STOCK PURCHASE AGREEMENT, dated as of August 6, 1999 by and between ZOG
INVESTMENTS, LTD., a Belize corporation, or their nominee ("PURCHASER") and
STARTRONIX INTERNATIONAL, INC. ("SELLER").
W I T N E S S E T H
WHEREAS, SELLER desires to sell 150,000 shares of StarTronix International,
Inc. Common Stock (the "Shares") to PURCHASER on the terms and conditions set
forth in this Stock Purchase Agreement (hereinafter called "Agreement"); and
WHEREAS, PURCHASER desires to buy the Shares on the terms and conditions
set forth herein;
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the parties hereto as
follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Sale of the Shares. Upon the execution of this Agreement as
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provided in Section 3.1 hereto (the "Closing"), subject to the terms and
conditions herein set forth, and on the basis of the representations, warranties
and agreements herein contained, SELLER shall sell to PURCHASER, and PURCHASER
shall purchase from SELLER, the Shares.
1.2 Instruments of Conveyance and Transfer. Simultaneously with the
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Closing, SELLER shall deliver a certificate or certificates representing the
Shares to PURCHASER, in form and substance satisfactory to PURCHASER, as shall
be effective to vest in PURCHASER all right, title and interest in and to all of
the Shares, as set forth in Section 3 herein.
1.3 Consideration and Payment for the Shares. In consideration for the
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Shares PURCHASER shall pay the purchase price equal to $1.00 per share, for the
total purchase price of $150,000 ("Purchase Price"). The Purchase Price shall
paid by PURCHASER to counsel for the SELLER on the Closing Date in accordance
with the instructions provided in paragraph 3.3.
ARTICLE 2
REPRESENTATIONS AND COVENANTS OF SELLER AND PURCHASER
2.1 The SELLER hereby represents and warrants that:
(a) It shall transfer title, in and to the Shares, to the PURCHASER free and
clear of all liens, security interests, pledges, encumbrances, charges,
restrictions, demands and claims, of any kind and nature whatsoever, whether
direct or indirect or contingent, except as set forth in Paragraph 2.2 herein.
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2.2 On the Closing Date as defined herein in Section 3.1, the SELLER
shall deliver to the PURCHASER certificates representing the Shares subject to
no liens, security interests, pledges, encumbrances, charges, restrictions,
demands or claims in any other party whatsoever, except as set forth in the
legend on the certificate(s), which legend shall provide as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF FOR A PERIOD OF ONE YEAR FROM THE ISSUANCE THEREOF EXCEPT
(i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE STATE LAWS OR (ii) UPON THE EXPRESS WRITTEN AGREEMENT OF THE COMPANY
AND COMPLIANCE, TO THE EXTENT APPLICABLE, WITH RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES.)
2.3. The PURCHASER hereby represents and warrants that:
(a) PURCHASER acknowledges that the Shares will be "restricted securities"
(as such term is defined in Rule 144 promulgated under the Securities Act of
1933, as amended ("Rule 144")), that the Shares will include the foregoing
restrictive legend, and, except as otherwise set forth in this Agreement, that
the Shares cannot be sold for a period of one year from the date of issuance
unless registered with the SEC and qualified by appropriate state securities
regulators, or unless PURCHASER obtains written consent from the SELLER and
otherwise complies with an exemption from such registration and qualification
(including, without limitation, compliance with Rule 144).
(b) The PURCHASER has 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 PURCHASER.
(c) The PURCHASER acknowledges that investment in the Shares involves
substantial risks and is suitable only for persons of adequate financial means
who can bear the economic risk of an investment in the Shares for an indefinite
period of time. PURCHASER further represents that he:
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(1) has adequate means of providing for his or her current needs and
possible personal contingencies, has no need for liquidity in his investment in
the Shares, is able to bear the substantial economic risks of an investment in
the Shares for an indefinite period, and, at the present time, can afford a
complete loss of his investment;
(2) is an "Accredited Investor" as that term is defined in Section 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"), in that (i) PURCHASER is a natural person whose individual net worth,
or joint net worth with PURCHASER's spouse, exceeds $1,000,000 and either he is
able to bear the economic risk of investment in the proposed investments or the
proposed investments will not exceed 10% of his net worth or joint net worth
with PURCHASER's spouse and/or (ii) PURCHASER is a natural person who had
individual income in excess of $200,000 in each of the two most recent years, or
joint income with such investor's spouse in excess of $300,000 in each of those
years and reasonably expects to reach the same income level in the current year,
and either PURCHASER is able to bear the economic risk of investment in the
proposed investments or the proposed investments will not exceed 10% of his or
her net worth or joint net worth with PURCHASER's spouse;
(3) does not have an overall commitment to investments which are not readily
marketable that is disproportionate to his net worth, and that his investment in
the Shares will not cause such overall commitment to become excessive;
(4) is acquiring the Shares for his own account, for investment purposes
only and not with a view toward resale, assignment or distribution thereof, and
no other person has a direct or indirect, beneficial interest, in whole or in
part, in such Shares;
(5) has such knowledge and experience in financial, tax and business matters
that he is capable of evaluating the merits and risks of an investment in the
Shares;
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(6) has been given the opportunity to ask questions of and to receive
answers from persons acting on each of the SELLERS' behalf concerning the terms
and conditions of this transaction and also has been given the opportunity to
obtain any additional information which each of the SELLERS possess or can
acquire without unreasonable effort or expense. As a result, PURCHASER is
cognizant of the financial condition, capitalization, use of proceeds from this
financing and the operations and financial condition of StarTronix
International, Inc., has available full information concerning their affairs and
has been able to evaluate the merits and risks of the investment in the Shares;
and
(7) The funds provided for the PURCHASER's purchase are either separate
property, community property over which the signatory(ies) hereto has or have
the right of control or are otherwise funds as to which the undersigned has the
sole right of management.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 Closing. The Closing shall be deemed to have occurred upon the
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date of signing of this Agreement. Subsequent to the signing, the following
shall occur as a single integrated transaction:
3.2 Delivery by SELLER.
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(a) SELLER shall deliver to the PURCHASER the stock certificate and
any and all other instruments of conveyance and transfer required by Section
1.2.
(b) SELLER shall deliver, or cause to be delivered, to the PURCHASER
such instruments, documents and certificates as are required to be delivered by
SELLER or its representatives pursuant to the provisions of this Agreement.
3.3 Delivery by PURCHASER.
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(a) The PURCHASER shall deliver the Purchase Price as required in Section
1.3 made payable to "The Law Offices of M. Richard Cutler fbo StarTronix
International, Inc." to 610 Newport Center Drive, Suite 800, Newport Beach, CA
92660, Attn: M. Richard Cutler, Esq.
(b) The PURCHASER shall deliver, or cause to be delivered, to SELLER such
instruments, documents and certificates as are required to be delivered by the
PURCHASER or its representatives pursuant to the provisions of this Agreement.
ARTICLE 4
TERMINATION, AMENDMENT AND WAIVER
4.1 Termination. Notwithstanding anything to the contrary contained in
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this Agreement, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to delivery of the
Purchase Price solely by the mutual consent of all of the parties.
<PAGE>
4.2 Waiver and Amendment. Any term, provision, covenant,
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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
MISCELLANEOUS
5.1 Entire Agreement. This Agreement sets forth the entire agreement and
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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 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.
5.2 Notices. All notices provided for in this Agreement shall be in
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writing signed by the party giving such notice, and delivered personally or sent
by overnight courier or messenger or sent by registered or certified mail (air
mail if overseas), return receipt requested, or by telex, facsimile
transmission, telegram or similar means of communication. Notices shall be
deemed to have been received on the date of personal delivery, telex, facsimile
transmission, telegram or similar means of communication, or if sent by
overnight courier or messenger, shall be deemed to have been received on the
next delivery day after deposit with the courier or messenger, or if sent by
certified or registered mail, return receipt requested, shall be deemed to have
been received on the third business day after the date of mailing. Notices
shall be sent to the addresses set forth below:
If to SELLER:
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StarTronix International, Inc.
7700 Irvine Center Drive, Suite 510
Irvine, California 92618
Attn: Greg Gilbert, President
Facsimile (949) 646-7997
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With a copy to:
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Law Offices of M. Richard Cutler, Esq.
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Facsimile: (949) 719-1988
Attention: M. Richard Cutler, Esq.
If to Purchaser:
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Zog Investments, Ltd.
c/o D.W. Barton
177 Riverside, Suite F-100
Newport Beach, CA 92663
5.3 Choice of Law and Venue. This Agreement and the rights of the
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parties hereunder shall be governed by and construed in accordance with the laws
of the State of California including all matters of construction, validity,
performance, and enforcement and without giving effect to the principles of
conflict of laws.
5.4 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
5.5 Attorneys' Fees. Except as otherwise provided herein, if a dispute
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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.
5.6 Taxes. Any income taxes required to be paid in connection with the
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payments due hereunder, shall be borne by the party required to make such
payment. Any withholding taxes in the nature of a tax on income shall be
deducted from payments due, and the party required to withhold such tax shall
furnish to the party receiving such payment all documentation necessary to prove
the proper amount to withhold of such taxes and to prove payment to the tax
authority of such required withholding.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date first written hereinabove.
PURCHASER SELLER
ZOG INVESTMENTS, LTD. STARTRONIX INTERNATIONAL, INC.
/s/ Zog Investments, Ltd /s/ Greg Gilbert
___________________________ _______________________________
By: _____________________ By: Greg Gilbert
Its: _____________________ Its: President
