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Unassociated Document

EXHIBIT 10.106 

    AGREEMENT
      AND PLAN OF MERGER

     

    BY
      AND AMONG

     

    INSIGNIA
      SOLUTIONS PLC

     

    JEODE
      INC.

     

    DOLLARDAYS
      INTERNATIONAL, INC.

     

    AND

     

    THE
      REPRESENTATIVE OF THE HOLDERS OF ALL OF THE

     

    CAPITAL
      STOCK OF DOLLARDAYS INTERNATIONAL, INC.

     

    DATED
      AS OF JUNE 23, 2008

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    TABLE
      OF CONTENTS

     

    
      	 	 	
              Page

            
	 	 	 
	
              SECTION
                1.

            	
              The
                Merger.

            	
              1

            
	
              1.1.

            	
              The
                Merger

            	
              1

            
	
              1.2.

            	
              Effective
                Time; Closing

            	
              2

            
	
              1.3.

            	
              Effect
                of the Merger

            	
              2

            
	
              1.4.

            	
              Certificate
                of Incorporation; Bylaws; Corporate Records.

            	
              2

            
	
              1.5.

            	
              Directors
                and Officers

            	
              2

            
	
              1.6.

            	
              Appointment
                of Representative; Agreements Binding on Company
                Securityholders

            	
              2

            
	
              SECTION
                2.

            	
              Definitions;
                Conversion and Exchange of Securities.

            	
              3

            
	
              2.1.

            	
              Certain
                Definitions

            	
              3

            
	
              2.2.

            	
              Effect
                on Capital Stock

            	
              4

            
	
              2.3.

            	
              Dissenting
                Holders.

            	
              5

            
	
              2.4.

            	
              Options
                and Warrants

            	
              5

            
	
              2.5.

            	
              Surrender
                of Certificates.

            	
              6

            
	
              2.6.

            	
              Further
                Action

            	
              7

            
	
              2.7.

            	
              Legends

            	
              7

            
	
              SECTION
                3.

            	
              Representations
                and Warranties of the Company

            	
              8

            
	
              3.1.

            	
              Organization
                and Standing.

            	
              8

            
	
              3.2.

            	
              Capitalization
                and Ownership of Shares

            	
              8

            
	
              3.3.

            	
              Subsidiaries

            	
              9

            
	
              3.4.

            	
              Authority
                for Agreement.

            	
              9

            
	
              3.5.

            	
              Consents

            	
              9

            
	
              3.6.

            	
              Financial
                Statements; Liabilities

            	
              10

            
	
              3.7.

            	
              Absence
                of Changes

            	
              10

            
	
              3.8.

            	
              Taxes

            	
              11

            
	
              3.9.

            	
              Property
                and Sufficiency.

            	
              12

            
	
              3.10.

            	
              Contracts

            	
              12

            
	
              3.11.

            	
              Benefit
                Plans.

            	
              14

            
	
              3.12.

            	
              Intellectual
                Property.

            	
              15

            
	
              3.13.

            	
              Accounts
                Receivable

            	
              17

            
	
              3.14.

            	
              Government
                Funding

            	
              17

            
	
              3.15.

            	
              Insurance

            	
              17

            
	
              3.16.

            	
              Personnel.

            	
              17

            
	
              3.17.

            	
              Litigation

            	
              18

            
	
              3.18.

            	
              Environmental
                Matters

            	
              18

            
	
              3.19.

            	
              Compliance
                with Instruments; Laws; Governmental Authorizations.

            	
              18

            
	
              3.20.

            	
              Banking
                Relationships

            	
              19

            
	
              3.21.

            	
              Books
                and Records

            	
              19

            
	
              3.22.

            	
              Brokers
                and Finders; Existing Discussions

            	
              19

            
	
              3.23.

            	
              Vote
                Required; Notices

            	
              19

            
	
              3.24.

            	
              Anti-Takeover
                Statute Not Applicable

            	
              20

            
	
              3.25.

            	
              Certain
                Relationships and Related Transactions

            	
              20

            
	
              3.26.

            	
              Disclosures

            	
              20

            
	
              SECTION
                4.

            	
              Representations
                and Warranties by Parent and Merger Sub

            	
              20

            
	
              4.1.

            	
              Organization
                and Standing

            	
              20

            
	
              4.2.

            	
              Capitalization

            	
              21

            
	
              4.3.

            	
              Subsidiaries

            	
              21

            

    

     

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

    
       

      TABLE
        OF CONTENTS

       

    

    
      	 	 	
              Page

            
	 	 	 
	
              4.4.

            	
              Parent
                Financial Statements; Liabilities.

            	
              21

            
	
              4.5.

            	
              Authority
                for Agreement.

            	
              22

            
	
              4.6.

            	
              Taxes

            	
              22

            
	
              4.7.

            	
              Benefit
                Plans.

            	
              23

            
	
              4.8.

            	
              Insurance

            	
              24

            
	
              4.9.

            	
              Personnel.

            	
              24

            
	
              4.10.

            	
              Litigation

            	
              25

            
	
              4.11.

            	
              Environmental
                Matters

            	
              26

            
	
              4.12.

            	
              Compliance
                with Instruments; Laws; Governmental Authorizations.

            	
              26

            
	
              4.13.

            	
              Banking
                Relationships

            	
              26

            
	
              4.14.

            	
              Brokers
                and Finders

            	
              26

            
	
              4.15.

            	
              Property
                and Sufficiency

            	
              26

            
	
              4.16.

            	
              Disclosures

            	
              27

            
	
              SECTION
                5.

            	
              Additional
                Agreements.

            	
              27

            
	
              5.1.

            	
              Approvals

            	
              27

            
	
              5.2.

            	
              Confidentiality;
                Access to Information; No Modification of Representations, Warranties
                or
                Covenants.

            	
              27

            
	
              5.3.

            	
              Public
                Disclosure

            	
              27

            
	
              5.4.

            	
              Representative

            	
              28

            
	
              5.5.

            	
              Regulatory
                Filings; Reasonable Efforts.

            	
              28

            
	
              5.6.

            	
              Advise
                of Changes

            	
              29

            
	
              5.7.

            	
              Cooperation

            	
              29

            
	
              5.8.

            	
              Employee
                Benefit Plans

            	
              29

            
	
              SECTION
                6.

            	
              Conditions
                Precedent to the Obligations of Each Party to Effect the
                Merger

            	
              29

            
	
              6.1.

            	
              Stockholder
                Approvals

            	
              29

            
	
              6.2.

            	
              No
                Order

            	
              29

            
	
              6.3.

            	
              Government
                Approvals

            	
              29

            
	
              6.4.

            	
              Government
                Litigation and Legal Requirements

            	
              29

            
	
              SECTION
                7.

            	
              Additional
                Conditions Precedent to the Obligations of Parent and Merger
                Sub

            	
              30

            
	
              7.1.

            	
              Representations,
                Warranties and Covenants.

            	
              30

            
	
              7.2.

            	
              No
                Material Adverse Effect

            	
              30

            
	
              7.3.

            	
              Other
                Third Party Approvals

            	
              30

            
	
              7.4.

            	
              Dissenting
                Shares

            	
              30

            
	
              7.5.

            	
              Stockholder
                Approval

            	
              30

            
	
              SECTION
                8.

            	
              Conditions
                Precedent to Obligations of the Company

            	
              30

            
	
              8.1.

            	
              Representations,
                Warranties and Covenants.

            	
              30

            
	
              8.2.

            	
              Release
                Agreement

            	
              30

            
	
              8.3.

            	
              Voting
                and Lockup Agreement

            	
              31

            
	
              8.4.

            	
              Closing
                Date Cash

            	
              31

            
	
              SECTION
                9.

            	
              Closing
                Deliveries.

            	
              31

            
	
              9.1.

            	
              Closing
                Deliveries of the Company

            	
              31

            
	
              9.2.

            	
              Closing
                Deliveries of Parent

            	
              31

            
	
              SECTION
                10.

            	
              Survival

            	
              32

            
	
              SECTION
                11.

            	
              Termination.

            	
              32

            
	
              11.1.

            	
              Termination
                prior to the Effective Time of the Merger

            	
              32

            
	
              11.2.

            	
              Notice
                of Termination; Effect of Termination

            	
              33

            

    

     

    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

    
       

      TABLE
        OF CONTENTS

    

     

    
      	 	 	
              Page

            
	 	 	 
	
              SECTION
                12.

            	
              Fees
                and Expenses

            	
              33

            
	
              SECTION
                13.

            	
              Indemnification.

            	
              33

            
	
              13.1.

            	
              Indemnification
                of Parent Indemnified Parties

            	
              33

            
	
              13.2.

            	
              Certain
                Limitations

            	
              34

            
	
              13.3.

            	
              Indemnification
                by LLC Holders

            	
              34

            
	
              13.4.

            	
              Indemnification
                of Company Indemnified Parties

            	
              34

            
	
              SECTION
                14.

            	
              Representative.

            	
              34

            
	
              14.1.

            	
              Powers
                of the Representative

            	
              34

            
	
              14.2.

            	
              Notices

            	
              36

            
	
              14.3.

            	
              Agreement
                of the Representative

            	
              36

            
	
              SECTION
                15.

            	
              Director
                and Officer Indemnification.

            	
              36

            
	
              SECTION
                16.

            	
              Post-Closing
                Covenants.

            	
              36

            
	
              16.1.

            	
              Options

            	
              36

            
	
              16.2.

            	
              Financial
                Statements

            	
              37

            
	
              16.3.

            	
              Delivery
                of Merger Consideration

            	
              37

            
	
              SECTION
                17.

            	
              Miscellaneous.

            	
              37

            
	
              17.1.

            	
              Notices

            	
              37

            
	
              17.2.

            	
              Successors
                and Assigns

            	
              38

            
	
              17.3.

            	
              Interpretation

            	
              38

            
	
              17.4.

            	
              Counterparts

            	
              39

            
	
              17.5.

            	
              Facsimile

            	
              39

            
	
              17.6.

            	
              Severability

            	
              39

            
	
              17.7.

            	
              Third
                Parties

            	
              39

            
	
              17.8.

            	
              Certain
                Definitions

            	
              39

            
	
              17.9.

            	
              Governing
                Law

            	
              40

            
	
              17.10.

            	
              Entire
                Agreement, Not Binding Until Executed

            	
              40

            
	
              17.11.

            	
              Amendments;
                No Waiver

            	
              40

            
	
              17.12.

            	
              Waiver
                of Jury Trial

            	
              40

            

    

    
      
         

      

      
        -iii-

        
          

        

      

      
         

      

    

    EXHIBITS

     

    
      	
              Stockholders
                Written Consent

            	
              Exhibit
                A

            

    

    
      	
              Certificate
                of Merger

            	
              Exhibit
                B

            

    

    
      	
              Certificate
                of Incorporation of Surviving Corporation

            	
              Exhibit
                C

            

    

    
      	
              Parent
                Pro Forma Capitalization Table 

            	
              Exhibit
                D

            

    

    
      	
              Form
                of Warrant - Peter Engel

            	
              Exhibit
                E

            

    

    
      	
              Form
                of Warrant - Windstone

            	
              Exhibit
                F

            

    

    
      	
              Letter
                of Transmittal to Company Stockholders

            	
              Exhibit
                G

            

    

    
      	
              Voting
                and Lockup Agreement

            	
              Exhibit
                H

            

    

    
      	
              Form
                of Opinion of Company Counsel

            	
              Exhibit
                I

            

    

    
      	
              Form
                of Opinion of Parent Counsel

            	
              Exhibit
                J

            

    

     

    
      
         

      

      
        -iv-

        
          

        

      

      
         

      

    

    AGREEMENT
      AND PLAN OF MERGER

     

    THIS
      AGREEMENT AND PLAN OF MERGER is made as of June 23, 2008 (this “Agreement”)
      by and
      among Insignia Solutions PLC, a corporation organized under the laws of England
      and Wales (“Parent”),
      Jeode
      Inc., a Delaware corporation and a wholly-owned subsidiary of Parent
      (“Merger
      Sub”),
      DollarDays International, Inc., a Delaware corporation (the “Company”),
      and
      the Representative (as defined below). The holders of all of the capital stock
      of the Company (the “Company
      Stock”)
      are
      collectively referred to as the “Company
      Stockholders,”
and
      the
      Company Stockholders, together with the holders of all other equity securities
      of the Company, including securities convertible into, or exercisable or
      exchangeable for, equity securities of the Company (the “Company
      Securities”),
      are
      collectively referred to herein as the “Company
      Securityholders.”

     

    WHEREAS,
      the board of directors of the Company has determined that the merger of Merger
      Sub with and into the Company upon the terms and subject to the conditions
      set
      forth herein (the “Merger”)
      is
      desirable and in the best interests of the Company and the Company Stockholders;
      has approved, in accordance with applicable provisions of the laws of the State
      of Delaware (“Delaware
      Law”),
      this
      Agreement and each of the transactions contemplated hereby, including the
      Merger; and has unanimously recommended that the Company Stockholders approve
      this Agreement and each of the transactions contemplated hereby, including
      the
      Merger; and

     

    WHEREAS,
      the board of directors of Merger Sub has determined that it is advisable and
      in
      the best interests of Merger Sub to enter into a business combination with
      the
      Company upon the terms and subject to the conditions set forth herein;
      and

     

    WHEREAS,
      in furtherance of such combination, the board of directors of Merger Sub, and
      Parent, as the sole stockholder of Merger Sub, have approved this Agreement
      and
      the Merger, upon the terms and subject to the conditions set forth herein,
      in
      accordance with applicable law; and

     

    WHEREAS,
      concurrently with the execution and delivery of this Agreement, the Company
      has
      delivered to Parent and Merger Sub (a) a written consent of certain Company
      Stockholders, holding at least 75% of the Company’s capital stock, a copy of
      which is attached hereto as Exhibit
      A
      (the
“Stockholders
      Written Consent”),
      adopting this Agreement and approving the Merger in accordance with (i) the
      Certificate of Incorporation of the Company, as in effect on the date of this
      Agreement (the “Charter”,
      and
      together with the Bylaws of the Company, as in effect on the date of this
      Agreement the “Company
      Organizational Documents”),
      and
      (ii) Delaware Law (collectively, the “Requisite
      Stockholder Approval”),
      and
      (b) a voting agreement executed by such Company Stockholders, holding at least
      75% of the Company’s capital stock, agreeing to vote the Parent ordinary shares
      issued to them (in the form of Parent ADRs) in the Merger in favor of (a) the
      authorization of 90,000,000 additional ordinary shares such that the total
      authorized share capital of the Parent shall be 200,000,000 ordinary shares,
      or
      such larger amount as might subsequently be decided by the board of directors
      of
      Parent following the Effective Time of the Merger, and (b) the election of
      the
      Parent Director and the Independent Director to the board of directors of Parent
      for at least two years following the Effective Time. 

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants and
      agreements herein contained, and intending to be legally bound hereby, the
      parties hereby agree as follows:

     

    SECTION
      1. The
      Merger.

     

    1.1. The
      Merger.
      At the
      Effective Time (as defined below), and subject to and upon the terms and
      conditions of this Agreement and the applicable provisions of Delaware Law,
      Merger Sub shall be merged with and into the Company, the separate corporate
      existence of Merger Sub shall cease, and the Company shall continue as the
      surviving corporation. The Company as the surviving corporation after the Merger
      is hereinafter sometimes referred to as the “Surviving
      Corporation.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.2. Effective
      Time; Closing.
      The
      closing of the transactions contemplated by this Agreement (the “Closing”)
      shall
      take place on June 23, 2008 or not later than the second (2nd) Business Day
      after the satisfaction or waiver of each of the conditions set forth in Sections
      6, 7 and 8 below (other than conditions that by their nature are to be satisfied
      at Closing, but subject to the satisfaction or waiver of those conditions at
      such time) or at such other time as Parent and the Company shall agree (the
      “Closing
      Date”).
      In
      connection with the Closing, the parties shall cause the Merger to be
      consummated by filing a certificate of merger with the Secretary of State of
      the
      State of Delaware, as contemplated by the General Corporation Law of the State
      of Delaware (the “DGCL”),
      and
      in the form attached hereto as Exhibit
      B
      (the
“Certificate
      of Merger”)
      and
      make all other filings or recordings required by Delaware Law in connection
      with
      the Merger. The Merger shall be effective upon the date and time of the filing
      of the Certificate of Merger with the Secretary of State of the State of
      Delaware (the “Effective
      Time”).
      The
      Closing shall take place at 10:00 a.m., Pacific Time, on the Closing Date at
      the
      offices of Fenwick & West LLP, 555 California St., San Francisco, California
      94104.

     

    1.3. Effect
      of the Merger.
      At the
      Effective Time, the effect of the Merger shall be as provided in this Agreement,
      the Certificate of Merger and the applicable provisions of Delaware Law,
      including Section 259 of the DGCL. Without limiting the generality of the
      foregoing, and subject thereto, at the Effective Time all the property, rights,
      privileges, powers and franchises of the Company and Merger Sub shall vest
      in
      the Surviving Corporation, and all debts, liabilities and duties of the Company
      and Merger Sub shall become the debts, liabilities and duties of the Surviving
      Corporation.

     

    1.4. Certificate
      of Incorporation; Bylaws; Corporate Records.

     

    (a) Charter
      and Bylaws of Merger Sub.
      The
      Company and Merger Sub shall take all necessary actions to cause the form of
      the
      Certificate of Incorporation as attached hereto as Exhibit
      C
      and
      bylaws of the Company as in effect immediately prior to the Effective Time
      to
      become the Certificate of Incorporation and bylaws of the Surviving Corporation
      from and after the Effective Time until thereafter changed or amended as
      provided therein or by applicable Law. The name of the Surviving Corporation
      shall be DollarDays International, Inc. 

     

    (b) Corporate
      Records.
      At the
      Closing, the Company shall deliver or cause to be delivered to Parent possession
      of the minute books, stock record books and, to the extent requested by Parent,
      all other documents, books, records, agreements and financial data, of the
      Company.

     

    1.5. Directors
      and Officers.
      The
      board of directors of the Parent immediately after the Effective Time shall
      comprise of five (5) members, each to hold office in accordance with the
      Certificate of Incorporation and Bylaws of the Surviving Corporation. One board
      member (the “Parent Director”) shall be appointed by the current members of the
      Parent board of directors, one independent board member will be appointed with
      the approval of both the Parent Director and Peter Engel, and three board
      members shall be appointed by the Representative on behalf of the Company
      Stockholders. Parent agrees to take such actions as are available to it to
      cause
      the Parent Directors to continue to be nominated to the board of directors
      of
      Parent for at least two years following the Effective Time. The designated
      officers of Merger Sub immediately prior to the Effective Time shall be the
      initial officers of the Surviving Corporation, in each case until their
      respective successors are duly elected or appointed and qualified, or their
      earlier death, resignation or removal.

     

    1.6. Appointment
      of Representative; Agreements Binding on Company Securityholders.
      Each
      Company Stockholder that does not perfect his or its appraisal rights under
      the
      DGCL will, as a specific term of the Merger, be deemed to (a) have irrevocably
      constituted and appointed, effective as of the Effective Time, Peter Engel
      (together with its permitted successors, the “Representative”),
      as
      its true and lawful agent, proxy and attorney-in-fact, to exercise all or any
      of
      the powers, authority and discretion conferred on him or her under this
      Agreement (including, without limitation, Section 13 and Section 14), and (b)
      to
      have irrevocably agreed to, and be bound by and comply with, all of the
      obligations of the Company Stockholders set forth herein (including, without
      limitation, Section 13 and Section 14). The Representative agrees to act as,
      and
      to undertake the duties and responsibilities of, such agent and attorney-in-fact
      as set forth in Section 13 and Section 14. This power of attorney is coupled
      with an interest and is irrevocable.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    SECTION
      2. Definitions;
      Conversion and Exchange of Securities.

     

    2.1. Certain
      Definitions.
      For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    “Balance
      Sheet”
shall
      mean the balance sheet of DDI LLC as of May 31, 2008 and included in the
      Financial Statements.

     

    “Closing
      Date Cash”
shall
      mean the amount of cash plus any account receivables (excluding the amount
      contemplated by the Release Agreement) minus any account payables, held by
      the
      Parent on the Closing Date, as disclosed in Schedule
      4.6(a)
      hereto.

     

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

     

    “Company
      Common Stock”
shall
      mean the common stock, par value $.001 per share, of the Company.

     

    “Company
      Preferred Stock”
shall
      mean the preferred stock, par value $.001 per share, of the Company.

     

    “Indebtedness”
shall
      include all liabilities and obligations, including any applicable penalties
      (including with respect to any prepayment thereof), interest and premiums,
      (i)
      for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
      instruments, (iii) under leases required to be capitalized in accordance with
      GAAP, (iv) with respect to letters of credit but only to the extent actually
      drawn on or prior to Closing, (v) in the nature of guarantees of the obligations
      described in clauses (i) through (iv) above of any other Person, or (vi) in
      the
      nature of obligations of the type referred to in clauses (i) through (v) of
      any
      other Person secured by any Security Interest on any asset of the Parent
      Parties.

     

    “Lien”
shall
      mean any lien (including liens for Taxes), pledge, mortgage, deed of trust,
      security interest, claim, lease license, charge, option, right of first refusal,
      easement, restriction, reservation, servitude, proxy, voting trust or agreement,
      transfer restriction under any stockholder or similar agreement, or encumbrance
      of any nature whatsoever.

     

    “Merger
      Consideration”
shall
      mean 73,333,333 Parent ADRs as described on Exhibit
      D,
      provided that (a) in the event that Parent shall be required to make any payment
      prior to the Final Delivery Date (as defined in Section 2.2(a) pursuant to
      any
      of the liabilities disclosed on Section 4.4(c) of the Parent Disclosure Schedule
      under the heading “Contingent Liabilities”, the Merger Consideration will be
      increased by a number of Parent ADRs equal to the product of .15 multiplied
      by
      the amount of such payment, provided that such payment shall have been approved
      by the Board of the Parent (such approval to include the approval of Vincent
      Pino) (such approval not to unreasonably withheld), and provided further than
      no
      such increase shall be effected unless and until the amount of such payments
      equals or exceeds $250,000, but in the event that such payments do equal or
      exceed $250,000, then such an increase shall be effected for the entire amount
      of such payments (i.e., from “dollar one”), and (b) in the event that Parent
      recovers any cash prior to the Final Delivery Date as a result of any claim
      held
      by it immediately prior to the Effective Time, or is not required to make all
      or
      any part of any payment disclosed on Section 4.4(c) of the Parent Disclosure
      Schedule under the heading “Non-Contingent Liabilities”, the Merger
      Consideration will be reduced by a number of Parent ADRs equal to the product
      of
      .15 multiplied by the amount of cash received, or payment not required to be
      made.

     

    “Option”
shall
      mean any option to acquire shares of Company Common Stock, including options
      granted under the Option Plan.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Option
      Plans”
shall
      mean the Company’s current option plan, as may be amended from time to time, and
      any other plan or arrangement under which the Company or DDI LLC may have
      outstanding or may grant equity-based awards. 

     

    “Parent
      ADRs”
shall
      mean the American Depository Receipts of the Parent issuable by The Bank of
      New
      York pursuant to that certain Deposit Agreement by and between Parent and The
      Bank of New York. 

     

    “Parent
      Option Plan”
shall
      mean the Parent’s 1995 Incentive Stock Option Plan for U.S. Employees, and any
      other plan or arrangement under which the Parent may grant equity-based
      awards.

     

    “Parent
      Stockholders”
shall
      mean the holders of all of the capital stock of the Parent immediately prior
      to
      the Effective Time. 

     

    “Per
      Share Common Consideration”
shall
      mean a number of Parent ADRs equal to (a) 73,333,333 divided by (b) the total
      number of outstanding shares of capital stock of the Company immediately prior
      to Closing. 

     

    “Person”
shall
      mean a person, firm, entity, partnership, association or any business
      organization thereof.

     

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

     

    “Subsidiary”
shall
      mean any corporation or other organization, whether incorporated or
      unincorporated, of which (a) at least a majority of the securities or other
      interests having by their terms ordinary voting power to elect a majority of
      the
      board of directors or others performing similar functions with respect to such
      corporation or other organization is directly or indirectly owned or controlled
      by the Company or by any one or more of the Subsidiaries or (b) the Company
      is a
      general partner (excluding any such partnership where the Company does not
      have
      a majority of the voting interest in such partnership).

     

    “Warrants”
shall
      mean warrants to acquire shares of the Company Common Stock. 

     

    2.2. Effect
      on Capital Stock.
      At the
      Effective Time and upon the terms and subject to the conditions of this
      Agreement, by virtue of the Merger and without any action on the part of Parent,
      Merger Sub, the Company or any Company Securityholder:

     

    (a) Conversion
      of Securities.

     

    (i) Except
      as
      otherwise provided in Section 2.2(b) each share of Company Stock (other than
      any
      Dissenting Shares (as defined in Section 2.3(a)), issued and outstanding at
      the
      Effective Time shall be converted into the right to receive the Per Share Common
      Consideration, without interest, upon the surrender of the certificate
      representing such share in accordance with the terms hereof and in the manner
      provided herein. Parent shall take all such actions as may be necessary to
      authorize and deliver 46,978,375 Parent ADRs of the Merger Consideration within
      ninety (90) days of the Effective Time. Pursuant to Section 16.3, Parent shall
      take all such actions, including obtaining such approval of the Parent
      shareholders as may be required to increase the authorized share capital of
      Parent (the “Parent
      Shareholder Approval”)
      as may
      be necessary to authorize and deliver all of the remaining Merger Consideration
      as soon as reasonably practicable after the amendment and restatement of its
      Certificate of Incorporation or the equivalent, but in no event later than
      the
      later of October 15, 2008 and (b) the date 90 days after the Company shall
      have
      obtained, prepared and filed with the Securities and Exchange Commission all
      information and financial statements relating to the Company that may be
      required by the SEC or otherwise in connection with the Parent Shareholder
      Approval (the date of the actual delivery of the remaining Merger Consideration
      being referred to as the “Final
      Delivery Date”).
      All
      of the Merger Consideration shall be issued to DollarDays International, LLC
      (“DDI
      LLC”)
      or, if
      and when DDI LLC may distribute the Merger Consideration received by it to
      its
      members, to such members in proportion to their relative ownership of DDI
      LLC.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (ii) From
      and
      after the Effective Time, each such converted share of Company Stock shall
      no
      longer be outstanding and shall be automatically cancelled and retired and
      shall
      cease to exist, and each holder of a certificate formerly representing each
      such
      share shall cease to have any rights with respect thereto, except the right
      to
      receive (subject to the terms of this Agreement) the portion of the
      consideration specified in Section 2.2(a)(i) payable with respect to such
      Company Stock, without interest, upon the surrender of such certificate in
      accordance with the terms hereof and in the manner provided herein, or, if
      such
      share of Company Stock is a Dissenting Share, the right, if any, to receive
      payment from the Surviving Corporation of the “fair
      value”
or
      “fair
      market value”
of
      such
      Dissenting Share as determined in accordance with the applicable provisions
      of
      the DGCL.

     

    (b) Cancellation.
      Each
      share of Company Stock owned by the Company as treasury stock or owned by
      Parent, Merger Sub or any direct or indirect wholly owned subsidiary of Parent
      immediately prior to the Effective Time shall, by virtue of the Merger and
      without any action on the part of the holder thereof, cease to be outstanding,
      be canceled and retired without payment of any consideration therefor and cease
      to exist.

     

    (c) Capital
      Stock of Merger Sub.
      Each
      share of common stock of Merger Sub issued and outstanding immediately prior
      to
      the Effective Time shall be converted into and become, and shall represent,
      one
      fully paid and nonassessable share of common stock of the Surviving Corporation
      with the same rights, powers and privileges as the shares so converted and
      shall
      constitute the only outstanding shares of capital stock of the Surviving
      Corporation.

     

    2.3. Dissenting
      Holders.

     

    (a) Notwithstanding
      anything in this Agreement to the contrary, any shares of Company Stock
      outstanding immediately prior to the Effective Time eligible under the DGCL
      to
      exercise appraisal or dissenters’ rights and held by a holder who has not voted
      in favor of the Agreement and the Merger or consented thereto in writing and
      who
      has exercised and perfected appraisal or dissenters’ rights for such shares in
      accordance with Section 262 of the DGCL and has not effectively withdrawn or
      lost such appraisal or dissenters’ rights (collectively, the “Dissenting
      Shares”)
      shall
      not be converted into or represent the right to consideration for Company Stock
      set forth in Section 2.2(a), and the holder or holders of such shares shall
      be
      entitled only to such rights as may be granted to such holder or holders in
      Section 262 of the DGCL.

     

    (b) Notwithstanding
      the provisions of Section 2.3(a), if any holder of Dissenting Shares shall
      effectively withdraw or lose (through failure to perfect or otherwise) such
      holder’s appraisal rights and dissenters’ rights under Section 262 of the DGCL,
      then, as of the later of the Effective Time and the occurrence of such event,
      such holder’s shares shall automatically be converted into and represent only
      the right to receive the consideration for such shares set forth in Section
      2.2(a)(i), without interest. 

     

    (c) Prior
      to
      Effective Time, the Company shall (i) comply with the requirements of Section
      262 of the DGCL, (ii) give Parent prompt notice of any written demand received
      by the Company pursuant to Section 262 of the DGCL, and of withdrawals of such
      demands, and provide copies of any documents or instruments served pursuant
      to
      the DGCL and received by the Company and (iii) give Parent the opportunity
      to
      participate in all negotiations and proceedings with respect to any such
      demands. Prior to the Effective Time of the Merger, the Company shall not make
      any payment or settlement offer with respect to any such demand unless Parent
      shall have consented in writing to such payment or settlement
      offer.

     

    2.4. Options
      and Warrants.
      The
      Company and the Parent shall take all necessary steps to ensure that as soon
      as
      practicable after Closing:

     

    (a) Each
      Option outstanding and unexercised immediately prior to the Effective Time,
      will
      be deemed cancelled as of the Effective Time. Upon (and not before, or more
      than
      one week after) the date of the Parent Shareholder Approval, Parent shall issue
      to each person who immediately prior to the Effective Time was the holder of
      an
      outstanding Option, an option to purchase Parent ADRs which will be exercisable
      (or will become exercisable in accordance with its terms) for that number of
      whole Parent ADRs equal to the product of the number of shares of Common Stock
      that were issuable upon exercise of such Option immediately prior to the
      Effective Time multiplied by the Per Share Common Consideration (with each
      fractional share being rounded down to the nearest whole share) at an exercise
      price equal to  the greater of (x) the fair market value of the Parent ADRs
      covered by the option as of the grant date or (y) the quotient determined by
      dividing the exercise price per share of Common Stock at which such Option
      was
      exercisable immediately prior to the Effective Time by the Per Share Common
      Consideration (rounded up to the nearest whole cent).

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (b) Parent
      shall take all such actions as may be necessary to authorize and deliver
      4,921,791 Parent ADRs, at a price of $0.13 per Parent ADR within ninety (90)
      days of the Effective Time to Amorin or its affiliates. Pursuant to Section
      16.3, Parent shall take all such actions, including obtaining Parent Shareholder
      Approval as may be necessary to authorize and deliver an additional 2,761,135
      Parent ADRs, at a price of $0.13 per Parent ADR, as soon as reasonably
      practicable after the amendment and restatement of its Certificate of
      Incorporation or the equivalent, but in no event later than the later of (a)
      October 15, 2008 and (b) the date 90 days after the Company shall have obtained,
      prepared and filed with the Securities and Exchange Commission all information
      and financial statements relating to the Company that may be required by the
      SEC
      or otherwise in connection with the Parent Shareholder Approval. Receipt of
      such
      additional Parent ADRs by Amorin or its affiliates shall be (i) in full
      satisfaction of a note payable for the amount of $450,000 from the Company
      payable to Amorin or its affiliates and an additional investment of $550,000
      in
      the Company, and (ii) subject to and conditioned upon the execution by Amorin
      of
      an acknowledgment that upon receipt of such ADRs, Amorin and its affiliates
      will
      have received full payment of all amounts owing to it by the Company or DDI
      LLC.

     

    (c) Peter
      Engel shall receive a warrant to purchase 8,551,450 Parent ADRs at a price
      of
      $0.01 per Parent ADR in the form set forth in Exhibit E.
      

     

    (d) Windstone
      Capital Partners shall receive a warrant to purchase 3,603,876 Parent ADRs,
      at a
      price of $0.13 per Parent ADR in the form set forth in Exhibit
      F.
      

     

    2.5. Surrender
      of Certificates.

     

    (a) Surrender
      Procedures.

     

    (i) As
      soon
      as reasonably practicable after the Effective Time, but no later than five
      (5)
      Business Days thereafter, Parent shall instruct The Bank of New York (the
“Bank”)
      to
      mail to each Company Stockholder as of the Effective Time (i) a letter of
      transmittal in substantially the form attached as Exhibit G
      hereto
      and (ii) instructions for use in effecting the surrender of certificate(s)
      representing all of the shares of Company Stock held by such Company Stockholder
      in exchange for the Merger Consideration. The payment of the Merger
      Consideration with respect to each such certificate is conditioned upon (A)
      the
      execution and delivery of such transmittal letter and (B) the delivery of such
      certificates related thereto. As soon as practicable after receipt by the Bank
      of such certificate(s), properly endorsed or otherwise in proper form for
      transfer, for cancellation, together with such duly executed letter of
      transmittal, the Bank shall, in exchange therefor, pay to such Company
      Stockholder the Merger Consideration payable in respect of the shares of Company
      Stock formerly represented by the certificate(s) surrendered, but without
      interest, and the certificate(s) so surrendered shall forthwith be canceled.
      If
      payment of any portion of the applicable Merger Consideration is to be made
      to a
      person other than the Person in whose name the surrendered certificate(s) are
      registered, it shall be a condition of payment that the Person requesting such
      payment (i) shall have paid any transfer and other Taxes required by reason
      of
      the payment of those amounts to a Person other than the registered holder of
      the
      certificate(s) surrendered, and shall have established to the satisfaction
      of
      Parent that such Tax has been paid, or (ii) shall have established to the
      satisfaction of Parent that such Tax is not applicable. From and after the
      Effective Time, until surrendered as contemplated by this Section 2.5(a), each
      certificate formerly representing shares of Company Stock shall be deemed to
      represent for all purposes only the right to receive the applicable
      consideration as provided pursuant to Section 2.2(a) hereof, if any, in respect
      of such shares of Company Stock formerly represented thereby in accordance
      with
      the terms hereof and in the manner provided herein.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (b) Transfer
      Books; No Further Ownership Rights in the Shares.
      At the
      Effective Time, the stock transfer books of the Company shall be closed, and
      thereafter there shall be no further registration of transfers of the shares
      of
      Company Stock on the records of the Company. From and after the Effective Time,
      the holders of certificates formerly evidencing ownership of the shares of
      Company Stock outstanding immediately prior to the Effective Time shall cease
      to
      have any rights with respect to such shares, except as otherwise provided for
      herein or by applicable Legal Requirements. Parent shall cause the Surviving
      Corporation or the Bank to cancel and exchange, as provided in this Section
      2,
      any presented certificate representing shares of Company Stock outstanding
      immediately prior to the Effective Time.

     

    (c) Lost,
      Stolen or Destroyed Certificates.
      In the
      event any certificate(s) which formerly represented shares of Company Common
      Stock shall have been lost, stolen or destroyed, upon the making and delivery
      of
      an affidavit of that fact by the Company Stockholder thereof in form reasonably
      satisfactory to Parent. Parent shall instruct the Bank to pay such Company
      Stockholder the Merger Consideration which such Company Stockholder is entitled
      to receive pursuant to Section 2.2(a) hereof.

     

    (d) Dissenting
      Shares.
      The
      provisions of this Section 2.5 shall also apply to Dissenting Shares that lose
      their status as such, except that the obligations of Parent under this Section
      2.5 shall commence on the date of loss of such status and the holder of such
      shares shall be entitled to receive in exchange for such shares the applicable
      amounts provided in Section 2.

     

    2.6. Further
      Action.
      If, at
      any time after the Effective Time, any further action is necessary or desirable
      to vest the Surviving Corporation with full right, title and possession to
      all
      assets, property, rights, privileges, powers and franchises of the Company
      and
      Merger Sub, the officers and directors of the Company and Merger Sub immediately
      prior to the Effective Time are and will remain fully authorized in the name
      of
      the Company and Merger Sub or otherwise to take, and shall take, all such
      action. The rights of holders of existing options and warrants of Parent shall
      not be impaired in any respect by any insufficiency in the authorized and
      unissued share capital of Parent that may result from the transactions provided
      for in this Agreement or any subsequent issuance by Parent of ordinary shares
      or
      Parent ADRs, or rights to acquire ordinary shares or Parent ADRs. 

     

    2.7. Legends.
      The
      certificates evidencing the Merger Consideration will bear the legends set
      forth
      below: 

     

    “THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY OTHER
      JURISDICTIONS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
      AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
      ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
      EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
      OF
      COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
      ANY
      PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
      STATE SECURITIES LAWS.

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
      ON
      TRANSFER AS SET FORTH IN A VOTING AGREEMENT DATED AS OF JUNE 23, 2008 BY AND
      BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH
      MAY
      BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. ANY TRANSFER HEREOF IN
      VIOLATION OF SUCH TRANSFER RESTRICTIONS IS VOID.”

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    SECTION
      3. Representations
      and Warranties of the Company.
      The
      Company represents and warrants to Parent and Merger Sub that the statements
      in
      this Section 3 are true, complete and correct as of the date hereof (unless
      the
      particular statement speaks expressly as of another date, in which case it
      is
      true, complete and correct as of such other date), subject, in any case, to
      the
      exceptions provided in the Disclosure Schedule. Any exception or qualification
      set forth in the Disclosure Schedule with respect to a particular representation
      and warranty shall be deemed to be an exception or qualification with respect
      to
      any other applicable representations and warranties to which such exception
      or
      qualification is reasonably apparent on its face to be applicable, whether
      or
      not such exception or qualification is so numbered.

     

    3.1. Organization
      and Standing.

     

    (a) The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of its jurisdiction of incorporation and has full corporate
      power
      and authority to conduct its business as currently conducted and as proposed
      to
      be conducted by it. The Company is duly qualified to do business as a foreign
      corporation and is in good standing in every jurisdiction where the properties,
      owned, leased or operated, or the business conducted by it requires such
      qualification, except for such failures to be so duly qualified and in good
      standing that would not, individually or in the aggregate, have a Material
      Adverse Effect. The term “Material
      Adverse Effect”
as
      used
      in this Agreement shall mean any change in or effect on the Company that,
      individually or in the aggregate, with all changes in or effects on the Company,
      is or would reasonably be expected to have a materially adverse effect on (i)
      the business, results of operations, or financial condition of the Company,
      taken as a whole, or (ii) the Company’s ability to timely consummate the Merger
      in accordance with the terms of this Agreement.

     

    (b) Prior
      to
      the date of this Agreement, the Company has furnished to Parent complete and
      correct copies of the Charter and the Bylaws of the Company as currently in
      effect. The Charter and Bylaws are in full force and effect and the Company
      is
      not in violation of any provision of its Charter or Bylaws. Schedule
      3.1(b)
      attached
      hereto lists the directors and officers of the Company as of the date hereof.
      Except as provided in Schedule
      3.1(b)
      attached
      hereto, the operations now being conducted by the Company are not now and have
      never been conducted by the Company under any other name.

     

    3.2. Capitalization
      and Ownership of Shares.
      All of
      the capital stock of the Company is held by DDI LLC. Schedule
      3.2
      attached
      hereto sets out a list of the members of DDI LLC, and holders of warrants and
      convertible securities of DDI LLC, in a capitalization table of DDI LLC. The
      authorized capital stock of the Company consists of 18,000 shares of Company
      Common Stock, of which on the date hereof 4,451 shares are issued and
      outstanding on a fully diluted basis, including 348 shares reserved for exercise
      of options, and 2,000 shares of Company Preferred Stock of which on the date
      hereof no shares are issued and outstanding. All of the issued and outstanding
      shares of Company Stock have been, duly authorized, validly issued, fully paid
      and non-assessable. No subscription, Warrant, option, convertible security
      or
      other right (contingent or otherwise) to purchase or acquire any shares of
      capital stock of the Company is outstanding, or will be outstanding as of the
      Effective Time. From and after the Effective Time, no holder of any Option
      or
      Warrant will have the right to any consideration with respect thereto, except
      as
      expressly provided in Section 2.4 of this Agreement with respect to Options.
      The
      Company does not have any obligation (whether written, oral, contingent or
      otherwise) to issue any subscription, warrant, option, convertible security
      or
      other such right or to issue or distribute to holders of any shares of its
      capital stock any evidences of indebtedness or assets of the Company. The
      Company does not have any obligation (whether written, oral, contingent or
      otherwise) to purchase, redeem or otherwise acquire any shares of its capital
      stock or any interest therein or to pay any dividend or make any other
      distribution in respect thereof. There are no outstanding or authorized stock
      appreciation, phantom stock, or similar rights with respect to the Company.
      All
      of the issued and outstanding shares of capital stock of the Company have been
      offered, issued and sold by the Company without violation of United States
      federal, state, municipal or local or foreign order, judgment, writ, injunction,
      decree, law, statute, standard ordinance, code, resolution, promulgation, rule,
      regulation or any similar provision having the force or effect of law
      (collectively, “Legal
      Requirements”)
      applicable to the Company’s offer, issuance and sale of such
      securities.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    3.3. Subsidiaries.
      Except
      as set out in Schedule
      3.3
      attached
      hereto, the Company does not have any Subsidiaries, and the Company does not
      own
      or control, directly or indirectly, any equity or similar interest in, or any
      interest convertible into or exchangeable or exercisable for any equity or
      similar interest in, or have any commitment or obligation to invest in, purchase
      any securities or obligations of, fund, guarantee, contribute or maintain the
      capital of or otherwise financially support any corporation, partnership, joint
      venture or other business association or entity. Each former Subsidiary that
      is
      no longer in existence has been duly dissolved in accordance with its charter
      documents and the laws of the jurisdiction of its incorporation or organization
      and there are no outstanding liabilities or obligations (outstanding, contingent
      or otherwise), including Taxes, with respect to any such entity.

     

    3.4. Authority
      for Agreement.

     

    (a) The
      Company has all necessary corporate power and authority to execute and deliver
      this Agreement and each instrument required hereby to be executed and delivered
      by the Company at the Closing and to perform its obligations hereunder and
      thereunder and to consummate the transactions contemplated hereby and thereby.
      The execution, delivery and performance by the Company of this Agreement and
      each instrument required hereby to be executed and delivered by the Company
      at
      the Closing and the consummation by the Company of the transactions contemplated
      hereby and thereby have been duly and validly authorized by all necessary
      corporate action; and no other corporate proceedings on the part of the Company
      are necessary to authorize this Agreement or any instrument required hereby
      to
      be executed and delivered by the Company at the Closing or to consummate the
      Merger. The board of directors of the Company duly declared that the Merger
      is
      advisable as required by Section 251 of the DGCL, and has unanimously approved
      and adopted this Agreement and the Merger. None of such actions by the board
      of
      directors of the Company has been amended, rescinded or modified. This Agreement
      has been, and each instrument required hereby to be executed and delivered
      by
      the Company at the Closing will be, duly and validly executed and delivered
      by
      the Company and, assuming the due authorization, execution and delivery by
      Parent, Merger Sub and the Representative, constitutes a legal, valid and
      binding obligation of the Company, enforceable against the Company in accordance
      with its terms, subject to bankruptcy, insolvency, reorganization or similar
      laws of general application affecting the rights and remedies of creditors,
      and
      to general equity principles.

     

    (b) Except
      as
      set forth on Schedule
      3.4(b)
      attached
      hereto, the execution and delivery of this Agreement by the Company and each
      instrument required hereby to be executed and delivered by the Company at the
      Closing, the compliance by the Company with the provisions of this Agreement
      and
      each instrument required hereby to be executed and delivered by the Company
      at
      the Closing and the consummation of the transactions contemplated hereby or
      thereby, will not (i) conflict with or violate the Company Organizational
      Documents, (ii) conflict with, result in a breach of, constitute (with or
      without due notice or lapse of time or both) a default under, result in the
      acceleration of, create in any party the right to accelerate, terminate, modify
      or cancel, or require any notice, consent or waiver under, or result in the
      loss
      of any benefit to which the Company is entitled under, any material Contract
      or
      Permit (as defined in Section 3.19), Security Interest (as defined below)
      or other interest to which the Company is a party or by which the Company is
      bound or to which its assets are subject, (iii) result in the creation or
      imposition of any Security Interest upon any assets of the Company, or (iv)
      violate any Legal Requirement applicable to the Company or any of its assets.
      For purposes of this Agreement, “Security
      Interest”
means
      any mortgage, security interest, pledge, license, interest, encumbrance, claim,
      charge, option, restriction on the right to sell or dispose (and in the case
      of
      securities, vote), lien or other adverse claim of any kind (whether arising
      by
      contract or by operation of law and whether voluntary or
      involuntary).

     

    3.5. Consents.
      No
      consent, approval, order, Permit or authorization of, or registration,
      declaration or filing with, or notification to (together, the “Consents”)
      any
      United States federal, state, municipal or local or any foreign government,
      or
      political subdivision thereof, or any multinational organization or authority
      or
      any authority, agency or commission entitled to exercise any administrative,
      executive, judicial, legislative, police, regulatory or Taxing Authority power,
      or any court or tribunal (or any department, bureau or division thereof), or
      any
      arbitrator or arbitral body (collectively, “Governmental
      Authorities”)
      or any
      Person is required to be obtained by the Company in connection with the
      Company’s execution and delivery of this Agreement or the Company’s consummation
      of the Merger or the other transactions to be consummated at the Closing as
      contemplated by this Agreement, except for (i) compliance with the applicable
      requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
      amended (the “HSR
      Act”)
      and
      the Legal Requirements analogous to the HSR Act existing in foreign
      jurisdictions (collectively, “Foreign
      Merger Laws”),
      and
      (ii) the filing and recordation of the Certificate of Merger with the Secretary
      of State of the State of Delaware.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    3.6. Financial
      Statements; Liabilities 

     

    (a) Attached
      hereto as Schedule
      3.6
      are the
      audited financial statements (including balance sheets and statements of
      operations) of DDI LLC for December 31, 2006 and 2005 and the years then ended,
      and unaudited financial statements (including balance sheets and statements
      of
      operations) of DDI LLC for March 31, 2008 and December 31, 2007 and
      the three and twelve months then ended, respectively (collectively, the
“Financial
      Statements”):
      The
      Financial Statements were in each case prepared in accordance with United States
      generally accepted accounting principles (“GAAP”),
      consistently applied throughout the periods presented without modification
      of
      the accounting principles used in the preparation thereof throughout the periods
      presented. The Financial Statements (i) are in accordance with the books
      and records of the Company, and (ii) present fairly the financial condition
      and
      results of operations of the Company as of the dates and for the periods
      indicated.

     

    (b) The
      Company and DDI LLC each has in place a system of internal accounting controls
      that is sufficient to provide reasonable assurance regarding the reliability
      of
      the Company’s and DDI LLC’s financial statements (including the Financial
      Statements), including reasonable assurance that transactions are recorded
      as
      necessary to permit preparation of financial statements in accordance with
      generally accepted accounting principles and that receipts and expenditures
      are
      being made only in accordance with authorizations of management (such systems
      and processes are herein referred to as the “Controls”).
      Neither the Company’s employees nor the Company’s independent auditors have
      identified or made the Company aware of any complaint, allegation, deficiency,
      assertion or claim, whether written or oral, regarding the Controls or the
      Financial Statements. To the Company’s Knowledge, there have been no instances
      of fraud, whether or not material, that occurred during any period covered
      by
      the Financial Statements. The Company and DDI LLC each have in place a revenue
      recognition policy consistent with GAAP.

     

    (c) Except
      as
      set forth in Schedule 3.6(c)
      attached
      hereto, as of the date hereof and as of the Effective Time, Company has not
      and
      at the Effective Time will not have incurred, directly or indirectly, any
      Indebtedness, obligations or liabilities or engaged in any business activities
      of any type or kind whatsoever or entered into any agreements or arrangements
      with any Person, except for those obligations of the Company (i) in the
      ordinary course of business as reflected in the Financial Statements; and
      (ii) obligations and liabilities incurred after May 31, 2008 in the
      ordinary course of business. The consummation of the Merger will not give rise
      to any severances, bonuses, payment obligations or other liabilities except
      for
      legal and accounting fees.

     

    3.7. Absence
      of Changes.
      Except
      as set forth on Schedule
      3.7
      attached
      hereto, since December 31,
      2007.

     

    (i) there
      has
      been no change in the business, prospects, financial condition or results of
      operations of the Company or DDI LLC that constitutes a Material Adverse
      Effect;

     

    (ii) There
      has
      been no change by the Company or DDI LLC in its accounting or cash management
      methods, principles or practices or revaluation by the Company or DDI LLC of
      any
      of its assets;

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (iii) Neither
      the Company nor DDI LLC has declared, set aside or paid any dividend or other
      distribution in respect of any of its capital stock; or repurchased, redeemed
      or
      otherwise acquired any of its securities;

     

    (iv) Neither
      the Company nor DDI LLC has sold, transferred, delivered, leased, subleased,
      licensed, sublicenses, mortgaged, pledged, encumbered, impaired or otherwise
      disposed of (in whole or in part), or created, incurred, assumed or caused
      to be
      subjected to any Lien on, any of the rights, assets or properties of the Company
      or DDI LLC (including any Intellectual Property or accounts receivable), except
      for the sale of inventory in the ordinary course of business consistent with
      past practice;

     

    (v) Neither
      the Company nor DDI LLC has not acquired any rights, assets or properties other
      than inventory in the ordinary course of business consistent with past
      practice;

     

    (vi) there
      has
      not been any damage, destruction or loss (whether or not covered by insurance)
      with respect to any rights, assets or properties of the Company or DDI LLC;
      and

     

    (vii) the
      Company and DDI LLC have each conducted its business only in the ordinary course
      of business consistent with past practice. 

     

    3.8. Taxes.

     

    (a) (i)
      All
      Tax Returns required to be filed by or on behalf of the Company or DDI LLC
      have
      been duly and timely filed with the appropriate Taxing Authority in all
      jurisdictions in which such Tax Returns are required to be filed (after giving
      effect to any valid extensions of time in which to make such filings), and
      all
      such Tax Returns are true, complete and correct in all material respects; and
      (ii) all Taxes payable by or on behalf of the Company or DDI LLC have been
      fully
      and timely paid. With respect to any period for which such Tax Returns have
      not
      yet been filed or for which such Taxes are not yet due or owing, DDI LLC has
      made due and sufficient accruals for such Taxes on the Balance Sheet. All
      required estimated Tax payments sufficient to avoid any underpayment penalties
      or interest have been made by or on behalf of the Company or DDI
      LLC.

     

    (b) For
      purposes of this Agreement:

     

    “Tax”
or
      “Taxes”
means
      (i) all federal, state, local or foreign taxes, charges, fees, imposts, levies
      or other assessments, including without limitation all income, gross receipts,
      capital, sales, use, ad valorem, value added, transfer, franchise, profits,
      inventory, capital stock, license, withholding, payroll, employment, social
      security, unemployment, excise, severance, stamp, occupation, property and
      estimated taxes, customs duties, fees, assessments and charges of any kind
      whatsoever, (ii) all interest, penalties, fines, additions to Tax or additional
      amounts imposed by any Taxing Authority in connection with any item described
      in
      clause (i) and (iii) any liability in respect of any items described in clauses
      (i) or (ii) payable by reason of any Contract, assumption, transferee
      liability, operation of law, Treasury Regulation Section 1.1502 6 (or any
      predecessor or successor thereof of any analogous or similar provision of Tax
      Law) or otherwise.

     

    “Taxing
      Authority”
means
      the IRS or any other governmental body (whether state, local or foreign)
      responsible for the administration of any Tax.

     

    “Tax
      Law”
means
      any Legal Requirement (whether domestic or foreign) relating to
      Taxes.

     

    “Tax
      Return”
means
      any return, report or statement required to be filed with respect to any Tax
      (including any elections, declarations, schedules or attachments thereto, and
      any amendment thereof) including any information return, estimate, claim for
      refund, amended return or declaration of estimated Tax, and including, where
      permitted or required, affiliated, combined, consolidated or unitary returns
      for
      any group of entities that includes the Company or DDI LLC.

    
      
         

      

      
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    3.9. Property
      and Sufficiency.

     

    (a) The
      Company has good and marketable title to, or, in the case of leases of
      properties and assets, a valid leasehold interest in, or otherwise has a valid
      legal right to use, all of the properties and assets (whether real, personal,
      tangible or intangible) (i) reflected on the Balance Sheet (other than
      assets sold since the date of the Balance Sheet) or acquired thereafter and
      (ii)
      necessary to conduct all of the business and operations of the Company as
      currently conducted, and none of such properties or assets is subject to any
      Liens or Security Interest, other than those described in Schedule 3.9(a)
      attached
      hereto. The Company does not own any real property.

     

    (b) The
      properties, assets and contract rights of the Company constitute all of the
      properties and assets owned by DDI LLC prior to the Effective Time (and prior
      to
      the execution and delivery of the Contribution Agreement dated the date hereof
      between the Company and DDI LLC (the “Contribution
      Agreement”).
      The
      Contribution Agreement has been duly authorized, executed and delivered by
      the
      Company and DDI LLC, and, at or prior to the Effective Time of the Merger,
      all
      of the properties, assets of DDI LLC will have been contributed to the Company
      pursuant to the Contribution Agreement. The properties and assets contributed
      to
      the Company by DDI LLC at or prior to the Effective Time pursuant to the
      Contribution Agreement constitute all of the assets and properties necessary
      to
      conduct all of the business and operations of DDI LLC as conducted immediately
      prior to the date hereof.

     

    (c) Each
      of
      the leases for real property of the Company is identified in Schedule
      3.9(b)
      attached
      hereto (“Real
      Property Leases”).

     

    (d) Neither
      the Company nor DDI LLC have transferred or assigned any interest in any Real
      Property Lease, nor has the Company or DDI LLC subleased or otherwise granted
      rights of use or occupancy of any of the premises described therein to any
      Person. The facilities subject to a Real Property Lease (each a “Leased
      Premises”)
      and
      the personal property owned or leased by the Company are in good operating
      condition and repair and free from any material defects, reasonable wear and
      tear excepted, and are suitable for the uses for which they are being used
      in
      all material respects.

     

    3.10. Contracts.
      Except
      as disclosed in Schedule
      3.10
      attached
      hereto, neither the Company nor DDI LLC is a party to, subject to or otherwise
      bound by:

     

    (a) any
      Contract or series of related Contracts with the same counterparty or its
      affiliates which requires, or could reasonably be expected to require, aggregate
      future payments by or to the Company or DDI LLC in excess of
      $50,000;

     

    (b) any
      Contract for the sale of any commodity, product, material, supplies, equipment
      or other personal property for a sale price in excess of $50,000, other than
      purchase or sale orders entered into in the ordinary course of business
      consistent with past practice; 

     

    (c) any
      distributor, reseller manufacturer’s representative, sales representative or
      similar Contract under which the Company does not have the right to terminate
      without penalty on less than thirty (30) days’ notice;

     

    (d) any
      Contract pursuant to which Intellectual Property is licensed to or from the
      Company or DDI LLC other than Contracts licensing the right to use off-the-shelf
      or other readily commercially available third party software (including, but
      not
      limited, to any click-wrap or shrink-wrap license);

     

    (e) any
      Contract with any current or former officer, employee or director of the Company
      or DDI LLC or any “affiliate” (as defined in the Securities Act) of the Company
      or DDI LLC or such persons or, to the Company’s Knowledge, any member of his or
      her immediate family (any of the foregoing, a “Related
      Party”),
      including, without limitation, any Contract providing for the furnishing of
      services by, rental of real or personal property from, or otherwise requiring
      payments to, or from, any Related Party;

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (f) any
      Contract under which the Company or DDI LLC is restricted from carrying on
      any
      business or other services or competing with any Person anywhere in the world,
      or restricted from soliciting or hiring any person with respect to employment,
      or which would so restrict the Company or the Surviving Corporation after the
      Closing Date;

     

    (g) any
      loan
      agreement, indenture, note, bond, debenture or any other document or Contract
      evidencing Indebtedness or a Security Interest to any Person or any commitment
      to provide any of the foregoing, or any agreement of guaranty, indemnification
      or other similar commitment with respect to the obligations or liabilities
      of
      any other Person;

     

    (h) any
      Contract for the disposition of any of the Company’s or DDI LLC’s material
      assets or business (whether by merger, sale of stock, sale of assets or
      otherwise);

     

    (i) any
      Contract for the acquisition of the business or capital stock of another party
      (whether by merger, sale of stock, sale of assets or otherwise);

     

    (j) any
      Contract concerning a partnership, joint venture, joint development or other
      similar arrangement with one or more Persons;

     

    (k) any
      Contract creating any obligation with respect to the payment of any severance,
      retention, bonus or other similar payment to any Person, one condition to the
      payment or acceleration of which is the Company entering into this Agreement
      or
      the consummation of any of the transactions contemplated hereby; or

     

    (l) any
      other
      agreement (or group of related Contracts with the same third party) to the
      extent not otherwise disclosed in the Disclosure Schedule that is material
      to
      the Company .

     

    Schedule
      3.10(l)
      attached
      hereto provides a form of the Company’s and DDI LLC’s standard customer Contract
      and sets forth a list of the top five customer Contracts which deviate (other
      than with respect to prices, payment amounts or payment or delivery schedules)
      in any material respect from the Company’s and DDI LLC’s standard form. Each
      Contract to which DDI LLC was a party immediately prior to the date hereof
      has
      validly assigned to the Company.

     

    Each
      Contract disclosed in the Disclosure Schedule or required to be disclosed
      pursuant to this Section 3.10, each Real Property Lease and each other Contract
      to which the Company or DDI LLC is a party or otherwise bound relating to any
      Intellectual Property that is material to the business of the Company or DDI
      LLC
      is a valid and binding agreement of the Company and, to the Company's Knowledge,
      is in full force and effect in accordance with its terms, and neither the
      Company nor, to the Company’s Knowledge, any other party thereto is in default
      or breach in any material respect under the terms of any of the foregoing
      Contracts (a “default”
being
      defined for purposes hereof as an actual default or event of default or the
      existence of any fact or circumstance which would, upon receipt of notice or
      passage of time, constitute a default or right of termination), nor will the
      consummation of the transactions contemplated by this Agreement give rise to
      any
      such default or breach. No party to any of the foregoing Contracts has exercised
      any termination rights with respect thereto, and no party has given notice
      of
      any significant dispute with respect to any of the foregoing Contract. True
      and
      complete copies of each of the Contracts described in this paragraph have been
      made available to Parent.

     

    As
      used
      in this Agreement, a “Contract”
shall
      mean any agreement, understanding, contract, deed, mortgage, lease, sublease,
      license, sublicense, instrument, commitment, promise, undertaking or other
      binding arrangement, whether written or oral.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    3.11. Benefit
      Plans.

     

    (a) For
      purposes of this Agreement, the term “Company
      Employee Plan”
or
      “Plan”
means
      any employee benefit plan (as defined in Section 3(3) of the Employee Retirement
      Income Security Act of 1974, as amended (“ERISA”),
      whether or not subject to ERISA), any other bonus, profit sharing, compensation,
      pension, retirement, “401(k),” “SERP,” severance, savings, deferred
      compensation, fringe benefit, insurance, welfare, post-retirement health or
      welfare benefit, health, life, stock option, stock purchase, restricted stock,
      tuition refund, service award, company car or car allowance, scholarship,
      housing or living allowances, relocation, disability, accident, sick pay, sick
      leave, accrued leave, vacation, holiday, termination, unemployment, individual
      employment, consulting, executive compensation, incentive, commission, payroll
      practices, retention, change in control, non competition, other material plan,
      agreement, policy, trust fund or arrangement (whether written or unwritten,
      insured or self-insured) providing compensation or benefits, and any plan
      subject to Sections 125, 127, 129, 137 or 423 of the Code, currently
      maintained, sponsored or contributed to by the Company or DDI LLC or any trade
      or business, whether or not incorporated, that together with the Company would
      be deemed to be a “single employer” within the meaning of Section 4001(b) of
      ERISA (an “ERISA
      Affiliate”)
      or to
      which the Company or DDI LLC or any ERISA Affiliate is a party, or to which
      the
      Company or an ERISA Affiliate had, has or will have any liability. Each Plan
      is
      in writing. Schedule
      3.11
      attached
      hereto includes a true and complete list of all Plans, and the Company has
      provided or made available to Parent a complete copy of each Plan (or, in the
      case of any unwritten Plan, descriptions of the material terms thereof) as
      well
      as, if applicable, a copy of each trust or other funding arrangement, each
      summary plan description and summary of material modifications, and the most
      recent application for determination letter submitted to the IRS and the most
      recent determination letter received from the IRS. The Company has delivered
      to
      Parent true and complete copies of all Form 5500 Series annual reports for
      each
      Plan, together with all schedules, attachments, and related opinions and copies
      of any correspondence from or to the IRS, the Department of Labor or other
      U.S.
      government department or agency relating to an audit or penalty assessment
      with
      respect to any Plan or relating to requested relief from any liability or
      penalty relating to any Plan.

     

    (b) The
      Company, DDI LLC and each ERISA Affiliate is and has been in compliance with
      its
      obligations under the terms of each Plan.

     

    (c) Each
      Plan
      and each funding vehicle related to such Plan is currently in compliance in
      all
      material respects with, and has been administered and operated in compliance
      with, its terms and all applicable statutes, orders, rules and regulations.
      Each
      Plan which is intended to be a “qualified plan” as described in Section 401(a)
      of the Code has been determined by the IRS to so qualify, and there are no
      facts
      which might adversely affect such qualification.

     

    (d) Neither
      the Company nor its ERISA Affiliates nor DDI LLC maintain, sponsor or contribute
      to any single employer plan (as such term is defined in Section 4001(b) of
      ERISA) subject to Title IV of ERISA or any “multiemployer plan” (as such term is
      defined in Section 3(37) of ERISA), nor have they incurred any material
      liability, including, without limitation, withdrawal liability, with respect
      to
      any such Plan that remains unsatisfied.

     

    (e) No
      Plan
      is funded by, associated with or related to a “voluntary employees’ beneficiary
      association” within the meaning of Section 501(c)(9) of the Code. No Plan is or
      has been subject to Section 302 or Title IV of ERISA.

     

    (f) The
      Company and DDI LLC have made or will accrue prior to the Closing Date all
      payments and contributions (including insurance premiums) due and payable as
      of
      the Closing Date to each Plan as required to be made under the terms of such
      Plan.

     

    (g) With
      respect to all Plans and related trusts, there are no “prohibited transactions,”
as that term is defined in Section 406 of ERISA or Section 4975 of the Code,
      that have occurred which could subject any Plan, related trust or party dealing
      with any such Plan or related trust to any tax or penalty on prohibited
      transactions imposed by Section 501(i) of ERISA or Section 4975 of the
      Code.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (h) There
      are
      no actions, suits, arbitrations or claims (other than routine claims for
      benefits by employees of the Company or DDI LLC, or beneficiaries or dependents
      of such employees arising in the normal course of operation of a Plan) pending,
      or to the Knowledge of the Company, threatened, with respect to any Plan or
      any
      fiduciary or sponsor of a Plan with respect to their duties under such Plan
      or
      the assets of any trust under any such Plan.

     

    (i) The
      Company and DDI LLC have complied in all material respects with the health
      care
      continuation requirements of Section 601, et. seq. of ERISA with respect to
      employees and their spouses, former spouses and dependents.

     

    (j) Neither
      the Company nor DDI LLC has any obligations under any Plan to provide
      post-retirement medical benefits to any employee or any former employee of
      the
      Company other than statutory liability for providing group health plan
      continuation coverage under Part 6 of Title I of ERISA and Section 4980B of
      the
      Code or applicable state law.

     

    (k) Neither
      the negotiation or execution of this Agreement, nor the consummation of the
      transactions contemplated by this Agreement will, either alone or in combination
      with another event, (i) entitle any current or former employee, officer or
      consultant of the Company or DDI LLC or any ERISA Affiliate to severance pay,
      unemployment compensation or any other payment or additional rights, except
      as
      expressly provided in this Agreement, or (ii) accelerate the time of payment
      or
      vesting, or increase the amount of compensation (including equity compensation)
      due any such employee, officer or consultant.

     

    (l) Neither
      the Company nor DDI LLC is a party to, or otherwise obligated under, any
      contract, agreement, plan or arrangement covering any person that, individually
      or collectively, could give rise to the payment of any amount that would not
      be
      deductible by Parent, the Company or any of their respective affiliates by
      reason of Section 280G of the Code or that could be subject to Section 4999
      of
      the Code.

     

    (m) Each
      Company Employee Plan which is subject to the requirements of Section 409A
      of
      the Code has been adopted in good faith compliance with such Section and the
      guidance issued by the Department of Treasury thereunder to date. Each Option
      has been granted by the Board of Directors of the Company on the date the Board
      met and was granted with an exercise price equal to no less than one hundred
      percent of the fair market value per share of Company Common Stock on the date
      of grant.

     

    3.12. Intellectual
      Property.

     

    (a) Schedule
      3.12(a)
      attached
      hereto sets forth true, complete and correct lists of the Intellectual Property
      (as defined below), both U.S. and foreign, that is owned by the Company as
      of
      the date of this Agreement, along with the record owner of each such item of
      Intellectual Property, the jurisdiction in which each such item of Intellectual
      Property has been registered or filed and the applicable registration,
      application or serial number or similar identifier. All of the Intellectual
      Property that was owned by DDI LLC immediately prior to the date of this
      Agreement has been validly and fully contributed to the Company, and DDI LLC
      has
      not retained any rights thereto.

     

    (b) Other
      than (i) inbound “shrink-wrap” and similar publicly-available commercial binary
      code end-user licenses and (ii) outbound “shrink-wrap” licenses in the form set
      forth on Section
      3.12(b)
      of the
      Disclosure Schedule, Schedule
      3.12(b)
      attached
      hereto lists all contracts, licenses and agreements to which the Company is
      a
      party with respect to any Intellectual Property, including all licenses of
      Intellectual Property granted to or by the Company and all assignments of
      Intellectual Property to or by the Company. All such contracts, licenses and
      agreements are in full force and effect, and neither the Company nor DDI LLC
      is
      in material breach of any of the foregoing contracts, licenses or agreements
      and, to the Company’s Knowledge, no other party to any such contract, license or
      agreement is in breach thereof or has failed to perform thereunder. The
      consummation of the transactions contemplated by this Agreement will neither
      violate nor result in the breach, modification, cancellation, termination or
      suspension of such contracts, licenses and agreements. Following the Closing
      Date, both the Surviving Corporation will be permitted to exercise all of the
      Company’s and DDI LLC’s rights under such contracts, licenses and agreements to
      the same extent the Company would have been able to had the transactions
      contemplated by this Agreement not occurred (but the transactions contemplated
      by the Contribution Agreement had occurred) and without the payment of any
      additional amounts or consideration other than ongoing fees, royalties or
      payments which Company or DDI LLC would otherwise be required to
      pay.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    (c) Schedule
      3.12(c)
      attached
      hereto lists all contracts, licenses and agreements between the Company and
      any
      other person wherein or whereby the Company or DDI LLC have 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 or similar right with respect to the infringement by the
      Company or such other person of the Intellectual Property of any person other
      than the Company. 

     

    (d) No
      government funding, facilities of a university, college, other educational
      institution or research center or funding from third parties (other than equity
      or debt funding from Company Securityholders and financial lending institutions)
      was used in the development of any Intellectual Property owned by the Company
      or
      DDI LLC or Intellectual Property purported to be owned by the Company or DDI
      LLC. To the Knowledge of the Company, no current or former employee, consultant
      or independent contractor of the Company or DDI LLC, who was involved in, or
      who
      contributed to, the creation or development of any Company Intellectual Property
      or Intellectual Property purported to be owned by the Company or DDI LLC, has
      performed services for the government, university, college, or other educational
      institution or research center during a period of time during which such
      employee, consultant or independent contractor was also performing services
      for
      the Company.

     

    (e) The
      Company has provided to Parent a complete and accurate list of all material
      and
      replicable failures of Company software as currently made commercially available
      by the Company in the ordinary course of Company’s or DDI LLC’s business to
      materially conform to its user documentation in ordinary use.

     

    (f) For
      purposes of this Agreement, “Intellectual
      Property”
shall
      mean (i) trademarks, service marks, trade names, slogans, logos, trade dress,
      internet domain names and other similar designations of source or origin,
      together with all goodwill, registrations, applications, renewals and extensions
      related to the foregoing; (ii) patents, utility, models and industrial design
      registrations or applications (including without limitation any continuations,
      divisionals, continuations-in-part, provisionals, renewals, reissues,
      re-examinations, substitutions, extensions and applications for any of the
      foregoing); (iii) copyrights, copyrightable subject matter and moral rights
      (including without limitation any registrations, applications, renewals,
      extensions and reversions for any of the foregoing); (iv) mask works rights;
      (v)
      trade secrets and other confidential information, know-how, technology,
      proprietary processes, formulae, inventions, compositions, techniques, technical
      data and information, procedures, databases, algorithms, models, methodologies,
      customer lists, supplier lists, pricing and cost information, and business
      and
      marketing plans and proposals; and (vi) and computer programs, including any
      and
      all software implementation of algorithms, models and methodologies (whether
      in
      source code, object code or other form), databases, compilations, descriptions,
      flow-charts and other work product to design, plan, organize and develop any
      of
      the foregoing, screens, user interfaces, report formats, firmware, development
      tools, templates, menus, buttons and icons, and all documentation, including
      user manuals and other training documentation, related to any of the foregoing;
      in each of the foregoing subsections (i) through (vi) used in, held for use
      or necessary for the conduct of the business of the Company, as currently
      conducted and as planned to be conducted, or the business of DDI LLC as
      conducted immediately prior to the date hereof, whether such Intellectual
      Property is owned by the Company or a third party.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    3.13. Accounts
      Receivable.
      All of
      the accounts and notes receivable of the Company or DDI LLC, whether reflected
      on the Balance Sheet or arising since the date of the Balance Sheet, have arisen
      from bona fide transactions in the ordinary course of business consistent with
      past practices and are valid, genuine, and to the Knowledge of the Company,
      subject to the allowance for doubtful accounts set forth therein, are fully
      collectible in the aggregate amount thereof; provided,
      that
      the foregoing shall not be construed as a guarantee of such
      collectibility.

     

    3.14. Government
      Funding.
      Neither
      the Company nor DDI LLC have applied for or received any financial assistance
      from any supranational, national, local or foreign Governmental
      Authority.

     

    3.15. Insurance. Schedule
      3.15
      attached
      hereto contains a complete and correct list as of the date hereof of all
      insurance policies maintained by or on behalf of the Company. Such list includes
      the type of policy, form of coverage, policy number and insurer, coverage dates,
      named insured, limit of liability and premium and deductible amounts. True
      and
      complete copies of each listed policy have been made available to Parent. Such
      policies are in full force and effect, all premiums due thereon have been paid
      and the Company and DDI LLC have complied in all material respects with the
      provisions of such policies. Neither the Company nor DDI LLC have received
      any
      notices from any issuer of any of their insurance policies canceling or amending
      any policies listed in Schedule
      3.15
      attached
      hereto, increasing any deductibles or retained amounts thereunder, or increasing
      premiums payable thereunder. There is no claim by the Company or DDI LLC pending
      under any of such policies as to which coverage has been denied or disputed
      by
      the underwriters or in respect of which the underwriters have reserved their
      rights. Neither the Company nor DDI LLC nor any affiliate thereof has ever
      maintained, established, sponsored, participated in or contributed to any
      self-insurance plan.

     

    3.16. Personnel.

     

    (a) Schedule
      3.16(a)
      attached
      hereto sets forth a list of all employees, consultants or independent
      contractors of the Company as of the date hereof, (which also represents all
      employees, consultants or independent contractors of DDI LLC immediately prior
      to the date hereof) including, as of such date, their title, then current base
      salary or other compensation rate as well as any bonus paid for the fiscal
      year
      ended December 31, 2007 and any accrued and unpaid bonus scheduled for or paid
      or agreed to be paid to them by the Company for any future period. Schedule
      3.16(a)
      attached
      hereto also sets forth a list of all independent contractors and consultants
      of
      the Company or DDI LLC who received more than $30,000 with respect to services
      provided during 2007.

     

    (b) The
      Company and DDI LLC comply in all material respects with all Legal Requirements
      relating to the employment of labor, including all such Legal Requirements
      relating to wages, hours, WARN and any similar state or local “mass
      layoff”
or
      “plant
      closing”
Legal
      Requirement, collective bargaining, discrimination, civil rights, safety and
      health, workers’ compensation and the collection and payment of withholding
      and/or social security taxes and any similar tax. There has been no
“mass
      layoff”
or
      “plant
      closing”
(as
      defined by WARN) with respect to the Company within the six (6) months prior
      to
      Closing. “WARN”
means
      the Worker Adjustment and Retraining Notification Act of 1988, as
      amended.

     

    (c) Neither
      the Company nor DDI LLC is subject to any collective bargaining agreement or
      other labor union contract and no employee of the Company is represented by
      a
      labor union. There is not pending or, to the Company’s Knowledge, threatened,
      any picketing, strike, labor dispute, slowdown, lockout, walkout, work stoppage
      or other similar labor trouble involving employees of the Company or DDI LLC,
      and no union organizing activities are taking place or have taken place with
      respect to such employees.

     

    (d) To
      the
      Company’s Knowledge, none of the Company’s officers or employees or consultants
      intend to terminate his or her relationship with the Company for any reason,
      including, without limitation, as a result of the transactions contemplated
      hereby.

    
      
         

      

      
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    3.17. Litigation.
      Except
      as disclosed in Schedule
      3.17
      attached
      hereto, there is no (a) action, suit, claim, charge, cause of action or suit
      (whether in contract or tort or otherwise), litigation (whether at law or in
      equity, whether civil or criminal), controversy, assessment, arbitration,
      investigation, hearing, complaint, demand or other proceeding to, from, by
      or
      before any arbitrator, court, tribunal or other Governmental Authority
      (collectively, “Actions”)
      pending, or to the Company’s Knowledge, threatened against or affecting the
      Company or DDI LLC, (b) Action, to the Company’s Knowledge, pending or
      threatened against or affecting any of the material assets of the Company or
      DDI
      LLC, or the Merger or the other transactions contemplated hereby, (c)
      governmental inquiry or investigation pending or, to the Company’s Knowledge,
      threatened against or affecting the Company or DDI LLC (including, without
      limitation, any inquiry as to the qualification of the Company or DDI LLC to
      hold or receive any license or other Permit), (d) to the Company’s Knowledge,
      governmental inquiry or investigation pending or threatened against or affecting
      any of the material assets of the Company or DDI LLC, or (e) to the Company’s
      Knowledge, any Actions pending or threatened against any Related Party in
      connection with the business of the Company or DDI LLC and there is no
      reasonable basis for any of the foregoing. Neither the Company nor DDI LLC
      is in
      default with respect to any order, writ, injunction or decree of any
      Governmental Authority served upon the Company or DDI LLC or that exists to
      the
      Knowledge of the Company. There is no action or suit by the Company or DDI
      LLC
      pending, threatened or contemplated by the Company against any other
      Person.

     

    3.18. Environmental
      Matters.
      The
      Company and DDI LLC are and have been in compliance with all Environmental
      Laws;
      (ii) there has been no release or threatened release of any pollutant,
      contaminant or toxic or hazardous material, substance or waste, or petroleum
      or
      any fraction thereof, (each a “Hazardous
      Substance”)
      on,
      upon, into or from any site currently or heretofore owned, leased or otherwise
      used by the Company; (iii) there have been no Hazardous Substances generated
      by
      the Company or DDI LLC that have been disposed of, or come to rest at, any
      site
      that has been included in any published U.S. federal, state or local “superfund”
site list or any other similar list of hazardous or toxic waste sites published
      by any Governmental Authority within or outside the United States; (iv) there
      are no underground storage tanks located on, no polychlorinated biphenyls
      (“PCBs”)
      or
      PCB-containing equipment used or stored on, and no hazardous waste as defined
      by
      the Resource Conservation and Recovery Act, as amended, stored on, any site
      owned, leased or otherwise used by the Company or DDI LLC, except for the
      storage of hazardous waste in compliance with Environmental Laws; and (v) the
      Company has made available to Parent true and correct copies of all material
      environmental records, reports, notifications, certificates of need, permits,
      pending permit applications, correspondence, engineering studies and
      environmental studies or assessments in the possession of the Company or any
      of
      its representatives or advisors.

     

    For
      purposes of this Agreement, “Environmental
      Laws”
means
      any Legal Requirement (whether domestic or foreign) relating to (i) releases
      or
      threatened release of Hazardous Substances, (ii) pollution or protection of
      employee health or safety, public health or the environment or (iii) the
      manufacture, handling, transport, use, treatment, storage, or disposal of
      Hazardous Substances.

     

    3.19. Compliance
      with Instruments; Laws; Governmental Authorizations.

     

    (a) The
      Company is not and the Company has not been, in violation of any term or
      provision of the Company Organizational Documents. The Company and DDI LLC
      have
      complied in all material respects with all terms and provisions of all Permits
      and Legal Requirements. Neither the Company nor DDI LLC nor, to the Company’s
      Knowledge, any Related Person, is under investigation with respect to, has
      been
      threatened to be charged with, or has been given notice of, any violation of
      any
      Legal Requirement. All permits, concessions, grants, franchises, licenses and
      other governmental authorizations and approvals (collectively, “Permits”)
      (i)
      pursuant to which the Company currently operates or holds any interest in any
      of
      its properties, or (ii) which is required for the operation of the Company’s
      business as currently conducted or the holding of any such interest, have been
      issued or granted to the Company, and all such Permits are in full force and
      effect and constitute all Permits required to permit the Company to operate
      or
      conduct its business or hold any interest in its properties or
      assets.

    
      
         

      

      
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    (b) The
      Company and DDI LLC have each conducted their resepctive transactions in
      material compliance with applicable provisions of U.S. law, including the United
      States export control laws and regulations and U.S. economic sanctions
      laws.

     

    (c) Neither
      the Company nor DDI LLC (nor, to the Company’s Knowledge, each of its officers,
      directors, agents, employees and other Persons associated with or acting on
      its
      behalf) has directly or indirectly, taken any action which would cause it to
      be
      in violation of the U.S. Foreign Corrupt Practices Act , as amended, or any
      rules or regulations thereunder, including by offering or conveying, directly
      or
      indirectly (such as through an agent), anything of value to obtain or retain
      business or to obtain any improper advantage, including any bribe, rebate,
      payoff, influence payment, kickback or other similar unlawful payment to a
      foreign government official, candidate for office, or political party or
      official of a political party.

     

    3.20. Banking
      Relationships. Schedule
      3.20
      attached
      hereto sets forth a true and complete list of the name and location of each
      bank, brokerage or investment firm, savings and loan or similar financial
      institution in which the Company has an account or a safe deposit box or other
      arrangement, the account or other identifying numbers thereof and the names
      of
      all Persons authorized to draw on or who have access to such account or safe
      deposit box or such other arrangement. All such accounts or other arrangements
      of DDI LLC immediately prior to the date hereof have been transferred to the
      Company. There are no outstanding powers of attorney executed by or on behalf
      of
      the Company.

     

    3.21. Books
      and Records.
      The
      minute books of the Company and DDI LLC contain complete and accurate records
      of
      all meetings and other corporate actions of their respective stockholders and
      the board of directors and committees thereof. The stock records of the Company
      and DDI LLC are correct and complete and reflect all issuances, transfers,
      repurchases and cancellations of shares of capital stock of the Company and
      DDI
      LLC, respectively. The Company has made available to Parent true and complete
      copies of (a) the Company Organizational Documents, (b) all documents relating
      to the transactions contemplated by the Contribution Agreement, (c) all minute
      books (containing the records of meetings of stockholders, the board of
      directors and any committees of the board of directors to date) of the Company,
      (d) all stock certificate and stock record books of the Company and (e) any
      similar records or documents of the Company. Except as disclosed in Schedule
      3.21
      attached
      hereto, neither the Company nor DDI LLC have any prior names, and since the
      date
      of its incorporation or formation has not conducted business under any name
      other than the current name of the Company.

     

    3.22. Brokers
      and Finders; Existing Discussions.
      Except
      as disclosed in Schedule
      3.22,
      no
      broker, financial advisor, finder or investment banker or other Person is
      entitled to any broker’s, financial advisor’s, finder’s or other fee or
      commission in connection with the transactions contemplated by this Agreement
      based upon arrangements made by or on behalf of the Company or DDI
      LLC.

     

    3.23. Vote
      Required; Notices

     

    (a) The
      affirmative vote of the holders of at least a majority of the outstanding
      Company Common Stock constitute the Requisite Stockholder Approval and are
      the
      only votes of the holders of any of the Company’s capital stock necessary to
      approve this Agreement and the transactions contemplated hereby, and have been
      obtained in accordance with the terms of the Charter and the DGCL on or prior
      to
      the date hereof.

     

    (b) Prior
      to
      the Effective Time, the Company will have notified the holders of Company Stock,
      Options and Warrants with respect to the transactions contemplated hereby as
      and
      to the extent required by the terms and conditions of the Company Organizational
      Documents, the Option Plans, the DGCL, and other agreements of instruments
      governing such securities. 

     

    (c) Any
      information provided to the Company Stockholders in connection with the
      solicitation of their consent to, and adoption of, this Agreement and the Merger
      will not contain, at or prior to the Effective Time, any untrue statement of
      a
      material fact and did or will comply with any applicable requirement of the
      DGCL.

    
      
         

      

      
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    3.24. Anti-Takeover
      Statute Not Applicable.
      No
“business combination,” “fair price,” “moratorium,” “control share acquisition”
or other similar anti-takeover statute or regulation, including, but not limited
      to, Section 203 of the DGCL, or anti-takeover provision in the Company
      Organizational Documents is applicable to the Company, any shares of Company
      Stock or other Company Securities, this Agreement, the Merger or any of the
      other transactions contemplated by this Agreement.

     

    3.25. Certain
      Relationships and Related Transactions.
      Except
      as provided in Section 3.25
      of the
      Disclosure Schedule, no Related Party is indebted to the Company or DDI LLC.
      No
      Related Party owns any asset used in, or necessary to, the business of the
      Company or DDI LLC. Except as described in Section 3.25
      of the
      Disclosure Schedule, there is no transaction involving the Company or DDI LLC
      of
      the nature described in Item 404 of Regulation S K under the Securities Act.
      To
      the Company’s Knowledge, no Related Person owns any direct or indirect interest
      in, or controls or is a director, officer, employer or partner of, of consultant
      to, a competitor of the Company or DDI LLC.

     

    3.26. Disclosures.
      The
      information prepared or provided by the Company to the Parent or Merger Sub
      in
      connection with this Agreement or the Merger does not contain any untrue
      statement of a material fact or omits to state a material fact necessary to
      make
      the statements therein (in light of the circumstances under which they were
      made) not misleading. 

     

    SECTION
      4. Representations
      and Warranties by Parent and Merger Sub.
      Parent
      and Merger Sub (collectively known as the “Parent
      Parties”)
      represent and warrant to the Company that the statements in this Section 4
      are
      true, complete and correct as of the date hereof (unless the particular
      statement speaks expressly as of another date, in which case it is true,
      complete and correct as of such other date), subject, in any case, to the
      exceptions provided in the Disclosure Schedule. Any exception or qualification
      set forth in the Disclosure Schedule with respect to a particular representation
      and warranty shall be deemed to be an exception or qualification with respect
      to
      any other applicable representations and warranties to which such exception
      or
      qualification is reasonably apparent on its face to be applicable, whether
      or
      not such exception or qualification is so numbered. 

     

    4.1. Organization
      and Standing.
      Except
      as disclosed on Schedule
      4.1
      attached
      hereto, each of Parent, its subsidiaries and Merger Sub is a corporation duly
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation.

    
      
         

      

      
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    4.2. Capitalization.
      Schedule 4.2 attached hereto sets out a list of the stockholders in a
      capitalization table of the Parent, including a complete list of authorized
      and
      outstanding Parent ADRs. The authorized capital stock of the Parent consists
      of
      110 million shares of common stock, of which on the date hereof 50,938,247
      shares are issued and outstanding. All of the outstanding capital stock of
      Merger Sub is owned, beneficially and of record, by Parent. All of the issued
      and outstanding shares of Parent Parties’ Stock have been, duly authorized,
      validly issued, fully paid and nonassessable. Except as set forth in this
      Section 4.2, no subscription, warrant, option, convertible security or other
      right (contingent or otherwise) to purchase or acquire any shares of capital
      stock of the Parent Parties is authorized or outstanding, other than the Options
      and Warrants set forth in Schedule 4.2 attached hereto. From and after the
      Effective Time, no holder of any Option or Warrant will have the right to any
      consideration with respect thereto, except as set forth in this Agreement.
      Other
      than upon the exercise of currently outstanding Options and Warrants, the Parent
      Parties do not have any obligation (whether written, oral, contingent or
      otherwise) to issue any subscription, warrant, option, convertible security
      or
      other such right or to issue or distribute to holders of any shares of its
      capital stock any evidences of indebtedness or assets of the Parent Parties.
      Except as set forth in their respective charters, the Parent Parties do not
      have
      any obligation (whether written, oral, contingent or otherwise) to purchase,
      redeem or otherwise acquire any shares of its capital stock or any interest
      therein or to pay any dividend or make any other distribution in respect
      thereof. There are no outstanding or authorized stock appreciation, phantom
      stock, or similar rights with respect to the Parent Parties. All of the issued
      and outstanding shares of capital stock of the Parent Parties have been offered,
      issued and sold by the Parent Parties without violation of any Legal
      Requirements applicable to the Parent Parties’ offer, issuance and sale of such
      securities.

     

    4.3. Subsidiaries.
      Except
      as described in Schedule
      4.3
      attached
      hereto, Parent does not have any Subsidiaries other than Merger Sub, and Parent
      does not own or control, directly or indirectly, any equity or similar interest
      in, or any interest convertible into or exchangeable or exercisable for any
      equity or similar interest in, or have any commitment or obligation to invest
      in, purchase any securities or obligations of, fund, guarantee, contribute
      or
      maintain the capital of or otherwise financially support any corporation,
      partnership, joint venture or other business association or entity. Each former
      Subsidiary that is no longer in existence has been duly dissolved in accordance
      with its charter documents and the laws of the jurisdiction of its incorporation
      or organization and there are no outstanding liabilities or obligations
      (outstanding, contingent or otherwise), including Taxes, with respect to any
      such entity.

     

    4.4. Parent
      Financial Statements; Liabilities.

     

    (a) Attached
      hereto as Schedule
      4.4
      are the
      Parent Parties’ Consolidated audited financial statements (including balance
      sheets and statements of operations) for December 31, 2006 and 2005, and the
      years then ended (collectively, the “Parent
      Financial Statements”):
      The
      Financial Statements were in each case prepared in accordance with GAAP,
      consistently applied throughout the periods presented without modification
      of
      the accounting principles used in the preparation thereof throughout the periods
      presented. The Parent Financial Statements (i) are in accordance with the
      books and records of the Parent Parties, and (ii) present fairly the financial
      condition and results of operations of the Parent Parties as of the dates and
      for the periods indicated.

     

    (b) The
      Parent Parties have in place a system of internal accounting controls that
      is
      sufficient to provide reasonable assurance regarding the reliability of the
      Parent Parties’ financial statements (including the Parent Financial
      Statements), including reasonable assurance that transactions are recorded
      as
      necessary to permit preparation of financial statements in accordance with
      generally accepted accounting principles and that receipts and expenditures
      are
      being made only in accordance with authorizations of management (such systems
      and processes are herein referred to as the “Controls”).
      Neither the Parent Parties’ employees nor the Parent Parties’ independent
      auditors have identified or made the Parent Parties aware of any complaint,
      allegation, deficiency, assertion or claim, whether written or oral, regarding
      the Controls or the Parent Financial Statements. To the Knowledge of the Parent
      Parties, there have been no instances of fraud, whether or not material, that
      occurred during any period covered by the Parent Financial Statements. The
      Parent Parties have in place a revenue recognition policy consistent with GAAP.
      

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    (c) Except
      as
      set forth in Schedule
      4.4(c)
      attached
      hereto, as of the date hereof and as of the Effective Time, the Parent Parties
      have not and at the Effective Time will not have incurred, directly or
      indirectly, any Indebtedness, obligations or liabilities or engaged in any
      business activities of any type or kind whatsoever or entered into any
      agreements or arrangements with any Person, except for those obligations of
      the
      Parent (i) in the ordinary course of business as reflected in the Parent
      Financial Statements; and (ii) obligations and liabilities incurred after
      May 31, 2008 in the ordinary course of business, and (iii) under that
      certain Release Agreement dated as of June 23, 2008 by and among the Company,
      Smith Micro Software, Inc. (“Smith Micro”), IS Acquisition Sub, Inc., Parent,
      and certain of Parent’s subsidiaries (the “Release Agreement”). Pursuant to the
      Release Agreement, upon consummation of the Merger, the Company will cause
      Parent and certain of its subsidiaries to deliver to Smith Micro $500,000 and
      release certain claims against Smith Micro in exchange for the release of all
      claims by Smith Micro against Parent and its subsidiaries pursuant to that
      certain asset purchase agreement between Parent, Smith Micro, and the other
      parties thereto dated February 11, 2007, as amended April 4, 2007. Except as
      set
      forth in Schedule
      4.4(c)
      attached hereto, the consummation of this transaction will not give rise to
      any
      severances, bonuses, payment obligations or other liabilities except for legal
      and accounting fees. 

     

    4.5. Authority
      for Agreement.

     

    (a) Each
      of
      the Parent Parties have all necessary corporate power and authority to execute
      and deliver this Agreement and each instrument required hereby to be executed
      and delivered at Closing and to perform its obligations hereunder and thereunder
      and to consummate the transactions contemplated hereby and thereby. The
      execution and delivery by the Parent Parties of this Agreement and each
      instrument required hereby to be executed and delivered by them at Closing
      and
      the consummation by the Parent Parties of the transactions contemplated hereby
      have been duly and validly authorized by all necessary corporate action, and
      no
      other corporate proceedings on the part of the Parent Parties are necessary
      to
      authorize this Agreement or any instrument required hereby to be executed and
      delivered by them at the Closing or to consummate the Merger. This Agreement
      has
      been and each instrument required hereby to be delivered by the Parent Parties
      at the Closing will be duly and validly executed and delivered by the Parent
      Parties and, assuming the due authorization, execution and delivery by the
      Company and the Representative, constitutes a legal, valid and binding
      obligation of the Parent Parties, enforceable against the Parent Parties in
      accordance with its terms, subject to bankruptcy, insolvency, reorganization
      or
      similar laws of general application affecting the rights and remedies of
      creditors, and to general equity principles. Notwithstanding the foregoing,
      the
      parties hereto understand and agree that Parent has not received the Parent
      Shareholder Approval as of the date of this Agreement, and the failure to have
      obtained the Parent Shareholder Approval shall not be deemed a breach of any
      of
      the representations set forth in this Section 4.5(a) or elsewhere in this
      Agreement. 

     

    (b) The
      execution and delivery of this Agreement by the Parent Parties, and each
      instrument required hereby to be executed and delivered by the Parent Parties
      at
      the Closing, the compliance with the provisions of this Agreement and each
      such
      instrument by the Parent Parties and the consummation by the Parent Parties,
      of
      the transactions contemplated hereby or thereby, will not (i) conflict with
      or
      violate the Certificate of Incorporation or the Bylaws of Parent, each as
      amended to date and currently in effect, or the Certificate of Incorporation
      or
      the Bylaws of Merger Sub, each as amended to date and currently in effect,
      or
      (ii) violate any Legal Requirement applicable to Parent or Merger Sub or any
      of
      their respective properties or assets.

     

    4.6. Taxes.

     

    (a) (i)
      All
      Tax Returns required to be filed by or on behalf of the Parent Parties have
      been
      duly and timely filed with the appropriate Taxing Authority in all jurisdictions
      in which such Tax Returns are required to be filed (after giving effect to
      any
      valid extensions of time in which to make such filings), and all such Tax
      Returns are true, complete and correct in all material respects; and (ii) all
      Taxes payable by or on behalf of the Parent Parties have been fully and timely
      paid. With respect to any period for which such Tax Returns have not yet been
      filed or for which such Taxes are not yet due or owing, the Parent Parties
      have
      made due and sufficient accruals for such Taxes on the Parent’s Statement of
      Cash and Accounts Payable as of the date hereof, attached as Schedule
      4.6(a)
      hereto.
      (the “Parent
      Balance Sheet”).
      All
      required estimated Tax payments sufficient to avoid any underpayment penalties
      or interest have been made by or on behalf of the Parent
      Parties.

    
      
         

      

      
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    4.7. Benefit
      Plans.

     

    (a) For
      purposes of this Agreement, the term “Parent
      Employee Plan”
or
      “Plan”
means
      any employee benefit plan (as defined in Section 3(3) of the Employee Retirement
      Income Security Act of 1974, as amended (“ERISA”),
      whether or not subject to ERISA), any other bonus, profit sharing, compensation,
      pension, retirement, “401(k),” “SERP,” severance, savings, deferred
      compensation, fringe benefit, insurance, welfare, post-retirement health or
      welfare benefit, health, life, stock option, stock purchase, restricted stock,
      tuition refund, service award, company car or car allowance, scholarship,
      housing or living allowances, relocation, disability, accident, sick pay, sick
      leave, accrued leave, vacation, holiday, termination, unemployment, individual
      employment, consulting, executive compensation, incentive, commission, payroll
      practices, retention, change in control, non competition, other material plan,
      agreement, policy, trust fund or arrangement (whether written or unwritten,
      insured or self-insured) providing compensation or benefits, and any plan
      subject to Sections 125, 127, 129, 137 or 423 of the Code, currently
      maintained, sponsored or contributed to by the Parent Parties or any trade
      or
      business, whether or not incorporated, that together with the Parent Parties
      would be deemed to be a “single employer” within the meaning of Section 4001(b)
      of ERISA (an “ERISA
      Affiliate”)
      or to
      which the Parent Parties or any ERISA Affiliate is a party, or to which the
      Parent Parties or an ERISA Affiliate had, has or will have any liability. Each
      Plan is in writing. Schedule
      4.7
      attached
      hereto includes a true and complete list of all Plans, and the Parent Parties
      have provided or made available to the Company a complete copy of each Plan
      (or,
      in the case of any unwritten Plan, descriptions of the material terms thereof)
      as well as, if applicable, a copy of each trust or other funding arrangement,
      each summary plan description and summary of material modifications, and the
      most recent application for determination letter submitted to the IRS and the
      most recent determination letter received from the IRS. The Parent Parties
      have
      delivered to the Company true and complete copies of all Form 5500 Series annual
      reports for each Plan, together with all schedules, attachments, and related
      opinions and copies of any correspondence from or to the IRS, the Department
      of
      Labor or other U.S. government department or agency relating to an audit or
      penalty assessment with respect to any Plan or relating to requested relief
      from
      any liability or penalty relating to any Plan.

     

    (b) The
      Parent Parties and each ERISA Affiliate is and has been in compliance with
      its
      obligations under the terms of each Plan.

     

    (c) Each
      Plan
      and each funding vehicle related to such Plan is currently in compliance in
      all
      material respects with, and has been administered and operated in compliance
      with, its terms and all applicable statutes, orders, rules and regulations.
      Each
      Plan which is intended to be a “qualified plan” as described in Section 401(a)
      of the Code has been determined by the IRS to so qualify, and there are no
      facts
      which might adversely affect such qualification.

     

    (d) Neither
      the Parent Parties nor their ERISA Affiliates maintain, sponsor or contribute
      to
      any single employer plan (as such term is defined in Section 4001(b) of ERISA)
      subject to Title IV of ERISA or any “multiemployer plan” (as such term is
      defined in Section 3(37) of ERISA), nor have they incurred any material
      liability, including, without limitation, withdrawal liability, with respect
      to
      any such Plan that remains unsatisfied.

     

    (e) No
      Plan
      is funded by, associated with or related to a “voluntary employees’ beneficiary
      association” within the meaning of Section 501(c)(9) of the Code. No Plan is or
      has been subject to Section 302 or Title IV of ERISA.

     

    (f) The
      Parent Parties have made or will accrue prior to the Closing Date all payments
      and contributions (including insurance premiums) due and payable as of the
      Closing Date to each Plan as required to be made under the terms of such
      Plan.

    
      
         

      

      
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    (g) With
      respect to all Plans and related trusts, there are no “prohibited transactions,”
as that term is defined in Section 406 of ERISA or Section 4975 of the Code,
      that have occurred which could subject any Plan, related trust or party dealing
      with any such Plan or related trust to any tax or penalty on prohibited
      transactions imposed by Section 501(i) of ERISA or Section 4975 of the
      Code.

     

    (h) There
      are
      no actions, suits, arbitrations or claims (other than routine claims for
      benefits by employees of the Parent Parties, beneficiaries or dependents of
      such
      employees arising in the normal course of operation of a Plan) pending, or
      to
      the Knowledge of the Parent Parties, threatened, with respect to any Plan or
      any
      fiduciary or sponsor of a Plan with respect to their duties under such Plan
      or
      the assets of any trust under any such Plan.

     

    (i) The
      Parent Parties have complied in all material respects with the health care
      continuation requirements of Section 601, et. seq. of ERISA with respect to
      employees and their spouses, former spouses and dependents.

     

    (j) The
      Parent Parties do not have any obligations under any Plan to provide
      post-retirement medical benefits to any employee or any former employee of
      the
      Parent Parties other than statutory liability for providing group health plan
      continuation coverage under Part 6 of Title I of ERISA and Section 4980B of
      the
      Code or applicable state law.

     

    (k) Neither
      the negotiation or execution of this Agreement, nor the consummation of the
      transactions contemplated by this Agreement will, either alone or in combination
      with another event, (i) entitle any current or former employee, officer or
      consultant of the Parent Parties or any ERISA Affiliate to severance pay,
      unemployment compensation or any other payment or additional rights, except
      as
      expressly provided in this Agreement, or (ii) accelerate the time of payment
      or
      vesting, or increase the amount of compensation (including equity compensation)
      due any such employee, officer or consultant.

     

    (l) The
      Parent Parties are not a party to, or otherwise obligated under, any contract,
      agreement, plan or arrangement covering any person that, individually or
      collectively, could give rise to the payment of any amount that would not be
      deductible by Parent, the Company or any of their respective affiliates by
      reason of Section 280G of the Code or that could be subject to Section 4999
      of
      the Code.

     

    (m) Each
      Parent Employee Plan which is subject to the requirements of Section 409A of
      the
      Code has been adopted in good faith compliance with such Section and the
      guidance issued by the Department of Treasury thereunder to date. Each Option
      has been granted by the Board of Directors of the Company on the date the Board
      met and was granted with an exercise price equal to no less than one hundred
      percent of the fair market value per share of Company Common Stock on the date
      of the grant. 

     

    4.8. Insurance. Schedule
      4.8
      attached
      hereto contains a complete and correct list as of the date hereof of all
      insurance policies maintained by or on behalf of the Parent Parties. Such list
      includes the type of policy, form of coverage, policy number and insurer,
      coverage dates, named insured, limit of liability and premium and deductible
      amounts. True and complete copies of each listed policy have been made available
      to the Company. Such policies are in full force and effect, all premiums due
      thereon have been paid and the Parent Parties have complied in all material
      respects with the provisions of such policies. The Parent Parties have not
      received any notices from any issuer of any of their insurance policies
      canceling or amending any policies listed in Schedule
      4.8
      attached
      hereto, increasing any deductibles or retained amounts thereunder, or increasing
      premiums payable thereunder. There is no claim by the Parent Parties pending
      under any of such policies as to which coverage has been denied or disputed
      by
      the underwriters or in respect of which the underwriters have reserved their
      rights. Neither the Parent Parties nor any affiliate thereof has ever
      maintained, established, sponsored, participated in or contributed to any
      self-insurance plan.

     

    4.9. Personnel.

     

    (a) Schedule
      4.9(a)
      attached
      hereto sets forth a list of all employees, consultants or independent
      contractors of the Parent Parties as of the date hereof, including, as of such
      date, their title, then current base salary or other compensation rate as well
      as any bonus paid for the fiscal year ended December 31, 2007 and any accrued
      and unpaid bonus scheduled for or paid or agreed to be paid to them by the
      Parent Parties for any future period. Schedule
      4.9(a)
      attached
      hereto also sets forth a list of all independent contractors and consultants
      of
      the Parent Parties as of the date hereof who received more than $30,000 with
      respect to services provided during 2007.

    
      
         

      

      
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    (b) The
      Parent Parties comply in all material respects with all Legal Requirements
      relating to the employment of labor, including all such Legal Requirements
      relating to wages, hours, WARN and any similar state or local “mass
      layoff”
or
      “plant
      closing”
Legal
      Requirement, collective bargaining, discrimination, civil rights, safety and
      health, workers’ compensation and the collection and payment of withholding
      and/or social security taxes and any similar tax. There has been no
“mass
      layoff”
or
      “plant
      closing”
(as
      defined by WARN) with respect to the Parent Parties within the six (6) months
      prior to Closing. 

     

    (c) The
      Parent Parties are not subject to any collective bargaining agreement or other
      labor union contract and no employee of the Parent Parties is represented by
      a
      labor union. There is not pending or, to the Parent Parties’ Knowledge,
      threatened, any picketing, strike, labor dispute, slowdown, lockout, walkout,
      work stoppage or other similar labor trouble involving employees of the Parent
      Parties, and no union organizing activities are taking place or have taken
      place
      with respect to such employees.

     

    (d) To
      the
      Parent Parties’ Knowledge, none of the Parent Parties’ officers or employees or
      consultants intend to terminate his or her relationship with the Parent Parties
      for any reason, including, without limitation, as a result of the transactions
      contemplated hereby.

     

    4.10. Litigation.
      Except
      as disclosed in Schedule
      4.10
      attached
      hereto, there is no (a) action, suit, claim, charge, cause of action or
      suit (whether in contract or tort or otherwise), litigation (whether at law
      or
      in equity, whether civil or criminal), controversy, assessment, arbitration,
      investigation, hearing, complaint, demand or other proceeding to, from, by
      or
      before any arbitrator, court, tribunal or other Governmental Authority
      (collectively, “Actions”)
      pending, or to the Parent Parties’ Knowledge, threatened against or affecting
      the Parent Parties, (b) Action, to the Parent Parties’ Knowledge, pending or
      threatened against or affecting any of the material assets of the Parent
      Parties, or the Merger or the other transactions contemplated hereby, (c)
      governmental inquiry or investigation pending or, to the Parent Parties’
Knowledge, threatened against or affecting the Parent Parties (including,
      without limitation, any inquiry as to the qualification of the Parent Parties
      to
      hold or receive any license or other Permit), (d) to the Parent Parties’
Knowledge, governmental inquiry or investigation pending or threatened against
      or affecting any of the material assets of the Parent Parties, or (e) to the
      Parent Parties’ Knowledge, any Actions pending or threatened against any Related
      Party in connection with the business of the Parent Parties and there is no
      reasonable basis for any of the foregoing. The Parent Parties are not in default
      with respect to any order, writ, injunction or decree of any Governmental
      Authority served upon the Parent Parties or that exists to the Knowledge of
      the
      Parent Parties. There is no action or suit by the Parent Parties pending,
      threatened or contemplated by the Parent Parties against any other Person.
      

    
      
         

      

      
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    4.11. Environmental
      Matters.
      The
      Parent Parties are and have been in compliance with all Environmental Laws;
      (ii)
      there has been no release or threatened release of any Hazardous Substance
      on,
      upon, into or from any site currently or heretofore owned, leased or otherwise
      used by the Parent Parties; (iii) there have been no Hazardous Substances
      generated by the Parent Parties that have been disposed of, or come to rest
      at,
      any site that has been included in any published U.S. federal, state or local
      “superfund” site list or any other similar list of hazardous or toxic waste
      sites published by any Governmental Authority within or outside the United
      States; (iv) there are no underground storage tanks located on, no PCBs or
      PCB-containing equipment used or stored on, and no hazardous waste as defined
      by
      the Resource Conservation and Recovery Act, as amended, stored on, any site
      owned, leased or otherwise used by the Parent Parties, except for the storage
      of
      hazardous waste in compliance with Environmental Laws; and (v) the Parent
      Parties have made available to the Company true and correct copies of all
      material environmental records, reports, notifications, certificates of need,
      permits, pending permit applications, correspondence, engineering studies and
      environmental studies or assessments in the possession of the Parent Parties
      or
      any of its representatives or advisors.`

     

    4.12. Compliance
      with Instruments; Laws; Governmental Authorizations.

     

    (a) The
      Parent Parties are not in violation of any term or provision of the Parent
      Parties’ Organizational Documents. The Parent Parties have complied in all
      material respects with all terms and provisions of all Permits and Legal
      Requirements. Neither the Parent Parties nor, to the Parent Parties’ Knowledge,
      any Related Person, is under investigation with respect to, has been threatened
      to be charged with, or has been given notice of, any violation of any Legal
      Requirement. All permits, concessions, grants, franchises, licenses and other
      governmental authorizations and approvals (collectively, “Permits”)
      (i)
      pursuant to which the Parent Parties currently operate or hold any interest
      in
      any of their properties, or (ii) which is required for the operation of the
      Parent Parties’ businesses as currently conducted or the holding of any such
      interest, have been issued or granted to the Parent Parties, and all such
      Permits are in full force and effect and constitute all Permits required to
      permit the Parent Parties to operate or conduct its business or hold any
      interest in its properties or assets.

     

    (b) The
      Parent Parties have conducted their transactions in material compliance with
      applicable provisions of U.S. law, including the United States export control
      laws and regulations and U.S. economic sanctions laws.

     

    (c) The
      Parent Parties (and, to the Parent Parties’ Knowledge, each of its officers,
      directors, agents, employees and other Persons associated with or acting on
      its
      behalf) has not, directly or indirectly, taken any action which would cause
      it
      to be in violation of the U.S. Foreign Corrupt Practices Act , as amended,
      or
      any rules or regulations thereunder, including by offering or conveying,
      directly or indirectly (such as through an agent), anything of value to obtain
      or retain business or to obtain any improper advantage, including any bribe,
      rebate, payoff, influence payment, kickback or other similar unlawful payment
      to
      a foreign government official, candidate for office, or political party or
      official of a political party.

     

    4.13. Banking
      Relationships. Schedule
      4.13
      attached
      hereto sets forth a true and complete list of the name and location of each
      bank, brokerage or investment firm, savings and loan or similar financial
      institution in which the Parent Parties have an account or a safe deposit box
      or
      other arrangement, the account or other identifying numbers thereof and the
      names of all Persons authorized to draw on or who have access to such account
      or
      safe deposit box or such other arrangement. There are no outstanding powers
      of
      attorney executed by or on behalf of the Parent Parties.

     

    4.14. Brokers
      and Finders.
      No
      broker, financial advisor, finder or investment banker or other Person is
      entitled to any broker’s, financial advisor’s, finder’s or other fee or
      commission in connection with the transactions contemplated by this Agreement
      based upon arrangements made by or on behalf of the Company. 

     

    4.15. Property
      and Sufficiency.
      Except
      as set forth in Schedule
      4.15,
      the
      Parent Parties have good and marketable title to, or, in the case of leases
      of
      properties and assets, a valid leasehold interest in, or otherwise has a valid
      legal right to use, all of the properties and assets (whether real, personal,
      tangible or intangible) (i) reflected on the Parent Balance Sheet (other
      than assets sold since the date of the Parent Balance Sheet) or acquired
      thereafter and (ii) necessary to conduct all of the businesses and
      operations of the Parent Parties as currently conducted, and none of such
      properties or assets is subject to any Liens or Security Interest other than
      those described in Schedule 4.15
      attached
      hereto. The Parent Parties do not own any real property.

    
      
         

      

      
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    4.16. Disclosures.
      The
      information prepared or provided by the Parent or Merger Sub to the Company
      in
      connection with this Agreement or the Merger and any information in the filings
      of the Parent or Merger Sub with the Securities and Exchange Commission, do
      not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements therein (in light of the circumstances under
      which they were made) not misleading. 

     

    SECTION
      5. Additional
      Agreements.

     

    5.1. Approvals.
      Upon
      execution of this Agreement, each party to this Agreement shall obtain all
      necessary Board and stockholder approvals (except that Parent shall obtain
      the
      Parent Shareholder Approval following the Effective Time, as contemplated by
      Section 16.3). Without limitation to the foregoing, the Company shall take
      all
      action necessary to obtain the Requisite Stockholder Approval within two days
      after the execution of this Agreement.

     

    5.2. Confidentiality;
      Access to Information; No Modification of Representations, Warranties or
      Covenants.

     

    (a) Confidentiality.
      The
      parties acknowledge that the Company and Parent have previously executed the
      Non-Disclosure Agreement dated March 25, 2008 (the “Confidentiality
      Agreement”),
      which
      Confidentiality Agreement will continue in full force and effect in accordance
      with its terms. Each of Parent and the Company will hold, and will cause its
      respective affiliates, directors, officers, employees, agents, advisors and
      representatives (including, without limitation, attorneys, accountants,
      consultants, bankers and financial advisors) to hold any Confidential
      Information (as defined in the Confidentiality Agreement) confidential in
      accordance with the terms of the Confidentiality Agreement. The parties
      acknowledge and agree that the existence of this Agreement, the Disclosure
      Schedule, and the documents and instruments contemplated hereby and thereby,
      the
      terms and conditions hereof and thereof, and transactions contemplated hereby
      and thereby, shall constitute “Confidential
      Information”
under
      the Confidentiality Agreement. In addition, any information obtained from the
      Company pursuant to the access contemplated by Section 5.2(b) shall be
      subject to the Confidentiality Agreement.

     

    (b) Access
      to Information.
      The
      Company will afford Parent and Parent’s accountants, counsel and other
      representatives reasonable access during normal business hours to its premises,
      properties, books, records, financial, tax and accounting records (including,
      without limitation, the work papers of the Company’s independent accountants),
      Contracts, personnel, counsel, financial advisors and auditors, and those of
      DDI
      LLC, during the period prior to the Effective Time to obtain all information
      concerning its business, including, without limitation, the status of product
      development efforts, properties, results of operations and personnel for
      purposes of this Agreement, as Parent may reasonably request; provided,
      however,
      that
      the Company may restrict the foregoing access to the extent that any applicable
      Legal Requirement requires the Company to restrict or prohibit access to any
      such properties or information. In addition, any information obtained from
      the
      Company pursuant to the access contemplated by this Section 5.2(b) shall be
      subject to the Confidentiality Agreement. 

     

    5.3. Public
      Disclosure.
      No press
      release or any public disclosure, either written or oral, of the transactions
      contemplated hereby shall be made by the Company, the Representative or any
      officer, director, employee or affiliate under the control of the Company (other
      than to the Company Securityholders and the Company’s employees), without the
      express prior written consent of Parent. Prior to the Effective Time, no press
      release or any public disclosure, either written or oral, of the transactions
      contemplated hereby shall be made by Parent or any officer, director, employee
      or affiliate under the control of Parent, without providing the Company a
      reasonable opportunity to review such release or disclosure.

    
      
         

      

      
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    5.4. Representative.
      Unless
      otherwise required by applicable Legal Requirements, the Representative agrees
      that it (and its legal, financial, accounting and other representatives) shall
      hold in confidence all non-public information acquired in accordance with the
      terms of the Confidentiality Agreement as if the Representative were a party
      thereto.

     

    5.5. Regulatory
      Filings; Reasonable Efforts.

     

    (a) Regulatory
      Filings.
      Each of
      Parent, Merger Sub and the Company shall coordinate and cooperate with one
      another and shall each use all reasonable efforts to comply with, and shall
      each
      refrain from taking any action that would impede compliance with, all applicable
      Legal Requirements, and as soon as reasonably practicable after the date hereof,
      each of Parent, Merger Sub and the Company shall (and shall cause each of their
      respective affiliates to) obtain or make all consents, approvals, orders or
      authorizations of, or registrations, declarations or filings with any
      Governmental Authority in connection with the Merger and the transactions
      contemplated hereby, including, (i) any filings under any applicable Foreign
      Merger Laws and (ii) any filings required under the Securities Act, the Exchange
      Act, any applicable state or securities or “blue sky” laws and the securities
      laws of any foreign country, or any other applicable Legal Requirement relating
      to the Merger. Each of Parent, Merger Sub and the Company will cause all
      documents that it is responsible for filing with any Governmental Authority
      under this Section 5.5(a) to comply in all material respects with all applicable
      Legal Requirements.

     

    (b) Exchange
      of Information.
      Parent,
      Merger Sub and the Company each shall (and shall cause each of their respective
      affiliates to) promptly supply the other with any information that is required
      in order to effectuate or obtain any filings or other actions pursuant to
      Section 5.5(a). Except where prohibited by applicable Legal Requirements, and
      subject to the Confidentiality Agreement and any joint defense agreement entered
      into between the parties or their counsel, each of Parent, Merger Sub and the
      Company shall (and shall cause each of their respective affiliates to) (i)
      consult with the others prior to taking a position with respect to any such
      filing or other actions, (ii) to the extent reasonably required to permit
      appropriate coordination of efforts, permit the others to review and discuss
      in
      advance, and consider in good faith the views of the others in connection with,
      any analyses, appearances, presentations, memoranda, briefs, white papers,
      arguments, opinions and proposals before making or submitting any of the
      foregoing to any Governmental Authority in connection with any Action in
      connection with this Agreement or the transactions contemplated hereby, (iii)
      coordinate with the others in preparing and exchanging such information and
      (iv) promptly provide the others (and their counsel) with copies of all
      filings, presentations or submissions (and a summary of any oral presentations)
      made by such party with any Governmental Authority in connection with this
      Agreement or the transactions contemplated hereby; provided,
      however,
      that,
      notwithstanding the foregoing, with respect to any such filing, presentation
      or
      submission, each of Parent, Merger Sub and the Company (and their respective
      affiliates) need not supply the others (or their counsel) with copies (or in
      case of oral presentations, a summary) to the extent that any applicable Legal
      Requirement requires such party or its subsidiaries to restrict or prohibit
      access to any such information.

     

    (c) Notification.
      Each of
      Parent, Merger Sub and the Company will notify the others promptly upon the
      receipt of: (i) any comments from any Governmental Authority in connection
      with
      any filings or other actions made pursuant hereto and (ii) any request by any
      Governmental Authority for amendments or supplements to any filings or other
      actions made pursuant to, or for information provided to comply in all material
      respects with any Legal Requirements. Whenever any event occurs that is required
      to be set forth in an amendment or supplement to any filing or other action
      made
      pursuant to Section 5.5(a), Parent, Merger Sub or the Company, as the case
      may
      be, will promptly inform the others of such occurrence and cooperate in filing
      with the applicable Governmental Authority such amendment or
      supplement.

     

    (d) Reasonable
      Efforts.
      Upon
      the terms and subject to the conditions set forth herein, each of the parties
      hereto agrees to use all reasonable efforts to take, or cause to be taken,
      all
      actions, and to do, or cause to be done, and to assist and cooperate with the
      other parties in doing, all things necessary, to consummate and make effective,
      in the most expeditious manner practicable, the Merger and the other
      transactions contemplated by this Agreement, including, without limitation,
      using all reasonable efforts to satisfy the conditions precedent set forth
      in
      Sections 6, 7 and 8.

    
      
         

      

      
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    5.6. Advise
      of Changes.
      From the
      date hereof and continuing until the earlier of the termination of this
      Agreement or the Effective Time, Parent and the Company shall promptly advise
      the other party in writing to the extent it has Knowledge of (a) any event
      or
      circumstance that would reasonably be expected to result in the representations
      and warranties made by it (and, in the case of Parent, made by Merger Sub)
      in
      this Agreement becoming untrue or inaccurate in any material respect, (b) the
      failure by it (and, in the case of Parent, by Merger Sub) to comply in any
      material respect with or satisfy in any material respect any covenant, condition
      or agreement to be complied with or satisfied by it under this Agreement prior
      to the Effective Time, (c) any change or event that constitutes a Material
      Adverse Effect or (d) any notice or other communication from any Person alleging
      that the consent of such Person is or may be required in connection with the
      transactions contemplated by this Agreement; provided,
      however,
      that no
      such notification will be deemed to prevent or cure any breach of, or inaccuracy
      in, amend or supplement any Section of the Disclosure Schedule, or otherwise
      disclose an exception to, or affect in any manner, the representations,
      warranties, covenants or agreements of the parties (or remedies with respect
      thereto) or the conditions to the obligations of the parties or the Company
      Stockholders under this Agreement.

     

    5.7. Cooperation.
      Subject
      to compliance with applicable Legal Requirements, from the date hereof until
      the
      Effective Time, the Company shall confer on a regular and frequent basis with
      one or more representatives of Parent to report operational matters that are
      material and the general status of ongoing operations, in each case with respect
      to the Company.

     

    5.8. Employee
      Benefit Plans

     

    (a) .
      With
      respect to each benefit plan, program, practice, policy or arrangement
      maintained by Parent Parties in which employees of the Company subsequently
      participate, for purposes of determining eligibility, vesting and entitlement
      to
      benefits, including for severance benefits and vacation entitlement, service
      with the Company (or predecessor employers to the extent the Company provides
      past service credit) shall be treated as service with Parent Parties, as
      applicable; provided
      that
      such service shall not be recognized for purpose of accruals of benefits or
      to
      the extent that such recognition would result in a duplication of benefits
      or to
      the extent that such service was not recognized under the applicable Company
      plan.

     

    SECTION
      6. Conditions
      Precedent to the Obligations of Each Party to Effect the Merger.
      The
      respective obligations of each party under this Agreement to consummate the
      Merger and the other transactions contemplated hereby shall be subject to the
      satisfaction at or prior to the Closing Date of the following
      conditions:

     

    6.1. Stockholder
      Approvals.
      The
      Requisite Stockholder Approval shall have not been rescinded, revoked or
      changed.

     

    6.2. No
      Order.
      No
      temporary restraining order, preliminary or permanent injunction or other order
      or judgment preventing the consummation of the Merger shall have been issued
      by
      any court of competent jurisdiction and remain in effect.

     

    6.3. Government
      Approvals.
      All
      consents, approvals, orders or authorizations of, or registrations, declarations
      or filings with, any Governmental Authority (if any) identified on Schedule
      6.3
      shall
      have been obtained or made, in a manner reasonably satisfactory in form and
      substance to Parent and the Company, and no such consent, approval, order or
      authorization shall have been revoked.

    
      
         

      

      
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    6.4. Government
      Litigation and Legal Requirements.
      There
      shall be no Action pending against Parent, the Company or any of their
      respective affiliates by any Governmental Authority or any Legal Requirement
      enacted or deemed applicable (a) seeking to enjoin or make illegal, delay or
      otherwise restrain or prohibit the consummation of the Merger or the other
      transactions contemplated hereby, (b) that would result in the Merger or any
      of
      the other transactions contemplated hereby being rescinded following
      consummation, (c) seeking to require an Action of divestiture, (d) that
      otherwise would have a Material Adverse Effect or (e) that is reasonably likely,
      directly or indirectly, to result in any of the consequences referred to in
      clauses (a) through (d) of this Section 6.4.

     

    SECTION
      7. Additional
      Conditions Precedent to the Obligations of Parent and Merger Sub.
      The
      obligations of Parent and Merger Sub under this Agreement to consummate the
      Merger and the other transactions contemplated hereby shall be subject to
      satisfaction at or prior to the Closing Date of each of the following
      conditions:

     

    7.1. Representations,
      Warranties and Covenants.

     

    (a) Each
      of
      the representations and warranties of the Company in Section 3 of this
      Agreement shall be true, complete and correct in all material respects as of
      the
      date hereof and, as updated as of the Effective Time (except that those
      representations and warranties which address matters only as of another
      particular date shall remain true, compete and correct as of such date),
      and

     

    (b) The
      Company and the Representative shall have performed and complied in all material
      respects with all covenants and obligations of this Agreement required to be
      performed and complied with by them as of the Effective Time.

     

    7.2. No
      Material Adverse Effect.
      Since
      the date of this Agreement, there shall not have occurred any circumstance
      or
      change in or effect on the Company or any Company Securityholder that
      constitutes a Material Adverse Effect.

     

    7.3. Other
      Third Party Approvals.
      All
      consents, approvals, orders or authorizations of, or registrations, declarations
      or filings with, any Person identified on Schedule
      7.3
      shall
      have been obtained or made, in a manner reasonably satisfactory in form and
      substance to Parent, and no such consent, approval, order or authorization
      shall
      have been revoked.

     

    7.4. Dissenting
      Shares.
      Holders
      of no more than two percent (2%) of the Company Stock shall have exercised
      any
      appraisal or dissenters’ rights pursuant to the DGCL.

     

    7.5. Stockholder
      Approval.
      The
      Company shall have obtained the Requisite Stockholder Approval.

     

    SECTION
      8. Conditions
      Precedent to Obligations of the Company.
      All
      obligations of the Company under this Agreement to consummate the Merger and
      the
      other transactions contemplated hereby are subject to the satisfaction at or
      prior to the Closing Date of the following conditions:

     

    8.1. Representations,
      Warranties and Covenants.

     

    (a) Section 4
      of this Agreement, taken as a whole, shall be true, complete and correct in
      all
      material respects as of the date hereof and, as updated as of the Effective
      Time
      (except that those representations and warranties which address matters only
      as
      of another particular date shall remain true, complete and correct as of such
      date), and

     

    (b) Parent
      and Merger Sub shall have performed and complied in all material respects with
      all covenants and obligations of this Agreement required to be performed and
      complied with by them as of the Effective Time

     

    8.2. Release
      Agreement.
      A
      Release Agreement by and among the Company, Smith Micro Software, Inc., a
      Delaware corporation (“Smith Micro”), Smith Micro’s wholly-owned subsidiary, IS
      Acquisition Sub, Inc., a Delaware corporation, Parent and Merger Sub shall
      have
      been executed and delivered to the Company.

    
      
         

      

      
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    8.3. Voting
      and Lockup Agreement.
      All
      directors and officers of the Parent, who are stockholders of the Parent, shall
      have executed and delivered a voting and lockup agreement to the Company in
      the
      form attached as Exhibit
      H
      hereto
      agreeing (a) not to transfer their shares for a certain period of time, and
      (b)
      vote their shares in favor of the authorization of 90,000,000 additional
      ordinary shares such that the total authorized share capital of the Parent
      shall
      be 200,000,000 ordinary shares (including any actions that may be required
      therefore) (ii) give effect to the appointment of directors in accordance with
      Section 1.5 herein (if such matter is to be submitted for the approval of
      Parent’s shareholders), and (iii) approve such other actions as may be required
      to consummate the Merger and the transactions contemplated by this Agreement
      or
      any provisions of this Agreement.

     

    8.4. Closing
      Date Cash.
      The
      Closing Date Cash shall be $4,004,267. 

     

    SECTION
      9. Closing
      Deliveries.

     

    9.1. Closing
      Deliveries of the Company.
      At or
      prior to the Closing, the Company shall deliver, or caused to be delivered,
      to
      Parent the following:

     

    (a) a
      certificate executed on behalf of the Company by its Chief Executive Officer
      or
      its Chief Financial Officer to the effect that, as of the Effective Time, each
      of the conditions set forth in Sections 7.1 and 7.2 have been
      satisfied;

     

    (b) the
      Certificate of Merger, duly executed by the Company;

     

    (c) a
      certificate of the Secretary of the Company dated the Closing Date, in form
      and
      substance reasonably satisfactory to Parent as to (i) the Company Organizational
      Documents and the Company being in good standing (including attaching the
      Company Organizational Documents and certificates of good standing dated not
      more than five (5) Business Days prior to the Closing issued by the Secretary
      of
      State of the State of Delaware and by each state in which the Company is
      qualified to do business as a foreign corporation), (ii) the attached actions
      taken by the Company’s board of directors and stockholders to authorize this
      Agreement, the Merger and the other transactions contemplated hereby, including
      evidence of compliance with the Company Organizational Documents, (iii) the
      incumbency and signatures of the officers of the Company executing this
      Agreement and the other agreements, instruments and other documents executed
      by
      or on behalf of the Company pursuant to this Agreement or otherwise in
      connection with the transactions contemplated hereby, and (iv) the Company
      having taken all necessary and appropriate steps such that all Company
      Securities, including Options and Warrants, will be treated as set forth in
      Section 2; and

     

    (d) A
      legal
      opinion of Ellenoff Grossman & Schole LLP in the form attached as
Exhibit I
      hereto.

     

    9.2. Closing
      Deliveries of Parent.
      At or
      prior to the Closing, Parent shall deliver, or caused to be delivered, to the
      Company the following:

     

    (a) a
      certificate executed on behalf of the Parent by one of its Senior or Executive
      Vice Presidents to the effect that, as of the Effective Time, the conditions
      set
      forth in Section 9.1 above have been satisfied; 

     

    (b) the
      Certificate of Merger, duly executed by Merger Sub; and

     

    (c) a
      legal
      opinion of Fenwick & West LLP in the form attached as Exhibit J
      hereto.

     

    (d) a
      bank
      statement or some other document satisfactory to the Company, describing the
      cash balance of the Parent as at Closing. 

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    SECTION
      10. Survival.
      All
      representations, warranties, covenants and obligations contained herein shall
      survive the Closing and shall continue until eighteen (18) months after the
      Effective Time (the “Survival
      Period”)
      and
      shall thereafter terminate, provided
      that if
      any claims for indemnification have been asserted in good faith with respect
      to
      inaccuracy or a breach of such representations, warranties, covenants and
      obligations prior to the end of the Survival Period, such claim shall survive
      and continue in effect until final resolution of such claims. 

     

    SECTION
      11. Termination.

     

    11.1. Termination
      prior to the Effective Time of the Merger.
      This
      Agreement may be terminated at any time prior to the Effective Time, by action
      taken or authorized by the Board of Directors of the terminating party or
      parties:

     

    (a) by
      mutual
      written consent duly authorized by the Boards of Directors of Parent and the
      Company;

     

    (b) by
      either
      the Company or Parent if the Merger shall not have been consummated by June
      30,
      2008 (the “End
      Date”);
      provided
      that the
      right to terminate this Agreement under this Section 11.1(b) shall not be
      available to any party whose intentional action or inaction has been a principal
      cause of, or resulted in the failure of, the Merger to occur on or before such
      date and such intentional action or inaction constitutes a breach of this
      Agreement;

     

    (c) by
      the
      Company if the Merger shall not have been consummated by June 30, 2008;

     

    (d) by
      either
      the Company or Parent if a Governmental Authority shall have issued or enacted
      any Legal Requirement or taken any other action (including, without limitation,
      the failure to have taken an action), in any case having the effect of
      permanently restraining, enjoining or otherwise prohibiting the Merger, which
      Legal Requirement is final and nonappealable, as applicable;

     

    (e) by
      the
      Company, (i) upon a breach of any representation, warranty, covenant or
      agreement set forth in this Agreement by Parent or Merger Sub, or (ii) if any
      representation or warranty of Parent or Merger Sub shall have become untrue,
      in
      either case such that the conditions set forth in Section 9.1 would not be
      satisfied as of the time of such breach or as of the time such representation
      or
      warranty shall have become untrue, provided
      that if
      such inaccuracy in Parent’s or Merger Sub’s representations and warranties or
      breach by Parent or Merger Sub is curable prior to the End Date through the
      exercise of reasonable efforts, then the Company may not terminate this
      Agreement under this Section 11.1(d) prior to thirty (30) days following the
      receipt of written notice from the Company by Parent of such breach (it being
      understood that the Company may not terminate this Agreement pursuant to this
      Section 11.1(d) if the Company shall have materially breached this Agreement
      or
      if such breach by Parent or Merger Sub is cured such that such conditions would
      then be satisfied); 

     

    (f) by
      Parent, (i) upon a breach of any representation, warranty, covenant or agreement
      set forth in this Agreement by the Company or the Representative, or (ii) if
      any
      representation or warranty of the Company shall have become untrue, in either
      case such that the conditions set forth in Section 7.1 or Section 7.2 would
      not be satisfied as of the time of such breach or as of the time such
      representation or warranty shall have become untrue, provided
      that if
      such inaccuracy in the Company’s representations and warranties or breach by the
      Company or the Representative is curable by the Company or the Representative
      prior to the End Date through the exercise of reasonable efforts, then Parent
      may not terminate this Agreement under this Section 11.1(f) prior to the thirty
      (30) days following the receipt of written notice from Parent by the Company
      of
      such breach (it being understood that Parent may not terminate this Agreement
      pursuant to this Section 11.1(f) if Parent shall have materially breached this
      Agreement or if such breach by the Company or the Representative is cured such
      that such conditions would then be satisfied);

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    (g) by
      Parent, if a Material Adverse Effect shall have occurred, or Parent first
      becomes aware of a Material Adverse Effect, after the date hereof;
      or

     

    (h) By
      Parent, if the Company shall not have obtained the Requisite Stockholder
      Approval by the close of business on the date two days after the date of this
      Agreement.

     

    11.2. Notice
      of Termination; Effect of Termination.
      If a
      party wishes to terminate this Agreement pursuant to Section 11.1, then such
      party shall deliver to the other parties to this Agreement a written notice
      stating that such party is terminating this Agreement and setting forth a brief
      description of the basis on which such party is terminating this Agreement.
      Any
      termination of this Agreement under Section 12.1 above will be effective
      immediately upon the delivery of a valid written notice of the terminating
      party
      to the other party hereto. In the event of the termination of this Agreement
      as
      provided in Section 11.1, this Agreement shall be of no further force or effect,
      except (i) as set forth in Sections 5.2(a), 5.3, 5.4, 11..2, 12, 16 and 17,
      each
      of which shall survive the termination of this Agreement and (ii) nothing herein
      shall relieve any party from liability for any breach of this Agreement or
      willful failure to perform any covenant set forth in this Agreement prior to
      such termination. No termination of this Agreement shall affect the obligations
      of the parties contained in the Confidentiality Agreement, all of which
      obligations shall survive termination of this Agreement in accordance with
      their
      terms.

     

    SECTION
      12. Fees
      and Expenses.
      Except
      as otherwise provided in this Agreement, (a) all fees, costs and expenses of
      Parent or Merger Sub incurred in connection with this Agreement and the
      transactions contemplated hereby, including, without limitation, fees and
      expenses of financial advisors, financial sponsors, legal counsel and other
      advisors, shall be paid by Parent whether or not the Merger is consummated
      and
      (b) all fees, costs and expenses of the Company, the Representative and the
      Company Stockholders to the extent incurred, or required to be incurred prior
      to
      the Closing or arising from any Company action prior to the Closing in
      connection with this Agreement and the transactions contemplated hereby,
      including, without limitation, fees and expenses of financial advisors,
      financial sponsors, legal counsel and other advisors, shall be paid by the
      Company. 

     

    SECTION
      13. Indemnification.

     

    13.1. Indemnification
      of Parent Indemnified Parties.
      Subject
      to Section 13.3 below, each Company Stockholder who accepts payment of
      consideration pursuant to this Agreement upon conversion of the share(s) of
      Company Stock pursuant to Section 2, shall be deemed to have agreed, and hereby
      agrees, to indemnify, defend and hold harmless Parent, Merger Sub, their
      respective affiliates (including, without limitation, following the Effective
      Time, the Surviving Corporation) and their respective directors, officers,
      representatives, successors and assigns (collectively, the “Parent
      Indemnified Parties”)
      shall
      be entitled to be held harmless and indemnified from and against, and shall
      be
      entitled to be compensated and reimbursed for, any and all Damages arising
      from
      or related to any of the following (each a “Parent
      Claim”):

     

    (a) any
      misrepresentation or breach or failure of any representation or warranty made
      by
      the Company or the Representative in this Agreement to be true and correct
      in
      all respects (in each case, as such representation or warranty would read if
      all
      qualifications as to materiality, including, without limitation, each reference
      to the defined term Material Adverse Effect, were deleted
      therefrom);

     

    (b) any
      breach or non-fulfillment of any covenant or agreement to be performed by the
      Company in this Agreement prior to the Effective Time;

     

    (c) any
      amount paid by Parent, the Company or the Surviving Corporation to any Company
      Stockholder with respect to Dissenting Shares pursuant to the DGCL in excess
      of
      the value such Person would have received in the Merger for such Dissenting
      Shares had such shares been converted pursuant to Section 2, and all interest,
      costs, expenses and fees incurred by the Company, Parent or the Surviving
      Corporation in connection with the exercise of all dissenters’ rights under the
      DGCL.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    13.2. Certain
      Limitations.
      Except
      in the event of (i) fraud or willful misconduct of the Company prior to the
      Effective Time or (ii) breaches of the Extended Representation (collectively
      the
“Non-Threshold
      Claims”),
      no
      Parent Indemnified Person shall be entitled to recover any Damages pursuant
      to
      this Section 14 until such time as and except to the extent that the total
      amount of all Damages otherwise indemnifiable pursuant to this Agreement that
      have been directly or indirectly suffered or incurred by the Parent Indemnified
      Parties, or to which any one or more Parent Indemnified Parties has otherwise
      become subject, exceeds $200,000 in the aggregate. Following such time as the
      cumulative amount of such Damages exceeds $200,000 in the aggregate, the Parent
      Indemnified Parties shall be entitled to recover all such Damages (it being
      understood that all Damages related to Non-Threshold Claims shall be disregarded
      for purposes of such $200,000 calculation). 

     

    13.3. Indemnification
      by LLC Holders.
      To the
      extent that each holder of membership interests in DDI LLC (“LLC
      Holder”)
      receives any Merger Consideration, as a condition to such transfer, each LLC
      Holder agrees to be bound by Section 13.1 herein, and failure to agree shall
      render such transfer null and void. If the LLC Holder sells, transfers or
      conveys such Merger Consideration, he shall remain liable during the Survival
      Period for claims under Section 13.1, up to the amount of the Merger
      Consideration he has received.

     

    13.4. Indemnification
      of Company Indemnified Parties.
      The
      Parent shall indemnify, defend and hold harmless the Company and its respective
      affiliates (including, without limitation, following the Effective Time, the
      Surviving Corporation) and their respective directors, officers,
      representatives, successors and assigns (collectively, the “Company
      Indemnified Parties”)
      shall
      be entitled to be held harmless and indemnified from and against, and shall
      be
      entitled to be compensated and reimbursed for, any and all Damages arising
      from
      or related to any of the following (each a “Company
      Claim”):

     

    (a) any
      misrepresentation or breach or failure of any representation or warranty made
      by
      the Parent Parties in this Agreement to be true and correct in all respects
      (in
      each case, as such representation or warranty would read if all qualifications
      as to materiality, including, without limitation, each reference to the defined
      term Material Adverse Effect, were deleted therefrom); or

     

    (b) any
      breach or non-fulfillment of any covenant or agreement to be performed by the
      Parent Parties in this Agreement prior to the Effective Time.

     

    SECTION
      14. Representative.

     

    14.1. Powers
      of the Representative.
      By
      approval of this Agreement and the transactions contemplated hereby by the
      requisite percentage of the Company Stockholders under the DGCL and the Charter,
      and pursuant to the Letters of Transmittal, the Company Stockholders designate
      the Representative to serve as the representative of the Company Stockholders
      with respect to the matters expressly set forth in this Agreement.

     

    (a) The
      Representative shall have and may exercise all of the powers expressly conferred
      upon him, her or it pursuant to this Agreement, which shall include, without
      limitation:

     

    (i) The
      power
      to execute as Representative any other agreement or instrument entered into
      or
      delivered in connection with the transactions contemplated hereby;

     

    (ii) The
      power
      to give or receive any notice or instruction permitted or required under this
      Agreement, or any other agreement, document or instrument entered into or
      executed in connection herewith, to be given or received by any Company
      Stockholder, and each of them (other than notice for service of process relating
      to any Action before a court or other tribunal of competent jurisdiction, which
      notice must be given to each Company Stockholder, individually, as applicable),
      and to take any and all action for and on behalf of the Company Stockholders,
      and each of them, under this Agreement or any other such agreement, document
      or
      instrument;

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    (iii) The
      power
      (subject to the provisions of Section 15.1(c) hereof) to (A) contest, negotiate,
      defend, compromise or settle any Actions for which a Parent Indemnified Party
      may be entitled to indemnification through counsel selected by the
      Representative and solely at the cost, risk and expense of the Company
      Stockholders, (B) agree to, negotiate, enter into settlements and compromises
      of, and comply with orders of courts with respect to such Parent Claims, (C)
      resolve any Parent Claims, (D) take any actions in connection with the
      resolution of any dispute relating hereto or to the transactions contemplated
      hereby by arbitration, settlement or otherwise, and (E) take or forego any
      or
      all actions permitted or required of any Company Stockholder or necessary in
      the
      judgment of the Representative for the accomplishment of the foregoing and
      all
      of the other terms, conditions and limitations of this Agreement;

     

    (iv) The
      power
      to consult with legal counsel, independent public accountants and other experts
      selected by it, solely at the cost and expense of the Company
      Stockholders;

     

    (v) The
      power
      to waive any terms and conditions of this Agreement providing rights or benefits
      to the Company Stockholders (other than the payment of the consideration payable
      to such Company Stockholders pursuant to Section 2 of this Agreement) in
      accordance with the terms hereof and in the manner provided herein);
      and

     

    (vi) The
      power
      to take any actions in regard to such other matters as are reasonably necessary
      for the consummation of the transactions contemplated hereby or as the
      Representative reasonably believes are in the best interests of the Company
      Stockholders.

     

    (b) The
      Representative represents and warrants to Parent and Merger Sub
      that:

     

    (i) The
      Representative has all necessary power and authority to execute and deliver
      this
      Agreement and to carry out his, her or its obligations hereunder and
      thereunder;

     

    (ii) This
      Agreement has been duly executed and delivered by the Representative and,
      assuming the due authorization, execution and delivery of this Agreement by
      Parent, Merger Sub and the Company, constitutes the valid and legally binding
      obligation of the Representative, enforceable against the Representative in
      accordance with its terms, subject to bankruptcy, insolvency, reorganization
      or
      similar laws of general application affecting the rights and remedies of
      creditors, and to general equity principles; and

     

    (c) Each
      Company Stockholder agrees that Parent, Merger Sub, their respective affiliates
      (including, without limitation, after the Effective Time, the Surviving
      Corporation) shall be entitled to rely on any action taken by the
      Representative, on behalf of such Company Stockholder, pursuant to Section 14.1(a)
      above
      (an “Authorized
      Action”),
      and
      that each Authorized Action shall be binding on each Company Stockholder as
      fully as if such Company Stockholder had taken such Authorized Action. Parent
      agrees that the Representative, as the Representative, shall have no liability
      to Parent for any Authorized Action, except to the extent that such Authorized
      Action is found by a final order of a court of competent jurisdiction to have
      constituted fraud or willful misconduct. Each Company Stockholder severally
      (in
      proportion to their ownership of Company Stock immediately prior to the
      Effective Time) agrees to indemnify, defend and hold harmless the Representative
      against all expenses (including reasonable attorneys’ fees), judgments, fines
      and amounts paid in settlement actually and reasonably incurred by the
      Representative in connection with any action, suit or proceeding to which the
      Representative is made a party by reason of the fact it is or was acting as
      the
      Representative pursuant to the terms of this Agreement and any expenses incurred
      by the Representative in connection with the performance of its duties
      hereunder. Each Company Stockholder agrees that none of Parent, Merger Sub,
      their respective affiliates (including, without limitation, after the Effective
      Time, the Surviving Corporation) shall be liable to any Company Stockholder
      for
      any actions taken or omitted by them in reliance upon any instructions, notice
      or other instruments delivered by the Representative. No resignation of the
      Representative shall become effective unless at least thirty (30) days prior
      written notice of the replacement or resignation of such Representative shall
      be
      provided to Parent. Parent, Merger Sub and their respective affiliates
      (including, without limitation, after the Effective Time, the Surviving
      Corporation) shall be entitled to rely at any time after receipt of any such
      notice on the most recent notice so received. If the Representative shall be
      unable or unwilling to serve in such capacity, his, her or its successor who
      shall serve and exercise the powers of the Representative hereunder shall be
      appointed by a written instrument signed by a majority of the Company
      Stockholders. 

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    (d) The
      Representative shall not have by reason of this Agreement a fiduciary
      relationship in respect of any Company Stockholder, except in respect of amounts
      received on behalf of such Company Stockholder. The Representative shall not
      be
      liable to any Company Stockholder for any action taken or omitted by it or
      any
      agent employed by it hereunder or under any other document entered into in
      connection herewith, except that the Representative shall not be relieved of
      any
      liability imposed by law for willful misconduct or fraud. The Representative
      shall not be liable to Company Stockholders for any apportionment or
      distribution of payments made by the Representative in good faith, and if any
      such apportionment or distribution is subsequently determined to have been
      made
      in error, the sole recourse of any Company Stockholder to whom payment was
      due,
      but not made, shall be to recover from other Company Stockholders any payment
      in
      excess of the amount to which they are determined to have been entitled. The
      Representative shall not be required to make any inquiry concerning either
      the
      performance or observance of any of the terms, provisions or conditions of
      this
      Agreement. Neither the Representative nor any agent employed by it shall incur
      any liability to any Company Stockholder by virtue of the failure or refusal
      of
      the Representative for any reason to consummate the transactions contemplated
      hereby or relating to the performance of its other duties hereunder, except
      for
      actions or omissions constituting fraud, bad faith or willful
      misconduct.

     

    14.2. Notices.
      Any
      notice given to the Representative will constitute notice to each and all of
      the
      Company Stockholders at the time notice is given to the Representative. Any
      action taken by, or notice or instruction received from, the Representative
      will
      be deemed to be action by, or notice or instruction from, each and all of the
      Company Stockholders. Parent, Merger Sub, the Company and the Surviving
      Corporation may, disregard any notice or instruction received from any one
      or
      more individual Company Stockholders.

     

    14.3. Agreement
      of the Representative.
      The
      Representative hereby agrees to do such acts, and execute further documents,
      as
      shall be necessary to carry out the provisions of this Agreement.

     

    SECTION
      15. Director
      and Officer Indemnification.

     

    (a) Parent
      and Merger Sub agree that all rights to exculpation and indemnification for
      acts
      or omissions occurring prior to the Effective Time existing as of the date
      of
      this Agreement in favor of each present and former officer, director and
      employee of the Company as provided in the Charter and Bylaws of the Company
      or
      the indemnification agreements between the Company and its directors and
      officers in effect as of the date of this Agreement shall survive the Merger
      and
      shall continue in full force and effect in accordance with their terms for
      three
      (3) years following the Effective Time, and Parent shall cause the Surviving
      Corporation to fulfill and honor such obligations in accordance with their
      terms
      as in effect as of the date of this Agreement.

     

    SECTION
      16. Post-Closing
      Covenants.

     

    16.1. Options.
      Parent
      covenants that as soon as practicable after the Closing, but subject to any
      amendment to its Articles of Association, and any increase in its authorized
      share capital, as may be required therefore, Parent will reserve a number of
      shares equal to 11.6% of its outstanding stock for options for employees of
      the
      Company, which will include the options to be granted pursuant to Section
      2.4(a), and of which no more than 3.9% shall be reserved for options granted,
      or
      to be granted, to Peter Engel. Any new options granted after the Effective
      Time
      (other than any options granted as provided in Section 2.4(a)) will have an
      exercise price equal to the greater of (a) $0.15 and (b) the fair market value
      of the Parent ADRs at the time of the grant. 

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    16.2. Financial
      Statements.
      The
      Company covenants that it will deliver to Parent audited financial statements
      of
      the Company as of and for the year ended December 31, 2007, no later than ninety
      (90) days after the Closing Date.

     

    16.3. Delivery
      of Merger Consideration.
      Parent
      covenants that it shall:

     

    (a) take
      all
      such actions as may be necessary to authorize and deliver (i) all of the
      remaining Merger Consideration within the time period specified pursuant to
      Section 2.2 herein and (ii) an additional 2,761,135 Parent ADRs to Amorin or
      its
      affiliates within the time period specified pursuant to Section 2.4(b) herein,
      including obtaining the Parent Shareholder Approval to authorize of 90,000,000
      additional ordinary shares such that the total authorized share capital of
      the
      Parent shall be 200,000,000 ordinary shares. 

     

    (b) give
      effect to the appointment of directors in accordance with Section 1.5 herein,
      and

     

    (c) approve
      such other actions as may be required to consummate the Merger and the
      transactions contemplated by this Agreement or any provisions of this
      Agreement.

     

    SECTION
      17. Miscellaneous.

     

    17.1. Notices.
      All
      notices, requests, demands, consents and communications necessary or required
      under this Agreement shall be delivered by hand or sent by registered or
      certified mail, return receipt requested, by overnight prepaid courier or by
      facsimile (receipt confirmed) to:

     

    if
      to
      Parent or Merger Sub:

    

    Insignia
      Solutions PLC

    51
      East
      Campbell Avenue,

    Suite
      130

    Campbell,
      California 95008

    Attention:
      George Monk

    Facsimile:
      (408) 874 2602

     

    with
      a
      copy to:

     

    Fenwick
      & West LLP

    555
      California St.

    San
      Francisco, CA 94104

    Attention:
      David K. Michaels

    Facsimile:
      (415) 281-1350

     

    if
      to the
      Company:

    

    DollarDays
      International, Inc.

    7575
      East
      Redfield Road, Suite 201

    Scottsdale,
      AZ 85260 

    Facsimile:
      (480) 922 3764

    Attention:
      Peter Engel

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    with
      a
      copy to:

    

    Greenberg
      Traurig, LLP

    2375
      E.
      Camelback Road

    Suite
      700

    Phoenix,
      Arizona 85016

    Facsimile:
      (602) 445-8615

    Attention:
      Quinn P. Williams, Esq. 

     

    if
      to the
      Representative:

    

    Peter
      Engel

    c/o
      DollarDays International, Inc.

    7575
      East
      Redfield Road, Suite 201

    Scottsdale,
      AZ 85260 

    Facsimile:
      (480) 922 3764

     

    with
      a
      copy to:

    

    Greenberg
      Traurig, LLP

    2375
      E.
      Camelback Road

    Suite
      700

    Phoenix,
      Arizona 85016

    Facsimile:
      (602) 445-8615

    Attention:
      Quinn P. Williams, Esq. 

     

    All
      such
      notices, requests, demands, consents and other communications shall be deemed
      to
      have been duly given or sent three (3) days following the date on which mailed,
      or one (1) day following the date mailed if sent by overnight courier, or on
      the
      date on which delivered by hand or by facsimile transmission (receipt
      confirmed), as the case may be, and addressed as aforesaid. Any notice to be
      given to any Company Stockholders hereunder shall be given to the Representative
      or, if for any reason there ceases to be a Representative, to each Company
      Stockholder.

     

    17.2. Successors
      and Assigns.
      All
      covenants and agreements and other provisions set forth in this Agreement and
      made by or on behalf of any of the parties hereto shall bind and inure to the
      benefit of the successors, heirs and permitted assigns of such party, whether
      or
      not so expressed. None of the parties may assign, transfer or delegate any
      of
      their respective rights or obligations under this Agreement without the consent
      in writing of the Company, Parent and the Representative provided,
      that
      Parent and Merger Sub (including the Surviving Corporation) may, without
      obtaining the prior written consent of Representative, assign any of its rights,
      or delegate any of its obligations, under this Agreement to (a) any affiliate
      of
      Parent, (b) any successor of such party by merger or otherwise, or (c) the
      purchaser of all or substantially all of the assets or stock of such Person.
      The
      Representative shall execute such acknowledgements of such assignments in such
      forms as Parent or Merger Sub (including the Surviving Corporation) may from
      time to time reasonably request. Any purported assignment or delegation of
      rights or obligations in violation of this Section 17.2 is void and of no force
      or effect.

     

    17.3. Interpretation.
      For
      purposes of this Agreement, the following rules of interpretation
      apply:

     

    (a) Descriptive
      Headings.
      The
      headings of the sections and paragraphs of this Agreement have been inserted
      for
      convenience of reference only and shall not be deemed to be part of this
      Agreement.

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    (b) Calculation
      of Time Period.
      When
      calculating the period of time before which, within which or following which
      any
      act is to be done or step taken pursuant to this Agreement, the date that is
      the
      reference date in calculating such period is excluded. If the last day of such
      period is a non-business day, the period in question ends on the next succeeding
      business day.

     

    (c) Currency.
      Any
      reference in this Agreement to $ means U.S. dollars.

     

    (d) Section
      and Similar References.
      Unless
      the context otherwise requires, all references in this Agreement to any
“Section,” “Schedule” or “Exhibit” are to the corresponding Section, Schedule or
      Exhibit of this Agreement.

     

    (e) Mutual
      Drafting.
      The
      parties hereto have participated jointly in the negotiation and drafting of
      this
      Agreement and have been represented by their own legal counsel in connection
      with the transactions contemplated by this Agreement, with the opportunity
      to
      seek advice as to their legal rights from such counsel. In the event an
      ambiguity or question of intent or interpretation arises, this Agreement is
      to
      be construed as jointly drafted by the parties hereto and no presumption or
      burden of proof is to arise favoring or disfavoring any party by virtue of
      the
      authorship of any provision of this Agreement or by reason of the extent to
      which any such provision is inconsistent with any prior draft
      hereof.

     

    17.4. Counterparts.
      This
      Agreement may be executed in two or more counterparts and by the different
      parties hereto on separate counterparts, each of which when so executed and
      delivered shall be an original, but all of which together shall constitute
      one
      and the same instrument.

     

    17.5. Facsimile.
      The
      exchange of signature pages to this Agreement (in counterparts or otherwise)
      by
      facsimile transmission or other electronic transmission shall be sufficient
      to
      bind the parties to the terms and conditions of this Agreement.

     

    17.6. Severability.
      In the
      event that any one or more of the provisions contained herein is held invalid,
      illegal or unenforceable in any respect for any reason in any jurisdiction,
      the
      validity, legality and enforceability of any such provision in every other
      respect and of the remaining provisions hereof shall not be in any way impaired
      or affected (so long as the economic or legal substance of the transactions
      contemplated hereby is not affected in any manner materially adverse to any
      party), it being intended that each of parties’ rights and privileges shall be
      enforceable to the fullest extent permitted by applicable Legal Requirements,
      and any such invalidity, illegality and unenforceability in any jurisdiction
      shall not invalidate or render unenforceable such provision in any other
      jurisdiction (so long as the economic or legal substance of the transactions
      contemplated hereby is not affected in any manner materially adverse to any
      party). If any court of competent jurisdiction determines that any provision
      of
      this Agreement is invalid, illegal or unenforceable, such court has the power
      to
      fashion and enforce another provision (instead of the provision held to be
      invalid, illegal or unenforceable) that is valid, legal and enforceable and
      carries out the intentions of the parties hereto under this Agreement and,
      in
      the event that such court does not exercise such power, the parties hereto
      shall
      negotiate in good faith in an attempt to agree to another provision (instead
      of
      the provision held to be invalid, illegal or unenforceable) that is valid,
      legal
      and enforceable and carries out the parties’ intentions to the greatest lawful
      extent under this Agreement.

     

    17.7. Third
      Parties.
      Except
      as specifically set forth or referred to herein, nothing herein expressed or
      implied is intended or shall be construed to confer upon or give to any Person,
      other than the parties hereto and their permitted successors and assigns, any
      rights or remedies under or by reason of this Agreement or any other
      certificate, document, instrument or agreement executed in connection herewith
      nor be relied upon other than the parties hereto and their permitted successors
      or assigns. The Parent Indemnified Persons not party hereto are entitled to
      the
      rights and remedies of Section 13 hereof. The present and former directors
      and
      officers of the Company are intended to be third party beneficiaries of Section
      15 hereof.

     

    17.8. Certain
      Definitions.
      For
      purposes of this Agreement, (a) an individual will be deemed to have “Knowledge”
of a particular fact or other matter if such individual is actually aware of
      such fact or other matter and (b) the Company will be deemed to have “Knowledge”
of a particular fact or other matter if Peter Engel, is actually aware of such
      fact or other matter or such individual would reasonably be expected to discover
      or otherwise become aware of such fact or other matter by reason of his position
      as a senior officer of the Company or by reason of the duties that a Person
      in a
      similar role would customarily perform, (c) “affiliate” means, with respect to
      any Person, any other Person that, directly or indirectly through one or more
      intermediaries, controls, or is controlled by, or is under common control with,
      such Person, and the term “control” (including the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of
      the power to direct or cause the direction of the management and policies of
      such Person, whether through ownership of voting securities, by contract or
      otherwise, and (d) “Business Day” means any day of the year on which national
      banking institutions in The Commonwealth of Massachusetts and the State of
      New
      York are open to the public for conducting business and are not required or
      authorized to close.

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    17.9. Governing
      Law.
      This
      Agreement, and all matters arising out of or relating to this Agreement and
      any
      of the transactions contemplated hereby, including, without limitation, the
      validity hereof and the rights and obligations of the parties hereunder, shall
      be construed in accordance with and governed by the laws of the State of
      Delaware (without giving effect to the conflicts of laws provisions
      thereof).

     

    17.10. Entire
      Agreement, Not Binding Until Executed.
      This
      Agreement, including the Disclosure Schedule, Schedules and Exhibits, is
      complete, and all promises, representations, understandings, warranties and
      agreements with reference to the subject matter hereof, and all inducements
      to
      the making of this Agreement relied upon by all the parties hereto, have been
      expressed herein or in such Disclosure Schedule, Schedules, and Exhibits and
      this Agreement, including such Disclosure Schedule, Schedules, and Exhibits
      supersede any prior understandings, negotiations, agreements or representations
      by or among the parties, written or oral, to the extent they related in any
      way
      to the subject matter hereof or thereof. Neither this Agreement nor any of
      the
      terms or provisions hereof are binding upon or enforceable against any party
      hereto unless and until the same is executed and delivered by all of the parties
      hereto.

     

    17.11. Amendments;
      No Waiver.
      Subject
      to applicable Legal Requirements, any provision of this Agreement may be amended
      or waived prior to the Effective Time if, but only if, such amendment or waiver
      is in writing and is signed, in the case of an amendment, by each of the parties
      hereto, or, in the case of a waiver, by each party against whom the waiver
      is to
      be effective; provided
      that,
      after approval and adoption of this Agreement and the Merger by the Company
      Stockholders and without their further approval, no amendment or waiver shall
      reduce the amount or change the kind of consideration to be received in exchange
      for any share of Company Stock. No course of dealing and no failure or delay
      on
      the part of any party hereto in exercising any right, power or remedy conferred
      by this Agreement shall operate as a waiver thereof or otherwise prejudice
      such
      party’s rights, powers and remedies. The failure of any of the parties to this
      Agreement to require the performance of a term or obligation under this
      Agreement or the waiver by any of the parties to this Agreement of any breach
      hereunder shall not prevent subsequent enforcement of such term or obligation
      or
      be deemed a waiver of any subsequent breach hereunder. No single or partial
      exercise of any right, power or remedy conferred by this Agreement shall
      preclude any other or further exercise thereof or the exercise of any other
      right, power or remedy.

     

    17.12. Waiver
      of Jury Trial.
      EACH OF
      THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND
      ANY
      ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR
      OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY
      PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
      HEREOF. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
      SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM ANY BREACH.

     

    [Remainder
      of page intentionally blank]`

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement under
      seal
      as of the day and year first above written.

     

    
      	 	
              INSIGNIA
                SOLUTIONS PLC

            
	 	 
	 	
              By:
                /s/ George
                Monk                                               
                

            
	 	
              Name: 
                George Monk

            
	 	
              Title:   
                Chief Financial Officer

            
	 	 
	 	 
	 	
              JEODE
                INC.

            
	 	 
	 	
              
                By:
                  /s/ George
                  Monk                                               
                  

              

            
	 	
              Name: 
                George Monk

            
	 	
              Title:   
                Chief Financial Officer

            
	 	 
	 	 
	 	
              DOLLARDAYS
                INTERNATIONAL, INC.

            
	 	 
	 	
              By:
                /s/ Peter
                Engel                                                    
                

            
	 	
              Name: 
                Peter Engel

            
	 	
              Title:   
                President

            
	 	 
	 	 
	 	
              REPRESENTATIVE

            
	 	 
	 	
              /s/
                Peter
                Engel                                                          
                

            
	 	 
	 	
              Name:  Peter
                Engel

            

    

     

     

    
      
        
          [Signature
            Page to Agreement and Plan of Merger]EXECUTION
      COPY

    
 

    SEPARATION
      AGREEMENT AND RELEASE OF CLAIMS 

    

    THIS
      AGREEMENT is made and entered into by and between NexCen
      Brands, Inc.
      (the
“Company”) and Charles
      A. Zona (the
      “Executive”).

     

    All
      capitalized terms used herein unless otherwise defined in this Agreement shall
      have the meaning assigned to them in the Employment Agreement. 

     

    WHEREAS,
      the Company and Executive entered into an employment agreement made as of
      December 11, 2006 (the “Employment Agreement”); 

     

    WHEREAS,
      Executive’s employment was terminated by the Company without Cause effective as
      of May 30, 2008 (“Termination Date”), and as of such date Executive ceased to
      hold any position as an officer of the Company or any affiliate;
      and

     

    WHEREAS,
      Executive desires to receive separation pay and benefits, and the Company is
      willing to provide separation pay and benefits on the condition that Executive
      enters into this Agreement. 

     

    THEREFORE,
      in consideration of the mutual agreements and promises set forth within this
      Agreement, the receipt and sufficiency of which are hereby acknowledged, the
      Company and Executive agree as follows:

     

    
      	1.	
              Consideration

            

    

     

    In
      consideration of Executive's agreements and promises set forth below, the
      Company will provide to Executive the following separation payments pursuant
      to
      the Employment Agreement:

     

    
      	 	
              a.

            	
              Base
                Salary, Accrued Paid Time Off. The
                Company shall pay to Executive any unpaid Base Salary through and
                including the Termination Date. Executive acknowledges that there
                is no
                declared but unpaid Annual Bonus or any other bonus during the Employment
                Period that is due and owing to the Executive as of the Termination
                Date.
                

            

    

     

    The
      Company shall pay to Executive all accrued but unused paid time during the
      Employment Period through and including the Termination Date. The parties
      acknowledge and agree that as of Termination Date, Executive has accrued
      $29,000.00 of paid time off and has received $24,615.38 of that amount, less
      deductions for federal and/or state income tax withholding, FICA and any other
      deduction from wages required by law or regulation. The Company shall pay the
      remaining $4,384.62 of accrued paid time off, less deductions for federal and/or
      state income tax withholding, FICA and any other deduction from wages required
      by law or regulation, by including such net amount in the next semi-monthly
      installment payment to be made pursuant to subparagraph 1.b. below, following
      execution of this Agreement. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      EXECUTION
        COPY

       

       

    

    
      	 	
              b.

            	
              Semi-Monthly
                Installment Payment.
                The Company shall pay to Executive payments totaling One
                Hundred Fifty Thousand Dollars ($150,000.00)
                (less deductions for federal and/or state income tax withholding,
                FICA and
                any other deduction from wages required by law or regulation), which
                shall
                be paid in substantially equal semi-monthly installments over a period
                of
                six months, beginning no later than June 16, 2008, in accordance
                with the
                Company’s normal payroll practices.

            

    

     

    
      	 	
              c.

            	
              Continued
                Participation in Company’s Group Medical Plan. The
                Company shall continue Executive’s participation in the Company’s group
                medical plan on the same basis as he previously participated, until
                the
                earlier of May
                30, 2009
                or
                the date Executive is provided with health insurance coverage by
                a
                successor employer. Executive shall promptly inform Sue Nam, General
                Counsel of the Company, if and when he is provided with health insurance
                coverage by a successor employer. After
                May 30, 2009, Executive may continue to participate in the
                Company’s group health plans to the extent permitted under the
                Consolidated Omnibus Budget Reconciliation Act (“COBRA”). 

            

    

     

    
      	 	
              d.

            	
              Reimbursable
                Expenses. Executive
                acknowledges and agrees that as of the date of this agreement, he
                has
                received all reimbursable expenses or other entitlements then due
                and
                owing to the Executive. 

            

    

     

    
      	 	
              e.

            	
              Stock
                Options.
                The parties hereby agree that (i) Executive vested as of December
                11, 2007
                in (i) 83,334 shares of
                his initial Option Grant to purchase a total of 250,000 shares of
                the
                Company’s common stock; (ii) Executive vested as of the Termination Date
                in all of his additional stock option grant to purchase a total of
                25,000
                shares of the Company’s common stock; and (iii) Executive voluntarily
                surrendered 166,666 shares of his unvested initial Option Grant.
                Executive’s 108,334 vested stock options shall be exerciseable as of the
                Termination Date and shall remain exercisable by Executive (or his
                estate,
                in the event of his death) until December 31, 2009, following which
                time
                any unexercised stock options shall terminate.

            

    

     

    
      	 	
              f.

            	
              Other
                Benefits.
                Executive shall receive any vested benefits to which Executive is
                entitled
                in accordance with the terms of any of the Company's employee benefit
                plans or programs, including without limitation the Company's 401(k)
                plan.

            

    

     

    The
      terms
      of Paragraph 1 shall have no force if Executive revokes his acceptance of this
      Agreement pursuant to Paragraph 11 (Special Provisions for Age
      Discrimination).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    EXECUTION
      COPY

     

     

    
      	2.	
              No
                Further Payments

            

    

     

    Except
      as
      provided for in Paragraph 1, Executive is not entitled to and will not receive
      any further salary, wages, benefits, severance or separation payments from
      the
      Company. 

     

    
      	3.	
              General
                Release 

            

    

     

    Executive
      on behalf of himself and his heirs, successors and assigns, in consideration
      of
      the performance by the Company of its material obligations under the Employment
      Agreement and this Agreement, do hereby release and forever discharge as of
      the
      date hereof the
      Company,
      its
      Subsidiaries, its Affiliates, each such Person’s respective successors and
      assigns and each of the foregoing Persons’ respective present and former
      directors, officers, partners, stockholders, members, managers, agents,
      representatives, employees (and each such Person’s respective successors and
      assigns) (collectively, the “Released
      Parties”)
      to the
      extent provided below. 

    

    
      	 	
              a.

            	
              Executive
                understands that payments or benefits paid or granted to him under
                this
                Agreement represent, in part, consideration for signing this Agreement
                and
                are not salary, wages or benefits to which he was already entitled.
                Executive understands and agrees that he will not receive the payments
                and
                benefits specified in Paragraph 1 (other than the payments and benefits
                in
                subparagraphs 1.a and 1.f) of this Agreement unless he executes this
                Agreement and does not revoke this Agreement within the time period
                permitted hereafter or breach this
                Agreement.

            

    

    

    
      	 	
              b.

            	
              Executive
                knowingly and voluntarily releases and forever discharges the
                Company
                and the other Released Parties from any and all claims, controversies,
                actions, causes of action, cross-claims, counter-claims, demands,
                debts,
                compensatory damages, liquidated damages, punitive or exemplary damages,
                other damages, claims for costs and attorneys’ fees, or liabilities of any
                nature whatsoever in law and in equity, both past and present (through
                the
                date of this Agreement), whether under the laws of the United States
                or
                another jurisdiction and whether known or unknown, suspected or claimed
                against the
                Company
                or
                any of the Released Parties which Executive, his spouse, or any of
                his
                heirs, executors, administrators or assigns, have or may have, which
                arise
                out of or are connected with his employment with, or his separation
                from,
                the
                Company
                (including, but not limited to, any allegation, claim or violation,
                arising under: Title VII of the Civil Rights Act of 1964, as amended;
                the
                Civil Rights Act of 1991; the Age Discrimination in Employment Act
                of
                1967, as amended (including the Older Workers Benefit Protection
                Act); the
                Equal Pay Act of 1963, as amended; the Americans with Disabilities
                Act of
                1990; the Family and Medical Leave Act of 1993; the Civil Rights
                Act of
                1866, as amended; the Worker Adjustment Retraining and Notification
                Act;
                the Employee Retirement Income Security Act of 1974; any applicable
                Executive Order Programs; the Fair Labor Standards Act; or their
                state or
                local counterparts; or under any other federal, state or local civil
                or
                human rights law, or under any other local, state, or federal law,
                regulation or ordinance; or under any public policy, contract
                or
                tort, or under common law; or arising under any policies, practices or
                procedures of the
                Company
                or
                any of the Released Parties; or any claim for wrongful discharge,
                breach
                of contract,
                infliction of emotional distress, or defamation; or any claim for
                costs,
                fees, or other expenses, including attorneys’ fees incurred in these
                matters (all of the foregoing collectively referred to herein as
                the
                “Claims”); provided, however, that nothing contained in this Agreement
                shall apply to, or release the
                Company
                from, (i) any obligation of the
                Company
                contained in the Employment Agreement or this Agreement to be performed
                after the date hereof, (ii) any vested or accrued benefits pursuant
                to any employee benefit plan, program or policy of the
                Company,
                (iii) any right Executive has to indemnification by the Company (under
                the
                Employment Agreement or otherwise), and (iv) any claims Executive
                may have
                as a member of a class in connection with any securities derivative
                class
                action against the Company.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

      EXECUTION
        COPY

    

    
 

    
      	 	
              c.

            	
              Executive
                represents that he has made no assignment or transfer of any right,
                claim,
                demand, cause of action, or other matter covered by paragraph 3.b.
                above.

            

    

    

    
      	 	
              d.

            	
              Executive
                agrees that this Agreement does not waive or release any rights or
                claims
                that he may have under the Age Discrimination in Employment Act of
                1967
                which arise after the date he executes this Agreement. Executive
                acknowledges and agrees that his separation from employment with
                the
                Company
                in
                compliance with the terms of the Employment Agreement and this Agreement
                shall not serve as the basis for any claim or action (including,
                without
                limitation, any claim under the Age Discrimination in Employment
                Act of
                1967).

            

    

     

    
      	 	
              e.

            	
              In
                signing this Agreement, Executive acknowledges and intends that the
                Agreement shall be effective as a bar to each and every one of the
                Claims
                hereinabove mentioned or implied. Executive expressly consents that
                this
                General Release shall be given full force and effect according to
                each and
                all of its express terms and provisions, including those relating
                to
                unknown and unsuspected Claims (notwithstanding any state statute
                that
                expressly limits the effectiveness of a general release of unknown,
                unsuspected and unanticipated Claims), if any, as well as those relating
                to any other Claims hereinabove mentioned or implied. Executive
                acknowledges and agrees that this waiver is an essential and material
                term
                of this Agreement and that without such waiver the
                Company
                would not have agreed to the terms of the Agreement. Executive covenants
                that he shall not directly or indirectly, commence, maintain or prosecute
                or sue any of the Released Persons either affirmatively or by way
                of
                cross-complaint, indemnity claim, defense or counterclaim or in any
                other
                manner or at all on any Claim covered by this General Release. Executive
                further agrees that in the event he should bring a Claim seeking
                damages
                against the
                Company,
                or in the event he should seek to recover against the
                Company
                in
                any Claim brought by a governmental agency on his behalf, this Agreement
                shall serve as a complete defense to such Claims. Executive further
                agree
                that he is not aware of any pending charge or complaint of the type
                described in paragraph 3.b. as of the execution of this
                Agreement.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    EXECUTION
      COPY

     

     

    
      	4.	
              No
                Admission of Liability. 

            

    

     

    Executive
      agrees that neither this Agreement, nor the furnishing of the consideration
      for
      this Agreement, shall be deemed or construed at any time to be an admission
      by
the
      Company,
      any
      Released Party or Executive of any improper or unlawful conduct.

     

    
      	5.	
              Confidentiality.
                

            

    

     

    Executive
      agrees that this Agreement is confidential and agree not to disclose any
      information regarding the terms of this Agreement, except to his immediate
      family and any tax, legal or other counsel he has consulted regarding the
      meaning or effect hereof or as required by law, and Executive will instruct
      each
      of the foregoing not to disclose the same to anyone. 

    

    Any
      non-disclosure provision in this Agreement does not prohibit or restrict
      Executive (or his attorney) from responding to any inquiry about this Agreement
      or its underlying facts and circumstances by the Securities and Exchange
      Commission, the National Association of Securities Dealers, Inc. or any other
      self-regulatory organization or governmental entity. 

    

    
      	6.	
              Affirmation
                of Employment Agreement. 

            

    

     

    Except
      as
      otherwise provided in this Agreement, the parties hereby expressly re-affirm
      the
      Employment Agreement, including but not limited to the Executive’s obligations
      under Sections 1.5, 1.6, 1.7, 1.8, 1.9 1.10 and 3.1 of the Employment
      Agreement and the Company’s obligations under Section 1.3(g) of the Employment
      Agreement. Notwithstanding anything to the contrary in the Employment Agreement,
      the parties agree that (i) for purposes of Sections 1.8 and 2.1 of the
      Employment Agreement, the definition of “Business”
shall
      be limited to the licensing- businesses of Iconix and Cherokee only; (ii)
      Section 1.8(a) of the Employment Agreement shall not preclude Executive from
      participating in or otherwise being employed by or providing services to any
      Person that purchases the Company’s licensing business or other successor to the
      Company; (iii) in the event Executive participates in or otherwise is employed
      by or provides services to any Person that purchases the Company’s licensing
      business or is a successor to the Company, Section 1.5 of the Employment
      Agreement shall not preclude Executive from using or disclosing any Confidential
      Information or Third Party Information to the extent such disclosure or use
      is
      consistent with Executive’s service with such purchaser or other successor; and
      (iv) Section 1.3(g) of the Employment Agreement shall survive and continue
      in
      full force in accordance with its terms as though Executive continued to be
      an
      executive officer of the Company, notwithstanding Executive’s termination of
      employment with, and service as an officer of, the Company on the Termination
      Date.

    

    
      	7.	
              Validity.
                

            

    

     

    Whenever
      possible, each provision of this Agreement shall be interpreted in such manner
      as to be effective and valid under applicable law, but if any provision of
      this
      Agreement is held to be invalid, illegal or unenforceable in any respect under
      any applicable law or rule in any jurisdiction, such invalidity, illegality
      or
      unenforceability shall not affect any other provision or any other jurisdiction,
      but this Agreement shall be reformed, construed and enforced in such
      jurisdiction as if such invalid, illegal or unenforceable provision had never
      been contained herein. 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    EXECUTION
      COPY

    
 

    
      	8.	
              Successors
                and Assigns

            

    

     

    This
      Agreement shall inure to and be binding upon the parties hereto and to their
      respective heirs, legal representatives, successors, and assigns.

     

    
      	9.	
              Governing
                Law

            

    

     

    This
      Agreement shall be construed in accordance with the laws of the state of New
      York and any applicable federal laws.

     

    
      	10.	
              Special
                Notification

            

    

     

    Because
      this Agreement includes a waiver and release of claims arising under the Age
      Discrimination in Employment Act, federal law provides that Executive may have
      twenty-one (21) days from receipt of the Agreement to review and consider this
      Agreement before executing it. Federal law also provides that the Employer
      must
      advise Executive to consult with an attorney before signing this Agreement.
      Executive understands that it is Executive’s decision whether or not to consult
      an attorney. 

     

    Pursuant
      to federal law, Executive is further advised that the release and covenant
      not
      to sue contained herein do not apply to claims that arise after the execution
      of
      this Agreement. Executive further understands and agrees that Executive is
      receiving additional consideration that Executive would not be entitled to
      receive under the Employment Agreement, any Company policy, practice or plan
      of
      if Executive did not execute this Agreement which includes the waiver and
      release of claims under the Age Discrimination in Employment Act.

     

    Executive
      represents and warrants that he has had ample opportunity to consider this
      Agreement and has had an opportunity to consult an attorney before executing
      this Agreement.

     

    
      	11.	
              Revocation
                of Agreement

            

    

     

    Federal
      law also provides that, because this Agreement waives and releases claims
      arising under the Age Discrimination in Employment Act, that Executive may
      revoke this Agreement within seven (7) days after Executive executes it. For
      this revocation to be effective, written notice must be received by Sue
      Nam, General Counsel,
      no
      later than the close of business on the seventh day after Executive has executed
      this Agreement. If Executive revokes the Agreement, it will not be effective
      or
      enforceable, and Executive will not receive the payments described in Paragraph
      1 (other
      than the payments and benefits in subparagraphs 1.a and 1.f).

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    EXECUTION
      COPY

     

     

    
      	12.	
              Acknowledgement.
                

            

    

     

    BY
      SIGNING THIS AGREEMENT, EXECUTIVE REPRESENTS AND AGREES THAT: 

    

    (a) EXECUTIVE
      HAS READ IT CAREFULLY; 

    

    (b) EXECUTIVE
      UNDERSTANDS ALL OF ITS TERMS AND KNOWS THAT HE IS GIVING UP IMPORTANT RIGHTS,
      INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
      ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
      THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND
      THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; 

    

    (c) EXECUTIVE
      VOLUNTARILY CONSENTS TO EVERYTHING IN THE AGREEMENT; 

    

    (d) EXECUTIVE
      HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY (VIA THIS AGREEMENT) BEFORE
      EXECUTING IT AND EXECUTIVE HAS DONE SO OR, AFTER CAREFUL READING AND
      CONSIDERATION, EXECUTIVE HAS CHOSEN NOT TO DO SO OF HIS OWN VOLITION;

    

    (e) EXECUTIVE
      HAS HAD AT LEAST 21 DAYS FROM THE DATE OF HIS RECEIPT OF THE LANGUAGE OF THE
      GENERAL RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON DECEMBER 11, 2006 TO CONSIDER
      IT; AND THE CHANGES MADE SINCE THE DECEMBER 11, 2006 VERSION OF THE GENERAL
      RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

    

    (f) THE
      CHANGES TO THE LANGUAGE OF THE GENERAL RELEASE SINCE DECEMBER 11, 2006 EITHER
      ARE NOT MATERIAL OR WERE MADE AT HIS REQUEST. 

    

    (g) EXECUTIVE
      HAS SIGNED THIS AGREEMENT KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF
      ANY
      COUNSEL RETAINED TO ADVISE HIM WITH RESPECT TO IT; AND 

    

    (h) EXECUTIVE
      AGREES THAT THE PROVISIONS OF THIS AGREEMENT MAY NOT BE AMENDED, WAIVED, CHANGED
      OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
      REPRESENTATIVE OF THE
      COMPANY
      AND BY
      EXECUTIVE. 

     

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    EXECUTION
      COPY

    
 

    IN
      WITNESS WHEREOF, the Parties have executed this Agreement as of the date
      indicated below. 

     

     

    /s/
      Charles A.
      Zona                                                    

     

    CHARLES
      A. ZONA

    Date: June
      20,
      2008

     

     

     

    NEXCEN
      BRANDS, INC. 

     

     

    By:
      /s/
      Kenneth J.
      Hall                                                

    Name: Kenneth
      J. Hall

    Title:
      Chief Financial Officer

    Date:
      June 26, 2008

     

     

    
      
         

      

      
        8

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