EXHIBIT 4.16
DEBT TERM SHEET
When signed by all parties, this Term Sheet will memorialize the terms
and conditions of a binding agreement between Xxxxxx X. Xxxxxxx
("Xxxxxxx") and DDL Electronics, Inc. ("DDL") as to all of the terms
herein set forth. This agreement may be supplemented by additional
definitive agreements, instruments and other documents including terms
and conditions customary in transactions of this nature but not
inconsistent herewith. The terms set forth herein shall not be further
modified or negotiated without the consent of both parties and shall be
included in the definitive agreements.
1. Xxxxxxx'x Advance: Not later than June 30, 1997, Xxxxxxx
will advance $2 million to DDL in immediately available funds for the
purpose of prepaying DDL's outstanding senior secured notes on June 30,
1997.
2. Promissory Note: DDL will issue to Xxxxxxx a secured non-
negotiable Promissory Note bearing simple interest, payable at maturity,
at eight percent (8%) per annum, in the form attached hereto as Exhibit
"A" and made a part hereof by this reference. Said Promissory Note
shall have an initial maturity date of February 1, 1999, which is
subject to extension to October 31, 1999, upon the fulfillment of the
condition set forth in the Note.
3. Prepayment Option: Provisions will be included in the
final documents for prepayment of the note any time after sixty days
from closing. Prepayment will require thirty (30) days advance written
notice from DDL.
4. Security: The note will be secured by a pledge of all of
the outstanding common stock of SMTEK, Inc. as collateral.
5. Corporate Governance: Xxxxxxx will be given the right to
select two representatives on DDL's Board of Directors immediately upon
funding. DDL will reconstitute its Board to make two Director positions
available within the seven existing positions. Xxxxxxx X. Xxxxxx and
Xxxxxxx X. Xxxxxxx will remain on the Board.
Agreed as of June 30, 1997:
DDL ELECTRONICS, INC.
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxx, President & CEO Xxxxxx X. Xxxxxxx
