SALE AND TRANSFER AGREEMENT

 

 

 

 

 

__________________________________________

AGREEMENT FOR THE SALE AND TRANSFER OF

CERTAIN SHARES RELATING TO THE ERA

GROUP

__________________________________________

Sale and Transfer Agreement

between

era GmbH & Co.KG, represented by its sole general partner ( Komplementär ) era Verwaltungs GmbH (era GmbH & Co.KG hereinafter referred to as the " Seller " ), and Mr. Erich Gottlieb Aichele (hereinafter referred to as " Mr. Aichele " or the " Seller's Guarantor ") and Dr. Peter Baumgartner (hereinafter referred to as " Dr. Baumgartner ") and Pulse GmbH (hereinafter referred to as " Purchaser 1 "), and CST Electronics Co., Ltd. (hereinafter referred to as " Purchaser 2 ") and Drew Moyer (hereinafter referred to as " Purchaser 3 ") (Purchasers 1, 2 and 3 hereinafter collectively referred to as the " Purchasers "; the Seller, Mr. Aichele, Dr. Baumgartner and the Purchasers hereinafter collectively referred to as the " Parties ", and each of them as a " Party ") dated November 28, 2005

 

Recitals

A.         The Seller is a limited partnership ( GmbH & Co. KG ) with registered offices in Bretten, Germany, which is registered in the commercial register ( Handelsregister ) of the Local Court ( Amtsgericht ) of Bruchsal under HRA 507-Br, and represented by its sole general partner era Verwaltungs GmbH with registered offices in Bretten, Germany, which is registered with the commercial register ( Handelsregister ) of the Lower Court of Bruchsal under HRB 921-Br. The Seller is the top holding company of a group of companies affiliated within the meaning of Sections 15 et seq. of the German Stock Corporation Act ( Aktiengesetz, AktG ), (collectively the " Seller's Group " and companies affiliated with another company within the meaning of Sections 15 et seq. AktG hereinafter " Affiliated Companies " of the respective other company) their field of activity being the production and distribution of electrical products for the automotive and electrical industry.

B.         Purchasers 1 and 2 are companies forming part of the Technitrol group of companies (the " Technitrol Group ") which is active in the business of electronic components and electrical contact products. Purchaser 1 is a limited liability company ( Gesellschaft mit beschränkter Haftung) duly organized under the laws of Germany with registered offices in Rodgau, Germany, and registered with the Commercial Register of the Lower Court of Offenbach am Main under HRB 21908. Purchaser 2 is a limited liability company duly organized under the laws of Hong Kong. Purchaser 3 is Senior Vice President and Chief Financial Officer of Technitrol Inc., PA, USA.

C.         Mr. Aichele and Dr. Baumgartner, collectively, are the sole shareholders of the Seller with Mr. Aichele holding 90 % and Dr. Baumgartner holding 10 % of all of the shares in the Seller.

D.         The Seller currently owns (directly or indirectly) the shares in, inter alia , the following legal entities (as set forth in more detail in Section 1 below):

E.         The Seller and Mr. Aichele intend to sell and transfer and the Purchasers intend to purchase and to be transferred certain shares and assets as set out in Recitals F and G below (all shares referred to in Recital F and G, including the shares indirectly held in EMC and Eraplast Tunisia, collectively the " Group Shares "; the companies to which the Group Shares relate collectively the " Target Companies "; the Target Companies and the businesses to which the Group Shares relate together with the assets referred to in Recital H collectively the " Era Business ").

F.          The Seller intends to sell and transfer all of its shares in Era Elektrotechnik, Era PowerTrain, and Era GmbH, as well as its shares in FEM and Auslandsholding and its interests in BREMI (the " German Era Companies ) to Purchaser 1 and thereby also intends to indirectly sell and transfer certain shares held by Era Elektrotechnik in Eraplast Tunisia and by Era PowerTrain in EMC to Purchaser 1 (the businesses of the German Era Companies and of EMC collectively the " German Era Business ") and Purchaser 1 wishes to purchase and to be transferred the shares in the German Era Companies. FEM, BREMI and Auslandsholding (collectively the " BREMI Companies ") are currently in the process of being merged into Era PowerTrain. Should these mergers be validly completed prior to or at the Closing, the sale and transfer of the shares and interests in the BREMI Companies contemplated under Sections 1.4 and 1.6, respectively, will become obsolete without having any impact on any of the provisions of this Agreement.

G.         The Seller intends to sell and transfer all of its shares in Tunera to Purchaser 2. Mr. Aichele intends to sell and transfer all of his shares in Tunera to Purchaser 3. Purchaser 2 and Purchaser 3 wish to purchase and to be transferred these shares, which, together with the indirect acquisition of the shares in Eraplast Tunisia by Purchaser 1, is intended to result in the sale and transfer of all of the Seller's and Mr. Aichele's shares in both Eraplast Tunisia and Tunera (collectively the " Tunisian Era Companies " and the businesses relating to such shares the " Tunisian Era Business ").

H.         The Seller intends to sell and transfer to the Target Companies, prior to or at the Closing Date, certain IP rights required to continue to conduct the Era Business (the " Seller IP Rights ").

I.           The Seller further intends to ensure that it will have achieved a separation from Tunera of certain assets which, as of the date of this Agreement, prior to or at the Closing Date, form part of the cable shield business conducted at Tunera (the " Excluded Cable Shield Assets ") (the " Cable Shield Exclusion "). For an interim period of three months, the Parties intend to enter into a tolling agreement ensuring a seamless separation of Seller's cable shield business.

NOW, THEREFORE, the Parties, and the Guarantors agree as follows:

Section 1
Sale and Transfer of the Shares in the German Era Companies

1.1        Particulars of the German Era Companies

1.1.1    Era Elektrotechnik is a limited liability company ( Gesellschaft mit beschränkter Haftung ) duly organized under the laws of Germany with registered offices in Herrenberg, Germany, and registered with the Commercial Register of the Lower Court of Böblingen under HRB 1276.

1.1.2    Era PowerTrain is a limited liability company duly organized under the laws of Germany with registered offices in Meinerzhagen, Germany, and registered with the Commercial Register of the Lower Court of Iserlohn under HRB 3354.

1.1.3    Era GmbH is a limited liability company duly organized under the laws of Germany with registered offices in Herrenberg, Germany, and registered with the Commercial Register of the Lower Court of Böblingen under HRB 5966.

1.1.4    FEM is a limited liability company ( Gesellschaft mit beschränkter Haftung ) duly organized under the laws of Germany with registered offices in Münchhausen, Germany, and registered with the Commercial Register of the Lower Court of Marburg under HRB 1416.

1.1.5    BREMI is a limited partnership ( Kommanditgesellschaft ) with BREMI Fahrzeug-Elektrik GmbH (having its registered offices in Kierspe, Germany and registered with the Commercial Register of the Lower Court of Iserlohn under HRB 3438)) as a general partner ( Komplementär) , duly organized under the laws of Germany and registered with the Commercial Register of the Lower Court of Iserlohn under HRA 2666.

1.1.6    Auslandsholding is a limited liability company duly organized under the laws of Germany with registered offices in Kierspe and registered with the Commercial Register of the Lower Court of Iserlohn under HRB 3526, with a registered share capital of DEM 100,000.00, of which the Seller currently holds one share with a par value of DEM 75,000.00 representing 75% of all shares.

1.2        Registered Share Capital of the German Era Companies

1.2.1    The registered share capital ( Stammkapital ) of Era Elektrotechnik amounts to DEM 1,000,000 and is divided into the following shares, all of which are held by the Seller:

           

(1)        one share with a par value ( Nennbetrag ) of DEM 900,000,

(2)        one share with a par value of DEM 100,000.

1.2.2    The registered share capital of Era PowerTrain amounts to EUR 261,000 and the single one share in Era PowerTrain with a par value in the aforementioned amount is held by the Seller.

1.2.3    The registered share capital of Era GmbH amounts to EUR 25,000 and the single one share in Era GmbH with a par value in the aforementioned amount is held by the Seller.

1.2.4    The registered share capital of FEM amounts to EUR 62,000 and the single one share in FEM with a par value in the aforementioned amount is held by the Seller.

FEM currently holds one share with the par value of DEM 25,000, representing 25% of all shares in Auslandsholding.

1.2.5    The registered contribution ( Haftsumme ) of and the interest in BREMI amounts to EUR 306,775.13 of which an amount of EUR 306,675.13 is held by the Seller and an amount of EUR 100 is held in trust by BREMI Fahrzeug-Elektrik GmbH for the Seller. One day after the registration of the merger between BREMI and Era PowerTrain as described in Recital F, Seller will, by anticipated transfer ( Übertragung eines künftigen Geschäftsanteils ), automatically acquire a future share with a par value of EUR 100 in Era PowerTrain which BREMI Fahrzeug-Elektrik GmbH will have acquired in exchange for its current interest in BREMI (the " BREMI Minority Share ").

1.2.6    All issued shares in the German Era Companies are hereinafter referred to as the " German Era Companies Shares ", regardless of whether the number and par value of such shares correspond to the particulars given in this Section 1.2.

1.3        Participations of the German Era Companies

1.3.1    Era Elektrotechnik currently holds shares with a par value of TND 5,100 (representing 51% of all of the shares) in Eraplast Tunisia, a limited liability company ( Societé à Responsabilité Limitée ) duly organized under the laws of Tunisia with registered offices at Bizerte, Tunisia, and registered with the Commercial Register ( Registre de Commerce et des Societés ) in Bizerte under number B 18822003 with a share capital ( capital social ) of TND 10,000. The remaining shares with a par value of TND 4,900 (representing 49% of all the shares) are currently held by Mr. Andreas Wagner (the " Wagner Eraplast Shares ") but will be acquired by Era Elektrotechnik and/or another Target Company prior to or at the Closing Date.

1.3.2    Era PowerTrain currently holds one share with a par value of DEM 58,000 representing 11.6% (the " EMC Share ") of all of the shares in EMC, a limited liability company duly organized under the laws of Germany with registered offices in Dortmund and registered with the Commercial Register of the Lower Court of Dortmund under HRB 11572, with a registered share capital of DEM 500,000.

1.4        Sale and Purchase of the German Era Companies Shares

The Seller hereby offers ( bietet an) to sell the German Era Companies Shares (including the BREMI Minority Share) to Purchaser 1 upon the terms and conditions of this Agreement. Purchaser 1 hereby accepts ( nimmt an ) this offer. Each of the offers and acceptances with regard to the shares of FEM and Auslandsholding and the interests in BREMI is subject to the condition subsequent ( auflösende Bedingung ) that the mergers of FEM, Auslandsholding and BREMI, respectively, with Era PowerTrain will have been validly completed prior to the Closing Date.

1.5        Profit Entitlement, Ancillary Rights

The sale and purchase of the German Companies Shares (including the BREMI Minority Share) pursuant to Section 1.4 above shall include all claims and other rights attaching to the German Era Companies Shares, including the right to receive profits ( Gewinnbezugsrecht ) for the current and all future financial years ( Geschäftsjahre ) of the German Era Companies and the right to receive any profits of the German Era Companies which have not yet been distributed.

1.6        Transfer of the German Era Companies Shares

The Seller hereby offers ( bietet an ) to transfer by way of assignment of shares ( Geschäftsanteilsabtretung ) the German Era Companies Shares including the BREMI Minority Share to the Purchaser subject to the condition precedent ( unter der aufschiebenden Bedingung ) of payment of the Preliminary Purchase Price in accordance with Section 5. Purchaser 1 hereby accepts ( nimmt an ) this offer. Each of the offers and acceptances with regard to the shares of FEM and Auslandsholding and the interest in BREMI is subject to the condition subsequent ( auflösende Bedingung ) that the mergers of FEM, Auslandsholding or BREMI, respectively, into Era PowerTrain will have been validly completed prior to the Closing Date.

1.7        Consents; Releases

1.7.1    By a resolution dated November 22, 2005, a copy of which is attached as Annex 1.7.1 , the shareholders' meeting ( Gesellschafterversammlung ) of the Seller unanimously and irrevocably consented to the sale and transfer of the German Era Companies Shares including the BREMI Minority Share to Purchaser 1.

1.7.2    By resolutions dated November 20 , 2005, a copy of each of which is attached as Annex 1.7.2 , the shareholders' meeting ( Gesellschafterversammlung ) of each of the German Era Companies (except EMC) unanimously and irrevocably consented to the sale and transfer of the respective German Era Companies Shares including the BREMI Minority Share to Purchaser 1.

Section 2
Sale and Transfer of the Shares in Tunera

2.1        Particulars of Tunera

Tunera is a limited liability company ( Societé à Responsabilité Limitée ) duly organized under the laws of Tunisia with registered offices at Bizerte, Tunisia, and registered with the Commercial Register ( Registre de Commerce et des Societés ) in Bizerte under number B 146051997. The share capital ( capital social ) of Tunera amounts to TND 15,000.

2.2        Registered Share Capital of Tunera

The registered share capital ( capital social ) of Tunera amounts to TND 15,000 and is divided into the following shares, all of which are held by the Seller and Mr. Aichele:

(1)        1,497 shares with a par value of TND 10 each, which are held by the Seller (the " Seller Tunera Shares "),

(2)        three shares with a par value of TND 10 each, which are held by Mr. Aichele (the " Mr. Aichele Tunera Shares ")

(the Seller Tunera Shares and the Mr. Aichele Tunera Shares collectively the " Tunera Shares ").

2.3        Sale and Purchase of the Tunera Shares

The Seller hereby offers ( bietet an ) to sell the Seller Tunera Shares to Purchaser 2 upon the terms and conditions of this Agreement. Purchaser 2 hereby accepts ( nimmt an ) this offer.

Mr. Aichele hereby offers ( bietet an ) to sell the Mr. Aichele Tunera Shares to Purchaser 3 upon the terms and conditions of this Agreement. Purchaser 3 hereby accepts ( nimmt an ) this offer.

2.4        Profit Entitlement, Ancillary Rights

The sale and purchase of the Tunera Shares pursuant to Section 2.3 above shall include all claims and other rights attaching to the Tunera Shares, including the right to receive profits ( le droit aux dividends ) for the current and all future financial years ( exercice social ) of Tunera and the right to receive any profits of Tunera which have not yet been distributed.

2.5        Transfer of the Tunera Shares

2.5.1    The Seller and Purchaser 2 shall effect the transfer of the Seller Tunera Shares to Purchaser 2 prior to or at the Closing Date by way of valid and binding execution of a separate transfer agreement (the " Seller Tunera Shares Transfer Agreement ").

2.5.2    Mr. Aichele and Purchaser 3 shall effect the transfer of the Mr. Aichele Tunera Shares to Purchaser 3 prior to or at the Closing Date by way of valid and binding execution of a separate transfer agreement (the " Mr. Aichele Tunera Shares Transfer Agreement ").

2.6        Consents

By a resolution dated November 22, 2005, a copy of which is attached as Annex 2.6 , the shareholders' meeting ( Gesellschafterversammlung ) of the Seller unanimously and irrevocably consented to the sale and transfer of the Seller Tunera Shares to Purchaser 2.

Section 3
Interim Period

3.1        No Deviation from the Ordinary Course of Business

3.1.2    From the date of this Agreement through the Closing Date (as defined in Section 4.1.1), the Seller shall ensure that the Era Business is operated only in the ordinary course of business, with the standard of care of a prudent merchant and consistent with prior practice and that there is no deviation from this ordinary course of business (except as expressly provided for in this Agreement or as otherwise expressly consented to in writing by any of the Purchasers). In particular, without limiting the foregoing, the Seller shall ensure that there is no deviation from this ordinary course of business (except as expressly provided for in this Agreement or as otherwise expressly consented to in writing by any of the Purchasers) by

(1)        incurring any obligation (schuldrechtliche Verpflichtung) or liability (Haftung) exceeding the amount of EUR 10,000 in the individual case, except current trade payables in connection with the purchase of goods or services in the ordinary course of business ( im gewöhnlichen Geschäftsbetrieb ) and consistent with prior practice;

(2)        mortgaging ( Bestellung einer Hypothek oder Grundschuld ), pledging ( Verpfändung ), assigning or transferring for security purposes ( Sicherungsabtretung oder Sicherungsübereignung ) or subjecting to liens ( Grundpfandrechte ), charges ( dingliche Belastungen ) or any other encumbrances ( dingliche Belastung ) any of its tangible or intangible assets ( materiellen oder immateriellen Vermögensgegenständen ) -- whether to be shown in the balance sheet or not ( bilanzierungsfähig ) --, in each case except as in accordance with the ordinary course of business and consistent with prior practice;

(3)        taking up any loans ( Darlehen ) or credits ( Kredit ) or receiving other financing ( Erhalt anderer Fremdfinanzierungen );

(4)        establishing any entity ( Gründung von Tochtergesellschaften ); acquiring or selling any participation ( Erwerb oder Veräußerung von Gesellschaftsbeteiligungen ) (including silent partnerships) in other entities or incurring the obligation to acquire or sell such participation;

(5)        entering into any company collective bargaining agreement ( Tarifvertrag );

(6)        performing any acts ( Handlungen ), or failing to perform any acts (Unterlassungen ), which would result in an increase of cash or cash equivalents (within the meaning of Sections 298, 266 para. 2 lit. B IV German Commercial Code ( Handelsgesetzbuch ), " Cash "), except if in the ordinary course of business and consistent with prior practice; in particular, the collection and sale of receivables ( Forderungen aus Lieferung und Leistung ), and the making of capital expenditures ( Investitionen ) shall only occur in a manner and at a time consistent with prior practice;

(7)        commencing any new branches of business ( Geschäftszweig ), abandoning of branches and closing of industrial premises or offices ( Betriebsstätten );

(8)        canceling, terminating or materially amending or modifying any Material Agreeement;

(9)        paying of any open or hidden dividends ( Dividenden) or making any other distribution ( Ausschüttung );

(10)      increasing or reducing the Target Companies' respective share capital ( Kapitalerhöhung oder Kapitalherabsetzung) , or issuing, granting or selling any options, rights or warrants with respect to shares;

(11)      entering into real estate transactions of any kind ( Erwerb oder Veräußerung oder Belastung von Immobilien ) and concluding, amending or prolonging any lease agreements relating to real estate ( Immobilienleasingverträge) ;

(12)      making any capital expenditures ( Investitionen) on fixed assets in excess of an aggregate of EUR 100,000 except as in accordance with the ordinary course of business and consistent with prior practice;

(13)      selling the Era Business in whole (within the meaning of Section 179a German Stock Corporation Act ( Aktiengesetz )) or in material parts, performing transactions under the German Transformation Act ( Umwandlungsgesetz ), resolving any amendments to or modifications of articles of association ( Beschluss über Satzungsänderung ) or entering into any agreements within the meaning of Section 291 et seq. of the German Stock Corporation Act or by similar transactions;

(14)      appointing or removing of, or extending of the powers of representation of, any managing director ( Geschäftsführer ) or Prokuristen;

(15)      issuing of any kind of personal guarantee ( Bürgschaft ), guarantee ( Schuldbeitritt ) or other assumption of liability ( Haftungsübernahme ) for the obligations of third parties ( Dritten );

(16)      concluding of exchange forward transactions ( Devisentermingeschäft ) other than a standard ancillary transaction concluded for the purposes of hedging the exchange rates ( Absicherung von Währungsrisiken) of the current business and the conclusion of any other speculative exchange transactions ( Spekulationsgeschäft ) of any kind;

(17)      concluding or amending of agreements or incurring of obligations ( Verpflichtungsgeschäft ) vis-à-vis, any shareholder, board member ( Geschäftsführer und/oder Mitglied eines Aufsichts-, Verwaltungs- oder Beirats) , senior member of staff, or member of the Seller's Group.

3.1.2    During the period set forth in Section 3.1.1, the Seller shall further procure that all necessary steps are taken to protect the assets and business prospects of the Era Business and that its goodwill is preserved and retained (including, in particular, the existing business relationships with customers and suppliers).

3.1.3    The Seller shall further refrain from any actions that may impair, jeopardize or impede the Closing. In particular, without limitation, the Seller shall not offer the shares or assets relating to the Era Business to third parties or transfer them to third parties.

3.1.4    The Seller shall (i) inform the Purchasers without undue delay ( unverzüglich ) of any fact, circumstance or occurrence (whether existing on or before the date of this Agreement or arising afterwards) which could constitute a Material Adverse Change (as defined in Section 4.3.1), render any Guarantee incomplete or incorrect assumed that such Guarantee would be repeated at any time before or at the Closing Date by reference to the facts and circumstances then existing or lead to any indemnity claim under this Agreement and, (ii) during the period set forth in Section 3.1.1, the Seller shall further inform the Purchasers prior to making any decision on or engaging in any major transaction which might substantially affect the business of at least one of the Target Companies or the Era Business, in which case the Seller also shall, or shall cause the relevant Target Company to, provide all relevant information requested by the Purchasers without undue delay.

3.2        Existing Agreements

The Seller covenants that, unless otherwise provided for in this Agreement, all agreements between any of the Target Companies on the one hand and the Seller or its Affiliated Companies or the Seller's Guarantor or Dr. Baumgartner or their spouses or relatives as defined in Section 138 German Insolvency Code ( InsO ) on the other hand are terminated with effect as of a date prior to, or at, the Closing Date, free of any costs or charges and entailing no obligation to pay any damages or other compensation on part of the Target Companies or Technitrol Group.

3.3        Intra-group Liabilities

The Seller, the Seller's Guarantor and Dr. Baumgartner shall have fulfilled ( erfüllen ) and discharged ( ablösen ) any liabilities ( Verpflichtungen ) vis-à-vis the Target Companies and the Seller, the Seller's Guarantor and Dr. Baumgartner shall ensure that the Target Companies shall have fulfilled and discharged any liabilities vis-à-vis the Seller, the Seller's Guarantor and Dr. Baumgartner prior to or at the Closing Date irrespective of their due date. The Seller and the Seller's Guarantor further covenant that the other entities of the Seller's Group (except the Target Companies) shall have fulfilled and discharged any liabilities vis-à-vis the Target Companies prior to or at the Closing Date irrespective of their due date, or the Seller and the Seller's Guarantor shall, at their discretion, have fulfilled and discharged these liabilities as a "third party" within the meaning of Section 267 German Civil Code prior to or at the Closing Date.

3.4        Transition of Business

The Seller and the Seller's Guarantor covenant that the Era Business is duly lead over to the Purchasers upon Closing, in particular, without limitation, that any information necessary for the Purchasers or the managing directors of the Target Companies is available in order to effect a seamless transition.

3.5        Indemnification

The Seller shall -- irrespective of any fault on its part ( verschuldensunabhängig ) -- indemnify ( freistellen ) and hold harmless ( schadlos halten ) the Purchasers and/or, at the Purchasers' absolute discretion, any of the Target Companies, from and against any and all losses arising out of or in connection with a breach of any of the covenants and obligations set forth in this Section 3.

Section 4
Closing

4.1        Closing Date

4.1.1    The Parties shall effect the consummation of the transactions contemplated by this Agreement (heretofore and hereinafter referred to as the " Closing ") on January 2, 2006 or as soon as practicable after the date on which the Joint Closing Condition set forth in Section 4.2 has been satisfied. The aforesaid shall not apply if any of the Negative Closing Conditions set forth in Section 4.3 occurs unless Purchaser 1 (on behalf of the Purchasers) demands the Closing regardless of the occurrence of any Negative Closing Condition pursuant to Section 4.4.

The date on which the Closing occurs shall heretofore and hereinafter be referred to as the " Closing Date ".

4.1.2    The Closing shall take place at the offices of OPPENLÄNDER Rechtsanwälte at Altenbergstr. 3, 70180 Stuttgart or at any other place the Parties will have agreed upon in written form (including telefax).

4.2        Joint Closing Condition

The obligation to carry out the Closing shall be subject to the satisfaction of the following condition to Closing (heretofore and hereinafter referred to as the " Joint Closing Condition "):

The German Federal Cartel Office ( Bundeskartellamt ) has cleared the transactions contemplated under this Agreement. This condition shall be deemed satisfied if

(1)        any of the Purchasers and/or the Seller and/or Mr. Aichele has received a written notice from the German Federal Cartel Office according to Section 36 of the German Act Against Restraints on Competition ( GWB ) that it will not prohibit the acquisition, or

(2)        the German Federal Cartel Office fails to notify any of the Purchasers and/or the Seller and/or Mr. Aichele within one month after the pre-merger filing in accordance with Section 40 para. 1 clause 1 GWB that it has commenced a formal investigation of the proposed acquisition, or

(3)        the German Federal Cartel Office fails to issue an order in accordance with Section 40 para. 2 clause 1 GWB to any of the Purchasers and/or the Seller and/or Mr. Aichele within four months after receipt by the Federal Cartel Office of the pre-merger filing, and no extension of the four-month period has been agreed with the Federal Cartel Office.

Neither any of the Purchasers nor the Seller nor Mr. Aichele shall grant their consent and approval to any extension of the waiting periods without the prior written consent of the respective other Parties involved.

4.3        Negative Closing Condition

            The Purchasers shall not be obliged to carry out the Closing if any of the following circumstances (heretofore and hereinafter collectively referred to as " Negative Closing Conditions " and each of them as a " Negative Closing Condition ") has occurred:

4.3.1    Any change, circumstance, event or effect has occurred with respect to any of the Target Companies and/or any of their businesses and/or the Era Business that -- individually or in the aggregate with other adverse changes or circumstances -- has, or may reasonably be expected to have, a material adverse effect on the assets and liabilities ( Vermögenslage ), financial condition ( Finanzlage ), results of operation ( Ertragslage ), or business operations and prospects, of any of the Target Companies or the Era Business other than circumstances arising out of general economic conditions generally affecting companies in the business in which the Target Companies operate (hereinafter referred to as " Material Adverse Change ").

Without limiting the foregoing sentence, it is understood that a Material Adverse Change will be deemed to have occurred if the Target Companies fail to achieve any of the following goals:

(1)        achieve not less than 95% of the revenues and not less than 90% of the inventory build for each of ignition coils, coils and transformers as set forth by category in Annex 4.3.1(1) during the period between October 1, 2005 and December 23, 2005;

(2)        based on the consumption schedule available at the customers' website, receive rolling forecasts for the shipment of ignition coils from VW/Audi and BMW for the period between January 2, 2006 and February 24, 2006 of at least 560,000 units.

4.3.2    At least one of the Guarantees is

(1)       at the date of this Agreement incomplete or incorrect in material respects or

(2)       at the Closing Date -- assumed that such Guarantee would be made as of the Closing Date -- incomplete or incorrect in material respects.

4.3.3    Any other obligations contained in this Agreement to be fulfilled or complied with by the Seller and/or Mr. Aichele on or before the Closing Date (including its obligation to effect and carry out the Closing subject to the provisions set forth in this Section 4, particularly Section 4.7) has not been fulfilled or complied with in all respects.

4.4        Closing despite Negative Closing Conditions

The Seller and Mr. Aichele shall, upon request by Purchaser 1 (on behalf of the Purchasers), be obliged to carry out the Closing regardless of whether any or all of the Negative Closing Conditions have occurred. Any such request shall not preclude the exercise of any other right or remedy of the Purchasers under this Agreement.

4.5        Obligations with Respect to the Closing Conditions

The Parties shall inform each other (by written notice of the Seller to Purchaser 1 on behalf of the Purchasers or by written notice of Purchaser 1 on behalf of the Purchasers to the Seller) without undue delay ( unverzüglich ) in each case as soon as the Joint Closing Condition has been satisfied. The Seller shall inform the Purchasers (by written notice to Purchaser 1) without undue delay ( unverzüglich ) in each case as soon as any Negative Closing Condition has occurred or its occurrence is imminent.

4.6        Consequences of Non-Satisfaction of the Joint Closing Conditions and Occurrence of Negative Closing Conditions

1. 1. 1. Both the Seller and the Purchasers shall have a right to withdraw from ( zurücktreten ) this Agreement by written notice by the withdrawing Party (in case of the Purchasers by Purchaser 1 on behalf of the Purchasers) to the respective other Party if the Joint Closing Condition has not been satisfied, at the latest, on May 31, 2006.
      2. The Purchasers shall further have the right to withdraw from this Agreement (by written notice of Purchaser 1 on behalf of the Purchasers to the Seller) if at least one Negative Closing Condition has occurred prior to the Closing.
      3. If (i) the Purchasers withdraw from this Agreement due to the occurrence of a Negative Closing Condition and (ii) such Negative Closing Condition did not arise out of circumstances which were beyond the Seller's control, then the Seller shall reimburse and indemnify the Purchasers from and against any costs and expenses incurred in connection with the preparation, negotiation and execution of the transactions contemplated in this Agreement, but shall in any event pay an amount of EUR 1,000,000. For the avoidance of doubt, the payment of the aforementioned amount shall not preclude any other claims of the Purchasers made due to the occurrence of such Negative Closing Condition, however, the amount which the Purchasers may claim thereunder shall be reduced by this amount of EUR 1,000,000.
      4. If the Seller withdraws from this Agreement based on a right to withdraw under this Agreement (except in case of a withdrawl pursuant to Section 4.6.1), then Purchaser 1 (on behalf of the Purchasers) shall reimburse and indemnify the Seller from and against any costs and expenses incurred in connection with the preparation, negotiation and execution of the transactions contemplated in this Agreement, but shall in any event, pay an amount of EUR 1,000,000, provided, however, that the forgoing only applies if (i) the reason for the Seller's withdrawal was not due to circumstances which were beyond the Purchasers' control and (ii) Seller and Mr. Aichele have fulfilled all of their duties prior to or at Closing, particularly those under this Section 4. For the avoidance of doubt, the payment of the aforementioned amount shall not preclude any other claims of the Seller due to such circumstances not beyond the Purchasers' control, however, the amount which the Seller may claim thereunder shall be reduced by this amount of EUR 1,000,000.

4.7        Closing

At the Closing the following actions shall be taken simultaneously:

4.7.1    The Seller shall deliver a letter personally signed by the managing directors of the Seller and the Target Companies at the Closing Date, in which it is confirmed that no Negative Closing Condition has occurred until signing of this letter, provided, however, Purchasers may still prove the occurrence of a Negative Closing Condition even after this letter has been delivered to the Purchasers.

4.7.2    The Seller shall deliver to the Purchasers

(1)        duly executed originals of (i) resignation letters of Mr. Aichele as managing director of any of the Target Companies and Mr. Andreas Wagner as managing director of Eraplast Tunisia (such resignation letters being substantially in the form of the draft attached as Annex 4.7.2(1) and (ii) a revocation ( Widerruf ) letter of Mrs. Christl Aichele-Schnabel as Prokurist of Era Elektrotechnik (such revocation letter being substantially in the form of the draft attached as Annex 4.7.2(1)) and (iii) confirmations by Mr. Aichele and Mrs. Christl Aichel-Schnabel that they have no claims outstanding against the respective Target Company;

(2)        duly executed originals of (i) agreements satisfactory to the Purchasers relating to the Cable Shield Exclusion pursuant to which the Excluded Cable Shield Assets listed in Annex 4.7.2(2) are sold and transferred out of the Target Companies prior to or at the Closing Date and (ii) of a tolling agreement between Tunera and the transferee of the Cable Shield Assets as listed in Annex 4.7.2(2) providing for the manufacture of the cable shield products by Tunera (using Seller's inventory belonging to the Cable Shield Assets) for a period of three months subject to an extension of this agreement's term by a period of up to nine months, it being understood that the Cable Shield Assets and the pertaining business shall be removed from the real estate listed in Annex 7.4.1.a at the end of the tolling agreement's term;

(3)        a duly executed original of an agreement pursuant to which certain assets of Transera Electronics Inc., Canada, which are listed in Annex 4.7.2(3) (the " Canadian Era Assets ") are sold and transferred to Pulse Canada Limited, Canada or, at the Purchasers' absolute discretion, to any other company of the Technitrol Group prior to or at the Closing Date;

(4)        (i) a copy of a duly executed agreement pursuant to which certain assets of era advanced electrics (Suzhou) Ltd., China which are listed in Annex 4.7.2(4) (the " Chinese Era Assets ") are sold and transferred to LK Products (Suzhou) Telecommunications Components Co., Ltd., China, or, at the Purchasers' absolute discretion, to any other company of the Technitrol Group prior to or at the Closing Date, it being understood that the required approval of such sale and transfer by competent Chinese authorities shall not be required for a due execution within the meaning of this Section 4.7.2(4) and (ii) duly executed originals of a tolling agreement between era advanced electrics (Suzhou) Ltd., China and LK Products (Suzhou) Telecommunications Components Co., Ltd., China on at arm's length hourly rates for the services provided thereunder and with a period of three months; the tolling agreement shall further provide for an obligation to agree ( Verhandlungspflicht ) on the extension of this agreement's term by a period of up to nine months in the event such extension is required to continue the business pertaining to the Chinese Era Assets or, in the event the approval by the competent Chinese authorities will not have been granted by then, for a period required to obtain such approval, it being understood that the Chinese Era Assets and the pertaining business is removed from the real estate currently used by era advanced electrics (Suzhou) Ltd. a as soon as possible; the Seller shall ensure that the approval by the Chineses authorities can be obtained as soon as possible;

(5)        duly executed originals of agreements pursuant to which the employees of the Era Business in France listed in Annex 4.7.2(5) have been validly transferred to Pulse S.A.S. or, at the Purchasers' absolute discretion, to any other company of the Technitrol Group prior to or at the Closing Date by way of (i) valid cancellation agreements ( Aufhebungsvereinbarungen ) and (ii) entering into new employment agreements the term of which commences as from the Closing Date (the " Transfer of French Employees ");

(6)        a duly executed original of an agreement with Advanced Hungary satisfactory to the Purchasers regarding the provision of certain IT services (the " IT Services Agreement Hungary ") having a term commencing as of the Closing Date;

(7)        a duly executed letter from the Seller, the Seller's Guarantor and Dr. Baumgartner that all intra-group liabilities have been fulfilled in accordance with Section 3.3 prior to or at the Closing Date;

(8)        duly executed originals of cancellation agreements ( Aufhebungsvereinbarungen ) regarding non-compete obligations, taking effect as of the Closing Date, (substantially in the form attached as Annex 4.7.2(8 )) with those employees of the Target Companies with employment agreements containing an unenforceable non-compete obligation (such employees being listed in Annex 4.7.2(8) ) or, in the event that any of these employees should not have agreed to enter into a cancellation agreement prior to the Closing Date, alternatively, duly executed originals of waivers of the respective non-compete rights declared (substantially in the form attached as Annex 4.7.2(8)) , prior to or at the Closing Date, by such employees' employing Target Company pursuant to Section 75a German Commercial Code;

(9)                    evidence that any remaining liabilities and obligations of Era PowerTrain or any other Target Company from litigation, or the settlement of litigation, against Era PowerTrain or any other Target Company involving (i) Siemens Electronic Design and Manufacturing Services GmbH & Co. KG, (ii) Ferriere di Stabio S.A. and (iii) VW/Audi as specified in Section 11 have been fully settled and fulfilled ( erfüllt ) prior to or at the Closing Date Date in the form of copies of letters of the respective claimants ( Gläubiger ) confirming receipt of payment and fulfillment of all remaining liabilities and obligations of the respective Target Company and, in addition, a duly executed letter from the Seller dated as of the Closing Date, which confirms to the Purchasers that there are no other remaining liabilities and obligations of Era PowerTrain or any other Target Company from litigation, or the settlement of litigation, against Era PowerTrain, or any other Target Company, which have not been fully settled and fulfilled ( erfüllt ) prior to or at the Closing Date; without limiting the foregoing, the Seller shall particularly provide evidence in the aforementioned form that Era PowerTrain has made the following payments required in each of these litigation/settlement cases:

(1)        EUR 70,000 to Siemens EDM;

(2)        EUR 27,500 to Ferriere die Stabio S.A.; and

(3)        EUR 50,000 to VW/Audi;

(10)      copies of duly executed pay-off letters by all banks or other similar financial institutions having current or future claims ( gegenwärtige oder künftige Ansprüche ) against any of the Target Companies in relation to Fundet Debt (as defined below) and a duly executed letter from the Seller to the Purchasers, in both cases confirming that, as of the Closing Date, none of the Target Companies has any obligations or liabilities from any borrowings in the nature of indebtedness including, inter alia , all interest and non-interest bearing debt obligations owed to banks or other similar financial institutions and capital leases (hereinafter referred to as " Funded Debt "), which shall further include the confirmation that, as of the Closing Date at the latest, none of the Target Companies bears any costs, charges, obligations or liabilities, interest, in particular, but not limited to, damages, penalties, prepayment fees ( Vorfälligkeitsentschädigung ) or other compensation for early termination, from any agreement relating to Funded Debt;

(11)      duly executed originals of cancellation agreements ( Aufhebungsvereinbarungen ) substantially in the form attached as Annex 4.7.2(11) between the employing Target Company and the managing directors and Prokuristen, in particular Mrs. Aichele-Schnabel, listed in Annex 4.7.2(11) who are currently employed by any of the Target Companies (or in relation to whom there are possibly -- e.g. in addition to written employment or service agreement with a company of the Seller's Group (except the Target Companies) -- (oral) employment or service agreements existing between these persons and any of the Target Companies) but who shall not transfer to the Purchasers by the transactions contemplated in this Agreement;

(12)      duly executed originals of the cancellation agreements ( Aufhebungsvereinbarungen ) between the Seller and the Target Companies on the one hand and Dr. Baumgartner on the other hand regarding Dr. Baumgartner's service agreements substantially in the form attached as Annex 4.7.2(12)(a) ; (a) duly executed original(s) of the new service agreement(s) between Dr. Baumgartner and any of the German Era Companies or Purchaser 1 or any other Company of the Technitrol Group substantially containing, inter alia , the terms as described in Annex 4.7.2(12)(b);

(13)      duly executed originals of sale and transfer agreements regarding the Seller IP Rights listed in Annex 4.7.2(13) pursuant to which such Seller IP Rights are validly sold and transferred to the Target Companies or a Target Company prior to or at the Closing Date;

(14)      copies of duly executed originals of (i) the notarial Seller Tunera Shares Transfer Agreement substantially in the form attached as Annex 4.7.2(14)(a) , (ii) the notarial Mr. Aichele Tunera Shares Transfer Agreement substantially in the form attached as Annex 4.7.2(14)(b) , (iii) a resolution of the shareholders' meeting of Tunera (substantially in the form attached as Annex 4.7.2(14)(c) ) validly approving the aforementioned share transfers in accordance with Tunisian law and (iv) notifications of the aforementioned share transfers to the management and the shareholders of Tunera in accordance with Tunisian law and substantially in the form attached as Annex 4.7.2(14)(d);

(15)      duly executed original of an interim lease agreement between Pulse Canada Limited (as tenant) and Mrs. Aichele-Schnabel (as landlord) pertaining to the building currently used for the operation of the business relating to the Canadian Era Assets and providing for (i) at arm's length terms substantially as applied under the current lease agreement and (ii) a term of six months as from the Closing Date;

(16)      duly executed originals of shareholders' resolutions of the Target Companies dated as of the Closing Date formally approving all actions of Mr. Aichele, Dr. Baumgartner and Mrs. Aichele-Schnabel as managing directors and/or Prokurist ( Entlastungsbeschlüsse ) of the respective Target Company, such resolutions, for the avoidance of doubt, not precluding any claims of the Purchasers against the Seller or the Seller's Guarantor under this Agreement;

(17)      sufficient evidence that the net book value of each piece of equipment (or clusters of pieces of equipment forming a single production line) used in the ERA Business which has not been operated at Capacity has been reduced to zero on the financial books ( Handelsbücher, nicht Steuerbilanz ) of the respective Target Company owning such equipment on or before the day prior to the Closing Date. " Capacity " shall mean 80% of the average theoretical two shift production hours at 7.5 hours/shift for each such piece of equipment for the 90 consecutive Business Days preceding the Closing Date; and

(18)      duly executed originals of agreements satisfactory to the Purchasers pursuant to which (i) the Wagner Eraplast Shares as described in Section 1.3.1 are effectively sold and transferred to Era Elektrotechnik and/or another Target Company prior to or at the Closing Date and (ii) satisfactory assurances that Mr. Papadopoulus, currently working for Eraplast Tunisia by way of employee leasing ( Arbeitnehmerüberlassung ) by Mr. Andreas Wagner or any of his affiliated companies, in particular Fa. Weisshaar, will continue to work for Eraplast Tunisia for an interim period of 90 days from the Closing Date at the same salary and benefits as he is receiving on the date of this Agreement.

4.7.3    Purchasers shall effect payment of the Preliminary Purchase Price to the Seller, Mr. Aichele and/or the entities listed in Section 5.2 in accordance with Section 5.

4.8        Closing Despite Lack of Certain Closing Actions

Upon demand of Purchaser 1 (on behalf of the Purchasers), the Seller and Mr. Aichele shall be obliged to carry out the Closing by performing the actions to be taken by the Seller and Mr. Aichele set forth in this Sections 4 even if any action or any actions set forth in Section 4.7 have not been performed at the Closing Date. Any Closing according to the foregoing sentence shall not preclude the exercise of any other right or remedy of the Purchasers under this Agreement.

4.9        Joint Closing Statement; Acquisition of Control

Following performance by the Parties of their obligations pursuant to this Section 4, the Parties shall sign a joint declaration confirming that Closing has taken place ( Gemeinsame Bestätigung des Closing-Eintritts ) and that all conditions precedent ( aufschiebende Bedingungen ) pursuant to Sections 1.6 above have been properly fulfilled. For the avoidance of doubt, upon receipt of payment of the Preliminary Purchase Price in accordance with Section 5, control of the Era Business shall pass from the Seller and Mr. Aichele to the Purchasers.

Section 5
Preliminary Purchase Price; Conditions of Payment

5.1        Preliminary Purchase Price

The total purchase price to be paid by Purchasers for the Era Business as sold and purchased hereunder, subject to adjustments as provided for in Section 6, shall be an amount of EUR 49,200,000 (the " Headline Price ").

For the purposes of establishing any further adjustment to the purchase price to be paid at Closing, the Seller shall, at the latest five (5) days, but no earlier than ten (10) days, before the Closing Date, prepare in accordance with (i) applicable German generally accepted accounting principles (German GAAP, hereinafter referred to as the " Accounting Principles ") and reflecting the actions described in Section 4.7.2(17) and (ii) the valuation policy referred to in Section 6.6(1) and deliver to the Purchasers a good faith estimate of the Closing Balance Sheet, as defined below, (the " Estimated Closing Balance Sheet ") and an estimate of the Consolidated Working Capital using the Estimated Closing Balance Sheet (the " Estimated Consolidated Working Capital "). Consolidated Working Capital shall have the meaning set forth in Section 6.7.

If the Estimated Consolidated Working Capital is less than EUR 5,900,000 (the deficiency being the " Estimated Consolidated Working Capital Deficiency "), the amount to be paid at Closing shall be the Headline Price less the Estimated Consolidated Working Capital Deficiency , resulting in the purchase price to be paid at Closing (the " Preliminary Purchase Price ").

In any case, the Preliminary Purchase Price shall be reduced by the Retention Amount as defined in Section 5.3.

5.2        Payment of Preliminary Purchase Price

5.2.1    Notwithstanding Purchasers' obligation to pay the Preliminary Purchase Price pursuant to Section 5.1, and notwithstanding any allocation of the Preliminary Purchase Price among the Purchasers or within Technitrol Group, actual payment of the Preliminary Purchase Price shall be made in accordance with a fund flow plan to be agreed upon by the Parties at least five (5) days prior to the Closing Date (the "Fund Flow Plan" ). The Parties agree that the Fund Flow Plan and any purchase prices provided for in any of the transfer agreements referred to in Section 4.7.2(3), (4) and (14) shall constitute a payment allocation only which does not necessarily reflect a value relation of the shares and assets sold. In case of contradiction between the purchase price provisions in the agreements referenced in the foregoing sentence and allocations in the Fund Flow Plan, the latter shall prevail. The Preliminary Purchase Price as allocated in the Fund Flow Plan may be made by one or more Purchasers and may not only be effected by the Purchasers but also by Technitrol Inc., PA, USA or any company of the Technitrol Group as a "third party" within the meaning of Section 267 German Civil Code.

5.2.2    If the Headline Price is to be reduced by the Estimated Consolidated Working Capital Deficiency, the Parties shall agree on an allocation of this reduction in the Fund Flow Plan.

5.3        Retention Amount

Of the Preliminary Purchase Price, an amount of EUR 3,000,000 shall be retained by the Purchasers for a period of one year from the Closing Date in the full amount and thereafter for a further period of one year in the amount of EUR 2,000,000 (and the remainder of EUR 1,000,000 to be released to the Seller pursuant to Section 5.3.4) on the following terms (the respective amount the " Retention Amount " ( Sicherungseinbehalt ), the respective period the " Retention Period " ( Sicherungsperiode )):

5.3.1    To the extent that, prior to the expiry of the Retention Period, any Purchaser shall have given a Breach Notice or notified the Seller or the Seller's Guarantor by written notice of any claims pursuant to Sections 9 through 11 and/or any other claims of the Purchasers against the Seller or the Seller's Guarantor under this Agreement (each such claim a " Claim ") and the amount of any such Claim has been agreed by the Seller (or the Seller's Guarantor) and the Purchaser (or finally determined pursuant to Section 6.4 or in the proceedings pursuant to Section 21.2), the respective Purchaser may satisfy such Claim out of the Retention Amount and the Retention Amount shall be reduced accordingly.

5.3.2    At the end of the Retention Period, any Purchaser, at the Purchaser's discretion, shall release its remaining part of the Retention Amount less the aggregate amount of any Claims which have been notified by the respective Purchaser to the Seller or the Seller's Guarantors prior to the expiry of the Retention Period and in respect of which proceedings pursuant to Section 21.2 have been commenced but not completed prior to the expiry of the Retention Period (the " Ongoing Claims ").

5.3.3    The amount of each Ongoing Claim may be retained by Purchaser 1 until this Ongoing Claim has been finally determined (whether by way of proceedings pursuant to Section 21.2 or by agreement between Seller (and/or the Seller's Guarantor) and Purchaser 1 (on behalf of the Purchasers), following which it shall be released or retained permanently by Purchaser 1 (as applicable).

5.3.4    Each amount required to be released pursuant to Sections 5.3 sentence 1, 5.3.2 or 5.3.3 above shall fall due for payment on the fifth Business Day (each such date a " Retention Amount Due Date ") ( Auszahlungstermin des Sicherungseinbehalts ) after the date on which it was due to be released pursuant to Sections 5.3 sentence 1, 5.3.2 or Section 5.3.3 and shall be paid together with interest thereon at the applicable rate pursuant to Section 247 German Civil Code ( Bürgerliches Gesetzbuch, BGB ) for the period from the Closing Date until (but excluding) the relevant Retention Amount Due Date.

5.4        Payment Modalities

All amounts to be paid under this Section 5 or otherwise under or in connection with this Agreement shall be paid free of costs and charges in immediately available funds by wire transfer with value on the relevant due date ( mit Wertstellung zum jeweiligen Fälligkeitstag ) to the following account of the Seller:

Account number: xxxxxx

Bank code: xxxxxx

SWIFT Code: xxxxxx

IBAN: xxxxxxx with Sparkasse Pforzheim-Calw,

to the extent paid to Mr. Aichele pursuant to Section 5 or otherwise under or in connection with this Agreement, to the following account of Mrs. Christl Aichele-Schnabel:

Account number: xxxxxx

Bank code: xxxxxx

SWIFT Code: xxxxxx

IBAN: xxxxxx with Hypovereinsbank,

to the extent paid to era advanced electrics (Suzhou) Ltd., China, pursuant to Section 5 or otherwise under or in connection with this Agreement to the following account of era advanced electrics (Suzhou) Ltd., China:

Account number: xxxxxx

SWIFT Code: xxxxxx

IBAN: xxxxxx with Bank of China (328 Dong Huan Road 215021 Suzhou/China),

and, to the extent paid to Transera Electronics Inc., Canada, pursuant to Section 5 or otherwise under or in connection with this Agreement to the following account of Transera Electronics Inc., Canada:

Account number: xxxxxx

SWIFT CODE: xxxxxx

IBAN: xxxxxx with TD Canada Trust Commercial Banking (15 King Street South, N2J 1N9 Waterloo, Ontario, Canada).

5.5        Default Interest

Amounts which have become due and payable ( zur Zahlung fällig ) under or in connection with this Agreement and which are not paid on the due date ( Fälligkeitstag ) shall bear interest from (and including) the due date ( Fälligkeitstag ) until (but excluding) the date of receipt of payment (receipt of payment being determined by reference to the date of value ( Tag der Wertstellung )) at the rate of 8 percentage points above the applicable base rate set forth in Section 247 German Civil Code. The right of any Party to claim damages for delay ( Verzugsschaden ) shall remain unaffected by the foregoing sentence.

5.6        Calculation of Interest

Interest payable under or in connection with this Agreement shall be calculated on the basis of actual days elapsed and a 360-day year.

5.7        Monetary Amounts

For the purposes of determining whether a monetary limit or threshold contained in this Agreement has been reached or exceeded, the value of any relevant claim expressed in a currency other than Euros shall be translated into Euros at the European Central Bank fixing rates published shortly after 2.15 p.m. (German time) on the date on which the relevant claim is asserted in writing.

5.8        Business Day

For the purposes of this Agreement, " Business Day " means a day on which banks are open for business in Frankfurt am Main.

Section 6
Purchase Price Reduction

6.1        Purchase Price Reduction

The Preliminary Purchase Price shall be reduced after the Closing pursuant to this Section 6 (hereinafter referred to as the " Purchase Price Reduction ").

6.2        Closing Balance Sheet

Within thirty days after the Closing Date, the Purchasers shall prepare and deliver to the Seller (by delivery of Purchaser 1 on behalf of the Purchasers) a consolidated balance sheet of the Target Companies (except EMC) as of the Closing Date (the " Closing Balance Sheet "), audited by KPMG, LLP and prepared in accordance with the Accounting Principles consistent with each of the Target Companies' past practices (but only to the extent such past practices are consistent with the applicable Accounting Principles but, in any case, reflecting the actions described in Section 4.7.2(17), and the inventory valuation methods described in Section 6.6(1)) from which the Consolidated Working Capital shall be computed.

6.3        Accountant's Access , Notification of Disagreement

The Purchasers will give the Seller and its designated accountant access to the premises of the Target Companies and to their books and records and to the appropriate personnel for purposes of confirming the Closing Balance Sheet. Unless the Seller notifies the Purchasers (by written notification to Purchaser 1 on behalf of the Purchasers) that the Seller disagrees with the Closing Balance Sheet within thirty days after receipt thereof, the Closing Balance Sheet shall be conclusive and binding on the Parties.

6.4        Final Determination of Closing Balance Sheet

If the Seller notifies the Purchasers (by written notification to Purchaser 1 on behalf of the Purchasers) of their disagreement with the Closing Balance Sheet within this 30-day period, then the Purchasers and the Seller shall attempt in good faith to resolve their differences with respect thereto within thirty days after Purchaser 1's receipt of Seller's written notice of disagreement. Any dispute regarding the Closing Balance Sheet not resolved by the Purchasers and the Seller within such 30-day period will be resolved by the German branch of Ernst & Young, LLP or, failing its ability to act, the German branch of Deloitte & Touche, LLP (the " Final Audit Firm "). The Purchasers, on the one hand, and the Seller, on the other hand, each represent and warrant to the other that neither they nor their Affiliated Companies currently have any material audit, advisory, tax or other relationship with the Final Audit Firm. At the date of appointment of the Final Audit Firm, the Purchasers and Seller will restate such representation and warranty as at this date. If, for any reason, any of them is unable to make such a representation and warranty, the Seller and the Purchasers shall select such other major accounting firm as they may agree to serve as the Final Audit Firm; it being understood that neither the Purchasers and their Affiliated Companies, on the one hand, nor the Seller and its Affiliated Companies on the other hand, have any material audit, advisory, tax or other relationship with such accounting firm as above selected to serve as the Final Audit Firm. The determination by the Final Audit Firm of the Closing Balance Sheet (with such modifications therein, if any, as reflect such determination), which shall be made as promptly as possible, but in no event later than thirty days after the date of the Final Audit Firm was retained, shall be conclusive and binding upon the Parties. This shall be the sole and exclusive remedy for a dispute under this Section 6.4. For the avoidance of doubt, the dispute resolution provisions under Section 21.2 are not applicable to disputes under this Section 6.

The Final Audit Firm's determination shall be based on the Accounting Principles consistent with the Target Companies' past practices (but only to the extent the Target Companies' past practices are consistent with the Accounting Principles and the inventory valuation methods described in Section 6.6(1) but taking into account the depreciation as described in Section 4.7.2(17). The fees and expenses of the Final Audit Firm in acting under this Section 6.4 shall be shared equally by the Purchasers on the one hand and Seller on the other hand.

6.5        Consolidated Working Capital Deficiency Adjustment

If the Consolidated Working Capital using the Closing Balance Sheet prepared in accordance with this Section 6 is less than EUR 5,900,000 (the " Consolidated Working Capital Deficiency "), then the Seller shall pay to Purchaser 1 or, at Purchaser 1's absolute discretion, to Technitrol Inc., PA, USA or any company of Technitrol Group an amount in Euros equal to the Consolidated Working Capital Deficiency. Payment shall be made by the Seller not more than fifteen (15) days following the determination of the Closing Balance Sheet pursuant to Section 6.2, and the amount of this payment shall bear interest from the Closing Date to the date of payment at the rate of 8 percentage points above the applicable base rate set forth in Section 247 German Civil Code.

6.6        Inventory

The quantity and valuation of the inventory of the Target Companies as of the Closing Date shall be determined for purposes of calculating the Closing Balance Sheet pursuant to Section 6.2 as follows:

(1)       the value of the inventory as of the Closing Date shall be determined from the books and records of the Target Companies and in accordance with the Accounting Principles and the Purchasers' valuation policy attached as Annex 6.6(1) ;

(2)       a physical inventory shall be taken on the Closing Date in accordance with the procedures attached as Annex 6.6(2) ; and

(3)       any disagreement regarding the value of the inventory shall be resolved in the manner and at the time described in Sections 6.2 through 6.4.

6.7        Consolidated Working Capital and Eraplast Netting

6.7.1    " Consolidated Working Capital " shall mean with respect to the Target Companies, the difference between: (A) the sum of (i) trade accounts receivable (net of related reserves) plus (ii) inventories (net of related reserves) plus (iii) other receivables (excluding VAT and other Tax receivables) plus (iv) prepaid accounts, minus (B) the sum of (i) trade accounts payable plus (ii) other payables (excluding VAT and other Tax related payables plus (iii) accrued expenses.

6.7.2    For purposes of the preparation of both the Closing Balance Sheet and the calculation of Consolidated Working Capital, (i) all accounts between Eraplast Tunisia and the German ERA Companies and/or the Tunisian Era Companies will be settled in their entirety so that there are no related accounts receivable, accounts payable, loan balances or other balances between them whatsoever and (ii) all accounts between Eraplast Tunisia, the Tunisian Era Companies and/or the German ERA Companies on the one hand and Mr. Andreas Wagner and/or any of his affiliated companies (that is, those which he controls, is controlled by or is under common control with), and in particular Fa. Weisshaar, on the other hand, will be settled in their entirety so that there are no accounts receivable, accounts payable, loan balances or other balances between them whatsoever.

 

Section 7
Guarantees

The Seller hereby guarantees to each of the Purchasers, subject to the requirements and limitations provided in Section 8 or otherwise in this Agreement, by way of an independent promise of guarantee ( selbständiges Garantieversprechen ) in accordance with Section 311 Para. 1 German Civil Code (hereinafter collectively referred to as the " Guarantees " and each of them as a " Guarantee ") that the statements set forth below are, in case of each of such statements, complete and correct as of the date of this Agreement and as of the Closing Date -- unless it is specifically provided for in a Guarantee that the Guarantee is made as of a different date --, it being understood that (i) the statements shall not constitute a quality guarantee concerning the object of the purchase within the meaning of Section 444 German Civil Code ( Garantie für die Beschaffenheit der Sache ) nor covenants concerning the object of the purchase (Beschaffenheitsvereinbarungen) within the meaning of Section 434 para. 1 sentence 1 German Civil Code, and (ii) the provisions contained in Section 8 hereof do not contain any exclusions (Ausschlüsse) or limitations (Beschränkungen) within the meaning of Section 444 German Civil Code (as amended) but rather form an integral part of the Guarantees:

7.1        Corporate Issues and Authority of the Seller

7.1.1    Each of the Target Companies has been duly established under the laws of its respective jurisdiction of incorporation. Each of the Target Companies validly exists and each of the Target Companies has its actual center of administration in its respective country of incorporation. Each of the Target Companies has corporate power and authority to carry on its business.

7.1.2    The statements made in the Recitals and Sections 1.1 through 1.3 and in Sections 2.1 and 2.2, including, without limitation, with respect to the Target Companies, their respective registered share capital ( Stamm-, Grundkapital) and division of the share capital ( Einteilung der Geschäftsanteile/Aktien ) are complete and correct. The share capital of each of the Target Companies (excluding EMC) and the EMC Share is fully paid-in, non-assessable ( keine Nachschußpflicht ), and no repayments or refunds, neither openly nor concealed, contravening the applicable provisions on capital preservation, have been made. Capital contributions to the Group Shares have not been reduced or impaired by losses. All applicable provisions under applicable law and articles of association regarding the increase or decrease of the share capital of the Target Companies have been duly observed without compensation by later profits. The incorporations of the Tunisian Era Companies and the subscription in their share capital have been made in accordance with the Tunisian foreign exchange regulations and the Tunisian Era Companies benefit of the status of non-resident companies (sociétés non residents ). As a consequence, the Purchasers will be in a position to freely repatriate their dividends. None of the transactions under this Agreement will result in a modification of the Tunisian Era Companies' exchange status.

7.1.3    Attached hereto as Annex 7.1.3.a are true and complete articles of association ( Satzung ) and any shareholders' agreements ( Gesellschaftervereinbarungen ) of the Target Companies. Such articles of association and shareholders' agreements are presently valid and in full force and effect. Any facts and other documents required by applicable law to be filed with the competent commercial register or other comparable authorities have been completely, duly and timely filed. Attached hereto as Annex 7.1.3.b are true, complete and correct recordings of the competent commercial registers ( Handelsregisterauszüge ) or other comparable authorities regarding the Target Companies. There are no resolutions or other actions which are not reflected in the excerpts from the commercial register or other comparable authority contained in Annex 7.1.3.b that under the applicable law have to be registered in the commercial register ( eintragungspflichtige Tatsachen ).

7.1.4    The Seller and Mr. Aichele is entitled to freely dispose of the respective Group Shares without any limitations or restrictions ( keine Einschränkung der Verfügungsbefugnis) . The Group Shares are validly existing, free and clear of any claims, rights, liens or privileges ( frei von dinglichen oder schuldrechtlichen Rechten jeder Art) of third parties. There are no options ( schuldrechtliche Vorkaufsrechte) , pre-emptive rights ( dingliche Vorkaufsrechte) , shareholder agreements, trust agreements ( Treuhandverträge) , sub-participations ( Unterbeteiligungen) or other agreements with respect to the Group Shares. Upon transfer of the Group Shares, the Purchasers acquires full and unrestricted title ( unbelastetes Eigentum) to the Group Shares, free and clear of any rights of third parties.

7.1.5    Except for EMC, none of the Target Companies has established a supervisory board, advisory board or any similar corporate body such as a so-called " Verwaltungsrat " or " Beirat " or the like.

7.1.6    The Target Companies have not entered into any silent partnership agreements ( Stille Beteiligungen ), domination and profit and loss pooling agreements or any other agreements within the meaning of Sections 291 et seq. of the German Stock Corporation Act or similar agreements such as plant management agreements ( Betriebsführungsverträge ). The Target Companies have not entered into any cash pooling agreements.

7.1.7    The Target Companies do neither directly, indirectly nor in trust ( treuhänderisch ) hold any shares ( Geschäftsanteile/Aktien ), interests ( Beteiligungsrechte ) or equity ( Eigenkapital ) (including, without limitation, silent partnerships and sub-participations) in, or have entered into any agreement to (i) hold any shares, interests or equity in or (ii) establish, any other entity. None of the Target Companies is party to any joint venture, consortium, partnership ( Personengesellschaft ) or other syndicate.

7.1.8    No bankruptcy ( Konkurs ), insolvency ( Insolvenz ), judicial composition ( gerichtliche Anordnung ) or comparable proceedings have been initiated or applied for under any applicable law against the Seller or Mr. Aichele or any of the Target Companies, nor have any legal proceedings ( prozessuale Maßnahmen) or other enforcement measures been initiated or applied for with respect to any property or other assets of the Seller, Mr. Aichele or any of the Target Companies. There are no circumstances that would justify the opening of such proceedings or the avoidance, challenge or rescission of this Agreement in the future; in particular, neither the Seller, nor Mr. Aichele, nor the Target Companies are over-indebted ( überschuldet ) or illiquid ( zahlungsunfähig ), nor is illiquidity impending ( drohende Zahlungsunfähigkeit ) pursuant to Section 18 of the German Insolvency Code ( Insolvenzordnung ) or comparable Tunisian law. Except as disclosed in Annex 7.1.8 , neither the Seller, nor Mr. Aichele, nor the Target Companies have ceased or suspended payments ( Zahlungen eingestellt ), and no debt settlement arrangement with respect to the Seller, Mr. Aichele and/or the Target Companies, or other compromise or arrangement between the Seller, Mr. Aichele and/or the Target Companies and any of their creditors, has been proposed or approved.

7.1.9    The execution and consummation of this Agreement, including the transactions contemplated hereunder, by the Seller and Mr. Aichele does and will neither result in a violation of third party rights nor of any duties or obligations arising from or in connection with any (i) statutes, regulations, ordinances, international treaties, administrative regulations, orders, judgments, decrees, licenses, permits, rulings, decisions, awards or other legal norms of any supranational, international, national or any other applicable law (all items under (i) above are hereinafter collectively referred to as the " Regulations "), (ii) contracts, other agreements or offers to enter into contracts or other agreements (assuming that such offers have already been accepted) (all items under (ii) above are hereinafter collectively referred to as the " Transactions ").

7.1.10 This Agreement constitutes the legal, valid and binding obligation of the Seller, and the Seller's Guarantor and Dr. Baumgartner, enforceable under German or Tunisian law against the Seller, the Seller's Guarantor and Dr. Baumgartner in accordance with its terms and conditions. The Seller, the Seller's Guarantor and Dr. Baumgartner are not required to give any notice to any third party (including, without limitation, authorities or other public bodies) or to obtain any third party's consent or authorization in connection with the execution and consummation of this Agreement under applicable law. The execution and consummation of this Agreement do not cancel, revoke, terminate, amend or interfere with, any claims, other rights or legal relationships of any of the Target Companies. The execution and consummation of this Agreement do not constitute any rights of cancellation or reclaim or other rights of any counterparty to the Target Companies or other third parties. Any actions required on part of the Seller, the Seller's Guarantor or Dr. Baumgartner in order to validly authorize and perform the execution and consummation of this Agreement have been taken. In particular, all necessary consents and approvals by corporate bodies and shareholders have been validly granted and validly exist.

7.1.11 Any mandatory notice requirements with respect to the Group Shares, in particular under Section 16 of the German Limited Liability Company Act and Section 20 of the German Stock Corporation Act, have been, at any time, duly and timely fulfilled.

7.2        2004 and June 2005 Financial Statements; Accounts Receivables and Payables

7.2.1    The copies of the audited consolidated financial statements of the Target Companies for the last completed financial year ending on December 31, 2004 (the " 2004 Financial Statements ") and unaudited financial statements for the period from January 1, 2005 until June 30, 2005 (the " June 2005 Financial Statements ") submitted to the Purchasers and attached as Annex 7.2.1 are complete and true to original and correspond to the financial statements as adopted by the shareholders or any other competent body. The 2004 Financial Statements and the June 2005 Financial Statements have been prepared in accordance with any applicable provisions and, in particular, with generally accepted accounting principles as consistently applied with past practice, maintaining the same accounting and valuation principles, methods and rules. All options to capitalize or to include items on the liabilities side ( alle Bilanzierungswahlrechte ) have been consistently ( stetig ) exercised.

7.2.2    The 2004 Financial Statements and the June 2005 Financial Statements present a true and fair view of the consolidated assets and liabilities ( Vermögenslage ), financial condition ( Finanzlage ) and consolidated results of operation ( Ertragslage ) of the Target Companies (except for the inclusion of the Excluded Cable Shield Assets) as for the times and for the periods referenced therein. The balance sheets within the 2004 Financial Statements and the June 2005 Financial Statements are complete and correct with respect to the items to be shown on the assets and liabilities side, including, without limitation, as to their aggregate amount. However, assets and other items have only been capitalized if and to the extent that such capitalization is required by applicable law. All depreciations and value adjustments ( Abschreibungen und Wertberichtigungen ) and all accruals ( Rückstellungen ) permitted under applicable law have been made in an amount permitted. The results of ordinary business operations ( Ergebnis der gewöhnlichen Geschäftstätigkeit ) of the Target Companies (Section 275 para. 2 no. 14 and, respectively, para. 3 no. 13 German Commercial Code or respective applicable Tunisian law) were not affected by any exceptional incidents. To the extent not required to be included on the liabilities side of the balance sheet, any contingent liabilities ( Eventualverbindlichkeiten ) -- including liabilities based on comfort letters ( Patronatserklärungen ) -- have been included in the 2004 Financial Statements and the June 2005 Financial Statements as below-the-lines items. The risks of the future development are reflected accurately in 2004 Financial Statements and the June 2005 Financial Statements.

7.2.3    Unless reflected in the 2004 Financial Statements or the June 2005 Financial Statements, none of the Target Companies has any liabilities, including, without limitation, uncertain and contingent liabilities and irrespective of whether known or unknown, from swaps, options or other derivatives, except occurred since the date of the June 2005 Financial Statement in the ordinary course of business consistent with past practice and as disclosed in Annex 7.2.3 .

7.2.4    Since January 1, 2005, none of the Target Companies has resolved o