Form 8-K 3-9-2006

0000026058-06-000020.txt : 20060309 0000026058-06-000020.hdr.sgml : 20060309 20060309162251 ACCESSION NUMBER: 0000026058-06-000020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060309 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060309 DATE AS OF CHANGE: 20060309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CTS CORP CENTRAL INDEX KEY: 0000026058 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 350225010 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04639 FILM NUMBER: 06676415 BUSINESS ADDRESS: STREET 1: 905 WEST BOULEVARD NORTH CITY: ELKHART STATE: IN ZIP: 46514 BUSINESS PHONE: 5742937511 MAIL ADDRESS: STREET 1: 905 W BLVD NORTH CITY: ELKHART STATE: IN ZIP: 46514 8-K 1 form8-k.htm FORM 8-K 3-9-2006 Form 8-K 3-9-2006

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 9 , 2006 (March 8 , 2006)

CTS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Indiana	1-4639	35-0225010
(State or Other Jurisdiction of Incorporation)	(Commission File Numbers)	(I.R.S. Employer Identification Nos.)

905 West Boulevard North
Elkhart, Indiana		46514
(Address of Principal Executive Offices)		(Zip Code)

Registrants' Telephone Number, Including Area Code: (574) 293-7511

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

q	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

q	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

q	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

q	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On March 8, CTS Corporation and its lenders agreed to amend the credit agreement entered into by the parties on July 14, 2003 in order to increase the permitted level of unsecured debt under other agreements and to modify restrictions on dividends and other distributions. CTS and its lenders further agreed to amend the security agreement entered into by the parties as of that date in order to increase the level of collateral which may be held outside permitted collateral locations. Copies of the amendments are attached hereto as Exhibits 10(a) and 10(b).

Item 9.01 Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired.

Not applicable.

(b)	Pro Forma Financial Information.

Not applicable.

The following exhibits are filed with this report:

Exhibit No. Exhibit Description

10(a) Fourth Amendment to Credit Agreement

10(b) Second Amendment to Security Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CTS CORPORATION

/s/ Richard G. Cutter

By: Richard G. Cutter

Vice President, Secretary

and General Counsel

Date: March 9, 2006

EXHIBIT INDEX

Exhibit No. Exhibit Description

10(a) Fourth Amendment to Credit Agreement

10(b) Second Amendment to Security Agreement

EX-10.A 2 ex10_a.htm EXHIBIT 10A Exhibit 10a

FOURTH AMENDMENT TO CREDIT AGREEMENT

Fourth Amendment to Credit Agreement, dated as of March 8, 2006 (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 N.A., successor by merger with 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 amend the restrictions on the payment of dividends.

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 Section 8.7(p) of the Credit Agreement is hereby amended in its entirety and as so amended shall read as follows:

(p) unsecured indebtedness of the Borrower and its Subsidiaries not otherwise permitted by this Section in an amount not to exceed $30,000,000 in the aggregate at any one time outstanding.

SECTION 2.2 Section 8.12 of the Credit Agreement is hereby amended in its entirety and as so amended shall read as follows:

Section 8.12. Dividends and Certain Other Restricted Payments. The Borrower shall not, nor shall it 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 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; provided, however, that the foregoing shall not operate to prevent (I) the making of dividends or distributions (i) by any Subsidiary of the Borrower or its Subsidiaries to its parent corporation and (ii) so long as no Default or Event of Default exists prior to or would result after giving effect to such action, by the Borrower, (II) any distribution or redemption under the Borrower’s Shareholder Rights Plan, and (III) so long as no Default or Event of Default has occurred and is continuing, the Borrower may repurchase shares of its capital stock for an aggregate purchase price not to exceed $30,000,000.

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 Section 6 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

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 and each other Loan Document is hereby ratified, approved and confirmed in each and every respect.

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 4.4 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]

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 Treasurer

LTB Investment Corporation

By /s/ Matthew W. Long

Name Matthew W. Long

Title Treasurer

“Lenders”

Harris N.A., successor by merger with Harris Trust and Savings Bank, in its individual capacity as a Lender and as Administrative Agent

By /s/ Thad Rasche

Name Thad Rasche

Title Director

National City Bank of Indiana, as Lender

By /s/ Chris Thornton

Name Chris Thornton

Title Vice President

Key Bank National Association, as Lender

By /s/ Jeff Kalinowski

Name Jeff Kalinowski

Title Senior Vice President

The Northern Trust Company, as Lender

By /s/ Jared Hall

Name Jared Hall

Title Vice President

EX-10.B 3 ex10_b.htm EXHIBIT 10B Exhibit 10b

SECOND AMENDMENT TO SECURITY AGREEMENT

Second Amendment to SECURITY Agreement, dated as of March 8, 2006 (this “Amendment”), among CTS CORPORATION, an Indiana corporation (the “Borrower”), the other parties executing this Amendment under the heading “Debtors” and HARRIS N.A., successor by merger with Harris Trust and Savings Bank, as administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower and certain other parties have executed and delivered to the Agent that certain Security Agreement dated as of July 14, 2003 (such Security Agreement, as the same may from time to time be amended, modified or restated, including supplements thereto which add additional parties as Debtors thereunder, being hereinafter referred to as the “Security Agreement”); and

WHEREAS, the Borrower has asked the Lenders and the Administrative Agent to permit the Borrower to increase the amount of Collateral that may be located at locations that are not Permitted Collateral Locations.

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 Security Agreement shall have such meanings when used in this Amendment.

ARTICLE II.

AMENDMENTS

SECTION 2.1 Section 4(b) of the Security Agreement is hereby amended by deleting the amount “$3,500,000” appearing in the second sentence thereof and inserting in its place the amount “$10,000,000.”

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

In order to induce the Administrative Agent to enter into this Amendment, each Debtor hereby reaffirms, as of the date hereof, its representations and warranties contained in the Security Agreement and additionally represents and warrants unto 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 it of this Amendment are within its powers, have been duly authorized by all necessary corporate action, and do not:

(a) contravene such Debtors’ constituent documents;

(b) contravene any contractual restriction, law or governmental regulation or court decree or order binding on or affecting such Debtor; or

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

ARTICLE IV.

MISCELLANEOUS PROVISIONS

SECTION 4.1 Ratification of and References to the Credit Agreement. The Security Agreement is hereby ratified, approved and confirmed in each and every respect and each Debtor agrees that all of its obligations under the Security Agreement, and the liens and security interests granted and provided for in the Security Agreement, are and shall remain in full force and effect for the benefit and security of all of the Secured Obligations.

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. This Amendment shall become effective when counterparts hereof executed on behalf of the Debtors and Administrative Agent shall have been received by the Administrative Agent. Delivery of an executed counterpart of a signature page of this Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 4.4 No Other Amendments. Except for the amendments expressly set forth above, the text of the Security 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 4.5 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]

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.

“Debtors”

CTS Corporation, an Indiana corporation

By /s/ Matthew W. Long

Name Matthew W. Long

Title Treasurer

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 Treasurer

LTB Investment Corporation

By /s/ Matthew W. Long

Name Matthew W. Long

Title Treasurer

Harris N.A., successor by merger with Harris Trust and Savings Bank, as Agent

By /s/ Thad Rasche

Name Thad Rasche

Title Director