Exhibit 10.1





Exhibit 10.1




AMENDMENT NO. 2 TO AGREEMENT




THIS AMENDMENT No. 2, dated as of November 16, 2009 (“Amendment No. 2”), to the Agreement
dated February 4, 2009 (the “Agreement”), and Amendment No. 1, dated August 13, 2009 (“Amendment
No. 1”), by and among White Electronic Designs Corporation, an Indiana corporation (“WEDC”),
Wynnefield Partners Small Cap Value, L.P. (and its affiliates) (“Wynnefield Partners”), Caiman
Partners, L.P. (“Caiman Partners"), Kahn Capital Management LLC (“Kahn Partners”) and, solely with
respect to Section 8(b) of the Agreement in each of their respective capacities as shareholders,
Jack A. Henry, Paul D. Quadros, Thomas M. Reahard, Thomas J. Toy and Edward A. White (the “Other
Parties”). For purposes of this Amendment No. 2, other than as set forth in Section 3.1 hereof,
Wynnefield Partners and the Other Parties are merely signatories, acknowledging, approving and
affirming this Amendment No. 2 and shall not be deemed to take on further obligations as a result
of this Amendment No. 2. From time to time in this Amendment No. 2, the signatories hereto are
referred to individually as a “Party” and together as the “Parties.”



RECITALS




WHEREAS, Brian Kahn, the Chairman of the Board of Directors (the “Board”) of WEDC, and his
affiliated entities Caiman Partners, Kahn Partners, and other affiliates of Mr. Kahn set forth in
the Schedule 13D (or any amendments thereto) (the “13D”) relating to the common stock of WEDC (the
"Common Stock”) filed with the Securities and Exchange Commission (the “SEC”) by Mr. Kahn and his
affiliated entities (Mr. Kahn, Caiman Partners, Kahn Partners, and the other affiliates of Mr. Kahn
set forth in the 13D are collectively referred to as, the “Kahn Entities”), may currently be deemed
to beneficially own (as determined under Rule 13d-3 promulgated under the Exchange Act) shares of
Common Stock totaling, in the aggregate, 4,438,647 shares, or approximately 19.35% of the Common
Stock issued and outstanding (based upon 22,940,196 shares of Common Stock issued and outstanding
as of August 7, 2009, as reported in WEDC’s most recent Quarterly Report on Form 10-Q, filed with
the SEC on August 12, 2009); and



WHEREAS, the Parties hereto have agreed to enter into this Amendment No. 2 to the Agreement to
provide for the acquisition by the Kahn Entities of Common Stock, wherein, the Kahn Entities may
purchase or acquire shares of Common Stock until such time as the Kahn Entities would, in the
aggregate, collectively beneficially own (after aggregating all their ownership, other than
equity-based grants to Mr. Kahn as a result of Board service) up to thirty-five percent (35%) of
the issued and outstanding shares of Common Stock, excluding equity-based grants to Mr. Kahn as a
result of Board service (the “Maximum Threshold”), as of the date of such purchase or acquisition,
based upon the number of shares of Common Stock issued and outstanding as set forth in the most
recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed by WEDC with the SEC prior
to the date of such purchase or acquisition, in exchange for certain additional obligations set
forth herein.



NOW, THEREFORE, in consideration of the foregoing, the mutual promises contained herein, and
other good and valuable consideration, the sufficiency of which is hereby acknowledged, intending
to be legally bound hereby, the parties agree as follows:



Section 1.1. Capitalized terms used but not otherwise defined herein have the meanings
assigned thereto in the Agreement.


 


 









 





Section 1.2. As of the date of this Amendment No. 2, Amendment No. 1 is hereby terminated and
shall be of no further force or effect.



Section 1.3. The Kahn Entities represent and warrant to WEDC that as of the date hereof (a)
this Amendment No. 2 has been duly authorized, executed and delivered by Caiman Partners and Kahn
Partners, and is a valid and binding obligation of Caiman Partners and Kahn Partners, enforceable
against Caiman Partners and Kahn Partners in accordance with its terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws generally affecting the rights of creditors and subject to general
equity principles; (b) neither the execution of this Amendment No. 2 nor the consummation of any of
the transactions contemplated hereby nor the fulfillment of the terms hereof, in each case in
accordance with the terms hereof, will conflict with, result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets of Caiman Partners or Kahn Partners
or any of their subsidiaries pursuant to any law, any order of any court or other agency of
government, the organizational documents of Caiman Partners or Kahn Partners as currently in
effect, or the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or instrument to which Caiman
Partners or Kahn Partners is a party or bound or to which its or their property or assets is
subject; (c) as of the date of this Amendment No. 2, the Kahn Entities may be deemed to
beneficially own (as determined under Rule 13d-3 promulgated under the Exchange Act), in the
aggregate, 4,438,647 shares of Common Stock; and (d) the Kahn Entities 13D filed with the SEC is
materially correct as to the SEC form and presents a fair and accurate description, in all material
respects, of the relationship and affiliations of such entities as they apply to the ownership of
the Common Stock.



Section 1.4. WEDC hereby represents and warrants to the Kahn Entities that (a) this Amendment
No. 2 has been duly authorized, executed and delivered by WEDC, and is a valid and binding
obligation of WEDC, enforceable against WEDC in accordance with its terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws generally affecting the rights of creditors and subject to general
equity principles; (b) neither the execution of this Amendment No. 2 nor the consummation of any of
the transactions contemplated hereby nor the fulfillment of the terms hereof, in each case in
accordance with the terms hereof, will conflict with, result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets of WEDC or any of its subsidiaries
pursuant to any law, any order of any court or other agency of government, WEDC’s Restated Articles
of Incorporation, Amended and Restated Bylaws, or the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which WEDC is a party or bound or to which its property or assets is
subject nor trigger any “change of control” provisions in any agreement to which WEDC is a party.




Section 2.1. Section 6(b) of the Agreement is amended and restated in its entirety as follows:



"(i) cause Wynnefield Partners to purchase or otherwise acquire or agree to acquire beneficial
ownership (as determined under Rule 13d-3 promulgated under the Exchange Act) of any Common Stock
or other securities issued by WEDC, if in any such case, immediately after the taking of such
action, Wynnefield Partners would, in the aggregate, beneficially own more than 9.9% of the then
outstanding shares of Common Stock, or (ii) cause the Kahn Entities to purchase or otherwise
acquire beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act)


 


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of any Common Stock or other securities issued by WEDC, if in any such case, immediately after
the taking of such action, the Kahn Entities would, in the aggregate, collectively beneficially own
(as determined under Rule 13d-3 promulgated under the Exchange Act) more than the Maximum
Threshold, as of the date of such purchase or acquisition, based upon the number of shares of
Common Stock issued and outstanding as set forth in the most recent Quarterly Report on Form 10-Q
or Annual Report on Form 10-K filed by WEDC with the SEC prior to the date of such purchase or
acquisition.”



Section 2.2. Notwithstanding anything to the contrary in the Agreement, the Kahn Entities
hereby also agree to comply with all of the obligations in clause (a), (c), (d), (e), (f), (g),
(h), (i), (j), and (k) of Section 6 until the termination date set forth in Section 2.4 of this
Amendment No. 2.



Section 2.3. The Kahn Entities hereby agree that their obligations in Section 7 of the
Agreement are hereby extended to include WEDC 2010 annual shareholders’ meeting so that the Kahn
Entities agree to vote all shares of Common Stock beneficially owned by them for each of WEDC’s
nominees for election to the Board, as proposed by WEDC’s Corporate Governance and Nominating
Committee and approved by the Board. In addition, from the date hereof until the termination date
set forth in Section 2.4 of this Amendment No. 2, the Kahn Entities shall, and shall cause their
respective officers, directors, employees, representatives and agents to, vote any shares of Common
Stock beneficially owned by them in connection with any matter or proposal submitted to a vote of
WEDC’s shareholders as recommended by a majority of the members of the Board.



Section 2.4. Notwithstanding the termination provisions of Section 9 of the Agreement, the
Kahn Entities’ obligations under this Amendment No. 2 shall continue until two business days
following the 2010 WEDC annual meeting of shareholders.



Section 2.5. Notwithstanding Section 2.4 above, until the later of (i) the end of Mr. Kahn’s
service on the Board, or (ii) two business days following the 2010 WEDC annual meeting of
shareholders, the Kahn Entities shall not, and shall cause their respective officers, directors,
employees, representatives and agents not to, in any manner, directly or indirectly, form, join or
in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act)
with respect to the Common Stock (other than a group comprised solely of the Kahn Entities), or
seek, alone or in concert with others, (1) to acquire substantially all the assets of WEDC without
approval from the Board, (2) to acquire shares of the Common Stock in excess of the Maximum
Threshold, as of the date of such acquisition (based upon the number of shares of Common Stock
issued and outstanding as set forth in the most recent Quarterly Report on Form 10-Q or Annual
Report on Form 10-K filed by WEDC with the SEC prior to the date of such acquisition), without
approval from the Board, (3) for so long as shares of the Common Stock are listed on the NASDAQ
Global Market or any other publicly-traded exchange (each, an “Exchange”), to sell shares of Common
Stock in a privately negotiated transaction not open to other shareholders of WEDC at a price
greater than the average closing price of the Common Stock as reported by the applicable Exchange
over the five (5) day trading period immediately preceding the date of such sale, without approval
from the Board, or (4) take or seek to take, or cause or seek to cause others to take, directly or
indirectly, any action inconsistent with the actions identified in items (1), (2), and (3) of this
sentence without approval from the Board.


 


3









 





Section 3.1. WEDC and the Kahn Entities may disclose the existence of this Amendment No. 2
after its execution pursuant to mutual agreement of WEDC and the Kahn Entities and no Party
hereunder shall make any other public release(s) regarding the matters hereof. Notwithstanding the foregoing, (i) WEDC may file a Current Report on Form 8-K with the Securities Exchange
Commission disclosing any information with respect to this Amendment No. 2 reasonably required
under such form, and (ii) the Kahn Entities may file an Amendment to the 13D with the SEC
disclosing any information with respect to this Amendment No. 2 reasonably required under such form
and may attach this Amendment No. 2 as an Exhibit to such Amendment to the 13D. The Kahn Entities
hereto agree that they shall continue to comply with the obligations set forth in the last sentence
of Section 10 of the Agreement until two business days following the 2010 WEDC annual meeting of
shareholders.



Section 3.2. Except as specifically amended pursuant to the terms of this Amendment No. 2, the
terms and provisions of the Agreement shall remain in full force and effect.



Section 3.3. This Amendment No. 2 may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.



[signatures on following page]



 


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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be executed by
their duly authorized representatives as of the day and year first written above.



	 	 	 	 	 	 	 	 	 
	White Electronic Designs Corporation	 	 	 	Wynnefield Partners Small Cap Value, L.P.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gerald R. Dinkel
	 	 	 	By:
	 	/s/ Nelson Obus
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Gerald R. Dinkel
	 	 	 	 	 	Its: General Partner
	Title:

	 	President and Chief Executive Officer	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Caiman Partners, L.P.	 	 	 	Kahn Capital Management LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Brian R. Kahn
	 	 	 	By:
	 	/s/ Brian R. Kahn
	 

	 	 
	 	 	 	 	 	 
	Its:

	 	General Partner
	 	 	 	Its:
	 	Manager
	 
	 	 	 	 	 	 	 	 






Other Parties:



	 	 	 
	 
	 	 
	/s/ Paul D. Quadros

	 	/s/ Jack A. Henry
	 

	 	 
	Paul D. Quadros, a shareholder

	 	Jack A. Henry, a shareholder
	 
	 	 
	/s/ Thomas M. Reahard

	 	/s/ Thomas J. Toy
	 

	 	 
	Thomas M. Reahard, a shareholder

	 	Thomas J. Toy, a shareholder
	 
	 	 
	/s/ Edward A. White
 


	 	 
	Edward A. White, a shareholder
	 	 






SIGNATURE PAGE TO AMENDMENT

NO. 2