AGREEMENT AND PLAN OF MERGER BY AND AMONG INNOVO GROUP INC. JOE'S JEANS, INC. JD HOLDINGS, INC. AND JOSEPH M. DAHAN DATED AS OF FEBRUARY 6, 2007

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

INNOVO GROUP INC.

JOE’S JEANS, INC.

JD HOLDINGS, INC.

AND

JOSEPH M. DAHAN

DATED AS OF FEBRUARY 6, 2007

TABLE OF CONTENTS

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (" Agreement "), dated as of February 6, 2007, by and among Innovo Group Inc., a Delaware corporation  (" Acquiror "), Joe’s Jeans, Inc., a Delaware corporation (" Merger Sub "), JD Holdings, Inc., a California corporation (" Seller ") and Joseph M. Dahan, a resident of California (" Stockholder") . Each of Acquiror, Merger Sub, Seller and Stockholder is a party (" party ") hereto, and one or more of them are parties (" parties ") to this Agreement as the context may require.

WITNESSETH:

WHEREAS, this Agreement contemplates a tax-free merger of Seller with and into Merger Sub in a merger pursuant to Internal Revenue Code Section 368(a)(2)(D). Stockholder will receive Acquiror Common Stock in exchange for its Seller Common Stock.

WHEREAS, Stockholder owns all of the issued and outstanding capital stock of Seller; and

WHEREAS, the Boards of Directors of Acquiror and Seller each have determined that it is advisable and in the best interests of their respective companies and their stockholders to consummate the business combination transactions provided for herein, including the merger of Seller with and into Merger Sub subject to the terms and conditions set forth herein; and

WHEREAS, the parties desire to provide for certain undertakings, conditions, representations, warranties and covenants in connection with the transactions contemplated hereby.

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

ARTICLE I
THE MERGER

1.1    The Merger    Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.2 hereof), Seller shall be merged with and into Merger Sub (the " Merger ") in accordance with the Delaware General Corporation Law (the " DGCL ") with Merger Sub as the surviving corporation, (hereinafter sometimes called the " Surviving Corporation "), which shall continue its corporate existence under the laws of the State of Delaware as a subsidiary of Acquiror, and the separate corporate existence of Seller shall terminate. The Merger shall in all respects have the effects provided in Section 1.5.

1.2    Effective Time    The Merger shall become effective on the date and at the time that a Certificate of Merger is filed with the Secretary of State of the State of Delaware pursuant to Section 103 of the DGCL, unless a later date and time is specified as the effective time in such documents, provided that the parties shall cause the Merger to be effective no later than the day following the date on which the Closing occurs (the " Effective Time "). A closing (the " Closing ") shall take place at 10:00 a.m. on the fifth Business Day (the " Closing Date ") following the receipt of all necessary approvals and consents of any governmental or regulatory authority, agency, court, commission or other entity, domestic or foreign (" Governmental Entity "), all required shareholder approvals, including but not limited to, the required approval by Acquiror’s shareholders, and the expiration of all statutory waiting periods in respect thereof and the satisfaction or waiver, to the extent permitted hereunder, of the conditions to the consummation of the Merger specified in Article VI of this Agreement (other than the delivery of certificates, instruments and documents to be delivered at the Closing), at the offices of Acquiror, or at such other place and time as the parties may mutually agree upon. For purposes of this Agreement, a Business Day (" Business Day ") is any day that banks located in the State of California are not permitted or required to be closed, except a

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Saturday or Sunday. At the Closing, there shall be delivered to Acquiror and Seller the certificates and other documents required to be delivered under Article VI hereof.

1.3    The Articles of Incorporation and Bylaws of the Surviving Corporation    The Certificate of Incorporation and the Bylaws of Merger Sub shall be the Certificate of Incorporation and the Bylaws of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law.

1.4    Directors and Officers    Immediately after the Effective Time, the directors of the Surviving Corporation shall consist of the directors of Merger Sub, in office immediately prior to the Effective Time, until their respective successors are duly elected, appointed or qualified or until their earlier death, resignation or removal in accordance with the Certificate of Incorporation and the Bylaws of the Surviving Corporation. The officers of Merger Sub shall, from and after the Effective Time, continue as the officers of the Surviving Corporation until their successors shall have been duly elected, appointed or qualified or until their earlier death, resignation or removal in accordance with the Certificate of Incorporation and the Bylaws of the Surviving Corporation.

1.5    Effect of the Merger    From and after the Effective Time, the separate existence and corporate organization of Seller shall cease, and all right, title and interest in and to all real estate and other property owned by Seller shall be allocated to and shall be vested in Merger Sub as the surviving corporation, without reversion or impairment, without further act or deed, and without any transfer or assignment having occurred (but subject to any existing liens or other encumbrances thereon as set forth in Schedule 3.9 (a), and all liabilities and obligations of Seller shall be allocated to Merger Sub as the surviving corporation, as primary obligor therefor and, except as set forth herein, no other person shall be liable therefor, and all proceedings pending by or against the Seller shall be continued by or against Merger Sub as the surviving corporation, and all liabilities, obligations, assets or rights associated with such proceedings shall be allocated to and vested in Merger Sub as the surviving corporation.

ARTICLE II
MERGER CONSIDERATION

2.1    Merger Consideration    (a) All of the shares of Acquiror and Merger Sub issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding after the Effective Time and shall be unaffected by the Merger. The manner and basis of converting the shares of common stock, no par value, of Seller (the " Seller Common Stock ") upon consummation of the Merger shall be as follows:  At the Effective Time, by virtue of the Merger and without any action on the part of Acquiror, Merger Sub, Seller or Stockholder, all of the Seller Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into Fourteen Million (14,000,000) shares (the " Merger Consideration ") of common stock of Acquiror, par value $.10 per share (the " Acquiror Common Stock) ".

(b)   At the Effective Time, Acquiror shall pay or cause to be paid to Stockholder Three Hundred Thousand and 00/100 Dollars ($300,000.00) in immediately available funds.

2.2    Exchange of Seller Common Stock Certificates    (a) Seller and Acquiror shall designate a mutually acceptable person to serve as exchange agent (the " Exchange Agent ") in connection with the Merger. The Exchange Agent shall provide appropriate stock certificate transmittal materials to the former holders of Seller Common Stock promptly after the Effective Time (which transmittal materials shall specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of a certificate or certificates formerly representing shares of Seller Common Stock to the Exchange Agent) and instructions for use in effecting the surrender to the Exchange Agent of certificates of Seller Common Stock in exchange of the Merger Consideration. After the Effective Time, the holder of shares of Seller Common Stock issued and outstanding immediately prior to the Effective Time shall surrender for cancellation the certificate or certificates representing such shares to the Exchange Agent, together with a letter of transmittal duly executed and completed in accordance with the instructions thereto and any other

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documents reasonably required by the Exchange Agent or Acquiror, and promptly upon surrender of such certificates and other documents, Exchange Agent, on behalf of Acquiror, shall deliver the Merger Consideration to Stockholder in exchange for each such share, without interest. Each certificate for Seller Common Stock so surrendered and all transmittal materials shall be duly completed and endorsed as the Exchange Agent may require. Exchange Agent shall not be obligated to deliver the Merger Consideration to which Stockholder is entitled as a result of the Merger until Stockholder surrenders his certificate or certificates representing shares of Seller Common Stock for exchange as provided in this Section 2.2. After the Effective Time, each certificate that represented outstanding shares of Seller Common Stock prior to the Effective Time shall be deemed for all corporate purposes (other than the payment of dividends and other distributions to which Stockholder may be entitled) to evidence only the right of Stockholder to receive the Merger Consideration in exchange for each such share or as provided in Section 2.1 of this Agreement.

(b)   From and after the Effective Time, Stockholder shall cease to have any rights with respect to shares of Seller Common Stock represented thereby except as otherwise provided in this Agreement or by applicable law. All rights to receive the Merger Consideration issued upon conversion of the shares of Seller Common Stock pursuant to this Article II shall be deemed to have been paid or issued, as the case may be, in full satisfaction of all rights pertaining to such shares of Seller Common Stock.

(c)   Promptly after the Effective Time, Acquiror shall deposit with the Exchange Agent (defined above) certificates representing shares equal to the aggregate Merger Consideration (the " Exchange Fund ") for the benefit of Stockholder.

2.3    Additional Actions    If at any time after the Effective Time the Surviving Corporation shall consider that any further assignments or assurances in law or any other acts are necessary or desirable to carry out the purposes of this Agreement, Seller and its proper officers and directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such proper deeds, assignments and assurances in law and to do all acts necessary or proper to vest, perfect or confirm title to and possession of such rights, properties or assets in the Surviving Corporation and otherwise to carry out the purposes of this Agreement; and the proper officers and directors of the Surviving Corporation are fully authorized in the name of Seller or otherwise to take any and all such action.

2.4    Investor Rights Agreement    Acquiror and Stockholder shall enter into an Investor Rights Agreement dated as of the Closing Date, in the form of Schedule 6.3(c) hereto (the "Investor Rights Agreement") which shall provide for, among other things, the registration of the Acquiror Common Stock constituting the Merger Consideration.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

Seller and Stockholder jointly and severally make the representations and warranties to Acquiror contained in this Article III, except as set forth in the disclosure schedule attached hereto as Exhibit B (the " Seller Disclosure Schedule "). The Seller Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections contained in this Article III. Disclosure in any section of the Disclosure Schedule shall be effectively made whether or not expressly excepted in the corresponding section of this Agreement. The following representations and warranties are made as of the date of this Agreement. The phrase " delivered to Acquiror " or " made available to Acquiror " or any phrase of similar import means that Seller has delivered, provided access to or made certain items available for review and copying to Acquiror or its counsel. For purposes of this Article III, the phrase " to the Knowledge of Seller " or any phrase of similar import shall be deemed to refer to the actual knowledge of Seller and/or Stockholder after reasonable investigation.

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3.1    Corporate Organization    (a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of California. Seller has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not have a material adverse effect on the business, operations, assets or financial condition of Seller. Seller Disclosure Schedule 3.1(a) sets forth true and complete copies of the Charter and Bylaws of Seller as in effect on the date hereof.

(b)   Seller is the successor by merger dated December 18, 2006, of JD Design, LLC, a California limited liability company. As such, the phrase "to the Knowledge of Seller" includes knowledge and information of JD Design, LLC obtained by Seller due to the merger between Seller and JD Design, LLC.

3.2    Capitalization     The authorized capital stock of Seller consists of 100,000 shares of the Seller Common Stock, of which 1,000 are issued and outstanding as of the date hereof. All issued and outstanding shares of capital stock of Seller have been duly authorized and validly issued and are fully paid, non-assessable and free of preemptive rights. Seller is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the transfer, purchase or issuance of any shares of capital stock of Seller or any securities representing the right to purchase or otherwise receive any shares of such capital stock or any securities convertible into or representing the right to purchase or subscribe for any such stock.

3.3    Authority; No Violation    (a) Subject to the approval of this Agreement and the Plan of Merger and the transactions contemplated hereby and thereby by Stockholder, Seller has full corporate power and authority to execute and deliver this Agreement and the Plan of Merger and to consummate the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the Plan of Merger and the consummation of the transactions contemplated hereby and thereby have been duly and validly approved by the Board of Directors of Seller. Except for the approval of Stockholder of this Agreement and the Plan of Merger, no other corporate proceedings on the part of Seller are necessary to consummate the transactions so contemplated. This Agreement and the Plan of Merger have been duly and validly executed and delivered by Seller and constitute valid and binding obligations of Seller, enforceable against it in accordance with and subject to their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and except that the availability of equitable remedies (including specific performance) is within the discretion of the appropriate court.

(b)   The execution and delivery of this Agreement and the Plan of Merger by Seller, the consummation by Seller of the transactions contemplated hereby and thereby in accordance with the terms hereof and thereof, and compliance by Seller with any of the terms or provisions hereof or thereof, do not and will not (i) violate any provision of the Articles or other governing instrument or Bylaws of Seller, (ii) assuming that the consents and approvals set forth below are duly obtained, violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Seller or any of its properties or assets, or (iii) violate, conflict with, result in a breach of any provisions of, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of, accelerate the performance required by, require the payment of any termination or like fee, or result in the creation of any lien, security interest, charge or other encumbrance upon any of the respective properties or assets of Seller under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Seller is a party, or by which any of its properties or assets may be bound or affected. Except as set forth in Seller Disclosure Schedule 3.3(b) and for consents and approvals of or filings or registrations with or notices to the Secretary of State of the State of Delaware and Stockholder, no consents or approvals of or

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filings or registrations with or notices to any Governmental Entity or non-governmental third party are required on behalf of Seller in connection with (a) the execution and delivery of this Agreement and the Plan of Merger by Seller and (b) the consummation by Seller of the Merger and the other transactions contemplated hereby and by the Plan of Merger.

3.4    Financial Statements    (a) Seller has previously delivered to Acquiror copies of the consolidated balance sheets of JD Design, LLC as of December 31, 2005, 2004 and 2003 and the related consolidated statements of income, changes in members’ equity and cash flows for the years ended December 31, 2005, 2004 and 2003, in each case accompanied by the audit reports provided by independent public accountants, as well as the unaudited consolidated balance sheet of any predecessor of Seller as of June 30, 2006 and the related unaudited consolidated statements of income, changes in members’ equity and cash flows for the three and twelve-month periods ended September 30, 2006 and 2005.

(b)   Each of the financial statements referred to in this Section 3.4 fairly represents the financial position of Seller as of the respective dates of such financial statement and has been or will be, as the case may be, prepared in accordance with U.S. generally accepted accounting principles (" GAAP ") consistently applied during the periods involved; provided, however, that the interim statements are subject to normal year-end adjustments.

3.5    Legal Proceedings    Seller is not a party to any, and there are no pending or, to the Knowledge of Seller, threatened legal, administrative, arbitration or other proceedings, claims, actions or governmental investigations of any nature against Seller. Seller is not a party to any order, judgment or decree which affects the business, operations, assets or financial condition of Seller.

3.6    Taxes and Tax Returns    (a) Seller (and/or JD Design, LLC) has duly filed (and until the Effective Time will so file) all returns, declarations, reports, information returns and statements (" Returns ") required to be filed or sent by or with respect to them in respect of any Taxes (as hereinafter defined) and has duly paid (and until the Effective Time will so pay) all Taxes due and payable other than Taxes or other charges which (i) are being contested in good faith (and are set forth on Seller Disclosure Schedule 3.6(a)) and (ii) have not finally been determined. Seller has established (and until the Effective Time will establish) on its books and records reserves that are adequate for the payment of all Taxes not yet due and payable, whether or not disputed or accrued, as applicable. Except as set forth in Seller Disclosure Schedule 3.6(a), (i) the federal income tax returns of Seller have not been audited by the Internal Revenue Service (the " IRS ") (or are closed to examination due to the expiration of the applicable statute of limitations), and (ii) the California franchise tax returns of Seller have not been audited by applicable authorities (or are closed to examination due to the expiration of the statute of limitations), and in the case of both (i) and (ii) no deficiencies were asserted as a result of such examinations which have not been resolved and paid in full. All Returns filed (and until the Effective Time to be filed) are or will be, as applicable, complete and accurate. There are no audits or other administrative or court proceedings presently pending nor any other disputes pending, or claims asserted in writing for, Taxes or assessments upon Seller, and no taxing authority has given written notice of the commencement of any audit, examination or deficiency action. Seller has not given any currently outstanding waivers or comparable consents regarding the application of the statute of limitations with respect to any Taxes or Returns.

(b)   Except as set forth in Seller Disclosure Schedule 3.6(b), Seller (and/or JD Design, LLC) (i) has not requested any extension of time within which to file any Return which Return has not since been filed, (ii) is not a party to any written or unwritten agreement, arrangement or understanding providing for the allocation or sharing of, or indemnification with respect to, Taxes, (iii) is not required to include in income any adjustment pursuant to Section 481(a) of the Code by reason of a voluntary change in accounting method initiated by Seller (nor does Seller have any Knowledge that the IRS has proposed any such adjustment or change of accounting method), (iv) has not filed a consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply, (v) has not been a "distributing corporation"

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or a "controlled corporation" in a transaction intended to qualify under Section 355(a) of the Code within the past five years, (vi) has not ever been a member of a consolidated, combined or unitary Tax group or (vii) has not ever engaged in any "listed transaction" within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

(c)   For purposes of this Agreement, " Taxes " shall mean all taxes, charges, fees, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment (including withholding, payroll and employment taxes required to be withheld with respect to income paid to employees), excise, estimated, severance, stamp, occupation, property or other taxes, customs duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority (domestic or foreign).

(d)   No liens for Taxes exist with respect to any of the assets or properties of Seller, except for liens for Taxes not yet due and payable.

(e)   Seller is not an S corporation within the meaning of Section 1361(a) of the Code.

(f)    None of the assets of Seller (i) is tax-exempt use property within the meaning of Section 168(h) of the Code, (ii) directly or indirectly secures any debt the interest on which is exempt under Section 103(a) of the Code or (iii) is property that is required to be treated as being owned by a person (other than Seller) pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, as in effect immediately before the enactment of the Tax Reform Act of 1986.

(g)   Seller will not be required to include in a taxable period ending after the Effective Time taxable income attributable to income that economically accrued in a taxable period ending on or before the Effective Time as a result of the installment method of accounting, the completed contract method of accounting, any method of reporting revenue from contracts which are required to be reported on the percentage of completion method (as defined in Section 460(b) of the Code) but that were reported using another method of accounting, or any other method of accounting.

(h)   Seller is not a party to any contract or plan which, individually or collectively with respect to any person, could give rise to the payment of any amount that would not be deductible by Seller or Seller Subsidiary, by reason of Section 162(a)(1), 162(m) or 280G of the Code.

(i)    Seller is not a partner or a member of any partnership or joint venture, or any other entity classified as a partnership for federal income tax purposes.

(j)    Seller has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income tax within the meaning of Section 6662 of the Code.

3.7    Employee Benefit Plans.    Seller has no plan or arrangement for employee benefit plans.

3.8    Compliance with Applicable Law   ( a) Seller has all permits, licenses, certificates of authority, orders and approvals of, and has made all filings, applications and registrations with Governmental Entities that are required in order to permit it to carry on its business as it is presently being conducted; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect; and to the Knowledge of Seller, no suspension or cancellation of any of the same is threatened.

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(b)   Seller is not in violation of its respective Articles or other governing instrument or Bylaws, or of any applicable federal, state or local law or ordinance or any order, rule or regulation of any Governmental Entity, or in default with respect to any order, writ, injunction or decree of any court, or in default under any order, license, regulation or demand of any Governmental Entity; and Seller has not received any written notice from any Governmental Entity asserting that Seller is in violation of any of the foregoing. Seller is not subject to any regulatory or supervisory cease and desist order, agreement, written directive, memorandum of understanding or written commitment and has not received any written communication requesting that it enter into any of the foregoing.

3.9    Certain Contracts    (a) Except as disclosed in Seller Disclosure Schedule 3.9(a), Seller is not a party to, is not bound or affected by, and does not receive and is not obligated to pay benefits under (i) any agreement, arrangement or commitment, including any agreement, indenture or other instrument relating to the borrowing of money by Seller or the guarantee by Seller of any obligation; (ii) any agreement, arrangement or commitment relating to the employment of a consultant or the employment, retirement, election or retention in office of any present or former director, officer or employee of Seller; (iii) any contract, agreement or understanding with a labor union; (iv) any agreement, arrangement or understanding pursuant to which any payment (whether of severance pay or otherwise) became or may become due to any director, officer or employee of Seller upon execution of this Agreement or upon or following consummation of the transactions contemplated by this Agreement (either alone or in connection with the occurrence of any additional acts or events); (v) any agreement, arrangement or understanding to which Seller is a party or by which it is bound which limits the freedom of Seller to compete in any line of business or with any person, or that involves any restriction of the geographic area in which, or method by which, it may carry on its business (other than as may be required by law or any regulatory agency); (vi) any joint venture, partnership or similar agreement, arrangement or understanding providing for the sharing of profits, losses, costs or liabilities by Seller with any other person; or (vii) any other agreement, arrangement or understanding to which Seller is a party and which is material to the business, operations, assets or financial condition of Seller, in each of the foregoing cases whether written or oral; (each such agreement listed, or required to be listed, in this Section 3.9(a) is referred to herein as a " Seller Agreement ").

(b)   Seller is not in default or in non-compliance under any Seller Agreement and there has not occurred any event that with the lapse of time or the giving of notice, or both, would constitute such a default or non-compliance. Each Seller Agreement is legal, valid, binding and enforceable against Seller and, to the Knowledge of Seller, the other parties thereto in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and except that the availability of equitable remedies (including specific performance) is within the discretion of the appropriate court. With respect to each Seller Agreement, such Seller Agreement is in full force and effect in accordance with its terms; all rents and other monetary amounts that may have become due and payable thereunder have been paid; and the Merger will not constitute a default or cause for termination or modification of any such Seller Agreement.

3.10    Properties and Insurance    (a) All real and personal property, including intellectual property, owned by Seller or presently used by Seller in its business is in an adequate condition (ordinary wear and tear excepted) and is sufficient to carry on the business of Seller in the ordinary course of business consistent with its past practices. Seller has good and marketable title to all its assets and properties, whether real or personal, tangible or intangible, and such assets and properties are not subject to any encumbrances, liens, mortgages, security interests or pledges, except as set forth on Schedule 3.10(a).

(b)   Seller Disclosure Schedule 3.10(b) sets forth a list of all policies of fire, theft, public liability and other insurance (including, without limitation, fidelity bonds insurance) maintained by Seller at the date thereof. The business operations and all insurable properties and assets of Seller are insured for their benefit against all risks which, in the reasonable judgment of the management of Seller, should be insured

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against, in each case, under valid, binding and enforceable policies or bonds issued by insurers of recognized responsibility, in such amounts with such deductibles and against such risks and losses as are, in the opinion of the management of Seller, adequate for the business engaged in by Seller. As of the date hereof, Seller has not received any written notice of cancellation or written notice of a material amendment of any such insurance policy or bond or is in default under such policy or bond, no coverage thereunder is being disputed, and all material claims thereunder have been or will be filed in a timely fashion.

3.11    Minute Books    The minute books, including any attachments thereto, of Seller contain complete and accurate records of all meetings and other corporate action held or taken by its Boards of Directors (including committees of their respective Boards of Directors) and stockholders.

3.12    Affiliate Transactions    Except as disclosed in Seller Disclosure Schedule 3.12 and except as specifically contemplated by this Agreement, Seller has not engaged in or agreed to engage in (whether in writing or orally) any transaction with any "affiliate," as such term is defined in Rule 405 under the Securities Act of 1933, as amended (the "1933 Act").

3.13    Broker Fees    Neither Seller, nor any of its directors or officers, nor Stockholder has employed any consultant, broker or finder or incurred any liability for any consultant’s, broker’s or finder’s fees or commissions in connection with any of the transactions contemplated by this Agreement.

3.14    Employees; Compensatio n   Seller has disclosed on Seller Disclosure Schedule 3.14 a complete and correct list of the name, age, position, rate of compensation and any incentive compensation arrangements, bonuses or commissions or fringe or other benefits, whether payable in cash or in kind, of (i) each director and employee of Seller, (ii) each independent contractor, consultant and agent of Seller who has received or is entitled to payments and/or benefits of $25,000 or more on an annual basis during fiscal year 2006 or who is proposed to receive or be entitled to payments and/or benefits of $25,000 or more on an annual basis during fiscal year 2007, and (iii) each other person to whom Seller pays or provides, or has an obligation, agreement (written or unwritten), policy or practice of paying or providing, retirement, health, welfare or other benefits of any kind or description whatsoever.

3.15    Intellectual Property    (a) Seller has disclosed in Seller Disclosure Schedule 3.15 the Intellectual Property (as defined below) owned, licensed or otherwise possessed by Seller, including a complete and accurate list of all material U.S. and foreign (A) trademark or service mark registrations and applications, (B) copyright registrations and applications, (C) internet domain names, and (D) the name(s) and address(es) of the registered owner of such Intellectual Property, if not the Seller. Seller does not own any patents or patent applications. Seller owns or has the valid right to use, in each case free and clear of all material liens (except as otherwise disclosed on Schedule 3.16 (a) attached hereto), all applications, trademarks, service marks, trademark or service mark registrations and applications, trade name, logos, designs, samples, patterns, sketches, artwork, Internet domain names, slogans and general intangibles of like nature, together with all goodwill related to the foregoing, copyrights, copyright registrations, renewals and applications, technology, trade secrets and other confidential information, know-how, proprietary processes, licenses, agreements and all other material proprietary rights (collectively, the " Intellectual Property ") used in the business of Seller as it currently is conducted.

(b)   The ownership or right to use such Intellectual Property of Seller (i) has not been challenged in any prior litigation, (ii) is not being challenged in any pending litigation, and (iii) is not, to the Knowledge of Seller, the subject of any threatened or proposed litigation. For purposes of this paragraph 3.15(b), the term "litigation" shall not be deemed to include trademark applications and related oppositions and/or proceedings against any Intellectual Property entered into in the normal course of business.

(c)   The conduct of the business of Seller as currently conducted or planned by Seller to be conducted does not, in any material respect, infringe upon (either directly or indirectly, such as through contributory

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infringement or inducement to infringe), dilute, misappropriate or otherwise violate any Intellectual Property owned and controlled by any third party. Seller has not entered into any agreement to indemnify any other person against any charges of infringement of any Intellectual Property, other than indemnity provisions arising in the ordinary course of business, such as those in purchase orders, invoices or similar sales-related documents.

3.16    Full Disclosure    No representation or warranty of the Seller contained in this Agreement, the Seller Disclosure Schedule or in any agreement, document or certificate delivered by Seller to Acquiror or Merger Sub pursuant to this Agreement (a) contains or at the Closing will contain any untrue statement of a material fact or (b) omits or at the Closing will omit to state a material fact necessary to make the statements herein or therein not misleading, in light of the circumstances under which such statements were or will be made.

3.17    Investment Representations by Stockholder    (a) Stockholder will, on the Closing Date, be an "accredited investor" within the meaning of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"). Stockholder will acquire the shares of Acquiror Common Stock solely for the purpose of investment, for his own account, and not with a view to any distribution thereof within the meaning of Section 2(11) of the Securities Act.

(b)   Stockholder understands that the shares of Acquiror Common Stock have not been registered under the Securities Act.

(c)   Stockholder, along or in conjunction with his advisors, has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the shares of Acquiror Common Stock and of making an informed investment decision with respect thereto.

(d)   Stockholder is able to bear the economic risk of an investment in the shares of Acquiror Common Stock.

(e)   Stockholder and his advisors have been given access to all documents, books and additional information concerning the Acquiror and its subsidiaries which they have requested. Stockholder has been represented by legal counsel and financial advisors in this transaction and such advisors have been given the opportunity to ask questions of, and receive answers from, the officers of the Acquiror and its subsidiaries concerning the affairs and business and financial condition of the Acquiror and its subsidiaries. Stockholder has conducted such investigations in making a decision to enter into this Agreement and the transactions contemplated herein as Stockholder and his advisors have deemed necessary and advisable.

3.18    No Violation; Stockholder    The execution and delivery of this Agreement and the Plan of Merger by Stockholder, the consummation by