Exhibit 10.1
 

AGREEMENT AND PLAN OF MERGER

July 1, 2006
 
 
 

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TABLE OF CONTENTS
 

 
 Page
SECTION ONE
1

1.
The Merger
1

 
1.1
The Merger
1
 
1.2
Purchase Price
2
 
1.3
Closing; Effective Time
2
 
1.4
Effect of the Merger
2
 
1.5
Articles of Incorporation; Bylaws
2
 
1.6
Directors and Officers
2
 
1.7
Effect on Capital Stock
3
 
1.8
Surrender of Certificates
3
 
1.9
No Further Ownership Rights in MTG Shares
4
 
1.10
Innofone Charter Documents
4
 
1.11
Taking of Necessary Action; Further Action
4

   
SECTION TWO
4

2.
Representations and Warranties of MTG and MTG Shareholders
4

 
2.1
Organization; Subsidiaries
5
 
2.2
Articles of Incorporation and Bylaws
5
 
2.3
Capital Structure
5
 
2.4
Authority
5
 
2.5
No Conflicts; Required Filings and Consents
5
 
2.6
Financial Statements
6
 
2.7
Absence of Undisclosed Liabilities
6
 
2.8
Absence of Certain Changes
7
 
2.9
Litigation
6
 
2.10
Restrictions on Business Activities
6
 
2.11
Permits; Company Products; Regulation
7
 
2.12
Title to Property
7
 
2.13
Intellectual Property
7
 
2.14
Taxes
8
 
2.15
Employee Matters
9
 
2.16
Material Contracts
9
 
2.17
Interested Party Transactions
10
 
2.18
Insurance
10
 
2.19
Compliance With Laws
10
 
2.20
Minute Books
10
 
2.21
Complete Copies of Materials
10
 
2.22
Brokers’ and Finders’ Fees
10
 
2.23
No Vote Required
11
 
2.24
Third Party Consents
11
 
2.25
Representations Complete
11

 
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SECTION THREE
11

3.
Representations and Warranties of Acquiror
11

 
3.1
Organization, Standing and Power
11
 
3.2
Capital Structure
11
 
3.3
Authority
12
 
3.4
No Conflict; Required Filings and Consents
12
 
3.5
SEC Documents; Financial Statements
12
 
3.6
Absence of Undisclosed Liabilities
13
 
3.7
Absence of Certain Changes
13
 
3.8
Litigation
13
 
3.9
Governmental Authorization
13
 
3.10
Compliance With Laws
14
 
3.11
Broker’s and Finders’ Fees
14
 
3.12
Accounting and Tax Matters
14

   
SECTION FOUR
14

4.
Conduct Prior to the Effective Time
14

 
4.1
Conduct of Business of MTG and Innofone
14
 
4.2
Conduct of Business of MTG
15
 
4.3
No Solicitation
16

   
SECTION FIVE
17

5.
Additional Agreements
17

 
5.1
Best Efforts and Further Assurances
17
 
5.2
Consents; Cooperation
17
 
5.3
Access to Information
17
 
5.4
Confidentiality
18
 
5.5
Public Disclosure
18
 
5.6
State Statutes
18
 
5.7
Filings or Notices Pursuant to Securities Laws
18
 
5.8
Unamimous Consent of Stockholders
19
 
5.9
Acquisition of Innofone Common Stock
19
 
5.10
Employment Agreements
21
 
5.11
Innofone Restructuring
21

     SECTION SIX
 22

6.
Conditions to the Merger
22

 
6.1
Conditions to Obligations of Each Party to Effect the Merger
22
 
6.2
Additional Conditions to Obligations of MTG
22
 
6.3
Additional Conditions to the Obligations of Innofone
23

    SECTION SEVEN
 24

7.
Termination, Amendment and Waiver
24

 
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7.1
Termination
24
 
7.2
Effect of Termination
25
 
7.3
Expenses and Termination Fees
25
 
7.4
Amendment
25
 
7.5
Extension; Waiver
25

    SECTION EIGHT
 26

8.
Escrow and Indemnification
26

 
8.1
Survival of Representations and Warranties
26
 
8.2
Indemnification by MTG and MTG Share
26
 
8.3
Indemnification by Innofone
26
 
8.4
Exclusive Contractual Remedy and Limitations
26

   
SECTION NINE
 27

9.
General Provisions
27

 
9.1
Survival of Warranties
27
 
9.2
Notices
27
 
9.3
Interpretation
27
 
9.4
Counterparts
28
 
9.5
Entire Agreement; Nonassignability; Parties in Interest
28
 
9.6
Severability
28
 
9.7
Remedies Cumulative
28
 
9.8
Governing Law
28
 
9.9
Rules of Construction
28
 
9.10
Amendments and Waivers
28

 
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AGREEMENT AND PLAN OF MERGER
 

This AGREEMENT AND PLAN OF MERGER (the “Agreement”) is made and entered into as
of July 1, 2006, by and among Innofone.com, Inc. (“Innofone” or “Purchaser”), a
Nevada corporation, Mobile Tech Acquisition Corp., a Nevada corporation and
wholly-owned subsidiary of Innofone (“Merger Sub” or the “Surviving
Corporation”), Mobile Technology Group, Inc., a Nevada corporation (“MTG”), and
its holders (the “MTG Shareholders”). The parties hereto are sometime
hereinafter collectively referred to as the “Parties.” 
 
RECITALS
 
WHEREAS, Purchaser desires to acquire MGT through the merger of MGT with and
into Merger Sub (the “Merger”), with Merger Sub being the surviving corporation
of the Merger, pursuant to which all MGT Shares (as defined below) of MGT issued
and outstanding at the Effective Time (as defined below), will be converted into
the right to receive the Stock Consideration (as defined below), each as more
fully provided herein;

WHEREAS, the MGT Shareholders own all of the currently issued and outstanding
MGT Shares;

WHEREAS, MGT desires to be merged with and into Merger Sub and the MGT
Shareholders shall be entitled to receive the Stock Consideration in exchange
for their MGT Shares.

WHEREAS, the respective boards of directors of Innofone, Merger Sub and MGT, and
the MGT Shareholders, have determined that the Merger is desirable and in the
best interests of their respective shareholders and, by resolutions duly
adopted, have approved and adopted this Agreement.

WHEREAS, Innofone, Merger Sub and MGT are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”).

 
AGREEMENT
 
The parties hereby agree as follows: 
 
SECTION ONE
 
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, the Certificate of Merger
attached hereto as Exhibit A (the “Certificate of Merger”) and the applicable
provisions of the Nevada Corporations Code (“Nevada Law”), MTG shall (i) be
merged with and into Merger Sub and the separate corporate existence of MTG
shall cease; (ii) the Merger Sub shall continue as the surviving corporation of
the Merger, remaining as a wholly-owned subsidiary of Innofone; and (iii) Merger
Sub shall be operated as a subsidiary and/or division of Innofone under various
agreements and inter-company agreements to be entered into by and/or between
Merger Sub and Innofone. MTG shall tender and exchange all the MGT Shares to
Merger Sub at the price (the “Purchase Price”) set forth in Paragraph 1.2 below.
 
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1.2    Purchase Price. In consideration for all issued and outstanding MTG
Shares, Purchaser shall provide the following:
 
    (a)    Cash Deposit. Innofone has paid prior, as a good faith deposit
against the terms provided hereunder, to MTG total cash of $7,500.
 
           (b)    Stock Issuance to MTG Shareholders. Upon Closing Date (as
defined below), Innofone shall tender to MTG Shareholders, according to their
respective common stock holdings at the Closing Date, 1,441,441 shares of
restricted Common Stock of Innofone (the “Stock Consideration”). All Stock
Consideration issued hereunder shall be free and clear of all liens and
encumbrances other than carrying a restrictive legend.
 
1.3    Closing; Effective Time. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall take place on July 1, 2006 or as soon as
practicable, (and in no event later than five business days after the
satisfaction or waiver of each of the conditions set forth in Section 4 below or
at such other time as the parties agree (the “Closing Date”). In connection with
the Closing, the Parties shall cause the Merger to be consummated by filing the
Certificate of Merger, together with the required officers’ certificates, with
the Secretary of State of the State of Nevada, in accordance with the relevant
provisions of Nevada Law (the time of such filing being the “Effective Time”).
The Closing shall take place at the offices of MTG, or at such other location as
the parties agree.
 
1.4    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 Nevada Law. At the Effective Time, all the property,
rights, privileges, powers and franchises of MTG shall vest in the Surviving
Corporation, and all debts, liabilities and duties of MTG shall become the
debts, liabilities and duties of the Surviving Corporation.
 
1.5    Articles of Incorporation; Bylaws.
 
(a)    At the Effective Time, the Articles of Incorporation of MTG, as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation
of the Surviving Corporation until thereafter amended as provided by Nevada Law
and such Articles of Incorporation.
 
(b)    At the Effective Time, the Bylaws of MTG, as in effect immediately prior
to the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by law, the Articles of Incorporation of the
Surviving Corporation and such Bylaws.
 
1.6    Directors and Officers. At the Effective Time, the officers and directors
of MTG immediately prior to the Effective Time shall resign and Kirk Anderson,
Ricardo Micheri, and James Tyner. (the “MTG Division Directors”) shall be the
directors of the Surviving Corporation. The officers of MTG immediately prior to
the Effective Time shall resign and Kirk Anderson, Ricardo Micheri, James Tyner,
Justin Saman, and Gerard N. Casale, Jr. shall be the officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
 
1.7    Effect on MTG Shares. By virtue of the Merger and without any action on
the part of MTG or any of its respective stockholders, the following shall occur
at the Effective Time:
 
(a)    Conversion of MTG Shares. All of the issued and outstanding shares of MTG
(the “MTG Shares”) issued and outstanding immediately prior to the Effective
Time shall be converted and exchanged for Stock Consideration in the amounts as
set forth on Exhibit B attached hereto. All MTG Shares, when so converted, shall
no longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a certificate representing any such MTG
Shares shall cease to have any rights with respect thereto, except the right to
receive the Stock Consideration therefore upon the surrender of such
certificate(s) in accordance with Section 1.8 below, without interest. 
  
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(b)    Dissenters’ Rights. MTG Shares held by persons have neither executed this
Agreement nor approved the Merger contemplated hereby, are entitled to exercise
dissenters’ rights in accordance with Chapter 13 of Nevada Law (“Dissenting
Shares”). Dissenting Shares shall not be converted into Innofone Common Stock
but shall instead be converted into the right to receive such consideration as
may be determined to be due with respect to such Dissenting Shares pursuant to
Nevada Law. MTG agrees that, except with the prior written consent of Innofone,
or as required under Nevada Law, it will not voluntarily make any payment with
respect to, or settle or offer to settle, any such purchase demand.
 
1.8    Surrender of Certificates.
 
(a)    Innofone to Provide Common Stock. Promptly after the Effective Time,
Innofone shall make available to MTG for exchange in accordance with this
Section 1, through such reasonable procedures as Innofone may adopt, the Stock
Consideration.
 
(b)    Exchange Procedures. Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each holder of record of a certificate
or certificates (the “Certificates”) which immediately prior to the Effective
Time represented outstanding MTG Shares, whose shares were converted into the
right to receive shares the Stock Consideration pursuant to Section 1.7, (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon receipt of the
Certificates by the MTG Shareholders, and shall be in such form and have such
other provisions as Innofone may reasonably specify) and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for certificates
representing shares of Innofone Common Stock. Upon surrender of a Certificate
for cancellation to the MTG Shareholders or to such other agent or agents as may
be appointed by Innofone, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, the
holder of such Certificate shall be entitled to receive in exchange therefor a
certificate representing the number of whole shares of Innofone Common Stock as
indicated on Exhibit B hereto, and the Certificate so surrendered shall
forthwith be cancelled. Until so surrendered, each Certificate will be deemed
from and after the Effective Time, for all corporate purposes, to evidence the
ownership of the number of full shares of Innofone Common Stock into which such
shares of MTG Shares shall have been so converted. 
 
(c)    No Liability. Notwithstanding anything to the contrary in this Section
1.8, none of the Surviving Corporation or any party hereto shall be liable to
any person for any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
 
(d)    Distributions With Respect to Unexchanged Shares. No dividends or other
distributions with respect to Innofone Common Stock with a record date after the
Effective Time will be paid to the holder of any unsurrendered Certificate with
respect to the shares of Innofone Common Stock represented thereby until the
holder of record of such Certificate shall surrender such Certificate. Subject
to applicable law, following surrender of any such Certificate, there shall be
paid to the record holder of the certificates representing whole shares of
Innofone Common Stock issued in exchange therefor, without interest, at the time
of such surrender, the amount of any such dividends or other distributions with
a record date after the Effective Time payable (but for the provisions of this
Section 1.8(d)) with respect to such shares of Innofone Common Stock.
 
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(e)    Transfers of Ownership. If any certificate for shares of Innofone Common
Stock is to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it will be a condition of such
issuance that the Certificate so surrendered will be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
exchange will have paid to Innofone or any agent designated by it any transfer
or other taxes required by reason of the issuance of a certificate for shares of
Innofone Common Stock in any name other than that of the registered holder of
the Certificate surrendered, or established to the satisfaction of Innofone or
any agent designated by it that such tax has been paid or is not payable. In
addition, the transferee of such issuance shall agree to the placing of any
required restrictive legends on the new certificate for such shares of Innofone
Common Stock.
 
1.9    No Further Ownership Rights in MTG Shares. All MTG Shares issued upon the
surrender for exchange of shares of Innofone Common Stock in accordance with the
terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to such MTG Shares, and there shall be no further registration
of transfers on the records of the Surviving Corporation of MTG Shares that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this Section 1.
 
1.10    Innofone Charter Documents. At or prior to the Closing Date, the
Articles of Incorporation and By Laws of MGT shall be amended and restated in
the forms of Exhibits C-1 and C-2, respectively, attached hereto and
incorporated herein by reference.
 
1.11    Taking of Necessary Action; Further Action. If at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of MTG, the officers and directors of MTG are fully authorized in
the name of their respective corporations or otherwise to take, and will take,
all such lawful and necessary action, so long as such action is not inconsistent
with this Agreement.
 
SECTION TWO
 
2.    Representations and Warranties of MTG and MTG Shareholders.
 
In this Agreement, any reference to a “Material Adverse Effect” with respect to
any entity or group of entities means any event, change or effect that, when
taken individually or together with all other adverse changes and effects, is or
is reasonably likely to be materially adverse to the condition (financial or
otherwise), properties, assets, liabilities, business, operations, results of
operations or prospects of such entity and its subsidiaries, taken as a whole,
or to prevent or materially delay consummation of the Merger or otherwise to
prevent such entity and its subsidiaries from performing their obligations under
this Agreement.
 
In this Agreement, any reference to a party’s “knowledge” means such party’s
actual knowledge after due and diligent inquiry of officers, directors and other
employees of such party reasonably believed to have knowledge of the matter in
questions.
 
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Except as disclosed in a document dated as of the date of this Agreement and
delivered by MTG to Innofone prior to the execution and delivery of this
Agreement and referring to the representations and warranties in this Agreement
(the “MTG Disclosure Schedule”), MTG and MTG Shareholders hereby jointly and
severally represent and warrant to Merger Sub and Innofone as follows:
 
2.1    Organization; Subsidiaries. MTG is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. MTG has the requisite corporate power and authority and all
necessary government approvals to own, lease and operate its properties and to
carry on its business as now being conducted and as proposed to be conducted,
except where the failure to have such power, authority and governmental
approvals would not, individually or in the aggregate, have a Material Adverse
Effect on MTG. MTG is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect on MTG. MTG has no subsidiaries
and the MTG does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, limited liability
company, joint venture or other business association or entity.
 
2.2    Articles of Incorporation and Bylaws. MTG has delivered to Merger Sub and
Innofone a true and correct copy of the Articles of Incorporation and Bylaws or
other charter documents of MTG as amended to date. MTG is not in violation of
any of the provisions of its Articles of Incorporation or Bylaws or equivalent
organizational documents.
 
2.3    Capital Structure. The authorized capital stock of MTG consists of 2,500
shares of Common Stock of which 1,000 shares are presently issued and
outstanding as of the date of this Agreement. There are no other outstanding
shares of capital stock or voting securities and no outstanding commitments to
issue any shares of capital stock or voting securities. All outstanding MTG
Shares are duly authorized, validly issued, fully paid and non-assessable and
are free of any liens or encumbrances other than any liens or encumbrances
created by or imposed upon the holders thereof, and are not subject to
preemptive rights or rights of first refusal created by statute, the Articles of
Incorporation or Bylaws of MTG or any agreement to which MTG is a party or by
which it is bound. All outstanding MTG Shares were issued in compliance with all
applicable federal and state securities laws. There are no contracts,
commitments or agreements relating to voting, purchase or sale of MTG’s capital
stock (i) between or among MTG and any of its Shareholders and (ii) to the best
of MTG’s knowledge, between or among any of MTG’s Shareholders.
 
2.4    Authority. MTG has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of MTG. MTG’s Board of Directors has unanimously
approved the Merger and this Agreement. This Agreement has been duly executed
and delivered by MTG and all MTG Shareholders and assuming due authorization,
execution and delivery by Merger Sub and Innofone, constitutes the valid and
binding obligation of MTG enforceable against MTG in accordance with its terms.
 
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2.5    No Conflicts; Required Filings and Consents.
 
(a)    The execution and delivery of this Agreement by MTG does not, and the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (i) any provision of
the Articles of Incorporation or Bylaws of MTG, as amended, or (ii) any material
mortgage, indenture, lease, contract or other agreement or instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to MTG or any of its properties or
assets. The parties acknowledge that Gerard N. Casale, Jr. (“Casale”) is a
shareholder of both MTG and Innofone and has also acted in the past as corporate
counsel to MTG and is currently Vice President of Business & Legal Affairs at
Innofone. As such, the parties understand that a conflict of interest may exist
in Casale’s equity holdings and representation as counsel to both parties and by
executing below hereby waive any such conflict of interest existing in the past
or present or arising in the future. Casale has abstained from any affirmative
vote or consent or approval of this Agreement or the contemplated subject merger
transaction.
 
(b)    No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality (“Governmental Entity”) is
required by or with respect to MTG in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby,
except for (i) the filing of the Certificate of Merger, together with the
required officers’ certificates, as provided in Section 1.2, (ii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), the Securities Act of 1933, as amended (the “Securities Act”),
applicable state securities laws and the securities laws of any foreign country;
and (iii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on MTG and would not prevent, or materially alter or delay any of the
transactions contemplated by this Agreement.
 
2.6    Financial Statements. Section 2.6 of the MTG Disclosure Schedule includes
a true, correct and complete copy of MTG’s unaudited financial statements for
each of the fiscal year ended December 31, 2005, and for the three-month period
ended March 31, 2006, (collectively, the “Financial Statements”).
 
2.7    Absence of Undisclosed Liabilities. MTG has no material obligations or
liabilities of any nature (matured or unmatured, fixed or contingent) other than
(i) those set forth or adequately provided for in the Balance Sheet for the
period ended March 31, 2006, (the “MTG Balance Sheet”); (ii) those incurred in
the ordinary course of business and not required to be set forth in the MTG
Balance Sheet under generally accepted accounting principles; (iii) those
incurred in the ordinary course of business since the date of the MTG Balance
Sheet and consistent with past practice; and (iv) those incurred in connection
with the execution of this Agreement.
 
2.8    Absence of Certain Changes. Except as set forth on MTG Disclosure
Schedule, since March 31, 2006 (the “MTG Balance Sheet Date”) there has not
been, occurred or arisen any material change in MTG’s business or corporate
operations or its financial condition.
 
2.9    Litigation. There is no private or governmental action, suit, proceeding,
claim, arbitration or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of MTG, threatened against
MTG or any of its properties or any of its officers or directors (in their
capacities as such) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on MTG. There is no judgment, decree
or order against MTG or, to the best knowledge of MTG, any of its directors or
officers (in their capacities as such), that could prevent, enjoin, or
materially alter or delay any of the transactions contemplated by this
Agreement, or that could reasonably be expected to have a Material Adverse
Effect on MTG.
 
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2.10    Restrictions on Business Activities. There is no agreement, judgment,
injunction, order or decree binding upon MTG that has or could reasonably be
expected to have the effect of prohibiting or materially impairing any current
or future business practice of MTG, any acquisition of property by MTG or the
overall conduct of business by MTG as currently conducted or as proposed to be
conducted by MTG. MTG has not entered into any agreement under which MTG is
restricted from selling, licensing or otherwise distributing any of its products
to any class of customers, in any geographic area, during any period of time or
in any segment of the market.
 
2.11    Permits; Company Products; Regulation.
 
(a)    MTG is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exceptions, consents, certificates, approvals and
orders necessary for MTG, to own, lease and operate its properties or to carry
on its business as it is now being conducted (the “MTG Authorizations”).
 
(b)    MTG has obtained, in all countries where either MTG is marketing or has
marketed its products, all applicable licenses, registrations, approvals,
clearances and authorizations required by local, state or federal agencies in
such countries regulating the safety, effectiveness and market clearance of the
products currently or previously marketed by MTG in such countries, except for
any such failures as would not, individually or in the aggregate, have a
Material Adverse Effect on MTG.
 
2.12    Title to Property.
 
(a)    MTG has good and marketable title to all of its respective properties,
interests in properties and assets, real and personal, reflected in the MTG
Balance Sheet or acquired after the MTG Balance Sheet Date (except properties,
interests in properties and assets sold or otherwise disposed of since the MTG
Balance Sheet Date in the ordinary course of business), or with respect to
leased properties and assets, valid leasehold interests in, free and clear of
all mortgages, liens, pledges, charges or encumbrances of any kind or character,
except (i) the lien of current taxes not yet due and payable, (ii) such
imperfections of title, liens and easements as do not and will not materially
detract from or interfere with the use of the properties subject thereto or
affected thereby, or otherwise materially impair business operations involving
such properties, and (iii) liens securing debt which is reflected on the MTG
Balance Sheet.
 
(b)    Section 2.12(b) of the MTG Disclosure Schedule also sets forth a true,
correct and complete list of all equipment (the “Equipment”) owned or leased by
MTG, and such Equipment is, taken as a whole, (i) adequate for the conduct of
MTG’s business, consistent with its past practice, and (ii) in good operating
condition (except for ordinary wear and tear).
 
2.13    Intellectual Property.
 
(a)    MTG owns, or is licensed or otherwise possesses legally enforceable
rights to use all patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, copyrights, and any applications for
any of the foregoing, maskworks, net lists, schematics, industrial models,
inventions, technology, know-how, trade secrets, inventory, ideas, algorithms,
processes, computer software programs or applications (in both source code and
object code form), and tangible or intangible proprietary information or
material (“Intellectual Property”) that are used or proposed to be used in MTG’s
business as currently conducted or as proposed to be conducted by MTG, except to
the extent that the failure to have such rights have not had and could not
reasonably be expected to have a Material Adverse Effect on MTG.
 
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(b)    There is no material unauthorized use, disclosure, infringement or
misappropriation of any Intellectual Property rights of MTG, any trade secret
material to MTG or any Intellectual Property right of any third party to the
extent licensed by or through MTG, by any third party, including any employee or
former employee of MTG. MTG has not entered into any agreement to indemnify any
other person against any charge of infringement of any Intellectual Property,
other than indemnification provisions contained in purchase orders arising in
the ordinary course of business.
 
(c)    MTG is not or will not be as a result of the execution and delivery of
this Agreement or the performance of its obligations under this Agreement, in
breach of any license, sublicense or other agreement relating to the
Intellectual Property or Third Party Intellectual Property Rights, the breach of
which would have a Material Adverse Effect on MTG.
 
2.14    Taxes.
 
(a)    For purposes of this Section 2.14 and other provisions of this Agreement
relating to Taxes, the following definitions shall apply:
 
(i)    The term “Taxes” shall mean all taxes, however denominated, including any
interest, penalties or other additions to tax that may become payable in respect
thereof, (A) imposed by any federal, territorial, state, local or foreign
government or any agency or political subdivision of any such government, which
taxes shall include, without limiting the generality of the foregoing, all
income or profits taxes (including but not limited to, federal, state and
foreign income taxes), payroll and employee withholding taxes, unemployment
insurance contributions, social security taxes, sales and use taxes, ad valorem
taxes, excise taxes, franchise taxes, gross receipts taxes, withholding taxes,
business license taxes, occupation taxes, real and personal property taxes,
stamp taxes, environmental taxes, transfer taxes, workers’ compensation, Pension
Benefit Guaranty Corporation premiums and other governmental charges, and other
obligations of the same or of a similar nature to any of the foregoing, which
are required to be paid, withheld or collected, (B) any liability for the
payment of amounts referred to in (A) as a result of being a member of any
affiliated, consolidated, combined or unitary group, or (C) any liability for
amounts referred to in (A) or (B) as a result of any obligations to indemnify
another person.
 
(ii)    The term “Returns” shall mean all reports, estimates, declarations of
estimated tax, information statements and returns required to be filed in
connection with any Taxes, including information returns with respect to backup
withholding and other payments to third parties.
 
(b)    All Returns required to be filed by or on behalf of MTG have been duly
filed on a timely basis and such Returns are true, complete and correct. All
Taxes shown to be payable on such Returns or on subsequent assessments with
respect thereto, and all payments of estimated Taxes required to be made by or
on behalf of MTG under Section 6655 of the Code or comparable provisions of
state, local or foreign law, have been paid in full on a timely basis, and no
other Taxes are payable by MTG Subsidiary with respect to items or periods
covered by such Returns (whether or not shown on or reportable on such Returns).
MTG has withheld and paid over all Taxes required to have been withheld and paid
over, and complied with all information reporting and backup withholding in
connection with amounts paid or owing to any employee, creditor, independent
contractor, or other third party. MTG has received, from each employee who holds
stock that is subject to a substantial risk of forfeiture as of the date hereof,
a copy of the election(s) made under Section 83(b) of the Code with respect to
all such shares, and such elections were validly made and filed with the
Internal Revenue Service in a timely fashion. There are no liens on any of the
assets of MTG with respect to Taxes, other than liens for Taxes not yet due and
payable or for Taxes that MTG is contesting in good faith through appropriate
proceedings. MTG has not been at any time a member of an affiliated group of
corporations filing consolidated, combined or unitary income or franchise tax
returns for a period for which the statute of limitations for any Tax
potentially applicable as a result of such shareholdership has not expired.
 
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(c)    The amount of MTG’s liabilities for unpaid Taxes for all periods through
the date of the Financial Statements do not, in the aggregate, exceed the amount
of the current liability accruals for Taxes reflected on the Financial
Statements, and the Financial Statements properly accrue in accordance with
generally accepted accounting principles (“GAAP”) all liabilities for Taxes of
MTG payable after the date of the Financial Statements attributable to
transactions and events occurring prior to such date. No liability for Taxes of
MTG has been incurred or material amount of taxable income has been realized (or
prior to and including the Effective Time will be incurred or realized) since
such date other than in the ordinary course of business.
 
(d)    Merger Sub and Innofone have been furnished by MTG true and complete
copies of (i) relevant portions of income tax audit reports, statements of
deficiencies, closing or other agreements received by or on behalf of MTG
relating to Taxes, and (ii) all federal, state and foreign income or franchise
tax returns and state sales and use tax Returns for or including MTG for all
periods since MTG’s inception.
 
(e)    No audit of the Returns of or including MTG by a government or taxing
authority is in process, threatened or, to MTG’s knowledge, pending (either in
writing or orally, formally or informally). No deficiencies exist or have been
asserted (either in writing or orally, formally or informally) or are expected
to be asserted with respect to Taxes of MTG, and MTG has not received notice
(either in writing or orally, formally or informally) nor does it expect to
receive notice that it has not filed a Return or paid Taxes required to be filed
or paid. MTG is not a party to any action or proceeding for assessment or
collection of Taxes, nor has such event been asserted or threatened (either in
writing or orally, formally or informally) against MTG or any of its assets. No
waiver or extension of any statute of limitations is in effect with respect to
Taxes or Returns of MTG. MTG has disclosed on its federal and state income and
franchise tax returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Code Section 6662 or
comparable provisions of applicable state tax laws.
 
2.15    Employee Matters. MTG is in compliance in all material respects with all
currently applicable federal, state, local and foreign laws and regulations
respecting employment, discrimination in employment, terms and conditions of
employment, wages, hours and occupational safety and health and employment
practices, and is not engaged in any unfair labor practice. There are no pending
claims against MTG under any workers compensation plan or policy or for long
term disability. MTG has no material obligations under COBRA or any similar
state law with respect to any former employees or qualifying beneficiaries
thereunder.
 
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2.16    Material Contracts.
 
(a)    Section 2.16(a) of the MTG Disclosure Schedule contains a list of all
contracts and agreements to which MTG is a party and that are material to the
business, results of operations, or condition (financial or otherwise), of MTG
taken as a whole (such contracts, agreements and arrangements as are required to
be set forth in Section 2.16(a) of the MTG Disclosure Schedule being referred to
herein collectively as the “Material Contracts”).
 
(b)    Except as would not, individually or in the aggregate, have a Material
Adverse Effect on MTG, each MTG license, each Material Contract is a legal,
valid and binding agreement, and none of the MTG licenses or Material Contracts
is in default by its terms or has been cancelled by the other party; MTG is not
in receipt of any claim of default under any such agreement; and MTG does not
anticipate any termination or change to, or receipt of a proposal with respect
to, any such agreement as a result of the Merger or otherwise. MTG has furnished
Innofone with true and complete copies of all such agreements together with all
amendments, waivers or other changes thereto.
 
2.17    Interested Party Transactions. MTG is not indebted to any director,
officer, employee or agent of MTG (except for amounts due as normal salaries and
bonuses and in reimbursement of ordinary expenses), and no such person is
indebted to MTG. To MTG’s knowledge, none of MTG’s officers or directors, or any
shareholders of their immediate families, are, directly or indirectly, indebted
to MTG (other than in connection with purchases of the MTG’s stock) or have any
direct or indirect ownership interest in any firm or corporation with which MTG
is affiliated or with which MTG has a business relationship, or any firm or
corporation which competes with MTG except that officers, directors and/or
equity holders of MTG may own stock in (but not exceeding two percent of the
outstanding capital stock of) any publicly traded companies that may compete
with MTG. To MTG’s knowledge, none of MTG’s officers or directors or any
shareholders of their immediate families are, directly or indirectly, interested
in any material contract with MTG. MTG is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
 
2.18    Insurance. MTG has policies of insurance and bonds of the type and in
amounts customarily carried by persons conducting businesses or owning assets
similar to those of MTG. There is no material claim pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
by the underwriters of such policies or bonds. All premiums due and payable
under all such policies and bonds have been paid and MTG are otherwise in
compliance with the terms of such policies and bonds.
 
2.19    Compliance With Laws. MTG has complied with, is not in violation of, and
has not received any notices of violation with respect to, any federal, state,
local or foreign statute, law or regulation with respect to the conduct of its
business, or the ownership or operation of its business, except for such
violations or failures to comply as could not reasonably be expected to have a
Material Adverse Effect on MTG.
 
2.20    Minute Books. The minute book of MTG made available to Merger Sub and
Innofone contains a complete summary of all meetings of directors and
stockholders or actions by written consent since the time of incorporation of
MTG through the date of this Agreement, and reflects all transactions referred
to in such minutes accurately in all material respects.
 
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2.21    Complete Copies of Materials. MTG has delivered or made available true
and copies of each document that has been requested by Merger Sub and/or
Innofone or their counsel in connection with their legal and accounting review
of MTG.
 
2.22    Brokers’ and Finders’ Fees. MTG has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders’ fees or agents’
commissions or investment bankers’ fees or any similar charges in connection
with this Agreement or any transaction contemplated hereby.
 
2.23    No Vote Required. Upon the execution of this Agreement by all MTG
Shareholders, no other vote of the holders of MTG Shares is necessary to approve
this Agreement and the transactions contemplated hereby.
 
2.24    Third Party Consents. No consent or approval is needed from any third
party in order to effect the Merger, this Agreement or any of the transactions
contemplated hereby.
 
2.25    Representations Complete. None of the representations or warranties made
by MTG herein or in any schedule or exhibit hereto, including the MTG Disclosure
Schedule, or certificate(s) furnished by MTG pursuant to this Agreement, when
all such documents are read together in their entirety, contains or will contain
at the Effective Time any untrue statement of a material fact, or omits or will
omit at the Effective Time to state any material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading.
 
SECTION THREE
 
3.    Representations and Warranties of Merger Sub and Innofone.
 
Except as disclosed in a document dated as of the date of this Agreement and
delivered by Merger Sub and Innofone to MTG prior to the execution and delivery
of this Agreement and referring to the representations and warranties in this
Agreement (the “Merger Sub/Innofone Disclosure Schedule”), Merger Sub and
Innofone hereby represent and warrants to MTG and MTG Shareholders as follows:
 
3.1    Organization, Standing and Power. Both Merge Sub and Innofone are a
corporations duly organized, validly existing and in good standing under the
laws of their jurisdictions of organization. Both Merger Sub and Innofone have
the corporate power to own their properties and to carry on their businesses as
now being conducted and as proposed to be conducted and are duly qualified to do
business and are in good standing in each jurisdiction in which the failure to
be so qualified and in good standing would have a Material Adverse Effect on
Merger Sub and/or Innofone. Merger Sub and Innofone have delivered true and
correct copies of their Articles of Incorporation and Bylaws or other charter
documents, as applicable, of Merger Sub and Innofone, each as amended to date,
to MTG. Neither Merger Sub, Innofone nor any of its subsidiaries is in violation
of any material provisions of their Articles of Incorporation or Bylaws or
equivalent organizational documents.
 
3.2    Capital Structure.
 
(a)    The authorized capital stock of Merger Sub consists of 1,000 shares of
Common Stock, no-par value, of which one (1) share was issued and outstanding to
Innofone as of the close of business on May 17, 2006. The authorized capital
stock of Innofone consists of 950,000,000 shares of Common Stock, $0.001 par
value, of which 61,780,084 shares were issued and outstanding as of the close of
business on July 11, 2006. Other than as contemplated under this Agreement,
there are no options, warrants, calls, rights, commitments or agreements of any
character to which Merger Sub and/or Innofone is a party or by which either of
them is bound obligating Merger Sub and/or Innofone to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of Merger Sub and/or Innofone or
obligating Merger Sub and/or Innofone to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. The shares of Innofone
Common Stock to be issued to the MTG Shareholders pursuant to the Merger will be
duly authorized, validly issued, fully paid, and non-assessable.
 
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3.3    Authority. Merger Sub and Innofone have all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Merger Sub and Innofone (other
than, with respect to the Merger, the filing and recordation of appropriate
merger documents as required by Nevada law). This Agreement has been duly
executed and delivered by Merger Sub and Innofone and constitutes the valid and
binding obligations of Innofone.
 
3.4    No Conflict; Required Filings and Consents.
 
(a)    The execution and delivery of this Agreement do not, and the consummation
of the transactions contemplated hereby will not, conflict with, or result in
any violation of, or default under (with or without notice or lapse of time, or
both), or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under (i) any provision of the Articles of
Incorporation or Bylaws of Merger Sub and/or Innofone, as amended, or (ii) any
material mortgage, indenture, lease, contract or other agreement or instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Innofone or its properties or
assets.
 
(b)    No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required by or with
respect to Innofone in connection with the execution and delivery of this
Agreement by Merger Sub and/or Innofone or the consummation by Merger Sub and/or
Innofone of the transactions contemplated hereby, except for (i) the filing of
appropriate merger documents as required by Nevada Law, (ii) the filing of a
Form 8-K with the SEC within five days after the Closing Date, (iii) the filing
with the SEC of a notice on Form D and any other filings as may be required
under applicable state securities laws and the securities laws of any foreign
country, and (iv) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on Merger Sub and/or Innofone and would not prevent, materially alter or
delay any the transactions contemplated by this Merger.
 
3.5    SEC Documents; Financial Statements.
 
(a)    Merger Sub and/or Innofone have filed all forms, reports and documents
required to be filed by Merger Sub and/or Innofone with the SEC since August 31,
2005 through the date hereof, and MTG and MTG Shareholders have had access to
all such forms, reports and documents through the SEC Edger website. Included in
those filings are all Annual Reports on Form 10-KSB and Quarterly Reports on
Form 10-QSB including the Annual Report on Form 10-KSB for the year ending
December 31, 2005 filed with the SEC on April 17, 2006. In addition, Merger Sub
and/or Innofone will have made available to MTG true and complete copies of any
additional documents filed with the SEC by Merger Sub and/or Innofone after the
date hereof and prior to the Effective Time (collectively, the “Merger
Sub/Innofone SEC Documents”). As of their respective filing dates, the Merger
Sub/Innofone SEC Documents complied in all material respects with the
requirements of the Exchange Act and the Securities Act, and none of the Merger
Sub/Innofone SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which they
were made, not misleading, except to the extent corrected by a subsequently
filed Innofone SEC Document.
 
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(b)    The financial statements of Innofone, including the notes thereto,
included in the Merger Sub/Innofone SEC Documents (the “Innofone Financial
Statements”) were complete and correct in all material respects as of their
respective filing dates, complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto as of their respective dates, and have been
prepared in accordance with United States generally accepted accounting
principles applied on a basis consistent throughout the periods indicated and
consistent with each other (except as may be indicated in the notes thereto or,
in the case of unaudited statements, included in Quarterly Reports on Forms
10-Q). The Innofone Financial Statements fairly present the consolidated
financial condition and operating results of Innofone and its subsidiaries at
the dates and during the periods indicated therein (subject, in the case of
unaudited statements, to normal, recurring year-end adjustments). There has been
no change in Innofone accounting policies except as described in the notes to
the Innofone Financial Statements.
 
3.6    Absence of Undisclosed Liabilities. Merger Sub and/or Innofone have no
material obligations or liabilities of any nature (matured or unmatured, fixed
or contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet included in Innofone’s Annual Report on Form 10-KSB heretofore
made available to MTG for the period ended December 31, 2005 (the “Innofone
Balance Sheet”), (ii) those incurred in the ordinary course of business and not
required to be set forth in the Innofone Balance Sheet under United States
generally accepted accounting principles, and (iii) those incurred in the
ordinary course of business since the Innofone Balance Sheet Date and consistent
with past practice.
 
3.7    Absence of Certain Changes. Since December 31, 2005 (the “Innofone
Balance Sheet Date”), Innofone has conducted its business in the ordinary course
in a manner consistent with past practice and there has not occurred: (i) any
change, event or condition (whether or not covered by insurance) that has
resulted in, or might reasonably be expected to result in, a Material Adverse
Effect to Innofone; (ii) any declaration, setting aside, or payment of a
dividend or other distribution with respect to the shares of Innofone, or any
direct or indirect redemption, purchase or other acquisition by Innofone of any
of its shares of capital stock; (iii) any material amendment or change to
Innofone’s Articles of Incorporation or Bylaws; or (iv) any negotiation or
agreement by Innofone to do any of the things described in the preceding clauses
(i) through (iii) (other than negotiations with MTG and its representatives
regarding the transactions contemplated by this Agreement).
 
3.8    Litigation. There is no private or governmental action, suit, proceeding,
claim, arbitration or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of Merger Sub and/or
Innofone or any of their subsidiaries, threatened against Merger Sub and/or
Innofone or any of their subsidiaries or any of their respective properties or
any of their respective officers or directors (in their capacities as such)
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on Innofone. There is no judgment, decree or order
against Merger Sub and/or Innofone or any of their subsidiaries or, to the
knowledge of Innofone or any of its subsidiaries, any of their respective
directors or officers (in their capacities as such) that could prevent, enjoin,
or materially alter or delay any of the transactions contemplated by this
Agreement, or that could reasonably be expected to have a Material Adverse
Effect on Innofone.
 
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3.9    Governmental Authorization. Each of Merger Sub and/or Innofone and their
subsidiaries has obtained each federal, state, county, local or foreign
governmental consent, license, permit, grant, or other authorization of a
Governmental Entity that is required for the operation of Innofone’s or any of
its subsidiaries’ business (“Innofone Authorizations”), and all of such Innofone
Authorizations are in full force and effect, except where the failure to obtain
or have any of such Innofone Authorizations could not reasonably be expected to
have a Material Adverse Effect on Innofone.
 
3.10    Compliance With Laws. Each of Merger Sub and/or Innofone and their
subsidiaries have complied with, are not in violation of, and have not received
any notices of violation with respect to, any federal, state, local or foreign
statute, law or regulation with respect to the conduct of their businesses, or
the ownership or operation of their business, except for such violations or
failures to comply as could not reasonably be expected to have a Material
Adverse Effect on Merger Sub and/or Innofone.
 
3.11    Broker’s and Finders’ Fees. Except for sales commissions in connection
with the private placement of equity funding as set forth in Section 5.11,
Merger Sub and/or Innofone have not incurred, nor will they incur, directly or
indirectly, any liability for brokerage or finders’ fees or agents’ commissions
or investment bankers’ fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
 
3.12    Accounting and Tax Matters. Neither Merger Sub, Innofone nor any of
their subsidiaries nor, to the knowledge of Merger Sub, Innofone and any of
their subsidiaries, any of their respective affiliates or agents is aware of any
agreement, plan or other circumstance that would prevent the Merger from
constituting a transaction under Section 368(a) of the Code. The failure of this
transaction to qualify as a tax-free reorganization will not give any rights of
recession or any other remedies or relief to MTG and/or the MTG shareholders.
 
SECTION FOUR
 
4.    Conduct Prior to the Effective Time.
 
4.1    Conduct of Business of MTG and Innofone. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, each of MTG, Merger Sub and Innofone agrees
(except to the extent expressly contemplated by this Agreement or as consented
to in writing by the other parties), to carry on its and its subsidiaries’
business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted, to pay and to cause its subsidiaries to pay
debts and Taxes when, to pay or perform other obligations when due, and to use
all reasonable efforts consistent with past practice and policies to preserve
intact its and its subsidiaries’ present business organization, keep available
the services of its and its subsidiaries’ present officers and key employees and
preserve its and its subsidiaries’ relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with it
or its subsidiaries, to the end that its and its subsidiaries’ goodwill and
ongoing businesses shall be unimpaired at the Effective Time. Each of MTG,
Merger Sub and Innofone agrees to promptly notify the other of any event or
occurrence not in the ordinary course of its or its subsidiaries’ business, and
of any event that could have a Material Adverse Effect. Without limiting the
foregoing, except as expressly contemplated by this Agreement, neither MTG,
Merger Sub nor Innofone shall do, cause or permit any of the following, or
allow, cause or permit any of its subsidiaries to do, cause or permit any of the
following, without the prior written consent of the other:
 
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(a)    Charter Documents. Cause or permit any amendments to their Articles of
Incorporation or Bylaws;
 
(b)    Dividends; Changes in Capital Stock. Declare or pay any dividends on or
make any other distributions (whether in cash, stock or property) in respect of
any of its capital stock, or (except in the case of Innofone’s recapitalization
of its shares as set forth in Section 5.12(a) hereof) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock except from former employees, directors and
consultants in accordance with agreements providing for the repurchase of shares
in connection with any termination of service to it or its subsidiaries;
 
(c)    Stock Option Plans, Etc. Approve and adopt any stock plans or stock
option plans;
 
(d)    Extraordinary Transactions. Enter into any transactions that involve any
corporate reorganization, change of control, acquisition, merger, undertaking of
liability in excess of $10,000, sale of assets over $10,000, sale of equity in
excess of value of $50,000, or other transaction or event which could
substantially effect the viability or integrity of MTG (“Extraordinary
Transactions”); or 
 
(e)    Other. Take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through (d) above, or any action which would make
any of its representations or warranties contained in this Agreement untrue or
incorrect or prevent it from performing or cause it not to perform its covenants
hereunder.
 
4.2    Conduct of Business of MTG. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, except as expressly contemplated by this Agreement, MTG
shall not do, cause or permit any of the following, without the prior written
consent of Merger Sub and Innofone:
 
(a)    Material Contracts. Enter into any material contract or commitment, or
violate, amend or otherwise modify or waive any of the terms of any of its
Material Contracts, other than in the ordinary course of business consistent
with past practice;
 
(b)    Issuance of Securities. Issue, deliver or sell or authorize or propose
the issuance, delivery or sale of, or purchase or propose the purchase of, any
shares of its MTG Shares or securities convertible into, or subscriptions,
rights, warrants or options to acquire, or other agreements or commitments of
any character obligating it to issue any such shares or other convertible
securities;
 
(c)    Intellectual Property. Transfer to any person or entity any rights to its
Intellectual Property;
 
(d)    Exclusive Rights. Enter into or amend any agreements pursuant to which
any other party is granted exclusive marketing or other exclusive rights of any
type or scope with respect to any of its products or technology;
 
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(e)    Dispositions. Sell, lease, license or otherwise dispose of or encumber
any of its properties or assets which are material, individually or in the
aggregate, to its business, taken as a whole, except in the ordinary course of
business consistent with past practice;
 
(f)    Indebtedness. Incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any debt securities or guarantee any debt
securities of others;
 
(g)    Insurance. Materially reduce the amount of any material insurance
coverage provided by existing insurance policies;
 
(h)    Termination or Waiver. Terminate or waive any right of substantial value,
other than in the ordinary course of business;
 
(i)    Employee Benefit Plans; New Hires; Pay Increases. Adopt any employee
benefit or stock purchase or option plan, or hire any new director level or
officer level employee, pay any special bonus or special remuneration to any
employee or director, or increase the salaries or wage rates of its employees;
 
(j)    Taxes. Other than in the ordinary course of business, make or change any
material election in respect of Taxes, adopt or change any accounting method in
respect of Taxes, file any material Tax Return or any amendment to a material
Tax Return, enter into any closing agreement, settle any claim or assessment in
respect of Taxes, or consent to any extension or waiver of the limitation period
applicable to any claim or assessment in respect of Taxes;
 
(k)    Revaluation. Revalue any of its assets, including without limitation
writing down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business;
 
(l)    Liability Limit. Upon closing, MTG shall maintain contingent and/or
historical liabilities including any and all accounts payable and other accrued
liabilities not to exceed $50,000 (“Liability Limit”). The Liability Limit does
not include recurring monthly expenses and/or ongoing overhead incurred from the
date of Closing. Merger Sub and/or Innofone shall not accept any form of
historical liability of MTG in excess of the Liability Limit; or
 
(m)    Other. Take or agree in writing or otherwise to take, any of the actions
described in Sections 4.2(a) through (l) above, or any action which would make
any of its representations or warranties contained in this Agreement untrue or
incorrect or prevent it from performing or cause it not to perform its covenants
hereunder.
 
4.3    No Solicitation. MTG and its officers, directors, employees or other
agents of MTG will not, directly or indirectly, (i) take any action to solicit,
initiate or encourage any Takeover Proposal (as defined below) or (ii) engage in
negotiations with, or disclose any nonpublic information relating to MTG to, or
afford access to the properties, books or records of MTG to, any person that has
advised MTG that it may be considering making, or that has made, a Takeover
Proposal. MTG will promptly notify Merger Sub and Innofone after receipt of any
Takeover Proposal or any notice that any person is considering making a Takeover
Proposal or any request for nonpublic information relating to MTG or for access
to the properties, books or records of MTG by any person that has advised MTG
that it may be considering making, or that has made, a Takeover Proposal and
will keep Innofone fully informed of the status and details of any such Takeover
Proposal notice or request. For purposes of this Agreement, “Takeover Proposal”
means any offer or proposal for, or any indication of interest in, a merger or
other business combination involving MTG or the acquisition of any significant
equity interest in, or a significant portion of the assets of MTG, other than
the transactions contemplated by this Agreement.
 

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SECTION FIVE
 
5.    Additional Agreements.
 
5.1    Best Efforts and Further Assurances. Each of the Parties to this
Agreement shall use its best efforts to effectuate the transactions contemplated
hereby and to fulfill and cause to be fulfilled the conditions to closing under
this Agreement. Each party hereto, at the reasonable request of another party
hereto, shall execute and deliver such other instruments and do and perform such
other acts and things as may be necessary or desirable for effecting completely
the consummation of this Agreement and the transactions contemplated hereby.
 
5.2    Consents; Cooperation.
 
(a)    Each of Merger Sub, Innofone and MTG shall use their reasonable best
efforts to promptly (i) obtain from any Governmental Entity any consents,
licenses, permits, waivers, approvals, authorizations or orders required to be
obtained or made by Merger Sub, Innofone or MTG in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereunder, and (ii) make all necessary filings,
and thereafter make any other required submissions, with respect to this
Agreement and the Merger required under the Securities Act and the Exchange Act
and any other applicable federal, state or foreign securities laws.
 
(b)    MTG and each MTG Shareholder shall cooperate with Innofone in the
preparation of the private placement memorandum and other offering materials
below and provide Innofone with accurate and complete descriptions of MTG’s
business operations, financial condition and other required disclosure
information. The information supplied by MTG or any of MTG Shareholders for
inclusion in the offering materials shall not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
 
(c)    From the date of this Agreement until the earlier of the Effective Time
or the termination of this Agreement, each party shall promptly notify the other
party in writing of any pending or, to the knowledge of such party, threatened
action, proceeding or other event that may cause a Material Adverse Effect.
 
5.3    Access to Information.
 
(a)    MTG shall afford Merger Sub and/or Innofone and their accountants,
counsel and other representatives, reasonable access during normal business
hours during the period prior to the Effective Time to (i) all of MTG’s
properties, books, contracts, commitments and records, and (ii) all other
information concerning the business, properties and personnel of MTG as Innofone
may reasonably request. MTG agrees to provide to Merger Sub, Innofone and their
accountants, counsel and other representatives copies of internal financial
statements promptly upon request. Innofone shall afford MTG and its accountants,
counsel and other representatives, reasonable access during normal business
hours during the period prior to the Effective Time to (x) all of Innofone’s and
any Innofone subsidiaries’ properties, books, contracts, commitments and
records, and (y) all other information concerning the business, properties and
personnel of Innofone and any of its subsidiaries, as MTG may reasonably
request. Innofone agrees to provide to MTG and its accountants, counsel and
other representatives copies of internal financial statements promptly upon
request.
 
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(b)    Subject to compliance with applicable law, from the date hereof until the
Effective Time, each of Merge Sub, Innofone and MTG shall confer on a regular
and frequent basis with one or more representatives of the other party to report
operational matters of materiality and the general status of ongoing operations.
 
(c)    No information or knowledge obtained in any investigation pursuant to
this Section 5.3 shall affect or be deemed to modify any representation or
warranty contained herein or the conditions to the obligations of the parties to
consummate the Merger.
 
5.4    Confidentiality. The information received in accordance with Section 5.3
shall be deemed to be “Confidential Information.” Each of Merge Sub, Innofone
and MTG and each MTG Shareholder agrees that it will treat in confidence all
documents, materials, and other Confidential Information that it shall have
obtained regarding any other party during the course of the negotiations leading
to the consummation of the transactions contemplated hereby (whether obtained
before or after the date of this Agreement), the investigation provided for
herein, and the preparation of this Agreement and other related documents. Such
documents, materials, and other Confidential Information shall not be
communicated to any third person (other than to its respective counsel,
accountants, financial advisors, or lenders) and shall not be used for any
purpose to the detriment of any other party. No party shall use any Confidential
Information in any manner whatsoever except solely for the purpose of evaluating
a possible business relationship as contemplated by this Agreement. No party and
no representative of a party will, during the term of this Agreement or at any
time during the two years thereafter, irrespective of the time, manner, or cause
of termination of this Agreement, use, disclose, copy, or assist any other
person in the use, disclosure, or copying of any documents, materials, or other
Confidential Information of any other party hereto.
 
5.5    Public Disclosure. Unless otherwise permitted by this Agreement, Merger
Sub, Innofone and MTG shall consult with each other before issuing any press
release or otherwise making any public statement or making any other public (or
non-confidential) disclosure (whether or not in response to an inquiry)
regarding the terms of this Agreement and the transactions contemplated hereby,
and neither shall issue any such press release or make any such statement or
disclosure without the prior approval of the other (which approval shall not be
unreasonably withheld), except as may be required by law.
 
5.6    State Statutes. If any state takeover law shall become applicable to the
transactions contemplated by this Agreement, Innofone and its Board of Directors
or MTG and its Board of Directors, as the case may be, shall use their
reasonable best efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effects of such state takeover law on
the transactions contemplated by this Agreement.
 
5.7    Filings or Notices Pursuant to Securities Laws.  
 
(a)    Merge Sub and/or Innofone shall prepare and file with the SEC a notice on
Form D and such other notices or applications as Merger Sub and/or Innofone may
deem appropriate under state securities laws in connection with the transactions
contemplated by this Agreement. MTG, each MTG Shareholder, Merger Sub, and
Innofone shall take any action required to be taken under any applicable federal
or state securities laws in connection with the issuance of the Stock
Consideration. MTG and each MTG Shareholder shall furnish, or cause such part to
furnish, to Merger Sub and/or Innofone all information concerning MTG and the
MTG Shareholders as Merger Sub and/or Innofone may reasonably request in
connection with such actions.
 
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(b)    The information supplied by any party for inclusion in the notices or
other filings in accordance with this Section 5.7 shall not, at the time filed,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. If at any time prior to the Closing any event or
circumstance relating to any party or any party’s affiliates, or its or their
respective officers or directors, is discovered by any party that should be set
forth in a supplement or amendment to any notices or other filings in accordance
with this Section 5.7, such party shall promptly inform each other party thereof
in writing. All documents that such party is responsible for filing with the SEC
or any state authority in connection with the transactions contemplated herein
shall comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder, the
Exchange Act and the rules and regulations thereunder, state securities laws,
and other applicable state laws
 
5.8    Unanimous Consent of Stockholders. As promptly as practicable after the
date hereof, MTG shall take all action necessary in accordance with Nevada Law
and its Articles of Incorporation and Bylaws to secure the majority in interest
consent of all required MTG Shareholders approving the Merger and the
transactions contemplated herein.
 
5.9    Acquisition of Innofone Common Stock. The consummation of this Agreement
and the transactions contemplated herein, including the issuance of the Innofone
Common Stock to the MTG Shareholders as contemplated hereby, constitutes the
offer and sale of securities under the Securities Act and applicable state
securities Laws. Such transactions shall be consummated in reliance on
exemptions from the registration and prospectus delivery requirements of such
statutes that depend, among other items, on the circumstances under which the
MTG Shareholders acquire such securities comprising the Merger Consideration.

(a)    In order to provide documentation for reliance upon exemptions from the
registration and prospectus delivery requirements for the issuance of Innofone
Common Stock in the Merger, each MTG Shareholder hereby makes the following
representations and warranties:

(i)    Such MTG Shareholder acknowledges that neither the SEC nor the securities
commission of any state or other federal agency has made any determination as to
the merits of acquiring the Innofone Common Stock, and that the transactions
contemplated herein involve certain risks.

(ii)    Such MTG Shareholder has received and read this Agreement and
understands the risk related to the consummation of the transactions herein
contemplated.

(iii)    Such MTG Shareholder has such knowledge and experience in business and
financial matters that such MTG Shareholder is capable of evaluating the Merger
and Innofone and its business operations.

(iv)    Such MTG Shareholder has been provided with a copy of the Agreement and
the related disclosure schedules of the parties hereto plus all materials and
information requested by each or his or her representative, including any
information requested to verify any information furnished (to the extent such
information is available or can be obtained without unreasonable effort or
expense), and each has been provided the opportunity for direct communication
with Innofone and its representatives regarding the transactions contemplated
hereby.
 
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(v)    All information that each MTG Shareholder has provided to Merger Sub
and/or Innofone or its agents or representatives concerning suitability to hold
shares in Innofone following the transactions contemplated hereby is complete,
accurate, and correct.

(vi)    Such MTG Shareholder has not offered or sold any interest in this
Agreement and has no present intention of dividing the Innofone Common Stock to
be received or the rights under this Agreement with others or of reselling or
otherwise disposing of any portion of such stock or rights, either currently or
after the passage of a fixed or determinable period of time or on the occurrence
or nonoccurrence of any predetermined event or circumstance.

(vii)    Such MTG Shareholder was at no time solicited by any leaflet, public
promotional meeting, circular, newspaper or magazine article, radio or
television advertisement, or any other form of general advertising or
solicitation in connection with the offer, sale, or purchase of the Innofone
Common Stock through this Agreement.

(viii)    As a result of the Merger, such MTG Shareholder believes that its
financial prospects resulting from its ownership in Innofone will not be
materially less favorable than his or her retained ownership in MTG. Each MTG
Shareholder anticipates no need in the foreseeable future to sell the Innofone
Common Stock to be acquired pursuant hereto. Each is able to bear the economic
risks of this investment, and consequently, without limiting the generality of
the foregoing, is able to hold the Innofone Common Stock to be received for an
indefinite period.

(ix)    Such MTG Shareholder understands that the Innofone Common Stock has not
been registered, but is being acquired by reason of a specific exemption under
the Securities Act as well as under certain state securities Laws for
transactions by an issuer not involving any public offering and that any
disposition of the Innofone Common Stock may, under certain circumstances, be
inconsistent with this exemption and may make the holder who disposes of such
stock an “underwriter” within the meaning of the Securities Act. It is
understood that the definition of “underwriter” focuses upon the concept of
“distribution” and that any subsequent disposition of the subject Innofone
Common Stock can only be effected in transactions that are not considered
distributions.

(x)    Such MTG Shareholder acknowledges that the shares of Innofone Common
Stock must be held and may not be sold, transferred, or otherwise disposed of
for value unless they are subsequently registered under the Securities Act or an
exemption from such registration is available. Innofone is under no obligation
to register the Innofone Common Stock under the Securities Act. If Rule 144 is
available (and no assurance is given that it will be except as expressly set
forth in this Agreement), after one year and prior to two years following the
Effective Date, only routine sales of such Innofone Common Stock in limited
amounts can be made in reliance upon Rule 144 in accordance with the terms and
conditions of that rule. Innofone is under no obligation to the MTG Shareholders
to make Rule 144 available, except as may be expressly agreed to by it in
writing in this Agreement, and in the event Rule 144 is not available,
compliance with Regulation A or some other disclosure exemption may be required
before such persons can sell, transfer, or otherwise dispose of such Innofone
Common Stock without registration under the Securities Act. Innofone’s registrar
and transfer agent will maintain a stop-transfer order against the registration
of transfer of the Innofone Common Stock, and the certificate representing the
Innofone Common Stock will bear a legend in substantially the following form so
restricting the sale of such securities:
 
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The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), and are
“restricted securities” within the meaning of Rule 144 promulgated under the
Securities Act. The securities have been acquired for investment and may not be
sold or transferred without complying with Rule 144 in the absence of an
effective registration or other compliance under the Securities Act.

(xi)    Such MTG Shareholder acknowledges that Innofone may refuse to register
transfer shares of the Innofone Common Stock in the absence of compliance with
Rule 144 unless the holder furnishes the issuer with a “no-action” or
interpretive letter from the SEC or an opinion of counsel reasonably acceptable
to Innofone stating that the transfer is proper. Further, unless such letter or
opinion states that the shares of Innofone Common Stock are free of any
restrictions under the Securities Act, Innofone may refuse to transfer the
Innofone Common Stock to any transferee that does not furnish in writing to
Innofone the same representations and agree to the same conditions respecting
such Innofone Common Stock as set forth herein. Innofone may also refuse to
transfer the Innofone Common Stock if any circumstances are present reasonably
indicating that the transferee’s representations are not accurate.

    (b)    Such MTG Shareholder shall execute and deliver to Merge Sub and/or
Innofone, at or prior to the Closing, such further letters of representation,
acknowledgment, suitability, or the like, as Merger Sub and/or Innofone and its
counsel may reasonably request in connection with reliance on exemptions from
registration under such securities Laws.

    (c)    Each Party acknowledges that the basis for relying on exemptions from
registration or qualifications are factual, depending on the conduct of the
various parties, and that no legal opinion or other assurance will be required
or given to the effect that the transactions contemplated hereby are in fact
exempt from registration or qualification.

5.10    Employment Agreements. Contemporaneously with the execution of this
Agreement, the following MTG Shareholders, who shall also be executive officers
and/or directors of the Merger Sub following the Merger, shall execute and
deliver Employment Agreements in substantially the forms attached as Exhibits
D-1, D-2, and D-3 providing for the position set forth opposite the name of each
below, all subject to the Closing and to become effective at the Effective Time:
 
Name
Position
   
Kirk Anderson
Chief Executive Officer of the Merger Sub
Ricardo Micheri
Secretary of the Merger Sub
James Tyner
CFO of the Merger Sub

 
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5.11 Merger Sub Restructuring. At or prior to the Closing, Merger Sub shall:

(a)    consent to the election as directors of the following persons, each to
assume office at the Closing and to serve until the next annual meeting of
stockholders and until his successor is elected and qualified:

Kirk Anderson
Ricardo Micheri
James Tyner

(b)    obtain the approval of the foregoing by the stockholders of Merger Sub in
the manner required by Nevada Law and Merger Sub’s certificate of incorporation
and bylaws.

SECTION SIX 
 
6.    Conditions to the Merger.
 
6.1    Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to the
satisfaction on or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by agreement of all the
parties hereto:
 
(a)    Stockholder Approval. This Agreement and the Merger shall have been duly
approved and adopted by the MTG Shareholders.
 
(b)    No Injunctions or Restraints; Illegality. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal. In the event an
injunction or other order shall have been issued, each party agrees to use its
reasonable diligent efforts to have such injunction or other order lifted.
 
(c)    Governmental Approval. Merge Sub, Innofone and MTG shall have timely
obtained from each Governmental Entity all approvals, waivers and consents, if
any, necessary for consummation of or in connection with the Merger and the
several transactions contemplated hereby, including, without limitation, such
approvals, waivers and consents as may be required under the Securities Act and
under any state securities laws.
 
(d)    Approval of Form 8-K. Merge Sub, Innofone and MTG have approved the Form
8-K to be filed with the SEC within 5 days of the Effective Time.
 
6.2    Additional Conditions to Obligations of MTG. The obligations of MTG to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Effective Time of each
of the following conditions, any of which may be waived, in writing, by MTG:
 
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(a)    Representations, Warranties and Covenants  (i) Each of the
representations and warranties of Innofone in this Agreement that is expressly
qualified by a reference to materiality shall be true in all respects as so
qualified, and each of the representations and warranties of Merger Sub and/or
Innofone in this Agreement that is not so qualified shall be true and correct in
all material respects, on and as of the Effective Time as though such
representation or warranty had been made on and as of such time (except that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date), and (ii) Merger
Sub and Innofone shall have performed and complied in all material respects with
all covenants, obligations and conditions of this Agreement required to be
performed and complied with by them as of the Effective Time.
 
(b)    Certificates of Merger Sub and Innofone.
 
(i)    Compliance Certificates of Merge Sub and Innofone. MTG shall have been
provided with certificates executed on behalf of Merger Sub and Innofone by
their Presidents to the effect that, as of the Effective Time, each of the
conditions set forth in Section 6.2(a) above and (d) below has been satisfied
with respect to Merger Sub and Innofone.
 
(ii)    Certificate of Secretary of Merger Sub and Innofone. MTG shall have been
provided with certificates executed by the Secretaries of Merger Sub and
Innofone certifying:
 
(A)    Resolutions duly adopted by the Board of Directors and consent of the
holders of a majority of outstanding shares of Merger Sub and Innofone
authorizing the execution of this Agreement and the execution, performance and
delivery of all agreements, documents and transactions contemplated hereby; and
 
(B)    The incumbency of the officers of Merger Sub and Innofone executing this
Agreement and all agreements and documents contemplated hereby.
 
(c)    No Material Adverse Changes. No material adverse change shall have
occurred in the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, operations, results of
operations or prospects of Innofone, taken as a whole.
 
(d)    Good Standing. MTG shall have received a certificate or certificates of
the Secretary of State of the State of Nevada certifying as of a date no more
than ten business days prior to the Effective Time that Merge Sub and Innofone
are, as of such date, in good standing and authorized to transact business as a
domestic corporation.
 
6.3    Additional Conditions to the Obligations of Innofone. The obligations of
Merger Sub and Innofone to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, by Innofone:
 
(a)    Representations, Warranties and Covenants. (i) Each of the
representations and warranties of MTG and the MTG Shareholders in this Agreement
that is expressly qualified by a reference to materiality shall be true in all
respects as so qualified, and each of the representations and warranties of MTG
and the MTG Shareholders in this Agreement that is not so qualified shall be
true and correct in all material respects, on and as of the Effective Time as
though such representation or warranty had been made on and as of such time
(except that those representations and warranties which address matters only as
of a particular date shall remain true and correct as of such date), and
(ii) MTG and the MTG Shareholders shall have performed and complied in all
material respects with all covenants, obligations and conditions of this
Agreement required to be performed and complied with by it as of the Effective
Time.
 
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(b)    No Material Adverse Changes. No material adverse change shall have
occurred in the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, operations, results of
operations or prospects of MTG, taken as a whole.
 
(c)    Certificates of MTG.
 
(i)    Compliance Certificate of MTG. Innofone shall have been provided with a
certificate executed on behalf of MTG by its President to the effect that, as of
the Effective Time, each of the conditions set forth in Section 6.3(a) and (b)
above has been satisfied.
 
(ii)    Certificate of Secretary of MTG. Innofone shall have been provided with
a certificate executed by the Secretary of MTG certifying:
 
(A)    Resolutions duly adopted by the Board of Directors and the MTG
Shareholders authorizing the execution of this Agreement and the execution,
performance and delivery of all agreements, documents and transactions
contemplated hereby;
 
(B)    The Articles of Incorporation and Bylaws of MTG, as in effect immediately
prior to the Effective Time, including all amendments thereto; and
 
(C)    the incumbency of the officers of MTG executing this Agreement and all
agreements and documents contemplated hereby.
 
(d)    Third Party Consents. Merge Sub and/or Innofone shall have been furnished
with evidence satisfactory to it that MTG has obtained those consents, waivers,
approvals or authorizations of those Governmental Entities and third parties
whose consent or approval are required in connection with the Merger as set
forth in Sections 5.2(a)
 
(e)    Injunctions or Restraints on Merger and Conduct of Business. No
proceeding brought by any administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking to
prevent the consummation of the Merger shall be pending. In addition, no
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal or regulatory
restraint provision limiting or restricting Innofone’s conduct or operation of
the business of MTG, following the Merger shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
Governmental Entity, domestic or foreign, seeking the foregoing be pending.
 
 (f)    Resignation of Directors and Officers. Merger Sub and/or Innofone shall
have received letters of resignation from each of its directors and officers
immediately prior to the Effective Time, which resignations in each case shall
be effective as of the Effective Time.
 
SECTION SEVEN
 
7.    Termination, Amendment and Waiver.
 
7.1    Termination. At any time prior to the Effective Time, this Agreement may
be terminated and the Merger may be abandoned:
 
(a)    by mutual consent duly authorized by the Boards of Directors of each of
Merger Sub, Innofone and MTG;
 
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(b)    by either Merger Sub, Innofone or MTG, if, without fault of the
terminating party,
 
(i)    the Effective Time shall not have occurred on or before midnight July 31,
2006 (or such later date as may be agreed upon in writing by the parties); or
 
(ii)    there shall be any applicable federal or state law that makes
consummation of the Merger illegal or otherwise prohibited or if any court of
competent jurisdiction or Governmental Entity shall have issued an order,
decree, ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action shall have
become final and nonappealable;
 
(c)    by Merger Sub and/or Innofone, if MTG or any of the MTG Shareholders
shall materially breach any of its representations, warranties or obligations
hereunder and such breach shall not have been cured within ten calendar business
days of receipt by MTG of written notice of such breach, provided that Merger
Sub and/or Innofone is not in material breach of any of their representations,
warranties or obligations hereunder, and provided further, that no cure period
shall be required for a breach which by its nature cannot be cured;
 
(d)    by MTG, if Merger Sub and/or Innofone shall materially breach any of its
representations, warranties or obligations hereunder and such breach shall not
have been cured within ten calendar days following receipt by Merger Sub and/or
Innofone of written notice of such breach, provided that neither MTG nor any of
the MTG Shareholders is not in material breach of any of its representations,
warranties or obligations hereunder, and provided further, that no cure period
shall be required for a breach which by its nature cannot be cured.
 
7.2    Effect of Termination. In the event of termination of this Agreement as
provided in Section 7.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Merger Sub, Innofone or MTG
or their respective officers, directors, stockholders or affiliates, except to
the extent that such termination results from the breach by a party hereto of
any of its representations, warranties or covenants set forth in this Agreement;
provided that, the provisions of Section 5.4 (Confidentiality), Section 7.3
(Expenses and Termination Fees) and this Section 7.2 shall remain in full force
and effect and survive any termination of this Agreement.
 
7.3    Expenses and Termination Fees. Whether or not the Merger is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated including, without limitation, filing fees and the
fees and expenses of advisors, accountants, legal counsel and financial
printers, shall be paid by the party incurring such expense.
 
7.4    Amendment. The Boards of Directors of Merger Sub, Innofone and MTG and
the MTG Shareholders may cause this Agreement to be amended at any time by
execution of an instrument in writing signed on behalf of each of the parties.
 
7.5    Extension; Waiver. At any time prior to the Effective Time any party may,
to the extent legally allowed, (i) extend the time for the performance of any of
the obligations or other acts of the other parties, (ii) waive any inaccuracies
in the representations and warranties made to such party contained herein or in
any document delivered pursuant hereto, and (iii) waive compliance with any of
the agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
 
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SECTION EIGHT
 
8.    Indemnification.
 
8.1    Survival of Representations and Warranties. All covenants to be performed
prior to the Effective Time, and all representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the consummation of the Merger and continue until the second anniversary
of the Effective Time (the “Indemnification Termination Date”); provided that if
any claims for indemnification have been asserted with respect to any such
representations and warranties prior to the Indemnification Termination Date,
the representations and warranties on which any such claims are based shall
continue in effect until final resolution of any claims. All covenants to be
performed after the Effective Time shall continue indefinitely.
 
8.2    Indemnification by MTG and MTG Shareholders. Subject to the limitations
set forth in this Section 8, from and after the Effective Time, MTG and the MTG
Shareholders shall protect, defend, indemnify and hold harmless Innofone and the
Merger Sub and its respective parent corporation, affiliates, officers,
directors, employees, representatives and agents (Innofone, Merger Sub and each
of the foregoing persons or entities is hereinafter referred to individually as
an “Merger Sub Indemnified Person” and collectively as “Merger Sub Indemnified
Persons”) from and against any and all losses, costs, damages, liabilities, fees
(including without limitation attorneys’ fees) and expenses (collectively, the
“Merger Sub Damages”), that any of the Merger Sub Indemnified Persons by reason
of or in connection with any claim, demand, action or cause of action alleging
misrepresentation, breach of, or default in connection with, any of the
representations, warranties, covenants or agreements of MTG and the MTG
Shareholders contained in this Agreement, including any exhibits or schedules
attached hereto, and the Certificate of Merger, which becomes known to Merge Sub
and/or Innofone prior to the Indemnification Termination Date. Damages in each
case shall be net of the amount of any insurance proceeds and indemnity and
contribution actually recovered by Innofone or the Merger Sub.
 
8.3    Indemnification by Innofone. Subject to the limitations set forth in this
Section 8, from and after the Effective Time, Innofone shall protect, defend,
indemnify and hold harmless MTG and MTG Shareholders and their respective
affiliates, officers, directors, employees, representatives and agents (MTG, MTG
Shareholders and each of the foregoing persons or entities is hereinafter
referred to individually as an “MTG Indemnified Person” and collectively as “MTG
Indemnified Persons”) from and against any and all losses, costs, damages,
liabilities, fees (including without limitation attorneys’ fees) and expenses
(collectively, the “MTG Damages”), that any of the MTG Indemnified Persons by
reason of or in connection with any claim, demand, action or cause of action
alleging misrepresentation, breach of, or default in connection with, any of the
representations, warranties, covenants or agreements of Innofone contained in
this Agreement, including any exhibits or schedules attached hereto, and the
Certificate of Merger, which becomes known to MTG or the MTG Shareholders prior
to the Indemnification Termination Date. Damages in each case shall be net of
the amount of any insurance proceeds and indemnity and contribution actually
recovered by MTG or the MTG Shareholders.
 
8.4    Exclusive Contractual Remedy and Limitations. Merger Sub, Innofone, the
MTG Shareholders and MTG each acknowledge that Merger Sub Damages or MTG
Damages, if any, may relate to unresolved contingencies existing at the
Effective Time, which if resolved at the Effective Time would have led to a
reevaluation of the total consideration the Parties would have agreed to
transfer in connection with the Merger. The maximum liability of MTG and the MTG
Shareholders for any breach of a representation, warranty or covenant of MTG or
MTG Shareholders and the maximum liability of Merger Sub and Innofone
collectively, for any breach of a representation, warranty or covenant of Merger
Sub or Innofone shall be limited to $500,000; provided, however, that nothing
herein shall limit the liability: (i) of MTG for any breach of representation,
warranty or covenant if the Merger does not close, and (ii) of any officer,
director or Member of MTG for such person’s or entity’s fraud or intentional
misrepresentation.     
 
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SECTION NINE
 
9.    General Provisions.
 
9.1    Survival of Warranties. The representations, warranties and agreements
set forth in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time of the Merger and (except to the
extent that survival is necessary to effectuate the intent of such provisions)
shall terminate on the second anniversary of the Effective Time of the Merger,
provided that representations, warranties and agreements relating to Taxes shall
terminate on the date which is 30 days after expiration of all applicable
statutes of limitations relating to such Taxes.
 
9.2    Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon receipt, when delivered personally
or by courier, overnight delivery service or confirmed facsimile, or 48 hours
after being deposited in the regular mail as certified or registered mail
(airmail if sent internationally) with postage prepaid, if such notice is
addressed to the party to be notified at such party’s address or facsimile
number as set forth below, or as subsequently modified by written notice,
 
(a)    if to Merger Sub and/or Innofone, to:
Alex Lightman, CEO
Innofone.com, Incorporated
1431 Ocean Avenue, Suite 1500
Santa Monica, CA 90401

 
(b)    if to MTG and/or the MTG Shareholders, to:
Kirk Anderson, CEO
Mobile Technology Group, Inc.
101 Convention Center Drive, Suite P119
Las Vegas, NV 89109
 
9.3    Interpretation. When a reference is made in this Agreement to Exhibits or
Schedules, such reference shall be to an Exhibit or Schedule to this Agreement
unless otherwise indicated. The words “include,” “includes” and “including” when
used herein shall be deemed in each case to be followed by the words “without
limitation.” The phrase “made available” in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases “the date of this
Agreement,” “the date hereof,” and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to July 1, 2006. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
 
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9.4    Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument.

 
9.5    Entire Agreement; Nonassignability; Parties in Interest. This Agreement
and the documents and instruments and other agreements specifically referred to
herein or delivered pursuant hereto, including the Exhibits, the Schedules,
including the MTG Disclosure Schedule and the Merger Sub/Innofone Disclosure
Schedule (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and shall survive any termination of this Agreement or the Closing, in
accordance with its terms; (b) are not intended to confer upon any other person
any rights or remedies hereunder; and (c) shall not be assigned by operation of
law or otherwise except as otherwise specifically provided.
 
9.6    Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith, in order to maintain the economic position enjoyed by
each party as close as possible to that under the provision rendered
unenforceable. In the event that the parties cannot reach a mutually agreeable
and enforceable replacement for such provision, then (i) such provision shall be
excluded from this Agreement, (ii) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (iii) the balance of the
Agreement shall be enforceable in accordance with its terms.
 
9.7    Remedies Cumulative. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
 
9.8    Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Nevada,
without giving effect to principles of conflicts of law.
 
9.9    Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
 
9.10    Amendments and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the parties or their respective
successors and assigns. Any amendment or waiver effected in accordance with this
Section 9.10 shall be binding upon the parties and their respective successors
and assigns.
 
[Two Signature Pages Follow]

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MTG, MTG Shareholders, Merger Sub, and Innofone have executed this Agreement as
of the date first written above.
 

        Mobile Technology Group, Inc.:  
   
   
    By:      

--------------------------------------------------------------------------------

Kirk Anderson, CEO    

 

     
Innofone.com, Incorporated:
 
   
   
    By:   /s/ Alex Lightman  

--------------------------------------------------------------------------------

Alex Lightman, CEO  

 

     
Mobile Tech Acquisition Corp.
 
   
   
    By:   /s/ Kirk Anderson  

--------------------------------------------------------------------------------

Kirk Anderson, CEO  

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        MTG SHAREHOLDERS:  
   
   
      /s/ Kirk Anderson   Name:

--------------------------------------------------------------------------------

Kirk Anderson   Address: 4386 Jerdon Ct.
Las Vegas, NV 89129
     

   
   
   
     
/s/ James D. Tyner Jr.
 
Name:

--------------------------------------------------------------------------------

James D. Tyner Jr.
 
Address:
9811 W Charleston Blvd
Suite 2503
Las Vegas, NV 89117

       
   
   
      /s/ Ricardo Micheri  
Name:

--------------------------------------------------------------------------------

Ricardo Micheri
 
Address:
10106 Bonham Court
Las Vegas, NV 89148

       
   
   
      /s/ Erick Rodriguez  
Name:

--------------------------------------------------------------------------------

Erick Rodriguez
 
Address:
115 E Warm Springs Rd
Suite 100
Las Vegas, NV 89119
 

 
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EXHIBITS

Exhibit A -
Certificate of Merger
   
Exhibit B -
Merger Consideration
   
Exhibit C-1 -
Amended and Restated Articles of Incorporation for Merger Sub
   
Exhibit C-2 -
Amended and Restated By Laws for Merger Sub
   
Exhibit D-1 -
Form of Kirk Anderson Employment Agreement
   
Exhibit D-2 -
Form of Ricardo Micheri Employment Agreement
   
Exhibit D-3 -
Form of James Tyner Employment Agreement

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EXHIBIT A

CERTIFICATE OF MERGER

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EXHIBIT B

MERGER CONSIDERATION
 
NAME AND ADDRESS OF STOCKHOLDER
NUMBER OF MTG SHARES
NUMBER OF SHARES OF INNOFONE COMMON STOCK
Tyner Holdings LLC
9811 W Charleston Blvd
Suite 2503
Las Vegas, Nevada 89117
269
388,408
Kirk Anderson
4386 Jerdon Ct.
Las Vegas, NV 89129
154
221,709
Gerard N. Casale Jr.
1158 26th St., Ste. 325
Santa Monica, CA 90403
131
188,820
Erick Rodriguez
115 E Warm Springs Rd
Suite 100
Las Vegas, NV 89119
119
171,075
John M Xitco
P.O. Box 1693
Tacoma, WA 98401
115
165,771
Ricardo Micheri
10106 Bonham Court
Las Vegas, NV 89148
75
108,118
Teresa Hotchkin
210 Chettro Ct
Henderson, NV 89074
43
62,545
CDS Living Trust
208 Starlite
Las Vegas, NV 89107
26
37,527
Nikil Gandhy
3220 Whiffletree Lane
Torrance, CA 90505
22
31,273
KHWY Incorporated
12381 Wilshire Blvd.
Suite. 105
Los Angeles, CA 90025
22
31,273
Rhythm VIP, Inc.
115 E Warm Springs Rd.
Suite 100
Las Vegas, NV 89119
10
14,907
Mark Gore
115 E Warm Springs Rd
Suite 100
Las Vegas, NV 89119
9
12,509
Anthony Mistretta
8804 Buffalo Cloud Ave.
Las Vegas, NV 89143-5407
4
6,255
William T. Goehagen
330 E Warm Springs Rd.
Las Vegas, NV 89119
1
1,251

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EXHIBIT C-1

ARTICLES OF INCORPORATION

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EXHIBIT C-2

BYLAWS

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EXHIBIT D-1

FORM OF KIRK ANDERSON EMPLOYMENT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT D-2

FORM OF RICARDO MICHERI EMPLOYMENT AGREEMENT

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EXHIBIT D-3

FORM OF JAMES TYNER EMPLOYMENT AGREEMENT

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