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“indenture to be qualified” means this Indenture;

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

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

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

SECTION 1.04.RULES OF CONSTRUCTION.

Unless the context otherwise requires:

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

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

(3)“or” is not exclusive;

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

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

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

ARTICLE 2.

THE NOTES

SECTION 2.01.FORM AND DATING.

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

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

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

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

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

SECTION 2.02.EXECUTION AND AUTHENTICATION.

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

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

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

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

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

SECTION 2.03.REGISTRAR AND PAYING AGENT.

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

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

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

SECTION 2.04.PAYING AGENT TO HOLD MONEY IN TRUST.

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

SECTION 2.05.HOLDER LISTS.

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

SECTION 2.06.TRANSFER AND EXCHANGE.

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

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

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

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

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

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

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

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

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

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

(C)the Registrar receives the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(C)the Registrar receives the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(C)the Registrar receives the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(C)the Registrar receives the following:

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

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

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

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

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

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

(i)Private Placement Legend.

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

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

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

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

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

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

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

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

(i)General Provisions Relating to Transfers and Exchanges.

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

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

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

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

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

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

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

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

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SECTION 2.07.REPLACEMENT NOTES.

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

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

SECTION 2.08.OUTSTANDING NOTES.

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

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

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

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

SECTION 2.09.TREASURY NOTES.

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

SECTION 2.10.TEMPORARY NOTES.

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

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

SECTION 2.11.CANCELLATION.

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

ARTICLE 3.

REDEMPTION AND PREPAYMENT

SECTION 3.01.NOTICES TO TRUSTEE.

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

SECTION 3.02.SELECTION OF NOTES TO BE REDEEMED.

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

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

SECTION 3.03.NOTICE OF REDEMPTION.

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

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

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(a)the redemption date;

(b)the redemption price;

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

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

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

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

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

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

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

SECTION 3.04.EFFECT OF NOTICE OF REDEMPTION.

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

SECTION 3.05.DEPOSIT OF REDEMPTION PRICE.

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

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

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SECTION 3.06.NOTES REDEEMED IN PART.

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

SECTION 3.07.OPTIONAL REDEMPTION.

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

Year	Percentage
2004	104.000	%
2005	102.000	%
2006 and thereafter	100.000	%

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

SECTION 3.08.MANDATORY REDEMPTION.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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ARTICLE 4.

COVENANTS

SECTION 4.01.PAYMENT OF NOTES.

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

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

SECTION 4.02.MAINTENANCE OF OFFICE OR AGENCY.

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

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

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

SECTION 4.03.REPORTS.

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

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SECTION 4.04.COMPLIANCE CERTIFICATE.

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

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

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

SECTION 4.05.TAXES.

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

SECTION 4.06.STAY, EXTENSION AND USURY LAWS.

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

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SECTION 4.07.RESTRICTED PAYMENTS.

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

The foregoing provisions will not prohibit:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(p)distributions or payments of Receivables Fees; and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 4.10.ASSET SALES

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

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

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

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

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SECTION 4.11.TRANSACTIONS WITH AFFILIATES.

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

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

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

SECTION 4.12.LIENS.

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

SECTION 4.13.CORPORATE EXISTENCE.

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

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

SECTION 4.14.OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

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

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

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

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SECTION 4.15.SALE AND LEASEBACK TRANSACTIONS.

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

SECTION 4.16.ACCOUNTS RECEIVABLE FACILITY

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

SECTION 4.17.ADDITIONAL NOTE GUARANTEES

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

ARTICLE 5.

SUCCESSORS

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

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

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

SECTION 5.02.SUCCESSOR CORPORATION SUBSTITUTED.

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

ARTICLE 6.

DEFAULTS AND REMEDIES

SECTION 6.01.EVENTS OF DEFAULT.

Each of the following constitutes an Event of Default:

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

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

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

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

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

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

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

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

(i)commences a voluntary case,

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

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

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

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

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

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

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

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

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

SECTION 6.02.ACCELERATION.

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

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

SECTION 6.03.OTHER REMEDIES.

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

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

SECTION 6.04.WAIVER OF PAST DEFAULTS.

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

SECTION 6.05.CONTROL BY MAJORITY.

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

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SECTION 6.06.LIMITATION ON SUITS.

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

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

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

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

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

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

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

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

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

SECTION 6.08.COLLECTION SUIT BY TRUSTEE.

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

SECTION 6.09.TRUSTEE MAY FILE PROOFS OF CLAIM.

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

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

SECTION 6.10.PRIORITIES.

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

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

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

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

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

SECTION 6.11.UNDERTAKING FOR COSTS.

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

ARTICLE 7.

TRUSTEE

SECTION 7.01.DUTIES OF TRUSTEE.

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 7.02.RIGHTS OF TRUSTEE.

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

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

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

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

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

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

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

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

SECTION 7.03.INDIVIDUAL RIGHTS OF TRUSTEE.

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

SECTION 7.04.TRUSTEE’S DISCLAIMER.

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

SECTION 7.05.NOTICE OF DEFAULTS.

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

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

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

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

SECTION 7.07.COMPENSATION AND INDEMNITY.

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

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

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

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

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

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

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SECTION 7.08.REPLACEMENT OF TRUSTEE.

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

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

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

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

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

(d)the Trustee becomes incapable of acting.

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

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

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

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

SECTION 7.09.SUCCESSOR TRUSTEE BY MERGER, ETC.

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

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SECTION 7.10.ELIGIBILITY; DISQUALIFICATION.

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

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

SECTION 7.11.PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.

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

ARTICLE 8.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

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

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

SECTION 8.02.LEGAL DEFEASANCE AND DISCHARGE.

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

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

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

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

(d)the Legal Defeasance provisions of this Indenture.

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SECTION 8.03.COVENANT DEFEASANCE.

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

SECTION 8.04.CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.

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

In order to exercise either Legal Defeasance or Covenant Defeasance,

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

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

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

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

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

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

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

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

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

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

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

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

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

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SECTION 8.06.REPAYMENT TO ISSUER.

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

SECTION 8.07.REINSTATEMENT.

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

ARTICLE 9.

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01.WITHOUT CONSENT OF HOLDERS OF NOTES.

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

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

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

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

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

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

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

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

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

SECTION 9.02.WITH CONSENT OF HOLDERS OF NOTES.

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 9.03.COMPLIANCE WITH TRUST INDENTURE ACT.

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

SECTION 9.04.REVOCATION AND EFFECT OF CONSENTS.

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

SECTION 9.05.NOTATION ON OR EXCHANGE OF NOTES.

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

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

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

SECTION 9.06.TRUSTEE TO SIGN AMENDMENTS, ETC.

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

ARTICLE 10.

NOTE GUARANTEES

SECTION 10.01.GUARANTEE.

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

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

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

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

SECTION 10.02.LIMITATION ON GUARANTOR LIABILITY.

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

SECTION 10.03.EXECUTION AND DELIVERY OF NOTE GUARANTEE.

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 10.05.RELEASES FOLLOWING SALE OF ASSETS.

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

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

ARTICLE 11.

MISCELLANEOUS

SECTION 11.01.TRUST INDENTURE ACT CONTROLS.

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

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SECTION 11.02.NOTICES.

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

If to the Issuer and/or Guarantor:

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite 180

El Segundo, California 90245

Telecopier No.:

Attention: Chief Financial Officer

With a copy to:

Davis Polk & Wardwell

450 Lexington Avenue

New York, New York 10017

Telecopier No.: (212) 450-4800

Attention: Michael Kaplan, Esq.

If to the Trustee:

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, Connecticut 06103

Telecopier No.: 860-244-1889

Attention: Corporate Trust Administration

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

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

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

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

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

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

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

SECTION 11.04.CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

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

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

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

SECTION 11.05.STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

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

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

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

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

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

SECTION 11.06.RULES BY TRUSTEE AND AGENTS.

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

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

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

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

SECTION 11.08.GOVERNING LAW.

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

SECTION 11.09.NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

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

SECTION 11.10.SUCCESSORS.

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

SECTION 11.11.SEVERABILITY.

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

SECTION 11.12.COUNTERPART ORIGINALS.

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

SECTION 11.13.TABLE OF CONTENTS, HEADINGS, ETC.

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

[Signatures on following page]

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SIGNATURES

Dated as of July 23, 2004
	DECRANE AIRCRAFT HOLDINGS, INC.
	BY:	/s/  R. JACK DECRANE
		Name:  R. Jack DeCrane
		Title:  Chief Executive Officer
	AUDIO INTERNATIONAL, INC.
	CARL F. BOOTH & CO., LLC
	CUSTOM WOODWORK & PLASTICS, LLC
	DAH-IP HOLDINGS, INC.
	DAH-IP INFINITY, INC.
	DECRANE AIRCRAFT SEATING COMPANY, INC.
	DECRANE CABIN INTERIORS-CANADA, INC.
	DECRANE CABIN INTERIORS, LLC
	HOLLINGSEAD INTERNATIONAL, INC.
	PATS AIRCRAFT, LLC
	PCI NEWCO, INC.
	PPI HOLDINGS, INC.
	PRECISION PATTERN, INC.
	THE INFINITY PARTNERS, LTD.
	BY:	/s/  R. JACK DECRANE
		Name:  R. Jack DeCrane
		Title:  Authorized Signatory

69

U.S. Bank National Association as Trustee
BY:	/S/ CAUNA M. SILVA
	Name:  Cauna M. Silva
	Title:  Vice President

70

EXHIBIT A-1

(Face of Note)

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

CUSIP             

17% Senior Discount Notes due 2008

No. 1 $[                   ]

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

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

Dated:              , 200
DECRANE AIRCRAFT HOLDINGS, INC.
By:
	Name:
	Title:

This is one of the
Notes referred to in the
within-mentioned Indenture:

U.S. BANK NATIONAL ASSOCIATION as Trustee
By:
	Name:
	Title:

A-1-1

(Back of Note)

17% Senior Discount Notes due 2008

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

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

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

A-1-2

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

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

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

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

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

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

5.OPTIONAL REDEMPTION.

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

A-1-3

Year	Percentage
2004	104.000	%
2005	102.000	%
2006 and thereafter	100.000	%

6.MANDATORY REDEMPTION.

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

7.REPURCHASE AT OPTION OF HOLDER.

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

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

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

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

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

A-1-4

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

12.DEFAULTS AND REMEDIES.

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

A-1-5

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

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

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

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

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

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

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

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

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

DeCrane Aircraft Holdings, Inc.
2361 Rosecrans Avenue, Suite 180
El Segundo, California  90245
Attention: Chief Financial Officer

A-1-6

ASSIGNMENT FORM

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

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

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

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

Date:
	Your Signature:
		(Sign exactly as your name appears on the face of this Note)
	Signature Guarantee:

A-1-7

OPTION OF HOLDER TO ELECT PURCHASE

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

o Section 4.10o Section 4.14

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

Date:	Your Signature:
		(Sign exactly as your name appears on the Note)
	Tax Identification No:
	Signature Guarantee:

A-1-8

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

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

Date of Exchange Amount of
decrease in
Principal Amount
of this
Global Note Amount of
increase in
Principal
Amount of this
Global Note Principal Amount
of this Global Note
following such
decrease (or increase) Signature of
authorized officer
of Trustee or
Note Custodian]

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

A-1-9

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite 180

El Segundo, California  90245

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, CT  06103

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

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

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

[CHECK ALL THAT APPLY]

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

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

B-1

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

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

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

or

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

or

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

or

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

B-2

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

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

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

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

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

	[Insert Name of Transferor]
	By:
		Name:
		Title:
Dated:          ,

B-3

ANNEX A TO CERTIFICATE OF TRANSFER

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

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

(a)o  a beneficial interest in the:

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

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

 (b)o  a Restricted Definitive Note.

2.After the Transfer the Transferee will hold:

[CHECK ONE]

(a)o  a beneficial interest in the:

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

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

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

(b)o a Restricted Definitive Note; or

(c)o an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

B-4

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite 180

El Segundo, California  90245

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, CT  06103

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

(CUSIP:               )

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

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

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

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

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

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

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

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

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

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

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

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

	[Insert Name of Owner]
	By:
		Name:
		Title:
Dated:          ,

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EXHIBIT D

FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

DeCrane Aircraft Holdings, Inc.

2361 Rosecrans Avenue, Suite 180

El Segundo, California  90245

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, CT  06103

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

(CUSIP:                 )

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

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

we confirm that:

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

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

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

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

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

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

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

	[Insert Name of Accredited Investor]
	By:
		Name:
		Title:
Dated:                                 ,

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EXHIBIT E

FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS

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

W I T N E S S E T H

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

5.RELEASES.

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

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

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

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

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

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

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

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

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

[Guarantor]
By:
	Name:
	Title:
DECRANE AIRCRAFT HOLDINGS, INC.
By:
	Name:
	Title:
[EXISTING GUARANTORS]
By:
	Name:
	Title
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
	Name:
	Title:

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EX-4.8.1

Exhibit 4.8.1

DECRANE AIRCRAFT HOLDINGS, INC.

THE GUARANTORS NAMED ON THE SIGNATURE PAGES HEREOF

and

U.S. BANK NATIONAL ASSOCIATION,

FIRST SUPPLEMENTAL INDENTURE

Dated as of September 9, 2004

THIS FIRST SUPPLEMENTAL INDENTURE (the “Supplemental Indenture”), is made as of September 9, 2004 between DeCrane Aircraft Holdings, Inc., a Delaware corporation (the “Company”), each of the Guarantors party hereto and U.S. Bank National Association, as trustee (the “Trustee”).

RECITALS

WHEREAS, the Company and the Guarantors executed and delivered an Indenture dated as of July 23, 2004 (the “Indenture”) by and between the Company, the Guarantors and the Trustee, under which are issued $127,771,000 aggregate principal amount at maturity of 17% Senior Discount Notes due 2008 (the “Notes”);

WHEREAS, the Company proposes to issue additional Notes under the Indenture and desires to execute and deliver an amendment to the Indenture for the purpose of amending certain of the restrictive covenants contained in the Indenture;

WHEREAS, Section 9.02 of the Indenture provides that the Indenture may be amended, subject to certain exceptions specified in such Section 9.02, with the consent of the holders of a majority in aggregate principal amount at maturity of the Notes at the time outstanding (the “Requisite Consents”);

WHEREAS, the Company has obtained and delivered to the Trustee the Requisite Consents to amend the Indenture as set forth in Article 1 of this Supplemental Indenture (the “Proposed Amendment”);

WHEREAS, all other conditions and requirements necessary to make this Supplemental Indenture a valid and binding instrument in accordance with its terms and the terms of the Indenture have been satisfied.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the Company and the Trustee hereby covenant and agree, for the equal and proportionate benefit of all holders from time to time of the Notes as follows:

All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Indenture.

ARTICLE 1
AMENDMENTS TO CERTAIN PROVISIONS OF INDENTURE

Section 1.01.  Amendment of Certain Provisions of the Indenture.  The Indenture is hereby amended in the following respects:

Section 4.07 of the Indenture is hereby amended by adding the following clause:

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“(r) the exchange redemption, repurchase, retirement, defeasance or other acquisition of the Senior Subordinated Notes from funds and accounts managed by Putnam Investment Management, LLC and its affiliates in an amount not to exceed $1,425,000.”

ARTICLE 2  SUNDRY PROVISIONS

Section 2.01.  Effect of Supplemental Indenture.  Upon the execution and delivery of this Supplemental Indenture by the Company and the Trustee, the Indenture shall be modified in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes; and every Holder of Notes heretofore or hereafter authenticated and delivered under the Indenture and any coupons appertaining thereto shall be bound thereby.  Upon the execution of this Supplemental Indenture, the Proposed Amendment shall automatically take effect without the requirement of any further action by or notice to the Company.

Section 2.02.  Indenture Remains in Full Force and Effect.  Except as supplemented hereby, all provisions in the Indenture shall remain in full force and effect.

Section 2.03.  Indenture and Supplemental Indenture Construed Together.  This Supplemental Indenture is an indenture supplemental to and in implementation of the Indenture, and the Indenture and this Supplemental Indenture shall henceforth be read and construed together.

Section 2.04.  Confirmation and Preservation of Indenture.  The Indenture as supplemented by this Supplemental Indenture is in all respects confirmed and preserved.

Section 2.05.  Conflict with Trust Indenture Act.  If any provision of this Supplemental Indenture limits, qualifies or conflicts with another provision hereof which is required to be included in this Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

Section 2.06.  Certain Duties and Responsibilities of the Trustee.  In entering into this Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee, whether or not elsewhere herein so provided.  The Trustee, for itself and its successor or successors, accepts the terms of the Indenture as amended by this Supplemental Indenture, and agrees to perform the same, but only upon the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture.  The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture other than as to the validity of its execution and delivery by the Trustee.

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Section 2.07.  Effect of Headings.  The Article and Section headings provided herein are for convenience only and shall not affect the construction hereof.

Section 2.08.  Successors and Assigns.  All covenants and agreements in this Supplemental Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 2.09.  Separability Clause.  In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 2.10.  Benefits of Supplemental Indenture.  Nothing in this Supplemental Indenture, the Indenture, the Securities or the coupons, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder and the Holders of Securities and coupons, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.

Section 2.11.  Governing Law.  This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

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

DECRANE AIRCRAFT HOLDINGS, INC.
By:	/s/ RICHARD J. KAPLAN
	Name:		Richard J. Kaplan
	Title:		Senior Vice President, Chief Financial Officer, Secretary and Treasurer
AUDIO INTERNATIONAL, INC.
CARL F. BOOTH & CO., LLC
DECRANE AIRCRAFT SEATING COMPANY, INC.
DECRANE CABIN INTERIORS-CANADA, INC.
DECRANE CABIN INTERIORS, LLC
HOLLINGSEAD INTERNATIONAL, INC.
PATS AIRCRAFT, LLC
PCI NEWCO, INC.
PRECISION PATTERN, INC.
By:		/s/ RICHARD J. KAPLAN
		Name:		Richard J. Kaplan
		Title:		Chief Financial Officer
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:		/s/ CAUNA M. SILVA
		Name:			Cauna M. Silva
		Title:			Vice President

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EX-10.2.1

Exhibit 10.2.1

AMENDMENT NO. 1 TO AMENDED AND RESTATED INVESTORS’ AGREEMENT

This Amendment (the “Amendment”) to the Amended and Restated Investors’ Agreement dated as of October 6, 2000 is made as of December 31, 2001 among DeCrane Holdings Co. (“the “Company”) and DeCrane Aircraft Holdings, Inc. (“Opco” as, together with the Company, the “Companies”), the DLJ Entities (as defined therein), the DLJIP Entities (as defined therein), the Putnam Entities (as defined therein), and certain other Stockholders named therein.

W I T N E S S E T H :

WHEREAS, the Companies, the DLJ Entities, the DLJIP Entities and the Putnam Entities are parties to the Amended and Restated Investors’ Agreement dated as of October 6, 2000 (the “Investors’ Agreement”);

WHEREAS, the parties hereto desire to amend the Investors’ Agreement to allow the free transfer by the DLJIP Entities of the Senior Preferred Stock (as defined in the Investors’ Agreement);

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

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

Section 2.  Amendment to Restrictions on Transfer.  Section 3.05(b) of the Investors’ Agreement is amended by the addition of the words “and Senior Preferred Stock” after the words “Company Securities” and before the word “freely”.

Section 3.  Amendment to Restrictions on Transfer.  Section 3.05(c) of the Investors’ Agreement is amended by the addition of the words “and Senior Preferred Stock” after the words “Company Securities” and before the word “freely”.

Section 4.  Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of laws rules of such state.

Section 5.  Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Amendment shall become effective when this Amendment or a counterpart hereto shall have been executed by the Company (with the approval of the board of directors of the Company) and Stockholders holding at least 75% of the outstanding Shares, calculated on a Fully Diluted basis.

Section 6.  Effect of Amendment.  Except as expressly set forth herein, the amendments contained herein shall not constitute an amendment of any term or condition of the Investors’ Agreement, and all such terms and conditions shall remain in full force and effect and are hereby ratified and confirmed in all respects.

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

DECRANE HOLDINGS CO.
By:	/s/ RICHARD J. KAPLAN
	Name:	Richard J. Kaplan
	Title:	Assistant Secretary
DECRANE AIRCRAFT HOLDINGS, INC.
By:	/s/ RICHARD J. KAPLAN
	Name:	Richard J. Kaplan
	Title:	Senior Vice President
DLJ MERCHANT BANKING PARTNERS II, L.P.
By:	DLJ MERCHANT BANKING II, INC.
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:		Michael Isikow
	Title:		Attorney in Fact
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
By:	DLJ MERCHANT BANKING II, INC.
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:	Michael Isikow
	Title:	Attorney in Fact

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DLJ OFFSHORE PARTNERS II, C.V.
By:	DLJ MERCHANT BANKING II, INC.
	Advisory General Partner
By:	/s/ MICHAEL ISIKOW
	Name:	Michael Isikow
	Title:	Attorney in Fact
DLJ DIVERSIFIED PARTNERS, L.P.
By:	DLJ DIVERSIFIED PARTNERS, L.P.
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:		Michael Isikow
	Title:		Attorney in Fact
DLJ DIVERSIFIED PARTNERS-A, L.P.
By:	DLJ DIVERSIFIED PARTNERS, L.P.
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:Michael Isikow
	Title:Attorney in Fact
DLJMB FUNDING II, INC.
By:	/s/ MICHAEL ISIKOW
	Name:	Michael Isikow
	Title:	Attorney in Fact

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DLJ EAB PARTNERS, L.P.
By:	DLJ LBO PLANS MANAGEMENT
	CORPORATION, General Partner
By:	/s/ MICHAEL ISIKOW
	Name:	Michael Isikow
	Title:	Attorney in Fact
DLJ MILLENNIUM PARTNERS, L.P.
By:	DLJ MERCHANT BANKING II, INC.,
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:	Michael Isikow
	Title:	Attorney in Fact
UK INVESTMENT PLAN 1997 PARTNERS
By:	UK INVESTMENT PLAN 1997, INC.,
	General Partner
By:	/s/ MICHAEL ISIKOW
	Name:	Michael Isikow
	Title:	Attorney in Fact
DLJ FIRST ESC, L.P.
By:	DLJ LBO PLANS MANAGEMENT
	CORPORATION,
	as General Partner
By:	/s/ MICHAEL ISIKOW
	Name:		Michael Isikow
	Title:		Attorney in Fact

5

DLJ ESC II, L.P.
By:	DLJ LBO PLANS MANAGEMENT
	CORPORATION,
	as General Partner
By:	/s/ MICHAEL ISIKOW
	Name:		Michael Isikow
	Title:		Attorney in Fact
DLJ MILLENNIUM PARTNERS-A, L.P.
By:	DLJ MERCHANT BANKING II, INC.,
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:	Michael Isikow
	Title:	Attorney in Fact
DLJ INVESTMENT PARTNERS II, L.P.
By:	DLJ INVESTMENT PARTNERS II, INC.,
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:		Michael Isikow
	Title:		Attorney in Fact
DLJ INVESTMENT PARTNERS, L.P.
By:	DLJ INVESTMENT PARTNERS, INC.,
	Managing General Partner
By:	/s/ MICHAEL ISIKOW
	Name:		Michael Isikow
	Title:		Attorney in Fact

6

DLJ INVESTMENT FUNDING II, INC.
By:	/s/ MICHAEL ISIKOW
	Name:		Michael Isikow
	Title:		Attorney in Fact
PUTNAM HIGH YIELD TRUST
PUTNAM FUNDS TRUST – PUTNAM HIGH YIELD TRUST II
PUTNAM HIGH YIELD ADVANTAGE FUND
PUTNAM VARIABLE TRUST – PUTNAM VT HIGH YIELD FUND
PUTNAM STRATEGIC INCOME FUND
PUTNAM DIVERSIFIED INCOME TRUST
By:	PUTNAM INVESTMENT MANAGEMENT, INC.
By:	/s/ STEPHEN C. PEALHER
	Name:	Stephen C. Pealher
	Title:	Managing Director Chief Investment Officer

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EX-10.2.2

Exhibit 10.2.2

AMENDMENT NO. 2 TO AMENDED AND RESTATED INVESTORS’ AGREEMENT

This Amendment (the “Amendment”) dated as of July 23, 2004 to the Amended and Restated Investors’ Agreement dated as of October 6, 2000, and as subsequently amended by Amendment No. 1 dated as of December 31, 2001 among DeCrane Holdings Co. (the “Company”) and DeCrane Aircraft Holdings, Inc. (“Opco” and, together with the Company, the “Companies”), the DLJ Entities (as defined therein), the DLJIP Entities (as defined therein), the Putnam Entities (as defined therein) and certain other Stockholders named therein.

W  I  T  N  E  S  S  E  T  H:

WHEREAS, the Companies, the DLJ Entities, the DLJIP Entities and the Putnam Entities are parties to the Amended and Restated Investors’ Agreement dated as of October 6, 2000, as amended (the “Investors’ Agreement”); and

WHEREAS, the parties hereto desire to amend the Investors’ Agreement as provided herein;

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

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

Section 2.Amendment to Definition of Senior Preferred Stock.  The definition of Senior Preferred Stock in the Investors’ Agreement is amended to be the Senior Redeemable Exchangeable Preferred Stock of Opco, as amended from time to time.

Section 4.Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of laws rules of such state.

Section 5.Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Amendment shall become effective when this Amendment

or a counterpart hereto has been executed by the Company (with the approval of the board of directors of the Company) and Stockholders holding at least 75% of the outstanding Shares, calculated on a Fully Diluted basis.

Section 6.Effect of Amendment.  Except as expressly set forth herein, the amendments contained herein shall not constitute an amendment of any term or condition of the Investors’ Agreement, and all such terms and conditions shall remain in full force and effect and are hereby ratified and confirmed in all respects.

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

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

DECRANE HOLDINGS CO.
By:	/s/ R. JACK DECRANE
	Name:		R. Jack DeCrane
	Title:	Chief Executive Officer
DECRANE AIRCRAFT HOLDINGS, INC.
By:	/s/ R. JACK DECRANE
	Name:		R. Jack DeCrane
	Title:	Chief Executive Officer
DLJ MERCHANT BANKING PARTNERS II, L.P.
BY DLJ MERCHANT BANKING II, INC., Managing General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
BY DLJ MERCHANT BANKING PARTNERS II, INC., Managing General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President

DLJ OFFSHORE PARTNERS II, C.V.
BY DLJ MERCHANT BANKING PARTNERS II, INC., Advisory General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
DLJ DIVERSIFIED PARTNERS, L.P.
BY DLJ DIVERSIFIED PARTNERS, INC., Managing General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
DLJ DIVERSIFIED PARTNERS-A, L.P.
BY DLJ DIVERSIFIED PARTNERS, INC., Managing General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
DLJMB FUNDING II, INC.
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President

DLJ EAB PARTNERS, L.P.
BY DLJ LBO PLANS MANAGEMENT CORPORATION, General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
DLJ MILLENNIUM PARTNERS, L.P.
BY DLJ MERCHANT BANKING II, INC., Managing General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
UK INVESTMENT PLAN 1997 PARTNERS
BY UK INVESTMENT PLAN 1997, INC., General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
DLJ FIRST ESC L.P.
BY DLJ LBO PLANS MANAGEMENT CORPORATION, General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President

DLJ ESC II L.P.
BY DLJ LBO PLANS MANAGEMENT CORPORATION, General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President
DLJ MILLENNIUM PARTNERS-A, L.P.
BY DLJ MERCHANT BANKING II, INC., Managing General Partner
By:	/s/ MICHAEL S. ISIKOW
	Name:		Michael S. Isikow
	Title:	Vice President

DLJ INVESTMENT PARTNERS, L.P.
BY DLJ INVESTMENT PARTNERS II, INC., Managing General Partner
By:	/s/ JOHN M. MORIARTY, JR.
	Name:		John M. Moriarty, Jr.
	Title:	Managing Director
DLJ INVESTMENT PARTNERS II, L.P.
BY DLJ INVESTMENT PARTNERS II, INC., Managing General Partner
By:	/s/ JOHN M. MORIARTY, JR.
	Name:			John M. Moriarty, Jr.
	Title:	Managing Director
DLJIP HOLDINGS, L.P.
BY DLJ INVESTMENT PARTNERS II, INC., Managing General Partner
By:	/s/ JOHN M. MORIARTY, JR.
	Name:			John M. Moriarty, Jr.
	Title:	Managing Director

PUTNAM INVESTMENT MANAGEMENT, LLC on behalf of:
PUTNAM VARIABLE TRUST - PUTNAM VT HIGH YIELD FUND
PUTNAM HIGH YIELD TRUST
By:	/s/ MICHAEL E. DEFAO
	Name:			Michael E. DeFao
	Title:	Senior Vice President
NEON CAPITAL LIMITED
By:	/s/ PAUL COPE
	Name:		Paul Cope
	Title:	Director

EX-10.10.8

Exhibit 10.10.8

DECRANE AIRCRAFT HOLDINGS, INC.

FIFTH AMENDMENT

TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This FIFTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is dated as of June 9, 2004 and entered into by and among DeCrane Aircraft Holdings, Inc., a Delaware corporation (“Company”), the financial institutions listed on the signature pages hereof (“Lenders”), Credit Suisse First Boston, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as syndication agent for Lenders (in such capacity, “Syndication Agent”) and as administrative agent for Lenders (in such capacity, “Administrative Agent”), and is made with reference to that certain Third Amended and Restated Credit Agreement, dated as of May 11, 2000, as amended by a First Amendment to Third Amended and Restated Credit Agreement, dated as of June 30, 2000, as further amended by an Increased Commitments Agreement to Third Amended and Restated Credit Agreement, dated as of April 27, 2001, as further amended by a Second Amendment to Third Amended and Restated Credit Agreement dated as of March 19, 2002, as further amended by a Third Amendment to Third Amended and Restated Credit Agreement dated as of March 31, 2003 and as further amended by a Fourth Amendment to Third Amended and Restated Credit Agreement dated as of December 10, 2003 (the “Credit Agreement”), by and among Company, the lenders listed on the signature pages thereof, Syndication Agent and Administrative Agent.  Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement.

RECITALS

WHEREAS, Company and Lenders desire to amend the Credit Agreement to (i) permit Company to exchange up to $65,000,000 of Senior Subordinated Notes for senior discount notes due 2008 with an initial accreted value equal to the principal amount of the Senior Subordinated Notes being exchanged, which notes will bear paid-in-kind interest at a rate equal to 17% per annum, (ii) amend the definition of Net Senior Debt to exclude such senior discount notes and (iii) to make such other changes as set forth herein;

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

Section 1.AMENDMENTS TO THE CREDIT AGREEMENT

1.1Amendments to Section 1: Definitions

A.Subsection 1.1 of the Credit Agreement is hereby amended by adding thereto the following definitions:

“Capital Stock” means the capital stock or other equity interests of a Person.

“Second Lien Credit Agreement” means the Credit Agreement, dated as of December 22, 2003, by and among Company, the lenders named therein and Credit Suisse First Boston, acting through its Cayman Islands Branch, as Syndication Agent and as Administrative Agent, as amended from time to time, which agreement evidences $80,000,000 of Permitted Indebtedness.

“Senior Note Indenture” means the indenture setting forth the terms and conditions of the Senior Notes.

“Senior Notes” means the 17% Senior Discount Notes due 2008, which shall be pari passu with all existing and future senior Indebtedness of Company, be unsecured and pay interest in kind and not in cash.

“Senior Note Exchange” means the exchange of any Senior Subordinated Notes for Senior Notes with an initial accreted value equal to the principal amount of the Senior Subordinated Notes being so exchanged.

B.Subsection 1.1 of the Credit Agreement is further amended by amending the definition of the term “Net Senior Debt” to read in full as follows:

“Net Senior Debt” means, at any date, Consolidated Total Debt less the then accreted value of the Senior Notes less Subordinated Indebtedness less Cash and Cash Equivalents held by Company and its Subsidiaries, in each case at such date.

1.2Amendments to Section 7:  Company’s Negative Covenants

A.Subsection 7.1(vi) of the Credit Agreement is hereby amended to read as follows:

“(vi)Company and its Subsidiaries may become and remain liable with respect to up to $100,000,000 in aggregate principal amount of Indebtedness evidenced by the Senior Subordinated Notes less the initial accreted value of the Senior Notes issued in exchange therefor in the Senior Note Exchange;”

B.Subsection 7.1 of the Credit Agreement is further amended by deleting “and” at the end of clause (ix), adding a semicolon at the end of clause (x) and adding the following as clause (xi):

“(xi)Company and its Subsidiaries may become and remain liable with respect to up to $65,000,000 in aggregate initial accreted value of Indebtedness evidenced by the Senior Notes issued in the Senior Note Exchange (plus any payment-in-kind Senior Notes issued in lieu of cash interest thereon or any accretion thereon); provided that the terms and conditions of the Senior Notes, the Senior Note Indenture and the documentation evidencing the Senior Note Exchange are in form and substance satisfactory to Syndication Agent and that Company causes an opinion of counsel in form and substance satisfactory to Syndication Agent to be

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 delivered, at or prior to the date of the issuance of the Senior Notes, to Syndication Agent to the effect that (x) the Senior Notes and the Senior Note Indenture have been duly authorized, executed and delivered by Company and are legally valid and binding obligations of Company, enforceable in accordance with their terms, and (y) the terms and conditions of the Senior Note Exchange, the issuance and performance of the terms of the Senior Notes and performance of the terms of the Senior Note Indenture do not conflict with or violate the terms of this Agreement, the Second Lien Credit Agreement or the Senior Subordinated Note Indenture.”

C.Subsection 7.2B of the Credit Agreement is further amended to read as follows:

“B.No Further Negative Pledges.  Except (x) with respect to specific property encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to an Asset Sale, (y) customary limitations in respect of the Company and its Subsidiaries contained in any agreement with respect to Indebtedness incurred in reliance on subsections 7.1(ii), (iv), (vi), (vii), (viii), (x) or (xi), and (z) restrictions or limitations contained in any partnership agreement or joint venture agreement to which Company or any of its Subsidiaries is a party on the ability to create or assume Liens on any assets of the relevant partnership or joint venture, neither Company nor any of its Subsidiaries shall enter into any agreement (other than an agreement prohibiting only the creation of Liens securing Subordinated Indebtedness) prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired.”

D.Subsection 7.15 of the Credit Agreement is further amended by adding the following as subsection 7.15E:

“E.Company shall not, and shall not permit any of its Subsidiaries to, amend or otherwise change the terms of the Senior Notes, or make any amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate or fees on such Senior Notes, permit interest to be paid in cash, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, change any guaranty thereof, or provide any collateral therefor, or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder to the detriment of Lenders or to confer any additional rights on the holders of Senior Notes (or a trustee or other representative on their behalf) which would be adverse to Lenders.”

1.3Amendment to Section 9: The Agents.  Subsection 9.4 of the Credit Agreement is further amended by adding the following as subsection 9.4C:

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“C.Foreign Collateral.

(i)General.  Without derogating from any other authority granted to Administrative Agent herein or in the Collateral Documents or any other document relating thereto, each Lender hereby specifically (x) authorizes Administrative Agent to enter into pledge agreements pursuant to this subsection 9.4 with respect to the Capital Stock of all existing and future first-tier Foreign Subsidiaries, which pledge agreements may be governed by the laws of each of the jurisdictions of formation of such Foreign Subsidiaries, including but not limited to the laws of the province of Quebec, Canada, respectively, as agent on behalf of each of Lenders and Interest Rate Exchangers (as defined in the Security Agreement) with the effect that Lenders and Interest Rate Exchangers each become a secured party thereunder and (y) appoints Administrative Agent as its attorney-in-fact granting it the powers to execute each such pledge agreement and any registrations of the security interest thereby created, in each case in its name and on its behalf, with the effect that each Lender and Interest Rate Exchanger becomes a secured party thereunder.  With respect to each such pledge agreement, Administrative Agent has the power to sub-delegate to third parties its powers as attorney-in-fact of each Lender.

(ii)Canadian Collateral.  For the purposes of holding any Liens granted by the Company or any other Loan Party pursuant to the laws of the province of Quebec, the Lenders hereby acknowledge that the Administration Agent shall be and act as the person holding the power of attorney of all present and future Lenders and Interest Rate Exchangers for all purposes of Article 2692 of the Civil Code of Quebec (the Administration Agent acting in such capacity is herein referred to as the “Trustee”). By executing an assignment and assumption agreement in the form of Exhibit XII attached hereto, each future Lender and Interest Rate Exchanger shall be deemed to ratify the power of attorney granted to the Administration Agent hereunder.

The Lenders, the Interest Rate Exchangers and the Loan Parties hereby waive the benefit of Section 32 of An Act Respecting the Special Powers of Legal Persons (Quebec) and agree that the Administration Agent, in its capacity as Trustee, may acquire any bonds, debentures or other titles of indebtedness secured by any hypothec granted by the Company or any other Loan Party in favour of the Trustee pursuant to the laws of the province of Quebec.

The Lenders and Interest Rate Exchangers further acknowledge and agree that the Trustee shall be liable in the same manner and only to the extent provided for with respect to the Administration Agent under the terms hereof and hereby indemnify and hold harmless the Trustee in the same manner and to the same extent provided for with respect to the Administration Agent hereunder.”

1.4Amendment to Exhibits.  Exhibits IX and XXVI to the Credit Agreement are hereby amended to read in full as set forth on Exhibits IX and XXVI hereto.

Section 2.CONSENT

Lenders, constituting Requisite Lenders, hereby consent to the issuance of the Senior Notes on the date of the Senior Note Exchange, the cancellation of a principal amount of Senior Subordinated Notes equal to the initial accreted value of the Senior Notes issued on

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such date and the issuance of additional Senior Notes evidencing interest on such Senior Notes that is paid-in-kind.

Without limiting the generality of the provisions of subsection 10.6 of the Credit Agreement, the consent set forth herein shall be limited precisely as written and is provided solely for the purpose of permitting Company to issue the Senior Notes in exchange for a like principal amount of the Senior Subordinated Notes and additional Senior Notes evidencing interest that is paid-in-kind without violating the provisions of subsections 7.1, 7.5 and 7.15 of the Credit Agreement, and this consent does not constitute, nor should it be construed as, a waiver of compliance by Company with respect to (i) subsections 7.1, 7.5 and 7.15 of the Credit Agreement in any other instance or (ii) any other term, provision or condition of the Credit Agreement or any other instrument or agreement referred to therein (whether in connection with the Senior Note Exchange or otherwise).

Section 3.CONDITIONS TO EFFECTIVENESS

A.Section 1 and Section 2 of this Amendment shall become effective only upon the satisfaction of all of the following conditions (the date of satisfaction of such conditions being referred to herein as the “Fifth Amendment Effective Date”):

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

(a)Resolutions of its Board of Directors approving and authorizing the execution, delivery, and performance of (i) this Amendment and (ii) an amendment to the Second Lien Credit Agreement to the effect that the issuance of the Senior Notes in the Senior Note Exchange is permitted pursuant to the terms of such agreement and the Senior Note Indenture, certified as of the Fifth Amendment Effective Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment;

(b)Signature and incumbency certificates of its officers executing this Amendment; and

(c)Executed originals of this Amendment, executed by Parent, Company and each Subsidiary Guarantor.

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

3.Executed originals of this Amendment executed by Requisite Lenders.

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4.All fees and expenses owing to Administrative Agent in connection with this Amendment pursuant to Section 6B that have been invoiced to Company at least one Business Day prior to the Fifth Amendment Effective Date shall be paid to Administrative Agent on the Fifth Amendment Effective Date.

5.All documents executed or submitted in connection with the transactions contemplated hereby by or on behalf of Parent, Company or any of its Subsidiaries shall be reasonably satisfactory in form and substance to Agents and their counsel.

6.Syndication Agent shall have received copies of an amendment to the Second Lien Credit Agreement to the effect that the issuance of the Senior Notes in the Senior Note Exchange is permitted pursuant to the terms of such agreement.

Section 4.COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Company represents and warrants to each Lender that the following statements are true, correct and complete on and as of the Fifth Amendment Effective Date:

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

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

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

6

to obtain has not had and could not reasonably be expected to have a Material Adverse Effect.

D.Governmental Consents.  The execution, delivery and performance by each of Company and each of its Subsidiaries of this Amendment and the performance by Company of the Amended Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body other than any such registrations, consents, approvals, notices or other actions (x) that have been made, obtained or taken on or prior to the date on which such registrations, consents, approvals, notices or other actions are required to be made, obtained or taken, as the case may be, and are in full force and effect or (y) the failure of which to make, obtain or take has not had and could not reasonably be expected to have a Material Adverse Effect.

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

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

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

Section 5.ACKNOWLEDGEMENT AND CONSENT

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

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

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Each Guarantor (a) acknowledges and agrees that the Guaranty to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment;  (b) represents and warrants that all representations and warranties contained in the Amended Agreement and in the Guaranty to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Fifth Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date; and (c) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.

Section 6.MISCELLANEOUS

A.Effect of Amendment.

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

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

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

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

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

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

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

E.Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  This Amendment (other than the provisions of Section 1 and Section 2 hereof, the effectiveness of which is governed by Section 3 hereof) shall become effective upon the execution of a counterpart hereof by Company, Requisite Lenders, Syndication Agent and Guarantors and receipt by Company and Agents of written or telephonic notification of such execution and authorization of delivery thereof.

9

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

DECRANE AIRCRAFT HOLDINGS, INC., a Delaware corporation
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title:  Senior Vice President and Chief Financial Officer
AUDIO INTERNATIONAL, INC., an Arkansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name: Richard J. Kaplan
	Title:  Chief Financial Officer and Secretary
CARL F. BOOTH & CO., LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title:  Chief Financial Officer and Secretary
CUSTOM WOODWORK & PLASTICS, LLC., a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary

S-1

DAH-IP HOLDINGS, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
DAH-IP INFINITY, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
DECRANE AIRCRAFT SEATING COMPANY, INC., a Wisconsin corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
DECRANE CABIN INTERIORS, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary

S-2

DECRANE CABIN INTERIORS CANADA, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title:  Chief Financial Officer and Secretary
HOLLINGSEAD INTERNATIONAL, INC., a California corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
PATS AIRCRAFT, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
PCI NEWCO., INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary

S-3

PPI HOLDINGS, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
PRECISION PATTERN, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
THE INFINITY PARTNERS, LTD., a Texas limited partnership
by: DAH-IP Holdings, Inc., a Delaware limited partnership, its general partner (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
DECRANE HOLDINGS CO., a Delaware corporation (for purposes of Section 5 only) as a guarantor
By:	/s/ RICHARD J. KAPLAN
	Name:  Richard J. Kaplan
	Title:   Assistant Secretary

S-4

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as a Lender, Syndication Agent and Adminstrative Agent
By:	/s/ DANA KLEIN
	Name:  Dana Klein
	Title:  Managing Director
By:	/s/ THOMAS L. NEWBERRY
	Name:  Thomas L. Newberry
	Title:  Managing Director

S-5

		, as a Lender
By:
	Name:
	Title:

S-6

ANNEX A

MATTERS TO BE COVERED IN OPINION OF COUNSEL TO COMPANY

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

2.The execution, delivery and performance of the Amendment by Company have been duly authorized by all necessary corporate action on the part of Company, the Amendment has been duly executed and delivered by Company, and the Amendment and the Amended Agreement constitute the legally valid and binding obligations of Company, enforceable against Company in accordance with their respective terms except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) and by general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law.

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

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

A-1

EX-10.10.9

Exhibit 10.10.9

DECRANE AIRCRAFT HOLDINGS, INC.

SIXTH AMENDMENT

TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This SIXTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is dated as of July 16, 2004 and entered into by and among DeCrane Aircraft Holdings, Inc., a Delaware corporation (“Company”), the financial institutions listed on the signature pages hereof (“Lenders”), Credit Suisse First Boston, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as syndication agent for Lenders (in such capacity, “Syndication Agent”) and as administrative agent for Lenders (in such capacity, “Administrative Agent”), and is made with reference to that certain Third Amended and Restated Credit Agreement, dated as of May 11, 2000, as amended by a First Amendment to Third Amended and Restated Credit Agreement, dated as of June 30, 2000, as further amended by an Increased Commitments Agreement to Third Amended and Restated Credit Agreement, dated as of April 27, 2001, as further amended by a Second Amendment to Third Amended and Restated Credit Agreement dated as of March 19, 2002, as further amended by a Third Amendment to Third Amended and Restated Credit Agreement dated as of March 31, 2003, as further amended by a Fourth Amendment to Third Amended and Restated Credit Agreement dated as of December 10, 2003 and as further amended by a Fifth Amendment to Third Amended and Restated Credit Agreement dated as of June 9, 2004 (the “Credit Agreement”), by and among Company, the lenders listed on the signature pages thereof, Syndication Agent and Administrative Agent.  Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement.

RECITALS

WHEREAS, Company desires to issue the Senior Notes in connection with the Senior Note Exchange and enter into the Senior Note Indenture as permitted by subsection 7.1(xi) of the Credit Agreement;

WHEREAS, the proposed form of Senior Note Indenture permits redemption of the Senior Notes at the option of Company;

WHEREAS, Company and Lenders desire to amend the Credit Agreement to prohibit optional redemption, optional prepayment or optional purchase of the Senior Notes;

WHEREAS, Company may issue the Senior Notes only if, among other things, Syndication Agent has determined that the terms and conditions of the Senior Notes, the Senior Note Indenture and the documentation evidencing the Senior Note Exchange are satisfactory;

WHEREAS, Syndication Agent has decided to make such determination only upon request by Requisite Lenders, as provided in subsection 9.2D of the Credit Agreement.

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

Section 1.AMENDMENT TO THE CREDIT AGREEMENT

Section 7 of the Credit Agreement is hereby amended by adding the following as subsection 7.17:

“7.17Prepayments of Senior Notes.

Company shall not, and shall not permit any of its Subsidiaries to, make any optional redemption or optional purchase of, or optional prepayment with respect to, the Senior Notes.”

Section 2.REQUEST

Lenders, constituting Requisite Lenders, hereby determine that the terms and conditions of the Senior Notes, the Senior Note Indenture attached hereto as Exhibit A and the documentation evidencing the Senior Note Exchange attached hereto as Exhibit B are satisfactory in form and substance, and request Syndication Agent to indicate its satisfaction with such terms and conditions to Company.

Section 3.CONDITIONS TO EFFECTIVENESS

A.Section 1 and Section 2 of this Amendment shall become effective only upon the satisfaction of all of the following conditions (the date of satisfaction of such conditions being referred to herein as the “Sixth Amendment Effective Date”):

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

(a)an amendment to the Second Lien Credit Agreement to the effect that prepayment of the Senior Notes issued pursuant to the Senior Note Indenture is prohibited pursuant to the terms of such agreement;

(b)Signature and incumbency certificates of its officers executing this Amendment; and

(c)Executed originals of this Amendment, executed by Parent, Company and each Subsidiary Guarantor.

2.Executed originals of this Amendment executed by Requisite Lenders.

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Section 4.COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Company represents and warrants to each Lender that the following statements are true, correct and complete on and as of the Sixth Amendment Effective Date:

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

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

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

D.Governmental Consents.  The execution, delivery and performance by each of Company and each of its Subsidiaries of this Amendment and the performance by Company of the Amended Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body other than any such registrations, consents, approvals, notices or other actions (x) that have been made, obtained or taken on or prior to the date on which such registrations, consents, approvals, notices or other actions are required to be made, obtained or taken, as the case may be, and are in full force and effect or (y) the failure of which to make, obtain or take has not had and could not reasonably be expected to have a Material Adverse Effect.

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

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

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

Section 5.ACKNOWLEDGEMENT AND CONSENT

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

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

Each Guarantor (a) acknowledges and agrees that the Guaranty to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment;  (b) represents and warrants that all representations and warranties contained in the Amended Agreement and in the Guaranty to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Sixth Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date; and (c) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit

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Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.

Section 6.MISCELLANEOUS

A.Effect of Amendment.

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

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

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

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

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

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

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

E.Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature

5

pages are physically attached to the same document.  This Amendment shall become effective upon the execution of a counterpart hereof by Company, Requisite Lenders and Guarantors and receipt by Company and Agents of written or telephonic notification of such execution and authorization of delivery thereof.

6

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

DECRANE AIRCRAFT HOLDINGS, INC., a Delaware corporation
By:	/s/ R. JACK DECRANE
	Name:  R. Jack DeCrane
	Title: Chief Executive Officer
AUDIO INTERNATIONAL, INC., an Arkansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:  R. Jack DeCrane
	Title: Chief Executive Officer
CARL F. BOOTH & CO., LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
By:		Name: R. Jack DeCrane
	Title: Chief Executive Officer
CUSTOM WOODWORK & PLASTICS, LLC., a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer

A-1

DAH-IP HOLDINGS, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack decrane
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
DAH-IP INFINITY, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
DECRANE AIRCRAFT SEATING COMPANY, INC., a Wisconsin corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
DECRANE CABIN INTERIORS, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name: R. Jack DeCrane
	Title: Chief Executive Officer

A-2

DECRANE CABIN INTERIORS CANADA, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
HOLLINGSEAD INTERNATIONAL, INC., a California corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
PATS AIRCRAFT, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
PCI NEWCO., INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer

A-3

PPI HOLDINGS, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
PRECISION PATTERN, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
THE INFINITY PARTNERS, LTD., a Texas limited partnership
by: DAH-IP Holdings, Inc., a Delaware limited partnership, its general partner (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title: Chief Executive Officer
DECRANE HOLDINGS CO., a Delaware corporation (for purposes of Section 5 only) as a guarantor
By:	/s/ R. JACK DECRANE
	Name: R. Jack DeCrane
	Title:  Chief Executive Officer

A-4

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as a Lender, Syndication Agent and Adminstrative Agent
By:	/s/ DANA KLEIN
	Name: Dana Klein
	Title: Managing Director
By:	/s/ DAVID MILLER
	Name: David Miller
	Title: Managing Director

A-5

		, as a Lender
By:
	Name:
	Title:

A-6

EX-10.12.1

Exhibit 10.12.1

DECRANE AIRCRAFT HOLDINGS, INC.

FIRST AMENDMENT

TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of June 9, 2004 and entered into by and among DeCrane Aircraft Holdings, Inc., a Delaware corporation (“Company”), the financial institutions listed on the signature pages hereof (“Lenders”), Credit Suisse First Boston (successor to DLJ Capital Funding, Inc.), acting through its Cayman Islands Branch, as syndication agent for Lenders (in such capacity, “Syndication Agent”) and as administrative agent for Lenders (in such capacity, “Administrative Agent”), and is made with reference to that certain Credit Agreement, dated as of December 22, 2003, (the “Credit Agreement”), by and among Company, the lenders listed on the signature pages thereof, Syndication Agent and Administrative Agent.  Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement.

RECITALS

WHEREAS, Company and Lenders desire to amend the Credit Agreement to (i) permit Company to exchange up to $65,000,000 of Senior Subordinated Notes for senior discount notes due 2008 with an initial accreted value equal to the principal amount of the Senior Subordinated Notes being exchanged, which notes will bear paid-in-kind interest at a rate equal to 17% per annum, (ii) amend the definition of Net Senior Debt to exclude such senior discount notes and (iii) to make such other changes as set forth herein;

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

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT

1.1 Amendments to Section 1: Definitions

A.Subsection 1.1 of the Credit Agreement is hereby amended by adding thereto the following definitions:

“Capital Stock” means the capital stock or other equity interests of a Person.

“Interest Rate Exchanger” has the meaning assigned to that term in subsection 8.4B.

“Senior Note Indenture” means the indenture setting forth the terms and conditions of the Senior Notes.

“Senior Notes” means the 17% Senior Discount Notes due 2008, which shall be pari passu with all existing and future senior Indebtedness of Company, be unsecured and pay interest in kind and not in cash.

“Senior Note Exchange” means the exchange of any Senior Subordinated Notes for Senior Notes with an initial accreted value equal to the principal amount of the Senior Subordinated Notes being so exchanged.

B.Subsection 1.1 of the Credit Agreement is further amended by amending the definition of the term “Net Senior Debt” to read in full as follows:

“Net Senior Debt” means, at any date, Consolidated Total Debt less the then accreted value of the Senior Notes less Subordinated Indebtedness less Cash and Cash Equivalents held by Company and its Subsidiaries, in each case at such date.

1.2 Amendments to Section 6:  Company’s Negative Covenants

A.Subsection 6.1(vi) of the Credit Agreement is hereby amended to read as follows:

“(vi)Company and its Subsidiaries may become and remain liable with respect to up to $100,000,000 in aggregate principal amount of Indebtedness evidenced by the Senior Subordinated Notes less the initial accreted value of the Senior Notes issued in exchange therefor in the Senior Note Exchange;”

B.Subsection 6.1(xi) of the Credit Agreement is hereby amended to read as follows:

“(xi)Company and the Subsidiary Guarantors may become and remain liable with respect to obligations owed under the First Lien Credit Agreement; provided that the aggregate principal amount of Indebtedness under this clause (xi) plus the aggregate amount of undrawn letters of credit outstanding under subsection 6.4(ii)(A) shall not exceed $105,000,000 plus $10,000,000 plus the Net Senior Debt Ratio Amount, minus the aggregate amount of all repayments and prepayments of any term Indebtedness under the First Lien Credit Agreement, and the aggregate amount of all permanent reductions of revolving credit commitments under the First Lien Credit Agreement, in each case made after the Closing Date;”

C.Subsection 6.1 of the Credit Agreement is further amended by deleting “and” at the end of clause (x), adding a semicolon at the end of clause (xi) and adding the following as clause (xii):

“(xii)Company and its Subsidiaries may become and remain liable with respect to up to $65,000,000 in aggregate principal amount of Indebtedness evidenced by the Senior Notes issued in the Senior Note Exchange (plus any payment-in-kind Senior Notes issued in lieu of cash interest thereon); provided that the terms and conditions of the Senior Notes, the Senior Note Indenture and the documentation evidencing the Senior Note Exchange are in form and substance satisfactory to Syndication Agent and that Company causes an opinion of counsel in form and substance satisfactory to

2

Syndication Agent to be delivered, at or prior to the date of the issuance of the Senior Notes, to Syndication Agent to the effect that (x) the Senior Notes and the Senior Note Indenture have been duly authorized, executed and delivered by Company and are legally valid and bind obligations of Company, enforceable in accordance with their terms, and (y) the terms and conditions of the Senior Note Exchange, the issuance and performance of the terms of the Senior Notes and performance of the terms of the Senior Note Indenture do not conflict with or violate the terms of this Agreement, the First Lien Credit Agreement or the Senior Subordinated Note Indenture.”

D.Subsection 6.2B of the Credit Agreement is further amended to read as follows:

“B.No Further Negative Pledges.  Except (x) with respect to specific property encumbered to secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with respect to an Asset Sale, (y) customary limitations in respect of the Company and its Subsidiaries contained in any agreement with respect to Indebtedness incurred in reliance on subsections 6.1(ii), (iv), (vi), (vii), (viii), (x), (xi) or (xii), and (z) restrictions or limitations contained in any partnership agreement or joint venture agreement to which Company or any of its Subsidiaries is a party on the ability to create or assume Liens on any assets of the relevant partnership or joint venture, neither Company nor any of its Subsidiaries shall enter into any agreement (other than an agreement prohibiting only the creation of Liens securing Subordinated Indebtedness) prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired.”

E.Subsection 6.15 of the Credit Agreement is further amended by adding the following as subsection 6.15E:

“E.Company shall not, and shall not permit any of its Subsidiaries to, amend or otherwise change the terms of the Senior Notes, or make any amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate or fees on such Senior Notes, permit interest to be paid in cash, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, change any guaranty thereof, or provide any collateral therefor, or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder to the detriment of Lenders or to confer any additional rights on the holders of Senior Notes (or a trustee or other representative on their behalf) which would be adverse to Lenders.”

1.3 Amendment to Section 8: The Agents.  Subsection 8.4 of the Credit Agreement is further amended by adding the heading “A.General.” to the existing text and adding the following as subsection 8.4B:

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“B.Foreign Collateral.

(i)General.  Without derogating from any other authority granted to Administrative Agent herein or in the Collateral Documents or any other document relating thereto, each Lender hereby specifically (x) authorizes Administrative Agent to enter into pledge agreements pursuant to this subsection 8.4 with respect to the Capital Stock of all existing and future first-tier Foreign Subsidiaries, which pledge agreements may be governed by the laws of each of the jurisdictions of formation of such Foreign Subsidiaries, including but not limited to the laws of the province of Quebec, Canada, respectively, as agent on behalf of each of Lenders and parties to Interest Rate Agreements (“Interest Rate Exchangers”) with the effect that Lenders and Interest Rate Exchangers each become a secured party thereunder and (y) appoints Administrative Agent as its attorney-in-fact granting it the powers to execute each such pledge agreement and any registrations of the security interest thereby created, in each case in its name and on its behalf, with the effect that each Lender and Interest Rate Exchanger becomes a secured party thereunder.  With respect to each such pledge agreement, Administrative Agent has the power to sub-delegate to third parties its powers as attorney-in-fact of each Lender.

(ii)Canadian Collateral.  For the purposes of holding any Liens granted by the Company or any other Loan Party pursuant to the laws of the province of Quebec, the Lenders hereby acknowledge that the Administration Agent shall be and act as the person holding the power of attorney of all present and future Lenders and Interest Rate Exchangers for all purposes of Article 2692 of the Civil Code of Quebec (the Administration Agent acting in such capacity is herein referred to as the “Trustee”). By executing an assignment and assumption agreement in the form of Exhibit I attached hereto, each future Lender and Interest Rate Exchanger shall be deemed to ratify the power of attorney granted to the Administration Agent hereunder.

The Lenders, the Interest Rate Exchangers and the Loan Parties hereby waive the benefit of Section 32 of An Act Respecting the Special Powers of Legal Persons (Quebec) and agree that the Administration Agent, in its capacity as Trustee, may acquire any bonds, debentures or other titles of indebtedness secured by any hypothec granted by the Company or any other Loan Party in favour of the Trustee pursuant to the laws of the province of Quebec.

The Lenders and Interest Rate Exchangers further acknowledge and agree that the Trustee shall be liable in the same manner and only to the extent provided for with respect to the Administration Agent under the terms hereof and hereby indemnify and hold harmless the Trustee in the same manner and to the same extent provided for with respect to the Administration Agent hereunder.”

1.4 Amendment to Exhibits.  Exhibits III and IX to the Credit Agreement are hereby amended to read in full as set forth on Exhibits III and IX hereto.

Section 2. CONSENT

Lenders, constituting Requisite Lenders, hereby consent to the issuance of the Senior Notes on the date of the Senior Note Exchange, the cancellation of a principal amount of Senior Subordinated Notes equal to the initial accreted value of the Senior Notes issued on

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such date and the issuance of additional Senior Notes evidencing interest on such Senior Notes that is paid-in-kind.

Without limiting the generality of the provisions of subsection 9.6 of the Credit Agreement, the consent set forth herein shall be limited precisely as written and is provided solely for the purpose of permitting Company to issue the Senior Notes in exchange for a like principal amount of the Senior Subordinated Notes and additional Senior Notes evidencing interest that is paid-in-kind without violating the provisions of subsections 6.1, 6.5 and 6.15 of the Credit Agreement, and this consent does not constitute, nor should it be construed as, a waiver of compliance by Company with respect to (i) subsections 6.1, 6.5 and 6.15 of the Credit Agreement in any other instance or (ii) any other term, provision or condition of the Credit Agreement or any other instrument or agreement referred to therein (whether in connection with the Senior Note Exchange or otherwise).

Section 3. CONDITIONS TO EFFECTIVENESS

A.Section 1 and Section 2 of this Amendment shall become effective only upon the satisfaction of all of the following conditions (the date of satisfaction of such conditions being referred to herein as the “First Amendment Effective Date”):

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

(a) Resolutions of its Board of Directors approving and authorizing the execution, delivery, and performance of (i) this Amendment and (ii) an amendment to the First Lien Credit Agreement to the effect that the issuance of the Senior Notes in the Senior Note Exchange is permitted pursuant to the terms of such agreement and the Senior Note Indenture, certified as of the First Amendment Effective Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment;

(b) Signature and incumbency certificates of its officers executing this Amendment; and

(c) Executed originals of this Amendment, executed by Parent, Company and each Subsidiary Guarantor.

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

3.  Executed originals of this Amendment executed by Requisite Lenders.

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4.  All fees and expenses owing to Administrative Agent in connection with this Amendment pursuant to Section 6B that have been invoiced to Company at least one Business Day prior to the First Amendment Effective Date shall be paid to Administrative Agent on the First Amendment Effective Date.

5.  All documents executed or submitted in connection with the transactions contemplated hereby by or on behalf of Parent, Company or any of its Subsidiaries shall be reasonably satisfactory in form and substance to Agents and their counsel.

6.  Syndication Agent shall have received copies of an amendment to the First Lien Credit Agreement to the effect that the issuance of the Senior Notes in the Senior Note Exchange is permitted pursuant to the terms of such agreement.

Section 4. COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Company represents and warrants to each Lender that the following statements are true, correct and complete on and as of the First Amendment Effective Date:

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

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

C.No Conflict.  The execution, delivery and performance by each of Company and each of its Subsidiaries of this Amendment, and the performance by Company of the Amended Agreement do not and will not (i) violate any provision of (x) any law or any governmental rule or regulation applicable to Company or any of its Subsidiaries where such violations in the aggregate have had or could reasonably be expected to have a Material Adverse Effect, (y) the Certificate or the Articles of Incorporation or Bylaws (or any other organization document) of Parent, Company or any of Company’s Subsidiaries or (z) any order, judgment or decree of any court or other agency of government binding on Company or any of Company’s Subsidiaries where such violations in the aggregate have had or could reasonably be expected to have a Material Adverse Effect, (ii) conflict with, result in a breach of or constitute a default under any Contractual Obligation of Parent, Company or any of its Subsidiaries where such conflict, breach or default in the aggregate have had or could reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Company or any of Company’s Subsidiaries (other than Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of or consent of any Person under any Contractual Obligation of Parent, Company or any of Company’s Subsidiaries, except for this Amendment and such approvals or consents the failure of which

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to obtain has not had and could not reasonably be expected to have a Material Adverse Effect.

D.Governmental Consents.  The execution, delivery and performance by each of Company and each of its Subsidiaries of this Amendment and the performance by Company of the Amended Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body other than any such registrations, consents, approvals, notices or other actions (x) that have been made, obtained or taken on or prior to the date on which such registrations, consents, approvals, notices or other actions are required to be made, obtained or taken, as the case may be, and are in full force and effect or (y) the failure of which to make, obtain or take has not had and could not reasonably be expected to have a Material Adverse Effect.

E.Binding Obligation.  This Amendment has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

F.Incorporation of Representations and Warranties From Credit Agreement.  The representations and warranties contained in Section 4 of the Credit Agreement are and will be true, correct and complete in all material respects on and as of the First Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

G.Absence of Default.  No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute an Event of Default or a Potential Event of Default.

Section 5. ACKNOWLEDGEMENT AND CONSENT

Each of Parent and the Subsidiary Guarantors (each a “Guarantor”) is a party to a Guaranty and each such Guarantor has guarantied the Obligations.

Each Guarantor hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment.  Each Guarantor hereby confirms that the Guaranty to which it is a party or otherwise bound will continue to guaranty to the fullest extent possible the payment and performance of all “Guarantied Obligations” as such term is defined in the applicable Guaranty, including without limitation the payment and performance of all such “Guarantied Obligations” in respect of the Obligations of Company now or hereafter existing under or in respect of the Amended Agreement.

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Each Guarantor (a) acknowledges and agrees that the Guaranty to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment;  (b) represents and warrants that all representations and warranties contained in the Amended Agreement and in the Guaranty to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the First Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date; and (c) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.

Section 6. MISCELLANEOUS

A.Effect of Amendment.

(i)On and after the First Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Agreements.

(ii)On and after the First Amendment Effective Date, each reference in the other Loan Documents to the “Lenders,” “Commitments,” or words of like import shall mean and be a reference to the Lenders and Commitments as amended by this Agreement.

(iii)Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

(iv)The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Agents or any Lender under, the Credit Agreement or any of the other Loan Documents.

B.Fees and Expenses.  Company acknowledges that all costs, fees and expenses as described in subsection 9.2 of the Credit Agreement incurred by Agents and their counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Company.

C.Headings.  Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

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D.Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

E.Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  This Amendment (other than the provisions of Section 1 and Section 2 hereof, the effectiveness of which is governed by Section 3 hereof) shall become effective upon the execution of a counterpart hereof by Company, Requisite Lenders, Syndication Agent and Guarantors and receipt by Company and Agents of written or telephonic notification of such execution and authorization of delivery thereof.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

DECRANE AIRCRAFT HOLDINGS, INC., a Delaware corporation
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Senior Vice President and Chief Financial Officer
AUDIO INTERNATIONAL, INC., an Arkansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
CARL F. BOOTH & CO., LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
CUSTOM WOODWORK & PLASTICS, LLC., a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary

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	DAH-IP HOLDINGS, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
	By:		/s/ Richard J. Kaplan
			Name: Richard J. Kaplan
			Title: Chief Financial Officer and Secretary
	DAH-IP INFINITY, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
	By:		/s/ Richard J. Kaplan
			Name: Richard J. Kaplan
			Title: Chief Financial Officer and Secretary
DECRANE AIRCRAFT SEATING COMPANY, INC., a Wisconsin corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:		/s/ Richard J. Kaplan
		Name: Richard J. Kaplan
		Title: Chief Financial Officer and Secretary
DECRANE CABIN INTERIORS, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:		/s/ Richard J. Kaplan
		Name: Richard J. Kaplan
		Title: Chief Financial Officer and Secretary

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DECRANE CABIN INTERIORS CANADA, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
HOLLINGSEAD INTERNATIONAL, INC., a California corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
PATS AIRCRAFT, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
PCI NEWCO., INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title:  Chief Financial Officer and Secretary

S-3

PPI HOLDINGS, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
PRECISION PATTERN, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
THE INFINITY PARTNERS, LTD., a Texas limited partnership
by: DAH-IP Holdings, Inc., a Delaware limited partnership, its general partner (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Chief Financial Officer and Secretary
DECRANE HOLDINGS CO., a Delaware corporation (for purposes of Section 5 only) as a guarantor
By:	/s/ Richard J. Kaplan
	Name: Richard J. Kaplan
	Title: Managing Director

S-4

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as a Lender, Syndication Agent and Adminstrative Agent
By:	/s/ Dana Klei
	Name: Dana Klein
	Title: Managing Director
By:	/s/ Thomas L. Newberry
	Name: Thomas L. Newberry
	Title: Managing Director

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		,as a Lender
By:
	Name:
	Title:

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ANNEX A

MATTERS TO BE COVERED IN OPINION OF COUNSEL TO COMPANY

1.Company has been duly incorporated, and is validly existing in good standing under the laws of the State of Delaware with corporate power to own its properties and assets, to enter into the Amendment and to perform its obligations under the Amendment.

2.The execution, delivery and performance of the Amendment by Company have been duly authorized by all necessary corporate action on the part of Company, the Amendment has been duly executed and delivered by Company, and the Amendment and the Amended Agreement constitute the legally valid and binding obligations of Company, enforceable against Company in accordance with their respective terms except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) and by general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law.

3.Company’s execution and delivery of the Amendment and the consummation of the transactions contemplated by the Amendment do not and will not (i) violate the Certificate of Incorporation or By-laws of Parent or of Company, (ii) violate, breach or result in a default under Senior Subordinated Note Indenture or the First Lien Credit Agreement, (iii) breach or otherwise violate any existing obligation of Company under any order, judgment or decree of any New York, California or federal court or Governmental Authority binding on Company or (iv) violate any New York, California or federal statute or regulation.

4.No governmental consents, approvals, authorizations, registrations, declarations or filings are required by Company in connection with the execution and delivery by Company of the Amendment, and the performance by Company of the Amended Agreement.

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EX-10.12.2

Exhibit 10.12.2

DECRANE AIRCRAFT HOLDINGS, INC.

SECOND AMENDMENT

TO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of July 16, 2004 and entered into by and among DeCrane Aircraft Holdings, Inc., a Delaware corporation (“Company”), the financial institutions listed on the signature pages hereof (“Lenders”), Credit Suisse First Boston (successor to DLJ Capital Funding, Inc.), acting through its Cayman Islands Branch, as syndication agent for Lenders (in such capacity, “Syndication Agent”) and as administrative agent for Lenders (in such capacity, “Administrative Agent”), and is made with reference to that certain Credit Agreement, dated as of December 22, 2003, as amended by a First Amendment to Credit Agreement dated as of June9, 2004 (the “Credit Agreement”), by and among Company, the lenders listed on the signature pages thereof, Syndication Agent and Administrative Agent.  Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement.

RECITALS

WHEREAS, Company desires to issue the Senior Notes in connection with the Senior Note Exchange and enter into the Senior Note Indenture as permitted by subsection 6.1(xii) of the Credit Agreement;

WHEREAS, the proposed form of Senior Note Indenture permits redemption of the Senior Notes at the option of Company;

WHEREAS, Company and Lenders desire to amend the Credit Agreement to prohibit optional redemption, optional prepayment or optional purchase of the Senior Notes;

WHEREAS, Company may issue the Senior Notes only if, among other things, Syndication Agent has determined that the terms and conditions of the Senior Notes, the Senior Note Indenture and the documentation evidencing the Senior Note Exchange are satisfactory;

WHEREAS, Syndication Agent has decided to make such determination only upon request by Requisite Lenders, as provided in subsection 8.2B of the Credit Agreement.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

Section 1.  AMENDMENTS TO THE CREDIT AGREEMENT

Section 6 of the Credit Agreement is hereby amended by adding the following as subsection 6.16:

“6.16      Prepayments of Senior Notes.

Company shall not, and shall not permit any of its Subsidiaries to, make any optional redemption or optional purchase of, optional prepayment with respect to, the Senior Notes.”

Section 2.  CONSENT

Lenders, constituting Requisite Lenders, hereby determine that the terms and conditions of the Senior Notes, the Senior Note Indenture attached hereto as Exhibit A and the documentation evidencing the Senior Note Exchange attached hereto as Exhibit B are satisfactory in form and substance, and request Syndication Agent to indicate its satisfaction with such terms and conditions to Company.

Section 3.  CONDITIONS TO EFFECTIVENESS

A.            Section 1 and Section 2 of this Amendment shall become effective only upon the satisfaction of all of the following conditions (the date of satisfaction of such conditions being referred to herein as the “Second Amendment Effective Date”):

1.             On or before the Second Amendment Effective Date, Company shall deliver to Lenders (or to Syndication Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) the following, each, unless otherwise noted, dated the Second Amendment Effective Date:

(a)           an amendment to the First Lien Credit Agreement to the effect that prepayment of the Senior Notes issued pursuant to the Senior Note Indenture is prohibited pursuant to the terms of such agreement;

(b)           Signature and incumbency certificates of its officers executing this Amendment; and

(c)           Executed originals of this Amendment, executed by Parent, Company and each Subsidiary Guarantor.

2.             Executed originals of this Amendment executed by Requisite Lenders.

Section 4.  COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Company represents and warrants to each Lender that the following statements are true, correct and complete on and as of the Second Amendment Effective Date:

A.            Corporate Power and Authority.  Each of Company and its Subsidiaries has all requisite corporate power and authority to enter into this Amendment to carry out the transactions contemplated by, and perform its obligations under, the Credit Agreement as amended by this Amendment (the “Amended Agreement”).

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B.            Authorization of Agreement.  The execution and delivery of this Amendment and the performance of the Amended Agreement have been duly authorized by all necessary corporate action on the part of each of Company and its Subsidiaries.

C.            No Conflict.  The execution, delivery and performance by each of Company and each of its Subsidiaries of this Amendment, and the performance by Company of the Amended Agreement do not and will not (i) violate any provision of (x) any law or any governmental rule or regulation applicable to Company or any of its Subsidiaries where such violations in the aggregate have had or could reasonably be expected to have a Material Adverse Effect, (y) the Certificate or the Articles of Incorporation or Bylaws (or any other organization document) of Parent, Company or any of Company’s Subsidiaries or (z) any order, judgment or decree of any court or other agency of government binding on Company or any of Company’s Subsidiaries where such violations in the aggregate have had or could reasonably be expected to have a Material Adverse Effect, (ii) conflict with, result in a breach of or constitute a default under any Contractual Obligation of Parent, Company or any of its Subsidiaries where such conflict, breach or default in the aggregate have had or could reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Company or any of Company’s Subsidiaries (other than Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of or consent of any Person under any Contractual Obligation of Parent, Company or any of Company’s Subsidiaries, except for this Amendment and such approvals or consents the failure of which to obtain has not had and could not reasonably be expected to have a Material Adverse Effect.

D.            Governmental Consents.  The execution, delivery and performance by each of Company and each of its Subsidiaries of this Amendment and the performance by Company of the Amended Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body other than any such registrations, consents, approvals, notices or other actions (x) that have been made, obtained or taken on or prior to the date on which such registrations, consents, approvals, notices or other actions are required to be made, obtained or taken, as the case may be, and are in full force and effect or (y) the failure of which to make, obtain or take has not had and could not reasonably be expected to have a Material Adverse Effect.

E.             Binding Obligation.  This Amendment has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

F.             Incorporation of Representations and Warranties From Credit Agreement.  The representations and warranties contained in Section 4 of the Credit Agreement are and will be true, correct and complete in all material respects on and as of the

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Second Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date.

G.            Absence of Default.  No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute an Event of Default or a Potential Event of Default.

Section 5.  ACKNOWLEDGEMENT AND CONSENT

Each of Parent and the Subsidiary Guarantors (each a “Guarantor”) is a party to a Guaranty and each such Guarantor has guarantied the Obligations.

Each Guarantor hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment of the Credit Agreement effected pursuant to this Amendment.  Each Guarantor hereby confirms that the Guaranty to which it is a party or otherwise bound will continue to guaranty to the fullest extent possible the payment and performance of all “Guarantied Obligations” as such term is defined in the applicable Guaranty, including without limitation the payment and performance of all such “Guarantied Obligations” in respect of the Obligations of Company now or hereafter existing under or in respect of the Amended Agreement.

Each Guarantor (a) acknowledges and agrees that the Guaranty to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment;  (b) represents and warrants that all representations and warranties contained in the Amended Agreement and in the Guaranty to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Second Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date; and (c) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor to any future amendments to the Credit Agreement.

Section 6.  MISCELLANEOUS

A.            Effect of Amendment.

(i)            On and after the Second Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Agreements.

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(ii)           On and after the Second Amendment Effective Date, each reference in the other Loan Documents to the “Lenders,” “Commitments,” or words of like import shall mean and be a reference to the Lenders and Commitments as amended by this Agreement.

(iii)          Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

(iv)          The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Agents or any Lender under, the Credit Agreement or any of the other Loan Documents.

B.            Fees and Expenses.  Company acknowledges that all costs, fees and expenses as described in subsection 9.2 of the Credit Agreement incurred by Agents and their counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Company.

C.            Headings.  Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

D.            Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

E.             Counterparts; Effectiveness.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  This Amendment shall become effective upon the execution of a counterpart hereof by Company, Requisite Lenders and Guarantors and receipt by Company and Agents of written or telephonic notification of such execution and authorization of delivery thereof.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

DECRANE AIRCRAFT HOLDINGS, INC., a Delaware corporation
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
AUDIO INTERNATIONAL, INC., an Arkansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
CARL F. BOOTH & CO., LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
CUSTOM WOODWORK & PLASTICS, LLC., a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer

S-1

DAH-IP HOLDINGS, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
DAH-IP INFINITY, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
DECRANE AIRCRAFT SEATING COMPANY, INC., a Wisconsin corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
DECRANE CABIN INTERIORS, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. JACK DECRANE
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer

S-2

DECRANE CABIN INTERIORS CANADA, INC., a Delaware corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
HOLLINGSEAD INTERNATIONAL, INC., a California corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
PATS AIRCRAFT, LLC, a Delaware limited liability company (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
PCI NEWCO., INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer

S-3

PPI HOLDINGS, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
PRECISION PATTERN, INC., a Kansas corporation (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack DeCrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
THE INFINITY PARTNERS, LTD., a Texas limited partnership
by: DAH-IP Holdings, Inc., a Delaware limited partnership, its general partner (for purposes of Section 5 only) as a Subsidiary Guarantor
By:	/s/ R. Jack decrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer
DECRANE HOLDINGS CO., a Delaware corporation (for purposes of Section 5 only) as a guarantor
By:	/s/ R. Jack decrane
	Name:	R. Jack DeCrane
	Title:	Chief Executive Officer

S-4

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch (successor to DLJ Capital Funding, Inc.), as a Lender, Syndication Agent and Adminstrative Agent
By:	/s/ DANA KLEIN
	Name:	Dana Klein
	Title:	Managing Director
By:	/s/ Richard Carey
	Name:	Richard Carey
	Title:	Managing Director

S-5

		, as a Lender
By:
	Name:
	Title:

S-6

ANNEX A

MATTERS TO BE COVERED IN OPINION OF COUNSEL TO COMPANY

1.             Company has been duly incorporated, and is validly existing in good standing under the laws of the State of Delaware with corporate power to own its properties and assets, to enter into the Amendment and to perform its obligations under the Amendment.

2.             The execution, delivery and performance of the Amendment by Company have been duly authorized by all necessary corporate action on the part of aaaaaaaCompany, the Amendment has been duly executed and delivered by Company, and the Amendment and the Amended Agreement constitute the legally valid and binding obligations of Company, enforceable against Company in accordance with their respective terms except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws) and by general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law.

3.             Company’s execution and delivery of the Amendment and the consummation of the transactions contemplated by the Amendment do not and will not (i) violate the Certificate of Incorporation or By-laws of Parent or of Company, (ii) violate, breach or result in a default under Senior Subordinated Note Indenture or the First Lien Credit Agreement, (iii) breach or otherwise violate any existing obligation of Company under any order, judgment or decree of any New York, California or federal court or Governmental Authority binding on Company or (iv) violate any New York, California or federal statute or regulation.

4.             No governmental consents, approvals, authorizations, registrations, declarations or filings are required by Company in connection with the execution and delivery by Company of the Amendment, and the performance by Company of the Amended Agreement.

A-1

EX-10.13

Exhibit 10.13

EXCHANGE AGREEMENT


dated as of


July 23, 2004


among


DECRANE AIRCRAFT HOLDINGS, INC.,


THE GUARANTORS SET FORTH ON THE SIGNATURE PAGES
HERETO


and


THE HOLDERS SET FORTH ON THE SIGNATURE PAGES HERETO

TABLE OF CONTENTS

i

Section 6.02.  Indemnification
ARTICLE 7
MISCELLANEOUS
Section 7.01.  Notices
Section 7.02.  No Waivers; Amendments
Section 7.03.  Exclusivity
Section 7.04.  Termination
Section 7.05.  Successors And Assigns
Section 7.06.  Governing Law
Section 7.07.  Jurisdiction
Section 7.08.  WAIVER OF JURY TRIAL
Section 7.09.  Counterparts; Effectiveness
Section 7.10.  Expenses
Section 7.11.  Entire Agreement
Section 7.12.  Captions; Certain Definitions
Schedule 1.02	-	Amount of Old Notes and New Notes; Taxpayer Identification Number
Exhibit A	-	Form of Indenture
Exhibit B	-	Form of Registration Rights Agreement

ii

EXCHANGE AGREEMENT

AGREEMENT dated as of July 23, 2004, among DeCrane Aircraft Holdings, Inc., a Delaware corporation (the “Company”), the affiliates of the Company set forth on the signature pages hereto as Guarantors (the “Guarantors”), and certain holders of the Company’s 12% Senior Subordinated Notes due 2008 (the “Old Notes”) set forth on the signature pages hereto (together with their successors and assigns, the “Holders”).

W  I  T  N  E  S  S  E  T  H :

WHEREAS, the Holders are holders of a portion the Old Notes;

WHEREAS, the Holders and the Company desire that the Holders exchange the Old Notes for new 17% Senior Discount Notes due 2008 of the Company (the “New Notes”) guaranteed by each of the Guarantors, to be issued pursuant to the provisions of an Indenture, substantially in the form attached hereto as Exhibit A, dated as of the Closing Date (as defined herein) (the “Indenture”) among the Company, the Guarantors named therein and U.S. Bank National Association, as Trustee  (the “Trustee”);

WHEREAS, in connection with the exchange of the Old Notes for the New Notes, the Company will enter into an amendment (the “Credit Agreement Amendment”) to the Third Amended and Restated Credit Agreement dated May 11, 2000 among the Company, the lenders party thereto and Credit Suisse First Boston, as administrative agent and syndication agent for the lenders (as amended, the “Credit Agreement”);

WHEREAS, in connection with the exchange of the Old Notes for the New Notes, the Company will enter into an amendment (the “Second Lien Credit Agreement Amendment”) to the Second Lien Credit Agreement dated December 22, 2003 among the Company, the lenders party thereto and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent and syndication agent for the lenders (as amended, the “Second Lien Credit Agreement”);

WHEREAS, concurrently with the exchange of the Old Notes for the New Notes, the Company will amend the terms of its 16% Senior Redeemable Exchangeable Preferred Stock due 2009 (the “Senior Preferred Stock Amendment”) and DeCrane Holdings Co. will amend the terms of substantially all of its 14% Senior Redeemable Exchangeable Preferred Stock due 2009, whether through an amendment of such securities or an exchange therefor (the “Junior Preferred Stock Amendment”); and

WHEREAS, the Holders, the Company and the Guarantors will enter into a Registration Rights Agreement relating to the New Notes, substantially in the form attached hereto as Exhibit B, dated as of the Closing Date (the “Registration Rights Agreement”).

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NOW THEREFORE, the parties hereto agree as follows:

ARTICLE 1

ISSUANCE AND EXCHANGE

Section 1.01.  Issuance, Exchange And Delivery. Upon the terms and subject to the terms and conditions of this Agreement, the Company agrees to issue to each Holder, and each Holder agrees, severally but not jointly, to accept from the Company at the Closing, the New Notes in exchange for the surrender of the Old Notes, in each case in the principal amounts set forth opposite such Holder’s name on Schedule 1.02 hereto.

Section 1.02.  Closing.  The closing (the “Closing”) of the issuance of the New Notes hereunder shall take place at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York, as soon as possible, but in no event later than five (5) Business Days after satisfaction of the conditions set forth in Article 5, or at such other time or place as Company and the Holders may agree, such date is hereinafter referred to as the “Closing Date”.  At the Closing (a) each Holder shall surrender to the Company the principal amount of the Old Notes set forth opposite such Holder’s name on Schedule 1.02 hereto; and (b) the Company shall deliver to each Holder New Notes with an initial accreted value equal to the amount  set forth opposite such Holder’s name on Schedule 1.02 hereto, plus an amount in cash equal to the accrued and unpaid interest on the Old Notes being exchanged to the Closing Date.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS

The Company and each of the Guarantors represents and warrants to each Holder that:

Section 2.01.  No Default under the Credit Agreement.  As of the date hereof, (i) no Potential Event of Default or Event of Default (each as defined in the Credit Agreement) under the Credit Agreement has occurred and is continuing, and (ii) the Company is able to satisfy the conditions to borrowing thereunder to permit the Company to borrow at least $1 of additional debt thereunder pursuant to the terms thereto on the date hereof.

Section 2.02.  Authorizations.  The execution, delivery and performance by the Company and each of the Guarantors of this Agreement have been duly authorized by all necessary corporate action on the part of the Company and each of the Guarantors.  The New Notes have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and issued to the holders in exchange for the Old Notes in accordance with the  terms of this

2

Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability, and will be entitled to the benefits of the Indenture; each of the Guarantors has duly authorized its guarantee of the New Notes and, when the New Notes have been executed and authenticated in accordance with the provisions of the Indenture and issued to the holders in exchange for the Old Notes in accordance with the terms of this Agreement and the Indenture has been executed and delivered by each Guarantor, the guarantee of the New Notes will be a valid and binding obligation of the each Guarantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability.  Each of the Indenture and the Registration Rights Agreement has been duly authorized by all necessary corporate action on the part of the Company and each of the Guarantors, as applicable.  This Agreement is and, when executed and delivered on the Closing Date, each of the Indenture and the Registration Rights Agreement will be, a valid and binding agreement of the Company and each of the Guarantors, as applicable, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability and except as rights to indemnification and contribution under the Registration Rights Agreement may be limited under applicable law.

Section 2.03.  Governmental Authorization.  Assuming the accuracy of the representations and warranties of the Holders and their compliance with the covenants herein, the execution, delivery and performance by the Company and each of the Guarantors of this Agreement, the Indenture, the Registration Rights Agreement and the New Notes require no material order, license, consent, authorization, or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official, except as may be required by Federal and state securities laws with respect to the Company’s obligations under the Registration Rights Agreement and except as may be required by state securities laws.

Section 2.04.  Non-Contravention.  The execution, delivery and performance by the Company and each of the Guarantors of this Agreement, the Registration Rights Agreement, the Indenture and the New Notes do not and will not (i) violate the certificate of incorporation or bylaws of the Company or any Guarantor or any material agreement or other instrument binding upon the Company or any Guarantor or (ii) violate any material applicable law, rule, regulation, judgment, injunction, order or decree.

Section 2.05.  No Registration.  Assuming the accuracy of the representations and warranties of the Holders and their compliance with the covenants herein, it is not necessary in connection with the issuance of the New Notes to the Holders in the manner contemplated by this Agreement to register

3

the  New Notes under the Securities Act of 1933, as amended (the “Securities Act”) or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

Section 2.06.  Litigation.  There is no action, suit, investigation or proceeding pending against, or to the knowledge of the Company or any Guarantor, threatened in writing against or affecting the Company or any Guarantor or any of their respective properties before any court or arbitrator or any governmental body, agency or official which could reasonably be expected to have a material adverse effect on the transactions contemplated by this Agreement.

Section 2.07.  Finder’s Fees.  Except for Credit Suisse First Boston LLC, whose compensation in connection with the exchange of the Old Notes for the New Notes will be paid by the Company, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the Company or any of its Affiliates (as defined in Rule 405 under the Securities Act) which might be entitled to any fee or commission from any Holder, the Company or any of their respective Affiliates upon consummation of the transactions contemplated by this Agreement.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Each Holder, severally as to itself and not jointly, represents, warrants and agrees to the Company and the Guarantors as follows:

Section 3.01.  Ownership of Old Notes.  Such Holder has, and on the Closing Date will have valid title to, or a valid “security entitlement” within the meaning of Section 8-501 of the New York Uniform Commercial Code in respect of, the Old Notes to be exchanged by such Holder free and clear of all security interests, claims, liens, equities or other encumbrances and the legal right and power, and all authorization and approval required by law, to enter into this Agreement and to transfer and deliver the Old Notes to be exchanged by such Holder or a security entitlement in respect of such Old Notes.

Section 3.02.  Authorization of Exchange Agreement.  The execution, delivery and performance of this Agreement are within such Holder’s powers and have been duly authorized by all requisite corporate action on the part of such Holder.  This Agreement constitutes a valid and binding agreement of such Holder enforceable in accordance with its terms.  This Agreement has been duly executed and delivered by such Holder.

Section 3.03.  Non-Contravention.  The execution and delivery by such Holder of, and the performance by such Holder of its obligations under, this Agreement will not contravene any provision of applicable law or the certificate

4

of incorporation, by-laws or other organizational document of such Holder or any material agreement or other instrument binding upon such Holder, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Holder.

Section 3.04.  Exchange for Investment.  Such Holder acknowledges that the New Notes have not been registered under the Securities Act or any state securities laws and that the issuance of the New Notes contemplated hereby is to be effected pursuant to an exemption from the registration requirements imposed by such laws, including Section 4(2) under the Securities Act.  Such Holder is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act and the New Notes to be received by it pursuant to this Agreement are being received for its own account without a view toward distribution in violation of the Securities Act and such Holder will not offer, sell, transfer, pledge, hypothecate or otherwise dispose of the New Notes unless (i) pursuant to a transaction either registered under, or exempt from registration pursuant to Rule 144A and Regulation S under, the Securities Act or (ii) to an accredited investor, provided that such accredited investor accepts delivery of such New Notes in the form of a definitive note registered in the name of such accredited investor.

Section 3.05.  Restricted Securities.  Such Holder acknowledges that the New Notes have not been registered under the Securities Act and may not be offered, sold, pledged or otherwise transferred prior to the expiration of the applicable holding period of the New Notes under Rule 144 (k) of the Securities Act, except (a) in accordance with Rule 144A or Regulation S under the Securities Act or pursuant to another exemption from the registration requirements of the Securities Act or (b) pursuant to an effective registration statement under the Securities Act.  The New Notes will bear a legend and will be subject to transfer restrictions as set forth in the Indenture.

Section 3.06.  Inspections; No Other Representations.  Each Holder is an informed and sophisticated purchaser, and has engaged expert advisors experienced in the evaluation of the transactions contemplated hereunder.  Each Holder has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement.  Each Holder acknowledges that the Company has given such Holder complete and open access (to the extent requested by such Holder) to the key employees, and documents of the Company and its subsidiaries.  Each Holder agrees to accept the New Notes on the Closing Date based upon its own inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to the Company, except as expressly set forth in this Agreement.  Without limiting the generality of the foregoing, each Holder acknowledges that the Company makes no representation or warranty with respect to (i) any projections, estimates or budgets delivered to or made available to the Holder of future revenues, future

5

results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company and the Guarantors or the future business and operations of the Company and the Guarantors or (ii) any other information or documents made available to such Holder or its  advisors with respect to the Company or the Guarantors or their respective businesses or operations, except as expressly set forth in this Agreement.

Section 3.07.  Finder’s Fees.  There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of such Holder or any of its Affiliates which might be entitled to any fee or commission from such Holder, the Company or any of their respective Affiliates upon consummation of the transactions contemplated by this Agreement.

Section 3.08.  Taxpayer Identification Numbers.  The number set forth under “Taxpayer Identification Number” on Schedule 1.02 hereto listed next to the name of such Holder is such Holder’s federal taxpayer identification number.

ARTICLE 4
COVENANTS

Section 4.01.  Covenants of the Company.  In further consideration of the agreements of the Holders contained in this Agreement, the Company covenants with each of the Holders as follows:

(a)        the Company will use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement;

(b)        the Company will use its commercially reasonable efforts to obtain any consents, approvals or waivers that are required to be obtained from third parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement; and

(c)        prior to the Closing Date, the Company agrees that, except as the Company and its counsel reasonably determine to be required by law, it will not disclose the identity of the Holders to any third party without the prior written consent of such Holder, which consent shall not be unreasonably withheld, except that the Company may disclose any Holder’s identity to its advisors and counsel or to any other Holder that is a party to this Agreement (it being understood that the Company will be required to publicly file this Agreement, the Indenture and the Registration Rights Agreement with the Securities and Exchange Commission, which documents will identify each Holder).

6

Section 4.02.  Covenants of the Holders.  In further consideration of the agreements of the Company contained in this Agreement, each Holder covenants with the Company as follows:

(a)        such Holder and its Affiliates (as defined in Rule 405 under the Securities Act) will hold, and will use their commercially reasonable efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, (i) the existence of this Agreement or any facts relating to the transaction contemplated by this Agreement and (ii) all confidential documents and information concerning the Company or any Guarantor furnished to such Holder or its Affiliates in connection with the transactions contemplated by this Agreement, except to the extent that such information can be shown to have been (A) previously known on a non-confidential basis by such Holder, (B) in the public domain through no fault of such Holder or (C) later lawfully acquired by such Holder from sources other than the Company or any Guarantor; provided that such Holder may disclose such information to its officers, directors, employees, accountants, counsel, consultants, advisors and agents in connection with the transactions contemplated by this Agreement  so long as such persons are informed by such Holder of the confidential nature of such information and are directed by such Holder to treat such information confidentially.  Each Holder shall be responsible for any failure to treat such information confidentially by such persons.  The obligation of each Holder and its Affiliates to hold any such information in confidence shall be satisfied if they exercise the same care with respect to such information as they would take to preserve the confidentiality of their own similar information and shall in any event expire six months from the Closing Date.  If this Agreement is terminated, each Holder and its Affiliates will, and will use their commercially reasonable efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to, destroy or deliver to the Company, upon request, all documents and other materials, and all copies thereof, obtained by such Holder or its Affiliates or on their behalf from the Company or any Guarantor in connection with this Agreement that are subject to such confidentiality provisions;

(b)        unless this Agreement is terminated in accordance with Section 7.04 hereof, such Holder will not pledge, sell, contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any of the Old Notes or any right or interest (voting or otherwise and including any participation interest) therein, except with the consent of the Company or pursuant to Section 1.02 hereof; and

(c)        such Holder will use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement.

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ARTICLE 5

CONDITIONS TO THE CLOSING

Section 5.01.  Conditions to Obligation of Each Party.  The obligations of each party hereto to consummate the issuance of the New Notes in exchange for the Old Notes is subject to the satisfaction (or, to the extent permitted by law, waiver by such party), at or prior to the Closing Date, of the following conditions:

(a)        no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Closing and there shall not be threatened, instituted or pending any action, suit, investigation or proceeding which could reasonably be expected to have a material adverse effect on the transactions contemplated by this Agreement;

(b)        the Senior Preferred Stock Amendment and the Junior Preferred Stock Amendment shall have been consummated or shall be consummated concurrently with the Closing;

(c)        the Credit Agreement Amendment shall be in full force and effect; and

(d)        the Second Lien Credit Agreement Amendment shall be in full force and effect.

Section 5.02.  Conditions to the Obligations of the Holders.  The obligation of the Holders to exchange the Old Notes for the New Notes is subject to the satisfaction (or, to the extent permitted by law, waiver by each Holder), at or prior to the Closing Date, of the following additional conditions:

(a)        no more than $65,000,000 in principal amount of Old Notes shall be exchanged for New Notes or other securities of the Company;

(b)        the representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects, the Company shall have performed and complied with all covenants and agreements required by this Agreement to be performed by it at or prior to the Closing Date, and each Holder shall have received a certificate, dated the Closing Date, signed by an authorized officer of the Company to the foregoing effect;

(c)        the Company shall have delivered to each Holder an opinion of  Davis Polk & Wardwell, special counsel to the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Holders, to the effect that (subject to appropriate assumptions and limitations):

(i)    the New Notes have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and issued to the Holders in exchange for the Old Notes in

8

accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto;

(ii)   the Indenture has been duly authorized, executed and delivered by each of the Company and each of the Guarantors organized under the laws of Delaware (the “Delaware Guarantors”) and is a valid and binding agreement of the Company, and (assuming due authorization, execution and delivery by each other Guarantor (the “Non-Delaware Guarantors”)) the Guarantors, enforceable in accordance with its terms; except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto;

(iii)  this Agreement has been duly authorized, executed and delivered by each of the Company and the Delaware Guarantors;

(iv)  the Registration Rights Agreement has been duly authorized, executed and delivered by each of the Company and the Delaware Guarantors and is a valid and binding agreement of the Company and (assuming due authorization, execution and delivery by the Non-Delaware Guarantors) the Guarantors, enforceable against each of the Company and the Guarantors in accordance with its terms, except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) rights to indemnity and contribution thereunder may be limited by applicable law;

9

(v)   each of the Delaware Guarantors has duly authorized its Guarantee of the New Notes; assuming each of the Non-Delaware Guarantors has duly authorized its Guarantee of the New Notes, when the New Notes and the Guarantee evidenced thereon have been executed and authenticated in accordance with the terms of the Indenture and issued to the Holders in exchange for the Old Notes in accordance with the terms thereof, the Guarantee of each Guarantor will be the legally valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto; and

(vi)  the Exchange will not contravene the Credit Agreement, the Second Lien Credit Agreement, or the indenture for the Old Notes.

(d)        the Company and the Guarantors shall have executed and delivered the Indenture and the Registration Rights Agreement;

(e)        The Holders shall have received copies of each of the Credit Agreement Amendment and the Second Lien Credit Agreement Amendment, each of which shall be in full force and effect and no term or condition thereof shall have been amended, waived or otherwise modified without the prior consent of the Holders;

(f)         all fees and expenses payable to the Holders on or prior to the Closing Date shall have been paid in full; and

(g)        each Holder shall have received all documents reasonably requested by it relating to the existence of the Company and the corporate authority for entering into this Agreement and the consummation of the transactions contemplated hereby, all in form and substance reasonably satisfactory to it.

Section 5.03.  Conditions to the Obligations of the Company.  The obligations of the Company to issue the New Notes to the Holders pursuant to this Agreement are subject to the satisfaction (or, to the extent permitted by law, waiver by each Holder), at or prior to the Closing Date, of the following conditions:

(a)        the representations and warranties of the Holders contained in this Agreement shall be true and correct in all material respects and the Holders shall

10

have performed and complied with all covenants and agreements required by this Agreement to be performed by them at or prior to the Closing Date; and

(b)        the Holders shall have executed and delivered the Registration Rights Agreement; and

(c)        the Company shall have received all documents reasonably requested by it relating to the existence of each Holder and the authority for entering into this Agreement and the consummation of the transactions contemplated hereby, all in form and substance reasonably satisfactory to it.

ARTICLE 6SURVIVAL; INDEMNIFICATION

Section 6.01.  Survival.  The representations and warranties of the parties hereto contained in this Agreement, shall survive the execution and delivery of this Agreement.  The covenants and agreements of the parties contained in this Agreement shall survive the Closing in accordance with their terms or, if no term is specified, indefinitely.

Section 6.02.  Indemnification.  (a) The Company hereby indemnifies each of the Holders, each person, if any, who controls any Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, and each affiliate of any Holder within the meaning of Rule 405 under the Securities Act against and agrees to hold each of them harmless from any and all losses, claims, damages, costs, liabilities or expenses (or actions, suits or proceedings in respect thereof), including reasonable expenses of investigation and reasonable attorneys’ fees and expenses, in each case, in connection with any action, suit or proceeding involving a third party (“Damages”) incurred or suffered by any of them, in each case arising out of any misrepresentation or breach of warranty, covenant or agreement made or to be performed by the Company pursuant to this Agreement.

(b)        The Company shall not be responsible for any Damages to the extent a court of competent jurisdiction shall have finally determined that such Damages resulted primarily from (i) such indemnified person’s bad faith or gross negligence; (ii) any claims made by one or more of the indemnified persons against another indemnified person or indemnified persons in connection with the Transactions or (iii) any breach of the representations and warranties of any of the Holders set forth in this Agreement (clauses (i) through (iii), collectively, “Excluded Claims”).  If for any reason (other than that such liability is an Excluded Claim) the foregoing indemnity is unavailable or insufficient to hold an indemnified person harmless, then the Company shall contribute to amounts paid or payable by such indemnified person in respect of such Damages in such proportion as appropriately reflects the relative benefits received by, and fault of,

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the Company and such indemnified person in connection with the matters as to which such Damages relate and other equitable considerations.

(c)        The party seeking indemnification under this Section (the “Indemnified Party”) agrees to give prompt notice to the party against whom indemnity is sought (the “Indemnifying Party”) of the assertion of any claim, or the commencement of any suit, action or proceeding (“Claim”) in respect of which indemnity may be sought under such Section and will provide the Indemnifying Party such information with respect thereto that the Indemnifying Party may reasonably request. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely prejudiced the Indemnifying Party.

(d)        The Indemnifying Party shall be entitled to participate in the defense of any Claim asserted by any third party (“Third Party Claim”) and, subject to the limitations set forth in this Section, shall be entitled to control and appoint lead counsel for such defense, in each case at its expense.

(e)        If the Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld) before entering into any settlement of such Third Party Claim and the Indemnified Party shall be entitled to participate in the defense of such Third Party Claim and to employ separate counsel of its choice for such purpose.  The fees and expenses of such separate counsel shall be paid by the Indemnified Party.

(f)         Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.

ARTICLE 7
MISCELLANEOUS

Section 7.01.  Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Holders, to:

Wayzata Investment Partners, LLC
701 East Lake Street
Suite 300
Wayzata, MN  55391

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Attention:  Joe Deignan
Facsimile:  (952) 345-8900

and

Putnam Investment Management, LLC
Putnam Fiduciary Trust Company
One Post Office Square
Boston , MA  02109
Attention:  James P. Miller
Facsimile:  (617) 760-8639

and

Deephaven Distressed Opportunities Trading Ltd
130 Cheshire Lane
Suite 102
Minnetonka, MN 55305
Attention:  Peter H. Glerum
Facsimile:  (952) 249-5316

with a copy (which shall not constitute notice to any Holder) to:

Ropes & Gray LLP
One International Place
Boston, MA  02110
Attention:  Don De Amicis, Esq.
Facsimile:  (617) 951-7050

if to the Company, to:

DeCrane Aircraft Holdings, Inc.
2361 Rosecrans Avenue, Suite 180
El Segundo, California  90245
Attention:  Chief Financial Officer
Facsimile:  (310) 643-5106

with a copy (which shall not constitute notice to the Company) to:

Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention:  Michael P. Kaplan, Esq.
Facsimile:  (212) 450-3800

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt.  Otherwise, any

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such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.

Section 7.02.  No Waivers; Amendments. (a)No failure or delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(b)   Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by all parties hereto.

Section 7.03.  Exclusivity. After the Closing, Article 6 will provide the exclusive remedy for Holders for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby.  The Company shall retain all remedies available at law for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby.

Section 7.04.  Termination. (a) This Agreement shall terminate, prior to the Closing Date:

(i)    at any time by mutual written agreement of the Company and the Holders;

(ii)   if there shall be any law or regulation that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any non-appealable final order, decree or judgment of any court or governmental body having competent jurisdiction, if so determined by the Company or the Holders; or

(iii)  on July 30, 2004, unless extended to a later date by an instrument executed by the Company and the Holders.

The party desiring to terminate this Agreement pursuant to this Section 7.04 shall give notice of such termination to the other parties.

(b)        If this Agreement is terminated as permitted by Section 7.04, such termination shall be without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other parties to this Agreement; provided that if such termination shall result from the (i) willful failure of any party to fulfill a condition to the performance of the obligations of the other parties, (ii) failure to perform a covenant of this Agreement or (iii) breach by any party hereto of any representation or warranty or

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agreement contained herein, such party shall be fully liable for any and all damages incurred or suffered by the other party as a result of such failure or breach.

Section 7.05.  Successors And Assigns. The Company may not assign any of its rights and obligations hereunder without the prior written consent of the Holders.  No Holder may assign its rights or obligations hereunder without the prior written consent of the Company.  This Agreement shall be binding upon the Company and the Holders and their respective successors and assigns.

Section 7.06.  Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York, without regard to the choice of law rules of such state.

Section 7.07.  Jurisdiction. Except as otherwise expressly provided in this Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party agrees that service of process on such party as provided in this Section shall be deemed effective service of process on such party.

Section 7.08.  WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.09.  Counterparts; Effectiveness.  This Agreement may be executed in any number of counterparts each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto.  No

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provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder

Section 7.10.  Expenses.  Except as otherwise provided in Article 6 herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense; provided however, that the Company shall pay the fees and expenses of Ropes & Gray LLP, special counsel to the Holders incurred in connection with the negotiation, execution and delivery of this Agreement and the transactions contemplated hereby; provided further that such fees and expenses shall not exceed $75,000.

Section 7.11.  Entire Agreement.  This Agreement, the Indenture, the Registration Rights Agreement and the New Notes constitute the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, written or oral, relating to the subject matter hereof.

Section 7.12.  Captions; Certain Definitions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  All references to “$” or “dollars” shall be to United States dollars and all references to “days” shall be to calendar days unless otherwise specified.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words, “without limitation.”

[Remainder of page intentionally left blank; next page is signature page]

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IN WITNESS WHEREOF, the parties hereto have caused this  Exchange Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

DECRANE AIRCRAFT HOLDINGS INC.
By:	/s/ R. JACK DECRANE
	Name:			R.Jack DeCrane
	Title:	Chief Executive Officer
	AUDIO INTERNATIONAL, INC.
	CARL F. BOOTH & CO., LLC
	CUSTOM WOODWORK & PLASTICS, LLC
	DAH-IP HOLDINGS, INC.
	DAH-IP INFINITY, INC.
	DECRANE AIRCRAFT SEATING COMPANY, INC.
	DECRANE CABIN INTERIORS-CANADA, INC.
	DECRANE CABIN INTERIORS, LLC
	HOLLINGSEAD INTERNATIONAL, INC.
	PATS AIRCRAFT, LLC
	PCI NEWCO, INC.
	PPI HOLDINGS, INC.
	PRECISION PATTERN, INC.
	THE INFINITY PARTNERS, LTD.
	as Guarantors
By:	/s/ R. JACK DECRANE
	Name:			R. Jack DeCrane
	Title:		Chief Executive Officer

WAYZATA INVESTMENT PARTNERS, LLC
as Manager, on behalf of various funds
By:		/s/ JOSEPH M. DEIGNAN
		Name:			Joseph M. Deignan
		Title:	Authorized Signatory
PUTNAM INVESTMENT MANAGEMENT, LLC on behalf of:
PUTNAM HIGH YIELD TRUST
PUTNAM HIGH YIELD ADVANTAGE FUND
PUTNAM VARIABLE TRUST- PUTNAM VT HIGH YIELD FUND
PUTNAM MASTER INCOME TRUST
PUTNAM PREMIER INCOME TRUST
PUTNAM MASTER INTERMEDIATE INCOME TRUST
PUTNAM DIVERSIFIED INCOME TRUST
PUTNAM VARIABLE TRUST - PUTNAM VT DIVERSIFIED INCOME FUND
PUTNAM ASSET ALLOCATION: CONSERVATIVE PORTFOLIO
PUTNAM MANAGED HIGH YIELD TRUST
PUTNAM HIGH INCOME BOND FUND
PUTNAM HIGH INCOME OPPORTUNITIES TRUST
By:	/s/ MICHAEL E. DEFAO
	Name:				Michael E. DeFao
	Title:			Senior Vice President
PUTNAM FIDUCIARY TRUST COMPANY on behalf of: PUTNAM HIGH YIELD FIXED INCOME FUND, LLC
By:	/s/ MICHAEL E. DEFAO
	Name:					Michael E. DeFao
	Title:			Senior Vice President
DEEPHAVEN DISTRESSED OPPORTUNITIES TRADING LTD.
By:	/s/ Peter H. Glerum
	Name:				Peter H. Glerum
	Title:		Assistant Portfolio Manager

SCHEDULE 1.02

Holder	Taxpayer Identification Number	Principal Amount of Old Notes		Initial Accreted Value of New Notes
Wayzata Investment Partners, LLC, as Manager for:
Sapphire Special Opportunities Fund, LLC	23-3895790	$	7,789,000	$	7,789,000
Wayland Recovery Fund, LLC	22-3875940	$	8,708,000	$	8,708,000
Wayland Investment Fund II, LLC	41-1982966	$	8,707,000	$	8,707,000
Wayland Distressed Opportunities Fund I-A, LLC	11-3693643	$	6,466,000	$	6,466,000
Putnam High Yield Trust	04-6415410	$	11,600,000	$	11,600,000
Putnam High Yield Advantage Fund	06-6290063	$	5,000,000	$	5,000,000
Putnam Variable Trust-Putnam VT High Yield Fund	04-2986135	$	2,155,000	$	2,155,000
Putnam Master Income Trust	04-2993219	$	500,000	$	500,000
Putnam Premier Income Trust	04-2995046	$	1,310,000	$	1,310,000
Putnam Master Intermediate Income Trust	04-6584465	$	1,000,000	$	1,000,000
Putnam Diversified Income Trust	04-3017475	$	4,290,000	$	4,290,000
Putnam Variable Trust - Putnam VT Diversified Income Fund	04-6737822	$	820,000	$	820,000
Putnam Asset Allocation:  Conservative Portfolio	04-6746611	$	150,000	$	150,000
Putnam Managed High Yield Trust	04-6733967	$	240,000	$	240,000
Putnam High Income Bond Fund	04-6562068	$	60,000	$	60,000
Putnam High Income Opportunities Trust	04-6777185	$	60,000	$	60,000
Putnam High Yield Fixed Income Fund, LLC	51-6190220	$	100,000	$	100,000
Deephaven Distressed Opportunities Trading Ltd	41-1963795	$	5,530,000	$	5,530,000
Total		$	64,485,000	$	64,485,000

EX-10.13.1

Exhibit 10.13.1

EXCHANGE AGREEMENT


dated as of


September 9, 2004


among


DECRANE AIRCRAFT HOLDINGS, INC.,


THE GUARANTORS SET FORTH ON THE SIGNATURE PAGES HERETO


and


THE HOLDERS SET FORTH ON THE SIGNATURE PAGES HERETO

TABLE OF CONTENTS

Section 6.02.  Indemnification
ARTICLE 7
MISCELLANEOUS
Section 7.01.  Notices
Section 7.02.  No Waivers; Amendments
Section 7.03.  Exclusivity
Section 7.04.  Termination
Section 7.05.  Successors And Assigns
Section 7.06.  Governing Law
Section 7.07.  Jurisdiction
Section 7.08.  WAIVER OF JURY TRIAL
Section 7.09.  Counterparts; Effectiveness
Section 7.10.  Expenses
Section 7.11.  Entire Agreement
Section 7.12.  Captions; Certain Definitions
Schedule 1.02	-	Amount of Old Notes and New Notes; Taxpayer Identification Number

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EXCHANGE AGREEMENT

AGREEMENT dated as of September 9, 2004, among DeCrane Aircraft Holdings, Inc., a Delaware corporation (the “Company”), the affiliates of the Company set forth on the signature pages hereto as Guarantors (the “Guarantors”), and certain holders of the Company’s 12% Senior Subordinated Notes due 2008 (the “Old Notes”) set forth on the signature pages hereto (together with their successors and assigns, the “Holders”).

W  I  T  N  E  S  S  E  T  H :

WHEREAS, the Holders are holders of a portion the Old Notes;

WHEREAS, the Holders and the Company desire that the Holders exchange the Old Notes for new 17% Senior Discount Notes due 2008 of the Company (the “New Notes”) guaranteed by each of the Guarantors, to be issued pursuant to the provisions of an Indenture dated as of July 23, 2004 among the Company, the Guarantors named therein and U.S. Bank National Association, as Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture dated as of September 9, 2004 among the Company, the Guarantors named therein and the Trustee (the “Indenture”).

WHEREAS, the Company has entered into an amendment (the “Credit Agreement Amendment”) to the Third Amended and Restated Credit Agreement dated May 11, 2000 among the Company, the lenders party thereto and Credit Suisse First Boston, as administrative agent and syndication agent for the lenders (as amended, the “Credit Agreement”), which amendment will permit such exchange; and

WHEREAS, the Company has entered into an amendment (the “Second Lien Credit Agreement Amendment”) to the Second Lien Credit Agreement dated December 22, 2003 among the Company, the lenders party thereto and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent and syndication agent for the lenders (as amended, the “Second Lien Credit Agreement”), which amendment will permit such exchange.

NOW THEREFORE, the parties hereto agree as follows:

ARTICLE 1
ISSUANCE AND EXCHANGE

Section 1.01.  Issuance, Exchange And Delivery. Upon the terms and subject to the terms and conditions of this Agreement, the Company agrees to issue to each Holder, and each Holder agrees, severally but not jointly, to accept from the Company at the Closing, the New Notes in exchange for the surrender of the Old Notes, in each case in the principal amounts set forth opposite such Holder’s name on Schedule 1.02 hereto.

Section 1.02.  Closing.  The closing (the “Closing”) of the issuance of the New Notes hereunder shall take place at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York, as soon as possible, but in no event later than five (5) Business Days after satisfaction of the conditions set forth in Article 5, or at such other time or place as Company and

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the Holders may agree, such date is hereinafter referred to as the “Closing Date”.  At the Closing (a) each Holder shall surrender to the Company the principal amount of the Old Notes set forth opposite such Holder’s name on Schedule 1.02 hereto; and (b) the Company shall deliver to each Holder New Notes with an initial accreted value equal to the amount  set forth opposite such Holder’s name on Schedule 1.02 hereto, plus an amount in cash equal to the accrued and unpaid interest on the Old Notes being exchanged to the Closing Date.

ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS

The Company and each of the Guarantors represents and warrants to each Holder that:

Section 2.01.  No Default under the Credit Agreement.  As of the date hereof, (i) no Potential Event of Default or Event of Default (each as defined in the Credit Agreement) under the Credit Agreement has occurred and is continuing, and (ii) the Company is able to satisfy the conditions to borrowing thereunder to permit the Company to borrow at least $1 of additional debt thereunder pursuant to the terms thereto on the date hereof.

Section 2.02.  Authorizations.  The execution, delivery and performance by the Company and each of the Guarantors of this Agreement have been duly authorized by all necessary corporate action on the part of the Company and each of the Guarantors.  The New Notes have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and issued to the holders in exchange for the Old Notes in accordance with the terms of this Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability, and will be entitled to the benefits of the Indenture; each of the Guarantors has duly authorized its guarantee of the New Notes and, when the New Notes have been executed and authenticated in accordance with the provisions of the Indenture and issued to the holders in exchange for the Old Notes in accordance with the terms of this Agreement, the guarantee of the New Notes will be a valid and binding obligation of the each Guarantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability.  The Indenture has been duly authorized by all necessary corporate action on the part of the Company and each of the Guarantors, as applicable.  Each of this Agreement and the Indenture is, a valid and binding agreement of the Company and each of the Guarantors, as applicable, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability.

Section 2.03.  Governmental Authorization.  Assuming the accuracy of the representations and warranties of the Holders and their compliance with the covenants herein, the execution, delivery and performance by the Company and each of the Guarantors of this Agreement, the Indenture and the New Notes require no material order, license, consent, authorization, or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official, except as may be required by Federal and state securities laws with respect to the Company’s obligations under the

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Registration Rights Agreement (as defined below) and except as may be required by state securities laws.

Section 2.04.  Non-Contravention.  The execution, delivery and performance by the Company and each of the Guarantors of this Agreement, the Indenture and the New Notes do not and will not (i) violate the certificate of incorporation or bylaws of the Company or any Guarantor or any material agreement or other instrument binding upon the Company or any Guarantor or (ii) violate any material applicable law, rule, regulation, judgment, injunction, order or decree.

Section 2.05.  No Registration.  Assuming the accuracy of the representations and warranties of the Holders and their compliance with the covenants herein, it is not necessary in connection with the issuance of the New Notes to the Holders in the manner contemplated by this Agreement to register the New Notes under the Securities Act of 1933, as amended (the “Securities Act”) or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

Section 2.06.  Litigation.  There is no action, suit, investigation or proceeding pending against, or to the knowledge of the Company or any Guarantor, threatened in writing against or affecting the Company or any Guarantor or any of their respective properties before any court or arbitrator or any governmental body, agency or official which could reasonably be expected to have a material adverse effect on the transactions contemplated by this Agreement.

Section 2.07.  Finder’s Fees.  Except for Credit Suisse First Boston LLC, whose compensation in connection with the exchange of the Old Notes for the New Notes will be paid by the Company, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of the Company or any of its Affiliates (as defined in Rule 405 under the Securities Act) which might be entitled to any fee or commission from any Holder, the Company or any of their respective Affiliates upon consummation of the transactions contemplated by this Agreement.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Each Holder, severally as to itself and not jointly, represents, warrants and agrees to the Company and the Guarantors as follows:

Section 3.01.  Ownership of Old Notes.  Such Holder has, and on the Closing Date will have valid title to, or a valid “security entitlement” within the meaning of Section 8-501 of the New York Uniform Commercial Code in respect of, the Old Notes to be exchanged by such Holder free and clear of all security interests, claims, liens, equities or other encumbrances and the legal right and power, and all authorization and approval required by law, to enter into this Agreement and to transfer and deliver the Old Notes to be exchanged by such Holder or a security entitlement in respect of such Old Notes.

Section 3.02.  Authorization of Exchange Agreement.  The execution, delivery and performance of this Agreement are within such Holder’s powers and have been duly authorized

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by all requisite corporate action on the part of such Holder.  This Agreement constitutes a valid and binding agreement of such Holder enforceable in accordance with its terms.  This Agreement has been duly executed and delivered by such Holder.

Section 3.03.  Non-Contravention.  The execution and delivery by such Holder of, and the performance by such Holder of its obligations under, this Agreement will not contravene any provision of applicable law or the certificate of incorporation, by-laws or other organizational document of such Holder or any material agreement or other instrument binding upon such Holder, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Holder.

Section 3.04.  Exchange for Investment.  Such Holder acknowledges that the New Notes have not been registered under the Securities Act or any state securities laws and that the issuance of the New Notes contemplated hereby is to be effected pursuant to an exemption from the registration requirements imposed by such laws, including Section 4(2) under the Securities Act.  Such Holder is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act and the New Notes to be received by it pursuant to this Agreement are being received for its own account without a view toward distribution in violation of the Securities Act and such Holder will not offer, sell, transfer, pledge, hypothecate or otherwise dispose of the New Notes unless (i) pursuant to a transaction either registered under, or exempt from registration pursuant to Rule 144A and Regulation S under, the Securities Act or (ii) to an accredited investor, provided that such accredited investor accepts delivery of such New Notes in the form of a definitive note registered in the name of such accredited investor.

Section 3.05.  Restricted Securities.  Such Holder acknowledges that the New Notes have not been registered under the Securities Act and may not be offered, sold, pledged or otherwise transferred prior to the expiration of the applicable holding period of the New Notes under Rule 144 (k) of the Securities Act, except (a) in accordance with Rule 144A or Regulation S under the Securities Act or pursuant to another exemption from the registration requirements of the Securities Act or (b) pursuant to an effective registration statement under the Securities Act.  The New Notes will bear a legend and will be subject to transfer restrictions as set forth in the Indenture.

Section 3.06.  Inspections; No Other Representations.  Each Holder is an informed and sophisticated purchaser, and has engaged expert advisors experienced in the evaluation of the transactions contemplated hereunder.  Each Holder has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement.  Each Holder acknowledges that the Company has given such Holder complete and open access (to the extent requested by such Holder) to the key employees, and documents of the Company and its subsidiaries.  Each Holder agrees to accept the New Notes on the Closing Date based upon its own inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to the Company, except as expressly set forth in this Agreement.  Without limiting the generality of the foregoing, each Holder acknowledges that the Company makes no representation or warranty with respect to (i) any projections, estimates or budgets delivered to or made available to the

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Holder of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company and the Guarantors or the future business and operations of the Company and the Guarantors or (ii) any other information or documents made available to such Holder or its  advisors with respect to the Company or the Guarantors or their respective businesses or operations, except as expressly set forth in this Agreement.

Section 3.07.  Finder’s Fees.  There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of such Holder or any of its Affiliates which might be entitled to any fee or commission from such Holder, the Company or any of their respective Affiliates upon consummation of the transactions contemplated by this Agreement.

Section 3.08.  Taxpayer Identification Numbers.  The number set forth under “Taxpayer Identification Number” on Schedule 1.02 hereto listed next to the name of such Holder is such Holder’s federal taxpayer identification number.

ARTICLE 4
COVENANTS

Section 4.01.  Covenants of the Company.  In further consideration of the agreements of the Holders contained in this Agreement, the Company covenants with each of the Holders as follows:

(a)the Company will use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement;

(b)the Company will use its commercially reasonable efforts to obtain any consents, approvals or waivers that are required to be obtained from third parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement;

(c)prior to the Closing Date, the Company agrees that, except as the Company and its counsel reasonably determine to be required by law, it will not disclose the identity of the Holders to any third party without the prior written consent of such Holder, which consent shall not be unreasonably withheld, except that the Company may disclose any Holder’s identity to its advisors and counsel or to any other Holder that is a party to this Agreement (it being understood that the Company will be required to publicly file this Agreement with the Securities and Exchange Commission, which documents will identify each Holder); and

(d)to the extent that the New Notes constitute Transfer Restricted Securities (as defined in the Registration Rights Agreement), the Company will include any New Notes held by the Holder in any Registration Statement (as defined in the Registration Rights Agreement) that the Company files pursuant to the Registration Rights Agreement dated July 23, 2004 among the Company, the Guarantors and the holders listed therein.

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Section 4.02.  Covenants of the Holders.  In further consideration of the agreements of the Company contained in this Agreement, each Holder covenants with the Company as follows:

(a)such Holder and its Affiliates (as defined in Rule 405 under the Securities Act) will hold, and will use their commercially reasonable efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, (i) the existence of this Agreement or any facts relating to the transaction contemplated by this Agreement and (ii) all confidential documents and information concerning the Company or any Guarantor furnished to such Holder or its Affiliates in connection with the transactions contemplated by this Agreement, except to the extent that such information can be shown to have been (A) previously known on a non-confidential basis by such Holder, (B) in the public domain through no fault of such Holder or (C) later lawfully acquired by such Holder from sources other than the Company or any Guarantor; provided that such Holder may disclose such information to its officers, directors, employees, accountants, counsel, consultants, advisors and agents in connection with the transactions contemplated by this Agreement  so long as such persons are informed by such Holder of the confidential nature of such information and are directed by such Holder to treat such information confidentially.  Each Holder shall be responsible for any failure to treat such information confidentially by such persons.  The obligation of each Holder and its Affiliates to hold any such information in confidence shall be satisfied if they exercise the same care with respect to such information as they would take to preserve the confidentiality of their own similar information and shall in any event expire six months from the Closing Date.  If this Agreement is terminated, each Holder and its Affiliates will, and will use their commercially reasonable efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to, destroy or deliver to the Company, upon request, all documents and other materials, and all copies thereof, obtained by such Holder or its Affiliates or on their behalf from the Company or any Guarantor in connection with this Agreement that are subject to such confidentiality provisions;

(b)unless this Agreement is terminated in accordance with Section 7.04 hereof, such Holder will not pledge, sell, contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any of the Old Notes or any right or interest (voting or otherwise and including any participation interest) therein, except with the consent of the Company or pursuant to Section 1.02 hereof; and

(c)such Holder will use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement.

ARTICLE 5
CONDITIONS TO THE CLOSING

Section 5.01.  Conditions to Obligation of Each Party.  The obligations of each party hereto to consummate the issuance of the New Notes in exchange for the Old Notes is subject to the satisfaction (or, to the extent permitted by law, waiver by such party), at or prior to the Closing Date, of the following conditions:

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(a)no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Closing and there shall not be threatened, instituted or pending any action, suit, investigation or proceeding which could reasonably be expected to have a material adverse effect on the transactions contemplated by this Agreement;

(b)the Credit Agreement Amendment shall be in full force and effect; and

(c)the Second Lien Credit Agreement Amendment shall be in full force and effect.

Section 5.02.  Conditions to the Obligations of the Holders.  The obligation of the Holders to exchange the Old Notes for the New Notes is subject to the satisfaction (or, to the extent permitted by law, waiver by each Holder), at or prior to the Closing Date, of the following additional conditions:

(a)the representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects, the Company shall have performed and complied with all covenants and agreements required by this Agreement to be performed by it at or prior to the Closing Date, and each Holder shall have received a certificate, dated the Closing Date, signed by an authorized officer of the Company to the foregoing effect;

(b)the Company shall have delivered to each Holder an opinion of  Davis Polk & Wardwell, special counsel to the Company, dated the Closing Date, in form and substance reasonably satisfactory to the Holders, to the effect that (subject to appropriate assumptions and limitations):

(i)the New Notes have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and issued to the Holders in exchange for the Old Notes in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto;

(ii)the Indenture has been duly authorized, executed and delivered by each of the Company and each of the Guarantors organized under the laws of Delaware (the “Delaware Guarantors”) and is a valid and binding agreement of the Company, and (assuming due authorization, execution and delivery by each other Guarantor (the “Non-Delaware Guarantors”)) the Guarantors, enforceable in accordance with its terms; except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is

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considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto; and

(iii)this Agreement has been duly authorized, executed and delivered by each of the Company and the Delaware Guarantors.

(c)The Holders shall have received copies of each of the Credit Agreement Amendment and the Second Lien Credit Agreement Amendment, each of which shall be in full force and effect and no term or condition thereof shall have been amended, waived or otherwise modified without the prior consent of the Holders; and

(d)each Holder shall have received all documents reasonably requested by it relating to the existence of the Company and the corporate authority for entering into this Agreement and the consummation of the transactions contemplated hereby, all in form and substance reasonably satisfactory to it.

Section 5.03.  Conditions to the Obligations of the Company.  The obligations of the Company to issue the New Notes to the Holders pursuant to this Agreement are subject to the satisfaction (or, to the extent permitted by law, waiver by each Holder), at or prior to the Closing Date, of the following conditions:

(a)the representations and warranties of the Holders contained in this Agreement shall be true and correct in all material respects and the Holders shall have performed and complied with all covenants and agreements required by this Agreement to be performed by them at or prior to the Closing Date; and

(b)the Company shall have received all documents reasonably requested by it relating to the existence of each Holder and the authority for entering into this Agreement and the consummation of the transactions contemplated hereby, all in form and substance reasonably satisfactory to it.

ARTICLE 6
SURVIVAL; INDEMNIFICATION

Section 6.01.  Survival.  The representations and warranties of the parties hereto contained in this Agreement, shall survive the execution and delivery of this Agreement.  The covenants and agreements of the parties contained in this Agreement shall survive the Closing in accordance with their terms or, if no term is specified, indefinitely.

Section 6.02.  Indemnification.  (a) The Company hereby indemnifies each of the Holders, each person, if any, who controls any Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, and each affiliate of any Holder within the meaning of Rule 405 under the Securities Act against and agrees to hold each

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of them harmless from any and all losses, claims, damages, costs, liabilities or expenses (or actions, suits or proceedings in respect thereof), including reasonable expenses of investigation and reasonable attorneys’ fees and expenses, in each case, in connection with any action, suit or proceeding involving a third party (“Damages”) incurred or suffered by any of them, in each case arising out of any misrepresentation or breach of warranty, covenant or agreement made or to be performed by the Company pursuant to this Agreement.

(b)The Company shall not be responsible for any Damages to the extent a court of competent jurisdiction shall have finally determined that such Damages resulted primarily from (i) such indemnified person’s bad faith or gross negligence; (ii) any claims made by one or more of the indemnified persons against another indemnified person or indemnified persons in connection with the Transactions or (iii) any breach of the representations and warranties of any of the Holders set forth in this Agreement (clauses (i) through (iii), collectively, “Excluded Claims”).  If for any reason (other than that such liability is an Excluded Claim) the foregoing indemnity is unavailable or insufficient to hold an indemnified person harmless, then the Company shall contribute to amounts paid or payable by such indemnified person in respect of such Damages in such proportion as appropriately reflects the relative benefits received by, and fault of, the Company and such indemnified person in connection with the matters as to which such Damages relate and other equitable considerations.

(c)The party seeking indemnification under this Section (the “Indemnified Party”) agrees to give prompt notice to the party against whom indemnity is sought (the “Indemnifying Party”) of the assertion of any claim, or the commencement of any suit, action or proceeding (“Claim”) in respect of which indemnity may be sought under such Section and will provide the Indemnifying Party such information with respect thereto that the Indemnifying Party may reasonably request. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely prejudiced the Indemnifying Party.

(d)The Indemnifying Party shall be entitled to participate in the defense of any Claim asserted by any third party (“Third Party Claim”) and, subject to the limitations set forth in this Section, shall be entitled to control and appoint lead counsel for such defense, in each case at its expense.

(e)If the Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld) before entering into any settlement of such Third Party Claim and the Indemnified Party shall be entitled to participate in the defense of such Third Party Claim and to employ separate counsel of its choice for such purpose.  The fees and expenses of such separate counsel shall be paid by the Indemnified Party.

(f)Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.

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ARTICLE 7
MISCELLANEOUS

Section 7.01.  Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Holders, to:

The Putnam Advisory Company, LLC
The Putnam Fiduciary Trust Company
One Post Office Square
Boston , MA  02109
Attention:  James P. Miller
Facsimile:  (617) 760-8639

with a copy (which shall not constitute notice to any Holder) to:

Ropes & Gray LLP
One International Place
Boston, MA  02110
Attention:  Don De Amicis, Esq.
Facsimile:  (617) 951-7050

if to the Company, to:

DeCrane Aircraft Holdings, Inc.
2361 Rosecrans Avenue, Suite 180
El Segundo, California  90245
Attention:  Chief Financial Officer
Facsimile:  (310) 643-5106

with a copy (which shall not constitute notice to the Company) to:

Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention:  Michael P. Kaplan, Esq.
Facsimile:  (212) 450-3800

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a Business Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.

Section 7.02.  No Waivers; Amendments. (a)No failure or delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the

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exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(b)Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by all parties hereto.

Section 7.03.  Exclusivity. After the Closing, Article 6 will provide the exclusive remedy for Holders for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby.  The Company shall retain all remedies available at law for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby.

Section 7.04.  Termination. (a) This Agreement shall terminate, prior to the Closing Date:

(i)at any time by mutual written agreement of the Company and the Holders; or

(ii)if there shall be any law or regulation that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any non-appealable final order, decree or judgment of any court or governmental body having competent jurisdiction, if so determined by the Company or the Holders.

The party desiring to terminate this Agreement pursuant to this Section 7.04 shall give notice of such termination to the other parties.

(b)If this Agreement is terminated as permitted by Section 7.04, such termination shall be without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other parties to this Agreement; provided that if such termination shall result from the (i) willful failure of any party to fulfill a condition to the performance of the obligations of the other parties, (ii) failure to perform a covenant of this Agreement or (iii) breach by any party hereto of any representation or warranty or agreement contained herein, such party shall be fully liable for any and all damages incurred or suffered by the other party as a result of such failure or breach.

Section 7.05.  Successors And Assigns. The Company may not assign any of its rights and obligations hereunder without the prior written consent of the Holders.  No Holder may assign its rights or obligations hereunder without the prior written consent of the Company.  This Agreement shall be binding upon the Company and the Holders and their respective successors and assigns.

Section 7.06.  Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York, without regard to the choice of law rules of such state.

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Section 7.07.  Jurisdiction. Except as otherwise expressly provided in this Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party agrees that service of process on such party as provided in this Section shall be deemed effective service of process on such party.

Section 7.08.  WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.09.  Counterparts; Effectiveness.  This Agreement may be executed in any number of counterparts each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto.  No provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder

Section 7.10.  Expenses.  Except as otherwise provided in Article 6 herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

Section 7.11.  Entire Agreement.  This Agreement, the Indenture and the New Notes constitute the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, written or oral, relating to the subject matter hereof.

Section 7.12.  Captions; Certain Definitions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  All references to “$” or “dollars” shall be to United States dollars and all references to “days” shall be to calendar days unless otherwise specified.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words, “without limitation.”

[Remainder of page intentionally left blank; next page is signature page]

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IN WITNESS WHEREOF, the parties hereto have caused this  Exchange Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

DECRANE AIRCRAFT HOLDINGS INC.
By:			/S/ RICHARD J. KAPLAN
		Name:	Richard J. Kaplan
		Title:	Senior Vice President, Chief Financial Officer,
			Secretary and Treasurer
AUDIO INTERNATIONAL, INC.
CARL F. BOOTH & CO., LLC
DECRANE AIRCRAFT SEATING COMPANY, INC.
DECRANE CABIN INTERIORS-CANADA, INC.
DECRANE CABIN INTERIORS, LLC
HOLLINGSEAD INTERNATIONAL, INC.
PATS AIRCRAFT, LLC
PCI NEWCO, INC.
PRECISION PATTERN, INC.
as Guarantors
By:				/S/ RICHARD J. KAPLAN
	Name:			Richard J. Kaplan
	Title:			Chief Financial Officer

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THE PUTNAM ADVISORY COMPANY, LLC on behalf of:
THE NORTHROP GRUMAN PENSION MASTER TRUST
ABBOTT LABORATORIES ANNUITY RETIREMENT PLAN
PUTNAM WORLD TRUST II - PUTNAM HIGH YIELD BOND FUND
	By:
		Name:
		Title:

THE PUTNAM FIDUCIARY TRUST COMPANY on behalf of:
MARSH & MCLENNAN COMPANIES, INC. U.S.
RETIREMENT PLAN - HIGH YIELD
	By:
		Name:
		Title:

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SCHEDULE 1.02

Holder	Taxpayer Identification Number	Principal  Amount of Old Notes		Initial Accreted Value of New Notes
The Putnam Advisory Company, LLC, on behalf of:
The Northrop Grumman Pension Master Trust		$	240,000	$	240,000
Abbott Laboratories Annuity Retirement Plan		$	90,000	$	90,000
Putnam World Trust II – Putnam High Yield Bond Fund		$	74,000	$	74,000
The Putnam Fiduciary Trust Company on behalf of:
Marsh & McLennan Companies, Inc. U.S. Retirement Plan – High Yield		$	111,000	$	111,000
Total		$	515,000	$	515,000

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EX-10.14

Exhibit 10.14

SENIOR PREFERRED STOCK AMENDMENT AGREEMENT

dated as of

July 23, 2004

among

DECRANE AIRCRAFT HOLDINGS, INC.,

DECRANE HOLDINGS CO.

and

THE HOLDERS SET FORTH ON THE SIGNATURE PAGES HERETO

TABLE OF CONTENTS

ARTICLE 7
MISCELLANEOUS
Section 7.01.  Notices
Section 7.02.  No Waivers; Amendments
Section 7.03.  Waiver of Warrant Requirements
Section 7.04.  Termination
Section 7.05.  Successors And Assigns
Section 7.06.  Limited Recourse and Non-Petition
Section 7.07.  Governing Law
Section 7.08.  Jurisdiction
Section 7.09.  WAIVER OF JURY TRIAL
Section 7.10.  Counterparts; Effectiveness
Section 7.11.  Expenses
Section 7.12.  Entire Agreement
Section 7.13.  Captions; Certain Definitions
Schedule 1.02	-	Taxpayer Identification Number; Shares of Existing Preferred Stock and Senior Preferred Stock; Shares of Common Stock to be Issued
Schedule 3.01	-	Ownership of Existing Preferred Stock
Exhibit A	-	Certificate of Amendment to Certificate of Designations
Exhibit B		Form of Waiver
Exhibit C	-	Form of Registration Rights Agreement Amendment
Exhibit D	-	Form of Investors’ Agreement Amendment

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SENIOR PREFERRED STOCK AMENDMENT AGREEMENT

AGREEMENT dated as of July 23, 2004, among DeCrane Aircraft Holdings, Inc., a Delaware corporation (the “Company”), DeCrane Holdings Co., a Delaware corporation (“DeCrane Holdings”), and the other persons set forth on the signature pages hereto (together with their successors and assigns, each a “Holder” and together the “Holders”).

W  I  T  N  E  S  S  E  T  H :

WHEREAS, the Holders are holders of all of the outstanding shares of 16% Senior Redeemable Exchangeable Preferred Stock Due 2009 of the Company (the “Existing Preferred Stock”);

WHEREAS, the Holders and the Company have agreed to amend certain terms of the Existing Preferred Stock such that the powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions of the Existing Preferred Stock as amended (the “Senior Preferred Stock”) shall be as set forth in Exhibit A (the “Certificate of Designations”);

WHEREAS, in connection with, and in consideration for, the amendment of the Existing Preferred Stock, DeCrane Holdings will also issue certain shares of common stock, par value $.01 per share, of DeCrane Holdings (the “Common Stock”) to the Holders as provided herein;

WHEREAS, in connection with the amendment of the Existing Preferred Stock, the Company will enter into an amendment (the “Credit Agreement Amendment”) to the Third Amended and Restated Credit Agreement dated as of May 11, 2000 among the Company, the lenders party thereto and Credit Suisse First Boston (as successor to DLJ Capital Funding, Inc.), as administrative agent and syndication agent for the lenders (as amended prior to the date hereof and by the Credit Agreement Amendment, the “Senior Credit Agreement”)

WHEREAS, in connection with the amendment of the Existing Preferred Stock, the Company will enter into an amendment  (the “Second Lien Credit Agreement Amendment”) to the Second Lien Credit Agreement dated as of December 22, 2003 among the Company, the lenders party thereto and Credit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent and syndication agent for the lenders (as amended prior to the date hereof and by the Second Lien Credit Agreement Amendment, the “Second Lien Credit Agreement”);

WHEREAS, concurrently with the amendment of the Existing Preferred Stock, the Company will exchange a portion of the 12% Senior Subordinated Notes Due 2008 (the “Old Notes”) for new 17% Senior Discount Notes Due 2008 (the “New Notes”) to be issued pursuant to the provisions of an indenture, dated

as of the Closing Date (as defined herein) (the “Indenture”) among the Company, the Guarantors named therein and U.S. Bank National Association, as Trustee;

WHEREAS, concurrently with the amendment of the Existing Preferred Stock, DeCrane Holdings will obtain waivers of certain rights from holders of more than 99% of the outstanding shares of its 14% Senior Redeemable Exchangeable Preferred Stock Due 2009 (the “Junior Preferred Stock”) pursuant to a waiver substantially in the form attached hereto as Exhibit B (the “Junior Preferred Stock Waiver”); and

WHEREAS, the Holders and the Company will enter into Amendment No. 2 to the Senior Preferred Stock Registration Rights Agreement dated as of June 30, 2000 among the Company and the stockholders named therein (as the same may be amended from time to time, the “Registration Rights Agreement”), substantially in the form attached hereto as Exhibit C (the “Registration Rights Agreement Amendment”) and DeCrane Holdings, with the approval of its board of directors and the holders of at least 75% of the outstanding shares of common stock and preferred stock of DeCrane Holdings, will enter into Amendment No. 2 to the Amended and Restated Investors’ Agreement dated October 6, 2000 among DeCrane Holdings, the Company and the stockholders named therein (as the same may be amended from time to time, the “Investors’ Agreement”), substantially in the form attached hereto as Exhibit D (the “Investors’ Agreement Amendment”).

NOW THEREFORE, the parties hereto agree as follows:

ARTICLE 1
AMENDMENT

Section 1.01.  Consent to Amendment. Subject to the terms and conditions set forth herein and in reliance on the representations and warranties contained herein, the Company agrees to amend the Certificate of Designations, Preferences and Rights of 16% Senior Redeemable Exchangeable Preferred Stock Due 2009 so that the powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions of the Senior Preferred Stock shall be as set forth in the Certificate of Designations, and each Holder consents to such amendment, which amendment shall be effective on the Closing Date (as defined herein).

Section 1.02.  Closing.  The closing (the “Closing”) of the amendment of the Existing Preferred Stock and the issuance of the Common Stock hereunder, as consideration for the amendment of the Existing Preferred Stock, shall take place at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York, as soon as possible, but in no event later than five (5) business days after satisfaction of the conditions set forth in Article 5, or at such other time or place

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as the Company, DeCrane Holdings and the Holders may agree, such date is hereinafter referred to as the “Closing Date”.  On the Closing Date, the Company will file the Certificate of Designations with the Secretary of State of Delaware.  At the Closing, each Holder, severally and not jointly, shall surrender to the Company its Existing Preferred Stock certificates and the Company shall deliver to each Holder (a) a new certificate for the same number of shares of Senior Preferred Stock and (b) a certificate for a number of shares of Common Stock determined by (i) dividing (A) the number of shares of Existing Preferred Stock held by such Holder immediately prior to the Closing by (B) the total number of outstanding shares of Existing Preferred Stock immediately prior to the Closing and (ii) multiplying such quotient by 7.5% of the total number of shares of Common Stock of DeCrane Holdings outstanding immediately after the Closing (including for this purpose the total number of shares of Common Stock issuable upon exercise of the Class A Warrants for the Purchase of Shares of Common Stock of DeCrane Holdings and the Class B Warrants for the Purchase of Shares of Common Stock of DeCrane Holdings (collectively, the “Penny Warrants”)).  Schedule 1.02 hereto sets forth the number of shares of Common Stock that DeCrane Holdings will issue to each Holder, subject to any changes that might result from any transfer of shares of the Existing Preferred Stock and/or any changes in the total number of outstanding shares of Common Stock between the date hereof and the Closing Date.

ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND DECRANE HOLDINGS

The Company and DeCrane Holdings represent and warrant to each Holder that:

Section 2.01.  No Default Under Credit Agreement.  As of the date hereof, (i) no Potential Event of Default or Event of Default (each as defined in the Senior Credit Agreement) has occurred and is continuing, and (ii) the Company is able to satisfy the conditions to borrowing under the Senior Credit Agreement to permit the Company to borrow at least $1 of additional debt thereunder pursuant to the terms thereto on the date hereof.

Section 2.02.  Authorizations.  The execution, delivery and performance by the Company and DeCrane Holdings of this Agreement have been duly authorized by all necessary corporate action on the part of the Company and DeCrane Holdings.  Upon the effectiveness of this Agreement, the amendments to the terms of the Existing Preferred Stock as set forth in the Certificate of Designations shall have been duly authorized by all necessary corporate action on the part of the Company.  The issuance of Common Stock to the Holders as provided herein has been duly authorized by all necessary corporate action on the part of DeCrane Holdings.  Each of the Registration Rights Agreement Amendment and the Investors’ Agreement Amendment has been duly authorized

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by all necessary corporate action on the part of the Company and DeCrane Holdings, as applicable.  This Agreement is and, when executed and delivered on the Closing Date, each of the Credit Agreement Amendment, Second Lien Credit Agreement Amendment, Registration Rights Agreement Amendment and the Investors’ Agreement Amendment will be, a valid and binding agreement of the Company and DeCrane Holdings, as applicable, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability and except as rights to indemnification and contribution under the Registration Rights Agreement or the Investors’ Agreement may be limited under applicable law.

Section 2.03. Governmental Authorization.  Assuming the accuracy of the representations and warranties of the Holders and their compliance with the covenants herein, the execution, delivery and performance by the Company and DeCrane Holdings of this Agreement, the Registration Rights Agreement Amendment and the Investors’ Agreement Amendment and the consummation of the transactions contemplated hereby require no material order, license, consent, authorization, or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official, other than the filing of the Certificate of Designations with the Secretary of State of Delaware and except as may be required by Federal and state securities laws with respect to the Company’s obligations under the Registration Rights Agreement and except as may be required by state securities laws.

Section 2.04.  Non-Contravention.  The execution, delivery and performance by the Company and DeCrane Holdings of this Agreement, the Registration Rights Agreement Amendment, the Investors’ Agreement Amendment and the Certificate of Designations do not and will not (i) violate the certificate of incorporation or bylaws of the Company or DeCrane Holdings or (ii) violate any material applicable law, rule, regulation, judgment, injunction, order or decree, (iii) upon obtaining the consents and taking the other actions required to satisfy the conditions precedent set forth in Article 5, require any material consent or other action by any person under, constitute a material default under, or give rise to any material right of termination, cancellation or acceleration of any right or obligation of the Company or DeCrane Holdings or to a loss of any material benefit to which the Company or DeCrane Holdings are entitled under any provision of any agreement or other instrument binding upon the Company or DeCrane Holdings or any of the Company’s or DeCrane Holdings’ assets or properties or (iv) result in the creation or imposition of any material lien on any property or assets of the Company or DeCrane Holdings.

Section 2.05.  Litigation.  There is no action, suit, investigation or proceeding pending against, or to the knowledge of the Company or DeCrane Holdings, threatened in writing against or affecting the Company or DeCrane Holdings or any of their respective properties before any court or arbitrator or any governmental body, agency or official which could reasonably be expected to

4

have a material adverse effect on the transactions contemplated by this Agreement.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Each Holder, severally and not jointly, as to itself only, represents and warrants to the Company and DeCrane Holdings as follows:

Section 3.01.  Ownership of Existing Preferred Stock.  Except as set forth on Schedule 3.01 with respect to a pledge prior to the date hereof, such Holder has, and on the Closing Date will have valid title to, or a valid “security entitlement” within the meaning of Section 8-501 of the New York Uniform Commercial Code in respect of, the shares of Existing Preferred Stock shown on Schedule 1.02, free and clear of all security interests, claims, liens, equities or other encumbrances.

Section 3.02.  Authorization of Agreement.  The execution, delivery and performance of this Agreement are within such Holder’s powers and have been duly authorized by all requisite corporate action on the part of such Holder.  This Agreement constitutes a valid and binding agreement of such Holder enforceable in accordance with its terms.  This Agreement has been duly executed and delivered by such Holder, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability.

Section 3.03.  Non-Contravention.  The execution and delivery by such Holder of, and the performance by such Holder of its obligations under, this Agreement will not contravene any provision of applicable law or the certificate of incorporation, by-laws or other organizational document of such Holder or any material agreement or other instrument binding upon such Holder, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Holder.

Section 3.04.  Investment Purposes.  Such Holder acknowledges that the Senior Preferred Stock and the Common Stock have not been registered under the Securities Act or any state securities laws and that the amendment of the Existing Preferred Stock and the issuance of the Common Stock contemplated hereby are to be effected pursuant to an exemption from the registration requirements imposed by such laws, including Section 4(2) under the Securities Act.  Such Holder is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act and the shares of Common Stock to be received by it pursuant to this Agreement are being received for its own account without a view toward distribution in violation of the Securities Act and such Holder will not offer, sell, transfer, pledge, hypothecate or otherwise dispose of the Senior Preferred Stock unless pursuant to a transaction either registered under, or exempt from

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registration under, the Securities Act, it being agreed that Neon Capital Limited may grant a security interest in the Senior Preferred Stock and the Common Stock for the benefit of the holders of the Series 95 $5,929,820 Limited Recourse Pass-Through Secured Notes due 2013 (the “Neon Notes”), subject to compliance with applicable securities laws.

Section 3.05.  Inspections; No Other Representations.  Each Holder is an informed and sophisticated purchaser, and has engaged expert advisors, experienced in the evaluation of the transactions contemplated hereunder.  Each Holder has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement.  Each Holder acknowledges that the Company and DeCrane Holdings have given such Holder complete and open access (to the extent requested by such Holder) to the key employees and documents of the Company, DeCrane Holdings and their respective subsidiaries.  Each Holder agrees to the amendment of the Existing Preferred Stock and the issuance of the Common Stock on the Closing Date based upon its own inspection, examination and determination with respect thereto as to all matters, and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to the Company or DeCrane Holdings, except as expressly set forth in this Agreement.  Without limiting the generality of the foregoing, each Holder acknowledges that the Company and DeCrane Holdings make no representation or warranty with respect to (i) any projections, estimates or budgets delivered to or made available to the Holder of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Company and DeCrane Holdings or the future business and operations of the Company and DeCrane Holdings or (ii) any other information or documents made available to such Holder or its advisors with respect to the Company or DeCrane Holdings or their businesses or operations, except as expressly set forth in this Agreement.

Section 3.06. Taxpayer Identification Number.  The number set forth under “Taxpayer Identification Number” on Schedule 1.02 hereto next to the name of such Holder is such Holder’s federal taxpayer identification number.

ARTICLE 4
COVENANTS

Section 4.01.  Covenants of the Company and DeCrane Holdings.  In further consideration of the agreements of the Holders contained in this Agreement, the Company and DeCrane Holdings covenant with each of the Holders as follows:

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(a)the Company and DeCrane Holdings will use their commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement;

(b)the Company and DeCrane Holdings will use their commercially reasonable efforts to obtain or cause to be obtained any consents, approvals or waivers that are required to be obtained from third parties to any material contracts in connection with the consummation of the transactions contemplated by this Agreement; and

(c)in addition to the obligations contained in Section 7.11(a) of the Securities Purchase Agreement dated as of June 20, 2000 among the Company, DeCrane Holdings and the purchasers party thereto (the “Securities Purchase Agreement”), prior to the Closing Date, the Company and DeCrane Holdings agree that, except as the Company or DeCrane Holdings and their counsel reasonably determine to be required by law, they will not disclose the identity of the Holders to any third party without the prior written consent of such Holder, which consent shall not be unreasonably withheld, except that the Company or DeCrane Holdings may disclose any Holder’s identity to their advisors and counsel or to any other Holder that is a party to this Agreement (it being understood that the Company will be required to publicly file this Agreement and the Registration Rights Agreement Amendment and the Investors’ Agreement Amendment with the Securities and Exchange Commission and that DeCrane Holdings will be required to publicly file this Agreement and the Investors’ Agreement with the Securities and Exchange Commission, which documents will identify each Holder).

Section 4.02.  Covenants of the Holders.  In further consideration of the agreements of the Company and DeCrane Holdings contained in this Agreement, each Holder covenants with the Company and DeCrane Holdings as follows:

(a)in addition to the obligations contained in Section 7.11(b) of the Securities Purchase Agreement, such Holder and its Affiliates (as defined in Rule 405 under the Securities Act) will hold, and will use their best efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, (i) the existence of this Agreement or any facts relating to the transaction contemplated by this Agreement and (ii) all confidential documents and information concerning the Company or DeCrane Holdings furnished to such Holder or its Affiliates in connection with the

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transactions contemplated by this Agreement, except to the extent that such information can be shown to have been (A) previously known on a nonconfidential basis by such Holder, (B) in the public domain through no fault of such Holder or (C) later lawfully acquired by such Holder from sources other than the Company or DeCrane Holdings; provided that such Holder may disclose such information (1) to another Holder, (2) to its officers, directors, employees, accountants, counsel, consultants, advisors and agents in connection with the transactions contemplated by this Agreement so long as such persons are informed by such Holder of the confidential nature of such information and are directed by such Holder to treat such information confidentially, (3) upon the request or demand of any governmental authority having jurisdiction over such Holder, (4) in response to any order of any court or other governmental authority or as may be required pursuant to any requirement of law or (5) in connection with the exercise of any remedy hereunder; provided further that Neon Capital Limited (“Neon”) may disclose such information to (i) the trustee with respect to the Neon Notes and (ii) to the beneficiaries of the security interest granted by Neon with respect to the Existing Preferred Stock.  Each Holder shall be responsible for any failure to treat such information confidentially by such persons.  The obligation of each Holder and its Affiliates to hold any such information in confidence shall be satisfied if they exercise the same care with respect to such information as they would take to preserve the confidentiality of their own similar information and shall in any event expire six months from the Closing Date.  If this Agreement is terminated, each Holder and its Affiliates will, and will use their best efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to, destroy or deliver to the Company or DeCrane Holdings, upon request, all documents and other materials, and all copies thereof, obtained by such Holder or its Affiliates or on their behalf from the Company or DeCrane Holdings in connection with this Agreement that are subject to such confidentiality provisions;

(b)such Holder will use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this Agreement; and

(c)unless this Agreement is terminated in accordance with Section 7.05 hereof, until the Existing Preferred Stock is amended pursuant to the terms of this Agreement, such Holder will not pledge, sell, contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of the Existing Preferred Stock or any right or interest (voting or otherwise and including any participation interest) therein, except with the consent of the Company and DeCrane Holdings or pursuant to Section 1.02 hereof.

ARTICLE 5
CONDITIONS TO THE CLOSING

Section 5.01.  Conditions to Obligation of Each Party.  The Holders’ consent to the amendment of the Existing Preferred Stock as set forth in the Certificate of Designations and the obligations of the Company to amend the Existing Preferred Stock and of DeCrane Holdings to issue the Common Stock hereunder are subject to the satisfaction (or, to the extent permitted by law, waiver by such party), at or prior to the Closing Date, of the following conditions:

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(a)no provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Closing and there shall not be threatened, instituted or pending any action, suit, investigation or proceeding which could reasonably be expected to have a material adverse effect on the transactions contemplated by this Agreement;

(b)the exchange of the Old Notes for the New Notes shall have been consummated or shall be consummated concurrently with the Closing;

(c)the Credit Agreement Amendment shall be in full force and effect; and

(d)the Second Lien Credit Agreement Amendment shall be in full force and effect.

Section 5.02.  Conditions to the Obligations of the Holders.  The consent of the Holders to the amendment of the Existing Preferred Stock as set forth in the Certificate of Designations is subject to the satisfaction (or, to the extent permitted by law, waiver by each Holder), at or prior to the Closing Date, of the following additional conditions:

(a)the representations and warranties of the Company and DeCrane Holdings contained in this Agreement shall be true and correct in all material respects, each of the Company and DeCrane Holdings shall have performed and complied with all covenants and agreements required by this Agreement to be performed by it or complied with by it at or prior to the Closing Date, and each Holder shall have received a certificate, dated the Closing Date, signed by an authorized officer of each of the Company and DeCrane Holdings to the foregoing effect;

(b)new certificates representing the shares of Senior Preferred Stock and Common Stock to be issued to the Holders hereunder shall have been prepared and made available for delivery to the Holders in exchange for Existing Preferred Stock certificates as provided in Section 1.02;

(c)the Certificate of Designations shall have been filed with the Secretary of State of Delaware prior to or concurrently with the Closing;

(d)the Company and the DLJ Entities (as defined in the Investors’ Agreement) shall have executed and delivered the Junior Preferred Stock Waiver;

(e)the Company shall have executed and delivered the Registration Rights Agreement Amendment and the Investors’ Agreement Amendment and DeCrane Holdings, with the approval of its board of directors and the holders of at least 75% of the outstanding shares of common stock and preferred stock of DeCrane Holdings, shall have executed and delivered the Investors’ Agreement Amendment;

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(f)The Holders shall have received copies of each of the Credit Agreement Amendment, the Second Lien Credit Agreement Amendment, the Exchange Agreement relating to the exchange of the Old Notes for the New Notes and the Indenture for the New Notes, each of which shall be in full force and effect and no term or condition thereof shall have been amended, waived or otherwise modified without the prior consent of the Holders;

(g)the Company shall have delivered to each Holder an opinion of  Davis Polk & Wardwell, special counsel to the Company and DeCrane Holdings, dated the Closing Date, in form and substance reasonably satisfactory to the Holders, to the effect that (subject to appropriate assumptions and limitations):

(i)the Company and DeCrane Holdings are validly existing and in good standing under the laws of the State of Delaware with corporate power to enter into the amendment;

(ii)the Common Stock to be issued pursuant to this Agreement has been duly authorized by DeCrane Holdings and, when issued and delivered to the Holders, will be fully paid and nonassessable;

(iii)the filing of the Certificate of Designations by the Company in the State of Delaware and the issuance by DeCrane Holdings of the Common Stock pursuant to this Agreement do not (A) contravene the Certificate of Incorporation or By-laws of DeCrane Holdings or of the Company, (B) contravene the Indenture, the indenture governing the Old Notes, the Credit Agreement or the Second Lien Credit Agreement or (C) violate any New York or federal law that in our experience are normally applicable to transactions of this type; provided that Davis Polk & Wardwell expresses no opinion as to federal or state securities laws;

(iv)each of this Agreement, the Investors’ Agreement Amendment and the Registration Rights Agreement Amendment has been duly authorized, executed and delivered by each of the Company and DeCrane Holdings (to the extent party thereto) and is a valid and binding agreement of the Company and DeCrane Holdings (to the extent party thereto) in each case enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally and equitable principles of general applicability and except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any

10

comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto;

(v)the Certificate of Designations has been duly authorized by all necessary corporate action on the part of the Company;

(vi)the New Notes have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Indenture and issued to the Holders in exchange for the Old Notes in accordance with the terms of the Exchange Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto;

(vii)the Indenture has been duly authorized, executed and delivered by each of the Company and each of the affiliates of the Company set forth on the signature pages of the Indenture as Guarantors (the “Guarantors”) organized under the laws of Delaware (the “Delaware Guarantors”) and is a valid and binding agreement of the Company, and (assuming due authorization, execution and delivery by each other Guarantor (the “Non-Delaware Guarantors”)) the Guarantors, enforceable in accordance with its terms, except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto; and

(viii)each of the Delaware Guarantors has duly authorized its Guarantee of the New Notes; assuming each of the Non-Delaware Guarantors has duly authorized its Guarantee of the New Notes, when the New Notes and the Guarantee evidenced thereon have been executed and authenticated in accordance with the terms of the Indenture and issued to

11

 the Holders in exchange for the Old Notes in accordance with the terms thereof, the Guarantee of each Guarantor will be the legally valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except (x) as such enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally, (y) as such enforcement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (z) to the extent that a waiver of the rights under any usury or stay law may be unenforceable, we express no opinion, however, as to the applicability (and, if applicable, the effect) of Section 548 of the United States Bankruptcy Code or any comparable provision of state law to the questions addressed above or on the conclusions expressed with respect thereto.

(h)all fees and expenses payable to the Holders on or prior to the Closing Date shall have been paid in full; and

(i)each Holder shall have received all documents reasonably requested by it relating to the existence of the Company and DeCrane Holdings and the corporate authority for entering into this Agreement and the consummation of the transactions contemplated hereby, all in form and substance reasonably satisfactory to it.

Section 5.03.  Conditions to the Obligations of the Company and DeCrane Holdings.  The obligation of the Company to amend the Existing Preferred Stock and the obligation of DeCrane Holdings to issue the Common Stock pursuant to this Agreement are subject to the satisfaction (or, to the extent permitted by law, waiver by each Holder), at or prior to the Closing Date, of the following additional conditions:

(a)the representations and warranties of the Holders contained in this Agreement shall be true and correct in all material respects;

(b)the Holders shall have executed and delivered the Registration Rights Agreement Amendment and the Investors’ Agreement Amendment; and

(c)the Company and DeCrane Holdings shall have received all documents reasonably requested by it relating to the existence of each Holder and the authority for entering into this Agreement and the consummation of the transactions contemplated hereby, all in form and substance reasonably satisfactory to it.

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ARTICLE 6
SURVIVAL; INDEMNIFICATION

Section 6.01.  Survival.  The representations and warranties of the parties hereto contained in this Agreement shall survive the execution and delivery of this Agreement.

Section 6.02.  Indemnification.  (a) The Company and DeCrane Holdings hereby indemnify, jointly and severally, each Holder and its affiliates, limited partners, general partners, directors, members, officers and employees against and agrees to hold each of them harmless from any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (“Damages”) incurred or suffered by any such party arising out of any misrepresentations or breach of warranty, covenant or agreement made or to be performed by the Company and DeCrane Holdings pursuant to this Agreement.

(b)After the Closing Date, this Section 6.02 will provide the exclusive remedy for the Holders for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby except to the extent any such claim is in respect of fraud.  The Company shall retain all remedies available at law for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby.

ARTICLE 7
MISCELLANEOUS

Section 7.01.  Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Holders, to:

DLJ Investment Partners II, L.P.
DLJ Investment Partners, L.P.
DLJIP II Holdings, L.P.
11 Madison Avenue
New York, NY 10010
Attention:  Rob Petrini
Facsimile:  (212) 448-3220

with a copy (which shall not constitute notice to any Holder) to:

Cahill Gordon & Reindel LLP
80 Pine Street

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New York, NY 10005
Attention:  John Schuster
Facsimile:  (212) 269-5420

and

Putnam Investment Management, LLC
Putnam Fiduciary Trust Company
One Post Office Square
Boston, MA 02109
Attention:  Michael DeFao, Senior Vice President
Facsimile:  (617) 292-1625

with a copy (which shall not constitute notice to any Holder) to:

Ropes & Gray LLP
One International Place
Boston, MA 02110
Attention:  Don De Amicis, Esq.
Facsimile:  (617) 951-7050

and

Neon Capital Limited
P.O. Box 1984 GT
Elizabethan Square
Georgetown, Grand Cayman
Cayman Islands, British West Indies
Attention:  Neil Ross/Scott Macdonald
Facsimile:  (345) 949-5223

if to the Company, to:

DeCrane Aircraft Holdings, Inc.
2361 Rosecrans Avenue, Suite 180
El Segundo, California 90245
Attention:  Chief Financial Officer
Facsimile:  (310) 643-5106

with a copy (which shall not constitute notice to the Company) to:

Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention:  Nancy L. Sanborn, Esq.
Facsimile:  (212) 450-3800

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if to DeCrane Holdings, to:

DeCrane Holdings Co.
2361 Rosecrans Avenue, Suite 180
El Segundo, California 90245
Attention:  Chief Financial Officer
Facsimile:  (310) 643-5106

with a copy (which shall not constitute notice to DeCrane Holdings) to:

Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention:  Nancy L. Sanborn, Esq.
Facsimile:  (212) 450-3800

All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5 p.m. in the place of receipt and such day is a business day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt.

Section 7.02.  No Waivers; Amendments. (a)No failure or delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(b)Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by all parties hereto.

Section 7.03.  Waiver of Warrant Requirements.  In connection with the issuance of the Common Stock, each Holder hereby waives the requirement that notice must be given to such Holder under Sections (h)(2) and (h)(11) of the Penny Warrants held by such Holder.  Each such Holder also hereby waives the requirement that DeCrane Holdings file an officers’ certificate setting forth the adjusted exercise price for the Penny Warrants, the facts requiring such adjustment and the manner of computing such adjustment as required pursuant to Section (h)(11) of the Penny Warrants. It is understood and agreed that there shall be no adjustment to the exercise price of the Penny Warrants in connection with the issuance of the Common Stock.

Section 7.04.  Termination. (a) This Agreement shall terminate, prior to the Closing Date:

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(i)at any time by mutual written agreement of the Company, DeCrane Holdings and the Holders;

(ii)if there shall be any law or regulation that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any non-appealable final order, decree or judgment of any court or governmental body having competent jurisdiction, if so determined by the Company, DeCrane Holdings or the Holders; or

(iii)on July 30, 2004, unless extended to a later date by an instrument executed by the Company, DeCrane Holdings and the Holders.

The party desiring to terminate this Agreement pursuant to 7.04 shall give notice of such termination to the other parties.

(b)If this Agreement is terminated as permitted by 7.04, such termination shall be without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other parties to this Agreement; provided that if such termination shall result from the (i) willful failure of any party to fulfill a condition to the performance of the obligations of the other parties, (ii) failure to perform a covenant of this Agreement or (iii) breach by any party hereto of any representation or warranty or agreement contained herein, such party shall be fully liable for any and all damages incurred or suffered by the other party as a result of such failure or breach.

Section 7.05.  Successors And Assigns. The Company or DeCrane Holdings may not assign any of their respective rights and obligations hereunder without the prior written consent of the Holders.  No Holder may assign any of its rights or obligations hereunder without the prior written consent of the Company and DeCrane Holdings.  This Agreement shall be binding upon the Company, DeCrane Holdings and the Holders and their respective successors and permitted assigns.

Section 7.06.  Limited Recourse and Non-Petition.  Claims against each Holder arising out of this Agreement shall be limited to the economic value of such Holders’ Senior Preferred Stock and any payments or distributions with respect to such Holder’s Senior Preferred Stock, and the Company shall have no recourse against the Holder for any obligation with respect to this Agreement beyond the economic value of the Senior Preferred Stock and any payments or distributions with respect to the Senior Preferred Stock, and should the amount of any such obligation exceed the economic value of such Holder’s Senior Preferred Stock and such payments or distributions, the Company shall not be entitled to petition for the dissolution or winding-up of such Holder.

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Section 7.07.  Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York, without regard to the choice of law rules of such state.

Section 7.08.  Jurisdiction. Except as otherwise expressly provided in this Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party agrees that service of process on such party as provided in this Section shall be deemed effective service of process on such party.

Section 7.09.  WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.10.  Counterparts; Effectiveness.  This Agreement may be executed in any number of counterparts each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto.  No provision of this Agreement is intended to confer upon any person other than the parties hereto any rights or remedies hereunder

Section 7.11.  Expenses.  Except as otherwise provided in Article 6 herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense; provided however, that the Company shall pay the reasonable fees and expenses of (i) Cahill Gordon & Reindel LLP, special counsel to certain Holders and (ii) Ropes & Gray LLP, special counsel to certain other Holders, in each case to the extent incurred in connection with the negotiation, execution and delivery of this Agreement and the transactions contemplated hereby; provided further that the fees and expenses payable by the

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Company pursuant to the foregoing proviso shall not exceed $55,000 with respect to Cahill Gordon & Reindel LLP and $20,000 with respect to Ropes & Gray LLP.

Section 7.12.  Entire Agreement.  This Agreement, the Registration Rights Agreement, the Investors’ Agreement, the Certificate of Designations and the Securities Purchase Agreement (including without limitation the indemnification provisions contained therein and the Company’s and DeCrane Holdings’ covenants under Article VI of the Securities Purchase Agreement), which shall survive the execution and delivery of this Agreement) constitute the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, written or oral, relating to the subject matter hereof.

Section 7.13.  Captions; Certain Definitions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  All references to “$” or “dollars” shall be to United States dollars and all references to “days” shall be to calendar days unless otherwise specified.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words, “without limitation.”

[Remainder of page intentionally left blank; next page is signature page]

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IN WITNESS WHEREOF, the parties hereto have caused this Senior Preferred Stock Amendment Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

DECRANE AIRCRAFT HOLDINGS, INC.
By:	/s/  R. JACK DECRANE
	Name:  /s/ R. Jack DeCrane
	Title:  Chief Executive Officer
DECRANE HOLDINGS CO.
By:	/s/  R. JACK DECRANE
	Name:  /s/ R. Jack DeCrane
	Title:  Chief Executive Officer
DLJ INVESTMENT PARTNERS II, INC. on behalf of: DLJ INVESTMENT PARTNERS II, L.P. DLJ INVESTMENT PARTNERS, L.P. DLJIP II HOLDINGS, L.P.
By:	/S/  JOHN M. MORIARTY, JR.
	Name:  John M. Moriarty, Jr.
	Title:  Managing Director
PUTNAM INVESTMENT MANAGEMENT, LLC on behalf of:       PUTNAM VARIABLE TRUST- PUTNAM VT HIGH              YIELD FUND       PUTNAM HIGH YIELD TRUST
By:	/s/  MICHAEL E. DEFAO
	Name:  Michael E. DeFao
	Title:  Senior Vice President
NEON CAPITAL LIMITED
By:	/S/PAUL COPE
	Name:  Paul Cope
	Title:  Director

SCHEDULE 1.02*

Holder	Taxpayer Identification Number	Shares of Existing Preferred Stock and Senior Preferred Stock	Shares of Common Stock to be Issued**
DLJ Investment Partners II, L.P.	13-4048184	113,651.2	158,632
DLJ Investment Partners, L.P.	13-3868693	50,512.0	70,504
DLJIP II Holdings, L.P.	13-4192504	35,836.8	50,020
Neon Capital Limited		21,000.0	29,311
Putnam High Yield Trust	04-6415410	21,000.0	29,311
Putnam Variable Trust – Putnam VT High Yield Fund	04-2986135	8,000.0	11,167
Total		250,000.0	348,945

*	Assumes no transfers after the date of this Agreement.
**	Assumes 348,945 shares of Common Stock is equal to 7.5% of the Common Stock outstanding immediately after the Closing (calculated in accordance with Section 1.02).

SCHEDULE 3.01

The Existing Preferred Stock of Neon Capital Limited is subject to a security agreement granted in favor of the trustee for the Neon Notes.

EX-21.1

EXHIBIT 21.1

LIST OF SUBSIDIARIES OF REGISTRANT

Subsidiaries of DeCrane Aircraft Holdings, Inc.

AUDIO INTERNATIONAL, INC., an Arkansas corporation.

CARL F. BOOTH & CO., LLC, a Delaware limited liability company.

DECRANE AIRCRAFT SEATING COMPANY, INC., a Wisconsin corporation.

DECRANE CABIN INTERIORS - CANADA, Inc., a Delaware corporation.

HOLLINGSEAD INTERNATIONAL, INC., a California corporation.

PATS AIRCRAFT LLC, a Delaware limited liability company.

PCI NEWCO, INC., a Kansas corporation.

PRECISION PATTERN, INC., a Kansas corporation.

EX-31.1

Exhibit 31.1

CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Chief Executive Officer Certification

I, R. Jack DeCrane, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of DeCrane Aircraft Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)(Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986)

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2004

/s/ R. JACK DECRANE

R. Jack DeCrane

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Chief Financial Officer Certification

I, Richard J. Kaplan, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of DeCrane Aircraft Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)(Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986)

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2004

/s/ RICHARD J. KAPLAN

Richard J. Kaplan

Senior Vice President, Chief Financial Officer,
Secretary and Treasurer

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Chief Executive Officer and Chief Financial Officer Certification

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

R. Jack DeCrane, the Chief Executive Officer and Richard J. Kaplan, the Chief Financial Officer of DeCrane Aircraft Holdings, Inc., each certifies that, to the best of his knowledge:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of DeCrane Aircraft Holdings, Inc.

Date: November 12, 2004

/s/ R. JACK DECRANE

R. Jack DeCrane

Chief Executive Officer

/s/ RICHARD J. KAPLAN

Richard J. Kaplan

Senior Vice President, Chief Financial Officer,
Secretary and Treasurer