Document:

exhibit101

    

    

    

    

    

    

    

    

    

    

    

    

    AGREEMENT
      AND PLAN OF

    MERGER

    

    

    

    

    

    

    

    

    

    BECOMING
      ART INC.

    

    and

    

    OXFORD
      MEDIA ACQUISITION CORP.

    

    and

    

    OXFORD
      MEDIA CORP.

    

    

    

    

    

    

    ____________,
      2005

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AGREEMENT
      AND PLAN OF MERGER

    

    I

    

    PARTIES

    

    THIS
      AGREEMENT AND PLAN OF MERGER (the
      “Agreement”) is
      entered into effective as of the ____ day of ________, 2005 (the “Effective
      Date”), by and between BECOMING ART INC., a Nevada corporation (“Parent”);
      OXFORD MEDIA ACQUISITION CORP., a Delaware corporation and a wholly-owned
      subsidiary of Parent (“Merger Sub”); and,
      OXFORD
      MEDIA CORP., a Delaware corporation (“Company”). Parent, Merger Sub, and Company
      are sometimes referred to collectively herein as the “Parties”, and each
      individually as a “Party”.

    

    II

    

    RECITALS

    

    A. The
      Board
      of Directors of Parent has deemed it advisable, and in the best interests of
      Parent and its stockholders, that Parent, Merger Sub, and Company consummate
      the
      business combination and other transactions provided for herein in order to
      advance the long-term strategic business interests of Parent.

    

    B. The
      Board
      of Directors of Merger Sub has deemed it advisable, and in the best interests
      of
      Merger Sub and its stockholder, that Merger Sub, Parent, and Company consummate
      the business combination and other transactions provided for herein in order
      to
      advance the long-term strategic business interests of Merger Sub.

    

    C. Merger
      Sub is a direct, wholly-owned subsidiary of Parent, formed solely for the
      purpose of effecting the Merger and will conduct no activity and incur no
      liability or obligation other than as contemplated by this
      Agreement.

    

    D. The
      Board
      of Directors of Company has deemed it advisable, and in the best interests
      of
      Company and its stockholders, that Company, Parent, and Merger Sub consummate
      the business combination and other transactions provided for herein in order
      to
      advance the long-term strategic business interests of Company.

    

    E. The
      respective Boards of Directors of Parent, Merger Sub, and Company have approved,
      in accordance with applicable provisions of Nevada General Corporation Law,
      Delaware General Corporation Law, and Delaware General Corporation Law,
      respectively, this Agreement and the transactions contemplated hereby, including
      the Merger.

    

    F. The
      Board
      of Directors of Company has resolved to recommend to its stockholders
approval
      and adoption of this Agreement and approval of the Merger.

     

    G. The
      Board
      of Directors of Merger Sub has resolved to recommend to its stockholder

     

     

    
      
        
        

      

      
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    approval
      and adoption of this Agreement and approval of the Merger.

    

    H. The
      Parties desire to make certain representations, warranties, and agreements
      in
      connection with the Merger and also to prescribe certain conditions to the
      Merger.

    

    I. The
      Parties desire to enter into a transaction under which Merger Sub would merge
      into Company. As a result of the Merger, among other things: (i) Company would
      acquire and assume all of the assets, business, obligations, and liabilities
      of
      Merger Sub, as provided for and qualified herein; (ii) each issued and
      outstanding share of common stock of Company will be converted into shares
      of
      common stock of Parent in accordance with the provisions of this
      Agreement;
      (iii)
each
      issued and outstanding share of common stock of Merger Sub will be converted
      into shares of common stock of Company in accordance with the provisions of
      this
      Agreement; (iv) Merger
      Sub would
      disappear and cease to be an active corporation; and (v) and, Company would
      become a direct, wholly-owned subsidiary of Parent.

    

    J. For
      United States federal income tax purposes, and for purposes of state tax
      reporting, the Parties intend that the Merger qualify as a reorganization under
      the provisions of Section 368(a) of the Code, and the Parties further intend,
      by
      executing this Agreement, to adopt a plan of reorganization within the meaning
      of Section 354(a) of the Code.

    

    K. NOW,
      THEREFORE,
      in
      consideration of the promises and the mutual covenants contained herein, and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Parties, intending to be legally bound, hereby agree
      as
      follows:

    

    III

    

    DEFINED
      TERMS AND INTERPRETATION

    

    3.1 Definitions.
      The
      following capitalized terms shall have the respective meanings specified in
      this
      Article III. Other terms defined elsewhere herein shall have meanings so given
      them.

    

    3.1.1. Affiliate.
      “Affiliate”
      shall mean a Person that directly or indirectly, through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      the
      first Person.

    

    3.1.2. Code.
“Code”
      shall mean the Internal Revenue Code of 1986, as amended from time-to-time,
      and
      the rules and regulations thereunder.

    

    3.1.3. Company
      Common Stock.
      “Company Common Stock” shall mean any share of the Common Stock, $.01 par value
      per share, of Company.

    

    3.1.4. Confidential
      Information.
      “Confidential Information” shall mean any information concerning the businesses
      and affairs of a respective Party that is not already generally available to
      the
      public.

    

    3.1.5. Control.
      “Control” (including the terms “controlled by” and “under 

     

     

    
      
        
        

      

      
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    common
      control with”) shall mean the possession, directly or indirectly, of the power
      to direct or cause the direction of the management policies of a Person, whether
      through the ownership of voting securities, by contract or
      otherwise.

    

    3.1.6. Delaware
      Law.
      “Delaware Law” shall mean the General Corporation Law of the State of Delaware,
      as amended.

    

    3.1.7. Dissenting
      Share.
      “Dissenting Shares” shall mean the shares held by a Dissenting Stockholder.

    

    3.1.8. Dissenting
      Stockholder.
      “Dissenting Stockholder” shall mean any holder of Company Common Stock
outstanding
      immediately prior to the Effective Date
      who
shall
      have not voted in favor of the Merger and who shall have
      made
      and perfected a proper demand in writing for payment of the value of said shares
      in accordance with all applicable dissenters’ rights statutes in accordance with
      Delaware Law, and who has not effectively withdrawn or lost the right to such
      payment.

    

    3.1.9. Intellectual
      Property.
      “Intellectual Property” (also referred to as “Intellectual Property Assets”)
      shall mean and include the following, as well as all other general intangibles
      of a like nature and all (i) goodwill, and (ii) confidential data or information
      relating to the below listed items, for each respective party:

    

    (a) The
      Party’s full legal name and all derivations thereof used by that Party, all
      fictional business names, trading names, designs, registered and unregistered
      trademarks, registered and unregistered service marks, and applications
      (collectively, the “Marks”);

    

    (b) All
      patents, patent applications, and inventions and discoveries that may be
      patentable (collectively, the “Patents”);

    

    (c) All
      copyrights in both published works and unpublished works (collectively, the
      “Copyrights”);

    

    (d) All
      rights in mask works (collectively, the “Rights in Mask Works”);
      and

    

    (e) All
      know-how, trade secrets, confidential information, customer lists, computer
      software, databases, source codes, object codes, works of authorship, know-how,
      technical information, data, process technology, user interfaces, proprietary
      concepts, ideas, techniques, business models and methodologies, plans, drawings,
      and blue prints owned, used, or licensed by Parent as licensee or licensor
      (collectively, the “Trade Secrets”). 

    

    3.1.10. IRS.
“IRS”
      shall mean the Internal Revenue Service.

    

    3.1.11. Knowledge.
      “Knowledge” shall mean actual
      knowledge after reasonable investigation.

     

     

    
      
        
        

      

      
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    3.1.12. Material
      Adverse Change.
      “Material Adverse Change” shall mean a change which results in a Material
      Adverse Effect.

    

    3.1.13. Material
      Adverse Effect.
      “Material Adverse Effect” shall mean the following meaning:

    

    (a) with
      respect to Company, (i) a material adverse effect (whether taken individually
      or
      in the aggregate with all other such effects) on the financial condition,
      business, results of operations or properties of Company; (ii) an effect which
      would materially impair Company’s ability to timely to consummate the
      transactions contemplated under this Agreement; or, (iii) any event,
      circumstance or condition affecting Company which would prevent or materially
      delay the consummation of the transactions contemplated under this
      Agreement;

    

    (b) with
      respect to Parent, (i) a material adverse effect (whether taken individually
      or
      in the aggregate with all other such effects) on the financial condition,
      business, results of operations or properties of Parent; (ii) an effect which
      would materially impair Parent’s ability timely to consummate the transactions
      contemplated under this Agreement; or, (iii) any event, circumstance or
      condition affecting Parent which would prevent or materially delay the
      consummation of the transactions contemplated by this Agreement;
      and

    

    (c) with
      respect to the Merger Sub, (i) a material adverse effect (whether taken
      individually or in the aggregate with all other such effects) on the financial
      condition, business, results of operations or properties of Merger Sub; (ii)
      an
      effect which would materially impair Merger Sub’s ability to timely to
      consummate the transactions contemplated under this Agreement; or, (iii) any
      event, circumstance or condition affecting Merger Sub which would prevent or
      materially delay the consummation of the transactions contemplated under this
      Agreement

    

    3.1.14. Merger
      Consideration.
“Merger
      Consideration” shall mean the consideration which each holder of Company Common
      Stock is entitled to receive pursuant to Section 4.4, below. 

    3.1.15. Merger
      Sub Stock.
“Merger
      Sub Stock” shall mean any share of the Common Stock, $.001 par value per share,
      of Merger Sub.

    

    3.1.16. Nevada
      Law.
“Nevada
      General Corporation Law” shall mean the General
      Corporation Law of the State of Nevada, as amended.

    

    3.1.17. Ordinary
      Course of Business.
      “Ordinary Course of Business” shall mean the course of business procedures and
      practices consistent with past custom and practice (including with respect
      to
      quantity and frequency).

    

    3.1.18. Parent
      Common Stock.
“Parent
      Common Stock” shall mean any
      share
      of the Common Stock, $.001 par value per share, of Parent.

     

     

    
      
        
        

      

      
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    3.1.19. Person.
      “Person” shall mean any individual,
      corporation (including any non-profit corporation), general partnership, limited
      partnership, limited liability partnership, joint venture, estate, trust,
      company (including any limited liability company or joint stock company), firm
      or other enterprise, association, organization, unincorporated
      organization, governmental
      entity, or
      any
      other type of entity.

    

    3.1.20. Requisite
      Stockholder Approval.
      “Requisite Stockholder Approval” shall mean the affirmative vote of the holders
      of a majority of that company’s issued and outstanding shares entitled to vote
      on the Merger actually voting in favor of this Agreement and the
      Merger.

    

    3.1.21. SEC.
“SEC”
      shall mean the Securities and Exchange Commission.

    

    3.1.22. SEC
      Filings.
“SEC
      Filings” shall mean that Person’s filings with the SEC.

    

    3.1.23. Security
      Interest.
      “Security Interest” shall mean any mortgage, pledge, lien, encumbrance, charge,
      or other security interest, other
      than
      (a)
      mechanic’s, materialmen’s, and similar liens, (b) liens for taxes not yet due
      and payable or for taxes that the taxpayer is contesting in good faith through
      appropriate proceedings, (c) purchase money liens and liens securing rental
      payments under capital lease arrangements, and (d) other liens arising in the
      Ordinary Course of Business and not incurred in connection with the borrowing
      of
      money.

    

    3.1.24. Subsidiary.
      “Subsidiary” shall mean any corporation with respect to which a specified Person
      (or a Subsidiary thereof) owns a majority of the common stock or has the power
      to vote or direct the voting of sufficient securities to elect a majority of
      the
      directors.

    

    3.1.25. Surviving
      Corporation.
      “Surviving Corporation” shall mean the corporate entity of Company as existing
      immediately after the Merger.

    

    3.1.25. Surviving
      Corporation Common Stock.
      “Surviving Corporation Common Stock”shall
      mean any share of the Common Stock, $.01 par value per share, of the Surviving
      Corporation.

    

    3.1.26. Tax
      or Taxes.
“Tax”
      or “Taxes” shall mean any federal, state, local or foreign income, gross
      receipts, license, payroll, employment, excise, severance, stamp, occupation,
      premium, windfall profits, environmental, customs duties, capital stock,
      franchise, profits, withholding, social security (or similar), unemployment,
      disability, real property, personal property, sales, use, transfer,
      registration, value added, alternative or add-on minimum, estimated, or other
      tax of any kind whatsoever, including any interest, penalty, or addition
      thereto, whether disputed or not.

    

    3.1.27. Tax
      Return.
“Tax
      Return” shall mean any return, declaration, report, claim for refund, or
      information return or statement relating to Taxes, including any schedule or
      attachment thereto, and including any amendment thereof.

    

    3.1.28. Transaction
      Expenses.
      “Transaction Expenses” shall mean and include all reasonable, actual, and
      documented out-of-pocket expenses (including, without limitation, all

     

     

    
      
        
        

      

      
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    reasonable
      fees and expenses of counsel, accountants, and investment bankers to a Party
      and
      its Affiliates) incurred by a Party or on its behalf in connection with or
      related to (i) the authorization, preparation, negotiation, execution, and
      performance of this Agreement; (ii) the preparation, printing, filing, and
      mailing of any SEC Filings made or contemplated by that Party in connection
      with
      this Agreement and the transactions envisioned hereunder; and, (iii) all other
      matters related to the consummation of the transactions contemplated under
      this
      Agreement.

    

    3.2 Accounting
      Terms and Determinations.
      All
      accounting terms used in this Agreement and not otherwise defined shall have
      the
      meaning accorded to them in accordance with GAAP and, except as expressly
      provided herein, all accounting determinations shall be made in accordance
      with
      GAAP, consistently applied. When used herein, the term “financial statements”
      shall include the notes and schedules attached thereto. The term “GAAP” means
      generally accepted accounting principles consistently applied as in effect
      from
      time to time.

    3.3 Interpretation.
      

    

    3.3.1. Provision
      Not Construed Against Party Drafting Agreement.
      This
      Agreement is the result of negotiations by and between the Parties, and each
      Party has had the opportunity to be represented by independent legal counsel
      of
      its choice. This Agreement is the product of the work and efforts of all
      Parties, and shall be
      deemed
      to have been drafted by all Parties. In the event of a dispute, no Party hereto
      shall be entitled to claim that any provision should be construed against any
      other Party by reason of the fact that it was drafted by one particular
      Party.

    

    3.3.2. Number
      and Gender.
      Wherever
      from the context it appears appropriate, (i) each term stated either in the
      singular or plural shall include the singular and plural; and, (iii) wherever
      from the context it appears appropriate, the masculine, feminine, or neuter
      gender, shall each include the others

    

    3.3.3. Incorporation
      of Exhibits and Schedules.
      The
      Exhibits and Schedules identified in this Agreement are incorporated herein
      by
      reference and made a part hereof as if set out in full herein.

    

    3.3.4. Article
      and Section Headings.
      The
      article and section headings used in this Agreement are inserted for convenience
      and identification only and are not to be used in any manner to interpret this
      Agreement.

    

    3.3.5. Severability.
      Each
      and every provision of this Agreement is severable and independent of any other
      term or provision of this Agreement. If any term or provision hereof is held
      void or invalid for any reason by a court of competent jurisdiction, such
      invalidity shall not affect the remainder of this Agreement.

    

    3.3.6. Entire
      Agreement.
      This
      Agreement, and all references, documents, or instruments referred to herein,
      contains the entire agreement and understanding of the Parties hereto in respect
      to the subject matter contained herein. The Parties have expressly not relied
      upon any promises, representations, warranties, agreements, covenants, or
      undertakings, other than those expressly set forth 

     

    
      
        
        

      

      
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    or
      referred to herein. This Agreement supersedes any and all prior written or
      oral
      agreements, understandings, and negotiations between the Parties with respect
      to
      the subject matter contained herein.

    

    3.4 Additional
      Definitions
      and Interpretation Provisions.
      For
      purposes of this Agreement, (i) those words, names, or terms which are
      specifically defined herein shall have the meaning specifically ascribed to
      them; (ii); the words “hereof”, “herein”, “hereunder”, and words of similar
      import, when used in this Agreement, shall refer to this Agreement as a whole,
      and not to any particular provision of this Agreement; (iii) all references
      to
      designated “Articles”, “Sections”, and to other subdivisions are to the
      designated Articles, Sections, and other subdivisions of this Agreement as
      originally executed; (iv) all references to “Dollars” or “$” shall be construed
      as being United States dollars; (v) the
      term
“including” is not limiting and means “including without limitation”;
and,
      (vi)
      all references to all statutes, statutory provisions, regulations, or similar
      administrative provisions shall be construed as a reference to such statute,
      statutory provision, regulation, or similar administrative provision as in
      force
      at the date of this Agreement and as may be subsequently amended.

    

    IV

    

    THE
      MERGER

    

    4.1 Basic
      Transaction.
      On and
      subject to the terms and conditions of this Agreement, and pursuant to Delaware
      Law, Merger Sub will merge with and into Company (the “Merger”) at the Effective
      Date. Immediately following the Merger, the corporate existence of Merger Sub
      will cease and Company will continue as the surviving corporation of the Merger,
      and is sometimes referred to herein as the Surviving Corporation. Surviving
      Corporation will succeed to and assume all of the rights and obligations of
      Merger Sub in accordance with Delaware Law. 

    

    4.2 Effects
      of the Merger.

    

    4.2.1. General.
      The
      Merger shall become legally effective at the time Company and Merger Sub file
      a
      Certificate of Merger in the form attached hereto as Exhibit 4.2.1. (the
“Certificate of Merger”) with the Secretary of State of the State of Delaware,
      which shall be referred to herein as the “Effective Date”. The Merger shall have
      the effect set forth in Delaware Law. Surviving Corporation may, at any time
      after the Effective Date, take any action (including, but not limited to,
      executing, delivering, filing, or recording, any document) in the name and
      on
      behalf of either Company or Merger Sub in order to carry out and effectuate
      the
      transactions contemplated by this Agreement or as required under Delaware
      Law.

    

    4.2.2. Certificate
      of Incorporation.
      The
      Certificate of Incorporation of Company in effect at and as of the Effective
      Date shall remain the
      Certificate of Incorporation of Surviving Corporation after the Effective Date
      without
      any further modification or amendment until thereafter as may amended
as
      provided therein and as permitted by Delaware Law and this Agreement (the
“Certificate”).

    

    4.2.3. Bylaws.
      The
      Bylaws of Company in effect at and as of the Effective Date 

     

     

    
      
        
        

      

      
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    shall
      remain the Bylaws
      of
      the Surviving Corporation
      without
      any further modification or amendment until thereafter as may be amended in
      accordance with Delaware Law and as provided in the Certificate and the Bylaws
      of Company (the “Bylaws”).

     

    4.2.4. Directors
      and Officers of Company.
      Each
      and every one of the directors and officers of Company in office at and as
      of
      the Effective Date will retain their respective position(s) as of an on the
      Effective Date, and they shall serve until their respective successors are
      duly
      elected or appointed and qualified.

    

    4.2.5. Directors
      and Officers of Parent.
      In
      accordance with the following and as reflected on Exhibit 4.2.5., attached
      hereto and incorporated herein by reference:

    

    (i) Immediately
      prior to the Effective Date the directors of Parent will have taken all
      necessary action to remove all officers of Parent and designate and appoint
      the
      individuals noted on Exhibit 4.2.5. to assume their respective officer positions
      as of and at the Effective Date. 

    

    (ii) Immediately
      prior to the Effective Date the directors of Parent will have taken all
      necessary action to (1) appoint as directors those individuals listed on Exhibit
      4.2.5.; and, (2) accept resignations from all other directors of the Company,
      with said resignations and appointments to be effective as of the acceptance
      of
      the SEC Filings made in connection with this Section 4.2.5. 

    

    (iii) The
      new
      directors and officers of Parent shall retain their respective positions until
      the earlier of their resignation or removal or until their respective successors
      are duly elected and qualified, as the case may be.

    

    4.3 Conversion
      of Merger Sub Stock.
      Subject
      to the terms and conditions of this Agreement, at the Effective Date, by virtue
      of the Merger and without any further action on the part of the Parties,
each
      share of Merger Sub Stock issued and outstanding immediately prior to the
      Effective Date shall be converted into and become one (1) validly issued, fully
      paid, and nonassessable share of Surviving Corporation Common Stock.
Each
      certificate evidencing ownership of shares of Merger Sub Common Stock
      outstanding immediately prior to the Effective Date shall evidence ownership
      of
      such shares of capital stock of the Surviving Corporation,
      and
      such converted shares, collectively, will represent all of the issued and
      outstanding Surviving Corporation Common Stock of the Surviving
      Corporation.

    

    4.4 Conversion
      of Company Common Stock.
      Upon
      the
      terms and subject to the conditions of this Agreement, at the Effective Date,
      by
      virtue of the Merger and without any action on the part of Merger Sub, the
      Company, or the holders of any of the following securities, the following shall
      occur:

    

    4.4.1. Conversion
      of Shares.
      Each
      share of Company Common Stock issued
      and outstanding immediately prior to the Effective Date(other than any shares
      of
      Company Common Stock to be canceled pursuant to Section 4.4.2. or Section
      4.4.3., below, and any Dissenting Shares, as defined in Section 4.6, below)
      will
      be canceled and extinguished and automatically converted into 

     

     

    
      
        
        

      

      
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    the
      right
      to receive, upon surrender of the certificate(s) representing such Company
      Common Stock in the manner provided in Section 5.1, below (or in the case of
      a
      lost, stolen or destroyed certificate, upon delivery of an affidavit, and bond,
      if required, in the manner provided in Section 5.2, below), one (1) duly
      authorized, validly issued, fully paid, and nonassessable shares of Parent
      Common Stock. Each
      Dissenting Share shall be converted into the right to receive payment from
      the
      Surviving Corporation with respect thereto in accordance with the provisions
      of
      Delaware Law. As
      of the
      Effective Date, all such shares of Company Common Stock will no longer be
      outstanding and will automatically be cancelled and retired and will cease
      to
      exist, and each holder of a certificate or a certificate which immediately
      prior
      to the Effective Date represented outstanding shares of Company Common Stock
      will cease to have any rights with respect thereto, except the right to receive
      the Merger Consideration.

    

    4.4.2. Cancellation
      of Treasury and Parent-Owned Shares.
      All
      Company Common Stock held by the Company or owned by Merger Sub, Parent, or
      any
      direct or indirect wholly-owned subsidiary of the Company or of Parent
      immediately prior to the Effective Date shall be canceled and extinguished
      without any conversion thereof.

    

    4.4.3. Fractional
      Shares.
      No
      fraction of a share of Parent Common Stock will be issued by virtue of the
      Merger, but in lieu thereof each holder of shares of Company Common Stock who
      would otherwise be entitled to a fraction of a share of Parent Common Stock
      (after aggregating all fractional shares of Parent Common Stock that otherwise
      would be received by such holder) shall receive a total number of Parent Common
      Stock rounded down to the closest whole number.

    

    4.4.4. Stock
      Options; Employee Stock Purchase Plans.

    

    (i) At
      the
      Effective Date, by virtue of the Merger and without any action on the part
      of
      any holder of outstanding options to purchase Company Common Stock (the “Company
      Stock Options”), each Company Stock Option, whether vested or unvested, and all
      stock option plans or other equity-related plans of the Company (the “Company
      Stock Plans”), insofar as they relate to Company Stock Options, shall be assumed
      by Parent and the Company Stock Options shall become an option to acquire shares
      of Parent Common Stock, on the same terms and conditions as were applicable
      under the Company Stock Option immediately prior to the Effective Date, except
      that (i) such assumed Company Stock Option shall be exercisable for that number
      of whole shares of Parent Common Stock equal to the product (rounded down to
      the
      nearest whole number of shares of Parent Common Stock) obtained by multiplying
      the number of shares of Company Common Stock issuable upon the exercise of
      such
      Company Stock Option immediately prior to the Effective Time by the conversion
      ratio referenced in Section 4.4.1., above; and, (ii) the per share exercise
      price for the shares of Parent Common Stock issuable upon exercise of such
      assumed Company Stock Options shall be equal to the quotient (rounded up to
      the
      nearest whole cent) obtained by dividing the exercise price per share of the
      Company Common Stock for which the Company Stock Option was exercisable
      immediately prior to the Effective Time by the conversion ratio referenced
      in
      Section 4.4.1., above.

    

    (ii) The
      rights and preferences of all affected Persons under similar or related plans
      or
      arrangements, such as stock appreciation, phantom stock, profit participation,
      or 

     

     

    
      
        
        

      

      
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    other
      similar rights, shall remain substantially unaffected by the Merger and shall
      be
      treated in a manner substantially similar to that under subparagraph (i),
      above.

    

    (iii) As
      promptly as practicable after the Closing Date, Parent shall issue to each
      holder of an outstanding Company Stock Option immediately prior to the Effective
      Date a document evidencing the foregoing assumption of such Company Stock
      Option.

      

    4.4.5. No
      Further Ownership Rights in Company Common Stock.
      Payment
      of the Merger Consideration shall be deemed to have been paid in full
      satisfaction of all rights pertaining to the Company Common Stock, and after
      the
      Effective Date, there shall be no further registration of transfers on the
      records of the Surviving Corporation of the Company Common Stock which were
      outstanding immediately prior to the Effective Date. If, after the Effective
      Date, certificates are presented to the Surviving Corporation for any reason,
      they shall be canceled and exchanged as provided in Article V,
      below.

    

    4.5 Parent
      Shares.
      Each
      share of Parent Common Stock issued and outstanding at and as of the Effective
      Date will remain issued and outstanding.

    

    4.6 Dissenting
      Shares.

    

    4.6.1. General.
      Notwithstanding
      any provision of this Agreement to the contrary, the Dissenting Shares of
each
      Dissenting Stockholder shall
      not
      be converted into, or represent the right to receive, any shares of Parent
      Common Stock under Section 4.4.1., above. Instead, Dissenting Stockholders
      shall
      be entitled to receive payment of the appraised value of such Dissenting Shares
      held by them in accordance with the provisions of Delaware Law. However,
      all
      Dissenting Shares held by Dissenting Stockholders who shall have failed to
      perfect or who effectively shall have withdrawn or lost their rights to
      appraisal of such Dissenting Shares under Delaware Law shall thereupon be deemed
      to have been converted into, and to have become exchangeable for, as of the
      Effective Date, the right to receive Parent Common Stock under Section 4.4.1.,
      above. 

    

    4.6.2. Notice.
      Company
      shall give Parent (i) prompt notice of any demands for appraisal received by
      Company, withdrawals of such demands, and any other instruments served pursuant
      to Delaware Law and received by Company and (ii) the opportunity to direct
      all
      negotiations and proceedings with respect to demands for appraisal under
      Delaware Law. Company shall not, except with the prior written consent of
      Parent, make any payment with respect to any demands for appraisal or offer
      to
      settle or settle any such demands. 

    

    4.7 Taking
      of Necessary Action; Further Action.
      If, at
      any time after the Effective Date, any further action is necessary or desirable
      to carry out the purposes of this Agreement and to vest Surviving Corporation
      with full right, title, and possession to all assets, property, rights,
      privileges, powers, and franchises of Company and Merger Sub, the officers
      and
      directors of Company and Merger Sub will take all such lawful and necessary
      action.

    

    4.8 Tax-Free
      Reorganization.
      The
      Parties intend that the Merger be treated as a tax free plan of reorganization
      under Section 368(a) of the Code. The Parties shall not take a position on
      

     

    
      
        
        

      

      
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    any
      Tax
      Return or before any taxing authority that is inconsistent with this Section
      4.8
      unless otherwise required by a final and binding determination or resolution
      of
      a governmental body with appropriate jurisdiction, and each Party agrees to
      promptly notify the other Parties of any assertion by a taxing authority of
      a
      position that is inconsistent with this Section 4.8. No Party represents or
      warrants that the Merger will qualify as reorganization under the
      Code.

    

    V

    

    SHARE
      AND CASH ISSUANCE

    

    5.1 Issuance
      of Parent Common Stock.
      At the
      Closing, Parent shall issue share certificates of Parent Common Stock in a
      total
      amount equal to the conversion
      ratio referenced in Section 4.4.1. times
      the
      number of outstanding shares of Company Common Stock (other than any Dissenting
      Shares). The Parent Common Stock shall be issued hereunder to each record holder
      of outstanding Company Common Stock, in the form of a share certificate
      representing the number of shares of Parent Common Stock to which he is
      entitled, in exchange for his surrender of his share certificates which
      represented his shares of Company Common Stock.

    

    5.2 Lost,
      Stolen, or Destroyed Certificates.
      In the
      event that any certificates shall have been lost, stolen, or destroyed, Parent
      shall transfer the Merger Consideration payable with respect to such lost,
      stolen, or, destroyed certificates upon the making of an affidavit of that
      fact
      by the holder thereof. However,
      Parent
      may, in its sole discretion and as a condition precedent to the payment of
      such
      portion of the Merger Consideration, require the owner of such lost, stolen,
      or
      destroyed certificates to deliver a bond in such reasonable and customary amount
      as it may direct as indemnity against any claim that may be made against Parent
      or Surviving Corporation with respect to the certificates alleged to have been
      lost, stolen or destroyed. 

    

    5.3 Cash
      Payment for Dissenting Shares.
      At
      the
      Closing, Parent shall tender all necessary cash payments for the Dissenting
      Shares, as required under Section 4.6, above. In connection therewith,
Parent
      and Surviving Corporation shall be entitled to deduct and withhold from any
      consideration payable or otherwise deliverable pursuant to this Agreement to
      any
      holder or former holder of Company Common Stock such amounts as may be required
      to be deducted or withheld therefrom under the Code or under any provision
      of
      state, local, or foreign tax law or under any other applicable legal
      requirement. To the extent such amounts are so deducted or withheld, such
      amounts shall be treated for all purposes under this Agreement as having been
      paid to the person to whom such amounts would otherwise have been
      paid. 

    

    5.4 Surrender
      of Merger Sub Share Certificates.
      Promptly after the Effective Date, Surviving Corporation shall issue, as
      appropriate, the correct number of shares of Company Common Stock to holders
      of
      Merger Sub Stock.

    

    

    VI

    

    REPRESENTATIONS
      AND WARRANTIES BY PARENT

    

    Parent
      hereby represents and warrants to Company as follows: 

     

     

    
      
        
        

      

      
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    6.1 Generally.
      Parent
      represents and warrants to Company that the statements contained in this Article
      VI are correct and complete as of the Effective Date and will be correct and
      complete as of the Closing Date (as though made then and as though the Closing
      Date were substituted for the date of this Agreement throughout this Article
      VI), except as expressly set forth to the contrary herein and in Schedules
      attached to this Agreement, corresponding to the lettered and numbered
      paragraphs contained in this Article VI. 

    

    6.2 Organization
      and Qualification.
      Parent
      is a corporation duly organized, validly existing, and in good standing under
      the laws of the State of Nevada. Parent is duly authorized to conduct business
      and is in good standing under the laws of each jurisdiction where such
      qualification is required. 

    

    6.3 Subsidiaries.
      Schedule 6.3, attached hereto and incorporated herein by reference, sets forth
      for each subsidiary of Parent (i) its name and jurisdiction of incorporation,
      and (ii) the percentage of such Person’s issued and outstanding shares of
      capital stock owned by Parent.

    

    6.4 Authorization.
      

    

    6.4.1. Operation
      of Business.
      Parent
      has the requisite corporate power and authority and all requisite licenses,
      permits and franchises necessary to own and operate its properties and to carry
      on its business as now being conducted.

    

    6.4.2 Execution
      of Agreement.
      Parent
      has the requisite corporate power and authority and
      has
      obtained all approvals and consents necessary to enter
      into and carry out the terms and conditions of this Agreement, as well as all
      transactions contemplated hereunder. All corporate proceedings have been taken
      and all corporate authorizations have been secured which are necessary to
      authorize the execution, delivery and performance by Parent of this Agreement.
      This Agreement has been duly and validly executed and delivered by Parent and
      constitutes the valid and binding obligations of Parent, enforceable in
      accordance with the respective terms.

    

    6.5 Effect
      of Agreement.
      As of
      the Closing, the consummation by Parent of the transactions herein contemplated,
      including the execution, delivery and consummation of this Agreement, will
      comply with all applicable law and will not:

    

    (a) Violate
      any judgment, statute, law,
      code,
      act, order,
      writ, rule, ordinance, regulation, governmental
      consent or governmental requirement, or
      determination or decree of any arbitrator, court, or other governmental agency
      or administrative body, which
      now
      or at any time hereafter may be applicable to and enforceable against the
      relevant party, work, or activity in question or any part thereof (collectively,
      “Requirement of Law”) applicable to or binding upon Parent or the Parent Common
      Stock to be issued hereunder;

    (b) Violate
      (i)
      the
      terms of the Certificate of Incorporation or Bylaws of Parent; or, (ii) any
      material agreement, contract, mortgage, indenture, bond, bill, note, or other
      material instrument or writing binding upon Parent or to which Parent is
      subject; 

    

    (c) Accelerate
      or constitute an event entitling the holder of any indebtedness of
      

     

     

    
      
        
        

      

      
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    Parent
      to
      accelerate the maturity of such indebtedness or to increase the rate of interest
      presently in effect with respect to such indebtedness; or

    

    (d) Result
      in
      the breach of, constitute a default under, constitute an event which with notice
      or lapse of time, or both, would become a default under, or result in the
      creation of any lien, security interest, charge or encumbrance upon any part
      of
      the assets of Parent or
      any
      other assets of Parent under any agreement, commitment, contract (written or
      oral) or other instrument to which Parent is a party, or by which any of its
      assets (or any part thereof) is bound or affected.

    

    6.6 Consents.
      No
      consents, approvals or other authorizations or notices, other than those which
      have been obtained and are in full force and effect, are required by any state
      or federal regulatory authority or other Person or entity in connection with
      the
      execution and delivery of this Agreement and the performance of any obligations
      contemplated hereunder.

    

    6.7 Legal
      Proceedings.
      Except
      as
      set forth in the SEC Filings of Parent and in Schedule 6.7, attached hereto
      and
      incorporated herein by reference, there
      is
      no
      claim, legal action, suit, arbitration, investigation or hearing, notice of
      claims or other legal, administrative or governmental proceedings pending or
      to
      the best knowledge of Parent, threatened against Parent (or in which Parent
      is
      plaintiff or otherwise a party thereto), and, to the best knowledge of Parent,
      there are no facts existing which might result in any such claim, action, suit,
      arbitration, investigation, hearing, notice of claim or other legal,
      administrative or governmental proceeding. Parent has not waived any statute
      of
      limitations or other affirmative defense with respect to any of its liabilities.
      There is no continuing order, injunction or decree of any court, arbitrator
      or
      governmental or administrative authority to which Parent is a party or to which
      it or any of its assets are subject. Parent has not been permanently or
      temporarily enjoined or barred by order, judgment or decree of any court or
      other tribunal or any agency or regulatory body from engaging in or continuing
      any conduct or practice.

    

    6.8 Regulatory
      Compliance.
      To the
      best Knowledge of Parent, it has not violated any Requirement of Law, the
      violation of which would be reasonably likely to have a Material Adverse Effect.
      Further, Parent and each Subsidiary have met the minimum funding requirements
      of
      ERISA with respect to any employee benefit plans subject to ERISA, and no event
      has occurred resulting from Parent’s failure to comply with ERISA that could
      result in Parent’s incurring any material liability. Parent is not an
“investment company” or a company “controlled” by an “investment company” within
      the meaning of the Investment Company Act of 1940. 

    

    6.9 Capitalization.
      Parent
      is authorized to issue seventy five million
      (75,000,000) shares of Parent Common Stock. Two million eight hundred
      eighty-four thousand five hundred fifty (2,884,550) shares of Parent Common
      Stock are issued and outstanding. All of the issued and outstanding Parent
      Common Stock has been duly authorized and is validly issued, fully paid, and
      nonassessable. Other than as otherwise provided for herein or reflected Schedule
      6.9, attached hereto and incorporated herein by reference, there are no
      outstanding or authorized options, warrants, purchase rights, subscription
      rights, conversion rights, exchange rights, or other contracts or commitments
      that could require Parent to issue, sell, or otherwise cause to become
      outstanding any of its capital stock. 

    

    6.10 Parent
      Common Stock to be Issued.
      The
      Parent Common Stock to be issued pursuant to the provisions of this Agreement
      will, upon such transfer, be duly authorized, legally and 

     

    
      
        
        

      

      
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    validly
      issued, fully paid and nonassessable, and free
      and
      clear of all liens, mortgages, pledges, and other encumbrances of any nature,
      unless expressly provided herein to the contrary.

    

    6.11 Employee
      Benefit Plans.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.11, attached hereto
      and incorporated herein by reference, Parent is not a party to any written
      or
      oral (i) contract with any labor union, (ii) bonus, pension, profit-sharing,
      retirement, deferred compensation, savings, stock purchase, stock option,
      hospitalization, insurance or other plan providing employees benefits, (iii)
      employment, agency, consulting or similar contract which cannot be terminated
      by
      it in one hundred twenty (120) days or less, without cost, or (iv) any other
      plan, agreement or arrangement governed by the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”). 

    

    6.12 Permits
      and Licenses.
      Parent
      has all licenses and permits (federal, state, and local) required by
      governmental authorities to own, operate and carry on its business as now being
      conducted, and such licenses and permits are in full force and effect. No
      violations are or have been recorded in respect to the licenses or permits,
      included but not limited to fire and health and safety law violations, and
      no
      proceeding is pending or threatened looking toward the revocation or limitation
      of any of them. 

    

    6.13 Customers
      and Suppliers.
      The
      books and records of Parent contain a correct and complete list of each of
      the
      customers and suppliers of Parent who have dealt with Parent during the last
      five (5) years (the “Customers and Suppliers”). Parent has taken all
      commercially reasonable steps to maintain the confidentiality of the Customers.
      To Parent’s best Knowledge:

    

    (a) None
      of
      the Customers or Suppliers, or any other person or entity having material
      business dealings with Parent will or may cease to continue such relationship
      with Parent;

    

    (b) None
      of
      the Customers or Suppliers, or any other person or entity having material
      business dealings with Parent will or may substantially reduce the extent of
      such relations with Parent at any time from or after the Closing;

    

    (c) There
      are
      no other existing or contemplated material modifications or changes in the
      business relationship of any Customers or Suppliers with Parent; 

    

    (d) There
      are
      no existing conditions or state of facts or circumstances which have or would
      have a Material Adverse Effect on the relationship of Parent with Customers
      or
      Suppliers after Closing, or which has prevented or will prevent such business
      from being carried on after the Closing in essentially the same manner as it
      is
      currently carried on.

    

    6.14 Leases
      and Similar Agreements.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.14, attached hereto
      and incorporated herein by reference, Parent is not a party to, nor are any
      of
      its assets bound by or subject to, any leases or other similar agreements or
      instruments, whether as lessor or lessee. With regard to all such disclosed
      leases and similar agreements, Parent has delivered to Company any and all
      consents or waivers of other parties necessary for the continuation of the
      leases and similar agreements upon the same terms and conditions in effect
      as of
      the Closing.

     

    
      
        
        

      

      
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    6.15 Material
      Agreements.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.15, attached hereto
      and incorporated herein by reference, Parent is not a party to, nor are any
      of
      its assets bound by or subject to, any of the following:

    

    (a) license
      agreement, assignment or contract (whether as licensor or licensee, assignor
      or
      assignee) relating to trademarks, trade names, patents or copyrights (or
      applications therefore), know-how or technical assistance, or other proprietary
      rights (other than trademark agreements which are entered into in the ordinary
      course of Parent’s business in conjunction with sales agreements;

    

    (b) agreement
      or other arrangement for the sales of goods or services by Parent to any
      government or governmental authority (other than pursuant to open purchase
      orders issued by such entities);

    

    (c) agreement
      with any vendor, distributor, dealer, sales agent or representative other than
      contracts or orders for the purchase or sale of goods made in the usual and
      Ordinary Course of Business at an aggregate price per contract or order of
      less
      than $10,000 and a terms of less than ninety days under any such contract or
      order;

    

    (d) agreement
      with any supplier or customer with respect to discounts (other than those
      reflected on Parent’s current price lists) or allowances or extended payment
      terms;

     

    
      (e) joint
        venture or partnership agreement with any other person;

      

      (f) agreement
        which restricts Parent from doing business anywhere in the world;
        or

    

     

                                    (g) long-term
      services agreement.

    

    6.16 Employment
      Agreements.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.16, attached hereto
      and incorporated herein by reference, and except as otherwise provided for
      herein, Parent is not a party to any employment agreement, independent
      contractor agreement, or similar arrangement or agreement, whether it be reduced
      to written form or an oral promise.

    

    6.17 Restrictive
      Covenant Agreements.
      Schedule 6.17, attached hereto and incorporated herein by reference, represents
      a list of all restrictive covenant agreements and arrangements held by Parent
      with regard to its business. Copies of all such contracts are also attached
      hereto as part of Schedule 6.17.

     

    6.18 Accounts
      Receivable.
      All
      accounts receivable of Parent arose from valid sales transactions in the
      Ordinary Course of Business and represent valid obligations due Parent, and
      represent valid obligations due Parent, and are collectible in the Ordinary
      Course of Business in the aggregate recorded amounts thereof in accordance
      with
      their terms.

    

    6.19 Insurance
      Policies.
      All
      insurance policies maintained by Parent on its assets, business, officers and
      personnel provide adequate and sufficient liability and property damage coverage
      commensurate with the business practices of Parent. Parent does not conduct
      any
      business which would result in the cancellation of, or a material increase
      in
      the premiums, for any of its insurance policies.

     

     

    
      
        
        

      

      
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    6.20 Environmental
      Matters.
      To the
      best Knowledge of Parent, with regard to matters of environmental
      compliance:

    

    (a) Parent
      has conducted and is conducting its business, and has used and is using its
      properties, whether currently owned, operated or leased or owned, operated
      or
      leased by Parent at any time in the past; and at the time of acquisition of
      any
      security interest, all properties in which Parent has a security interest had
      always been used, in compliance with all applicable federal, and state and
      local
      environmental laws and regulations, except where the failure to comply with
      such
      laws and regulations, in the aggregate, has not had and could not have a
      material adverse effect on the condition (financial or otherwise), business
      or
      properties of Parent.

    

    (b) Neither
      Parent nor any property currently owned, operated or leased or which has been
      owned, operated or leased by Parent, is subject to any existing, pending or
      threatened investigation, action or proceeding, including any notice of
      violation, by any governmental authority regarding contamination of any part
      of
      such property or infractions of any law, statute, ordinance or regulation or
      any
      license or permit issued by any government agency pertaining to health,
      industrial hygiene or environmental safety or environmental conditions on,
      under
      or about such property, except where such investigations, actions, proceedings,
      notifications or infractions, in the aggregate, have not had and could not
      have
      a material adverse effect on the condition (financial or otherwise), business
      or
      properties of Parent.

    

    (c) Except
      as
      set forth in Schedule 6.20,
      attached hereto and incorporated herein by reference, there are no underground
      storage tanks or toxic or hazardous wastes, substances, or materials, or
      pollutants or contaminants, including asbestos, presently located on or under
      any property which is currently or has been owned, operated or leased by Parent;
      there were no underground storage tanks or toxic or hazardous wastes,
      substances, or materials, or pollutants or contaminants, including asbestos,
      located on or under any property in which Parent or Parent has or had an
      interest. As used herein, the terms toxic or hazardous wastes, substances or
      materials, pollutants and contaminants mean any material which is or becomes
      during the term of this Agreement regulated or controlled as a hazardous or
      toxic waste or environmental pollutant under any federal, state or local law,
      ordinance, order, decree or regulation currently in effect and applicable to
      Parent or any property owned, operated or leased by Parent.

    

    6.21 Other
      Arrangements.
      Parent
      is not a party to any contract, commitment or agreement, nor are any of its
      assets subject to, or bound or affected by, any order, judgment, decree, law,
      statute, ordinance, rule, regulation or other restriction of any kind or
      character which is not applicable to Parent generally, which would, individually
      or in the aggregate, cause a Material Adverse Effect on Parent. Parent is also
      not a party or subject to any agreement, contract or other obligation which
      would require the making of any payment, other than payments contemplated by
      this Agreement, to any other person as a result of the consummation of the
      transactions contemplated herein.

    

    6.22 Undisclosed
      Liabilities.
      Parent
      does not have any liability (whether known or unknown, whether asserted or
      unasserted, whether absolute or contingent, whether accrued or unaccrued,
      whether liquidated or unliquidated, and whether due or to become due), including
      any liability for Taxes, except for (i) liabilities set forth in the Parent
      Financial Statements, and (ii) liabilities which have arisen after the date
      of
      the Parent Financial Statements in the Ordinary Course of 

     

     

    
      
        
        

      

      
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    Business
      (none of which results from, arises out of, relates to, is in the nature of,
      or
      was caused by any breach of contract, breach of warranty, tort, infringement,
      or
      violation of law).

    

    6.23 Material
      Defaults.
      Parent
      is not in material default, or alleged to be in default, under any material
      agreement, contract, lease, mortgage, commitment, instrument or obligation,
      and
      no other party to any agreement, contract, lease, mortgage, commitment,
      instrument or obligation to which Parent is a party is in default thereunder,
      which default would materially and adversely affect the properties, assets,
      business or prospects of Parent.

    

    6.24 Tax
      Returns and Disputes.
      Parent
      has filed all Tax Returns (federal, state and local) required to be filed by
      it,
and
      all
      such Tax Returns filed are complete and accurate in all material respects.
      Parent has paid
      all
      Taxes shown to be due and payable on the returns or any assessments or penalties
      received by it and all other Taxes (federal, state and local) due and payable
      by
      it. Parent
      has collected and withheld all Taxes which it has been required to collect
      or
      withhold and has timely submitted all such collected and withheld amounts to
      the
      appropriate authorities. Parent is in compliance with the back-up withholding
      and information reporting requirements under the Code and any state, local
      or
      foreign laws, and the rules and regulations thereunder. 

    

    6.25 Title
      to Assets.
      Parent
      has good and marketable title to all of its assets, free and clear of all liens,
      mortgages, conditional sale and other title retention agreements, pledges,
      assessments, tax liens and other encumbrances of any nature, except as expressly
      disclosed on Schedule 6.25, attached hereto and incorporated herein by
      reference. 

    

    6.26 Condition
      of Assets.
      The
      assets of Parent are in good operating condition and repair, subject to
      reasonable wear and tear, constitute all of the assets used in the conduct
      of
      the business, and are sufficient for the proper operation of the Ordinary Course
      of Business.

    

    6.27 Intellectual
      Property Assets.
      The
      Intellectual Property Assets are all those necessary for the operation of the
      business of Parent as it is currently conducted, and are listed on Schedule
      6.27, attached hereto and incorporated herein by reference. Parent is the owner
      of all right, title, and interest in and to each of the Intellectual Property
      Assets, free and clear of all liens, security interests, charges, encumbrances,
      equities, and other adverse claims, and has the right to use without payment
      to
      a third party all of the Intellectual Property Assets. To the extent that any
      employee or former employee of Parent has developed or invented or otherwise
      produced any of the Intellectual Property Assets, all such former and current
      employees of Parent have executed written contracts that assign to Parent all
      rights to any inventions, improvements, discoveries, or information relating
      to
      the Intellectual Property Assets. No such employee or former employee has
      entered into any contract that restricts or limits in any way the scope or
      type
      of work in which the employee may be engaged or requires the employee to
      transfer, assign, or disclose information concerning his work to anyone other
      than Parent. With regard to different aspects of the Intellectual Property
      Assets: 

    

    6.27.1. Patents.

    

    (i) All
      of
      the issued Patents are currently in compliance with formal legal requirements
      (including payment of filing, examination, and maintenance fees and proofs
      of
      working or use), are valid and enforceable, and are not subject to any
      maintenance fees or Taxes or 

     

     

    
      
        
        

      

      
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    actions
      falling due within ninety (90) days after the Closing Date.

    

    (ii) No
      Patent
      has been or is now involved in any interference, reissue, reexamination, or
      opposition proceeding. To Parent’s Knowledge, there is no potentially
      interfering patent or patent application of any third party.

    

    (iii) No
      Patent
      is infringed or, to Parent’s Knowledge, has been challenged or threatened in any
      way. None of the products manufactured and sold, nor any process or know-how
      used, by Parent infringes or is alleged to infringe any patent or other
      proprietary right of any other Person.

    

    (iv) All
      products made, used, or sold under the Patents have been marked with the proper
      patent notice.

    

    6.27.2. Trademarks.

    

    (i) All
      Marks
      that have been registered with the United States Patent and Trademark Office
      are
      currently in compliance with all formal legal requirements (including the timely
      post-registration filing of affidavits of use and incontestability and renewal
      applications), are valid and enforceable, and are not subject to any maintenance
      fees or Taxes or actions falling due within ninety days after the Closing
      Date.

    

    (ii) No
      Mark
      has been or is now involved in any opposition, invalidation, or cancellation
      and, to Parent’s Knowledge, no such action is Threatened with the respect to any
      of the Marks.

    

    (iii) To
      Parent’s Knowledge, there is no potentially interfering trademark or trademark
      application of any third party.

    

    (iv) No
      Mark
      is infringed or, to Parent’s Knowledge, has been challenged or threatened in any
      way. None of the Marks used by Parent infringes or is alleged to infringe any
      trade name, trademark, or service mark of any third party.

    

    (v) All
      products and materials containing a Mark bear the proper federal registration
      notice where permitted by law.

    

    6.27.3. Copyrights.

    

    (i) All
      the
      Copyrights have been registered and are currently in compliance with formal
      legal requirements, are valid and enforceable, and are not subject to any
      maintenance fees or Taxes or actions falling due within ninety days after the
      date of Closing.

    

    (ii) No
      Copyright is infringed or, to Parent’s Knowledge, has been challenged or
      threatened in any way. None of the subject matter of any of the Copyrights
      infringes or is alleged to infringe any copyright of any third party or is
      a
      derivative work based on the work of a 

     

     

    
      
        
        

      

      
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    third
      party.

    

    (iii) All
      works
      encompassed by the Copyrights have been marked with the proper copyright
      notice.

    

    6.27.4. Trade
      Secrets.

    

    (i) With
      respect to each Trade Secret, the documentation relating to such Trade Secret
      is
      current, accurate, and sufficient in detail and content to identify and explain
      it and to allow its full and proper use without reliance on the Knowledge or
      memory of any individual.

    

    (ii) Parent
      has taken all reasonable precautions to protect the secrecy, confidentiality,
      and value of the Trade Secrets.

    

    (iii) Parent
      has good title and an absolute (but not necessarily exclusive) right to use
      the
      Trade Secrets. The Trade Secrets are not part of the public Knowledge or
      literature, and, to Parent’s Knowledge, have not been used, divulged, or
      appropriated either for the benefit of any Person or to the detriment of Parent.
      No Trade Secret is subject to any adverse claim or has been challenged or
      threatened in any way.

    

    6.28 Financial
      Condition.
      The
      financial statements of Parent as reflected in the most recently filed Parent’s
      SEC Filings requiring to contain financial statements (collectively, the “Parent
      Financial Statements”) present fairly the financial position, results of
      operations, and cash flows of Parent at the dates and for the fiscal periods
      then ended, in accordance with GAAP. There has been no Material Adverse Change
      in the Parent Financial Statements. 

    

    6.29 No
      Other Material Adverse Change.
      Since
      01 January 2005 there has been no Material Adverse Change in the business,
      financial condition, results of operations, assets, or liabilities of Parent,
      including but not limited to the following:

    

    (a) Any
      damage, destruction or loss (whether or not covered by insurance) materially
      and
      adversely affecting the properties, assets, business or prospects of
      Parent;

    (b) Any
      change in the accounting methods or practices followed by Parent or any change
      in the depreciation or amortization policies or rates adopted by Parent (whether
      or not presently outstanding), except liabilities incurred, and obligations
      under agreements entered into, in the ordinary course of business;
      or

    

    (c) Any
      sale,
      lease, abandonment or other disposition by Parent, other than in the ordinary
      course of business, of any machinery, equipment or other operating properties
      directly or indirectly related to Parent.

    

    6.30 Other
      Matters.
      Parent
      has not taken and has not agreed to take any action, and has no Knowledge of
      any
      fact or circumstances that would materially impede or delay the consummation
      of
      the transactions contemplated hereby.

    

    6.31 Disclosure.
      The
      representations and warranties of Parent contained in this Agreement

     

     

    
      
        
        

      

      
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    and
      in
      the SEC Filings of Parent and in any agreement, certificate, affidavit,
      statutory declaration or other document delivered or given pursuant to this
      Agreement are true and correct and do not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the statements
      contained in such representations and warranties not misleading to the
      Stockholders.

    

    6.32 Advice
      of Changes.
      Between
      the Effective Date hereof and the Closing Date, Parent shall promptly advise
      Company in writing of any fact which, if existing or known at the Effective
      Date, would have been required to be set forth or disclosed in or pursuant
      to
      this Agreement or of any fact which, if existing or known at the Effective
      Date,
      would have made any of the representations contained herein untrue.

    

    6.33 Lack
      of Fairness
      Opinion.
      The
      Board of Directors of Parent has made a well informed, independent, good faith
      decision to not obtain any type of written opinion from a qualified professional
      that the Merger is fair, from a financial point of view.

    

    6.34 Tax-Free
      Transaction.
      Neither
      Parent nor any of its Subsidiaries knows of any fact or has taken, or failed
      to
      take, any action that could prevent the Merger from qualifying as a tax-free
      reorganization within the meaning of Section 368(a) of the Code.

    

    VII

    

    REPRESENTATIONS
      AND WARRANTIES BY COMPANY

    

    Company
      hereby represents and warrants to Parent and Merger Sub as follows:

    

    7.1 Generally.
      Company
      hereby represents and warrants to Parent and Merger Sub that the statements
      contained in this Article VII are correct and complete as of the Effective
      Date
      and will be correct and complete as of the Closing Date (as though made then
      and
      as though the Closing Date were substituted for the date of this Agreement
      throughout this Article VII), except as expressly set forth to the contrary
      herein and in Schedules attached to this Agreement, corresponding to the
      lettered and numbered paragraphs contained in this Article VII. 

    7.2 Organization
      and Good Standing.
      Company
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of Delaware. 

    

    7.3 Subsidiaries.
      Schedule 7.3, attached hereto and incorporated herein by reference, sets forth
      for each subsidiary of Company (i) its name and jurisdiction of incorporation,
      and (ii) the percentage of such Person’s issued and outstanding shares of
      capital stock owned by Company.

    

    7.4 Authorization.
      

    

    7.4.1. Operation
      of Business.
      Company
      has the requisite corporate power and authority and all requisite licenses,
      permits and franchises necessary to own and operate its properties and to carry
      on its business as now being conducted.

    

    7.4.2 Execution
      of Agreement.
      Company
      has the requisite corporate power and authority and
      has
      obtained all approvals and consents necessary to enter
      into and carry out the terms 

     

     

    
      
        
        

      

      
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    and
      conditions of this Agreement, as well as all transactions contemplated
      hereunder. All corporate proceedings have been taken and all corporate
      authorizations have been secured which are necessary to authorize the execution,
      delivery and performance by Company of this Agreement. This Agreement has been
      duly and validly executed and delivered by Company and constitutes the valid
      and
      binding obligations of Company, enforceable in accordance with the respective
      terms, provided,
      however,
      that
      Company cannot consummate the Merger unless and until it receives the Requisite
      Stockholder Approval. 

    

    7.5 Effect
      of Agreement
      As of
      the Closing, the consummation by Company of the transactions herein
      contemplated, including the execution, delivery and consummation of this
      Agreement, will comply with all applicable law and will not:

    

    (a) Violate
      any
      Requirement of Law applicable to or binding upon Company;

    (b) Violate
      (i)
      the
      terms of the Certificate of Incorporation or Bylaws of Company; or, (ii) any
      material agreement, contract, mortgage, indenture, bond, bill, note, or other
      material instrument or writing binding upon Company or to which Company is
      subject; 

    

    (c) Accelerate
      or constitute an event entitling the holder of any indebtedness of Company
      to
      accelerate the maturity of such indebtedness or to increase the rate of interest
      presently in effect with respect to such indebtedness; or

    

    (d) Result
      in
      the breach of, constitute a default under, constitute an event which with notice
      or lapse of time, or both, would become a default under, or result in the
      creation of any lien, security interest, charge or encumbrance upon any of
      the
      assets or any other properties of Company under any agreement, commitment,
      contract (written or oral) or other instrument to which Company is a party
      or by
      which it is bound or affected.

    

    7.6 Consents.
      No
      consents, approvals or other authorizations or notices, other than those which
      have been obtained and are in full force and effect, are required by any state
      or federal regulatory authority or other Person or entity in connection with
      the
      execution and delivery of this Agreement and the performance of any obligations
      contemplated hereunder.

    

    7.7 Legal
      Proceedings.
      There
      are no legal, administrative, arbitral or other actions, claims, suits or
      proceedings or investigations instituted or pending or, to the Knowledge of
      Company’s management, threatened against Company, or against any property,
      asset, interest or right of Company, that might reasonably be expected to have
      a
      Material Adverse Effect or that might reasonably be expected to threaten or
      impede the consummation of the transactions contemplated by this
      Agreement.

    

    7.8 Regulatory
      Compliance.
      To the
      best Knowledge of Company, it has not violated any Requirement of Law, the
      violation of which would be reasonably likely to have a Material Adverse Effect.
      Further, Company and each Subsidiary have met the minimum funding requirements
      of ERISA with respect to any employee benefit plans subject to ERISA, and no
      event has occurred resulting from Company’s failure to comply with ERISA that
      could result in Company’s incurring any material liability. Company is not an
“investment company” or a company “controlled” by an 

     

    
      
        
        

      

      
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    “investment
      company” within the meaning of the Investment Company Act of 1940. 

    

    7.9 Capitalization.
      Company
      is authorized to issue fifty million (50,000,000)
      shares of Company Stock. Five million eight hundred seventy eight thousand
      three
      hundred thirty six (5,878,336) shares of Company Stock are issued and
      outstanding. All of the issued and outstanding Company Stock has been duly
      authorized and is validly issued, fully paid, and nonassessable. Other than
      as
      otherwise provided for herein or reflected Schedule 7.9, attached hereto and
      incorporated herein by reference, there are no outstanding or authorized
      options, warrants, purchase rights, subscription rights, conversion rights,
      exchange rights, or other contracts or commitments that could require Company
      to
      issue, sell, or otherwise cause to become outstanding any of its capital stock.
      

    

    7.10 Disclosure.
      No
      representation or warranty made by Company in this Agreement or in its SEC
      Filings or in any writing furnished or to be furnished pursuant to or in
      connection with this Agreement knowingly contains or will contain any untrue
      statement of a material fact, or omits or will omit to state any material fact
      required to make the statements herein or therein contained not misleading.
      

    

    7.11 Material
      Defaults.
      Company
      is not in material default, or alleged to be in default, under any material
      agreement, contract, lease, mortgage, commitment, instrument or obligation,
      and
      no other party to any agreement, contract, lease, mortgage, commitment,
      instrument or obligation to which Company is a party is in default thereunder,
      which default would materially and adversely affect the properties, assets,
      business or prospects of Company.

    

    7.12 Tax
      Returns and Disputes.
      Company
      has filed all Tax Returns (federal, state and local) required to be filed by
      it,
      has paid all Taxes shown to be due and payable on the returns or any assessments
      or penalties received by it and all other Taxes (federal, state and local)
      due
      and payable by it. There are no audits pending and there are no present disputes
      as to Taxes of any nature payable by Company.

    

    7.13 Financial
      Condition.
      The
      audited financial statements of Company for the period ended December 31, 2003
      and the unaudited financial statements of Company for the nine months ended
      September 30, 2004 (collectively, the “Company Financial Statements”) present
      fairly the financial position, results of operations and cash flows of Company
      at the dates and for the fiscal periods then ended, in accordance with GAAP
      (except, with respect to the unaudited interim Company Financial Statements,
      for
      the absence of footnotes thereto and subject to customary year end adjustments).
      

    

    7.14 No
      Material Adverse Change.
      Since
      September 30, 2004, there has been no Material Adverse Change in the business,
      financial condition, results of operations, assets, or liabilities of
      Company.

    

    7.15 Disclosure.
      The
      representations and warranties of Company contained in this Agreement and in
      any
      agreement, certificate, affidavit, statutory declaration or other document
      delivered or given pursuant to this Agreement are true and correct and do not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements 

     

    
      
        
        

      

      
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    contained
      in such representations and warranties not misleading to Parent.

    

    7.16 Other
      Matters.
      Company
      has not taken and has not agreed to take any action, and has no Knowledge of
      any
      fact or circumstances that would materially impede or delay the consummation
      of
      the transactions contemplated under this Agreement. 

    

    7.17 Advice
      of Changes.
      Between
      the Effective Date hereof and the Closing Date, Company shall promptly advise
      Parent in writing of any fact which, if existing or known at the Effective
      Date,
      would have been required to be set forth or disclosed in or pursuant to this
      Agreement or of any fact which, if existing or known at the Effective Date,
      would have made any of the representations contained herein untrue.

    

    7.18 Lack
      of Fairness
      Opinion.
      The
      Board of Directors of Company has made a well informed, independent, good faith
      decision to not obtain any type of written opinion from a qualified professional
      that the Merger is fair, from a financial point of view.

    

    7.19 Tax-Free
      Transaction.
      Neither
      Company nor any of its Subsidiaries knows of any fact or has taken, or failed
      to
      take, any action that could prevent the Merger from qualifying as a tax-free
      reorganization within the meaning of Section 368(a) of the Code.

    

    VIII

    

    REPRESENTATIONS
      AND WARRANTIES BY MERGER SUB

    

    Parent
      and Merger Sub, jointly and severally, hereby represent and warrant to Company
      as follows:

    

    8.1 Generally.
      Parent
      and Merger Sub, jointly and severally, hereby represent and warrant to Company
      that the statements contained in this Article VIII are correct and complete
      as
      of the Effective Date and will be correct and complete as of the Closing Date
      (as though made then and as though the Closing Date were substituted for the
      date of this Agreement throughout this Article VIII), except as expressly set
      forth to the contrary herein and in Schedules attached to this Agreement,
      corresponding to the lettered and numbered paragraphs contained in this Article
      VIII. 

    

    8.2 Organization
      and Qualification.
      Merger
      Sub is a corporation duly organized, validly existing, and in good standing
      under the laws of the State of Delaware. Merger Sub is duly authorized to
      conduct business and is in good standing under the laws of each jurisdiction
      where such qualification is required. 

    

    8.3 Capitalization.
      The
      entire authorized capital stock of Merger Sub consists of one thousand (1,000)
      shares of Merger Sub Stock, of which all one thousand (1,000) shares of Merger
      Sub Stock are issued and outstanding. All of the issued and outstanding shares
      of Merger Sub Stock have been duly authorized and are validly issued, fully
      paid, and nonassessable. Other than as reflected Schedule 8.3, attached hereto
      and incorporated herein by reference, there are no outstanding or authorized
      options, warrants, purchase rights, subscription rights, conversion rights,
      exchange rights, or other contracts or commitments that could require Merger
      Sub
      to issue, sell, or otherwise cause to 

     

    
      
        
        

      

      
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    become
      outstanding any of its capital stock. There are no outstanding or authorized
      stock appreciation, phantom stock, profit participation, or similar rights
      with
      respect to Merger Sub, other than as reflected on Schedule 8.3.

    

    8.4 Authorization.
      

    

    8.4.1. Operation
      of Business.
      Merger
      Sub has the requisite corporate power and authority and all requisite licenses,
      permits and franchises necessary to own and operate its properties and to carry
      on its business as now being conducted. Merger Sub is also duly qualified and
      in
      good standing as a foreign corporation authorized to do business in every
      jurisdiction in which it owns or leases properties, or conducts any business,
      so
      as to require qualification.

    

    8.4.2 Execution
      of Agreement.
      Merger
      Sub has the requisite corporate power and authority to enter into and carry
      out
      the terms and conditions of this Agreement, as well as all transactions
      contemplated hereunder. All corporate proceedings have been taken and all
      corporate authorizations have been secured which are necessary to authorize
      the
      execution, delivery, and performance by Merger Sub of this Agreement. This
      Agreement has been duly and validly executed and delivered by Merger Sub and
      constitutes the valid and binding obligations of Merger Sub, enforceable in
      accordance with the respective terms, provided,
      however,
      that
      Merger Sub cannot consummate the Merger unless and until it receives the
      Requisite Stockholder Approval. 

    

    8.5 Effect
      of Agreement.
      As of
      the Closing, the consummation by Merger Sub of the transactions herein
      contemplated, including the execution, delivery and consummation of this
      Agreement, will comply with all applicable law and will not:

    

    (a) Violate
      any
      Requirement of Law applicable to or binding upon Merger Sub;

    (b) Violate
      (i)
      the
      terms of the Certificate of Incorporation or Bylaws of
      Merger
      Sub;
      or,
      (ii) any material agreement, contract, mortgage, indenture, bond, bill, note,
      or
      other material instrument or writing binding upon Merger
      Sub
      or to
      which Merger
      Sub
      is
      subject; 

    (c) Accelerate
      or constitute an event entitling the holder of any indebtedness of Merger
      Sub
      to
      accelerate the maturity of such indebtedness or to increase the rate of interest
      presently in effect with respect to such indebtedness; or

    

    (d) Result
      in
      the breach of, constitute a default under, constitute an event which with notice
      or lapse of time, or both, would become a default under, or result in the
      creation of any lien, security interest, charge or encumbrance upon any of
      the
      assets or any other properties of Merger
      Sub
      under
      any agreement, commitment, contract (written or oral) or other instrument to
      which Merger
      Sub
      is a
      party or by which it is bound or affected.

    

    8.6 Legal
      Proceedings.
      Except
      as set forth in Schedule 8.6, attached hereto and incorporated herein by
      reference, there is no claim, legal action, suit, arbitration, investigation
      or
      hearing, notice of claims or other legal, administrative or governmental
      proceedings pending or to the best knowledge of Merger Sub, threatened against
      Merger
      Sub
      (or in
      which Merger
      Sub
      is
      plaintiff or otherwise a party thereto), and, to the best knowledge
      of
      Merger
      Sub,
      there
      are no facts existing which might result in any such claim, action, suit,
      arbitration, investigation, hearing, notice of claim or other 

     

    
      
        
        

      

      
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    legal,
      administrative or governmental proceeding. Merger
      Sub
      has not
      waived any statute of limitations or other affirmative defense with respect
      to
      any of its liabilities. There is no continuing order, injunction or decree
      of
      any court, arbitrator or governmental or administrative authority to which
      Merger
      Sub
      is a
      party or to which it or any of its assets are subject. Merger
      Sub
      has not
      been permanently or temporarily enjoined or barred by order, judgment or decree
      of any court or other tribunal or any agency or regulatory body from engaging
      in
      or continuing any conduct or practice.

     

     

    8.7 Material
      Agreements and Arrangement.
      Except
      as set forth in Schedule 8.7, attached hereto and incorporated herein by
      reference, Merger
      Sub
      is not a
      party to, nor are any of its assets bound by or subject to, any contract,
      commitment, agreement, order, judgment, decree, law, statute, ordinance, rule,
      regulation, or other restriction of any kind or character which would,
      individually or in the aggregate, result in a Material Adverse Change to
Merger
      Sub.
      Merger
      Sub
      is also
      not a party or subject to any agreement, contract or other obligation which
      would require the making of any payment, other than payments contemplated by
      this Agreement, to any other Person as a result of the consummation of the
      transactions contemplated herein.

    

    8.8  Undisclosed
      Liabilities.
      Merger
      Sub
      does not
      have any liability (whether known or unknown, whether asserted or unasserted,
      whether absolute or contingent, whether accrued or unaccrued, whether liquidated
      or unliquidated, and whether due or to become due), including any liability
      for
      taxes, except for those set forth on Schedule 8.8, attached hereto and
      incorporated herein by reference.

    

    8.9 Disclosure.
      No
      representation or warranty made by Merger Sub in this Agreement or in any
      writing furnished or to be furnished pursuant to or in connection with this
      Agreement knowingly contains or will contain any untrue statement of a material
      fact, or omits or will omit to state any material fact required to make the
      statements herein or therein contained not misleading. Merger Sub has disclosed
      to Company all material information known to it related to Merger
      Sub.

    

    

    8.10 Material
      Defaults.
      Merger
      Sub is not in material default, or alleged to be in default, under any material
      agreement, contract, lease, mortgage, commitment, instrument or obligation,
      and
      no other party to any agreement, contract, lease, mortgage, commitment,
      instrument or obligation to which Merger Sub is a party is in default
      thereunder, which default would materially and adversely affect the properties,
      assets, business, or prospects of Merger Sub.

    

    8.11 Other
      Matters.
      Merger
      Sub has not taken and has not agreed to take any action, and has no Knowledge
      of
      any fact or circumstances that would materially impede or delay the consummation
      of the transactions contemplated under this Agreement. 

    

    8.12 Advice
      of Changes.
      Between
      the Effective Date hereof and the Closing Date, Merger Sub shall promptly advise
      Company in writing of any fact which, if existing or known at the Effective
      Date, would have been required to be set forth or disclosed in or pursuant
      to
      this Agreement or of any fact which, if existing or known at the Effective
      Date,
      would have made any of the representations contained herein untrue.

    

    
      
        
        

      

      
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    IX

    

    CONDUCT
      OF BUSINESS PRIOR TO CLOSING

    

    9.1 Conduct
      Prior to Closing.
      Parent
      hereby covenants and agrees that, prior to the Closing, unless the prior written
      consent of Company shall have been obtained, which consent shall not be
      unreasonably withheld, and except as otherwise contemplated in this Agreement,
      Parent and Merger Sub shall both operate its respective business only in the
      usual, regular, and Ordinary Course of Business and in accordance with its
      prior
      practices, and shall use its reasonable best efforts to preserve intact its
      business organizations and assets and maintain its rights, franchises, and
      business and customer relations necessary to run its business as currently
      run.

    

    9.2 Forbearances.
      From
      the
      Effective Date until the Closing, Parent covenants and agrees to ensure that
      neither Parent nor Merger Sub will (other than as contemplated in this
      Agreement) do any of the following without the prior written consent of Company
      acting in good faith:

    

    (a) declare,
      set aside, make or pay any dividend or other distribution in respect of its
      capital stock or otherwise purchase or redeem, directly or indirectly, any
      shares of its capital stock;

    

    (b) issue,
      sell or deliver or enter into any agreement to issue, sell or deliver any shares
      of its capital stock or any options, warrants, or other rights, agreements,
      commitments, arrangements or understandings of any kind, contingent or
      otherwise, to purchase, sell or deliver any such shares, or any securities
      convertible into or exchangeable for any such shares, or effect any stock split,
      or otherwise change, combine or reclassify its authorized
      capitalization;

    

    (c) incur
      any
      indebtedness or issue or sell any debt securities or prepay any
      debt;

     

    (d) mortgage,
      pledge or otherwise subject to any material lien or lease, any of its properties
      or assets, tangible or intangible or permit or suffer any such property or
      asset
      to be subjected to any material lien or lease; or license or dispose of any
      material assets, except in the Ordinary Course of Business consistent with
      its
      prior practice;

    

    (e) forgive
      or cancel any debts or claims, or waive any rights, except for fair
      value;

    

    (f) modify
      or
      extend the current term of any material agreement, or waive any material rights
      thereunder;

    

    (g) pay
      any
      bonus to any employee or agent or contractor, or grant to any employee or agent
      or contractor any increase in compensation except in the Ordinary Course of
      Business consistent with its prior practice, or enter into any employment,
      severance, termination or similar agreement with any employee or agent or
      contractor;

    

    (h) amend
      its
      Certificate of Incorporation or Bylaws or any other organizational
      documents;

     

     

    
      
        
        

      

      
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    (i) make
      any
      material changes in policies or practices relating to business practices or
      other terms accounting therefore or in policies of employment;

    

    (j) enter
      into any type of business not conducted by it as of the Effective Date or create
      or organize any subsidiary or enter into or participate in any joint venture
      or
      partnership;

    

    (k) except
      as
      otherwise expressly contemplated by this Agreement, enter into any agreement
      or
      transactions with any Affiliates or make any amendment or modification to any
      such agreement; 

    

    (l) make
      or
      change any election in respect of Taxes or settle any claim related to Taxes;
      or

    

    (m) enter
      into any contract, commitment or arrangement to do any of the
      foregoing.

    

    9.2 Full
      Access.
      Each
      Party will permit representatives of the other to have full access to all
      premises, properties, personnel, books, records (including tax records),
      contracts, and documents of or pertaining to each Party. Each Party will treat
      and hold as such any Confidential Information it receives from the other in
      the
      course of the reviews contemplated by this Section 9.2, will not use any of
      the
      Confidential Information except in connection with this Agreement, and, if
      this
      Agreement is terminated for any reason whatsoever, agrees to return to the
      other
      Party all tangible embodiments (and all copies) thereof which are in its
      possession.

    

    9.3 Exclusivity.
      Parent
      will not solicit, initiate, or encourage the submission of any proposal or
      offer
      from any Person relating to all or any of the capital stock or assets of Merger
      Sub or Parent (including any acquisition structured as a merger, consolidation,
      or share exchange); provided,
      however,
      that
      Merger Sub and Parent, and their respective directors and officers, will remain
      free to (i) assist or participate in or facilitate any discussions or
      negotiations; or, (ii) furnish any information, in regard to any attempt by
      any
      Person to do or seek any of the foregoing to the extent their fiduciary duties
      may require. Parent shall notify Company immediately if any Person makes any
      proposal, offer, inquiry, or contact with respect to any of the
      foregoing.

    

    9.4 Pre-Existing
      Indemnification Obligations.
      Company, as the Surviving Corporation in the Merger, will observe any
      indemnification provisions now existing in the Certificate of Incorporation
      or
      Bylaws of Merger Sub for the benefit of any individual who served as a director
      or officer of Merger Sub at any time prior to the Effective Date, as well as
      all
      written agreements providing similar protections and rights to the same
      group.

    

    9.5 SEC
      Merger Filings.
      

    

    9.5.1. Parent
      Obligation to File.
      As
      promptly as practicable after the execution of this Agreement, Parent will
      prepare and file with the SEC any and all additional SEC Filings which are
      reasonably required as a result of the transactions envisioned hereunder
      (together with any amendments thereof or supplements thereto, collectively
      referred to herein as the “SEC Merger Filings”). Parent will use its reasonable
      best efforts to cause the SEC Merger Filings to become 

     

    
      
        
        

      

      
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    effective
      as promptly as practicable, and, will take all or any action required under
      any
      applicable federal or state securities laws in connection with the Merger.
      Each
      of Parent and Company will furnish all information concerning it and the holders
      of its capital stock as the other may reasonably request in connection with
      such
      actions and the preparation of the SEC Merger Filings. None of the SEC Merger
      Filings will be filed with the SEC by, and no amendment or supplement to the
      SEC
      Merger Filings will be made by, Parent without the approval of Company, (which
      approval will not be unreasonably withheld or delayed). Parent will advise
      Company, promptly after it receives notice thereof, of the time when the SEC
      Merger Filings become effective or any supplement or amendment has been filed,
      and of all other communications from the SEC in regard to the SEC Merger
      Filings. 

    

    9.5.2. Accuracy
      of Information.
      Parent
      shall ensure that the information included in the SEC Merger Filings will not,
      at (i) the time the SEC Merger Filings are declared effective; and, (ii) the
      Closing Date, 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
      Date
      any event or circumstance relating to Parent or any of its officers or directors
      should be discovered by Parent which should be set forth in an amendment or
      a
      supplement to the SEC Merger Filings, Parent will promptly inform Company.
      The
      SEC Merger Filings will comply as to form and substance in all material respects
      with the applicable requirements of the Securities Act and the rules and
      regulations thereunder, and the Exchange Act and the rules and regulations
      thereunder.

    

    X

    

    CONDITIONS
      PRECEDENT

    

    10.1 Mutual
      Obligations.
       The
      Parties agree as follows with respect to the period from and after the execution
      of this Agreement up to the Closing:

    

    10.1.1. General.
      Each of
      the Parties will use its best efforts to take all action and to do all things
      necessary in order to consummate and make effective the transactions
      contemplated by this Agreement (including satisfaction, but not waiver, of
      all
      conditions for Closing established herein).

    

    10.1.2. Notices
      and Consents.
      Each
      Party will give any notices to third parties, and will use its best efforts
      to
      obtain any third party consents the other reasonably may request in connection
      with the Merger.

    

    10.1.3. Regulatory
      Matters and Approvals.
      Each of
      the Parties will give any notices to, make any filings with, and use its best
      efforts to obtain any authorizations, consents, and approvals of governments
      and
      governmental agencies in connection with the matters referred to herein.

    

    10.1.4. Delaware
      Law.
      Merger
      Sub will call a special meeting of its stockholders (the “Special Merger Sub
      Meeting”) as soon as reasonably practicable in order that the stockholders may
      consider and vote upon the adoption of this Agreement and the approval of the
      Merger in accordance with Delaware Law. Company will call a special meeting
      of
      its stockholders (the “Special Company Meeting”) as soon as reasonably
      practicable in order that the stockholders may consider and vote upon the
      adoption of this Agreement and the approval of the Merger in accordance with
      Delaware 

     

    
      
        
        

      

      
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    Law.
      

    

    10.1.5. Notice
      of Developments.
      Each
      Party will give prompt written notice to the other of any material adverse
      development causing a breach of any of its own representations and warranties
      hereunder. No disclosure by any Party pursuant to this Section 10.1.5., however,
      shall be deemed to amend or supplement the Schedules attached hereto or serve
      to
      prevent or cure any misrepresentation, breach of warranty, or breach of covenant
      hereunder.

    

    10.1.6. Certificate
      of Merger.
      The
      Parties shall execute the Certificate of Merger, which shall be filed with
      the
      Office of the Secretary State of Delaware as part of the legal compliance with
      Delaware Law. 

    

    10.2 Conditions
      to Obligation of Company.
      The
      obligation of Company to consummate the transactions to be performed by it
      in
      connection with the Closing is subject to satisfaction of the following
      conditions, any or all of which Company may waive if it executes a writing
      so
      stating at or prior to the Closing:

    

    (a) This
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Merger Sub;

    

    (b) Parent
      and Merger Sub shall have procured all necessary third party consents;

    

    (c)
       The
      representations and warranties set forth in Articles VI and VIII, above, shall
      be true and correct in all material respects at and as of the Closing
      Date;

    (d) Parent
      and Merger Sub shall have performed and complied with all of its respective
      covenants hereunder in all material respects through the Closing;

    

    (e) No
      action, suit, or proceeding shall be pending or threatened before any court
      or
      quasi-judicial or administrative agency of any federal, state, local, or foreign
      jurisdiction or before any arbitrator wherein an unfavorable injunction,
      judgment, order, decree, ruling, or charge would (i) prevent consummation of
      any
      of the transactions contemplated by this Agreement; (ii) cause any of the
      transactions contemplated by this Agreement to be rescinded following
      consummation; or, (iii) affect adversely the right of the Surviving Corporation
      to own the former assets, and to operate the former businesses of Merger Sub
      (and no such injunction, judgment, order, decree, ruling, or charge shall be
      in
      effect); 

    (f) this
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Company; and

    

    (g) all
      actions to be taken by Parent and Merger Sub in connection with consummation
      of
      the transactions contemplated hereby and all certificates, opinions,
      instruments, and other documents required to effect the transactions
      contemplated hereby will be reasonably satisfactory in form and substance to
      Company.

    

    10.3 Conditions
      to Obligation of Parent and Merger Sub.
      The
      obligation of Parent and Merger Sub to consummate the transactions to be
      performed by each in connection with the Closing is 

     

    
      
        
        

      

      
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    subject
      to satisfaction of the following conditions, any or all of which Parent or
      Merger Sub may waive if it executes a writing so stating at or prior to the
      Closing.

     

    (a) This
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Company;

    

    (b) the
      representations and warranties set forth in Article VII above shall be true
      and
      correct in all material respects at and as of the Closing Date;

    

    (c) Company
      shall have performed and complied with all of its covenants hereunder in all
      material respects through the Closing;

    

    (d) No
      action, suit, or proceeding shall be pending or threatened before any court
      or
      quasi-judicial or administrative agency of any federal, state, local, or foreign
      jurisdiction or before any arbitrator wherein an unfavorable injunction,
      judgment, order, decree, ruling, or charge would (i) prevent consummation of
      any
      of the transactions contemplated by this Agreement; (ii) cause any of the
      transactions contemplated by this Agreement to be rescinded following
      consummation; or, (iii) affect adversely the right of the Surviving Corporation
      to own the former assets and to operate the former businesses of Merger Sub
      (and
      no such injunction, judgment, order, decree, ruling, or charge shall be in
      effect);

    

    (e) this
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Merger Sub; and

    

    (f) all
      actions to be taken by Company in connection with consummation of the
      transactions contemplated hereby and all certificates, opinions, instruments,
      and other documents required to effect the transactions contemplated hereby
      will
      be reasonably satisfactory in form and substance to Parent and Merger
      Sub.

    

    XI

    

    TERMINATION

    

    11.1 Termination
      of Agreement.
      Any of
      the Parties may terminate this Agreement with the prior authorization of its
      board of directors (whether before or after stockholder approval) as provided
      below:

    

    (a) The
      Parties may terminate this Agreement by their written consent at any time prior
      to the Effective Date;

    

    (b) Company
      may terminate this Agreement by giving written notice to Parent at any time
      prior to the Effective Date (i) in the event Parent or Merger Sub has breached
      any material representation, warranty, or covenant contained in this Agreement
      in any material respect, and Company has notified Parent of the breach, and
      the
      breach has continued without cure for a period of ten (10) days after the notice
      of breach; or, (ii) if the Closing shall not have occurred on or before the
      10th
      day of
      July, 2005, by reason of the failure of any condition precedent under Section
      10.2 hereof 

     

    
      
        
        

      

      
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    (unless
      the failure results primarily from Company breaching any representation,
      warranty, or covenant contained in this Agreement);

    

    (c) Parent
      may terminate this Agreement by giving written notice to Company at any time
      prior to the Effective Date (i) in the event Company has breached any material
      representation, warranty, or covenant contained in this Agreement in any
      material respect, and Merger Sub has notified Company of the breach, and the
      breach has continued without cure for a period of ten (10) days after the notice
      of breach; or, (ii) if the Closing shall not have occurred on or before the
      10th
      day of
      July, 2005, by reason of the failure of any condition precedent under Section
      10.3 hereof (unless the failure results primarily from Merger Sub breaching
      any
      representation, warranty, or covenant contained in this Agreement);

    

    (d) Any
      Party
      may terminate this Agreement by giving written notice to the other Party at
      any
      time in the event this Agreement and the Merger fail to receive the Requisite
      Stockholder Approval for the other Party.

    

    11.2 Effect
      of Termination.
      If any
      Party terminates this Agreement pursuant to this Article XI, all rights and
      obligations of the Parties hereunder shall terminate without any liability
      of
      any Party to any other Party (except for any liability of any Party then in
      breach, and except as otherwise provided for under Section 14.3, below);
provided,
      however,
      that
      the confidentiality provisions contained herein shall survive any such
      termination.

    

    XII

    

    CLOSING
      AND CLOSING DATE

    

    12.1 Closing.
      The
      closing of the transactions contemplated under this Agreement (the “Closing”)
      shall have taken place on the 29th
      day of
      June, 2005, at such place as the Parties may agree, or at such other time as
      the
      Parties may agree. The date on which the Closing occurs is also referred to
      herein as the “Closing Date”. 

    

    12.2 Obligations
      of Parent.
      At the
      Closing, Parent shall deliver or cause to be delivered to Company the following:
      

    

    (a) Executed
      Board of Directors resolution authorizing the transactions contemplated
      hereunder; 

    

    (b) All
      share
      certificates representing shares of Parent Common Stock to be issued as part
      of
      the Merger Consideration hereunder, endorsed in favor of the stockholders of
      Company as required under Sections 4.4, 5.1, and 5.2, above; 

    

    (c) Proof
      of
      the filing of all SEC Merger Filings required to be made by Parent;

    

    (d) Proof
      that all directors and officers of Parent existing as of the Effective Date
      

     

    
      
        
        

      

      
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    have
      resigned as of the Closing, and that new directors and officers have been
      designated and legally elected pursuant to Section 4.2.5., as of the Closing;
      

    

    (e) Any
      governmental and third party consents, approvals, and assurances necessary
      for
      the consummation of the transactions contemplated by this
      Agreement.

    

    12.3 Obligations
      of Merger Sub.
      At the
      Closing, Merger Sub shall deliver or cause to be delivered to Company the
      following: 

    

    (a) Executed
      Board of Directors and Shareholders resolution authorizing the transactions
      contemplated hereunder; 

    

    (b) All
      share
      certificates representing ownership of all issued and outstanding shares of
      Merger Sub Stock; and 

     

    (c) Any
      governmental and third party consents, approvals, and assurances necessary
      for
      the consummation of the transactions contemplated by this
      Agreement.

    

    12.4 Obligations
      of Company.
      At the
      Closing, Company shall deliver or cause to be delivered to Merger
      Sub:

    

    (a) Executed
      Board of Directors and Shareholders resolution authorizing the transactions
      contemplated hereunder;

    

    (b) Share
      certificates representing one thousand (1,000) shares of Company Common Stock
      Company, endorsed pro rata in favor of Parent as the sole shareholder of Merger
      Sub, subject to the terms and conditions of this Agreement; 

    

    (c) All
      share
      certificates representing ownership of all issued and outstanding shares of
      Company Common Stock; 

    

    (d) Executed
      Board of Directors and Shareholders resolution authorizing the transactions
      contemplated hereunder; and

    

    (e)  Any
      governmental and third party consents, approvals, and assurances necessary
      for
      the consummation of the transactions contemplated by this
      Agreement.

    

    XIII

    

    REGULATORY
      FILINGS

    

    13.1 Required
      Filings.
      The
      Parties shall coordinate and cooperate with one another and shall each use
      all
      reasonable efforts to comply with, and shall each refrain from taking any action
      that would impede compliance with any and all applicable federal, state, local,
      municipal, foreign or other law, statute, constitution, principle of common
      law,
      resolution, ordinance, code, order, edict, decree, rule, regulation, ruling
      or
      requirement issued, enacted, adopted, promulgated, implemented or 

     

    
      
        
        

      

      
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    otherwise
      put into effect by or under the authority of any governmental entity. As
      promptly as practicable after the date hereof, the Parties shall make all
      filings, notices, petitions, statements, registrations, submissions of
      information, application or submission of other documents required by any
      governmental entity in connection with the Merger and the transactions
      contemplated hereby. 

    

    13.2 Exchange
      Of Information.
      Each of
      the Parties shall promptly supply the other with any information which may
      be
      required in order to effectuate any filings or application pursuant to Section
      13.1, above. Except where prohibited by applicable legal requirements, each
      of
      the Parties shall consult with the other prior to taking a position with respect
      to any such filing, shall permit the other to review and discuss in advance,
      and
      consider in good faith the views of the other in connection with any analyses,
      appearances, presentations, memoranda, briefs, white papers, arguments, opinions
      and proposals before making or submitting any of the foregoing to any
      governmental entity by or on behalf of any Party hereto in connection with
      any
      investigations or proceedings in connection with this Agreement or the
      transactions contemplated hereby, coordinate with the other in preparing and
      exchanging such information and promptly provide the other (and its counsel)
      with copies of all filings, presentations or submissions (and a summary of
      any
      oral presentations) made by such Party with any governmental entity in
      connection with this Agreement or the transactions contemplated hereby. However,
      with respect to any such filing, presentation or submission, each of the Parties
      need not supply the other (or its counsel) with copies (or in case of oral
      presentations, a summary) to the extent that any law, treaty, rule or regulation
      of any governmental entity applicable to such Party requires such Party to
      restrict or prohibit access to any such properties or information.

    

    13.3 Notification.
      Each of
      the Parties will notify the other promptly upon the receipt of: (i) any comments
      from any officials of any governmental entity in connection with any filings
      made pursuant hereto and (ii) any request by any officials of any governmental
      entity for amendments or supplements to any filings made pursuant to, or
      information provided to comply in all material respects with, any applicable
      legal requirements. Whenever any event occurs that is required to be set forth
      in an amendment or supplement to any filing made pursuant to Section 13.1,
      above, the responsible Party will promptly inform the other of such occurrence
      and cooperate in filing with the applicable governmental entity such amendment
      or supplement.

    

    XIV

    

    ADDITIONAL
      OBLIGATIONS AND AGREEMENTS

    

    14.1 Survival
      of Representations.
      All of
      the covenants, agreements, representations, and warranties made by each Party
      in
      this Agreement, or pursuant hereto or in connection with the transactions
      contemplated hereby, shall survive the Closing for a period of five (5)
      years.

    

    14.2 Brokers.
      Each
      Party represents and warrants that if it has entered into any deal, arrangement,
      or commitment with any broker or finder who has acted for it in connection
      with
      this Agreement or the transactions contemplated hereby, that the Party entering
      into the deal, arrangement, or commitment will be solely responsible thereunder,
      and that the other Party will have no obligation thereunder. Each Party agrees
      to indemnify and hold harmless the other Party with respect to any claim for
      any
      brokerage or finder’s fee or other commission.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    14.3 Payment
      of Transaction Expenses.
      Except
      as otherwise provided for in this Section 14.3, all
      Transaction Expenses incurred by the Parties will be borne solely and entirely
      by the Party that incurred such Transaction Expenses. However,
      Parent
      agrees that if Parent terminates this Agreement for any reason other than a
      material breach of this Agreement by Company, then Parent shall pay by wire
      transfer of immediately available funds to Company the actual and documented
      Transaction Expenses of Company, the payment of which will not relieve Parent
      of
      any liability or damages resulting from any breach by Parent of any of its
      representations, warranties, covenants, or agreements set forth in this
      Agreement. 

    

    14.4 Books
      and Records.
      Merger
      Sub shall deliver to Company all books and records of Merger Sub reasonably
      related to the conduct of its business.

    

    14.5 Payment
      of Taxes: Filing of Returns.
      Surviving Corporation shall be liable for the filing of all tax returns and
      reports and for the payment of all federal, state and local taxes of Merger
      Sub
      for any period ending on or prior to the Closing Date. Surviving Corporation
      shall remain so liable for the payment of all taxes attributable to or relating
      to said filings. All other Parties are responsible for all reporting and payment
      obligations related to all Taxes. 

    

    14.6 Public
      Disclosure.
      Without
      limiting any other provision of this Agreement, unless
      otherwise required by a Requirement of Law or the requirements of any listing
      agreement with any applicable stock exchange, the
      Parties will use their reasonable best efforts to consult with each other before
      issuing, and provide each other the opportunity to review, comment upon and
      concur with, and use all reasonable efforts to agree on any press release or
      public statement with respect to this Agreement and the transactions
      contemplated hereby, including the Merger, and will not issue any such press
      release or make any such public statement prior to such consultation and (to
      the
      extent practicable) agreement, except as may be required by law or any other
      applicable national or regional securities exchange. The Parties have agreed
      to
      the text of the joint press release announcing the signing of this
      Agreement.

    

    XV

    

    NOTICES

    

    All
      notices, requests, demands and other communications required or permitted to
      be
      given hereunder shall be effected pursuant to Section 16.10, below, as
      follows:

    

    If
      to
      Company:                                                                     
      With
      a
      copy to:

    Mr.
      Thomas
      Hemingway                                                   
      Keith
      A.
      Rosenbaum,
      Esq.

    OXFORD
      MEDIA
      CORP.                                                
      SPECTRUM
      LAW GROUP, LLP

    One
      Technology
      Drive                                                      
      1900
      Main
      Street 

    Building
      H                                                                            
      Suite
      125

    Irvine,
      California
      92628                                                       
      Irvine,
      California 92618

     

    
      
        
        

      

      
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    If
      to
      Parent or Merger Sub:
      

    c/o
      Kyleen E. Cane, Esq. 

    CANE
      CLARK LLP

    3273
      E.
      Warm Springs

    Las
      Vegas, Nevada 89120

    XVI

    

    ADDITIONAL
      PROVISIONS

    

    16.1 Executed
      Counterparts.
      This
      Agreement may be executed in any number of original, fax, electronic, or copied
      counterparts, and all counterparts shall be considered together as one
      agreement. A faxed, electronic, or copied counterpart shall have the same force
      and effect as an original signed counterpart. Each of the Parties hereby
      expressly forever waives any and all rights to raise the use of a fax machine
      or
      E-Mail to deliver a signature, or the fact that any signature or agreement
      or
      instrument was transmitted or communicated through the use of a fax machine
      E-Mail, as a defense to the formation of a contract. 

    

    16.2 Successors
      and Assigns.
      Except
      as expressly provided in this Agreement, each and all of the covenants, terms,
      provisions, conditions and agreements herein contained shall be binding upon
      and
      shall inure to the benefit of the successors and assigns of the Parties
      hereto.

     

    16.3 Governing
      Law.
      This
      Agreement shall be governed by the laws of the State of Delaware, without giving
      effect to any choice or conflict of law provision or rule (whether of the State
      of Delaware or any other jurisdiction) that would cause the application of
      the
      laws of any jurisdiction other than the State of Delaware. If any court action
      is necessary to enforce the terms and conditions of this Agreement, the Parties
      hereby agree that the Superior Court of California, County of Orange, shall
      be
      the sole jurisdiction and venue for the bringing of such action. 

    

    16.4 Additional
      Documentation.
      The
      Parties hereto agree to execute, acknowledge, and cause to be filed and
      recorded, if necessary, any and all documents, amendments, notices, and
      certificates which may be necessary or convenient under the laws of the State
      of
      Delaware. 

    

    16.5 Attorney’s
      Fees.
      If any
      legal action (including arbitration) is necessary to enforce the terms and
      conditions of this Agreement, the prevailing Party shall be entitled to costs
      and reasonable attorney’s fees. 

    

    16.6 Amendment.
      This
      Agreement may be amended or modified only by a writing signed by all
      Parties.

    

    16.7 Remedies.

    

    16.7.1. Specific
      Performance.
      The
      Parties hereby declare that it is impossible to measure in money the damages
      which will result from a failure to perform any of the obligations under this
      Agreement. Therefore, each Party waives the claim or defense that an adequate
      remedy at law exists in any action or proceeding brought to enforce the
      provisions hereof.

    

    16.7.2.
      Cumulative.
      The
      remedies of the Parties under this Agreement are cumulative 

     

    
      
        
        

      

      
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    and
      shall
      not exclude any other remedies to which any person may be lawfully
      entitled.

     

    16.8 Waiver.
      No
      failure by any Party to insist on the strict performance of any covenant, duty,
      agreement, or condition of this Agreement or to exercise any right or remedy
      on
      a breach shall constitute a waiver of any such breach or of any other covenant,
      duty, agreement, or condition. No
      course
      of dealing between the Parties, nor any failure to exercise, nor any delay
      in
      exercising, any right, power or privilege of either Party shall operate as
      a
      waiver thereof, nor shall any single or partial exercise of any right, power,
      or
      privilege hereunder preclude any other or further exercise thereof or the
      exercise of any other right, power or privilege.

    

    16.9 Assignability.
      This
      Agreement is not assignable by either Party without the expressed written
      consent of all Parties.

    

    16.10 Notices.
      All
      notices, requests and demands hereunder shall be in writing and delivered by
      hand, by facsimile transmission, by E-Mail, by mail, by telegram, or by
      recognized commercial over-night delivery service (such as Federal Express,
      UPS,
      or DHL), and shall be deemed given (a) if by hand delivery, upon such delivery;
      (b) if by facsimile transmission, upon telephone confirmation of receipt of
      same; (c) if by E-Mail, upon telephone confirmation of receipt of same; (d)
      if
      by mail, forty-eight (48) hours after deposit in the United States mail, first
      class, registered or certified mail, postage prepaid; (e) if by telegram, upon
      telephone confirmation of receipt of same; or, (f) if by recognized commercial
      over-night delivery service, upon such delivery.

    

    16.11 Time.
      All
      Parties agree that time is of the essence as to this Agreement.

     

    16.12 Disputes.
      

    

    16.12.1. Mediation.
      All
      disputes, claims or controversies arising out of or relating to this Agreement
      with more than Five Thousand Dollars ($5,000) in controversy, including but
      not
      limited to any dispute, claim or controversy arising out of or relating to
      this
      Agreement or the breach, termination, enforcement, interpretation or validity
      thereof, including the determination of the scope or applicability of this
      agreement to arbitrate, shall be initially submitted to Judicial Arbitration
      and
      Mediation Services (“JAMS”) in Orange County, California, or its successor, for
      mediation. Mediation shall be commenced by providing to JAMS and the other
      Party
      a written request for mediation, setting forth the subject of the dispute and
      the relief requested. The Parties will cooperate with JAMS and with one another
      in selecting a mediator from JAMS’ panel of neutral mediators, and in scheduling
      the mediation proceedings. The Parties will participate in the mediation in
      good
      faith, and they will share equally in its costs. All offers, promises, conduct
      and statements, whether oral or written, made in the course of the mediation
      by
      any of the Parties, their agents, employees, experts and attorneys, and by
      the
      mediator or any JAMS employees, are confidential, privileged and inadmissible
      for any purpose, including impeachment, in any arbitration or other proceeding
      involving the Parties, provided that evidence that is otherwise admissible
      or
      discoverable shall not be rendered inadmissible or non-discoverable as a result
      of its use in the mediation. Either Party may initiate arbitration with respect
      to the matters submitted to mediation by filing a written demand for arbitration
      at any time following the initial mediation session or 45 days after the date
      of
      filing the written request for mediation, whichever occurs first. The mediation
      may continue after the commencement of arbitration if the Parties so desire.
      Unless otherwise agreed by the Parties, the mediator shall be disqualified
      from
      serving as arbitrator in the case. The provisions of this paragraph
      

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    may
      be
      enforced by any Court of competent jurisdiction, and the Party seeking
      enforcement shall be entitled to an award of all costs, fees and expenses,
      including attorney fees, to be paid by the Party against whom enforcement is
      ordered.

    

    16.12.2. Arbitration.
      If the
      matter is not resolved through mediation under Section 16.12.1., above, then
      it
      shall be submitted to JAMS in Orange County, California, or its successor,
      for
      final and binding arbitration before a sole arbitrator. The arbitration shall
      be
      administered by JAMS pursuant to its Comprehensive Arbitration Rules and
      Procedures if the amount in controversy exceeds $250,000, or pursuant to its
      Streamlined Arbitration Rules and Procedures if the amount in controversy is
      $250,000 or less. Judgment on the Award may be entered in any court having
      jurisdiction.

    

    16.12.3. Small
      Claims.
      All
      disputes, claims, or controversies arising out of or relating to this Agreement
      with Five Thousand Dollars ($5,000) or less in controversy shall be adjudicated
      in the Harbor Municipal Court District of the Superior Court of California,
      County of Orange, according to California law.

    

    16.12.4. Waiver
      of Jury Trial and Related Rights. 
      By initialing the space below, the Parties hereby agree to have all disputes,
      claims or controversies arising out of or relating to this Agreement, which
      are
      not resolved by mediation, decided by neutral binding arbitration as provided
      in
      this Agreement. Each Party is giving up any rights it might possess to have
      those matters litigated in a court or jury trial. By initialing in the space
      below, each Party is giving up its judicial rights to discovery and appeal
      except to the extent that they are specifically provided for under this
      Agreement. If either Party refuses to submit to arbitration after agreeing
      to
      this provision, that Party may be compelled to arbitrate under federal or state
      law. The foregoing has been read and understood. Each Party agrees to submit
      all
      disputes, claims or controversies arising out of or relating to this Agreement,
      that have not been resolved by mediation, to binding arbitration in accordance
      with this Agreement. 

    

    16.13 Recitals.
      The
      facts recited in Article II, above, are hereby conclusively presumed to be
      true
      as between and affecting the Parties.

    

    16.14 Consents,
      Approvals, and Discretion.
      Except
      as herein expressly provided to the contrary, whenever this Agreement requires
      consent or approval to be given by a Party, or a Party must or may exercise
      discretion, the Parties agree that such consent or approval shall not be
      unreasonably withheld, conditioned, or delayed, and such discretion shall be
      reasonably exercised. Except as otherwise provided herein, if no response to
      a
      consent or request for approval is provided within ten (10) days from the
      receipt of the request, then the consent or approval shall be presumed to have
      been given. 

    

    16.15 Best
      Efforts.
      The
      Parties shall use and exercise their best efforts, taking all reasonable,
      ordinary and necessary measures to ensure an orderly and smooth relationship
      under this Agreement, and further agree to work together and negotiate in good
      faith to resolve any differences or problems which may arise in the
      future.

    

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    XVII

    

    EXECUTION

    

    IN
      WITNESS WHEREOF,
      this
      Agreement has been executed by the Parties, and shall be effective as of and
      on
      the last date set forth below.

    

    PARENT:                                                                    
      MERGER
      SUB:

    BECOMING
      ART
      INC.,                                              OXFORD
      MEDIA ACQUISITION CORP., 

    a
      Nevada
      corporation                                                
      a
      Delaware corporation

    

    

    BY:___________________________                 
      BY:__________________________

    
NAME:________________________               
      NAME:________________________ 

    

    TITLE:_________________________              
      TITLE:________________________

    

    DATED:________________________             
      DATED:_______________________

     

     

    BY:___________________________               
      BY:___________________________

    

    NAME:________________________               
      NAME:________________________

    

    TITLE:________________________                
      TITLE:________________________

    

    DATED:_______________________               
      DATED:_______________________

    

    

    COMPANY:             

     

    OXFORD
      MEDIA CORP.,     

    a
      Delaware corporation

    

    

    BY:___________________________   

    

    NAME:________________________   

    

    TITLE:________________________    

    

    DATED:_______________________

    

    

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

     

    BY:___________________________   

    

    NAME:________________________  

    

    TITLE:________________________   

    

    DATED:_______________________

    

    

    

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    INDEX
      OF EXHIBITS AND SCHEDULES

    

    EXHIBITS

    

    Exhibit
      4.2.1.  Certificate
      of Merger

    Exhibit
      4.2.5.  Directors
      and Officers of Parent

    

    SCHEDULES

    

    Schedule
      6.3  Parent
      Subsidiaries

    Schedule
      6.7  Parent
      Legal Proceedings

    Schedule
      6.9  Parent
      Capitalization

    Schedule
      6.11            
      Parent
      Employee Benefits 

    Schedule
      6.14            
      Parent
      Leases and Similar Agreements

    Schedule
      6.15            
      Parent
      Material Agreements

    Schedule
      6.16            
      Parent
      Employment Agreements

    Schedule
      6.17            
      Parent
      Restrictive Covenants Agreements

    Schedule
      6.20            
      Parent
      Environmental Matters

    Schedule
      6.25            
      Parent
      Title to Assets

    Schedule
      6.27            
      Parent
      Intellectual Property Assets

    Schedule
      7.3  Company
      Subsidiaries

    Schedule
      7.9  Company
      Capitalization

    

    Schedule
      8.3  Merger
      Sub Capitalization  

    Schedule
      8.6  Merger
      Sub Legal Proceedings

    Schedule
      8.7  Merger
      Sub Material Agreements

    Schedule
      8.8  Undisclosed
      Liabilities

    

    

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    EXHIBIT
      4.2.1.

    

    CERTIFICATE
      OF MERGER

    

    

    

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    EXHIBIT
      4.2.5.

    

    DIRECTORS
      AND OFFICERS OF PARENT

    

    

    New
      Directors:                   Thomas
      C.
      Hemingway

     

                                                                  
      T. Richard Hutt

    

    New
      Officers:                    
      Chief
      Executive
      Officer:                 
      Thomas
      C.
      Hemingway

     

                                                                  President:                                          
      David
      L.
      Parker

     

                                                                
      Chief
      Operating
      Officer:                   
      J.
      Richard Shafer

     

                                                                 Chief
      Financial
      Officer:                    
      David
      Noyes

     

                                                                
      Secretary:                                            T.
      Richard Hutt

     

                                                                
      Chief
      Technical
      Officer:                    Herbert
      Presley

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.3

    

    PARENT
      SUBSIDIARIES

    

    

    

    

    

    

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.7

    

    PARENT
      LEGAL PROCEEDINGS

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.9

    

    PARENT
      CAPITALIZATION

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.11

    

    PARENT
      EMPLOYEE BENEFITS

    

    

    

    

    

    

    

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.14

    

    PARENT
      LEASES AND SIMILAR AGREEMENTS

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.15

    

    PARENT
      MATERIAL AGREEMENTS

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.16

    

    PARENT
      EMPLOYMENT AGREEMENTS

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.17

    

    PARENT
      RESTRICTIVE COVENANTS AGREEMENTS

    

    

    

    

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.20

    

    PARENT
      ENVIRONMENTAL MATTERS

    

    

    

    

    

    

    

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.25

    

    PARENT
      TITLE TO ASSETS

    

    

    

    

    

    

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.27

    

    PARENT
      INTELLECTUAL PROPERTY ASSETS

    

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    SCHEDULE
      7.3

    

    COMPANY
      SUBSIDIARIES

    

    

    

    

    

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    SCHEDULE
      7.9

    

    COMPANY
      CAPITALIZATION

    

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    SCHEDULE
      8.3

    

    MERGER
      SUB CAPITALIZATION

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    SCHEDULE
      8.6

    

    MERGER
      SUB LEGAL PROCEEDINGS

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

    SCHEDULE
      8.7

    

    MERGER
      SUB MATERIAL AGREEMENTS

    

    

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    SCHEDULE
      8.8

    

    MERGER
      SUB UNDISCLOSED LIABILITIES

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        59exhibit102

    

    

    

    

    

    

    

    

    

    

    

    

    AGREEMENT
      AND PLAN OF

    MERGER

    

    

    

    

    

    

    

    

    

    BECOMING
      ART INC.

    

    and

    

    CBC
      ACQUISITION CORP.

    

    and

    

    CREATIVE
      BUSINESS CONCEPTS, INC.

    

    

    

    

    

    

    ____________,
      2005

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    AGREEMENT
      AND PLAN OF MERGER

    

    I

    

    PARTIES

    

    THIS
      AGREEMENT AND PLAN OF MERGER (the
      “Agreement”) is
      entered into effective as of the ____ day of ________, 2005 (the “Execution
      Date”) by and between BECOMING ART INC., a Nevada corporation (“Parent”); CBC
      ACQUISITION CORP., a California corporation and a wholly-owned subsidiary of
      Parent (“Merger Sub”); and,
      CREATIVE BUSINESS CONCEPTS, INC., a California corporation (“Company”). Parent,
      Merger Sub, and Company are sometimes referred to collectively herein as the
      “Parties”, and each individually as a “Party”.

    

    II

    

    RECITALS

    

    A. The
      Board
      of Directors of Parent has deemed it advisable, and in the best interests of
      Parent and its stockholders, that Parent, Merger Sub, and Company consummate
      the
      business combination and other transactions provided for herein in order to
      advance the long-term strategic business interests of Parent.

    

    B. The
      Board
      of Directors of Merger Sub has deemed it advisable, and in the best interests
      of
      Merger Sub and its stockholder, that Merger Sub, Parent, and Company consummate
      the business combination and other transactions provided for herein in order
      to
      advance the long-term strategic business interests of Merger Sub.

    

    C. Merger
      Sub is a direct, wholly-owned subsidiary of Parent, formed solely for the
      purpose of effecting the Merger and will conduct no activity and incur no
      liability or obligation other than as contemplated by this
      Agreement.

    

    D. The
      Board
      of Directors of Company has deemed it advisable, and in the best interests
      of
      Company and its stockholders, that Company, Parent, and Merger Sub consummate
      the business combination and other transactions provided for herein in order
      to
      advance the long-term strategic business interests of Company.

    

    E. The
      respective Boards of Directors of Parent, Merger Sub, and Company have approved,
      in accordance with applicable provisions of Nevada Law, California Law, and
      California Law, respectively, this Agreement and the transactions contemplated
      hereby, including the Merger.

    

    F. The
      Board
      of Directors of Company has resolved to recommend to its stockholders approval
      and adoption of this Agreement and approval of the Merger.

    

    G. The
      Board
      of Directors of Merger Sub has resolved to recommend to its stockholder approval
      and adoption of this Agreement and approval of the Merger.

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    H. The
      Parties desire to make certain representations, warranties, and agreements
      in
      connection with the Merger and also to prescribe certain conditions to the
      Merger.

    

    I. The
      Parties desire to enter into a transaction under which Merger Sub would merge
      into Company. As a result of the Merger, among other things: (i) Company would
      acquire and assume all of the assets, business, obligations, and liabilities
      of
      Merger Sub, as provided for and qualified herein; (ii) each issued and
      outstanding share of common stock of Company will be converted into shares
      of
      common stock of Parent in accordance with the provisions of this
      Agreement;
      (iii)
each
      issued and outstanding share of common stock of Merger Sub will be converted
      into shares of common stock of Company in accordance with the provisions of
      this
      Agreement; (iv) Merger
      Sub would
      disappear and cease to be an active corporation; and (v) and, Company would
      become a direct, wholly-owned subsidiary of Parent.

    

    J. For
      United States federal income tax purposes, and for purposes of state tax
      reporting, the Parties intend that the Merger qualify as a reorganization under
      the provisions of Section 368(a) of the Code, and the Parties further intend,
      by
      executing this Agreement, to adopt a plan of reorganization within the meaning
      of Section 354(a) of the Code.

    

    K. NOW,
      THEREFORE,
      in
      consideration of the promises and the mutual covenants contained herein, and
      for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Parties, intending to be legally bound, hereby agree
      as
      follows:

    

    III

    

    DEFINED
      TERMS AND INTERPRETATION

    

    3.1 Definitions.
      The
      following capitalized terms shall have the respective meanings specified in
      this
      Article III. Other terms defined elsewhere herein shall have meanings so given
      them.

    

    3.1.1. Affiliate.
      “Affiliate”
      shall mean a Person that directly or indirectly, through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      the
      first Person.

    

    3.1.2. California
      Law.
      “California Law” shall mean the General Corporation Law of the State of
      California, as amended.

    

    3.1.3. Code.
“Code”
      shall mean the Internal Revenue Code of 1986, as amended from time-to-time,
      and
      the rules and regulations thereunder.

    

    3.1.4. Company
      Common Stock.
      “Company Common Stock” shall mean any share of the Common Stock, $0.00 par value
      per share, of Company.

    

    3.1.5. Confidential
      Information.
      “Confidential Information” shall mean any information concerning the businesses
      and affairs of a respective Party that is not already generally 

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    available
      to the public.

    

    3.1.6. Control.
      “Control” (including the terms “controlled by” and “under common control with”)
      shall mean the possession, directly or indirectly, of the power to direct or
      cause the direction of the management policies of a Person, whether through
      the
      ownership of voting securities, by contract or otherwise.

    

    3.1.7. Dissenting
      Share.
      “Dissenting Shares” shall mean the shares held by a Dissenting Stockholder.

    

    3.1.8. Dissenting
      Stockholder.
      “Dissenting Stockholder” shall mean any holder of Company Common Stock
outstanding
      immediately prior to the Effective Date
      who
shall
      have not voted in favor of the Merger and who shall have
      made
      and perfected a proper demand in writing for payment of the value of said shares
      in accordance with all applicable dissenters’ rights statutes in accordance with
      California Law, and who has not effectively withdrawn or lost the right to
      such
      payment.

    

    3.1.9. Intellectual
      Property.
      “Intellectual Property” (also referred to as “Intellectual Property Assets”)
      shall mean and include the following, as well as all other general intangibles
      of a like nature and all (i) goodwill, and (ii) confidential data or information
      relating to the below listed items, for each respective party:

    

    (a) The
      Party’s full legal name and all derivations thereof used by that Party, all
      fictional business names, trading names, designs, registered and unregistered
      trademarks, registered and unregistered service marks, and applications
      (collectively, the “Marks”);

    

    (b) All
      patents, patent applications, and inventions and discoveries that may be
      patentable (collectively, the “Patents”);

    

    (c) All
      copyrights in both published works and unpublished works (collectively, the
      “Copyrights”);

    

    (d) All
      rights in mask works (collectively, the “Rights in Mask Works”);
      and

    

    (e) All
      know-how, trade secrets, confidential information, customer lists, computer
      software, databases, source codes, object codes, works of authorship, know-how,
      technical information, data, process technology, user interfaces, proprietary
      concepts, ideas, techniques, business models and methodologies, plans, drawings,
      and blue prints owned, used, or licensed by Parent as licensee or licensor
      (collectively, the “Trade Secrets”). 

    

    3.1.10. IRS.
“IRS”
      shall mean the Internal Revenue Service.

    

    3.1.11. Knowledge.
      “Knowledge” shall mean actual
      knowledge after reasonable investigation.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    3.1.12. Material
      Adverse Change.
      “Material Adverse Change” shall mean a change which results in a Material
      Adverse Effect.

    

    3.1.13. Material
      Adverse Effect.
      “Material Adverse Effect” shall mean the following meaning:

    

    (a) with
      respect to Company, (i) a material adverse effect (whether taken individually
      or
      in the aggregate with all other such effects) on the financial condition,
      business, results of operations or properties of Company; (ii) an effect which
      would materially impair Company’s ability to timely to consummate the
      transactions contemplated under this Agreement; or, (iii) any event,
      circumstance or condition affecting Company which would prevent or materially
      delay the consummation of the transactions contemplated under this
      Agreement;

    

    (b) with
      respect to Parent, (i) a material adverse effect (whether taken individually
      or
      in the aggregate with all other such effects) on the financial condition,
      business, results of operations or properties of Parent; (ii) an effect which
      would materially impair Parent’s ability timely to consummate the transactions
      contemplated under this Agreement; or, (iii) any event, circumstance or
      condition affecting Parent which would prevent or materially delay the
      consummation of the transactions contemplated by this Agreement;
      and

    

    (c) with
      respect to the Merger Sub, (i) a material adverse effect (whether taken
      individually or in the aggregate with all other such effects) on the financial
      condition, business, results of operations or properties of Merger Sub; (ii)
      an
      effect which would materially impair Merger Sub’s ability to timely to
      consummate the transactions contemplated under this Agreement; or, (iii) any
      event, circumstance or condition affecting Merger Sub which would prevent or
      materially delay the consummation of the transactions contemplated under this
      Agreement

    

    3.1.14. Merger
      Consideration.
“Merger
      Consideration” shall mean the consideration which each holder of Company Common
      Stock is entitled to receive pursuant to Section 4.4, below. 

    3.1.15. Merger
      Sub Stock.
“Merger
      Sub Stock” shall mean any share of the Common Stock, $0.00 par value per share,
      of Merger Sub.

    

    3.1.16. Nevada
      Law.
“Nevada
      General Corporation Law” shall mean the General
      Corporation Law of the State of Nevada, as amended.

    

    3.1.17. Ordinary
      Course of Business.
      “Ordinary Course of Business” shall mean the course of business procedures and
      practices consistent with past custom and practice (including with respect
      to
      quantity and frequency).

    

    3.1.18. Parent
      Common Stock.
“Parent
      Common Stock” shall mean any
      share
      of the Common Stock, $.001 par value per share, of Parent.

    

    3.1.19. Person.
      “Person” shall mean any individual,
      corporation (including any 

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    non-profit
      corporation), general partnership, limited partnership, limited liability
      partnership, joint venture, estate, trust, company (including any limited
      liability company or joint stock company), firm or other enterprise,
      association, organization, unincorporated
      organization, governmental
      entity, or
      any
      other type of entity.

    

    3.1.20. Requisite
      Stockholder Approval.
      “Requisite Stockholder Approval” shall mean the affirmative vote of the holders
      of a majority of that company’s issued and outstanding shares entitled to vote
      on the Merger actually voting in favor of this Agreement and the
      Merger.

    

    3.1.21. SEC.
“SEC”
      shall mean the Securities and Exchange Commission.

    

    3.1.22. SEC
      Filings.
“SEC
      Filings” shall mean that Person’s filings with the SEC.

    

    3.1.23. Security
      Interest.
      “Security Interest” shall mean any mortgage, pledge, lien, encumbrance, charge,
      or other security interest, other
      than
      (a)
      mechanic’s, materialmen’s, and similar liens, (b) liens for taxes not yet due
      and payable or for taxes that the taxpayer is contesting in good faith through
      appropriate proceedings, (c) purchase money liens and liens securing rental
      payments under capital lease arrangements, and (d) other liens arising in the
      Ordinary Course of Business and not incurred in connection with the borrowing
      of
      money.

    

    3.1.24. Subsidiary.
      “Subsidiary” shall mean any corporation with respect to which a specified Person
      (or a Subsidiary thereof) owns a majority of the common stock or has the power
      to vote or direct the voting of sufficient securities to elect a majority of
      the
      directors.

    

    3.1.25. Surviving
      Corporation.
      “Surviving Corporation” shall mean the corporate entity of Company as existing
      immediately after the Merger.

    

    3.1.25. Surviving
      Corporation Common Stock.
      “Surviving Corporation Common Stock”shall
      mean any share of the Common Stock, $0.00 par value per share, of the Surviving
      Corporation.

    

    3.1.26. Tax
      or Taxes.
“Tax”
      or “Taxes” shall mean any federal, state, local or foreign income, gross
      receipts, license, payroll, employment, excise, severance, stamp, occupation,
      premium, windfall profits, environmental, customs duties, capital stock,
      franchise, profits, withholding, social security (or similar), unemployment,
      disability, real property, personal property, sales, use, transfer,
      registration, value added, alternative or add-on minimum, estimated, or other
      tax of any kind whatsoever, including any interest, penalty, or addition
      thereto, whether disputed or not.

    

    3.1.27. Tax
      Return.
“Tax
      Return” shall mean any return, declaration, report, claim for refund, or
      information return or statement relating to Taxes, including any schedule or
      attachment thereto, and including any amendment thereof.

    

    3.1.28. Transaction
      Expenses.
      “Transaction Expenses” shall mean and include all reasonable, actual, and
      documented out-of-pocket expenses (including, without limitation, all reasonable
      fees and expenses of counsel, accountants, and investment bankers to a Party
      and
      its 

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Affiliates)
      incurred by a Party or on its behalf in connection with or related to (i) the
      authorization, preparation, negotiation, execution, and performance of this
      Agreement; (ii) the preparation, printing, filing, and mailing of any SEC
      Filings made or contemplated by that Party in connection with this Agreement
      and
      the transactions envisioned hereunder; and, (iii) all other matters related
      to
      the consummation of the transactions contemplated under this
      Agreement.

    

    3.2 Accounting
      Terms and Determinations.
      All
      accounting terms used in this Agreement and not otherwise defined shall have
      the
      meaning accorded to them in accordance with GAAP and, except as expressly
      provided herein, all accounting determinations shall be made in accordance
      with
      GAAP, consistently applied. When used herein, the term “financial statements”
      shall include the notes and schedules attached thereto. The term “GAAP” means
      generally accepted accounting principles consistently applied as in effect
      from
      time to time.

     

    3.3 Interpretation.
      

    

    3.3.1. Provision
      Not Construed Against Party Drafting Agreement.
      This
      Agreement is the result of negotiations by and between the Parties, and each
      Party has had the opportunity to be represented by independent legal counsel
      of
      its choice. This Agreement is the product of the work and efforts of all
      Parties, and shall be
      deemed
      to have been drafted by all Parties. In the event of a dispute, no Party hereto
      shall be entitled to claim that any provision should be construed against any
      other Party by reason of the fact that it was drafted by one particular
      Party.

    

    3.3.2. Number
      and Gender.
      Wherever
      from the context it appears appropriate, (i) each term stated either in the
      singular or plural shall include the singular and plural; and, (iii) wherever
      from the context it appears appropriate, the masculine, feminine, or neuter
      gender, shall each include the others

    

    3.3.3. Incorporation
      of Exhibits and Schedules.
      The
      Exhibits and Schedules identified in this Agreement are incorporated herein
      by
      reference and made a part hereof as if set out in full herein.

    

    3.3.4. Article
      and Section Headings.
      The
      article and section headings used in this Agreement are inserted for convenience
      and identification only and are not to be used in any manner to interpret this
      Agreement.

    

    3.3.5. Severability.
      Each
      and every provision of this Agreement is severable and independent of any other
      term or provision of this Agreement. If any term or provision hereof is held
      void or invalid for any reason by a court of competent jurisdiction, such
      invalidity shall not affect the remainder of this Agreement.

    

    3.3.6. Entire
      Agreement.
      This
      Agreement, and all references, documents, or instruments referred to herein,
      contains the entire agreement and understanding of the Parties hereto in respect
      to the subject matter contained herein. The Parties have expressly not relied
      upon any promises, representations, warranties, agreements, covenants, or
      undertakings, other than those expressly set forth or referred to herein. This
      Agreement supersedes any and all prior written or oral agreements, 

     

     

    
      
         

      

      
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    understandings,
      and negotiations between the Parties with respect to the subject matter
      contained herein.

    

    3.4 Additional
      Definitions
      and Interpretation Provisions.
      For
      purposes of this Agreement, (i) those words, names, or terms which are
      specifically defined herein shall have the meaning specifically ascribed to
      them; (ii); the words “hereof”, “herein”, “hereunder”, and words of similar
      import, when used in this Agreement, shall refer to this Agreement as a whole,
      and not to any particular provision of this Agreement; (iii) all references
      to
      designated “Articles”, “Sections”, and to other subdivisions are to the
      designated Articles, Sections, and other subdivisions of this Agreement as
      originally executed; (iv) all references to “Dollars” or “$” shall be construed
      as being United States dollars; (v) the
      term
“including” is not limiting and means “including without limitation”;
and,
      (vi)
      all references to all statutes, statutory provisions, regulations, or similar
      administrative provisions shall be construed as a reference to such statute,
      statutory provision, regulation, or similar administrative provision as in
      force
      at the date of this Agreement and as may be subsequently amended.

    

    IV

    

    THE
      MERGER

    

    4.1 Basic
      Transaction.
      On and
      subject to the terms and conditions of this Agreement, and pursuant to
      California Law, Merger Sub will merge with and into Company (the “Merger”) at
      the Effective Date. Immediately following the Merger, the corporate existence
      of
      Merger Sub will cease and Company will continue as the surviving corporation
      of
      the Merger, and is sometimes referred to herein as the Surviving Corporation.
      Surviving Corporation will succeed to and assume all of the rights and
      obligations of Merger Sub in accordance with California Law. 

    

    4.2 Effects
      of the Merger.

    

    4.2.1. General.
      The
      Merger shall become legally effective at the time Company files with the
      Secretary of State of the State California the following duly executed and
      approved documents, collectively referred to herein as the “Merger Document
      Filings”, in the form attached hereto as Exhibit 4.2.1.: (i) Agreement of
      Merger; (ii) Certificate of Approval of Agreement of Merger of Company; (iii)
      Certificate of Approval of Agreement of Merger of Parent; and, (iv) Certificate
      of Approval of Agreement of Merger of Merger Sub. The date on which the Merger
      Document Filings are so filed shall be referred to herein as the “Effective
      Date”. The Merger shall have the effect set forth under California Law.
      Surviving Corporation may, at any time after the Effective Date, take any action
      (including, but not limited to, executing, delivering, filing, or recording,
      any
      document) in the name and on behalf of either Company or Merger Sub in order
      to
      carry out and effectuate the transactions contemplated by this Agreement or
      as
      required under California Law.

     

    4.2.2. Articles
      of Incorporation.
      The
      Articles of Incorporation of Company in effect at and as of the Effective Date
      shall remain the
      Articles of Incorporation of Surviving Corporation after the Effective Date
      without
      any further modification or amendment until thereafter as may amended
as
      provided therein and as permitted by California Law and this Agreement (the
      “Certificate”).

     

     

    
      
         

      

      
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    4.2.3. Bylaws.
      The
      Bylaws of Company in effect at and as of the Effective Date shall remain the
      Bylaws
      of
      the Surviving Corporation
      without
      any further modification or amendment until thereafter as may be amended in
      accordance with California Law and as provided in the Certificate and the Bylaws
      of Company (the “Bylaws”).

     

    4.2.4. Directors
      and Officers of Company.
      Each
      and every one of the directors and officers of Company in office at and as
      of
      the Effective Date will retain their respective position(s) as of an on the
      Effective Date, and they shall serve until their respective successors are
      duly
      elected or appointed and qualified.

    

    4.2.5. Directors
      and Officers of Parent.
      The
      directors and officers of Parent immediately prior to the Effective Date will
      retain their respective positions but only up to and until said positions are
      changed and effective as a result of corporate action or SEC Filings, as
      appropriate. 

    

    4.3 Conversion
      of Merger Sub Stock.
      Subject
      to the terms and conditions of this Agreement, at the Effective Date, by virtue
      of the Merger and without any further action on the part of the Parties,
each
      share of Merger Sub Stock issued and outstanding immediately prior to the
      Effective Date shall be converted into and become one (1) validly issued, fully
      paid, and nonassessable share of Surviving Corporation Common Stock.
Each
      certificate evidencing ownership of shares of Merger Sub Common Stock
      outstanding immediately prior to the Effective Date shall evidence ownership
      of
      such shares of capital stock of the Surviving Corporation,
      and
      such converted shares, collectively, will represent all of the issued and
      outstanding Surviving Corporation Common Stock of the Surviving
      Corporation.

    

    4.4 Conversion
      of Company Common Stock.
      Upon
      the
      terms and subject to the conditions of this Agreement, at the Effective Date,
      by
      virtue of the Merger and without any action on the part of Merger Sub, the
      Company, or the holders of any of the following securities, the following shall
      occur:

    

    4.4.1. Conversion
      of Shares.
      Each
      share of Company Common Stock issued
      and outstanding immediately prior to the Effective Date(other than any shares
      of
      Company Common Stock to be canceled pursuant to Section 4.4.2. or Section
      4.4.3., below, and any Dissenting Shares, as defined in Section 4.6, below)
      will
      be canceled and extinguished and automatically converted into the right to
      receive, upon surrender of the certificate(s) representing such Company Common
      Stock in the manner provided in Section 5.1, below (or in the case of a lost,
      stolen or destroyed certificate, upon delivery of an affidavit, and bond, if
      required, in the manner provided in Section 5.2, below), one (1) duly
      authorized, validly issued, fully paid, and nonassessable shares of Parent
      Common Stock. Each
      Dissenting Share shall be converted into the right to receive payment from
      the
      Surviving Corporation with respect thereto in accordance with the provisions
      of
      California Law. As
      of the
      Effective Date, all such shares of Company Common Stock will no longer be
      outstanding and will automatically be cancelled and retired and will cease
      to
      exist, and each holder of a certificate or a certificate which immediately
      prior
      to the Effective Date represented outstanding shares of Company Common Stock
      will cease to have any rights with respect thereto, except the right to receive
      the Merger Consideration.

    

    4.4.2. Cancellation
      of Treasury and Parent-Owned Shares.
      All
      Company 

     

    
      
         

      

      
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    Common
      Stock held by the Company or owned by Merger Sub, Parent, or any direct or
      indirect wholly-owned subsidiary of the Company or of Parent immediately prior
      to the Effective Date shall be canceled and extinguished without any conversion
      thereof.

    

    4.4.3. Fractional
      Shares.
      No
      fraction of a share of Parent Common Stock will be issued by virtue of the
      Merger, but in lieu thereof each holder of shares of Company Common Stock who
      would otherwise be entitled to a fraction of a share of Parent Common Stock
      (after aggregating all fractional shares of Parent Common Stock that otherwise
      would be received by such holder) shall receive a total number of Parent Common
      Stock rounded down to the closest whole number.

    

    4.4.4. Stock
      Options; Employee Stock Purchase Plans.

    

    (i) At
      the
      Effective Date, by virtue of the Merger and without any action on the part
      of
      any holder of outstanding options to purchase Company Common Stock (the “Company
      Stock Options”), each Company Stock Option, whether vested or unvested, and all
      stock option plans or other equity-related plans of the Company (the “Company
      Stock Plans”), insofar as they relate to Company Stock Options, shall be assumed
      by Parent and the Company Stock Options shall become an option to acquire shares
      of Parent Common Stock, on the same terms and conditions as were applicable
      under the Company Stock Option immediately prior to the Effective Date, except
      that (i) such assumed Company Stock Option shall be exercisable for that number
      of whole shares of Parent Common Stock equal to the product (rounded down to
      the
      nearest whole number of shares of Parent Common Stock) obtained by multiplying
      the number of shares of Company Common Stock issuable upon the exercise of
      such
      Company Stock Option immediately prior to the Effective Time by the conversion
      ratio referenced in Section 4.4.1., above; and, (ii) the per share exercise
      price for the shares of Parent Common Stock issuable upon exercise of such
      assumed Company Stock Options shall be equal to the quotient (rounded up to
      the
      nearest whole cent) obtained by dividing the exercise price per share of the
      Company Common Stock for which the Company Stock Option was exercisable
      immediately prior to the Effective Time by the conversion ratio referenced
      in
      Section 4.4.1., above.

    

    (ii) The
      rights and preferences of all affected Persons under similar or related plans
      or
      arrangements, such as stock appreciation, phantom stock, profit participation,
      or other similar rights, shall remain substantially unaffected by the Merger
      and
      shall be treated in a manner substantially similar to that under subparagraph
      (i), above.

    

    (iii) As
      promptly as practicable after the Closing Date, Parent shall issue to each
      holder of an outstanding Company Stock Option immediately prior to the Effective
      Date a document evidencing the foregoing assumption of such Company Stock
      Option.

     

                                 
      4.4.5. No
      Further Ownership Rights in Company Common Stock.
      Payment
      of the Merger Consideration shall be deemed to have been paid in full
      satisfaction of all rights pertaining to the Company Common Stock, and after
      the
      Effective Date, there shall be no further registration of transfers on the
      records of the Surviving Corporation of the Company Common Stock which were
      outstanding immediately prior to the Effective Date. If, after the Effective
      Date, certificates are presented to the Surviving Corporation for any reason,
      they shall be canceled and exchanged as provided in Article V,
      below.

     

     

    
      
         

      

      
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    4.5 Parent
      Shares.
      Each
      share of Parent Common Stock issued and outstanding at and as of the Effective
      Date will remain issued and outstanding.

    

    4.6 Dissenting
      Shares.

    

    4.6.1. General.
      Notwithstanding
      any provision of this Agreement to the contrary, the Dissenting Shares of
each
      Dissenting Stockholder shall
      not
      be converted into, or represent the right to receive, any shares of Parent
      Common Stock under Section 4.4.1., above. Instead, Dissenting Stockholders
      shall
      be entitled to receive payment of the appraised value of such Dissenting Shares
      held by them in accordance with the provisions of California Law. However,
      all
      Dissenting Shares held by Dissenting Stockholders who shall have failed to
      perfect or who effectively shall have withdrawn or lost their rights to
      appraisal of such Dissenting Shares under California Law shall thereupon be
      deemed to have been converted into, and to have become exchangeable for, as
      of
      the Effective Date, the right to receive Parent Common Stock under Section
      4.4.1., above. 

    

    4.6.2. Notice.
      Company
      shall give Parent (i) prompt notice of any demands for appraisal received by
      Company, withdrawals of such demands, and any other instruments served pursuant
      to California Law and received by Company and (ii) the opportunity to direct
      all
      negotiations and proceedings with respect to demands for appraisal under
      California Law. Company shall not, except with the prior written consent of
      Parent, make any payment with respect to any demands for appraisal or offer
      to
      settle or settle any such demands. 

    

    4.7 Taking
      of Necessary Action; Further Action.
      If, at
      any time after the Effective Date, any further action is necessary or desirable
      to carry out the purposes of this Agreement and to vest Surviving Corporation
      with full right, title, and possession to all assets, property, rights,
      privileges, powers, and franchises of Company and Merger Sub, the officers
      and
      directors of Company and Merger Sub will take all such lawful and necessary
      action.

    

    4.8 Tax-Free
      Reorganization.
      The
      Parties intend that the Merger be treated as a tax free plan of reorganization
      under Section 368(a) of the Code. The Parties shall not take a position on
      any
      Tax Return or before any taxing authority that is inconsistent with this Section
      4.8 unless otherwise required by a final and binding determination or resolution
      of a governmental body with appropriate jurisdiction, and each Party agrees
      to
      promptly notify the other Parties of any assertion by a taxing authority of
      a
      position that is inconsistent with this Section 4.8. No Party represents or
      warrants that the Merger will qualify as reorganization under the
      Code.

    

    

    V

    

    SHARE
      AND CASH ISSUANCE

    

    5.1 Issuance
      of Parent Common Stock.
      At the
      Closing, Parent shall issue share certificates of Parent Common Stock in a
      total
      amount equal to the conversion
      ratio referenced in Section 4.4.1. times
      the
      number of outstanding shares of Company Common Stock (other than any

     

    
      
         

      

      
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    Dissenting
      Shares). The Parent Common Stock shall be issued hereunder to each record holder
      of outstanding Company Common Stock, in the form of a share certificate
      representing the number of shares of Parent Common Stock to which he is
      entitled, in exchange for his surrender of his share certificates which
      represented his shares of Company Common Stock.

    

    5.2 Lost,
      Stolen, or Destroyed Certificates.
      In the
      event that any certificates shall have been lost, stolen, or destroyed, Parent
      shall transfer the Merger Consideration payable with respect to such lost,
      stolen, or, destroyed certificates upon the making of an affidavit of that
      fact
      by the holder thereof. However,
      Parent
      may, in its sole discretion and as a condition precedent to the payment of
      such
      portion of the Merger Consideration, require the owner of such lost, stolen,
      or
      destroyed certificates to deliver a bond in such reasonable and customary amount
      as it may direct as indemnity against any claim that may be made against Parent
      or Surviving Corporation with respect to the certificates alleged to have been
      lost, stolen or destroyed. 

    

    5.3 Cash
      Payment for Dissenting Shares.
      At
      the
      Closing, Parent shall tender all necessary cash payments for the Dissenting
      Shares, as required under Section 4.6, above. In connection therewith,
Parent
      and Surviving Corporation shall be entitled to deduct and withhold from any
      consideration payable or otherwise deliverable pursuant to this Agreement to
      any
      holder or former holder of Company Common Stock such amounts as may be required
      to be deducted or withheld therefrom under the Code or under any provision
      of
      state, local, or foreign tax law or under any other applicable legal
      requirement. To the extent such amounts are so deducted or withheld, such
      amounts shall be treated for all purposes under this Agreement as having been
      paid to the person to whom such amounts would otherwise have been
      paid. 

    

    5.4 Surrender
      of Merger Sub Share Certificates.
      Promptly after the Effective Date, Surviving Corporation shall issue, as
      appropriate, the correct number of shares of Company Common Stock to holders
      of
      Merger Sub Stock.

    

    VI

    

    REPRESENTATIONS
      AND WARRANTIES BY PARENT

    

    Parent
      hereby represents and warrants to Company as follows: 

    

    6.1 Generally.
      Parent
      represents and warrants to Company that the statements contained in this Article
      VI are correct and complete as of the Execution Date and will be correct and
      complete as of the Closing Date (as though made then and as though the Closing
      Date were substituted for the date of this Agreement throughout this Article
      VI), except as expressly set forth to the contrary herein and in Schedules
      attached to this Agreement, corresponding to the lettered and numbered
      paragraphs contained in this Article VI. 

    

    6.2 Organization
      and Qualification.
      Parent
      is a corporation duly organized, validly existing, and in good standing under
      the laws of the State of Nevada. Parent is duly authorized to conduct business
      and is in good standing under the laws of each jurisdiction where such
      qualification is required. 

     

     

    
      
         

      

      
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    6.3 Subsidiaries.
      Schedule 6.3, attached hereto and incorporated herein by reference, sets forth
      for each subsidiary of Parent (i) its name and jurisdiction of incorporation,
      and (ii) the percentage of such Person’s issued and outstanding shares of
      capital stock owned by Parent.

    

    6.4 Authorization.
      

    

    6.4.1. Operation
      of Business.
      Parent
      has the requisite corporate power and authority and all requisite licenses,
      permits and franchises necessary to own and operate its properties and to carry
      on its business as now being conducted.

    

    6.4.2 Execution
      of Agreement.
      Parent
      has the requisite corporate power and authority and
      has
      obtained all approvals and consents necessary to enter
      into and carry out the terms and conditions of this Agreement, as well as all
      transactions contemplated hereunder. All corporate proceedings have been taken
      and all corporate authorizations have been secured which are necessary to
      authorize the execution, delivery and performance by Parent of this Agreement.
      This Agreement has been duly and validly executed and delivered by Parent and
      constitutes the valid and binding obligations of Parent, enforceable in
      accordance with the respective terms.

    

    6.5 Effect
      of Agreement.
      As of
      the Closing, the consummation by Parent of the transactions herein contemplated,
      including the execution, delivery and consummation of this Agreement, will
      comply with all applicable law and will not:

    

    (a) Violate
      any judgment, statute, law,
      code,
      act, order,
      writ, rule, ordinance, regulation, governmental
      consent or governmental requirement, or
      determination or decree of any arbitrator, court, or other governmental agency
      or administrative body, which
      now
      or at any time hereafter may be applicable to and enforceable against the
      relevant party, work, or activity in question or any part thereof (collectively,
      “Requirement of Law”) applicable to or binding upon Parent or the Parent Common
      Stock to be issued hereunder;

    

    (b) Violate
      (i)
      the
      terms of the Certificate of Incorporation or Bylaws of Parent; or, (ii) any
      material agreement, contract, mortgage, indenture, bond, bill, note, or other
      material instrument or writing binding upon Parent or to which Parent is
      subject; 

    

    (c) Accelerate
      or constitute an event entitling the holder of any indebtedness of Parent to
      accelerate the maturity of such indebtedness or to increase the rate of interest
      presently in effect with respect to such indebtedness; or

    

    (d) Result
      in
      the breach of, constitute a default under, constitute an event which with notice
      or lapse of time, or both, would become a default under, or result in the
      creation of any lien, security interest, charge or encumbrance upon any part
      of
      the assets of Parent or
      any
      other assets of Parent under any agreement, commitment, contract (written or
      oral) or other instrument to which Parent is a party, or by which any of its
      assets (or any part thereof) is bound or affected.

    

    6.6 Consents.
      No
      consents, approvals or other authorizations or notices, other than those which
      have been obtained and are in full force and effect, are required by any state
      or federal regulatory authority or other Person or entity in connection with
      the
      execution and delivery of this 

     

     

    
      
         

      

      
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    Agreement
      and the performance of any obligations contemplated hereunder.

    

    6.7 Legal
      Proceedings.
      Except
      as
      set forth in the SEC Filings of Parent and in Schedule 6.7, attached hereto
      and
      incorporated herein by reference, there
      is
      no
      claim, legal action, suit, arbitration, investigation or hearing, notice of
      claims or other legal, administrative or governmental proceedings pending or
      to
      the best knowledge of Parent, threatened against Parent (or in which Parent
      is
      plaintiff or otherwise a party thereto), and, to the best knowledge of Parent,
      there are no facts existing which might result in any such claim, action, suit,
      arbitration, investigation, hearing, notice of claim or other legal,
      administrative or governmental proceeding. Parent has not waived any statute
      of
      limitations or other affirmative defense with respect to any of its liabilities.
      There is no continuing order, injunction or decree of any court, arbitrator
      or
      governmental or administrative authority to which Parent is a party or to which
      it or any of its assets are subject. Parent has not been permanently or
      temporarily enjoined or barred by order, judgment or decree of any court or
      other tribunal or any agency or regulatory body from engaging in or continuing
      any conduct or practice.

    

    6.8 Regulatory
      Compliance.
      To the
      best Knowledge of Parent, it has not violated any Requirement of Law, the
      violation of which would be reasonably likely to have a Material Adverse Effect.
      Further, Parent and each Subsidiary have met the minimum funding requirements
      of
      ERISA with respect to any employee benefit plans subject to ERISA, and no event
      has occurred resulting from Parent’s failure to comply with ERISA that could
      result in Parent’s incurring any material liability. Parent is not an
“investment company” or a company “controlled” by an “investment company” within
      the meaning of the Investment Company Act of 1940. 

    

    6.9 Capitalization.
      Parent
      is authorized to issue seventy five million
      (75,000,000) shares of Parent Common Stock. Nine million eight hundred
      eighty-four thousand five hundred fifty (9,884,550) shares of Parent Common
      Stock are issued and outstanding. All of the issued and outstanding Parent
      Common Stock has been duly authorized and is validly issued, fully paid, and
      nonassessable. Other than as otherwise provided for herein or reflected Schedule
      6.9, attached hereto and incorporated herein by reference, there are no
      outstanding or authorized options, warrants, purchase rights, subscription
      rights, conversion rights, exchange rights, or other contracts or commitments
      that could require Parent to issue, sell, or otherwise cause to become
      outstanding any of its capital stock. 

    

    6.10 Parent
      Common Stock to be Issued.
      The
      Parent Common Stock to be issued pursuant to the provisions of this Agreement
      will, upon such transfer, be duly authorized, legally and validly issued, fully
      paid and nonassessable, and free
      and
      clear of all liens, mortgages, pledges, and other encumbrances of any nature,
      unless expressly provided herein to the contrary.

    

    

    6.11 Employee
      Benefit Plans.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.11, attached hereto
      and incorporated herein by reference, Parent is not a party to any written
      or
      oral (i) contract with any labor union, (ii) bonus, pension, profit-sharing,
      retirement, deferred compensation, savings, stock purchase, stock option,
      hospitalization, insurance or other plan providing employees benefits, (iii)
      employment, agency, consulting or similar contract which cannot be terminated
      by
      it in one hundred twenty (120) days or less, without cost, or (iv) any other
      plan, agreement or arrangement governed by the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”). 

     

     

    
      
         

      

      
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    6.12 Permits
      and Licenses.
      Parent
      has all licenses and permits (federal, state, and local) required by
      governmental authorities to own, operate and carry on its business as now being
      conducted, and such licenses and permits are in full force and effect. No
      violations are or have been recorded in respect to the licenses or permits,
      included but not limited to fire and health and safety law violations, and
      no
      proceeding is pending or threatened looking toward the revocation or limitation
      of any of them. 

    

    6.13 Customers
      and Suppliers.
      The
      books and records of Parent contain a correct and complete list of each of
      the
      customers and suppliers of Parent who have dealt with Parent during the last
      five (5) years (the “Customers and Suppliers”). Parent has taken all
      commercially reasonable steps to maintain the confidentiality of the Customers.
      To Parent’s best Knowledge:

    

    (a) None
      of
      the Customers or Suppliers, or any other person or entity having material
      business dealings with Parent will or may cease to continue such relationship
      with Parent;

    

    (b) None
      of
      the Customers or Suppliers, or any other person or entity having material
      business dealings with Parent will or may substantially reduce the extent of
      such relations with Parent at any time from or after the Closing;

    

    (c) There
      are
      no other existing or contemplated material modifications or changes in the
      business relationship of any Customers or Suppliers with Parent; 

    

    (d) There
      are
      no existing conditions or state of facts or circumstances which have or would
      have a Material Adverse Effect on the relationship of Parent with Customers
      or
      Suppliers after Closing, or which has prevented or will prevent such business
      from being carried on after the Closing in essentially the same manner as it
      is
      currently carried on.

    

    6.14 Leases
      and Similar Agreements.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.14, attached hereto
      and incorporated herein by reference, Parent is not a party to, nor are any
      of
      its assets bound by or subject to, any leases or other similar agreements or
      instruments, whether as lessor or lessee. With regard to all such disclosed
      leases and similar agreements, Parent has delivered to Company any and all
      consents or waivers of other parties necessary for the continuation of the
      leases and similar agreements upon the same terms and conditions in effect
      as of
      the Closing.

     

    6.15 Material
      Agreements.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.15, attached hereto
      and incorporated herein by reference, Parent is not a party to, nor are any
      of
      its assets bound by or subject to, any of the following:

    

    (a) license
      agreement, assignment or contract (whether as licensor or licensee, assignor
      or
      assignee) relating to trademarks, trade names, patents or copyrights (or
      applications therefore), know-how or technical assistance, or other proprietary
      rights (other than trademark agreements which are entered into in the ordinary
      course of Parent’s business in conjunction with sales agreements;

    

    (b) agreement
      or other arrangement for the sales of goods or services by Parent to any
      government or governmental authority (other than pursuant to open purchase
      orders issued by such 

     

    
      
         

      

      
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    entities);

    

    (c) agreement
      with any vendor, distributor, dealer, sales agent or representative other than
      contracts or orders for the purchase or sale of goods made in the usual and
      Ordinary Course of Business at an aggregate price per contract or order of
      less
      than $10,000 and a terms of less than ninety days under any such contract or
      order;

    

    (d) agreement
      with any supplier or customer with respect to discounts (other than those
      reflected on Parent’s current price lists) or allowances or extended payment
      terms;

    

    (e) joint
      venture or partnership agreement with any other person;

    

    (f) agreement
      which restricts Parent from doing business anywhere in the world;
      or

    (g) long-term
      services agreement.

    

    6.16 Employment
      Agreements.
      Except
      as set forth in the SEC Filings of Parent and in Schedule 6.16, attached hereto
      and incorporated herein by reference, and except as otherwise provided for
      herein, Parent is not a party to any employment agreement, independent
      contractor agreement, or similar arrangement or agreement, whether it be reduced
      to written form or an oral promise.

    

    6.17 Restrictive
      Covenant Agreements.
      Schedule 6.17, attached hereto and incorporated herein by reference, represents
      a list of all restrictive covenant agreements and arrangements held by Parent
      with regard to its business. Copies of all such contracts are also attached
      hereto as part of Schedule 6.17.

    

    6.18 Accounts
      Receivable.
      All
      accounts receivable of Parent arose from valid sales transactions in the
      Ordinary Course of Business and represent valid obligations due Parent, and
      represent valid obligations due Parent, and are collectible in the Ordinary
      Course of Business in the aggregate recorded amounts thereof in accordance
      with
      their terms.

    

    6.19 Insurance
      Policies.
      All
      insurance policies maintained by Parent on its assets, business, officers and
      personnel provide adequate and sufficient liability and property damage coverage
      commensurate with the business practices of Parent. Parent does not conduct
      any
      business which would result in the cancellation of, or a material increase
      in
      the premiums, for any of its insurance policies.

    

    6.20 Environmental
      Matters.
      To the
      best Knowledge of Parent, with regard to matters of environmental
      compliance:

    

    (a) Parent
      has conducted and is conducting its business, and has used and is using its
      properties, whether currently owned, operated or leased or owned, operated
      or
      leased by Parent at any time in the past; and at the time of acquisition of
      any
      security interest, all properties in which Parent has a security interest had
      always been used, in compliance with all applicable federal, and state and
      local
      environmental laws and regulations, except where the failure to comply with
      such
      laws and regulations, in the aggregate, has not had and could not have a
      material adverse effect on the condition (financial or otherwise), business
      or
      properties of Parent.

     

    
      
         

      

      
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    (b) Neither
      Parent nor any property currently owned, operated or leased or which has been
      owned, operated or leased by Parent, is subject to any existing, pending or
      threatened investigation, action or proceeding, including any notice of
      violation, by any governmental authority regarding contamination of any part
      of
      such property or infractions of any law, statute, ordinance or regulation or
      any
      license or permit issued by any government agency pertaining to health,
      industrial hygiene or environmental safety or environmental conditions on,
      under
      or about such property, except where such investigations, actions, proceedings,
      notifications or infractions, in the aggregate, have not had and could not
      have
      a material adverse effect on the condition (financial or otherwise), business
      or
      properties of Parent.

    

    (c) Except
      as
      set forth in Schedule 6.20,
      attached hereto and incorporated herein by reference, there are no underground
      storage tanks or toxic or hazardous wastes, substances, or materials, or
      pollutants or contaminants, including asbestos, presently located on or under
      any property which is currently or has been owned, operated or leased by Parent;
      there were no underground storage tanks or toxic or hazardous wastes,
      substances, or materials, or pollutants or contaminants, including asbestos,
      located on or under any property in which Parent or Parent has or had an
      interest. As used herein, the terms toxic or hazardous wastes, substances or
      materials, pollutants and contaminants mean any material which is or becomes
      during the term of this Agreement regulated or controlled as a hazardous or
      toxic waste or environmental pollutant under any federal, state or local law,
      ordinance, order, decree or regulation currently in effect and applicable to
      Parent or any property owned, operated or leased by Parent.

    

    6.21 Other
      Arrangements.
      Parent
      is not a party to any contract, commitment or agreement, nor are any of its
      assets subject to, or bound or affected by, any order, judgment, decree, law,
      statute, ordinance, rule, regulation or other restriction of any kind or
      character which is not applicable to Parent generally, which would, individually
      or in the aggregate, cause a Material Adverse Effect on Parent. Parent is also
      not a party or subject to any agreement, contract or other obligation which
      would require the making of any payment, other than payments contemplated by
      this Agreement, to any other person as a result of the consummation of the
      transactions contemplated herein.

    

    6.22 Undisclosed
      Liabilities.
      Parent
      does not have any liability (whether known or unknown, whether asserted or
      unasserted, whether absolute or contingent, whether accrued or unaccrued,
      whether liquidated or unliquidated, and whether due or to become due), including
      any liability for Taxes, except for (i) liabilities set forth in the Parent
      Financial Statements, and (ii) liabilities which have arisen after the date
      of
      the Parent Financial Statements in the Ordinary Course of Business (none of
      which results from, arises out of, relates to, is in the nature of, or was
      caused by any breach of contract, breach of warranty, tort, infringement, or
      violation of law).

    

    6.23 Material
      Defaults.
      Parent
      is not in material default, or alleged to be in default, under any material
      agreement, contract, lease, mortgage, commitment, instrument or obligation,
      and
      no other party to any agreement, contract, lease, mortgage, commitment,
      instrument or obligation to which Parent is a party is in default thereunder,
      which default would materially and adversely affect the properties, assets,
      business or prospects of Parent.

    

    6.24 Tax
      Returns and Disputes.
      Parent
      has filed all Tax Returns (federal, state and local) required to be filed by
      it,
and
      all
      such Tax Returns filed are complete and accurate in all material 

     

    
      
         

      

      
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    respects.
      Parent has paid
      all
      Taxes shown to be due and payable on the returns or any assessments or penalties
      received by it and all other Taxes (federal, state and local) due and payable
      by
      it. Parent
      has collected and withheld all Taxes which it has been required to collect
      or
      withhold and has timely submitted all such collected and withheld amounts to
      the
      appropriate authorities. Parent is in compliance with the back-up withholding
      and information reporting requirements under the Code and any state, local
      or
      foreign laws, and the rules and regulations thereunder. 

    

    6.25 Title
      to Assets.
      Parent
      has good and marketable title to all of its assets, free and clear of all liens,
      mortgages, conditional sale and other title retention agreements, pledges,
      assessments, tax liens and other encumbrances of any nature, except as expressly
      disclosed on Schedule 6.25, attached hereto and incorporated herein by
      reference. 

    

    6.26 Condition
      of Assets.
      The
      assets of Parent are in good operating condition and repair, subject to
      reasonable wear and tear, constitute all of the assets used in the conduct
      of
      the business, and are sufficient for the proper operation of the Ordinary Course
      of Business.

    

    6.27 Intellectual
      Property Assets.
      The
      Intellectual Property Assets are all those necessary for the operation of the
      business of Parent as it is currently conducted, and are listed on Schedule
      6.27, attached hereto and incorporated herein by reference. Parent is the owner
      of all right, title, and interest in and to each of the Intellectual Property
      Assets, free and clear of all liens, security interests, charges, encumbrances,
      equities, and other adverse claims, and has the right to use without payment
      to
      a third party all of the Intellectual Property Assets. To the extent that any
      employee or former employee of Parent has developed or invented or otherwise
      produced any of the Intellectual Property Assets, all such former and current
      employees of Parent have executed written contracts that assign to Parent all
      rights to any inventions, improvements, discoveries, or information relating
      to
      the Intellectual Property Assets. No such employee or former employee has
      entered into any contract that restricts or limits in any way the scope or
      type
      of work in which the employee may be engaged or requires the employee to
      transfer, assign, or disclose information concerning his work to anyone other
      than Parent. With regard to different aspects of the Intellectual Property
      Assets: 

    

    6.27.1. Patents.

    (i) All
      of
      the issued Patents are currently in compliance with formal legal requirements
      (including payment of filing, examination, and maintenance fees and proofs
      of
      working or use), are valid and enforceable, and are not subject to any
      maintenance fees or Taxes or actions falling due within ninety (90) days after
      the Closing Date.

    

    (ii) No
      Patent
      has been or is now involved in any interference, reissue, reexamination, or
      opposition proceeding. To Parent’s Knowledge, there is no potentially
      interfering patent or patent application of any third party.

    

    (iii) No
      Patent
      is infringed or, to Parent’s Knowledge, has been challenged or threatened in any
      way. None of the products manufactured and sold, nor any process or know-how
      used, by Parent infringes or is alleged to infringe any patent or other
      proprietary right of any other Person.

    

    (iv) All
      products made, used, or sold under the Patents have been marked 

     

     

    
      
         

      

      
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    with
      the
      proper patent notice.

    

    6.27.2. Trademarks.

    

    (i) All
      Marks
      that have been registered with the United States Patent and Trademark Office
      are
      currently in compliance with all formal legal requirements (including the timely
      post-registration filing of affidavits of use and incontestability and renewal
      applications), are valid and enforceable, and are not subject to any maintenance
      fees or Taxes or actions falling due within ninety days after the Closing
      Date.

    

    (ii) No
      Mark
      has been or is now involved in any opposition, invalidation, or cancellation
      and, to Parent’s Knowledge, no such action is Threatened with the respect to any
      of the Marks.

    

    (iii) To
      Parent’s Knowledge, there is no potentially interfering trademark or trademark
      application of any third party.

    

    (iv) No
      Mark
      is infringed or, to Parent’s Knowledge, has been challenged or threatened in any
      way. None of the Marks used by Parent infringes or is alleged to infringe any
      trade name, trademark, or service mark of any third party.

    

    (v) All
      products and materials containing a Mark bear the proper federal registration
      notice where permitted by law.

    

    6.27.3. Copyrights.

    

    (i) All
      the
      Copyrights have been registered and are currently in compliance with formal
      legal requirements, are valid and enforceable, and are not subject to any
      maintenance fees or Taxes or actions falling due within ninety days after the
      date of Closing.

    

    (ii) No
      Copyright is infringed or, to Parent’s Knowledge, has been challenged or
      threatened in any way. None of the subject matter of any of the Copyrights
      infringes or is alleged to infringe any copyright of any third party or is
      a
      derivative work based on the work of a third party.

    

    (iii) All
      works
      encompassed by the Copyrights have been marked with the proper copyright
      notice.

    

    6.27.4. Trade
      Secrets.

    

    (i) With
      respect to each Trade Secret, the documentation relating to such Trade Secret
      is
      current, accurate, and sufficient in detail and content to identify and explain
      it and to allow its full and proper use without reliance on the Knowledge or
      memory of any individual.

    

    (ii) Parent
      has taken all reasonable precautions to protect the secrecy, 

     

     

    
      
         

      

      
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    confidentiality,
      and value of the Trade Secrets.

    

    (iii) Parent
      has good title and an absolute (but not necessarily exclusive) right to use
      the
      Trade Secrets. The Trade Secrets are not part of the public Knowledge or
      literature, and, to Parent’s Knowledge, have not been used, divulged, or
      appropriated either for the benefit of any Person or to the detriment of Parent.
      No Trade Secret is subject to any adverse claim or has been challenged or
      threatened in any way.

    

    6.28 Financial
      Condition.
      The
      financial statements of Parent as reflected in the most recently filed Parent’s
      SEC Filings requiring to contain financial statements (collectively, the “Parent
      Financial Statements”) present fairly the financial position, results of
      operations, and cash flows of Parent at the dates and for the fiscal periods
      then ended, in accordance with GAAP. There has been no Material Adverse Change
      in the Parent Financial Statements. 

    

    6.29 No
      Other Material Adverse Change.
      Since
      01 January 2005 there has been no Material Adverse Change in the business,
      financial condition, results of operations, assets, or liabilities of Parent,
      including but not limited to the following:

    

    (a) Any
      damage, destruction or loss (whether or not covered by insurance) materially
      and
      adversely affecting the properties, assets, business or prospects of
      Parent;

    

    (b) Any
      change in the accounting methods or practices followed by Parent or any change
      in the depreciation or amortization policies or rates adopted by Parent (whether
      or not presently outstanding), except liabilities incurred, and obligations
      under agreements entered into, in the ordinary course of business;
      or

    

    (c) Any
      sale,
      lease, abandonment or other disposition by Parent, other than in the ordinary
      course of business, of any machinery, equipment or other operating properties
      directly or indirectly related to Parent.

    

    6.30 Other
      Matters.
      Parent
      has not taken and has not agreed to take any action, and has no Knowledge of
      any
      fact or circumstances that would materially impede or delay the consummation
      of
      the transactions contemplated hereby.

    

    6.31 Disclosure.
      The
      representations and warranties of Parent contained in this Agreement and in
      the
      SEC Filings of Parent and in any agreement, certificate, affidavit, statutory
      declaration or other document delivered or given pursuant to this Agreement
      are
      true and correct and do not contain any untrue statement of a material fact
      or
      omit to state a material fact necessary to make the statements contained in
      such
      representations and warranties not misleading to the Stockholders.

    

    6.32 Advice
      of Changes.
      Between
      the Execution Date hereof and the Closing Date, Parent shall promptly advise
      Company in writing of any fact which, if existing or known at the Execution
      Date, would have been required to be set forth or disclosed in or pursuant
      to
      this Agreement or of any fact which, if existing or known at the Execution
      Date,
      would have made any of the representations contained herein untrue.

     

    
      
         

      

      
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    6.33 Lack
      of Fairness
      Opinion.
      The
      Board of Directors of Parent has made a well informed, independent, good faith
      decision to not obtain any type of written opinion from a qualified professional
      that the Merger is fair, from a financial point of view.

    

    6.34 Tax-Free
      Transaction.
      Neither
      Parent nor any of its Subsidiaries knows of any fact or has taken, or failed
      to
      take, any action that could prevent the Merger from qualifying as a tax-free
      reorganization within the meaning of Section 368(a) of the Code.

    

    VII

    

    REPRESENTATIONS
      AND WARRANTIES BY COMPANY

    

    Company
      hereby represents and warrants to Parent and Merger Sub as follows:

    

    7.1 Generally.
      Company
      hereby represents and warrants to Parent and Merger Sub that the statements
      contained in this Article VII are correct and complete as of the Execution
      Date
      and will be correct and complete as of the Closing Date (as though made then
      and
      as though the Closing Date were substituted for the date of this Agreement
      throughout this Article VII), except as expressly set forth to the contrary
      herein and in Schedules attached to this Agreement, corresponding to the
      lettered and numbered paragraphs contained in this Article VII. 

    

    7.2 Organization
      and Good Standing.
      Company
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of California. 

    

    7.3 Subsidiaries.
      Schedule 7.3, attached hereto and incorporated herein by reference, sets forth
      for each subsidiary of Company (i) its name and jurisdiction of incorporation,
      and (ii) the percentage of such Person’s issued and outstanding shares of
      capital stock owned by Company.

    

    7.4 Authorization.
      

     

                                   
      7.4.1.
      Operation
      of Business.
      Company
      has the requisite corporate power and authority and all requisite licenses,
      permits and franchises necessary to own and operate its properties and to carry
      on its business as now being conducted.

    

    7.4.2.
      Execution
      of Agreement.
      Company
      has the requisite corporate power and authority and
      has
      obtained all approvals and consents necessary to enter
      into and carry out the terms and conditions of this Agreement, as well as all
      transactions contemplated hereunder. All corporate proceedings have been taken
      and all corporate authorizations have been secured which are necessary to
      authorize the execution, delivery and performance by Company of this Agreement.
      This Agreement has been duly and validly executed and delivered by Company
      and
      constitutes the valid and binding obligations of Company, enforceable in
      accordance with the respective terms, provided,
      however,
      that
      Company cannot consummate the Merger unless and until it receives the Requisite
      Stockholder Approval. 

    

    7.5 Effect
      of Agreement
      As of
      the Closing, the consummation by Company of the transactions herein
      contemplated, including the execution, delivery and consummation of this
      Agreement, will comply with all applicable law and will not:

     

     

    
      
         

      

      
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    (a) Violate
      any
      Requirement of Law applicable to or binding upon Company;

     

    (b) Violate
      (i)
      the
      terms of the Certificate of Incorporation or Bylaws of Company; or, (ii) any
      material agreement, contract, mortgage, indenture, bond, bill, note, or other
      material instrument or writing binding upon Company or to which Company is
      subject; 

    

    (c) Accelerate
      or constitute an event entitling the holder of any indebtedness of Company
      to
      accelerate the maturity of such indebtedness or to increase the rate of interest
      presently in effect with respect to such indebtedness; or

    

    (d) Result
      in
      the breach of, constitute a default under, constitute an event which with notice
      or lapse of time, or both, would become a default under, or result in the
      creation of any lien, security interest, charge or encumbrance upon any of
      the
      assets or any other properties of Company under any agreement, commitment,
      contract (written or oral) or other instrument to which Company is a party
      or by
      which it is bound or affected.

    

    7.6 Consents.
      No
      consents, approvals or other authorizations or notices, other than those which
      have been obtained and are in full force and effect, are required by any state
      or federal regulatory authority or other Person or entity in connection with
      the
      execution and delivery of this Agreement and the performance of any obligations
      contemplated hereunder.

    

    7.7 Legal
      Proceedings.
      Other
      than as otherwise provided for herein or reflected on Schedule 7.7, attached
      hereto and incorporated herein by reference, there
      are
      no legal, administrative, arbitral or other actions, claims, suits or
      proceedings or investigations instituted or pending or, to the Knowledge of
      Company’s management, threatened against Company, or against any property,
      asset, interest or right of Company, that might reasonably be expected to have
      a
      Material Adverse Effect or that might reasonably be expected to threaten or
      impede the consummation of the transactions contemplated by this
      Agreement.

     

    7.8 Regulatory
      Compliance.
      To the
      best Knowledge of Company, it has not violated any Requirement of Law, the
      violation of which would be reasonably likely to have a Material Adverse Effect.
      Further, Company and each Subsidiary have met the minimum funding requirements
      of ERISA with respect to any employee benefit plans subject to ERISA, and no
      event has occurred resulting from Company’s failure to comply with ERISA that
      could result in Company’s incurring any material liability. Company is not an
“investment company” or a company “controlled” by an “investment company” within
      the meaning of the Investment Company Act of 1940. 

    

    7.9 Capitalization.
      Company
      is authorized to issue one hundred million (100,000,000)
      shares of Company Stock. Five million one hundred ninety two thousand five
      hundred (5,192,500) shares of Company Stock are issued and outstanding. All
      of
      the issued and outstanding Company Stock has been duly authorized and is validly
      issued, fully paid, and nonassessable. Other than as otherwise provided for
      herein or reflected on Schedule 7.9, attached hereto and incorporated herein
      by
      reference, there are no outstanding or authorized options, warrants, purchase
      rights, subscription rights, conversion rights, exchange rights, or other
      contracts or commitments that could require Company to issue, sell, or otherwise
      cause to become outstanding any of its capital stock. 

     

     

    
      
         

      

      
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    7.10 Disclosure.
      No
      representation or warranty made by Company in this Agreement or in its SEC
      Filings or in any writing furnished or to be furnished pursuant to or in
      connection with this Agreement knowingly contains or will contain any untrue
      statement of a material fact, or omits or will omit to state any material fact
      required to make the statements herein or therein contained not misleading.
      

    

    7.11 Material
      Defaults.
      Company
      is not in material default, or alleged to be in default, under any material
      agreement, contract, lease, mortgage, commitment, instrument or obligation,
      and
      no other party to any agreement, contract, lease, mortgage, commitment,
      instrument or obligation to which Company is a party is in default thereunder,
      which default would materially and adversely affect the properties, assets,
      business or prospects of Company.

    

    7.12 Tax
      Returns and Disputes.
      Company
      has filed all Tax Returns (federal, state and local) required to be filed by
      it,
      has paid all Taxes shown to be due and payable on the returns or any assessments
      or penalties received by it and all other Taxes (federal, state and local)
      due
      and payable by it. There are no audits pending and there are no present disputes
      as to Taxes of any nature payable by Company.

    

    7.13 Financial
      Condition.
      The
      audited financial statements of Company for the period ended December 31, 2003
      and the unaudited financial statements of Company for the nine months ended
      September 30, 2004 (collectively, the “Company Financial Statements”) present
      fairly the financial position, results of operations and cash flows of Company
      at the dates and for the fiscal periods then ended, in accordance with GAAP
      (except, with respect to the unaudited interim Company Financial Statements,
      for
      the absence of footnotes thereto and subject to customary year end adjustments).
      

    

    7.14 No
      Material Adverse Change.
      Since
      September 30, 2004, there has been no Material Adverse Change in the business,
      financial condition, results of operations, assets, or liabilities of
      Company.

    

    7.15 Disclosure.
      The
      representations and warranties of Company contained in this Agreement and in
      any
      agreement, certificate, affidavit, statutory declaration or other document
      delivered or given pursuant to this Agreement are true and correct and do not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements contained in such representations and
      warranties not misleading to Parent.

    

    7.16 Other
      Matters.
      Company
      has not taken and has not agreed to take any action, and has no Knowledge of
      any
      fact or circumstances that would materially impede or delay the consummation
      of
      the transactions contemplated under this Agreement. 

    

    7.17 Advice
      of Changes.
      Between
      the Execution Date hereof and the Closing Date, Company shall promptly advise
      Parent in writing of any fact which, if existing or known at the Execution
      Date,
      would have been required to be set forth or disclosed in or pursuant to this
      Agreement or of any fact which, if existing or known at the Execution Date,
      would have made any of the representations contained herein untrue.

     

     

    
      
         

      

      
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    7.18 Lack
      of Fairness
      Opinion.
      The
      Board of Directors of Company has made a well informed, independent, good faith
      decision to not obtain any type of written opinion from a qualified professional
      that the Merger is fair, from a financial point of view.

    

    7.19 Tax-Free
      Transaction.
      Neither
      Company nor any of its Subsidiaries knows of any fact or has taken, or failed
      to
      take, any action that could prevent the Merger from qualifying as a tax-free
      reorganization within the meaning of Section 368(a) of the Code.

    

    VIII

    

    REPRESENTATIONS
      AND WARRANTIES BY MERGER SUB

    

    Parent
      and Merger Sub, jointly and severally, hereby represent and warrant to Company
      as follows:

    

    8.1 Generally.
      Parent
      and Merger Sub, jointly and severally, hereby represent and warrant to Company
      that the statements contained in this Article VIII are correct and complete
      as
      of the Execution Date and will be correct and complete as of the Closing Date
      (as though made then and as though the Closing Date were substituted for the
      date of this Agreement throughout this Article VIII), except as expressly set
      forth to the contrary herein and in Schedules attached to this Agreement,
      corresponding to the lettered and numbered paragraphs contained in this Article
      VIII. 

    

    8.2 Organization
      and Qualification.
      Merger
      Sub is a corporation duly organized, validly existing, and in good standing
      under the laws of the State of California. Merger Sub is duly authorized to
      conduct business and is in good standing under the laws of each jurisdiction
      where such qualification is required. 

    

    

    8.3 Capitalization.
      The
      entire authorized capital stock of Merger Sub consists of one thousand (1,000)
      Merger Sub Stock, of which all one thousand (1,000) shares of Merger Sub Stock
      are issued and outstanding. All of the issued and outstanding shares of Merger
      Sub Stock have been duly authorized and are validly issued, fully paid, and
      nonassessable. Other than as reflected Schedule 8.3, attached hereto and
      incorporated herein by reference, there are no outstanding or authorized
      options, warrants, purchase rights, subscription rights, conversion rights,
      exchange rights, or other contracts or commitments that could require Merger
      Sub
      to issue, sell, or otherwise cause to become outstanding any of its capital
      stock. There are no outstanding or authorized stock appreciation, phantom stock,
      profit participation, or similar rights with respect to Merger Sub, other than
      as reflected on Schedule 8.3.

    

    8.4 Authorization.
      

    

    8.4.1. Operation
      of Business.
      Merger
      Sub has the requisite corporate power and authority and all requisite licenses,
      permits and franchises necessary to own and operate its properties and to carry
      on its business as now being conducted. Merger Sub is also duly qualified and
      in
      good standing as a foreign corporation authorized to do business in every
      jurisdiction in which it owns or leases properties, or conducts any business,
      so
      as to require qualification.

     

     

    
      
         

      

      
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    8.4.2 Execution
      of Agreement.
      Merger
      Sub has the requisite corporate power and authority to enter into and carry
      out
      the terms and conditions of this Agreement, as well as all transactions
      contemplated hereunder. All corporate proceedings have been taken and all
      corporate authorizations have been secured which are necessary to authorize
      the
      execution, delivery, and performance by Merger Sub of this Agreement. This
      Agreement has been duly and validly executed and delivered by Merger Sub and
      constitutes the valid and binding obligations of Merger Sub, enforceable in
      accordance with the respective terms, provided,
      however,
      that
      Merger Sub cannot consummate the Merger unless and until it receives the
      Requisite Stockholder Approval. 

    

    8.5 Effect
      of Agreement.
      As of
      the Closing, the consummation by Merger Sub of the transactions herein
      contemplated, including the execution, delivery and consummation of this
      Agreement, will comply with all applicable law and will not:

    

    (a) Violate
      any
      Requirement of Law applicable to or binding upon Merger Sub;

    (b) Violate
      (i)
      the
      terms of the Certificate of Incorporation or Bylaws of
      Merger
      Sub;
      or,
      (ii) any material agreement, contract, mortgage, indenture, bond, bill, note,
      or
      other material instrument or writing binding upon Merger
      Sub
      or to
      which Merger
      Sub
      is
      subject; 

    

    (c) Accelerate
      or constitute an event entitling the holder of any indebtedness of Merger
      Sub
      to
      accelerate the maturity of such indebtedness or to increase the rate of interest
      presently in effect with respect to such indebtedness; or

    

    (d) Result
      in
      the breach of, constitute a default under, constitute an event which with notice
      or lapse of time, or both, would become a default under, or result in the
      creation of any lien, security interest, charge or encumbrance upon any of
      the
      assets or any other properties of Merger
      Sub
      under
      any agreement, commitment, contract (written or oral) or other instrument to
      which Merger
      Sub
      is a
      party or by which it is bound or affected.

    

    8.6 Legal
      Proceedings.
      Except
      as set forth in Schedule 8.6, attached hereto and incorporated herein by
      reference, there is no claim, legal action, suit, arbitration, investigation
      or
      hearing, notice of claims or other legal, administrative or governmental
      proceedings pending or to the best knowledge of Merger Sub, threatened against
      Merger
      Sub
      (or in
      which Merger
      Sub
      is
      plaintiff or otherwise a party thereto), and, to the best knowledge
      of
      Merger
      Sub,
      there
      are no facts existing which might result in any such claim, action, suit,
      arbitration, investigation, hearing, notice of claim or other legal,
      administrative or governmental proceeding. Merger
      Sub
      has not
      waived any statute of limitations or other affirmative defense with respect
      to
      any of its liabilities. There is no continuing order, injunction or decree
      of
      any court, arbitrator or governmental or administrative authority to which
      Merger
      Sub
      is a
      party or to which it or any of its assets are subject. Merger
      Sub
      has not
      been permanently or temporarily enjoined or barred by order, judgment or decree
      of any court or other tribunal or any agency or regulatory body from engaging
      in
      or continuing any conduct or practice.

     

    8.7 Material
      Agreements and Arrangement.
      Except
      as set forth in Schedule 8.7, attached hereto and incorporated herein by
      reference, Merger
      Sub
      is not a
      party to, nor are any of its assets bound by or subject to, any contract,
      commitment, agreement, order, judgment, decree, law, statute, ordinance, rule,
      regulation, or other restriction of any kind or character which would,
      individually or in 

     

    
      
         

      

      
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    the
      aggregate, result in a Material Adverse Change to Merger
      Sub.
      Merger
      Sub
      is also
      not a party or subject to any agreement, contract or other obligation which
      would require the making of any payment, other than payments contemplated by
      this Agreement, to any other Person as a result of the consummation of the
      transactions contemplated herein.

    

    8.8  Undisclosed
      Liabilities.
      Merger
      Sub
      does not
      have any liability (whether known or unknown, whether asserted or unasserted,
      whether absolute or contingent, whether accrued or unaccrued, whether liquidated
      or unliquidated, and whether due or to become due), including any liability
      for
      taxes, except for those set forth on Schedule 8.8, attached hereto and
      incorporated herein by reference.

    

    8.9 Disclosure.
      No
      representation or warranty made by Merger Sub in this Agreement or in any
      writing furnished or to be furnished pursuant to or in connection with this
      Agreement knowingly contains or will contain any untrue statement of a material
      fact, or omits or will omit to state any material fact required to make the
      statements herein or therein contained not misleading. Merger Sub has disclosed
      to Company all material information known to it related to Merger
      Sub.

    

    8.10 Material
      Defaults.
      Merger
      Sub is not in material default, or alleged to be in default, under any material
      agreement, contract, lease, mortgage, commitment, instrument or obligation,
      and
      no other party to any agreement, contract, lease, mortgage, commitment,
      instrument or obligation to which Merger Sub is a party is in default
      thereunder, which default would materially and adversely affect the properties,
      assets, business, or prospects of Merger Sub.

    

    8.11 Other
      Matters.
      Merger
      Sub has not taken and has not agreed to take any action, and has no Knowledge
      of
      any fact or circumstances that would materially impede or delay the consummation
      of the transactions contemplated under this Agreement. 

     

    8.12 Advice
      of Changes.
      Between
      the Execution Date hereof and the Closing Date, Merger Sub shall promptly advise
      Company in writing of any fact which, if existing or known at the Execution
      Date, would have been required to be set forth or disclosed in or pursuant
      to
      this Agreement or of any fact which, if existing or known at the Execution
      Date,
      would have made any of the representations contained herein untrue.

    

    IX

    

    CONDUCT
      OF BUSINESS PRIOR TO CLOSING

    

    9.1 Conduct
      Prior to Closing.
      Parent
      hereby covenants and agrees that, prior to the Closing, unless the prior written
      consent of Company shall have been obtained, which consent shall not be
      unreasonably withheld, and except as otherwise contemplated in this Agreement,
      Parent and Merger Sub shall both operate its respective business only in the
      usual, regular, and Ordinary Course of Business and in accordance with its
      prior
      practices, and shall use its reasonable best efforts to preserve intact its
      business organizations and assets and maintain its rights, franchises, and
      business and customer relations necessary to run its business as currently
      run.

    

    9.2 Forbearances.
      From
      the
      Execution Date until the Closing, Parent covenants and agrees to ensure that
      neither Parent nor Merger Sub will (other than as contemplated in this

     

    
      
         

      

      
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    Agreement)
      do any of the following without the prior written consent of Company acting
      in
      good faith:

    

    (a) declare,
      set aside, make or pay any dividend or other distribution in respect of its
      capital stock or otherwise purchase or redeem, directly or indirectly, any
      shares of its capital stock;

    

    (b) issue,
      sell or deliver or enter into any agreement to issue, sell or deliver any shares
      of its capital stock or any options, warrants, or other rights, agreements,
      commitments, arrangements or understandings of any kind, contingent or
      otherwise, to purchase, sell or deliver any such shares, or any securities
      convertible into or exchangeable for any such shares, or effect any stock split,
      or otherwise change, combine or reclassify its authorized
      capitalization;

    

    (c) incur
      any
      indebtedness or issue or sell any debt securities or prepay any
      debt;

    

    (d) mortgage,
      pledge or otherwise subject to any material lien or lease, any of its properties
      or assets, tangible or intangible or permit or suffer any such property or
      asset
      to be subjected to any material lien or lease; or license or dispose of any
      material assets, except in the Ordinary Course of Business consistent with
      its
      prior practice;

    

    (e) forgive
      or cancel any debts or claims, or waive any rights, except for fair
      value;

    

    (f) modify
      or
      extend the current term of any material agreement, or waive any material rights
      thereunder;

    

    (g) pay
      any
      bonus to any employee or agent or contractor, or grant to any employee or agent
      or contractor any increase in compensation except in the Ordinary Course of
      Business consistent with its prior practice, or enter into any employment,
      severance, termination or similar agreement with any employee or agent or
      contractor;

    

    (h) amend
      its
      Certificate of Incorporation or Bylaws or any other organizational
      documents;

    

    (i) make
      any
      material changes in policies or practices relating to business practices or
      other terms accounting therefore or in policies of employment;

    

    (j) enter
      into any type of business not conducted by it as of the Execution Date or create
      or organize any subsidiary or enter into or participate in any joint venture
      or
      partnership;

    

    (k) except
      as
      otherwise expressly contemplated by this Agreement, enter into any agreement
      or
      transactions with any Affiliates or make any amendment or modification to any
      such agreement; 

    

    (l) make
      or
      change any election in respect of Taxes or settle any claim related to Taxes;
      or

     

     

    
      
         

      

      
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    (m) enter
      into any contract, commitment or arrangement to do any of the
      foregoing.

    

    9.2 Full
      Access.
      Each
      Party will permit representatives of the other to have full access to all
      premises, properties, personnel, books, records (including tax records),
      contracts, and documents of or pertaining to each Party. Each Party will treat
      and hold as such any Confidential Information it receives from the other in
      the
      course of the reviews contemplated by this Section 9.2, will not use any of
      the
      Confidential Information except in connection with this Agreement, and, if
      this
      Agreement is terminated for any reason whatsoever, agrees to return to the
      other
      Party all tangible embodiments (and all copies) thereof which are in its
      possession.

    

    9.3 Exclusivity.
      Parent
      will not solicit, initiate, or encourage the submission of any proposal or
      offer
      from any Person relating to all or any of the capital stock or assets of Merger
      Sub or Parent (including any acquisition structured as a merger, consolidation,
      or share exchange); provided,
      however,
      that
      Merger Sub and Parent, and their respective directors and officers, will remain
      free to (i) assist or participate in or facilitate any discussions or
      negotiations; or, (ii) furnish any information, in regard to any attempt by
      any
      Person to do or seek any of the foregoing to the extent their fiduciary duties
      may require. Parent shall notify Company immediately if any Person makes any
      proposal, offer, inquiry, or contact with respect to any of the
      foregoing.

    

    9.4 Pre-Existing
      Indemnification Obligations.
      Company, as the Surviving Corporation in the Merger, will observe any
      indemnification provisions now existing in the Certificate of Incorporation
      or
      Bylaws of Merger Sub for the benefit of any individual who served as a director
      or officer of Merger Sub at any time prior to the Execution Date, as well as
      all
      written agreements providing similar protections and rights to the same
      group.

    

    9.5 SEC
      Merger Filings.
      

    

    9.5.1. Parent
      Obligation to File.
      As
      promptly as practicable after the execution of this Agreement, Parent will
      prepare and file with the SEC any and all additional SEC Filings which are
      reasonably required as a result of the transactions envisioned hereunder
      (together with any amendments thereof or supplements thereto, collectively
      referred to herein as the “SEC Merger Filings”). Parent will use its reasonable
      best efforts to cause the SEC Merger Filings to become effective as promptly
      as
      practicable, and, will take all or any action required under any applicable
      federal or state securities laws in connection with the Merger. Each of Parent
      and Company will furnish all information concerning it and the holders of its
      capital stock as the other may reasonably request in connection with such
      actions and the preparation of the SEC Merger Filings. None of the SEC Merger
      Filings will be filed with the SEC by, and no amendment or supplement to the
      SEC
      Merger Filings will be made by, Parent without the approval of Company, (which
      approval will not be unreasonably withheld or delayed). Parent will advise
      Company, promptly after it receives notice thereof, of the time when the SEC
      Merger Filings become effective or any supplement or amendment has been filed,
      and of all other communications from the SEC in regard to the SEC Merger
      Filings. 

    

    9.5.2. Accuracy
      of Information.
      Parent
      shall ensure that the information included in the SEC Merger Filings will not,
      at (i) the time the SEC Merger Filings are declared 

     

    
      
         

      

      
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    effective;
      and, (ii) the Closing Date, 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 Date any event or circumstance relating to Parent or any of its officers
      or directors should be discovered by Parent which should be set forth in an
      amendment or a supplement to the SEC Merger Filings, Parent will promptly inform
      Company. The SEC Merger Filings will comply as to form and substance in all
      material respects with the applicable requirements of the Securities Act and
      the
      rules and regulations thereunder, and the Exchange Act and the rules and
      regulations thereunder.

    

    X

    

    CONDITIONS
      PRECEDENT

    

    10.1 Mutual
      Obligations.
       The
      Parties agree as follows with respect to the period from and after the execution
      of this Agreement up to the Closing:

    

    10.1.1. General.
      Each of
      the Parties will use its best efforts to take all action and to do all things
      necessary in order to consummate and make effective the transactions
      contemplated by this Agreement (including satisfaction, but not waiver, of
      all
      conditions for Closing established herein).

    

    10.1.2. Notices
      and Consents.
      Each
      Party will give any notices to third parties, and will use its best efforts
      to
      obtain any third party consents the other reasonably may request in connection
      with the Merger.

    

    10.1.3. Regulatory
      Matters and Approvals.
      Each of
      the Parties will give any notices to, make any filings with, and use its best
      efforts to obtain any authorizations, consents, and approvals of governments
      and
      governmental agencies in connection with the matters referred to herein.

    

    10.1.4. California
      Law.
      Company
      will call a special meeting of its shareholders (the “Special Company Meeting”)
      as soon as reasonably practicable in order that the shareholders may consider
      and vote upon the adoption of this Agreement and the approval of the Merger
      in
      accordance with California Law. 

    

    10.1.5. Notice
      of Developments.
      Each
      Party will give prompt written notice to the other of any material adverse
      development causing a breach of any of its own representations and warranties
      hereunder. No disclosure by any Party pursuant to this Section 10.1.5., however,
      shall be deemed to amend or supplement the Schedules attached hereto or serve
      to
      prevent or cure any misrepresentation, breach of warranty, or breach of covenant
      hereunder.

    

    10.1.6. Merger
      Document Filings.
      The
      Parties shall execute the Merger Document Filings, which shall be filed with
      the
      Office of the Secretary State of California as part of the legal compliance
      with
      California Law. 

    

    10.2 Conditions
      to Obligation of Company.
      The
      obligation of Company to consummate the transactions to be performed by it
      in
      connection with the Closing is subject to satisfaction of the following
      conditions, any or all of which Company may waive if it executes a writing
      so
      stating at or 

     

     

    
      
         

      

      
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    prior
      to
      the Closing:

    

    (a) This
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Merger Sub;

    

    (b) Parent
      and Merger Sub shall have procured all necessary third party consents;

    

    (c)
       The
      representations and warranties set forth in Articles VI and VIII, above, shall
      be true and correct in all material respects at and as of the Closing
      Date;

    

    (d) Parent
      and Merger Sub shall have performed and complied with all of its respective
      covenants hereunder in all material respects through the Closing;

    

    (e) No
      action, suit, or proceeding shall be pending or threatened before any court
      or
      quasi-judicial or administrative agency of any federal, state, local, or foreign
      jurisdiction or before any arbitrator wherein an unfavorable injunction,
      judgment, order, decree, ruling, or charge would (i) prevent consummation of
      any
      of the transactions contemplated by this Agreement; (ii) cause any of the
      transactions contemplated by this Agreement to be rescinded following
      consummation; or, (iii) affect adversely the right of the Surviving Corporation
      to own the former assets, and to operate the former businesses of Merger Sub
      (and no such injunction, judgment, order, decree, ruling, or charge shall be
      in
      effect); 

    (f) this
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Company at the Special Company Meeting; and

    

    (g) all
      actions to be taken by Parent and Merger Sub in connection with consummation
      of
      the transactions contemplated hereby and all certificates, opinions,
      instruments, and other documents required to effect the transactions
      contemplated hereby will be reasonably satisfactory in form and substance to
      Company.

    

    10.3 Conditions
      to Obligation of Parent and Merger Sub.
      The
      obligation of Parent and Merger Sub to consummate the transactions to be
      performed by each in connection with the Closing is subject to satisfaction
      of
      the following conditions, any or all of which Parent or Merger Sub may waive
      if
      it executes a writing so stating at or prior to the Closing.

     

    (a) This
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Company;

    

    (b) the
      representations and warranties set forth in Article VII above shall be true
      and
      correct in all material respects at and as of the Closing Date;

    

    (c) Company
      shall have performed and complied with all of its covenants hereunder in all
      material respects through the Closing;

    

    (d) No
      action, suit, or proceeding shall be pending or threatened before any court
      or
      quasi-judicial or administrative agency of any federal, state, local, or foreign
      jurisdiction or before any arbitrator wherein an unfavorable injunction,
      judgment, order, decree, ruling, or charge would (i) 

     

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    prevent
      consummation of any of the transactions contemplated by this Agreement; (ii)
      cause any of the transactions contemplated by this Agreement to be rescinded
      following consummation; or, (iii) affect adversely the right of the Surviving
      Corporation to own the former assets and to operate the former businesses of
      Merger Sub (and no such injunction, judgment, order, decree, ruling, or charge
      shall be in effect);

    

    (e) this
      Agreement and the Merger shall have received the Requisite Stockholder Approval
      of Merger Sub; and

    

    (f) all
      actions to be taken by Company in connection with consummation of the
      transactions contemplated hereby and all certificates, opinions, instruments,
      and other documents required to effect the transactions contemplated hereby
      will
      be reasonably satisfactory in form and substance to Parent and Merger
      Sub.

    

    XI

    

    TERMINATION

    

    11.1 Termination
      of Agreement.
      Any of
      the Parties may terminate this Agreement with the prior authorization of its
      board of directors (whether before or after stockholder approval) as provided
      below:

     

    (a) The
      Parties may terminate this Agreement by their written consent at any time prior
      to the Effective Date;

    

    (b) Company
      may terminate this Agreement by giving written notice to Parent at any time
      prior to the Effective Date (i) in the event Parent or Merger Sub has breached
      any material representation, warranty, or covenant contained in this Agreement
      in any material respect, and Company has notified Parent of the breach, and
      the
      breach has continued without cure for a period of ten (10) days after the notice
      of breach; or, (ii) if the Closing shall not have occurred on or before the
      10th
      day of
      July, 2005, by reason of the failure of any condition precedent under Section
      10.2 hereof (unless the failure results primarily from Company breaching any
      representation, warranty, or covenant contained in this Agreement);

    

    (c) Parent
      may terminate this Agreement by giving written notice to Company at any time
      prior to the Effective Date (i) in the event Company has breached any material
      representation, warranty, or covenant contained in this Agreement in any
      material respect, and Merger Sub has notified Company of the breach, and the
      breach has continued without cure for a period of ten (10) days after the notice
      of breach; or, (ii) if the Closing shall not have occurred on or before the
      10th
      day of
      July, 2005, by reason of the failure of any condition precedent under Section
      10.3 hereof (unless the failure results primarily from Merger Sub breaching
      any
      representation, warranty, or covenant contained in this Agreement);

    

    (d) Any
      Party
      may terminate this Agreement by giving written notice to the other Party at
      any
      time in the event this Agreement and the Merger fail to receive the Requisite
      Stockholder Approval for the other Party.

     

     

    
      
         

      

      
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    11.2 Effect
      of Termination.
      If any
      Party terminates this Agreement pursuant to this Article XI, all rights and
      obligations of the Parties hereunder shall terminate without any liability
      of
      any Party to any other Party (except for any liability of any Party then in
      breach, and except as otherwise provided for under Section 14.3, below);
provided,
      however,
      that
      the confidentiality provisions contained herein shall survive any such
      termination.

    

    XII

    

    CLOSING
      AND CLOSING DATE

    

    12.1 Closing.
      The
      closing of the transactions contemplated under this Agreement (the “Closing”)
      shall take place on that day which is as soon as practicable after Company
      confirms it has received the Requisite Stockholder Approval of Company at the
      Special Company Meeting, at such place as the Parties may agree, or at such
      other time as the Parties may agree. The date on which the Closing occurs is
      also referred to herein as the “Closing Date”. 

    

    12.2 Obligations
      of Parent.
      At the
      Closing, Parent shall deliver or cause to be delivered to Company the following:
      

    

    (a) Executed
      Board of Directors resolution authorizing the transactions contemplated
      hereunder; 

    (b) All
      share
      certificates representing shares of Parent Common Stock to be issued as part
      of
      the Merger Consideration hereunder, endorsed in favor of the stockholders of
      Company as required under Sections 4.4, 5.1, and 5.2, above; 

    

    (c) Proof
      of
      the filing of all SEC Merger Filings required to be made by Parent;

    

    (d) Proof
      that all directors and officers of Parent are as reflected in Section 4.2.5.,
      above; 

    

    (e) Any
      governmental and third party consents, approvals, and assurances necessary
      for
      the consummation of the transactions contemplated by this
      Agreement.

    

    12.3 Obligations
      of Merger Sub.
      At the
      Closing, Merger Sub shall deliver or cause to be delivered to Company the
      following: 

    

    (a) Executed
      Board of Directors and Shareholders resolution authorizing the transactions
      contemplated hereunder; 

    

    (b) All
      share
      certificates representing ownership of all issued and outstanding shares of
      Merger Sub Stock; and 

     

    (c) Any
      governmental and third party consents, approvals, and assurances necessary
      for
      the consummation of the transactions contemplated by this
      Agreement.

    

    12.4 Obligations
      of Company.
      At the
      Closing, Company shall deliver or cause to be 

     

     

    
      
         

      

      
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    delivered
      to Merger Sub:

    

    (a) Executed
      Board of Directors and Shareholders resolution authorizing the transactions
      contemplated hereunder;

    

    (b) Share
      certificates representing one thousand (1,000) shares of Company Common Stock
      Company, endorsed pro rata in favor of Parent as the sole shareholder of Merger
      Sub, subject to the terms and conditions of this Agreement; 

    

    (c) All
      share
      certificates representing ownership of all issued and outstanding shares of
      Company Common Stock; 

    

    (d) Executed
      Board of Directors and Shareholders resolution authorizing the transactions
      contemplated hereunder; and

    

    (e)  Any
      governmental and third party consents, approvals, and assurances necessary
      for
      the consummation of the transactions contemplated by this
      Agreement.

    

    XIII

    

    REGULATORY
      FILINGS

    

    13.1 Required
      Filings.
      The
      Parties shall coordinate and cooperate with one another and shall each use
      all
      reasonable efforts to comply with, and shall each refrain from taking any action
      that would impede compliance with any and all applicable federal, state, local,
      municipal, foreign or other law, statute, constitution, principle of common
      law,
      resolution, ordinance, code, order, edict, decree, rule, regulation, ruling
      or
      requirement issued, enacted, adopted, promulgated, implemented or otherwise
      put
      into effect by or under the authority of any governmental entity. As promptly
      as
      practicable after the date hereof, the Parties shall make all filings, notices,
      petitions, statements, registrations, submissions of information, application
      or
      submission of other documents required by any governmental entity in connection
      with the Merger and the transactions contemplated hereby. 

    

    13.2 Exchange
      Of Information.
      Each of
      the Parties shall promptly supply the other with any information which may
      be
      required in order to effectuate any filings or application pursuant to Section
      13.1, above. Except where prohibited by applicable legal requirements, each
      of
      the Parties shall consult with the other prior to taking a position with respect
      to any such filing, shall permit the other to review and discuss in advance,
      and
      consider in good faith the views of the other in connection with any analyses,
      appearances, presentations, memoranda, briefs, white papers, arguments, opinions
      and proposals before making or submitting any of the foregoing to any
      governmental entity by or on behalf of any Party hereto in connection with
      any
      investigations or proceedings in connection with this Agreement or the
      transactions contemplated hereby, coordinate with the other in preparing and
      exchanging such information and promptly provide the other (and its counsel)
      with copies of all filings, presentations or submissions (and a summary of
      any
      oral 

     

     

    
      
         

      

      
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    presentations)
      made by such Party with any governmental entity in connection with this
      Agreement or the transactions contemplated hereby. However, with respect to
      any
      such filing, presentation or submission, each of the Parties need not supply
      the
      other (or its counsel) with copies (or in case of oral presentations, a summary)
      to the extent that any law, treaty, rule or regulation of any governmental
      entity applicable to such Party requires such Party to restrict or prohibit
      access to any such properties or information.

    

    13.3 Notification.
      Each of
      the Parties will notify the other promptly upon the receipt of: (i) any comments
      from any officials of any governmental entity in connection with any filings
      made pursuant hereto and (ii) any request by any officials of any governmental
      entity for amendments or supplements to any filings made pursuant to, or
      information provided to comply in all material respects with, any applicable
      legal requirements. Whenever any event occurs that is required to be set forth
      in an amendment or supplement to any filing made pursuant to Section 13.1,
      above, the responsible Party will promptly inform the other of such occurrence
      and cooperate in filing with the applicable governmental entity such amendment
      or supplement.

    XIV

    

    ADDITIONAL
      OBLIGATIONS AND AGREEMENTS

    

    14.1 Survival
      of Representations.
      All of
      the covenants, agreements, representations, and warranties made by each Party
      in
      this Agreement, or pursuant hereto or in connection with the transactions
      contemplated hereby, shall survive the Closing for a period of five (5)
      years.

    

    14.2 Brokers.
      Each
      Party represents and warrants that if it has entered into any deal, arrangement,
      or commitment with any broker or finder who has acted for it in connection
      with
      this Agreement or the transactions contemplated hereby, that the Party entering
      into the deal, arrangement, or commitment will be solely responsible thereunder,
      and that the other Party will have no obligation thereunder. Each Party agrees
      to indemnify and hold harmless the other Party with respect to any claim for
      any
      brokerage or finder’s fee or other commission.

    

    14.3 Payment
      of Transaction Expenses.
      Except
      as otherwise provided for in this Section 14.3, all
      Transaction Expenses incurred by the Parties will be borne solely and entirely
      by the Party that incurred such Transaction Expenses. However,
      Parent
      agrees that if Parent terminates this Agreement for any reason other than a
      material breach of this Agreement by Company, then Parent shall pay by wire
      transfer of immediately available funds to Company the actual and documented
      Transaction Expenses of Company, the payment of which will not relieve Parent
      of
      any liability or damages resulting from any breach by Parent of any of its
      representations, warranties, covenants, or agreements set forth in this
      Agreement. 

    

    14.4 Books
      and Records.
      Merger
      Sub shall deliver to Company all books and records of Merger Sub reasonably
      related to the conduct of its business.

     

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    
 

    14.5 Payment
      of Taxes: Filing of Returns.
      Surviving Corporation shall be liable for the filing of all tax returns and
      reports and for the payment of all federal, state and local taxes of Merger
      Sub
      for any period ending on or prior to the Closing Date. Surviving Corporation
      shall remain so liable for the payment of all taxes attributable to or relating
      to said filings. All other Parties are responsible for all reporting and payment
      obligations related to all Taxes. 

    

    14.6 Public
      Disclosure.
      Without
      limiting any other provision of this Agreement, unless
      otherwise required by a Requirement of Law or the requirements of any listing
      agreement with any applicable stock exchange, the
      Parties will use their reasonable best efforts to consult with each other before
      issuing, and provide each other the opportunity to review, comment upon and
      concur with, and use all reasonable efforts to agree on any press release or
      public statement with respect to this Agreement and the transactions
      contemplated hereby, including the Merger, and will not issue any such press
      release or make any such public statement prior to such consultation and (to
      the
      extent practicable) agreement, except as may be required by law or any other
      applicable national or regional securities exchange. The Parties have agreed
      to
      the text of the joint press release announcing the signing of this
      Agreement.

    

    XV

    

    NOTICES

    

    All
      notices, requests, demands and other communications required or permitted to
      be
      given hereunder shall be effected pursuant to Section 16.10, below, as
      follows:

    

    If
      to
      Company:                                         
                               
         With
      a
      copy to:

    Mr.
      Thomas
      Hemingway                                                   
       Keith
      A.
      Rosenbaum,
      Esq.

    CREATIVE
      BUSINESS CONCEPTS,
      INC.                   
      SPECTRUM
      LAW GROUP, LLP

    One
      Technology
      Drive                                                       
      1900
      Main
      Street 

    Building
      H                                                                             
      Suite
      125

    Irvine,
      California
      92628                                                        
      Irvine,
      California 92618

    

    If
      to
      Parent or Merger Sub:
      

    c/o
      Kyleen E. Cane, Esq. 

    CANE
      CLARK LLP

    3273
      E.
      Warm Springs

    Las
      Vegas, Nevada 89120

    XVI

    

    ADDITIONAL
      PROVISIONS

    

    16.1 Executed
      Counterparts.
      This
      Agreement may be executed in any number of original, fax, electronic, or copied
      counterparts, and all counterparts shall be considered together as one

     

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    agreement.
      A faxed, electronic, or copied counterpart shall have the same force and effect
      as an original signed counterpart. Each of the Parties hereby expressly forever
      waives any and all rights to raise the use of a fax machine or E-Mail to deliver
      a signature, or the fact that any signature or agreement or instrument was
      transmitted or communicated through the use of a fax machine E-Mail, as a
      defense to the formation of a contract. 

    

    16.2 Successors
      and Assigns.
      Except
      as expressly provided in this Agreement, each and all of the covenants, terms,
      provisions, conditions and agreements herein contained shall be binding upon
      and
      shall inure to the benefit of the successors and assigns of the Parties
      hereto.

     

    16.3 Governing
      Law.
      This
      Agreement shall be governed by the laws of the State of California, without
      giving effect to any choice or conflict of law provision or rule (whether of
      the
      State of California or any other jurisdiction) that would cause the application
      of the laws of any jurisdiction other than the State of California. If any
      court
      action is necessary to enforce the terms and conditions of this Agreement,
      the
      Parties hereby agree that the Superior Court of California, County of Orange,
      shall be the sole jurisdiction and venue for the bringing of such action.

    

    16.4 Additional
      Documentation.
      The
      Parties hereto agree to execute, acknowledge, and cause to be filed and
      recorded, if necessary, any and all documents, amendments, notices, and
      certificates which may be necessary or convenient under the laws of the State
      of
      California. 

    16.5 Attorney’s
      Fees.
      If any
      legal action (including arbitration) is necessary to enforce the terms and
      conditions of this Agreement, the prevailing Party shall be entitled to costs
      and reasonable attorney’s fees. 

    

    16.6 Amendment.
      This
      Agreement may be amended or modified only by a writing signed by all
      Parties.

    

    16.7 Remedies.

    

    16.7.1. Specific
      Performance.
      The
      Parties hereby declare that it is impossible to measure in money the damages
      which will result from a failure to perform any of the obligations under this
      Agreement. Therefore, each Party waives the claim or defense that an adequate
      remedy at law exists in any action or proceeding brought to enforce the
      provisions hereof.

    

    16.7.2.
      Cumulative.
      The
      remedies of the Parties under this Agreement are cumulative and shall not
      exclude any other remedies to which any person may be lawfully
      entitled.

     

    16.8 Waiver.
      No
      failure by any Party to insist on the strict performance of any covenant, duty,
      agreement, or condition of this Agreement or to exercise any right or remedy
      on
      a breach shall constitute a waiver of any such breach or of any other covenant,
      duty, agreement, or condition. No
      course
      of dealing between the Parties, nor any failure to exercise, nor any delay
      in
      exercising, any right, power or privilege of either Party shall operate as
      a
      waiver thereof, nor shall any single or partial exercise of any right, power,
      or
      privilege hereunder preclude any other or further exercise thereof or the
      exercise of any other right, power or privilege.

    

    16.9 Assignability.
      This
      Agreement is not assignable by either Party without the expressed 

     

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    written
      consent of all Parties.

    

    16.10 Notices.
      All
      notices, requests and demands hereunder shall be in writing and delivered by
      hand, by facsimile transmission, by E-Mail, by mail, by telegram, or by
      recognized commercial over-night delivery service (such as Federal Express,
      UPS,
      or DHL), and shall be deemed given (a) if by hand delivery, upon such delivery;
      (b) if by facsimile transmission, upon telephone confirmation of receipt of
      same; (c) if by E-Mail, upon telephone confirmation of receipt of same; (d)
      if
      by mail, forty-eight (48) hours after deposit in the United States mail, first
      class, registered or certified mail, postage prepaid; (e) if by telegram, upon
      telephone confirmation of receipt of same; or, (f) if by recognized commercial
      over-night delivery service, upon such delivery.

    

    16.11 Time.
      All
      Parties agree that time is of the essence as to this Agreement.

    

    16.12 Disputes.
      

    

    16.12.1. Mediation.
      All
      disputes, claims or controversies arising out of or relating to this Agreement
      with more than Five Thousand Dollars ($5,000) in controversy, including but
      not
      limited to any dispute, claim or controversy arising out of or relating to
      this
      Agreement or the breach, termination, enforcement, interpretation or validity
      thereof, including the determination of the scope or applicability of this
      agreement to arbitrate, shall be initially submitted to Judicial Arbitration
      and
      Mediation Services (“JAMS”) in Orange County, California, or its successor, for
      mediation. Mediation shall be commenced by providing to JAMS and the other
      Party
      a written request for mediation, setting forth the subject of the dispute and
      the relief requested. The Parties will cooperate with JAMS and with one another
      in selecting a mediator from JAMS’ panel of neutral mediators, and in scheduling
      the mediation proceedings. The Parties will participate in the mediation in
      good
      faith, and they will share equally in its costs. All offers, promises, conduct
      and statements, whether oral or written, made in the course of the mediation
      by
      any of the Parties, their agents, employees, experts and attorneys, and by
      the
      mediator or any JAMS employees, are confidential, privileged and inadmissible
      for any purpose, including impeachment, in any arbitration or other proceeding
      involving the Parties, provided that evidence that is otherwise admissible
      or
      discoverable shall not be rendered inadmissible or non-discoverable as a result
      of its use in the mediation. Either Party may initiate arbitration with respect
      to the matters submitted to mediation by filing a written demand for arbitration
      at any time following the initial mediation session or 45 days after the date
      of
      filing the written request for mediation, whichever occurs first. The mediation
      may continue after the commencement of arbitration if the Parties so desire.
      Unless otherwise agreed by the Parties, the mediator shall be disqualified
      from
      serving as arbitrator in the case. The provisions of this paragraph
      may be
      enforced by any Court of competent jurisdiction, and the Party seeking
      enforcement shall be entitled to an award of all costs, fees and expenses,
      including attorney fees, to be paid by the Party against whom enforcement is
      ordered.

    

    16.12.2. Arbitration.
      If the
      matter is not resolved through mediation under Section 16.12.1., above, then
      it
      shall be submitted to JAMS in Orange County, California, or its successor,
      for
      final and binding arbitration before a sole arbitrator. The arbitration shall
      be
      administered by JAMS pursuant to its Comprehensive Arbitration Rules and
      Procedures if the amount in controversy exceeds $250,000, or pursuant to its
      Streamlined Arbitration Rules and Procedures if the amount in controversy is
      $250,000 or less. Judgment on the Award may be entered 

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    in
      any
      court having jurisdiction.

    

    16.12.3. Small
      Claims.
      All
      disputes, claims, or controversies arising out of or relating to this Agreement
      with Five Thousand Dollars ($5,000) or less in controversy shall be adjudicated
      in the Harbor Municipal Court District of the Superior Court of California,
      County of Orange, according to California law.

    

    16.12.4. Waiver
      of Jury Trial and Related Rights. 
      By initialing the space below, the Parties hereby agree to have all disputes,
      claims or controversies arising out of or relating to this Agreement, which
      are
      not resolved by mediation, decided by neutral binding arbitration as provided
      in
      this Agreement. Each Party is giving up any rights it might possess to have
      those matters litigated in a court or jury trial. By initialing in the space
      below, each Party is giving up its judicial rights to discovery and appeal
      except to the extent that they are specifically provided for under this
      Agreement. If either Party refuses to submit to arbitration after agreeing
      to
      this provision, that Party may be compelled to arbitrate under federal or state
      law. The foregoing has been read and understood. Each Party agrees to submit
      all
      disputes, claims or controversies arising out of or relating to this Agreement,
      that have not been resolved by mediation, to binding arbitration in accordance
      with this Agreement. 

    

    16.13 Recitals.
      The
      facts recited in Article II, above, are hereby conclusively presumed to be
      true
      as between and affecting the Parties.

    

    16.14 Consents,
      Approvals, and Discretion.
      Except
      as herein expressly provided to the contrary, whenever this Agreement requires
      consent or approval to be given by a Party, or a Party must or may exercise
      discretion, the Parties agree that such consent or approval shall not be
      unreasonably withheld, conditioned, or delayed, and such discretion shall be
      reasonably exercised. Except as otherwise provided herein, if no response to
      a
      consent or request for approval is provided within ten (10) days from the
      receipt of the request, then the consent or approval shall be presumed to have
      been given. 

    

    16.15 Best
      Efforts.
      The
      Parties shall use and exercise their best efforts, taking all reasonable,
      ordinary and necessary measures to ensure an orderly and smooth relationship
      under this Agreement, and further agree to work together and negotiate in good
      faith to resolve any differences or problems which may arise in the
      future.

    

    XVII

    

    EXECUTION

    

    IN
      WITNESS WHEREOF,
      this
      Agreement has been executed by the Parties, and shall be effective as of and
      on
      the last date set forth below.

    

    PARENT:                                                                             
      MERGER
      SUB:

    BECOMING
      ART
      INC.,                                                      
      CBC
      ACQUISITION CORP., 

    a
      Nevada
      corporation                                                         
      a
      California corporation

    

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

    

    BY:___________________________                           
      BY:___________________________

    

    NAME:________________________                          
      NAME:________________________ 

    

    TITLE:________________________                           
      TITLE:________________________

    

    DATED:_______________________                           
      DATED:_______________________

    

    

    BY:___________________________                          
      BY:___________________________

    

    NAME:________________________                         
      NAME:________________________

    

    TITLE:________________________                           
      TITLE:________________________

    

    DATED:_______________________                          
      DATED:_______________________

    

    

    COMPANY:             

    CREATIVE
      BUSINESS CONCEPTS, INC.,

    a
      California corporation

    

    

    BY:___________________________   

    

    NAME:________________________   

    

    TITLE:________________________    

    

    DATED:_______________________

    

     

    BY:___________________________   

    

    NAME:________________________  

    

    TITLE:________________________   

    

    DATED:_______________________

    

    

    

    

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    INDEX
      OF EXHIBITS AND SCHEDULES

    

    EXHIBITS

    

    Exhibit
      4.2.1.  Merger
      Document Filings

     

    SCHEDULES

    

    Schedule
      6.3  Parent
      Subsidiaries

    Schedule
      6.7  Parent
      Legal Proceedings

    Schedule
      6.9  Parent
      Capitalization

    Schedule
      6.11            
      Parent
      Employee Benefits 

    Schedule
      6.14            
      Parent
      Leases and Similar Agreements

    Schedule
      6.15            
      Parent
      Material Agreements

    Schedule
      6.16            
      Parent
      Employment Agreements

    Schedule
      6.17             Parent
      Restrictive Covenants Agreements

    Schedule
      6.20            
      Parent
      Environmental Matters

    Schedule
      6.25            
      Parent
      Title to Assets

    Schedule
      6.27             Parent
      Intellectual Property Assets

    Schedule
      7.3  Company
      Subsidiaries

    Schedule
      7.7  Company
      Legal Proceedings 

    Schedule
      7.9  Company
      Capitalization

    

    Schedule
      8.3  Merger
      Sub Capitalization  

    Schedule
      8.6  Merger
      Sub Legal Proceedings

    Schedule
      8.7  Merger
      Sub Material Agreements

    Schedule
      8.8  Undisclosed
      Liabilities

    

    

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    EXHIBIT
      4.2.1.

    

    CERTIFICATE
      OF MERGER

    

    

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    SCHEDULE
      6.3

    

    PARENT
      SUBSIDIARIES

    

    

    

    

    

    

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    SCHEDULE
      6.7

    

    PARENT
      LEGAL PROCEEDINGS

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

    SCHEDULE
      6.9

    

    PARENT
      CAPITALIZATION

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

    SCHEDULE
      6.11

    

    PARENT
      EMPLOYEE BENEFITS

    

    

    

    

    

    

    

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    SCHEDULE
      6.14

    

    PARENT
      LEASES AND SIMILAR AGREEMENTS

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

    SCHEDULE
      6.15

    

    PARENT
      MATERIAL AGREEMENTS

    

    

    

    

    

    

    

    

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

    SCHEDULE
      6.16

    

    PARENT
      EMPLOYMENT AGREEMENTS

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    SCHEDULE
      6.17

    

    PARENT
      RESTRICTIVE COVENANTS AGREEMENTS

    

    

    

    

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    SCHEDULE
      6.20

    

    PARENT
      ENVIRONMENTAL MATTERS

    

    

    

    

    

    

    

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    SCHEDULE
      6.25

    

    PARENT
      TITLE TO ASSETS

    

    

    

    

    

    

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    SCHEDULE
      6.27

    

    PARENT
      INTELLECTUAL PROPERTY ASSETS

    

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    SCHEDULE
      7.3

    

    COMPANY
      SUBSIDIARIES

    

    

    IT
      NETWORKS, INC.

    

    

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

    SCHEDULE
      7.7

    

    COMPANY
      LEGAL PROCEEDINGS

    

    

    Company
      is currently engaged in one litigation item. It is a dispute with the City
      of
      Vista, California, a former customer of Company, which was commenced
      approximately eighteen (18) months ago. Although not an actual litigated matter
      in that no lawsuit has been filed, the dispute is the subject of a binding
      arbitration process. The dispute essentially entails the automatic renewals
      of a
      maintenance agree under which Company provided network services to the City
      of
      Vista. The dispute also involves the recent termination of the agreement. The
      arbitration was initiated by Company, which is effectively the “Plaintiff” in
      the matter. Company seeks approximately $29,000 in damages. The City of Vista
      is
      demanding approximately $9,000 as the measure of their damages. Management
      of
      Company has been advised by legal counsel that it is more likely than not that
      Company will obtain a judgment against the City of Vista for the full amount
      of
      its claim and that the City of Vista will take nothing on its claim. In any
      event, legal counsel further advises Company that the maximum exposure for
      Company in this dispute is approximately $9,000. 

     

     

     

    
 

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

    SCHEDULE
      7.9

    

    COMPANY
      CAPITALIZATION

    

    

    

    1.    
      CBC
      is in
      the process of adopting a stock option plan for which that number of shares
      of
      CBC voting common stock determined in the sole discretion of the Board of
      Directors of CBC will be reserved. 

    

    2.    
      At
      least
      eight hundred twelve thousand four hundred sixty nine (812,469) shares of CBC
      voting common stock is potentially issuable upon the exercise of a conversion
      feature contained in four (4) separate promissory notes (the “Convertible
      Notes”). The Convertible Notes are in the respective amounts of $287,500,
      $525,000, $237,500, and $420,000, and each of the Convertible Notes is in favor
      of an existing shareholder of CBC. Each of the Convertible Notes are dated
      September 30, 2004 and are due on September 30, 2007, although each of the
      Convertible Notes may be prepaid, in whole or in part, at any time by the
      Company upon 30-days prior notice. The Convertible Notes carry an interest
      rate
      of 8% per annum. The holder of each respective Convertible Note is entitled
      to
      convert the outstanding principal balance and all accrued and unpaid interest
      into shares of common stock, at any time after September 30, 2005, at a
      conversion price for each share of common stock equal to $2.00 per share of
      common stock.

    

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    SCHEDULE
      8.3

    

    MERGER
      SUB CAPITALIZATION

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    SCHEDULE
      8.6

    

    MERGER
      SUB LEGAL PROCEEDINGS

    

    

    

    

    

    

    

    

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    SCHEDULE
      8.7

    

    MERGER
      SUB MATERIAL AGREEMENTS

    

    

    

    

    

    

    

    

    

    

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

    SCHEDULE
      8.8

    

    MERGER
      SUB UNDISCLOSED LIABILITIES

    

    

    

    

    

    

    

    

    
      
         

      

      
        58

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