Document:

June 9, 2005

DG Acquisition Corp.
420 Lexington Avenue, Suite 2650
New York, New York 10170

EarlyBirdCapital, Inc.
275 Madison Avenue
Suite 1203
New York, New York 10016

          Re: Initial Public Offering

Gentlemen:

          Drake Family Capital Appreciation Trust ("Trust"), a stockholder of DG
Acquisition Corp. ("Company"), in consideration of EarlyBirdCapital, Inc.
("EBC") entering into a letter of intent ("Letter of Intent") to underwrite an
initial public offering of the securities of the Company ("IPO") and embarking
on the IPO process, hereby agrees as follows (certain capitalized terms used
herein are defined in paragraph 10 hereof):

          1. If the Company solicits approval of its stockholders of a Business
Combination, the Trust will vote all Insider Shares owned by it in accordance
with the majority of the votes cast by the holders of the IPO Shares.

          2. In the event that the Company fails to consummate a Business
Combination within 18 months from the effective date ("Effective Date") of the
registration statement relating to the IPO (or 24 months under the circumstances
described in the prospectus relating to the IPO), Trust will vote all Insider
Shares owned by it in favor of the Company's decision to liquidate. Each of
Trust and each trustee or controlling person of Trust (each a "Control Person")
hereby waives any and all right, title, interest or claim of any kind in or to
any distribution of the Trust Fund (as defined in the Letter of Intent) and any
remaining net assets of the Company as a result of such liquidation with respect
to its Insider Shares ("Claim") and hereby waives any Claim either may have in
the future as a result of, or arising out of, any contracts or agreements with
the Company and will not seek recourse against the Trust Fund for any reason
whatsoever.

          3. The Trust acknowledges and agrees that the Company will not
consummate any Business Combination which involves a company which is affiliated
with any of the Insiders unless the Company obtains an opinion from an
independent investment banking firm reasonably acceptable to EBC that the
business combination is fair to the Company's stockholders from a financial
perspective.

          4. Neither the Trust, any Control Person, nor any affiliate of the
Trust or any Control Person ("Affiliate") will be entitled to receive and will
not accept any compensation for services rendered to the Company prior to the
consummation of the Business Combination; provided that commencing on the
Effective Date, Blue Alternative Asset Management LLC ("Related Party"), shall
be allowed to charge the Company $7,500 per month, representing an allocable
share of Related Party's overhead, to compensate it for the Company's use of
Related Party's offices, utilities and personnel. Related Party and the Trust
shall also be entitled to reimbursement from the Company for their out-of-pocket
expenses incurred in connection with seeking and consummating a Business
Combination.

          5. Neither the Trust, any Control Person, nor any Affiliate will be
entitled to receive or accept a finder's fee or any other compensation in the
event the undersigned, any member of the family of the undersigned or any
Affiliate of the undersigned originates a Business Combination.

          6. The Trust will escrow its Insider Shares for the three year period
commencing on the Effective Date subject to the terms of a Stock Escrow
Agreement which the Company will enter into with the Trust and an escrow agent
acceptable to the Company.

          7. The Trust's Questionnaire furnished to the Company and EBC and
annexed as Exhibit A hereto is true and accurate in all respects. The Trust
represents and warrants that no Control Person:

     (a) is subject to, or a respondent in, any legal action for, any
injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any
jurisdiction;

     (b) has never been convicted of or pleaded guilty to any crime (i)
involving any fraud or (ii) relating to any financial transaction or handling of
funds of another person, or (iii) pertaining to any dealings in any securities
and is not currently a defendant in any such criminal proceeding; and

     (c) has never been suspended or expelled from membership in any securities
or commodities exchange or association or had a securities or commodities
license or registration denied, suspended or revoked.

          8. The Trust has full right and power, without violating any

agreement by which it is bound, to enter into this letter agreement.

          9. This letter agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of
the substantive laws of another jurisdiction. The Trust hereby (i) agrees that
any action, proceeding or claim against him arising out of or relating in any
way to this letter agreement (a "Proceeding") shall be brought and enforced in
the courts of the State of New York of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive, (ii) waives any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum and
(iii) irrevocably agrees to appoint Graubard Miller as agent for the service of
process in the State of New York to receive, for the undersigned and on his
behalf, service of process in any Proceeding. If for any reason such agent is
unable to act as such, the Trust will promptly notify the Company and EBC and
appoint a substitute agent acceptable to each of the Company and EBC within 30
days and nothing in this letter will affect the right of either party to serve
process in any other manner permitted by law.

          10. As used herein, (i) a "Business Combination" shall mean an
acquisition by merger, capital stock exchange, asset or stock acquisition,
reorganization or otherwise, of an operating business; (ii) "Insiders" shall
mean all officers, directors and stockholders of the Company immediately prior
to the IPO; (iii) "Insider Shares" shall mean all of the shares of Common Stock
of the Company owned by an Insider prior to the IPO; and (iv) "IPO Shares" shall
mean the shares of Common Stock issued in the Company's IPO.

                                         Drake Family Capital Appreciation Trust
                                         ---------------------------------------
                                         Print Name of Insider

                                         By: /s/ John C. Drake
                                             -----------------------------------
                                             Name: John C. Drake
                                             Title: TrusteeJune 9, 2005

DG Acquisition Corp.
420 Lexington Avenue, Suite 2650
New York, New York 10170

EarlyBirdCapital, Inc.
275 Madison Avenue
Suite 1203
New York, New York 10016

          Re: Initial Public Offering

Gentlemen:

          The undersigned officer and director of DG Acquisition Corp.
("Company"), in consideration of EarlyBirdCapital, Inc. ("EBC") entering into a
letter of intent ("Letter of Intent") to underwrite an initial public offering
of the securities of the Company ("IPO") and embarking on the IPO process,
hereby agrees as follows (certain capitalized terms used herein are defined in
paragraph 10 hereof):

          1. The undersigned hereby waives any and all right, title, interest or
claim of any kind ("Claim") in or to any distribution of the Trust Fund (as
defined in the Letter of intent) and any remaining net assets of the Company as
a result of the Company's liquidation in the event that the Company fails to
consummate a Business Combination within 18 months from the effective date
("Effective Date" of the registration statement relating to the IPO (or 24
months under the circumstances described in the prospectus relating to the IPO)
and hereby waives any Claim the undersigned may have in the future as a result
of, or arising out of, any contracts or agreements with the Company and will not
seek recourse against the Trust Fund for any reason whatsoever. In the event of
the liquidation of the Trust Fund, the undersigned agrees to indemnify and hold
harmless the Company, severally and in equal proportion with Mark R. Graham, the
Company's Vice Chairman, Co-Chief Executive Officer, Treasurer and Assistant
Secretary, against any and all loss, liability, claims, damage and expense
whatsoever (including, but not limited to, any and all legal or other expenses

DG Acquisition Corp.
EarlyBirdCapital, Inc.
June 9, 2005
Page 2

reasonably incurred in investigating, preparing or defending against any
litigation, whether pending or threatened, or any claim whatsoever) which the
Company may become subject as a result of any claim by any vendor or other
person who is owed money by the Company for services rendered or products sold
or contracted for, or by any target business, but only to the extent necessary
to ensure that such loss, liability, claim, damage or expense does not reduce
the amount in the Trust Fund.

          2. In order to minimize potential conflicts of interest which may
arise from multiple affiliations, the undersigned agrees to present to the
Company for its consideration, prior to presentation to any other person or
entity, any suitable opportunity to acquire an operating business, until the
earlier of the consummation by the Company of a Business Combination, the
liquidation of the Company or until such time as the undersigned ceases to be an
officer or director of the Company, subject to any pre-existing fiduciary and
contractual obligations the undersigned might have.

          3. The undersigned acknowledges and agrees that the Company will not
consummate any Business Combination which involves a company which is affiliated
with any of the Insiders unless the Company obtains an opinion from an
independent investment banking firm reasonably acceptable to EBC that the
business combination is fair to the Company's stockholders from a financial
perspective.

          4. Neither the undersigned, any member of the family of the
undersigned, nor any affiliate ("Affiliate") of the undersigned will be entitled
to receive and will not accept any compensation for services rendered to the
Company prior to the consummation of the Business Combination; provided that
commencing on the Effective Date, Blue Alternative Asset Management LLC
("Related Party"), shall be allowed to charge the Company $7,500 per month,
representing an allocable share of Related Party's overhead, to compensate it
for the Company's use of Related Party's offices, utilities and personnel.
Related Party and the undersigned shall also be entitled to reimbursement from
the Company for their out-of-pocket expenses incurred in connection with seeking
and consummating a Business Combination.

          5. Neither the undersigned, any member of the family of the
undersigned, nor any Affiliate of the undersigned will be entitled to receive or
accept a finder's fee or any other compensation in the event the undersigned,
any member of the family of the undersigned or any Affiliate of the undersigned
originates a Business Combination.

DG Acquisition Corp.
EarlyBirdCapital, Inc.
June 9, 2005
Page 3

          6. The undersigned agrees to be the Chairman of the Board, Co-Chief
Executive Officer, President and Secretary of the Company until the earlier of
the consummation by the Company of a Business Combination or the liquidation of
the Company. The undersigned's biographical information furnished to the Company
and EBC and attached hereto as Exhibit A is true and accurate in all respects,
does not omit any material information with respect to the undersigned's
background and contains all of the information required to be disclosed pursuant
to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933. The
undersigned's Questionnaire furnished to the Company and EBC and annexed as
Exhibit B hereto is true and accurate in all respects. The undersigned
represents and warrants that:

     (a) he is not subject to, or a respondent in, any legal action for, any
injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any
jurisdiction;

     (b) he has never been convicted of or pleaded guilty to any crime (i)
involving any fraud or (ii) relating to any financial transaction or handling of
funds of another person, or (iii) pertaining to any dealings in any securities
and he is not currently a defendant in any such criminal proceeding; and

     (c) he has never been suspended or expelled from membership in any
securities or commodities exchange or association or had a securities or
commodities license or registration denied, suspended or revoked.

          7. The undersigned has full right and power, without violating any
agreement by which he is bound, to enter into this letter agreement and to serve
as Chairman of the Board, Co-Chief Executive Officer, President and Secretary of
the Company.

          8. The undersigned authorizes any employer, financial institution, or
consumer credit reporting agency to release to EBC and its legal representatives
or agents (including any investigative search firm retained by EBC) any
information they may have about the undersigned's background and finances
("Information"). Neither EBC nor its agents shall be violating the undersigned's
right of privacy in any manner in requesting and obtaining the Information and
the undersigned hereby releases them from liability for any damage whatsoever in
that connection.

          9. This letter agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to

DG Acquisition Corp.
EarlyBirdCapital, Inc.
June 9, 2005
Page 4

conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. The undersigned hereby (i) agrees that
any action, proceeding or claim against him arising out of or relating in any
way to this letter agreement (a "Proceeding") shall be brought and enforced in
the courts of the State of New York of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive, (ii) waives any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum and
(iii) irrevocably agrees to appoint Graubard Miller as agent for the service of
process in the State of New York to receive, for the undersigned and on his
behalf, service of process in any Proceeding. If for any reason such agent is
unable to act as such, the undersigned will promptly notify the Company and EBC
and appoint a substitute agent acceptable to each of the Company and EBC within
30 days and nothing in this letter will affect the right of either party to
serve process in any other manner permitted by law.

          10. As used herein, (i) a "Business Combination" shall mean an
acquisition by merger, capital stock exchange, asset or stock acquisition,
reorganization or otherwise, of an operating business; (ii) "Insiders" shall
mean all officers, directors and stockholders of the Company immediately prior
to the IPO; and (iii) "IPO Shares" shall mean the shares of Common Stock issued
in the Company's IPO.

                                        John C. Drake
                                        -------------
                                        Print Name of Insider

                                        /s/ John C. Drake
                                        ----------------------------------------
                                        Signature

                                                                       EXHIBIT A

JOHN C. DRAKE has been our chairman of the board and co-chief executive since
our inception. Mr. Drake co-founded Drake Goodwin & Graham, a private equity
firm which invests in manufacturing, distributing, real estate development and
financial services, in 1985, and has been partner since that time. Since January
2002, Mr. Drake has been a partner in JJR Capital Partners, a merchant bank in
Toronto, Ontario and has been chairman of DGM Bank and Trust in Barbados since
June 1998. Mr. Drake has also been president of Drake Goodwin Corp., a merchant
bank company, since September 1985. Mr. Drake received a B.A. in Biology and an
LLB from the University of Western Ontario.

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