exv10wa



 






CTS Corporation

Form 10-Q



EXHIBIT 10(a)




THIRD AMENDMENT TO CREDIT AGREEMENT




     THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of April 29, 2005 (this “Amendment”),
among CTS CORPORATION, an Indiana corporation (the “Borrower”), the guarantors party
hereto, the financial institutions listed on the signature pages hereof as Lenders and HARRIS TRUST
AND SAVINGS BANK (“Harris”), as administrative agent (in such capacity, the
“Administrative Agent”).



W I T N E S S E T H:




     WHEREAS, the Borrower, the guarantors party thereto (the “Guarantors”), the financial
institutions listed on the signature pages thereof as Lenders and the Administrative Agent have
heretofore entered into that certain Credit Agreement, dated as of July 14, 2003 (as amended, the
“Credit Agreement”), among the Borrower, the Guarantors party thereto, the Lenders party
thereto, Harris, as L/C Issuer and Administrative Agent, and National City Bank of Indiana, as
Syndication Agent, and Key Bank National Association, as Documentation Agent; and



     WHEREAS, the Borrower has asked the Lenders and the Administrative Agent to (i) amend the
Leverage Ratio and (ii) make certain other changes to the Credit Agreement.



     NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions
contained herein and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:



ARTICLE I.

DEFINITIONS




SECTION 1.1 Use of Defined Terms. Unless otherwise defined or the context otherwise
requires, terms for which meanings are provided in the Credit Agreement shall have such meanings
when used in this Amendment.



ARTICLE II.

AMENDMENTS




SECTION 2.1





	 	(a)	 	Section 5.1 of the Credit Agreement is hereby amended by inserting the
following new defined term in proper alphabetical order:
	 
	 	 	 	“Adjusted EBITDA” means, with reference to any period, EBITDA
for such period plus an amount calculated by the Borrower and
approved by the Administrative Agent in its reasonable discretion
equal to the EBITDA of the Persons or assets which are the subject
of each Permitted Acquisition as if such Permitted Acquisition was
completed on the first day of such period to the extent not
subsequently sold or otherwise disposed of during such period.




1









 






	 	(b)	 	The defined term “Leverage Ratio”appearing in Section 5.1 of the
Credit Agreement is hereby amended in its entirety and as so amended
shall read as follows:
	 
	 	 	 	“Leverage Ratio” means, as of the last day of any fiscal
quarter of the Borrower, the ratio of Total Funded Debt of the
Borrower and its Subsidiaries as of the last day of such fiscal
quarter to Adjusted EBITDA of the Borrower and its Subsidiaries for
the period of four fiscal quarters then ended.





ARTICLE III.

REPRESENTATIONS AND WARRANTIES



In order to induce the Lenders and the Administrative Agent to enter into this Amendment, the
Borrower hereby reaffirms, as of the date hereof, its representations and warranties contained in
Article III of the Credit Agreement and additionally represents and warrants to the Administrative
Agent and each Lender as set forth in this Article III.



SECTION 3.1 Due Authorization, Non-Contravention, etc. The execution, delivery and
performance by the Borrower of this Amendment are within the Borrower’s powers, have been duly
authorized by all necessary corporate action, and do not:





	 	(a)	 	contravene the Borrower’s constituent documents;
	 
	 	(b)	 	contravene any contractual restriction, law or governmental regulation
or court decree or order binding on or affecting the Borrower; or
	 
	 	(c)	 	result in, or require the creation or imposition of, any Lien on any
of the Borrower’s properties.




SECTION 3.2 Government Approval, Regulation, etc. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or regulatory body or
other Person is required for the due execution, delivery or performance by the Borrower of this
Amendment.



SECTION 3.3 Validity, etc. This Amendment constitutes the legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms.




ARTICLE IV.

MISCELLANEOUS PROVISIONS



SECTION 4.1 Ratification of and References to the Credit Agreement. The Credit
Agreement is hereby ratified, approved and confirmed in each and every respect.




2









 







SECTION 4.2 Headings. The various headings of this Amendment are for convenience of
reference only, are not part of this Amendment and shall not affect the construction of, or be
taken into consideration in interpreting, this Amendment.



SECTION 4.3 Execution in Counterparts, Effectiveness, etc. This Amendment may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
agreement.



SECTION 4.4 Effectiveness. This Amendment shall become effective upon execution and
delivery by the Borrower, Guarantors and the Required Lenders.



SECTION 4.5 No Other Amendments. Except for the amendments expressly set forth above,
the text of the Credit Agreement and the other Loan Documents shall remain unchanged and in full
force and effect, and the Lenders and the Administrative Agent expressly reserve the right to
require strict compliance with the terms of the Credit Agreement and the other Loan Documents.



SECTION 4.6 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF ILLINOIS.




     [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]



3









 





     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their respective officers thereunto duly authorized as of the day and year first above
written.



	 	 	 	 	 
	 	 	“BORROWER”
	 
	 	 	 	 
	 	 	CTS CORPORATION, an Indiana corporation
	 
	 	 	 	 
	 

	 	By
	 	               /s/ Matthew W. Long
	 

	 	 	 	 
	 

	 	 	 	Name MATTHEW W. LONG
	 

	 	 	 	Title Treasurer
	 	 	“GUARANTORS”
	 
	 	 	 	 
	 	 	CTS CORPORATION, a Delaware corporation
	 
	 	 	 	 
	 

	 	By
	 	               /s/ Matthew W. Long
	 

	 	 	 	 
	 

	 	 	 	Name MATTHEW W. LONG
	 

	 	 	 	Title Treasurer
	 
	 	 	 	 
	 	 	CTS ELECTRONIC COMPONENTS, INC.
	 
	 	 	 	 
	 

	 	By
	 	               /s/ Richard G. Cutter
	 

	 	 	 	 
	 

	 	 	 	Name RICHARD G. CUTTER
	 

	 	 	 	Title Vice President and Secretary
	 
	 	 	 	 
	 	 	DYNAMICS CORPORATION OF AMERICA
	 
	 	 	 	 
	 

	 	By
	 	               /s/ Matthew W. Long
	 

	 	 	 	 
	 

	 	 	 	Name MATTHEW W. LONG
	 

	 	 	 	Title Vice President and Treasurer
	 
	 	 	 	 
	 	 	LTB INVESTMENT CORPORATION
	 
	 	 	 	 
	 

	 	By
	 	               /s/ Matthew W. Long
	 

	 	 	 	 
	 

	 	 	 	Name MATTHEW W. LONG
	 

	 	 	 	Title Vice President and Treasurer






4









 






	 	 	 	 	 
	 	 	“LENDERS”
	 
	 	 	 	 
	 	 	HARRIS TRUST AND SAVINGS BANK, in its individual
capacity as a Lender and as Administrative Agent
	 
	 	 	 	 
	 

	 	By
	 	               /s/ Thad D. Rasche
	 

	 	 	 	 
	 

	 	 	 	Name THAD D. RASCHE
	 

	 	 	 	Title Vice President
	 
	 	 	 	 
	 	 	NATIONAL CITY BANK OF INDIANA, as Lender
	 
	 	 	 	 
	 

	 	By
	 	                /s/ Robert E. Norell, Jr.
	 

	 	 	 	 
	 

	 	 	 	Name ROBERT E. NORELL, JR.
	 

	 	 	 	Title Vice President
	 
	 	 	 	 
	 	 	KEY BANK NATIONAL ASSOCIATION, as Lender
	 
	 	 	 	 
	 

	 	By
	 	               /s/ Daniel Di Marco
	 

	 	 	 	 
	 

	 	 	 	Name DANIEL DI MARCO
	 

	 	 	 	Title Assistant Vice President







5