exv10w7








    Exhibit 10.7



 




    MODIFICATION
    AGREEMENT



 




    DATE:      February
    12, 2008
    



 


	 	 	 	 	 
	

    PARTIES:


	
 
	
    Borrower:
	
 
	
    WHITE ELECTRONIC DESIGNS CORPORATION, 

    an Indiana corporation

	
 
	
 
	
    Bank:
	
 
	
    JPMORGAN CHASE BANK, N.A., as Administrative 

    Agent and Lender









 




    RECITALS:



 



    A. Bank has extended to Borrower credit (“Loan”)
    under that Credit Agreement, dated as of April 3, 2007
    (“Credit Agreement”) in the original principal amount
    of $30,000,000.00 as evidenced by that Note (Revolving Loans)
    dated as of April 3, 2007 (the “Note”). As of
    February 12, 2008, the outstanding principal balance of the
    Loan is $.00. All undefined capitalized terms used herein shall
    have the meaning given them in the Credit Agreement.



 



    B. The Loan is secured by, among other things, the Security
    Documents. The agreements, documents, and instruments securing
    the Loan and the Credit Agreement are referred to individually
    and collectively as the “Security Documents.”



 



    C. Borrower has requested that Bank modify the Loan and the
    Credit Documents as provided herein. Bank is willing to so
    modify the Loan and the Credit Documents, subject to the terms
    and conditions herein.



 




    AGREEMENT:



 



    For good and valuable consideration, the receipt and sufficiency
    of which are hereby acknowledged, Borrower and Bank agree as
    follows:



 



    Section 1.  ACCURACY
    OF RECITALS, ACKNOWLEDGEMENTS.



 



    1.1 Borrower acknowledges the accuracy of the Recitals.



 



    Section 2.  MODIFICATION
    OF CREDIT DOCUMENTS; OTHER AGREEMENTS.



 



    2.1 Section 6.06
    of the Credit Agreement is hereby amended to read as
    follows:



 



    Section 6.06  Restricted
    Payments.  The Borrower will not, and will not
    permit any of its Subsidiaries to, declare or make, or agree to
    pay or make, directly or indirectly, any Restricted Payment,
    except (a) the Borrower may declare and pay dividends with
    respect to its Equity Interests payable solely in additional
    shares of its common stock, (b) Subsidiaries may declare
    and pay dividends ratably with respect to their Equity
    Interests, (c) the Borrower may make Restricted Payments
    pursuant to and in accordance with stock option plans or other
    benefit plans for management or employees of the Borrower and
    its Subsidiaries, (d) the Borrower may purchase, redeem or
    otherwise acquire up to, but no more than, thirty-five percent
    (35%) of its common stock prior to the termination of this
    Agreement, and (e) cash dividends and distributions paid on
    the common stock of Borrower; provided, for purpose of this
    clause (e), that (i) no Default has occurred and is
    continuing at the time such dividend or distribution is paid,
    (ii) the aggregate amount of all such Restricted Payments
    pursuant to this clause (e) made by Borrower in any fiscal
    year does not exceed 50% of Net Income (if greater than $0)
    earned during the immediately preceding fiscal year, and
    (iii) if Restricted Payments made pursuant to this
    clause (e) in any fiscal year are less than permitted in
    such fiscal year, the excess permitted amount for such fiscal
    year may be carried forward to the next succeeding fiscal year.













 






    Section 3.  RATIFICATION
    OF CREDIT DOCUMENTS AND COLLATERAL.



 



    The Credit Documents are ratified and affirmed by Borrower and
    shall remain in full force and effect as modified herein. Any
    property or rights to or interests in property granted as
    security in the Credit Documents shall remain as security for
    the Loan and the obligations of Borrower in the Credit Documents.



 



    Section 4.  BORROWER
    REPRESENTATIONS AND WARRANTIES.



 



    Borrower represents and warrants to Bank:



 



    4.1 No default or event of default under any of the Credit
    Documents as modified herein, nor any event, that, with the
    giving of notice or the passage of time or both, would be a
    default or an event of default under the Credit Documents as
    modified herein has occurred and is continuing.



 



    4.2 There has been no material adverse change in the
    financial condition of Borrower or any other person whose
    financial statement has been delivered to Bank in connection
    with the Loan from the most recent financial statement received
    by Bank.



 



    4.3 Each and all representations and warranties of Borrower
    in the Credit Documents are accurate on the date hereof.



 



    4.4 Borrower has no claims, counterclaims, defenses, or
    set-offs with respect to the Loan or the Credit Documents as
    modified herein.



 



    4.5 The Credit Documents as modified herein are the legal,
    valid, and binding obligation of Borrower, enforceable against
    Borrower in accordance with their terms.



 



    4.6 Borrower is validly existing under the laws of the
    State of its formation or organization and has the requisite
    power and authority to execute and deliver this Agreement and to
    perform the Credit Documents as modified herein. The execution
    and delivery of this Agreement and the performance of the Credit
    Documents as modified herein have been duly authorized by all
    requisite action by or on behalf of Borrower. This Agreement has
    been duly executed and delivered on behalf of Borrower.



 



    Section 5.  BORROWER
    COVENANTS.



 



    Borrower covenants with Bank:



 



    5.1 Borrower shall execute, deliver, and provide to Bank
    such additional agreements, documents, and instruments as
    reasonably required by Bank to effectuate the intent of this
    Agreement.



 



    5.2 Borrower fully, finally, and absolutely and forever
    releases and discharges Bank and its present and former
    directors, shareholders, officers, employees, agents,
    representatives, successors and assigns, and their separate and
    respective heirs, personal representatives, successors and
    assigns, from any and all actions, causes of action, claims,
    debts, damages, demands, liabilities, obligations, and suits, of
    whatever kind or nature, in law or equity of Borrower, whether
    now known or unknown to Borrower, and whether contingent or
    matured, (i) in respect of the Loan, the Credit Documents,
    or the actions or omissions of Bank in respect of the Loan or
    the Credit Documents and (ii) arising from events occurring
    prior to the date of this Agreement.



 



    Section 6.  CONDITIONS.



 



    6.1 The agreements of Bank and the modifications contained
    herein shall not be binding upon Bank until Bank has executed
    and delivered this Agreement and Bank has received, at
    Borrower’s expense, all of the following, all of which
    shall be in form and content satisfactory to Bank and shall be
    subject to approval by Bank:



 



    (a) An original of this Agreement fully executed by the
    Borrower and Guarantors.



 



    (b) Such resolutions or authorizations and such other
    documents as Bank may require relating to the existence and good
    standing of that corporation, partnership or trust, and the
    authority of any person executing this Agreement or other
    documents on behalf of that corporation, limited liability
    company, partnership or trust.




    

    2








 






    (c) Payment of all the internal and external costs and
    expenses incurred by Bank in connection with this Agreement
    (including, without limitation, inside and outside attorneys,
    appraisal, appraisal review, processing, title, filing, and
    recording costs, expenses, and fees).



 



    Section 7.  INTEGRATION,
    ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR
    WAIVER.



 



    The Credit Documents as modified herein contain the complete
    understanding and agreement of Borrower and Bank in respect of
    the Loan and supersede all prior representations, warranties,
    agreements, arrangements, understandings, and negotiations. No
    provision of the Credit Documents as modified herein may be
    changed, discharged, supplemented, terminated, or waived except
    in a writing signed by the parties thereto.



 



    Section 8.  BINDING
    EFFECT.



 



    The Credit Documents as modified herein shall be binding upon
    and shall inure to the benefit of Borrower and Bank and their
    successors and assigns and the executors, legal administrators,
    personal representatives, heirs, devisees, and beneficiaries of
    Borrower, provided, however, Borrower may not assign any of its
    right or delegate any of its obligation under the Credit
    Documents and any purported assignment or delegation shall be
    void.



 



    Section 9.  CHOICE
    OF LAW.



 



    This Agreement shall be governed by and construed in accordance
    with the laws of the State of Arizona, without giving effect to
    conflicts of law principles.



 



    Section 10.  COUNTERPART
    EXECUTION.



 



    This Agreement may be executed in one or more counterparts, each
    of which shall be deemed an original and all of which together
    shall constitute one and the same document. Signature pages may
    be detached from the counterparts and attached to a single copy
    of this Agreement to physically form one document.



 



    DATED as of the date first above stated.



 



    WHITE ELECTRONIC DESIGNS

    CORPORATION, an Indiana corporation



 








    By: /s/  Roger
    A. Derse








    Name: Roger A. Derse




    Title: VP/CFO



 








    BORROWER



 



    JPMORGAN CHASE BANK, N.A., individually 

    and as Administrative Agent



 



    By: /s/  Steve
    P. Reinhart








    Name: Steve P. Reinhart




    Title: Senior Vice President



 








    BANK




    

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