exv10w1



 





EXHIBIT 10.1




SECURITIES PURCHASE AGREEMENT




by and between




METHODE ELECTRONICS, INC.




and




GEMTRON CORPORATION




Dated as of February 28, 2007




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	1. PURCHASE AND SALE OF INTERESTS
	 	 	1	 
	1.1. Agreement to Purchase and Sell Interests
	 	 	1	 
	1.2. Purchase Price
	 	 	1	 
	 
	 	 	 	 
	2. CLOSING
	 	 	2	 
	2.1. Closing
	 	 	2	 
	2.1.1. Closing Deliverables
	 	 	2	 
	2.1.2. Closing Payment
	 	 	2	 
	2.2. Payment of Cash by TST
	 	 	2	 
	2.3. Location and Effective Time of Closing
	 	 	2	 
	 
	 	 	 	 
	3. CALCULATION OF ADJUSTED NET WORKING CAPITAL AND BONUS RIGHTS SETTLEMENT AMOUNT
	 	 	3	 
	3.1. Adjusted Net Working Capital Calculation
	 	 	3	 
	3.1.1. Estimated Closing Statement
	 	 	3	 
	3.1.2. Closing Statement
	 	 	3	 
	3.1.3. Disputed Adjustments
	 	 	3	 
	3.1.4. Payment of Net Working Capital Adjustment
	 	 	4	 
	3.2. Calculation of Bonus Rights Settlement Amount
	 	 	4	 
	3.3. Independent Accounting Firm
	 	 	4	 
	3.3.1. Selection
	 	 	4	 
	3.3.2. Independent Accounting Firm Fees and Expenses
	 	 	5	 
	 
	 	 	 	 
	4. REPRESENTATIONS AND WARRANTIES OF GEMTRON CONCERNING TST
	 	 	5	 
	4.1. Organization, Power and Qualification
	 	 	5	 
	4.2. Subsidiaries
	 	 	5	 
	4.3. Authorization by TST
	 	 	5	 
	4.4. No Violation; TST Consents
	 	 	6	 
	4.5. Capitalization
	 	 	6	 
	4.6. Financial Statements
	 	 	6	 
	4.7. Liabilities and Obligations
	 	 	7	 
	4.8. Absence of Certain Changes
	 	 	7	 
	4.9. Tax Returns and Reports
	 	 	9	 
	4.10. Title to and Condition of Assets
	 	 	10	 
	4.10.1. Title and Condition
	 	 	10	 
	4.10.2. All Assets Necessary
	 	 	11	 
	4.11. Real Estate and Leases
	 	 	11	 
	4.12. Material Contracts
	 	 	11	 
	4.13. Receivables
	 	 	13	 
	4.14. Inventory
	 	 	13	 
	4.15. Litigation
	 	 	13	 
	4.16. Bank Accounts, Guarantees, Powers of Attorney, Systems Access
	 	 	13	 
	4.17. Insurance
	 	 	13	 
	4.18. Employment and Labor Matters
	 	 	14	 
	4.19. Employee Benefits
	 	 	15	 






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	4.19.1. Employee Plans
	 	 	15	 
	4.19.2. TST Bonus Rights Settlement Plan
	 	 	16	 
	4.20. Intellectual Property
	 	 	17	 
	4.20.1. Title to Intellectual Property
	 	 	17	 
	4.20.2. Identification of Intellectual Property
	 	 	17	 
	4.20.3. No Infringement by TST
	 	 	17	 
	4.20.4. Infringement by Third Parties
	 	 	17	 
	4.20.5. Registrations for Intellectual Property
	 	 	18	 
	4.20.6. Trade Secrets
	 	 	18	 
	4.20.7. Employee Developments
	 	 	18	 
	4.21. Legal Compliance
	 	 	18	 
	4.22. Approvals
	 	 	19	 
	4.23. Transactions with Affiliates
	 	 	19	 
	4.24. Environmental Matters
	 	 	19	 
	4.24.1. Environmental Compliance
	 	 	19	 
	4.24.2. Environmental Audits
	 	 	19	 
	4.24.3. Release, Storage or Disposal of Hazardous Materials
	 	 	19	 
	4.24.4. Remedial Actions
	 	 	20	 
	4.24.5. Storage Tanks
	 	 	20	 
	4.24.6. PCBs and Asbestos
	 	 	20	 
	4.24.7. Environmental Claims
	 	 	20	 
	4.25. TST Products
	 	 	21	 
	4.25.1. Product Liability
	 	 	21	 
	4.25.2. Warranties; Rebates
	 	 	21	 
	4.25.3. Complaints
	 	 	21	 
	4.26. Principal Customers and Suppliers
	 	 	21	 
	4.27. Copies of Documents
	 	 	22	 
	 
	 	 	 	 
	5. REPRESENTATIONS AND WARRANTIES OF GEMTRON CONCERNING GEMTRON
	 	 	22	 
	5.1. Organization; Authorization
	 	 	22	 
	5.2. No Violation; Gemtron Consents
	 	 	22	 
	5.3. Ownership of TST
	 	 	23	 
	 
	 	 	 	 
	6. REPRESENTATIONS AND WARRANTIES OF METHODE
	 	 	23	 
	6.1. Organization; Authorization
	 	 	23	 
	6.2. No Violation; Methode Consents
	 	 	23	 
	 
	 	 	 	 
	7. COVENANTS PRIOR TO CLOSING
	 	 	24	 
	7.1. Conduct of Business; No Material Change
	 	 	24	 
	7.2. Investigation
	 	 	24	 
	7.3. Preserve Accuracy of Representations and Warranties; Schedules
	 	 	24	 
	7.4. Notice of Certain Events
	 	 	25	 
	7.5. Regulatory Authorizations; Notices and Consents
	 	 	25	 
	7.5.1. Governmental Approvals for Gemtron’s and TST’s Performance
	 	 	25	 
	7.5.2. Consents of Third Parties for Gemtron’s and TST’s Performance
	 	 	25	 
	7.5.3. Governmental Approvals for Methode’s Performance
	 	 	25	 
	7.5.4. HSR Filings
	 	 	26	 






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	7.6. Excluded Assets and Liabilities
	 	 	26	 
	7.7. No Solicitation; Other Offers
	 	 	26	 
	7.8. Employee Departures
	 	 	26	 
	7.9. TST Bonus Rights Settlement Plan Payments
	 	 	26	 
	7.10. Satisfaction of Closing Conditions
	 	 	27	 
	7.10.1. Methode’s Closing Conditions
	 	 	27	 
	7.10.2. Gemtron’s Closing Conditions
	 	 	27	 
	 
	 	 	 	 
	8. CONDITIONS TO CLOSING
	 	 	27	 
	8.1. Mutual Conditions
	 	 	27	 
	8.1.1. No Suit
	 	 	27	 
	8.1.2. HSR Waiting Period
	 	 	27	 
	8.2. Conditions to Methode’s Obligations
	 	 	27	 
	8.2.1. Representations and Warranties
	 	 	27	 
	8.2.2. Covenants
	 	 	27	 
	8.2.3. Intentionally Omitted
	 	 	28	 
	8.2.4. Consents and Approvals
	 	 	28	 
	8.2.5. No Material Adverse Effect
	 	 	28	 
	8.2.6. Payoff Letter
	 	 	28	 
	8.2.7. Supply Agreement
	 	 	28	 
	8.2.8. Shared Services Agreement
	 	 	28	 
	8.2.9. Bonus Rights Letters of Credit Arrangements
	 	 	28	 
	8.2.10. Technology Review
	 	 	28	 
	8.2.11. Closing Documents
	 	 	28	 
	8.3. Conditions to Gemtron’s and TST’s Obligations
	 	 	29	 
	8.3.1. Representations and Warranties
	 	 	29	 
	8.3.2. Covenants
	 	 	29	 
	8.3.3. Intentionally Omitted
	 	 	30	 
	8.3.4. Approvals
	 	 	30	 
	8.3.5. Purchase Price
	 	 	30	 
	8.3.6. Bonus Rights Letters of Credit Arrangements
	 	 	30	 
	8.3.7. Closing Documents
	 	 	30	 
	 
	 	 	 	 
	9. TERMINATION
	 	 	30	 
	9.1. Termination of Agreement Prior to Closing
	 	 	30	 
	9.1.1. Mutual Consent
	 	 	30	 
	9.1.2. Breach
	 	 	31	 
	9.1.3. Respective Conditions
	 	 	31	 
	9.1.4. Mutual Conditions
	 	 	31	 
	9.2. Effect of Termination Prior to Closing
	 	 	31	 
	 
	 	 	 	 
	10 INDEMNIFICATION
	 	 	31	 
	10.1. Indemnification Obligations of Methode
	 	 	31	 
	10.2. General Indemnification Obligations of Gemtron
	 	 	32	 
	10.3. Special Intellectual Property Indemnification Obligations of Gemtron
	 	 	33	 
	10.4. Nature and Survival of Representations and Warranties
	 	 	33	 
	10.5. Limitations on Indemnification Obligations
	 	 	33	 
	10.5.1. Threshold
	 	 	33	 






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	10.5.2. General Limitation on Amount
	 	 	34	 
	10.6. Method of Asserting Claims
	 	 	34	 
	10.7. Certain Limitations
	 	 	35	 
	10.8. Setoff; Payment of Claims
	 	 	35	 
	10.8.1. Setoff by Methode
	 	 	35	 
	10.8.2. Setoff by Gemtron
	 	 	35	 
	10.9. Treatment of Claims
	 	 	35	 
	10.10. Insurance Recoveries
	 	 	35	 
	10.11. Exclusive Remedy
	 	 	35	 
	 
	 	 	 	 
	11 POST-CLOSING AGREEMENTS
	 	 	36	 
	11.1. Tax Returns
	 	 	36	 
	11.1.1. Preparation of Tax Returns
	 	 	36	 
	11.1.2. Reimbursement of Refunds
	 	 	36	 
	11.1.3. Continued Cooperation
	 	 	36	 
	11.2. Releases
	 	 	37	 
	11.3. Employees
	 	 	37	 
	11.4. Gemtron’s Post-Closing Confidentiality Obligations
	 	 	37	 
	11.5. Employee Benefit Plans
	 	 	37	 
	11.5.1. Participation in Employee Plans
	 	 	37	 
	11.5.2. Group Health Plan
	 	 	38	 
	11.5.3. Vacation Pay
	 	 	38	 
	11.5.4. COBRA Benefits
	 	 	38	 
	 
	 	 	 	 
	12 GENERAL PROVISIONS
	 	 	38	 
	12.1. Entire Agreement
	 	 	38	 
	12.2. Amendment; Waiver
	 	 	38	 
	12.3. Expenses
	 	 	38	 
	12.4. Notices
	 	 	38	 
	12.5. Assignment
	 	 	39	 
	12.6. Severability
	 	 	39	 
	12.7. Counterparts; Facsimiles
	 	 	40	 
	12.8. Construction
	 	 	40	 
	12.9. Instruments of Further Assurance
	 	 	40	 
	12.10. Public Announcements
	 	 	40	 
	12.11. No Third Party Beneficiaries
	 	 	41	 
	12.12. Governing Law
	 	 	41	 
	12.13. Disputes
	 	 	41	 






- iv - 









 






EXHIBITS




	 	 	 
	Exhibit A

	 	Estimated Adjusted Net Working Capital Calculation
	Exhibit B

	 	Form of Supply Agreement
	Exhibit C

	 	Form of Shared Services Agreement
	Exhibit D

	 	Form of Noncompetition and Confidentiality Agreement
	Exhibit E

	 	Bonus Rights Settlement Amount






SCHEDULES




	 	 	 
	Schedule 4.1

	 	Foreign Qualifications
	Schedule 4.4

	 	No Violation; TST Consents
	Schedule 4.6

	 	Financial Statements
	Schedule 4.7

	 	Liabilities and Obligations
	Schedule 4.8

	 	Absence of Certain Changes
	Schedule 4.9

	 	Tax Returns and Reports
	Schedule 4.10

	 	Title to and Condition of Assets
	Schedule 4.11

	 	Real Estate and Leases
	Schedule 4.12

	 	Material Contracts
	Schedule 4.13

	 	Receivables
	Schedule 4.15

	 	Litigation
	Schedule 4.16

	 	Bank Accounts, Guarantees and Powers
	Schedule 4.17

	 	Insurance
	Schedule 4.18

	 	Employee Matters
	Schedule 4.19

	 	Employee Benefits
	Schedule 4.20

	 	Intellectual Property
	Schedule 4.21

	 	Legal Compliance
	Schedule 4.22

	 	Approvals
	Schedule 4.24

	 	Environmental Matters
	Schedule 4.25

	 	TST Products
	Schedule 4.26

	 	Principal Customers and Suppliers
	Schedule 5.2

	 	No Violation; Gemtron Consents
	Schedule 6.2

	 	No Violation; Methode Consents
	Schedule 8.2.4

	 	Consents and Approvals






- v - 









 






SECURITIES PURCHASE AGREEMENT




     This SECURITIES PURCHASE AGREEMENT (“Agreement”) is made and entered into as of February 28,
2007, by and between Methode Electronics, Inc., a Delaware corporation (“Methode”), and Gemtron
Corporation, a Tennessee corporation (“Gemtron”). Capitalized terms used but not defined in this
Agreement shall have the respective meanings set forth in the Appendix of Definitions attached
hereto and made a part hereof.



R E C I T A L S:




     WHEREAS, Gemtron is a member of TouchSensor Technologies, L.L.C., a Delaware limited liability
company (“TST”), and, as of the Closing, Gemtron will be the sole member and holder of all of the
Interests of TST;



     WHEREAS, TST owns certain patents, trade secrets, know-how and other Intellectual Property
relating to touch-based switches and sensors employing field-effect technology, and associated
displays, incorporated into flexible and rigid substrates (the “Technology”) and is in the business
of developing, licensing, manufacturing and selling products utilizing the Technology (the
“Business”);



     WHEREAS, Gemtron desires to sell, transfer and assign to Methode, and Methode wishes to
acquire from Gemtron, upon the terms and conditions set forth herein, one hundred percent (100%) of
the Interests of TST, such that Methode (or a Subsidiary of Methode designated by Methode in
writing prior to the Closing) becomes the sole member of TST and the sole holder of all ownership
interest in TST;



     NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
in reliance upon the representations and warranties hereinafter set forth, the parties agree as
follows.


1. PURCHASE AND SALE OF INTERESTS.




     1.1. Agreement to Purchase and Sell Interests. Subject to the terms and conditions
contained herein, Gemtron agrees to transfer and deliver to Methode (or a Subsidiary of Methode
designated by Methode in writing prior to the Closing), and Methode agrees to acquire (or cause a
Subsidiary of Methode designated by Methode in writing prior to the Closing to acquire) from
Gemtron, at the Closing, free and clear of all claims or Liens of any nature whatsoever, all of the
Interests of TST (collectively, the “Acquired Interests”).



     1.2. Purchase Price. The aggregate purchase price for all of the Acquired Interests (the “Purchase Price”) shall
equal (A) (i) Sixty Five Million Dollars ($65,000,000), plus (ii) the Net Working Capital
Adjustment (which may be a positive number increasing the aggregate Purchase Price or a negative
number decreasing the aggregate Purchase Price) as set forth in the Final Closing Statement (as
defined in Section 3.1), minus (iii) the Bonus Rights Settlement Amount (as defined in Section
3.2), payable as provided in Sections 2.1.2 and 3.1.4, plus (B) the assumption by Methode of
Gemtron’s obligations under the Bonus Rights Letters of Credit, as provided in Section 8.3.6.



- 1 -









 




2. CLOSING.




     2.1. Closing. The consummation of the purchase and sale of the Acquired Interests as
contemplated by this Agreement (the “Closing”) shall take place on February 28, 2007, subject to
the satisfaction or waiver of all of the conditions to Gemtron’s and Methode’s obligations to close
set forth in Section 8, or on such other date as may be mutually agreed upon by Methode and Gemtron
(the “Closing Date”).



          2.1.1. Closing Deliverables. At the Closing, (i) Gemtron will deliver to Methode the
various agreements, certificates and documents referred to in Section 8.2, (ii) Methode will
deliver to Gemtron the various agreements, certificates and documents referred to in Section 8.3,
(iii) Gemtron will transfer, assign, convey and deliver to Methode instruments of assignment
conveying all right, title and interest in the Acquired Interests, free and clear of all Liens,
(iv) Methode will pay the Closing Payment as provided in Section 2.1.2 and (v) Gemtron and Methode
will instruct TST to pay to Gemtron all available cash of TST as provided in Section 2.2.




          2.1.2. Closing Payment. At the Closing, Methode shall deliver to Gemtron a sum equal
to (i) Sixty Five Million Dollars ($65,000,000) minus (ii) the Bonus Rights Settlement Amount (as
defined in Section 3.2) (the “Closing Payment”), payable by wire transfer to Gemtron in accordance
with the following wire instructions:



JPMorgan Chase Bank

55 Water Street

New York, NY 10041



ABA # 021-000021

Account Name: Gemtron Corporation

Account Number: 323-080812



The Closing Payment shall be applied as follows:





     (a) first, the amount identified in the Payoff Letter delivered by Gemtron pursuant to
Section 8.2.6 to the repayment of all Liabilities owed by TST to Gemtron; and




     (b) the remainder of the Closing Payment to Gemtron.



     2.2. Payment of Cash by TST. Notwithstanding Section 7.1, immediately prior to the
Closing, Gemtron shall declare, immediately prior to Closing, a distribution of all available cash
of TST as of the close of business on the Closing Date. To the extent that such distribution is
not paid prior to the Closing, Gemtron and Methode shall cause TST to pay to Gemtron such
distribution, promptly after the Closing by wire transfer to Gemtron in accordance with the wire
instructions set forth in Section 2.1.2.



     2.3. Location and Effective Time of Closing. The Closing shall take place at the offices
of Jenner & Block LLP, 330 North Wabash Avenue, Chicago, Illinois 60611, at 10:00




- 2 -









 




a.m. (Chicago
time), or such other location and time as may be agreed by the parties. Title to the Acquired
Interests shall be deemed to have been transferred to Methode at 11:59 p.m. (Chicago time) on the
Closing Date.





	3.	 	CALCULATION OF ADJUSTED NET WORKING CAPITAL AND BONUS RIGHTS SETTLEMENT AMOUNT.





     3.1. Adjusted Net Working Capital Calculation.



          3.1.1. Estimated Closing Statement. Gemtron and Methode hereby agree that
Exhibit A hereto sets forth, by way of example, the manner in which the Adjusted Net
Working Capital was calculated as of the dates shown thereon and the format of the Closing
Statement.




          3.1.2. Closing Statement.
Gemtron and Methode shall direct the Independent Accounting Firm (as defined in Section 3.3.1)
to prepare and submit to Methode and Gemtron a statement (the “Closing Statement”) certified by the
Independent Accounting Firm and setting forth the current assets of TST, including receivables, all
deposits (including security deposits and prepaid rents, however denominated), and all other
current assets, but excluding cash, as they shall exist at the Closing Date, less the current
liabilities, including payables, accrued expenses, deferred income and all other current
liabilities, of TST as they shall exist at the Closing Date and less all other Liabilities (if
any), including noncurrent deferred income and any Indebtedness not paid off as part of the Closing
Payment, but excluding Liabilities represented by the Bonus Rights Settlement Amount and excluding
the long-term portion of the capital lease reflected in the Financial Statements and disclosed on
Schedule 4.12 (“Adjusted Net Working Capital”). In each case, the current assets, current
liabilities and other Liabilities shall be determined in accordance with GAAP consistent with TST’s
past practices. The Closing Statement shall show in reasonable detail the means by which Adjusted
Net Working Capital was calculated (including lists of current assets and current liabilities) and
shall set forth the Net Working Capital Adjustment (as defined in Section 3.1.4). The manner in
which the Adjusted Net Working Capital shall be calculated and the format of the Closing Statement
shall be consistent with Exhibit A hereto. Gemtron and Methode shall cause TST to direct
the Independent Accounting Firm to submit the Closing Statement as soon as reasonably practical
after the Closing and in no event later than May 31, 2007.




          3.1.3. Disputed Adjustments. Upon receipt of the Closing Statement, Gemtron and
Methode and their respective accountants and representatives shall be permitted during the
succeeding thirty (30) day period to examine the accounting records and work papers prepared by the
Independent Accounting Firm in connection with the preparation of the Closing Statement. If
Gemtron and Methode agree to the Closing Statement, it shall become the final Closing Statement
(the “Final Closing Statement”). If Gemtron and/or Methode do not agree to the Closing Statement,
Gemtron and/or Methode shall within thirty (30) days after delivery of the Closing Statement by the
Independent Accounting Firm, prepare and deliver to the other party a list of disputed adjustments
(the “Disputed Adjustments”) to the Closing Statement. If either party fails to deliver a list of
Disputed Adjustments within thirty (30) days after the delivery of the Closing Statement by the
Independent Accounting Firm, such party shall be

- 3 -









 








deemed to have agreed to the Closing Statement.
Gemtron and Methode shall use Reasonable Efforts to resolve the Disputed Adjustments. If Gemtron
and Methode are able to reach an agreement on the Disputed Adjustments, the Closing Statement shall
be amended to reflect such agreement and shall become the Final Closing Statement. If Gemtron and
Methode are unable to reach an agreement on the Disputed Adjustments within thirty (30) days after
receipt of all Disputed Adjustments, then Gemtron and Methode shall select a replacement
Independent Accounting Firm in accordance with Section 3.3 (unless Methode and Gemtron both elect
to retain the original Independent Accounting Firm) and shall cause such Independent Accounting
Firm to review the Disputed Adjustments and determine the final value of each of the Disputed
Adjustments in a prompt manner (and in any event within sixty (60) days of receipt of the Disputed
Adjustments). In making such determination, the Independent Accounting Firm shall consider only
the items or amounts in dispute (and any other items or amounts relating thereto), and the
determination of each Disputed Adjustment’s value, as so computed, shall not, in any event, be
outside the range
of dollars proposed by Gemtron and Methode. The Closing Statement shall then be amended to
reflect the determination of the final value of each of the Disputed Adjustments and shall become
the Final Closing Statement. The Final Closing Statement shall be deemed to be and shall be
conclusive and binding on the parties to this Agreement for purposes of determining the Adjusted
Net Working Capital as of the Closing and the Net Working Capital Adjustment.




          3.1.4. Payment of Net Working Capital Adjustment. Within twenty (20) calendar days
after the Final Closing Statement is determined and becomes final, (i) if the Adjusted Net Working
Capital in the Final Closing Statement is greater than $11,225,000, then Methode shall pay to
Gemtron the difference, by wire transfer to Gemtron, or (ii) if the Adjusted Net Working Capital in
the Final Closing Statement is less than $10,225,000, then Gemtron shall pay to Methode the
difference, by wire transfer to Methode. The amount payable by either party under this Section
3.1.4 shall be the “Net Working Capital Adjustment,” expressed as a positive number increasing the
aggregate Purchase Price under Section 1.2 if payable by Methode and expressed as a negative number
decreasing the aggregate Purchase Price under Section 1.2 if payable by Gemtron.




     3.2. Calculation of Bonus Rights Settlement Amount. Attached as Exhibit E
hereto is a statement setting forth the net present value of all amounts scheduled to be paid after
the Closing Date (assuming that all payments of principal and interest due under the TST Bonus
Rights Settlement Plan shall be paid when due and applying an agreed discount rate) for Liabilities
under the TST Bonus Rights Settlement Plan (the “Bonus Rights Settlement Amount”).



     3.3. Independent Accounting Firm.



          3.3.1. Selection. Prior to the Closing and continuing after the Closing, Methode and
Gemtron shall jointly retain KPMG LLP to determine the Adjusted Net Working Capital in accordance
with this Section 3 (the “Independent Accounting Firm”). The parties shall cause TST to grant the
Independent Accounting Firm reasonable access to the records and premises of TST, prior to and
after Closing, to permit the Independent Accounting Firm to perform the duties assigned to it
hereunder. In the event that the Independent Accounting Firm is or becomes unwilling to perform
the duties assigned to such Independent Accounting Firm hereunder,

- 4 -









 








Gemtron and Methode agree that
the Independent Accounting Firm should be replaced, or the Independent Accounting Firm is otherwise
required to be replaced pursuant to this Agreement, Methode and Gemtron shall jointly select a firm
of certified public accountants of national or regional standing mutually acceptable to Gemtron and
Methode to act as the replacement Independent Accounting Firm. In the event that Gemtron and
Methode are unable to agree upon the selection of the replacement Independent Accounting Firm,
either party may provide written notice to the other, in which case Gemtron shall select a firm of
certified public accountants of national or regional standing and Methode shall select a firm of
certified public accountants of national or regional standing, and the two firms so selected shall
select a third firm of certified public accountants of
national or regional standing which Methode and Gemtron shall jointly retain on behalf of TST
to act as the replacement Independent Accounting Firm.




          3.3.2. Independent Accounting Firm Fees and Expenses. The fees, costs and expenses of
the Independent Accounting Firm in preparing the Closing Statement or in assisting with the
resolution or in resolving any Disputed Adjustments or Disputed Calculations shall be shared
equally by Methode, on one hand, and Gemtron, on the other hand.





	4.	 	REPRESENTATIONS AND WARRANTIES OF GEMTRON CONCERNING TST.





     As an inducement for Methode to enter into this Agreement Gemtron represents and warrants to
Methode as of the date hereof and as of the Closing Date (except with respect to those
representations and warranties that address matters only as of a particular date, which are made as
of such date) as follows:



     4.1. Organization, Power and Qualification. TST is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to own or hold under lease its properties and assets
and to carry on its Business as now conducted. Except as disclosed on Schedule 4.1, TST is
duly qualified to do business and is in good standing as a foreign corporation in Illinois and in
every other jurisdiction in which the nature of its activities or the ownership or leasing of
property requires such qualification. True, correct and complete copies of the TST Organizational
Documentation have been furnished to Methode. No manager (as such term is defined in the Delaware
Limited Liability Act) has at any time been designated for TST. The minute books of TST containing
minutes of operating board and member meetings are complete in all material respects and there has
not been any company action which requires operating board or member approval or which is otherwise
material to TST for which minutes or written consents have not been prepared and placed in such
minute books. The Interest ownership records of TST are complete and correct in all material
respects.



     4.2. Subsidiaries. TST has no Subsidiaries and TST does not own, directly or
indirectly, any stocks, bonds or securities or any equity or other proprietary interest in any
corporation, partnership, limited liability company, joint venture, business enterprise or other
entity of any nature whatsoever.



     4.3. Authorization by TST. TST has all necessary corporate power and authority to
execute and deliver all agreements and documents to be executed and delivered by it pursuant to



- 5 -









 







this Agreement, and to consummate the transactions contemplated thereby. The execution, delivery
and performance of
the agreements and documents to be executed and delivered pursuant to this Agreement, and the
consummation of the transactions contemplated thereby, have been duly approved and authorized by
all necessary limited liability company actions on behalf of TST. All agreements and documents to
be executed and delivered by TST pursuant to this Agreement will constitute the valid and binding
agreements of TST, enforceable in accordance with their respective terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar Laws, now or hereafter in effect, affecting creditors’ rights generally, and (ii) the
remedy of specific performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any proceeding therefor may be
brought.



     4.4. No Violation; TST Consents. Except as set forth on Schedule 4.4, neither
the execution and delivery of this Agreement, nor the consummation of the transactions contemplated
hereby, will constitute a violation of, or be in conflict with, or result in a cancellation of or
right to cancel, or constitute a default under: (a) any term or provision of the TST Organizational
Documentation; (b) any judgment, decree, order, regulation or rule of any court or other
Governmental Authority to which TST is subject; (c) any applicable Law; or (d) any Contract to
which TST is a party or is bound; or cause any material change in the rights or obligations of any
party under any such Contract. Except as set forth on Schedule 4.4, neither the execution
and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will
create (or cause the acceleration of the maturity of) any debt, obligation or Liability affecting,
or result in the creation or imposition of any Lien (other than a Permitted Lien), or impair in any
material respect the right of TST to use, any of the assets owned or used by TST or any of the
Interests of TST.



     Except for the filing requirements under the HSR Act and except as set forth on Schedule
4.4 no material consent of, or notice to, any Governmental Authority or any other Person is
required to be obtained or given by TST in connection with the execution, delivery or performance
of this Agreement by TST or Gemtron or any other agreement or document to be executed, delivered or
performed hereunder by TST, or to enable TST to continue to conduct its Business and affairs after
the Closing in the manner in which they are currently conducted.



     4.5. Capitalization. There currently exist 657,969 Interests, all of which will, as
of the Closing, be held by Gemtron. All capital contributions required for the issuance of the
Interests have been paid in full and Gemtron has no obligation to make any capital contribution to
TST. No Interests have been issued in violation of any rights under applicable Law (including all
applicable federal and state securities Laws), the TST Organizational Documentation or the terms of
any Contract to which TST is a party or by which TST is bound (or to which TST was a party or by
which TST was bound at the time of such issuance). TST has no outstanding subscriptions, options,
warrants, rights or other agreements granting to any Person any interest in or right to acquire
from TST at any time, or upon the happening of any stated event, any Interests, any securities
convertible into or exchangeable for any Interest, or any interest therein; or requiring TST to
repurchase, reacquire, redeem or retire any Interests. There are no outstanding or authorized
equity appreciation, phantom equity or similar rights with respect to TST. There are no
voting trusts, proxies or any other agreements or understandings with respect to the voting of the
Interests of TST.



- 6 -









 





     4.6. Financial Statements. Schedule 4.6 hereto contains true and complete
copies of the following financial statements:




     (a) The audited balance sheets of TST, together with the related statements of income
and members’ deficit and cash flows at and for each of the five (5) consecutive fiscal years
ended September 30, 2006 (the “Financial Statements”); and




     (b) The internal financial report for the quarter ended December 31, 2006 (the “Interim
Financial Report”).



     The Financial Statements: (i) were prepared in accordance with the books of account and other
financial records of TST, (ii) fairly and accurately present the assets, Liabilities and financial
condition of TST in all material respects as at the respective dates thereof, and the results of
operations and cash flows for the periods then ended, (iii) have been prepared in accordance with
GAAP applied on a consistent basis with TST’s past practices, and (iv) include all adjustments
(consisting only of normal recurring accruals) that are necessary for a fair presentation of the
financial condition and the results of operation of the Business of TST as of the dates thereof or
for the periods covered thereby.



     The Interim Financial Report (i) was prepared in accordance with the books of account and
other financial records of TST, and (ii) has been prepared on a consistent basis with TST’s past
practices and the internal financial reports previously delivered to Methode by Gemtron and/or TST.



     4.7. Liabilities and Obligations. To Gemtron’s Knowledge, TST does not have any
Liabilities of any nature whatsoever, whether arising out of contract, tort, statute or otherwise,
which are not reflected, reserved against or given effect to in the Financial Statements except:
(a) Liabilities and obligations incurred in the Ordinary Course of Business since the dates of the
Financial Statements, which are of the same nature as those set forth in the Financial Statements,
and which are not, individually or in the aggregate, material to TST and (b) Liabilities and
obligations which are specifically disclosed in Schedule 4.7. To Gemtron’s Knowledge,
there is no basis for assertion against TST of any Liabilities not adequately reflected, reserved
against or given effect to in the Financial Statements or in Schedule 4.7, except for
Liabilities described in clause (a) above.



     4.8. Absence of Certain Changes. Except as disclosed in Schedule 4.8 or on
the Financial Statements, since October 1, 2006, the Business and operations of TST have been
conducted in the Ordinary Course of Business and, without limiting the foregoing, there has not
been:




     (a) any material adverse change in the condition (financial or otherwise) of the
properties, assets, Liabilities or results of operation of TST, or any event, occurrence,
development, state of circumstances or facts that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;




     (b) any damage, destruction or loss (whether or not covered by insurance) affecting the
properties, assets, Liabilities, financial condition, results of operations or



- 7 -









 







business
prospects of TST that has had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;




     (c) any material labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize any employees
of TST, or any material lockouts, strikes, slowdowns, work stoppages or threats thereof by
or with respect to such employees;




     (d) any material change in the customary methods of operations of TST, including
practices and policies relating to manufacturing, purchasing, Inventories, marketing,
selling and pricing;




     (e) any declaration, setting aside, or payment of any dividend or other distribution in
respect of the Interests, or any direct or indirect redemption, retirement, purchase or
other acquisition of any of Interests, or any issuance of Interests or the granting,
issuance or exercise of any right, warrant, option or similar commitment relating to any
Interests;




     (f) any amendment of (or authorization of any amendment of) the TST Organizational
Documentation or any reorganization of (or authorization of any reorganization of) the
capital structure of TST;




     (g) any increase in the compensation, benefits, commissions or perquisites payable or
to become payable by TST to any director, officer, employee, or agent of TST, or any payment
of or agreement to pay any bonus, profit sharing or other extraordinary compensation to any
employee of TST (other than any such increase or payment to Persons other than Gemtron that
were paid or that become payable in the Ordinary Course of Business);




     (h) any establishment, adoption or amendment of (i) a severance or termination pay plan
or agreement for any director, officer or employee of TST, or any increase in benefits
payable under any existing severance or termination pay policies or employment agreements,
or (ii) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement,
deferred compensation, compensation, stock option, restricted stock or other benefit plan or
arrangement covering any director, officer or employee of TST, except as required by
applicable Law;




     (i) any change in the accounting methods or practices or in any method of tax
accounting followed by TST or any change in depreciation or amortization policies or rates
theretofore adopted, except for any such change required by reason of a concurrent change in
GAAP;




     (j) any write-up or write-down of the value of any Inventories or revaluation any
assets of TST, other than in the Ordinary Course of Business and in accordance with GAAP;




     (k) any cancellation or release of any Indebtedness owed to or Claims held by TST;



- 8 -









 






     (l) any sale, lease, abandonment or other disposition by TST, other than in the
Ordinary Course of Business, of any machinery, equipment or other operating properties, or
any other tangible assets owned, leased or licensed by TST;




     (m) any sale or abandonment or other disposition by TST, other than in the Ordinary
Course of Business, of any Intellectual Property or other intangible assets owned or used by
TST;




     (n) any incurrence, assumption or guarantee by TST of any Indebtedness;




     (o) any transaction or commitment made, or any Contract entered into, by TST pursuant
to which any property or assets of TST is subjected to a Lien (other than a Permitted Lien);




     (p) any making of any loan, advance or capital contribution to, or investment in any
Person;




     (q) any transaction or commitment made, or any Contract entered into, by TST relating
to any of its assets or Business (including the acquisition or disposition of any assets) or
any relinquishment by TST of any Contract or other right, in either case, material to TST,
other than transactions and commitments in the Ordinary Course of Business and those
contemplated by this Agreement;




     (r) any transaction or commitment made, or any Contract entered into, by TST pursuant
to which any Intellectual Property is disclosed to or licensed to any Person, other than
transactions and commitments in the Ordinary Course of Business;




     (s) any transaction or commitment made, or any Contract entered into, by TST with a
director or officer of TST, any member of the immediate family of any such Persons, or any
Person controlled by any of the foregoing Persons; or




     (t) any agreement or commitment on the part of TST to do any of the foregoing.



     4.9. Tax Returns and Reports.




     (a) All Tax Returns required to be filed by TST through the date hereof have been, and
as to Tax Returns required to be filed through the Closing Date will be, timely filed with
the appropriate Governmental Authorities in all jurisdictions in which such Tax
Returns are required to be filed, and all such Tax Returns are or will be true and
correct in all material respects and prepared in accordance with applicable Law and properly
reflect, or will properly reflect, the Taxes of TST in all material respects for the periods
covered thereby.




     (b) Except as set forth on Schedule 4.9, and except for current Taxes not yet
due and payable (or that will not be due and payable by the Closing Date) all Taxes due and
payable by TST with respect to all periods prior to and through the date hereof have been,
and through the Closing Date will be, duly and properly computed, reported, fully



- 9 -









 







paid and
discharged and there are no unpaid Taxes with respect to any period prior to and through the
date hereof, and there will not be any unpaid Taxes with respect to any period through the
Closing Date, which are or could become a Lien (other than a Permitted Lien) on the
properties and assets of TST. All unpaid Taxes, whether or not disputed, for all periods
ending prior to and through the date hereof have been, and through the Closing Date will be,
properly accrued on the books and financial records of TST in accordance with GAAP and in
amounts sufficient for the payment of all unpaid Taxes required to be paid by TST with
respect to such periods.




     (c) Neither Gemtron nor TST has received any currently outstanding notice of assessment
or proposed assessment by the IRS or any other Governmental Authority in connection with any
Tax Returns and there are no pending tax examinations of or tax claims asserted against TST
or its properties. Except as disclosed on Schedule 4.9, neither Gemtron nor TST has
received any notice from a Governmental Authority in a jurisdiction where TST does not pay
Taxes or file Tax Returns that TST is or may be subject to Taxes assessed by such
jurisdiction.




     (d) Except as disclosed in Schedule 4.9, there are no Tax Liens (other than the
Permitted Liens) on any of the properties or assets of TST.




     (e) TST has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or due and owing to any employee, creditor, independent
contractor, or other third party and TST has properly reflected the status of all employees
and independent contractors in connection therewith as required by all applicable Laws.




     (f) TST has not: (i) waived any statute of limitations in respect of Taxes or agreed or
consented to any extension of time with respect to a Tax assessment or deficiency which
waiver, agreement or consent is currently in force; or (ii) been a United States real
property holding corporation within the meaning of Code Sec. 897(c)(2) during the applicable
period specified in Code Sec. 897(c)(1)(A)(ii).




     (g) TST is not a party to, or bound by, any tax sharing, tax indemnity, tax allocation
or similar agreement or arrangement. TST has never been a member of an affiliated group
within the meaning of Section 1504 of the Code (or any similar group defined under a similar
provision of any state, local or foreign Law) (an “Affiliated Group”) filing a consolidated
federal income Tax Return (other than an Affiliated Group
of which TST is the includible common parent) and is not liable for any Taxes of any
Person as a transferee or successor, by contract, or otherwise.




     (h) Copies of all income tax returns of TST for the three fiscal years ended September
30, 2005 have heretofore been delivered by Gemtron and TST to Methode.



     4.10. Title to and Condition of Assets.



          4.10.1. Title and Condition. TST is the owner of and has good and marketable title to,
or a leasehold interest in, all of the properties and assets reflected in the Financial Statements
(other than those properties and assets disposed of by TST since the dates of the

- 10 -









 








balance sheets
included in the Financial Statements, in the Ordinary Course of Business and for fair value) in the
amounts and categories reflected therein, and to all properties and assets acquired by TST after
the respective dates thereof, free and clear of Liens, except for the Permitted Liens. Except as
disclosed in Schedule 4.10.1, the tangible properties and tangible assets of TST that are
utilized in the operation of its Business (including all buildings) are in good operating condition
and repair, ordinary wear and tear excepted, are usable in the Ordinary Course of Business and
conform in all material respects to all applicable Laws relating to their construction, use and
operation. Notwithstanding the foregoing, this Section 4.10.1 does not apply to Intellectual
Property.




          4.10.2. All Assets Necessary. Except as set forth in Schedule 4.10.2, (i)
TST’s assets include all assets, properties and rights necessary to conduct its Business
substantially in the manner conducted since October 1, 2006, and (ii) Gemtron has not retained or
failed to deliver any material asset or right of any kind or nature, which is owned by TST or which
Gemtron or any of its Affiliates owns or to which Gemtron or any of its Affiliates has rights,
which is necessary to, or designed for or used in the conduct of, TST’s Business; provided that
this Section 4.10.2 does not apply to Intellectual Property.




     4.11. Real Estate and Leases. TST does not own, and has not ever owned, any real
estate. Schedule 4.11 sets forth a description of all real estate (including buildings and
improvements) leased by TST (the “Leased Facilities”) according to the character of the property
and the location thereof; and a brief description (including in each case the annual rent payable,
the expiration date, a brief description of the property covered and the name of the lessor) of
every lease or agreement (written or oral) under which TST is lessee of, or holds or operates, any
such Leased Facility (each a “Facility Lease”). Each Facility Lease is in full force and effect and
constitutes a legal, valid and binding obligation of the respective parties thereto. Neither TST
nor, to Gemtron’s Knowledge, any other party thereto is in default in any material respect under a
Facility Lease nor has any event occurred which with the passage of time or giving of notice or
both would constitute such a default. Except as disclosed on Schedule 4.11, the Leased
Facilities do not violate any building, zoning or other Laws, or any Contracts, applicable thereto,
and no notice of
any such violation or claimed violation has been received by TST. Except as disclosed on
Schedule 4.11, no modifications, alterations, improvements or installations to a Leased
Facility have been made which would permit the landlord to require material expenditures by the
tenant to place such Leased Facility in conformance with requirements arising under or upon
expiration or termination of the Facility Lease therefor.



     4.12. Material Contracts. Except as set forth in Schedule 4.12, TST is not a
party to, or bound by, any Contracts:




     (a) for the sale of products (including raw materials, commodities, supplies, or other
personal property) or for the furnishing of services, the performance of which will extend
over a period of more than one year, or that involves annual payments in excess of $50,000
or which cannot be canceled by TST without penalty and without more than thirty (30) days
prior notice;



- 11 -









 






     (b) for the purchase of products or services involving payment of in excess of $50,000
per annum by TST or which cannot be canceled by TST without penalty or further payment and
without more than thirty (30) days prior notice;




     (c) for leasing tangible personal property (including leases for office or computer
equipment, furniture, fixtures, and vehicles) which require an annual payment in excess of
$50,000 or the term of which at any time exceeded one (1) year;




     (d) for the lease of real or tangible personal property to any Person;




     (e) constituting a partnership or joint venture;




     (f) between TST and any Governmental Authority;




     (g) under which it has created, incurred, assumed, or guaranteed any Indebtedness, or
under which it has imposed a Lien on any of its assets, tangible or intangible;




     (h) prohibiting TST from freely engaging in the business (or in any line of business)
anywhere in the world or containing any other restrictive covenant or containing any
exclusivity clause or obligation that would otherwise restrict the conduct of the business
of TST, to Gemtron’s Knowledge;




     (i) for the employment of any individual on a full-time, part-time, consulting, or
other basis providing annual compensation in excess of $80,000 and which is not cancelable
without payment of severance and on thirty (30) days’ notice or less, or any severance
agreement;




     (j) under which it has advanced or loaned any amount to any of its directors, officers,
and employees or guaranteed any such loan;




     (k) for the purchase or sale of capital stock membership interests or interests
therein, or of securities convertible into or exchangeable for capital stock;




     (l) providing for the services of dealers, distributors, sales representatives or
similar representatives;




     (m) used as standard forms of agreements by TST;




     (n) relating to the ownership, use or licensing of any Intellectual Property (provided,
however, that shrink-wrap licenses whereby TST licenses generally-available off-the-shelf
software may be disclosed on Schedule 4.12 by listing only the software name and
number of licenses/seats purchased rather than by listing individual licenses), including,
without limitation, any current or past grant of, or termination of any grant of, rights in
TST Intellectual Property, any development of TST Intellectual Property by a third party, or
any transfer of rights in any Intellectual Property; or




     (o) which are otherwise material to TST.



- 12 -









 





     Except as provided in Schedule 4.12, each Contract to which TST is a party or is
otherwise bound: (i) is legal, valid and binding on TST and, to Gemtron’s Knowledge, on the other
parties thereto, and is in full force, and (ii) upon the consummation of the transactions
contemplated by this Agreement shall continue in full force and effect without penalty or adverse
consequence. Neither TST or, to Gemtron’s Knowledge, any other party thereto, is in breach of, or
default under the provisions of any Contract (except where such default does not give rise to any
termination right or penalty under the terms of such Contract). True, correct and complete copies
of all written Contracts disclosed on Schedule 4.12 and accurate descriptions of all oral
Contracts disclosed on Schedule 4.12 have been provided to Methode.



     4.13. Receivables. An aged list of all unpaid accounts and notes receivable of TST
(the “Receivables”) outstanding as of the most recent practicable date is attached on Schedule
4.13 hereto. Except as disclosed on Schedule 4.13, all Receivables, net of any
reserves for doubtful accounts, arose from sales in the Ordinary Course of Business, represent
legal and valid obligations to TST and are not subject to any valid dispute, counterclaim, Lien
(other than a Permitted Lien) or set-off, or any other reduction or discount that has been agreed
to by TST.



     4.14. Inventory. All Inventories of TST reflected on the most recent balance sheet
contained in the Financial Statements or acquired since the dates thereof, net of the reserve set
forth in the Financial Statements are and will at the Closing Date consist of items of a quality
and quantity usable and salable in the Ordinary Course of Business as first quality goods. Each
item of Inventory reflected on the Financial Statements and the books and records of TST is valued
at the lower of cost or market in accordance with GAAP, and TST has recognized all loss resulting
from the obsolescence, physical deterioration, changes in prices, discontinuation of product lines,
pending customer claims, pending warranty claims, pending intellectual property claims or any other
change resulting in a valuation of any item of Inventory at below cost. All Inventories
which may not reasonably be expected to be used or sold within six (6) months have been
classified as noncurrent assets and have been reported as such and reserved for in the Financial
Statements. TST has, and on the Closing Date will have, sufficient amounts of Inventory to conduct
its Business and such amounts are consistent with its past practices.



     4.15. Litigation. Except as disclosed in Schedule 4.15, there are no actions,
suits, inquiries, proceedings, claims or investigations by or before any Governmental Authority
pending or, to Gemtron’s Knowledge, threatened against, or involving, TST, any of its properties,
assets or the Business, or any officers or directors of TST, and, to Gemtron’s Knowledge, there is
no basis for any such action. Except as set forth in Schedule 4.15, there are no
judgments, consents, decrees, injunctions, or any other judicial or administrative mandates
outstanding against TST.



     4.16. Bank Accounts, Guarantees, Powers of Attorney, Systems Access. Schedule
4.16 sets forth: (i) a list of all accounts and deposit boxes maintained by TST at any bank or
other financial institution and the names of the individuals authorized to effect transactions in
such accounts and with access to such boxes; (ii) all agreements or commitments of TST guaranteeing
the payment of money or the performance of other contracts by TST, or by any third persons; (iii)
the names of all Persons holding general or special powers of attorney from TST, together with a
summary of the terms thereof, and (iv) the names of all employees and other Persons with



- 13 -









 







remote
access to the computer servers, databases and other systems of TST, with an identification of the
manner or type of remote access.



     4.17. Insurance. Schedule 4.17 contains a description of all insurance
policies maintained by or on behalf of TST on its properties, assets, Business or personnel, in
each case specifying (i) the insurer, (ii) the amount of coverage, (iii) the type of insurance,
(iv) the policy number, and (v) any currently pending claims thereunder or any claims asserted
thereunder or under similar policies since October 1, 2003. All such policies are (and pending
Closing will continue to be) in full force and effect, and TST is not in default in any material
respect with respect to any provision contained in any insurance policies, and no event has
occurred that, with notice or lapse of time, would reasonably be expected to constitute such a
default or permit termination of the policy. TST has not failed to give any notice or present any
claim under any such policy in due and timely fashion.



     To Gemtron’s Knowledge, all such insurance is in such amounts and against such risks as are
usual and customary and reasonably calculated to protect the Business of TST and its assets and
properties. To the extent that any Contract to which TST is a party requires TST to maintain a
specified level of insurance coverage, TST maintains such required insurance coverage in accordance
with such Contract. At no time has TST been denied any insurance or indemnity bond coverage which
it has requested or received any written notice from or on behalf of any insurance carrier
presently providing insurance relating to it that (i) insurance rates may or will be substantially
increased other than in the Ordinary Course of Business; (ii) policies presently in effect will be
canceled or will not be renewed; or (iii) material alterations to any of the properties
or Business operations of TST are necessary or required by such carrier. To Gemtron’s
Knowledge, none of TST’s insurance policies are subject to retroactive premium adjustment in
respect of prior periods, outside of usual and customary adjustments dependent upon sales and
payroll levels typical for insurance policies of this type.



     4.18. Employment and Labor Matters. Schedule 4.18 contains a list of the
names of each current employee of TST, together with their position, current hourly rate or annual
salary and their total compensation for the fiscal year ended September 30, 2006. Schedule
4.18 contains a list of the names and positions of former employees of TST employed by TST at
any time after October 1, 2005. Schedule 4.18 contains a list of the ten (10) most highly
compensated employees of TST during the fiscal year ended September 30, 2006 (and any officers of
TST not included among the foregoing), together with their position, annual salary, bonus and
perquisites and total compensation for each of the fiscal years ended September 30, 2004, 2005 and
2006. Except as disclosed on Schedule 4.18:




     (a) TST is not a party to or otherwise bound by any contract, agreement or collective
bargaining agreement with any labor union or organization or other commitment respecting
employment or compensation of any of its officers, directors, agents or employees, and no
employees of TST are represented by any labor union or similar organization.




     (b) There are no charges or complaints involving any federal, state or local civil
rights enforcement agency, court or other Governmental Authority; complaints or citations
under the Occupational Safety and Health Act or any state or local occupational



- 14 -









 







safety act
or regulation; unfair labor practice charges or complaints with the National Labor Relations
Board; or other claims, charges, actions or controversies pending, or, to Gemtron’s
Knowledge, threatened or proposed, involving TST and any employee, former employee or any
labor union or other organization representing or claiming to represent such employees’
interests.




     (c) TST is and has heretofore been in compliance in all material respects with all Laws
respecting employment and employment practices, terms and conditions of employment and wages
and hours, the sponsorship, maintenance, administration and operation of (or the
participation of its employees in) employee benefit plans and arrangements and occupational
safety and health programs, and TST is not engaged in any violation of any Law related to
employment, including unfair labor practices or acts of employment discrimination.




     (d) TST is not expected to make any payments, whether as the result of the consummation
of the transactions contemplated by this Agreement or otherwise, that will not be deductible
for federal income tax purposes due to the restrictions of Code Section 162(m) or which will
be “excess parachute payments” within the meaning of Code Section 280G.



     4.19. Employee Benefits.



          4.19.1. Employee Plans. As used herein, the term “Employee Plan” includes any pension,
retirement, savings, disability, medical, dental, health, life (including any individual life
insurance policy to which TST makes premium payments, whether or not such party is the owner,
beneficiary or both of such policy), death benefit, group insurance, profit sharing, deferred
compensation, stock option, bonus, incentive, vacation pay, severance pay, or other employee
benefit plan, trust, arrangement, contract, agreement, policy or commitment (including any Pension
Plan or Welfare Plan or employee benefit plan within the meaning of Section 3(3) of ERISA) whether
any of the foregoing is funded, insured or self-funded, written or oral, (a) to which TST is a
party or by which TST (or any of its rights, properties or assets) is bound, or (b) with respect to
which TST has made any payments, contributions or commitments since January 1, 1997, or may
otherwise have any Liability (whether or not any such party still maintains such plan, trust,
arrangement, contract, agreement, policy or commitment), and, without limitation to the foregoing,
specifically including the TST Terminated Employee Bonus and Equity Plans, the TST Bonus Rights
Settlement Plan and the TST 2006 Profit Sharing Plan. With respect to the Employee Plans:





     (a) True, correct and complete copies of all Employee Plans and all current employee
manuals or current written statements of policy relating to the employment of employees of
TST have been furnished to Methode. Written summaries of any unwritten Employee Plans or
current material employment practices have also been furnished to Methode.




     (b) TST has not received any notice to correct any violation of any applicable Law
relating to any of said Employee Plans described in Schedule 4.19 or the manner in
which they are administered, with which it has not complied; and the provisions and



- 15 -









 







operations of all such plans, programs and policies are in compliance with applicable Laws.




     (c) There are no Employee Plans that provide or any employees entitled to retiree
benefits under any Welfare Plans. TST does not maintain or contribute to, and has not at
any time maintained or contributed to, a “defined benefit plan” within the meaning of
Section 3(35) of ERISA. TST does not maintain and has not had an obligation to contribute
to any multiemployer plan (within the meaning of Section 3(37) of ERISA). TST does not
maintain any employee welfare benefit plan (as described in Section 3(1) of ERISA), except
as set forth in Schedule 4.19. To Gemtron’s Knowledge, each Employee Plan and each
related trust, insurance contract or fund maintained by, or contributed to, by TST has
complied in form and operation with all filings, reporting, disclosure and other
requirements of ERISA and, to the extent applicable, the Code. To Gemtron’s Knowledge,
neither TST nor any of its officers or directors has engaged in any transaction in violation
of the prohibited transactions provisions set forth in Section 4975 of the Code or Section
406 of ERISA, which would result in Liability to any such party.




     (d) All required reports and descriptions (including Form 5500 annual reports, summary
annual reports, PBGC-1’s, and summary plan descriptions) have been timely filed or
distributed appropriately with respect to each Employee Plan. To Gemtron’s
Knowledge, the requirements of COBRA (as set forth in Section 4980B of the Code and
Section 601-609 of ERISA) have been met with respect to each Welfare Plan.




     (e) All contributions (including employer contributions and employee salary reduction
contributions) which are due have been paid to each Pension Plan and proper accruals have
been made on the books and financial records of TST for all contributions for any period
ending on or before the Closing Date which are not yet due. All premiums or other payments
for all periods ending on or before the Closing Date have been paid with respect to each
Welfare Plan.




     (f) There is no Employee Plan that is a Welfare Plan, the benefits under which are not
provided exclusively from the assets of TST or through insurance contracts.




     (g) The financial and actuarial statements, if any, for each Employee Plan reflect in
all material respects the financial condition and funding of the Employee Plans as of the
date of such financial and actuarial statements, and no change has occurred with respect to
the financial condition or funding of the Employee Plans since the date of such financial
and actuarial statements.




     (h) There is no litigation or filed claims against TST with respect to any Employee
Plan other than routine claims for benefits.



     The consummation of the transactions contemplated by this Agreement will not (i) entitle any
current or former employee, director or officer of TST to severance pay, unemployment compensation
or any other payment, (ii) accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee, director or officer, or trigger the funding



- 16 -









 







(through a grantor
trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any
other material obligation pursuant to, any or any other agreement; or (iii) result in any breach or
violation of, or a default under, any Employee Plan.



          4.19.2. TST Bonus Rights Settlement Plan. True, correct and complete copies of the TST
Bonus Rights Settlement Plan, all promissory notes issued by TST as contemplated by the TST Bonus
Rights Settlement Plan, and all retention agreements and non-compete agreements executed by TST
employees as contemplated by the TST Bonus Rights Settlement Plan have been provided by TST to
Methode and such documents are in full force and have not been amended. The TST Bonus Rights
Settlement Plan has been executed by all employees of TST who at any time held any rights under any
TST Terminated Employee Bonus and Equity Plan and effectively, validly and completely terminates
the TST Terminated Employee Bonus and Equity Plans. TST has, through the date of this Agreement,
and will have, through the date of Closing, made all payments (including principal and interest)
contemplated by the TST Bonus Rights Settlement Plan when due and has at all times since inception
maintained the standby letters of credit issued by JPMorgan Chase Bank, N.A. (“Chase Bank”)
contemplated by the TST Bonus Rights Settlement Plan (the “Bonus Rights Letters of Credit”).




     4.20. Intellectual Property.



          4.20.1. Title to Intellectual Property. Except as disclosed on Schedule 4.20,
TST is the sole and exclusive owner of all of the Registered Intellectual Property and has the
valid right to use all other material Intellectual Property listed on Schedule 4.20 in the
manner in which such Intellectual Property is currently used. Except as disclosed on Schedule
4.20, to Gemtron’s Knowledge, TST has exclusive right to use and disclose the Trade Secrets
identified on Schedule 4.20. No other Person holds any right, Lien (other than a Permitted
Lien) or other interest not specified in Schedule 4.20, or has any right to a royalty or
payment of any kind from TST, with respect to the TST Intellectual Property. Except as disclosed
on Schedule 4.20, within the past six (6) years, there has been no asserted claims or
litigation challenging or threatening to challenge the right, title and interest of TST to the TST
Intellectual Property, and to Gemtron’s Knowledge, there is no basis for any such claims. Except
for Contracts disclosed on Schedule 4.12, to Gemtron’s Knowledge, no Intellectual Property
owned by or licensed to TST is subject to any outstanding judgment, injunction, order, decree, or
agreement restricting the use thereof by TST or restricting the licensing thereof by TST to any
Person.




          4.20.2. Identification of Intellectual Property. Schedule 4.20 lists and
identifies correctly and completely (with patent numbers, registration numbers or application
numbers, as applicable) all patents, patent applications and registrations for or applications to
register Intellectual Property that are owned by TST (collectively, “Registered Intellectual
Property”). Schedule 4.20 also lists all common law trademarks utilized by TST, where the
loss of such common law rights could reasonably be expected to have a Material Adverse Effect and
all unregistered copyrights owned or utilized by TST, where the loss of such copyright could
reasonably be expected to have a Material Adverse Effect.




          4.20.3. No Infringement by TST. To Gemtron’s Knowledge, (i) the operation of the
Business of TST and the ownership, manufacture, purchase, sale, licensing and use of any
Intellectual Property owned by or licensed to TST do not contravene, conflict with, violate or

- 17 -









 








infringe upon any Intellectual Property of any third party and no Trade Secret used by TST has been
misappropriated by TST from any third party; (ii) the use, licensing or sale by or to TST of any of
the TST Intellectual Property does not require the acquiescence, agreement or consent of any third
party that has not been obtained; and (iii) the operations and Business of TST do not violate any
rights of others in any of the items set forth in Schedule 4.20, and no further rights or
licenses with respect to Intellectual Property are required by TST for the conduct of the Business
as now being conducted by it.




          4.20.4. Infringement by Third Parties.
To Gemtron’s Knowledge, no right of TST with respect to the TST Intellectual Property is being
violated or infringed by others. Except as described in Schedule 4.20, the TST
Intellectual Property and TST’s products are not subject to any pending or, to Gemtron’s Knowledge,
any threatened challenge or claim of infringement, interference or unfair competition.




          4.20.5. Registrations for Intellectual Property. Except as set forth on Schedule
4.20, all Registered Intellectual Property is: (i) to Gemtron’s Knowledge, in compliance with
all formal legal requirements and are not subject to any maintenance fees or taxes or actions, the
deadline for which falls due prior to the Closing Date or within thirty days after the Closing
Date; or (ii) not subject to any pending or, to Gemtron’s Knowledge, any threatened action in which
a third party seeks to cancel, invalidate or oppose any right arising therefrom or has otherwise
contested the validity, enforceability, or ownership thereof. Without limitation to the foregoing,
Gemtron has provided true and complete copies of all office actions for pending U.S. patent
applications citing any prior art against any such patent application included within the
Registered Intellectual Property.




          4.20.6. Trade Secrets. TST has exercised at least a reasonable degree of care in
protecting the secrecy of all Trade Secrets owned by TST and, to Gemtron’s Knowledge, no material
Trade Secret owned by TST has been divulged to any third party without obligation to maintain the
confidentiality thereof. To Gemtron’s Knowledge, the chip design schematics, DAT tapes, software,
artwork, maskworks and functional block diagrams owned by, licensed by or used by TST in connection
with the chip manufacturing and development processes of TST, are current, accurate, and sufficient
in detail and content to identify and allow their full and proper use without reliance on the
knowledge or memory of any individual or group of individuals.




          4.20.7. Employee Developments. Except as disclosed on Schedule 4.20, all
current and former employees of TST involved in the development of Intellectual Property have
executed written agreements assigning or agreeing to assign to TST all right, title and interest in
Intellectual Property developed by such employees as part of their employment activities (“Employee
IP Agreements”). True and correct copies of the Employee IP Agreements have been provided to
Methode prior to the Closing Date. Except as described in Schedule 4.20, neither TST nor,
to Gemtron’s Knowledge, any current or former employee of TST is in breach of, or default under,
the provisions of any such agreement. To Gemtron’s Knowledge, no current employee of TST has
entered into any written agreement with a third party which restricts or limits the scope or type
of work that such employee may perform for TST in a manner that interferes with such employee’s
ability to fulfill his employment duties for TST.





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     4.21. Legal Compliance. Except as described in Schedule 4.21 hereto, TST has
materially complied with and is in material compliance with all Laws applicable to it (including
Laws applicable to immigration, controls, wages and hours, civil rights and competition, but
excluding, to the extent covered by Section 4.20, Laws regarding the infringement, misappropriation or other unauthorized use of
Intellectual Property), has complied in all material respects with ethical business practices in
the conduct of its Business, and has not received any notice of claimed noncompliance with any Laws
or ethical business practices. Without limitation to the foregoing, TST has not, nor, have any
employees, officers, directors, consultants, advisors, agents, members or representatives of TST or
other Person acting on behalf of TST, violated, or taken any action which would cause TST to be in
violation of, the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or the USA
Patriot Act, or any rules and regulations thereunder, in any material respect. Each of TST’s
internal management and accounting practices and controls are adequate to ensure compliance in all
material respects with the FCPA and the USA Patriot Act. There is not now, and there has never
been, any employment by TST of, or beneficial ownership in TST by, any governmental or political
official of any country.




     4.22. Approvals. TST possesses or has applied for all material governmental permits,
licenses, consents, certificates, orders, authorizations and approvals (the “Approvals”) to own or
hold under lease and operate its properties and assets and to carry on its Business as now
conducted. TST has not received any notice of proceedings relating to the revocation or
modification of any such Approvals. The Approvals are identified in Schedule 4.22. TST is
operating in compliance with the provisions, terms and conditions of the Approvals.



     4.23. Transactions with Affiliates. Except as expressly set forth in the Supply
Agreement and the Shared Services Agreement and the Noncompetition Agreement, and except for the
employment relationship of TST officers with TST and the compensation received by TST directors
from TST in connection with their service as directors, neither Gemtron nor its Affiliates, nor any
officer or director of TST, Gemtron or its Affiliates, nor any member of the immediate family of
any such Persons: (a) has any direct or indirect interest in (i) any property or asset which is
owned or used by TST in the conduct of its Business, or (ii) any entity which does business with
TST; or (b) has any financial, Business or contractual relationship or arrangement with TST, has
any outstanding loans to or from TST, performs services or supplies goods to TST, or has any other
Liabilities due to or from TST.



     4.24. Environmental Matters.



          4.24.1. Environmental Compliance. Except as disclosed in Schedule 4.24, all
facilities formerly owned, leased, used or operated by TST or any predecessor in interest were
owned, leased, used or operated in compliance in all material respects with all applicable
Environmental Laws and all Environmental Permits and all facilities currently owned, leased, used
or operated by TST have been, and continue to be, owned, leased, used or operated in compliance in
all material respects with all applicable Environmental Laws and all Environmental Permits. Any
past non-compliance with Environmental Laws or Environmental Permits has been resolved without any
pending, on-going or future obligation, cost or Liability, and, to Gemtron’s Knowledge, there
is no requirement proposed for adoption or implementation of any future obligation, cost or
Liability under any applicable Environmental Law or Environmental Permit.







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          4.24.2. Environmental Audits. Schedule 4.24 identifies (i) all environmental
audits, assessments, occupational health studies or similar studies or analyses undertaken by, or
at the direction of, Governmental Authorities, TST or any predecessor in interest since January 1,
2003; (ii) the most recent inspection of each operating facility by the U.S. Environmental
Protection Agency or other relevant Governmental Authority; (iii) written communications with
Governmental Authorities relating to issues of noncompliance concerning Environmental Laws or
Environmental Permits since January 1, 2003; and (iv) any written claim or complaint received by
TST concerning violations of any Environmental Laws, in each case relating to the real property
owned, leased or occupied by TST, or TST’s operations, since January 1, 2003. No water (including
groundwater analyses), soil, air or asbestos samples have been taken at any real property owned,
leased or occupied by TST, or TST’s operations, since January 1, 2003.




          4.24.3. Release, Storage or Disposal of Hazardous Materials. To Gemtron’s Knowledge,
Hazardous Materials have not been Released (i) on any real property currently owned, leased or
occupied by TST or (ii) during its period of ownership, lease or occupancy, on any property
formerly owned, leased or occupied by, or on behalf of, TST. TST has reported promptly to
appropriate authorities any unauthorized Release of any Hazardous Material at any facility leased,
owned, used or operated by TST, or any predecessor in interest, which was required to be reported
under applicable Environmental Laws. Except as disclosed in Schedule 4.24, to Gemtron’s
Knowledge, (a) no real property currently or formerly owned, leased or occupied by TST, (b) no real
property adjoining real property currently or formerly owned, leased or occupied by TST and (c) no
site or location used by TST or any predecessor in interest for the storage, disposal or treatment
of any Hazardous Material or other waste (i) has been placed on the National Priorities List or its
state equivalent; (ii) the U.S. Environmental Protection Agency or other relevant Governmental
Authority has proposed, or is proposing, to place on the National Priorities List or state
equivalent; (iii) is on notice of, or subject to a claim, administrative order or other demand
either to take Remedial Action or to reimburse any Person who has taken Remedial Action in
connection with that site; (iv) has filed (or has had filed with respect to it) notification of
hazardous waste activities; or (v) is on any state Comprehensive Environmental Response
Compensation Liability Information System List or equivalent list.




          4.24.4. Remedial Actions. TST is not conducting, nor has undertaken or completed, any
Remedial Action relating to any Release or threatened Release of Hazardous Materials at real
property owned, leased or occupied by TST or at any other site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law or Environmental Permit. To Gemtron’s Knowledge, neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby will require any
Remedial Action or notice to or consent of Governmental Authorities or any third party
pursuant to any applicable Environmental Law or Environmental Permit.




          4.24.5. Storage Tanks. Except as set forth in Schedule 4.24 TST has not owned
or operated, and does not presently own or operate, any underground or aboveground storage tanks.
To Gemtron’s Knowledge, there are no underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, lagoons or other areas in which Hazardous Materials are being or
have been treated, stored or disposed on any real property owned, leased or occupied by TST or, to
Gemtron’s Knowledge, on any property formerly owned, leased or occupied by, or on behalf of, TST.
To Gemtron’s Knowledge, there are no wastes, drums or containers disposed




- 20 -









 







of or buried on, in or
under the ground located on the premises owned or operated by TST. TST has not disposed of or
buried any wastes, drums or containers on, in or under the ground or any surface waters located on
the premises owned or operated by TST. Neither TST nor any party acting on its behalf, has
disposed of or buried, or arranged to dispose of or bury, any waste, drums or containers in or on
the premises of a third party other than those pursuant to and in compliance with all applicable
Environmental Laws.




          4.24.6. PCBs and Asbestos. Except as set forth in Schedule 4.24, to Gemtron’s
Knowledge, there are no polychlorinated biphenyls, asbestos or asbestos-containing materials or
urea formaldehyde in or on premises owned or operated by TST.




          4.24.7. Environmental Claims. There are no Environmental Claims pending or threatened
against TST and, to Gemtron’s Knowledge, there are no circumstances that would reasonably be
expected to form the basis of any Environmental Claim, including with respect to any off-site
disposal location currently or formerly used by, or on behalf of, TST or any of its predecessors or
with respect to any facilities previously owned, leased or occupied by TST that would be material.




     4.25. TST Products.



          4.25.1. Product Liability. Except as disclosed in Schedule 4.25, there are no
actions, suits, inquiries, proceedings, claims, or investigations by or before any Governmental
Authority pending or, to Gemtron’s Knowledge, threatened, against or involving TST relating to any
product alleged to have been manufactured or sold by TST and alleged to have been defective or
improperly designed or manufactured.




          4.25.2. Warranties; Rebates.
Except as disclosed in Schedule 4.25, (i) no customer of TST has any right to return
any products for credit or refund pursuant to any formal or informal policy or practice of TST,
(ii) TST has not given any express or implied warranties in connection with sales by it, (iii) TST
has not offered any rebates, discounts, promotional credits or similar benefits which are in force
or may be otherwise claimed by any third party with respect to any of TST’s products or services,
and (iv) TST has not promised or offered any customer or potential customer any future rebates,
credits, price reductions or similar benefits with respect to any of TST’s products or services.




          4.25.3. Complaints. Except as described in Schedule 4.25, no customer of TST
has returned any products, applied for or requested any credit or refund or submitted any written
complaint with TST (or any Governmental Authority) regarding performance of any of its products.




     4.26. Principal Customers and Suppliers. Schedule 4.26 sets forth separate
lists of the ten (10) largest customers of TST in terms of sales during the years ended September
30, 2004, 2005 and 2006, and the ten (10) largest suppliers to TST during the years ended September
30, 2004, 2005 and 2006, showing in each case the approximate total sales and purchases by or from
each such customer or supplier during such period. Except as set forth on Schedule 4.26,
there are no customers or suppliers who accounted for more than 5% of sales or purchases,
respectively, by TST during the periods shown.



- 21 -









 





     Except as set forth on Schedule 4.26, since May 1, 2006, (i) there has not been any
material adverse change in the business relationship of TST with any such named customer or
supplier, or any other customer or supplier that is material to its Business, and (ii) to Gemtron’s
Knowledge, there has been no material adverse change in the business of any customer or supplier
listed on Schedule 4.26, or any other customer or supplier that is material to its
Business, that could cause such customer to cease purchasing from or selling to or dealing with TST
or otherwise reduce in any material respect the amount (or pricing) of such purchases, the amount
of such sales or the extent of such Person’s dealings with TST. To Gemtron’s Knowledge, no
customer listed on Schedule 4.26 intends to cease purchasing from or dealing with TST after
the Closing, intends to shift its purchases to a different technology, or intends to alter in any
material respect the amount of such purchases or the extent of dealings with TST after the Closing.
Except as set forth on Schedule 4.26, no customer listed on Schedule 4.26 has
requested price reductions or other changes in the terms of sale offered by TST to such customer
for periods after September 30, 2006.



     4.27. Copies of Documents. Copies of all documents specifically referenced in the
Schedules have been delivered to Methode, and such copies are true, correct and complete copies
thereof, and include all amendments, supplements or modifications thereto or waivers thereunder.



5. REPRESENTATIONS AND WARRANTIES OF GEMTRON CONCERNING GEMTRON.




     As an inducement for Methode to enter into this Agreement, Gemtron represents and warrants to
Methode as of the date hereof and as of the Closing Date (except with respect to those
representations and warranties that address matters only as of a particular date, which are made as
of such date) as follows:



     5.1. Organization; Authorization. Gemtron is a corporation duly organized and
existing under the laws of the State of Tennessee. Gemtron has all necessary power and authority
to execute and deliver this Agreement and all other agreements and documents to be executed and
delivered by Gemtron pursuant to this Agreement, and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and all other agreements and
documents to be executed and delivered by Gemtron pursuant hereto, and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on
behalf of Gemtron. This Agreement constitutes, and all other agreements and documents to be
executed and delivered by Gemtron pursuant to this Agreement, will constitute, the valid and
binding agreements of Gemtron, enforceable against Gemtron in accordance with their respective
terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting creditors’
rights generally, and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.



     5.2. No Violation; Gemtron Consents. Neither the execution and delivery of this
Agreement by Gemtron, nor of any other agreement or document to be executed and delivered



- 22 -









 




by
Gemtron pursuant to this Agreement, nor the consummation by Gemtron of the transactions
contemplated hereby or thereby, will constitute a violation of, or be in conflict with, or result
in a cancellation of or constitute a default under, or create (or cause the acceleration of the
maturity of) any debt, obligation or Liability affecting the Acquired Interests pursuant to, or
result in the creation or imposition of any Lien upon the Acquired Interests under: (a) any term or
provision of the certificate of incorporation or bylaws of Gemtron; (b) any judgment, decree,
order, regulation or rule of any court or other Governmental Authority to which Gemtron is subject;
(c) any applicable Law, or (d) any Contract, to which Gemtron is a party or by which Gemtron is
bound.




     Except for the expiration of the waiting period under the HSR Act with respect to the filing
made thereunder by Gemtron and Methode prior to the date hereof and except as set forth on
Schedule 5.2, no material consent of, or notice to, or filing with any Governmental
Authority or any other Person is required to be obtained or given by Gemtron in connection with the
execution, delivery or performance of this Agreement or any other agreement or document to be
executed, delivered or performed hereunder by Gemtron.



     5.3. Ownership of TST. As of the Closing, Gemtron will be the sole member of TST and
the lawful, record and beneficial owner of, and have good and valid title to, all of the Acquired
Interests, free and clear of all Liens. There are no subscriptions, options, warrants, rights or
other agreements granting to any Person any interest in or right to acquire from Gemtron at any
time, or upon the happening of any stated event, any Interests, any securities convertible into or
exchangeable for any Interest, or any interest therein.



6. REPRESENTATIONS AND WARRANTIES OF METHODE.




     Methode represents and warrants to Gemtron as of the date hereof and as of the Closing Date
(except with respect to those representations and warranties that address matters only as of a
particular date, which are made as of such date) as follows:



     6.1. Organization; Authorization. Methode is a corporation duly organized and
existing under the laws of the State of Delaware. Methode has all requisite corporate power and
authority to execute and deliver this Agreement and all other agreements and documents to be
executed and delivered by Methode pursuant this Agreement and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement and all other
agreements and documents to be executed and delivered by Methode pursuant hereto, and the
consummation of the transactions contemplated hereby and thereby have been duly authorized by all
necessary action on behalf of Methode. This Agreement constitutes, and all other agreements and
documents to be executed and delivered by Methode pursuant to this Agreement will constitute, the
valid and binding agreements of Methode, enforceable against Methode in accordance with their
respective terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting
creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.



- 23 -









 





     6.2. No Violation; Methode Consents. Neither the execution and delivery of this
Agreement by Methode, nor of any other agreement or document to be executed and delivered by
Methode pursuant to this Agreement, nor the consummation by Methode of the transactions
contemplated hereby or thereby will constitute a violation of, or be in conflict with, or result in
a cancellation of, or constitute a default under: (a) any term or provision of the certificate of
incorporation or bylaws of Methode; (b) any judgment, decree, order, regulation or rule of any
court or other Governmental Authority to which Methode is subject; (c) any applicable Law; (d) any
Contract to which Methode is a party or is bound.



     Except for the expiration of the waiting period under the HSR Act with respect to the filing
made thereunder by Gemtron and Methode prior to the date hereof and except as set forth on
Schedule 6.2, no material consent of, or notice to, or filing with, any Governmental
Authority or any other Person is required to be obtained or given by Methode in connection with the
execution, delivery or performance of this Agreement or any other agreement or document to be
executed, delivered or performed hereunder by the Methode.



7. COVENANTS PRIOR TO CLOSING.




     7.1. Conduct of Business; No Material Change. Until the Closing, Gemtron will cause
TST to conduct its Business only in the Ordinary Course of Business and will make no material
change in the Business or operations of TST. Without limiting the generality of the foregoing,
until the Closing:




     (a) TST will, and Gemtron will cause TST to (i) use Reasonable Efforts to continue its
advertising and promotional activities, and pricing and purchasing policies, in accordance
with past practice; and (ii) use Reasonable Efforts to preserve intact and in good condition
its Business organization, properties and assets, keep available the services of the present
officers, employees and agents of TST, continue in full force and effect without material
modification all existing policies or binders of insurance, and preserve its current
relationships with its customers, suppliers, and other Persons with which it has significant
business relationships.




     (b) Without Methode’s prior written consent, TST will not, and Gemtron will not make or
permit TST to, (i) enter into any Contract which, if entered into prior to the date hereof,
would have been required to be disclosed to Methode pursuant to Section 4.11, Section 4.12,
Section 4.16, Section 4.18, Section 4.20 or Section 4.21 hereof, (ii) take any action
enumerated in items (d) through (t) of Section 4.8 hereof, (iii) incur any Indebtedness or
subject any property or asset of TST to a Lien (other than a Permitted Lien), (iv) modify
the compensation paid or payable to any present or former employee or contractor of TST, or
(v) agree to or commit to do any of the foregoing.



     7.2. Investigation. Gemtron shall cause TST at all reasonable times to allow Methode
and its representatives reasonable access during normal business hours to all offices, operations,
equipment, property, assets, books, contracts, commitments, records and affairs of TST for the
purpose of familiarizing themselves with the operation and conduct of all aspects of its Business
and for the purpose of reasonable inspection, examination, audit, counting and copying; provided



- 24 -









 




such access shall not unreasonably interfere with the operation and conduct of the Business of TST.
Gemtron shall cause TST at all reasonable times to allow Methode and its representatives to discuss
the affairs, finances and accounts of TST with the respective directors, officers, employees and
representatives of TST during normal business hours, provided such access shall
not unreasonably interfere with the operation and conduct of the Business of TST. Without
limitation to the foregoing, Gemtron will swiftly take all necessary steps to assure TST management
fully and timely assist and cooperate with the foregoing requirements. Gemtron shall have the
right to have a Gemtron corporate representative present during such access and interviews.




     7.3. Preserve Accuracy of Representations and Warranties; Schedules. Gemtron will, and
will cause TST to, refrain from taking any action outside the Ordinary Course of Business which
would render any representation and/or warranty contained in Section 4 or Section 5 of this
Agreement inaccurate as of the Closing Date, except with respect to any representation and/or
warranty that addresses matters only as of a particular date, which shall remain true and correct
as of such date, and except for changes in such representations and warranties specifically
permitted by this Agreement.



     From time to time prior to the Closing Date, Gemtron will promptly supplement or amend any
Schedules provided for in this Agreement (i) if any matter arises hereafter which, if existing or
occurring at or prior to the date of this Agreement, would have been required to be set forth or
described in any such Schedule, or (ii) if it becomes necessary to correct any information in any
such Schedule which has become inaccurate; provided, however, that for purposes of
determining the rights and obligations of the parties under this Agreement, any such supplemental
or amended disclosure by any party shall not be deemed to have been disclosed as of the date
hereof, to constitute a part of, or an amendment or supplement to, such party’s Schedules, or to
cure any breach or inaccuracy of a representation or warranty.



     7.4. Notice of Certain Events. Gemtron shall promptly notify Methode of any of the
following:




     (a) any notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions contemplated under this
Agreement;




     (b) any notice or other communication from any Governmental Authority in connection
with the transactions contemplated under this Agreement;




     (c) any actions, suits, claims, investigations or proceedings commenced or, to
Gemtron’s Knowledge, threatened against, relating to or involving or otherwise affecting TST
that relate to the consummation of the transactions contemplated under this Agreement; and




     (d) any material breach of a representation, warranty or covenant of TST or Gemtron
contained herein or the occurrence of any event constituting a Material Adverse Effect on
TST.



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     7.5. Regulatory Authorizations; Notices and Consents.



          7.5.1. Governmental Approvals for Gemtron’s and TST’s Performance. Gemtron shall use,
and cause TST to use, Reasonable Efforts to obtain all authorizations, consents, orders and
approvals of all Governmental Authorities and officials that may be or become necessary for its
execution and delivery of, and the performance of its obligations pursuant to, this Agreement and
will cooperate fully with Methode in promptly seeking to obtain all such authorizations, consents,
orders and approvals.




          7.5.2. Consents of Third Parties for Gemtron’s and TST’s Performance. Gemtron shall
give, and cause TST to give, promptly such notices to third parties and use Reasonable Efforts to
obtain such third party consents and estoppel certificates as Methode may in its reasonably
discretion deem necessary or desirable in connection with the transactions contemplated by this
Agreement.




          7.5.3. Governmental Approvals for Methode’s Performance. Methode shall use Reasonable
Efforts to obtain all authorizations, consents, orders and approvals of all Governmental
Authorities and officials that may be or become necessary for its execution and delivery of, and
the performance of its obligations pursuant to, this Agreement.




          7.5.4. HSR Filings. Without limiting the generality of the foregoing, the parties
acknowledge that each of Methode and Gemtron have filed Notification and Report Forms with the
Federal Trade Commission and the Antitrust Division of the United States Department of Justice
under the HSR Act. Each of Methode and Gemtron will use Reasonable Efforts to obtain an early
termination of the applicable waiting period, and will promptly make any further filings and submit
any further materials or information pursuant thereto that may be necessary, proper, or advisable
in connection therewith.




     7.6. Excluded Assets and Liabilities. Prior to the Closing, Gemtron will, and will
cause TST to: (a) cancel or repay in full all Indebtedness held by Gemtron or its Affiliates with
respect to TST (other than accounts payable arising in the ordinary course reflected on the Closing
Statement), (b) repay in full all Indebtedness held by TST with respect Gemtron and its Affiliates
(other than accounts receivable arising in the ordinary course reflected on the Closing Statement),
and (c) and terminate all Contracts between TST and Gemtron or its Affiliates other than the Supply
Agreement and Shared Service Agreement delivered pursuant to Section 8.2; which transactions, in
each case, shall be in form and substance acceptable to Methode.



     7.7. No Solicitation; Other Offers. From the date of this Agreement until the Closing
or the termination hereof, Gemtron will not, and will cause TST, and the officers, directors,
employees, investment bankers, attorneys, accountants, consultants or other agents or advisors of
Gemtron and TST not to,
directly or indirectly, (i) solicit, initiate, or encourage the submission of any proposal or
offer from any Person relating to the acquisition of any Interests of TST (including any
acquisition structured as a merger, consolidation, or share exchange), (ii) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to the acquisition of
any material assets of TST (excluding Inventories in the Ordinary Course of Business), or (iii)
participate in any discussions or negotiations with any Person regarding, furnish any information
with respect to, assist or participate in, or facilitate in any other manner



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any effort or attempt
by any Person to do or seek, any of the foregoing. Promptly after the Closing, Gemtron shall
assign to TST any non-disclosure agreements or confidentiality agreements that are currently in
effect between Gemtron or its Affiliates (other than TST) and any Person who has executed any such
agreement in connection with any proposal, offer, discussion, negotiation or investigation relating
to the acquisition of Interests of TST or any material assets of TST.




     7.8. Employee Departures. In the event that any employee of TST resigns or otherwise
terminates his or her employment with TST or (without prejudice to the restrictions set forth in
Section 7.1) has his or her employment terminated by TST prior to Closing, Gemtron will cause TST
to provide written notification to each such employee reminding the employee of his or her
obligations to TST with respect to confidentiality, disclosure and ownership of inventions and
noncompetition obligations in form and substance acceptable to Methode. Gemtron will cause TST to
provide a copy of any written communications (and to use Reasonable Efforts to notify Methode of
any oral communications) related to confidentiality, disclosure and ownership of inventions and
noncompetition obligations, including with respect to any dispute or potential dispute relating to
the foregoing or relating to any other matter, between such former employee and TST and/or Gemtron.



     7.9. TST Bonus Rights Settlement Plan Payments. In the event that any payments
contemplated by the TST Bonus Rights Settlement Plan become due and payable after the date of this
Agreement and prior to Closing, TST shall pay such all amounts (including principal and interest)
when due.



     7.10. Satisfaction of Closing Conditions.



          7.10.1. Methode’s Closing Conditions. Gemtron and TST agree to use Reasonable Efforts
to satisfy the conditions to Methode’s obligation to consummate the Closing set forth in Sections
8.1 and 8.2 hereof. Without limitation to the foregoing, Gemtron shall execute and deliver, and
cause TST to execute and deliver, at the Closing the documents, agreements and instruments listed
in Sections 8.2.3, 8.2.4, 8.2.6, 8.2.7, 8.2.8 and 8.2.11.




          7.10.2. Gemtron’s Closing Conditions.
Methode agrees to use Reasonable Efforts to satisfy the conditions to Gemtron’s obligation to
consummate the Closing set forth in Sections 8.1 and 8.3 hereof. Without limitation to the
foregoing, Methode shall execute and deliver at the Closing the documents, agreements and
instruments listed in Sections 8.3.3, 8.3.6 and 8.3.7.




8. CONDITIONS TO CLOSING.




     8.1. Mutual Conditions. The respective obligations of each party to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to
Closing of each of the following conditions:



          8.1.1. No Suit. No suit, action or other proceeding or investigation shall to the
knowledge of any party to this Agreement be threatened or pending before or by any Governmental
Agency or by any third party restraining or prohibiting the consummation of the transactions
contemplated by this Agreement.





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          8.1.2. HSR Waiting Period. The applicable waiting period under the HSR Act, or any
similar foreign regulatory regime, shall have expired or been terminated.




     8.2. Conditions to Methode’s Obligations. The obligations of Methode to consummate
the transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to
Closing of each of the following conditions:



          8.2.1. Representations and Warranties. All representations and warranties made by
Gemtron contained in this Agreement shall be true and correct in all material respects on the date
of this Agreement and as of the Closing Date as though such representations and warranties were
made as of the Closing Date, except for those representations and warranties that address matters
only as of a particular date, which shall remain true and correct as of such date, provided that
for purposes of this Section 8.2.1, any materiality qualifiers with respect to such representations
and warranties shall be ignored..




          8.2.2. Covenants.
Gemtron and TST shall have duly performed or complied in all respects with all of the
obligations to be performed or complied with by each of them under the terms of this Agreement on
or prior to Closing.




          8.2.3. Intentionally Omitted.




          8.2.4. Consents and Approvals. All material authorizations, consents, waivers,
approvals or other action required in connection with the execution, delivery and performance of
this Agreement by Gemtron and TST and the consummation by Gemtron and TST of the transactions
contemplated in this Agreement, all as so indicated in Schedule 8.2.4, shall have been
obtained.




          8.2.5. No Material Adverse Effect. There shall have occurred and be continuing no
Material Adverse Effect (whether or not covered by insurance).




          8.2.6. Payoff Letter. Gemtron shall have delivered to Methode a payoff letter (the
“Payoff Letter”) for all outstanding Indebtedness of TST, in form and substance acceptable to
Methode, in its reasonable discretion. Notwithstanding anything herein to the contrary, this
condition shall only be satisfied if such Payoff Letters specify an aggregate payoff amount less
than the Closing Payment minus the Bonus Rights Settlement Amount.




          8.2.7. Supply Agreement. TST and Gemtron shall have executed and delivered to Methode
a Supply Agreement in substantially the form attached hereto as Exhibit B (the “Supply
Agreement”), and such Supply Agreement shall not have been amended, cancelled, terminated or
otherwise modified.




          8.2.8. Shared Services Agreement. TST and Schott North America, Inc. shall have
executed and delivered to Methode a Shared Services Agreement in substantially the form attached
hereto as Exhibit C (the “Shared Services Agreement”), and such Shared Services Agreement
shall not have been amended, cancelled, terminated or otherwise modified.





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          8.2.9. Bonus Rights Letters of Credit Arrangements. Chase Bank shall have consented
to Methode’s assumption of Gemtron’s obligations under the Bonus Rights Letters of Credit,
including all costs and fees associated therewith.




          8.2.10. Technology Review. Methode shall be satisfied in its reasonable discretion
that all Technology used by TST is adequately protected by Intellectual Property rights owned
exclusively by TST.




          8.2.11. Closing Documents. The following documents shall have been delivered to
Methode:





     (a) Instruments of Assignment. Instruments of assignment transferring,
assigning and conveying to Methode (or its designated Subsidiary) all right, title and
interest in the Acquired Interests, free and clear of all Liens, duly executed by Gemtron.




     (b) Noncompetition Agreement. A Noncompetition and Confidentiality Agreement
executed by Gemtron, SCHOTT AG and AFG Industries, Inc. in favor of TST and Methode in
substantially the form attached hereto as Exhibit D (the “Noncompetition
Agreement”).




     (c) Certified Charter. A true and complete copy of the certificate of
formation of TST, certified by the Secretary of State of Delaware as of a recent date prior
to the Closing Date.




     (d) Good Standings. Certificates of legal existence and good standing for TST
issued as of a recent date prior to the Closing Date by the Secretaries of State of
Delaware, Illinois and each other jurisdiction in which it is qualified to do business and a
certificate of legal existence and good standing for Gemtron issued as of a recent date
prior to the Closing Date by the Secretary of State of Tennessee.




     (e) Secretary’s Certificates. A certificate of the Secretary of each of TST
and Gemtron dated as of the Closing Date certifying (i) that the certified certificate of
formation of TST delivered to Methode has not been amended or modified since the date
thereof, (ii) true and complete copies of the operating agreement of TST, as in effect at
the Closing, (iii) the resolutions of the operating board and members, or the directors, as
the case may be, for each of TST and Gemtron authorizing the execution, delivery and
performance of this Agreement and/or all other agreements, instruments, certificates and
documents executed by such Person in connection herewith, and (iv) the incumbency of the
officers of TST and Gemtron executing and delivering this Agreement and/or all other
agreements, instruments, certificates and documents executed by such Person in connection
herewith.




     (f) Minute Books. All books and records related to TST, including the true and
complete minute books of TST containing the records of meetings of members, operating board
and any committees of the operating board, together with the true and complete Interest
transfer and ownership records of TST showing all transfers of Interests of TST to date and
containing all cancelled certificates representing Interests (if any).



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     (g) Resignations. Resignations of all of the members of the operating board of
TST and of the Secretary and Treasurer of TST.



     8.3. Conditions to Gemtron’s and TST’s Obligations. The obligations of Gemtron and
TST to consummate the transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing of each of the following conditions:



          8.3.1. Representations and Warranties. All representations and warranties made by
Methode contained in this Agreement shall be true and correct in all material respects on the date
of this Agreement and as of the Closing Date as though such representations and warranties were
made as of the Closing Date, except for those representations and warranties that address matters
only as of a particular date, which shall remain true and correct as of such date, provided that
for purposes of this Section 8.3.1, any materiality qualifiers with respect to such representations
and warranties shall be ignored.




          8.3.2. Covenants. Methode shall have duly performed or complied in all material
respects with all of the obligations to be performed or complied with by it under the terms of this
Agreement on or prior to Closing.




          8.3.3. Intentionally Omitted.




          8.3.4. Approvals. All material authorizations or approvals or other action required
in connection with the execution, delivery and performance of this Agreement by Methode, and the
consummation by Methode of the transactions contemplated hereby shall have been obtained.




          8.3.5. Purchase Price. Methode shall have paid to Gemtron the Closing Payment (less
amounts paid to third parties pursuant to the Payoff Letters) payable at Closing in accordance with
Section 2.1.2 hereof.




          8.3.6. Bonus Rights Letters of Credit Arrangements. As of the Closing, (a) Methode
shall have executed such documentation as reasonably required by Chase Bank to assume the
obligations of Gemtron under the Bonus Rights Letters of Credit, including all costs and fees
associated therewith, and (b) Chase Bank shall have executed such documentation as reasonably
required by Gemtron to release, waive and forever discharge Gemtron from any and all Liabilities
with respect to such Bonus Rights Letters of Credit.




          8.3.7. Closing Documents.
The following documents shall have been delivered to Gemtron:





     (a) Certified Charter. A true and complete copy of the articles of
incorporation of Methode, certified by its jurisdiction of incorporation as of a recent date
prior to the Closing Date.




     (b) Good Standings. Certificates of legal existence and good standing for
Methode issued as of a recent date prior to the Closing Date by the State of Delaware.



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     (c) Secretary’s Certificate. A certificate of the Secretary of Methode dated
as of the Closing Date certifying (i) that the certified articles of incorporation of
Methode delivered to Gemtron have not been amended or modified since the date thereof, (ii)
true and complete copies of the bylaws of Methode as in effect at the Closing, (iii) the
resolutions of the board of directors of Methode authorizing the execution, delivery and
performance of this Agreement, and (iv) the incumbency of the officers of Methode delivering
instruments and certificates pursuant to this Agreement.



9. TERMINATION.




     9.1. Termination of Agreement Prior to Closing. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing, as follows:



          9.1.1. Mutual Consent. By mutual consent of all of the parties to this Agreement.




          9.1.2. Breach. By Methode on the one hand or by Gemtron on the other hand by reason
of the breach by the other in any material respect of any of its representations, warranties,
covenants or agreements contained in this Agreement, which breach has not been cured within ten
(10) days after notice thereof.




          9.1.3. Respective Conditions. By Methode on the one hand or by Gemtron on the other
hand if the conditions precedent to its respective obligations contained in Sections 8.2 or 8.3
hereof have not been met in all material respects at the Closing through no fault of the
terminating party by January 31, 2007, or such later date as may be agreed to by Methode and
Gemtron (the “Termination Date”).




          9.1.4. Mutual Conditions.
By Methode on the one hand or by Gemtron and TST on the other hand if any of the conditions
described in Section 8.1 shall not have been fulfilled through no fault of the terminating party by
the Termination Date.




     9.2. Effect of Termination Prior to Closing. If this Agreement is terminated pursuant
to Section 9.1 above, all rights and obligations of the parties hereunder shall terminate without
any Liability on the part of any party, except for any Liability of any party then in breach of any
representation, warranty, covenant or obligation hereunder.



10. INDEMNIFICATION.




     From and after the Closing, the parties shall be indemnified as set forth below.



     10.1. Indemnification Obligations of Methode. Methode covenants and agrees with
Gemtron that it shall reimburse and indemnify Gemtron and its directors, managers, officers,
employees, shareholders, members, agents and representatives (the “Gemtron Indemnified Parties”)
for, and hold harmless Gemtron Indemnified Parties from, any and all Claims incurred by any of
Gemtron Indemnified Parties after the Closing that result from:



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     (a) any inaccuracy in or breach of any representations or warranties made by Methode in
this Agreement or the Schedules or any other written certificate furnished to Gemtron by or
on behalf of Methode pursuant to this Agreement;




     (b) any nonfulfillment of any covenant or agreement of Methode under this Agreement;




     (c) any Taxes, payments or accruals or salaries, wages, amounts payable under Employee
Plans or otherwise to employees or agents of TST, and other Liabilities of TST, in each
case, relating to and incurred with respect to the periods after the Closing Date, except to
the extent covered by Gemtron’s indemnification obligations in Section 10.2;




     (d) any fees, expenses or other payments incurred or owed by Methode to any brokers or
comparable third parties retained or employed by Methode or its Affiliates in connection
with the transactions contemplated by this Agreement; or




     (e) any claims made by a third party alleging facts which, if true, would entitle
Gemtron Indemnified Parties to indemnification pursuant to (a) through (d) above.



     10.2. General Indemnification Obligations of Gemtron.
Gemtron covenants and agrees with Methode that it shall reimburse and indemnify Methode and
its Affiliates (including TST) and their respective directors, officers, employees and agents
(excluding those directors, officers and employees of TST who were directors, officers or employees
of TST as of the Closing to the extent (and only to the extent) any such person (x) contributed to
any inaccuracy in or breach of any representation or warranty giving rise to such Claim, including
by making any untrue statement of a material fact or failing to state a material fact necessary in
order to make the statements contained herein not misleading, and (y) is not entitled to, and does
not receive, indemnification from TST for such actions) (the “Methode Indemnified Parties”) for,
and hold harmless Methode Indemnified Parties from, any and all Claims incurred by any of Methode
Indemnified Parties after the Closing that result from:




     (a) any inaccuracy in or breach of any representations or warranties made by Gemtron in
this Agreement or the Schedules or any other written certificate furnished to Methode by or
on behalf of Gemtron pursuant to this Agreement;




     (b) any nonfulfillment of any covenant or agreement of Gemtron under this Agreement;




     (c) any Taxes, payments or accruals or salaries, wages, bonuses, vacation, amounts
payable under Employee Plans or otherwise to employees or agents of TST, and other
Liabilities of TST, in each case, relating to and incurred with respect to the periods on or
prior to the Closing Date, whether or not due or payable on or prior to the Closing Date,
but only to the extent such Taxes, payments and Liabilities are not properly reflected in
the Final Closing Statement;



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     (d) any litigation or legal compliance matters to the extent relating or due to the
conduct of TST’s Business on or prior to the Closing Date, including the claims described in
Schedule 4.15 and/or Schedule 4.21 hereto;




     (e) the final amount paid for warranty, product recall or product liability claims
arising from occurrences on or prior to the Closing Date (whether or not such claim is then
asserted);




     (f) any fees, expenses or other payments incurred or owed by Gemtron or TST to any
brokers, finders or comparable third parties retained or employed by them or their
Affiliates in connection with the transactions contemplated by this Agreement;




     (g) any and all other Liabilities to the extent arising prior to the Closing, except
for Liabilities (including trade payables incurred in the Ordinary Course of Business)
reflected on the Final Closing Sheet and taken into account in the calculation of the Net
Working Capital Adjustment and except for the capital lease obligations reflected in the
Financial Statements and disclosed on Schedule 4.12;




     (h) any and all Liabilities relating to Item 1 of Schedule 4.7;




     (i) any claims made by a third party alleging facts which, if true, would entitle the
Methode Indemnified Parties to indemnification pursuant to (a) through (h) above.



     10.3. Special Intellectual Property Indemnification Obligations of Gemtron. For
purposes of this Agreement, “Covered IP Litigation” shall include any Claim commenced, filed or
otherwise instituted before a Governmental Authority or an arbitration panel by Methode or TST
against any Person employed by TST on or at any time prior to the Closing Date (each a “Covered
Employee”) or by a Covered Employee against Gemtron or TST, involving claims or allegations that
such Covered Employee (or any Affiliate or employer of a Covered Employee) has infringed, is
infringing or is threatening to infringe upon any TST Intellectual Property rights, or that such
Covered Employee has breached, is in breach of or is threatening to breach an Employee IP Agreement
or that such Covered Employee is not bound by, or is allegedly not bound by, the terms of TST’s
standard Employee IP Agreement or has violated such Covered Employee’s common law obligations with
respect to Intellectual Property.



     In the event that any Covered IP Litigation arises prior to the third anniversary of the
Closing Date, then Gemtron shall reimburse and indemnify Methode or TST, as applicable, for fifty
percent (50%) of all necessary and reasonable out-of-pocket legal fees and/or expenses (including
reasonable attorneys’ and expert fees, reasonable travel expenses, court costs and other
expenditures) in excess of Five Hundred Thousand Dollars ($500,000) incurred by Methode or TST, as
applicable, in pursuing, defending, settling or otherwise prosecuting such Covered IP Litigation;
provided that the aggregate liability of Gemtron to Methode or TST for indemnification
under this Section 10.3 shall be limited to One Million Dollars ($1,000,000).



     10.4. Nature and Survival of Representations and Warranties. The representations and
warranties contained in this Agreement shall survive the Closing (in the absence of a showing of
willful and knowing misrepresentation or breach by the party making such representation or



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warranty) until the third anniversary of the Closing Date, except that (a) the representations and
warranties set forth in Section 4.5 (Capitalization) and 5.3 (Ownership of TST) shall survive
indefinitely, (b) the representations and warranties set forth in Section 4.24 (Environmental
Matters) shall survive until the fifth anniversary of the Closing Date and (c) the representations
and warranties set forth in Section 4.9 (Taxes) and Section 4.19 (Employee Benefits) shall survive
until ninety (90) days after the expiration of the applicable statute of limitations. If written
notice of a Claim has been given to the party against whom indemnification is sought prior to the
expiration of the applicable representation and warranty, then the relevant representation and
warranty shall survive as to such Claim, until such Claim has been finally resolved.




     10.5. Limitations on Indemnification Obligations.



          10.5.1. Threshold. Notwithstanding any other provision in this Agreement to the
contrary, no indemnification claims may be asserted by any party pursuant to Section 10.1(a) or
Section 10.2(a) of this Agreement until the aggregate amount of all such indemnification claims of
the Methode Indemnified Parties, on one hand, or Gemtron Indemnified Parties on the other hand,
exceeds Five Hundred Thousand Dollars ($500,000) in the aggregate (the “Aggregate Threshold
Amount”), at which time the party seeking indemnification shall be entitled to assert all
individual indemnification claims or groups of related claims that exceed Twenty-Five Thousand
Dollars ($25,000) (the “Individual Threshold Amount”) in excess of the Aggregate Threshold Amount;
provided that Claims relating to indemnification claims based upon Sections 10.1(b) through (d),
Sections 10.2(b) through (i), Section 10.3 and Claims relating to indemnification claims based upon
a breach of the representations and warranties set forth in Sections 4.3 (Stock Ownership) and 4.5
(Capitalization) of this Agreement shall be subject to the Individual Threshold Amount, but not be
subject to the Aggregate Threshold Amount; provided further that (i) no indemnification claims may
be asserted by Methode Indemnified Parties pursuant to Section 10.1(h) until the aggregate amount
of such Claims exceeds Fifty Thousand Dollars ($50,000) (the “Special Threshold Amount”) in the
aggregate, after which Gemtron shall be liable for all such Claims regardless of the Individual
Threshold Amount or the Aggregate Threshold Amount, and (ii) the amount of any Claims asserted by
Methode Indemnified Parties pursuant to Section 10.1(h) shall be added to the amount of any Claims
pursuant to Section 10.2(a) for purposes of satisfying the Aggregate Threshold Amount.




          10.5.2. General Limitation on Amount. Notwithstanding anything to the contrary in
this Agreement, the aggregate liability of Gemtron to all Methode Indemnified Parties, on one hand,
and the aggregate liability of Methode to all Gemtron Indemnified Parties, on the other hand, for
all indemnification under this Section 10 shall each be limited to Six Million Dollars
($6,000,000).




     10.6. Method of Asserting Claims. The party seeking indemnification (the
“Indemnitee”) will give prompt written notice to the other party or parties (the “Indemnitor”) of
any Claim which it discovers or of which it receives notice after the Closing and which might give
rise to a claim by it for indemnification against Indemnitor under this Section 10, stating the
nature, basis and (to the extent known) amount thereof; provided that failure to give prompt notice
shall not jeopardize the right of any Indemnitee to indemnification except to the extent



- 34 -









 




that such
failure prejudices the ability of the Indemnitor to defend such Claim or to recover any payment
under its applicable insurance coverage.




     In case of any Claim or suit by a third party or by any Governmental Authority, or any legal,
administrative or arbitration proceeding (a “Third Party Claim”) with respect to which Indemnitor
may have liability under the indemnity agreement contained in this Section 10, Indemnitor shall be
entitled to participate in the defense of such Third Party Claim and, to the extent desired by it,
to assume the defense of such Third Party Claim, and after notice from Indemnitor to Indemnitee of
the election so to assume the defense of such Third Party Claim, Indemnitor will not be liable to
Indemnitee for any legal or other expenses subsequently incurred by Indemnitee in connection with
the defense of such Third Party Claim unless Indemnitor does not actually assume the defense of
such Third Party Claim following notice of such election. Indemnitee and Indemnitor will render to
each other such assistance as may reasonably be required of each other in order to insure proper
and adequate defense of any such Third Party Claim. If the Indemnitor actually assumes the defense
of the Indemnitee, the Indemnitee will not make any settlement of any Third Party Claim which might
give rise to liability of Indemnitor
under the indemnity agreements contained in this Section without the written consent of
Indemnitor, which consent shall not be unreasonably withheld, and the Indemnitor shall not agree to
make any settlement of any Third Party Claim which would not include the unconditional release of
the Indemnitee without the Indemnitee’s written consent, which consent shall not be unreasonably
withheld.



     10.7. Certain Limitations. OTHER THAN IN RESPECT OF A “THIRD PARTY CLAIM” (AS
DEFINED HEREIN), AND ABSENT FRAUD, AN INDEMNITOR WILL NOT BE LIABLE UNDER THIS SECTION 10 IN
RESPECT OF ANY CLAIM FOR INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY
KIND, INCLUDING CONSEQUENTIAL DAMAGES RESULTING FROM BUSINESS INTERRUPTION OR LOST PROFITS.



     10.8. Setoff; Payment of Claims.



          10.8.1. Setoff by Methode. Methode is hereby authorized by Gemtron to cause any
final, non-appealable or undisputed Claims it or any other Methode Indemnified Party may have
against Gemtron under this Agreement to be paid by reduction or offset of such Claims against any
amounts payable by Methode (or such other Methode Indemnified Party) to Gemtron pursuant to this
Agreement. The rights contained herein shall not be exclusive, but shall be in addition to any
other rights and remedies available to Methode pursuant to this Agreement.




          10.8.2. Setoff by Gemtron. Gemtron is hereby authorized by Methode to cause any
final, non-appealable or undisputed Claims it or any other Gemtron Indemnified Party may have
against Methode under this Agreement to be paid by reduction or offset of such Claims against any
amounts payable by Gemtron (or such other Gemtron Indemnified Party) to Methode pursuant to this
Agreement. The rights contained herein shall not be exclusive, but shall be in addition to any
other rights and remedies available to Gemtron pursuant to this Agreement.




     10.9. Treatment of Claims. Amounts paid to or on behalf of an Indemnitor or
Indemnitee, as indemnification hereunder, shall be treated as adjustments to the Purchase Price.



 - 35 -









 





     10.10. Insurance Recoveries. The amount of any losses for which an Indemnitee shall
be entitled to indemnification under this Section 10 shall be net of the amount of any insurance
recoveries actually received by or on behalf of the Indemnitee or its Affiliates from third parties
with respect to such indemnifiable losses. The Indemnitee shall use Reasonable Efforts to collect
any such insurance
within such time period. No pending insurance claim or right to seek any insurance recovery
shall delay or in any way affect the right of any Indemnitee to indemnification hereunder.
However, if an Indemnitee or its Affiliates receives an insurance recovery from a third party in
respect of an indemnifiable loss under this Agreement after the full amount of such indemnifiable
loss has been paid by an Indemnitor or after the Indemnitor has made a partial payment of such
indemnifiable loss and the amount of such insurance recovery exceeds the remaining unpaid balance
of such indemnifiable loss, then the Indemnitee shall promptly remit to the Indemnitor the excess
(if any) of (i) the sum of the amount theretofore paid by such Indemnitor in respect of such
indemnifiable loss plus the amount of the insurance recovery received from the third party in
respect thereof, less (ii) the full amount of such indemnifiable loss.



     10.11. Exclusive Remedy. Absent fraud or willful and intentional breach by any of the
parties to this Agreement, from and after the Closing, the remedies provided in this Section 10
shall be the sole and exclusive remedies of the parties hereto (and any Gemtron Indemnified Parties
or Methode Indemnified Parties) for all disputes arising out of or relating to this Agreement or
any other agreements and documents executed and delivered pursuant to this Agreement, and shall
supersede and replace all other rights and remedies that any of the parties may have hereunder.



11. POST-CLOSING AGREEMENTS.




     11.1. Tax Returns.



          11.1.1. Preparation of Tax Returns. Gemtron shall (i) timely file or cause to be
filed on behalf of TST all Tax Returns with respect to TST for all periods commencing and ending
prior to or on the Closing Date, and (ii) be responsible for all Taxes due with respect to such Tax
Returns, but only to the extent such Taxes are not properly reflected as Liabilities on the Final
Closing Statement. All such Tax Returns described in this Section 11.1.1 shall be prepared and
filed using tax accounting methods and principles which are consistent with those used in the Tax
Returns applicable to TST for preceding tax periods. In preparing such Tax Returns, no election
shall be made with respect to the computation of any item of income, deduction or credit of TST
which is inconsistent with the preparation of prior years’ Tax Returns filed for TST. Gemtron
shall deliver to Methode copies of the proposed form of each Tax Return to be filed in accordance
with this Section 11.1.1 no later than thirty (30) days prior to the date such Tax Return is
required to be filed for its review and shall deliver to Methode a true and complete copy of each
Tax Return filed in accordance with this Section 11.1.1 within fifteen (15) days after the date the
Tax Return is filed with the applicable taxing authority. To the extent Taxes properly reflected
as Liabilities on the Final Closing Statement are required to be paid with any Tax Return filed by
Gemtron pursuant to this Section 11.1.1, Methode shall pay over such amounts to Gemtron in
immediately available funds not less than ten (10) days prior to the date such Tax Return is
required to be filed by Gemtron.





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          11.1.2. Reimbursement of Refunds. If Methode or TST receives a refund with respect to
Taxes for which Gemtron is responsible under Section 10.2(c) hereof, Methode will pay the amount of
such refund to Gemtron within thirty (30) days of receipt. If Gemtron receives a refund with
respect to Taxes for which Methode is responsible under Section 10.1(c) hereof, Gemtron will pay
the amount of such refund to Methode within thirty (30) days of receipt.




          11.1.3. Continued Cooperation. From and after the Closing, Gemtron and Methode shall
(i) each provide the other with such assistance as may reasonably be requested by the other party
in connection with the preparation of any Tax Return, or the conduct of any audit or other
examination by any taxing authority or judicial or administrative proceedings relating to Liability
for Taxes; (ii) each retain and provide the other with any records or other information that
reasonably may be relevant to such Tax Return, audit or examination, proceeding or determination;
and (iii) each provide the other with adequate information, including but not limited to any final
determination of any such audit or examination, proceeding or determination that may reasonably be
expected to affect any amount required to be shown on any Tax Return of the other for any period.
Without limiting the generality of the foregoing, Methode shall retain, and shall cause TST to
retain, and Gemtron shall retain, until ninety (90) days after the applicable statute of
limitations (including any extensions) have expired, copies of all Tax Returns, supporting work
schedules, and other records or information that may be relevant to such Tax Returns for all tax
periods or portions thereof ending before or including the Closing and shall not destroy or
otherwise dispose of any such records without first providing the other party with a reasonable
opportunity to review and copy same.




     11.2. Releases. As of the Closing, Gemtron and its Affiliates hereby release and
discharge TST and each of its directors, officers, employees, agents, Affiliates and their
respective successors and assigns, and TST hereby releases and discharges Gemtron, its Affiliates
and their successors and assigns, from any and all claims, contentions, demands, causes of action
at law or in equity, debts, Liens, agreements, notes, obligations, or Liabilities of any nature,
character or description whatsoever, whether known or unknown, contingent or matured, which
Gemtron, TST, or their respective Affiliates, or any of them, may now or hereafter have against the
other by reason of any matter, event, thing or state of facts occurring, arising, done, omitted or
suffered to be done from the beginning of the world to the Closing Date; provided,
however, that this release is not intended to, and shall not release Gemtron, TST or their
respective Affiliates, from (a) any claims arising under this Agreement, or under any other
agreements executed and delivered by the parties as contemplated in this Agreement or in such other
agreements, and the payment and performance by them of all of their respective obligations under
this Agreement and under such other agreements, or (b) any Liability constituting accounts payable
or accounts receivable
arising in the ordinary course in each case to the extent set forth upon the Closing
Statement; and further provided, however, Gemtron and its Affiliates do not release
those directors, officers and employees of TST who were directors, officers or employees of TST as
of the Closing to the extent (and only to the extent) any such person (x) contributed to any
inaccuracy in or breach of any representation or warranty giving rise to any Claims pursuant to
this Agreement, including by making any untrue statement of a material fact or failing to state a
material fact necessary in order to make the statements contained herein not misleading, and (y) is
not entitled to, and does not receive, indemnification from TST for such actions.



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     11.3. Employees. Methode acknowledges that all TST employees immediately prior to the
Closing Date shall continue as TST employees after the Closing Date. Absent a written agreement
between TST and an employee, all TST employees shall be employed as “employees-at-will.”



     11.4. Gemtron’s Post-Closing Confidentiality Obligations. Gemtron hereby acknowledges
that all Trade Secrets concerning TST, the Technology and TST’s Business and operations are owned
by TST and Gemtron hereby further agrees that from and after the Closing, Gemtron will not directly
or indirectly disclose to anyone (except as required by Law or by a Governmental Authority, in
which event Gemtron shall use Reasonable Efforts to notify TST in advance of such disclosure) such
Trade Secrets, or use or exploit such Trade Secrets.



     11.5. Employee Benefit Plans.



          11.5.1. Participation in Employee Plans. Effective as of the Closing Date, (a) all
TST employees shall cease participation in all Gemtron Employee Plans, including the Gemtron
Corporation Profit Sharing Plan and the Gemtron Health Plan, and (b) such TST employees shall be
eligible to participate in any and all applicable Methode Employee Plans, including the Methode
Electronics, Inc. 401(k) Savings Plan (the “Methode Savings Plan”), subject to eligibility
requirements and the terms and conditions of the plan documents.




          11.5.2. Group Health Plan. As of the Closing Date, Methode shall (a) waive any
pre-existing condition limitation under the Methode Electronics, Inc. Medical and Dental Plan in
which TST employees and their eligible dependents participate and (b) provide each TST employee
with any credit for any co-payments and deductibles incurred by any of them prior to the Closing
Date under the Gemtron Health Plan in order to satisfy any applicable deductible or out-of-pocket
requirements under the Methode Electronics, Inc. Medical and Dental Plan.




          11.5.3. Vacation Pay.
Methode shall cause each TST employee to be credited with his or her years of service as of
immediately prior to the Closing Date for purposes of vacation pay.




          11.5.4. COBRA Benefits. In accordance with Treasury Regulation Section 54.4980B-9
Q&A-7, as of the Closing Date, Methode shall assume the liability for providing and administering
all required notices and benefits under COBRA to all TST employees whose employment terminates on
or after the Closing Date. Gemtron shall retain all liabilities and obligations under COBRA for
qualifying events that occurred prior to the Closing Date.



12. GENERAL PROVISIONS.




     12.1. Entire Agreement. This Agreement and the other agreements and documents
referred to herein and in that certain Confidentiality Agreement dated September 30, 2004 by and
between Methode and TST, as amended by that certain letter agreement dated October 13, 2006 by and
between Methode and TST, set forth the entire understanding of the parties with respect to the
subject matter hereof. Any previous agreements or understandings between the parties regarding the
subject matter hereof are merged into and superseded by this Agreement.



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     12.2. Amendment; Waiver. This Agreement may be amended, supplemented or interpreted
at any time only by written instrument duly executed by each of the parties hereto. Any of the
terms or conditions of this Agreement may be waived at any time by the party or parties entitled to
the benefit thereof but only by a written notice signed by the party or parties waiving such terms
or conditions.



     12.3. Expenses. Except as set forth in Section 3 of this Agreement, Methode and
Gemtron shall each pay its own expenses, including the expenses of its own legal counsel,
investment bankers, brokers and accountants, incurred in connection with the preparation, execution
and delivery of this Agreement and the other agreements and documents referred to herein and the
consummation of the transactions contemplated hereby and thereby.



     12.4. Notices. All notices, requests, demands and other communications required or
permitted to be given hereunder shall be by hand-delivery, certified or registered mail, return
receipt requested; telecopier, or air courier to the parties set forth below. Such notices shall
be deemed given: at the time personally delivered, if delivered by hand or courier; on the fifth
(5th) business day after being deposited in the mail, postage prepaid, if sent certified or
registered mail; and when receipt
is acknowledged by facsimile equipment if telecopied and if a copy is also promptly mailed by
certified or registered mail.



	 	 	 
	If to Methode:

	 	Methode Electronics, Inc.
	 

	 	7401 West Wilson Avenue
	 

	 	Chicago, Illinois 60706-4548
	 

	 	Attention: President and Chief Executive Officer
	 

	 	Telecopier: (708) 867-3288
	 
	 	 
	Copy to:

	 	Lord, Bissell & Brook LLP
	 

	 	111 South Wacker Drive
	 

	 	Chicago, Illinois 60606
	 

	 	Attention: James W. Ashley, Jr., Esq.
	 

	 	Telecopier: (312) 443-0336
	 
	 	 
	If to Gemtron:

	 	Gemtron Corporation
	 

	 	615 Highway 68
	 

	 	Sweetwater, Tennessee 37874
	 

	 	Attention: Doug Roberts, President
	 

	 	Telecopier: (423) 337-3448
	 
	 	 
	Copy to:

	 	Schott North America, Inc.
	 

	 	555 Taxter Road, 4th Floor
	 

	 	Elmsford, New York 10523
	 

	 	Attention: Manfred Jaeckel, VP, General Counsel
	 

	 	&
Secretary

	 

	 	Telephone: (914) 831-2280
	 

	 	Telecopier: (914) 831-2380
	And copy to:
	 	 






- 39 -









 






	 	 	 
	 

	 	Jenner & Block LLP
	 

	 	330 North Wabash Avenue
	 

	 	Chicago, Illinois 60611
	 

	 	Attention: John F. Cox
	 

	 	Telecopier: (312) 840-7396






     12.5. Assignment. Neither this Agreement nor any of the rights and obligations
hereunder may be assigned by any party, whether or not by operation of law, without the prior
written consent of the other parties hereto, provided that Methode may transfer or assign this
Agreement to a Subsidiary or any Person succeeding to all or substantially all of the Interests or
assets of TST (or Methode) by way of an asset sale, merger, reorganization or otherwise without the
consent of any other parties, in each case, provided that Methode shall, notwithstanding such
transfer or assignment, remain primarily liable to Gemtron for the performance of any and all
obligations of Methode under this Agreement. Subject to the foregoing, this Agreement shall be
binding upon and inure
to the benefit of and be enforceable by the respective heirs, legal representatives,
successors and permitted assigns of the parties hereto.



     12.6. Severability. If any term, provision, covenant or restriction in this Agreement
is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated as
long as the economic or legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to either party. Upon such a determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner in order that the transactions hereby be consummated
as originally contemplated to the fullest extent possible.



     12.7. Counterparts; Facsimiles. This Agreement and all documents referenced herein
may be executed in any number of counterparts, each of which may be executed by less than all of
the parties hereto, each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one and the same instrument. Each party is
hereby authorized to rely upon and accept as an original any executed copy of this Agreement or
other document referenced herein which is sent by facsimile, telegraphic or other electronic
transmission.



     12.8. Construction. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for
any purpose, and shall not in any way define or affect the meaning, construction or scope of any of
the provisions hereof. The terms “hereof,” “herein” and “hereunder” and terms of similar import are
references to this Agreement as a whole and not to any particular provision of this Agreement.
Section, clause, Schedule and Exhibit references contained in this Agreement are references to
Sections, clauses, Schedules and Exhibits in or to this Agreement, unless otherwise specified.
Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and
plural, as the identity of the person may in the context require. The use of the words “include,”
“including” or variations thereof in this Agreement shall be by way of example rather than by
limitation. The parties hereto acknowledge that all parties participated equally in the drafting
and negotiation of this Agreement and were represented by counsel of



- 40 -









 







their own choosing in
connection therewith. Consequently, this Agreement shall be construed without referencing to any
rule of law, which provides that ambiguities in a contract are to be resolved against the drafter
thereof.



     12.9. Instruments of Further Assurance. Each of the parties hereto agrees, upon the
request of any of the other parties hereto, from time to time after the Closing to execute and
deliver to such other party or parties all such instruments and documents of further assurance or
otherwise as shall be reasonable under the
circumstances, and to do any and all such acts and things as may reasonably be required to
carry out the obligations of such requested party hereunder.



     12.10. Public Announcements. No notices to third parties or other publicity,
including press releases, employee notifications, vendor notifications and customer notifications,
concerning any of the transactions provided for herein shall be made by any party hereto unless
planned and coordinated jointly among the parties hereto, with each party approving any press
release in writing prior to release; provided that nothing herein shall restrict or delay either
party from issuing any press release or other publicity to the extent required by Law.



     12.11. No Third Party Beneficiaries. Except for the provisions of Section 10 relating
to indemnified parties under this Agreement, (i) the provisions of this Agreement are solely for
the benefit of the parties hereto and are not intended to confer upon any Person except the parties
hereto any rights or remedies hereunder, and (ii) there are no third party beneficiaries of this
Agreement and this Agreement shall not provide any third party with any remedy or Claim or other
right in excess of those existing without reference to this Agreement.



     12.12. Governing Law. This Agreement shall be governed, construed and enforced in
accordance with the internal laws of the State of Illinois, excluding any choice of law rules which
may direct the application of the laws of another jurisdiction.



     12.13. Disputes. Except for matters entrusted for determination to the Independent
Accounting Firm pursuant to Section 3.1.3, any controversy or claim arising out of or relating to
this Agreement, or the breach thereof (but specifically excluding any controversy or claim arising
out of or relating to the Supply Agreement, the Shared Services Agreement or the Noncompetition
Agreement or the breach thereof), shall be settled by arbitration administered by the American
Arbitration Association in accordance with its Commercial Arbitration Rules. The number of
arbitrators shall be one (1). The place of arbitration shall be Chicago, Illinois. Any award
rendered by the arbitrator shall be in writing, reasoned on the basis of applicable Law and subject
to all of the terms, conditions and limitations of this Agreement, including Section 10 hereof.
Each party shall bear its own costs and expenses and an equal share of the arbitrator’s and
administrative fees of arbitration. Judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.



[SIGNATURES ON FOLLOWING PAGE]




- 41 -









 








     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties to this Agreement on
the day and year first above written.



	 	 	 	 	 	 	 	 	 
	GEMTRON CORPORATION	 	 	 	METHODE ELECTRONICS, INC.
	 
	By:

	 	/s/ Douglas D. Roberts
	 	 	 	By:
	 	/s/ Donald Duda
	 

	 	 
	 	 	 	 	 	 
	Name: Douglas D. Roberts	 	 	 	Name: Donald Duda
	Title: President and Chief Operating Officer	 	 	 	Title: President and Chief Executive Officer






 









 





APPENDIX OF DEFINITIONS




     The following definitions shall be applicable for purposes of the Agreement except as
otherwise specifically provided to the contrary in the text of the Agreement.



     “Affiliates” of a Person shall mean any Person controlling, controlled by or under
common control with that Person. “Control” for this purpose shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or interests, by contract, or otherwise.



     “CERCLA” shall mean the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended.



     “Claim” shall mean any action, suit, claim, proceeding, investigation, hearings,
audit, charge, complaint, demand, injunction, judgment, order, decree, ruling, loss, Tax, Lien,
Liability, assessment, fine, penalty, amount paid in settlement, damage, cost or expense (including
court costs and reasonable attorneys’ fees, expert fees and travel expenses).



     “Code” shall mean the Internal Revenue Code of 1986, as amended.



     “Contract” shall mean any oral or written contract, agreement, lease, indenture,
commitment or understanding (including purchase orders, sales orders and supply contracts).



     “Environment” shall mean surface waters, groundwaters, surface water sediment, soil,
subsurface strata, ambient air and other environmental medium.



     “Environmental Claims” shall mean any and all actions, suits, demands, demand letters,
claims, Liens, notices of non-compliance or violation, notices of Liability or potential Liability,
investigations, proceedings, consent orders or consent agreements to the extent relating to any
Environmental Law, Environmental Permit or any Hazardous Material or arising from any alleged
injury or threat of injury to health, safety or the Environment.



     “Environmental Law” shall mean any Law relating to pollution or protection of the
Environment, health, safety or natural resources or to the use, handling, transportation,
treatment, storage, disposal, Release or discharge of Hazardous Materials, including CERCLA.



     “Environmental Permit” shall mean any permit, approval, identification number,
license, or other authorization or application therefor required for TST to operate its Business,
assets or properties as currently operated under any currently applicable Environmental Law.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.



     “GAAP” shall mean United States generally accepted accounting principles as in effect
from time to time.



     “Governmental Authority” shall mean any United States federal, state, municipal or
local (or any non-U.S. government, governmental, regulatory or administrative) authority,
department,



 









 







agency, commission, board, bureau, or instrumentality (or political subdivision thereof) or
any court, tribunal, or judicial body.



     “Hazardous Materials” shall mean any waste or other substance that is listed, defined,
designated or classified as, or otherwise determined to be, hazardous, radioactive, dangerous or
toxic or a pollutant or a contaminant or otherwise regulated under or pursuant to any Environmental
Law, including any admixture or solution thereof, and specifically including petroleum and all
derivatives thereof or synthetic substitutes therefore, radioactive materials, asbestos or
asbestos-containing materials, and polychlorinated biphenyls.



     “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.



     “Indebtedness” of any Person means all obligations (whether interest, principal, fees,
penalties or otherwise) and Liabilities consisting of, without duplication: (a) indebtedness for
borrowed money or for the deferred purchase price of property or services in respect of which such
Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and
other current liabilities incurred in the Ordinary Course of Business) and any commitment by which
such Person assures a creditor against loss; (b) obligations evidenced by debt securities bonds,
debentures, notes or other similar instruments; (c) obligations under capitalized leases in respect
of which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or
in respect of which obligations such Person assures a creditor against loss; (d) any unsatisfied
obligation of such Person for “withdrawal liability” to a “multiemployer plan,” as such terms are
defined under ERISA; (e) obligations with respect to letters of credit issued for such Person’s
account, (f) secured by a Lien; or (g) arising from any guaranty for any of the foregoing,
including a guarantee in the form of an agreement to repurchase or reimburse.



     “Independent Accounting Firm” has the meaning set forth in Section 3.3.1.



     “Intellectual Property” means (a) all trademarks, service marks, certification marks,
trade dress, logos, trade names, Internet domain names, and corporate names, together with all
goodwill associated therewith, and all applications, registrations, and renewals in connection
therewith, (b) all copyrights, mask works and all applications, registrations, and renewals in
connection therewith, (c) all Trade Secrets; (d) all patents and patent applications, and all
divisions, reissues, continuations, extensions, re-exams, continuations-in-part thereof, (e) all
computer software (including data and related documentation), and (f) and all other forms of
intellectual property.



     “Interest” shall mean (i) any equity interest, membership interest or other ownership
interest in TST, including all rights to profits and losses, rights in management and any and all
other rights as a member or non-member holder associated therewith, (ii) any other form of security
issued by TST, and (iii) any contractual, legal or other right to acquire any of the foregoing
(including any subscription agreement, option, warrant or convertible or exchangeable security).



     “Inventories” means all inventories, including all raw materials, supplies,
work-in-process, and finished goods.



     “IRS” shall mean the Internal Revenue Service.



 









 





     “Law(s)” shall mean any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order, other requirement or rule of law, in effect as of the date hereof
and as of the Closing Date and as amended, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or judgment.



     “Liability” means any obligation or liability (whether direct or indirect, whether
known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether matured or unmatured, whether liquidated or unliquidated, and whether due or
to become due).



     “Lien” shall mean any mortgage, lien, pledge, charge, security interest, encumbrance
or other third party interest or claim of any nature whatsoever.



     “Material Adverse Effect” shall mean a material adverse effect upon or change in (i)
the Technology, properties, assets, Liabilities, financial condition or results of operations of
TST, taken as a whole, (ii) the continued conduct, prior to the Closing, of the Business of TST, as
presently conducted by TST, or (iii) the ability of the Parties to consummate the transaction
contemplated by this Agreement; provided, however, that “Material Adverse Effect” shall not include
any changes, effects or events that are not specific to TST or the Business and are caused by
general changes in economic conditions or general changes, including changes in a law, application
to TST or the Business, in the industry in which the Business operates.



     “Ordinary Course of Business” means the ordinary course of business consistent with
the past custom, practice and operations of TST (including with respect to quantity and frequency).



     “Pension Plan” shall have the meaning defined in Section 3(2) of ERISA.



     “Permitted Liens” means any (i) mechanics’, materialmens’ and similar Liens with
respect to amounts not yet due and payable provided that such amounts are reflected as current
Liabilities in the Financial Statements and Final Closing Statement, (ii) Liens for current Taxes
being disputed in good faith and through proper proceedings as disclosed on Schedule 4.9 or
those not yet due and payable, (iii) Liens securing rental payments under capital lease
arrangements reflected in the Financial Statements and disclosed on Schedule 4.12, (iv)
Liens encumbering real property at any of the Leased Facilities that do not materially interfere
with the use of the Leased Facilities by TST or the conduct by TST of the Business thereon, and (v)
Liens disclosed and described in Attachment 1 to this Appendix of Definitions.



     “Person” shall mean an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization, a Governmental Authority (or department, agency or political subdivision thereof) or
any other person or entity.



     “Reasonable Efforts” shall mean the commercially reasonable effort that a Person
ordinarily would use, apply or exercise to protect his own rights and business, provided that when
used in connection with the obtaining of a consent, approval or other act of an unaffiliated third
party or Governmental Authority, “reasonable efforts” shall not require the commencement of
litigation against or acquisition of control of such third party.



 









 





     “Release” shall mean actual or threatened disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing, and the like into or
upon any land or water or air or otherwise into the Environment.



     “Remedial Action” shall mean any investigation, assessment, monitoring, treatment,
response, excavation, removal, remediation, or cleanup of Hazardous Materials in the Environment.



     “Gemtron’s Knowledge” means (a) actual knowledge of the applicable facts and
circumstances of Doug Roberts, Gerhard Kiewel or Oliver Kille learned in the ordinary course of
their duties, or (b) the knowledge of the applicable facts and circumstances of Tom Schreiber, Bob
Erazmus, Dave Caldwell, Robert Campbell or Greg Schreiber learned in the ordinary course of their
duties in each case after due inquiry by such persons to those TST employees who in the ordinary
course of their duties would be reasonably likely to have knowledge of the facts or circumstances
in question.



     “Subsidiary” shall mean any Person with respect to which a specified Person (or
Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the
voting of sufficient securities to elect a majority of the directors.



     “Taxes” shall mean all federal, state, local and foreign income, excise, property,
sales, use, payroll, intangibles, franchise, gross receipts, license, employment, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital stock, profits,
withholding, social security, Medicare, unemployment, disability, real property, personal property,
transfer, registration, value added, alternative or add-on minimum and other taxes, fees,
assessments or charge of whatever nature, and all penalties and interest related thereto, whether
disputed or not, including tax withholdings or amounts paid to any Person or Liabilities for taxes
as a result of being a member of a unitary, consolidated or similar group or as a result of being a
party to any tax sharing, tax indemnity, tax allocation or similar agreement or arrangement.



     “Tax Return” means any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.



     “Trade Secrets” shall mean all trade secrets and confidential business information
including all inventions, compositions, manufacturing and production processes and techniques,
business methods, processes and techniques (in each case whether or not patentable), discoveries,
developments, ideas, concepts, research and development, databases, designs, formulae, methods,
processes, designs, drawings, specifications, and items of proprietary know-how, information or
data prospect lists, customer lists, supplier lists, projections, analyses and market studies,
pricing and cost information, and business and marketing plans and proposals; provided that “Trade
Secrets” do not include non-proprietary information otherwise available to the industry or the
public.



     “TST 1999 Bonus Rights Plan” means the TouchSensor Technologies, L.L.C. 1999 Bonus
Payment Rights Plan, as may have been amended, together with all Contracts with current or former
TST employees relating thereto.



 









 





     “TST 2001 Bonus Rights Plan” means the TouchSensor Technologies, L.L.C. 2001 Bonus
Payment Rights Plan, as may have been amended, together with all Contracts with current or former
TST employees relating thereto.



     “TST 2006 Profit Sharing Plan” means TouchSensor Technologies, L.L.C. 2006 Bonus
Payment Rights Plan, as set forth in the TST Bonus Rights Settlement Plan and subsequently
documented in the 2006 Bonus Payment Rights Plan dated April 19, 2006, as may have been amended,
together with all Contracts with current or former TST employees relating thereto.



     “TST Bonus Rights Settlement Plan” means the TouchSensor Technologies, L.L.C.
Settlement of Bonus Payment Rights & Membership Units & Options & Closing of Respective Plans
Effective 12/30/05 adopted by TST.



     “TST Intellectual Property” means Intellectual Property owned by TST.



     “TST Option Plan” means the TouchSensor Technologies, L.L.C. Option Plan, as may have
been amended.



     “TST Organizational Documentation” means the Certificate of Formation of TST, as
amended, the Amended and Restated Operating Agreement of TST dated as of October 11, 2000 and the
membership interest certificates of TST.



     “TST Terminated Employee Bonus and Equity Plans” means the TST 1999 Bonus Rights Plan,
the TST 2001 Bonus Rights Plan and the TST Option Plan and all grants issued, promised or made
under any of the foregoing or any similar plans.



     “Welfare Plan” shall have the meaning defined in Section 3(1) of ERISA.