REORGANIZATION AND STOCK
PURCHASE AGREEMENT
by and between
StarTronix International, Inc.
a Delaware corporation
RunTec Inc.
a Delaware corporation
and
StarTronix, Inc.
a Delaware corporation
<PAGE>
REORGANIZATION AND STOCK PURCHASE AGREEMENT
REORGANIZATION AND STOCK PURCHASE AGREEMENT ("Agreement"), dated as of
September 20, 1999, by and between StarTronix International, Inc., a Delaware
corporation (hereinafter referred to as "StarTronix International"), RunTec
Inc., a Delaware corporation (hereinafter referred to as "RunTec") and
StarTronix, Inc., a Delaware corporation (hereinafter referred to as
"StarTronix"). Each of StarTronix International, RunTec and StarTronix shall be
referred to herein as a "Party" and collectively as the "Parties."
W I T N E S S E T H
WHEREAS, StarTronix International owns 100% of the issued and outstanding common
stock of StarTronix (the "StarTronix Shares").
WHEREAS, StarTronix International desires to sell and RunTec desires to
purchase the StarTronix Shares in accordance with the terms set forth herein;
NOW THEREFORE, in consideration of the premises and respective mutual
agreements, covenants, representations and warranties herein contained, it is
agreed between the parties hereto as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Sale of the StarTronix Shares. At the Closing, subject to the
---------------------------------
terms and conditions herein set forth, and on the basis of the representations,
warranties and agreements herein contained, StarTronix International shall sell
to RunTec and RunTec shall purchase from StarTronix International, all of the
StarTronix Shares. As consideration for the receipt of the StarTronix Shares,
RunTec shall execute and deliver to StarTronix International, a promissory note
(the "Note") in the original principal amount of ONE HUNDRED THOUSAND DOLLARS
($100,000.00), in the form attached hereto as Exhibit A.
1.2 Instruments of Conveyance and Transfer. At the Closing, StarTronix
--------------------------------------
International shall deliver to RunTec the StarTronix Shares and RunTec shall
deliver to StarTronix International the Note.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of StarTronix International. To
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induce RunTec to enter into this Agreement and to consummate the transactions
contemplated hereby, StarTronix International represents and warrants, as of the
date hereof and as of the Closing, as follows:
<PAGE>
2.1.1 StarTronix International and StarTronix have the full right,
power and authority to enter into this Agreement and to carry out and consummate
the transaction contemplated herein. This Agreement constitutes the legal,
valid and binding obligation of StarTronix International and StarTronix.
2.1.2 Corporate Existence and Authority of StarTronix International.
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StarTronix International is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. It has all requisite
corporate power, franchises, licenses, permits and authority to own its
properties and assets and to carry on its business as it has been and is being
conducted. It is in good standing in each state, nation or other jurisdiction
wherein the character of the business transacted by it makes such qualification
necessary.
2.1.3 Capitalization of StarTronix International. The authorized
---------------------------------------------
equity securities of StarTronix International consists of 100,000,000 shares of
common stock, of which 23,510,961 shares are issued and outstanding and
10,000,000 shares of preferred stock, of which 50,000 shares of Series C
Preferred Stock are issued and outstanding. No other shares of capital stock of
StarTronix International are issued and outstanding. All of the issued and
outstanding shares have been duly and validly issued in accordance and
compliance with all applicable laws, rules and regulations and are fully paid
and nonassessable. There are no options, warrants, rights, calls, commitments,
plans, contracts or other agreements of any character granted or issued by
StarTronix International which provide for the purchase, issuance or transfer of
any shares of the capital stock of StarTronix International nor are there any
outstanding securities granted or issued by StarTronix International that are
convertible into any shares of the equity securities of StarTronix International
except for the issued and outstanding preferred stock. StarTronix International
is not obligated or committed to purchase, redeem or otherwise acquire any of
its equity. All presently exercisable voting rights in StarTronix International
are vested exclusively in its outstanding shares of common stock, each share of
which is entitled to one vote on every matter to come before it's shareholders,
and other than as may be contemplated by this Agreement, there are no voting
trusts or other voting arrangements with respect to any of StarTronix
International's equity securities.
2.1.4 Corporate Existence and Authority of StarTronix. StarTronix is a
------------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. It has all requisite corporate power, franchises,
licenses, permits and authority to own its properties and assets and to carry on
its business as it has been and is being conducted. It is in good standing in
each state, nation or other jurisdiction wherein the character of the business
transacted by it makes such qualification necessary.
<PAGE>
2.1.5 Capitalization of StarTronix. The authorized equity securities
-------------------------------
of StarTronix consists of 1,500 shares of common stock, no par value, of which
1,500 shares are issued and outstanding. No other shares of capital stock of
StarTronix are issued and outstanding. All of the issued and outstanding shares
have been duly and validly issued in accordance and compliance with all
applicable laws, rules and regulations and are fully paid and nonassessable.
There are no options, warrants, rights, calls, commitments, plans, contracts or
other agreements of any character granted or issued by StarTronix which provide
for the purchase, issuance or transfer of any shares of the capital stock of
StarTronix nor are there any outstanding securities granted or issued by
StarTronix that are convertible into any shares of the equity securities of
StarTronix. StarTronix is not obligated or committed to purchase, redeem or
otherwise acquire any of its equity. All presently exercisable voting rights in
StarTronix are vested exclusively in its outstanding shares of common stock,
each share of which is entitled to one vote on every matter to come before it's
shareholders, and other than as may be contemplated by this Agreement, there are
no voting trusts or other voting arrangements with respect to any of
StarTronix's equity securities.
2.1.6 Execution of Agreement. The execution and delivery of this
-------------------------
Agreement does not, and the consummation of the transactions contemplated hereby
will not: (a) violate, conflict with, modify or cause any default under or
acceleration of (or give any party any right to declare any default or
acceleration upon notice or passage of time or both), in whole or in part, any
charter, article of incorporation, bylaw, mortgage, lien, deed of trust,
indenture, lease, agreement, instrument, order, injunction, decree, judgment,
law or any other restriction of any kind to which either StarTronix
International or StarTronix are a party or by which either of them or any of
their properties are bound; (b) result in the creation of any security interest,
lien, encumbrance, adverse claim, proscription or restriction on any property or
asset (whether real, personal, mixed, tangible or intangible), right, contract,
agreement or business of StarTronix International or StarTronix; (c) violate any
law, rule or regulation of any federal or state regulatory agency; or (d) permit
any federal or state regulatory agency to impose any restrictions or limitations
of any nature on StarTronix International or StarTronix or any of their
respective actions.
2.1.7 Taxes.
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2.1.7.1 All taxes, assessments, fees, penalties, interest and other
governmental charges with respect to StarTronix which have become due and
payable on the date hereof have been paid in full or adequately reserved against
by StarTronix, (including without limitation, income, property, sales, use,
franchise, capital stock, excise, added value, employees' income withholding,
social security and unemployment taxes), and all interest and penalties thereon
with respect to the periods then ended and for all periods thereto;
<PAGE>
2.1.7.2 There are no agreements, waivers or other arrangements
providing for an extension of time with respect to the assessment of any tax or
deficiency against StarTronix, nor are there any actions, suits, proceedings,
investigations or claims now pending against StarTronix, nor are there any
actions, suits, proceedings, investigations or claims now pending against
StarTronix in respect of any tax or assessment, or any matters under discussion
with any federal, state, local or foreign authority relating to any taxes or
assessments, or any claims for additional taxes or assessments asserted by any
such authority, and there is no basis for the assertion of any additional taxes
or assessments against StarTronix, and
2.1.7.3 The consummation of the transactions contemplated by this
Agreement will not result in the imposition of any additional taxes on or
assessments against StarTronix.
2.1.8 Disputes and Litigation. There is no suit, action, litigation,
--------------------------
proceeding, investigation, claim, complaint, or accusation pending, threatened
against or affecting StarTronix or any of its properties, assets or business or
to which StarTronix is a party, in any court or before any arbitrator of any
kind or before or by any governmental agency (including, without limitation, any
federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality), and there is no basis for such suit,
action, litigation, proceeding, investigation, claim, complaint, or accusation;
(b) there is no pending or threatened change in any environmental, zoning or
building laws, regulations or ordinances which affect or could affect StarTronix
or any of its properties, assets or businesses; and (c) there is no outstanding
order, writ, injunction, decree, judgment or award by any court, arbitrator or
governmental body against or affecting StarTronix or any of its properties,
assets or business. There is no litigation, proceeding, investigation, claim,
complaint or accusation, formal or informal, or arbitration pending, or any of
the aforesaid threatened, or any contingent liability which would give rise to
any right of indemnification or similar right on the part of any director or
officer of StarTronix or any such person's heirs, executors or administrators as
against StarTronix.
2.1.9 Compliance with laws. StarTronix has at all times been, and
-----------------------
presently is, in full compliance with, and has not received notice of any
claimed violation of, any applicable federal, state, local, foreign and other
laws, rules and regulations. StarTronix has filed all returns, reports and other
documents and furnished all information required or requested by any federal,
state, local or foreign governmental agency and all such returns, reports,
documents and information are true and complete in all respects. All permits,
licenses, orders, franchises and approvals of all federal, state, local or
foreign governmental or regulatory bodies required of StarTronix for the conduct
of its business have been obtained, no violations are or have been recorded in
respect of any such permits, licenses, orders, franchises and approvals, and
there is no litigation, proceeding, investigation, arbitration, claim, complaint
or accusation, formal or informal, pending or threatened, which may revoke,
limit, or question the validity, sufficiency or continuance of any such permit,
license, order, franchise or approval. Such permits, licenses, orders,
franchises and approvals are valid and sufficient for all activities presently
carried on by StarTronix.
2.1.10 Guaranties. StarTronix has not guaranteed any dividend,
-----------
obligation or indebtedness of any Person; nor has any Person guaranteed any
dividend, obligation or indebtedness of StarTronix.
<PAGE>
2.1.11 Books and Records. StarTronix keeps its books, records and
--------------------
accounts (including, without limitation, those kept for financial reporting
purposes and for tax purposes) in accordance with good business practice and in
sufficient detail to reflect the transactions and dispositions of its assets,
liabilities and equities. The minute books of StarTronix contain records of its
shareholders' and directors' meetings and of action taken by such shareholders
and directors. The meeting of directors and shareholders referred to in such
minute books were duly called and held, and the resolutions appearing in such
minute books were duly adopted. The signatures appearing on all documents
contained in such minute books are the true signatures of the persons purporting
to have signed the same.
2.2 Representations and Warranties of RunTec. To induce StarTronix and
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StarTronix International to enter into this Agreement and to consummate the
transactions contemplated hereby, RunTec represents and warrants, as of the date
hereof and as of the Closing, as follows:
2.2.1 Corporate Existence and Authority of RunTec. RunTec is a
-------------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. It has all requisite corporate power, franchises,
licenses, permits and authority to own its properties and assets and to carry on
its business as it has been and is being conducted. It is in good standing in
each state, nation or other jurisdiction in each state, nation or other
jurisdiction wherein the character of the business transacted by it makes such
qualification necessary.
2.2.2 Capitalization of RunTec. The authorized equity securities of
---------------------------
RunTec consists of 1,500 shares of common stock, of which 1,500 shares are
issued and outstanding as of the date hereof. No other shares of capital stock
of RunTec are issued and outstanding. All of the issued and outstanding shares
have been duly and validly issued in accordance and compliance with all
applicable laws, rules and regulations and are fully paid and nonassessable.
All presently exercisable voting rights in RunTec are vested exclusively in its
outstanding shares of common stock, each share of which is entitled to one vote
on every matter to come before it's shareholders, and other than as may be
contemplated by this Agreement, there are no voting trusts or other voting
arrangements with respect to any of RunTec's equity securities.
<PAGE>
2.2.3 Execution of Agreement. The execution and delivery of this
-------------------------
Agreement and the issuance of the Note does not, and the consummation of the
transactions contemplated hereby will not: (a) violate, conflict with, modify
or cause any default under or acceleration of (or give any party any right to
declare any default or acceleration upon notice or passage of time or both), in
whole or in part, any charter, article of incorporation, bylaw, mortgage, lien,
deed of trust, indenture, lease, agreement, instrument, order, injunction,
decree, judgment, law or any other restriction of any kind to which RunTec is a
party or by which it or any of its properties are bound; (b) result in the
creation of any security interest, lien, encumbrance, adverse claim,
proscription or restriction on any property or asset (whether real, personal,
mixed, tangible or intangible), right, contract, agreement or business of
RunTec; (c) violate any law, rule or regulation of any federal or state
regulatory agency; or (d) permit any federal or state regulatory agency to
impose any restrictions or limitations of any nature on RunTec or any of its
actions.
2.2.4 Taxes.
------
2.2.4.1 All taxes, assessments, fees, penalties, interest and other
governmental charges with respect to RunTec which have become due and payable on
the date hereof have been paid in full or adequately reserved against by RunTec
(including without limitation, income, property, sales, use, franchise, capital
stock, excise, added value, employees' income withholding, social security and
unemployment taxes), and all interest and penalties thereon with respect to the
periods then ended and for all periods thereto;
2.2.4.2 There are no agreements, waivers or other arrangements
providing for an extension of time with respect to the assessment of any tax or
deficiency against RunTec nor are there any actions, suits, proceedings,
investigations or claims now pending against RunTec, nor are there any actions,
suits, proceedings, investigations or claims now pending against RunTec in
respect of any tax or assessment, or any matters under discussion with any
federal, state, local or foreign authority relating to any taxes or assessments,
or any claims for additional taxes or assessments asserted by any such
authority, and there is no basis for the assertion of any additional taxes or
assessments against RunTec, and
2.2.4.3 The consummation of the transactions contemplated by this
Agreement will not result in the imposition of any additional taxes on or
assessments against RunTec.
2.2.5 Disputes and Litigation. There is no suit, action, litigation,
--------------------------
proceeding, investigation, claim, complaint, or accusation pending, threatened
against or affecting RunTec or any of its properties, assets or business or to
which RunTec is a party, in any court or before any arbitrator of any kind or
before or by any governmental agency (including, without limitation, any
federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality), and there is no basis for such suit,
action, litigation, proceeding, investigation, claim, complaint, or accusation;
(b) there is no pending or threatened change in any environmental, zoning or
building laws, regulations or ordinances which affect or could affect RunTec or
any of its properties, assets or businesses; and (c) there is no outstanding
order, writ, injunction, decree, judgment or award by any court, arbitrator or
governmental body against or affecting RunTec or any of its properties, assets
or business. There is no litigation, proceeding, investigation, claim,
complaint or accusation, formal or informal, or arbitration pending, or any of
the aforesaid threatened, or any contingent liability which would give rise to
any right of indemnification or similar right on the part of any director or
officer of RunTec or any such person's heirs, executors or administrators as
against RunTec.
<PAGE>
2.2.6 Compliance with laws. RunTec has at all times been, and
-----------------------
presently is, in full compliance with, and has not received notice of any
claimed violation of, any applicable federal, state, local, foreign and other
laws, rules and regulations. RunTec has filed all returns, reports and other
documents and furnished all information required or requested by any federal,
state, local or foreign governmental agency and all such returns, reports,
documents and information are true and complete in all respects. All permits,
licenses, orders, franchises and approvals of all federal, state, local or
foreign governmental or regulatory bodies required of RunTec for the conduct of
its business have been obtained, no violations are or have been recorded in
respect of any such permits, licenses, orders, franchises and approvals, and
there is no litigation, proceeding, investigation, arbitration, claim, complaint
or accusation, formal or informal, pending or threatened, which may revoke,
limit, or question the validity, sufficiency or continuance of any such permit,
license, order, franchise or approval. Such permits, licenses, orders,
franchises and approvals are valid and sufficient for all activities presently
carried on by RunTec.
2.2.7 Guaranties. RunTec has not guaranteed any dividend, obligation
-----------
or indebtedness of any Person; nor has any Person guaranteed any dividend,
obligation or indebtedness of RunTec.
2.2.8 Books and Records. RunTec keeps its books, records and accounts
-------------------
(including, without limitation, those kept for financial reporting purposes and
for tax purposes) in accordance with good business practice and in sufficient
detail to reflect the transactions and dispositions of its assets, liabilities
and equities. The minute books of RunTec contain records of its shareholders'
and directors' meetings and of action taken by such shareholders and directors.
The meeting of directors and shareholders referred to in such minute books were
duly called and held, and the resolutions appearing in such minute books were
duly adopted. The signatures appearing on all documents contained in such
minute books are the true signatures of the persons purporting to have signed
the same.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 Closing. The Closing shall be deemed to have occurred as of the
--------
date of signing of this Agreement. Subsequent to the signing, the following
shall occur as a single integrated transaction:
<PAGE>
3.2 Delivery by RunTec:
---------------------
(a) RunTec shall deliver to StarTronix International the Note.
3.3 Delivery by StarTronix International:
----------------------------------------
(a) StarTronix International shall deliver to RunTec all of the
StarTronix Shares and all instruments of conveyance and transfer required by
Section 1.2.
ARTICLE 4
CONDITIONS, TERMINATION, AMENDMENT AND WAIVER
4.1 Condition Precedent. This Agreement, and the transactions
--------------------
contemplated hereby, shall be subject to the approval of the Board of Directors
of RunTec, StarTronix International and StarTronix, and, if necessary, the
respective shareholders thereof.
4.2 Termination. Notwithstanding anything to the contrary contained in
------------
this Agreement, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing by the
mutual consent of all of the parties;
4.3 Waiver and Amendment. Any term, provision, covenant,
-----------------------
representation, warranty or condition of this Agreement may be waived, but only
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or
of the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
parties hereto.
ARTICLE 5
COVENANTS
5.1 To induce RunTec to enter into this Agreement and to consummate the
transactions contemplated hereby, and without limiting any covenant, agreement,
representation or warranty made StarTronix International covenants and agrees as
follows:
<PAGE>
5.1.1 Notices and Approvals. StarTronix International agrees: (a) to give
----------------------
and to cause StarTronix to give all notices to third parties which may be
necessary or deemed desirable by RunTec in connection with this Agreement and
the consummation of the transactions contemplated hereby; (b) to use its best
efforts to obtain and to cause StarTronix to obtain, all federal and state
governmental regulatory agency approvals, consents, permit, authorizations, and
orders necessary or deemed desirable by RunTec in connection with this Agreement
and the consummation of the transaction contemplated hereby; and (c) to use its
best efforts to obtain, and to cause StarTronix to obtain, all consents and
authorizations of any other third parties necessary or deemed desirable by
RunTec in connection with this Agreement and the consummation of the
transactions contemplated hereby.
5.1.2 Information for RunTec's Statements and Applications. StarTronix
--------------------------------------------------------
International and StarTronix and their employees, accountants and attorneys
shall cooperate fully with RunTec in the preparation of any statements or
applications made by RunTec to any federal or state governmental regulatory
agency in connection with this Agreement and the transactions contemplated
hereby and to furnish RunTec with all information concerning StarTronix
International and StarTronix necessary or deemed desirable by RunTec for
inclusion in such statements and applications, including, without limitation,
all requisite financial statements and schedules.
5.2 To induce StarTronix International and StarTronix to enter into
this Agreement and to consummate the transactions contemplated hereby, and
without limiting any covenant, agreement, representation or warranty made RunTec
covenants and agrees as follows:
5.2.1 Notices and Approvals. RunTec agrees: (a) to give all notices to
------------------------
third parties which may be necessary or deemed desirable by StarTronix
International in connection with this Agreement and the consummation of the
transactions contemplated hereby; (b) to use its best efforts to obtain all
federal and state governmental regulatory agency approvals, consents, permit,
authorizations, and orders necessary or deemed desirable by StarTronix
International in connection with this Agreement and the consummation of the
transaction contemplated hereby; and (c) to use its best efforts to obtain all
consents and authorizations of any other third parties necessary or deemed
desirable by StarTronix International in connection with this Agreement and the
consummation of the transactions contemplated hereby.
5.2.2 Information for StarTronix International's Statements and
--------------------------------------------------------------
Applications. RunTec and its employees, accountants and attorneys shall
---
cooperate fully with StarTronix International in the preparation of any
statements or applications made by StarTronix International or StarTronix to any
federal or state governmental regulatory agency in connection with this
Agreement and the transactions contemplated hereby and to furnish StarTronix
International with all information concerning RunTec necessary or deemed
desirable by StarTronix International for inclusion in such statements and
applications, including, without limitation, all requisite financial statements
and schedules.
<PAGE>
ARTICLE 6
MISCELLANEOUS
6.1 Expenses. Except as otherwise specifically provided for herein,
---------
whether or not the transactions contemplated hereby are consummated, each of the
parties hereto shall bear all taxes of any nature (including, without
limitation, income, franchise, transfer and sales taxes) and all fees and
expenses relating to or arising from its compliance with the various provisions
of this Agreement and such party's covenants to be performed hereunder, and
except as otherwise specifically provided for herein, each of the parties hereto
agrees to pay all of its own expenses (including, without limitation, attorneys
and accountants' fees and printing expenses) incurred in connection with this
Agreement, the transactions contemplated hereby, the negotiations leading to the
same and the preparations made for carrying the same into effect, and all such
taxes, fees and expenses of the parties hereto shall be paid prior to Closing.
6.2 Notices. Any notice, request, instruction or other document
--------
required by the terms of this Agreement, or deemed by any of the parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by prepaid telegram or delivered or mailed by registered or
certified mail, postage prepaid, with return receipt requested, to the following
addresses:
To RunTec:
RunTec Inc.
2901 Pacific Coast Highway, Suite 360
Newport Beach, CA 92663
Attn: Jimmy M. Sellards
Facsimile: (949) 574-7119
To StarTronix or StarTronix International:
StarTronix International, Inc.
7700 Irvine Center Drive, Suite 510
Irvine, CA 92618
Attn: Greg Gilbert
Facsimile (949) 646-7997
<PAGE>
with a copy to:
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Attn: M. Richard Cutler, Esq.
Facsimile (949) 719-1988
The persons and addresses set forth above may be changed from time to time
by a notice sent as aforesaid. If notice is given by delivery in accordance
with the provisions of this Section, said notice shall be conclusively deemed
given at the time of such delivery. If notice is given by mail in accordance
with the provisions of this Section, such notice shall be conclusively deemed
given forty-eight (48) hours after deposit thereof in the United States mail.
If notice is given by telegraph in accordance with the provisions of this
Section, such notice shall be conclusively deemed given at the time that the
telegraphic agency shall confirm delivery thereof to the addressee.
6.3 Entire Agreement. This Agreement, together with the schedule and
------------------
exhibits hereto, sets forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement, or exhibits hereto or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
6.4 Survival of Representations. All statements of fact (including
------------------------------
financial statements) contained in the schedules, the exhibits, the certificates
or any other instrument delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by the respective party hereunder. All
representation, warranties agreements and covenants hereunder shall survive the
Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the parties or of any information a party may have
in respect thereto. Consummation of the transactions contemplated hereby shall
not be deemed or construed to be a waiver of any right or remedy possessed by
any party hereto, notwithstanding that such party knew or should have known at
the time of Closing that such right or remedy existed.
6.5 Incorporated by Reference. All documents (including, without
----------------------------
limitation, all financial statements) delivered as part hereof or incident
hereto are incorporated as a part of this Agreement by reference.
<PAGE>
6.6 Remedies Cumulative. No remedy herein conferred upon and Party is
---------------------
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
6.7 Execution of Additional Documents. Each party hereto shall make,
------------------------------------
execute, acknowledge and deliver such other instruments and documents, and take
all such other actions as may be reasonably required in order to effectuate the
purposes of this Agreement and to consummate the transactions contemplated
hereby.
6.8 Finders' and Related Fees. Each of the parties hereto is
-----------------------------
responsible for, and shall indemnify the other against, any claim by any third
party to a fee, commission, bonus or other remuneration arising by reason of any
services alleged to have been rendered to or at the instance of said party to
this Agreement with respect to this Agreement or to any of the transactions
contemplated hereby.
6.9 Governing Law. This Agreement has been negotiated and executed in
---------------
the State of California and shall be construed and enforced in accordance with
the laws of such state.
6.10 Forum. Each of the parties hereto agrees that any action or suit
------
which may be brought by any party hereto against any other party hereto in
connection with this Agreement or the transactions contemplated hereby may be
brought only in a federal or state court in Orange County, California.
6.11 Attorneys' Fees. Except as otherwise provided herein, if a
----------------
dispute should arise between the parties including, but not limited to
arbitration, the prevailing party shall be reimbursed by the nonprevailing party
for all reasonable expenses incurred in resolving such dispute, including
reasonable attorneys' fees exclusive of such amount of attorneys' fees as shall
be a premium for result or for risk of loss under a contingency fee arrangement.
6.12 Binding Effect and Assignment. This Agreement shall inure to the
-------------------------------
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, legal representatives and assigns.
6.13 Counterparts. This Agreement may be executed in counterparts,
-------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date first written hereinabove.
RUNTEC INC.
a Delaware corporation ("RUNTEC")
/s/ Jimmy M. Sellards
___________________________________
By: Jimmy M. Sellards
Its: ______________
STARTRONIX INTERNATIONAL, INC.
a Delaware corporation ("STARTRONIX INTERNATIONAL")
/s/ Greg Gilbert
___________________________________
By: Greg Gilbert
Its: President
STARTRONIX, INC.
a Delaware corporation ("STARTRONIX")
/s/ Greg Gilbert
___________________________________
By: Greg Gilbert
Its: President
<PAGE>
EXHIBIT "A"
PROMISSORY NOTE
$100,000 Irvine, California
September 20, 1999
FOR VALUE RECEIVED, the undersigned RUNTEC INC., a Delaware corporation
("RunTec"), hereby promises to pay to the order of STARTRONIX INTERNATIONAL,
INC., a Delaware Corporation, or its assign or assigns ("StarTronix
International" or "Payee"), at 7700 Irvine Center Drive, Suite 510, Irvine, CA
92618 or at such other place as Payee or any holder hereof may from time to time
designate, the principal sum of ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00), and to pay simple interest at said office or place from the date
hereof on the unpaid principal balance amount hereof at a rate of twelve percent
(12%) per annum. This note shall be payable, including the principal balance
and any and all interest accruing hereunder, due and payable on or before
September 20, 2000. Interest shall be calculated on the basis of a 365-day year
and actual days. In no event shall the rate of interest hereunder exceed the
maximum interest rate permitted by applicable law.
RunTec and all endorsers, guarantors and sureties hereof hereby severally
waive diligence, demand, presentment, protest and notice of any kind, and assent
to extensions of the time of payment, release, surrender or substitution of
security, or forbearance or other indulgence, without notice.
RunTec may, at its option, at any time and from time to time, prepay all or
any part of the principal balance of this Note, without penalty or premium,
provided that concurrently with each such prepayment RunTec shall pay accrued
interest on the principal so prepaid to the date of such prepayment.
This Note may not be changed, modified or terminated orally, but only by an
agreement in writing signed by the party to be charged.
In the event the Payee or any holder hereof shall refer this Note to an
attorney for collection, RunTec agrees to pay, in addition to unpaid principal
and interest, all the costs and expenses incurred in attempting or effecting
collection hereunder, including reasonable attorney's fees, whether or not suit
is instituted.
In the event of any litigation with respect to this Note, RunTec waives the
right to a trial by jury and all rights of setoff and rights to interpose
counterclaims and cross-claims. RunTec hereby irrevocably consents to the
jurisdiction of the courts of the State of California in connection with any
action or proceeding arising out of or relating to this Note.
This Note shall be governed by California law, without reference to any
choice of law principles thereof.
RUNTEC INC.
/s/ Jimmy M. Sellards
By: _______________________________
Jimmy M. Sellards, _________________
