Common use of Covenant Waiver Clause in Contracts

Covenant Waiver. The Borrower has informed the Lender that, as of the quarter ending September 30, 2008, it is in default of the required: (a) minimum EBITDA set forth in Section 2.1 of the Covenant Exhibit (as amended); and (b) the minimum Tangible Net Worth ratio set forth in Section 2.3 of the Covenant Exhibit (as amended) (each, an “Existing Default” and collectively, the “Existing Events of Default”). Borrower has requested that the Lender waive the Existing Events of Default. The Lender hereby waives the Existing Events of Default as of the quarter ending September 30, 2008. This waiver shall be narrowly construed and shall not extend to any other now or hereafter existing violations, defaults or events of default under any of the Sparton Corporation Loan Documents including, without limitation, any violation of one or more of the above described covenants for any future period of time, nor shall this waiver prejudice any rights or remedies the Lender may have under the Sparton Corporation Loan Documents or applicable law. This waiver does not imply that the Bank will waive any future defaults under the Sparton Corporation Loan Documents. Specifically, without limitation, Borrower will continue to be required to comply with the above described financial covenants for all future periods as required under the Sparton Corporation Loan Documents.

Covenant Waiver. The Borrower has informed the Lender that, as of the quarter ending September 30December 31, 2008, it is in default of the required: (a) minimum EBITDA set forth in Section 2.1 of the Covenant Exhibit (as amended); and (b) the minimum Tangible Net Worth ratio set forth in Section 2.3 of the Covenant Exhibit (as amended) (each, an “Existing Default” and collectively, the “Existing Events of Default”). Borrower has requested that the Lender waive the Existing Events of Default. The Lender hereby waives the Existing Events of Default as of the quarter ending September 30December 31, 2008. This waiver shall be narrowly construed and shall not extend to any other now or hereafter existing violations, defaults or events of default under any of the Sparton Corporation Loan Documents including, without limitation, any violation of one or more of the above described covenants for any future period of time, nor shall this waiver prejudice any rights or remedies the Lender may have under the Sparton Corporation Loan Documents or applicable law. This waiver does not imply that the Bank will waive any future defaults under the Sparton Corporation Loan Documents. Specifically, without limitation, Borrower will continue to be required to comply with the above described financial covenants for all future periods as required under the Sparton Corporation Loan Documents.