AGREEMENT AND PLAN OF MERGER BY AND AMONG THUNDERBALL ENTERTAINMENT, INC., PHILADELPHIA MORTGAGE NEWCO, INC. AND PHILADELPHIA MORTGAGE CORPORATION

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

THUNDERBALL ENTERTAINMENT, INC.,

PHILADELPHIA MORTGAGE NEWCO, INC.

AND

PHILADELPHIA MORTGAGE CORPORATION

April 26, 2005

<PAGE>

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT is dated as of ______, 2005, by and among Philadelphia

Mortgage Corporation, a Nevada corporation ("Parent"), Philadelphia Mortgage

Newco, Inc., a Minnesota corporation and wholly-owned subsidiary of Parent

("Merger Subsidiary"), and Thunderball Entertainment, Inc., a Minnesota

company (the "Company").

WHEREAS, the Company is in the business of developing and distributing

products in the redemption game industry (the "Business"); and

WHEREAS, the Boards of Directors of Parent and Merger Subsidiary, and the

shareholders of the Company, have approved the merger of the Company with and

into Merger Subsidiary (the "Merger") upon the terms and subject to the

conditions set forth herein; and

WHEREAS, for federal income tax purposes, it is intended that the Merger

will qualify as a reorganization within the meaning of Section 368(a)(1)(A)

and (a)(2)(D) of the Internal Revenue Code of 1986, as amended (the "Code");

and

WHEREAS, the parties hereto desire to make certain representations,

warranties, and agreements in connection with the Merger and also to prescribe

various conditions to the Merger;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual

representations, warranties, covenants, and agreements contained herein, the

parties hereto agree as follows:

ARTICLE 1

THE MERGER; CONVERSION OF SHARES

1.1 The Merger. Subject to the terms and conditions of this Agreement,

at the Effective Time (as defined in Section 1.2 hereof), the Merger

Subsidiary will be merged with and into the Company in accordance with the

provisions of the Minnesota Business Corporation Act (the "Minnesota Act"),

whereupon the separate corporate existence of the Merger Subsidiary will

cease, and the Company will continue as the surviving corporation (the

"Surviving Corporation"). From and after the Effective Time, the Surviving

Corporation will possess all the rights, privileges, powers, and franchises

and be subject to all the restrictions, disabilities, and duties of the

Company and Merger Subsidiary, all as more fully described in the Minnesota

Act.

1.2 Effective Time. As soon as practicable after each of the

conditions set forth in Article 5 and Article 6 has been satisfied or waived,

the Company and Merger Subsidiary will file, or cause to be filed, with the

Secretary of State of the State of Minnesota, Articles of Merger for the

Merger, which Articles will be in the form required by and executed in

accordance with the applicable provisions of the Minnesota Act. The Merger

will become effective at the time such filing is made or, if agreed to by

Parent and the Company, such later time or date set forth in the Articles of

Merger (the "Effective Time").

1.3 Closing.

(a) Unless this Agreement has been terminated and the transactions

contemplated herein have been abandoned pursuant to Article 7 hereof, the

closing of the Merger (the "Closing") will take place at a time and on a date

(the "Closing Date") to be specified by the parties, which will be no later

than May 10, 2005 (the "Termination Date"); provided, however, that all of the

conditions provided for in Articles 5 and 6 hereof shall have been satisfied

or waived by such date. The Closing will be held at the offices of Maslon

Edelman Borman & Brand, LLP, located at 3300 Wells Fargo Center, 90 South

Seventh Street, Minneapolis, Minnesota 55402, or such other place as the

parties may agree, at which time and place the documents and instruments

necessary or appropriate to effect the transactions contemplated herein will

be exchanged by the parties. Except as otherwise provided herein, all actions

taken at the Closing will be deemed to be taken simultaneously.

(b) At Closing, the Company shall pay Jenson Services, Inc., a Utah

corporation ("Jenson Services"), the sum of $175,000, $25,000 of which has

already been paid to Jenson Services by the Company, in consideration of

Jenson Services' payment of, and indemnification of Parent and the Company

with respect to, any and all past liabilities of any type or nature of Parent

existing at Closing. The "Indemnification Agreement" is attached hereto as

Exhibit 1.3(b).

1.4 Conversion of Interests. Subject to the terms and conditions of

this Agreement, at the Effective Time, by virtue of the Merger and without any

action on the part of the Company and/or the Merger Subsidiary:

(a) All of the shares of the Company ("Company Common Stock")

issued and outstanding immediately prior to the Effective Time (except for

Company Common Stock referred to in Section 1.4(b) hereof) will be converted

into the right to receive an aggregate of 8,000,000 shares common stock of the

Parent, par value $.001 per share ("Parent Common Stock"), and Parent adopts,

ratifies and approves the Company written compensation agreements pursuant to

which any of Company Common Stock was issued under Rule 701 of the Securities

and Exchange Commission. The amount of Parent Common Stock into which shares

of Company Common Stock is converted is referred to herein as the "Merger

Consideration".

(b) Each share of Company Common Stock issued and outstanding

immediately prior to the Effective Time that is then owned beneficially or of

record by Parent, Merger Subsidiary, or any direct or indirect subsidiary of

Parent or the Company will be canceled without payment of any consideration

therefor and without any conversion thereof. Furthermore, at the Effective

Time, one (1) share of Company Common Stock shall be issued to Parent.

(c) Except as expressly set forth herein, each share of any other

equity interest of the Company (other than Company Common Stock) will be

canceled without payment of any consideration therefor and without any

conversion thereof.

(d) Each share of common stock of Merger Subsidiary, par value

$.001 per share ("Merger Subsidiary Common Stock"), issued and outstanding

immediately prior to the Effective Time will be canceled as of the Effective

Time.

1.5 Exchange of Company Common Stock.

(a) At the Closing, the Company will arrange for each holder of

record (a "Shareholder") of Company Common Stock outstanding immediately prior

to the Effective Time to deliver to the Parent appropriate evidence of such

holder's Company Common Stock ("Company Certificates"), together with an

appropriate assignment signed by such holders, in exchange for the number of

whole shares of Parent Common Stock into which such interests have been

converted as provided in Section 1.4(a), and the Company Certificate(s) so

surrendered will be canceled.

(b) All shares of Parent Common Stock issued upon the surrender for

exchange of shares of Company Common Stock in accordance with the terms hereof

will be deemed to have been issued in full satisfaction of all rights

pertaining to such Company Common Stock.

(c) As of the Effective Time, the holders of Company Certificates

representing shares of Company Common Stock will cease to have any rights as

Shareholders of the Company, except such rights, if any, as they may have

pursuant to the Minnesota Act. Except as provided above, until such Company

Certificates are surrendered for exchange, each such Company Certificate will,

after the Effective Time, represent for all purposes only the right to receive

certificates representing the number of whole shares of Parent Common Stock

into which Company Common Stock shall have been converted pursuant to the

Merger as provided in Section 1.4(a).

(d) No fractional shares of Parent Common Stock will be issued upon

the surrender for exchange of Company Certificates; no dividend or other

distribution of Parent will relate to any fractional share; and such

fractional share interests will not entitle the owner thereof to vote or to

any rights of a shareholder of Parent. All fractional shares of Parent Common

Stock to which a holder of Company Common Stock immediately prior to the

Effective Time would otherwise be entitled, at the Effective Time, will be

aggregated if and to the extent multiple Company Certificates of such holder

are submitted together to Parent. If a fractional share results from such

aggregation, then such fractional share will be rounded up to the nearest

whole share and each holder of shares of Company Common Stock Interests who

otherwise would be entitled to receive such fractional share of Parent Common

Stock will receive one whole share in lieu of such fractional share.

(e) At Closing, Parent will cancel 133,334 shares of Parent Common

Stock issued and outstanding immediately prior to Closing and issue 459,141

shares of new restricted Parent Common Stock as set forth on Exhibit 1.5(e)

attached hereto, and, as a result of such transactions, Parent will have

outstanding no more than 600,000 shares of Parent Common Stock at Closing.

1.6 Articles of Incorporation of the Surviving Corporation. The

Articles of Incorporation of the Company as in effect immediately prior to the

Effective Time will be the Articles of Incorporation of the Surviving

Corporation.

1.7 Bylaws of the Surviving Corporation. The Bylaws of the Company, as

in effect immediately prior to the Effective Time, will be the Bylaws of the

Surviving Corporation until thereafter amended in accordance with applicable

law.

1.8 Directors and Officers of the Surviving Corporation and Parent.

(a) Directors and Officers of the Surviving Corporation. The

directors and officers of the Company, as of the Effective Time, shall

continue as the directors of the Surviving Corporation.

(b) Directors of the Parent. The directors of the Parent

immediately prior to the Effective Time shall appoint Ronald E. Eibensteiner

and Brian Niebur to the Parent's Board of Directors, and thereafter resign

effective as of the Effective Time. The officers of the Surviving Corporation

shall be appointed by the new directors.

Within six (6) months from the Effective Time, the board of directors of the

Surviving Corporation will form an independent compensation committee to

review and determine long-term compensation for the Surviving Corporation's

officers.

1.9 Dissenting Interests. Notwithstanding any provision of this

Agreement to the contrary, each outstanding Company Common Stock, the holder

of which has demanded and perfected such holder's right to dissent from the

Merger and to be paid the fair value of such shares in accordance with Section

302A.471 of the Minnesota Act and, as of the Effective Time, has not

effectively withdrawn or lost such dissenters' rights ("Dissenting

Interests"), will not be converted into or represent a right to receive Parent

Common Stock into which Company Common Stock are converted pursuant to Section

1.4 hereof, but the holder thereof will be entitled only to such rights as are

granted by the Minnesota Act. Parent will cause the Company to make all

payments to holders of Company Common Stock with respect to such demands in

accordance with the Minnesota Act. The Company will give Parent (i) prompt

written notice of any notice of intent to demand fair value for any Company

Common Stock, withdrawals of such notices, and any other instruments served

pursuant to the Minnesota Act and received by the Company, and (ii) the

opportunity to conduct jointly all negotiations and proceedings with respect

to demands for fair value for Company Common Stock under the Minnesota Act.

The Company will not, except with the prior written consent of Parent or as

otherwise required by law, voluntarily make any payment with respect to any

demands for fair value for Company Common Stock or settle or offer to settle

any such demands.

1.10 Reverse Split/Combination of Parent Common Stock. The Company

hereby covenants that for a two-year (2-year) period following the Effective

Time, it shall not cause Parent to effect any reverse stock split of Parent

Common Stock without the prior written consent of Parent's current directors.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to Parent as follows:

2.1 Disclosure Schedule. The disclosure schedule attached hereto as

Exhibit 2.1 (the "Company Disclosure Schedule") is divided into sections that

correspond to the sections of this Article 2. The Company Disclosure Schedule

comprises a list of all exceptions to the truth and accuracy of, and of all

disclosures or descriptions required by, the representations and warranties

set forth in the remaining sections of this Article 2.

2.2 Corporate Organization, etc. The Company is a corporation duly

organized, validly existing and in good standing under the laws of the State

of Minnesota with the requisite corporate power and authority to carry on its

business as it is now being conducted and to own, operate and lease its

properties and assets, is duly qualified or licensed to do business as a

foreign corporation in good standing in every other jurisdiction in which the

character or location of the properties and assets owned, leased or operated

by it or the conduct of its business requires such qualification or licensing,

except in such jurisdictions in which the failure to be so qualified or

licensed and in good standing would not, individually or in the aggregate,

have a Material Adverse Effect (as defined below) on the Company. The Company

Disclosure Schedule contains a list of all jurisdictions in which the Company

is qualified or licensed to do business and includes complete and correct

copies of the Company's articles of incorporation and bylaws. The Company

does not own or control any capital stock of any corporation or any interest

in any partnership, joint venture or other entity.

2.3 Capitalization. The authorized capital securities of the Company

is set forth in the Company Disclosure Schedule. The number of shares of

Company Common Stock outstanding, as of the date of this Agreement and as set

forth in the Company Disclosure Schedule, represent all of the issued and

outstanding capital securities of the Company. All issued and outstanding

shares of Company Common Stock are duly authorized, validly issued, fully paid

and nonassessable and are without, and were not issued in violation of,

preemptive rights. There are no shares of Company Common Stock or other

equity securities of the Company outstanding or any securities convertible

into or exchangeable for such interests, securities or rights. Other than as

set forth on the Company Disclosure Schedule and pursuant to this Agreement,

there is no subscription, option, warrant, call, right, contract, agreement,

commitment, understanding or arrangement to which the Company is a party, or

by which it is bound, with respect to the issuance, sale, delivery or transfer

of the capital securities of the Company, including any right of conversion or

exchange under any security or other instrument. The Company has no

subsidiaries.

2.4 Authorization, etc. The Company has all requisite corporate power

and authority to enter into, execute, deliver, and perform its obligations

under this Agreement. This Agreement has been duly and validly executed and

delivered by the Company and is the valid and binding legal obligation of the

Company enforceable against the Company in accordance with its terms, subject

to bankruptcy, moratorium, principles of equity and other limitations limiting

the rights of creditors generally.

2.5 Non-Contravention. Except as set forth in the Company Disclosure

Schedule, neither the execution, delivery and performance of this Agreement,

and each other agreement to be entered into in connection with this Agreement,

nor the consummation of the transactions contemplated herein will:

(a) violate, contravene or be in conflict with any provision of the

articles of incorporation or bylaws of the Company;

(b) be in conflict with, or constitute a default, however defined

(or an event which, with the giving of due notice or lapse of time, or both,

would constitute such a default), under, or cause or permit the acceleration

of the maturity of, or give rise to any right of termination, cancellation,

imposition of fees or penalties under any debt, note, bond, lease, mortgage,

indenture, license, obligation, contract, commitment, franchise, permit,

instrument or other agreement or obligation to which the Company is a party or

by which the Company or any of the Company's properties or assets is or may be

bound;

(c) result in the creation or imposition of any pledge, lien,

security interest, restriction, option, claim or charge of any kind whatsoever

("Encumbrances") upon any property or assets of the Company under any debt,

obligation, contract, agreement or commitment to which the Company is a party

or by which the Company or any of the Company's assets or properties are

bound; or

(d) materially violate any statute, treaty, law, judgment, writ,

injunction, decision, decree, order, regulation, ordinance or other similar

authoritative matters (referred to herein individually as a "Law" and

collectively as "Laws") of any foreign, federal, state or local governmental

or quasi-governmental, administrative, regulatory or judicial court,

department, commission, agency, board, bureau, instrumentality or other

authority (referred to herein individually as an "Authority" and collectively

as "Authorities").

2.6 Consents and Approvals. Except as set forth in the Company

Disclosure Schedule, with respect to the Company, no consent, approval, order

or authorization of or from, or registration, notification, declaration or

filing with ("Consent") any individual or entity, including without limitation

any Authority, is required in connection with the execution, delivery or

performance of this Agreement by the Company or the consummation by the

Company of the transactions contemplated herein.

2.7 Financial Statements. The Company Disclosure Schedule contains a

copy of the draft financial statements of the Company as of December 31, 2004

(the "Financial Statements"). Except as disclosed therein or in the Company

Disclosure Schedule, the aforesaid Financial Statements: (i) are in accordance

with the books and records of the Company and have been prepared in conformity

with good accounting practices (except as stated therein or in the notes

thereto); and (ii) are true, complete and accurate in all material respects

and fairly present the financial position of the Company as of the date

thereof, and the income or loss for the period then ended. The Company will

deliver audited Financial Statements to legal counsel for the pre-Merger

Shareholders of Parent upon or prior to the filing of a Current Report on Form

8-K following and with respect to the Merger contemplated hereby.

2.8 Absence of Undisclosed Liabilities. The Company does not have any

material liabilities, obligations or claims of any kind whatsoever, whether

secured or unsecured, accrued or unaccrued, fixed or contingent, matured or

unmatured, known or unknown, direct or indirect, contingent or otherwise and

whether due or to become due (referred to herein individually as a "Liability"

and collectively as "Liabilities"), other than: (a) Liabilities that are fully

reflected or reserved for in the Balance Sheet; (b) Liabilities that are set

forth on the Company Disclosure Schedule; (c) Liabilities incurred by the

Company in the ordinary course of business after the date of the Balance Sheet

and consistent with past practice; (d) Liabilities in an amount not to exceed

$50,000 individually or in the aggregate unless such amounts are disclosed on

the Company Disclosure Schedule; or (e) Liabilities for express executory

obligations to be performed after the Closing under the contracts described in

Section 2.14 of the Company Disclosure Schedule.

2.9 Absence of Certain Changes. Except as set forth in the Company

Disclosure Schedule, since December 31, 2004, the Company has owned and

operated its assets, properties and business in the ordinary course of

business and consistent with past practice. Without limiting the generality

of the foregoing, subject to the aforesaid exceptions:

(a) the Company has not experienced any change that has had or

could reasonably be expected to have a Material Adverse Effect on the Company;

and

(b) the Company has not suffered (i) any loss, damage, destruction

or other property or casualty (whether or not covered by insurance) or (ii)

any loss of officers, employees, dealers, distributors, independent

contractors, customers or suppliers, which had or may reasonably be expected

to result in a Material Adverse Effect on the Company.

2.10 Assets. Except as set forth in the Company Disclosure Schedule,

the Company has good and marketable title to all of its assets and properties,

whether or not reflected in the Balance Sheet or acquired after the date

thereof (except for properties sold or otherwise disposed of since the date

thereof in the ordinary course of business and consistent with past

practices), that relate to or are necessary for the Company to conduct its

business and operations as currently conducted (collectively, the "Assets"),

free and clear of any mortgage, pledge, lien, security interest, conditional

or installment sales agreement, encumbrance, claim, easement, right of way,

tenancy, covenant, encroachment, restriction or charge of any kind or nature

(whether or not of record) (a "Lien"), other than (i) liens securing specific

Liabilities shown on the Balance Sheet with respect to which no breach,

violation or default exists; (ii) mechanics', carriers', workers' or other

like liens arising in the ordinary course of business; (iii) minor

imperfections of title that do not individually or in the aggregate, impair

the continued use and operation of the Assets to which they relate in the

operation of the Company as currently conducted; and (iv) liens for current

taxes not yet due and payable or being contested in good faith by appropriate

proceedings ("Permitted Liens").

2.11 Receivables and Payables.

(a) Except as set forth on the Company Disclosure Schedule, all

accounts receivable of the Company represent sales in the ordinary course of

business and, to the Company's knowledge, are current and collectible net of

any reserves shown on the Balance Sheet and none of such receivables is

subject to any Lien other than a Permitted Lien.

(b) Except as set forth on the Company Disclosure Schedule, all

payables by the Company arose in bona fide transactions in the ordinary course

of business and no such payable is delinquent by more than sixty (60) days

beyond the due date in its payment.

2.12 Intellectual Property Rights. The Company owns or has the

unrestricted right to use, and the Company Disclosure Schedule contains a

detailed listing of, all patents, patent applications, patent rights,

registered and unregistered trademarks, trademark applications, tradenames,

service marks, service mark applications, copyrights, internet domain names,

computer programs and other computer software, inventions, know-how, trade

secrets, technology, proprietary processes, trade dress, software and formulae

(collectively, "Intellectual Property Rights") used in, or necessary for, the

operation of its Business as currently conducted or proposed to be conducted.

Except as set forth on the Company Disclosure Schedule, to the Company's

knowledge, the use of all Intellectual Property Rights necessary or required

for the conduct of the Business of the Company as presently conducted and as

proposed to be conducted does not infringe or violate the Intellectual

Property Rights of any person or entity. Except as described on the Company

Disclosure Schedule, to the Company's knowledge: (a) the Company does not own

or use any Intellectual Property Rights pursuant to any written license

agreement; (b) the Company has not granted any person or entity any rights,

pursuant to a written license agreement or otherwise, to use the Intellectual

Property Rights; and (c) the Company owns, has unrestricted right to use and

has sole and exclusive possession of and has good and valid title to, all of

the Intellectual Property Rights, free and clear of all Liens and

Encumbrances. All license agreements relating to Intellectual Property Rights

are binding and there is not, under any of such licenses, any existing default

or event of default (or event which with notice or lapse of time, or both,

would constitute a default, or would constitute a basis for a claim on

non-performance) on the part of the Company or, to the knowledge of the

Company, any other party thereto.

2.13 Litigation. Except as set forth in the Company Disclosure

Schedule, there is no legal, administrative, arbitration, or other proceeding,

suit, claim or action of any nature or investigation, review or audit of any

kind, or any judgment, decree, decision, injunction, writ or order pending,

noticed, scheduled, or, to the knowledge of the Company, threatened or

contemplated by or against or involving the Company, its assets, properties or

business or its directors, officers, agents or employees (but only in their

capacity as such), whether at law or in equity, before or by any person or

entity or Authority, or which questions or challenges the validity of this

Agreement or any action taken or to be taken by the parties hereto pursuant to

this Agreement or in connection with the transactions contemplated herein.

2.14 Contracts and Commitments; No Default.

(a) Except as set forth in the Company Disclosure Schedule, the

Company is not a party to, nor are any of the Assets bound by, any written or

oral:

(i) employment, non-competition, consulting or severance agreement,

collective bargaining agreement, or pension, profit-sharing, incentive

compensation, deferred compensation, stock purchase, stock option, stock

appreciation right, group insurance, severance pay or retirement plan or

agreement;

(ii) indenture, mortgage, note, installment obligation, agreement

or other instrument relating to the borrowing of money by the Company;

(iii) contract, agreement, lease (real or personal property) or

arrangement that (A) is not terminable on less than 30 days' notice without

penalty, (B) is not over one year in length of obligation of the Company, or

(C) involves an obligation of more than $50,000 over its term;

(iv) contract, agreement, commitment or license relating to

Intellectual Property Rights or contract, agreement or commitment of any other

type, whether or not fully performed, not otherwise disclosed pursuant to this

Section 2.14;

(v) obligation or requirement to provide funds to or make any

investment (in the form of a loan, capital contribution or otherwise) in any

person or entity; or

(vi) outstanding sales or purchase contracts, commitments or

proposals that will result in any material loss upon completion or performance

thereof after allowance for direct distribution expenses, or bound by any

outstanding contracts, bids, sales or service proposals quoting prices that

are not reasonably expected to result in a normal profit.

(b) True and complete copies (or summaries, in the case of oral items)

of all agreements disclosed pursuant to this Section 2.14 (the "Company

Contracts") have been provided to Parent for review. Except as set forth in

the Company Disclosure Schedule, all of the Company Contracts items are valid

and enforceable by and against the Company in accordance with their terms, and

are in full force and effect. The Company is not in breach, violation or

default, however defined, in the performance of any of its obligations under

any of the Company Contracts, and no facts and circumstances exist which,

whether with the giving of due notice, lapse of time, or both, would

constitute such breach, violation or default thereunder or thereof, and, to

the knowledge of the Company, no other parties thereto are in a breach,

violation or default, however defined, thereunder or thereof, and no facts or

circumstances exist which, whether with the giving of due notice, lapse of

time, or both, would constitute such a breach, violation or default thereunder

or thereof.

2.15 Compliance with Law; Permits and Other Operating Rights. Except

as set forth in the Company Disclosure Schedule, the Assets, properties,

business and operations of the Company are and have been in compliance in all

respects with all Laws applicable to the Company's assets, properties,

business and operations, except where the failure to comply would not have a

Material Adverse Effect. The Company possesses all material permits, licenses

and other authorizations from all Authorities necessary to permit it to

operate its business in the manner in which it presently is conducted and the

consummation of the transactions contemplated by this Agreement will not

prevent the Company from being able to continue to use such permits and

operating rights. The Company has not received notice of any violation of any

such applicable Law, and is not in default with respect to any order, writ,

judgment, award, injunction or decree of any Authority.

2.16 Brokers. Neither the Company nor, to the knowledge of the

Company, any of the its directors, officers or employees, has employed any

broker, finder, investment banker or financial advisor or incurred any

liability for any brokerage fee or commission, finder's fee or financial

advisory fee, in connection with the transactions contemplated hereby, nor is

there any basis known to the Company for any such fee or commission to be

claimed by any person or entity.

2.17 Issuance