EXHIBIT 10-AM PAYOFF AGREEMENT
THIS PAYOFF AGREEMENT (this "Agreement") is made as of
this 29th day of December, 1994, by and among SANWA BANK
CALIFORNIA, a California corporation ("Sanwa"), and DDL
ELECTRONICS, INC., a Delaware corporation (formerly known as DATA
DESIGN LABORATORIES, INC., a Delaware corporation) ("DDL"),
AEROSCIENTIFIC CORP., an Oregon corporation ("Aero-Or"),
AEROSCIENTIFIC CORP., a California corporation ("Aero-Cal"), A.J.
ELECTRONICS, INC., a California corporation ("A.J."), DDL EUROPE
LIMITED ("DDL-E"), DDL ELECTRONICS LIMITED ("DDL-Ltd."), and
IRLANDUS CIRCUITS LIMITED ("Irlandus") (Aero-Or, Aero-Cal, A.J.,
DDL-E, DDL-Ltd., and Irlandus are collectively referred to herein
as the "DDL Affiliates"). Terms not otherwise defined in this
Agreement shall have the meanings ascribed to them in that
certain Amended and Restated Credit Agreement dated as of June 5,
1992 between Sanwa and DDL (the "Credit Agreement").
RECITALS
A. DDL and Sanwa entered into that certain Amended and Restated
Credit Agreement dated as of June 5, 1992 (the "Credit
Agreement").
B. To secure DDL's obligations under the Credit Agreement, DDL
and the DDL Affiliates executed certain General Security
Agreements dated as of June 5, 1992 in favor of Sanwa, and the
DDL Affiliates executed certain Continuing Guaranties dated as of
June 5, 1992 in favor of Sanwa.
C. Pursuant to the terms of the Credit Agreement, DDL is
indebted to Sanwa in the principal sum of $6,847,519.59 plus
accrued but unpaid interest, costs and expenses, together with
the other obligations set forth in the Credit Agreement
(collectively, the "Outstanding Debt").
D. DDL has experienced certain operating difficulties, which it
is currently attempting to resolve, but which make DDL unable to
comply with certain provisions of the Credit Agreement.
E. DDL has requested Sanwa to accept, and Sanwa has agreed to
accept, the sum of $4,500,000.00 in full and complete
satisfaction of the Outstanding Debt.
NOW, THEREFORE, in consideration of the above recitals and of the
mutual covenants contained herein, Sanwa, DDL and the DDL
Affiliates hereby agree as follows:
I.
AGREEMENT FOR PART PERFORMANCE
Sanwa hereby accepts payment of the sum of Four Million
Five Hundred Thousand Dollars ($4,500,000.00) from DDL in full
and complete satisfaction of the Outstanding Debt.
II.
RELEASE OF LIENS: TERMINATION OF AGREEMENTS
2.1 Release of Liens. Sanwa hereby releases any and all
liens, encumbrances and other security interests (collectively,
the "Security Interests") it may hold in the Collateral and Real
Property Collateral of DDL and/or the DDL Affiliates.
Concurrently with the execution of this Agreement, Sanwa shall
deliver or cause to be delivered to DDL, in form and substance
satisfactory to DDL and Sanwa, such statements terminating the
Security Interests, and such other documents as DDL may
reasonably deem necessary to assure itself that the Security
Interests have been released and terminated, including, without
limitation, the statements and documents identified on Exhibit 1
of this Agreement.
2.2 Termination of Agreements. The parties hereto agree
that all outstanding agreements and understandings between Sanwa
and DDL and/or the DDL Affiliates, other than this Agreement, are
hereby terminated and all obligations thereunder are completely
satisfied and released. Such agreements and understandings
include, without limitation, those identified on Exhibit 2 of
this Agreement.
2.3 Further Assurances. At DDL's and/or the DDL
Affiliates' sole expense, including reasonable attorneys' fees,
each party to this Agreement shall cooperate fully in the
execution of any and all other documents and in the completion of
any additional actions that may be necessary or appropriate to
give full force and effect to the terms and intent of this
Agreement, in form and substance satisfactory to DDL and Sanwa,
including, without limitation, execution of all documents
necessary or appropriate to release Sanwa's Security Interest in
Collateral and/or Real Property Collateral located in Northern
Ireland.
III.
MUTUAL RELEASE
3.1 Release. In consideration of this Agreement and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, DDL and the DDL Affiliates, on one
hand, and Sanwa, on the other, hereby and forever mutually
release and discharge one another and each of the other's
successors, subsidiaries, affiliates, parent companies,
employees, former employees, consultants, owners, officers,
directors, shareholders, general partners, limited partners,
predecessors, assigns, agents, attorneys, insurers, and
representatives from any and all causes of action, actions,
judgments, liens, indebtedness, damages, losses, claims,
liabilities, and demands of any nature whatsoever, known or
unknown, absolute or contingent, related or incidental to the
Outstanding Debt other than the obligations set forth in this
Agreement.
3.2 Release of Unknown Claims. It is the intention of the
parties in executing this Agreement that this Agreement shall be
effective as a bar to each and every claim, demand, and cause of
action that the parties may have against one another related or
incidental to the Outstanding Debt other than the obligations set
forth in this Agreement. In furtherance of this intention, the
parties hereby expressly waive any and all rights or benefits
conferred by the provisions of Section 1542 of the California
Civil Code, and by any similar provision of California or Federal
law now in effect or in effect in the future, and expressly
consent that this Agreement shall be given full force and effect
according to each and all of its express terms and conditions,
including those relating to unknown and unsuspected claims,
demands, and causes of action, if any:
A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his settlement
with the debtor.
The parties acknowledge that they may hereafter
discover claims or facts in addition to or different from those
which they now know or believe to exist with respect to the
subject matter of this Agreement and which, if known or suspected
at the time of executing this Agreement, may have materially
affected this settlement. Nevertheless, the parties hereby waive
any rights, claims, or causes of action that might arise as a
result of such different or additional claims or facts. The
parties acknowledge that they understand the significance and
potential consequence of such a release of unknown claims and of
the specific waiver of their rights under Section 1542. The
parties intend that the claims released by them under this
Agreement be construed as broadly as possible.
IV.
MISCELLANEOUS
4.1 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of DDL, the DDL Affiliates and Sanwa and
their respective successors and assigns.
4.2 Governing Law: Waiver of Trial by Jury. This Agreement
shall be governed by and interpreted and construed in accordance
with the laws of the State of California. The parties hereto
consent to the jurisdiction of any state or federal court located
within Los Angeles County of the State of California. The parties
hereto waive the right to trial by jury in any action, suit,
proceeding or counterclaim of any kind arising out of or related
to this Agreement.
4.3 Recitals. All of the recitals are incorporated herein
and made a part hereof.
4.4 Warranty of Authorization. Each person whose signature
appears hereon warrants and guarantees that he or she has been
duly authorized and has full authority to execute this Agreement
on behalf of the entity on whose behalf this Agreement is
executed.
4.5 Entire Agreement. This Agreement constitutes and
contains the entire agreement and understanding between the
parties. This Agreement supersedes and replaces all prior
negotiations and all agreements, proposed or otherwise, whether
written or oral, concerning the subject matter hereof. This is a
fully integrated document. In executing this Agreement, no party
hereto has relied on any representation not contained within this
document. Each party hereto has been represented by counsel and
has relied solely on its counsel's advice as to the legal effect
hereof and its own knowledge and the terms of this document.
4.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute but one and the same
instrument.
4.7 Attorneys' Fees and Costs. In the event of litigation
in connection with or concerning the subject matter of this
Agreement or any breach of this Agreement, the prevailing party
shall be entitled to recover all costs and expenses incurred by
that party, including reasonable attorneys' fees and costs, in
addition to any other relief to which it may be entitled. The
parties further agree that the prevailing party shall be entitled
to recover all costs, including reasonable attorneys' fees and
costs, of collecting any costs and expenses awarded pursuant to
the prior sentence.
4.8 Headings. The headings set forth herein are solely for
the purpose of identification and have no legal significance.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first written above.
SANWA BANK CALIFORNIA, a California corporation
By:________________________________
Its:_______________________________
DDL ELECTRONICS, INC., a Delaware corporation
By:______________________________
Its: ____________________________
AEROSCIENTIFIC CORP., an Oregon corporation
By:_______________________________
its:______________________________
AEROSCIENTIFIC CORP, a California
corporation
By:_______________________________
Its:______________________________
A.J. ELECTRONICS, INC., a California corporation
By:_______________________________
Its:______________________________
DDL EUROPE LIMITED
By:__________________________________
Its:_________________________________
DDL ELECTRONICS, LTD.
By:__________________________________
Its:_________________________________
IRLANDUS CIRCUITS LIMITED
By:__________________________________
Its:_________________________________
EXHIBIT 1 TO PAYOFF AGREEMENT
Release of Liens
1. Request for Reconveyance of that certain Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by
DDL to First American Title Insurance Company ("First
American") for the benefit of Sanwa, The Tokai Bank Ltd.
("Tokai") and First Interstate Bank of Oregon ("FIB") with
respect to that property commonly known as 223 North Crescent
Way, Anaheim, California;
2. Request for Reconveyance of that certain Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by
A.J. to First American for the benefit of Sanwa, Tokai and FIB
with respect to that property commonly known as 20945 Plummer
Street, Chatsworth, California;
3. Request for Reconveyance of that certain Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by
DDL to First American for the benefit of Sanwa, Tokai and FIB
with respect to that property commonly known as 7915 Center
Avenue, Cucamonga, California;
4. Request for Reconveyance of that certain Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by
DDL to First American for the benefit of Sanwa and Tokai with
respect to that property known as Lot 11, Tract 11428, in the
City of Rancho Cucamonga, California;
5. Request for Reconveyance of that certain Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by
DDL to First American for the benefit of Sanwa and Tokai with
respect to that property known as Lot 13, Tract 11428, in the
City of Rancho Cucamonga, California;
6. Request for Reconveyance of that certain Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by DDL
to Fidelity National Title Insurance Company for the benefit of
Sanwa, Tokai and FIB with respect to that property commonly known
as 21423 North 11th Avenue, Phoenix, Arizona;
7. Request for Reconveyance of that certain Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by
Aero-Or to First American for the benefit of Sanwa with respect
to that property commonly known as 1270 NW 167th Place,
Beaverton, Oregon;
8. Deed of Release among Irlandus, FIB, Tokai and Sanwa with
respect to that property located in Northern Ireland;
9. Deed of Release among DDL, FIB, Tokai and Sanwa with respect
to that property located in Northern Ireland;
10. Form UCC-3 Termination Statement terminating Sanwa's
security interest in the assets of DDL under that certain
Financing Statement filed in the Office of the Oregon Secretary
of State on June 23, 1992 as file number R12780;
11. Form UCC-3 Termination Statement terminating Sanwa's
security interest in the assets of Aero-Cal under that certain
Financing Statement filed in the Office of the California
Secretary of State on June 22, 1992 as file number 92134431;
12. Form UCC-3 Termination Statement terminating Sanwa's
security interest in the assets of Aero-Or under that certain
Financing Statement filed in the Office of the Oregon Secretary
of State on June 23, 1992 as file number R12781;
13. Form UCC-2 Termination Statement terminating Sanwa's
security interest in the assets of A.J. under that certain
Financing Statement filed in the Office of the California
Secretary of State on June 22, 1992 as file number 92134433;
14. Form UCC-2 Termination Statement terminating Sanwa's
security interest in the assets of DDL under that certain
Financing Statement filed in the Office of the California
Secretary of State on June 22, 1992 as file number 92134429;
15. Form UCC-3 Termination Statement terminating Sanwa's
security interest in the assets of DDL under that certain
Financing Statement filed in the Office of the Delaware Secretary
of State on June 23, 1992 as file number 9207522;
16. Notice of Assignment of Promissory Note to Omni Acquisition
Corp.;
17. Notice of Assignment of Promissory Note and Deed of Trust to
M. Peter Thomas and Lisa Thomas;
18. Notice of Assignment of Promissory Note and Deed of Trust to
Thomas J. Gullo and Linda G. Gullo;
19. Assignment of Deed of Trust (as collateral), assigning all
beneficial interest under that certain Second Deed of Trust and
Assignment of Rents with Request for Notice dated May 10, 1990
executed by M. Peter Thomas and Lisa Thomas recorded as
Instrument No. 90-286466 and further recorded as Instrument No.
90-375203.
20. Assignment of Deed of Trust (as collateral), assigning all
beneficial interest under that certain Second Deed of Trust and
Assignment of Rents with Request for Notice dated May 30, 1990
executed by Thomas J. Gullo and Linda C. Gullo recorded as
Instrument No. 90-314878 and further recorded as Instrument No.
90-372668.
21. Original Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing by A.J. to First American for the
benefit of Sanwa, Tokai and FIB with respect to that property
commonly known as 20945 Plummer Street, Chatsworth, California;
22. Original Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing by DDL to First American for the
benefit of Sanwa, Tokai and FIB with respect to that property
commonly known as 7915 Center Avenue, Cucamonga, California;
23. Original Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing by DDL to First American for the
benefit of Sanwa and Tokai with respect to that property known as
Lot 11, Tract 11428, in the City of Rancho Cucamonga, California;
24. Original Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing by DDL to First American for the
benefit of Sanwa and Tokai with respect to that property known as
Lot 13, Tract 11428, in the City of Rancho Cucamonga, California;
25. Original Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing by Aero-Or to First American for the
benefit of Sanwa with respect to that property commonly known as
1270 NW 167th Place, Beaverton, Oregon;
26. Original Second Deed of Trust and Assignment of Rents with
Request for Notice dated May 10, 1990 executed by M. Peter Thomas
and Lisa Thomas recorded as Instrument No. 90-286466 and further
recorded as Instrument No. 90-375203;
27. Original Second Deed of Trust and Assignment of Rents with
Request for Notice dated May 30, 1990 executed by Thomas J.
Gullo and Linda G. Gullo recorded as Instrument No. 90-314878
and further recorded as Instrument No. 90-372668;
28. Original Promissory Note Secured by Second Deed of Trust
dated May 10, 1990 in the principal amount of $560,000 executed
by M. Peter Thomas and Lisa Thomas;
29. Original Promissory Note Secured by Second Deed of Trust
dated May 30, 1990 in the principal amount of $250,000 executed
by Thomas J. Gullo and Linda C. Gullo;
30. Original Promissory Note dated February 28, 1992 in the
principal amount of $292,536.36 executed by Omni Acquisition
Corp.
EXHIBIT 2
TO
PAYOFF AGREEMENT
Termination of Agreements
1. The Credit Agreement;
2. Pledge and Security Agreement dated as of June 5, 1992 by
DDL in favor of Sanwa, Tokai and First Interstate Bank of Oregon,
N.A. ("FIB");
3. General Security Agreement dated as of June 5, 1992 by DDL
in favor of Sanwa;
4. General Security Agreement dated as of June 5, 1992 by Aero-
Or in favor of Sanwa;
5. General Security Agreement dated as of June 5, 1992 by
AeroCal in favor of Sanwa;
6. General Security Agreement dated as of June 5, 1992 by A.J.
in favor of Sanwa;
7. Continuing Guaranty dated as of June 5, 1992 by Aero-Or in
favor of Sanwa;
8. Continuing Guaranty dated as of June 5, 1992 by Aero-Cal in
favor of Sanwa; and
9. Continuing Guaranty dated as of June 5, 1992 by A.J. in
favor of Sanwa.