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.

 

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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
 
      (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 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 4.3    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]

 

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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           

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“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