Document:

Exhibit 10.30

 

FOURTH
AMENDMENT AND WAIVER TO CREDIT AGREEMENT

 

This FOURTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT
(“Amendment”) is dated as of June 25, 2009, but is effective as of May 2,
2009, among METHODE ELECTRONICS, INC., a Delaware corporation (the “Borrower”),
each lender party hereto, and BANK OF AMERICA, N.A., as Administrative Agent,
and L/C Issuer.

 

WHEREAS, the Borrower, each lender from time to time
party thereto (collectively, the “Lenders” and individually, a “Lender”)
and Bank of America, N.A., as Administration Agent and L/C Issuer are parties
to that certain Credit Agreement, dated as of December 19, 2002, as
amended by the Amendment to Credit Agreement dated as of November 3, 2005,
the Amendment to Credit Agreement dated as of January 31, 2006 and the
Waiver and Amendment dated as of February 28, 2007 (the “Existing
Credit Agreement,” and as amended and modified by this Amendment and any
future amendments, restatements, supplements and modifications thereto, the “Credit
Agreement”) (terms defined in the Credit Agreement shall have the same
respective meanings when used herein);

 

WHEREAS, the Borrower has requested that Agent and
Lenders agree to waive the Events of Default as a result of the Borrower’s
non-compliance with Section 6.02(b) and Section 7.13(b) of
the Existing Credit Agreement for the fiscal quarter ended January 31,
2009 and amend the Credit Agreement in certain respects, all as more fully
hereinafter set forth, and

 

WHEREAS, Agent and Required Lenders are willing to
waive such Events of Default and amend and modify the Existing Credit
Agreement, effective as of May 2, 2009 (except as otherwise indicated
herein), on the terms and conditions contained herein.

 

NOW THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the parties hereto covenant and
agree as follows:

 

ARTICLE I

WAIVERS

 

Subject to the satisfaction of the conditions
precedent set forth in Article IV of this Amendment, the Agent and Lenders
hereby waive the Borrower’s non-compliance with Section 6.02(b) and Section 7.13(b) of
the Existing Credit Agreement, solely with respect to the Borrower’s fiscal
quarter ended January 31, 2009.  The
Borrower agrees that the foregoing waivers are specific in time and in intent
and do not constitute, nor shall they be construed as, a waiver of any other
right, power or privilege under the Existing Credit Agreement, any of the other
Loan Documents or under any agreement, contract, indenture, document or other
instrument executed and delivered in connection with the Loan Documents; nor
shall the waiver contained in this Article 1 constitute a waiver of any
other Default or Event of Default of any other term or provision under the
Existing Credit Agreement or any of the other Loan Documents.

 

 

ARTICLE II

AMENDMENT

 

2.01.        Effective as of March 15,
2009, Section 1.1 of the Credit Agreement is amended so that the
definition of “Applicable Rate” shall be amended prospectively from such date
as follows:

 

“Applicable Rate” means as to (i) any Eurodollar Rate Loan
or Letter of Credit, a margin per annum equal to 2.75%, (ii) any Base Rate
Loan, a margin per annum equal to 1.50% and (iii) the Commitment Fee, a
margin per annum equal to 0.50%.

 

2.02.        Section 1.1 of the
Credit Agreement is amended so that the definition of “Consolidated Debt to
EBITDA Ratio” shall read in its entirety as follows:

 

“Consolidated
Debt to EBITDA Ratio” means as of any date of determination, the ratio of (i) Net
Consolidated Indebtedness on such date to (ii) Consolidated EBITDA for the
most recent period of twelve consecutive fiscal months then ended, to be
reported by Borrower for each fiscal month in a monthly Compliance Certificate;
provided that in the case of any fiscal month ending prior to October 31,
2009, the Consolidated Debt to EBITDA Ratio shall be calculated by annualizing
the Consolidated EBITDA component of such calculation for the period from November 2,
2008 to the measurement date.

 

2.03.        Section 1.1 of the
Credit Agreement is amended so that the definition of “Consolidated EBITDA”
shall read in its entirety as follows:

 

“Consolidated EBITDA”
means, for any period, for the Borrower and its Subsidiaries on a consolidated
basis, an amount equal to the sum of (a) Consolidated Net Income, (b) Consolidated
Interest Charges, (c) the amount of taxes, based on or measured by income,
used or included in the determination of such Consolidated Net Income, and (d) the
amount of depreciation and amortization expense deducted in determining such
Consolidated Net Income, (e) cash restructuring charges deducted in
determining such Consolidated Net Income in an aggregate amount not to exceed
$12,000,000 during the term of this Agreement, (f) the amount of non-cash
restructuring and non-cash goodwill and intangible asset impairment charges deducted
in determining such Consolidated Net Income.

 

2.04.        Section 1.1 of the
Credit Agreement is amended by adding a definition of “Consolidated Interest
Coverage Ratio” as follows:

 

“Consolidated Interest Coverage Ratio”
means, as of any date of determination, the ratio of (a) Consolidated
EBITDA for the period of the four prior fiscal quarters ending on such date to (b) Consolidated
Interest Charges paid in cash for such period; provided that for the fiscal
quarter ending nearest July 31, 

 

2

 

2009, the measurement period
for both components shall be the prior three fiscal quarters ending on such
date.

 

2.05.        Section 1.1 of the
Credit Agreement is amended to delete the definition of “Consolidated Fixed Charge
Coverage Ratio”.

 

2.06.        Section 1.1 of the
Credit Agreement is amended by adding a definition of “Net Consolidated
Indebtedness” as follows:

 

“Net Consolidated
Indebtedness” means at any time total Indebtedness of the Borrower and its
Subsidiaries minus an amount
equal to 33% of the aggregate amount of unencumbered cash or Investments in
cash equivalents of the Borrower and its Subsidiaries; provided that if the
result of such subtraction is negative, the amount shall be zero.

 

2.07.        Section 6.02(b) of
the Credit Agreement is amended to read in its entirety as follows:

 

(b)           concurrently with the
delivery of the financial statements referred to in Sections 6.01(a) and
(b), and within 30 days after the end of any fiscal month of the
Borrower that is not a fiscal year or fiscal quarter end, a duly completed
Compliance Certificate signed by a Responsible Officer of the Borrower;

 

2.08.        Section 7.07(d) of
the Credit Agreement is amended to read in its entirety as follows:

 

(d)           the Borrower may declare or
pay cash dividends to its stockholders provided that immediately before and
after giving effect to such declaration or payment, (i) no Default or
Event of Default would exist and (ii) the Borrower’s Consolidated Debt to
EBITDA Ratio is less than 1.50:1.00, and

 

2.09.        Section 7.07(e) of
the Credit Agreement is amended to read in its entirety as follows:

 

(e)           the Borrower may purchase or
otherwise acquire shares of its capital stock or warrants, rights or options to
acquire any such shares for cash (individually, a “Share Repurchase” and
collectively, the “Share Repurchases”), provided that (1) any
shares of the Borrower’s capital stock, warrants, rights or options so
purchased or acquired shall be retired concurrently with such purchase or
acquisition (or held by the Borrower thereafter as treasury shares), (2) immediately
before and after giving effect to any such Share Repurchase pursuant to this Section 7.07(e),
(i) no Default or Event of Default would exist, and (ii) the Borrower’s
Consolidated Debt to EBITDA Ratio is less than 1.50:1.00.

 

3

 

2.10.        Section 7.13 of the
Credit Agreement is amended to read in its entirety as follows:

 

7.13  Financial Covenants.

 

(a)   Consolidated Net Worth.  Permit Consolidated Net Worth as of the end
of any fiscal quarter of the Borrower to be less than the sum of (a) 85%
of Consolidated Net Worth as of May 2, 2009, plus (b) an amount equal
to 50% of the Consolidated Net Income earned in each fiscal quarter ending
after May 2, 2009 (with no deduction for a net loss in any such fiscal
quarter), plus (c) an amount equal to 100% of the aggregate cumulative net
proceeds of any Equity Issuance after May 2, 2009; minus (d) the
amount of non-cash restructuring and non-cash goodwill and intangible asset
impairment charges deducted in determining Consolidated Net Income after May 2,
2009.

 

(b)  Consolidated Interest
Coverage Ratio.  Beginning
with the fiscal quarter ending nearest July 31, 2009, permit the
Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of the
Borrower to be less than 3.50:1.00.

 

(c)  Consolidated Debt to
EBITDA Ratio.  Beginning
with the fiscal month ending May 2, 2009, permit its Consolidated Debt to
EBITDA Ratio as of the end of any fiscal month of the Borrower to exceed
2.50:1.

 

2.11.        The Credit Agreement is
further amended so that Exhibit C shall read in its entirety as set forth
in Schedule 1 attached hereto:

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

The Borrower hereby represents and warrants to the
Administrative Agent and the Lenders that:

 

3.01.        After giving effect to this
Amendment, the representations and warranties of the Borrower set forth in Article V
of the Credit Agreement are true and correct as of the date hereof as though
made on the date hereof and as though applied to the Credit Agreement as
amended by this Amendment (except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this Section 3.01,
the representations and warranties contained in Section 5.05(a) and (b) of
the Credit Agreement shall be deemed to refer to the most recent statements
furnished pursuant to Section 6.01 (a) and (b) of the Credit
Agreement).

 

3.02.        After giving effect to this
Amendment, no Default or Event of Default has occurred and is continuing.

 

4

 

ARTICLE IV

CONDITIONS PRECEDENT

 

This Amendment shall become effective as of May 2,
2009 (or in the case of Section 2.01 hereof, effective as of March 15,
2009), upon receipt by the Administrative Agent of all of the following in form
and substance satisfactory to the Administrative Agent:

 

4.01.        counterparts of this Amendment and Acknowledgement
(or an executed facsimile copy hereof and thereof), executed by the Borrower,
the Required Lenders and the Guarantors, respectively;

 

4.02.        a Guaranty Supplement in the
form attached to this Amendment;

 

4.03.        a duly completed Compliance
Certificate for the Borrower’s fiscal quarter ended January 31, 2009;

 

4.04.        for the ratable account of
each Lender which executes and delivers its signature page hereto as and
when required by the Administrative Agent, an amendment fee equal to 0.10% of such
Lender’s Commitment;

 

4.05.        evidence of the payment to
the Administrative Agent in immediately available funds of all reasonable legal
fees and expenses of the Administrative Agent to the extent theretofore
invoiced;

 

4.06.        a certificate of the Secretary
or the Assistant Secretary each of the Borrower and its Domestic Subsidiaries
as to resolutions, and the signatures and incumbency of officers authorized to
sign this Amendment; and

 

4.07.        such other documents as the
Administrative Agent shall require.

 

ARTICLE V

 

GENERAL

 

5.01.        As amended or modified by
this Amendment, the Loan Documents shall remain in full force and effect.  References to the Credit Agreement in any of
the Loan Documents shall be deemed to include a reference to the Credit
Agreement as amended or modified hereby, whether or not reference is made to
this Amendment.  Section headings
used in this Amendment are for convenience of reference only, and shall not
affect the construction of this Amendment.

 

5.02.        This Amendment may be
executed in any number of counterparts (each of which shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument).

 

5

 

5.03.        The Borrower agrees to pay
to or reimburse the Administrative Agent, upon demand, for all reasonable costs
and expenses incurred (including legal expenses) in connection with the
development, preparation, negotiation, execution and delivery of this
Amendment.

 

5.04.        All obligations of the Borrower
and rights of the Administrative Agent and the Lenders, that are expressed
herein, shall be in addition to and not in limitation to those provided by
applicable law.  This Amendment shall be
a contract made under and governed by the internal laws of the State of
Illinois, without giving effect to principles of conflicts of laws.  Whenever possible, each provision of this
Amendment shall be interpreted in such manner as to be effective and valid
under applicable law; but if any provision of this Amendment shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Amendment.

 

5.05.        The Borrower acknowledges
and agrees that the execution and delivery by the Administrative Agent and the
Required Lenders of this Amendment shall not be deemed to create a course of
dealing or otherwise obligate the Lenders to forbear or execute similar amendments
under the same or similar circumstances in the future.

 

5.06.        This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.  No
third party beneficiaries are intended in connection with this Amendment.

 

5.07.        This Amendment, together
with the Credit Agreement, contains the entire and exclusive agreement of the
parties hereto with reference to the matters discussed herein and therein.  This Amendment supercedes all prior drafts
and communications with respect hereto. 
This Amendment may not be amended except in accordance with the
provisions of Section 10.1 of the Credit Agreement.

 

[Signature Page Follows]

 

6

 

IN WITNESS WHEREOF, each parties hereto have caused
this Agreement to be duly executed as of the date first above written.

 

	
   

  	
  METHODE
  ELECTRONICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Douglas A. Koman

  
	
   

  	
  Name:

  	
  Douglas
  A. Koman

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan M. Phillips

  
	
   

  	
  Name:

  	
  Jonathan
  M. Phillips

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., as a Lender, and L/C Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan M. Phillips

  
	
   

  	
  Name:

  	
  Jonathan
  M. Phillips

  
	
   

  	
  Title:

  	
  Senior Vice PresidentExhibit
10.31

 

Corporate
Headquarters

7401
West Wilson Avenue

Chicago,
IL 60706-4548

708.867.6777
· Fax: 708.867.6999
· 877.316.7700

 

Via
e-mail

 

August 25,
2008

 

Mr. Mark
A. Shively

Delphi E
& S

2151
East Lincoln Road

Kokomo,
Indiana 46901

 

Re:
Methode/Delphi - Long-Term Agreement

 

Dear
Mark:

 

As
you know, Methode and Delphi do not currently have in place a long-term
agreement but Methode has agreed to ship parts to Delphi at the prices provided
in our May 1, 2008 letter.  As
indicated in our prior letters, these prices will be effective through September 30,
2008.

 

As
we have previously communicated, Methode is interested in continuing as a
supplier to Delphi and is interested in entering into a long-term agreement. Per
your request, Methode is providing the attached pricing which will be in effect
for three years, beginning October 1, 2008.  This revised three-year pricing reflects the
impact of material and component price increases since providing our May 1,
2008 pricing, as well as the impact of further, significantly reduced
volumes.  The May 1, 2008 pricing
was based on anticipated 2009 model year volumes of 5,293,924 units.  Based on the latest information available,
including Delphi releases, however, the 2009 model year volumes will be closer
to 4,300,000 units, if not lower. Please note the differential between this
figure and the Finley volumes for the same period of 6,805,000 units.

 

Moving
forward, we will use 4,300,000 units as the baseline for model year 2009 and
3,900,000 for model year 2010 and 2,500,000 for model year 2011.  As previously committed, any shipments above
this baseline quantity will be subject to a 5% rebate on the additional
units.  Further, in order to address your
concerns as to possible pricing consequences for volumes 20% or more below the
Finley volumes, we are withdrawing our right to readjust pricing.  Note that we have also removed our
requirement to review PODS D pricing after one year.  Due to the significant reduction in GMT900
volume, updated pricing for the GMT900 PODS-D program is included in the
attached prices.

 

As
to the three-year pricing provided herein, we require the following conditions.
First, as previously discussed, Methode must be placed on a material/component
cost adder program.  The material/component
costs used to calculate the attached pricing will be the base line.  On a quarterly basis any increases or
surcharges would be passed along to Delphi for reimbursement which must be paid
within 30 days.

 

 

Second,
ZCRI payment terms must apply for the term of the agreement.

 

Third,
as previously discussed Methode cannot agree to several terms of the purchase
orders and the Delphi General Terms and Conditions (“Delphi T’s & C’s).
One such term is paragraph 12 of PO# 550063028, which provides that “tools and
equipment provided for performance of an operation by consignee remain the
property of Delphi unless otherwise noted”. As Delphi knows, not all tools and
equipment used by Methode in the production of Delphi parts are the property of
Delphi. As such, Methode objects to that term to the extent it was intended to
include tools or equipment not paid for by Delphi.

 

Similarly,
Methode cannot agree to paragraph 16 of the Delphi T’s & C’s to the
extent that it grants Seller the right to take possession of and title to any
part of any equipment owned by Methode if it was used in the production of
Delphi parts.

 

Given
the fact that the agreement would expire after three years, Methode can not
agree to paragraph 18 of the Delphi T’s and C’s. Specifically, Methode does not
agree to produce any service or replacement parts other than those that will be
produced prior to September 30, 2011. Given the limited amount of service
parts ordered and the resulting set-up costs incurred by Methode, the pricing
for service parts will be determined by the order quantity.

 

Finally,
Methode does not agree to paragraph 28 of the Delphi T’s and C’s regarding
Delphi audits. In lieu of that paragraph, Methode will agree to the following
term adapted from the OESA (Original Equipment Suppliers Association) Draft
Model Terms and Conditions:

 

Seller
will maintain records as necessary to support amounts charged to Buyer in
accordance with Seller’s document retention policies. Buyer and its
representatives may audit Seller’s records of transactions completed within one
year prior to the audit date, to the extent needed to verify the quantities
shipped and that the prices charged match the agreed prices. Any audit will be
conducted at Buyer’s expense (but will be reimbursed by Seller if the audit uncovers
material errors in the amounts charged), at reasonable times, and at Seller’s
usual place of business.

 

Methode
will accept purchase orders with the attached pricing subject to the above
conditions and exceptions through September 30, 2011. In order for Methode
to accept purchase orders for product shipped after September 30, 2008,
the purchase orders must have these exceptions noted as well as Delphi must
remove any reference to pricing being “under protest”. Delphi must also waive
all rights or claims to having paid Methode “under protest” as to any past
purchase orders.

 

Please
provide written acceptance to this letter no later than close of business September 5,
2008.

 

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  /s/
  Timothy R. Glandon

  	
   

  
	
  Timothy
  R. Glandon

  	
   

  
	
  Vice
  President & General Manager

  	
   

  
	
  North
  American Automotive Operations

  	
   

  

 

 

                                 Electronics &
Safety

 

Via
E-Mail and UPS or FedX

 

September 4,
2008

 

Mr. Timothy
R. Glandon

Vice
President & General Manager

North
American Automotive Operations

111
W. Buchanan Street

P.O. Box
130

Carthage,
IL 62321-0130

 

Re:    Methode/Delphi

 

Dear
Tim:

 

Delphi
accepts the three-year pricing proposal set out in your August 25, 2008
letter.

 

Methode
will be placed on a material cost adder program.  The material/component costs used to calculate
the attached pricing will be the baseline. On a quarterly basis any increases
or surcharges will be passed along to Delphi for reimbursement which must be
paid within 30 days.

 

ZCRI
payment terms to apply for the term of the agreement.

 

That
portion of Paragraph 12 on the Purchase Order providing that “tools and
equipment provided for performance of an operation by consignee remain the
property of Delphi unless otherwise noted” shall be deleted as you have
demanded.

 

Additionally,
Paragraph 16 of Delphi’s Terms and Conditions shall not be applicable to the
extent that it allows Delphi to take possession of and title to any part of any
equipment owned by Methode (not paid for by Delphi) if it was used in the
production of Delphi parts.

 

In
regard to service parts obligation in Paragraph 18 of Delphi’s Terms &
Conditions, Delphi is in agreement with your proposal as to service parts with
the price to be determined by order quantity.

 

It
is agreed that Paragraph 28 of Delphi’s Terms & Conditions as to “Right
to Audit and Inspect” shall not be applicable and that instead, the OESA Draft
Model Terms and Conditions must apply:

 

Seller
will maintain records as necessary to support amounts charged to Buyer in
accordance with the Seller’s document retention policies. Buyer and its
representatives may audit Seller’s records of transactions completed within one
year prior to the audit date, to the extent needed to verify the quantities
shipped and that the prices charged match the agreed prices. Any audit will be
conducted at Buyer’s expense (but will be reimbursed by Seller if the audit
uncovers material 

 

One
Corporate Center PO Box 9005 Kokomo, IN 46904-9005 USA

 

 

errors
in the amounts charged) at reasonable times, and at Seller’s usual place of
business.

 

Delphi
will delete the reference to pricing being “under protest” and waive its right
in regard to having paid Methode “under protest” as to past purchase orders.
Delphi will issue new Purchase Orders with the above exceptions with an
expiration date of September 30, 2011.

 

A
copy of your August 25, 2008 letter is attached hereto. Purchase orders
consistent with the terms of this letter will follow.

 

Sincerely,

 

Mark
A. Shively

Mark
A. Shively

Purchasing
Manager

Delphi
Electronics Group

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