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                            MERGER AGREEMENT AND PLAN

                                OF REORGANIZATION



      This Agreement, is entered into as of January 28, 2004 (the "Agreement")

by and among MEMS USA, Inc. (Nevada), a corporation organized under the laws of

the State of Nevada (hereinafter "MEMS"), the shareholder guaranteeing MEMS's

obligations set forth on the signature page hereto (the "Guarantor"), MEMS USA,

Inc., a California corporation (hereinafter the "Company") and certain of the

shareholders of the Company as set forth on the signature page hereto (the

"Selling Shareholders").



                                   WITNESSETH:



      WHEREAS, the Selling Shareholders cumulatively own 80.18754% of the

outstanding capital stock of the Company; and



      WHEREAS, the Guarantor cumulatively owns approximately 75% of the

outstanding capital stock of MEMS; and



      WHEREAS, the parties intend that this Agreement shall constitute a plan of

reorganization (the "Plan") of a type described in Section 368(a) of the

Internal Revenue Code of 1986, as amended. However, no party is representing to

any other party that the transaction will so qualify. The Plan comprises the

merger (the "Merger") of a to-be-formed subsidiary of MEMS into the Company with

such newly formed subsidiary disappearing and the Company surviving, and the

conversion of all the Company's securities into newly issued shares of the

common stock of MEMS; and



      WHEREAS, MEMS, the Company, the Guarantor and the Selling Shareholders

believe it is in their best interests to adopt and consummate the Plan,



      NOW, THEREFORE, in consideration of the mutual terms and covenants set

forth herein, MEMS, the Company, the Guarantor and the Selling Shareholders

approve and adopt this Agreement and mutually covenant and agree with each other

as follows:



                                    ARTICLE I



                             PLAN OF REORGANIZATION





      1.01 The Merger.





      (a) MEMS shall form a wholly owned corporation under the laws of the State

of California ("Msub"). MEMS will cause Msub to execute and deliver, and MEMS

agrees to execute and deliver, an Agreement of Merger substantially in the form

of Exhibit "1" hereto (the "Merger Agreement"), providing for the merger of Msub

with and into the Company (the "Merger"). The Company shall be the surviving

corporation in the Merger (the "Surviving Corporation") and as a result thereof

shall become a wholly owned subsidiary of MEMS.



                                       1

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      (b) Pursuant to the Merger, each share of common stock, no par value per

share, of the Company issued and outstanding immediately prior to the Effective

Time (as defined below) shall thereupon be converted into and become 1.7125634

of one validly issued, fully paid and nonassessable share of common stock, no

part value per share, of MEMS ("MEMS Common Stock"), subject to adjustment for

the elimination of fractional shares. No fractional shares shall be issued.

Instead, cash equal to $2.50 per share of eliminated fractional shares will be

paid in lieu thereof. MEMS has authorized the issuance, and shall issue, up to

10,000,000 shares of MEMS Common Stock to each holder of the Company's common

stock who is not a dissenter under Section 1.09 herein. The Company and the

Selling Shareholders will cause all stock certificates representing issued and

outstanding shares of the Company's Common Stock to be delivered, free and clear

of all encumbrances, to MEMS at or prior to delivery of certificates evidencing

ownership of the MEMS Common Stock into which the Company's Common Stock is to

be converted. Certificates representing MEMS Common Stock and the payment for

eliminated fractional shares will be delivered to the holders of the Company's

common stock at the later of the Effective Time or upon surrender to the Company

of valid stock certificates representing their shares of the Company's common

stock. Certificates representing MEMS Common Stock issued pursuant to the Merger

will bear the following legend:



            "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED

            UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR

            OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER SAID ACT OR UNLESS AN

            EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE IN THE OPINION OF

            COUNSEL FOR THE ISSUE."



      (c) At the Effective Time, each share of Common Stock of Msub that is

issued and outstanding will be converted into one newly issued share of the

Company common Stock. From and after the Effective Time, MEMS, as the sole

shareholder of the Company, shall be entitled to receive, upon surrender to the

Company of the certificate or certificates representing such shares, one or more

certificates representing the Company Common Stock, into which such shares have

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