AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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JACKSON RIVERS CO | JKRC SUB, INC | DIVERSE NETWORKS, INC

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Texas Date: 12/7/2005
Law Firm: Weycer, Kaplan, Pulaski & Zuber, P.C

Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and

entered into as of December 1, 2005, by and among THE JACKSON RIVERS COMPANY, a

Florida corporation (the "Parent"), JKRC SUB, INC., a Texas corporation (the

"Merger Sub"), DIVERSE NETWORKS, INC., a Texas corporation (the "Company"), and

the shareholders of the Company who are signatories hereto (each, a

"Shareholder" and collectively, the "Shareholders"). Capitalized terms used in

this Agreement without definition shall have the meanings set forth or

referenced in Article XI.

W I T N E S S E T H:

WHEREAS, the Shareholders are collectively the beneficial and record

owners of all of the issued and outstanding capital stock of the Company,

comprised of 5,105,000 shares of common stock, no par value per share

(collectively, the "Company Shares");

WHEREAS, the respective Boards of Directors of the Parent, Merger

Sub, and the Company have approved the merger (the "Merger") of the Company into

Merger Sub on the terms and subject to the conditions set forth in this

Agreement, whereby each issued Company Share not owned by the Parent, Merger

Sub, or the Company shall be converted into the right to receive the Merger

Consideration (as defined in Section 2.1 below); and

WHEREAS, the Parent, as the sole stockholder of Merger Sub, will

approve this Agreement immediately following the execution of this Agreement;

WHEREAS, for Federal income tax purposes it is intended that the

Merger qualify as a "reorganization" within the meaning of Section 368(a) of the

Internal Revenue Code of 1986, as amended (the "Code"); and

WHEREAS, the Parent, Merger Sub, and the Company desire to make

certain representations, warranties, covenants and agreements in connection with

the Merger and also to prescribe various conditions to the Merger;

NOW, THEREFORE, in consideration of the mutual covenants and

agreements herein contained, and for other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, the parties hereto

agree as follows:

ARTICLE I

MERGER

1.1 The Merger. On the terms and subject to the conditions set forth in

this Agreement, and in accordance with the Texas Business Corporation Act (the

"TBCA"), the Company shall be merged with and into Merger Sub at the Effective

Time. At the Effective Time and as a result of the Merger, the separate

corporate existence of the Company shall cease and Merger Sub shall continue as

the surviving entity (the "Surviving Entity"). The Merger, the issuance of

promissory notes issued by Parent in connection with the Merger, the issuance by

the Parent of shares of preferred stock, par value $0.001 per share, of the

Parent (the "Parent Preferred Stock") in connection with the Merger (the "Share

Issuance") and the other transactions contemplated by this Agreement are

referred to in this Agreement as the "Transactions."

<PAGE>

1.2 Closing. The closing (the "Closing") of the Merger shall take place at

the offices of Spectrum Law Group, 1900 Main Street, Suite 125, Irvine, CA 92614

at 10:00 a.m., Pacific Daylight Time, on the third (3rd) Business Day following

the satisfaction (or, to the extent permitted by Law, waiver by the party or

parties entitled to the benefits thereof) of the conditions set forth in

Sections 4.1 and 4.2 (other than those conditions that by their nature are to be

satisfied at the Closing, but subject to the fulfillment or waiver of those

conditions), or at such other place, time and date as shall be agreed in writing

by the Parent and the Company. The date on which the Closing occurs is referred

to in this Agreement as the "Closing Date."

1.3 Effective Time. Prior to the Closing, the Parent shall prepare, and on

the Closing Date, the Surviving Entity shall file with the Secretary of State of

the State of Texas, a certificate of merger or other appropriate documents (in

any such case, the "Certificate of Merger") executed in accordance with the

relevant provisions of the TBCA and shall make all other filings or recordings

required under the TBCA. The Merger shall become effective at such time as the

Certificate of Merger is duly filed with such Secretary of State on the Closing

Date, or at such later time as the Parent and the Company shall agree and

specify in the Certificate of Merger (the time the Merger becomes effective

being the "Effective Time").

1.4 Effect of the Merger. At the Effective Time, the effect of the Merger

shall be as provided herein and in the applicable provisions of the TBCA.

1.5 Articles of Incorporation and By-laws.

(a) The articles of incorporation of Merger Sub, as in effect

immediately prior to the Effective Time, shall be the articles of incorporation

of the Surviving Entity until thereafter changed or amended as provided therein

or by the TBCA or applicable Law.

(b) The by-laws of Merger Sub, as in effect immediately prior to the

Effective Time, shall be the by-laws of the Surviving Entity until thereafter

changed or amended as provided therein or by applicable Law.

1.6 Directors. The directors of the Surviving Entity shall be James E.

Nelson and Jeffrey Flannery, until the earlier of their resignation or removal

or until their respective successors are duly elected and qualified, as the case

may be.

1.7 Officers. The officers of the Surviving Entity shall be James E.

Nelson as Chairman of the Board and Chief Operating Officer and President, until

the earlier of their resignation or removal or until their respective successors

are duly elected or appointed and qualified, as the case may be.

<PAGE>

ARTICLE II

EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF

CERTIFICATES

2.1 Effect on Capital Stock. At the Effective Time, by virtue of the

Merger and without any action on the part of the holder of any Company Shares or

any shares of capital stock of Merger Sub:

(a) Capital Stock of Merger Sub. Each issued and outstanding share

of capital stock of Merger Sub shall continue to be issued and outstanding and

shall constitute the only issued and outstanding shares of the Surviving Entity.

(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each of

Company Share that is owned by the Company, Parent or Merger Sub (or any direct

or indirect wholly-owned subsidiary of Parent or Merger Sub) shall no longer be

outstanding and shall automatically be canceled and retired and shall cease to

exist, and no cash, Parent Common Stock or other consideration shall be

delivered or deliverable in exchange therefor.

(1) Subject to Sections 2.1(b), 2.1(d) and 2.3(e), each issued

and outstanding Company Share outstanding prior to the Effective Time shall be

converted into the right to receive , at the election of the holder thereof, one

of the following:

(i) for each such Company Share with respect to which an

election to receive stock consideration (a "Stock Election") has

effectively been made , and not revoked or lost, pursuant to Section 2.3

(each, an "Electing Share"), the right to receive one (1) share (the

"Exchange Ratio") of Parent Series B Preferred Stock (the "Stock

Consideration") with substantially the rights, privileges and preferences

set forth on Exhibit A hereto (the "Series B_Preferred Stock"); and

(ii) for each such Company Share other than Electing

Shares (each, a "Non-Electing Share") the right to receive $0.21 in the

form of a promissory note made by the Parent (the "Note Consideration")

payable within one (1) year of the closing date, bearing interest at 8%

per annum, with installments of principal and interest payable on a

quarterly basis, and containing such other terms as are set forth in the

form of promissory note attached hereto as Exhibit B (the "Note"), and

each stockholder of the Company that holds Non-Electing Shares shall be

deemed to have made a Note election (a "Note Election") with respect to

such Non-Electing Shares.

(2) The Notes payable and the shares of the Parent's Series B

Preferred Stock to be issued, upon the conversion of Company Shares pursuant to

this Section 2.1(c), are referred to collectively as "Merger Consideration." As

of the Effective Time, all such Company Shares shall no longer be outstanding

and shall automatically be canceled and retired and shall cease to exist, and

each holder of a certificate representing any such Company Shares shall cease to

have any rights with respect thereto, except the right to receive Merger

Consideration upon surrender of such certificate in accordance with Section 2.2.

<PAGE>

(d) Dissenters Rights. Notwithstanding anything in this Agreement to

the contrary, Company Shares ("Dissenter Shares") that are outstanding

immediately prior to the Effective Time and that are held by any person who is

entitled to demand and properly demands payment for such Dissenter Shares

pursuant to, and who complies in all respects with, Articles 5.12 and 5.13, et.

seq. of the TBCA (the "Dissenter Rights") shall not be converted into Merger

Consideration as provided in Section 2.1(c)(1), but rather the holders of

Dissenter Shares shall be entitled to payment for such Dissenter Shares in

accordance with the Dissenter Rights; provided, however, that if any such holder

shall fail to perfect or otherwise shall waive, withdraw or lose the right to

receive payment under the Dissenter Rights, then the right of such holder to be

paid in accordance with the Dissenter Rights shall cease and such Dissenter

Shares shall be deemed to have been converted as of the Effective Time into, and

to have become exchangeable solely for the right to receive, Merger

Consideration as provided in Section 2.1(c)(1). The Company shall serve prompt

notice to the Parent of any written notice of intent to demand payment, or any

written demand for payment, received by the Company in respect of any Company

Shares, and the Parent shall have the right to participate in and direct all

negotiations and proceedings with respect to such demands. Prior to the

Effective Time, the Company shall not, without the prior written consent of the

Parent, make any payment with respect to, or settle or offer to settle, any such

demands, or agree to do any of the foregoing.

2.2 Exchange of Certificates.

(a) Exchange Agent. Spectrum Law Group LLP shall serve as Exchange

Agent (the "Exchange Agent") for payment of Merger Consideration upon surrender

of certificates representing Company Shares. The Exchange Agent shall also act

as the agent for the Company's stockholders for the purpose of receiving and

holding their Forms of Election and Certificates and shall obtain no rights or

interest in such shares. Promptly following the Effective Time, Parent shall

deposit with the Exchange Agent, for the benefit of the holders of Company

Shares, for exchange in accordance with this Article II, through the Exchange

Agent: (i) certificates representing the number of shares of Parent Series B

Preferred Stock issuable and (ii) Notes representing the amount of Note

Consideration payable, in each case, pursuant to Section 2.1(c) in exchange for

outstanding Company Shares (such shares of Parent Series B Preferred Stock and

Notes being hereinafter referred to as the "Exchange Fund"). The Exchange Agent

shall, pursuant to irrevocable instructions, deliver the Merger Consideration

contemplated to be issued pursuant to Section 2.1 out of the Exchange Fund.

(b) Exchange Procedures. As soon as practicable after the Effective

Time, the Exchange Agent, or its designee, shall mail to each holder of a

certificate or certificates (the "Certificates") that immediately prior to the

Effective Time represented outstanding shares of Company Shares whose shares

were converted into the right to receive Merger Consideration pursuant to

Section 2.1(c) who did not complete a Form of Election pursuant to Section 2.3,

(i) a letter of transmittal (which shall specify that delivery shall be effected

and risk of loss and title to the Certificates shall pass, only upon delivery of

the Certificates to the Exchange Agent and shall be in such form and have such

other provisions as Parent shall reasonably specify) and (ii) instructions for

use in effecting the surrender of the Certificates in exchange for Merger

Consideration. Upon surrender of a Certificate for cancellation to the Exchange

Agent or to such other agent or agents as may be appointed by Parent, together

with such letter of transmittal, duly executed, and such other documents as may

reasonably be required by the Exchange Agent, the holder of such Certificate

shall be entitled to receive in exchange therefore the amount of Notes, if any,

and the number of shares of Parent Series B Preferred Stock in to which the

aggregate number of Company Shares previously represented by such Certificate

shall have been converted pursuant to Section 2.1(c), and the Certificate so

surrendered shall forthwith be canceled.

<PAGE>

the shares issuable upon conversion thereof) (i) shall not be registered under

the Securities Act or any state securities laws, (ii) will be offered and sold

in reliance upon exemptions provided in the Securities Act and state securities

laws for transactions not involving any public offering, and (iii) therefore,

shall constitute "restricted securities" within the meaning of the Securities

Act and cannot be resold or transferred unless they are subsequently registered

under the Securities Act and such applicable state securities laws or unless an

exemption from such registration is available.

(d) Investment Representation Letters. On or before the Closing

Date, each of the Shareholders shall execute and deliver an Investment

Representation Letter, in the form attached hereto as Exhibit C (the "Investor

Representation Letter"), which contains certain representations designed to

confirm the availability to the Parent of the exemption from registration under

Section 4(2) of the Securities Act in connection with the issuance of the Parent

Common Stock pursuant to this Agreement. Notwithstanding anything to the

contrary in this Agreement, in the event that any Shareholder (a "Defaulting

Shareholder") is unable or fails to execute and deliver an Investor

Representation Letter in favor of the Parent, or the Parent has a reasonable

basis to believe that the representations of such Shareholder in the Investor

Representation Letter are not true and correct in any material respects, then

the Parent may in its sole and absolute discretion refuse to issue the Merger

Consideration allocable to the Defaulting Shareholder.

(e) No Further Ownership Rights in Company Shares. The Merger

Consideration paid and/or issued in accordance with the terms of this Article II

upon conversion of any Company Shares shall be deemed to have been paid and/or

issued in full satisfaction of all rights pertaining to such Company Shares,

subject, however, to the Surviving Entity's obligation to pay any dividends or

make any other distributions with a record date prior to the Effective Time that

may have been declared or made by the Company on such Company Shares in

accordance with the terms of this Agreement or prior to the date of this

Agreement and which remain unpaid at the Effective Time, and after the Effective

Time there shall be no further registration of transfers on the stock transfer

books of the Surviving Entity of Company Shares that were outstanding

immediately prior to the Effective Time. If, after the Effective Time, any

Certificates formerly representing Company Shares are presented to the Surviving

Entity or the Exchange Agent for any reason, they shall be canceled and

exchanged as provided in this Article II.

<PAGE>

(f) No Liability. None of Parent, Merger Sub or the Company or the

Exchange Agent shall be liable to any person in respect of any Merger

Consideration (or dividends or distributions with respect thereto) delivered to

a public official pursuant to any applicable abandoned property, escheat or

similar Law. If any Certificate has not been surrendered prior to five years

after the date on which the final Merger Considerationl becomes due (or

immediately prior to such earlier date on which Merger Consideration in respect

of such Certificate would otherwise escheat to or become the property of any

Governmental Entity), any such cash, shares, dividends or distributions in

respect of such Certificate shall, to the extent permitted by applicable Law,

become the property of the Surviving Entity, free and clear of all claims or

interest of any person previously entitled thereto.

(h) Income Tax Treatment. It is intended by the parties hereto that

the Merger qualify as a "reorganization" within the meaning of Section 368(a) of

the Code. The parties hereto hereby adopt this Agreement as a "plan of

reorganization" within the meanings of Sections 1.368-2(g) and 1.368-3(a) of the

U.S. Treasury Regulations promulgated under the Code.

2.3 Elections.

(a) Each person who, on or prior to the Election Date referred to in

paragraph (b) below, is a record holder of Company Shares shall be entitled,

with respect to all or any portion of such shares, to make an unconditional

Stock Election on or prior to such Election Date, on the basis hereinafter set

forth.

(b) Parent shall prepare a form of election, which form shall be

subject to the reasonable approval of the Company (the "Form of Election") and

shall be mailed to the record holders of Company Shares as of the date of this

Agreement, which Form of Election shall be used by each record holder of shares

of Company Shares who wishes to elect to receive the stock consideration

pursuant to Section 2.1(c)(1) for any or all Company Shares held by such holder.

Any such holder's election to receive the stock consideration pursuant to

Section 2.1(c)(1) shall have been properly made only if the Exchange Agent shall

have received at its designated office, by 5:00 p.m., Pacific Standard Time, on

the Business Day immediately preceding the Closing Date (the "Election Date"), a

Form of Election properly completed and signed and accompanied by Certificates

for the Company Shares to which such Form of Election relates, duly endorsed in

blank or otherwise in form acceptable for transfer on the books of the Company.

If the Closing is delayed to a subsequent date, the Election Date shall be

similarly delayed and Parent will promptly announce such rescheduled Election

Date and Closing.

submitted such Form of Election to the Exchange Agent only by written notice

received by the Exchange Agent (i) prior to 5:00 p.m., Pacific Time, on the

Election Date or (ii) after such time, if (and only to the extent that) the

Exchange Agent is legally required to permit revocations and only if the

Effective Time shall not have occurred prior to such date. In addition, all

Forms of Election shall automatically be revoked if the Exchange Agent is

notified in writing by Parent and the Company that the Merger has been

abandoned. If a Form of Election is revoked, the Certificate or Certificates for

the shares of Company Shares to which such Form of Election relates shall be

promptly returned to the stockholder submitting the same to the Exchange Agent

and any such shares shall be treated as Non-Electing Shares (unless and until

another duly completed Form of Election (and the Certificate or Certificates, or

guarantees of delivery, as applicable, to which such Form of Election relates)

has been submitted to the Exchange Agent in accordance with this Agreement).

<PAGE>

(d) The determination of the Exchange Agent in its sole discretion

shall be binding as to whether or not elections to receive the stock

consideration pursuant to Section 2.1(c)(1) have been properly made or revoked

pursuant to this Section 2.3 with respect to shares of Company Shares and when

elections and revocations were received by it. If no Form of Election is

received with respect to shares of Company Shares, or if the Exchange Agent

determines that any election to receive the stock consideration pursuant to

Section 2.1(c)(1) was not properly made with respect to shares of Company

Shares, such shares shall be treated by the Exchange Agent as Non-Electing

Shares at the Effective Time, and such shares shall be converted into the right

to receive the Note Consideration in accordance with Section 2.1(c)(1)(ii). The

Exchange Agent may, with the mutual agreement of Parent and the Company, make

such rules as are consistent with this Section 2.03 for the implementation of

the elections provided for herein as shall be necessary or desirable fully to

effect such elections.

2.4 Company Equity Awards.

(a) At the Effective Time, other than stock options issued under the

Company's 2000 Omnibus Stock Incentive Plan that have an exercise price of $1.00

per share (which shall expire) or $.50 per share (which, pursuant to the terms

of the Company's 2000 Omnibus Stock Incentive Plan shall receive in lieu thereof

from the Company an equitable substitution for such options), each Company Stock

Option then outstanding under any Company Stock Plan, whether or not then

exercisable, shall be assumed by Parent and converted into an option to purchase

Parent Series B Preferred Stock in accordance with this Section 2.4(a). Each

Company Stock Option so converted shall continue to have, and be subject to, the

same terms and conditions as set forth in the applicable Company Stock Plan and

any agreements thereunder immediately prior to the Effective Time, provided,

however, that all of such stock options shall be deemed to be fully vested as of

the Effective Time. Notwithstanding the foregoing, the conversion of any Company

Stock Options which are "incentive stock options," within the meaning of Section

422 of the Code, into options to purchase Parent Series B Preferred Stock shall

be made so as not to constitute a "modification" of such Company Stock Options

within the meaning of Section 424 of the Code.

(b) Parent shall take all corporate action necessary to reserve for

issuance a sufficient number of shares of Parent Series B Preferred Stock for

delivery upon exercise or settlement of the Company Stock Options being assumed

or settled in accordance with this Section 2.4.

<PAGE>

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties concerning the Company. The Company

hereby represents and warrants to the Parent as follows:

(a) Authority. The Company has the corporate power and authority to

enter into and deliver this Agreement and each of the other agreements,

certificates, instruments and documents contemplated hereby (collectively, the

"Ancillary Documents") to which it is a party, to carry out its obligations

hereunder and under any Ancillary Document and to consummate the transactions

contemplated hereby and by the Ancillary Documents. All actions, authorizations

and consents required by Law for the execution, delivery, and performance by the

Company of this Agreement and each Ancillary Document to which it is a party,

and the consummation of the transactions contemplated hereby and thereby, have

been properly taken or obtained, including without limitation, the approval of

this Agreement and the transactions contemplated by it by the Board of Directors

of the Company.

(b) Execution and Delivery. This Agreement has been, and each

Ancillary Document to which the Company is a party will be at the Closing, duly

authorized, executed and delivered by the Company and constitutes a legal, valid

and binding obligation of the Company, enforceable against the Company in

accordance with their respective terms and conditions, except as enforceability

thereof may be limited by applicable bankruptcy, reorganization, insolvency or

other similar laws affecting or relating to creditors' rights generally or by

general principles of equity.

execution, delivery and performance by the Company of this Agreement and each

Ancillary Document to which it is a party, and the consummation of the

transactions contemplated hereby and thereby, do not and will not violate,

conflict with or result in a breach of any term, condition or provision of, or

require the consent of any Person under, or result in the creation of or right

to create any Lien upon any of the assets of the Company under, (i) any Laws to

which the Company or any of its assets are subject, (ii) any permit, judgment,

order, writ, injunction, decree or award of any Governmental Authority to which

the Company or any of its assets are subject, (iii) the articles of

incorporation or bylaws of the Company, or (iv) any license, indenture,

promissory note, bond, credit or loan agreement, lease, agreement, commitment or

other instrument or document to which the Company is a party or by which the

Company or any of its assets are bound, except where, in the case of clause

(iv), such violation, conflict, breach, etc. would not, individually or in the

aggregate, have a Material Adverse Effect on the Company.

(d) Governmental Consents. No consent, approval, order or

authorization of, or registration, declaration or filing with, any Governmental

Authority, is required to be obtained by the Company in connection with or as a

result of the execution and delivery of this Agreement or any of the Ancillary

Documents, or the performance of its obligations hereunder and thereunder.

(e) Organization, Standing and Qualification. The Company is a

corporation duly incorporated, validly existing, and in good standing under the

Laws of the State of Texas. The Company has corporate power and authority to

own, lease and operate its properties and to carry on its business as now being

conducted, to use its name and is duly qualified, licensed or authorized to do

business and in good standing, in each jurisdiction where the nature of the

activities conducted by it or the character of the properties owned, leased or

operated by it require such qualification, licensing or authorization. Each such

jurisdiction is identified on Schedule 3.1(e). The Company's corporate minute

books reflect all resolutions approved and other material actions taken by its

shareholders or Board of Directors and any committees thereof since the date of

its incorporation. The Shareholders or the Company have previously delivered to

the Parent true, correct and complete copies of the Articles of Incorporation

and Bylaws of the Company, each as currently in effect (collectively, the

"Organization Documents").

<PAGE>

(f) Capitalization. The authorized capital stock of the Company

consists solely of 40,000,000 shares of common stock, of which 5,105,000 shares

are issued and outstanding, and 10,000,000 shares of preferred stock, of which

no shares are issued and outstanding. As of the date hereof, each Shareholder

owns of record such number of shares of Common Stock as is set forth opposite

such Shareholder's name on Schedule 3.1(f). The Company Shares constitute all of

the issued and outstanding capital stock of the Company. All of the issued and

outstanding shares of capital stock of the Company are duly authorized, validly

issued, fully paid and non-assessable. No shares of Common Stock are held in

treasury. Except as disclosed in Schedule 3.1(f), there are no outstanding

subscriptions, options, warrants, calls, contracts, demands, commitments,

convertible or exchangeable securities, profits interests, conversion rights,

preemptive rights, rights of first refusal or other rights, agreements,

arrangements or commitments of any nature whatsoever under which the Company is

or may become obligated to issue, redeem, assign or transfer any shares of

capital stock or purchase or make payment in respect of any shares of capital

stock of the Company now or previously outstanding, and there are no outstanding

or authorized stock appreciation, phantom stock or similar rights with respect

to or any shares of its capital stock.

(g) No Subsidiaries or Other Equity Interests. The Company does not,

nor has it ever at any time since its organization, had a direct or indirect

Subsidiary or owned, directly or indirectly, any equity, investment or other

equity interest, or any right (contingent or otherwise) to acquire the same, in

any other Person.

(h) Financial Statements. The Company has previously delivered to

the Parent true, complete and correct copies of unaudited financial statements

of the Company for the fiscal year ended December 31, 2004 (the "Financial

Statements"). The Financial Statements comply as to form in all material

respects with the applicable accounting requirements and the published rules and

regulations with respect thereto, were prepared in accordance with GAAP applied

on a consistent basis during the periods involved and fairly present in all

material respects the financial position of the Company as of the respective

dates thereof and the results of its operations and cash flows for the

respective periods then ended.

(i) Absence of Undisclosed Liabilities. Except to the extent

adequately reflected on or reserved against in the Financial Statements and

except for recurring Liabilities incurred in the ordinary course of business

consistent with recent past practice, as of September 30, 2005 (the "Balance

Sheet Date"), the Company had no direct or indirect Liabilities for any period

prior to such date or arising out of transactions entered into or any set of

facts existing prior thereto. Since the Balance Sheet Date, the Company has not

incurred any Liabilities except in the ordinary course of business consistent

with recent past practice, none of which are, individually or in the aggregate,

material.

<PAGE>

(j) Ordinary Course. Since the Balance Sheet Date, except as

otherwise disclosed on Schedule 3.1(j), the Company has operated its business in

the ordinary course consistent with past practice and there has not occurred:

(i) any change in the condition (financial or otherwise),

properties, assets, liabilities, business, prospects, operations or results of

operations that has had or could reasonably be expected to have a Material

Adverse Effect on the Company;

(ii) any amendments or changes in any of its Organization

Documents;

(iii) any issuance or sale of any shares of or interests in,

or rights of any kind to acquire any shares of or interests in, or receipt of

any payment based on the value of, its capital stock or any securities

convertible or exchangeable into shares of its capital stock (including, without

limitation, any stock options, phantom stock or stock appreciation rights) or

any adjustment, split, combination or reclassification of its capital stock, or

any declaration or payment of any dividend or any distribution on, or any

redemption, purchase, retirement or other acquisition, directly or indirectly,

of any shares of its capital stock or any securities or obligations convertible

into or exchangeable for any shares of its capital stock;

(iv) any investment of a capital nature on its own account in

excess of $50,000 individually or $100,000 in the aggregate;

(v) any entering into, amendment of, modification in,

relinquishment, termination, or non-renewal by the Company of any contract,

lease, transaction, commitment or other right or obligation, except for purchase

and sale commitments entered into in the ordinary course of business consistent

with recent past practice;

(vi) any waiver, forfeiture, or failure to assert any rights

of a material value or made, whether directly or indirectly, any payment of any

material Liability before the same came due in accordance with its terms;

(vii) any material damage, destruction or loss of the

Company's assets or properties, whether covered by insurance or not;

(viii) any payment of (or any making of oral or written

commitments or representations to pay) any bonus, increased salary or special

remuneration to any director, officer, employee or consultant or any entry into

or alterations of the terms of any employment, consulting or severance agreement

with any such person; any payment of any severance or termination pay (other

than payments made in accordance with existing plans or agreements); any grant

of stock option or issuance of any restricted stock; any entry into or

modification of any agreement or Employee Benefit Plan (except as required by

law) or any similar agreement;

<PAGE>

(ix) any modification of any term of benefits payable under

any Employee Benefit Plan;

(x) (A) any creation, incurrence or assumption of any

Liability for borrowed money except those Liabilities incurred in the ordinary

course of business consistent with recent past practice, (B) issuance or sale of

any securities convertible into or exchangeable for debt securities of the

Company; or (C) issuance or sale of options or other rights to acquire from the

Company, directly or indirectly, debt securities of the Company or any

securities convertible into or exchangeable for any such debt securities;

(xi) any material change in the amounts or scope of coverage

of insurance policies;

(xii) any merger or consolidation with any other Person,

acquisition of any capital stock or other securities of any other Person, or

acquisition of all or a significant portion of the assets of any other Person,

or acquisition of any assets or properties from any Shareholder or its affiliate

or family member;

(xiii) any assumption or guarantee of any Liability or

responsibility (whether primarily, secondarily, contingently or otherwise) for

the obligations of any other Person;

(xiv) any loan, advance (including, without limitation, any

loan or advance to any stockholder, officer, director or employee of such

Company) or capital contribution to, or investment in, any Person, except travel

advances or advances of no more than $50,000 to employees in the ordinary course

of business consistent with recent past practice;

(xv) any sale, transfer or lease to others of, any grant,

creation or assumption of Liens against, or otherwise disposed of, any of its

material assets, whether tangible or intangible;

(xvi) any lapse, failure to take any actions to protect, or

any adverse change in respect of any of its Proprietary Rights;

(xvii) any consummation of any other transaction that is not

in the Company's ordinary course of business consistent with recent past

practice;

(xviii) any collection of the Company's accounts receivable,

or any payment of the Company's accounts payable, in each case that is not in

the Company's ordinary course of business consistent with recent past practice;

(xix) any agreement or commitment, in writing or otherwise, to

take any of the actions described in the foregoing subclauses (i) through

(xviii).

<PAGE>

(k) Title to Assets. Except as disclosed on Schedule 3.1(k), the

Company has good and marketable title to all of the tangible and intangible

assets owned by it, free and clear of any Liens, and none of such assets are

owned by any Person other than the Company. The Company owns, leases, licenses

or otherwise has the contractual right to use all of the assets used in or

necessary for the conduct of its business as currently conducted. The Company

has delivered to the Parent a schedule of the fixed assets of the Company dated

within thirty (30) days prior to the date hereof. All personal property owned or

leased by the Company, taken as a whole, is in good repair and is operational

and usable in the operation of the Company, subject to ordinary wear and tear.

(l) Receivables and Payables. Except as disclosed on Schedule

3.1(l), (i) the accounts and notes receivable reflected on the Financial

Statements or arising since the Balance Sheet Date (collectively, the

"Receivables"), are bona fide, represent valid obligations to the Company, and

have arisen or were acquired in the ordinary course of business and in a manner

consistent with recent past practice and with the Company's regular credit

practices; (ii) the Company's provision for doubtful accounts reflected on its

Financial Statements or reserved on its books since the Balance Sheet Date has

been determined in accordance with the generally accepted accounting principles

consistently applied; (iii) the Receivables have been collected or are

collectible in full, net of any allowance for uncollectibles recorded on the

Financial Statements or properly reserved on its books since the Balance Sheet

Date, in a manner consistent with past practice in the ordinary course of

business and without resort to litigation; (iv) to the Knowledge of the Company,

none of the Receivables is or will at the Closing Date be subject to any

defense, counterclaim or setoff; (v) since the Balance Sheet Date, the Company

has not canceled, reduced, discounted, credited or rebated or agreed to cancel,

reduce, discount, credit or rebate, in whole or in part, any Receivables; and

(vi) there has been no material adverse change since the Balance Sheet Date in

the amounts of Receivables or the allowances with respect thereto, or accounts

payable of the Company, from those reflected in the balance sheet of the Company

as of such date. The Company has provided to the Parent a schedule of aged

Receivables and payables for the Company as of a date which is within three (3)

business days of the date hereof.

(m) Real Property.

(i) The Company does not now own, and has never owned, any

real property.

(ii) Schedule 3.1(m) sets forth a true and complete list of

all real property leased or otherwise used by the Company, identifying the

lessor or other owner thereof (the "Real Property").

(iii) There is not existing or proposed as a matter of public

record or, to the Knowledge of the Company, presently contemplated, any

condemnation or similar action, or zoning action or proceeding, with respect to

any portion of the Real Property. None of the existing buildings and

improvements which in part comprise the Real Property fails to comply fully with

all size, height, set back, use and other zoning restrictions and regulations

applicable thereto, including, without limitation, the parking space

requirements of all applicable zoning ordinances and regulations. The Company or

its landlord has obtained all licenses, permits, approvals, certificates, and

other authorizations required by applicable Laws for the use and occupancy of

the Real Property as it is currently being utilized. None of the Real Property

is subject to any encumbrance, easement, right-of-way, building or use

restriction, exception, variance, reservation, limitation or other Liens which

might in any material respect interfere with or impair the continued use thereof

as currently utilized or proposed to be utilized by the Company.

<PAGE>

(n) Proprietary Rights.

(i) To the Knowledge of the Company, the Company owns or

possesses licenses or other rights to use all trademarks, trade and business

names, internet domain names, service marks, service names, copyrights, customer

lists, trade secrets and inventions (whether or not patentable) (collectively,

"Proprietary Rights") that are necessary to the conduct of the Company's

business as currently conducted or anticipated.

(ii) Schedule 3.1(n)(ii) sets forth a true and complete list

of all trademarks, trade names, service marks, service names, internet domain

names, copyrights and patents included in the Proprietary Rights of the Company

(identifying which are owned and which are licensed), including all United

States, state and foreign registrations or applications for registration thereof

and all agreements relating thereto. All filing, registration, maintenance or

similar fees payable in connection with each registration (or application

therefor) of Proprietary Rights set forth on Schedule 3.1(n)(ii) have been paid

and each such registration is valid and in full force and effect.

(iii) Except as disclosed in Schedule 3.1(n)(iii), the Company

is not required to pay any royalty, license fee or similar compensation in

connection with the conduct of its business as currently conducted.

(iv) To the Knowledge of the Company, the Company has not

interfered with, infringed upon, misappropriated or otherwise come into conflict

with the Proprietary Rights of any other Person or committed any acts of unfair

competition, and no claims have been asserted by any Person alleging such

interference, infringement, misappropriation, conflict or act of unfair

competition.

(v) To the Knowledge of the Company, no Person is infringing

upon its Proprietary Rights.

(vi) There are no Proprietary Rights developed by any

shareholder, director, officer, consultant or employee of the Company that are

used in the Company's business and that have not been transferred to, or are not

owned free and clear of any Liens by, the Company.

(o) Material Agreements. Schedule 3.1(o)(1) sets forth a true and

complete list, and the Company has provided to the Parent complete copies

(including all amendments and extensions thereof and all waivers thereunder) or,

if oral, an accurate and complete description, of each of the following, whether

written or oral, to which the Company is a party or is otherwise bound (each, a

"Material Agreement"):

<PAGE>

(i) all loan agreements, indentures, mortgages, notes,

installment obligations, capital leases or other agreements or instruments

relating to the borrowing of money (or guarantees thereof);

(ii) all continuing contracts or commitments for the future

purchase, sale or manufacture of products, materials, supplies, equipment or

services requiring payment to or from the Company in an amount in excess of

$50,000 per annum which are not terminable on 30 days' or less notice without

cost or other liability at or any time after the Closing Date, or in which the

Company has granted or received manufacturing rights, most favored nation

pricing provisions or exclusive rights relating to any product or service;

(iii) all contracts with any Governmental Authority;

(iv) all leases, subleases or any other agreements or

arrangements under which the Company has the right or license to use any

personal property, whether tangible or intangible, owned or licensed by another

Person;

(v) all agreements or arrangements under which any other

Person has the right or license to use any real property or personal property,

whether tangible or intangible, owned, leased or licensed by the Company;

(vi) all contracts or understandings which by their terms

restrict the ability of the Company to conduct its business or to otherwise

compete, including as to manner or place;

(vii) all joint venture or similar agreements or

understandings;

(viii) lease and other agreements pertaining to the Real

Property;

(ix) all collective bargaining, employment, severance,

consulting, nondisclosure or confidentiality agreements, and agreements

requiring a charge of control or parachute payments, or any other type of

contract or understanding with any officer, employee or consultant, other than

pursuant to Employee Benefit Plans, which is not immediately terminable by the

Company without cost or other liability to the Company;

(x) all agreements with sales agents or representatives,

wholesalers, distributors and dealers;

(xi) all agreements concerning any Hazardous Materials; and

(xii) all other contracts, without regard to monetary amount,

which were not entered into in the ordinary course of business consistent with

past practice or which are material to the conduct of the Company's business and

not listed above.

<PAGE>

Except as disclosed on Schedule 3.1(o)(2), the Company is not,

and to the Knowledge of the Company, any other party thereto is not, in default

under any Material Agreement and no event has occurred or is reasonably expected

to occur which (after notice or lapse of time or both) would become a breach or

default under, or would otherwise permit modification, cancellation,

acceleration or termination of, any Material Agreement or would result in the

creation of or right to obtain any Lien upon, or any Person obtaining any right

to acquire, any assets, rights or interests of the Company. Except as disclosed

on Schedule 3.1(o)(3): (i) each Material Agreement is in full force and effect

and is a valid and binding obligation of the Company, and, to the Knowledge of

the Company, the other parties thereto; (ii) there are no unresolved disputes

with respect to any Material Agreement; and (iii) the Company has no reasonable

basis to believe that any party to a Material Agreement intends either to

modify, cancel or terminate such Material Agreement.

(p) Litigation. Except as disclosed on Schedule 3.1(p), there is no

claim, legal action, suit, arbitration, investigation or other proceeding

pending, or to the Knowledge of the Company, threatened against or relating to

the Company or its assets. Neither the Company nor any of its assets are subject

to any outstanding judgment, order, writ, injunction or decree of any

Governmental Authority. There is currently no investigation or review by any

Governmental Authority with respect to the Company pending or, to the Knowledge

of the Company, threatened, nor has any Governmental Authority notified the

Company of its intention to conduct the same.

(q) Compliance with Laws. To the Knowledge of the Company, the

Company has all licenses, permits and other authorizations from all applicable

Governmental Authorities necessary or desirable for the conduct of its business

as currently conducted or as currently expected to be conducted following the

Closing Date. Schedule 3.1(q) hereto sets forth a true and complete list of all

such licenses, permits and other authorizations obtained by the Company, each of

which is in full force and effect and no violations thereunder have been

recorded. To the Knowledge of the Company, the Company is in compliance, and has

complied, in all material respects with all Laws applicable to it and has not

received any notice of any violation thereof.

(r) Environmental Matters. To the Knowledge of the Company, except

as disclosed in Schedule 3.1(r):

(i) During the period that the Company has owned, leased or

operated any properties or facilities, neither it nor any other Person has

disposed, released, or participated in or authorized the release or threatened

release of Hazardous Materials on, from or under such properties or facilities.

There is not now nor has there ever been any presence, disposal, release or

threatened release of Hazardous Materials on, from or under any of such

properties or facilities, which may have occurred prior to the Company having

taken possession of any of such properties or facilities. For the purposes of

this Agreement, the terms "disposal," "release," and "threatened release" shall

have the definitions assigned thereto by the Comprehensive Environmental

Response Compensation and Liability Act of 1980, 42 U. S.C. ss. 9601 et seq., as

amended ("CERCLA").

<PAGE>

(ii) The operations of the Company and properties that the

Company owns, leases or operates, are in compliance in all material respects

with Environmental Law. During the time that the Company has owned, leased or

operated its properties and facilities, neither the Company nor any other Person

has used, generated, manufactured or stored on, under or about such properties

or facilities or transported or arranged for disposal to or from such properties

or facilities, any Hazardous Materials which may be considered a violation of

applicable Environmental Law.

(iii) During the time that the Company has owned, leased or

operated its properties and facilities, there has been no litigation or

proceeding brought or, to the Knowledge the Company, threatened against the

Company by, or any settlement reached the Company with, any Persons alleging the

presence, disposal, release or threatened release of any Hazardous Materials, on

from or under any of such properties or facilities.

(iv) There are no facts, circumstances or conditions relating

to the properties and facilities owned, leased or operated by the Company which

could give rise to a claim under any Environmental Law or to any material

Environmental Costs and Liabilities.

(s) Related Party Transactions. Except as disclosed on Schedule

3.1(s), no Related Party has been directly or indirectly a party to any contract

or other arrangement (whether written or oral) with the Company providing for

services (other than as an employee of the Company), products, goods or

supplies, rental of real or personal property, or other wise requiring payments

from or to the Company. For purposes hereof, the term "Related Party" shall mean

any Shareholder or a director or officer of the Company or any member of his or

her family or any corporation, partnership, limited liability company, other

business entity or trust in which he or she or any member of his or her family

has greater than a ten percent (10%) interest, or of which he or she or any

member of his or her family is an officer, director, general partner, member or

trustee.

(t) Insurance. Schedule 3.1(t)(l) sets forth a list of the Company's

insurance policies (including property, casualty, liability (general,

professional and directors and officers) and workers' compensation), listing for

each policy the identity of the insurance carrier, the policy period, the limits

and retentions and any special exclusions. Except as set forth on Schedule

3.1(t)(2), such insurance coverage and coverage amounts are, in the opinion of

the Company, customary for the business engaged in by the Company. Such policies

are currently in full force and effect, all premiums have been paid in full with

respect thereto and the Company has not received any notice of termination or

modification from the insurance carriers. Schedule 3.1(t)(l) also sets forth a

true and complete description of any self-insurance arrangement by or affecting

the Company, including any reserves established thereunder, if any.

(u) Taxes.

(i) The Company has timely filed with the appropriate taxing

authorities all returns and reports in respect of Taxes ("Returns") required to

be filed by it (taking into account any extension of time to file granted to or

on the account of the Company). The information on such Returns is complete and

accurate in all material respects. The Company has paid on a timely basis all

Taxes (whether or not shown on any Return) due and payable. There are no Liens

for Taxes (other than for current Taxes not yet due and payable) upon the assets

of the Company. As used in this Section 3.1(u), the Company shall mean,

individually and collectively, (i) the Company and (ii) any individual, trust,

corporation, partnership or other entity as to which the Company may be liable

for Taxes incurred by such individual or entity as a transferee or pursuant to

any provision of federal, state, local or foreign law or regulation.

<PAGE>

(ii) No unpaid (or unreserved in accordance with generally

accepted accounting principles applied on a consistent basis) deficiencies for

Taxes have been claimed, proposed or assessed by any taxing authority or other

Governmental Authority with respect to the Company for any Pre-Closing Period

and, to the best knowledge of the Company or the Shareholder, there are no

pending audits, investigations or claims for or relating to any liability in

respect of Taxes of the Company, nor has the Company been notified of any

request for such an audit, investigation or claim. The Company has not requested

any extension of time within which to file any currently unfiled returns in

respect of any Taxes and no extension of a statute of limitations relating to

any Taxes is in effect with respect to the Company.

(iii) (1) The Company has made or will make provision for all

Taxes payable by it with respect to any Pre-Closing Period which are not payable

prior to the Closing Date; (2) the provisions for Taxes with respect to the

Company for the Pre-Closing Period are adequate

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