ACQUISITION AGREEMENT

Exhibit 2.1

ACQUISITION AGREEMENT

          This Acquisition Agreement (the “ Agreement ”) is entered into on the date set forth on the signature page among the Person designated on the signature page as “Buyer” (“ Buyer ”), Proliance International, Inc., a Delaware corporation (the “ Company ”), and each of the Subsidiaries of the Company identified on the signature page as “Other Sellers” (collectively with the Company, “ Sellers ”).

RECITALS

          A. On the date hereof (the “ Petition Date ”), Sellers and certain of the Company’s domestic Subsidiaries will become debtors and debtors in possession under title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “ Bankruptcy Code ”), and will file voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “ Bankruptcy Court ”) (the “ Bankruptcy Case ”).

          B. Sellers and their Subsidiaries are engaged in the business of designing, manufacturing and marketing (1) radiators, radiator cores, heater cores and complete heaters, temperature control parts and other heat exchange products for the automotive and light truck aftermarket and (2) radiators, radiator cores, condensors, charge air coolers, oil coolers, marine coolers and other specialty heat exchangers primarily for the heavy duty aftermarket (collectively, but for purposes of this Agreement excluding any business engaged in by any Excluded Subsidiary, the “ Business ”).

          C. Subject to the terms and conditions set forth herein and as authorized under sections 363 and 365 of the Bankruptcy Code, Buyer desires to purchase from Sellers, and Sellers desire to sell to Buyer, the Purchased Assets in exchange for the payment to Sellers of the Purchase Price and the assumption by Buyer of the Assumed Liabilities.

          NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I
CERTAIN DEFINITIONS

          1.1 Defined Terms . In addition to the terms defined elsewhere herein, for purposes of this Agreement, the following defined terms have the meanings specified below when used herein with initial capital letters:

          “ 2008 Financial Statements ” means the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2008 as filed with the SEC.

          “ 503(b)(9) Claims ” means all claims pursuant to section 503(b)(9) of the Bankruptcy Code.

          “ Actions or Proceedings ” means any action, suit, proceeding, arbitration or Governmental Authority investigation.

          “ Affiliate ” means any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, “control” of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by Contract, voting securities or otherwise.

          “ Assumed Trade Payables ” means any trade payables of Sellers arising on or after the Petition Date and incurred in the ordinary course of business through the Closing and unpaid as of the Closing Date.

          “ Bid Procedures Order ” means an order of the Bankruptcy Court, substantially in the form attached hereto as Exhibit A .

          “ Books and Records ” means all of the books, records, electronically stored data and other documents and any Copyrights related thereto (including customer and supplier lists and files, distribution lists, mailing lists, sales materials, operating, production and other manuals, equipment maintenance and operating manuals, correspondence with customers, suppliers, employees or Governmental Authorities, plans, files, specifications, process drawings, computer programs, data and information, manufacturing and quality control records and procedures, research and development files and advertising and promotional materials) related to the Purchased Assets, the Assumed Liabilities or the Business that are held by Sellers and existing on the Closing Date.

          “ Business Day ” means a day other than Saturday, Sunday or any other day on which banking institutions in New York, New York are required or authorized to close by Law.

          “ Buyer Material Adverse Effect ” means an event, circumstance or development which, individually or in the aggregate, has had or could reasonably be expected to have or result in a material adverse effect on or a material adverse change in or to the ability of Buyer to consummate the transactions contemplated by this Agreement or perform its obligations under this Agreement.

          “ Buyer’s Transfer Taxes ” means all of the Transfer Taxes that are not Sellers’ Transfer Taxes.

          “ Charter Documents ” means such Person’s certificate or articles of incorporation, memorandum and articles of association, by-laws, limited liability company operating agreement and other comparable constituent, charter or organizational documents, as applicable in such Person’s jurisdiction of formation.

          “ Closing Working Capital ” means any United States assets (including the assets of the Nuevo Laredo operations) that would be reflected in the line items for “accounts receivable” and “inventory” on a combined balance sheet of Sellers and the

Included Subsidiaries as of the Closing, net of any related reserves and less any Liabilities assumed by Buyer at the Closing pursuant to Section 2.3(b), and prepared in accordance with Sellers’ Accounting Principles and Practices.

          “ Code ” means the Internal Revenue Code of 1986.

          “ Confidentiality Agreement ” means, collectively (a) that certain letter agreement, dated as of March 20, 2009, by and among the Company, Roger Brown, Arthur Slaven, John McLinden and Michael Lerner, and (b) that certain letter agreement, dated as of June 1, 2009, by and between the Company and Wynnchurch Capital, Ltd., in each case as the foregoing may have been subsequently amended.

          “ Competing Transaction ” means (a) a transaction pursuant to which any Person (or group of Persons), directly or indirectly, acquires or would acquire a majority of the Company’s capital stock, whether from the Company or otherwise and whether of a type contemplated by prior proposals from stockholders or creditors of the Company or otherwise, (b) a merger, reorganization, share exchange, consolidation or other business combination involving the Company in which the holders of the Company’s capital stock immediately prior to such transaction would cease to own a majority of such capital stock (or capital stock of the acquiring or resulting stock in such transaction), (c) a transaction pursuant to which any Person (or group of Persons) acquires or would acquire control of Purchased Assets (including for this purpose the outstanding equity securities of Included Subsidiaries and securities of the entity surviving any merger or business combination involving any Included Subsidiary) of the Company or any Included Subsidiary (excluding any Excluded Assets or any equity interests or assets of any Excluded Subsidiary) representing more than 50% of the fair market value of all the Purchased Assets, net revenues or net income of the Company and the Included Subsidiaries, taken as a whole, immediately prior to such transaction (excluding any Excluded Assets or any equity interests or assets of any Excluded Subsidiary), (d) any other consolidation, business combination, recapitalization, capital restructuring, plan of reorganization or similar transaction involving the Company or any of the Included Subsidiaries, as a result of which the holders of shares of the Company’s capital stock immediately prior to such transaction do not, in the aggregate, continue to hold a majority of the outstanding shares of common stock and the outstanding voting power of the surviving or resulting entity in such transaction immediately after the consummation thereof, (e) any transaction involving an acquisition of the Company, a capital contribution to the Company or a restructuring of the Indebtedness of the Company proposed by or on behalf of the Company’s stockholders or debtholders, or (f) any other transaction that is conditioned or predicated on the transactions contemplated by this Agreement not being completed in accordance with the terms of this Agreement or is intended or could reasonably be expected to result in such transactions not being so completed; provided , however , that in no event will a transaction involving the sale of only Excluded Assets or any equity interests or assets of any Excluded Subsidiary be deemed to be a Competing Transaction for any purpose under this Agreement.

          “ Contract ” means any agreement, lease, license, evidence of Indebtedness, mortgage, indenture, security agreement, purchase order or other contract, whether written or oral.

          “ Copyrights ” means any copyrights, whether in published or unpublished works and whether in digital or print media, and any United States or foreign registrations thereof and applications therefor, including all renewals and extensions thereof and rights corresponding thereto throughout the world.

          “ Employee ” means each employee, officer or consultant of Sellers or any Included Subsidiary.

          “ Environment ” means any land, soil, substrata, groundwater, surface water, drinking water, sediment, air or terrestrial or aquatic biota.

          “ Environmental Laws ” means all Laws (including CERCLA) in effect on and after the date hereof relating to the protection of the Environment, including Laws relating to Environmental Releases or threatened Environmental Releases of Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials.

          “ Environmental Release ” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the atmosphere, soil, surface water, sewer system, groundwater or land.

          “ Equipment ” means all plants, machinery, equipment, furniture, fixtures, computer hardware, vehicles, tools, supplies, leasehold improvements and, except for the Inventory, all other tangible personal property owned by Sellers and the Included Subsidiaries and used in the conduct of the Business.

          “ ERISA ” means the Employee Retirement Income Security Act of 1974.

          “ Estimated IBNR/FSA Liability Amount ” means $400,000.

          “ Exchange Act ” means the Securities Exchange Act of 1934.

          “ Excluded Subsidiary ” means any direct or indirect Subsidiary of the Company that is not an Included Subsidiary, including Radiadores GDI, S.A. de C.V., Aftermarket LLC, Aftermarket Delaware Corporation, Proliance International Holding Corporation, Nederlandse Radiateuren Fabriek B.V. and each of the direct and indirect Subsidiaries of the foregoing (other than MexPar and its direct and indirect Subsidiaries).

          “ GAAP ” means United States generally accepted accounting principles, consistently applied throughout the specified period and in the immediately prior comparable period.

          “ Governmental Authority ” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision.

          “ Hazardous Materials ” means any material, substance, chemical, waste, hazardous waste, pollutant, contaminant or hazardous or toxic substance as to which liabilities, restrictions or standards of conduct are imposed pursuant to any Environmental Law, including asbestos, formaldehyde, polychlorinated biphenyls, lead based paint, radioactive materials, waste oil and other petroleum products.

          “ HSR Act ” means Section 7A of the Clayton Act (Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976) and the rules and regulations promulgated thereunder.

          “ Indebtedness ” of any Person means all obligations of such Person (a) for borrowed money, (b) evidenced by notes, bonds, debentures or similar instruments, (c) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (d) under capital leases, and (e) in the nature of guarantees of the obligations described in clauses (a) through (d) above of any other Person.

          “ Individual Health Insurance Escrow Deposit ” means an amount equal to $2,000 multiplied by the number of Employees as of immediately prior to the New Hire Deadline who do not become New Hires.

          “ Initial Escrow Period ” means the period of time beginning on the Closing Date and ending on the later to occur of (a) the date that is the two-month anniversary of the Closing Date and (b) the final determination of Closing Working Capital in accordance with Section 3.4.

          “ Intellectual Property ” means all intellectual property used or held for use by Sellers and the Included Subsidiaries in connection with the Business including (a) all Copyrights, (b) all Patents, (c) all trade secrets, (d) all Trademarks, (e) all Software, and (f) all rights to sue or otherwise claim for past, present or future infringement or unauthorized use or disclosure or breach of any of the assets, properties or rights described above.

          “ Inventory ” means all spare parts, raw materials, finished products, goods in-process and supplies held by Sellers and the Included Subsidiaries, wherever situated.

          “ IRS ” means the United States Internal Revenue Service.

          “ Knowledge ” and “ Known ” mean the actual knowledge, after due inquiry, of the executive officers of the applicable Person.

          “ Laws ” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States, any foreign country or

any domestic or foreign state, county, city or other political subdivision or of any Governmental Authority.

          “ Liabilities ” means all Indebtedness, obligations and other liabilities of a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or to become due).

          “ Liens ” means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge, option, right of first refusal, easement, voting trust or agreement, transfer restriction or other encumbrance of any kind.

          “ MexPar ” means Manufacturera Mexicana de Partes de Automoviles S.A. de C.V.

          “ Multiple Employer Plan ” means a single employer plan, as defined in Section 4001(a)(15) of ERISA, which (a) is maintained for Employees and at least one Person other than Sellers or one of their Subsidiaries or (b) was so maintained and in respect of which the Company or one of the Included Subsidiaries could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

          “ Option ” with respect to any Person means any security, right, subscription, warrant, option, “phantom” stock right, swap, hedge, derivative or other Contract that gives the right to purchase or otherwise receive or be issued any shares of capital stock of, or any membership interest, ownership interest or other equity interest in, such Person or any security of any kind convertible into or exchangeable or exercisable for any shares of capital stock of, or any membership interest, ownership interest or other equity interest in, such Person.

          “ Order ” means any writ, judgment, decree, injunction or similar order of any Governmental Authority (in each such case whether preliminary or final).

          “ Patents ” means any United States or foreign patents, together with any extensions, reexaminations and reissues of such patents, patents of addition, patent applications, divisions, continuations, continuations-in-part and any subsequent filings in any country or jurisdiction claiming priority therefrom.

          “ Permits ” means all permits, approvals, licenses, authorizations, certificates, rights, exemptions and Orders from any Governmental Authority used by or held for use by Sellers and the Included Subsidiaries and related to the Business.

          “ Permitted Liens ” means (a) all defects, exceptions, restrictions, easements and rights of way of record or that are disclosed on an ALTA title insurance policy delivered by Sellers to Buyer, (b) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings provided an appropriate reserve is established therefor, (c) mechanics’, carriers’, workers’ and repairers’ Liens arising or incurred in the ordinary course of business, (d) zoning, entitlement and other

land use and environmental regulations by any Governmental Authority provided that such regulations have not been violated, (e) the interest of a lessor under a capital or operating lease, (f) liens arising by operation of Law, and (g) liens directly related to the Assumed Liabilities.

          “ Person ” means any natural person, corporation, limited liability company, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or Governmental Authority.

          “ Purchased Contracts ” means all Contracts of Sellers that are set forth on Schedule 1.1(a) (which Schedule is subject to modification as permitted by Section 2.1(c)) and are unexpired as of the Closing Date.

          “ Regulation ” means the income tax regulations, including temporary regulations, promulgated under the Code.

          “ Representatives ” with respect to any Person means such Person’s officers, employees, counsel, accountants, financial advisors, consultants and other representatives.

          “ Sale Order ” means a final Order (or Orders) of the Bankruptcy Court which is not subject to a stay pending appeal, in substantially the form attached as Exhibit B with such changes therein as may have been ordered or otherwise made by the Bankruptcy Court so long as the effects thereof, considered as a whole, are not materially adverse to Buyer or Sellers, as applicable.

          “ SEC ” means the Securities and Exchange Commission.

          “ Seller Material Adverse Effect ” means an event, circumstance or development which, individually or in the aggregate with all other events, circumstances or developments, has had or could reasonably be expected to have or result in (a) a material adverse effect on or a material adverse change in or to the business, assets, properties, results of operations or financial condition of Sellers and the Included Subsidiaries (taken as a whole) or (b) a material adverse effect on or a material adverse change in or to the ability of Sellers to consummate the transactions contemplated by this Agreement or perform its obligations under this Agreement, other than, as applied to clause (a) only, an effect or change resulting from any one or more of the following to the extent that, as applied to the events in (i), (ii), (iii) and (v) below, the effects thereof on Sellers and the Included Subsidiaries (taken as a whole) are not disproportionate to the effects thereof on other United States companies engaged in the industry in which Sellers and the Included Subsidiaries operate: (i) the effect of any change in the United States economy or securities or financial markets in general; (ii) the effect of any change that generally affects the industry in which Sellers and the Included Subsidiaries operate; (iii) the effect of any change arising in connection with any force majeure (such as hurricanes, floods or earthquakes), hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof;

(iv) the effect of any actions taken by Buyer or its Affiliates with respect to the transactions contemplated hereby; (v) the effect of any changes in applicable Laws or accounting rules; (vi) any effect resulting from or arising out of the filing of the Bankruptcy Case; (vii) any effect resulting from or arising out of the public announcement of this Agreement, compliance with terms of this Agreement or the consummation of the transactions contemplated by this Agreement; or (viii) any matter approved by the Bankruptcy Court.

          “ Seller SEC Documents ” means the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, but does not include any exhibits attached thereto, filed with the SEC and publicly available on or after January 1, 2007 and prior to the date of this Agreement, as amended to the date of this Agreement.

          “ Seller SEC Reports ” means all required registration statements, prospectuses, reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC since January 1, 2007.

          “ Sellers’ Accounting Principles and Practices ” means the accounting policies and related policies and practices utilized by the Company in the preparation of its 2008 Financial Statements applied on a consistent basis in accordance with GAAP.

          “ Sellers’ Transfer Taxes ” means one-half of the aggregate Transfer Taxes; provided, however, that Sellers’ Transfer Taxes will in no event exceed $100,000.

          “ Software ” means, except to the extent generally available for purchase from a third Person, any and all (a) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, (d) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, and (e) all documentation including user manuals and other training documentation related to any of the foregoing.

          “ Subsidiary ” with respect to an entity means any Person in which such entity, directly or indirectly through Subsidiaries or otherwise, beneficially owns more than 50% of either the equity interests in, or the voting control of, such Person.

          “ Target Working Capital ” means $72,097,000.

          “ Taxes ” means any and all taxes, fees, levies, duties, tariffs, import and other similar charges imposed by any taxing authority, together with any related interest, penalties or other additions to tax or additional amounts imposed by any taxing authority, and without limiting the generality of the foregoing, will include net income, alternative or add-on minimum tax, gross income, gross receipts, capital, sales, use, ad valorem, value added, franchise, profits, license, transfer, recording, escheat, withholding, payroll, employment, social security, excise, severance, stamp, occupation, premium, property,

windfall profit, environmental, custom duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever.

          “ Tax Returns ” means all returns, reports and forms required to be filed with a Governmental Authority with respect to Taxes.

          “ Trademarks ” means (a) any unregistered trademarks and service marks in the United States or foreign jurisdictions or multinational trademark authorities, (b) any trademarks or service marks registered in the United States or foreign jurisdictions or multinational trademark authorities and any applications therefore, (c) any trade names, brand names, product identifiers, certification marks, logos, trade dress and Internet domain names, and uniform resource locators associated therewith, and any registration thereof or application therefor in the United States or foreign jurisdictions, including any extension, modification or renewal of any such registration or application, and (d) all goodwill associated with all of the foregoing throughout the world.

          “ Transfer Taxes ” means any federal, state, county, local, foreign or other sales, use, transfer, conveyance, documentary transfer, recording or other similar tax, fee or charge imposed upon the sale, transfer or assignment of property or any interest therein or the recording thereof, and any penalty, addition to tax or interest with respect thereto, but such term will not include any tax on, based upon or measured by, the net income, gains or profits from such sale, transfer or assignment of the property or any interest thereon.

          “ WARN Act ” means the Worker Adjustment and Retraining Notification Act of 1988, as amended.

          1.2 Terms Defined Elsewhere in this Agreement . For purposes of this Agreement, the following terms have the meanings set forth in the sections indicated:

          1.3 Construction of Certain Terms and Phrases . (a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (iv) the terms “Article,” “Section,” “Schedule” or “Exhibit” refer to the specified Article, Section, Schedule or Exhibit of or to this Agreement, (v) the phrase “ordinary course of business” refers to the business of Sellers in connection with Sellers’ business, (vi) the terms “include,” “includes” and “including” will be deemed to be followed by the words “without limitation,” and (vii) any reference in this Agreement to $ means U.S. dollars. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period will be excluded, and whenever this Agreement refers to a number of days, such number will refer to calendar days unless Business Days are specified. All accounting terms used herein and not expressly defined herein will have the meanings given to them under GAAP. Unless otherwise expressly provided herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented.

          (b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as jointly drafted by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

ARTICLE II
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

          2.1 Purchase and Sale of Assets . (a) On the terms and subject to the conditions set forth in this Agreement, at the Closing, Buyer will purchase, acquire and accept from Sellers, and Sellers will sell, transfer, convey and deliver to Buyer all of Sellers’ right, title and interest in, to and under the Purchased Assets, free and clear of all Liens, other than those created by Buyer or its Affiliates and other than Permitted Liens.

          (b) For all purposes of and under this Agreement, the term “ Purchased Assets ” means all properties, assets and rights of Sellers existing as of the Closing, whether real or personal, tangible or intangible (excluding only the Excluded Assets), including:

          (i) all Subsidiary Equity Interests identified on Schedule 2.1(b)(i) (each Subsidiary identified on such Schedule, an “ Included Subsidiary ” and, collectively, the “ Included Subsidiaries ”);

     (ii) the Books and Records, excluding any Books and Records that relate exclusively to an Excluded Asset;

     (iii) the Equipment and Inventory;

     (iv) all Intellectual Property rights owned or licensed by Sellers;

     (v) the goodwill of Sellers related to the Business not otherwise specifically identified in this Section 2.1(b);

     (vi) the Permits, to the extent assignable;

     (vii) all accounts and notes receivable (billed and unbilled) of Sellers as of the Closing (including intercompany accounts receivable, except (1) as set forth in Section 7.11 and (2) any intercompany accounts receivable of Sellers in respect of amounts owed by any Excluded Subsidiary);

     (viii) all deposits (including customer deposits and security deposits for rent, electricity, telephone or otherwise) and prepaid charges and expenses of Sellers, other than any deposits or prepaid charges and expenses paid in connection with or relating to any Excluded Assets;

     (ix) all rights of Sellers with respect to owned real property and under real property leases, together in each case with all improvements, fixtures and other appurtenances thereto and rights in respect thereof;

     (x) all of Sellers’ rights under any Purchased Contracts;

     (xi) all of Sellers’ rights under any non-disclosure or confidentiality, non-compete or non-solicitation agreements with employees and agents of Sellers or with third parties to the extent relating to the Business or the Purchased Assets (or any portion thereof);

     (xii) except as set forth in Section 2.2(b)(xiv), all insurance policies or rights to proceeds thereof relating to the assets, properties, business or operations of Sellers;

     (xiii) all rights, claims or causes of action of Sellers (other than Avoidance Actions) against third parties relating to the Purchased Assets or Assumed Liabilities arising out of events occurring prior to the Closing Date;

     (xiv) all rights of Sellers under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers and contractors to the extent relating to products sold, or services provided, to Sellers or to the extent affecting any Purchased Assets, other than any

warranties, representations and guarantees pertaining to any Excluded Assets; and

     (xv) all other tangible or intangible assets, other than the Excluded Assets.

          (c) At any time prior to and including the date that is three Business Days prior to the date of the auction provided for in the Bid Procedures Order (the date of such auction, the “ Auction Date ”), Buyer may designate any of the Purchased Assets as additional Excluded Assets by giving written notice to the Company setting forth in reasonable detail the Purchased Assets so designated. Buyer acknowledges and agrees that there will be no reduction in the Purchase Price if it elects to designate any Purchased Assets as Excluded Assets. Sellers acknowledge and agree that Buyer will not be responsible for or otherwise assume or have any obligation for any Liabilities associated with or related to or arising under any Contract designated as an additional Excluded Asset in accordance with the foregoing.

          2.2 Excluded Assets . (a) Nothing herein will be deemed to sell, transfer, assign or convey the Excluded Assets to Buyer, and Sellers will retain all right, title and interest to, in and under the Excluded Assets.

          (b) For all purposes of and under this Agreement, the term “ Excluded Assets ” means:

     (i) all cash, cash equivalents, bank deposits or similar cash items;

     (ii) any shares of capital stock or other equity interest of any Seller or any Excluded Subsidiary or any securities convertible into, exchange or exercisable for shares of capital stock or other equity interests of any Seller or any Excluded Subsidiary;

     (iii) any minute books, stock ledgers, corporate seals and stock certificates of Sellers and the Excluded Subsidiaries, and other similar books and records that Sellers are required by Law to retain or that Sellers determine are necessary or advisable to retain, including Tax Returns, financial statements and corporate or other entity filings;

     (iv) all avoidance actions or similar causes of action arising under sections 544 through 553 of the Bankruptcy Code, including any proceeds thereof (collectively, the “ Avoidance Actions ”);

     (v) any assets of Sellers designated by Buyer as Excluded Assets pursuant to Section 2.1(c) hereof;

     (vi) any asset that would constitute a Purchased Asset (if owned on the Closing Date) that is conveyed or otherwise disposed of during the period from the date hereof until the Closing Date and all proceeds, rights

and benefits related thereto either (A) in the ordinary course of business in accordance with Sections 7.1 and 7.2 hereof or (B) as otherwise expressly permitted by the terms of this Agreement;

     (vii) all refunds, credits or rebates that were paid or will be paid by Sellers;

     (viii) any Books and Records exclusively related to any Excluded Asset and any Employees who are not New Hires;

     (ix) any assets of Sellers identified on Schedule 2.2(b)(ix) ;

     (x) subject to Section 2.6, any Purchased Contract or Permit that requires the consent of a third party to be assumed and assigned hereunder as to which, by the Closing Date, such consent has not been obtained by virtue of a written consent or order of the Bankruptcy Court or otherwise;

     (xi) the Seller Benefit Plans;

     (xii) Sellers’ rights under this Agreement and any debtor-in-possession loan agreement entered into after the date of this Agreement (the “ DIP Loan Agreement ”);

     (xiii) all Contracts of Sellers that are not Purchased Contracts; and

     (xiv) all insurance policies or rights to proceeds thereof relating to any Excluded Assets, including any directors’ or officers’ insurance policies and any fiduciary insurance policies of Sellers.

          2.3 Assumption of Liabilities . On the terms and subject to the conditions and limitations set forth in this Agreement, at the Closing, Buyer will assume, effective as of the Closing, and will timely perform and discharge in accordance with their respective terms, the following Liabilities (the “ Assumed Liabilities ”) and no others:

     (a) all Liabilities under the Purchased Contracts that arise on or after the Closing Date or arise prior to the Closing Date to the extent requiring performance after the Closing Date (in each case, other than Liabilities arising out of or relating to any breach);

     (b) all accounts payable and Assumed Trade Payables of Sellers arising in the ordinary course of business on or after the Petition Date and existing as of immediately prior to the Closing that do not constitute Retained Liabilities and that are set forth on Schedule 2.3(b) (which Schedule will be updated from time to time prior to the Closing by the mutual agreement of Buyer and the Company in good faith), provided that in each case such assumption will be limited to the individual amounts set forth on Schedule 2.3(b) (as such

Schedule exists at the Closing) and included in the calculation of Closing Working Capital;

     (c) all Liabilities arising from the sale of products of the Business pursuant to product warranties, product returns, customer programs, credits and rebates under Purchased Contracts;

     (d) all Liabilities for Taxes due or payable for any Tax period (or portion thereof) beginning after the Closing Date that arise out of the ownership or operation of the Business or the Purchased Assets following the Closing Date;

     (e) all Buyer’s Transfer Taxes; and

     (f) any cure amounts that Buyer is required to pay pursuant to the third sentence of Section 2.5.

     2.4 Retained Liabilities . Buyer will not assume and will be deemed not to have assumed, and Sellers will be solely liable with respect to, any Liabilities of Sellers other than the Assumed Liabilities (collectively, the “ Retained Liabilities ”). For the avoidance of doubt, the Retained Liabilities include the following:

     (a) all Liabilities existing prior to the Petition Date that are subject to compromise in the Bankruptcy Case, other than any Liabilities assumed by Buyer pursuant to Section 2.3;

     (b) all Liabilities relating to or arising out of the ownership or operation of an Excluded Asset, including all Liabilities of the Excluded Subsidiaries;

     (c) any cure amounts that Sellers are required to pay (or have paid on their behalf) pursuant to the second sentence of Section 2.5;

     (d) all Liabilities for Taxes due or payable by Seller for any Tax period (or portion thereof) ending on or before the Closing Date that arise out of the ownership or operation of the Business or the Purchased Assets on or before the Closing Date, except for Liabilities for Taxes attributable to actions of the Buyer after the Closing Date;

     (e) all Liabilities of Sellers arising under the Consolidated Omnibus Budget Reconciliation Act (COBRA) in respect of Employees;

     (f) all obligations of Sellers under the DIP Loan Agreement;

     (g) all Liabilities relating to amounts required to be paid by Sellers hereunder;

     (h) all Sellers’ Transfer Taxes;

     (i) all 503(b)(9) Claims; and

     (j) all Liabilities arising from the sale of products of the Business by Sellers prior to the Closing Date pursuant to product warranties, product returns, customer programs, credits and rebates, other than any Liabilities assumed by Buyer pursuant to Section 2.3(c).

          2.5 Cure Amounts . At Closing and pursuant to section 365 of the Bankruptcy Code, Sellers will assume and assign to Buyer and Buyer will assume from Sellers, the Purchased Contracts that are deemed to be executory contracts or unexpired leases for purposes of section 365 of the Bankruptcy Code. The cure amounts necessary to cure all defaults under any Purchased Contracts set forth on Schedule 2.5(a) will be paid by Buyer on behalf of Sellers at the Closing as set forth in Section 3.2(b), as such amounts are finally determined by the Bankruptcy Court pursuant to the procedures set forth in the Bid Procedures Order and/or the Sale Order (the “ Final Cure Costs ”), and Buyer will have no liability therefor (other than to make such payments on Sellers’ behalf). The cure amounts necessary to cure all defaults under any Purchased Contracts set forth on Schedule 2.5(b) will be paid by Buyer at the Closing, as such amounts are finally determined by the Bankruptcy Court pursuant to the procedures set forth in the Bid Procedures Order and/or the Sale Order, and Sellers will have no liability therefore.

          2.6 Non-Assignment of Assets . Notwithstanding any other provision of this Agreement to the contrary, this Agreement will not constitute an agreement to assign or transfer and will not effect the assignment or transfer of any Purchased Contract if (a) an attempted assignment thereof, without the approval, authorization or consent of, or granting or issuance of any license or permit by, any third party thereto (each such action, a “ Necessary Consent ”), would constitute a breach thereof or in any way adversely affect the rights of Buyer thereunder and (b) the Bankruptcy Court has not entered an Order providing that such Necessary Consent is not required. In such event, and without limiting any other provision of this Agreement, Sellers and Buyer will use their commercially reasonable efforts to obtain the Necessary Consents with respect to any such Purchased Contract or any claim or right or any benefit arising thereunder for the assignment thereof to Buyer as Buyer may reasonably request; provided , however , that Sellers will not be obligated to pay any consideration therefor to any third party from whom consent or approval is requested or to initiate any Actions or Proceedings to obtain any such consent or approval. If such Necessary Consent is not obtained, or if an attempted assignment thereof would be ineffective or would adversely affect the rights of any Seller thereunder so that Buyer would not in fact receive all such rights, such Seller and Buyer will cooperate in a mutually agreeable arrangement, to the extent feasible and at no expense to such Seller, under which Buyer would obtain the benefits and assume the obligations thereunder in accordance with this Agreement, including subcontracting, sub-licensing or sub-leasing to Buyer, or under which such Seller would enforce such rights for the benefit of Buyer with Buyer assuming such Seller’s obligations and any and all rights of such Seller against a third party thereto.

          2.7 Further Conveyances and Assumptions . (a) From time to time following the Closing, Sellers (to the extent practicable) will make available to Buyer

such non-confidential data in personnel records of New Hires as is reasonably necessary for Buyer to transition such New Hires into Buyer’s records.

          (b) From time to time following the Closing, Sellers (to the extent practicable) and Buyer will, and will cause their respective Affiliates to, execute, acknowledge and deliver all such further conveyances, notices, assumptions, releases and other instruments, and take such further actions, as may be reasonably necessary or appropriate to assure fully to Buyer and its respective successors or assigns, all of the properties, rights, titles, interests, estates, remedies, powers and privileges intended to be conveyed to Buyer under this Agreement and to assure fully to Sellers and their Affiliates and their successors and assigns, the assumption of the Assumed Liabilities and other obligations intended to be assumed by Buyer under this Agreement, and to otherwise make effective the transactions contemplated hereby.

ARTICLE III
CONSIDERATION; ADJUSTMENT

          3.1 Purchase Price . The aggregate purchase price (the “ Purchase Price ”) is (a) the amount of cash designated on the signature page as the “ Cash Purchase Price ,” subject to adjustment pursuant to Section 3.4 and (b) the assumption by Buyer of the Assumed Liabilities.

          3.2 The Closing . (a) Unless this Agreement has been terminated pursuant to Section 9.1, and subject to the satisfaction or waiver of the conditions set forth in Article VIII, the closing of the transactions contemplated by this Agreement (the “ Closing ”) will take place at the offices of Jones Day, 222 East 41 ^st Street, New York, NY 10017, at 10:00 a.m., local time, on the second Business Day following the date of satisfaction of the conditions set forth in Article VIII (other than the conditions that by their nature are to be satisfied at Closing, but subject to the satisfaction and waiver of such conditions), unless another date, time or place is mutually agreed to in writing by the parties hereto (the “ Closing Date ”).

          (b) At the Closing, (i) Buyer will pay the Cash Purchase Price (as adjusted, if applicable, pursuant to Section 3.4), less the amount of (A) the Initial Escrow Deposit, (B) the amount of the Estimated IBNR/FSA Liability Amount, and (C) the amount of the Final Cure Costs, by wire transfer of immediately available United States funds to an account or accounts designated by the Company no later than two Business Days prior to the Closing Date, (ii) Sellers will deliver the certificates and other documents to be delivered under Article VIII, (iii) Buyer will deliver the documents to be delivered under Article VIII and the other deliveries contemplated by Section 3.5, and (iv) Buyer will pay by wire transfer of immediately available United States funds or by check, on behalf of Sellers, the Final Cure Costs to the Persons entitled to be paid such Final Cure Costs pursuant to the Bid Procedures Order and/or the Sale Order.

          3.3 Initial Escrow Deposit . (a) Upon the execution of this Agreement, Buyer will deliver to Wells Fargo Bank, National Association (the “ Escrow Agent ”) cash in an amount equal to $500,000 by wire transfer of immediately available United States

funds and Buyer will deliver to the Escrow Agent no later than 5:00 p.m. EST on the third Business Day after the date of this Agreement cash in an amount equal to $1.5 million by wire transfer of immediately available United States funds (including all interest accrued thereon, collectively, the “ Initial Escrow Deposit ”). The Initial Escrow Deposit will be held by the Escrow Agent during the Initial Escrow Period in an account and will be released as follows and in accordance with the terms of the escrow agreement entered into among Buyer, the Company and the Escrow Agent on the date hereof in the form of Exhibit C (the “ Escrow Agreement ”).

               (1) the Initial Escrow Deposit will be paid to Buyer in the event this Agreement is terminated by the Company or Buyer, or both of them, pursuant to Section 9.1(a), 9.1(b)(i) (unless, in the case of a termination by the Company, Buyer could not have terminated this Agreement at such time pursuant to Section 9.1(b)(i)), 9.1(b)(iv), 9.1(b)(v) or 9.1(c), or by Buyer pursuant to Section 9.1(b)(ii), 9.1(b)(iii) or 9.1(d), and, in each event, will be paid upon such termination;

               (2) the Initial Escrow Deposit will be paid to the Company in the event this Agreement is terminated by the Company pursuant to Section 9.1(e), 9.1(b)(i) (but only to the extent that Buyer could not have terminated this Agreement at such time pursuant to Section 9.1(b)(i)), 9.1(b)(ii) or 9.1(b)(iii), and, in each event, will be paid upon such termination;

               (3) if the Closing occurs, (A) the Initial Escrow Deposit will be held by the Escrow Agent during the Initial Escrow Period and will be paid to Buyer during the Initial Escrow Period in amounts equal to Sellers’ obligations to Buyer under Section 3.4 and otherwise for any losses, liabilities, claims, damages, expenses (including costs of investigation and defense and reasonable attorneys’ fees and expenses) or diminution of value suffered or incurred by Buyer, whether or not involving a third-party, arising from or in connection with (i) any breach of any representation or warranty made by Sellers in this Agreement, Sellers’ Disclosure Schedule or any certificate, transfer instrument, document, writing or instrument delivered by Sellers pursuant to this Agreement, (ii) any breach of any covenant or obligation of Sellers in this Agreement or in any certificate, transfer instrument, document, writing or instrument delivered by Sellers pursuant to this Agreement, or (iii) any Retained Liabilities; provided , however , that in no event will Seller have any liability, and in no event will Buyer be entitled to be paid any amounts from the Initial Escrow Deposit, in excess of $125,000 in respect of any losses, liabilities, claims, damages, expenses or diminution of value resulting from any event described in clauses (i)-(iii); and (B) upon the expiration of the Initial Escrow Period, the remaining balance of the Initial Escrow Deposit, if any, will be paid to the Company. In the event of any dispute or disagreement between Buyer and Sellers with respect to whether any event described in clauses (A)(i)-(iii) of the previous sentence has occurred, or whether any amounts are payable out of the Initial Escrow Deposit with respect thereto, or whether any amounts are payable out of any Closing Escrow Deposit with respect to the matters set forth in Section 3.5, such disputes or disagreements will be submitted by the parties for final determination by the Bankruptcy Court on an expedited basis (to the extent permitted by the Bankruptcy Court).

          (b) Notwithstanding anything to the contrary contained in this Agreement, any amount due to Buyer from Sellers pursuant to this Section 3.3 or Section 3.4 will be paid solely from and to the extent of, and will be limited to, the funds contained at such time in the Initial Escrow Deposit, regardless of whether such funds are sufficient to satisfy any obligations of Sellers hereunder, and none of Sellers, their Representatives, Affiliates or any of Sellers’ creditors or other interested parties will have any obligation to make up any such shortfall.

          3.4 Working Capital . (a) For the purpose of determining the adjustment to the Cash Purchase Price, no less than two Business Days prior to the date of the final hearing to approve the Sale Order (the “ Sale Hearing ”), the Company will prepare and deliver to Buyer a statement (such statement, the “ Estimated Closing Working Capital Statement ”) setting forth the Company’s good faith estimate of the Closing Working Capital as of the close of business on the last Business Day immediately prior to the expected Closing Date (such effective date and time, the “ Adjustment Determination Effective Time ,” and such estimated amount, the “ Estimated Closing Working Capital Amount ”), and the components and calculation thereof as of the Adjustment Determination Effective Time. The Estimated Closing Working Capital Statement will be subject to the review of Buyer. If Buyer disputes the Estimated Closing Working Capital Amount, then Buyer and the Company will cooperate and negotiate in good faith to resolve any dispute regarding the Estimated Closing Working Capital Statement prior to the Sale Hearing (the results of any such resolution to be reflected on a new Estimated Closing Working Capital Statement, which will be considered the Estimated Closing Working Capital Statement for all further purposes); provided that if any item of dispute regarding the Estimated Closing Working Capital Statement is not resolved by agreement in writing between Buyer and the Company prior to the Sale Hearing, then Sellers’ estimate of such disputed item will be deemed final for purposes of the Closing absent manifest error. To the extent that the Estimated Closing Working Capital Amount exceeds the Target Working Capital, the Cash Purchase Price payable at the Closing will be increased by the amount of the excess, and to the extent that the Estimated Closing Working Capital Amount is less than the Target Working Capital, the Cash Purchase Price will be reduced by the amount of such deficiency.

          (b) Within 30 Business Days after the Closing Date, Buyer will cause to be prepared and delivered to the Company a statement (the “ Post Closing Working Capital Statement ”) setting forth Buyer’s calculation of the Closing Working Capital as of the Adjustment Determination Effective Time, and the components and calculation thereof as of the Adjustment Determination Effective Time.

          (c) The Company will have 20 Business Days following its receipt of the Post Closing Working Capital Statement to review the Post Closing Working Capital Statement and, during such time, (A) Buyer will give the Company and its Representatives reasonable access to all Books and Records of Buyer (including with respect to the Business) as is reasonably requested by the Company or its Representatives and (B) the Company may dispute any items set forth on the Post Closing Working Capital Statement (or specific calculations or methods contemplated

thereby). Unless the Company delivers written notice to Buyer of any dispute thereof on or prior to the 20 ^th Business Day after the Company’s receipt of the Post Closing Working Capital Statement, the Company will be deemed to have accepted and agreed to the Post Closing Working Capital Statement and such statement will be final, binding and conclusive. If the Company notifies Buyer in writing of any disputed items contained in the Post Closing Working Capital Statement (or any specific calculations or methods contemplated thereby) within such 20 Business Day period, then for ten Business Days following delivery of such notice by the Company to Buyer (the “ Resolution Period ”), Buyer and the Company will attempt in good faith to resolve their differences with respect to the disputed items (the “ Disputed Items ”). Any resolution by Buyer and the Company during the Resolution Period as to any Disputed Items will be set forth in writing and will be final, binding and conclusive. If Buyer and the Company do not resolve all Disputed Items by the end of the Resolution Period, then all Disputed Items remaining in dispute will be submitted within five calendar days after the expiration of the Resolution Period to a national independent accounting firm mutually acceptable to Buyer and the Company (the “ Neutral Arbitrator ”). The Neutral Arbitrator will act as an arbitrator to determine only those Disputed Items remaining in dispute as of the end of the Resolution Period. In resolving such Disputed Items, the Neutral Arbitrator may not assign a value to any Disputed Item greater than the greatest value for such Disputed Item claimed by Buyer or the Company or less than the