MODIFICATION AGREEMENT
Exhibit 10.7
DATE: February
12, 2008
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PARTIES:
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Borrower: |
WHITE ELECTRONIC DESIGNS CORPORATION, an Indiana corporation |
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| 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.
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(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
CORPORATION, an Indiana corporation
By:
/s/ Xxxxx
X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: VP/CFO
BORROWER
JPMORGAN CHASE BANK, N.A., individually
and as Administrative Agent
and as Administrative Agent
By:
/s/ Xxxxx
X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
BANK
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