Item 1.01 Entry into a Material Definitive Agreement.
On June 15, 2009, Sparton Corporation (the "Company") entered into a
Modification Agreement (the "Amendment") with National City Bank, a national
banking association (the "Lender"), which amends the terms of the existing
Promissory Note dated January 22, 2008 between the Company and the Lender, as
amended (the "Promissory Note") and the related documents. The Promissory Note
relates to an $18 million revolving line of credit facility (the "Line of Credit
Loan") that supports the Company's working capital needs and other general
corporate purposes. The Line of Credit Loan is secured by substantially all
assets of the Company. The Line of Credit Loan is evidenced by, among other
documents, the Promissory Note, as amended by the Master Amendment to Loan
Documents, dated as of April 21, 2008 and effective as of March 31, 2008, by the
Second Master Amendment to Loan Documents, dated as of July 31, 2008 and
effective as of June 30, 2008, by the Third Master Amendment to Loan Documents,
dated as of November 12, 2008, by the Fourth Master Amendment to Loan Documents,
dated as of January 20, 2009 and by the Promissory Note Modification Agreement
dated April 30, 2009 and effective May 1, 2009 (collectively, the "Line of
Credit Loan Documents").
Pursuant to the Amendment, the terms of the Line of Credit Loan Documents were
amended to extend the maturity date of the Promissory Note from June 15, 2009 to
August 15, 2009. The Company also ratified and confirmed its obligations and
liability to the Lender under the Line of Credit Loan Documents pursuant to the
Amendment.
The Line of Credit Loan Documents include representations, covenants and events
of default that are customary for financing transactions of this nature. The
Company's obligations under the Line of Credit Loan Documents are guaranteed by
each of the Company's subsidiaries, and each guarantee is secured by all assets
of the respective subsidiary.
The foregoing does not constitute a complete summary of the terms of the
Amendment and reference is made to the complete form of the Amendment and the
press release that are attached as Exhibit 10.1 and Exhibit 99.1, respectively,
to this report and are hereby incorporated by reference.
Table of Contents
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
Exhibit 10.1 Modification Agreement dated June 15, 2009 by and between Sparton
Corporation and National City Bank
Exhibit 99.1 Press Release dated June 19, 2009 issued by Sparton Corporation
regarding the Modification Agreement
