**EXHIBIT 10.30**

 

ASSET AND SHARE PURCHASEAGREEMENT

 

This ASSET AND SHAREPURCHASE AGREEMENT (this “Agreement”) is made and entered into as of September 30,2008, by and among Methode Electronics, Inc., a Delaware corporation (“Methode”);and Hetronic Holding LLC, an Oklahoma limited liability company (“HetronicHolding”), Hetronic International, Inc., an Oklahoma corporation (“HetronicInternational”), Hetronic USA Inc., an Oklahoma corporation (“HetronicUSA”), Hetronic West, Inc., an Oklahoma corporation (“Hetronic West”),Hetronic Europe GmbH, a German company with limited liability (“HetronicEurope”), Hetronic Malta Limited, a limited liability company incorporatedand registered in Malta with registration number C16025 (“Hetronic Malta”),and Max Heckl (the “Shareholder”). Hetronic International, Hetronic USA, Hetronic West, Hetronic Europe andHetronic Malta are herein sometimes referred to individually as a “Seller”and collectively, on a joint and several basis, as the “Sellers.” TheSellers, Hetronic Holding and the Shareholder are herein sometimes referred toindividually as a “Selling Party” and collectively, on a joint andseveral basis, as the “Selling Parties.” Capitalized terms used but not defined in this Agreement shall have therespective meanings set forth in the Appendix of Definitions attached heretoand made a part hereof.

 

RECITALS:

 

WHEREAS, the Shareholder isthe record and beneficial owner of ninety seven percent of the outstandingmembership interest of Hetronic Holding, which in turn directly or indirectlyholds all or a substantial majority of the stock or other equity interest ineach of the Sellers and Hetronic Asia Manufacturing & Trading Corp., acorporation incorporated in the Republic of the Philippines (“Hetronic Asia,”together with the Sellers, collectively the “Target Companies” and each,individually, a “Target Company”);

 

WHEREAS, Hetronic Holding isthe record and beneficial owner of seventy nine thousand four hundred eighty(79,480) shares, par value of One Hundred Philippine pesos per share, of theissued and outstanding stock of Hetronic Asia (the “Purchased Shares”);

 

WHEREAS, the individualsidentified on Schedule 5.4.2 hereto (each an “ManagementShareholder” and collectively the “Management Shareholders”) arecollectively the record and beneficial owners of three thousand twenty (3,020)shares, par value of One Hundred Philippine pesos per share, of the issued andoutstanding stock of Hetronic Asia (the “Management Shares” and,together with the Purchased Shares, the “Hetronic Asia Shares”);

 

WHEREAS, the ManagementShareholders and Hetronic Holding (each a “Hetronic Asia Shareholder”and collectively the “Hetronic Asia Shareholders”) are the beneficialowners of all of the Hetronic Asia Shares;

 

WHEREAS, the TargetCompanies are engaged in the business of developing, manufacturing, marketingand selling radio remote control products for use in applications such 

 

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astower cranes, overhead cranes, concrete pumps, work platforms, containerhandling equipment and other specialty equipment;

 

WHEREAS, Methode has or willform Subsidiaries in the various jurisdictions in which the Sellers have assetsor are engaged in business and will designate one or more such Subsidiaries (orMethode itself) as the “Buyer” or “Buyers” pursuant to Section 8.3.3 below(individually, each a “Buyer” and, collectively, the “Buyers”);

 

WHEREAS, Hetronic Holdingwishes to sell, transfer and assign to the Buyers, and the Buyers wish topurchase from Hetronic Holding, all of the Purchased Shares in exchange for theconsideration set forth herein upon and subject to the terms and conditionsherein set forth;

 

WHEREAS, the Sellers wish tosell, transfer and assign to the Buyers, and the Buyers wish to purchase fromthe Sellers, substantially all of the Sellers’ assets and properties (otherthan the Excluded Assets) and to assume certain specified liabilities ofSellers in exchange for the consideration set forth herein upon and subject tothe terms and conditions herein set forth; and

 

WHEREAS, Hetronic Holdingowns all of the issued and outstanding capital stock of Hetronic DeutschlandGmbH, a German company with limited liability formerly known as HetronicSteuersysteme GmbH (“Hetronic Deutschland”), which the partiesacknowledge is not included among the Sellers and is not selling its assets orproperties;

 

NOW, THEREFORE, inconsideration of the mutual covenants and agreements herein contained and inreliance upon the representations and warranties hereinafter set forth, theparties agree as follows.

 

# 1.             PURCHASE AND SALE OF ASSETSAND SHARES.

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## 1.1.          Agreement to Purchase andSell Assets. Subject to the terms and conditions containedherein, each of the Sellers agrees to sell, assign, transfer, convey anddeliver to the Buyers, and Methode agrees to cause a Buyer to acquire from eachof the Sellers, at the Closing, free and clear of all claims or Liens of anynature whatsoever, (except as otherwise disclosed in and permitted by thisAgreement), all right, title and interest in and to all of their respectiveassets and properties wherever situated, except for those assets and propertiesspecifically excluded by Section 1.3 hereof (the “Purchased Assets”).The Purchased Assets shall include, but not be limited to, the following:

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### 1.1.1.       Machinery and Equipment.  All machinery and equipment (including spareparts), vehicles, fixtures, capital works in process, tools, dies, patterns,molds, furniture, data processing hardware, computer and systems hardware andtelephone system equipment and office equipment and supplies and similartangible personal property (including any of the foregoing which have beenpurchased subject to any conditional sales or title retention agreement infavor of any other Person) employed or utilized by Sellers, as the same may exist at the Closing, and including theproperty described in Schedule 1.1.1 hereto, and all rights tocomputer software embedded in or installed upon the foregoing.

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### 1.1.2.       Receivables.  The Receivables of the Sellers as the samemay exist at the Closing, including all Receivables payable by any TargetCompany to any Seller, together with Hetronic Malta’s right to receive paymentunder the note receivable payable by Hetronic Asia to Hetronic Malta under theloan agreement dated August 5, 2004 between Hetronic Asia and HetronicMalta, as amended (the “Asia-Malta Receivable”).

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### 1.1.3.       Inventories.  All Inventories of the Sellers as the samemay exist at the Closing, together with all rights against suppliers of suchInventories and all bills of lading, warehouseman’s receipts and otherinstruments or documents representing rights to any item of Inventory in thepossession of third parties.

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### 1.1.4.       Contract and Other Rights.  All of the Seller’s rights and interests in,to and under all Contracts between it or them and any other party or partiesand all Contracts which have been acquired by it or them by assignment or inany other manner (whether or not disclosed or required to be disclosed in anyschedule hereto), including the Contracts described in Schedule 1.1.4hereof, and all rights of any of the Sellers thereunder; all prepayments anddeposits thereunder, and all claims, rights and causes of action of Sellers arisingthereunder against the other party to each such Contract and all other claims,rights and causes of action of the Sellers against third parties.

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### 1.1.5.       Intellectual Property andProprietary Rights.  AllIntellectual Property owned by, licensed by or used by any Seller, includingall Intellectual Property incorporated into the radio remote control productsdeveloped, manufactured, marketed or sold by the Sellers, the corporate andtrade name “Hetronic,” derivatives and all telephone numbers of the Sellers,including those rights described in Schedule 5.19 hereto.

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### 1.1.6.       Records.  All books, records (including recordsrelating to Inventories of the Target Companies, all maintenance reports andrepair logs relating to any other Acquired Assets), customer lists, personnelfiles, laboratory notebooks, budgets, plans, projections, reports anddocumentation (including call reports, customer and regulatory correspondence)and other current or historical files of Sellers and all confidential or proprietary information embodied thereby orrelating thereto (collectively, the “Acquired Records”).

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### 1.1.7.       Other Assets.  All other assets of the Sellers, whetherreal, personal, or tangible, intangible or mixed and whether or not reflectedin the Financial Statements or on the books or records of the Sellers,including all goodwill arising from or in connection with the business of theSellers, deposits under all leases and any prepaid expenses and other depositsor rights of Sellers, permits and licenses (including rights to clubmemberships, sky boxes arrangements and tickets) to the extent transferableunder law, and all of Sellers’ choses in action, causes of action andjudgments, express and implied warranties and existing and inchoate claims,rights and remedies related to any of the foregoing.

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## 1.2.          Agreement to Purchase andSell Shares. Subject to the terms and conditions containedherein, Hetronic Holding agrees to sell, assign, transfer, convey and deliverto the Buyer designated by Methode, and Methode agrees to cause a Buyer toacquire from Hetronic Holding, at the Closing, free and clear of all claims orLiens of any nature whatsoever, all right, title and interest in and to thePurchased Shares.

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## 1.3.          Excluded Assets.  Notwithstanding anything to the contrarycontained herein, the following assets shall not be sold to the Buyers pursuantto Section 1.1 and all of such Excluded Assets shall be retained by theSellers (the “Excluded Assets”):

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### 1.3.1.       Certain Cash, CashEquivalents and Investments.  All of the petty cash, cash on deposit inbanks or other financial institutions, prepaid accounts and security depositsof Sellers and other cash equivalents of Sellers, and any prepayments forTaxes; and all certificates of deposit, bonds, stock and other securities andinvestments of Sellers (other than the Purchased Shares), including the stockissued by any Seller held by the Shareholder or any other Seller (other thanthe Purchased Shares).

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### 1.3.2.       Excluded Contracts.  All of the Sellers’ rights, Liabilities andinterests in, to and under (a) the Contracts described on Schedule 1.3,(b) Contracts between any of the Selling Parties and third parties withwhom any of the Selling Parties have discussed the potential sale of thePurchased Assets (or any substantial portion thereof), or the securities of anyof the Selling Parties pursuant to which such third parties have agreed topreserve the confidentiality of information relating to the business of theSellers disclosed in the course of such discussions (the “Existing NDAs”),(c) letters of intent and similar Contracts between any of the SellingParties and third parties pursuant to which the Selling Parties have discussedthe potential sale of the Purchased Assets (or any substantial portionthereof), or the securities of any of the Selling Parties, and (d) thisAgreement and any other additional Contracts executed and delivered inconnection with this Agreement.

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### 1.3.3.       Corporate and Tax Documents.  All rights in and to each Seller’s corporateseal and other corporate documents and records of the Sellers, including thecorporate minute books, books and records relating to the Taxes of the Sellers and all confidential or proprietaryinformation embodied thereby or relating thereto (collectively, the “ExcludedRecords”).

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### 1.3.4.       Employee Plans.  All rights in and to the Employee Plansmaintained by the Sellers and the underlying Contracts.

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### 1.3.5.       Insurance Policies.  All of the Sellers’ rights in and to theinsurance policies maintained by the Sellers.

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### 1.3.6.       Certain AffiliateObligations. Any debt, obligation, Indebtedness or otherLiability arising outside the Ordinary Course of Business and owed or otherwisepayable by any of the other Selling Parties to any Seller, including HetronicMalta’s right to receive payment under the note receivable payable by HetronicDeutschland to Hetronic Malta; provided that, notwithstanding the foregoing,Hetronic Malta’s right to receive payment under the Asia-Malta Receivable is acknowledgedto be a Purchased Asset.

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### 1.3.7.       Hummer. One Hummerand one Ford Mustang.

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### 1.3.8.       Other Excluded Assets.  All rights in the assets and propertiesdescribed on Schedule 1.3.

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## 1.4.          Documentation.  In order to effectuate the sale, conveyance,transfer and assignment contemplated by Sections 1.1 and 1.2 hereof, theSelling Parties shall execute and deliver on the Closing Date (or, if requestedby Methode, after the Closing) all such warranty deeds, bills of sale and otherdocuments or instruments of conveyance, transfer or assignment as shall benecessary or appropriate to vest or confirm in the Buyer(s) marketabletitle to all right, title and interest of the Selling Parties in and to all ofthe Purchased Assets and Purchased Shares, all of which documents shall beprepared by counsel for Methode and the Buyers acting reasonably, whichdocuments may include (i) separate instruments of conveyance for eachSeller for each class of assets in each jurisdiction in which Purchased Assetsare located, (ii) certificates of title or similar instruments dulyendorsed by the applicable the Selling Party in favor of the Buyer designatedby Methode, and (iii) duly endorsed stock certificates and/or instrumentsof assignment conveying to a Buyer designated by Methode (and/or one or moreindividuals nominated by Methode) all right, title and interest in thePurchased Shares.

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# 2.             CONSIDERATION.

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## 2.1.          Purchase Price.  Subject to the terms and conditions containedherein, in consideration of the Sellers’ sale of the Purchased Assets andHetronic Holding’s sale of the Purchased Shares to the Buyers at the Closing,the Buyers shall assume, pay, perform and discharge, when and as due, theAssumed Liabilities and Methode shall pay on behalf of the Buyers, or cause theBuyers to pay, to the Selling Parties the aggregate consideration (the “PurchasePrice”) of Fifty Three Million Six Hundred Thirty Eight Thousand SixHundred Seventy Three United States Dollars ($53,638,673), subject topost-Closing adjustment as provided in Section 2.2.  The Purchase Price shall be payable asprovided in Section 4.3, subject to adjustment as provided in Section 2.3.

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## 2.2.          Reconciliationof Net Book Value.

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### 2.2.1.       June 30 Statement.  Exhibit A sets forth the bookvalue of the Acquired Assets, as they existed on June 30, 2008, less thebook value of the Acquired Liabilities, as they existed on June 30, 2008(the “June 30 Net Book Value”), calculated consistent with thehistorical practice of the Selling Parties in preparing the FinancialStatements (the “Historic Accounting Principles and Procedures”).

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### 2.2.2.       Closing Statement.  Promptly following the Closing Date, theShareholder shall direct HSPG & Associates, P.C. (the “Seller’sAccountant”) to prepare and submit to Methode a statement (the “ClosingStatement”) setting forth the book value of the Acquired Assets, as theyexist at the Closing Date, less the book value of the Acquired Liabilities, asthey exist at the Closing Date (“Closing Net Book Value”).** **Ineach case, the book value of Acquired Assets and the Acquired Liabilities shallbe determined in accordance with the Historic Accounting Principles andProcedures (except that an accrual shall be made for earned vacation). TheClosing Statement and the schedules thereto shall show in reasonable detail themeans by which Closing Net Book Value was calculated (including listings ofAcquired Assets and the Acquired Liabilities). The Shareholder shall direct Seller’s Accountant to submit the ClosingStatement as soon as reasonably practical after the Closing and in no eventlater than ninety days following the Closing Date. Methode shall provide toSeller’s Accountant all information 

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### reasonably requested bySeller’s Accountant and take all other reasonable actions required for thepreparation of the Closing Statement, and Methode shall provide Seller’sAccountant with access to all records of the business of the Target Companiesand to all former employees of the Target Companies in order to assist in thepreparation of the Closing Statement.

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### 2.2.3.       Disputed Adjustments. Upon receiptof the Closing Statement, Methode and its accountants and representatives shallbe permitted during the succeeding thirty (30) day period to examine theaccounting records and work papers prepared by Seller’s Accountant inconnection with the preparation of the Closing Statement.  If Methode agrees to the Closing Statementdelivered by Seller’s Accountant, it shall become the final Closing Statement(the “Final Closing Statement”). If Methode does not agree that the Closing Statement accurately setsforth the Closing Net Book Value determined in accordance with the HistoricAccounting Principles and Procedures (except that an accrual shall be made forearned vacation), Methode shall within thirty (30) days after delivery of theClosing Statement to Methode, prepare and deliver to the Shareholder a detailedlist of disputed adjustments, including the amount of each of the adjustmentclaimed by Methode (the “Disputed Adjustments”) to the ClosingStatement.  If Methode fails to deliver alist of Disputed Adjustments within thirty (30) days after the delivery of theClosing Statement to Methode, Methode shall be deemed to have agreed to theClosing Statement.  The Shareholder andMethode shall use their best efforts to resolve any Disputed Adjustments.  If the Shareholder and Methode are able to reachan agreement on the Disputed Adjustments, the Closing Statement shall be amendedto reflect such agreement and shall become the Final Closing Statement.  If the Shareholder and Methode are unable toreach an agreement on the Disputed Adjustments within thirty (30) days afterreceipt of all Disputed Adjustments, then the Shareholder and Methode shallselect an Independent Accounting Firm in accordance with Section 2.4 andshall cause such Independent Accounting Firm to review the Disputed Adjustmentsand determine the final value of each of the Disputed Adjustments in a promptmanner (and in any event within sixty (60) days of receipt of the DisputedAdjustments).  In making suchdetermination, the Independent Accounting Firm shall only apply the HistoricAccounting Principles and Procedures (except that an accrual shall be made forearned vacation).  In making suchdetermination, the Independent Accounting Firm shall consider only the items oramounts in dispute (and any other items or amounts relating thereto), and thedetermination of each Disputed Adjustment’s value, as so computed, shall not,in any event,  exceed the amount ofdollars claimed by Methode.  The ClosingStatement shall then be amended to reflect the determination of the final valueof each of the Disputed Adjustments and shall become the Final ClosingStatement.  The Final Closing Statementshall be deemed to be and shall be conclusive and binding on the parties tothis Agreement for purposes of determining the Closing Net Book Value.

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## 2.3.          Settlement.  In the event that the Closing Net Book Valueset forth on the Final Closing Statement is less than the June 30 Net BookValue plus One Million Five Hundred Thousand United States Dollars($1,500,000), the Purchase Price shall be reduced by an amount equal to suchshortfall (the “Adjustment Amount”); provided that the Adjustment Amountshall not exceed the funds in the Net Book Value Escrow Account.  Within twenty (20) calendar days after theFinal Closing Statement is determined and becomes final, the parties shalljointly instruct the Escrow Agent to (i) pay the Adjustment Amount (ifany) to Methode out of the funds in the Net Book Value Escrow Account by wiretransfer in accordance with the instructions provided by Methode, and then (ii) releaseany remaining funds in the Net Book Value Escrow 

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## Account to the SellingParties by wire transfer in accordance with the instructions provided by theShareholder.  The parties acknowledge andagree that the Selling Parties shall have no obligation to pay to Methode anyportion of the Adjustment Amount not covered by the Net Book Value EscrowAccount, that Methode shall look solely to the Net Book Value Escrow Accountfor payment of the Adjustment Amount and that the Selling Parties shall be andhereby are released from any portion of the Adjustment Amount that exceeds theNet Book Value Escrow Account.

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## 2.4.          Independent Accounting Firm.

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### 2.4.1.       Selection. The “IndependentAccounting Firm” shall be the firm of certified public accountants ofnational or regional standing mutually agreed by Methode and Shareholder.  In the event that the Shareholder and Methodeare unable to agree upon the selection of the Independent Accounting Firm,either party may provide written notice to the other, in which case theShareholder shall select a firm of certified public accountants of national orregional standing and Methode shall select a firm of certified publicaccountants of national or regional standing, and the two firms so selectedshall select a third firm of certified public accountants of national orregional standing which Methode shall retain to act as the IndependentAccounting Firm.  In the event that anIndependent Accounting Firm selected hereunder is or becomes unwilling toperform the duties assigned to such Independent Accounting Firm hereunder orthe Shareholder and Methode agree that the Independent Accounting Firm shouldbe replaced, the parties shall select replacement Independent Accounting Firmin the same manner as specified in this Section 2.4 for the originalIndependent Accounting Firm.

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### 2.4.2.       Independent Accounting FirmFees and Expenses. The fees, costs and expenses of the Seller’sAccountant in preparing the Closing Statement shall be shared equally byMethode and the Shareholder. The fees, costs and expenses of any IndependentAccounting Firm in assisting with the resolution or in resolving any DisputedAdjustments shall be born by Methode if the Closing Net Book Value is unchangedas a result of such resolution and by the Shareholder if the Closing Net BookValue decreases as a result of such resolution.

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## 2.5.          Allocationof Purchase Price.  Attached asSchedule 2.5 is the parties good faith determination of theallocation of the Purchase Price among the Purchased Assets and PurchasedShares, by jurisdiction and by asset category, in accordance with Code Section 1060and the Treasury regulations thereunder (and any similar provision of state,local or foreign law, as appropriate). Within thirty (30) calendar days after the Final Closing Statement isdetermined and become final, Methode shall determine and deliver to theShareholder, Methode’s good faith determination of the allocation of thePurchase Price (and all other capitalized costs) among the Purchased Assets andPurchased Shares, by jurisdiction and by asset category, after adjustment toreflect the final determination of the Closing Net Book Value in accordancewith Section 2.3, which adjusted allocation shall be made in accordancewith Code Section 1060 and the Treasury regulations thereunder (and anysimilar provision of state, local or foreign law, as appropriate), and whichallocation shall be binding upon Methode and the Selling Parties.  Methode and the Selling Parties and theirAffiliates shall report, act and file Tax Returns (including Internal RevenueService Form 8594) in all respects and for all tax purposes consistentwith such allocation.  Neither Methodenor the Selling Parties shall take any position (whether in tax 

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## audits, tax returns or otherwise)that is inconsistent with such allocation unless required to do so byapplicable law.

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# 3.             ASSUMED LIABILITIES ANDEXCLUDED LIABILITIES.

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## 3.1.          Assumed Liabilities. On the termsand subject to the conditions contained herein, at the Closing, the Buyersshall assume and agree to perform and discharge when and as due the liabilitiesand obligations set forth in Sections 3.1.1, 3.1.2 and 3.1.3 as the same mayexist at the Closing Date, and no others (the “Assumed Liabilities”):

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### 3.1.1.       Accounts Payable andOrdinary Course Liabilities.  The current liabilities consisting ofaccounts payable and accrued expenses of the Sellers arising in the OrdinaryCourse of Business (including accounts payable of the Sellers payable to otherTarget Companies solely to the extent that such payables are included in theAcquired Assets as Receivables of the applicable Target Company payee) as theyexist at the Closing Date, in each case to the extent reflected on the FinalClosing Statement.

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### 3.1.2.       Executory Agreements.  Liabilities and obligations which exist at oraccrue following the Closing Date under the Contracts described in Section 1.1.4hereof, but excluding (i) Contracts required to be disclosed in Schedule 5.11,Schedule 5.12, Schedule 5.17 or Schedule 5.22and not disclosed thereon, and (ii) Contracts described in Section 1.3hereof.

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### 3.1.3.       Warranty Claims.  The warranty obligations of the Sellerspending as of or arising after the Closing Date under the Hetronic Warrantiesidentified on Schedule 5.24 for finished goods or components orparts sold by the Sellers in the ordinary course on or prior to the ClosingDate or for Inventory acquired by Buyers from any Seller hereunder andsubsequently sold by Buyer (collectively, the “Assumed Warranty Claims”).

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## 3.2.          Excluded Liabilities.  Except as specifically provided in Section 3.1hereof, neither Methode nor any Buyer shall assume, or in any way become liablefor, any Liabilities of the Selling Parties of any kind or nature, whetheraccrued, absolute, contingent or otherwise, or whether due or to become due, orotherwise, whether known or unknown, arising out of events, transactions orfacts which shall have occurred, arisen or existed on or prior to the ClosingDate, which Liabilities, if ever in existence, shall continue to be Liabilitiesof the Selling Parties (the “Excluded Liabilities”).

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# 4.             CLOSING.

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## 4.1.          Closing.  The consummation of the purchase and sale ofthe Purchased Assets and Purchased Shares as contemplated by this Agreement(the “Closing”) shall take place on September 30, 2008, subject tothe satisfaction or waiver of all of the conditions to the Selling Parties’ andMethode’s obligations to close set forth in Section 8, or on such otherdate as may be mutually agreed upon by Methode and the Shareholder (the “ClosingDate”).  The Parties anticipate theClosing Date to occur on the date of execution and delivery of this Agreement.

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## 4.2.          Closing Deliverables. At theClosing, (i) the Selling Parties will deliver to Methode the variousagreements, certificates, opinions and documents referred to in Section 8.2,(ii) Methode will deliver to the Selling Parties the various agreements,certificates, opinions and documents referred to in Section 8.3, (iii) theSellers will transfer, assign, convey and deliver to Methode instruments ofassignment conveying all right, title and interest in the Purchased Assets,free and clear of all Liens, (iii) the Selling Parties will transfer,assign, convey and deliver to Methode instruments of assignment conveying allright, title and interest in the Purchased Shares, free and clear of all Liens,and (v) Methode will pay the Closing Payment as provided in Section 4.3.

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## 4.3.          Closing Payment. At theClosing, Methode shall deliver, or cause the Buyers to deliver, the sum ofFifty Three Million Six Hundred Thirty Eight Thousand Six Hundred Seventy ThreeUnited States Dollars ($53,638,673) (the “Closing Payment”) as follows:

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#### (a)           Methode shall deliver, orcause the Buyers to deliver, the sum of Five Million Dollars ($5,000,000) toJPMorgan Chase Bank, National Association (the “Escrow Agent”) to beheld in the account designated as the “Indemnity Escrow Account” under theEscrow Agreement (the “Indemnity Escrow Account”).

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#### (b)           Methode shall deliver, orcause the Buyers to deliver, the sum of One Million Five Hundred ThousandDollars ($1,500,000) to the Escrow Agent to be held in the account designatedas the “Net Book Value Escrow Account” under the Escrow Agreement (the “NetBook Value Escrow Account”).

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#### (c)           after payment of theforegoing amount, Methode shall pay, or cause the Buyers to pay, any amountsidentified in the Payoff Letters delivered pursuant to Section 8.2.5 (ifany) as required to discharge all Liabilities owed to the Persons issuing suchPayoff Letters, such amounts to be paid in accordance with the instructions setforth in such Payoff Letters;

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#### (d)           after payment of theforegoing amounts, Methode shall pay, or cause the Buyers to pay, to theSelling Parties the remainder of the Closing Payment in cash, payable by wiretransfer in accordance with wire instructions provided by the Shareholder inwriting at least five business days prior to the Closing Date (which wireinstructions may designate a single account to which payment to all SellingParties is to be made on an aggregate basis).

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## 4.4.          Location and Effective Timeof Closing.  The Closingshall be held by exchange of documents by facsimile or by e-mail in portabledocument format (or other mutually acceptable format), provided that if theParties elect for a physical Closing for all or a portion of the transaction,it shall be held at the offices of Hetronic International, 3000 NW 149thStreet, Oklahoma City, Oklahoma 73134, USA, or such other location as may beagreed by the parties. The Closing shall be held at 1:00 p.m. (OklahomaCity time) on the Closing Date or such other time as may be agreed by theparties. Title to the Purchased Assets and Purchased Shares shall be deemed tohave been transferred to the Buyers at 11:59 p.m. (Oklahoma City time) onthe Closing Date.

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# 5.             REPRESENTATIONS ANDWARRANTIES OF SELLING PARTIES.

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As an inducement for Methodeto enter into this Agreement, each of the Selling Parties, jointly andseverally, represents and warrants to Methode as follows:

 

## 5.1.          Organization and GoodStanding.  Each TargetCompany is an organization of the nature identified in Schedule 5.1and is duly organized, validly existing and in good standing under the laws ofthe jurisdiction identified in Schedule 5.1, and has all requisitepower and authority to own or hold under lease its properties and assets and tocarry on its business as now conducted. Each Target Company is duly qualified to do business and is in goodstanding as a foreign corporation in each jurisdiction in which the nature ofits activities or the ownership or leasing of property requires suchqualification, and such jurisdictions are listed on Schedule 5.1.

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## 5.2.          Enforceability andAuthorization.  EachSelling Party and Hetronic Asia has all necessary corporate power and authorityto execute and deliver all agreements and documents to be executed anddelivered by it pursuant to this Agreement, and to consummate the transactionscontemplated thereby.  The execution,delivery and performance of the agreements and documents to be executed anddelivered pursuant to this Agreement, and the consummation of the transactionscontemplated thereby, have been duly approved and authorized by all necessarycorporate, company or similar actions on behalf of each Selling Party andHetronic Asia.  All agreements anddocuments to be executed and delivered by each Selling Party and Hetronic Asiapursuant to this Agreement will constitute, the valid and binding agreements ofsuch Selling Party and Hetronic Asia, as applicable, enforceable in accordancewith their respective terms, except that (i) such enforcement may besubject to applicable bankruptcy, insolvency, reorganization, moratorium orother similar Laws, now or hereafter in effect, affecting creditors’ rightsgenerally, and (ii) the remedy of specific performance and injunctive andother forms of equitable relief may be subject to equitable defenses and to thediscretion of the court before which any proceeding therefor may be brought.

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## 5.3.          No Conflict; Consents.  Except as set forth on Schedule 5.3hereto, neither the execution and delivery of this Agreement, nor theconsummation of the transactions contemplated hereby, will constitute aviolation of, or be in conflict with, or result in a cancellation of or rightto cancel, or constitute a default under, or create (or cause the accelerationof the maturity of) any debt, obligation or Liability affecting the AcquiredAssets, Purchased Shares or Hetronic Asia, or result in the creation orimposition of any Lien upon the Acquired Assets or Purchased Shares under: (a) anyterm or provision of the Organizational Documentation of any Selling Party orHetronic Asia; (b) any judgment, decree, order, regulation or rule ofany court or other Governmental Authority; (c) any Law; or (d) anyContract to which any Selling Party or Hetronic Asia is a party or by which anySelling Party, Hetronic Asia or the Acquired Assets are bound. Neither theexecution and delivery of this Agreement by the Selling Parties, nor of anyother agreement or document to be executed and delivered by them pursuanthereto, nor the consummation by them of the transactions contemplated hereby orthereby will cause any change in the rights or obligations of any party underany Contract to which any Target Company is a party to or by which any TargetCompany or the Acquired Assets or the Purchased Shares are bound that have amaterial effect upon the Acquired Assets or the Purchased Shares.

 

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Except as set forth on Schedule 5.3hereto, no consent of, or notice to, any Governmental Authority or any otherPerson is required to be obtained or given by any Selling Party or HetronicAsia in connection with the execution, delivery or performance of thisAgreement by any Selling Party or any other agreement or document to beexecuted, delivered or performed hereunder by any Selling Party, or to enablethe Buyers and Hetronic Asia to continue to conduct the business of the TargetCompanies after the Closing in the manner in which they are currentlyconducted.

 

## 5.4.          Capitalizationand Ownership; Corporate Matters.

##  

### 5.4.1.       Ownership of Sellers.  The Shareholder is the record and beneficialowner of ninety seven percent (97%) of the outstanding membership interest ofHetronic Holding and Monika Heckl Trust, Nichole Heckl Trust and Torsten Rempeare each the record and beneficial owner of one percent (1%) of the outstandingmembership interest of Hetronic Holding. Except as set forth on Schedule 5.4.1, (i) HetronicHolding is the record and beneficial owner of all of the issued and outstandingshares, capital stock, or other applicable equity or other proprietaryinterests of Hetronic Deutschland, Hetronic Europe, Hetronic Malta and HetronicUSA, and (ii) Hetronic USA is the record and beneficial owner of all ofthe issued and outstanding shares, capital stock, or other applicable equity orother proprietary interests of Hetronic West.

###  

### 5.4.2.       Capitalization and Ownershipof Hetronic Asia.  Theauthorized capital stock of Hetronic Asia consists of Eight Million Two HundredFifty Thousand pesos (P8,250,000) in lawful money of the Philippines dividedinto Eighty-Two Thousand Five Hundred (82,500) shares with the par value of OneHundred Philippine pesos (P100) per share, of which Eighty-Two Thousand FiveHundred (82,500) shares are issued and outstanding and constitute the HetronicAsia Shares.  Schedule 5.4.2hereto sets forth each record and beneficial owner and holder of any shares ofthe issued and outstanding stock of Hetronic Asia, together with the number ofshares held by each such holder.  Thereare no Contracts relating to the issuance, sale, or transfer of any equitysecurities or other securities of Hetronic Asia.  Without limitation to the foregoing, HetronicAsia has no outstanding subscriptions, options, warrants, rights or otherContracts granting to any Person any interest in or right to acquire at anytime, or upon the happening of any stated event, any stock, equity securitiesor other securities issued by or issuable by Hetronic Asia (including anysecurities convertible into or exchangeable for any of the foregoing), or anyinterest therein; or requiring Hetronic Asia to repurchase, reacquire, redeemor retire any stock, equity securities or other securities. There are nooutstanding or authorized equity appreciation, phantom equity or similar rightswith respect to Hetronic Asia.  There areno voting trusts, proxies or any other agreements or understandings withrespect to the voting of the stock of Hetronic Asia. Each Hetronic AsiaShareholder has valid and marketable title to the Purchased Shares identifiedas owned by such Hetronic Asia Shareholder, free and clear of all Liens. Nolegend or other reference to any purported Liens appears upon any certificaterepresenting Hetronic Asia Shares. All of the Hetronic Asia Shares have beenduly authorized and validly issued and are fully paid and non-assessable. Thereare no contracts relating to the issuance, sale, or transfer of any equitysecurities or other securities of Hetronic Asia. None of the Hetronic AsiaShares are issued in violation of any Law. There are no subscriptions, options,warrants, rights or other agreements granting to any Person any interest in orright to acquire from any of the Hetronic Asia Shareholders at any time, orupon the happening of any stated event, any Hetronic Asia Shares or anyinterest therein.

###  

### 11

### 

###  

### 5.4.3.       Hetronic Asia CompanyMatters.  True, correct and completecopies of the Organizational Documentation, minute books and stock records ofHetronic Asia have been furnished to Methode. Hetronic Asia has no Subsidiaries and Hetronic Asia does not own,directly or indirectly, or have any Contract to acquire, any stocks, bonds orsecurities or any equity or other proprietary interest in any corporation,partnership, limited liability company, joint venture, business enterprise orother entity of any nature whatsoever. Schedule 5.4.3 sets forth: (i) alist of all accounts and deposit boxes maintained by Hetronic Asia at any bankor other financial institution and the names of the individuals authorized toeffect transactions in such accounts and with access to such boxes; (ii) allagreements or commitments of Hetronic Asia guaranteeing the payment of money orthe performance of other contracts by any other Person, and (iii) thenames of all Persons holding general or special powers of attorney fromHetronic Asia, together with a summary of the terms thereof. Schedule 5.4.3hereto sets forth the names and positions of each officer and director ofHetronic Asia.

###  

## 5.5.          Financial Statements.  Schedule 5.5 hereto contains trueand complete copies of the following financial statements (collectively, the “FinancialStatements”) (i) the unaudited consolidated balance sheets of theTarget Companies and Hetronic Deutschland, together with the related statementsof income at and for each of the three (3) consecutive fiscal years ended December 31,2007; and (ii) the unaudited consolidated balance sheets of the TargetCompanies and Hetronic Deutschland, together with the related statements ofincome at and for the quarterly periods ended March 31, 2008 and June 30,2008 (the “Interim Financial Statements”).

##  

Except as disclosed on Schedule 5.5,the Financial Statements: (i) were prepared in accordance with the booksof account and other financial records of the Target Companies and HetronicDeutschland, (ii) are accurate, correct and complete in all materialrespects and fairly present the assets, Liabilities and financial condition ofthe Target Companies and Hetronic Deutschland as at the respective datesthereof, and the results of operations for the periods then ended, and (iii) havebeen prepared on a consistent basis with the past practices of the TargetCompanies and Hetronic Deutschland.

 

In addition, Schedule 5.5hereto contains true and complete copies of the monthly management reports foreach monthly period completed since the date of the last Interim FinancialStatement and such management reports were prepared in accordance with thebooks of account and other financial records of the Target Companies.

 

## 5.6.          Books and Records.  The books of account and other financialrecords of the Target Companies, all of which have been made available toMethode, are complete and correct in all material respects and representactual, bona fide transactions and have been maintained in accordance withsound and customary business and accounting practices including the maintenanceof an adequate system of internal controls.

##  

## 5.7.          No Undisclosed Liabilities.  Hetronic Asia does not have any Liabilitiesof any nature whatsoever, whether arising out of contract, tort, statute orotherwise, which are not reflected, reserved against or given effect to in theInterim Financial Statements except: (a) Liabilities incurred in theOrdinary Course of Business since the dates of the last Interim FinancialStatement, which are of the same nature as those set forth in the InterimFinancial Statements, and which are not, individually or in the aggregate,material to Hetronic Asia, and 

##  

## 12

## 

##  

## (b) Liabilities whichare specifically disclosed in Schedule 5.7.  To Sellers’ Knowledge, there is no basis forassertion against Hetronic Asia of any Liabilities not adequately reflected,reserved against or given effect to in the Interim Financial Statements or in Schedule 5.7,except for Liabilities described in clause (a) above.

##  

## 5.8.          Absence of Certain Changes.  Except as disclosed in Schedule 5.8or the Financial Statements, since December 31, 2007, the business andoperations of the Target Companies have been conducted in the ordinary courseconsistent with past practices and, without limiting the foregoing, there hasnot been:

##  

#### (a)           any material adverse changein the condition (financial or otherwise) of the properties, assets,Liabilities or results of operation of the Target Companies, or any event,occurrence, development, state of circumstances or facts that would reasonablybe expected to have, individually or in the aggregate, a Material AdverseEffect;

####  

#### (b)           any damage, destruction orloss (whether or not covered by insurance) affecting the properties, assets,Liabilities, financial condition, results of operations or business prospectsof the Target Companies 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 alabor union or representative thereof to organize any employees of the TargetCompanies, or any material lockouts, strikes, slowdowns, work stoppages orthreats thereof by or with respect to such employees;

####  

#### (d)           any material change in thecustomary methods of operations of the Target Companies, including practicesand policies relating to manufacturing, purchasing, Inventories, marketing,selling and pricing;

####  

#### (e)           any declaration, settingaside, or payment of any dividend or other distribution, or any direct orindirect redemption, retirement, purchase or other acquisition of any shares,capital stock, or other applicable equity or other proprietary interests, orany issuance of shares, capital stock, or other applicable equity or otherproprietary interests or the granting, issuance or exercise of any right,warrant, option or similar commitment relating to any issued and outstandingshares, capital stock, or other applicable equity or other proprietaryinterests, other than cash dividends or cash distributions in accordance withlaw;

####  

#### (f)            any increase in thecompensation, benefits, commissions or perquisites payable or to become payableby any Target Company to any director, officer, employee, or agent of anyTarget Company, or any payment of or agreement to pay any bonus, profit sharingor other extraordinary compensation to any employee of any Target Company(other than any such increase or payment to Persons that were paid or thatbecome payable in the Ordinary Course of Business);

####  

#### (g)           any establishment, adoptionor amendment of (i) a severance or termination pay plan or agreement forany director, officer or employee of any Target Company, or any increase inbenefits payable under any existing severance or 

 

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####  

#### termination pay policies or employment agreements,or (ii) any collective bargaining, bonus, profit-sharing, thrift, pension,retirement, deferred compensation, compensation, stock option, restricted stockor other benefit plan or arrangement covering any director, officer or employeeof any Target Company;

####  

#### (h)           any material change in theaccounting methods or practices or in any method of tax accounting followed byany Target Company or any change in depreciation or amortization policies orrates theretofore adopted;

####  

#### (i)            any material write-up orwrite-down of the value of any Inventories or revaluation any assets of anyTarget Company, other than in the Ordinary Course of Business;

####  

#### (j)            any cancellation or releaseof any Indebtedness owed to or Claims held by any Target Company;

####  

#### (k)           any sale, lease, abandonmentor other disposition by any Target Company, other than in the Ordinary Courseof Business, of any machinery, equipment or other operating properties, or anyintangible assets owned, leased or licensed by any Target Company;

####  

#### (l)            any incurrence, assumptionor guarantee by any Target Company of any Indebtedness;

####  

#### (m)          any transaction orcommitment made, or any Contract entered into, by any Target Company pursuantto which any property or assets of any Target Company is subjected to a Lien;

####  

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

####  

#### (o)           any transaction orcommitment made, or any Contract entered into, by any Target Company relatingto any of its assets or business (including the acquisition or disposition ofany assets) or any relinquishment by any Target Company of any Contract orother right, in either case, material to any Target Company, other thantransactions and commitments in the Ordinary Course of Business and thosecontemplated by this Agreement;

####  

#### (p)           any transaction orcommitment made, or any Contract entered into, by any Target Company pursuantto which any Intellectual Property is disclosed to or licensed to any Person,other than transactions and commitments in the Ordinary Course of Business;

####  

#### (q)           any transaction orcommitment made, or any Contract entered into, by any Target Company with adirector or officer of any Target Company, any member of the immediate familyof any such Persons, or any Person controlled by any of the foregoing Persons;or

 

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####  

#### (r)            any agreement or commitmenton the part of any Target Company to do any of the foregoing.

####  

## 5.9.          Tax Matters.

##  

### 5.9.1.       Filing of Tax Returns. All TaxReturns required to be filed by the Target Companies through the date hereofhave been, and as to Tax Returns required to be filed through the Closing Datewill be, timely filed with the appropriate Governmental Authorities in all jurisdictionsin which such Tax Returns are required to be filed, in each case subject tosuch extensions that have been properly obtained by the Target Companies. Allsuch Tax Returns are or will be true and correct and prepared in accordancewith applicable Law and properly reflect, or will properly reflect, the Taxesof the Target Companies for the periods covered thereby. Copies of all incometax returns for or in respect of each Target Company for all years not barredby the statute of limitations have heretofore been delivered by the TargetCompanies to Methode.

###  

### 5.9.2.       Payment of Taxes. Except as setforth on Schedule 5.9, all Taxes due and payable by the TargetCompanies with respect to all periods prior to and through the date hereof havebeen, and through the Closing Date will be, duly and properly computed,reported, fully paid and discharged and there are no unpaid Taxes with respectto any period prior to and through the date hereof, and there will not be anyunpaid Taxes with respect to any period through the Closing Date, which are orcould become a Lien on any Acquired Assets or the Purchased Shares, except forcurrent Taxes not yet due and payable.

###  

### 5.9.3.       Assessments orInvestigations. None of the Target Companies has received anynotice of assessment or proposed assessment by the IRS or any otherGovernmental Authority in connection with any Tax Returns and there are nopending tax examinations of or tax claims asserted against any Target Companyor its properties.  No Target Company haswaived any statute of limitations in respect of Taxes or agreed to anyextension of time with respect to a Tax assessment or deficiency.  To Sellers’ Knowledge, there has been nointentional disregard of any Law in the preparation of any Tax Returnapplicable to any Target Company.  Noclaim has ever been made by a Governmental Authority in a jurisdiction where aTarget Company does not pay Taxes or file Tax Returns that such Target Companyis or may be subject to Taxes assessed by such jurisdiction.

###  

### 5.9.4.       Tax Liens. Except asdisclosed in Schedule 5.9, there are no Tax Liens on any of theproperties or assets of any Target Company, except for liens for current taxesnot yet due and payable and, to Sellers’ Knowledge, there is no basis for anyadditional assessment of any Taxes with respect to any Target Company.  No Target Company has waived any Law fixing,or consented to the extension of, any period of time for assessment of anyTaxes which waiver or consent is currently in effect.

###  

### 5.9.5.       Withholding. Each TargetCompany has withheld and paid all Taxes required to have been withheld and paidin connection with amounts paid or due and owing to any employee, creditor,independent contractor, or other third party and each Target Company hasproperly reflected the status of all employees and independent contractors inconnection therewith as required by all applicable Laws.

###  

### 15

### 

###  

### 5.9.6.       Other Tax Matters. No TargetCompany is a party to, or bound by, any tax sharing, tax indemnity, taxallocation or similar agreement or arrangement. No Target Company has ever been a member of an affiliated group withinthe meaning of Section 1504 of the Code (or any similar group definedunder a similar provision of any state, local or foreign Law (an “AffiliatedGroup”) filing a consolidated federal income Tax Return (other than theAffiliated Group of which Hetronic Holding is the includible common parent) orhas ever incurred any Liability for the Taxes of any Person under Treas. Reg. Section 1.1502-6(or any similar provision of any state, local, or foreign Law), as a transfereeor successor, by contract, or otherwise. No Target Company has: (i) fileda consent under Code Sec. 341(f) concerning collapsible corporations; (ii) madeany payments and is not obligated to make any payments that will not bedeductible to any Target Company under Code Sec. 280G; or (iii) been aUnited 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).

###  

## 5.10.        Title to Assets. The TargetCompanies are the owners of and have good and marketable title to the AcquiredAssets, free and clear of Liens, except for: (i) the lien of current taxesnot yet due and payable, and (ii) Liens disclosed and described in Schedule 5.10hereto.  Except as disclosed in Schedule 5.10,the Acquired Assets are usable in the Ordinary Course of Business, are inreasonable condition and repair and conform in all material respects to all applicableLaws relating to their construction, use and operation. Except as disclosed in Schedule 5.10,the Acquired Assets include all assets, properties and rights necessary toconduct the business conducted by the Target Companies substantially in the mannerconducted since January 1, 2007 and all assets, properties and rightsowned by any of the Selling Parties or their Affiliates and used in thebusiness conducted by the Target Companies since January 1, 2007;provided, however, that Hetronic Deutschland’s distribution and assemblyoperation is an essential component of the business conducted by the TargetCompanies, and none of such operations are being acquired because neither theshares or assets of Hetronic Deutschland are included in the Acquired Assets.

##  

## 5.11.        Real Estate and Leases. The TargetCompanies do not own, and have not ever owned, any real estate. No TargetCompany is a party to any oral lease or agreement under which any TargetCompany is lessee of, or holds or operates, any real estate (includingbuildings and improvements) (the “Leased Facilities”). Schedule 5.11lists every written lease or agreement under which any Target Company is lesseeof, or holds or operates, any Leased Facility (each a “Facility Lease”).True, correct and complete copies of all Facility Leases have been provided toMethode.  Each Facility Lease is in fullforce and effect and constitutes a legal, valid and binding obligation of therespective parties thereto.  No TargetCompany nor, to Sellers’ Knowledge, any other party thereto is in default inany material respect under a Facility Lease nor, to Sellers’ Knowledge, has anyevent occurred which with the passage of time or giving of notice or both wouldconstitute such a default.  Except as setforth in Schedule 5.11, no modifications, alterations, improvementsor installations to a Leased Facility have been made which would permit thelandlord to require material expenditures by the tenant to place such LeasedFacility in conformance with requirements arising under or upon expiration ortermination of the Facility Lease therefor. Except as set forth in Schedule 5.11,the present maintenance, operation, use and occupancy of the Leased Facilitiesby the Target Companies does not violate any instrument of record or agreementaffecting such Leased Facilities or any Law, including any zoning, subdivision,building, health, environmental, pollution, fire or similar 

##  

## 16

## 

##  

## Law and none of the TargetCompanies have received any notices from any Governmental Authority in respectto the Leased Facilities that have not been corrected (or are in the process ofbeing corrected and disclosed in Schedule 5.11) and all water, gas,electrical, steam, compressed air, telecommunication, sanitary and storm sewagelines and systems and other similar systems serving the Leased Facilities areinstalled and operating and are sufficient to enable the Leased Facilities tocontinue to be used and operated in the manner currently being used and operated,and any so-called hook-up fees or other associated charges have been fullypaid.  To Sellers’ Knowledge, there is noplan, study, or effort by any Governmental Authority or any non-governmentalPerson or agency which may adversely affect the present use of the LeasedFacilities. No current use by any Target Company of the Leased Facilities orimprovement located thereon is dependent on a nonconforming use or otherapproval from a Governmental Authority, the absence of which wouldsignificantly limit the use of any of the properties or assets in the operationof the Business. There are no pending condemnation proceedings with regard toall or any part of the Leased Facilities and, to Sellers’ Knowledge, no suchproceedings are threatened or contemplated by any Governmental Authority.

##  

## 5.12.        Material Contracts.  Except as set forth in Schedule 5.12,no Target Company is a party to, or bound by, any Contracts:

##  

#### (a)           for the sale of products(including raw materials, commodities, supplies, or other personal property) orfor the furnishing of services, the performance of which will extend over aperiod of more than one year, or that involves annual payments in excess of$100,000 or which cannot be canceled by such Target Company without penalty orfurther payment and without more than thirty (30) days prior notice;

####  

#### (b)           for the purchase of productsor services involving payment of in excess of $100,000 per annum by a TargetCompany or which cannot be canceled by such Target Company without penalty orfurther payment and without more than thirty (30) days prior notice;

####  

#### (c)           for leasing personalproperty (including leases for office or computer equipment, furniture,fixtures, and vehicles) which require an annual payment in excess of $100,000or the term of which at any time exceeded one (1) year;

####  

#### (d)           for the lease of real orpersonal property to any Person;

####  

#### (e)           constituting a partnershipor joint venture;

####  

#### (f)            between such Target Companyand any Governmental Authority;

####  

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

####  

#### (h)           prohibiting such TargetCompany from freely engaging in business (or in any line of business) anywherein the world or containing any other restrictive covenant or containing anyconfidentiality or exclusivity clause or obligation; or requiring such TargetCompany to engage in affirmative action; or otherwise materially restrictingthe 

 

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####  

#### conduct of the business of such Target Company,except to the extent such Contract is executed in connection with thetransactions contemplated hereby;

####  

#### (i)            for the employment of anyindividual on a full-time, part-time, consulting, or other basis providingannual compensation in excess of $20,000 or which is not cancelable withoutpayment of severance and on fourteen (14) days’ notice or less, or anyseverance agreement;

####  

#### (j)            under which it has advancedor loaned any amount to any of its directors, officers, and employees orguaranteed any such loan;

####  

#### (k)           for the purchase or sale ofcapital stock membership interests or interests therein, or of securitiesconvertible into or exchangeable for capital stock;

####  

#### (l)            providing for the servicesof dealers, distributors, sales representatives or similar representatives;

####  

#### (m)          relating to the ownership,use or licensing of any Intellectual Property (provided, however, thatshrink-wrap licenses whereby such Target Company licenses generally-availableoff-the-shelf software may be disclosed on Schedule 5.12 by listingonly the software name and number of licenses/seats purchased rather than bylisting individual licenses), including any current or past grant of, ortermination of any grant of, rights in the Target Company IntellectualProperty, any development of Target Company Intellectual Property by a thirdparty, or any transfer of rights in any Intellectual Property; or

####  

#### (n)           which are otherwise materialto the Acquired Assets or Hetronic International or the business conducted bythe Target Companies utilizing the Acquired Assets.

####  

Except as provided in Schedule 5.12,each Contract to which any Target Company is a party: (i) is legal, validand binding on the respective parties thereto and is in full force, and (ii) uponthe consummation of the transactions contemplated by this Agreement shallcontinue in full force and effect without penalty or adverse consequence.  No Target Company nor, to Sellers’ Knowledge,any other party thereto, is in breach of, or default under the provisions ofany such Contract (except where such default is excused as immaterial and doesnot give rise to any termination right or penalty under the terms of suchContract).  True, correct and completecopies of all written Contracts disclosed on Schedule 5.12 andaccurate descriptions of all oral Contracts disclosed on Schedule 5.12have been provided to Methode.

 

## 5.13.        Receivables.  An aged list of all unpaid Receivables of theTarget Companies outstanding as of the most recent practicable date is attachedon Schedule 5.13 hereto. Except as disclosed on Schedule 5.13, all Receivables of theTarget Companies, net of any reserves for doubtful accounts, arose from salesin the Ordinary Course of Business, represent legal and valid obligations tothe applicable Target Company and are good and collectible in the OrdinaryCourse of Business within the period specified on Schedule 5.13 andare not subject to any reduction or discount that has been agreed to by anyTarget Company or, to Sellers’ Knowledge, any dispute, counterclaim, Lien orset-off.

 

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##  

## 5.14.        Inventories.  All Inventories of the Target Companiesreflected on the balance sheet contained in the Interim Financial Statements oracquired since the dates thereof, net of reserves, consist of items of aquality and quantity usable and salable in the Ordinary Course of Business asfirst quality goods (subject to claims under the Assumed Warranties).  Each item of Inventory reflected on the FinancialStatements and the books and records of the Target Companies is valued at cost,provided that each item of Inventory reflected on the Financial Statements andthe books and records of Hetronic Malta is valued at the lower of cost ormarket.  Each Target Company has, and onthe Closing Date will have, sufficient amounts of Inventory to conduct itsbusiness and such amounts are consistent with its past practices.

##  

## 5.15.        Litigation.  Except as disclosed in Schedule 5.15,there are no actions, suits, inquiries, proceedings, claims or investigationsby or before any Governmental Authority pending or, to Sellers’ Knowledge,threatened against, or involving, the Acquired Assets, the Purchased Shares,the Target Companies, any of their properties, assets or businesses, or anyofficers or directors of the Target Companies, and, to Sellers’ Knowledge,there is no basis for any such action. Except as set forth in Schedule 5.15, there are nojudgments, consents, decrees, injunctions, or any other judicial or administrativemandates outstanding against any Target Company.

##  

## 5.16.        Insurance.  Schedule 5.16 contains adescription of all insurance policies maintained by or on behalf of any TargetCompany on its properties, assets, business or personnel, in each case specifying(i) the insurer, (ii) the amount of coverage, (iii) the type ofinsurance, (iv) the policy number, and (v) any currently pendingclaims thereunder or any claims asserted thereunder or under similar policiessince January 1, 2007.  All suchpolicies are (and pending Closing will continue to be) in full force andeffect, and no Target Company is in default in any material respect withrespect to any provision contained in any insurance policies, and, to Sellers’Knowledge, no event has occurred that, with notice or lapse of time, couldconstitute such a default or permit termination of the policy.  No Target Company has failed to give anynotice or present any claim under any such policy in due and timely fashion.  To the extent that any Contract to which anyTarget Company is a party requires any Target Company to maintain a specifiedlevel of insurance coverage, such Target Company maintains such requiredinsurance coverage in accordance with such Contract.

##  

## 5.17.        Employment andLabor Matters.

##  

### 5.17.1.     Employees. Schedule 5.17hereof contains a list of the names of each employee of each Target Companyemployed at any time since January 1, 2008, together with their currentemployment status, annual salary, bonuses and perquisites and their total compensationduring the fiscal year ended December 31, 2007.

###  

### 5.17.2.     Collective BargainingAgreements. Except as disclosed on Schedule 5.17,no Target Company is a party to or otherwise bound by any contract, agreementor collective bargaining agreement with any labor union or organization orother commitment respecting employment or compensation of any of its officers,directors, agents or employees, and no employees of any Target Company arerepresented by any labor union, workers council or similar organization.

 

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###  

### 5.17.3.     Employee Claims.  There are no charges or complaints involvingany federal, state or local civil rights enforcement agency, court or otherGovernmental Authority; complaints or citations under the Occupational Safetyand Health Act or any state or local occupational safety act or regulation;unfair labor practice charges or complaints with any Governmental Authoritywith jurisdiction over labor- or employment-related claims (including the UnitedStates National Labor Relations Board); or other claims, charges, actions orcontroversies pending, or, to Sellers’ Knowledge, threatened or proposed,involving any Target Company and any employee, former employee or any laborunion or other organization representing or claiming to represent suchemployees’ interests.

###  

### 5.17.4.     Compliance.  Each Target Company is and has heretoforebeen in compliance with all Laws respecting employment and employmentpractices, terms and conditions of employment and wages and hours, thesponsorship, maintenance, administration and operation of (or the participationof its employees in) employee benefit plans and arrangements and occupationalsafety and health programs, and no Target Company is engaged in any violation ofany Law related to employment, including unfair labor practices or acts ofemployment discrimination.

###  

## 5.18.        EmployeeBenefits.

##  

### 5.18.1.     Identification. Schedule 5.18 contains a true andcomplete list of all Employee Plans, whether express or implied, applicable toany employees or former employees of any Target Company and true and correctcopies of such Employee Plans have been furnished to Methode.  True and correct copies of all employeemanuals or written statements of policy relating to the employment of employeesof Target Companies, if any, have been furnished to Buyer. Without limitationto the foregoing, except as disclosed in Schedule 5.18, (i) noTarget Company maintains or contributes to, nor has any Target Company at anytime maintained or contributed to, a “defined benefit plan” within the meaningof Section 3(35) of ERISA, (ii) no Target Company maintains or hashad an obligation to contribute to any multiemployer plan (within the meaningof Section 3(37) of ERISA), and (iii) no Target Company maintains anyWelfare Plan.

###  

### 5.18.2.     Compliance. Each Employee Plan and each related trust, insurance contract or fundmaintained by, or contributed to, by any Target Company has complied in formand operation with all filings, reporting, disclosure and other requirements ofERISA and, to the extent applicable, the Code. No Selling Party or TargetCompany has received any notice to correct any violation of any applicable Lawsrelating to any Employee Plans of any TargetCompany or the manner in whichthey are administered, with which it has not complied; and the provisions andoperations of all such plans, programs and policies are in substantialcompliance with applicable Laws. All required reports and descriptions(including Form 5500 annual reports, summary annual reports, PBGC-1’s, andsummary plan descriptions) have been timely filed or distributed appropriatelywith respect to each Employee Plan. Neither the Target Companies nor any of their members, managers,officers or directors has engaged in any transaction in violation of theprohibited transactions provisions set forth in Section 4975 of the Codeor Section 406 of ERISA, which would be reasonably likely to result inliability to any such party.  Therequirements of COBRA have been met with respect to each Welfare Plan.  All contributions (including employercontributions and employee salary reduction contributions) which are due

 

20

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###  

### have been paid to eachPension Plan. All premiums or other payments for all periods ending on orbefore the Closing Date have been paid with respect to each Welfare Plan.  No Target Company has incurred, or taken anyactions that could cause it to occur, a “complete withdrawal” or “partialwithdrawal”, as defined in Sections 4203(a) and 4205(a), respectively, ofERISA, from any multiemployer pension plan as to which any Target Companycontributes, has contributed or has had an obligation to contribute.  No Selling Party or Target Company hasreceived from the sponsor of a multiemployer pension plan any notice of, or anynotice relating to, withdrawal liability under Part 1 of Subtitle E ofTitle IV of ERISA relating to such plan. There is no litigation or filed claimsagainst any Target Company with respect to any Employee Plan other than routineclaims for benefits.

###  

### 5.18.3.     Funding of Certain Plans. There is no Employee Plan that is a Welfare Plan, the benefits underwhich are not provided exclusively from the assets of the Target Companies orthrough insurance contracts. The financial and actuarial statements, if any,for each Employee Plan reflect in all material respects the financial conditionand funding of the Employee Plans as of the date of such financial andactuarial statements, and no change has occurred with respect to the financialcondition or funding of the Employee Plans since the date of such financial andactuarial statements.

###  

### 5.18.4.     Acceleration of Payments. The consummation of the transactions contemplated by this Agreementwill not (i) entitle any current or former employee, director or officerof any Target Company to severance pay, unemployment compensation or any otherpayment, (ii) accelerate the time of payment or vesting, or increase theamount of compensation due any such employee, director or officer, or triggerthe funding (through a grantor trust or otherwise) of compensation or benefitsunder, increase the amount payable or trigger any other material obligationpursuant to, any or any other agreement; or (iii) result in any breach orviolation of, or a default under, any Employee Plan.

###  

## 5.19.        IntellectualProperty.

##  

### 5.19.1.     Identification ofIntellectual Property.  TheTarget Companies own or have the right to use, with the right to license orsublicense, all Intellectual Property necessary to conduct their business asnow conducted.  Schedule 5.19hereto lists and identifies correctly and completely (with patent numbers,registration numbers or application numbers, as applicable) the currentinterests of each Target Company in all registrations for or applications toregister Intellectual Property, lists all invention disclosures submitted byany personnel of any Target Company (for which a patent application has notbeen filed), and lists and generally identifies the current interests of eachTarget Company in all other Target Company Intellectual Property. With respectto any licenses, sublicenses, franchise agreements or similar types ofagreements concerning Target Company Intellectual Property, Schedule 5.19includes the identity of all parties thereto, a description of the nature andsubject matter thereof, the applicable royalty, the exclusivity ornon-exclusivity thereof and the term thereof.

###  

### 5.19.2.     Title to IntellectualProperty.  No otherPerson holds any right, Lien or other interest not specified in Schedule 5.19,or has any right to a royalty or payment of any kind from any Target Company,with respect to the Target Company Intellectual Property.  Except as indicated in Schedule 5.19,there has been no asserted claims or litigation challenging or 

 

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###  

### threatening to challenge theright, title and interest of any Target Company to use the Target CompanyIntellectual Property, and to Sellers’ Knowledge, there is no bases for anysuch claims.  No Target CompanyIntellectual Property is subject to any outstanding judgment, injunction,order, decree, or agreement restricting the use thereof by any Target Companyor restricting the licensing or transfer thereof by any Target Company.

###  

### 5.19.3.     No Infringement by TargetCompanies. The operation of the business of the TargetCompanies and the ownership, manufacture, purchase, sale, licensing and use ofany of the Target Company Intellectual Property do not contravene, conflictwith, violate or infringe upon any Intellectual Property of any third party andno Trade Secret has been misappropriated by any Target Company from any thirdparty.  In addition, the use, licensingor sale by or to each Target Company of any of the Target Company IntellectualProperty does not require the acquiescence, agreement or consent of any thirdparty that has not been obtained. The operations and business of each TargetCompany do not violate any rights of others in any of the items set forth in Schedule 5.19and no further rights or licenses with respect to Intellectual Property arerequired by any Target Company for the conduct of the business as now beingconducted by it.

###  

### 5.19.4.     Infringement by ThirdParties. To Sellers’ Knowledge, no right of any Target Company with respect tothe Target Company Intellectual Property is being violated or infringed byothers.  Except as described in Schedule 5.19,the Target Company Intellectual Property and the Target Companies’ products arenot subject to any pending or, to Sellers’ Knowledge, any threatened challengeor claim of infringement, interference or unfair competition.

###  

### 5.19.5.     Registrations forIntellectual Property. Except as set forth on Schedule 5.19, all patents, trademarkregistrations, applications for trademark registration, copyright registrationsand applications for copyright registration with respect to any Target CompanyIntellectual Property Right: (i) are in compliance with all formal legalrequirements 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 thirtydays after the Closing Date; or (ii) are not subject to any pending or, toSellers’ Knowledge, any threatened action in which a third party seeks tocancel, invalidate or oppose any right arising therefrom or has otherwisecontested the validity, enforceability, or ownership thereof.

###  

### 5.19.6.     Trade Secrets. With respectto each Trade Secret owned by, licensed by or used by a Target Company(including all technical information, vendor lists, specifications andrequirements and other Trade Secrets relating to the development processes,software and activities of each Target Company), the documentation maintainedby each Target Company relating thereto is reasonably current, accurate, andsufficient in detail and content to identify and allow its full and properuse.  Each Target Company has exercisedat least a reasonable degree of care in protecting the secrecy of all TradeSecrets owned by, licensed by or used by each Target Company and, to Sellers’Knowledge, no Trade Secret used by any Target Company has been divulged to anythird party without obligation to maintain the confidentiality thereof.

###  

### 5.19.7.     Employee Developments. Except asdescribed in Schedule 5.19, all current employees of each TargetCompany involved in the development of Intellectual Property have executedwritten agreements assigning to such Target Company all right, title andinterest 

###  

### 22

### 

###  

### in Intellectual Propertydeveloped by such employees as part of their employment activities (“EmployeeIP Agreements”).  True and correctcopies of the Employee IP Agreements of current and, to the extent available,former employees have been provided to Methode prior to the Closing Date.  Except as described in Schedule 5.19,neither any Target Company nor, to Sellers’ Knowledge, any current or formeremployee of any Target Company is in breach of, or default under the provisionsof any such agreement. Except as described in Schedule 5.19, noformer employee of a Target Company who developed any material Target CompanyIntellectual Property has failed to assign to such Target Company all right,title and interest in such Target Company Intellectual Property.  To Sellers’ Knowledge, no current employee ofany Target Company has entered into any written agreement with a third partywhich restricts or limits in any way the scope or type of work that such employeemay perform for any Target Company.

###  

### 5.19.8.     No Contravention. Theconsummation of the transactions contemplated by this Agreement will not alteror impair any of the rights of any Buyer after the Closing to use the TargetCompany Intellectual Property in the manner used by the Target Companies priorto the Closing.

###  

## 5.20.        Legal Compliance.  Except as disclosed in Schedule 5.20,each Target Company has complied with and is in compliance with all Lawsapplicable to it (including Laws applicable to immigration, controls, wages andhours, civil rights, occupational health and safety, and competition), hascomplied with ethical business practices in the conduct of its business, andhas not received any notice of claimed noncompliance with any Laws or ethicalbusiness practices. Without limitation to the foregoing, no Target Company has,nor, have any employees, officers, directors, consultants, advisors, agents,members or representatives of any Target Company or other Person acting onbehalf of any Target Company, violated, or taken any action which would causeany Target Company to be in violation of, the Foreign Corrupt Practices Act of1977, as amended (the “FCPA”), or the USA Patriot Act, or any rules andregulations thereunder.  There is notnow, and there has never been, any employment by any Target Company of, orbeneficial ownership in any Target Company by, any governmental or politicalofficial of any country.

##  

## 5.21.        Approvals. Except asdescribed in Schedule 5.21, each Target Company possesses or hasapplied for all governmental and other permits, licenses, consents,certificates, orders, authorizations and approvals (the “Approvals”) toown or hold under lease and operate its properties and assets and to carry onits business as now conducted and all such Approvals are identified in Schedule 5.21.  Each Approval is valid, binding and in fullforce and effect and each Target Company has complied with all requirements of,and is not in default under, any such Approval and has not received any noticethat it is in violation of any of the terms or conditions of such Approval orany notice relating to the revocation or modification of any such Approvals. Noloss or expiration of any Approval is threatened or pending other thanexpiration in accordance with the terms thereof.

##  

## 5.22.        Transactions with Affiliates.  Except as described in Schedule 5.22and except for the sale of goods and services and licensing of IntellectualProperty among the Target Companies in the Ordinary Course of Business and/orbetween the Target Companies and Hetronic Deutschland in the Ordinary Course ofBusiness, none of the Target Companies, their Affiliates, nor any officer ordirector of any Target Company or its Affiliates, nor any member of theimmediate family of any such Persons: (a) has any direct or indirectinterest in (i) any 

##  

## 23

## 

##  

## property or asset which isowned or used by any Target Company in the conduct of its business, or (ii) anyentity which does business with any Target Company; or (b) has anyfinancial, business or contractual relationship or arrangement with any TargetCompany, has any outstanding loans to or from any Target Company, performsservices or supplies goods to any Target Company, or has any other Liabilitiesdue to or from any Target Company.

##  

## 5.23.        EnvironmentalMatters.

##  

### 5.23.1.     Environmental Compliance.  Except as disclosed in Schedule 5.23,all facilities owned, leased, used or operated by any Target Company or anypredecessor in interest have been, and continue to be, owned, leased, used oroperated in compliance with all applicable Environmental Laws and allEnvironmental Permits. All past non-compliance with Environmental Laws orEnvironmental Permits has been resolved without any pending, on-going or futureobligation, cost or Liability, and there is no requirement proposed foradoption or implementation under any Environmental Law or Environmental Permit.

###  

### 5.23.2.     Environmental Audits.  Schedule 5.23 identifies (i) allenvironmental audits, assessments, occupational health studies or similarstudies or analyses undertaken by, or at the direction of, GovernmentalAuthorities, any Target Company, or any predecessor in interest; (ii) theresults of the most recent analyses of water (including groundwater analyses),soil, air or asbestos samples where non-compliance or contamination isindicated; (iii) the most recent inspection of each operating facility bythe U.S. Environmental Protection Agency or other relevant GovernmentalAuthority; (iv) written communications with Governmental Authoritiesrelating to issues of noncompliance concerning Environmental Laws orEnvironmental Permits; and (v) any written claim or complaint concerningenvironmental matters of any Target Company, in each case relating to the realproperty owned, leased or occupied by any Target Company, or any Target Company’soperations, as applicable.

###  

### 5.23.3.     Release, Storage or Disposalof Hazardous Materials. Hazardous Materials have not been Released by any Target Company on any realproperty owned, leased or occupied by any Target Company or, during its periodof ownership, lease or occupancy, on any property formerly owned, leased oroccupied by, or on behalf of, any Target Company.  Each Target Company has reported promptly to appropriateauthorities each unauthorized Release of any Hazardous Material at any facilityleased, owned, used or operated by any Target Company, or any predecessor ininterest, which was required to be reported by Target Companies underapplicable Environmental Laws.  Except asdisclosed in Schedule 5.23, no real property currently or formerlyowned, leased or occupied by any Target Company, and no site or location usedby any Target Company or any predecessor in interest has disposed, treated, orarranged for the storage, disposal or treatment of, any Hazardous Material orother waste (i) has been placed on the National Priorities List or itsstate equivalent; (ii) the U.S. Environmental Protection Agency or otherrelevant Governmental Authority has proposed, or is proposing, to place on theNational Priorities List or state equivalent; (iii) is on notice of, orsubject to a claim, administrative order or other demand either to takeRemedial Action or to reimburse any Person who has taken Remedial Action inconnection with that site; (iv) has filed (or has had filed with respectto it) notification of hazardous waste activities; or (v) is on any stateComprehensive Environmental Response Compensation Liability Information SystemList or equivalent list.

###  

### 24

### 

###  

### 5.23.4.     Remedial Actions.  No Target Company is conducting, nor hasundertaken or completed, any Remedial Action relating to any Release orthreatened Release of Hazardous Materials at real property owned, leased oroccupied by any Target Company or at any other site, location or operation,either voluntarily or pursuant to the order of any Governmental Authority orthe requirements of any Environmental Law or Environmental Permit. Neither theexecution of this Agreement nor the consummation of the transactionscontemplated hereby will require any Remedial Action or notice to or consent ofGovernmental Authorities or any third party pursuant to any applicableEnvironmental Law or Environmental Permit.

###  

### 5.23.5.     Storage Tanks.  Except as set forth in Schedule 5.23,no Target Company has owned or operated, nor presently owns or operates, anyunderground or aboveground storage tanks. To Sellers’ Knowledge, there are no underground or aboveground storagetanks or any surface impoundments, septic tanks, pits, lagoons or other areasin which Hazardous Materials are being or have been treated, stored or disposedon any real property owned, leased or occupied by any Target Company. ToSellers’ Knowledge, there are no wastes, drums or containers disposed of orburied on, in or under the ground located on the premises owned or operated byany Target Company.  No Target Companyhas disposed of or buried any wastes, drums or containers on, in or under theground or any surface waters located on the premises owned or operated by anyTarget Company.  No Target Company norany party acting on its behalf, has disposed of or buried, or arranged todispose of or bury, any waste, drums or containers in or on the premises of athird party other than those pursuant to and in compliance with all applicableEnvironmental Laws.

###  

### 5.23.6.     Contaminants.  Except as set forth in Schedule 5.23,there are no polychlorinated biphenyls, asbestos or asbestos-containingmaterials or urea formaldehyde in or on premises owned or operated by anyTarget Company and the soil, surface water and ground water at, under or oneach such premises are free from any material or substance which is or may behazardous or toxic, or which could otherwise pose a risk to health, safety orthe environment or which is regulated, prohibited or controlled pursuant to orthe subject of any Environmental Laws.

###  

### 5.23.7.     Environmental Claims.  There are no Environmental Claims pending orthreatened against any Target Company and, to Sellers’ Knowledge, there are nocircumstances that can reasonably be expected to form the basis of any suchEnvironmental Claim, including with respect to any off-site disposal locationcurrently or formerly used by, or on behalf of, any Target Company or any ofits predecessors or with respect to any facilities previously owned, leased oroccupied by any Target Company.

###  

## 5.24.        Product Liability andWarranty Matters.  Except asdisclosed in Schedule 5.24, there are no actions, suits, inquiries,proceedings, claims, or investigations by or before any Governmental Authoritypending or, to Sellers’ Knowledge, threatened, against or involving any TargetCompany relating to any product alleged to have been manufactured or sold byany Target Company and alleged to have been defective or improperly designed ormanufactured.  Schedule 5.24lists all formal or informal policies, practices of Target Companies pursuantto which any Person has any right to return any product or products sold by anyTarget Company for credit or refund and any other express or impliedwarranties, indemnifications or guarantees with respect to such products(collectively, “Hetronic Warranties”). Except as disclosed in 

##  

## 25

## 

##  

## Schedule 5.24, no customerof any Target Company has returned any products sold in the Business or appliedfor or requested any credit or refund with respect thereto except pursuant tosaid Hetronic Warranties.  Correct andcomplete copies of all written Hetronic Warranties disclosed on Schedule 5.24and accurate descriptions of all oral or informal Hetronic Warranties disclosedon the Schedule 5.24 have been provided to Buyer.

##  

## 5.25.        Principal Customers andSuppliers.  Schedule 5.25sets forth separate lists of the ten (10) largestcustomers of the Target Companies (collectively) in terms of sales during theyears ended December 31, 2005, 2006 and 2007 (the “Named Customers”),and the ten (10) largest suppliers to the Target Companies (collectively)during the years ended December 31, 2005, 2006 and 2007 (the “NamedSuppliers”), showing in each case the approximate total sales and purchasesby or from each such customer or supplier during such period. There are noother customers or suppliers who accounted for more than 5% of sales orpurchases, respectively, by the Target Companies during the periods shown.

##  

Except as set forth on Schedule 5.25,since January 1, 2008, no Named Customer or Named Supplier has terminatedits business relationship with the Target Companies or provided written noticeof its intent to refrain from purchasing from or dealing with the TargetCompanies or, after the Closing, the Buyers. To Sellers’ Knowledge, there has not otherwise been any material adversechange in the business relationship of any Target Company with any such NamedCustomer or Named Supplier.

 

## 5.26.        Solvency.  No Target Company is, nor will any TargetCompany be rendered by the occurrence of the transactions contemplated by thisAgreement, insolvent and, immediately after giving effect to the consummationof the transactions contemplated by this Agreement each Target Company will beable to pay its debts as they become due. As used herein, the term: (i) “insolvent” means that the sum of thepresent fair salable value of its assets does not and will not exceed its debtsand other probable liabilities, and (ii) “debts” includes any legalliability, whether matured or unmatured, liquidated or unliquidated, absolute,fixed or contingent, disputed or undisputed or secured or unsecured.

##  

## 5.27.        Material Adverse Affect. Since December 31,2007, there has not been any material adverse change in the liabilities,properties, customerrelationships, prospects, assets, results of operation or financial conditionof any Target Company, taken as a whole, and no event has occurred orcircumstance exists that may result in such a material adverse change.

##  

## 5.28.        Disclosure.  No representation or warranty of the SellingParties made hereunder or in the schedules contains any untrue statement of a materialfact or omits to state a material fact necessary in order to make thestatements contained herein or therein not misleading.  Copies of all documents referred to herein orin the schedules have been delivered or made available to Methode, are true,correct and complete copies thereof, and include all amendments, supplements ormodifications thereto or waivers thereunder.

##  

# 6.             REPRESENTATIONS ANDWARRANTIES OF METHODE.

#  

As an inducement for theSelling Parties to enter into this Agreement, Methode represents and warrantsto the Selling Parties as follows:

 

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##  

## 6.1.          Organization.  Methode and each of the Buyers is anorganization of the nature identified in Schedule 6.1 and is dulyorganized, validly existing and in good standing under the laws of thejurisdiction identified in Schedule 6.1.  Each Buyer has all requisite power andauthority to acquire the Purchased Assets and the Purchased Shares ascontemplated hereby.

##  

## 6.2.          Enforceabilityand Authorization.

##  

### 6.2.1.       Authorization by Methode.  Methode has all requisite corporate power andauthority to execute and deliver this Agreement and all other agreements anddocuments to be executed and delivered by Methode pursuant this Agreement andto consummate the transactions contemplated hereby.  The execution and delivery of this Agreementand all other agreements and documents to be executed and delivered by Methodepursuant hereto, and the consummation of the transactions contemplated herebyand thereby have been duly authorized by all necessary action on behalf ofMethode.  This Agreement constitutes, andall other agreements and documents to be executed and delivered by Methode willconstitute, the valid and binding agreements of Methode, enforceable againstMethode in accordance with their respective terms, except that (i) suchenforcement 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 specificperformance and injunctive and other forms of equitable relief may be subjectto equitable defenses and to the discretion of the court before which anyproceeding therefor may be brought.

###  

### 6.2.2.       Authorization by the Buyers.  Each Buyer has or will have all requisitecorporate power and authority to execute and deliver all agreements anddocuments to be executed and delivered by such Buyer pursuant this Agreementand to consummate the transactions contemplated hereby.  The execution and delivery of all agreementsand documents to be executed and delivered by each Buyer pursuant hereto, andthe consummation of the transactions contemplated hereby and thereby have beenor will be duly authorized by all necessary action on behalf of the Buyer.  This Agreement constitutes, and all otheragreements and documents to be executed and delivered by each Buyer willconstitute, the valid and binding agreements of such Buyer, enforceable againstsuch Buyer in accordance with their respective terms, except that (i) suchenforcement 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 specificperformance and injunctive and other forms of equitable relief may be subjectto equitable defenses and to the discretion of the court before which anyproceeding therefor may be brought.

###  

## 6.3.          No Conflict; MethodeConsents.  Neither theexecution and delivery of this Agreement by Methode, nor the execution anddelivery by Methode and/or the Buyers of any other agreement or document to beexecuted and delivered by Methode and/or the Buyers pursuant to this Agreement,nor the consummation by Methode and/or the Buyers of the transactionscontemplated hereby or thereby will constitute a violation of, or be inconflict with, or result in a cancellation of, or constitute a default under: (a) anyterm or provision of the certificate of incorporation or bylaws of Methode orsuch Buyer; (b) any judgment, decree, order, regulation or rule ofany court or other Governmental Authority to which Methode or such Buyer issubject; (c) any applicable Law; (d) any Contract to which Methode orsuch Buyer is a party or is bound.

##  

## 27

## 

 

Except as set forth on Schedule 6.3,no consent of, or notice to, or filing with any Governmental Authority or anyother Person, is required to be obtained or given by Methode or any Buyer inconnection with the execution, delivery or performance of this Agreement or anyother agreement or document to be executed, delivered or performed hereunder bythe Methode or the Buyers.

 

# 7.             INTENTIONALLY OMITTED.

#  

# 8.             CONDITIONS TO CLOSING.

#  

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

##  

### 8.1.1.       No Suit.  No suit, action or other proceeding orinvestigation shall to the knowledge of any party to this Agreement bethreatened or pending before or by any Governmental Agency or by any thirdparty restraining or prohibiting the consummation of the transactionscontemplated by this Agreement.

###  

## 8.2.          Conditions to Methode’sObligations.  Theobligations of Methode to consummate the transactions contemplated by thisAgreement shall be subject to the fulfillment at or prior to Closing of each ofthe following conditions:

##  

### 8.2.1.       Intentionally Omitted.

###  

### 8.2.2.       Intentionally Omitted.

###  

### 8.2.3.       Required Consents andApprovals.  Allmaterial authorizations, consents, waivers, approvals or other actionidentified in Schedule 8.2.3, shall have been obtained.

###  

### 8.2.4.       No Material Adverse Effect.  There shall have occurred no Material AdverseEffect (whether or not covered by insurance).

###  

### 8.2.5.       Payoff Letters.  The Selling Parties shall have delivered toMethode payoff letters (the “Payoff Letters”) for all outstandingIndebtedness of the Sellers secured by any Lien and for all outstandingIndebtedness of Hetronic Asia (whether secured or unsecured), in each case inform and substance acceptable to Methode, in its sole discretion.  Except for such releases and UCC terminationstatements covered by such pay-off letters, the Target Companies shall haveobtained all releases and authorization to file all UCC termination statementsnecessary to cause its properties and assets to be free and clear of all Liensas of the Closing Date.  Notwithstandinganything herein to the contrary, this condition shall only be satisfied if suchPayoff Letters specify an aggregate payoff amount less than the Closing Paymentminus the funds to be deposited in the Indemnity Escrow Account and Net BookValue Escrow Account.

###  

### 8.2.6.       Employment Agreements.  Torsten Rempe shall have entered into anEmployment Agreement with a Buyer in the form attached hereto as Exhibit B,and such 

###  

### 28

### 

###  

### Employment Agreement shallnot have been amended, cancelled, terminated or otherwise modified.

###  

### 8.2.7.       Ampcontrol Agreement.  Ampcontrol, Inc. shall have executed anddelivered to Methode a Supply Agreement in the form attached hereto as Exhibit C(the “Ampcontrol Agreement”).

###  

### 8.2.8.       German DistributionAgreements.  HetronicDeutschland shall have executed and delivered to Methode a Distribution andAssembling Partner Agreement and a License Agreement in the forms attachedhereto as Exhibit D (together, the “German DistributionAgreements”).

###  

### 8.2.9.       Consulting Agreement. The Shareholdershall have executed and delivered to Methode a Consulting Agreement in the formattached hereto as Exhibit E (the “Consulting Agreement”).

###  

### 8.2.10.     Noncompetition Agreement.  Each Seller and the Shareholder shall haveexecuted and delivered to Methode a Noncompetition and ConfidentialityAgreement in favor of Methode and the Buyers in the form attached hereto as Exhibit F.

###  

### 8.2.11.     Foreign Counsel Opinion. Local counselto Hetronic Asia shall have delivered to Methode an opinion of counsel, datedthe Closing Date, in the form attached hereto as Exhibit G.

###  

### 8.2.12.     Escrow Agreement. The SellingParties and the Escrow Agent shall have executed and delivered to Methode anEscrow Agreement in the form attached hereto as Exhibit H (the “EscrowAgreement”).

###  

### 8.2.13.     Lease Addendum. J &G-Estates, L.L.C., an Oklahoma limited liability company, and HetronicInternational shall have executed and delivered to Methode a Lease Addendum inthe form attached hereto as Exhibit I (the “Lease Addendum”).

###  

### 8.2.14.     Closing Documents.  The following documents shall have beendelivered to Methode:

###  

#### (a)           Instruments of Assignmentfor Purchased Assets.  Bills ofsale, deeds and other documents or instruments transferring, assigning andconveying to the applicable Buyer designated by Methode all right, title andinterest in the Purchased Assets, free and clear of all Liens, duly executed bythe Sellers, all of which documents shall be in form and substance acceptableto Methode, acting reasonably.

####  

#### (b)           Name Change Documentation. Suchinstruments and other documentation necessary to change the legal name of eachSeller to remove the word “Hetronic” from such legal name, executed by suchPersons and in such form ready for filing with the appropriate GovernmentalAuthority in each such Person’s jurisdiction of organization (the “NameChange Filings”).

 

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####  

#### (c)           Good Standing Certificates.  Certificates of legal existence and goodstanding for each Target Company issued as of a recent date prior to theClosing Date by the Secretaries of State or other applicable GovernmentalAuthority of each jurisdiction in which such Target Company is organized orqualified to do business.

####  

#### (d)           Secretaries’ Certificates.  A certificate of the Secretary of eachSelling Party (other than the Shareholder) dated as of the Closing Datecertifying (i) that the existence and good standing such Selling Party hasnot changed since the date of the certificates of legal existence and goodstanding delivered to Methode, (ii) the resolutions of the applicablemanagement or supervisory board for such Selling Party authorizing theexecution, delivery and performance of this Agreement and/or all otheragreements, instruments, certificates and documents executed by such Person inconnection herewith, and (iii) the incumbency of the officers of suchSelling Party executing and delivering this Agreement and/or all otheragreements, instruments, certificates and documents executed by such SellingParty in connection herewith.

####  

### 8.2.15.     Hetronic Asia ClosingDeliveries.

###  

#### (a)           Stock Certificates andInstruments of Assignment for Purchased Shares. Hetronic Holding shallhave delivered to Methode the original share certificates representing thePurchased Shares, duly endorsed in favor of the Buyer designated by Methode oraccompanied by instruments of assignment or such other documentation necessaryto convey to a Buyer designated by Methode all right, title and interest in thePurchased Shares.

####  

#### (b)           Secretary Certificate. The Secretaryof Hetronic Asia shall have delivered a certificate dated as of the ClosingDate certifying (i) that the existence and good standing Hetronic Asia hasnot changed since the date of the certificates of legal existence and goodstanding delivered to Methode, (ii) a copy of current OrganizationalDocumentation, with all amendments, in force as of such date, and (iii) theincumbency of all directors and officers of Hetronic Asia.

####  

#### (c)           Intercompany AgreementTermination Documents. The Selling Parties and their Affiliates,as applicable, shall have executed and delivered to Methode such agreements asmay be necessary to terminate the agreements between the Selling Parties andtheir Affiliates and Hetronic Asia, in each case without further liability toHetronic Asia or the Selling Parties (the “Intercompany AgreementTermination Documents”).

####  

### 8.2.16.     German Local TransferAgreement. Hetronic Europe shall have executed and deliveredto Methode a Local Transfer Agreement in the form attached hereto as Exhibit K(the “German Local Transfer Agreement”).

###  

### 8.2.17.     Hetronic DeutschlandIntercompany Assignments. Hetronic Deutschland shall have executedand delivered to Methode the bills of sale and instruments of assignment in theform attached hereto as Exhibit L (the “Hetronic DeutschlandIntercompany Assignments”) conveying to Hetronic International, on a dateprior to the date of this Agreement, all rights in the Purchased Assetsidentified therein (consisting of Trademarks previously assigned by

 

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###  

### Hetronic Deutschland toHetronic International where such assignment has not been previously recorded).

###  

## 8.3.          Conditions to the SellingParties’ Obligations.  Theobligations of the Selling Parties to consummate the transactions contemplatedby this Agreement shall be subject to the fulfillment at or prior to theClosing of each of the following conditions:

##  

### 8.3.1.       Intentionally Omitted.

###  

### 8.3.2.       Intentionally Omitted.

###  

### 8.3.3.       Notice of Buyers.  Methode shall have delivered to theShareholder written notice identifying one or more Subsidiary of Methode (orMethode itself) as the Buyer(s) for the Purchased Assets and PurchasedShares and for each such Buyer, identifying which of the Purchased Assets(whether by the identity of the Seller owning such Purchased Assets or bylocation of such Purchased Assets or otherwise) or Purchased Shares such Buyerwill acquire hereunder.

###  

### 8.3.4.       Approvals.  All material authorizations, consents,waivers or approvals or other action required in connection with the execution,delivery and performance of this Agreement by Methode and the Buyers, and theconsummation by Methode and the Buyers of the transactions contemplated herebyshall have been obtained.

###  

### 8.3.5.       Ampcontrol Agreement.  A Buyer designated by Methode shall have executedand delivered to Ampcontrol, Inc. the Ampcontrol Agreement.

###  

### 8.3.6.       German DistributionAgreements.  A Buyerdesignated by Methode shall have executed and delivered to Hetronic Deutschlandthe German Distribution Agreements.

###  

### 8.3.7.       Consulting Agreement.  A Buyer designated by Methode shall haveexecuted and delivered to the Shareholder the Consulting Agreement.

###  

### 8.3.8.       Escrow Agreement. Methode andthe Escrow Agent shall have executed and delivered to Hetronic Holding theEscrow Agreement.

###  

### 8.3.9.       Lease Addendum. A Buyerdesignated by Methode shall have executed and delivered to Hetronic Holding theLease Addendum.

###  

### 8.3.10.     Employment Agreements.  A Buyer designated by Methode shall haveentered into, or offered to enter into, the Employment Agreement with TorstenRempe, and such Employment Agreement shall not have been amended, cancelled,terminated or otherwise modified by such Buyer.

###  

### 8.3.11.     Closing Documents.  The following documents shall have beendelivered to Hetronic Holding:

 

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#### (a)           Instruments of Assumption. An instrumentof assumption from each Buyer assuming the Assumed Liabilities assumed by suchBuyer, duly executed by the applicable Buyer.

####  

#### (b)           Secretary’s Certificates.  A certificate of the Secretary of each Buyerdated as of the Closing Date certifying (i) that the existence and goodstanding such Buyer has not changed since the date of the certificates of legalexistence and good standing delivered to Sellers, (ii) the resolutions ofthe applicable management or supervisory board for such Buyer authorizing theexecution, delivery and performance of this Agreement and/or all otheragreements, instruments, certificates and documents executed by such Person inconnection herewith, and (iii) the incumbency of the officers of suchBuyer executing and delivering this Agreement and/or all other agreements,instruments, certificates and documents executed by such Buyer in connectionherewith.

####  

#### (c)           Good Standing Certificates.  Certificates of legal existence and goodstanding for each Buyer issued as of a recent date prior to the Closing Date bythe Secretary of State or other applicable Governmental Authority of eachjurisdiction in which such Buyer is organized.

####  

### 8.3.12.     German Local TransferAgreement.  A Buyerdesignated by Methode shall have executed and delivered to Hetronic Europe theGerman Local Transfer Agreement.

###  

### 8.3.13.     Intercompany AgreementTermination Documents. Hetronic Asia shall have executed anddelivered to Hetronic Holding the Intercompany Agreement Termination Documents.

###  

## 8.4.          Payment. The ClosingPayment shall be paid in accordance with Section 4.3 at Closing.

##  

# 9.             TERMINATION.

#  

## 9.1.          Termination of AgreementPrior to Closing.  ThisAgreement and the transactions contemplated hereby may be terminated at anytime prior to the Closing, as follows:

##  

### 9.1.1.       Mutual Consent.  By mutual written agreement of Methode andthe Shareholder.

###  

### 9.1.2.       Breach.  By the Shareholder by reason of the breach byMethode in any material respect of any of its representations, warranties,covenants or agreements contained in this Agreement. By Methode by reason ofthe breach by any of the Selling Parties in any material respect of any of itsor their representations, warranties, covenants or agreements contained in thisAgreement. In the event of an alleged breach, the non-breaching party shallprovide written notice of such breach to the breaching party (the “BreachNotice”), and the non-breaching party may only proceed to terminate thisAgreement in the event the non-breaching party fails to cure such breach withinfifteen (15) days of the receipt of the Breach Notice.

 

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###  

### 9.1.3.       Respective Conditions.  By Methode or by the Shareholder if theconditions precedent to their respective obligations contained in Sections 8.2or 8.3 hereof have not been met in all material respects at the Closing throughno fault of the terminating party or its Affiliates by October 1, 2008,or such later date as may be agreed to by Methode and the Shareholder (the “DropDead Date”).

###  

### 9.1.4.       Mutual Conditions.  By Methode or by the Shareholder if any ofthe conditions described in Section 8.1 shall not have been fulfilledthrough no fault of the terminating party (or its Affiliates) by the Drop DeadDate.

###  

## 9.2.          Effect of Termination Priorto Closing.  If thisAgreement is terminated pursuant to Section 9.1 above, all rights andobligations of the parties hereunder shall terminate without any Liability onthe part of any party, except for any Liability of any party then in breach ofany representations, warranties, covenants or obligations hereunder.

##  

# 10.           INDEMNIFICATION.

#  

## 10.1.        Limited IndemnificationObligations of Methode. Methode covenants and agrees with the Selling Parties that it shallreimburse and indemnify the Selling Parties (the “Seller Indemnified Parties”)for, and hold harmless the Seller Indemnified Parties from, any and all Claimsincurred by any of the Seller Indemnified Parties that result from:

##  

#### (a)           any inaccuracy in or breachof any representations or warranties made by Methode in this Agreement or theschedules or any other written statement, list, certificate or other instrumentfurnished to the Selling Parties by or on behalf of Methode pursuant to this Agreement;

####  

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

####  

#### (c)           any Claims made by a thirdparty alleging facts which, if true, would entitle the Seller IndemnifiedParties to indemnification pursuant to (a) or (b) above;

####  

#### (d)           any failure of Methode tocomply with its obligations under this Section 10.1; or

####  

#### (e)           any fees or expenses(including reasonable attorneys’ fees) incurred by the Seller IndemnifiedParties in enforcing their rights under this Section 10.1.

####  

## 10.2.        General IndemnificationObligations of Methode. Methode covenants and agrees with the Selling Parties that it shallreimburse and indemnify the Seller Indemnified Parties for, and hold harmlessthe Seller Indemnified Parties from, any and all Claims incurred by any of theSeller Indemnified Parties that result from:

##  

#### (a)           any Assumed Liabilities;

 

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####  

#### (b)           any fees, expenses or otherpayments incurred or owed by Methode to any brokers or comparable third partiesretained or employed by Methode or its Affiliates in connection with thetransactions contemplated by this Agreement;

####  

#### (c)           any Liability arising fromany claim for personal injury, property damage, or strict liability arising outof the sale by any Buyer of any Inventories included in the Acquired Assets(whether constituting finished goods as of the Closing or work in process as ofthe Closing and subsequently completed by the Buyers) and sold by a Buyer afterthe Closing Date (the “Inventory Products Liability Claims”);

####  

#### (d)           any fees, expenses or otherpayments incurred or owed by Methode or any of the Buyers to any brokers,finders or comparable third parties retained or employed by them or theirAffiliates in connection with the transactions contemplated by this Agreement;

####  

#### (e)           any Claims made by a thirdparty alleging facts which, if true, would entitle the Seller IndemnifiedParties to indemnification pursuant to (a) through (d) above;

####  

#### (f)            any failure of Methode tocomply with its obligations under this Section 10.2; or

####  

#### (g)           any fees or expenses(including reasonable attorneys’ fees) incurred by the Seller IndemnifiedParties in enforcing their rights under this Section 10.2.

####  

## 10.3.        Limited IndemnificationObligations of the Selling Parties.  The Selling Parties, jointly and severally,covenant and agree with Methode that they shall reimburse and indemnify Methodeand its Affiliates (including the Buyers and Hetronic Asia) and theirrespective directors, officers, employees, licensees and agents (the “MethodeIndemnified Parties”) for, and hold harmless Methode Indemnified Partiesfrom, any and all Claims incurred by any of Methode Indemnified Parties thatresult from:

##  

#### (a)           any inaccuracy in or breachof any representations or warranties made by the Selling Parties in thisAgreement or the schedules or any other written statement, list, certificate orother instrument furnished to Methode by or on behalf of the Selling Partiespursuant to this Agreement;

####  

#### (b)           any nonfulfillment of anycovenant or agreement of any of the Selling Parties under this Agreement;

####  

#### (c)           any Claims made by a thirdparty alleging facts which, if true, would entitle the Methode IndemnifiedParties to indemnification pursuant to (a) or (b) above;

####  

#### (d)           any failure of the SellingParties to comply with their obligations under this Section 10.3; or

####  

#### (e)           any fees or expenses(including reasonable attorneys’ fees) incurred by Methode Indemnified Partiesin enforcing its rights under this Section 10.3.

 

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##  

## 10.4.        General IndemnificationObligations of the Selling Parties.  The Selling Parties, jointly and severally,covenant and agree with Methode that they shall reimburse and indemnify theMethode Indemnified Parties for, and hold harmless Methode Indemnified Partiesfrom, any and all Claims incurred by any of Methode Indemnified Parties thatresult from:

##  

#### (a)           any Taxes relating to orresulting from the conduct of the Target Companies’ business or the AcquiredAssets on or prior to the Closing Date (including any Taxes of the TargetCompanies accruing due to events prior to the Closing Date for which anyMethode Indemnified Party is held liable pursuant to Section 75 of theGerman Fiscal Code (*Abgabenordnung*)and including any Taxes of Hetronic Asia accruing due to events on or prior tothe Closing Date other than Taxes of Hetronic Asia reflected on the FinalClosing Statement);

####  

#### (b)           any payments or salaries,wages, bonuses, vacation, amounts payable under Employee Plans or otherwise dueto employees or agents of any Target Company, to the extent due or payable onor prior to the Closing Date (or any amounts due to employees or agents of anySelling Party who are not transferred to Buyer, whether or not due or payableon or prior to the Closing Date), other than amounts payable to employees oragents of Hetronic Asia and reflected on the Final Closing Statement;

####  

#### (c)           any Remedial Action requiredby Environmental Law or other Environmental Claim to the extent resulting fromthe conduct of the Target Companies’ business or the Acquired Assets on orprior to the Closing Date;

####  

#### (d)           any litigation or legalcompliance matters to the extent relating or due to the conduct of any TargetCompany’s business on or prior to the Closing Date, including any claims describedin Schedule 5.15 and/or Schedule 5.20 hereto, otherthan any Assumed Warranty Claims and Inventory Products Liability Claims;

####  

#### (e)           any product liability orstrict liability, arising from occurrences on or prior to the Closing Date(whether or not such claim is then asserted), other than any Assumed WarrantyClaims and Inventory Products Liability Claims;

####  

#### (f)            Liabilities of HetronicAsia, except for (i) Liabilities of Hetronic Asia that are reflected onthe Final Closing Statement, (ii) Assumed Warranty Claims relating toHetronic Asia or the business of Hetronic Asia, and (iii) InventoryProducts Liability Claims relating to Hetronic Asia or the business of HetronicAsia;

####  

#### (g)           any fees, expenses or otherpayments incurred or owed by the Selling Parties to any brokers, finders orcomparable third parties retained or employed by them or their Affiliates inconnection with the transactions contemplated by this Agreement;

####  

#### (h)           any Claims asserted by anyshareholder of any Target Company or Selling Party (including the Hetronic AsiaShareholders) for any portion of the Purchase Price;

####  

#### (i)            any and all other ExcludedLiabilities of the Sellers, except for Liabilities of the Sellers to MethodeIndemnified Parties arising under Section 10.3 of this Agreement;

 

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####  

#### (j)            any Claims made by a thirdparty alleging facts which, if true, would entitle the Methode IndemnifiedParties to indemnification pursuant to (a) through (i) above;

####  

#### (k)           any failure of the Selling Partiesto comply with their obligations under this Section 10.4; or

####  

#### (l)            any fees or expenses(including reasonable attorneys’ fees) incurred by Methode Indemnified Partiesin enforcing its rights under this Section 10.4.

####  

## 10.5.        Nature and Survival of Representationsand Warranties.  Allstatements made by or on behalf of a Selling Party herein or in the schedules,shall be deemed representations and warranties of the Selling Parties,regardless of any investigation made by or on behalf of Methode.  The representations and warranties containedin this Agreement and the schedules shall survive the Closing.  Neither the period of survival nor theLiability of the Selling Parties with respect to the Selling Parties’representations and warranties shall be reduced by any investigation made atany time by or on behalf of Methode.  Therepresentations and warranties made by the Selling Parties and by Methode underthis Agreement shall expire (in the absence of a showing of willful and knowingmisrepresentation or breach) twenty four (24)****monthsafter the Closing Date, except that the representations and warranties made inor pursuant to Section 5.2 (Enforceability and Authority), Section 5.4.2(Capitalization and Ownership of Hetronic Asia), Section 5.10 (Title to Assets),Section 5.23 (Environmental Matters) and Section 6.2 (Enforceabilityand Authority), Section 5.9 (Tax Matters), Section 5.18 (EmployeeBenefits), Section 5.20 (Compliance) and Section 5.24 (ProductLiability and Warranty Matters) shall survive until ninety (90) days after theexpiration of the applicable statute of limitations.  If written notice of a Claim has been givento the party against whom indemnification is sought prior to the expiration ofthe applicable representation and warranty, then the relevant representationand warranty shall survive as to such claim, until such claim has been finallyresolved.

##  

## 10.6.        Limitations onIndemnification Obligations.

##  

### 10.6.1.     Threshold.  Notwithstanding any other provision in thisAgreement to the contrary, no indemnification for Claims may be sought by aparty pursuant to Section 10.1 (Limited Indemnification Obligations ofMethode) or Section 10.3 (Limited Indemnification Obligations of theSelling Parties) of this Agreement until the aggregate amount of all suchClaims of the Methode Indemnified Parties, on one hand, or the SellerIndemnified Parties on the other hand, exceeds Three Hundred Thousand United States Dollars ($300,000) in theaggregate (the “Aggregate Threshold Amount”), at which time the partyasserting such Claim shall be entitled to assert such Claims for any amount inexcess of the Aggregate Threshold Amount; provided that the partiesagree that no Claim shall be asserted pursuant to Section 10.1 (LimitedIndemnification Obligations of Methode) or Section 10.3 (LimitedIndemnification Obligations of the Selling Parties) of this Agreement unlesssuch Claim exceeds Ten Thousand Dollars ($10,000) (the “Individual ThresholdAmount”); and provided further that the limitations set forth in this Section 10.6.1shall not apply to (i) Claims relating to indemnification based upon abreach of the representations and warranties set forth in Section 5.4.2(Capitalization and Ownership of Hetronic Asia) or Section 5.10 (Title toAssets), (ii) Claims for payment of the 

 

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###  

### Purchase Price, and (iii) Claimsrelating to intentional breaches of the covenants set forth in Section 11.For purposes of determining whether any materiality qualifier set forth in anyrepresentation or warranty or covenant is applicable, a Claim that exceeds theIndividual Threshold Amount shall be considered material and a Claim that doesnot exceed the Individual Threshold Amount shall not be considered material.For purposes of the limitations set forth in this Section 10.6.1, groupsof related Claims arising from the same circumstances shall be treated as asingle Claim.

###  

### 10.6.2.     General Limitation on Amount.  The aggregate liability of Selling Parties toall Methode Indemnified Parties, on one hand, and the aggregate liability ofMethode to all Seller Indemnified Parties, on the other hand, for any and allClaims shall be limited to the sum of Ten Million United States Dollars($10,000,000) (the “Liability Cap”); provided, however that the Liability Capshall not be applicable to (a) Claims for indemnification pursuant to Section 10.2(the General Indemnification Obligations of Methode) or Section 10.4 (theGeneral Indemnification Obligations for the Selling Parties), or (b) Claimsfor payment of the Purchase Price.

###  

## 10.7.        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 theClosing and which might give rise to a claim by it for indemnification againstIndemnitor under this Section 10, stating the nature, basis and (to theextent known) amount thereof; provided that failure to give prompt notice shallnot jeopardize the right of any Indemnitee to indemnification unless suchfailure shall have materially prejudiced the ability of the Indemnitor todefend such Claim or to recover any payment under its applicable insurancecoverage.

##  

In case of any Claim or suitby a third party or by any Governmental Authority, or any legal, administrativeor arbitration proceeding (a “Third Party Claim”) with respect to whichIndemnitor may have liability under the indemnity agreement contained in this Section 10,Indemnitor shall be entitled to participate in such Third Party Claim and, tothe extent desired by it, to assume the defense of such Third Party Claim, andafter notice from Indemnitor to Indemnitee of the election so to assume thedefense of such Third Party Claim, Indemnitor will not be liable to Indemniteefor any legal or other expenses subsequently incurred by Indemnitee inconnection with the defense of such Third Party Claim, other than reasonablecosts of investigation, unless Indemnitor does not actually assume the defenseof such Third Party Claim following notice of such election, or unless separaterepresentation is necessary to avoid a conflict of interest, in which case suchrepresentation shall be at the expense of the Indemnitor.  Indemnitee and Indemnitor will render to eachother such assistance as may reasonably be required of each other in order toinsure proper and adequate defense of any such Third Party Claim.  If the Indemnitor actually assumes thedefense of the Indemnitee, the Indemnitee will not make any settlement of anyThird Party Claim which might give rise to liability of Indemnitor under theindemnity agreements contained in this Section without the written consentof Indemnitor, which consent shall not be unreasonably withheld, and the Indemnitorshall not agree to make any settlement of any Third Party Claim which would notinclude the unconditional release of the Indemnitee without the Indemnitee’swritten consent.

 

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##  

## 10.8.        Setoff; Payment of Claims.  Subject to reasonable prior written notice tothe Shareholder, Methode is hereby authorized by each Selling Partyto cause any Claims it or any other Methode Indemnified Party may haveagainst any of the Selling Parties and any other amount owed to it by theSelling Parties under this Agreement or otherwise to be paid by reduction oroffset of such Claims or other amounts against any amounts payable by Methode(or any other Methode Indemnified Party) to any of the Selling Parties,pursuant to this Agreement, (including the Closing Payment) or in any otherfashion.  The rights contained hereinshall not be exclusive, but shall be in addition to any other rights andremedies available to Methode.  If anyClaims by Methode or any other Methode Indemnified Party are pending againstany of the Selling Parties at such time as any of the above payments wouldotherwise be made by Methode (or any other Methode Indemnified Party) to anySelling Party, then Methode (or any other Methode Indemnified Party) maywithhold from such payments any amount that would become reasonably necessaryto satisfy such Claim until such time as such Claim has been resolved; providedthat Methode’s exercise of its right of set-off is made in good faith and uponprior written notice to the Selling Parties. At such time as any amounts so withheld by Methode become payable to theSelling Parties, Methode shall pay such amounts.

##  

## 10.9.        Treatment of Claims.  Amounts paid to or on behalf of an Indemnitoror Indemnitee, as indemnification hereunder shall be treated as adjustments tothe Purchase Price.  If any GovernmentalAuthority asserts that an indemnification payment is not an adjustment to thePurchase Price, the Indemnitor will indemnify the Indemnitee against any Taximposed on the receipt of such indemnification payment pursuant to this Section 10,including any Tax imposed on any payment pursuant to this Section 10.7.

##  

## 10.10.      Insurance Recoveries.  The amount of any losses for which anIndemnitee shall be entitled to indemnification under this Section 10shall be net of the amount of any insurance recoveries actually received by oron behalf of the Indemnitee or its Affiliates from third parties with respectto such indemnifiable losses.  If anIndemnitee or its Affiliates receives an insurance recovery from a third partyin respect of an indemnifiable loss under this Agreement after the full amountof such indemnifiable loss has been paid by an Indemnitor or after theIndemnitor has made a partial payment of such indemnifiable loss and the amountof such insurance recovery exceeds the remaining unpaid balance of suchindemnifiable loss, then the Indemnitee shall promptly remit to the Indemnitorthe excess (if any) of (i) the sum of the amount theretofore paid by suchIndemnitor in respect of such indemnifiable loss plus the amount of theinsurance recovery received from the third party in respect thereof, less (ii) thefull amount of such indemnifiable loss. Nothing in this Section 10.8 shall obligate an Indemnitee to seekto recover any amounts under its insurance policies prior to, or as a conditionto, seeking indemnification under this Section 10.

##  

# 11.           POST-CLOSING AGREEMENTS.

#  

## 11.1.        Employees.  The Target Companies shall permit Methode andthe Buyers to have access to and contact with their employees and provide suchcooperation and assistance as Methode may reasonably request in connection withthe Buyers’ efforts to hire or retain such employees at the Closing and tominimize any disruption or adverse impact upon the relationship between theTarget Companies and such employees arising from the transactions contemplated 

 

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##  

## by this Agreement. Methodeshall cause the Buyers to offer, on the Closing Date, employment as employees-at-willto all employees of Sellers on terms and conditions (including seniority)comparable to (or better than) those as enjoyed by such employees on the dateof this Agreement (except that the terms of employment of any employeesexecuting written employment agreements with the Buyers shall be as set forthin such employment agreements and the terms of the consulting agreement withthe Shareholder shall be as set forth in the Consulting Agreement), and theSellers shall terminate the employment of such employees as of the ClosingDate. It shall be a condition precedent of employment by such Buyer thatapplicants complete all the standard procedures, forms and requirements(including drug testing, execution of the standard form of Inventions and ConfidentialityAgreement used by Methode and background checks) of Methode as a preconditionto commencing employment with such Buyer. Nothing in this Section 11.1, express or implied, shall confer uponany current or former employee of any Seller or other Person or legalrepresentative thereof any rights or remedies, including any right toemployment, continued employment for any specified period, or compensation orbenefits of any nature or kind whatsoever under or by reason of this Agreement.

##  

Notwithstanding theforegoing, the parties acknowledge that the employees of Hetronic Europe shall,without further action by the parties, become employees of the Buyer acquiringthe Purchased Assets of Hetronic Europe and the parties agree to promptlydeliver to each employee of Hetronic Europe a written notice of the transfer ofhis or her employment to the applicable Buyer in accordance with Section 613aGerman Civil Code and to take such actions as may be required under applicableLaw to notify such employees of the transactions hereunder.  Such automatic transfer of employees underapplicable Law shall not affect the agreements between Methode and the SellingParties hereunder with respect to the allocation of responsibility between theparties with respect to Liabilities relating to such employees (including theprovisions of Sections 3.2 and 10.4(b)).

 

## 11.2.        Employee Benefit Plans.  Promptly after Closing, the Buyers shall useReasonable Efforts to permit all employees of the Sellers hired by the Buyerspursuant to Section 11.1 (the “Hired Employees”) holding accountsestablished under the Savings Incentive Match Plan for Employees of SmallEmployers maintained by the Sellers (“SIMPLE IRA Plan”) to roll overtheir accounts from the SIMPLE IRA Plan into Methode’s existing 401(k) planor retain such accounts independently.

##  

## 11.3.        Sales after Closing.  After Closing, all inquiries regardingproducts of the Buyers, whether received by the Selling Parties or Affiliatesof the Selling Parties, shall be promptly referred to the applicable Buyer.

##  

## 11.4.        Confidentiality. The SellingParties hereby acknowledge that all Trade Secrets included in the AcquiredAssets shall be owned by the Buyers upon and following Closing and each SellingParty hereby further agrees that from and after the Closing, the SellingParties will not directly or indirectly disclose to anyone (except as requiredby law or by a governmental or regulatory body, in which event such SellingParty shall use reasonable efforts to notify Methode in advance of such disclosure)such Trade Secrets, or use or exploit such Trade Secrets.

##  

## 11.5.        Names Following the Closing.  Immediately following the Closing, theSelling Parties shall take such further actions as requested by Methode to fileand make effective the 

 

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##  

## Name Change Filings and tootherwise allow each Buyer to make full use of the name “Hetronic” in any formor combination, and the Selling Parties shall not thereafter use such name orother names acquired by the Buyers hereunder or names confusingly similarthereto.

##  

## 11.6.        Taxesand Expenses.** **All sales, stamp and othertransfer Taxes assessed by any Governmental Authority in connection with orarising from this Agreement shall be borne by the Selling Parties and  the Selling Parties shall indemnify, defendand hold the Buyers harmless from any such transfer Taxes.  All other costs and expenses shall be borneby the party incurring the particular cost or expense.

##  

## 11.7.        Post-Closing TaxPreparation. Cooperation on Books and Records. The Selling Parties shallduly prepare and timely file all Tax Returns (and pay all corresponding Taxes)relating to the Selling Parties with respect to Tax periods up to the ClosingDate with the appropriate Governmental Authorities in all jurisdictions inwhich such Tax Returns are required to be filed, which Tax Returns shall betrue and correct and prepared in accordance with applicable Law and willproperly reflect the Taxes of the Selling Parties for the periods coveredthereby.  In addition, upon Methode’sreasonable request, each of the Selling Parties shall (and shall cause theirAffiliates to) cooperate and render, at its own expense, all assistancenecessary to duly prepare and make available to the Governmental Authority allbooks and records for Tax purposes (including but not limited to a propertransfer pricing documentation) relating to the Selling Parties with respect toTax periods up to the Closing Date if so required by any GovernmentalAuthority.  In connection therewith, theSelling Parties shall provide to the Buyers (or permit the Buyers or anyGovernmental Authorities to utilize) all technical systems necessary to readsuch books and records kept in electronic or photo-optical form and make themaccessible to any Governmental Authorities.

##  

## 11.8.        Instruments of FurtherAssurance.  Each of theSelling Parties agrees, upon the request of Methode or any Buyer, from time totime after the Closing to execute and deliver, and cause their Affiliates toexecute and deliver, to Methode or any Buyer all such instruments and documentsof further assurance or otherwise as shall be reasonable under thecircumstances, and to do any and all such acts and things as may reasonably berequired to transfer and convey to the Buyers all right, title and interest tothe Purchased Assets and Purchased Shares and to otherwise carry out theobligations of the Selling Parties hereunder.

##  

## 11.9.        Pro-Ration of Expenses; TaxRefunds.  All real estate and personalproperty taxes, payroll taxes, worker’s compensation premium adjustments,utility payments, lease payments, insurance premiums, and other Taxes and otherexpenses and prepayments and relating to the ownership or use of the AcquiredAssets (or conduct of the business of Hetronic Asia) and attributable toperiods of time both before and after the Closing Date shall be proratedbetween the Selling Parties and the Buyers, as the case may be, as soon as apro rata charge or credit is reasonably determinable and Selling Parties andthe Buyers shall promptly reimburse the other for such pro rated amounts(except to the extent that such amounts are reflected in the Final ClosingStatement). Without limitation to the foregoing, notwithstanding the effectivedates set forth in the documents assigning any Contract (including leases)included within the Acquired Assets, the parties agree that all rent and otherobligations arising under such Contracts shall be prorated as of the ClosingDate. If Methode or Hetronic Asia receives a refund with respect to Taxes ofHetronic Asia relating to periods prior to the Closing Date or accruing due toevents on

 

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##  

## or prior to or on theClosing Date (other than Taxes of Hetronic Asia reflected on the Final ClosingStatement), Methode will pay the amount of such refund to Hetronic Holdingwithin thirty (30) days of receipt.  If HetronicHolding or any other Selling Party receives a refund with respect to Taxes ofHetronic Asia relating to periods after to the Closing Date or accruing due toevents after the Closing Date (or with respect to Taxes of Hetronic Asiareflected on the Final Closing Statement), Hetronic Holding will pay the amountof such refund to Methode within thirty (30) days of receipt.

##  

## 11.10.      Access to Records.****The Buyers shall maintain the Acquired Records, and theSelling Parties shall maintain the Excluded Records, in each case for a periodof three (3) years from and after the Closing Date, and each party shall,prior to permanently disposing of the records maintained by it pursuant to thisSection 11.10, give at least sixty days written notice to the otherparties of such disposal.  During suchperiod as a party is required to maintain records pursuant to this Section 11.10,such party shall provide the other parties with reasonable access to suchrecords and the right to make copies thereof; provided that to the extent thata party engages a third party to manage, maintain or store its records, theparty seeking access to such records shall pay any access and/or copy feescharged by such third party.

##  

## 11.11.      Access to Employees.  For a period of three years after theClosing, Methode shall permit Torsten Rempe to make himself (and such formeremployees of the Sellers to whom Torsten Rempe may in his discretion delegatesuch activities) available to the Sellers to a reasonable extent to providesuch assistance as the Shareholder may reasonably request in winding upthe Sellers’ affairs, provided that all requests for such assistance shallbe directed to, and handled through, Torsten Rempe and further provided thatsuch assistance does not materially interfere with the performance of their jobresponsibilities for the Buyers.  Inaddition, Methode shall not prohibit Simon Grima from continuing to hold theoffice of Managing Director of Hetronic Malta (as renamed) in order to executesuch documents as the Sellers may require for so long as such activities do notmaterially interfere with his performance of his job responsibilities for theBuyers, provided that the Selling Parties acknowledge that Simon Grima’scontinued activities as Managing Director of Hetronic Malta shall be at hisdiscretion and Methode has no obligation to require him to continue to holdsuch office.  The Selling Parties acknowledge that other employees of theSellers hired by the Buyers may be required to resign any offices held with theSellers.

##  

## 11.12.      Receivables. Buyers shall use ReasonableEfforts to collect all Receivables included in the Acquired Assets. In theevent any of the Receivables included in the Acquired Assets remain uncollectedtwelve (12) months after the Closing Date, then Buyers shall provide theSellers with a detailed list of such remaining uncollected Receivables includedin the Acquired Assets and Buyers shall have the right to cause the Sellers torepurchase such uncollected Receivables identified in writing by Buyers for thenominal value of such uncollected Receivables (without any discount forcollectability), provided that Sellers shall not be required to repurchase, inthe aggregate, uncollected Receivables with a nominal value in excess of fiftypercent of the nominal value of all remaining uncollected Receivables includedin the Acquired Assets.  Uponrepurchasing any Receivables as required under this Section 11.12, theSellers shall have the right to pursue all available rights and remedies tocollect such repurchased Receivables.

 

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##  

## 11.13.      Enforcement of Existing NDAs.  The Selling Parties agree that in the eventthat any third party violates or threatens to violate the terms of any ExistingNDA after the Closing, the Selling Parties shall, to the extent requested inwriting by the Buyers, enforce the terms of such Existing NDA against suchthird party and seek such equitable relief as the Buyers may reasonablyrequest; provided that the Buyers shall reimburse the Selling Parties for theirreasonable out-of-pocket costs and attorneys fees incurred at the Buyer’srequest.  In the event that the SellingParties learn of any violation of threatened violation of the terms of anyExisting NDA after the Closing, the Selling Parties will promptly provide writtennotice of the same to the Buyers.

##  

## 11.14.      Philippine Registration of ForeignInvestment.  The Selling Parties willprovide such assistance as Methode may reasonably request to assist the effortsof the Buyers to register the prior investment by Hetronic Holding and/or thecurrent investment by the Buyers in Hetronic Asia’s capital stock to enable theBuyer to request and comply with such requirements imposed by the BangkoSentral ng Pilipinas.

##  

# 12.                               GENERALPROVISIONS.

#  

## 12.1.        Entire Agreement.  This Agreement and the other agreements anddocuments referred to herein set forth the entire understanding of the partieswith respect to the subject matter hereof. Any previous agreements or understandings between the parties regardingthe subject matter hereof are merged into and superseded by this Agreement.

##  

## 12.2.        Amendment; Waiver.  This Agreement may be amended, supplementedor interpreted at any time only by written instrument duly executed by each ofMethode and the Shareholder. Any of the terms or conditions of this Agreementmay be waived at any time by the party or parties entitled to the benefitthereof but only by a written notice signed by the party or parties waivingsuch terms or conditions.

##  

## 12.3.        Expenses.  Except as set forth in Section 2.4 of thisAgreement, Methode and the Buyers, on one hand, and the Selling Parties, on theother hand, shall each pay its or their own expenses, including the expenses ofits or their own legal counsel, investment bankers, brokers and accountants,incurred in connection with the preparation, execution and delivery of thisAgreement and the other agreements and documents referred to herein and theconsummation of the transactions contemplated hereby and thereby.

##  

## 12.4.        Notices.  All notices, requests, demands and othercommunications required or permitted to be given hereunder shall be byhand-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, ifdelivered by hand or courier; on the fifth (5th) business day after beingdeposited in the mail, postage prepaid, if sent certified or registered mail;and when receipt is acknowledged by facsimile equipment if telecopied and if acopy is also promptly mailed by certified or registered mail.

##  

| If  to Methode: | Methode  Electronics, Inc. |
|-----------------|---------------------------------|
|            | 7401  West Wilson Avenue        |
|            | Chicago,  Illinois 60706-4548   |

 

42

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|                      | Attention:  President and Chief Executive Officer |
|---------------------------|---------------------------------------------------|
|                      | Telecopier:  708-867-3288                         |
|                      |                                              |
| Copy  to:                 | Locke  Lord Bissell & Liddell LLP        |
|                      | 111  South Wacker Drive                           |
|                      | Chicago,  Illinois 60606                          |
|                      | Attention:  James W. Ashley, Jr., Esq.  |
|                      | Telecopier:  312-443-0336                         |
|                      |                                              |
| If  to any Selling Party: | Mr. Max  Heckl                               |
|                      | 12901  N. Frisco Road                             |
|                      | Yukon,  Oklahoma 73099                            |
|                      | Telecopier:  214-853-5109                         |
|                      |                                              |
| Copy  to:                 | Kochman  Donati & Charbonnet             |
|                      | 12012  Wickchester Lane, Suite 310           |
|                      | Houston,  Texas  77079                       |
|                      | Attention:  Philip J. Kochman                     |
|                      | Telecopier:  713-871-2495                         |

 

## 12.5.        Assignment.  Neither this Agreement nor any of the rightsand obligations hereunder may be assigned by any party, whether or not byoperation of law, without the prior written consent of the other partieshereto, provided that Methode may transfer or assign this Agreement to any Personsucceeding to all or substantially all of the Acquired Assets or PurchasedShares by way of an asset sale, merger, reorganization or otherwise without theconsent of any other parties, as long as such assignment becomes effective onlyafter the disbursal of all funds held pursuant to the Escrow Agreement.  No assignment of this Agreement shall relievethe assigning party of its obligations under this Agreement or permit theassignee to assert rights broader or different than the assigning party wouldhave been permitted to assert. Subject to the foregoing, this Agreement shallbe binding upon and inure to the benefit of and be enforceable by therespective heirs, legal representatives, successors and permitted assigns ofthe parties hereto.

##  

## 12.6.        Severability.  If any term, provision, covenant orrestriction in this Agreement is held by a court of competent jurisdiction orother authority to be invalid, void or unenforceable, the remainder of theterms, provisions, covenants and restrictions of this Agreement shall remain infull force and effect and shall in no way be affected, impaired or invalidatedas long as the economic or legal substance of the transactions contemplatedhereby is not affected in any manner materially adverse to either party.  Upon such a determination, the parties shallnegotiate in good faith to modify this Agreement so as to effect the originalintent of the parties as closely as possible in an acceptable manner in orderthat the transactions hereby be consummated as originally contemplated to thefullest extent possible.

##  

## 12.7.        Counterparts; Facsimiles.  This Agreement and all documents referencedherein may be executed in any number of counterparts, each of which may beexecuted by less than all of the parties hereto, each of which shall beenforceable against the parties actually executing such counterparts, and allof which together shall constitute one and the same instrument. Each 

 

43

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##  

## party is hereby authorizedto rely upon and accept as an original any executed copy of this Agreement orother document referenced herein which is sent by facsimile, telegraphic orother electronic transmission.

##  

## 12.8.        Construction.  Section and subsection headingscontained 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 shallnot in any way define or affect the meaning, construction or scope of any ofthe provisions hereof. The terms “hereof,” “herein” and “hereunder” and termsof similar import are references to this Agreement as a whole and not to anyparticular provision of this Agreement. Section, clause, schedule and exhibit references contained in thisAgreement are references to sections, clauses, schedules and exhibits in or tothis Agreement, unless otherwise specified. Common nouns and pronouns shall bedeemed to refer to the masculine, feminine, neuter, singular and plural, as theidentity 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 thanby limitation. The parties hereto acknowledge that all parties participatedequally in the drafting and negotiation of this Agreement and were representedby counsel of their own choosing in connection therewith.  Consequently, this Agreement shall beconstrued without referencing to any rule of law, which provides thatambiguities in a contract are to be resolved against the drafter thereof.  The official language of this Agreement is,and shall continue for all purposes to be, the English language.

##  

## 12.9.        Public Announcements.  No notices to third parties or otherpublicity, including press releases, employee notifications, vendornotifications and customer notifications, concerning any of the transactionsprovided for herein shall be made by any party hereto unless planned andcoordinated jointly among the parties hereto, with each party approving anypress release in writing prior to release; provided that nothing herein shallrestrict or delay either party from issuing any press release or otherpublicity to the extent required by Law.

##  

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

##  

## 12.11.      Waiver of Trial by Jury.  The parties hereby knowingly, voluntarily andintentionally waive any right they may have to a trial by jury in respect toany litigation arising out of, under or in connection with this Agreement, orany course of conduct, course of dealing, statements (whether verbal orwritten) or actions of any party to this Agreement.  This provision is a material inducement forMethode and the Selling Parties entering into this Agreement.

##  

## 12.12.      Cumulative Remedies.  All rights and remedies of the parties tothis Agreement are cumulative of each other and of every other right or remedysuch parties may otherwise have at law or in equity, and the exercise of one ormore rights or remedies shall not prejudice or impair the concurrent orsubsequent exercise of other rights or remedies.

 

44

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##  

## 12.13.      Governing Law; Jurisdiction.  This Agreement shall be governed, construedand enforced in accordance with the internal laws of the State of Delaware,excluding any choice of law rules which may direct the application of thelaws of another jurisdiction. The parties hereby covenant and agree that anyand all actions arising out of or related to this Agreement shall****be brought and maintained in the federaland state courts sitting in Harris County, Texas, and each party to this Agreementhereby irrevocably consents and submits to the exclusive jurisdiction of andthe service of process from such courts for any and all such actions.

##  

## 12.14.      Authority of the Shareholder to Bindthe Selling Parties. Each the Selling Party acknowledges and agrees thatthe Shareholder shall have sole authority on behalf of each of and all of theSelling Parties to agree to, dispute or otherwise handle all matters relatingto this Agreement, including matters relating to the Closing Statement, theIndependent Accounting Firm, the assertion, waiver or defense of claims under Section 10,amendment of this Agreement pursuant to Section 12.2 and otherwise, ineach case as the Shareholder deems appropriate in his sole and absolutediscretion.  Each Selling Party herebyagrees that any determination by the Shareholder with respect to any mattersrelating to this Agreement shall be conclusive and binding upon such SellingParty.

##  

## 12.15.      Schedules. Any disclosure in aschedule to this Agreement with respect to a Section of this Agreementshall be deemed to be disclosed for other Sections of this Agreement to theextent that such disclosure sets forth facts in sufficient detail so that therelevance of such disclosure would be reasonably apparent to a reader of such disclosure.  No reference to or disclosure of any item orother matter in any schedule of this Agreement shall be construed as anadmission or indication that such item or other matter is material or that suchitem or other matter is required to be referred to or disclosed in thisAgreement.

##  

**[SIGNATURES ON FOLLOWING PAGE]**

 

45

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

 
| HETRONIC  HOLDING LLC      |                                   | HETRONIC  INTERNATIONAL, INC. |
|----------------------------|----------------------------------------|-------------------------------|
|                       |                                   |                          |
|                       |                                   |                          |   |   |
| By:                        | /s/  Max Heckl                         |                          | By: | /s/  Torsten Rempe |
| Name:                      | Max  Heckl                             |                          | Name: | Torsten  Rempe |
| Title:                     | President                              |                          | Title: | President |
|                       |                                   |                          |   |   |
|                       |                                   |                          |   |   |
| HETRONIC  USA INC.         |                                   | HETRONIC  WEST, INC.          |
|                       |                                   |                          |
|                       |                                   |                          |   |   |
| By:                        | /s/  Torsten Rempe                     |                          | By: | /s/  Torsten Rempe |
| Name:                      | Torsten  Rempe                         |                          | Name: | Torsten  Rempe |
| Title:                     | President                              |                          | Title: | President |
|                       |                                   |                          |   |   |
|                       |                                   |                          |   |   |
| HETRONIC  MALTA LIMITED    |                                   | HETRONIC  EUROPE GMBH         |
|                       |                                   |                          |
|                       |                                   |                          |   |   |
| By:                        | /s/  Simon Grima                       |                          | By: | /s/  Nicole Heckl |
| Name:                      | Simon  Grima                           |                          | Name: | Nicole  Heckl |
| Title:                     | Managing  Director                     |                          | Title: | Managing  Director |
|                       |                                   |                          |   |   |
|                       |                                   |                          |   |   |
| /s/  Max Heckl             |                                   |                          |   |
| Max  Heckl                 |                                   |                          |   |
|                       |                                   |                          |   |
|                       |                                   |                          |   |   |
| METHODE  ELECTRONICS, INC. |                                   |                          |   |
|                       |                                   |                          |   |
|                       |                                   |                          |   |
| By:                        | /s/  Donald Duda                       |                          |   |   |
| Name:                      | Donald  Duda                           |                          |   |   |
| Title:                     | President  and Chief Executive Officer |                          |   |   |

 

[Assetand Share Purchase Agreement Signature Page]

 

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APPENDIX OF DEFINITIONS

 

The following definitionsshall be applicable for purposes of the Agreement except as otherwisespecifically provided to the contrary in the text of the Agreement.

 

“Affiliates” of aPerson shall mean any Person controlling, controlled by or under common controlwith that Person.  “Control” for thispurpose shall mean the possession, directly or indirectly, of the power todirect 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.

 

“Acquired Assets”shall mean the Purchased Assets and all of the assets and properties whereversituated, of Hetronic Asia.

 

“Acquired Liabilities”shall mean the Assumed Liabilities and all of the Liabilities of Hetronic Asiaas of the Closing.

 

“CERCLA” shall meanthe Comprehensive Environmental Response Compensation and Liability Act of1980, as amended.

 

“Claim” shall meanany 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, reasonable attorneys’ fees, expertfees, travel expenses, court costs and other expenditures).

 

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

 

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

 

“Employee Plan” shallmean any pension, retirement, savings, accident, disability, medical, dental,health, life (including any individual life insurance policy to which any Target Company makes premiumpayments, whether or not such party is the owner, beneficiary or both of suchpolicy), death benefit, group insurance, profit sharing, compensation, deferredcompensation, stock purchase, stock option, stock ownership, stock appreciationrights, phantom stock, bonus, incentive, leave of absence, layoff, vacation payor sick day, severance, separation, dependent care, legal services, cafeteria,or other employee benefit plan, trust, contract, agreement, practice, policy,commitment or arrangement of any kind, whether any of the foregoing is funded,insured or self-funded, for the benefit of a single individual or more than oneindividual, written or oral, (a) to which any Target Company is a party or by which any Target Company (or any of its rights,properties or assets) is bound, or (b) with respect to which any Target Company has made any payments,contributions or commitments, or may otherwise have any liability (whether ornot any such party still maintains such plan, trust, arrangement, contract,agreement, policy or commitment), including, any Welfare Plan, any Pension Planand any “employee benefit plan” within the meaning of Section 3(3) ofERISA.

 

“Environment” shallmean surface waters, groundwaters, surface water sediment, soil, subsurfacestrata, ambient air and other environmental medium.

 

1

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“Environmental Claims”shall mean any and all actions, suits, demands, demand letters, claims, Liens,notices of non-compliance or violation, notices of Liability or potentialLiability, investigations, proceedings, consent orders or consent agreementsrelating in any way to any Environmental Law, Environmental Permit or anyHazardous Material or arising from any alleged injury to threat of injury tohealth, 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 otherauthorization or application therefor required to operate any Target Company’s business under anyapplicable Environmental Law.

 

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

 

“Governmental Authority”shall mean any United States federal, state, municipal or local or any non-U.S.government, governmental, regulatory or administrative authority, stateenterprise, department, agency, commission, board, bureau, or instrumentality(or political subdivision thereof) or any court, tribunal, or judicial orarbitral body.

 

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

 

“Indebtedness” of anyPerson shall mean all obligations (whether interest, principal, fees, penaltiesor otherwise) and Liabilities consisting of, without duplication: (a) indebtednessfor borrowed money or for the deferred purchase price of property or servicesin respect of which such Person is liable, contingently or otherwise, asobligor or otherwise (other than trade payables and other current liabilitiesincurred in the Ordinary Course of Business) and any commitment by which suchPerson assures a creditor against loss, including contingent reimbursementobligations with respect to letters of credit; (b) obligations evidencedby debt securities bonds, debentures, notes or other similar instruments; (c) obligationsunder capitalized leases in respect of which such Person is liable, contingentlyor otherwise, as obligor, guarantor or otherwise, or in respect of whichobligations such Person assures a creditor against loss; (d) anyunsatisfied obligation of such Person for “withdrawal liability” to a “multiemployerplan,” as such terms are defined under ERISA; (e) obligations with respectto letters of credit issued for such Person’s account, (f) secured by aLien; or (viii) arising from any guaranty for any of the foregoing,including a guarantee in the form of an agreement to repurchase or reimburse.

 

“Intellectual Property”shall mean (a) all trademarks, service marks, certification marks, tradedress, logos, trade names, Internet domain names, and corporate names, togetherwith all 

 

2

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translations,adaptations, derivations, and combinations thereof and including all goodwillassociated therewith, and all applications, registrations, and renewals inconnection therewith, (b) all copyrightable works (whether or notpublished or registered), all copyrights, mask works, derivative works thereof,and all applications, registrations, and renewals in connection therewith, (c) allTrade Secrets; (d) all patents and patent applications, and all divisions,reissues, continuations, extensions, and continuations-in-part thereof, and allinventor’s certificates and utility models, (e) all computer software(including data and related documentation), (f) and all other forms ofintellectual property or proprietary rights, and (g) all copies andtangible embodiments thereof (in whatever form or medium).

 

“Inventories” shallmean all inventories, including all raw materials, supplies, work-in-process,and finished goods, including any of the foregoing which have been purchasedsubject to any conditional sales or title retention agreement in favor of anyother Person.

 

“IRS” shall mean theInternal Revenue Service.

 

“Key Employees” shallmean Simon Grima, Hans-Ullrich John and Torsten Rempe.

 

“Knowledge”  The phrase “to Sellers’ Knowledge” or similarphrases shall mean those facts and circumstances known to the Shareholder orany of the Key Employees, in each case after due inquiry by such persons tothose employees of the Target Companies who in the ordinary course of theirduties would be reasonably likely to have knowledge of the facts orcircumstances in question.

 

“Law(s)” shall meanany federal, state, local or foreign statute, law, ordinance, regulation, rule,code, order, other requirement or rule of law, now or hereafter in effectand as amended, and any judicial or administrative interpretation thereof,including any judicial or administrative order, consent decree or judgment.

 

“Liability” shallmean any debt, obligation, assessment, fine, penalty, damage, cost, expense orother liability, whether direct or indirect, whether known or unknown, whetherasserted or unasserted, whether absolute or contingent, whether accrued orunaccrued, whether matured or unmatured, whether liquidated or unliquidated,and whether due or to become due.

 

“Lien” shall mean anymortgage, lien, pledge, charge, security interest, encumbrance or other thirdparty interest or claim of any nature whatsoever, including to the foregoing inthe case of real property, any rights-of-way, building use restrictions,exceptions, variances, reservations, or limitations of any nature.

 

“Material Adverse Effect”shall mean a material adverse effect upon or change in (i) the business,affairs, properties, assets, Liabilities, financial condition or results ofoperation of any Target Company,(ii) the continued conduct of the business of any Target Company, as presently conducted, or (iii) theability of the Parties to consummate the transaction contemplated by thisAgreement.

 

“Ordinary Course ofBusiness” shall mean the ordinary course of business consistent with pastcustom and practice (including with respect to quantity and frequency).

 

3

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“OrganizationalDocumentation” of a Person shall mean the certificate of incorporation,certificate of formation, articles of incorporation, by-laws, operatingagreement or other organic document of such Person.

 

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

 

“Person” shall meanan individual, a partnership, a corporation, a limited liability company, anassociation, a joint stock company, a trust, a joint venture, an unincorporatedorganization, a Governmental Authority (or department, agency or politicalsubdivision thereof) or any other person or entity.

 

“Reasonable Efforts”shall mean the good faith effort that a Person ordinarily would use, apply orexercise to protect his own rights and business, provided that when used inconnection with the obtaining of a consent, approval or other act of anunaffiliated third party or Governmental Authority, “reasonable efforts” shallnot require the commencement of litigation against or acquisition of control ofsuch third party or the assets or obligations requiring such consent, theacceleration of payment of any indebtedness or the payment of money.

 

“Receivables” shallmean all trade receivables, note receivables and other accounts receivable.

 

“Release” shall meanactual disposing, discharging, injecting, spilling, leaking, leaching, dumping,emitting, escaping, emptying, seeping, placing, and the like into or upon anyland 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 theEnvironment.

 

“Subsidiary” shallmean any Person with respect to which a specified Person (or Subsidiarythereof) owns a majority of the common stock or has the power to vote or directthe voting of sufficient securities to elect a majority of the directors (or individualsexercising similar functions).

 

“Taxes” shall meanall federal, state, local and foreign income, excise, property, sales, use,payroll, intangibles, franchise, gross receipts, license, employment,severance, stamp, occupation, premium, windfall profits, environmental, customsduties, capital stock, profits, withholding, social security, unemployment,disability, real property, personal property, transfer, registration, valueadded, alternative or add-on minimum and other taxes, fees, assessments orcharge of whatever nature, and all penalties and interest related thereto,whether disputed or not, including tax withholdings or amounts paid to anyPerson 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 taxsharing, tax indemnity, tax allocation or similar agreement or arrangement.

 

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

 

4

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“Target CompanyIntellectual Property” shall mean any and all Intellectual Property ownedby, licensed by or used by any Target Company or Target Companies, includingall Intellectual Property incorporated into the radio remote control productsdeveloped, manufactured, marketed or sold by the Target Companies, thecorporate and trade name “Hetronic,” derivatives and all telephone numbers ofthe Target Companies, including those rights described in Schedule 5.19hereto.

 

“Trade Secrets” shallmean all trade secrets and confidential business information including allinventions, compositions, manufacturing and production processes andtechniques, business methods, processes and techniques (in each case whether ornot patentable), discoveries, developments, ideas, concepts, research anddevelopment, databases, shoprights, designs, formulae, methods, processes,designs, drawings, blueprints, engineering computer information,specifications, and items of proprietary know-how, information or data;prospect lists, customer lists, supplier lists, projections, analyses andmarket studies, pricing and cost information, and business and marketing plansand proposals; and all other proprietary rights; provided that “Trade Secrets”do not include non-proprietary information, know-how or processes otherwiseavailable to the industry or the public.

 

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

 

5

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ASSET AND SHARE PURCHASE AGREEMENT

 

 

by and among

 

 

METHODE ELECTRONICS, INC.;

 

 

HETRONIC HOLDING LLC

 

and certain of its affiliates

 

and

 

Max Heckl

 

 

Dated as of September 30, 2008

 

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TABLE OF CONTENTS

 
| 1.     | PURCHASE AND SALE OF ASSETS AND SHARES            | 2                                               |
|--------|---------------------------------------------------|-------------------------------------------------|
|   | 1.1.                                              | Agreement to Purchase and Sell Assets           | 2 |
|   | 1.2.                                              | Agreement to Purchase and Sell Shares           | 3 |
|   | 1.3.                                              | Excluded Assets                                 | 4 |
|   | 1.4.                                              | Documentation                                   | 5 |
| 2.     | CONSIDERATION                                     | 5                                               |
|   | 2.1.                                              | Purchase Price                                  | 5 |
|   | 2.2.                                              | Reconciliation of Net Book Value                | 5 |
|   | 2.3.                                              | Settlement                                      | 6 |
|   | 2.4.                                              | Independent Accounting Firm                     | 7 |
|   | 2.5.                                              | Allocation of Purchase Price                    | 7 |
| 3.     | ASSUMED LIABILITIES AND EXCLUDED LIABILITIES      | 8                                               |
|   | 3.1.                                              | Assumed Liabilities                             | 8 |
|   | 3.2.                                              | Excluded Liabilities                            | 8 |
| 4.     | CLOSING                                           | 8                                               |
|   | 4.1.                                              | Closing                                         | 8 |
|   | 4.2.                                              | Closing Deliverables                            | 9 |
|   | 4.3.                                              | Closing Payment                                 | 9 |
|   | 4.4.                                              | Location and Effective Time of Closing          | 9 |
| 5.     | REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES | 10                                              |
|   | 5.1.                                              | Organization and Good Standing                  | 10 |
|   | 5.2.                                              | Enforceability and Authorization                | 10 |
|   | 5.3.                                              | No Conflict; Consents                           | 10 |
|   | 5.4.                                              | Capitalization and Ownership; Corporate Matters | 11 |
|   | 5.5.                                              | Financial Statements                            | 12 |
|   | 5.6.                                              | Books and Records                               | 12 |
|   | 5.7.                                              | No Undisclosed Liabilities                      | 12 |
|   | 5.8.                                              | Absence of Certain Changes                      | 13 |
|   | 5.9.                                              | Tax Matters                                     | 15 |
|   | 5.10.                                             | Title to Assets                                 | 16 |
|   | 5.11.                                             | Real Estate and Leases                          | 16 |
|   | 5.12.                                             | Material Contracts                              | 17 |
|   | 5.13.                                             | Receivables                                     | 18 |
|   | 5.14.                                             | Inventories                                     | 19 |
|   | 5.15.                                             | Litigation                                      | 19 |
|   | 5.16.                                             | Insurance                                       | 19 |
|   | 5.17.                                             | Employment and Labor Matters                    | 19 |
|   | 5.18.                                             | Employee Benefits                               | 20 |
|   | 5.19.                                             | Intellectual Property                           | 21 |
|   | 5.20.                                             | Legal Compliance                                | 23 |
|   | 5.21.                                             | Approvals                                       | 23 |
|   | 5.22.                                             | Transactions with Affiliates                    | 23 |
|   | 5.23.                                             | Environmental Matters                           | 24 |
|   | 5.24.                                             | Product Liability and Warranty Matters          | 25 |

 

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|   | 5.25.                                     | Principal Customers and Suppliers                          | 26 |
|--------|-------------------------------------------|------------------------------------------------------------|----|
|   | 5.26.                                     | Solvency                                                   | 26 |
|   | 5.27.                                     | Material Adverse Affect                                    | 26 |
|   | 5.28.                                     | Disclosure                                                 | 26 |
| 6.     | REPRESENTATIONS AND WARRANTIES OF METHODE | 26                                                         |
|   | 6.1.                                      | Organization                                               | 27 |
|   | 6.2.                                      | Enforceability and Authorization                           | 27 |
|   | 6.3.                                      | No Conflict; Methode Consents                              | 27 |
| 7.     | INTENTIONALLY OMITTED                     | 28                                                         |
| 8.     | CONDITIONS TO CLOSING                     | 28                                                         |
|   | 8.1.                                      | Mutual Conditions                                          | 28 |
|   | 8.2.                                      | Conditions to Methode’s Obligations                   | 28 |
|   | 8.3.                                      | Conditions to the Selling Parties’ Obligations        | 31 |
|   | 8.4.                                      | Payment                                                    | 32 |
| 9.     | TERMINATION                               | 32                                                         |
|   | 9.1.                                      | Termination of Agreement Prior to Closing                  | 32 |
|   | 9.2.                                      | Effect of Termination Prior to Closing                     | 33 |
| 10.    | INDEMNIFICATION                           | 33                                                         |
|   | 10.1.                                     | Limited Indemnification Obligations of Methode             | 33 |
|   | 10.2.                                     | General Indemnification Obligations of Methode             | 33 |
|   | 10.3.                                     | Limited Indemnification Obligations of the Selling Parties | 34 |
|   | 10.4.                                     | General Indemnification Obligations of the Selling Parties | 35 |
|   | 10.5.                                     | Nature and Survival of Representations and Warranties      | 36 |
|   | 10.6.                                     | Limitations on Indemnification Obligations                 | 36 |
|   | 10.7.                                     | Method of Asserting Claims                                 | 37 |
|   | 10.8.                                     | Setoff; Payment of Claims                                  | 38 |
|   | 10.9.                                     | Treatment of Claims                                        | 38 |
|   | 10.10.                                    | Insurance Recoveries                                       | 38 |
| 11.    | POST-CLOSING AGREEMENTS                   | 38                                                         |
|   | 11.1.                                     | Employees                                                  | 38 |
|   | 11.2.                                     | Employee Benefit Plans                                     | 39 |
|   | 11.3.                                     | Sales after Closing                                        | 39 |
|   | 11.4.                                     | Confidentiality                                            | 39 |
|   | 11.5.                                     | Names Following the Closing                                | 39 |
|   | 11.6.                                     | Taxes and Expenses                                         | 40 |
|   | 11.7.                                     | Post-Closing Tax Preparation                               | 40 |
|   | 11.8.                                     | Instruments of Further Assurance                           | 40 |
|   | 11.9.                                     | Pro-Ration of Expenses; Tax Refunds                        | 40 |
|   | 11.10.                                    | Access to Records                                          | 41 |
|   | 11.11.                                    | Access to Employees                                        | 41 |
|   | 11.12.                                    | Receivables                                                | 41 |
|   | 11.13.                                    | Enforcement of Existing NDAs                               | 42 |
|   | 11.14.                                    | Philippine Registration of Foreign Investment              | 42 |
| 12.    | GENERAL PROVISIONS                        | 42                                                         |
|   | 12.1.                                     | Entire Agreement                                           | 42 |
|   | 12.2.                                     | Amendment; Waiver                                          | 42 |

 

ii

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|   | 12.3.  | Expenses                                                 | 42 |
|--------|--------|----------------------------------------------------------|----|
|   | 12.4.  | Notices                                                  | 42 |
|   | 12.5.  | Assignment                                               | 43 |
|   | 12.6.  | Severability                                             | 43 |
|   | 12.7.  | Counterparts; Facsimiles                                 | 43 |
|   | 12.8.  | Construction                                             | 44 |
|   | 12.9.  | Public Announcements                                     | 44 |
|   | 12.10. | No Third Party Beneficiaries                             | 44 |
|   | 12.11. | Waiver of Trial by Jury                                  | 44 |
|   | 12.12. | Cumulative Remedies                                      | 44 |
|   | 12.13. | Governing Law; Jurisdiction                              | 45 |
|   | 12.14. | Authority of the Shareholder to Bind the Selling Parties | 45 |
|   | 12.15. | Schedules                                                | 45 |

 

EXHIBITS

 

| Exhibit A      |   | Form of  Adjusted Net Book Value Calculation           |
|---------------------|--------|-------------------------------------------------------------|
| Exhibit B      |   | Form of  Employment Agreement                          |
| Exhibit C      |   | Form of  AmpcontrolAgreement                           |
| Exhibit D      |   | Forms  of German Distribution Agreements                    |
| Exhibit E      |   | Form of  Consulting Agreement                          |
| Exhibit F      |   | Form of  Noncompetition and Confidentiality Agreement  |
| Exhibit G      |   | Forms  of Opinion of Counsel to Hetronic Asia               |
| Exhibit H      |   | Form of  Escrow Agreement                              |
| Exhibit I      |   | Form of  Lease Addendum                                |
| Exhibit J      |   | Intentionally  Omitted                                      |
| Exhibit K      |   | Form of  German Local Transfer Agreement               |
| Exhibit L      |   | Form of  Hetronic Deutschland Intercompany Assignments |
|                |   |                                                        |
| SCHEDULES           |
|                |   |                                                        |
| Schedule 1.1.1 |   | Machinery  and Equipment                                    |
| Schedule 1.1.4 |   | Assigned  Contracts                                         |
| Schedule 1.3   |   | Excluded  Contracts and Assets                              |
| Schedule 2.5   |   | Allocation  of Purchase Price                               |
| Schedule 5.1   |   | Organization  and Good Standing                             |
| Schedule 5.3   |   | No  Conflict; Consents                                      |
| Schedule 5.4.1 |   | Ownership  of Sellers                                       |
| Schedule 5.4.2 |   | Capitalization  and Ownership of Hetronic Asia              |
| Schedule 5.4.3 |   | Hetronic  Asia Company Matters                              |
| Schedule 5.5   |   | Financial  Statements                                       |
| Schedule 5.7   |   | No  Undisclosed Liabilities                                 |
| Schedule 5.8   |   | Absence  of Certain Changes                                 |

 

iii

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| Schedule 5.9   |   | Tax  Matters                            |
|---------------------|--------|-----------------------------------------|
| Schedule 5.10  |   | Title  to Assets                        |
| Schedule 5.11  |   | Real  Estate and Leases                 |
| Schedule 5.12  |   | Material  Contracts                     |
| Schedule 5.13  |   | Receivables                             |
| Schedule 5.15  |   | Litigation                              |
| Schedule 5.16  |   | Insurance                               |
| Schedule 5.17  |   | Employment  and Labor Matters           |
| Schedule 5.18  |   | Employee  Benefits                      |
| Schedule 5.19  |   | Intellectual  Property                  |
| Schedule 5.20  |   | Legal  Compliance                       |
| Schedule 5.21  |   | Approvals                               |
| Schedule 5.22  |   | Transactions  with Affiliates           |
| Schedule 5.23  |   | Environmental  Matters                  |
| Schedule 5.24  |   | Product  Liability and Warranty Matters |
| Schedule 5.25  |   | Principal  Customers and Suppliers      |
| Schedule 6.1   |   | Organization  and Good Standing         |
| Schedule 6.3   |   | No  Conflict; Consents                  |
| Schedule 8.2.3 |   | Required  Consents and Approvals        |

 

iv

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EXHIBIT AFORM OF ADJUSTED NET BOOK VALUE CALCULATION

 

Seeattached.

 

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EXHIBIT BFORM OF EMPLOYMENT AGREEMENT

 

Seeattached.

 

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EXHIBIT CFORM OF AMPCONTROL AGREEMENT

 

Seeattached.

 

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EXHIBIT DFORMS OF GERMAN DISTRIBUTION AGREEMENTS

 

Seeattached.

 

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EXHIBIT EFORM OF CONSULTING AGREEMENT

 

Seeattached.

 

----

 

EXHIBIT FFORM OF NONCOMPETITION AND CONFIDENTIALITY AGREEMENT

 

Seeattached.

 

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EXHIBIT GFORM OF OPINION OF COUNSEL TO HETRONIC ASIA

 

Seeattached.

 

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EXHIBIT HFORMS OF ESCROW AGREEMENTS

 

Seeattached.

 

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EXHIBIT IFORM OF LEASE ADDENDUM

 

Seeattached.

 

----

 

EXHIBIT J

 

IntentionallyOmitted

 

----

 

EXHIBIT KFORM OF GERMAN LOCAL TRANSFER AGREEMENT

 

Seeattached.

 

----

 

EXHIBIT LFORM OF HETRONIC DEUTSCHLAND INTERCOMPANY ASSIGNMENTS

 

Seeattached.

 

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SCHEDULES

 

Seeattached.

 

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