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Form 10-Q
Second Quarter 2004 [form10q-2qtr2004.htm]

EXHIBIT 10(A)

FIRST AMENDMENT TO CREDIT AGREEMENT

        FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of June 17, 2004 (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 $55,000,000
Credit Agreement, dated as of July 14, 2003 (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 permit the Borrower to repurchase a limited amount of its capital stock.

        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 8.12 of the Credit Agreement is hereby amended by:

  (a)     Deleting the word “and” at the end of Clause II thereof, and

  (b)     inserting immediately following Clause III thereof the following:

  , and (IV) 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 Article III of the Credit 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 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.

        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. This Amendment
shall become effective when counterparts hereof executed on behalf of the
Borrower, Guarantors and the Required Lenders 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 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.

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         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]

-3-

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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

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        Name
Title   Matthew W. Long
Treasurer                  
“GUARANTORS”                   CTS CORPORATION, a Delaware corporation          
        By     /s/ Richard G. Cutter

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        Name
Title   Richard G. Cutter
Secretary                  
CTS COMMUNICATIONS COMPONENTS, INC.                   By     /s/ Richard G.
Cutter

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        Name
Title   Richard G. Cutter
Vice President and Secretary                  
DYNAMICS CORPORATION OF AMERICA                    By     /s/ Richard G. Cutter

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        Name
Title   Richard G. Cutter
Vice President and Secretary                  
LTB INVESTMENT CORPORATION                   By     /s/ Richard G. Cutter

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        Name
Title   Richard G. Cutter
Vice President and Secretary

S-1

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                  “LENDERS”                   HARRIS TRUST AND SAVINGS BANK, in
its individual
capacity as a Lender and as Administrative Agent                   By     /s/
Richard Shuma

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        Name
Title   Richard Shuma
Managing Director

S-2

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                  NATIONAL CITY BANK OF INDIANA, as Lender                   By
    /s/ Robert E. Norell, Jr.

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        Name
Title   Robert E. Norell, Jr.
Vice President

S-3

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                  KEY BANK NATIONAL ASSOCIATION, as Lender                   By
    /s/ Jeff Kalinowski

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        Name
Title   Jeff Kalinowski
Vice President

S-4

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                  THE NORTHERN TRUST COMPANY, as Lender                   By    
/s/ Mark E. Taylor

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        Name
Title   Mark E. Taylor
Vice President

S-5