Document:

EX-10.1

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)

6EX-10.2

TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this “Agreement”) is dated as of this 11th day of May,
2006, by and between Ice Diamond, LLC a limited liability company organized under the laws of the
State of Delaware (the “Purchaser”), Ice.com, Inc., a Delaware corporation (“Parent”) and Odimo
Incorporated, a Delaware corporation (the “Seller”).

RECITALS

WHEREAS, as set forth in the Asset Purchase Agreement, dated May 11, 2006, by and among
Purchaser, Parent and Seller (the “Purchase Agreement”), Purchaser has agreed to purchase from
Seller and Seller has agreed to sell, transfer, assign and deliver to Purchaser the Purchased
Assets against delivery of the purchase price set forth in the Purchase Agreement (Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase
Agreement or as defined in Appendix 1 attached thereto and incorporated herein by
reference);

WHEREAS, the Purchase Agreement provides that Seller shall enter into a transition services
agreement with Purchaser pursuant to which Seller shall provide certain transitional services to
Purchaser with respect to the Business following the Closing Date for a limited period of time to
facilitate the transfer of the Purchased Assets; and

WHEREAS, the parties desire hereby to set forth the terms and conditions upon which Seller
shall provide such services to Purchaser.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:

1. Provision of Services; Standard of Performance.

1.1 Commencing on the date hereof, Seller shall provide to Purchaser the services and
facilities (each, a “Service” and collectively, the “Services”) described on Exhibit A, or
in such other form as the parties may agree in writing (each such schedule, a “Service Schedule”)
for the period of time specified thereon unless a Service is earlier terminated in accordance with
the terms hereof. Each Service shall become subject to this Agreement upon execution of a Service
Schedule related thereto. As noted on Schedule A, the Services shall include provision of
appropriate work space and warehouse space, in Seller’s facility located at 14051 NW
14th Street, Sunrise, FL 33323 (the “Facility”). In addition, if any services,
functions, responsibilities or other components of work for any Service are not specifically
described in the applicable Service Schedule but are inherent to or a necessary part of the
Services described therein, or are reasonably required for proper performance or provision of such
Services, they shall be deemed to be “Services” for all purposes under this Agreement.

1.2 Unless a different Performance Standard (as defined in Section 1.4) is set forth in the
applicable Service Schedule, Seller agrees to use its commercial best efforts to provide Services
in substantially the same manner as such Services were performed by Seller for the Business
immediately prior to the Closing Date. For the avoidance of doubt, the phrase “immediately prior
to the Closing Date” when used in this Agreement refers to manner in which the Seller operated the
Business and the diamond.com website prior to May 4, 2006. Seller shall give the Services
substantially the same priority as it accords its own operations. Notwithstanding anything
contained herein to the contrary, in connection with providing the Services hereunder, Seller shall
maintain the functionality of the diamond.com website as it was functioning immediately prior to
the Closing Date but will not be responsible to make any substantive changes to either the
functionality or the look and feel of the diamond.com website.

1.3 Except as may be provided in a Service Schedule, (i) Seller shall not be required to
provide Services to Purchaser except to the extent that such Services are being provided to the
Business; and (ii) the Services shall be used by Purchaser only for the purposes of conducting the
Business and operating the Purchased Assets substantially in the manner that they were conducted
and operated, by Seller immediately prior to the Closing Date, and shall not be used for any other
purposes, except as may be otherwise agreed to by Seller in writing.

1.4 Seller shall provide to Purchaser a weekly report and invoice setting forth the Services
performed during the preceding week with reference to any performance standards described on any
Service Schedule (the “Performance Standards”) and containing such additional information as may,
from time to time, be reasonably requested by Purchaser with respect to (i) any Additional Services
(as defined in Section 3.3 below) or (ii) any Service which Purchaser believes has not been
performed according to the applicable Performance Standards and for which Purchaser has stated its
specific reason for such belief.

1.5 Seller shall provide to Purchaser reasonable notice of any scheduled interference with
Seller’s operating or other systems, including downtime for network maintenance, which is
reasonably likely to interrupt the performance of or the availability of equipment necessary for
the provision of any Service. Purchaser shall not be obligated to pay any Fees with respect to any
period that the Services are interrupted due to scheduled interference with Seller’s operating or
other systems.

2. Payment

2.1 Purchaser shall pay to Seller a fixed fee based on the rate of $25,000 per month (the
“Fee”) for the Services. Payment of the Fee shall be payable in arrears every thirty days, with
the Closing Date counted as the first day of the first thirty day period. In addition, in the
event that additional third party expenses are incurred by Seller in providing the Services as a
result of extreme unforeseen circumstances, Purchaser shall reimburse Seller for such third party
expenses, provided, that to the extent such third party expenses are incurred for services
that benefit Seller and/or its remaining businesses, Purchaser shall not be liable for payment of
such third party fees, provided further that Purchaser shall not be responsible for payment
of third party charges for services that could reasonably have been rendered by Seller’s employees
immediately prior to the Closing Date.

2.2 In the event that the provision of the Services or the relationship created between the
parties hereunder gives rise to any Tax (other than a Tax based on income), such Tax shall be the
responsibility of Seller.

3. Term; Addition and Reduction of Services.

3.1 Subject to the terms of this Section 3 and of Section 8, the provision of the Services
shall commence on the date hereof and, with respect to each Service, shall terminate sixty (60)
days from the Closing Date (the “Services Termination Date”), unless sooner terminated by Purchaser
in accordance herewith.

3.2 Purchaser may terminate any Service by giving five (5) days’ prior written notice to
Seller, provided, that if Purchaser wishes to cancel all of the Services and this
Agreement, Purchaser shall give Seller ten (10) days prior written notice. Any requested
termination of a Service pursuant to this Section 3.2 shall become effective at the end of such
five (5) or ten (10) day notice period, as applicable. Seller shall thereafter no longer be
obligated to provide such Service and Purchaser shall thereafter no longer be obligated to pay for
such Service (except with respect to any Fees incurred up to such date). The applicable Service
Schedule shall thereafter be amended to reflect the termination of the Service. In the event of a
termination of this Agreement prior to the Services Termination Date, any remaining Fee owed shall
be prorated to reflect such reduction in time that services are provided.

3.3 If Purchaser desires to extend the term of any Service (or any part thereof) or add any
additional service (collectively, the “Additional Services”) arising out of or relating to the
Services, Purchaser shall give Seller five (5) days’ prior written notice, which notice shall
include reasonable details relating to such request. Purchaser and Seller shall negotiate in good
faith whether and on what terms Seller shall provide (if at all) any such extended term or any such
Additional Service provided that Seller shall not unreasonably withhold its consent to the
extension of any such term or provision of any such Additional Service if such extension or
Additional Service was inadvertently or unintentionally omitted from a Service Schedule as of the
date of this Agreement or is essential to effectuate an orderly transition of the Business and the
Purchased Assets in accordance with the Purchase Agreement. The applicable Service
Schedule shall thereafter be amended to include the extended term or a separate Service Schedule
shall be entered into to add the Additional Service. Upon execution of such amendment or new
Service Schedule, any Additional Service shall be deemed to be a “Service” for all purposes
hereunder.

3.4 Seller shall reduce the quantity of any Service provided hereunder upon five (5) days’
prior written notice from Purchaser. Any requested reduction of a Service pursuant to this
Section 3.4 shall become effective at the end of such five (5) day notice period.

3.5 Seller shall not terminate or reduce the quantity of any Service or add any Additional
Service except as provided in this Section 3 and in Section 8.

4. Employees and Subcontractors.

4.1 Leased Employees. Commencing on the date hereof, Seller agrees to provide to Purchaser
for the terms specified below, on a full time and efforts basis, those employees of Seller
identified on Exhibit B (the “Leased Employees”), who immediately before the Closing Date served in
the respective positions described in such Exhibit B. Such Exhibit B shall also set forth the
regular base salary and bonus in effect (both as described in Section 4.1(i) below) for such Leased
Employees on the date of this Agreement as well as vacations scheduled for each such Leased
Employee on the date of this Agreement and for the term of this Agreement. Seller shall use
commercially reasonable efforts to provide Purchaser the full time and effort of any Seller
employees that Purchaser reasonably requests to be included on a particular Service Schedule and
Seller shall take all reasonable steps to otherwise assist Purchaser in determining the Seller
employees who should be leased to Purchaser to best accomplish the Services.

(i) For each week, or portion thereof, during the term of the Service, Purchaser shall pay to
Seller every two weeks an amount equal to (A) one hundred percent (100%) of the Leased Employees’
annual regular base salary (not including the value of any bonuses, benefits and retirement or
other plan contributions), with a pro rata reduction for each day of such 5-day work week in which
the Leased Employee is not performing services on behalf of Purchaser due to vacation or otherwise,
plus (B) bonuses in effect for such period (but only those portions of bonuses pertaining to the
period covered by this Agreement (which bonuses shall be included on the applicable Service
Schedule identifying such Leased Employee) (collectively, the “Leased Employee Fee”). Purchaser
shall have no obligation to pay any Leased Employee Fee with respect to Leased Employees whose
services have been discontinued in accordance with Section 4.1(vii) below for any period after the
last day of service for Purchaser of such Leased Employee. Unless otherwise agreed by the parties,
the total amount of any Leased Employee Fees shall be set forth in the invoice delivered to
Purchaser pursuant to Section 1.4 hereof

(ii) Seller acknowledges and agrees that it shall be responsible for filing all Tax returns,
Tax declarations and Tax schedules, and for withholding and paying all required Taxes, when due,
with respect to any and all compensation earned by the Leased Employees under this Agreement.
Purchaser will not withhold any employment Taxes from amounts it pays to Seller for Leased
Employees hereunder.

(iii) Nothing in this Agreement shall cause the Leased Employees to be deemed employees of
Purchaser. The Leased Employees will be employees of Seller only and none of the benefits, if any,
that Purchaser provides to its own employees shall be available to the Leased Employees. None of
the Leased Employees shall be regarded as eligible employees for purposes of Purchaser’s employee
benefit plans, and no service rendered by any Leased Employee shall be taken into account for any
purposes under Purchaser’s employee benefit plans. The Leased Employees’ exclusion from benefit
programs maintained by Purchaser is a material component of the terms of compensation negotiated by
the parties.

(iv) Seller shall exercise best commercial efforts to assist Purchaser in obtaining Leased
Employees’ signatures to the form of Non-Disclosure and Proprietary Information Agreement used by
Purchaser (the “NDA”).

(v) To the extent that any Leased Employee is subject to a noncompetition or other restrictive
agreement with Seller that may preclude the Leased Employee’s performance of Services for Purchaser
hereunder, Seller represents and warrants that Seller has taken any necessary steps to release the
Leased Employee from any restrictions that are inconsistent with the provision of Services
contemplated under this Agreement.

(vi) Notwithstanding the employer/employee relationship that shall exist between the Leased
Employees and Seller, Seller shall obtain Purchaser’s written consent prior to implementing changes
in (a) the duties and activities of the Leased Employees, (b) the wages, hours, terms and material
conditions of employment of the Leased Employees, (c) vacation scheduling and other related
matters, and (d) the taking by Seller of any and all other material actions with respect to the
employment of any Leased Employee.

(vii) Nothing herein expressed or implied shall confer upon the Leased Employees any rights or
remedies of any nature or kind whatsoever, including any right to employment or continued
employment for any specified period. This Agreement is for the sole benefit of Seller and
Purchaser and nothing herein expressed or implied shall give or be construed to give to any other
Person any legal or equitable rights hereunder, whether as a third party beneficiary or otherwise.

(viii) If Purchaser reasonably determines that a Leased Employee is failing to perform in
accordance with this Agreement, Purchaser shall immediately notify Seller that Purchaser desires to
discontinue the services of such Leased Employee for cause, and Seller shall cooperate with
Purchaser in removing such Leased Employee or otherwise resolving such performance issues. Upon
such notice, Purchaser shall be entitled to terminate this Agreement immediately with respect to
such Leased Employee. In addition, Purchaser shall be entitled to discontinue the services of any
or all Leased Employees, without cause, upon not less than one (1) days’ prior written notice.

5. Cooperation; Records; Access.

5.1 The parties agree to fully cooperate in good faith with each other in connection with the
provision of the Services and the matters related to or arising hereunder, including, without
limitation, Seller’s cooperation with Purchaser to enable Purchaser to establish its own
infrastructure to perform the Services independently of Seller as soon as practicable after the
Closing Date.

5.2 Each of the parties shall create and maintain full and accurate books in connection with
the provision of the Services. For a period of no less than three (3) years, the parties will
maintain, in accordance with their standard document retention procedures, documentation supporting
the information relevant to cost calculations contained in the Service Schedules and cooperate with
each other in making such information available as needed in the event of a tax audit, whether in
the United States or any other country.

5.3 Purchaser shall make available during regular business hours (or otherwise upon reasonable
prior notice) to Seller or its Representatives all personnel designated by Purchaser to receive or
oversee the Services.

5.4 Seller shall make available during regular business hours (or otherwise upon reasonable
prior notice) to Purchaser or its Representatives (i) all personnel designated by Seller to provide
the Services, (ii) all books and records maintained by Seller in connection with this Agreement and
all other information or materials reasonably requested by Purchaser for the purpose of exercising
general oversight and monitoring of the performance of the Services and (iii) on Seller’s premises,
all records that Seller has prepared or maintained in providing the Services in order for Purchaser
to verify the accuracy of the Fees and the proper performance of Services.

5.5 Seller shall be responsible for obtaining any third party Consents necessary for the
performance of the Services, including, without limitation, any required Consent under any
intellectual property license or real property lease. The costs and expenses of obtaining any such
Consents shall be borne by Seller. In the event that the parties are unable to obtain any required
Consent, the parties shall negotiate in good faith reasonable modifications of the Services so that
such Consents are not required.

5.6 Each party agrees to make available any of its employees whose assistance, testimony or
presence is necessary to assist the other party in evaluating or defending any claims with respect
to the Services, including the presence of such employees as witnesses in Proceedings for such
purpose; provided that the party requiring such assistance shall reimburse the party providing such
assistance for any direct out-of-pocket costs in connection with such employee’s assistance,
testimony or presence, promptly following receipt of appropriate documentation of such
out-of-pocket costs.

5.7 For any work performed on Purchaser’s premises, Seller shall comply with all security,
confidentiality, safety and health policies of Purchaser. Seller shall take all necessary
precautions to prevent, and shall be responsible for, any injury to any Persons (including, without
limitation, employees of Purchaser) or damage to property (including, without limitation,
Purchaser’s property) arising from or relating to Seller’s performance of the Services or the use
by Seller of any Purchaser equipment, tools, facility or other property, whether or not such claim
is based upon its condition or on the alleged negligence of Purchaser in permitting its use.

5.8 Seller agrees during the term of this Agreement not to accept work or enter into any
agreement or accept any obligation that is inconsistent or incompatible with Seller’s obligations
under this Agreement or the scope of Services rendered for Purchaser. Seller represents and
warrants that, to the best of its knowledge, there is no other existing agreement or duty on
Seller’s part that is inconsistent with this Agreement.

6. Management Process.

6.1 On the Closing Date, each party shall designate a project manager (a “Project Manager”) to
report and discuss issues with respect to the provision of the Services. The Project Managers
shall meet to discuss the performance of the Services as often as reasonably necessary to ensure
the orderly provision of the Services, and in any event at least weekly, and shall have authority
to address and remedy problems related to the provision of the Services. Each party shall
designate successor Project Managers in the event that a designated individual is not available to
perform such role hereunder.

6.2 In the event that any dispute arises under this Agreement, the parties agree to negotiate
in good faith to resolve such dispute prior to seeking other relief. Either party may at any time
deliver a notice to the other party that it wishes to refer a dispute to the Project Managers.
Following receipt of such notice, the Project Managers shall negotiate in good faith to resolve
such dispute within a period of two (2) days (or such longer period of time as such Project
Managers may agree in writing). If at the end of such period, the Project Managers have not fully
resolved the dispute, the Purchaser may undertake to rectify the matter in dispute, including but
not limited to providing the Services in dispute, provided that if Purchaser undertakes to
address the matters in dispute, the Seller will be responsible for the all costs incurred by
Purchaser by reason of being required to rectify the matters in dispute and/or to provide such
Services, provided further, that Seller shall be responsible for losses incurred by
Purchaser as a result of Seller’s failure to provide such Services. For the avoidance of doubt,
costs and losses incurred by Purchaser as a result of the failure to provide the Services required
by this Agreement will be reimbursed to Purchaser first through disbursement of the Holdback Amount
and second, in the event the costs and losses incurred by Purchaser exceed the Holdback Amount,
from the Seller.

7. Intellectual Property.

7.1 As used herein, “Work Product” shall include, without limitation, all Intellectual
Property Rights and any related work-in-progress, improvements or modifications to any Intellectual
Property Rights that are created, developed or conceived (alone or with others) in connection with
the Services (i) during the term of this Agreement, whether or not created, developed or conceived
during regular business hours, and (ii) if based on Confidential Information of Purchaser, after
termination of this Agreement. Work Product shall include, without limitation, all materials
required to be delivered to Purchaser under this Agreement.

All Work Product shall be considered “work made for hire” (as such term is defined in 17
U.S.C. §101) and shall be the sole property of Purchaser, with Purchaser having the right to obtain
and hold in its own name all Intellectual Property Rights in and to such Work Product. To the
extent that the Work Product may not be considered “work made for hire,” Seller hereby
irrevocably assigns and agrees to assign to Purchaser, without additional consideration, all right,
title and interest in and to all Work Product, whether currently existing or created or developed
later, including, without limitation, all Intellectual Property Rights related thereto, whether
existing now or in the future, effective immediately upon the inception, conception, creation or
development thereof. Seller shall (i) disclose promptly to Purchaser all Work Product, and
(ii) whether during or after the term of this Agreement, execute such written instruments and do
such other acts as may be necessary in the opinion of Purchaser to obtain a patent, register a
copyright or otherwise evidence or enforce Purchaser’s rights in and to such Work Product (and
Seller hereby irrevocably appoints Purchaser and any of its officers as its attorney in fact to
undertake such acts in its name).

7.2 To the extent, if any, that Seller retains any right, title or interest in or to any Work
Product, Seller hereby grants to Purchaser a perpetual, irrevocable, fully paid-up, transferable,
sublicensable, exclusive, worldwide right and license (i) to use, reproduce, distribute, display
and perform (whether publicly or otherwise), prepare derivative works of and otherwise modify,
make, sell, offer to sell, import and otherwise use and exploit (and have others exercise such
rights on behalf of Purchaser) all or any portion of such Work Product, in any form or media (now
known or later developed); (ii) to modify all or any portion of such Work Product, including,
without limitation, the making of additions to or deletions from such Work Product, regardless of
the medium (now or hereafter known) into which such Work Product may be modified and regardless of
the effect of such modifications on the integrity of such Work Product; and (iii) to identify
Seller, or not to identify Seller, as one or more authors of or contributors to such Work Product
or any portion thereof, whether or not such Work Product or any portion thereof have been modified.
Seller further waives any “moral” rights or other rights with respect to attribution of authorship
or integrity of such Work Product Seller may have under any applicable law, whether under
copyright, trademark, unfair competition, defamation, right of privacy, contract, tort or other
legal theory.

7.3 Seller represents, warrants and covenants that: (i) Seller has the full power and
authority to enter into this Agreement and to perform its obligations hereunder, without the need
for any Consents other than as disclosed in the Purchase Agreement; (ii) Seller’s execution of and
performance under this Agreement shall not breach any oral or written agreement with any third
party or any obligation owed by Seller to any third party to keep any information or materials in
confidence or in trust; (iii) the Services, including, without limitation, any deliverables
required hereunder, shall be free from material errors or other defects and shall substantially
conform to any specifications for such Services and/or deliverables; (iv) the Work Product shall be
the original work of Seller, and any persons involved in the development of Work Product have
executed (or prior to any such involvement, shall execute) a written agreement with Seller in which
such persons (A) assign to Seller all right, title and interest in and to the Work Product in order
that Seller may fully grant the rights to Purchaser as provided herein and (B) agree to be bound by
confidentiality and non-disclosure obligations no less restrictive than those set forth in this
Agreement; (v) Seller has the right to grant the rights and assignments granted herein, without the
need for any Consents, assignments, releases, immunities or other rights not yet obtained; (vi) the
Services, Work Product, and Confidential Information of Seller (and the exercise of the rights
granted herein with respect thereto) do not and shall not infringe, misappropriate or violate any
Intellectual Property Rights of any third party, and are not and shall not be defamatory or
obscene; and (vii) neither the Work Product nor any element thereof shall be subject to any
Encumbrance.

7.4 Purchaser hereby disclaims all warranties of any kind, whether express, implied, statutory
or otherwise, with respect to any Confidential Information of Purchaser or other information or
materials supplied by Purchaser to Seller hereunder, including, without limitation, any warranties
with respect to any specifications for the Work Product or other deliverables required hereunder.

8. Termination.

8.1 Subject to the terms of this Section 8 and Section 3, this Agreement shall terminate on
the date which is 60 days from the Closing Date.

8.2 This Agreement may be terminated by either party in advance of the Services Termination
Date pursuant to Section 8.1 above:

(i) subject to Section 6.2, upon written notice to the other party if the other party shall
default in the performance of any of its material obligations under this Agreement and such default
shall continue and not be remedied for a period of five (5) days after receipt of prior written
notice stating that a default has occurred; or

(ii) upon written notice to the other party if the other party has filed against it any
involuntary petition in bankruptcy or similar proceeding seeking its reorganization, liquidation or
the appointment of a receiver, trustee or liquidator for all or substantially all of its assets,
whereupon such petition shall not be dismissed, or if the other party shall (A) apply for or
consent in writing to the appointment of a receiver, trustee or liquidator of all or substantially
all of its assets, (B) file a voluntary petition or admit in writing its inability to pay its debts
as they become due, (C) make a general assignment for the benefit of creditors, (D) file a petition
or an answer seeking reorganization or an arrangement with creditors or take advantage of any
insolvency law or (E) file an answer admitting the material allegations of a petition filed against
it in any bankruptcy, reorganization, insolvency proceedings or similar proceedings.

8.3 Upon the termination of this Agreement pursuant to this Section 8, Seller shall no longer
be obligated to provide any Services and Purchaser shall no longer be obligated to pay for any
Services (except with respect to any Fees incurred up to the date of such termination).

8.4 The provisions of Sections 8.3, 9, 10, 11, 13 and 14 shall survive any termination of this
Agreement.

9. Liability.

9.1 Seller shall, to the extent permitted by law, indemnify and hold harmless Purchaser and
its Representatives and Affiliates from and against all Damages incurred or sustained by Purchaser
where such Damages result from (i) the gross negligence or willful misconduct of, or breach of any
covenant contained in this Agreement by, Seller, its Representatives, Affiliates or any third party
performing Services hereunder, in each case, other than Damages relating to the gross negligence or
willful misconduct of Purchaser or Purchaser’s breach of its obligations pursuant to this
Agreement, or (ii) the failure by Seller to comply fully with its obligations to any Seller
employee, including, without limitation, payment of wages, provision of benefits, and payment of
employment taxes.

9.2 Purchaser shall, to the extent permitted by law, indemnify and hold harmless Seller and
its Representatives and Affiliates from and against all Damages incurred or sustained by Seller
where such Damages result from (i) the gross negligence or willful misconduct of or breach of any
covenant contained in this Agreement by Purchaser or its Representatives or Affiliates, in each
case, other than Damages relating to the gross negligence or willful misconduct of Seller or
Seller’s breach of its obligations pursuant to this Agreement; or (ii) the failure by Purchaser to
comply fully with its obligations to any Purchaser employee, including, without limitation, payment
of wages, provision of benefits, and payment of employment taxes.

9.3 Subject to Seller’s obligation to use its commercial best efforts to provide security
services, monitoring and access control at the Facility as such services were provided for the
Business immediately prior to the Closing Date, Purchaser shall be responsible for any risk of loss
with respect to Inventory stored at the Facility. Purchaser shall obtain appropriate insurance to
cover the Inventory stored at the Facility provided.

9.4 Seller shall not be responsible and shall provide no services relating to recording or
accounting for any transactions relating to the Business after the Closing Date. Purchaser
acknowledges that Seller shall cause transactional information and customer related data arising
out of the operation of the Business after the Closing Date to be made available to Purchaser in
ASCII File Format or as otherwise mutually agreed by the parties hereto.

10. Confidential Information.

10.1 Without the prior written consent of the other party, each party agrees not to (i)
disclose Confidential Information to any third party or (ii) use any Confidential Information
except as necessary to perform its obligations under this Agreement. Any Confidential Information
disclosed prior to the date hereof shall be protected by the terms of this Section 10. Each party
shall use no less than reasonable care in protecting any Confidential Information received. Each
party is and shall remain the sole owner of all right, title and interest in and to its respective
Confidential Information. Neither party shall possess any right, title or interest in or any lien
on Confidential Information of the other party. All Confidential Information disclosed hereunder
shall be on an “AS IS” basis with no warranties, express or implied.

10.2 Each party shall limit disclosure of Confidential Information to its Representatives and
Affiliates who have a bona fide need for Confidential Information to carry out the purposes of this
Agreement and who have agreed to observe the terms of this Section 10. Each party shall be
responsible for any breaches of this Section 10 by its Representatives and Affiliates. Seller
agrees to consult with Purchaser and to use commercially reasonable efforts to put in place
adequate procedures and make appropriate personnel assignments, in each case as of the Closing
Date, in order to ensure that Confidential Information of Purchaser is not used by Seller for the
benefit of its business or otherwise misused.

10.3 Upon the earlier to occur of (i) the termination of this Agreement, (ii) such time as any
Confidential Information ceases to be required by the party receiving such Confidential Information
to perform or receive the Services or (iii) a reasonable request of a party, all Confidential
Information of a party (and any copies thereof) shall be returned to that party and any such
Confidential Information of a party (and any copies thereof) stored in computer or other electronic
archival systems shall be deleted or erased, in each case within fifteen (15) days following such
termination or request. Upon the request of a party, the other party shall certify in writing that
all such Confidential Information has been returned or destroyed.

10.4 Seller shall not breach any agreements to keep in confidence, or to refrain from using,
the confidential, proprietary or trade secret information of a third party. Seller shall not
provide to Purchaser any information of a third party in the Work Product or otherwise, nor shall
Seller use any such information in its activities for Purchaser, without the prior written consent
of Purchaser and such third party.

10.5 In the event that either party or any of its Representatives or Affiliates breach the
confidentiality obligations set forth in this Section 11, then the non-breaching party shall have
all rights and remedies for breach of confidentiality provided for at law or in equity. If a
breach of such confidentiality obligations would cause irreparable harm to the business prospects
of the non-breaching party, notwithstanding any dispute resolution provisions herein to the
contrary, temporary or preliminary injunctive relief in a court of competent jurisdiction shall be
appropriate to prevent either party from a continuing or additional breach, in addition to any
other relief to which the non-breaching party may be entitled.

11. Non-Disparagement. Neither party shall, and each party shall ensure that its
Representatives shall not, directly or indirectly, make or cause to be made any disparaging or
derogatory statement about the other party (including its business or products) or any of its
Representatives.

12. Licenses, Permits and Third Party Consents. Seller warrants that all Services shall be
performed in compliance with all Legal Requirements. Each party shall obtain and maintain all
permits, approvals and licenses, and shall obtain any third party Consents, necessary or
appropriate to perform its obligations hereunder and shall at all times comply with the terms and
conditions of such permits, approvals and licenses or Consents. Unless otherwise provided in the
applicable Service Schedule, the costs of obtaining any permits, approvals, licenses, sublicenses
or approvals and third party Consents, shall be borne by Seller. Except as expressly set forth
herein, nothing contained in this Agreement shall be construed as conferring by implication,
estoppel or otherwise any license of any Intellectual Property Rights or Registered Intellectual
Property Rights of a party following consummation of the Transaction.

13. Independent Contractor. Each of Purchaser and Seller shall be an independent contractor
in the performance of its respective obligations hereunder. Nothing in this Agreement shall create
or be deemed to create a partnership, joint venture or a relationship of principal and agent or of
employer and employee between Purchaser and Seller, or between any of the Representatives,
contractors or suppliers of Purchaser, on the one hand, and of Seller, on the other hand.

14. Notices. Any notices authorized to be given hereunder shall be in writing and deemed
given, if delivered personally or by overnight courier, on the date of delivery if a Business Day,
or if not a Business Day, on the first Business Day following delivery, or if mailed, three days
after mailing by registered or certified mail, return receipt requested, and in each case,
addressed, as follows:

(i) if to Purchaser, to:

	 	 	 
	Shmuel Gniwisch

Chief Executive Officer

Ice.Com, Inc.

	 	

	 
	 	 
	1085 rue Saint-Alexandre #102

	 
	 	 
	Montreal, QC H2Z 1P4

CANADA

Facsimile No.:

Telephone No.:

	 	

(514) 393-1295

(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

	 	 	 	 	 
	(ii)

	 	if to Seller, to:
	 	

	
 
	 	Jeff Kornblum

Chief Operating Officer

Odimo Incorporated
	 	

	 
	 	 	 	 
	 	 	14051 NW 14th Street, Sunrise Florida, 33323

	 
	 	 	 	 
	
 
	 	Facsimile No.: (954) 835-2233

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.:

Telephone No.:
	 	

(305) 347-6463

(305) 577-4171

or if delivered by telecopier, on a Business Day before 5:30 PM local time of addressee on
transmission confirmed electronically, or if at any other time or day, on the first Business Day
succeeding transmission confirmed electronically, to the facsimile numbers provided above or to
such other address or telecopy number as any party shall specify to the other pursuant to the
foregoing notice provisions.

15. Severability. No invalidity or unenforceability of any section of this Agreement or any
portion thereof shall affect the validity or enforceability of any other section or the remainder
of such section.

16. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and the same
instrument.

17. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without giving effect to any choice or conflict of law provision or
rule (whether the State of Florida or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.

18. Succession; Third Party Beneficiaries. This Agreement shall be binding upon and inure to
the benefit of the parties named herein and their respective successors and permitted assigns.
Nothing herein, express or implied, is intended to or shall confer upon any other Person any legal
or equitable right, benefit or remedy of any nature under this Agreement.

19. Assignment. No party may assign either this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of the other party, which approval shall
not be unreasonably withheld.

20. Entire Agreement; Amendment. This Agreement, together with the Purchase Agreement and the
other Transaction Agreements, constitutes the entire understanding and agreement between the
parties hereto and supersedes any and all written or oral, prior or contemporaneous
representations, understandings and agreements between or among Purchaser and Seller with respect
to the subject matter hereof. This Agreement may not be canceled, altered, modified, amended or
waived, in whole or in part, in any way, except by an instrument in writing signed by all of the
parties hereto. All amendments or modifications of this Agreement shall be binding upon the
parties even in the absence of consideration so long as the same shall be in writing and executed
by the parties hereto.

21. Controlling Agreement. In the event of a conflict between the terms and conditions set
forth in this Agreement and the terms and conditions set forth in the Purchase Agreement, or the
interpretation and application thereof, the terms and conditions set forth in the Purchase
Agreement shall prevail, govern and control in all respects.

[Remainder of page intentionally left blank]

1

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

Ice Diamond, LLC

By: /s/ Shmuel Gniwisch

Name: Shmuel Gniwisch

Title: Chief Executive Officer

Ice.com, Inc.

By: /s/ Shmuel Gniwisch

Name: Shmuel Gniwisch

Title: Chief Executive Officer

Odimo Incorporated

By: /s/ Alan Lipton

Name: Alan Lipton

Title: President

[Signature Page to Transition Services
Agreement]

2

EXHIBIT A

	 	1.	 	Odimo shall provide Ice personnel access to its facility during normal business hours
and, upon reasonable notice therefor, after hours, sufficient to operate the diamond.com
website business, including call center, warehouse, fulfillment , shipment, jewelry
inspection and assembly and administrative areas.

	 	2.	 	Odimo shall provide Ice personnel with a reasonably secure work environment, a
functioning workstation, computer, telephone, and internet access comparable to what Odimo
personnel used immediately prior to the closing.

	 	3.	 	Odimo shall maintain and oversee internet connectivity and telecom services for Ice
and Ice personnel working on the diamond.com website at the facility.

	 	4.	 	Odimo shall provide Ice personnel with access to Ecometry which will enable the
diamond.com website to perform for the benefit of Ice, among other tasks, the following:

	 	a.	 	Order entry

	 	b.	 	Order processing

	 	c.	 	Customer service

	 	d.	 	Marketing tracking

	 	e.	 	Merchandising tracking

	 	f.	 	Logistics/Distribution

	 	g.	 	Inventory management

	 	h.	 	All of the various reporting modules

	 	5.	 	Odimo shall provide Ice with a segregated, secure area to store its inventory. Odimo
shall have no responsibility for loss or theft to the Ice inventory unless Odimo is grossly
negligent or it is deemed to have engaged in willful misconduct.

	 	6.	 	At the end of each week, Odimo will send Ice a file containing all of the financial
and other information reflective of the activity on the diamond.com website for that
period. The format of this file shall be ASCII or such other format as agreed by Odimo and
Ice. Immediately following the transition, Odimo shall send Ice data in ASCII format
which reflects the cumulative operations of the diamond.com website during the transition
period.

Notwithstanding anything contained herein to the contrary, Odimo shall maintain and operate the
diamond.com website business in substantially the same way as Odimo operated and maintained the
diamond.com website business immediately prior to May 4, 2006. Such services shall include
technology support, administrative assistance, website hosting and maintenance, shipping,
fulfillment and warehouse services.

3

APPENDIX 1

Definitions

“Additional Services” shall have the meaning specified in Section 3.3.

“Agreement” shall mean the Transition Services Agreement to which this Appendix
1 is attached (including all other schedules and exhibits attached hereto) as it may be amended
from time to time.

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

“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.

“Fees” shall have the meaning specified in Section 2.1.

“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.

“Performance Standards” shall have the meaning specified in Section 1.4.

“Purchase Agreement” shall have the meaning specified in the first WHEREAS clause of
this Agreement.

“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.

“Service” (and, with correlative meaning, “Services”) shall have the meaning specified
in Section 1.1.

“Service Schedule” shall have the meaning specified in Section 1.1.

“Work Product” shall have the meaning specified in Section 7.1.

4

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