Exhibit 10.1

AMENDMENT NO. 5 TO AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT

This AMENDMENT NO. 5 TO AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT (this
“Amendment No. 5”) dated as of May 3, 2018 (the “Amendment No. 5 Effective
Date”), is by and among SPARTON CORPORATION, an Ohio corporation (“Borrower”),
the other Loan Parties, the Lenders from time to time a party to the Credit
Agreement referred to below, and BMO HARRIS BANK, N.A., as Administrative Agent
(in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Administrative Agent, the Lenders, the Borrower and the other Loan
Parties are parties to that certain Amended and Restated Credit and Guaranty
Agreement, dated as of September 11, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, the Loan Parties have requested that the Administrative Agent and the
Lenders amend certain provisions of the Credit Agreement as set forth herein,
and the Administrative Agent and the Lenders have agreed to the requests on the
terms and subject to satisfaction of the conditions contained herein; and

WHEREAS, this Amendment No. 5 shall constitute a Loan Document, these Recitals
shall be construed as part of this Amendment No. 5 and capitalized terms used
but not otherwise defined in this Amendment No. 5 shall have the meanings
ascribed to them in the Credit Agreement.

NOW, THEREFORE, for and in consideration of the premises and mutual agreements
herein contained and for the purposes of setting forth the terms and conditions
of this Amendment No. 5, the parties, intending to be bound, hereby agree as
follows:

SECTION 1. Amendments. Subject to the satisfaction of the conditions set forth
in Section 3 of this Amendment No. 5, and in reliance on the representations and
warranties set forth in Section 5 of this Amendment No. 5, the Loan Parties, the
Administrative Agent and the Required Lenders hereby agree to amend the Credit
Agreement as of the Amendment No. 5 Effective Date as follows:

(a) Section 1.3 (Letters of Credit). The last sentence of subsection (b) of
Section 1.3 of the Credit Agreement is hereby amended and restated in its
entirety as follows:

“Notwithstanding the foregoing, the LC Issuer may issue one or more Letters of
Credit in U.S. Dollars with an expiration date which is later than the date
otherwise permitted by this Section 1.3 but not later than the third anniversary
of the scheduled Revolving Credit Termination Date (“Exception Letter of
Credit”); provided that (a) the aggregate outstanding amount of the L/C
Obligations with respect to all Exception Letters of Credit shall not at any
time exceed Two Million Five Hundred Thousand Dollars ($2,500,000) and
(b) Borrowers shall Cash Collateralize all Exception Letters of Credit on or
prior to the Revolving Credit Termination Date (or such earlier date as may be
requested by the LC Issuer or the Administrative Agent during the existence of
an Event of Default).”

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(b) Section 5.1 (Definitions – Amended and Restated). Section 5.1 of the Credit
Agreement is hereby amended by amending and restating the following definitions:

“Alternative Currency Sublimit”: $0.00.

“Applicable Margin” means, with respect to Loans, Reimbursement Obligations, and
the commitment fees and letter of credit fees payable under Section 2.1 hereof,
until the Pricing Date with respect to the last day of Parent’s fiscal quarter
March 2018, the rates per annum shown opposite Level II below, and thereafter
from one Pricing Date to the next the Applicable Margin means the rates per
annum determined in accordance with the following schedule:

 

LEVEL    TOTAL FUNDED
DEBT/EBITDA RATIO
FOR SUCH PRICING
DATE    APPLICABLE
MARGIN FOR BASE
RATE LOANS
UNDER REVOLVING
CREDIT AND
REIMBURSEMENT
OBLIGATIONS
SHALL BE:     APPLICABLE
MARGIN FOR
EUROCURRENCY
LOANS UNDER
REVOLVING CREDIT
AND LETTER OF
CREDIT FEE SHALL
BE:     APPLICABLE MARGIN
FOR COMMITMENT FEE
SHALL BE:  

II

   Greater than or equal
to 3.00 to 1.00      3.50 %      4.50 %      .50 % 

I

   Less than 3.00 to
1.00      2.50 %      3.50 %      .50 % 

For purposes hereof, the term “Pricing Date” means, for any measurement period
of the Borrowers ending on or after the last day of Parent’s fiscal quarter
March 2018, the date on which the Administrative Agent is in receipt of the
Borrowers’ most recent financial statements (and, in the case of the year-end
financial statements, audit report) for the fiscal quarter then ended, pursuant
to Section 8.5 hereof. The Applicable Margin shall be established based on the
Total Funded Debt/EBITDA Ratio for the most recently completed fiscal quarter
and the Applicable Margin established on a Pricing Date shall remain in effect
until the next Pricing Date. If the Borrowers have not delivered their financial
statements by the date such financial statements (and, in the case of the
year-end financial statements, audit report) are required to be delivered under
Section 8.5 hereof, until such financial statements and audit report are
delivered, the Applicable Margin shall be the highest Applicable Margin (i.e.,
Level II shall apply). If the Borrowers subsequently deliver such financial
statements before the next Pricing Date, the Applicable Margin established by
such late delivered financial statements shall take effect from the date of
delivery until the next Pricing Date. In all other circumstances, the Applicable
Margin established by such financial statements shall be in effect from the
Pricing Date that occurs immediately after the end of the fiscal quarter covered
by such financial statements until the next Pricing Date. Each determination of
the Applicable Margin made by the Administrative Agent in accordance with the
foregoing shall be conclusive and binding on the Borrowers and the Lenders if
reasonably determined.

 

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“EBITDA” means, with reference to any period, Net Income for such period, plus

(a) without duplication, the sum of all amounts deducted in arriving at such Net
Income amount in respect of (i) Interest Expense for such period, (ii) federal,
state, and local income taxes for such period, (iii) depreciation of fixed
assets and amortization of intangible assets for such period, (iv) non-recurring
fees, costs and expenses related to this Agreement and the other Loan Documents,
including, without limitation, with respect to amendments of the Loan Documents,
(v) reserved, (vi) non-cash compensation expense, or other non-cash expenses or
charges, for such period arising from the granting of stock options, stock
appreciation rights or similar equity arrangements, (vii) non-cash expenses or
losses resulting from any adjustment of Earn-Out Obligations in accordance with
GAAP, (viii) non-cash expenses or losses and other non-cash charges incurred
during such period (excluding any non-cash charges representing an accrual of,
or reserve for, cash charges to be paid within the next twelve months),
(ix) cash losses or other cash expenses from restructuring charges, discontinued
operations, and sales of assets (other than inventory sold in the ordinary
course of business) including proposed sales that are not consummated (including
the proposed sale to Ultra Electronics that was not consummated) in an aggregate
amount not to exceed 15% of the LTM EBITDA (calculated without giving effect to
the EBITDA Limited Addbacks); provided that, solely with respect to quarter
ending June 2018, the addback permitted by this clause (ix) shall not exceed
$5,500,000, and (x) extraordinary losses, plus

(b) without duplication, the amount of the “run rate” cost savings, operating
expense reductions and synergies projected by the Borrower Representative in
good faith to be realized in connection with, (i) any restructuring of Parent or
any of its Subsidiaries not in the ordinary course of business, or (ii) any
Disposition of a product line or facility used for operations of the Parent or
any of its Subsidiaries, in each case, that are projected by the Borrower
Representative in good faith to result from actions either taken or planned to
be taken no later than 12 months after the consummation of such transaction
(which cost savings, operating expense reductions and synergies projected to
result from any such action shall be added to EBITDA for any measurement period
ending not more than 12 months after such action is taken as though such cost
savings, operating expense reductions and synergies had been realized on the
first day of the relevant measurement period), net of the amount of actual
benefits realized from such actions; provided that (A) such cost savings,
operating expenses or synergies are factually supportable and quantifiable, and
substantiated by a quality of earnings/due diligence report provided by a third
party of national standing, (B) no cost savings, operating expense reductions or
synergies shall be added pursuant to this paragraph (b) to the extent
duplicative of any expenses or charges or other amounts included in EBITDA
pursuant to paragraph (a) of this definition or the pro forma adjustments
included in EBITDA pursuant to the definition of Pro Forma Basis, and (C) the
aggregate amount of cost savings, operating expense reductions or synergies
added pursuant to this paragraph (b) shall not exceed 5% of LTM EBITDA
(calculated without giving effect to the EBITDA Limited Addbacks) for such
measurement period, less

 

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(c) without duplication, the sum all amounts included in arriving at such Net
Income amount in respect of (i) extraordinary gains, (ii) gains or income from
discontinued operations (iii) gains from the sale of assets (other than
inventory sold in the ordinary course of business), and (iv) non-cash gains or
non-cash items of income during such period including, without limitation,
non-cash gains resulting from adjustments of Earn Out Obligations in accordance
with GAAP, all as determined for Parent and its Subsidiaries on a consolidated
basis in accordance with GAAP. For any period that includes a Disposition,
EBITDA shall be prepared on a Pro Forma Basis.

“Pro Forma Basis” means, for purposes of calculating any financial covenant
(including for purposes of determining the Applicable Margin), that any
Disposition permitted by Sections 8.10(c), 8.10(d), or 8.10(i), any incurrence
of Indebtedness, any Restricted Payment or payment of Subordinated Debt, as
applicable, shall be deemed to have occurred as of the first day of the four
(4) fiscal quarter period most recently ended prior to the date of such
transaction for which the Borrower Representative has delivered financial
statements pursuant to Section 8.5(a) or Section 8.5(b). With respect to any
such Disposition, (i) income statement and cash flow statement items (whether
positive or negative) attributable to the property disposed of shall be excluded
to the extent relating to any period occurring prior to the date of such
transaction and (ii) Indebtedness which is retired shall be excluded and deemed
to have been retired as of the first day of the applicable period.

“Revolving Credit Commitment” means, as to any Lender, the obligation of such
Lender to make Revolving Loans and to participate in Swing Loans and Letters of
Credit issued for the account of the Borrowers hereunder in an aggregate
principal or face amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 1 attached hereto and made a
part hereof, as the same may be reduced or modified at any time or from time to
time pursuant to the terms hereof. The Borrowers and the Lenders acknowledge and
agree that the Revolving Credit Commitments of the Lenders aggregate
$120,000,000 on the Amendment No. 5 Effective Date.

(c) Section 5.1 (Definitions - New). Section 5.1 of the Credit Agreement is
hereby amended by adding the following new definitions to such Section in their
alphabetically correct order:

“Amendment No. 5” means Amendment No. 5 to Amended and Restated Credit and
Guaranty Agreement dated as of April 3, 2018, among Borrowers, the other Loan
Parties, Administrative Agent and the Lenders.

“Amendment No. 5 Effective Date” means the date of Amendment No. 5.

“Exception Letter of Credit” is defined in Section 1.3(b) hereof.

“Restructuring Consultant” is defined in Section 8.27 hereof.

“Restructuring Trigger Event” is defined in Section 8.27 hereof.

 

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“Sale Transaction” means any sale of Parent and its Subsidiaries or the sale of
all or substantially all of the assets of Parent and its Subsidiaries, whether
such sale is structured as a sale of stock, a sale of assets, a merger or
otherwise.

(d) Section 6.4 (Use of Proceeds). The first Sentence of Section 6.4 of the
Credit Agreement is hereby amended and restated in its entirety as follows:

“The Borrowers shall use the proceeds of the Revolving Credit to refinance
existing indebtedness, to finance Capital Expenditures, to pay for fees and
expenses associated with the closing of this Agreement and the foregoing
transactions, for general working capital purposes and for other business
purposes; provided that such purposes are consistent with applicable Legal
Requirements.”

(e) Section 8.5 (Financial Reports).

(i) Subsection (h) of Section 8.5 of the Credit Agreement is hereby amended and
restated in its entirety as follows:

“(h) as soon as available, and in any event no later than 30 days after the last
day of each fiscal month (except, with respect to the last day of a fiscal
quarter, no later than 40 days after the end of such fiscal quarter) of each
fiscal year of the Parent, (i) a copy of the consolidated balance sheet of the
Parent and its Subsidiaries as of the last day of such fiscal month and the
consolidated statements of income, retained earnings, and cash flows of the
Parent and its Subsidiaries for the fiscal month and for the fiscal year-to-date
period then ended, each in reasonable detail showing in comparative form the
figures for the corresponding date and period in the previous fiscal year,
prepared by the Borrowers in accordance with GAAP (subject to the absence of
footnote disclosures and year-end audit adjustments) and (ii) commencing with
the fiscal month ending April 2018, a management discussion of the monthly
operating results in form, substance and detail reasonably acceptable to
Administrative Agent, in each case, certified to by its chief financial officer
or another officer of the Borrower Representative acceptable to the
Administrative Agent;”

(ii) Section 8.5 of the Credit Agreement is hereby amended by adding a new
subsection (k) thereto as follows:

“(k) (i) as soon as available, and in any event no later than 30 days after the
last day of each fiscal month of each fiscal year of the Parent, commencing with
fiscal month April 2018, a thirteen (13)-week rolling cash flow forecast for the
Parent and its Subsidiaries, which shall reflect on a line-item basis,
anticipated cash receipts and disbursements on a weekly basis for each week of
such forecast and (ii) as soon as available, and in any event no later than
30 days after the last day of each fiscal month of each fiscal year of the
Parent, commencing with fiscal month

 

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May 2018, a variance report setting forth material variances in cash receipts or
disbursements from the forecasted cash receipts and disbursements as set forth
in immediately preceding thirteen (13)-week rolling case flow forecast delivered
pursuant to clause (i) above, in each case, in form, substance and detail
reasonably acceptable to Administrative Agent.”

(f) Section 8.12 (Dividends and Certain Other Restricted Payments). Section 8.12
of the Credit Agreement is hereby amended and restated in its entirety as
follows:

“Section 8.12 Dividends and Certain Other Restricted Payments. No Loan Party
shall, nor shall any Loan Party permit any Subsidiary to, (a) declare or pay any
dividends on or make any other distributions in respect of any class or series
of its capital stock or other equity interests (other than dividends or
distributions payable solely in its capital stock or other equity interests), or
(b) directly or indirectly purchase, redeem, or otherwise acquire or retire any
of its capital stock or other equity interests or any warrants, options, or
similar instruments to acquire the same (the dividends, distributions,
purchases, redemptions and other payments restricted by this Section 8.12,
collectively, “Restricted Payments”); provided that, that the foregoing shall
not operate to prevent (i) the making of dividends or distributions by any
Subsidiary to any Loan Party or by any Subsidiary that is not a Loan Party to
any other Subsidiary that is not a Loan Party, or (ii) to pay any appraisal
claims made by dissenting shareholders of the Parent in accordance with
Chapter 1701 of the Ohio Revised Code with respect to a Sale Transaction in the
aggregate amount of up to $500,000.”

(g) Section 8.23 (Financial Covenants).

(i) Section 8.23(a) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

“(a) Total Funded Debt/EBITDA Ratio. As of the last day of each of the following
fiscal quarters of Parent, the Loan Parties shall not permit the Total Funded
Debt/EBITDA Ratio to be greater than the respective following amounts set forth
opposite such fiscal quarters:

 

Fiscal Quarter End

   Total Funded Debt/
EBITDA Ratio  

March 2018

     4.50: 1.00  

June 2018

     4.50: 1.00  

September 2018 and each fiscal quarter thereafter

     3.00: 1.00  

 

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(ii) Section 8.23(c) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

“(c) Minimum EBITDA. As of the last day of each of the following fiscal quarters
of the Parent, the Loan Parties shall not permit EBITDA for the period of four
fiscal quarters then ended to be less than the following:

 

Fiscal Quarter End

   Minimum EBITDA  

March 2018

   $ 21,400,000  

June 2018

   $ 20,000,000  

(h) Section 8.27 (Restructuring Consultant). The Credit Agreement is hereby
amended by adding a new Section 8.27 thereto as follows:

“Section 8.27 Restructuring Consultant. Parent has informed the Administrative
Agent and the Lenders that it intends to enter into a process to explore a Sale
Transaction. If (a) the Parent has not entered into a definitive agreement by
May 31, 2018 (or such later date as the Required Lenders permit in writing in
their sole discretion) with respect to a Sale Transaction, (b) the sale process
with respect to such Sale Transaction is terminated prior to May 31, 2018 (or
such later date as the Required Lenders permit in writing in their sole
discretion) or (c) the Parent has entered into a definitive agreement by May 31,
2018 (or such later date as the Required Lenders permit in writing in their sole
discretion) with respect to a Sale Transaction, and the definitive agreement is
later terminated (the events described in the foregoing clause (a)-(c), each, a
“Restructuring Trigger Event”), then within fifteen (15) days after the
occurrence of such Restructuring Trigger Event, the Parent shall engage, at its
own expense, a restructuring consultant acceptable to Administrative Agent (a
“Restructuring Consultant”), on terms and conditions acceptable to
Administrative Agent. In the event a Restructuring Consultant is required to be
engaged pursuant to this Section 8.27, Parent shall cause the Restructuring
Consultant to prepare and provide to Administrative Agent the Restructuring
Consultant’s initial report by no later than sixty (60) days after the date the
Restructuring Consultant was required to be engaged pursuant to this
Section 8.27 (or such later date as the Required Lenders permit in writing in
their sole discretion), and shall ensure Administrative Agent has reasonable
access to the Restructuring Consultant and its work and that such Restructuring
Consultant cooperates fully with Administrative Agent.”

(i) Exhibit E (Compliance Certificate). Schedule I to Exhibit E of the Credit
Agreement is hereby amended and restated in its entirety to read as set forth on
Annex A attached hereto.

(j) Schedule I (Commitments). Schedule I of the Credit Agreement is hereby
amended and restated in its entirety, to read as set forth on Annex B attached
hereto.

SECTION 2. Waiver of Event of Default. Subject to the satisfaction of the
conditions set forth in Section 3 of this Amendment No. 5, and in reliance on
the representations and warranties set forth in Section 4 of this Amendment
No. 5, the Required Lenders hereby waive any Event of Default that may have
occurred solely as a result of the Loan Parties’ failure to comply with
Section 8.23(a) of the Credit Agreement as in effect prior to the effectiveness
of this Amendment No. 5 solely with respect to the test period ending on the
last day of Parent’s fiscal quarter March 2018 (the “Subject Default”). The
Required Lenders’ waiver of the Subject Default shall not be deemed to be a
waiver of any other existing or hereafter arising Event of Default or any other
deviation from the express terms of the Credit Agreement including any further
breach of Section 8.23(a) of the Credit Agreement.

 

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SECTION 3. Conditions of Effectiveness. This Amendment No. 5 shall become
effective on the Amendment No. 4 Effective Date, but only upon receipt by the
Administrative Agent of the following:

(a) one or more counterparts of this Amendment No. 5 executed by the Loan
Parties, Swing Line Lender, L/C Issuer, the Administrative Agent and the
Required Lenders;

(b) receipt of any other deliveries set forth on the closing document checklist
delivered to the Borrower Representative prior to the date of this Amendment
No. 5; and

(c) Borrowers shall have paid the fees referred to Section 5(a)(i) of this
Amendment.

SECTION 4. Representations and Warranties. Each Loan Party represents and
warrants to the Administrative Agent and the Lenders that:

(a) (i) such Loan Party has all necessary power and authority to execute and
deliver this Amendment No. 5 and to perform its obligations hereunder, (ii) this
Amendment No. 5 has been duly authorized by all requisite corporate or limited
liability company action, as applicable, and constitutes the legal, valid and
binding obligations of such Loan Party and is enforceable against such Loan
Party in accordance with its terms, except as such enforceability may be limited
by applicable solvency, bankruptcy, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and applicable equitable principles
(whether considered in a proceeding at law or in equity), and (iii) neither the
execution, delivery or performance by such Loan Party of this Amendment No. 5
(A) violates any material provision of any law or regulation applicable to such
Loan Party, or any other decree of any governmental body, (B) conflicts with or
results in the breach or termination of, constitutes a default under or
accelerates any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which any Loan Party or Subsidiary is a
party or by which such Person or any of its property is bound, (C) results in
the creation or imposition of any Lien (other than Liens permitted pursuant to
Section 8.8 of the Credit Agreement) upon any Property of such Loan Party,
(D) violates or conflicts with the articles of incorporation (or articles of
formation), bylaws (or operating agreement), or other organizational documents,
as applicable, of such Loan Party, or (E) requires the consent, approval or
authorization of, or declaration or filing with, any other Person, except for
those already duly obtained;

(b) after giving effect to this Amendment No. 5, no Default or Event of Default
shall have occurred or be continuing as of the date hereof; and

(c) after giving effect to this Amendment No. 5 and the transactions
contemplated hereby, the representations and warranties of the Loan Parties
contained in the Credit Agreement and other Loan Documents are true and correct
on and as of date hereof to the same extent as though made on and as of such
date except to the extent such representations and warranties specifically
relate to an earlier date, in which case each such representation or warranty
shall have been true and correct on and as of such earlier date.

 

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SECTION 5. Reference to, and Effect on, Loan Documents.

(a) Fees and Expenses.

(i) Fees. On the Amendment No. 5 Effective Date, Borrowers shall pay to
Administrative Agent, for the account of the Qualifying Lenders (as hereinafter
defined) (including BMO Harris), in good and immediately available funds, in
amount equal to 0.50% of each Qualifying Lender’s Revolving Credit Commitment as
set forth on Annex B to this Amendment No. 5. “Qualifying Lender” means a Lender
who has, on or before 3:00 p.m. Central Standard Time on April 3, 2018,
(x) confirmed to Administrative Agent in writing that such Lender has obtained
all approvals necessary for such Lender to execute and deliver this Amendment
No. 5, and (y) delivered to Administrative Agent such Lender’s signature page to
this Amendment No. 5 duly executed by such Lender. Lenders who are not
Qualifying Lenders shall not be entitled to any amendment fee or other fee with
respect to this Amendment No. 5. In addition, Borrowers shall pay the fees set
forth in the fee letter dated as of the Amendment No. 5 Effective Date among
Borrower Representative, the Administrative Agent and the other parties named
therein to the Administrative Agent for its own account.

(ii) Expenses. The Borrower agrees to pay, on demand, in accordance with
Section 13.15 of the Credit Agreement, all costs and expenses of, or incurred
by, the Administrative Agent, including but not limited to reasonable attorneys’
fees and costs in connection with the preparation, execution and delivery of
this Amendment No. 5.

(b) Ratification of Loan Documents. Except as specifically amended above, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect. Notwithstanding anything contained herein, the terms of this Amendment
No. 5 are not intended to and do not effect a novation of the Credit Agreement
or any other Loan Document. Each of the Loan Parties hereby ratifies and
reaffirms each of the terms and conditions of the Loan Documents to which it is
a party and all of its obligations thereunder.

(c) No Waiver. Except as expressly set forth in this Amendment No. 5, the
execution, delivery and effectiveness of this Amendment No. 5 shall not operate
as a waiver of any Default or Event of Default whether now existing or hereafter
arising or of any right, power or remedy of the Administrative Agent or the
Lenders under the Credit Agreement, under any of the other Loan Documents or
under applicable law.

(d) References. Upon the effectiveness of this Amendment No. 5, each reference
in (i) the Credit Agreement to “this Agreement,” “this Credit Agreement,”
“hereunder,” “hereof” or words of similar import and (ii) any other Loan
Document to “the Credit Agreement” or words of similar import shall, in each
case and except as otherwise specifically stated therein, mean and be a
reference to the Credit Agreement as amended hereby. Upon the effectiveness of
this Amendment No. 5, each reference to the Loan Documents in the Credit
Agreement shall include this Amendment No. 5.

 

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SECTION 6. Miscellaneous.

(a) Successors and Assigns. This Amendment No. 5 shall be binding on the Loan
Parties and shall inure to the benefit of the Administrative Agent and the
Lenders and their respective successors and assigns.

(b) Entire Agreement. This Amendment No. 5 constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
other understandings, oral or written, with respect to the subject matter
hereof.

(c) Headings. Section headings in this Amendment No. 5 are included herein for
convenience of reference only and shall not constitute a part of this Amendment
No. 5 for any other purpose.

(d) Severability. Wherever possible, each provision of this Amendment No. 5
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Amendment No. 5 shall be prohibited
by or invalid under applicable law, 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 Amendment No. 5.

(e) Counterparts. This Amendment No. 5 may be executed in any number of separate
original counterparts and by the different parties on separate counterparts,
each of which shall be deemed to be an original, but all of such counterparts
shall together constitute one agreement. Delivery of an executed counterpart of
a signature page to this Amendment No. 5 by facsimile, “pdf” or other form of
electronic delivery shall be effective as delivery of a manually executed
counterpart of this Amendment No. 5.

(Signature Pages Follow)

 

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have duly
executed this Amendment No. 5 to Amended and Restated Credit and Guaranty
Agreement as of the date first above written.

 

BORROWER:     SPARTON CORPORATION, an Ohio corporation     By:   /s/ Joseph G.
McCormack       Joseph G. McCormack       Senior Vice President and Chief
Financial Officer

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

GUARANTORS:     SPARTRONICS, INC., a Michigan corporation     By:   /s/ Joseph
G. McCormack
      Joseph G. McCormack
      Vice President, Secretary and Treasurer     SPARTON TECHNOLOGY, INC., a
New Mexico corporation     By:   /s/ Joseph G. McCormack
      Joseph G. McCormack       Vice President, Secretary and Treasurer    
SPARTON DELEON SPRINGS, LLC, a Florida limited liability company     By:   /s/
Joseph G. McCormack
      Joseph G. McCormack
      Vice President and Secretary     SPARTON MEDICAL SYSTEMS, INC., a Michigan
corporation     By:   /s/ Joseph G. McCormack       Joseph G. McCormack      
Vice President, Secretary and Treasurer

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

GUARANTORS:     SPARTON MEDICAL SYSTEMS COLORADO, LLC, a Colorado limited
liability company     By:   /s/ Joseph G. McCormack       Joseph G. McCormack  
    Vice President and Secretary     SPARTON BP MEDICAL DENVER, LLC, a Delaware
limited liability company     By:   /s/ Joseph G. McCormack       Joseph G.
McCormack       Vice President and Secretary     SPARTON ONYX HOLDINGS, LLC, a
Delaware limited liability company     By:   /s/ Joseph G. McCormack      
Joseph G. McCormack       Vice President and Secretary     SPARTON ONYX, LLC, a
South Dakota limited liability company     By:   /s/ Joseph G. McCormack      
Joseph G. McCormack       Vice President and Secretary

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

GUARANTORS:     RESONANT POWER TECHNOLOGY, INC., a Wisconsin corporation     By:
  /s/ Joseph G. McCormack       Joseph G. McCormack       Vice President and
Secretary     SPARTON AUBREY GROUP, INC., a California corporation     By:   /s/
Joseph G. McCormack       Joseph G. McCormack       Vice President and Secretary
    SPARTON BROOKSVILLE, LLC, a Delaware limited liability company     By:   /s/
Joseph G. McCormack       Joseph G. McCormack       Vice President and Secretary
    SPARTON AYDIN, LLC, a Delaware limited liability company     By:   /s/
Joseph G. McCormack       Joseph G. McCormack       Vice President and Secretary

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

GUARANTORS:     SPARTON BECKWOOD, LLC, a Delaware limited liability company    
By:   /s/ Joseph G. McCormack       Joseph G. McCormack       Vice President and
Secretary     BECKWOOD SERVICES, INC., a New Hampshire corporation     By:   /s/
Joseph G. McCormack       Joseph G. McCormack       Vice President, Secretary
and Treasurer     SPARTON eMT, LLC, a Delaware limited liability company     By:
  /s/ Joseph G. McCormack       Joseph G. McCormack       Vice President and
Secretary     SPARTON IRVINE, LLC, a California limited liability company    
By:   /s/ Joseph G. McCormack       Joseph G. McCormack       Vice President and
Secretary

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

GUARANTORS:     SPARTON IED, LLC, a Delaware limited liability company     By:  
/s/ Joseph G. McCormack       Joseph G. McCormack       Vice President and
Secretary     SPARTON DESIGN SERVICES, LLC, a Delaware limited liability company
    By:   /s/ Joseph G. McCormack       Joseph G. McCormack       Vice President
and Secretary     REAL TIME ENTERPRISES, INC., a New York corporation     By:  
/s/ Joseph G. McCormack       Joseph G. McCormack       Vice President,
Secretary and Treasurer     HUNTER TECHNOLOGY CORPORATION, a California
corporation     By:   /s/ Joseph G. McCormack       Joseph G. McCormack      
Vice President, Secretary and Treasurer    

HTC-EIAC, INC., a California corporation

    By:   /s/ Joseph G. McCormack       Joseph G. McCormack       Vice
President, Secretary and Treasurer

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

ADMINISTRATIVE AGENT:     BMO HARRIS BANK N.A., as Administrative Agent    

By:

 

/s/ Julie A. Hughes

     

Julie A. Hughes

     

Vice President

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

LENDER, SWING LINE LENDER
AND L/C ISSUER:     BMO HARRIS BANK N.A.     By:   /s/ Julie A. Hughes      
Julie A. Hughes       Vice President

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

LENDER:     U.S. BANK NATIONAL ASSOCIATION     By:   /s/ Adam Gelfeld     Name:
  Adam Gelfeld     Title:   Senior Vice President

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

LENDER:     BANK OF AMERICA, N.A.       By:   /s/ John M. Schuessler       Name:
John M. Schuessler       Title:   Senior Vice President

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

LENDER:     SUNTRUST BANK       By:   /s/ Frank McCormack       Name:   Frank
McCormack       Title:   Senior Vice President

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

LENDER:     FIFTH THIRD BANK       By:   /s/ Cynthia Clark       Name: Cynthia
Clark       Title:   Vice President

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

LENDER:     ASSOCIATED BANK, N.A.       By:   /s/ Keith M. Butala       Name:
Keith M. Butala       Title: Vice President

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(Signature Page to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement)

 

LENDER:     KEYBANK NATIONAL ASSOCIATION       By:   /s/ Brian P. Fox        
Brian P. Fox         Vice President

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ANNEX A

to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement

SCHEDULE I

TO

COMPLIANCE CERTIFICATE

SPARTON CORPORATION AND THE OTHER LOAN PARTIES

COMPLIANCE CALCULATIONS

FOR AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT DATED AS OF

SEPTEMBER 11, 2014

CALCULATIONS AS OF                             ,                 

 

A. Total Funded Debt/EBITDA Ratio (Section 8.23(a))

  

1.  Total Funded Debt

   $                       

2.  Net Income for past 4 quarters

                           

3.  Interest Expense for past 4 quarters

                           

4.  Income taxes for past 4 quarters

                           

5.  Depreciation and Amortization Expense for past 4 quarters

                           

6.  Non-recurring fees, costs, expenses related to this Agreement or other Loan
Documents for past 4 quarters

                           

7.  Non-cash compensation expense, or other non-cash expenses or charges for the
past 4 quarters arising from the granting of stock options, stock appreciation
rights or similar equity arrangements

                           

8.  Non-cash expenses or losses resulting from any adjustment of Earn-Out
Obligations

                           

9.  Non-cash expenses or losses and other non-cash charges incurred for the past
4 quarters (excluding any non-cash charges representing an accrual of, or
reserve for, cash charges to be paid within the next twelve months)

                           

 

ANNEX A – Page 1

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10.  Cash losses or other cash expenses from restructuring charges, discontinued
operations, and sales of assets (other than inventory sold in the ordinary
course of business) including proposes sales that are not consummated (including
the proposed sale to Ultra Electronics that was not consummated) during the past
4 quarters in an aggregate amount not to exceed 15% of the LTM EBITDA
(calculated without giving effect to the EBITDA Limited Addbacks); provided that
solely with respect to the quarter ending June 2018, the addback permitted by
this item 10 shall not exceed $5,500,000

                       

11.  Extraordinary losses for the past 4 quarters

                       

12.  The amount of the “run rate” cost savings, operating expense reductions and
synergies projected by the Borrower Representative in good faith to be realized
in connection with (i) any restructuring of Parent or any of its Subsidiaries
not in the ordinary course of business, or (ii) any Disposition of a product
line or facility used for operations of the Parent or any of its Subsidiaries,
in each case, that are projected by the Borrower Representative in good faith to
result from actions either taken or planned to be taken no later than 12 months
after the consummation of such transaction (which cost savings, operating
expense reductions and synergies projected to result from any such action shall
be added to EBITDA for any measurement period ending not more than 12 months
after such action is taken as though such cost savings, operating expense
reductions and synergies had been realized on the first day of the relevant
measurement period), net of the amount of actual benefits realized from such
actions, in each case, subject to all the limitations set forth in paragraph (b)
of the definition of EBITDA including, without limitation, that the aggregate
amount of cost savings, operating expense reductions or synergies added pursuant
to paragraph (b) of the definition of EBITDA, shall not exceed 5% of LTM EBITDA
(calculated without giving effect to the EBITDA Limited Addbacks)

                       

13.  Reserved

                       

14.  Pro forma adjustments to EBITDA permitted pursuant to the definition of Pro
Forma Basis

                       

15.  Sum of Lines A2 through A14

                       

16.  Extraordinary gains for the past 4 quarters

                       

 

ANNEX A – Page 2

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17.  Gains or income from discontinued operations for the past 4 quarters

                           

18.  Gains from the sale of assets (other than inventory sold in the ordinary
course of business) for the past 4 quarters

                           

19.  Non-cash gains or non-cash items of income for the past 4 quarters

                           

20.  Sum of Lines A16 through A19

                           

21.  Line A15 less Line A20 (“EBITDA”)

                           

22.  Ratio of Line A1 to A21

             :1.0  

23.  Line A11 ratio must not exceed

             :1.0  

24.  The Loan Parties are in compliance (circle yes or no)

     yes/no  

B. Fixed Charge Coverage Ratio (Section 8.23(b))

  

1.  EBITDA from Line A21 above

   $                       

2.  Capital Expenditures for past 4 quarters

   $                       

3.  Difference of Line B1 minus B2

   $                       

4.  Principal payments for past 4 quarters

   $                       

5.  Cash Interest Expense for past 4 quarters

   $                       

6.  Cash income taxes for past 4 quarters

   $                       

7.  Restricted Payments for past 4 quarters

   $                       

8.  Sum of Lines B4, B5, B6 and B7

   $                       

9.  Ratio of Line B3 to Line B8

             :1.0  

10.  Line B9 ratio must not be less than

     1.50:1.0  

11.  The Loan Parties are in compliance (circle yes or no)

     yes/no  

C. Minimum EBITDA (Section 8.23(c)).

  

1.  EBITDA from Line A21 above

   $                       

2.  Minimum EBITDA

   $                       

3.  The Loan Parties are in compliance (circle yes or no)

     yes/no  

 

ANNEX A – Page 3

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ANNEX B

to Amendment No. 5 to Amended and Restated

Credit and Guaranty Agreement

SCHEDULE I

COMMITMENTS

 

NAME OF LENDER

   REVOLVING CREDIT COMMITMENT  

BMO Harris Bank, N.A.

   $ 25,476,000.00  

U.S. Bank National Association

   $ 21,972,000.00  

Bank of America, N.A.

   $ 20,568,000.00  

SunTrust Bank

   $ 18,276,000.00  

Fifth Third Bank

   $ 12,000,000.00  

Associated Bank, N.A.

   $ 10,908,000.00  

Keybank National Association

   $ 10,800,000.00  

TOTAL

   $ 120,000,000.00     

 

 

 

 

ANNEX B – Page 1