Asset Purchase Agreement

By and among

Ice.com, Inc.,

Ice Diamond, LLC,

and

Odimo Incorporated,

Dated as of May 11, 2006

1

         
ARTICLE 1. THE TRANSACTION
    1  
1.1 Purchased Assets
    1  
1.2 Excluded Assets
    2  
1.3 Reserved.
    3  
1.4 Retained Liabilities
    3  
1.5 Non-Assignable Assets
    5  
ARTICLE 2. CONSIDERATION FOR TRANSFER
    5   2.1 Purchase Price, Payment, Escrow and Security for Indemnification
Obligations5

2.2 Allocation of Purchase Price
    7  
ARTICLE 3. CLOSING AND CLOSING DELIVERIES
    7  
3.1 Closing; Time and Place
    7  
3.2 Deliveries by Seller
    7  
3.3 Deliveries by Purchaser
    10  
3.4 Delivery by Purchaser and Seller
    10  
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER
    10  
4.1 Organization, Good Standing, Qualification
    10  
4.2 Authority; Binding Nature of Agreements
    11  
4.3 No Conflicts; Required Consents
    11  
4.4 Subsidiaries
    11  
4.5 Financial Statements
    11  
4.6 Absence of Undisclosed Liabilities
    12  
4.7 Absence of Changes
    12  
4.8 Transactions with Affiliates
    12  
4.9 Inventory
    13  
4.10 Material Contracts
    13  
4.11 Insurance
    15  
4.12 Title; Sufficiency; Condition of Assets
    15  
4.13 Real Property
    16  
4.14 Intellectual Property
    16  
4.15 Suppliers and Affiliates
    19  
4.16 Seller Products and Product Warranty
    20  
4.17 Employees and Consultants.
    20  
4.18 Seller Benefit Plans
    21  
4.19 Compliance with Laws
    22  
4.20 SEC Documents, Financial Statements
    22  
4.21 Governmental Approvals
    24  
4.22 Proceedings and Orders
    24  
4.23 Environmental Matters
    25  
4.24 Taxes
    25  
4.25 Customers and Privacy
    27  
4.26 Brokers
    27  
4.27 Solvency
    27  
4.28 Board Approval
    27  
4.29 Material Third Party Consents
    27  
4.30 No Other Agreement
    28  
4.31 Product Liability
    28  
4.32 Projections
    28  
4.33 Promotions
    28  
4.34 Full Disclosure
    29  
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
    29  
5.1 Organization and Good Standing
    29  
5.2 Authority; Binding Nature of Agreements
    29  
5.3No Conflicts; Required Consents
    30  
5.4 Brokers
    30  
ARTICLE 6. POST CLOSING COVENANTS
    30  
6.1 Seller Intellectual Property
    30  
6.2 Cooperation
    30  
6.3 Limited Power of Attorney
    31  
6.4 Return of Purchased Assets
    31  
6.5 Records and Documents
    31  
6.6 Insurance and Warranty Claims.
    32  
6.7 Director and Officer Insurance
    32  
6.8 Dissolution; Restricted Payments
    32  
6.9 Bulk Sales Indemnification
    32  
6.10 Payment of Seller Supplier Accounts Payable
    32  
6.11 Non-Disclosure and Non-Compete
    32  
ARTICLE 7. INDEMNIFICATION
    35  
7.1 Survival of Representations and Warranties
    35  
7.2 Indemnification by Seller
    36  
7.3 Procedures for Indemnification
    36  
7.4 Remedies Cumulative
    36  
7.5 Maximum Amounts
    36  
7.6 Effect on Future Transactions
    37  
ARTICLE 8. MISCELLANEOUS PROVISIONS
    37  
8.1 Expenses
    37  
8.2 Notices
    37  
8.3 Interpretation
    38  
8.4 Counterparts; Facsimile Delivery
    38  
8.5 Entire Agreement; Nonassignability; Parties in Interest
    39  
8.6 Severability
    39  
8.7 Governing Law; Jurisdiction and Venue; Waiver Of Jury Trial
    39  
8.8 Rules of Construction
    39  
8.9 Incorporation of Appendices, Exhibits and Schedules
    39  
8.10 Assignment
    39  
8.11 Attorneys’ Fees
    40  
8.12 Further Assurances
    40  

2

APPENDICES, EXHIBITS AND SCHEDULES

     
Appendices
 

 
 

Appendix 1
  Certain Definitions
 
   
Exhibits
 

 
 

Exhibit A
Exhibit B
Exhibit 2.1(b)
Exhibit 3.2(a)
Exhibit 3.2(c)(i)
Exhibit 3.2(e)
Exhibit 3.4(a)
  Persons to Enter into Confidentiality and Non-Competition Agreements
Subsidiaries
Form of Escrow Agreement
Form of General Assignment and Bill of Sale
Form of Intellectual Property Assignment
Form of FIRPTA Notification Letter
Form of Transition Services Agreement

Schedules

3

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into this
11th day of May, 2006, by and among Ice.com, Inc., a Delaware corporation
(“Parent”), Ice Diamond, LLC, a Delaware limited liability company (the
“Purchaser”) and Odimo Incorporated (“Seller”), a Delaware corporation. Certain
capitalized terms used in this Agreement are defined on Appendix A hereto.
Seller’s subsidiary corporations listed on Exhibit B hereto are parties to this
Agreement for purposes of Section 6.11 only.

RECITALS

WHEREAS, Seller is engaged in several online retailing businesses, one of which
consists of an online jewelry and diamond jewelry retailing business (the
“Business”);

WHEREAS, Purchaser desires to purchase from Seller and Seller desires to sell to
Purchaser certain of the assets of, or related to, the Business on the terms and
conditions set forth herein;

WHEREAS, concurrent with and as a condition to the execution of this
Agreement, (i) the Consultants will enter into mutually acceptable consulting
agreements, and (ii) Purchaser, Seller and the individuals and entities listed
on Exhibit A will enter into confidentiality and non-competition agreements.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
representations, warranties, covenants and promises contained herein, the
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

AGREEMENT

ARTICLE 1. THE TRANSACTION

1.1 Purchased Assets. Subject to the terms and conditions of this Agreement, at
the Closing, Seller hereby sells, transfers, conveys, assigns and delivers to
Purchaser, and Purchaser hereby purchases from Seller, all of Seller’s right,
title and interest in, to and under the following assets, properties, goodwill
and rights of Seller used in the conduct of the Business (collectively, the
“Purchased Assets”):

(a) Machinery and Equipment. The machinery and equipment listed on
Schedule 1.1(a) (the “Machinery and Equipment”);

(b) Intellectual Property/Telephone Numbers. The Seller Intellectual Property
and telephone numbers and directory listings used by Seller primarily in the
conduct of the Business, as listed on Schedule 1.1(b);

(c) Transferred Contracts. All rights of Seller under Contracts listed on
Schedule 1.1 (c) (the “Transferred Contracts”);

(d) Governmental Approvals. All Governmental Approvals (and pending applications
therefor), including the Governmental Approvals listed on Schedule 1.1(d);

(e) Books and Records. True and correct copies of all books, files, papers,
agreements, correspondence, databases, information systems, programs, documents,
records and documentation thereof reasonably requested by Purchaser including
without limitation, customer information and historical sale records stored as
computer data bases, customer lists, price lists, files, sales correspondence
and other records, marketing information and other records, sales literature and
similar information related to the Business, any of the Purchased Assets, or
used in the conduct of the Business, on whatever medium (the “Books and
Records”), including but not limited to the information described on
Schedule 1.1(e), which shall be provided in forms or formats as agreed to by
Seller and Purchaser;

(f) Goodwill. All goodwill related to the Business;

(g) Accounts Receivable. Accounts receivable associated with sales and
transactions entered into after the Transfer Time;

(h) Deposits and Advances. All performance and other bonds, security and other
deposits, advances, advance payments, prepaid credits and deferred charges (the
“Deposits and Advances”) associated with transactions entered into or orders
placed after the Transfer Time;

(i) Rebates and Credits. All rights in, to and under claims for refunds, rebates
or other discounts due from suppliers or vendors and rights to offset in respect
thereof (the “Rebates and Credits”) associated with transactions entered into or
orders placed after the Transfer Time;

1.2 Excluded Assets. Other than as provided in Section 1.1, all other assets of
Seller (the “Excluded Assets”) shall not be included in the Purchased Assets.
The Excluded Assets shall include:

(a) Cash. Cash, cash equivalents, merchant deposits in transit, deposits with
credit card companies and marketable securities;

(b) Accounts Receivable. Accounts receivable associated with sales and
transactions entered into prior to the Closing Date.

(c) All Debt. Any intercompany or intracompany receivable cash balances between
Seller and any of its Affiliates or between any of its Affiliates;

(d) Corporate Documents. Corporate seals, certificates of incorporation, minute
books, stock transfer records, or other records related to the corporate
organization of Seller;

(e) Insurance Policies. All insurance policies;

(f) Deposits and Advances. All performance and other bonds, security and other
deposits, advances, advance payments, prepaid credits and deferred charges (the
“Deposits and Advances”) associated with transactions entered into or orders
placed prior to the Transfer Time;

(g) Rebates and Credits. All rights in, to and under claims for refunds, rebates
or other discounts due from suppliers or vendors and rights to offset in respect
thereof (the “Rebates and Credits”); associated with transactions entered into
or orders placed prior to the Transfer Time;

(h) Claims. All claims, choses-in-action, rights in action, rights to tender
claims or demands to Seller’s insurance companies, rights to any insurance
proceeds, and other similar claims (the “Seller Claims”)

and

(i) Rights Under Certain Agreements. All rights under a Transaction Agreement.

The parties hereby agree that, in the event Purchaser and/or Parent identify on
or before the Inventory Adjustment Date assets, Intellectual Property Rights, or
property which Purchaser and/or Parent believe should have been requested to be
included as Purchased Assets but which do not appear on the applicable
Appendices, Schedules or Exhibits to this Agreement, the parties shall use their
respective commercially reasonable best efforts to agree upon the terms upon
which such transfer shall occur.

1.3 Reserved.

1.4 Retained Liabilities. Purchaser shall not assume and shall not be liable or
responsible for any Liability of Seller, any direct or indirect subsidiary of
Seller (each, a “Subsidiary”) or any Affiliate of Seller (collectively, the
“Retained Liabilities”). Without limiting the foregoing, the Retained
Liabilities shall include, and Purchaser shall not be obligated to assume, and
does not assume, and hereby disclaims any of the following Liabilities of
Seller, its Subsidiaries or its Affiliates:

(a) Any Liability attributable to any assets, properties or Contracts that are
not included in the Purchased Assets, except Liabilities attributable to
Non-Assignable Assets, for which Seller and Purchaser have reached a mutually
acceptable arrangement pursuant to Section 1.5(b);

(b) Any Liability for breaches of any Contract on or prior to the Closing Date
or any Liability for payments or amounts due under any Contract on or prior to
the Closing Date;

(c) Any Liability to GSI Commerce, Inc. under the Asset Purchase Agreement by
and between Seller and Ashford.com dated December 6, 2002;

(d) Any Liability for Taxes attributable to or imposed upon Seller or its
Affiliates for any period, or attributable to or imposed upon the Purchased
Assets on or prior to the Closing Date, including any Transfer Taxes;

(e) Any Liability for or with respect to any loan, other indebtedness, or
account payable, including any such Liabilities owed to Affiliates of Seller;

(f) Any Liability arising from accidents, occurrences, misconduct, negligence,
breach of fiduciary duty or statements made or omitted to be made (including
libelous or defamatory statements) on or prior to the Closing Date, whether or
not covered by workers’ compensation or other forms of insurance;

(g) Any Liability arising as a result of any legal or equitable action or
judicial or administrative proceeding initiated at any time, to the extent
related to any action or omission on or prior to the Closing Date, including any
Liability for (i) infringement or misappropriation of any Intellectual Property
Rights or any other rights of any Person (including any right of privacy or
publicity); (ii) breach of product warranties; (iii) injury, death, property
damage or other losses arising with respect to or caused by Seller Products or
the manufacturer or design thereof; or (iv) violations of any Legal Requirements
(including federal and state securities laws);

(h) Any Liability incurred in connection with the making or performance of this
Agreement and the Transaction;

(i) Any Liability incurred in connection with a violation of or arising under
Environmental Laws;

(j) Any Liability for expenses and fees incurred by Seller incidental to the
preparation of the Transaction Agreements, preparation or delivery of materials
or information requested by Purchaser, and the consummation of the Transaction,
including all broker, counsel and accounting fees and Transfer Taxes;

(k) Any Liability arising out of transactions, commitments, infringements, acts
or omissions not in the ordinary course of business;

(l) Any Liability arising out of any Seller Benefit Plan or contract of
insurance for employee group medical, dental or life insurance plans;

(m) Any Liability for making payments of any kind to employees (including as a
result of the Transaction, the termination of an employee by Seller, or other
claims arising out of the terms of employment with Seller) or with respect to
payroll taxes;

(n) Any Legal Requirement applicable to Seller, the Purchased Assets or the
Retained Liabilities on or prior to the Closing Date or any Liability for a
violation of such a Legal Requirement;

(o) Any Liability to any stockholders of Seller;

(p) Any Liability for credit balances, credit memos and all other amounts due to
dealers, distributors and customers;

(q) Any Liability related to or arising from the acquisition of the Business by
Seller;

(r) Any Liability associated with the Federal CAN-SPAM Act or violations of
Seller’s privacy policies associated with collection, retention, use, transfer
or sale of customer information;

(s) Any costs or expenses associated with the contracts with MSN or NextJump set
forth on Schedule 4.33 of the Seller Disclosure Schedule; or

(t) Any costs or expenses incurred in connection with shutting down,
deinstalling and removing equipment not purchased by Purchaser and any costs or
expenses associated with any Transferred Contracts not assumed by Purchaser
hereunder.

1.5 Non-Assignable Assets.

(a) Notwithstanding the foregoing, if any of the Transferred Contracts or other
Purchased Assets are not assignable or transferable (each, a “Non-Assignable
Asset”) without the consent of, or waiver by, a third party (each, an
“Assignment Consent”), either as a result of the provisions thereof or
applicable Legal Requirements, and any of such Assignment Consents have not been
obtained by Seller on or prior to the date hereof, Purchaser may elect to either
(i) have Seller permanently retain the Non-Assignable Asset and all Liabilities
relating thereto at the Closing; or (ii) have Seller continue its efforts to
obtain the Assignment Consents after Closing, and, in either case, this
Agreement and the related instruments of transfer shall not constitute an
assignment or transfer of such Non-Assignable Assets, and Purchaser shall not
assume Seller’s rights or obligations under such Non-Assignable Asset (and such
Non-Assignable Asset shall not be included in the Purchased Assets). If
Purchaser elects item (ii) above, without limiting Seller’s obligations under
Section 3.2(s), Seller shall use its best efforts to obtain all such Assignment
Consents as soon as reasonably practicable after the Closing Date and thereafter
assign to Purchaser such Non-Assignable Assets. Following any such assignment,
such assets shall be deemed Purchased Assets for purposes of this Agreement.

(b) After the Closing, Seller shall cooperate with Purchaser in any reasonable
arrangement designed to provide Purchaser with all of the benefits of the
Non-Assignable Assets as if the appropriate Assignment Consents had been
obtained, including by establishing arrangements whereby Purchaser shall
undertake the work necessary to perform under Transferred Contracts.

ARTICLE 2. CONSIDERATION FOR TRANSFER

2.1 Purchase Price, Payment, Escrow and Security for Indemnification
Obligations.

(a) Acquired Asset Purchase Price. Subject to the terms of this Agreement, as
full consideration for the sale, assignment, transfer and delivery of the
Purchased Assets and the execution and delivery of the Transaction Agreements by
Seller to Purchaser, including but not limited to the services to be provided by
Seller to Purchaser under the Transition Services Agreement, Purchaser is paying
an aggregate purchase price of $7.5 million (the “Purchased Assets Purchase
Price”), payable (i) by wire transfer of immediately available U.S. funds to
Seller of $7.0 million and (ii) by wire transfer of $500,000 to the Escrow Agent
pursuant to Section 2.1(b) hereof.

(b) Notwithstanding the provisions of Section 2.1(a), as security for the
indemnification and other obligations of Seller set forth in this Agreement or
any other Transaction Agreement including but not limited to the Transition
Services Agreement, at the Closing, Purchaser shall deliver to the Escrow Agent
a portion of the Purchase Price otherwise deliverable pursuant to Section 2.1(a)
equal to $500,000 (collectively, the “Escrow Amount”), which Escrow Amount shall
be held in escrow (the “Escrow”) in accordance with the terms of an escrow
agreement, substantially in the form attached hereto as Exhibit  2.1(b) (the
“Escrow Agreement”). Nothing in this Section 2.1 shall be construed as limiting
Seller’s liability to Purchaser to the Escrow Amount, nor shall payments from
the Escrow Amount be considered as liquidated damages for any breach under this
Agreement or any other Transaction Agreement

(c) Inventory and Corporate Packaging Purchase Price. Subject to the terms of
this Agreement, as full consideration for the sale, transfer and delivery of
(i) all inventory of Seller Products listed on Schedule 2.1(c) (collectively,
the “Inventory”), (ii) all stocks of shipping and packaging materials used or
held for use in connection with the Business (the “Corporate Packaging”)
identified on Schedule 2.1(c), and (iii) any and all rights to market and sell
all such Inventory and Corporate Packaging, Purchaser is paying an aggregate
purchase price of $1,962,929.66 (the “Inventory Purchase Price”), payable by
wire transfer of immediately available U.S. funds to Seller.

(d) Purchase Price Adjustments

(i) Repairs and Returns. If Purchaser makes any repairs, accepts any returns or
grants any allowances from and after the Closing Date, in compliance with the
return or warranty policy of Seller published by Seller on or prior to the
Closing Date, relating to any product produced or sold by Seller on or prior to
the Closing Date, (a) Purchaser shall do so as agent of Seller without any
liability to Seller or anyone else by so acting and (b) the costs associated
with such returns, repairs or allowances shall be reimbursed by Seller on the
Inventory Adjustment Date. With respect to any return, the costs associated with
such return to be credited to Purchaser shall be equal to the excess of (I) the
sum of (a) the retail price to be credited to the customer plus (b) any merchant
costs associated with crediting the customer, plus (c) any return shipping costs
covered or reimbursed (together with (a) and (b) the “Full Retail Cost”) over
(II) the Net Inventory Cost for the returned item. For purposes hereof, “Net
Inventory Cost” for any returned item shall equal the “cost of goods sold” for
that item. The costs of repairs shall be the actual out of pocket costs incurred
by Purchaser in making such repair. In the event that Purchaser shall reasonably
determine that any items returned are broken, damaged or unable to be sold as
new (such items “Damaged Goods”), Seller shall indemnify Purchaser for the Full
Retail Cost of such items and upon return of any Damaged Goods to Purchaser,
Purchaser shall deliver the Damaged Goods to Seller at Seller’s expense.
Notwithstanding Section 6.11 hereof, Seller shall be permitted through the date
which is the 30th day following the Inventory Adjustment Date (as herein
defined) to liquidate the Damaged Goods on Odimo’s Ebay clearance site,
provided, that Seller shall not reference Purchaser, www.diamond.com,
www.ice.com, or the Business in connection with the liquidation of such Damaged
Goods. Purchaser and Seller shall use their respective commercially reasonable
best efforts to work together on repairs, returns and allowances for all items
returned for credit, exchange or repairs. On the date which is 120 days
following the Closing Date (or, if such date is not a Business Day, the first
Business Day thereafter) (such date, the “Inventory Adjustment Date”), Purchaser
shall present Seller with a schedule (the “Return and Repair Schedule”) of all
returns, repairs and allowances that have been transacted by Purchaser hereunder
and Seller shall reimburse Purchaser for any amount amounts owned to Purchaser
under this Section 2.1(d)(i).

(ii) Sweepstakes and Prize Payouts. Seller shall reimburse Purchaser for all
amounts paid or inventory or products distributed with respect to sweepstakes,
contests, programs, prizes or similar payments or transfers made with respect to
sweepstakes, contests or prizes committed to by Seller, directly or indirectly,
prior to the Closing Date (the “Sweepstakes Prizes”), provided that prior to
such payment or shipment by Purchaser of the any Sweepstakes Prizes, Seller
shall have agreed that such Sweepstakes Prize is within the terms agreed by
Seller with the sponsor of such sweepstakes, contest or program.

2.2 Allocation of Purchase Price. As soon as practicable after the Inventory
Adjustment Date, Purchaser shall provide to Seller for Seller’s review and
approval (which approval shall not be unreasonably withheld) a proposed
allocation of the Purchase Price, as adjusted pursuant to Section 2.1, among the
various classes of Purchased Assets (as such classes are defined for the
purposes of Section 1060 of the Code). All allocations made pursuant to this
Section 2.2 shall be made in accordance with the requirements of Section 1060 of
the Code. None of the parties shall take a position on any Tax Return (including
IRS Form 8594), before any Tax Authority or in any judicial proceeding that is
in any manner inconsistent with such allocation without the written consent of
the other parties to this Agreement or unless specifically required pursuant to
a determination by an applicable Tax Authority. The parties shall promptly
advise each other of the existence of any tax audit, controversy or litigation
related to any allocation hereunder.

ARTICLE 3. CLOSING AND CLOSING DELIVERIES

3.1 Closing; Time and Place. The closing of the purchase and sale provided for
in this Agreement (the “Closing”) shall occur at the offices of Morrison &
Foerster LLP, 1290 Avenue of the Americas, New York, New York 10104, at 2:00
P.M. (the “Closing Time”) on the date of execution of this Agreement (the
“Closing Date”).

3.2 Deliveries by Seller. On the date hereof, Seller is(i) taking all reasonable
steps necessary to place Purchaser in actual possession and operating control of
the Business and the Purchased Assets and (ii) delivering the following items,
duly executed by Seller as applicable, all of which shall be in a form and
substance reasonably acceptable to Purchaser and Purchaser’s counsel:

(a) General Assignment and Bill of Sale. General Assignment and Bill of Sale
covering all of the applicable Purchased Assets, Inventory and Corporate
Packaging, substantially in the form attached hereto as Exhibit 3.2(a) (the
“General Assignment and Bill of Sale”);

(b) Reserved;

(c) Intellectual Property Assignment. Any and all documents necessary to
properly record the assignment to Purchaser of all of Seller’s right, title and
interest in and to the Seller Intellectual Property, including (i) the
intellectual property assignment (the “Intellectual Property Assignment”),
substantially in the form of Exhibit 3.2(c)(i) attached hereto;

(d) Other Conveyance Instruments. Such other specific instruments of sale,
transfer, conveyance and assignment as Purchaser may request;

(e) FIRPTA. A FIRPTA Notification Letter, substantially in the form attached
hereto as Exhibit 3.2(e) (the “FIRPTA Notification Letter”);

(f) Reserved;

(g) Notice Letter to State of Delaware/Certificate of Amendment. Certificate of
Amendment of Certificate of Incorporation of Diamond.com, Inc. as filed with the
Delaware Secretary of State changing the name of Diamond.com, Inc. to Odimo
Subsidiary, Inc. and a letter to the Secretary of State of the State of Delaware
consenting to the use of the name Diamond.com, Inc. by Parent or any of its
affiliates, including Purchaser;

(h) Transferred Contracts. Originals of all Transferred Contracts;

(i) Request for Reconveyance of Deed of Trust; Payoff and Release Letters.
Payoff and release letters from creditors of Seller, including but not limited
the Lender Bank, together with UCC-3 termination statements with respect to any
financing statements filed against the Business or any of the Purchased Assets,
terminating all Encumbrances (including Tax liens) on any of the Purchased
Assets;

(j) Books and Records. The Books and Records, provided that Purchaser and Seller
hereby agree that the customer records associated with the Business shall be
made available to Purchaser for inspection on or prior to the Closing Date and
provided further that an electronic copy of all customer records shall be
provided to Purchaser in ASCII electronic format on a mobile hard drive on or
prior to Tuesday, May 16, 2006;

(k) Wiring Instructions/Lender Bank Confirmation. Irrevocable instructions
submitted to the Lender Bank instructing the Lender Bank, that upon receipt of
the monies to be wired pursuant to Section 3.3 hereof, an amount equal to all
amounts outstanding under the Credit Facility shall be transferred to an account
of the Lender Bank (the “Payoff Transfer”) such that following completion of the
Payoff Transfer there shall be no amounts outstanding under the Credit Facility,
and acknowledgement that the Credit Facility shall be terminated and that the
Softbank Guaranty shall be released;

(l) Officer’s Certificate. A Certificate executed on behalf of Seller by its
Chief Executive Officer (the “Officer’s Certificate”), certifying that (i) all
of the representations and warranties of Purchaser in this Agreement are true
and correct in all material respects (considered collectively and individually)
as of the date of this Agreement (or, to the extent such representations and
warranties speak as of an earlier date, they shall be true and correct in all
material respects as of such earlier date) and (ii) all of the representations
and warranties of Purchaser in this Agreement that contain an express
materiality qualification shall have been true and correct in all respects
(considered collectively and individually) as of the date of this Agreement;

(m) Secretary’s Certificate. A certificate of the Secretary of the Seller (the
“Secretary’s Certificate”) setting forth a copy of the resolutions adopted by
the Board of Directors of Seller authorizing and approving the execution and
delivery of the Agreement and the consummation of the transactions contemplated
hereby;

(n) Delaware law Opinion. Opinion from Delaware counsel, in form and substance
acceptable to Purchaser and its counsel, which opinion specifically identifies
Purchaser and Parent as intended recipients of such opinion, confirming that
Seller is not required under Delaware law to seek the approval of its
shareholders in order to complete the Transaction;

(o) Opinion of Seller’s Counsel. Opinion in form and substance acceptable to
Purchaser, addressing the matters set forth in Schedule 3.2(o);

(p) Appraisal. Copy of appraisal from American Appraisal Associates , confirming
(i) the book value and (ii) market value of the Purchased Assets;

(q) Fairness Opinion. Copy of opinion from Oppenheimer & Co, Inc.
(“Oppenheimer”) to Seller which confirms Oppenheimer’s view that the Transaction
is fair to Seller from a financial point of view;

(r) Certificates of Good Standing. A certificate from the Secretary of State of
each of Delaware, Florida and each other jurisdiction where the Business is
conducted as to Seller’s good standing and payment of all applicable taxes;

(s) Consents. All Assignment Consents and other Consents required (i) for the
transfer of the Business and the Purchased Assets; (ii) for the consummation of
the Transaction; or (iii) to prevent a breach or termination of any Material
Contract;

(t) Consulting Contracts. Consulting Contracts with each of the persons listed
on Schedule 3.2(t) in form and substance acceptable to Purchase and its counsel;

(u) Non-Competition Agreements. Non-competition agreements in form and substance
acceptable to Purchaser and its counsel with each of the persons and entities
listed on Schedule 3.2(u);

(v) Termination of Licenses. To the extent there are any licenses, Contracts or
rights that grant any subsidiary of the Seller the right to use the Seller
Intellectual Property, such licenses, contracts and rights shall be terminated
as of the Closing Date and Seller shall provide Purchaser executed copied of all
termination agreements effecting such terminations.

3.3 Deliveries by Purchaser. At the Closing, Purchaser shall cause a wire
transfer to Silicon Valley Bank for credit to Seller’s account, in the amount of
the Purchase Price less the Escrow Amount.

3.4 Delivery by Purchaser and Seller. Concurrently with the execution hereof,
Purchaser and Seller are delivering the following items, duly executed by the
appropriate parties, all of which shall be in a form and substance reasonably
acceptable to the non-delivering party and its counsel:

(a) Transition Services Agreement. A Transition Services Agreement,
substantially in the form attached hereto as Exhibit 3.4(a) (the “Transition
Services Agreement”), obligating Seller to provide certain transition services
to Purchaser after the Closing with respect to the Business on the terms
described therein;

(b) Other Documentation. Such other certificates, instruments or documents
required pursuant to the provisions of this Agreement or otherwise necessary or
appropriate to transfer the Purchased Assets in accordance with the terms hereof
and consummate the Transaction, and to vest in Purchaser and its successors and
assigns full, complete, absolute, legal and equitable title to the Purchased
Assets, Inventory and Corporate Packaging, free and clear of all Encumbrances,
including such certificates, instruments and documents to be executed or
delivered by Seller pursuant to Article 3 hereof.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER

Except as specifically set forth on Schedule 4 (the “Seller Disclosure
Schedule”) attached to this Agreement (the parts of which are numbered to
correspond to the individual Section numbers of this Article 4), Seller hereby
represents and warrants (without limiting any other representations or
warranties made by Seller in this Agreement or any other Transaction Agreement)
to Purchaser as follows:

4.1 Organization, Good Standing, Qualification. The Seller Disclosure Schedule
sets forth Seller’s jurisdiction of organization and each state or other
jurisdiction in which Seller is qualified to do business. Seller (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization; (ii) is duly qualified to conduct business
and is in corporate and tax good standing under the laws of each jurisdiction in
which the nature of its business (including the Business), the operation of its
assets (including the Purchased Assets) or the ownership or leasing of its
properties (including the Real Property and Personal Property) requires such
qualification; and (iii) has full power and authority required to own, lease and
operate its assets and to carry on its business (including the Business) as now
being conducted and as presently proposed to be conducted.

4.2 Authority; Binding Nature of Agreements. Seller has all requisite power and
authority to execute and deliver this Agreement and all other Transaction
Agreements to which it is a party and to carry out the provisions of this
Agreement and the other Transaction Agreements. The execution, delivery and
performance by Seller of this Agreement and the other Transaction Agreements
have been approved by all requisite action on the part of Seller and do not
require any consent or approval of the Seller’s stockholders. This Agreement has
been duly and validly executed and delivered by Seller. Each of this Agreement
and the other Transaction Agreements constitutes, or upon execution and
delivery, will constitute, the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.

4.3 No Conflicts; Required Consents. The execution, delivery and performance of
this Agreement or any other Transaction Agreement by Seller do not and will not
(with or without notice or lapse of time):

(a) conflict with, violate or result in any breach of (i) any of the provisions
of Seller’s Certificate of Incorporation or bylaws; (ii) any resolutions adopted
by the Board of Directors or stockholders of Seller; (iii) any of the terms or
requirements of any Governmental Approval held by Seller or any of its employees
or that otherwise relates to the Business or any of the Purchased Assets; or
(iv) any provision of any Material Contract;

(b) give any Governmental Authority or other Person the right to (i) challenge
the Transaction; (ii) exercise any remedy or obtain any relief under any Legal
Requirement or any Order to which Seller, or any of the Purchased Assets, is
subject; (iii) declare a default of, exercise any remedy under, accelerate the
performance of, cancel, terminate, modify or receive any payment under any
Material Contract; or (iv) revoke, suspend or modify any Governmental Approval;

(c) cause Seller or Purchaser to become subject to, or to become liable for the
payment of, any Tax, or cause any of the Purchased Assets to be reassessed or
revalued by any Tax Authority or other Governmental Authority;

(d) result in the imposition or creation of any Encumbrance upon or with respect
to any of the Purchased Assets; or

(e) require Seller to obtain any Consent or make or deliver any filing or notice
to a Governmental Authority.

4.4 Subsidiaries. None of the Purchased Assets is owned by any Subsidiary of
Seller or any other Entity and no portion of the Business is conducted by any
Subsidiary of Seller or any other Entity.

4.5 Financial Statements.

(a) Seller has previously delivered to Purchaser the following financial
statements (collectively, the “Financial Statements”): (i) the audited
consolidated balance sheets, and the related statements of operations, changes
in stockholders’ equity, and cash flows, of Seller as of and for the fiscal
years ended December 31, 2005, 2004 and 2003, together with the notes thereto;
and (ii) the unaudited consolidated balance sheets, and the related unaudited
statements of operations, changes in stockholder’s equity, and cash flows, of
the Business (the “Interim Balance Sheet”) as of and for the period ended
March 31, 2006 (the “Interim Balance Sheet Date”).

(b) All of the Financial Statements (i) are true, accurate and complete in all
respects; (ii) are consistent with the Books and Records of Seller;
(iii) present fairly and accurately the financial condition of Seller as of the
respective dates thereof and the results of operations, changes in stockholder’s
equity and cash flows of Seller for the periods covered thereby; and (iv) have
been prepared in accordance with GAAP, applied on a consistent basis throughout
the periods covered; provided, however, that the Interim Balance Sheet is
subject to year-end adjustments consistent with past practice (which will not be
material individually or in the aggregate) and do not contain all of the
footnotes required by GAAP. All reserves established by Seller and set forth in
the Interim Balance Sheet are adequate for the purposes for which they were
established.

(c) The Seller Disclosure Schedule sets forth an accurate, correct and complete
breakdown and aging of each of Seller’s accounts payable (including to all of
its suppliers) as of the Interim Balance Sheet Date.

4.6 Absence of Undisclosed Liabilities. Neither Seller nor the Business has any
Liabilities other than (i) those set forth in the Interim Balance Sheet;
(ii) those incurred in the ordinary course of business and not required to be
set forth in the Interim Balance Sheet under GAAP; (iii) those incurred in the
ordinary course of business since the date of the Interim Balance Sheet; and
(iv) those incurred in connection with the execution of any of the Transaction
Agreements.

4.7 Absence of Changes. Since the Interim Balance Sheet Date, (i) Seller has
conducted the Business in the ordinary course of business and (ii) no event or
circumstance has occurred that could reasonably have a Material Adverse Effect
on Seller or the Business.

4.8 Transactions with Affiliates. Except as set forth in the Financial
Statements, no Affiliate (a) owns, directly or indirectly, any debt, equity or
other interest in any Entity with which Seller is affiliated, has a business
relationship or competes other than Affiliates that own less than two percent
(2%) of the issued and outstanding capital stock of a publicly-traded competitor
of Seller; (b) is indebted to Seller, nor is Seller indebted (or committed to
make loans or extend or guarantee credit) to any Affiliate other than with
respect to any of Seller’s obligations to pay accrued salaries, reimbursable
expenses or other standard employee benefits; (c) has any direct or indirect
interest in any asset (including the Purchased Assets), property or other right
used in the conduct of or otherwise related to the Business; (d) has any claim
or right against Seller, and no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time)
directly or indirectly give rise to or serve as a basis for any claim or right
in favor of any Affiliate against Seller; (e) is a party to any Material
Contract or has had any direct or indirect interest in, any Material Contract,
transaction or business dealing of any nature involving Seller; or (f) received
from or furnished to Seller any goods or services (with or without
consideration) since the Interim Balance Sheet Date.

4.9 Inventory. All of the items in the Inventory are (a) valued on the Financial
Statements at the lower of cost and net realizable value, on a first-in,
first-out in accordance with GAAP; (b) of good and merchantable quality, fit for
the purpose for which they are intended, and saleable and useable in the
ordinary course of business; (c) free of defects and damage; and (d) in
quantities adequate and not excessive in relation to the circumstances of
Seller’s Business and in accordance with Seller’s past inventory stocking
practices. All of the items in Seller’s Inventory meet Seller’s current
standards and specifications.

4.10 Material Contracts.

(a) Schedule 4.10 sets forth an accurate, correct and complete list of all
Contracts associated with the Business or the Purchased Assets to which any of
the descriptions set forth below may apply (the “Material Contracts”):

(i) Personal Property Leases, Insurance, Contracts affecting any Seller
Intellectual Property or Seller’s information systems or software, Contracts
with employees or contractors, Seller Benefit Plans and Governmental Approvals;

(ii) Any Contract for capital expenditures or for the purchase of goods or
services in excess of $5,000;

(iii) Any Contract obligating Seller to sell or deliver any product or service
by or through the Business at a price which does not cover the cost (including
labor, materials and production overhead) plus the customary profit margin
associated with such product or service;

(iv) Any Contract involving financing or borrowing of money, or evidencing
indebtedness, any liability for borrowed money, any obligation for the deferred
purchase price of property in excess of $5,000 or guaranteeing in any way any
Contract in connection with any Person;

(v) Any joint venture, partnership, cooperative arrangement or any other
Contract involving a sharing of profits;

(vi) Any advertising or marketing Contract not terminable without payment or
penalty on 5 days notice;

(vii) Any Contract with respect to the discharge, storage or removal of
effluent, waste or pollutants;

(viii) Any Contract affecting any right, title or interest in or to real
property;

(ix) Any Contract relating to any license or royalty arrangement;

(x) Any power of attorney, proxy or similar instrument;

(xi) The Charter, Bylaws and other organizational or constitutive documents of
Seller and any Contract among stockholders of Seller;

(xii) Any Contract for the manufacture, service or maintenance of any product of
the Business;

(xiii) Any Contract for the purchase or sale of any assets other than in the
ordinary course of business or for the option or preferential rights to purchase
or sell any assets;

(xiv) Any requirement or output Contract;

(xv) Any Contract to indemnify any Person or to share in or contribute to the
liability of any Person;

(xvi) Any Contract for the purchase or sale of foreign currency or otherwise
involving foreign exchange transactions;

(xvii) Any Contract containing covenants not to compete in any line of business
or with any Person in any geographical area;

(xviii) Any Contract related to the acquisition of a business or the equity of
any other Entity;

(xix) Any other Contract which (i) provides for payment or performance by either
party thereto having an aggregate value of $5,000 or more; (ii) is not
terminable without payment or penalty on five (5) days (or less) notice; or
(iii) is between, inter alia, an Affiliate and Seller;

(xx) Any other Contract that involves future payments, performance of services
or delivery of goods or materials to or by Seller of an aggregate amount or
value in excess of $5,000, on an annual basis, or that otherwise is material to
the Business or prospects of Seller

(xxi) Any Contract which is material to the Business; and

(xxii) Any proposed arrangement of a type that, if entered into, would be a
Contract described in any of (i) through (xxi) above.

(b) Seller has delivered to Purchaser accurate, correct and complete copies of
all Material Contracts (or written summaries of the material terms thereof, if
not in writing), including all amendments, supplements, modifications and
waivers thereof. All nonmaterial contracts of Seller do not, in the aggregate,
represent a material portion of the Liabilities of Seller.

(c) Each Material Contract is currently valid and in full force and effect, and
is enforceable by Seller in accordance with its terms.

(d) (i) Seller is not in default, and no party has notified Seller that it is in
default, under any Contract. No event has occurred, and no circumstance or
condition exists, that might (with or without notice or lapse of time)
(a) result in a violation or breach of any of the provisions of any Material
Contract; (b) give any Person the right to declare a default or exercise any
remedy under any Material Contract; (c) give any Person the right to accelerate
the maturity or performance of any Material Contract or to cancel, terminate or
modify any Material Contract; or (d) otherwise have a Material Adverse Effect on
Seller in connection with any Material Contract; and

(ii) Seller has not waived any of its rights under any Material Contract.

(e) Each Person against which Seller has or may acquire any rights under any
Material Contract is (i) Solvent and (ii) able to satisfy such Person’s material
obligations and liabilities to Seller.

(f) The performance of the Transferred Contracts will not result in any
violation of or failure by Seller to comply with any Legal Requirement.

(g) The Material Contracts constitute all of the Contracts necessary to enable
Seller to conduct the Business in the manner in which such Business is currently
being conducted and in the manner in which such Business is proposed to be
conducted.

4.11 Insurance. The Seller Disclosure Schedule sets forth an accurate and
complete list of all insurance policies, self-insurance arrangements and
fidelity bonds, currently in effect, that insure the Business and/or the
Purchased Assets (collectively, the “Insurance Policies”). Seller has delivered
to Purchaser true, correct and complete copies of all Insurance Policies. Each
Insurance Policy is valid, binding, and in full force and effect. Seller is not
in breach of any Insurance Policy, and no event has occurred which, with notice
or the lapse of time, would constitute such a breach, or permit termination,
modification, or acceleration, of any Insurance Policy. Seller has not received
any notice of cancellation or non-renewal of any Insurance Policy. The
consummation of the Transaction will not cause a breach, termination,
modification, or acceleration of any Insurance Policy. There is no claim under
any Insurance Policy that has been improperly filed or as to which any insurer
has questioned, disputed or denied liability. Seller has not received any notice
of, nor does Seller have any Knowledge of any facts that might result in, a
material increase in the premium for any Insurance Policy. All sales of products
by the Business prior to the closing date are covered under the Insurance
Policies.

4.12 Title; Sufficiency; Condition of Assets.

(a) Seller has good and marketable title to, is the exclusive legal and
equitable owner of, and has the unrestricted power and right to sell, assign and
deliver the Purchased Assets, Inventory and Corporate Packaging. The Purchased
Assets, Inventory and Corporate Packaging are free and clear of all Encumbrances
of any kind or nature, except (a) restrictions imposed in any Governmental
Approval and (b) Encumbrances disclosed on Schedule 4.12 which are being removed
and released concurrently with the Closing on the date hereof. Upon Closing,
Purchaser will acquire exclusive, good and marketable title or license to (as
the case may be) the Purchased Assets, Inventory and Corporate Packaging and no
restrictions will exist on Purchaser’s right to resell, license or sublicense
any of the Purchased Assets or Inventory or engage in the Business.

(b) The Purchased Assets include all the assets necessary to permit Purchaser to
conduct the Business after the Closing in a manner substantially equivalent to
the manner as it is being conducted on the date of this Agreement in compliance
with all Legal Requirements.

(c) All Purchased Assets are (i) in good operating condition and repair,
ordinary wear and tear excepted; (ii) suitable and adequate for continued use in
the manner in which they are presently being used; (iii) adequate to meet all
present and reasonably anticipated future requirements of the Business; and
(iv) free of defects (latent and patent).

4.13 Real Property. Seller does not currently own nor has it ever owned, since
its inception, any Real Property.

4.14 Intellectual Property.

(a) Schedule 1.1(b) lists all Seller Intellectual Property, specifying in each
case whether such Seller Intellectual Property is owned or controlled by or for,
licensed to, or otherwise held by or for the benefit of Seller, including all
Registered Intellectual Property Rights owned by, filed in the name of or
applied for by Seller and used in the Business (the “Seller Registered
Intellectual Property Rights”).

(b) Each item of Seller Intellectual Property (i) is valid, subsisting and in
full force and effect, (ii) has not been abandoned or passed into the public
domain and (iii) is free and clear of any Encumbrances.

(c) The Seller Intellectual Property constitutes all the Intellectual Property
Rights used in and/or necessary to the conduct of the Business as it is
currently conducted, and as it is currently planned or contemplated to be
conducted by Seller prior to the Closing and by Purchaser following the Closing,
including the design, development, manufacture, use, import and sale of the
Seller Products (including those currently under development).

(d) Each item of Seller Intellectual Property either (i) is exclusively owned by
Seller and was written and created solely by employees of Seller acting within
the scope of their employment or by third parties, all of which employees and
third parties have validly and irrevocably assigned all of their rights,
including Intellectual Property Rights therein, to Seller, and no third party
owns or has any rights to any such Seller Intellectual Property, or (ii) is duly
and validly licensed to Seller for use in the manner currently used by Seller in
the conduct of the Business and, as it is currently planned or contemplated to
be used by Seller in the conduct of the Business prior to the Closing and by
Purchaser following the Closing.

(e) In each case in which Seller has acquired any Intellectual Property Rights
from any Person, Seller has obtained a valid and enforceable assignment
sufficient to irrevocably transfer all rights in such Intellectual Property
Rights (including the right to seek past and future damages with respect
thereto) to Seller. No Person who has licensed Intellectual Property Rights to
Seller has ownership rights or license rights to improvements made by Seller in
such Intellectual Property Rights. Seller has not transferred ownership of, or
granted any exclusive license of or right to use, or authorized the retention of
any exclusive rights to use or joint ownership of, any Intellectual Property
Rights that is or was Seller Intellectual Property to any Person.

(f) There are no facts, circumstances or information that (i) would render any
Seller Intellectual Property invalid or unenforceable, (ii) would adversely
affect any pending application for any Seller Registered Intellectual Property
Right, or (iii) would adversely affect or impede the ability of Seller to use
any Seller Intellectual Property in the conduct of the Business as it is
currently conducted or as it is currently planned or contemplated to be
conducted by Seller prior to Closing or by Purchaser following the Closing.
Seller has not misrepresented, or failed to disclose, and has no Knowledge of
any misrepresentation or failure to disclose, any fact or circumstances in any
application for any Seller Registered Intellectual Property Right that would
constitute fraud or a misrepresentation with respect to such application or that
would otherwise affect the validity or enforceability of any Seller Registered
Intellectual Property Right.

(g) All necessary registration, maintenance and renewal fees in connection with
each item of Seller Registered Intellectual Property Rights have been paid and
all necessary documents and certificates in connection with such Seller
Registered Intellectual Property Rights have been filed with the relevant
patent, copyright, trademark, domain name registries or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Seller Registered Intellectual Property Rights. There are no
actions that must be taken by Seller within one hundred twenty (120) days
following the Closing Date, including the payment of any registration,
maintenance or renewal fees or the filing of any responses to office actions,
documents, applications or certificates for the purposes of obtaining,
maintaining, perfecting, preserving or renewing any Registered Intellectual
Property Rights. To the maximum extent provided for by, and in accordance with,
applicable laws and regulations or registration requirements, Seller has
recorded in a timely manner each such assignment of a Registered Intellectual
Property Right assigned to Seller with the relevant governmental authority and
domain name registries, including without limitation the United States Patent
and Trademark Office (the “PTO”), the U.S. Copyright Office or their respective
counterparts in any relevant foreign jurisdiction, as the case may be.

(h) Seller has taken all necessary action to maintain and protect (i) the Seller
Intellectual Property, and (ii) the secrecy, confidentiality, value and Seller’s
rights in the Confidential Information and Trade Secrets of Seller and those
provided by any Person to Seller, including by having and enforcing a policy
requiring all current and former employees, consultants and contractors of
Seller to execute appropriate confidentiality and assignment agreements. All
copies thereof shall be delivered to Purchaser at Closing. Seller has no
Knowledge of any violation or unauthorized disclosure of any Trade Secret or
Confidential Information related to the Business, the Purchased Assets, or
obligations of confidentiality with respect to such. Only the individuals named
in the Seller Disclosure Schedule, which describes their relationship with
Seller, have had access to such Trade Secrets and Confidential Information, and
each such individual has signed a confidentiality agreement with respect
thereto.

(i) The operation of the Business as it is currently conducted, or as it is
currently planned or contemplated to be conducted by Seller prior to the
Closing, including but not limited to the design, development, use, import,
branding, advertising, promotion, marketing, manufacture and sale of the Seller
Products (including any currently under development), does not and will not, and
will not when operated by Purchaser substantially in the same manner following
the Closing, infringe or misappropriate any Intellectual Property Rights of any
Person, violate any right of any Person (including any right to privacy or
publicity), defame or libel any Person or constitute unfair competition or trade
practices under the laws of any jurisdiction, and Seller has not received notice
from any Person claiming that such operation or any Seller Product (including
any currently under development) infringes or misappropriates any Intellectual
Property Rights of any Person (including any right of privacy or publicity), or
defames or libels any Person or constitutes unfair competition or trade
practices under the laws of any jurisdiction (nor does Seller have Knowledge of
any basis therefor).

(j) To Seller’s Knowledge, no Person is violating, infringing or
misappropriating any Seller Intellectual Property Right.

(k) There are no Proceedings before any Governmental Authority (including before
the PTO) anywhere in the world related to any of the Seller Intellectual
Property, including any Seller Registered Intellectual Property Rights.

(l) No Seller Intellectual Property or Seller Product is subject to any
Proceeding or any outstanding decree, order, judgment, office action or
settlement agreement or stipulation that restricts in any manner the use,
transfer or licensing thereof by Seller or that may affect the validity, use or
enforceability of such Seller Intellectual Property or Seller Product.

(m) Schedule 1.1(c) lists all Transferred Contracts affecting any Intellectual
Property Rights. Seller is not in breach of, nor has Seller failed to perform
under, any such Transferred Contracts and, to Seller’s Knowledge, no other party
to any such Transferred Contracts, is in breach thereof or has failed to perform
thereunder.

(n) To the extent not listed on Schedule 1.1(c), the Seller Disclosure Schedule
lists all Transferred Contracts under which Seller has agreed to, or assumed,
any obligation or duty to warrant, indemnify, reimburse, hold harmless, guaranty
or otherwise assume or incur any obligation or liability, or provide a right of
rescission, with respect to the infringement or misappropriation by Seller or
such other person of the Intellectual Property Rights of any Person other than
Seller.

(o) There is no Material Contract affecting any Seller Intellectual Property
under which there is any dispute regarding the scope of such Material Contract,
or performance under such Material Contract, including with respect to any
payments to be made or received by Seller thereunder.

(p) All Seller Intellectual Property will be fully transferable, alienable or
licensable by Purchaser without restriction and without payment of any kind to
any third party. The consummation of the Transaction as contemplated hereby will
not result in any loss of, or the diminishment in value of, any Seller
Intellectual Property or the right to use any Seller Intellectual Property.

(q) Neither this Agreement nor the Transaction, including the assignment to
Purchaser, by operation of law or otherwise, of any Transferred Contracts will
result in (i) Purchaser granting to any third party any right to, or with
respect to, any Intellectual Property Right owned by, or licensed to, Purchaser;
(ii) Purchaser being bound by, or subject to, any non-compete or other
restriction on the operation or scope of its businesses, including the Business;
or (iii) Purchaser being obligated to pay any royalties or other amounts to any
third party.

(r) There are no licenses, Contracts or rights that grant any subsidiary of the
Seller the right to use any Seller Intellectual Property.

4.15 Suppliers and Affiliates.

(a) Suppliers. All Transferred Contracts with suppliers were entered into by or
on behalf of Seller and were entered into in the ordinary course of business for
usual quantities and at normal prices. The Seller Disclosure Schedule sets forth
an accurate, correct and complete:

(i) list of the 25 largest suppliers of the Business, determined on the basis of
costs of items purchased for each of the fiscal years ended December 31, 2005,
and the three month period ended March 31, 2006;

(ii) breakdown of the amounts paid to each supplier that received more than
$100,000 from Seller (on an annualized basis) for each of the fiscal years ended
December 31, 2005, and the three month period ended March 31, 2006; and

(iii) list of all sole source suppliers of Seller.

(b) The Seller Disclosure Schedule sets forth a true, accurate and complete list
of the top 500 Contract Affiliates of the Business.

(c) Seller has not entered into any Contract under which Seller is restricted
from selling, licensing or otherwise distributing any Seller Products to any
class of customers, in any geographic area, during any period of time or in any
segment of the market. There is no purchase commitment which provides that any
supplier will be the exclusive supplier of Seller or distributor. There is no
purchase commitment requiring Seller to purchase the entire output of a
supplier.

(d) Seller has not received any notice or other communication, has not received
any other information indicating, and otherwise has no Knowledge, that any
current customer, supplier or distributor identified in the Seller Disclosure
Schedule may cease dealing with Seller, may otherwise materially reduce the
volume of business transacted by such Person with Seller or otherwise is
materially dissatisfied with the service Seller provides such Person. Seller has
no reason to believe that any such Person will cease to do business with
Purchaser after, or as a result of, consummation of the Transaction, or that
such Person is threatened with bankruptcy or insolvency. Seller has no Knowledge
of any fact, condition or event which may, by itself or in the aggregate,
adversely affect its relationship with any such Person. Since January 1, 2006,
there has been no cancellation of backlogged orders in excess of the average
rate of cancellation prior to such date.

(e) Neither Seller nor any of its officers or employees has directly or
indirectly given or agreed to give any rebate, gift or similar benefit to any
customer, supplier, distributor, broker, governmental employee or other Person,
who was, is or may be in a position to help or hinder the Business (or assist in
connection with any actual or proposed transaction) which could subject Seller
(or Purchaser after consummation of the Transaction) to any damage or penalty in
any civil, criminal or governmental litigation or proceeding or which would have
a Material Adverse Effect on Seller (or Purchaser after consummation of the
Transaction).

(f) Schedule 4.15 (f) sets for a complete list of all amounts owed to suppliers
of the Business as of the Closing Date and the terms of payment with respect to
all amounts owed. Seller has reviewed and verified as correct all amounts owed
on Schedule 4.15(f) (the “Supplier Accounts Payable”).

4.16 Seller Products and Product Warranty. All products manufactured, processed,
distributed, shipped or sold by Seller in the context of operation of the
Business and any services rendered by Seller in the context of operation of the
Business have been in conformity with all applicable contractual commitments and
all expressed or implied warranties. To Seller’s knowledge, no liability exists
or will arise for repair, replacement or damage in connection with such sales or
deliveries, in excess of the reserve therefor on the Interim Balance Sheet. The
Seller Disclosure Schedule sets forth an accurate, correct and complete
statement of all written warranties, warranty policies, service and maintenance
agreements of the Business. No products heretofore manufactured, processed,
distributed, sold, delivered or leased by Seller in the context of operation of
the Business are now subject to any guarantee, written warranty, claim for
product liability, or patent or other indemnity. All warranties are in
conformity with the labeling and other requirements of the Magnuson-Moss
Warranty Act and other applicable laws. The Seller Disclosure Schedule sets
forth an accurate, correct and complete list and summary description of all
service or maintenance agreements under which Seller is currently obligated,
indicating the terms of such agreement and any amounts paid or payable
thereunder. The product warranty and return experience for the year ended
December 31, 2005 and the three months ended March 31, 2006I is set forth in the
Seller Disclosure Schedule. The product warranty reserves on Seller’s Financial
Statements and the Interim Balance Sheet were prepared in accordance with GAAP
and are adequate in light of the circumstances of which Seller is aware.

4.17 Employees and Consultants.

(a) Employees and Contracts. No employee of Seller, including but not limited to
the individuals listed on Schedule 4.17 has been granted the right to continued
employment by Seller or to any material compensation following termination of
employment with Seller. None of the Consultants is presently party to a
non-compete agreement with Seller.

(b) Disputes. There are no claims, disputes or controversies pending or, to the
Knowledge of Seller, threatened involving any employee or group of employees.
Seller has not suffered or sustained any work stoppage and no such work stoppage
is threatened.

(c) Compliance with Legal Requirements. Seller has complied with all Legal
Requirements related to the employment of its employees, including provisions
related to wages, hours, leaves of absence, equal opportunity, occupational
health and safety, workers’ compensation, severance, employee handbooks or
manuals, collective bargaining and the payment of social security and other
Taxes. Seller has no Liability under any Legal Requirements related to
employment and attributable to an event occurring or a state of facts existing
prior to the date thereof.

(d) WARN Act. Seller is in full compliance with the Worker Readjustment and
Notification Act (the “WARN Act”) (29 USC §2101) and similar applicable state or
local laws, including all obligations to promptly and correctly furnish all
notices required to be given thereunder in connection with any “plant closing”
or “mass layoff” to “affected employees”, “representatives” and any state
dislocated worker unit and local government officials. No reduction in the
notification period under the WARN Act is being relied upon by Seller. The
Seller Disclosure Schedule sets forth an accurate, correct and complete list of
all employees terminated (except with cause, by voluntarily departure or by
normal retirement), laid off or subjected to a reduction of more than 50% in
hours or work during the two full calendar months and the partial month
preceding this representation and warranty.

(e) Unions. Seller has no collective bargaining agreements with any of its
employees. There is no labor union organizing or election activity pending or,
to the Knowledge of Seller, threatened with respect to Seller.

4.18 Seller Benefit Plans.

(a) Schedule 4.18(a) identifies each Seller Benefit Plan. Each Seller Benefit
Plan has been maintained in compliance in all material respects with its terms
and with the requirements under applicable law, including but not limited to
ERISA and the Code.

(b) None of the Seller Benefit Plans is a (i) a Multiemployer Plan, (ii) a
Defined Benefit Plan, (iii) any plan that is subject to Section 412 of the Code,
or (iv) a plan intended to be qualified under Section  401(a) of the Code; and
neither Seller nor any ERISA Affiliate has at any time within the past six
(6) years contributed to, maintained, or incurred any liability with respect to
any such plan.

(c) No Seller Benefit Plan provides benefits, including death or medical
benefits (whether or not insured), with respect to employees or former employees
of Seller and its ERISA Affiliates beyond retirement or other termination of
service, other than coverage required by Section 4980B of the Code and
Sections 601 through 608 of ERISA (and, if applicable, comparable state law).

Nothing contained in any of the Seller Benefit Plans will obligate Purchaser to
provide any benefits to employees, former employees or beneficiaries of
employees or former employees, or to make any contributions to any plans from
and after the Closing.

4.19 Compliance with Laws.

(a) Seller is, and at all times since January 1, 2003 has been, in compliance in
all material respects, with each Legal Requirement that is applicable to Seller
or any of Seller’s properties, assets (including the Purchased Assets),
operations or businesses (including the Business), and no event has occurred,
and no condition or circumstance exists, that might (with or without notice or
lapse of time) constitute, or result directly or indirectly in, a default under,
a breach or violation of, or a failure comply with, any such Legal Requirement.
Seller has not received any notice from any third party regarding any actual,
alleged or potential violation of any Legal Requirement.

(b) To Seller’s knowledge, no Governmental Authority has proposed or is
considering any Legal Requirement that may affect Seller, Seller’s properties,
assets (including the Purchased Assets), operations or businesses (including the
Business), or Seller’s rights thereto.

4.20 SEC Documents, Financial Statements.

(a) Seller has provided to Purchaser a true and complete copy of each statement,
report, registration statement (with the prospectus in the form filed pursuant
to Rule 424(b) of the Securities Act of 1933, as amended (the “Securities
Act”)), definitive proxy statement, and other filings filed with the SEC by
Seller since February 16, 2005 (collectively, the “Seller SEC Documents”). In
addition, Seller has provided to Purchaser complete copies of all exhibits to
the Seller SEC Documents filed prior to the Execution Date, and will promptly
make available to Purchaser all exhibits to any additional Seller SEC Documents
filed prior to the Effective Time. All documents required to be filed as
exhibits to the Seller SEC Documents have been so filed. As of their respective
filing dates, the Seller SEC Documents complied as to form in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and the Securities Act and each of the Seller SEC
Documents was timely filed and did not contain any untrue statement of material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading, except to the extent corrected,
supplemented or superseded by a subsequently filed Seller SEC Document. To the
Seller’s knowledge, as of the date hereof, none of the Seller SEC Documents is
subject to ongoing SEC review or outstanding SEC comment.

(b) The financial statements of Seller, including the notes thereto, included in
the Seller SEC Documents (the “Seller Financial Statements”) and the audited
balance sheet of Seller, dated as of December 31, 2005 (the “Seller Balance
Sheet Date”) (i) were complete and correct as of their respective dates,
(ii) complied as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto as of their respective dates; (iii) have been prepared in
accordance with GAAP applied on a basis consistent throughout the periods
indicated and consistent with each other (except as may be indicated in the
notes thereto or, in the case of unaudited statements, included in Quarterly
Reports on Form 10-Q, as permitted by Form 10-Q of the SEC); and (iv) fairly
present the consolidated financial condition and results of operations of Seller
as of the respective dates and for the respective periods indicated therein
(subject, in the case of unaudited statements, to normal, recurring year-end
adjustments). There has been no change in Seller accounting policies except as
described n the notes to the Seller Financial Statements. The Seller does not
intend to correct or restate, and there is not any basis to restate, any of the
Seller Financial Statements.

(c) Each of the principal executive officer and the principal financial officer
of Seller (or each former principal executive officer and each former principal
financial officer of Seller, as applicable) has made all certifications required
by Rule 13a-14 or 15d-14 under the Exchange Act or Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002 (“SOX”) and the rules and regulations of the SEC
promulgated thereunder with respect to the Seller SEC Documents, and the
statements contained in such certifications are true and correct. For purposes
of the foregoing sentence, “principal executive officer” and “principal
financial officer” shall have the meanings given to such terms in SOX. Neither
Seller nor any of its subsidiaries has outstanding, or has arranged any
outstanding, “extensions of credit” to directors or executive officers within
the meaning of Section 402 of SOX.

(d) Neither Seller nor any of its subsidiaries is a party to, or has any
commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar contract or arrangement (including any contract or
arrangement relating to any transaction or relationship between or among Seller
and any of its subsidiaries, on the one hand, and any unconsolidated affiliate,
including any structured finance, special purpose or limited purpose entity or
Person, on the other hand or any “off-balance sheet arrangements” (as defined in
Item 303(a) of Regulation S-K of the SEC)).

(e) Seller maintains a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(f) Seller has in place the “disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) required in order for the
chief executive officer and chief financial officer of Seller to engage in the
review and evaluation process mandated by the Exchange Act and the rules
promulgated thereunder. Seller’s “disclosure controls and procedures” are
reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by Seller in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC,
and that all such information is accumulated and communicated to Seller’s
management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the chief executive officer and
chief financial officer of Seller required under the Exchange Act with respect
to such reports.

(g) Since February 16, 2005, Seller has not received from its independent
auditors any oral or written notification of a (x) “reportable condition” or (y)
“material weakness” in Seller’s internal controls. For purposes hereof, the
terms “reportable condition” and “material weakness” shall have the meanings
assigned to them in the Statements of Auditing Standards 60, as in effect on the
date hereof.

4.21 Governmental Approvals.

(a) Seller has all Governmental Approvals that are necessary or appropriate in
connection with Seller’s ownership and use of its properties or assets
(including the Purchased Assets) or Seller’s operation of its businesses
(including the Business). Seller has made all filings with, and given all
notifications to, all Governmental Authorities as required by all applicable
Legal Requirements. Schedule 1.1(d) contains an accurate, correct and complete
list and summary description of each such Governmental Approval, filing or
notification. Each such Governmental Approval, filing and notification is valid
and in full force and effect, and there is not pending or threatened any
Proceeding which could result in the suspension, termination, revocation,
cancellation, limitation or impairment of any such Governmental Approval, filing
or notification. No violations have been recorded in respect of any Governmental
Approvals, and Seller knows of no meritorious basis therefor. No fines or
penalties are due and payable in respect of any Governmental Approval or any
violation thereof.

(b) Seller has delivered to Purchaser accurate and complete copies of all of the
Governmental Approvals, filings and notifications identified in Schedule 1.1(d),
including all renewals thereof and all amendments thereto. All Governmental
Approvals are freely assignable to Purchaser.

4.22 Proceedings and Orders.

(a) There is no Proceeding pending or, or to Seller’s Knowledge, threatened
against or affecting Seller, any of Seller’s properties, assets (including the
Purchased Assets), operations or businesses (including the Business), or
Seller’s rights relating thereto. To Seller’s Knowledge, no event has occurred,
and no condition or circumstance exists, that might directly or indirectly give
rise to or serve as a basis for the commencement of any such Proceeding. Seller
has delivered to Purchaser true, accurate and complete copies of all pleadings,
correspondence and other documents relating to any such Proceeding. No insurance
company has asserted in writing that any such Proceeding is not covered by the
applicable policy related thereto.

(b) Neither Seller, its officers, directors, agents or employees, nor any of
Seller’s properties, assets (including the Purchased Assets), operations or
businesses (including the Business), nor Seller’s rights relating to any of the
foregoing, is subject to any Order or any proposed Order.

4.23 Environmental Matters. Neither the Seller nor any of its subsidiaries is,
and at no time has been, in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, where
such violation could have a Seller Material Adverse Effect, and to the best of
its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation. As used herein,
“Environmental Laws” means all applicable federal, state and local laws, rules,
regulations, codes, ordinances, judgments, decrees and the common law governing,
regulating or otherwise affecting the environment, or occupational health or
safety, including the federal Clean Air Act, the federal Clean Water Act, the
federal Resource Conservation and Recovery Act, the federal Comprehensive
Environmental Response, Compensation and Liability Act, the federal Toxic
Substances Control Act and their state and local counterparts. The term
“Hazardous Materials” means the existence in any form of polychlorinated
biphenyls, asbestos or asbestos containing materials, urea formaldehyde foam
insulation, oil, gasoline, petroleum, petroleum products and petroleum-derived
substances (other than in vehicles operated in the ordinary course of business),
pesticides and herbicides, and any other chemical, material or substance
regulated under any Environmental Laws. Seller and its subsidiaries has operated
all facilities and properties owned, leased or operated by it in material
compliance with the Environmental Laws; and no Hazardous Materials have been
stored, used, disposed of, treated, released or discharged by the Seller in
violation of Environmental Laws. To the knowledge of Seller, neither the Seller
nor any of its subsidiaries has received any notice from any governmental body
claiming any violation of any Environmental Law, or requiring any work, repairs,
construction, investigation, alterations, noise reduction, cleanup or
installation, which has not been fully complied with; and neither Seller nor any
of its subsidiaries has received any notice claiming that a release of Hazardous
Materials has occurred or exists on, in or under any facility or property owned,
leased or operated currently or in the past by the Seller or any of its
subsidiaries. Neither Seller nor any of its subsidiaries has in its possession
any reports of environmental consultants relating to the properties of the
Seller.

4.24 Taxes.

(a) Seller and each of its subsidiaries has timely filed all Tax Returns (as
defined below) that it was required to file, and such Tax Returns are true,
correct and complete. All Taxes (as defined below) shown to be payable on such
Tax Returns or on subsequent assessments with respect thereto have been paid in
full on a timely basis, and no other Taxes are payable by Seller or any
subsidiary with respect to any period ending prior to the date of this
Agreement, whether or not shown due or reportable on such Tax Returns, other
than Taxes for which adequate accruals have been provided in the Seller
Financial Statements or amounts payable with respect to periods or portions of
periods after the Seller Balance Sheet Date in accordance with past practice. No
claim has been made by a Tax Authority in a jurisdiction where Tax Returns are
not filed by or on behalf of the Seller or any of its subsidiaries that the
Seller or any such subsidiary is or may be subject to taxation by that
jurisdiction. Seller and each of its subsidiaries has withheld and paid over all
Taxes required to have been withheld and paid over, and complied with all
information reporting and backup withholding requirements, including maintenance
of required records with respect thereto. Neither Seller nor any subsidiary has
any liability for unpaid Taxes accruing after the date of its latest Financial
Statements except for Taxes incurred in the ordinary course of business. Except
as disclosed in the Seller SEC Documents, there are no liens for Taxes on the
properties of Seller or any of its subsidiaries, other than liens for Taxes not
yet due and payable.

(b) Except as disclosed in the Seller SEC Documents, no Tax Returns of Seller or
any of its subsidiaries have been audited and no audit or other administrative
proceeding is pending or threatened. No judicial proceeding is pending or
threatened that involves any Tax or Tax Return filed or paid by or on behalf of
the Seller or any of its subsidiaries. Neither the Seller nor any of its
subsidiaries is delinquent in the payment of any Tax or has requested an
extension of time to file a Tax Return and not yet filed such return. Seller has
delivered to Purchaser correct and complete copies of all Tax Returns filed,
examination reports, and statements of deficiencies assessed or agreed to by
Seller or any of its subsidiaries for the last five (5) years. Except as
disclosed in the Seller SEC Documents, neither Seller nor any of its
subsidiaries is delinquent in the payment of any tax, has waived any statute of
limitations in respect of any Tax or agreed to an extension of time with respect
to any Tax assessment or deficiency.

(c) Neither the Seller nor any subsidiary of the Seller has been a member of an
affiliated, consolidated, combined or unitary group except as disclosed in the
Seller SEC Documents. Neither Seller nor any of its subsidiaries is a party to
or bound by any tax indemnity agreement, tax sharing agreement, tax shelter
vehicle or similar contract. Neither Seller nor any of its subsidiaries is a
party to any joint venture, partnership, or other arrangement or contract which
could be treated as a partnership or “disregarded entity” for United States
federal income tax purposes.

(d) Neither Seller nor any of its subsidiaries is obligated under any agreement,
contract or arrangement that may result in the payment of any amount that would
not be deductible by reason of Sections 162(m) or 280G of the Code.

(e) Neither Seller nor any of its subsidiaries has been or, to its knowledge,
will be required to include any adjustment in Taxable income for any Tax period
(or portion thereof) pursuant to Section 481 or 263A of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Transaction
other than any such adjustments required as a result of the Transaction. Neither
Seller nor any of its subsidiaries has filed any disclosures under Section 6662
of the Code or comparable provisions of state, local or foreign law to prevent
the imposition of penalties with respect to any Tax reporting position taken on
any Tax Return. Neither Seller nor any of its subsidiaries has engaged in a
“reportable transaction” within the meaning of the Treasury Regulations under
Section 6011 of the Code. Neither the Seller nor any of its subsidiaries has
received a Tax opinion with respect to any transaction relating to the Seller or
any of its subsidiaries other than a transaction in the ordinary course of
business. Neither Seller nor any of its subsidiaries is currently or has been a
United States real property holding corporation (within the meaning of
Section 897(c)(2) of the Code) during the applicable periods specified in
Section 897(c)(1)(A)(ii) of the Code.

(f) Neither Seller nor any of its subsidiaries has been the “distributing
corporation” (within the meaning of Section 355(c)(2) of the Code) with respect
to a transaction described in Section 355 of the Code within the five (5) year
period ending as of the date of this Agreement. No Tax Asset of the Seller or
any of its subsidiaries is currently subject to a limitation under Sections 382
or 383 of the Code or similar provisions of state, local or foreign law.

(g) Seller has treated itself as owner of each of the Purchased Assets for Tax
purposes. None of the Purchased Assets is the subject of a “safe-harbor lease”
within the provisions of former Section 168(f)(8) of the Code, as in effect
prior to amendment by the Tax Equity and Fiscal Responsibility Act of 1982. None
of the Purchased Assets directly or indirectly secures any debt the interest on
which is tax exempt under Section 103(a) of the Code. None of the Purchased
Assets is “tax-exempt use property” within the meaning of Section 168(h) of the
Code or limited use property under Revenue Procedure 2001-28. None of the
Purchased Assets are U.S. real property interests as described in Section 897 of
the Code.

(h) The Seller is a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

4.25 Customers and Privacy. The Seller and its subsidiaries (i) have fully
complied with all federal, state and local laws relating to privacy and data
security and (ii) have complied with all aspects of collecting and processing
customer information and have fully complied with the CAN-Spam Act when sending
commercial emails to customers. The Seller and its subsidiaries have fully
complied with the terms of their privacy policies, and have not used information
collected in a manner inconsistent in any way with such laws or privacy
policies. The Seller’s use, license, sublicense and sale of any data collected
from users at any website operated by the Seller or its subsidiaries and any
co-branded websites which the Seller manages have complied in all material
respects with the Seller’s applicable published privacy policy at the time such
data was collected. The sale of the Purchased Assets (i) will not violate any
federal, state and local laws relating to privacy and data security and
(ii) will fully comply with Seller’s privacy policies.

4.26 Brokers. The Seller has no Liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Purchaser could become liable or
obligated.

4.27 Solvency. Seller is not entering into the Transaction with the intent to
hinder, delay or defraud any Person to which it is, or may become, indebted. The
Purchase Price is not less than the reasonably equivalent value of the Purchased
Assets. Seller’s assets, at a fair valuation, exceed its liabilities, and Seller
will be able after the Closing of the Transaction, to meet its debts as they
mature and will not become insolvent as a result of the Transaction. After the
Closing of the Transaction, Seller will have sufficient capital and property
remaining to conduct the business in which it will thereafter be engaged.

4.28 Board Approval. The Board of Directors of Seller has (i) approved and
declared advisable this Agreement and the Transaction and (ii) determined that
the Transaction is in the best interests of the stockholders of Seller and is on
terms that are fair to such stockholders.

4.29 Material Third Party Consents. Schedule 4.29 lists all contracts that
require a novation or consent to the Transaction, prior to the Closing Date so
that such contracts may remain in full force and effect after the Closing which,
if no novation occurs or if no consent to the Transaction, would have a Material
Adverse Effect on Purchaser’s ability to operate the Business in the same manner
as the Business was operated by Seller prior to the Effective Time.

4.30 No Other Agreement. Neither Seller, nor any of its Representatives, has
entered into any Contract with respect to the sale or other disposition of any
assets (including the Purchased Assets) or capital stock of Seller except as set
forth in this Agreement.

4.31 Product Liability.

(a) The Business is not subject to any Liabilities or Damages arising from any
injury to person or property or as a result of ownership, possession or use of
any Seller Product manufactured, processed, distributed, shipped or sold prior
to the Closing Date. All such Liabilities and Damages are fully covered by
product liability insurance or otherwise provided for, and Seller shall properly
satisfy and discharge all such Liabilities and Damages. There have been no
recalls of any Seller Products, and to the Knowledge of Seller, none are
threatened or pending, and no report has been filed or is required to have been
filed with respect to any Seller Products under the Consumer Products Safety
Act, as amended, or under any other law, rule or regulation. No circumstances
exist involving the safety aspects of any Seller Products that would cause any
obligation to report to any Governmental Authority. There are no, and within the
last twelve (12) months there have not been any, actions, claims or threats
thereof related to product liability against or involving Seller or any Seller
Products and no such actions, claims or threats have been settled, adjudicated
or otherwise disposed of within the last twelve (12) months.

(b) There are no citations, decisions, adjudications or written statements by
any Governmental Authority or consent decrees between any Governmental Authority
and Seller stating that any Seller Product is (i) defective or unsafe or
(ii) fails to meet any standards promulgated by any such standards. There is no
(A) fact or condition related to any Seller Product that would impose upon
Seller a duty to recall any Seller Product or (B) material liability for returns
or other product liability claims with respect to any Seller Product not
adequately reserved on the Financial Statements or Interim Balance Sheet in
accordance with GAAP.

4.32 Projections. The projections prepared and provided to Purchaser by the
Seller and its advisors in connection with Purchaser’s evaluation of the Seller
and the preparation and delivery of the Delaware Law Opinion and the Seller
Appraisal (i) were prepared in a manner consistent with the maintenance and
preparation of the Seller’s accounting records and statements, (ii) are not
inconsistent with the Seller’s audited financial statements or internal
accounting records and (iii) are reasonable as of the Closing Date and do not
reflect or include false or misleading statements or data; provided, that
unanticipated events and circumstances may occur and the actual results achieved
during the periods covered by such projections may vary from such projections
and such variations may be material, provided further, that Seller is not aware
of any pending or anticipated events that would cause such projections to be
incorrect.

4.33 Promotions. Schedule 4.33 sets forth a complete lists of all promotions,
coupons, vouchers, rebates, sweepstakes, programs or other offers made available
to customers of the Business since January 1, 2006 and such other promotions,
coupons, vouchers, rebates, sweepstakes, programs that are in effect as of the
Closing Date, along with copies of all related data, forms, specimen coupons,
vouchers rules, verification protocols, terms and conditions and expiration
dates.

4.34 Full Disclosure.

(a) Neither this Agreement nor any of the other Transaction Agreements,
(i) contains or will contain as of the Closing Date any untrue statement of fact
or (ii) omits or will omit to state any material fact necessary to make any of
the representations, warranties or other statements or information contained
herein or therein (in light of the circumstances under which they were made) not
misleading.

(b) Other than as set forth herein or in Seller’s filings with the SEC, there is
no fact (other than publicly known facts related exclusively to political or
economic matters of general applicability that will adversely affect all
Entities comparable to Seller) that may have a Material Adverse Effect on
Seller.

(c) All of the information set forth in the Seller Disclosure Schedule, and all
other information regarding Seller or Seller’s properties, assets (including the
Purchased Assets), operations, businesses (including the Business), Liabilities,
financial performance, net income and prospects that has been furnished to
Purchaser or any of its Representatives by or on behalf of Seller or any of
Seller’s Representatives, is accurate, correct and complete in all material
respects.

(d) Each representation and warranty set forth in this Article 4 is not
qualified in any way whatsoever except as explicitly provided therein, will not
merge on Closing or by reason of the execution and delivery of any Contract at
the Closing, will remain in force on and immediately after the Closing Date
subject to the terms and conditions of this Agreement, is given with the
intention that liability is not limited to breaches discovered before Closing,
is separate and independent and is not limited by reference to any other
representation or warranty or any other provision of this Agreement, and is made
and given with the intention of inducing Purchaser to enter into this Agreement.

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER

Except as specifically set forth on the Schedule 5 (the “Purchaser Disclosure
Schedule”) attached to this Agreement (the parts of which are numbered to
correspond to the applicable Section numbers of this Agreement), Purchaser
hereby represents and warrants as of the date hereof to Seller as follows:

5.1 Organization and Good Standing. Purchaser is a limited liability company
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization.

5.2 Authority; Binding Nature of Agreements. Purchaser has all requisite power
and authority to execute and deliver this Agreement and all other Transaction
Agreements to which it is a party and to carry out the provisions of this
Agreement and the other Transaction Agreements. The execution, delivery and
performance by Purchaser of this Agreement and the other Transaction Agreements
have been approved by all requisite action on the part of Purchaser. This
Agreement has been duly and validly executed and delivered by Purchaser. Each of
this Agreement and the other Transaction Agreements constitutes, or upon
execution and delivery, will constitute, the legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws and equitable principles related to or limiting creditors’
rights generally and by general principles of equity.

5.3 No Conflicts; Required Consents. The execution, delivery and performance of
this Agreement or any other Transaction Agreement by Purchaser do not and will
not (with or without notice or lapse of time) conflict with, violate or result
in any breach of (i) any of the provisions of Purchaser’s Certificate of
Formation; (ii) any resolutions adopted by Purchaser’s members or its board of
directors or committees thereof; (iii) any of the terms or requirements of any
Governmental Approval held by Purchaser or any of its employees or that
otherwise relates to Purchaser’s business; or (iv) any provision of a Contract
to which Purchaser is a party.

5.4 Brokers. The Purchaser has no Liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Seller could become liable or
obligated.

     
ARTICLE 6.
6.1
  POST CLOSING COVENANTS
Seller Intellectual Property.

(a) Seller agrees that, from and after the date hereof, it shall not, and it
shall cause its Representatives not to, use any of the Seller Intellectual
Property. If Seller or any assignee of Seller owns or has any right or interest
in any Seller Intellectual Property that cannot be, or for any reason is not,
assigned to Purchaser at the Closing, Seller shall grant or cause to be granted
to Purchaser, at the Closing, a worldwide, royalty-free, fully paid up,
perpetual, irrevocable, transferable, sublicensable, and exclusive license to
Exercise All Rights in and to such Seller Intellectual Property.

(b) If Purchaser is unable to enforce its Intellectual Property Rights against a
third party as a result of any Legal Requirement that prohibits enforcement of
such rights by a transferee of such rights, Seller agrees to assign to Purchaser
such rights as may be required by Purchaser to enforce its Intellectual Property
Rights in its own name. If such assignment still does not permit Purchaser to
enforce its Intellectual Property Rights against the third party, Seller agrees
to initiate proceedings against such third party in Seller’s name; provided,
however, that Purchaser shall be entitled to participate in such proceedings and
provided further that Purchaser shall be responsible for the costs and expenses
of such proceedings.

6.2 Cooperation. After the Closing, upon the request of Purchaser, Seller shall
(i) execute and deliver any and all further materials, documents and instruments
of conveyance, transfer or assignment as may reasonably be requested by
Purchaser to effect, record or verify the transfer to, and vesting in Purchaser,
of Seller’s right, title and interest in and to the Purchased Assets, free and
clear of all Encumbrances, in accordance with the terms of this Agreement; and
(ii) cooperate with Purchaser, at Purchaser’s expense, to enforce the terms of
any Transferred Contracts, including terms relating to confidentiality and
Intellectual Property Rights, and to contest or defend against any Proceeding
relating to the Transaction or to the operation of Seller’s Business before the
Closing Date. After the Closing, Seller shall (a) reasonably cooperate with
Purchaser in its efforts to continue and maintain for the benefit of Purchaser
those business relationships of Seller existing prior to the Closing and
relating to the business to be operated by Purchaser after the Closing;
(b) satisfy the Retained Liabilities in a manner that is not detrimental to any
of such relationships; (c) refer to Purchaser all inquiries relating to such
business; and (d) promptly deliver to Purchaser (i) any mail, packages and other
communications addressed to Seller relating to the Business and (ii) any cash or
other property that Seller receives and that properly belongs to Purchaser.
Neither Seller nor any of its officers, employees, agents or stockholders shall
take any action that would tend to diminish the value of the Purchased Assets
after the Closing or that would interfere with the business of Purchaser to be
engaged in after the Closing, including disparaging the name or business of
Purchaser.

6.3 Limited Power of Attorney. Effective upon the date hereof, Seller hereby
irrevocably appoints Purchaser and its successors, agents and assigns as its
true and lawful attorney, in its name, place and stead, with power of
substitution, to take any action and to execute any instrument which Purchaser
may deem necessary or advisable to fulfill Seller’s obligations or rights under,
or to accomplish the purposes of, this Agreement, including, (i) to demand and
receive any and all Purchased Assets and to make endorsements and give receipts
and releases for and in respect of the same; (ii) to institute, prosecute,
defend, compromise and/or settle any and all Proceedings with respect to the
Purchased Assets except those Proceedings listed on Schedule 6.3; (iii)  to make
any filings required to transfer any Seller Intellectual Property or any other
Purchased Assets; and (iv) to receive and open all mail, packages and other
communications addressed to Seller and relating to the Business. The foregoing
power of attorney is a special power of attorney coupled with an interest and is
irrevocable.

6.4 Return of Purchased Assets. If, for any reason after the Closing, any of the
Purchased Assets are ultimately determined to be Excluded Assets or Retained
Liabilities, respectively, (i) Purchaser shall transfer and convey (without
further consideration) to Seller, and Seller shall accept, such assets;
(ii) Seller shall assume, and agree to pay, perform, fulfill and discharge
(without further consideration) such liabilities; and (iii) Purchaser and Seller
shall execute such documents or instruments of conveyance or assumption and take
such further acts which are reasonably necessary or desirable to effect the
transfer of such assets back to Seller and the re-assumption of such liabilities
by Seller.

6.5 Records and Documents. For a period of three years after the Closing, at
Purchaser’s request, Seller shall provide Purchaser and its representatives with
access to and the right to make copies of those records and documents related to
the Business, including but not limited to the Books and Records, possession of
which is retained by Seller, as may be necessary or useful in connection with
Purchaser’s conduct of the Business after the Closing. If during such period
Seller elects to dispose of such records and documents, Seller shall give
Purchaser sixty (60) days’ prior written notice, during which period Purchaser
shall have the right to take such records and documents without further
consideration.

6.6 Insurance and Warranty Claims. Until January 31, 2008, Seller shall maintain
in full force and effect product liability insurance on all Seller Products
manufactured or sold prior to the Closing Date, in a form and with such limits
as currently maintained by Seller. Such policy shall name Purchaser as an
additional named insured and provide that it may not be cancelled without prior
notice to Purchaser. Seller shall provide, at Purchaser’s request, reasonably
satisfactory evidence that such insurance policy continues to be in effect and
that all premiums have been paid.

6.7 Director and Officer Insurance. Until March 1, 2007 Seller shall maintain in
full force and effect director and officer insurance as currently in effect.
Seller shall provide, at Purchaser’s request, reasonably satisfactory evidence
that such insurance policy continues to be in effect and that all premiums have
been paid.

6.8 Dissolution; Restricted Payments. Seller shall not, and shall not permit any
of its subsidiaries to, with the intent to hinder, delay or defraud any Person
to which it is, or may become, indebted, dissolve or liquidate or declare or
make any dividend payment or other distribution on any shares of its capital
stock, or purchase, redeem or otherwise acquire for value any shares of its
capital stock or any options, warrants or other rights to acquire such shares
now or hereafter outstanding.

6.9 Bulk Sales Indemnification. Subject to Section 7.2, Purchaser hereby waives
compliance by Seller with any applicable bulk sales Legal Requirements in
connection with the Transaction.

6.10 Payment of Seller Supplier Accounts Payable. Within two (2) Business Days
following the Closing Date, Seller shall cause all suppliers to the Business to
be paid in full, including but not limited all amounts set forth on
Schedule 4.15(f) hereto, without regard to any payment arrangements, grace
periods, rights of set off or other term or condition which would permit or
entitle Seller to pay such suppliers at any later date.

6.11 Non-Disclosure and Non-Compete.

(a) Noncompetition Agreement. For and in consideration of the Transaction
contemplated herein, following the Closing Date and for a period of five
(5) years thereafter, Seller and any entity which controls, or is controlled by,
or is under common control with Seller (an “Affiliate Entity”) shall not engage,
and shall not permit such Affiliate Entities, or, subject to Section 6.11(h),
successors or assigns of Seller or such Affiliate Entities, to engage, in any
“Competitive Activity” in the “Restricted Territory” (each as defined below).
The parties hereto agree that the agreements contained in this Section 6.11 are
reasonably necessary to protect the legitimate business interests of Purchaser
with respect to its purchase of the Purchased Assets and the operation of the
Business by Purchaser and Parent following the closing of the Transaction.

(b) “Competitive Activity” shall mean directly or indirectly (or having any
interest in, or performing any services for, any Person directly or indirectly)
(i) engaging in any activity that is the same as or similar to the Business
(which for purposes of this Section 6.11 shall include catalogue sales of
diamonds and jewelry), including but not limited to owning, managing, operating,
controlling, consulting for, advising or participating in the ownership,
management, operation or control of, any Person in the retail online or
catalogue sales of diamonds and jewelry; (ii) engaging in the development or
distribution of any product that is the same as, similar to, or competitive with
any Seller Product being developed or distributed by Purchaser for or in the
context of the Business or through catalogue sales, provided that such products
shall only include diamonds and jewelry; or (iii) acting as a Contract Affiliate
with any competitor of Purchaser or Parent with respect to the Business.

(c) “Restricted Territory” shall mean every state, territory, country, or
jurisdiction in which Purchaser, Parent or any Affiliate or Subsidiary of
Purchaser or Parent has carried on business prior to the Closing Date. For the
avoidance of doubt, Seller Purchaser and Parent hereby agree that due to the
nature of the Business as an internet based business, a specific territory or
area cannot be determined or identified which area would provide the protections
and benefits of the bargain made by and among Seller, Purchaser and Parent with
respect to the agreement of Seller and the Individuals and entities listed on
Exhibit A hereto to agree to the covenants contained in this Section 6.11 and
the Non-Competition Agreements.

(d) Nonsolicitation of Employees. Seller agrees that for a period of three
(3) years following the Closing Date, Seller and any Affiliate Entity will not
directly or indirectly, without the prior written approval of Parent, solicit
for hire or hire, any Restricted Employee, or directly or indirectly, solicit
for hire, or hire on behalf of any third party, any Restricted Employee;
provided however, that nothing in this Section 6.11(d) shall be deemed breached
by any general advertisement for potential employees that is not specifically
directed at the Restricted Employees, provided, that in the event a Restricted
Employee responds to a general advertisement for potential employees, (without
Seller soliciting such person in violation of the restriction contained in this
Section 6.11(d)), the hiring of such Restricted Employee shall not be deemed a
violation of this Section 6.11(d), provided further, that the exception to the
restriction contained in the preceding clause shall not be applicable to the
Consultants while the Services (as such term is defined in the Transition
Services Agreement) are being performed under the Transition Services Agreement.

(e) Nonsolicitation of Customers. Seller agrees that it will not, directly or
indirectly, without the prior written approval of Parent, solicit or contact any
customer of the Business, Parent or Purchaser, or any potential customer with
whom the Business, Parent or Purchaser has had any contact, or from which it has
received or to which it has submitted a proposal for products or services, for
the purpose of (i) any commercial pursuit which is in competition with the
Business or the businesses engaged in by Parent or Purchaser as of the date
hereof, (ii) providing such customer or potential customer products or services
that are the same as or substantially similar to those provided or offered to be
provided by the Business, Parent or Purchaser as of the date hereof, or
(iii) taking away or interfering or attempting to interfere with any customer,
trade, business or patronage of the Business, Parent or Purchaser.

(f) Noncompetition Covenants: Assignment by Purchaser and Parent. The parties
agree that if Purchaser or any of its Affiliates (including but not limited to
Parent) shall transfer all or substantially all of the Purchased Assets (as
acquired by Purchaser under this Agreement, the covenants of Seller not to
compete contained in this Section  6.11 may be assigned by Purchaser and Parent
to any Person to whom may be transferred the Business or the Purchased Assets by
the sale or transfer of the Business and or Purchased Assets or otherwise. It is
the parties’ intention that these covenants of Seller shall inure to the benefit
of any Person that may succeed to the Business and Purchased Assets of Seller
(as acquired by Purchaser under this Agreement) with the same force and effect
as if these covenants were made directly with such successor

(g) Nondisclosure.

(i) Seller acknowledges that, in connection with the operation of Seller and the
Business prior to the Closing Date, Seller, either directly or indirectly or
through its representatives, has had access to confidential information relating
to the Seller and the Business, including technical, financial or marketing
information, lists of vendors, suppliers and customers, ideas, methods,
developments, inventions, improvements, business plans, trade secrets,
scientific or statistical data, diagrams, drawings, specifications, or other
proprietary information relating thereto, including analyses, compilations,
studies or other documents, record or data prepared by Seller or its
representatives which contain or otherwise reflect or are generated from such
information (“Confidential Information”) a portion of which is being sold as
part of the Purchased Assets (the “Purchased Confidential Information”).

(ii) Seller agrees that it will treat all Purchased Confidential Information as
confidential, preserve the confidentiality thereof and not use or disclose any
Confidential Information for any purpose or reason whatsoever, except to
authorized representatives of Purchaser. If, however, Confidential Information
is disclosed, Seller will immediately notify Purchaser and Parent in writing and
will take all reasonable steps required to prevent further disclosure.

(h) Effect on Future Transactions. Seller undertakes and covenants not to enter
into, consent to or permit, and to use its best efforts to take all actions
necessary, advisable or advantageous to prevent, any (i) sale of its remaining
assets after giving effect to the Transaction (other than sales of inventory in
the ordinary course of business), provided that for the avoidance of doubt the
sale of the ashford.com url, business and/or customer information,
worldofwatches.com url, business and/or customer information or bulk inventory
sales shall not be deemed to be in the ordinary course of business, (ii) sale or
all or substantially all of its assets, (iii) merger or (iv) transaction with
similar effect whereby the acquirer or resulting company or entity, as the case
may be, shall not have agreed to abide by and undertake to comply with the
covenants and restrictions set forth in this Section 6.11 with respect to any
assets of Seller so purchased; provided that Purchaser and Parent shall be
included as intended third party beneficiaries of such covenants and agreements.
For the avoidance of doubt, Seller may engage in transaction resulting in (i),
(ii), (iii) or (iv) of this Section 6.11(h) with any Person so long as such
Person shall have covenanted and agreed not to utilize any asset acquired from
Seller in violation of the covenants and agreements contained in Section 6.11,
provided that Purchaser and Parent shall be included as intended third party
beneficiaries of such covenants and agreements.

(i) Noncompetition Covenants: Remedy for Breach. The parties agree that, in the
event of breach or threatened breach of Seller’s covenants in this Section 6.11,
the damage or imminent damage to the value and the goodwill of Purchaser and the
Business will be irreparable and extremely difficult to estimate, making any
remedy at law or in damages inadequate. Accordingly, the parties agree that
Purchaser shall be entitled to injunctive relief against Seller in the event of
any breach or threatened breach of any of such covenants by Seller, in addition
to any other relief (including damages) available to Purchaser under this
Agreement or under applicable law. Seller acknowledges and agrees that (i) the
covenants and restrictions contained in this Section 6.11 are necessary,
fundamental and required for the protection of the Business and the business of
Parent and Purchaser; (ii) the covenants and restrictions contained in this
Section 6.11 relate to matters that are of a special, unique and extraordinary
value; (iii) Seller understands that neither Purchaser nor Parent would enter
into this Agreement if Seller did not agree to the provisions of this
Section 6.11, and (iv) Seller has received adequate and independent
consideration in respect of such covenants and restrictions.

(j) Noncompetition Covenants: Scope and Choice of Law. It is the understanding
of the parties that the scope of the covenants contained in this Section 6.11,
both as to time and area covered, are necessary to protect the rights of
Purchaser and Parent and the goodwill that is a part of the Business of Seller
to be acquired by Purchaser and Parent. It is the parties’ intention that these
covenants be enforced to the greatest extent (but to no greater extent) in time,
area, and degree of participation as is permitted by the law of that
jurisdiction whose law is found to be applicable to any acts in breach of these
covenants. It being the purpose of this Agreement to govern competition by
Seller in the Restricted Territory, these covenants shall be governed by and
construed according to that law (from among those jurisdictions arguably
applicable to this Agreement and those in which a breach of this Agreement is
alleged to have occurred or to be threatened) which best gives them effect. The
prohibitions in each of subsections (a)-(i) in Section 6.11 above shall be
deemed, and shall be construed as separate and independent agreements between
Purchaser and Parent on the one hand, and Seller respectively, on the other. If
any such agreement or any part of such agreement is held invalid, void or
unenforceable by any court of competent jurisdiction, such invalidity, voidness,
or unenforceability shall in no way render invalid, void, or unenforceable any
other part of them or any separate agreement not declared invalid, void or
unenforceable; and this Agreement shall in such case be construed as if the
invalid, void, or unenforceable provisions were omitted. Seller agrees not
challenge, and not to permit encourage or assist any of its Affiliates from
challenging, the enforceability of the covenants contained in this Section 6.11.

ARTICLE 7. INDEMNIFICATION

7.1 Survival of Representations and Warranties. All representations, warranties,
covenants, conditions and agreements contained herein or in any other instrument
or other document delivered pursuant to this Agreement or in connection with the
Transaction shall survive the execution and delivery of this Agreement, the
consummation of the Transaction and any investigation or audit made by any party
hereto provided, however, that (a) all representations and warranties relating
to Taxes shall survive until six months after the expiration of the statute of
limitation applicable to such Taxes has expired (including all waivers and
extensions thereof), (b) all representations and warranties of Seller or
Purchaser contained in Sections 4.1, 4.2, 4.3, 4.12, 4.16, 4.18, 4.22, 4.23,
4.26, 4.31, 5.1 or 5.2 shall survive indefinitely; (c) all representations and
warranties other than those referred to in clauses (a) or (b) above shall
survive for a period of 18 months from the Closing Date and (d) any claim for
indemnification based upon a breach of any such representation or warranty and
asserted prior to end of the applicable survival period by written notice in
accordance with Section 8.2 shall survive until final resolution of such claim.
The representations and warranties contained in this Agreement (and any right to
indemnification for breach thereof) shall not be affected by any investigation,
verification or examination by any party hereto or by any Representative of any
such party or by any such party’s Knowledge of any facts with respect to the
accuracy or inaccuracy of any such representation or warranty.

7.2 Indemnification by Seller. Subject to the limitations set forth in this
Article 7, Seller shall indemnify, defend and hold harmless Purchaser, Parent
and its Representatives (each a “Purchaser Indemnitee”) from and against any and
all Damages, whether or not involving a third-party claim, including attorneys’
fees and related defense costs and expenses (collectively, “Purchaser Damages”),
arising out of, relating to or resulting from (a) any breach of a representation
or warranty of Seller contained in this Agreement or in any other Transaction
Agreement; (b) any breach of a covenant of Seller contained in this Agreement or
in any other Transaction Agreement; (c) Excluded Assets or Retained Liabilities;
or (d) any noncompliance with applicable bulk sales or fraudulent transfer Legal
Requirements in connection with the Transaction.

7.3 Procedures for Indemnification. Promptly after receipt by a Purchaser
Indemnitee of written notice of the assertion or the commencement of any
Proceeding by a third-party with respect to any matter referred to in
Sections 7.2, the Indemnitee shall give written notice thereof to the Seller,
and thereafter shall keep the Seller reasonably informed with respect thereto;
provided, however, that failure of the Indemnitee to give the Seller notice as
provided herein shall not relieve the Seller of its obligations hereunder except
to the extent that the Seller is prejudiced thereby. The Seller shall have the
right to join in the defense of said claim, action or proceeding at Seller’s own
cost and expense and, if the Seller agrees in writing to be bound by and to
promptly pay the full amount of any final judgment from which no further appeal
may be taken and if the Indemnitee is reasonably assured of the Seller’s ability
to satisfy such agreement, then at the option of the Seller, the Seller may take
over the defense of such claim, action or proceeding, except that, in such case,
the Indemnitee shall have the right to join in the defense of said claim, action
or proceeding at its own cost and expense and provided that whether or not the
Seller takes over defense of a claim, the Seller shall not admit any liability
with respect to, or settle, compromise or discharge, such claim without the
Indemnitees’s prior written consent (which consent shall not be unreasonably
withheld); provided further that the Seller shall not agree, without the
Indemnitee’s consent, to the entry of any Judgment or settlement, compromise or
decree that provides for injunctive or other nonmonetary relief affecting the
Indemnitee.

7.4 Remedies Cumulative. The remedies provided in this Agreement shall be
cumulative and shall not preclude any party from asserting any other right, or
seeking any other remedies, against the other party.

7.5 Maximum Amounts. The aggregate liability of the Seller to indemnify
Purchaser Indemnitees entitled to indemnification for Damages under clauses
(a) or (b) of Section 7.2 (except for Damages arising from a breach of any of
the representations and warranties in Sections 4.1, 4.2, 4.3, 4.12, 4.16, 4.18,
4.22, 4.23, 4.24, 4.26, 4.31 or any breach of this Article 7) shall in no event
exceed $10 million. Notwithstanding the foregoing, no maximum dollar limitation
shall apply to Damages (i) arising from any breach of the representations and
warranties of Seller contained in Sections 4.1, 4.2, 4.3, 4.12, 4.16, 4.18,
4.22, 4.23, 4.24, 4.26, 4.31 or this Article 7 or (ii) under clauses (c) or
(d) of Section 7.2. Notwithstanding anything to the contrary contained in this
Agreement, nothing herein shall foreclose, limit or prevent Purchaser or Parent
from seeking and obtaining, as and to the extent permitted under applicable law,
specific performance by Seller of any of its obligations under this Agreement or
injunctive relief against the Seller against Seller’s activities in breach of
this Agreement (including, without limitation, the obligations provided for
under Article 7).

7.6 Effect on Future Transactions. Seller undertakes and covenants not to enter
into, consent to or permit, and to use its best efforts to take all actions
necessary, advisable or advantageous to prevent, any (i) sale of its remaining
assets after giving effect to the Transaction (other than sales of inventory in
the ordinary course of business), provided that for the avoidance of doubt the
sale of the ashford.com url, business and/or customer information,
worldofwatches.com url, business and/or customer information or bulk inventory
sales shall not be deemed to be in the ordinary course of business, (ii) sale or
all or substantially all of its assets, (iii) merger or (iv) transaction with
similar effect whereby the acquirer or resulting company or entity, as the case
may be, shall not have agreed to abide by and undertake to comply with the
covenants and restrictions set forth in this Article 7.

7.8 Liability of Purchaser. The fact that Purchaser is not obligated to
indemnify Seller hereunder shall not be construed so as to limit the rights or
remedies that Seller may otherwise have against Purchaser, whether under this
Agreement or applicable law, in the event of (a) any breach or inaccuracy of a
representation or warranty of Purchaser contained in this Agreement or (b) any
failure by Purchaser to perform or comply with any covenant given by Purchaser
contained in this Agreement.

ARTICLE 8. MISCELLANEOUS PROVISIONS

8.1 Expenses. Each party shall pay it own costs and expenses in connection with
this Agreement and the Transaction (including the fees and expenses of its
advisers, accountants and legal counsel).

8.2 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by commercial delivery
service, or mailed by registered or certified mail (return receipt requested) or
sent via facsimile (with confirmation of receipt) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):

(a) if to Purchaser, to:

Shmuel Gniwisch
Chief Executive Officer
Ice.Com, Inc.
1085 rue Saint-Alexandre #102
Montreal, QC H2Z 1P4
CANADA
Facsimile No.: (514) 393-1295
Telephone No.: (514) 393-9788

with a copy to:

Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Attention: Michael G. Kalish, Esq.
Facsimile No.: (212) 468-7900
Telephone No.: (212) 336-8458

(b) if to Seller, to:

Jeff Kornblum

Chief Operating Officer

Odimo Incorporated

14051 NW 14th Street, Sunrise Florida, 33323

Facsimile No.:
Telephone No.: (954) 835-2233

with a copy to:

     
Berman Rennert Vogel & Mandler, P.A.
 

 
    Bank of America Tower at International Place, 29th Floor

 
   
100 S.E. Second Street
Miami, Florida 33131
Attention: Charles Rennert, Esq.
Facsimile No.: (305) 347-6463
Telephone No.:
 

(305) 577-4171

8.3 Interpretation. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed, as the context indicates, to be
followed by the words “but (is/are) not limited to.”

8.4 Counterparts; Facsimile Delivery. This Agreement may be executed in one or
more counterparts and delivered by facsimile, all of which shall be considered
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.

8.5 Entire Agreement; Nonassignability; Parties in Interest. This Agreement and
the documents and instruments and other agreements specifically referred to
herein or delivered pursuant hereto, including the Appendices, Exhibits and the
Seller Disclosure Schedule, (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, except for the Exclusivity Agreement,
which shall continue in full force and effect, and shall survive any termination
of this Agreement or the Closing, in accordance with its terms, (b) are not
intended to confer upon any other Person any rights or remedies hereunder and
(c) shall not be assigned by operation of law or otherwise except as otherwise
specifically provided.

8.6 Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.

8.7 Governing Law; Jurisdiction and Venue; Waiver Of Jury Trial. This Agreement
shall be governed by and construed in accordance with the laws of Delaware
without reference to such state’s principles of conflicts of law. Each of the
parties hereto irrevocably consents to the jurisdiction of any state court
located within the State of Delaware in connection with any matter based upon or
arising out of this Agreement or the matters contemplated herein, agrees that
process may be served upon them in any manner authorized by the laws of the
State of Delaware for such persons and waives and covenants not to assert or
plead any objection which they might otherwise have to such jurisdiction and
such process. THE PARTIES HERETO IRREVOCABLY WAIVE THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE MERGER OR THE TRANSACTIONS CONTEMPLATED HEREBY.

8.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.

8.9 Incorporation of Appendices, Exhibits and Schedules. The Appendices,
Exhibits and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.

8.10 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior written
consent of the other party, and any attempt to make any such assignment without
such consent shall be null and void. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.

8.11 Attorneys’ Fees. In any action at law or suit in equity to enforce this
Agreement or the rights of any of the parties hereunder, the prevailing party in
such action or suit shall be entitled to receive a sum for its attorneys’ fees
and all other costs and expenses incurred in such action or suit.

8.12 Further Assurances. Each party agrees (a) to furnish upon request to each
other party such further information, (b) to execute and deliver to each other
party such other documents, and (c) to do such other acts and things, all as
another party may reasonably request for the purpose of carrying out the intent
of this Agreement and the Transaction.

[Signatures Follow On a Separate Page]

4

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by their respective officers thereunto duly authorized all as of
the date first written above.

“Purchaser”
Ice Diamond, LLC
By: /s/ Shmuel Gniwisch

    Name: Shmuel Gniwisch
Title: Chief Executive Officer

“Parent”
Ice.com, Inc.
By: /s/ Shmuel Gniwisch

    Name: Shmuel Gniwisch
Title: Chief Executive Officer

“Seller”
Odimo Incorporated

By: /s/ Alan Lipton
Name: Alan Lipton
Title: President

For purposes of Section 6.11 only:

     
Ashford.com, Inc.
By: /s/ Alan Lipton
  Diamond.com, Inc.
By: /s/ Alan Lipton
 
   
Name: Alan Lipton
Title: President
  Name: Alan Lipton
Title: President
 
   
Worldofwatches.com, Inc.
By: /s/ Alan Lipton
  D.I.A. Marketing, Inc.
By: /s/ Alan Lipton
 
   
Name: Alan Lipton
Title: President
  Name: Alan Lipton
Title: President
 
   
1-888-Watches, LLC
By: /s/ Alan Lipton
  Millenium International Jewelers, Inc.
By: /s/ Alan Lipton
 
   
Name: Alan Lipton
Title: President
  Name: Alan Lipton
Title: President

5

APPENDIX 1

CERTAIN DEFINITIONS

“Affiliate” shall mean any member of the immediate family (including spouse,
brother, sister, descendant, ancestor or in-law) of any officer, director or
stockholder of Seller or any corporation, partnership, trust or other entity in
which Seller or any such family member has a five percent (5%) or greater
interest or is a director, officer, partner or trustee. The term Affiliate shall
also include any entity which controls, or is controlled by, or is under common
control with any of the individuals or entities described in the preceding
sentence.

“Agreement” shall mean the Asset Purchase Agreement to which this Appendix 1 is
attached (including the Seller Disclosure Schedule and all other appendices,
schedules and exhibits attached hereto), as it may be amended from time to time.

“Appraisal” shall mean the appraisal prepared for the Seller by American
Appraisal Associates.

“Assignment and Assumption” shall have the meaning specified in Section 3.2(b).

“Books and Records” shall have the meaning specified in Section 1.1(e).

“Business” shall have the meaning set forth in the first Recital.

“Closing” shall have the meaning specified in Section 3.1.

“Closing Date” shall have the meaning specified in Section 3.1.

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

“Confidential Information” shall have the meaning specified in “Confidential
Information” shall mean all Trade Secrets and other confidential and/or
proprietary information of a Person, including information derived from reports,
investigations, research, work in progress, codes, marketing and sales programs,
financial projections, cost summaries, pricing formula, contract analyses,
financial information, projections, confidential filings with any state or
federal agency, and all other confidential concepts, methods of doing business,
ideas, materials or information prepared or performed for, by or on behalf of
such Person by its employees, officers, directors, agents, representatives, or
consultants. Information shall not be deemed Confidential Information hereunder
if (i) such information becomes available to or known by the public generally
through no fault of Seller or (ii) disclosure is required by law or the order of
any governmental authority under color of law, provided, however, that prior to
disclosing any information pursuant to this clause (ii), Seller shall, if
possible, give prior written notice thereof to Purchaser and, at Purchaser’s
election, either provide Purchaser with the opportunity to contest such
disclosure or seek to obtain a protective order narrowing the scope of such
disclosure and/or use of the Confidential Information; or (iii) Seller
reasonably believes that such disclosure is required in connection with the
defense of a lawsuit against Seller. Nothing herein shall be construed as
prohibiting Purchaser from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages..

“Consent” shall mean any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Approval).

“Contract” shall mean any agreement, contract, consensual obligation, promise,
understanding, arrangement, commitment or undertaking of any nature (whether
written or oral and whether express or implied), whether or not legally binding.

“Contract Affiliates” shall mean Entities which are parties to Affiliate
Agreements whereby such entities are compensated for sales resulting from the
directions of customers to websites maintained by the Business.

“Consultants” shall mean the persons listed on Schedule 4.17.

“Copyright Assignment” shall have the meaning specified in Section 3.2(c).

“Copyrights” shall mean all copyrights, including in and to works of authorship
and all other rights corresponding thereto throughout the world, whether
published or unpublished, including rights to prepare, reproduce, perform,
display and distribute copyrighted works and copies, compilations and derivative
works thereof.

“Credit Facility” shall mean the revolving line of credit made available to the
Company under the Loan and Security Agreement by and among the Company,
Ashford.com, Inc., D.I.A. Marketing, Inc. and Lender Bank dated as of July 31,
2004, as amended by that certain First Loan Modification Agreement by and
between Lender Bank and Borrower dated as of November 13, 2004, as further
amended by that certain Second Loan Modification Agreement by and between Lender
Bank and Borrower dated as of January 1, 2005, as further amended by that
certain Third Loan Modification Agreement by and between Bank and Borrower dated
as of March 30, 2006 (as the same may from time to time be further amended,
modified, supplemented or restated).

“Damaged Goods” shall have the meaning set forth in Section 2.1(d)(i).

“Damages” shall mean and include any loss, damage, injury, decline in value,
lost opportunity, Liability, claim, demand, settlement, judgment, award, fine,
penalty, Tax, fee (including any legal fee, accounting fee, expert fee or
advisory fee), charge, cost (including any cost of investigation) or expense of
any nature.

“Defined Benefit Plan” shall mean either a plan described in Section 3(35) of
ERISA or a plan subject to the minimum funding standards set forth in
Section 302 of ERISA and Section 412 of the Code.

“Deposits and Advances” shall have the meaning specified in 1.2(f).

“Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, equity, trust, equitable interest, claim,
preference, right of possession, lease, tenancy, license, encroachment,
covenant, infringement, interference, Order, proxy, option, right of first
refusal, preemptive right, community property interest, legend, defect,
impediment, exception, reservation, limitation, impairment, imperfection of
title, condition or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).

“Entity” shall mean any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust or company (including any limited liability company or
joint stock company).

“Environmental Laws” shall have the meaning specified in Section 4.23.

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

“ERISA Affiliate” shall mean each trade or business, whether or not
incorporated, that would be treated as a single employer with Seller under
Section 4001 of ERISA or Section 414(b), (c), (m) or (o) of the Code.

“Escrow” shall have the meaning specified in Section 2.1(b).

“Escrow Agent” shall mean JP Morgan Chase.

“Escrow Amount” shall have the meaning specified in Section 2.1(b).

“Exchange Act” shall have the meaning specified in Section 4.20(a).

“Excluded Assets” shall have the meaning specified in Section 1.2.

“Exercise All Rights” shall mean to exercise or practice any and all rights now
or hereafter provided by law (by treaty, statute, common law or otherwise)
anywhere in the world to inventors, authors, creators and/or owners of
intellectual or intangible property; including the right to make, use, disclose,
sell, offer to sell, distribute, import, rent, lease, lend, reproduce, prepare
derivative works of and otherwise modify, perform and display (whether publicly
or otherwise), broadcast, transmit, use and/or otherwise exploit such
intellectual or intangible property and/or any product, component or service
embodying, related to or subject to such intellectual or intangible property;
and the right to assign, transfer, license and/or sublicense (with the right to
sublicense further) any of the foregoing, and the right to have and/or authorize
others to do any of the foregoing.

“Financial Statements” shall have the meaning specified in Section 4.5(a).

“FIRPTA Notification Letter” shall have the meaning specified in Section 3.2(e).

“Full Retail Cost” shall have the meaning set forth in Section 2.1(d)(i).

“GAAP” means U.S. generally accepted accounting principles in effect on the date
on which they are to be applied pursuant to this Agreement, applied consistently
throughout the relevant periods.

“General Assignment and Bill of Sale” shall have the meaning specified in
Section 3.2(a).

“Governmental Approval” shall mean any: (a) permit, license, certificate,
concession, approval, consent, ratification, permission, clearance,
confirmation, exemption, waiver, franchise, certification, designation, rating,
registration, variance, qualification, accreditation or authorization issued,
granted, given or otherwise made available by or under the authority of any
Governmental Authority or pursuant to any Legal Requirement; or (b) right under
any Contract with any Governmental Authority.

“Governmental Authority” shall mean any: (a) nation, principality, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; (c) governmental or quasi governmental authority of any nature
(including any governmental division, subdivision, department, agency, bureau,
branch, office, commission, council, board, instrumentality, officer, official,
representative, organization, unit, body or Entity and any court or other
tribunal); (d) multinational organization or body; or (e) individual, Entity or
body exercising, or entitled to exercise, any executive, legislative, judicial,
administrative, regulatory, police, military or taxing authority or power of any
nature.

“Hazardous Materials” shall have the meaning specified in Section 4.23.

“HSR Act” means the Hart Scott Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.

“Indemnitee” shall have the meaning specified in Section 7.3.

“Insurance Policies” shall have the meaning specified in Section 4.11.

“Intellectual Property Rights” shall mean any or all rights in and to
intellectual property and intangible industrial property rights, including,
without limitation, (i) Patents, Trade Secrets, Copyrights, Mask Works,
Trademarks and (ii) any rights similar, corresponding or equivalent to any of
the foregoing anywhere in the world.

“Interim Balance Sheet” shall have the meaning specified in Section 4.5(a).

“Interim Balance Sheet Date” shall have the meaning specified in Section 4.5(a).

“Inventory” shall have the meaning specified in Section 1.1(f)

“Inventory Adjustment Date” shall have the meaning specified in
Section 2.1(d)(i).

“IRS” means the Internal Revenue Service.

“IRS Notice” shall have the meaning specified in Section 3.2(f).

“Knowledge” An individual shall be deemed to have “Knowledge” of a particular
fact or other matter if: (i) such individual is actually aware of such fact or
other matter or (ii)  a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
a reasonably comprehensive investigation concerning the truth or existence of
such fact or other matter. Seller and Purchaser shall be deemed to have
“Knowledge” of a particular fact or other matter if any of their respective
directors, officers or employees with the authority to establish policy for the
company has actual knowledge of such fact or other matter after due and diligent
inquiry.

“Legal Requirement” shall mean any federal, state, local, municipal, foreign or
other law, statute, legislation, constitution, principle of common law,
resolution, ordinance, code, Order, edict, decree, proclamation, treaty,
convention, rule, regulation, permit, ruling, directive, pronouncement,
requirement (licensing or otherwise), specification, determination, decision,
opinion or interpretation that is, has been or may in the future be issued,
enacted, adopted, passed, approved, promulgated, made, implemented or otherwise
put into effect by or under the authority of any Governmental Authority.

“Lender Bank” shall mean Silicon Valley Bank, or any successor entity.

“Liability” shall mean any debt, obligation, duty or liability of any nature
(including any unknown, undisclosed, unmatured, unaccrued, unasserted,
contingent, indirect, conditional, implied, vicarious, derivative, joint,
several or secondary liability), regardless of whether such debt, obligation,
duty or liability would be required to be disclosed on a balance sheet prepared
in accordance with generally accepted accounting principles and regardless of
whether such debt, obligation, duty or liability is immediately due and payable.

“Machinery and Equipment” shall have the meaning specified in Section 1.1(a).

“Mask Work” a set of images or templates used in the manufacture of
semiconductor chips.

“Material Adverse Effect” means (i) with respect to Purchaser, any event, change
or effect that, when taken individually or together with all other adverse
events, changes and effects, is or is reasonably likely (a) to be materially
adverse to the condition (financial or otherwise), properties, assets,
liabilities, business, operations, results of operations or prospects of
Purchaser or its subsidiaries, taken as a whole or (b) to prevent or materially
delay consummation of the Transaction or otherwise to prevent Purchaser or its
subsidiaries from performing their obligations under this Agreement and
(ii) with respect to Seller or the Business, any event, change or effect that,
when taken individually or together with all other adverse events, changes and
effects, is or is reasonably likely (a) to be materially adverse to the
condition (financial or otherwise), properties, assets (including Purchased
Assets), liabilities, business, operations, results of operations or prospects
of Seller, its Subsidiaries, or the Business or (b) to prevent or materially
delay consummation of the Transaction or otherwise to prevent Seller or its
Subsidiaries from performing their obligations under this Agreement.

“Material Contracts” shall have the meaning specified in Section 4.10.

“Multiemployer Plan” shall mean a plan described in Section 3(37) of ERISA.

“Net Inventory Cost” shall have the meaning set forth in Section 2.1(d)(i).

“Non-Assignable Asset” shall have the meaning specified in Section 1.5(a).

“Officer’s Certificate” shall have the meaning specified in Section 3.2(l).

“Oppenheimer” shall mean Oppenheimer & Co, Inc.

“Order” shall mean any: (a) temporary, preliminary or permanent order, judgment,
injunction, edict, decree, ruling, pronouncement, determination, decision,
opinion, verdict, sentence, stipulation, subpoena, writ or award that is or has
been issued, made, entered, rendered or otherwise put into effect by or under
the authority of any court, administrative agency or other Governmental
Authority or any arbitrator or arbitration panel; or (b) Contract with any
Governmental Authority that is or has been entered into in connection with any
Proceeding.

“Patents” shall mean all United States and foreign patents and utility models
and applications therefor and all reissues, divisions, re-examinations,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof, and equivalent or similar rights anywhere in the world in inventions
and discoveries, including invention disclosures related to the Business or any
Purchased Assets.

“Payoff Transfer” shall have the meaning specified in Section 3.2(k).

“Person” shall mean any individual, Entity or Governmental Authority.

“Personal Property” shall mean all personal property, office furnishings and
furniture, display racks, shelves, decorations, supplies and other tangible
personal property used in the Business or in connection with the Purchased
Assets..

“Personal Property Leases” shall mean all rights in, to and under leases of
personal property to which Seller is a party.

“Proceeding” shall mean any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination
or investigation that is, has been or may in the future be commenced, brought,
conducted or heard at law or in equity or before any Governmental Authority or
any arbitrator or arbitration panel.

“PTO” shall have the meaning specified in Section 4.14(g).

“Purchase Price” shall have the meaning specified in Section 2.1(a).

“Purchased Assets” shall have the meaning specified in Section 1.1.

“Purchaser Damages” shall have the meaning specified in Section 7.2.

“Purchaser Disclosure Schedule” shall have the meaning specified in Article 5.

“Real Property” shall mean land, buildings, structures, easements,
appurtenances, improvements and fixtures located thereon.

“Rebates and Credits” shall have the meaning specified in Section 1.2(g).

“Registered Intellectual Property Rights” shall mean all United States,
international and foreign: (i) Patents, including applications therefor;
(ii) registered Trademarks, applications to register Trademarks, including
intent-to-use applications, or other registrations or applications related to
Trademarks; (iii) Copyright registrations and applications to register
Copyrights; (iv) Mask Work registrations and applications to register Mask
Works; and (v) any other Intellectual Property Rights that is the subject of an
application, certificate, filing, registration or other document issued by,
filed with, or recorded by, any state, government or other public legal
authority at any time.

“Representatives” shall mean officers, directors, employees, attorneys,
accountants, advisors, agents, distributors, licensees, shareholders,
subsidiaries and lenders of a party. In addition, all Affiliates of Seller shall
be deemed to be “Representatives” of Seller.

“Retained Liabilities” shall have the meaning specified in Section 1.4.

“Secretary’s Certificate” shall have the meaning specified in Section 3.2(m).

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Seller Balance Sheet Date” shall have the meaning specified in Section 4.20(b).

“Seller Benefit Plans” shall mean any “employee benefit plan,” as defined in
Section 3(3) of ERISA, any employment, severance or similar contract or
arrangement, or any plan, policy, fund, program or contract or arrangement
providing for compensation, bonus, profit-sharing, stock option, or other stock
related rights or other forms of incentive or deferred compensation, vacation
benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers’ compensation, supplemental
unemployment benefits, and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) that
is maintained, administered, or contributed to by any ERISA Affiliate.

“Transferred Contracts” shall have the meaning specified in Section 1.1(c).

“Transition Services Agreement” shall have the meaning specified in
Section 3.4(a).

“Seller Disclosure Schedule” shall have the meaning specified in Article 4.

“Seller Financial Statements” shall have the meaning specified in
Section 4.20(b)

“Seller Intellectual Property” shall mean all Intellectual Property Rights
related to the Business, the Purchased Assets and held by Seller, whether owned
or controlled, licensed, owned or controlled by or for, licensed to, or
otherwise held by or for the benefit of Seller including the Seller Registered
Intellectual Property Rights.

“Seller Products” shall mean all products and services manufactured, made,
designed, maintained, supported, developed, sold, licensed, marketed, or
otherwise distributed or provided (or planned or envisioned to be manufactured,
made, designed, maintained, supported, developed, sold, licensed, marketed, or
otherwise distributed or provided) by or for Seller (including all versions and
releases thereof, whether already distributed or provided, under development,
planned or conceived, or otherwise), together with any related materials,
information or data, including, without limitation, the names, numbers (e.g.,
part numbers) and packaging associated with such products and services..

“Seller Registered Intellectual Property Rights” shall have the meaning
specified in Section 4.14(a).

“Seller SEC Documents” shall have the meaning specified in Section 4.20(a).

“Solvent” shall mean, as to any Person at any time, that (a) the fair value of
the property of such Person is greater than the amount of such Person’s
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of
Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value of
the property of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured; (c) such Person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.

“SOX” shall have the meaning specified in Section 4.20(c).

“Subsidiary” shall have the meaning specified in Section 1.4.

“Survival Date” shall have the meaning specified in Section 7.1.

“Supplier Accounts Payable” shall have the meaning specified in Section 4.15.

“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any net
income, alternative or add-on minimum tax, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount and any interest
on such penalty, addition to tax or additional amount, imposed by any Tax
Authority.

“Tax Authority” means Governmental Authority responsible for the imposition,
assessment or collection of any Tax (domestic or foreign).

“Tax Return” shall mean any return, statement, declaration, notice, certificate
or other document that is or has been filed with or submitted to, or required to
be filed with or submitted to, any Governmental Authority in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement related to any Tax.

“Trade Secrets” shall mean all trade secrets under applicable law and other
rights in know-how and confidential or proprietary information, processing,
manufacturing or marketing information, including new developments, inventions,
processes, ideas or other proprietary information that provide Seller with
advantages over competitors who do not know or use it and documentation thereof
(including related papers, blueprints, drawings, chemical compositions,
formulae, diaries, notebooks, specifications, designs, methods of manufacture
and data processing software, compilations of information) and all claims and
rights related thereto.

“Trademark Assignment” shall have the meaning specified in Section 3.2(c).

“Trademarks” shall mean any and all trademarks, service marks, logos, trade
names, corporate names, universal resource locator (“url”), Internet domain
names and addresses and general-use e-mail addresses, and all goodwill
associated therewith throughout the world.

“Transaction” shall mean, collectively, the transactions contemplated by this
Agreement.

“Transaction Agreements” shall mean this Agreement and all other agreements,
certificates, instruments, documents and writings delivered by Purchaser and/or
Seller in connection with the Transaction, including but not limited to the
Transition Services Agreement.

“Transfer Taxes” shall mean all federal, state, local or foreign sales, use,
transfer, real property transfer, mortgage recording, stamp duty, value-added or
similar Taxes that may be imposed in connection with the transfer of Purchased
Assets, together with any interest, additions to Tax or penalties with respect
thereto and any interest in respect of such additions to Tax or penalties.

“Transfer Time.” shall mean 9:00 p.m. (Miami time) on May 7, 2006.

“Transition Services Agreement” shall have the meaning specified in
Section 3.4(a).

“WARN Act” shall have the meaning specified in Section 4.20(e)

6