Preview | Agreement and Plan of Merger |

1.1 Merger. Subject to the terms and conditions of this Agreement, at the Effective Time, MP shall be merged with and into Merger Sub in accordance with the provisions of Sections 1100-1113 of the California Corporation Code, and the separate corporate existence of MP shall cease. Merger Sub shall be the surviving corporation of the Merger (the ?Surviving Corporation?) and shall continue its corporate existence under the laws of the State of California. The name of the Surviving Corporation after the Merger shall be ?MacroPort, Inc.?

(b) Each share of MP Stock issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive the per share Consideration set forth in Article 2. At the Effective Time, holders of MP Stock shall cease to be and shall have no rights as shareholders of the Surviving Corporation (other than to receive the per share Consideration pursuant to this subsection, which shall be issuable in full satisfaction of all rights pertaining to such shares of MP Stock). From and after the Closing Date, there shall be no transfers on the stock transfer books of MP of shares of MP Stock and, if certificates are presented to MP for transfer on or after the Closing Date, they shall be delivered to the Buyer for cancellation.

1.3 Filing of Merger Certificate; Effective Time. Simultaneously with the Closing, the appropriate Parties shall duly execute a Certificate of Merger to be filed with the California Secretary of State to effect the Merger (in the form attached as Exhibit 1.3) (the "Merger Certificate"). The Merger Certificate shall be filed with the California Secretary of State on the Closing Date. The Merger shall be effective (the "Effective Time") as of the date on which the Merger Certificate has been duly filed and/or registered by the California Secretary of State.

1.4 Effects of Merger. The Parties intend for the Merger to have the effects set forth in this Agreement and the California Corporation Code. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the rights, privileges, immunities, powers, and franchises of MP and all property (real, personal, and mixed) of MP and all debts due to MP on any account, and all choses in action, and every other interest of or belonging to or due to MP, will vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities, and duties of MP shall become debts, liabilities, obligations, restrictions, disabilities, and duties of the Surviving Corporation and may be enforced against the Surviving Corporation to the same extent as if such debts, liabilities, obligations, restrictions, disabilities, and duties had been incurred or contracted by the Surviving Corporation. The title to any real estate or any interest therein vested, by deed or otherwise, in MP shall not revert or in any way become impaired by reason of the Merger.

1.5 Closing. The closing (the ?Closing?) of the Merger shall take place at 1:00 p.m., local time, on the Closing Date, at the offices of Ellis Funk, P.C., 3490 Piedmont Road, Suite 400, Atlanta, Georgia 30305, or at such other time and place as may be mutually agreed by the Buyer and MP. The ?Closing Date? shall be the date as of which all closing conditions shall have been satisfied or waived and the effective date of the transactions described herein shall be the close of business on the date immediately preceding the Closing Date, unless otherwise agreed by the parties. All transactions relating to the MP Business occurring on or after the close of business on the Closing Date shall be for the Buyer's account. If the Closing has not occurred on or before June 30, 2007, either MP or Buyer may terminate this Agreement by providing written notice of termination.

1.7 Directors and Officers. At the Effective Time, the officers of the Surviving Corporation shall be Kent Heyman, Chief Executive Officer and Chairman of the Board and Richard Liebman, Chief Financial Officer and Seccretary. The Board of Directors of the Surviving Corporation shall consist of two (2) members selected by Buyer (initially to be Kent Heyman and Richard Liebman). The initial directors and officers of the Surviving Corporation shall serve until their respective successors are duly elected or appointed and qualified.

(b) Exchange Procedures. Promptly after the Effective Time, Buyer shall instruct the Exchange Agent to mail to each holder of record of a certificate or certificates that immediately prior to the Effective Time represented outstanding shares of MP capital stock ("Certificates?) and to each holder of Dissenting Shares, (i) a letter of transmittal in customary form (that shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent and shall contain such other provisions as Buyer may reasonably specify and agreed to by MP), (ii) instructions in effecting the surrender of the Certificates in exchange for the per share Consideration to be paid hereunder, and (iii) such notification as may be required under the California Corporations Code to be given to the holders of Dissenting Shares. Upon surrender of Certificates for cancellation to the Exchange Agent together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holders of such Certificates shall be entitled to receive in exchange therefor the per share Consideration to be paid hereunder and the Certificates so surrendered shall forthwith be canceled. Until so surrendered, outstanding Certificates will be deemed from and after the Effective Time, for all corporate purposes, to evidence only the ownership of the per share Consideration to be paid hereunder with respect to such shares of MP capital stock. In the event of a transfer of ownership of shares of MP capital stock that is not registered in MP's transfer records, the per share Consideration to be paid hereunder may be issued to a transferee if the Certificate representing such shares of MP capital stock is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid.

(c) Fractional Shares. No fraction of a share of Buyer stock will be issued by virtue of the Merger, but in lieu thereof each holder of shares of MP capital stock who would otherwise be entitled to a fraction of a share of Buyer stock (after aggregating all fractional shares of Buyer stock to be received by such holder) shall receive from Buyer an amount of cash (rounded to the nearest whole cent) equal to the product of (i) such fraction, multiplied by (ii) the last trading price of Buyer Common Stock as reported on the Over the Counter Bulletin Board prior to the Closing Date.

(d) Required Withholding. Each of the Exchange Agent, Buyer and the 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 MP capital 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.

(e) Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the per share Consideration to be paid hereunder with respect to the shares of MP capital stock represented by such Certificates pursuant to Article 2 hereof; provided, however, that Buyer may, in its discretion and as a condition precedent to the issuance of such consideration, require the owner of such lost, stolen or destroyed Certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Buyer, the Surviving Corporation or the Exchange Agent against any claim that may be made with respect to the Certificates alleged to have been lost, stolen or destroyed.

(a) Notwithstanding any provision of this Agreement to the contrary other than Section 1.11(b), any shares of MP capital stock held by a holder who has demanded and perfected appraisal rights for such shares in accordance with Section 1300 of the California Corporations Code and who, as of the Effective Time, has not effectively withdrawn or lost such appraisal or dissenters? rights (?Dissenting Shares?), shall not be converted into or represent a right to receive the per share Consideration to be paid hereunder pursuant to Article 2 hereof, but instead shall be converted into the right to receive only such consideration as may be determined to be due with respect to such Dissenting Shares under the California Corporation Code. From and after the Effective Time, a holder of Dissenting Shares shall not be entitled to exercise any of the voting rights or other rights of a stockholder of the Surviving Corporation.

(b) Notwithstanding the provisions of Section 1300, if any holder of shares of MP capital stock who demands appraisal of such shares under the California Corporations Code shall effectively withdraw or lose (through failure to perfect or otherwise) the right to appraisal, then, as of the later of the Effective Time or the occurrence of such event, such holder?s shares shall no longer be Dissenting Shares and shall automatically be converted into and represent only the right to receive the per share Consideration to be paid hereunder pursuant to Article 2 hereof, without interest thereon, upon surrender of the certificate representing such shares pursuant to Section 1.9.

(c) MP shall give Buyer (i) prompt notice of any written demands for payment with respect to any shares of MP capital stock pursuant to the appraisal rights under California law, withdrawals of such demands, and any other instruments served pursuant to California law and received by MP which relate to any such demand for appraisal and (ii) the opportunity to participate at its own expense in all negotiations and proceedings which take place prior to the Effective Time with respect to demands for appraisal under California law. MP shall not, except with the prior written consent of Buyer (not to be unreasonably withheld), voluntarily make any payment with respect to any demands for appraisal of MP capital stock or offer to settle or settle any such demands.

1.12 Taking of Necessary Action; Further Action. If, at any time after the Closing, any further action is necessary to carry out the purposes of this Agreement and to vest the Buyer with full right, title and possession to all assets, property, rights, privileges, powers and franchises of MP, the Shareholders, at Buyer?s expense, shall use commercially reasonable efforts to take such lawful and necessary actions.

2.1 Purchase Price. The merger consideration (the ?Consideration?) shall consist of the following consideration: (i) $2,500,000 in the form of newly issued shares of Series B Convertible Preferred Stock of the Buyer to be valued as set forth in Section 2.2 below; (ii) $2,000,000 in the form of newly issued shares of Common Stock of the Buyer to be valued as set forth in Section 2.3 below; and (iii) Buyer?s commitment to make incentive payments in an aggregate amount not to exceed $3,000,000 as provided in Section 2.4 below.

2.2 Buyer Preferred Stock. At the Closing, the MP equity holders shall be entitled to receive $2,500,000 of Series B Convertible Preferred Stock, valued based on the average Sale Price of Buyer's stock during the 10 business days prior to the Closing, but in no event less than $0.20 or more than $0.35 (the ?Closing Stock Price?). For purposes of this Section 2.2 and Sections 2.3 and 2.4 below, the ?Sale Price? on any date means the closing sale price per share of Common Stock (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) on such date as reported in the Over the Counter Bulletin Board (?OTCBB?) or such other principal United States securities exchange on which the Buyer's Common Stock is traded or, if the Common Stock is not listed on the OTCBB or a United States national or regional securities exchange, (i) as reported by the National Association of Securities Dealers Automated Quotation System or by the National Quotation Bureau Incorporated, or (ii) if such bid and ask prices are not reported by the National Association of Securities Dealers Automated Quotation System or by the National Quotation Bureau Incorporated, in a manner to be determined by the Buyer on the basis of such quotations as the Buyer's Board of Directors considers appropriate in its reasonable discretion, subject to the written agreement of MP. The Buyer shall have the right to require conversion of the Series B Convertible Preferred Stock at any time after three (3) months following the Closing, if the Sale Price of the Buyer's Common Stock exceeds $0.45 per share for ten consecutive trading days. The other terms of the Series B Convertible Preferred Stock shall be as set forth in the Certificate of Designation of Rights, Preferences, Limitations, Terms and Conditions of Series B Convertible Preferred Stock attached as Exhibit 2.2 to this Agreement.

(a) Buyer shall pay to the MP equity holders amounts, not to exceed an aggregate of $3,000,000, based on the ?Qualifying Revenues? (defined below) during the twelve (12) month period (the "Incentive Period") beginning on the first day of the first calendar month beginning on or after the Closing Date as follows: (i) If the Qualifying Revenues during the Incentive Period are greater than or equal to $4,000,000, then the Buyer shall pay to the MP equity holders the cash sum of $500,000 plus $500,000 of Buyer's Common Stock, valued based on the average Sale Price of Buyer?s stock during the 10 business days prior to the Payment Date (defined in Section 2.4(b) below); and (ii) If the Qualifying Revenues during the Incentive Period exceed $4,000,000, then the Buyer shall pay to the MP equity holders an additional $0.25 in value ("Additional Payments ") for each dollar by which the Qualifying Revenues during the Incentive Period exceed $4,000,000; provided, however, that in no event shall the cumulative amount of Additional Payments exceed $2,000,000. The Additional Payments may be made by the Buyer, at its option, in either cash up to $1,000,000 or shares of Buyer's Common Stock or a combination thereof; provided, however, if the Additional Payments exceed $1,000,000, the maximum Buyer may pay in cash shall be $1,000,000 and any Additional Payments owing above $1,000,000 must be paid in Common Stock. If Additional Payments are made in shares of Buyer's Common Stock, the Common Stock shall be valued based on the average Sale Price of Buyer?s stock during the 10 business days prior to the Payment Date.

(b) Within forty-five (45) days following each calendar quarter during the Incentive Period, Buyer shall make a calculation of Qualifying Revenue for the period commencing on the Closing Date and ending as of the end of such calendar quarter and shall determine whether any payments of Additional Payments are due in accordance with this Section 2.4 (i.e., payments would be due only if the Qualifying Revenues through the end of such calendar quarter exceed $4,000,000). Buyer will provide a copy of each calendar quarter calculations to the Shareholders and simultaneously pay the MP equity holders any amounts then due. Within sixty (60) days after the end of the Incentive Period, Buyer shall make a calculation of Qualifying Revenues for the entire period and shall determine the final amount of payments due under this Section 2.4. Buyer shall provide a copy of such calculations to the Shareholders and shall simultaneously pay to the MP equity holders the amount so determined (in Common Stock or cash as provided in Section 2.4(a)). The incentive payment due under Section 2.4(a)(i) and the Additional Payments shall be made no later than seventy-five (75) days following the earlier of (i) the end of the calendar quarter in which the target Qualifying Revenues specified in Section 2.4(a) are achieved and (ii) the end of the Incentive Period (the ?Payment Date?).

(c) In the event the Qualifying Revenues during the Incentive Period are less than $2,500,000, then the MP equity holders shall return to the Buyer $1,000,000, comprised of $500,000 of the Series B Convertible Preferred Stock issued to the MP equity holders pursuant to Section 2.2 above and $500,000 of the Common Stock issued to the MP equity holders pursuant to Section 2.3 above, with the value based on the Closing Stock Price; provided, however, that each MP equity holder may elect, at its option (but not the obligation), to return all or part of the $1,000,000 claw back in cash. To secure this possible return of stock, the shares of Series B Convertible Preferred Stock and Common Stock subject to being returned to the Buyer shall be pledged to the Buyer pursuant to the terms of a Stock Pledge Agreement in the form attached as Exhibit 2.4. In the event the MP equity holders are required to return any consideration pursuant to this Section 2.4(c), MP and Buyer agree that such return shall be treated as a reduction in the total Consideration for tax purposes.

(d) For these purposes, ?Qualifying Revenue? shall mean (1) the total amount of revenues recognized by Buyer under generally accepted accounting principles, consistently applied by Buyer (but excluding any sales or use taxes or other add-on charges such as shipping) during the Incentive Period from the sale or licensing of MP products or services (but without double counting any revenue) from transactions described in subparts (i) through (v) of this Section 2.4(d), plus (2) to the extent not taken into account and credited to the Incentive Period under clause (1) above, cash received by Buyer during the Incentive Period from prepaid licenses that would constitute Qualifying Revenues, but only to the extent the prepayment is for a period not to exceed twelve (12) months from the date the prepaid license fee is received, minus (3) returns and refunds (to the extent not taken into account and credited to the Incentive Period under clause (1) above) actually granted and attributed to the Incentive Period in accordance with generally accepted accounting principles, consistently applied by Buyer, and also minus (4) to the extent not taken into account and credited to the Incentive Period under clause (1) above, Qualifying Revenues which Buyer reasonably determines will be uncollectible consistent with past practices and generally acceptable accounting principles: