SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 3, 1997
_____________________
Exact Name of Registrant as
Specified in Its Charter: DDL ELECTRONICS, INC.
______________________________
DELAWARE 1-8101 33-0213512
_____________________________ ____________ _____________
State or Other Jurisdiction of Commission I.R.S. Employer
Incorporation or Organization File Number Identification No.
Address of Principal Executive Offices: 2151 Anchor Court
Newbury Park, CA 91320
_________________________
Registrant's Telephone Number, Including
Area Code: (805) 376-9415
_________________________
Former Name or Former Address,
if Changed Since Last Report: Not applicable
_________________________
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Item 5. Other Events.
On June 12, 1997, DDL Electronics, Inc. sold 2,000,000 shares of its Common
Stock to a group of private investors pursuant to a Common Stock Purchase
Agreement dated as of June 3, 1997, a copy of which is attached as Exhibit
4.1. The private investors purchased such shares at a price of $0.75
per share. The Company expects in the near future to file a registration
statement covering the resale of such shares, as provided in the Common Stock
Purchase Agreement.
Item 7. Exhibits.
Exhibit Description
_______ ____________
4.1 Common Stock Purchase Agreement dated as of
June 3, 1997
SIGNATURE
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.
DDL ELECTRONICS, INC.
June 12, 1997 /s/ Richard K. Vitelle
_________________________________ ___________________________________
Date Richard K. Vitelle
Vice President - Finance
(Principal Financial Officer)
<PAGE>
Exhibit 4.1
This COMMON STOCK PURCHASE AGREEMENT, dated as of June 3, 1997, is
among DDL ELECTRONICS, INC., a Delaware corporation (the "Company"), and
each of the Purchasers identified as such on the Signature Pages hereof
(the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company desires to obtain equity financing through the
offer, issuance and sale of its Common Stock, par value $.01 per share (the
"Common Stock"); and
WHEREAS, the several Purchasers desire, on the terms and conditions
set forth in this Agreement, to purchase Common Stock in the amounts of
their Commitments (as defined below);
NOW, THEREFORE, based upon the foregoing and the mutual covenants and
agreements herein contained, and for other good and sufficient
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE I
CERTAIN DEFINED TERMS
Section 1.1. Definitions. When used herein, the following terms
shall have the following meanings:
"Agreement" shall mean this Common Stock Purchase Agreement, as it may
be amended or otherwise modified from time to time.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means five percent of the aggregate purchase price of the
Shares under this Agreement.
"Commitment" means, as to any Purchaser, the obligation of such
Purchaser to purchase Shares pursuant to Section 2.1 hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Material Adverse Effect" means, as to any Person, any material
adverse effect on the business, condition (financial or otherwise),
operations, performance, properties or prospects of such Person and its
Subsidiaries, taken as a whole.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
<PAGE>
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Placement Agent" means Fechtor, Detwiler & Co., Inc.
"Plan" means any plan regulated under ERISA.
"Purchaser" has the meaning set forth in the preamble of this
Agreement and shall include any partner of a Purchaser who receives shares
of Common Stock pursuant to a distribution from or a liquidation of such
Purchaser.
"Subsidiary" or "Subsidiaries" of any Person means any corporation or
other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions are at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries
of such Person.
"`33 Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"`34 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated hereunder.
ARTICLE II
PURCHASE AND SALE TERMS
Section 2.1. Purchase and Sale. Subject to the terms of this
Agreement, the Company shall authorize, issue and sell to each Purchaser,
and each Purchaser shall purchase from the Company at the Closing, at a
purchase price of $0.75 per share, the total number of shares of Common
Stock set forth opposite such Purchaser's name on the applicable Signature
Page hereof (all such shares being the "Shares"). In the Company's
discretion, some or all of the Shares may consist of Common Stock escrowed
with First Union National Bank at the date hereof as collateral for the
Company's 10% Senior Notes due July 1, 1997 (the Senior Notes"). The
obligation of each Purchaser to purchase Shares hereunder and to pay the
purchase price therefor is several and not joint.
Section 2.2. The Closing. The closing of the purchase and sale of
the Shares shall take place at the offices of the Placement Agent in
Boston, Massachusetts, or at such other location as the Company and a
majority in interest of the Purchasers may designate (the "Closing"). The
Closing shall occur on June 12, 1997 or on such other date as the Company
and a majority in interest of the Purchasers may designate (the "Closing
Date").
Section 2.3. Payment and Delivery. The amount of the purchase price
for each Purchaser to be paid on the Closing Date shall be as set forth
opposite such Purchaser's name on the applicable Signature Page hereof. At
the time of the Closing: (i) each Purchaser shall pay the purchase price of
the Shares purchased by it in full by wire transfer of immediately
available funds to an account designated by the Company in writing not less
than two business days prior to the Closing Date; and (ii) the Company
shall pay the Commission to the Placement Agent in full by wire transfer of
immediately available funds to an account designated by the Placement Agent
in writing not less than two business days prior to the Closing Date. As
soon as practicable following delivery of funds by each Purchaser on the
Closing Date, the Company shall deliver to each Purchaser stock
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certificates evidencing the total number of Shares to be purchased by it
hereunder, registered in the name of such Purchaser or its nominee.
Section 2.4. Use of Proceeds. The Company shall use the net cash
proceeds of its sale of Shares solely for the purpose of paying the
principal amount of, and interest accrued on, the Senior Notes or, in the
event that the Senior Notes shall have been paid in full without any use of
such proceeds, for working capital.
ARTICLE III
CLOSING CONDITIONS
The obligation of each Purchaser to purchase Shares on the Closing
Date shall be subject to satisfaction or waiver of the following conditions
on or prior to such date (unless otherwise specified below):
Section 3.1. Execution of This Agreement and Related Documents. This
Agreement shall have been duly authorized, executed and delivered by all
parties hereto and shall remain in full force and effect.
Section 3.2. Investments by Other Purchasers. Concurrently with the
purchase of Shares by such Purchaser on the Closing Date, other Purchasers
shall have purchased and, to the extent required by Section 2.3 for such
Purchaser and such other Purchasers, paid the purchase price for a number
of Shares that, when taken together with the purchase of such Purchaser,
shall total at least $1,250,000 in the aggregate.
Section 3.3. Representations and Warranties True and Correct. The
representations and warranties contained in Article IV shall be true and
correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
to the extent that any such representations and warranties specifically
apply to a prior date).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers, as of the
Closing Date (except to the extent any of the following representations or
warranties specifically apply or relate to a prior date, in which event the
Company represents and warrants such representations and warranties to be
true and correct as of such prior date), as follows:
Section 4.1. Corporate Existence. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or use of its assets or properties, or the conduct or nature of
its business, makes such qualification necessary (except for jurisdictions
in which the failure to so qualify or be in good standing would not be
reasonably likely to have a Material Adverse Effect). The Company has all
requisite corporate power and authority to conduct its business and own its
properties as currently and contemplated to be conducted and owned.
Section 4.2. Power and Authority. The Company has all requisite
corporate power and authority, and has taken all required corporate and
other action necessary, to execute, deliver and perform this Agreement and
to issue and sell the Common Stock as herein provided. None of the
foregoing actions will (i) violate any provision of the Company's charter
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or bylaws, (ii) result in the breach of or constitute a default under any
contract, agreement or instrument to which the Company is a party or by
which it is bound, (iii) result in the creation or imposition of any lien,
claim or encumbrance on any Company asset, (iv) give any person rights to
terminate any contracts or agreements with the Company or otherwise to
exercise rights against the Company or (v) violate any order, writ,
judgment, injunction, decree, statute, rule or regulation of any court,
tribunal or governmental entity applicable to or bearing upon the Company
or any of its assets or business, except, as to clauses (ii), (iii) and
(iv) above, as would have no Material Adverse Effect on the Company.
Section 4.3. Enforceability, etc. This Agreement has been duly
executed and delivered by the Company and, assuming that this Agreement is
duly executed and delivered by, and is within the power and authority of,
each of the Purchasers, constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors' rights generally and subject to general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
Section 4.4. Consents, Approvals and Non-Contravention. Neither the
execution, delivery and performance of this Agreement by the Company, nor
the consummation of any transaction related hereto or thereto, nor the
issuance, sale or delivery of any Common Stock hereunder, will
(a) require any consent or approval of, filing or taking of
any other action with, or notice to, any Person;
(b) violate any contract, agreement, instrument or other
arrangement to which the Company is a party or by which it is bound;
or
(c) violate (x) any order, writ, judgment, injunction or
decree or (y) any statute, law, rule or regulation of any court,
tribunal or governmental entity or authority applicable to or
bearing upon the Company or any of its assets or business;
except, as to clauses (a), (b) and (c) (y) above, as would have no Material
Adverse Effect.
Section 4.5. Brokers, etc. The Company has not dealt with any broker,
finder or other similar Person in connection with the offer or sale of any
Common Stock or any of the other transactions contemplated by this
Agreement in such a manner as to obligate any Person to pay any fee or
commission in respect thereof other than the Commission payable to the
Placement Agent hereunder.
Section 4.6. Private Sale; Public Resale. The Company has not
offered any Common Stock or any other securities to, or solicited any
offers to acquire any Common Stock or any other securities from, or
otherwise approached, negotiated or communicated in respect of any Common
Stock or any other securities from, or otherwise approached, negotiated or
communicated in respect of any Common Stock or any other securities with,
any Person in such a manner as to require that the offer or sale of the
Common Stock or any such other securities be registered pursuant to the '33
Act or any state securities laws ("Blue Sky Laws"). The Company is
eligible to use Form S-3 under the '33 Act to register offers and sales of
the Shares as contemplated by Article VII of this Agreement.
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally (but not jointly) represents and warrants to
the Company, at and as of the Closing Date, as follows:
Section 5.1. Power and Authority. Such Purchaser has full power and
authority and, if not an individual Purchaser, has taken all required
corporate (or trust or partnership, as the case may be) and other action
necessary to permit it to execute and deliver this Agreement and to carry
out the terms hereof. None of the foregoing actions will (i) violate any
provision of such Purchaser's charter, bylaws or other similar organic
document, if applicable, (ii) result in the breach of or constitute a
default under any contract, agreement or instrument to which such Purchaser
is a party or by which such Purchaser is bound or (iii) violate any order,
writ, judgment, injunction, decree, statute, rule or regulation of any
court, tribunal or governmental entity or authority applicable to or
bearing upon such Purchaser or any of its assets or business, except, as to
clause (iii) above, as would have no Material Adverse Effect on the
Purchaser.
Section 5.2. Enforceability, etc. This Agreement has been duly
executed and delivered by such Purchaser and, assuming that this Agreement
is duly executed and delivered by, and is within the power and authority
of, the Company, constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against it in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting creditors'
rights generally and subject to general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
Section 5.3. Purchase for Investment. Such Purchaser is purchasing
its Shares for investment, for its own account and not for the account of
any Plan (or if such Shares are being acquired for the account of any such
Plan, such acquisition does not involve a non-exempt prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the Code) and
not with a view to distribution thereof, except as permitted hereunder.
Such Purchaser has had no participation in any such undertaking and has no
participation in the underwriting of any such undertaking. Such Purchaser
understands that its Shares must be held indefinitely unless registered
under the '33 Act or exempt from registration. Such Purchaser will effect
no short sale of the Common Stock at any time from and including the date
hereof through the completion of the 180-day period described in Section
7.3(b) as the same may be extended pursuant to the block paragraph
following Section 7.3(i).
Section 5.4. Financial Matters, etc. Such Purchaser represents and
warrants to the Company that it understands that its purchase of Shares
hereunder involves substantial risk and that such Purchaser's financial
condition and investments are such that it is in a financial position to
hold such Shares for an indefinite period of time and to bear the economic
risk of, and withstand a complete loss of the value of, such Shares. Such
Purchaser represents that it is an "accredited investor" as that term is
defined in Regulation D promulgated under the '33 Act and that such
Purchaser is a sophisticated investor, capable of evaluating the merits and
risks of investing in the Company.
<PAGE>
Section 5.5. Full Disclosure. During the negotiation of the
transactions contemplated herein, the Purchaser and its representatives
have been afforded full and free access to the Company's corporate books,
financial statements and records, have been afforded an opportunity to ask
such questions of the Company's officers and employees concerning the
Company's business, operations, financial condition, assets, liabilities
and other relevant matters, and have been given all such information as has
been requested, in order to evaluate the merits and risks of the
prospective investment contemplated herein. The Purchasers and its
representatives have obtained and read all of the periodic reports filed by
the Company under the '34 Act from January 1, 1996 to the date hereof.
Section 5.6. Brokers, etc. Such Purchaser has not dealt with any
broker, finder or other similar Person in connection with the offer or sale
of any Shares or any of the transactions contemplated by this Agreement in
such a manner as to obligate any Person to pay any fee or commission in
respect thereof other than the Commission payable to the Placement Agent
hereunder.
ARTICLE VI
TERMINATION
Section 6.1. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by mutual consent of the Company and a majority in
interest of the Purchasers;
(b) by the Company if the Closing shall not have occurred by
June 27, 1997, provided that the failure to consummate the
transactions contemplated hereby is not a result of the failure by
the Company to perform any of its obligations hereunder.
Section 6.2. Effect of Termination. If this Agreement shall be
terminated pursuant to Section 6.1, then all obligations, representations
and warranties of the parties under this Agreement shall terminate and
there shall be no liability of any party to another party, except (i) for
any breach of this Agreement prior to such termination and (ii) as provided
in Section 8.1.
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1. Certain Other Defined Terms. Capitalized terms used in
this Article without definition shall have the respective meanings given
such terms elsewhere in this Agreement. As used in this Article, the
following terms shall have the following meanings:
"Commission" shall mean the Securities and Exchange Commission.
"Holder" shall mean any registered holder or holders of Shares.
"Prospectus" shall mean the prospectus included in the Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A promulgated
under the '33 Act), as amended or supplemented by any prospectus
<PAGE>
supplement, with respect to the terms of the offering of the Shares covered
by the Registration Statement, and all other amendments and supplements to
such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference
therein.
"Registration Statement" shall mean a registration statement of the
Company on Form S-3 that covers the offer and sale of the Shares pursuant
to this Article, as amended by any amendment to such registration
statement, including any post-effective amendment, and all exhibits and all
material incorporated by reference or deemed to be incorporated by
reference therein.
Section 7.2. Registration Rights. The Company will commence
preparation of the Registration Statement immediately following the Closing
and will file the Registration Statement with the Commission as soon as
practicable after the Closing and not later than thirty days after the
Closing Date. The Company will use its best efforts to cause the Shares to
be registered under the '33 Act for sale to the public by the Holders at
the earliest practicable date following the filing of the Registration
Statement with the Commission.
Section 7.3. Registration Procedures. In connection with the
registration obligations of the Company pursuant to the terms and
conditions of this Agreement, the Company shall:
(a) prior to filing a Registration Statement or Prospectus
or any amendments or supplements thereto, including documents incorporated
by reference after the initial filing of the Registration Statement,
furnish to the Holders of the Shares covered by such Registration Statement
(the "Selling Holders"), in care of the Placement Agent, one copy of each
document proposed to be filed at least two business days prior thereto, and
the Company will not, unless required by law, file any Registration
Statement or amendment thereto or any Prospectus or any supplement thereto
(including such documents incorporated by reference) to which Selling
Holders of at least a majority of the Shares being sold (the "Objecting
Party") shall object pursuant to notice given to the Company prior to the
filing of such amendment or supplement (the "Objection Notice"); the
Objection Notice shall set forth the objections and the specific areas in
the draft documents where such objections arise; the Company shall have
five business days after receipt of the Objection Notice to correct such
deficiencies to the satisfaction of the Objecting Party and will notify the
Placement Agent of any stop order issued or threatened by the Commission in
connection therewith and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered;
(b) promptly prepare and file with the Commission such
amendments and post-effective amendments to the Registration Statement as
may be necessary to keep such Registration Statement effective for a period
of not less than 180 days from and including the initial effective date
thereof; cause the Prospectus to be supplemented by any required Prospectus
supplement for the same period and, as so supplemented, to be filed
pursuant to Rule 424 under the '33 Act; and comply with the provisions of
the '33 Act applicable to it with respect to the disposition of all Shares
covered by the Registration Statement during the same period in accordance
with the intended methods of disposition by the Selling Holders set forth
in such Registration Statement or supplement to the Prospectus;
(c) promptly furnish to any Selling Holder and the
underwriters, if any, without charge, such number or conformed copies of
such Registration Statement and any post-effective amendment thereto and
<PAGE>
such number of copies of the Prospectus (including each preliminary
Prospectus) and any amendments or supplements thereto, and any documents
incorporated by reference therein, as such Selling Holder or underwriter
may request in order to facilitate the disposition of the Shares being sold
by such Selling Holder (it being understood that the Company consents to
the use of the Prospectus and any amendment or supplement thereto by each
Selling Holder and the underwriters, if any, in connection with the
offering and sale of the Shares covered by the Prospectus or any amendment
or supplement thereto);
(d) promptly notify the Placement Agent, and (if requested
by such Person) confirm such notice in writing, (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed and,
with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the Commission
or any other federal or state governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for
additional information to be included in any Registration Statement or
Prospectus or otherwise, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of a Registration Statement or the
initiation or threatening of a any proceedings for that purpose, (iv) of
the issuance by any state securities commission or other regulatory
authority of any order suspending the qualification or exemption from
qualification of any of the Shares under Blue Sky Laws the initiation of
any proceedings for that purpose and (v) of the happening of any event
which makes any statement made in a Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated by
reference therein untrue or which requires the making of any changes in
such Registration Statement, Prospectus or documents so that they will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and, as promptly as practicable
thereafter, prepare and file with the Commission and furnish a supplement
or amendment to such Prospectus so that, as thereafter deliverable to the
purchasers of such Shares, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading;
(e) promptly use its best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement and, if
one is issued, to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible moment;
(f) if requested by the managing underwriter, if any, or any
Selling Holder, promptly incorporate in a Prospectus supplement or post-
effective amendment such information as the managing underwriter or Selling
Holder requests to be included therein, including, without limitation, with
respect to the number of Shares being sold by such Selling Holder to such
underwriter or underwriters and with respect to any other terms of any
underwritten offering of the Shares to be sold in such offering, and
promptly make all required filings of such Prospectus supplement or post-
effective amendment;
(g) promptly make available for inspection by any Selling
Holder, any underwriter participating in any disposition pursuant to the
Registration Statement and any attorney, accountant or other agent or
representative retained by any such Selling Holder or underwriter
(collectively, the "Inspectors"), all financial and other records,
<PAGE>
pertinent corporate documents and properties of the Company (collectively,
the "Records"), as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information requested by any such
Inspector in connection with such Registration Statement;
(h) cooperate with each Selling Holder and each underwriter
participating in the disposition of such Shares and their respective
counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD"); and
(i) during the period when the Prospectus is required to be
delivered under the '33 Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the '34 Act.
Each Selling Holder, upon receipt of any notice from the Company of the
happening of any event of the kind contemplated by subsection (b) or (f) of
this Section 7.3, shall forthwith discontinue disposition of the Shares
until such Selling Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by subsection (b) or (f) of this Section
7.3 or until it is advised in writing (the "Advice") by the Company that
the use of the Prospectus may be resumed, and, if so directed by the
Company, such Selling Holder will, or will request the managing
underwriter, if any, to, deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Selling Holder's
possession, of the Prospectus covering such Shares current at the time of
receipt of such notice. In the event that the Company shall give any such
notice, the period for which the Registration Statement is required to be
kept effective pursuant to Section 7.3(b) hereof shall be extended by the
number of days during the period from and including the date of the giving
of such notice to and including the date when each Selling Holder shall
have received (i) the copies of the supplemented or amended Prospectus
contemplated by subsection (b) or (f) of this Section 7.3 or (ii) the
Advice. If the Registration Statement refers to any Selling Holder by name
or otherwise as the holder of any securities of the Company, then such
Selling Holder shall have the right to require (i) the insertion therein of
language, in form and substance satisfactory to such Selling Holder, to the
effect that the holding by such Selling Holder of such securities is not to
be construed as a recommendation by such Selling Holder of the investment
quality of the Company's securities covered thereby and that such holding
does not imply that such Selling Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such
reference to such Selling Holder by name or otherwise is not required by
the '33 Act or any similar federal statute then in force, the deletion of
the reference to such Selling Holder.
Section 7.4. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including,
without limitation, all Commission and securities exchange or NASD
registration and filing fees, fees and expenses of compliance with Blue Sky
Laws (including fees and disbursements of counsel in connection with "blue
sky" qualifications of the Shares), printing expenses, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of the Company's officers and employees performing
legal or accounting duties), fees and expenses incurred in connection with
the listing of the securities to be registered, if any, on each securities
exchange on which similar securities issued by the Company are then listed,
fees and disbursements of counsel for the Company and its independent
certified public accountants (including the expense of any special audit or
"cold comfort" letters required by or incident to such performance), '33
Act liability insurance (if the Company elects to obtain such insurance),
reasonable fees and expenses of any special experts retained by the Company
<PAGE>
in connection with such registration, fees and expenses of other Persons
retained by the Company, reasonable fees and expenses of one counsel for
the Holders incurred in connection with each registration hereunder (but
not including any underwriting fees, discounts or commissions attributable
to the sale of Shares) and any out-of-pocket expenses of the Holders
excluding any travel costs and counsel fees except as set forth above will
be borne by the Company whether or not the Registration Statement becomes
effective. The Holders will bear the fees and expenses of any attorneys
engaged to represent them and will pay the discounts, commissions and
expenses charged by any securities broker or dealer engaged to distribute
the Shares.
Section 7.5. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, each
Holder, its officers, directors and each Person who controls such Holder
(within the meaning of the '33 Act), and any agent or investment adviser
thereof, against all losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees and costs of investigation) arising
out of or based upon any untrue or alleged untrue statement of material
fact contained in any Registration Statement, any amendment or supplement
thereto, any Prospectus or preliminary Prospectus or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same arise out of or are based upon any information with
respect to such Holder furnished in writing to the Company by or on behalf
of such Holder expressly for use therein; provided that, in the event that
the Prospectus shall have been amended or supplemented and copies thereof
as so amended or supplemented shall have been furnished to a Holder prior
to the confirmation of any sales of Shares, such indemnity with respect to
the Prospectus shall not inure to the benefit of such Holder if the Person
asserting such loss, claim, damage, liability or expense and who purchased
the Shares from such holder did not, at or prior to the confirmation of the
sale of the Shares to such Person, receive a copy of the Prospectus as so
amended or supplemented and the untrue statement or omission of a material
fact contained in the Prospectus was corrected in the Prospectus as so
amended or supplemented. In connection with an underwritten offering, the
Company will indemnify the underwriters thereof, their officers and
directors and each person who controls such underwriters (within the
meaning of the '33 Act) to the same extent as provided above with respect
to the indemnification of the Holders of Shares except with respect to
information provided by the underwriter specifically for inclusion therein.
(b) Indemnification by Holders of Shares. In connection
with any Registration Statement in which a Holder is participating, each
such Holder will furnish to the Company in writing such information with
respect to the name and address of such Holder and such other information
as may be reasonably required for use in connection with any such
Registration Statement or Prospectus and agrees to indemnify, to the full
extent permitted by law, the Company, its directors and officers and each
Person who controls the Company (within the meaning of the '33 Act) against
any losses, claims, damages, liabilities and expenses resulting from any
untrue statement of a material fact or any omission of a material fact
required to be stated in the Registration Statement or Prospectus or any
amendment thereof or supplement thereto or necessary to make the statements
therein not misleading to the extent, but only to the extent, that such
untrue or alleged untrue statement is contained in or such omission or
alleged omission relates to any information with respect to such Holder so
furnished in writing by such Holder specifically for inclusion in any
Prospectus or Registration Statement; provided, however, that such Holder
shall not be liable in any such case to the extent that, prior to the
<PAGE>
filing of any such Registration Statement or Prospectus or amendment
thereof or supplement thereto, such Holder has furnished in writing to the
Company information expressly for use in such Registration Statement or
Prospectus or any amendment thereof or supplement thereto which corrected
or made not misleading information previously furnished to the Company. In
no event shall the liability of any Selling Holder hereunder be greater in
amount than the dollar amount of the proceeds received by such Selling
Holder upon the sale of the Shares giving rise to such indemnification
obligation.
c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder agrees to give prompt written notice
to the indemnifying party after the receipt by such Person of any written
notice of the commencement of any action, suit, proceeding or investigation
or threat thereof made in writing for which such Person will claim
indemnification or contribution pursuant to this Agreement and, unless in
the judgment of counsel of such indemnified party a conflict of interest
may exist between such indemnified party and the indemnifying party with
respect to such claim, permit the indemnifying party to assume the defense
of such claim. Whether or not such defense is assumed by the indemnifying
party, the indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be
unreasonably withheld). No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim
or litigation. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it will not be obligated to pay the fees
and expenses of more than one counsel (plus such local counsel, if any, as
may be reasonably required in other jurisdictions) with respect to such
claim, unless in the judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels. For the purposes of this subsection (c),
the term "conflict of interest" shall mean that there are one or more legal
defenses available to the indemnified party that are different from or
additional to those available to the indemnifying party or such other
indemnified parties, as applicable, which different or additional defenses
make joint representation inappropriate.
d) Contribution. If the indemnification from the
indemnifying party provided for in this Section 7.5 is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among
other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact, has been made by, or relates
to information supplied by, such indemnifying party or indemnified parties,
and the parties' intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by a party
as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations
set forth in subsection (c), any reasonable legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
<PAGE>
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this subsection (d), no
underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, and no Selling Holder shall be required to contribute any amount
in excess of the amount by which the total price at which the Shares of
such Selling Holder were offered to the public exceeds the amount of any
damages which such Selling Holder has otherwise been required to pay by
reason of such untrue statement or omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
'33 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Section 7.6. Transfer or Assignment of Registration Rights. The
rights to cause the Company to register Shares granted pursuant to this
Article may be transferred or assigned by any Holder to a transferee or
assignee of Shares, provided that the transferee or assignee of such rights
shall expressly assume the obligations of a Holder under this Article.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Expenses. Each party to this Agreement shall pay such
party's own costs and expenses incident to the preparation, negotiation and
performance hereof.
Section 8.2. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but, if any provision of this Agreement shall
be prohibited by or invalid under applicable law, then such provision shall
be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
Section 8.3. Parties in Interest. All covenants and agreements
contained in this Agreement by or on behalf of any party hereto shall bind
and inure to the benefit of the respective legal representatives,
successors and assigns of such party whether so expressed or not.
Section 8.4. Notices. All notices, demands and other communications
to be given and delivered under and by reason of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to
the recipient, sent to the recipient by a reputable express courier service
(charges prepaid), mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid, or sent by telecopier. Such
notices, demands and other communications shall be sent to the Company at
2151 Anchor Court, Newbury Park, California 91320 (telecopier number 805-
376-9015), Attention: Richard K. Vitelle, and to the Purchasers at the
addresses (or telecopier numbers) set forth on the Signature Pages hereof
or at such other address (or telecopier number) or to the attention of such
other Person as a recipient party may have specified by prior written
notice to the sending party.
<PAGE>
Section 8.5. No Waiver. No failure to exercise and no delay in
exercising any right, power or privilege granted under this Agreement shall
operate as a waiver of such right, power or privilege. No single or
partial exercise of any right, power or privilege granted under this
Agreement shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided in this Agreement are cumulative and are not exclusive of any
rights or remedies provided by law.
Section 8.6. Amendments and Waivers. Except as herein provided, this
Agreement may be modified or amended only by a writing signed by the
Company and by Purchasers of not less than 75% of the Shares at the time
outstanding.
Section 8.7. Understanding Among the Purchasers. The determination
of each Purchaser to purchase the Shares pursuant to this Agreement has
been made by such Purchaser independent of any other Purchaser and
independent of any statements or opinions as to the advisability of such
purchase or as to the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Company and its
Subsidiaries that may have been made or given by any other Purchaser or by
any agent or employee of any other Purchaser. In addition, it is
acknowledged by each Purchaser that no other Purchaser has acted as an
agent of such Purchaser in connection with making its investment hereunder
and that no other person shall be acting as an agent of such Purchaser in
connection with monitoring its investment hereunder.
Section 8.8. Survival, etc. All representations and warranties
contained in this Agreement or made in writing by or on behalf of the
Company or the Purchasers in connection with the transactions contemplated
by this Agreement shall survive the execution and delivery of this
Agreement, the Closing and any investigation made at any time by or on
behalf of the Company or any Purchaser for a period of two years following
the Closing Date.
Section 8.9. Governing Law. This Agreement shall be governed by, and
considered in accordance with, the laws of the State of Delaware without
regard to principles of conflict of laws.
Section 8.10. Entire Agreement. This Agreement expresses the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements among the parties, or
any of them, in that regard.
Section 8.11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all
of which taken together shall constitute one agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
DDL ELECTRONICS, INC.
By: /s/ Gregory L. Horton
______________________
Name: Gregory L. Horton
Title: President and CEO
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
PAR INVESTMENT PARTNERS, L.P. 1,000,000 $.75 / share
=$750,000
By:/s/ Arthur G. Eyker III
________________________
Name: Arthur G. Eyker, III
Title: Partner of PAR Capital Management, Inc.
which is General Partner of PAR Group, L.P.
which is General Partner of PAR Investment Partners, L.P.
One Financial Center
Suite 1600
Boston, MA 02111
Fax: 617-556-8875
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
A.I.M. OVERSEAS LTD. 250,000 $.75
By:/s/ S. Allen
________________________
Name: S. Allen
Title: Holder of Proxy
c/o LIS s.a.
1-rue Goethe
L-1637 Luxembourg
Attn: Sylvie Allen
Fax: 352-89-75-54
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ Peter D. Fenton 125,000 $.75
___________________________
Peter D. Fenton
7 Worthen Rd
Winchester, Mass 01890
Fax: 617-426-7276
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ Richard Fechtor 150,000 $0.75
___________________________
Richard Fechtor
17 Emily Rd
Framingham MA 01701
Fax:508-620-1149
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ Jeffrey R. Power 125,000 $0.75
___________________________
Jeffrey Power
74 Beach Street
Cohasset, MA 02025
Fax:617-383-1118
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ Sheldon M. Fechtor 100,000 $.75
___________________________
Sheldon M. Fechtor
151 Tremont St. Apt 19E
Boston, MA 02111
Fax:(617) 348-2829
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ Robert Detwiler 125,000 $.75
___________________________
Robert Detwiler
c/o Fechtor, Detwiler & Co, Inc.
155 Federal St
Boston, MA 02110
Fax:617-426-0506
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ John Pemble 75,000 $.75
___________________________
John Pemble
215 Raleigh Tavern Ln
North Andover, MA 01845
Fax:508-689-7858
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ Andrew Detwiler 25,000 $.75
___________________________
Andrew Detwiler
77 Nedgate St
Scituate, MA 02066
Fax:
<PAGE>
Signature Page for Common Stock Purchase Agreement
Name and Address of Purchaser Number of Shares Purchase Price
/s/ Maurice R. Buchsbaum 25,000 $.75
________________________
Maurice R. Buchsbaum
20805 Cipres Way
Boca Raton, Florida 33433
Fax: ____________________
0007049.04
