Lorence A. Harmer became a Director of Zagg in 2008.

Later he became part of Zagg’s Audit Committee and during this time the board members determined that Mr.
Harmer is an "audit committee financial expert" within the meaning established by the U.S. Securities and
Exchange Commission.

In June 2008, former board member, Lorance Harmer, introduced the Company to a potential consumer
electronics product, which became known as the ZAGGbox. The ZAGGbox aggregates digital content such as
music, pictures, videos and movies in a single location and allows the user to share the content with most other
networked media players, including mobile devices. After investigating the market opportunity for the
ZAGGbox, the Company determined in June 2009 to license certain rights for the development and sale of the
ZAGGbox in North America. Thereafter, the Company entered into a Distribution and License Agreement with
Teleportall, LLC, the owner of the technology used in the ZAGGbox, under which Teleportall agreed to
manufacture and deliver ZAGGboxes to the Company and the Company was appointed the exclusive distributor
for the ZAGGbox in North American. On June 17, 2009, the Company issued its initial purchase order for
15,000 ZAGGbox units and advanced to Teleportall a total of $1,152,500 representing a $200,000 NRE fee
and $952,500 in payment of 30% of the total purchase price for the 15,000 units ordered by the Company.
Teleportall proceeded to develop and test prototypes of the ZAGGbox and provided periodic progress reports to
the Company. The Company continued to conduct market analysis for the product and requested several
changes to the functions and features of the ZAGGbox. Teleportall did not deliver the product in time for
the 2009 Christmas selling season.
Development of the product continued in 2010 with the expectation that the product would be delivered in time
for the 2010 Christmas selling season. The Company made additional payments for long lead-time parts to
Teleportall in the aggregate amount of $2,747,410. When it became obvious to the Company that the product
would not be ready to market and sell during the 2010 Christmas season, the Company commenced discussions
to restructure the Distribution and License Agreement with Teleportall. During the course of those
discussions, the Company learned in January 2011 that Mr. Harmer had an indirect interest of 25% in
Teleportall.

On March 14, 2011, Lorence A. Harmer resigned as a director of Zagg.

On March 23, 2011, Zagg entered into a settlement agreement with Mr. Harmer and
several entities owned or controlled by Mr. Harmer, pursuant to which the parties agreed
to terminate the Distribution and License Agreement on the following terms:
Mr. Harmer, Teleportall, and certain of their affiliates delivered a promissory note
(the “Note”) dated March 23, 2011 to Zagg in the original principal amount of
$4,125,902 which accrues interest at the rate of LIBOR plus 4% per annum (adjusted quarterly) payable as
follows: (i) interest only payments (a) on September 23, 2011, and thereafter (b) on or before the last day of each
calendar quarter, (ii) 50% of the net profits of each ZAGGbox sale by Teleportall and its affiliates to be applied,
first, to accrued interest and, second, to the principal balance of the Note, and (iii) the unpaid balance due in full
on March 23, 2013. The principal amount of the Note is the aggregate amount of the payments made by us to
Teleportall and the internal cost of the ZAGGbox project incurred by us. The Note is secured by certain
real property, interests in entities that own real property and restricted securities.
Teleportall and the Company entered into a License Agreement on March 23, 2011 under which we licensed to
Teleportall the use certain ZAGG names and marks to sell and distribute the ZAGGbox product. Teleportall shall
pay ZAGG a 10% royalty on net sales of ZAGGboxes per calendar quarter.
 Teleportall and ZAGG entered into a non-exclusive Commission Agreement on March 23, 2011, under which
Teleportall may make introductions of many ZAGG products in all countries where ZAGG does not currently
have exclusive dealing agreements in respect of the marketing, distribution or sale of its products. The
Commission Agreement is for a term of two (2) years; provided that (a) the Commission Agreement shall
automatically terminate concurrent with any uncured default under the Note, and (b) the term may be extended for
an additional term on reasonable terms if Teleportall’s introductions during the initial term result in the purchase
of no less than $25,000,000 of ZAGG products during the initial term. Payment terms of the Commission
Agreement are as follows:

10.0% commission payments on orders received by us from retailers and distributors first introduced to the
company by Teleportall during the first 60 days after the introduction is made (the “Load-in Period”) to be split
50/50 between cash to Teleportall and principal payments on the Note. However, all commission payments will
be paid to ZAGG if Teleportall is in breach of the terms of the Note or any other agreements between the parties;
and

3.0% commission on all orders within the first 24 months after the Load-in Period, and 2.0% thereafter, from any
orders generated in the countries where Teleportall is paid a commission under the terms set forth in the preceding
bullet point (excluding the United States) regardless of Teleportall’s involvement in ZAGG’s receipt of the order
for 5 years. The 3.0% and 2.0% commissions will be split 50/50 between cash to Teleportall and principal
payments on the Note.

2. Payment of $4,125,902 by the Harmer Group to ZAGG. Effective the date hereof, the Harmer
Group will deliver to ZAGG a promissory note (the “Note”) for $4,125,902, a copy of which is attached
hereto as Exhibit A. The Note shall be secured with the following: (i) deeds of trust having a first priority
lien against Harmer’s Wolf Creek lot (the “Wolf Creek Property”) and Harmer’s leasehold interest in
real property located in Weatherford, Texas, and the fee interest in the improvements located thereon (the
“Weatherford Property”), copies of which are attached hereto as Exhibit B, (ii) a collateral assignment
granting a first priority security interest in Harmer’s interests in Holdings, which holds membership
interests in the various limited liability companies, partnerships or other entities which own rights in the
LaQuinta, Mesquite, Oquirrh Mountain Ranch, Hidden Valley I, Draper and Pineview Village
properties and Celio Shares and Warrants (all as defined herein), a copy of which is attached hereto as
Exhibit C, and (iii) a collateral assignment having a first priority security interest in Harmer’s interests in
the Merrill Lynch accounts which hold the Silver Lake III investment, a copy of which is attached
hereto as Exhibit D. If Harmer exercises any options under the Option Agreement he will grant ZAGG a
first priority security interest in 45,000 shares obtained by such exercise (the “Collateral Shares”) under
the terms of a securities pledge agreement in the form attached hereto as Exhibit E (the “ZAGG Shares
Pledge Agreement”).

Concerns about Mr. Harmer and the Harmer Group (incl.Teleportall LLC)
Lorence Harmer was CEO of Polaroid during the time the company fell victim to a Ponzi
Scheme. - http://en.wikipedia.org/wiki/Tom_Petters
Although no charges have been brought against him, Mr. Harmer is still under suspicion for his involvement in
this Ponzi scheme set up through the Petters Group of which he was a senior executive of.

Currently, Mr. Harmer has complaints filed against him in two separate bankruptcy cases (both related to
Petters Ponzi scheme) by different trustees from each case. – see complaint docs for details
In the Petters Company Chapter 11 BK case #: 08-45257, trustee Doug Kelly is attempting to recover
$1,285,000 which he believes Harmer received through fraudulent transfers
In the Polaroid Corporation Chapter 7 BK case #: 08-46617, trustee John Stoebner is attempting to recover
$3,337,000 which he believes Harmer received through fraudulent transfers

The trustee (Doug Kelly) from the Petters Company Chapter 11 BK case #: 08-45257 currently has a complaint
(Adversary case 10-04372) against “Lorence Harmer” to recover money he received from a fraudulent xfer
Filing Date: 10/7/2010

Demand: $1285000

Nature[s] of Suit: 11 Recovery of money/property - 542 turnover of property

13 Recovery of money/property - 548 fraudulent transfer
14 Recovery of money/property - other
Adversary case 10-04372. (11 (Recovery of money/property - 542 turnover of property)), (13 (Recovery of
money/property - 548 fraudulent transfer)), (14 (Recovery of money/property - other)), Complaint by Douglas A.
Kelley, Trustee against Lorence Harmer. Fee Amount $250 (Breyer, K. Jon) (Entered: 10/07/2010) Docket
Number: 609
Douglas A. Kelley, Trustee
Kelley, Wolter & Scott, P.A.
Centre Village Offices
431 S 7th St - Ste 2530
Minneapolis, MN 55415
612-371-9090

The trustee (John Stoebner) from the Polaroid Corporation Chapter 7 BK case #: 08-46617 currently has a
complaint (Adversary case 10-04603) against “Lorence Harmer” to recover money he received from a fraudulent xfer
Filing Date: 12/17/2010

Demand: $3337000

Nature[s] of Suit: 11 Recovery of money/property - 542 turnover of property

13 Recovery of money/property - 548 fraudulent transfer
Adversary case 10-04603. (11 (Recovery of money/property - 542 turnover of property)), (13 (Recovery of
money/property - 548 fraudulent transfer)), Complaint by JOHN R STOEBNER TRUSTEE against Lorence
Harmer. Receipt Number O, Fee Amount $250 (Mitchell, Ralph) (Entered: 12/17/2010)
Trustee
John R. Stoebner
Lapp, Libra, Thomson, Stoebner & Pusch,
One Financial Plaza, Suite 2500
120 South Sixth Street
Minneapolis, MN 55402
612-338-5815

Re: TELEPORTALL, LLC.

Barrett S. Morgan created, owns and solely operates TELEPORTALL, LLC. - He is not mentioned in any sort
of agreements with Zagg

Barrett S. Morgan (aka Stephen Barrett Morgan) was also the former Vice President of New Products and
Technology for Petters Consumer Brands, LLC – He is under suspicion for his involvement in this Ponzi
scheme set up through the Petters Group
On December 10, 2010 a complaint (Adversary case 10-04570) was filed against Mr. Morgan by John Stoebner,
the trustee in the Polaroid Corporation Chapter 7 BK case #: 08-46617. The BK trustee is attempting to recover
money ($35,482.17) he believes Mr. Morgan received through fraudulent transfers
Re: promissory note (the “Note”) dated March 23, 2011 to Zagg in the original principal amount of
$4,125,902 - secured by certain real property, interests in entities that own real property and restricted
securities.
In respect of the Wolf Creek Property, Harmer has paid and satisfied the obligation secured by that certain deed of
trust shown as Item 13 on Section 2, Schedule B of that certain title report issued by First American Title Insurance
Company dated March 10, 2011 (Order No. 041-5374522) (the “Wolf Creek Title Report”), a copy of which is in
Harmer’s possession.
503 N TRAPPERS LOOP RD HEBER CITY, UT 84032
County/FIPS: WASATCH
Legal Description: LOT 63 WOLF CREEK PLAT 4C 160 ACRES.
Concern:
Although Zagg has secured a “Deed of Trust” for this property on March, 23, 2011, nothing is listed on public record
through the “Wasach County Recorder” showing this property was released from the previous security agreement.
As of November 22, 2010, this same property is also recorded (doc#364681) as having a $2,866,201 loan secured
against it by “Northgate Partners” – see mortgage deed copy for further details!
Also, this property is currently listed for sale (MLS #:9985255) at $2,000,000 and the Wasatch county assesses it at
2011 Total Market Value of only $1,2000,000

In respect of the Weatherford Property, Harmer has paid and satisfied the obligation secured by that certain deed of
trust shown
Last: as Item
Although the11settlement
on Schedule C of thatdoesn’t
agreement certainmention
title report
Mr.issued by First
Harmer’s American
personal TitleatInsurance
property Company
6121 VERNESS CV
dated March 15, 2011
SALT LAKE CTY, UT 84121(Commitment No. 11R053909) (the “Weatherford Title Report”), a copy of which is in
Harmer’s
5025, I possession.
do believe it is part of Harmer’s personal Trust “THE LORENCE & ELIZABETH HARMER LIVING
Lots 314, 315,
TRUST” and 316
of which of the
Zagg hasPlat of Lots(March
recently surrounding Lake filed
29th, 2011) Weatherford, Located
a UCC lien in this
against the City
trust…of Weatherford, Parker
County, Texas
Concern:
Lorence Harmer also
This property obtained
has athis
loanproperty infor
against it 2001 from his father
$1,444,177 and itsR. Howard
current Harmer,
market valueJr.isHoward Harmer passed away
only $1,468,000
on May 26, 2004
Similar lots are currently selling from $40,000 to $200,000 depending on size, most are under $80,000
http://www.zillow.com/homedetails/318-W-Lake-Dr-Weatherford-TX-76087/28874817_zpid/
Concern:
They say this is coming out in summer of 2011
Be nice
This to know
property who already
doesn’t appearagreed
to haveto be a Zaggbox
any Dealer?
mortgages prior–to
Who hasof
Deed tried?  - maybe
Trust issuedsomeone
to Zagg should contact
on March, 23,Gary Tanner?
2011. The
http://www.zaggbox.com/dealers.php
current value of this property is likely between $120,000 and $300,000
Where to buy
Contact Gary at ZAGG, Inc. for information on where to buy the ZAGGbox.

Gary Tanner
1-801-263-0699 begin_of_the_skype_highlighting 1-801-263-0699 end_of_the_skype_highlighting Ext 112
[email protected]