EXHIBIT (10)(a)
SECOND AMENDMENT
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
("AMENDMENT") is made as of October 11, 2002 by and among CTS Corporation, an
Indiana corporation (the "BORROWER"), the financial institutions listed on the
signature pages hereof (the "LENDERS") and Bank One, NA, having its principal
place of business in Chicago, Illinois, as contractual representative (the
"AGENT"), under that certain Third Amended and Restated Credit Agreement dated
as of December 20, 2001 by and among the Borrower, the Lenders, the Agent, ABN
AMRO Bank N.V., as documentation agent and Xxxxxx Trust and Savings Bank, as
syndication agent, as amended by the First Amendment thereto dated as of April
15, 2002 (the "CREDIT AGREEMENT"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings given to them in the Credit
Agreement.
WHEREAS, the Borrower, the Lenders and the Agent are parties to the
Credit Agreement;
WHEREAS, the Borrower has requested that the Required Lenders consent
to certain amendments to the Credit Agreement;
WHEREAS, the Lenders and the Agent have agreed to amend the Credit
Agreement on the terms and conditions set forth herein; and
WHEREAS, the Borrower, the Lenders and the Agent have further agreed
to reduce the Aggregate Revolving Loan Commitment by $30,000,000 (the "REDUCTION
AMOUNT"), whereupon, consistent with the terms of the Credit Agreement, each
Lender's Revolving Loan Commitment shall be reduced by its respective Revolving
Loan Pro Rata Share of the Reduction Amount;
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
Borrower, the Lenders and the Agent have agreed to the following amendment to
the Credit Agreement.
1. AMENDMENTS. Effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 2 below, the
Credit Agreement is hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended to add the
following new defined term in the appropriate alphabetical location:
"SECOND AMENDMENT EFFECTIVE DATE" means October 11, 2002.
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(b) The definition of "AGGREGATE REVOLVING LOAN COMMITMENT" in Section
1.1 of the Credit Agreement is hereby restated in its entirety as follows:
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof. As of the Second Amendment Effective Date,
the Aggregate Revolving Loan Commitment is Eighty-Five Million and 00/100
Dollars ($85,000,000.00).
In furtherance of the amendment described in this clause (b), Exhibit A to the
Credit Agreement (Commitments) is hereby restated in its entirety in the form
attached as Exhibit A hereto.
(c) The definition of "DESIGNATED RESTRUCTURING CHARGES" in Section
1.1 of the Credit Agreement is hereby restated in its entirety as follows:
"DESIGNATED RESTRUCTURING CHARGES" means, (a) one-time cash
restructuring charges in an aggregate amount not to exceed $8,500,000
incurred during the period ending December 31, 2001 and (b) one-time cash
restructuring charges in an aggregate amount not to exceed $6,500,000,
which shall be incurred no later than December 31, 2002.
(d) Section 2.15(D) of the Credit Agreement is hereby amended to add
the following new clause (iii) at the end thereof:
(iii) Notwithstanding the foregoing clause (ii), from and after the
Second Amendment Effective Date, (a) it shall be assumed, solely for
purposes of determining the Applicable Eurodollar Margin, Applicable
Floating Rate Margin and Applicable Facility Fee Percentage in accordance
with the table set forth in such clause (ii), that the Senior Leverage
Ratio is at all times greater than or equal to 3.0 to 1.0 and less than 4.0
to 1.0 and (b) the remaining provisions of such clause (ii) shall cease to
apply.
(e) Section 7.3(B)(i) of the Credit Agreement is hereby amended to
restate the portion of the table setting forth the quarterly Total Leverage
Ratio levels for the quarters ending March 31, 2003 and thereafter as follows:
QUARTER ENDING TOTAL LEVERAGE RATIO
-------------- --------------------
March 31, 2003 3.00 to 1.00
June 30, 2003 and each 2.50 to 1.00
quarter thereafter
(f) Section 7.3(B)(ii) of the Credit Agreement is hereby amended to
restate the portion of the table setting forth the quarterly Senior Leverage
Ratio levels for the quarters ending March 31, 2003 and thereafter as follows:
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QUARTER OR DATE ENDING SENIOR LEVERAGE RATIO
---------------------- ---------------------
March 31, 2003 2.25 to 1.00
June 30, 2003 1.75 to 1.00
September 30, 2003 1.50 to 1.00
2. CONDITION OF EFFECTIVENESS. The effectiveness of this Amendment is
subject to the condition precedent that the Agent shall have received:
(a) counterparts of this Amendment duly executed by the Borrower, the
Required Lenders and the Agent;
(b) counterparts of the Reaffirmation attached hereto duly executed by
each Subsidiary Guarantor;
(c) for the account of each Lender, a fee in the amount of 20 basis
points on such Lender's Revolving Loan Commitment, determined as if the partial
termination of the Revolving Loan Commitments described in the fourth WHEREAS
clause hereto shall have occurred; and
(d) for the account of the Arranger, such fees as have been agreed to
in a separate letter agreement between the Arranger and the Borrower.
3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower hereby
represents and warrants as follows:
(a) This Amendment and the Credit Agreement as modified hereby
constitute legal, valid and binding obligations of the Borrower and are
enforceable against the Borrower in accordance with their terms.
(b) As of the date hereof and giving effect to the terms of this
Amendment, (i) there exists no Default or Unmatured Default and (ii) the
representations and warranties contained in Article VI of the Credit Agreement,
as modified hereby, are true and correct, except for changes reflecting events,
conditions or transactions permitted or not prohibited by the Credit Agreement.
4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND LOAN DOCUMENTS.
(a) Upon the effectiveness of Section 1 hereof, each reference to the
Credit Agreement in the Credit Agreement or any other Loan Document shall mean
and be a reference to the Credit Agreement as modified hereby.
(b) The Borrower reaffirms the terms and conditions of the Credit
Agreement and the Loan Documents executed by it, including, without limitation,
the Security Agreement, the Pledge Agreements, the Mortgages and the other
Collateral Documents, as applicable, and acknowledges and agrees that except as
specifically modified above, the Credit Agreement and all other documents,
instruments and agreements executed and/or delivered in connection therewith
shall remain in full force and effect and are hereby ratified and confirmed.
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(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Agent or the Lenders, nor constitute a waiver of or
consent to any provision of the Credit Agreement or any other documents,
instruments and agreements executed and/or delivered in connection therewith.
5. GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, THE
ARRANGER, ANY LENDER, OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AMENDMENT OR THE CREDIT AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
6. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
7. COUNTERPARTS. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts (including by means of
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
CTS CORPORATION, as the Borrower
/s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
BANK ONE, NA (MAIN OFFICE CHICAGO),
formerly known as NBD Bank, N.A.,
as the Agent, as a Lender, as the
Issuing Bank and as the Swing Line
Bank
/s/ XXXX X. XXXXXXX
---------------------------------
Name: Xxxx X. XxXxxxx
Title: Director
ABN AMRO BANK N.V., as
Documentation Agent and as a Lender
/s/ XXXX X. XXXXXX
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
/s/ XXXXX XXXXXXXXXX
---------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
XXXXXX TRUST AND SAVINGS BANK, as
Syndication Agent and as a Lender
/s/ XXXX X. XXXXXX
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
THE NORTHERN TRUST COMPANY, as a
Lender
/s/ XXXX X. XXXXXX
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
KEYBANK NATIONAL ASSOCIATION, as a
Lender
/s/ XXXX X. XXXXX
---------------------------------
Name: Xxxx X. Xxxxx
Title: V.P. Credit Management
NATIONAL CITY BANK OF INDIANA, as a
Lender
/s/ XXXXXX X. XXXXXX XX.
---------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.,
as a Lender
/s/ XXXXXXXXXX XXXXXXXXX
---------------------------------
Name: Xxxxxxxxxx Xxxxxxxxx
Title: Deputy General Manager
SUNTRUST BANK, as a Lender
/s/ XXXXXX X. XXXXX
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as Wachovia Bank,
N.A.), as a Lender
/s/ XXXXXX X. XXXXXXX, XX.
---------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Director
RESTATED EXHIBIT A
TO
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
COMMITMENTS
REVOLVING LOAN COMMITMENTS
--------------------------------------------------------------------------------
REVOLVING LOAN % OF REVOLVING LOAN
LENDER COMMITMENTS COMMITMENT
--------------------------------------------------------------------------------
Bank One, NA $14,166,666.66 16.6667%
(Administrative Agent)
--------------------------------------------------------------------------------
KeyBank National Association $13,222,222.04 15.5556%
--------------------------------------------------------------------------------
The Northern Trust Company $13,222,222.04 15.5556%
--------------------------------------------------------------------------------
ABN AMRO Bank N.V. $12,277,777.97 14.4444%
(Documentation Agent)
--------------------------------------------------------------------------------
Xxxxxx Trust and Savings Bank $12,277,777.97 14.4444%
(Syndication Agent)
--------------------------------------------------------------------------------
National City Bank of Indiana $ 5,666,666.66 6.6667%
--------------------------------------------------------------------------------
Bank of Tokyo-Mitsubishi $ 5,666,666.66 6.6667%
--------------------------------------------------------------------------------
SunTrust Bank $ 4,250,000.00 5.0000%
--------------------------------------------------------------------------------
Wachovia Bank, N.A. $ 4,250,000.00 5.0000%
--------------------------------------------------------------------------------
TOTAL $85,000,000.00 100.0000%
--------------------------------------------------------------------------------
SWING LINE COMMITMENT
--------------------------------------------------------------------------------
AMOUNT OF SWING LINE % OF SWING LINE
SWING LINE BANK COMMITMENT COMMITMENT
--------------------------------------------------------------------------------
Bank One, NA $10,000,000.00 100.0000%
--------------------------------------------------------------------------------
REAFFIRMATION
Each of the undersigned (each, a "GUARANTOR") hereby acknowledges
receipt of a copy of the Second Amendment dated as of October 11, 2002 (the
"AMENDMENT") to the Third Amended and Restated Credit Agreement dated as of
December 20, 2001 by and among CTS Corporation, a Delaware corporation (the
"BORROWER"), the financial institutions from time to time party thereto (the
"LENDERS"), Bank One, NA, having its principal place of business in Chicago,
Illinois, in its individual capacity as a Lender and in its capacity as
contractual representative (the "AGENT"), ABN AMRO Bank, N.V., as documentation
agent and Xxxxxx Trust and Savings Bank, as syndication agent (as amended by the
First Amendment thereto dated as of April 15, 2002, as so modified by the
Amendment and as the same may from time to time hereafter be amended, restated,
supplemented or otherwise modified, the "CREDIT AGREEMENT"). Capitalized terms
used in this Reaffirmation and not defined herein shall have the meanings given
to them in the Credit Agreement.
Each Guarantor, by its signature below, without in any way
establishing a course of dealing, hereby (i) acknowledges and consents to the
execution and delivery of the Amendment by the parties thereto, (ii) agrees that
the Amendment and the transactions contemplated thereby shall not limit or
diminish the obligations of such Guarantor to guarantee all of the "Obligations"
of the Borrower under and as defined in the Credit Agreement, all of the
"Guaranteed Obligations" under and as defined in the Subsidiary Guaranty and any
other obligations of such Guarantor arising under or pursuant to the Loan
Documents, (iii) reaffirms all of its obligations under the Subsidiary Guaranty
and the other Loan Documents to which it is a party and (iv) agrees that the
Subsidiary Guaranty and each and every other Loan Document executed by it
remains in full force and effect and is hereby reaffirmed, ratified and
confirmed. All references to the Credit Agreement contained the Subsidiary
Guaranty or any of the other Loan Documents shall be a reference to the Credit
Agreement as so modified by the Amendment and as the same may from time to time
hereafter be amended, modified or restated.
Dated: October 11, 2002
CTS COMMUNICATION COMPONENTS, INC.
(F/K/A CTS WIRELESS COMPONENTS, INC.)
/s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
CTS CORPORATION, a Delaware corporation
/s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
DYNAMICS CORPORATION OF AMERICA
/s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
LTB INVESTMENT CORPORATION
/s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
