AGREEMENT AND PLAN OF REORGANIZATION

     THIS AGREEMENT AND PLAN OF  REORGANIZATION  (the  "Agreement")  is made and
                                                        ---------
entered into as of March 31, 2002 by and among Gateway  International  Holdings,
Inc., a Nevada  corporation  (the "Parent"),  GWIH  Acquisition  Corp., a Nevada
                                   ------
corporation and a wholly-owned  subsidiary of Parent (the "Sub"),  Bechler Cams,
                                                           ---
Inc., a California  corporation  (the  "Company")  and Daniel  Lennert and Laura
                                        -------
Stearman (collectively, the "Shareholders").
                             ------------

                                    RECITALS

     A. The Boards of Directors  of each of the Company,  Parent and Sub believe
it is in the best  interests of each company and their  respective  shareholders
that Parent acquire the Company through the statutory merger of the Sub with and
into the Company (the "Merger") and, in furtherance  thereof,  have approved the
Merger.

     B.  Pursuant  to the  Merger,  among  other  things,  all of the issued and
outstanding  shares of capital stock of the Company shall be converted  into the
right to receive the consideration set forth in Section 1.2.

     C. The parties  intend that the Merger shall  constitute  a  reorganization
within the  meaning of Section  368 of the  Internal  Revenue  Code of 1986,  as
amended (the "Code").
              ----

     D. The Company and the  Shareholders,  on the one hand, and Parent and Sub,
on the other hand, desire to make certain representations, warranties, covenants
and other agreements in connection with the Merger.

     NOW,   THEREFORE,   in  consideration   of  the  covenants,   promises  and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:


                                    ARTICLE I
                                   THE MERGER

     1.1 The  Merger.  At the  Effective  Time (as  defined in Section  1.3) and
         -----------
subject  to and  upon  the  terms  and  conditions  of  this  Agreement  and the
applicable  provisions of the Nevada  Revised  Statutes  ("Nevada  Law") and the
                                                           -----------
California General  Corporation Law ("California  Law"), the Sub shall be merged
                                      ---------------
with and into the  Company,  the separate  corporate  existence of the Sub shall
cease and the Company  shall  continue  as the  surviving  corporation  and as a
wholly-owned  subsidiary  of the Parent.  The  surviving  corporation  after the
Merger is hereinafter sometimes referred to as the "Surviving Corporation."
                                                    ---------------------

     1.2 Merger  Consideration.  As  consideration  for the Merger (the  "Merger
         ---------------------                                            ------
Consideration"),  Parent  shall issue to the  Shareholders  an  aggregate of One
-------------
Million Three Hundred  Thousand shares of Parent common stock,  $0.001 par value
(the "Parent Common Stock").
      -------------------

<PAGE>

     1.3 Effective Time. Unless this Agreement is earlier terminated pursuant to
         --------------
Section  8.1,  the  closing of the  Merger  (the  "Closing")  will take place as
                                                   -------
promptly as  practicable,  but no later than five (5)  business  days  following
satisfaction or waiver of the conditions set forth in Article VI, at the offices
of Jeffers,  Shaff & Falk,  LLP,  18881 Von Karman Avenue,  Suite 1400,  Irvine,
California,  unless  another place or time is agreed to in writing by Parent and
the Company.  The date upon which the Closing actually occurs is herein referred
to as the "Closing  Date." On the Closing Date,  the parties  hereto shall cause
           -------------
the  Merger  to be  consummated  by  filing a  Certificate  of  Merger  (or like
instrument)  substantially in the form attached hereto as Exhibit A (the "Merger
                                                          ---------       ------
Certificate")  with the  Secretary  of State  of the  State of  Nevada - and the
-----------
Secretary of State of the State of California, in accordance with the applicable
provisions  of Nevada  Law and  California  Law (the time of  acceptance  by the
Secretary  of State of the State of  Nevada of such  filing  being  referred  to
herein as the "Effective Time").
               --------------

     1.4 Effect of the Merger.  At the Effective  Time, the effect of the Merger
         --------------------
shall be as provided in the  applicable  provisions of Nevada Law and California
Law. Without limiting the generality of the foregoing,  and subject thereto,  at
the Effective Time, all the property, rights, privileges,  powers and franchises
of the Company and Sub shall vest in the Surviving  Corporation,  and all debts,
liabilities  and  duties  of  the  Company  and  Sub  shall  become  the  debts,
liabilities and duties of the Surviving Corporation.

     1.5 Certificate of Incorporation; Bylaws.
         ------------------------------------

     (a) Unless  otherwise  determined by Parent prior to the Effective Time, at
the Effective Time, the Certificate of Incorporation of the Company shall be the
Certificate  of  Incorporation  of the Surviving  Corporation  until  thereafter
amended as provided by law and such Certificate of Incorporation.

     (b) The  Bylaws  of the  Company,  as in  effect  immediately  prior to the
Effective  Time,  shall  be  the  Bylaws  of  the  Surviving  Corporation  until
thereafter amended.

     1.6  Directors and  Officers.  The  directors of the Surviving  Corporation
          -----------------------
immediately after the Effective Time shall be Daniel Lennert and Laura Stearman,
each to hold the office of director of the Surviving  Corporation  in accordance
with the  provisions of the  applicable  laws of the State of California and the
Certificate of Incorporation and Bylaws of the Surviving Corporation until their
successors  are duly  qualified  and  elected.  The  officers  of the  Surviving
Corporation  immediately  after the Effective  Time shall be Daniel  Lennert and
Laura  Stearman,  each to hold office in accordance  with the  provisions of the
Bylaws of the Surviving Corporation.

     1.7 Effect of Merger on the Capital Stock of the Constituent Corporations.
         ---------------------------------------------------------------------
     (a) Certain Definitions.  For all purposes of this Agreement, the following
terms shall have the following meanings:

          "Company  Capital  Stock"  shall  mean  shares of common  stock of the
           -----------------------
Company and shares of any other capital stock of the Company.

          "Company  Common Stock" shall mean shares of the common stock,  no par
           ---------------------
value per share, of the Company.

                                       2
<PAGE>
          "Exchange  Ratio" shall be equal to the  quotient  obtained by
           ---------------
dividing (i) the Merger  Consideration  (as defined  below) by the total  number
of shares of Company Capital Stock that are issued and outstanding   immediately
prior to the Effective Time.

          "GAAP"  shall  mean U.S.  generally  accepted  accounting   principles
           ----
consistent  with the reporting  practices and principles  used by Parent and the
Company from time to time.

          "Knowledge"  shall mean actual knowledge or what would be within the
           ---------
actual knowledge of a prudent person after reasonable investigation.

          "Merger  Shares"  means that number of shares of Parent  Common Stock
           --------------
to be issued to the Shareholders pursuant to Subsection 1.2.

          "Parent  Common  Stock" shall mean shares of the common  stock, $0.001
           ---------------------
par value per share, of Parent.

     (b) Effect on Capital Stock. At the Effective Time, by virtue of the Merger
         -----------------------
and without any action on the part of Sub, the Company or the Shareholders, each
share of Company Capital Stock issued and outstanding  immediately  prior to the
Effective Time will be canceled and extinguished and be converted  automatically
into the right to receive,  upon surrender of the certificate  representing such
share of Company Capital Stock in the manner provided in Section 1.8, a fraction
of the Merger Consideration, as determined pursuant to Section 1.2.

     (c)  Adjustment  to Parent  Common  Stock.  The  number of shares of Parent
          ------------------------------------
Common Stock issuable hereunder shall be adjusted to reflect fully the effect of
any stock split,  reverse stock split, stock dividend (including any dividend or
distribution   of   securities    convertible   into   Parent   Common   Stock),
reorganization,  recapitalization  or other like change  with  respect to Parent
Common Stock occurring after the date hereof.

     (d) Fractional  Shares. No fractional share of Parent Common Stock shall be
         ------------------
issued in the Merger. In lieu thereof,  any fractional share shall be rounded up
to the nearest whole share of Parent Common Stock.

     1.8 Surrender of Certificates.  On and after the Effective Time, all of the
         -------------------------
outstanding  certificates  which  prior to that time  represented  shares of the
Company Capital Stock shall be deemed for all purposes to evidence  ownership of
and to represent  the right to receive the Merger  Consideration  into which the
shares of the Company  represented by such  certificates  have been converted as
herein provided. The registered owner on the books and records of the Company or
its transfer agent of any such outstanding stock certificate  shall,  until such
certificate  shall have been surrendered for transfer or conversion or otherwise
accounted  for to the Parent or its  transfer  agents,  have and be  entitled to
exercise any voting and other rights with respect to and to receive any dividend
and  other  distributions  upon  the  shares  of the  Parent  evidenced  by such
outstanding certificate as above provided.

                                       3
<PAGE>

     1.9 No  Further  Ownership  Rights in  Company  Capital  Stock.  The Merger
         ----------------------------------------------------------
Consideration  to be issued pursuant to Section 1.2 above upon the surrender for
exchange of shares of Company  Capital Stock in accordance with the terms hereof
shall be deemed to be full  satisfaction of all rights pertaining to such shares
of  Company  Capital  Stock,  and  there  shall be no  further  registration  of
transfers  on the  records  of the  Surviving  Corporation  of shares of Company
Capital Stock that were outstanding immediately prior to the Effective Time. If,
after  the  Effective  Time,   certificates   are  presented  to  the  Surviving
Corporation for any reason,  they shall be canceled and exchanged as provided in
this Article I.

     1.10 Tax and Accounting Consequences.  It is intended by the parties hereto
          -------------------------------
that the Merger shall constitute a reorganization  within the meaning of Section
368 of the  Code.  Each  party  has  consulted  with  its own tax  advisors  and
accountants with respect to the tax and accounting  consequences,  respectively,
of the Merger.

     1.11 Taking of Necessary Action;  Further Action. If, at any time after the
          --------------------------
Effective  Time,  any further  action is necessary or desirable to carry out the
purposes  of this  Agreement  and to vest the  Surviving  Corporation  with full
right, title and possession to all assets, property, rights, privileges,  powers
and  franchises  of the Company  and Sub,  the  officers  and  directors  of the
Company,  Parent and Sub are fully  authorized  in the name of their  respective
corporations  or otherwise to take, and will take, all such lawful and necessary
action.


                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                              AND THE SHAREHOLDERS

     Each of the Company and the  Shareholders  hereby,  jointly and  severally,
represent  and  warrant to Parent and Sub,  subject  to such  exceptions  as are
specifically  disclosed in the disclosure schedule  (referencing the appropriate
section  numbers)  supplied by the Company and the  Shareholders  to Parent (the
"Disclosure Schedule"), and dated as of the date hereof that on the date hereof
 -------------------
and as of the Effective Time as though made at the Effective Time as follows:

         2.1 Organization  of  the  Company. The  Company  is a corporation duly
             ---------------------------
organized,  validly existing and in good standing under the laws of the State of
California.  The Company has the corporate  power to own its  properties  and to
carry on its business as now being  conducted.  The Company is duly qualified to
do business and in good standing as a foreign  corporation in each  jurisdiction
in which it conducts business. The Company has delivered a true and correct copy
of its Articles of Incorporation and Bylaws, each as amended to date, to Parent.
Schedule 2.1 lists the directors and officers of the Company. The operations now
being conducted by the Company have not been conducted under any other name.

         2.2 Subsidiaries.  The  Company  does  not have, and has never had, any
             ------------
subsidiaries  or affiliated  companies  and does not otherwise  own, and has not
otherwise  owned,  any shares in the capital of or any  interest in, or control,
directly or indirectly, any corporation, partnership, association, joint venture
or other business entity.

                                       4
<PAGE>

         2.3 Company Capital Structure.
             -------------------------

     (a) The authorized capital stock of the Company consists of 1,000 shares of
authorized  Company Common Stock of which 100 shares are issued and  outstanding
as of the  date of this  Agreement.  The  Company  Capital  Stock is held by the
persons,  with the domicile  addresses  and in the amounts set forth in Schedule
2.3(a).  All outstanding  shares of Company  Capital Stock are duly  authorized,
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights  created by  statute,  the  Articles  of  Incorporation  or Bylaws of the
Company or any agreement to which the Company is a party or by which it is bound
and have been issued in compliance with federal and state securities laws. There
are no declared or accrued  unpaid  dividends  with respect to any shares of the
Company Capital Stock. The Company has no other capital stock authorized, issued
or outstanding.

     (b)  Except  as set forth on  Schedule  2.3(b),  there  are no  outstanding
options,  warrants,  calls, rights,  commitments or agreements of any character,
written  or  oral,  to  which  the  Company  is a party  or by which it is bound
obligating the Company to issue,  deliver,  sell, repurchase or redeem, or cause
to be  issued,  delivered,  sold,  repurchased  or  redeemed,  any shares of the
capital  stock of the  Company  or  obligating  the  Company  to grant,  extend,
accelerate the vesting of, change the price of, or otherwise amend or enter into
any such option,  warrant, call, right,  commitment or agreement.  Except as set
forth on Schedule 2.3(b),  there are no outstanding stock appreciation,  phantom
stock,  profit  participation,  or other  similar  rights  with  respect  to the
Company.   There  are  no  voting  trusts,   proxies,  or  other  agreements  or
understandings with respect to the voting stock of the Company.

         2.4 Authority.  Each  of  the  Company  and  the  Shareholders  has all
             ---------
requisite  power and  authority  to enter into this  Agreement  and any  Related
Agreements (as hereinafter defined) to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and any Related Agreements to which it is a party and the consummation
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of the Company, and no further action
is required  on the part of the Company or the  Shareholders  to  authorize  the
Agreement,  any Related  Agreements to which it is a party and the  transactions
contemplated hereby and thereby,  subject only to the approval of this Agreement
by the  Shareholders.  The Board of  Directors  of the Company  has  unanimously
approved  this  Agreement  and  the  Merger.  This  Agreement  and  any  Related
Agreements  to which the Company or the  Shareholders  is a party have been duly
executed and delivered by the Company or the  Shareholders,  as the case may be,
and, assuming the due authorization, execution and delivery by the other parties
hereto and thereto,  constitute the valid and binding  obligation of the Company
and the Shareholders,  as the case may be,  enforceable in accordance with their
respective  terms,  subject  to the  laws of  general  application  relating  to
bankruptcy,  insolvency  and the relief of debtors and to rules of law governing
specific  performance,  injunctive  relief  or  other  equitable  remedies.  The
"Related Agreements" shall  mean  all such ancillary agreements required in this
 ------------------
Agreement  to  be  executed  and  delivered  in connection with the transactions
contemplated hereby.

         2.5 No Conflict. Except as set forth in Schedule 2.5, the execution and
             -----------
delivery of this  Agreement  and any Related  Agreements to which the Company or
the  Shareholders  are a party by either the Company or the Shareholders do not,
and, the consummation of the transactions contemplated hereby and thereby will

                                       5
<PAGE>

not,  conflict  with,  or result in any  violation of, or default under (with or
without  notice  or  lapse  of  time,  or  both),  or give  rise  to a right  of
termination,  cancellation,  modification  or  acceleration of any obligation or
loss of any benefit under (any such  event,  a  "Conflict") (i) any provision of
                                                 --------
the  Articles of  Incorporation  and Bylaws of the Company,  (ii) any  mortgage,
indenture, lease, contract or other agreement or instrument, permit, concession,
franchise  or license to which the Company or the  Shareholders  or any of their
respective  properties  or assets are  subject,  or (iii) any  judgment,  order,
decree, statute, law, ordinance, rule or regulation applicable to the Company or
the Shareholders or their respective properties or assets.

         2.6 Consents.  No consent, waiver, approval, order or authorization of,
             --------
or registration, declaration or filing with, any court, administrative agency or
commission or other federal,  state, county, local or other foreign governmental
authority, instrumentality,  agency or commission ("Governmental Entity") or any
                                                    --------------------
third party, including a party to any agreement with the Company (so as not to
trigger any Conflict), is required by or with respect to the Company or the
Shareholders in connection with the execution and delivery of this Agreement and
any Related Agreements to which the Company or the Shareholders are a party or
the consummation of the transactions contemplated hereby and thereby, except for
(i) such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable securities laws
thereby, and (ii) the filing of the Merger Certificate with the Secretary of
State of the State of Nevada and the Secretary of State of the State of
California.

         2.7 Company Financial Statements. Schedule 2.7 sets forth the Company's
             ----------------------------
unaudited  balance  sheet  as of  March  31,  2001  and  the  related  unaudited
statements of income and cash flow for the  twelve-month  period ended March 31,
2001 and the Company's  unaudited balance sheet as of December 31, 2001, and the
related  unaudited  statements  of income and cash flow for the nine months then
ended (collectively, the "Unaudited Financials").  The  Unaudited Financials are
                          ---------------------
correct in all material respects and have been prepared in accordance with GAAP,
applied on a basis  consistent  throughout the periods  indicated and consistent
with each other  (except that the  Unaudited  Financials  do not contain all the
notes that may be required by GAAP). The Unaudited Financials present fairly the
consolidated  financial  condition  and  consolidated  operating  results of the
Company and any consolidated subsidiaries as of the dates and during the periods
indicated  therein,  subject  in the case of the  Unaudited  Financials  for the
period ended December 31, 2001, to normal year-end  adjustments,  which will not
be material in amount or significance.  The Company's unaudited balance sheet as
of December 31, 2001 shall be hereinafter referred to as the "Current Balance
                                                              ---------------
Sheet."
-----

         2.8  No   Undisclosed  Liabilities.  The  Company  has   no  liability,
              -------------------------------
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of
any type, whether accrued,  absolute,  contingent,  matured,  unmatured or other
(whether or not required to be reflected in financial  statements  in accordance
with GAAP), which individually or in the aggregate (i) has not been reflected in
the Current  Balance  Sheet,  or (ii) has not arisen in the  ordinary  course of
business consistent with past practices since December 31, 2001.

         2.9  No Changes.  Except as set forth in Schedule 2.9,  since  December
              ----------
31, 2001,  there has not been,  occurred or arisen any:

                                       6
<PAGE>


     (a) Amendments or changes to the Articles of Incorporation or Bylaws of the
Company;

     (b) Capital  expenditure or commitment by the Company,  either individually
or in the aggregate exceeding $10,000;

     (c) Destruction of, damage to or loss of any material  assets,  business or
customer of the Company (whether or not covered by insurance);

     (d) Labor trouble or claim of wrongful  discharge or other  unlawful  labor
practice or action;

     (e) Change in  accounting  methods or  practices  (including  any change in
depreciation or amortization policies or rates) by the Company;

     (f) Revaluation by the Company of any of its assets;

     (g)  Declaration,   setting  aside  or  payment  of  a  dividend  or  other
distribution with respect to the Company Capital Stock or any direct or indirect
redemption,  purchase or other acquisition by the Company of the Company Capital
Stock;

     (h)  Increase  in the  salary or other  compensation  payable  or to become
payable by the Company to any of its officers, directors, employees or advisors,
or the  declaration,  payment or  commitment  or  obligation of any kind for the
payment,  by the Company,  of a bonus or other additional salary or compensation
to any such person;

     (i) Any  agreement,  contract,  covenant,  instrument,  lease,  license  or
commitment  to which the  Company is a party or by which it or any of its assets
are bound or any termination,  extension, amendment or modification to the terms
of any agreement,  contract, covenant,  instrument, lease, license or commitment
to which the Company is a party or by which it or any of its assets are bound;

     (j) Sale,  lease,  license  or other  disposition  of any of the  assets or
properties  of the  Company or any  creation  of any  security  interest in such
assets or properties;

     (k) Loan by the Company to any person or entity,  incurring  by the Company
of any indebtedness,  guaranteeing by the Company of any indebtedness,  issuance
or sale of any  debt  securities  of the  Company  or  guaranteeing  of any debt
securities  of others,  except for advances to employees for travel and business
expenses in the ordinary course of business, consistent with past practice;

     (l) Waiver or release of any right or claim of the  Company  including  any
write-off or other compromise of any account receivable of the Company;

                                       7
<PAGE>

     (m) The  commencement or notice or threat or reasonable  basis therefore of
any lawsuit or, to the Company's or the Shareholders'  Knowledge,  proceeding or
investigation against the Company or its affairs;

     (n) Notice of any claim or potential claim of ownership by any person other
than the Company of the  Company  Intellectual  Property  (as defined in Section
2.13) or of  infringement  by the  Company  of any other  person's  Intellectual
Property (as defined in Section 2.13);

     (o) Issuance or sale,  or contract to issue or sell,  by the Company of any
shares  of  its  capital  stock  or  securities  exchangeable,   convertible  or
exercisable  therefore,  or any  securities,  warrants,  options  or  rights  to
purchase any of the foregoing,  except for options to purchase  capital stock of
the  Company  granted to  employees  of the  Company in the  ordinary  course of
business consistent with past practice;

     (p) (i) Selling or entering into any license  agreement with respect to the
Company Intellectual Property with any third party, (ii) buying or entering into
any license  agreement  with respect to the  Intellectual  Property of any third
party or (iii) change in pricing or  royalties  set or charged by the Company to
its  customers or licensees or in pricing or royalties set or charged by persons
who have licensed Intellectual Property to the Company;

     (q) Any event or condition of any  character  that has had or is reasonably
likely to have a Material  Adverse  Effect on the Company  (for all  purposes of
this Agreement, the term "Material Adverse Effect" means any change,
                          -----------------------
event or effect that is materially  adverse to the business,  assets  (including
intangible assets), condition (financial or otherwise), results of operations or
prospects of the Company);

     (r) Transaction by the Company except in the ordinary course of business as
conducted on that date and consistent with past practices; or

     (s)  Negotiation  or  agreement  by the  Company or any officer or employee
thereof to do any of the things  described in the preceding  clauses (a) through
(r) (other than negotiations with Parent and its  representatives  regarding the
transactions contemplated by this Agreement).

         2.10     Tax Matters.
                  -----------

                  (a) Definition of Taxes. For  the  purposes of this Agreement,
                      -------------------
"Tax" or, collectively, "Taxes", means (i) any and all federal, state, local and
 ---                     -----
foreign taxes, assessments and other governmental charges,  duties,  impositions
and  liabilities,  including  taxes based upon or  measured  by gross  receipts,
income,  profits,  sales,  use and  occupation,  and value  added,  ad  valorem,
transfer,  franchise,  withholding,  payroll, recapture,  employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such  amounts;  (ii) any  liability for the payment of any amounts of
the type described in clause (i) as a result of being a member of an affiliated,
consolidated,  combined or unitary group for any period; and (iii) any liability
for the payment of any amounts of the type  described in clause (i) or (ii) as a
result of any express or implied  obligation to indemnify any other person or as
a result of any obligations under any agreements or arrangements with any other

                                       8
<PAGE>

person with respect to such amounts and  including  any liability for taxes of a
predecessor entity.

                  (b) Tax Returns and Audits.
                      ----------------------

     (i) As of the  Effective  Time the Company  will have  prepared  and timely
filed all  required  federal,  state,  local  and  foreign  returns,  estimates,
information statements and reports ("Returns") relating to
                                     -------
any and all Taxes concerning or attributable to the Company or its operations
and such Returns are true and correct and have been completed in accordance with
applicable law.

     (ii) As of the  Effective  Time the Company (A) will have paid all Taxes it
is required to pay and will have  withheld  with  respect to its  employees  all
federal and state income taxes,  Federal  Insurance  Contribution  Act ("FICA"),
                                                                         ----
Federal Unemployment Tax Act ("FUTA") and other Taxes required to
                               ----
be withheld, and (B) will have accrued on the Current Balance Sheet all Taxes
attributable to the periods covered by the Current Balance Sheet and will not
have incurred any liability for Taxes for the period prior to the Effective Time
other than in the ordinary course of business.

     (iii) The Company has not been  delinquent in the payment of any Tax nor is
there any Tax deficiency outstanding,  assessed or proposed against the Company,
nor has the  Company  executed  any waiver of any statute of  limitations  on or
extending the period for the assessment or collection of any Tax.

     (iv) No  audit  or  other  examination  of any  Return  of the  Company  is
presently in progress, nor has the Company been notified of any request for such
an audit or other examination.

     (v) No  adjustment  relating to any  Returns  filed by the Company has been
proposed  formally  or  informally  by any Tax  authority  to the Company or any
representative thereof.

     (vi) The Company has no liabilities  for unpaid federal,  state,  local and
foreign Taxes which have not been accrued or reserved against in accordance with
GAAP on the Current Balance Sheet, whether asserted or unasserted, contingent or
otherwise,  and the Company has not incurred any  liability  for Taxes since the
date of the Current Balance Sheet other than in the ordinary course of business.

     (vii) The Company has made available to Parent or its legal counsel, copies
of all foreign, federal and state income and all state sales and use Returns for
the Company filed for all periods since its inception.

     (viii) There are (and  immediately  following the Effective Time there will
be) no liens, pledges,  charges,  claims,  restrictions on transfer,  mortgages,
security interests or other encumbrances of any sort (collectively,  "Liens") on
                                                                      -----

                                       9
<PAGE>

the assets of the Company  relating to or attributable to Taxes other than Liens
for Taxes not yet due and payable.

     (ix) Neither the Company nor the  Shareholders  have Knowledge of any basis
for the  assertion  of any claim  relating or  attributable  to Taxes  that,  if
adversely determined, would result in any Lien on the assets of the Company.

     (x) None of the Company's  assets are treated as "tax-exempt use property,"
within the meaning of Section 168(h) of the Code.

     (xi) As of the Effective Time,  there will not be any contract,  agreement,
plan  or  arrangement,  including  but not  limited  to the  provisions  of this
Agreement,  covering  any  employee  or former  employee  of the  Company  that,
individually or collectively,  could give rise to the payment of any amount that
would not be deductible by the Company as an expense under applicable law.

     (xii) The Company has not filed any consent  agreement under Section 341(f)
of the  Code or  agreed  to have  Section  341(f)(4)  of the  Code  apply to any
disposition  of a subsection  (f) asset (as defined in Section  341(f)(4) of the
Code) owned by the Company.

     (xiii) The Company is not a party to any tax  sharing,  indemnification  or
allocation  agreement  nor  does  the  Company  owe any  amount  under  any such
agreement.

     (xiv) The Company's tax basis in its assets for purposes of determining its
future  amortization,  depreciation  and other federal  income tax deductions is
accurately reflected on the Company's Tax books and records.

     (xv) The  Company is not,  and has not been at any time,  a "United  States
Real Property Holding  Corporation"  within the meaning of Section  897(c)(2) of
the Code.

     (c) Executive  Compensation Tax. There is no contract,  agreement,  plan or
         ---------------------------
arrangement  to which the Company is a party,  including  but not limited to the
provisions of this  Agreement,  covering any employee or former  employee of the
Company that,  individually or  collectively,  could give rise to the payment of
any amount that would not be deductible pursuant to Sections 162(m), 280G or 404
of the Code.

     2.11   Restrictions   on  Business   Activities.   There  is  no  agreement
            ----------------------------------------
(non-compete or otherwise), commitment, judgment, injunction, order or decree to
which the Company is a party or otherwise  binding upon the Company which has or
may have the effect of  prohibiting  or impairing  any business  practice of the
Company,  any acquisition of property (tangible or intangible) by the Company or
the conduct of business by the  Company.  Without  limiting the  foregoing,  the
Company has not entered into any agreement under which the Company is restricted
from  selling,  licensing or otherwise  distributing  any of its  technology  or
products to or providing  services to,  customers or potential  customers or any
class of customers,  in any geographic area, during any period of time or in any
segment of the market.

                                       10
<PAGE>



     2.12    Title of Properties; Absence of Liens and -Encumbrances; -Condition
             -------------------------------------------------------------------
of Equipment.
-------------

     (a) The  Company  does not own any real  property,  and has never owned any
real property. Schedule 2.12(a) sets forth a list of all real property currently
leased by the  Company,  the name of the lessor,  the date of the lease and each
amendment  thereto and, with respect to any current lease,  the aggregate annual
rental and/or other fees payable under any such lease.  All such current  leases
are in full force and effect,  are valid and effective in accordance  with their
respective  terms,  and there is not,  under any of such  leases,  any  existing
default or event of default  (or event  which with  notice or lapse of time,  or
both, would constitute a default).

     (b) The  Company  has good and valid  title  to,  or, in the case of leased
properties  and  assets,  valid  leasehold  interests  in,  all of its  tangible
properties  and assets,  real,  personal and mixed,  used or held for use in its
business,  free and clear of any  Liens,  except  as  reflected  in the  Current
Balance  Sheet and except for Liens for Taxes not yet due and  payable  and such
imperfections  of title and  encumbrances,  if any,  which are not  material  in
character,  amount  or  extent,  and which do not  detract  from the  value,  or
interfere  with the present  use, of the  property  subject  thereto or affected
thereby.

     (c)  Schedule   2.12(c)  lists  all  material   items  of  equipment   (the
"Equipment")  owned or leased by the Company and such Equipment is, (i) adequate
-----------
for the conduct of the business of the Company as currently  conducted  and (ii)
in good  operating  condition,  regularly  and properly  maintained,  subject to
normal wear and tear.

     (d) The Company  has sole and  exclusive  ownership,  free and clear of any
Liens,  of all customer  files and other  customer  information  relating to the
Company's current and former customers (the "Customer  Information").  No person
                                             ---------------------
other than the Company possesses any claims or rights with respect to use of the
Customer Information.

         2.13     Intellectual Property.
                  ---------------------

     (a) For the purposes  of  this  Agreement,  the  following  terms  have the
following definitions:

         (i)    "Intellectual  Property"  shall mean any or all of the following
and all rights  in,  arising  out of, or  associated  therewith:  (i) all United
States  and  foreign  patents  and  applications  therefore  and  all  reissues,
divisions,    renewals,    extensions,    provisionals,     continuations    and
continuations-in-part  thereof; (ii) all inventions (whether patentable or not),
invention disclosures,  improvements,  trade secrets,  proprietary  information,
know how,  technology,  technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights,  copyright registrations
and applications therefore and all other rights corresponding thereto throughout
the  world;  (iv) all mask  works,  mask  work  registrations  and  applications
therefore;  (v) all industrial  designs and any  registrations  and applications
therefore  throughout  the  world;  (vi) all  trade  names,  logos,  common  law
trademarks  and service  marks;  trademark  and service mark  registrations  and
applications  therefore and all goodwill  associated  therewith  throughout  the
world;  (vii)  all  databases  and  data  collections  and  all  rights  therein
throughout the world;  (viii) all computer  software  including all source code,

                                       11
<PAGE>

object code, firmware,  development tools, files, records and data, all media on
which any of the foregoing is recorded, all World Wide Web addresses,  sites and
domain names, (ix) any similar, corresponding or equivalent rights to any of the
foregoing and (x) all documentation related to any of the foregoing.

          (ii)  "Company  Intellectual  Property"  shall mean  any  Intellectual
                 -------------------------------
Property  that  is owned  by  or exclusively licensed to the Company.

          (iii) "Registered Intellectual Property" shall mean all United States,
                 --------------------------------
international  and  foreign:   (i)  patents,   patent  applications   (including
provisional applications); (ii) registered trademarks,  applications to register
trademarks,  intent-to-use applications,  or other registrations or applications
related  to  trademarks;   (iii)  registered  copyrights  and  applications  for
copyright  registration;  (iv) any mask work  registrations  and applications to
register mask works; and (v) any other Company Intellectual Property that is the
subject of an application,  certificate,  filing, registration or other document
issued by,  filed with,  or recorded by, any state,  government  or other public
legal authority.

     (b) Schedule 2.13(b) lists all Registered  Intellectual  Property owned by,
or filed in the name of,  the  Company  (the  "Company  Registered  Intellectual
                                               ---------------------------------
Property")  and lists any  proceedings  or actions  before  any court,  tribunal
--------
(including  the  United  States  Patent  and  Trademark  Office  (the  "PTO") or
equivalent  authority  anywhere  in the  world)  related  to any of the  Company
Registered Intellectual Property.

     (c) Each item of  Company  Intellectual  Property,  including  all  Company
Registered Intellectual Property listed in Schedule 2.13(b) and all Intellectual
Property  licensed to the Company,  is free and clear of any Liens.  The Company
(i) is the exclusive  owner of all trademarks and trade names used in connection
with the operation or conduct of the business of the Company, including the sale
of any products or  technology  or the  provision of any services by the Company
and (ii) owns exclusively, and has good title to, all copyrighted works that are
Company  products  or other  works of  authorship  that  the  Company  otherwise
purports to own.

     (d) To the extent that any  Intellectual  Property  has been  developed  or
created by any person other than the Company for which the Company has, directly
or indirectly,  paid, the Company has a written  agreement with such person with
respect  thereto and the Company  thereby has obtained  ownership of, and is the
exclusive  owner of, all such  Intellectual  Property by  operation of law or by
valid assignment.

     (e) The Company has not transferred  ownership of or granted any license of
or  right  to  use  or  authorized  the  retention  of any  rights  to  use  any
Intellectual Property that is or was Company Intellectual Property, to any other
person.

     (f) The Company  Intellectual  Property  constitutes  all the  Intellectual
Property used in and/or necessary to the conduct of its business as it currently
is conducted or is reasonably contemplated to be conducted,  including,  without
limitation, the design,  development,  manufacture,  use, import and sale of the
products, technology and services of the Company (including products, technology
or services currently under development).

                                       12
<PAGE>


     (g) Other  than  "shrink-wrap"  and  similar  widely  available  commercial
end-user  licenses,  the contracts,  licenses and agreements  listed in Schedule
2.13(g) include all contracts, licenses and agreements to which the Company is a
party with  respect to any  Intellectual  Property.  No person who has  licensed
Intellectual  Property to the Company has ownership  rights or license rights to
improvements  made by the Company in such  Intellectual  Property  that has been
licensed to the Company.

     (h) Schedule 2.13(h) lists all contracts,  licenses and agreements  between
the Company and any other  person  wherein or whereby the Company has agreed to,
or assumed,  any  obligation  or duty to  warrant,  indemnify,  reimburse,  hold
harmless,  guaranty or otherwise  assume or incur any obligation or liability or
provide  a  right  of   rescission   with   respect  to  the   infringement   or
misappropriation  by the  Company  or  such  other  person  of the  Intellectual
Property of any person other than the Company.

     (i) The  operation  of the  business  of the  Company  as it  currently  is
conducted or is  reasonably  contemplated  to be  conducted,  including  but not
limited to the Company's design, development,  use, import, manufacture and sale
of the  products,  technology  or services  (including  products,  technology or
services  currently  under  development)  of the  Company  does not  infringe or
misappropriate  the Intellectual  Property of any person,  violate the rights of
any person  (including  rights to privacy or  publicity),  or constitute  unfair
competition  or trade  practices  under  the laws of any  jurisdiction,  and the
Company has not received  notice from any person claiming that such operation or
any act,  product,  technology  or service  (including  products,  technology or
services   currently   under   development)   of  the   Company   infringes   or
misappropriates  the Intellectual  Property of any person or constitutes  unfair
competition or trade  practices under the laws of any  jurisdiction  (nor is the
Company or any of the Shareholders aware of any basis therefore).

     (j) Each item of  Company  Registered  Intellectual  Property  is valid and
subsisting,  all  necessary  registration,   maintenance  and  renewal  fees  in
connection  with such  Registered  Intellectual  Property have been paid and all
necessary  documents and certificates in connection with such Company Registered
Intellectual  Property  have been filed  with the  relevant  patent,  copyright,
trademark or other authorities in the United States or foreign jurisdictions, as
the case may be, for the purposes of maintaining  such  Registered  Intellectual
Property.  There are no actions  that must be taken by the Company  within sixty
(60) days of the  Closing  Date,  including  the  payment  of any  registration,
maintenance  or renewal  fees or the filing of any  documents,  applications  or
certificates for the purposes of maintaining, perfecting, preserving or renewing
any  Company  Intellectual  Property.  In each  case in which  the  Company  has
acquired  any  Intellectual  Property  rights from any  person,  the Company has
obtained a valid and enforceable  assignment  sufficient to irrevocably transfer
all rights in such Intellectual  Property  (including the right to seek past and
future damages with respect to such  Intellectual  Property) to the Company and,
to the maximum extent provided for by, and in accordance  with,  applicable laws
and regulations, the Company has recorded each such assignment with the relevant
governmental authorities, including the PTO, the U.S. Copyright Office, or their
respective equivalents in any relevant foreign jurisdiction, as the case may be.

     (k) There are no contracts,  licenses or agreements between the Company and
any other person with respect to Company Intellectual Property under which there

                                       13
<PAGE>

is any dispute known to the Company or the  Shareholders  regarding the scope of
such agreement,  or performance  under such agreement  including with respect to
any payments to be made or received by the Company there under.

     (l) To the  Knowledge  of the  Company and the  Shareholders,  no person is
infringing or misappropriating any Company Intellectual Property.

     (m) The  Company  has taken all steps  that are  required  to  protect  the
Company's rights in confidential information and trade secrets of the Company or
provided by any other person to the Company. Without limiting the foregoing, the
Company has, and enforces,  a policy  requiring  each  employee,  consultant and
contractor to execute  proprietary  information,  confidentiality and assignment
agreements  substantially  in the Company's  standard forms, and all current and
former employees,  consultants and contractors of the Company have executed such
an agreement.

     (n) No Company Intellectual  Property or product,  technology or service of
the Company is subject to any proceeding or outstanding decree, order, judgment,
agreement  or  stipulation  that  restricts  in any manner the use,  transfer or
licensing   thereof  by  the  Company  or  may  affect  the  validity,   use  or
enforceability of such Company Intellectual Property.

     (o) No (i) product, technology, service or publication of the Company, (ii)
material  published or  distributed by the Company or (iii) conduct or statement
of the Company constitutes obscene material, a defamatory statement or material,
false advertising or otherwise violates any law or regulation.

         2.14     Agreements, Contracts and Commitments.
                  -------------------------------------

     (a)  Except as set forth in  Schedules  2.13(g),  2.13(h) or  2.14(a),  the
Company is not a party to nor is it bound by:

          (i) Any employment or consulting agreement,   contract  or  commitment
with an employee or individual  consultant or salesperson or consulting or sales
agreement, contract or commitment with a firm or other organization;

          (ii) Any agreement or plan, including, without  limitation,  any stock
option plan, stock  appreciation  rights plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated,  by the occurrence of any of the transactions  contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement;

          (iii) Any fidelity or surety bond or completion bond;

          (iv)  Any lease of personal property with fixed annual rental payments
in excess of $10,000;

                                       14
<PAGE>


          (v)   Any agreement,  contract or commitment  containing any  covenant
limiting the freedom of the Company to  engage  in  any  line of  business or to
compete with any person;

          (vi)  Any  agreement,  contract  or   commitment   relating to capital
expenditures   and  involving  future  payments  in  excess  of  $10,000  either
individually or in the aggregate;

          (vii) Any agreement,contract or commitment relating to the disposition
or acquisition of assets or any interest in any business  enterprise outside the
ordinary course of the Company's business;

          (viii) Any mortgages, indentures, loans or credit agreements, security
agreements or other agreements or instruments relating to the borrowing of money
or extension of credit;

          (ix)  Any purchase  order or contract  for the  purchase of  materials
involving  an  amount  in  excess  of  $10,000  either  individually  or in  the
aggregate;

          (x)  Any construction contracts;

          (xi) Any  dealer,  distribution,   joint  marketing   or   development
agreement;

          (xii) Any sales  representative,  original    equipment  manufacturer,
value added,  remarketer or other  agreement for  distribution  of the Company's
products or services; or

          (xiii)   Any other  agreement,  contract  or commitment  that involves
$10,000 or more or is not cancelable without penalty within thirty (30) days.

     (b) The Company is in  compliance  with and has not  breached,  violated or
defaulted under, or received notice that it has breached,  violated or defaulted
under,  any of the terms or conditions  of any  agreement,  contract,  covenant,
instrument,  lease,  license or commitment to which the Company is a party or by
which it is bound (collectively a "Contract"),  nor is the Company or any of the
Shareholders  aware of any event that would constitute such a breach,  violation
or default with the lapse of time, giving of notice or both. Each Contract is in
full force and effect and is not subject to any default there under by any party
obligated to the Company  pursuant  thereto.  The Company has obtained,  or will
obtain prior to the Closing Date, all necessary consents,  waivers and approvals
of parties to any Contract as are required  there under in  connection  with the
Merger or for such Contracts to remain in effect without  modification after the
Closing.  Following  the  Effective  Time,  the  Surviving  Corporation  will be
permitted to exercise all of the Company's  rights under the  Contracts  without
the payment of any additional amounts or consideration  other than ongoing fees,
royalties or payments  which the Company would  otherwise be required to pay had
the transactions contemplated by this Agreement not occurred.

     2.15 Interested Party Transactions.  No officer, director or shareholder of
          ----------------------------
the Company  (nor any  ancestor,  sibling,  descendant  or spouse of any of such

                                       15
<PAGE>

persons,  or any trust,  partnership or corporation in which any of such persons
has or has had an  interest),  has or has had,  directly or  indirectly,  (i) an
interest in any entity which furnished or sold, or furnishes or sells, services,
products or  technology  that the  Company  furnishes  or sells,  or proposes to
furnish or sell, or (ii) any interest in any entity that purchases from or sells
or furnishes to the Company any goods or services or (iii) a beneficial interest
in any Contract;  provided,  however, that ownership of no more than one percent
(1%) of the outstanding  voting stock of a publicly traded corporation shall not
be deemed an "interest in any entity" for purposes of this Section 2.15.

     2.16  Governmental  Authorization.  Schedule  2.16  accurately  lists  each
           ---------------------------
consent,  license, permit, grant or other authorization issued to the Company by
a Governmental  Entity (i) pursuant to which the Company  currently  operates or
holds any  interest in any of its  properties  or (ii) which is required for the
operation  of  its  business  or  the  holding  of  any  such  interest  (herein
collectively called "Company Authorizations"). The Company Authorizations are in
                     ----------------------
full force and effect and  constitute  all  Company  Authorizations  required to
permit the  Company to operate or conduct its  business or hold any  interest in
its properties or assets.

     2.17  Litigation.  There is no  action,  suit or  proceeding  of any nature
           ----------
pending,  or,  to the  Company's  or the  Shareholders'  Knowledge,  threatened,
against the Company, its properties or any of its officers or directors, nor, to
the Knowledge of the Company and the Shareholders, is there any reasonable basis
therefore.  There  is no  investigation  pending  or,  to the  Company's  or the
Shareholders'  Knowledge,  threatened against the Company, its properties or any
of its  officers  or  directors  (nor,  to the  Knowledge  of the Company or the
Shareholders,  is  there  any  reasonable  basis  therefore)  by or  before  any
Governmental  Entity.  No  Governmental  Entity  has at any time  challenged  or
questioned the legal right of the Company to conduct its operations as presently
or previously conducted.

     2.18  Accounts Receivable.
           -------------------

          (a) The Company has made available to Parent a list  of  all  accounts
receivable  of the  Company as of  December  31, 2001 along with a range of days
elapsed since invoice.

          (b) All of the Company's accounts  receivable  arose  in  the ordinary
course of business,  are carried at values  determined in  accordance  with GAAP
consistently  applied  and are  collectible  except to the  extent  of  reserves
therefore set forth in the Current  Balance Sheet. No person has any Lien on any
of the Company's  accounts  receivable and no request or agreement for deduction
or  discount  has  been  made  with  respect  to any of the  Company's  accounts
receivable.

     2.19 Minute Books. The minutes of the Company made available to counsel for
          ------------
Parent are the only  minutes of the Company and  contain a  reasonably  accurate
summary of all meetings of the Board of Directors (or committees thereof) of the
Company  and  its   shareholders   or  actions  by  written  consent  since  the
incorporation of the Company.

     2.20 Environmental Matters.
          ---------------------

          (a) Hazardous  Material.  The  Company  has  not:  (i)  operated   any
underground  storage  tanks at any  property  that the  Company  has at any time

                                       16
<PAGE>

owned,  operated,  occupied or leased;  or (ii) illegally  released any material
amount of any substance that has been designated by any  Governmental  Entity or
by applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment,  including, without limitation,
PCBs, asbestos,  petroleum,  and  urea-formaldehyde and all substances listed as
hazardous  substances  pursuant  to the  Comprehensive  Environmental  Response,
Compensation,  and Liability Act of 1980, as amended,  or defined as a hazardous
waste pursuant to the United States  Resource  Conservation  and Recovery Act of
1976,  as  amended,  and the  regulations  promulgated  pursuant to said laws (a
"Hazardous Material"), but excluding office and janitorial supplies properly and
safely  maintained.  No  Hazardous  Materials  are  present  as a result  of the
deliberate  actions of the Company  or, to the  Company's  or the  Shareholders'
Knowledge,  as a result of any actions of any other person or otherwise,  in, on
or under any property, including the land and the improvements, ground water and
surface  water  thereof,  that  the  Company  has at any time  owned,  operated,
occupied or leased.

           (b) Hazardous Materials Activities. The Company has not  transported,
               ------------------------------
stored,  used,  manufactured,  disposed of, released or exposed its employees or
others to Hazardous Materials in violation of any law in effect on or before the
Effective  Time,  nor  has  the  Company  disposed  of,  transported,  sold,  or
manufactured  any product  containing  a Hazardous  Material  (any or all of the
foregoing being collectively referred to as "Hazardous Materials Activities") in
violation  of  any  rule,  regulation,  treaty  or  statute  promulgated  by any
Governmental  Entity in effect  prior to or as of the date  hereof to  prohibit,
regulate or control Hazardous Materials or any Hazardous Material Activity.

           (c) Permits. The Company currently holds all environmental approvals,
               -------
permits,  licenses,   clearances  and  consents  (the  "Environmental  Permits")
necessary  for the  conduct  of the  Company's  Hazardous  Material  Activities,
respectively,  and  other  businesses  of the  Company  as such  activities  and
businesses are currently being conducted.

           (d) Environmental  Liabilities.  No  action,  proceeding,  revocation
               --------------------------
proceeding,  amendment procedure,  writ,  injunction or claim is pending, or, to
the  Company's  or  the  Shareholders'  Knowledge,   threatened  concerning  any
Environmental Permit,  Hazardous Material or any Hazardous Materials Activity of
the  Company.  Neither the Company nor any of the  Shareholders  is aware of any
fact or  circumstance  that  could  involve  the  Company  in any  environmental
litigation or impose upon the Company any environmental liability.

         2.21 Brokers' and Finders' Fees. Except  as set forth in Schedule 2.21,
              --------------------
the Company has not incurred,  nor will it incur,  directly or  indirectly,  any
liability for brokerage or finders' fees or agents'  commissions  or any similar
charges  in  connection  with this  Agreement  or any  transaction  contemplated
hereby.  Schedule  2.21 sets forth the  principal  terms and  conditions  of any
agreement, written or oral, with respect to such fees.

         2.22 Employee Matters and Benefit Plans.
              ----------------------------------

          (a)  Definitions.  With the exception of the definition of "Affiliate"
set forth in Section 2.22(a)(i) below (which definition shall apply only to this
Section 2.22),  for purposes of this  Agreement,  the following terms shall have
the meanings set forth below:

                                       17
<PAGE>


                 (i) "Affiliate"  shall  mean  any  other person or entity under
                      ---------
common control with the Company within the meaning of Section  414(b),  (c), (m)
or (o) of the Code and the regulations issued there under;

                 (ii) "Company Employee Plan"  shall  mean  any  plan,  program,
                       ---------------------
policy,  practice,  contract,  agreement  or  other  arrangement  providing  for
compensation,  severance,  termination pay, deferred  compensation,  performance
awards,  stock or  stock-related  awards,  fringe  benefits  or  other  employee
benefits or remuneration of any kind, whether written or unwritten or otherwise,
funded or unfunded,  including without limitation, each "employee benefit plan,"
within the  meaning of Section  3(3) of ERISA  which is or has been  maintained,
contributed  to,  or  required  to be  contributed  to,  by the  Company  or any
Affiliate for the benefit of any Employee,  or with respect to which the Company
or any Affiliate has or may have any liability or obligation;

                 (iii) "COBRA"  shall  mean  the   Consolidated  Omnibus  Budget
                        -----
Reconciliation Act of 1985, as amended;

                 (iv)  "DOL" shall mean the Department of Labor;
                        ---

                 (v)   "Employee"  shall  mean  any  current or former employee,
                        --------
consultant or director of the Company or any Affiliate;

                 (vi)  "Employee   Agreement"  shall  mean   each    management,
                        --------
employment,  severance,  consulting,  relocation,  repatriation,   expatriation,
visas,  work permit or other agreement,  contract or  understanding  between the
Company or any Affiliate and any Employee;

                 (vii)  "ERISA"  shall  mean  the  Employee  Retirement   Income
                         -----
Security Act of 1974, as amended;


                 (viii)  "FMLA" shall mean the Family Medical Leave Act of 1993,
                          -----
as amended;

                 (ix)   "International  Employee  Plan" shall mean each  Company
                         -----------------------------
Employee  Plan  that  has been  adopted  or  maintained  by the  Company  or any
Affiliate,  whether informally or formally, or with respect to which the Company
or any Affiliate  will or may have any  liability,  for the benefit of Employees
who perform services outside the United States;

                 (x)   "IRS" shall mean the Internal Revenue Service;
                        ---

                 (xi)   "Multi-employer   Plan"  shall  mean any "Pension Plan"
                         --------------------
(as defined below) which is a "multi-employer plan," as defined in Section 3(37)
of ERISA;
                 (xii)  "PBGC"  shall   mean  the  Pension  Benefit   Guaranty
                         ----
Corporation; and

                 (xiii) "Pension Plan" shall mean each  Company  Employee  Plan
                         ------------
that is an "employee  pension  benefit plan," within the meaning of Section 3(2)
of ERISA.

                                       18
<PAGE>

     (b) Schedule.  Schedule  2.22(b)  contains an accurate and complete list of
         --------
each  Company  Employee  Plan and each  Employee  Agreement  under each  Company
Employee  Plan or  Employee  Agreement.  The  Company  does not have any plan or
commitment to establish any new Company Employee Plan or Employee Agreement,  to
modify any Company  Employee  Plan or Employee  Agreement  (except to the extent
required  by law or to  conform  any  such  Company  Employee  Plan or  Employee
Agreement to the  requirements of any applicable law, in each case as previously
disclosed to Parent in writing,  or as required by this Agreement),  or to enter
into any Company Employee Plan or Employee Agreement.

     (c) Documents. The Company has provided to Parent: (i) correct and complete
         ---------
copies of all documents  embodying each Company  Employee Plan and each Employee
Agreement including,  without limitation, all amendments thereto and all related
trust  documents;  (ii) the most recent  annual  actuarial  valuations,  if any,
prepared for each Company  Employee Plan; (iii) the three (3) most recent annual
reports (Form Series 5500 and all schedules  and financial  statements  attached
thereto),  if any,  required  under  ERISA or the Code in  connection  with each
Company  Employee Plan;  (iv) if the Company  Employee Plan is funded,  the most
recent annual and periodic  accounting of Company Employee Plan assets;  (v) the
most recent summary plan description  together with the summary(ies) of material
modifications thereto, if any, required under ERISA with respect to each Company
Employee Plan; (vi) all IRS  determination,  opinion,  notification and advisory
letters,  and all applications and  correspondence to or from the IRS or the DOL
with  respect to any such  application  or letter;  (vii) all  material  written
agreements and contracts relating to each Company Employee Plan, including,  but
not limited to, administrative  service agreements,  group annuity contracts and
group insurance contracts; (viii) all communications material to any Employee or
Employees  relating  to any  Company  Employee  Plan  and any  proposed  Company
Employee  Plans,  in  each  case,  relating  to  any  amendments,  terminations,
establishments,  increases or decreases in benefits, acceleration of payments or
vesting  schedules or other  events  which would result in any  liability to the
Company;  (ix) all correspondence to or from any governmental agency relating to
any Company  Employee  Plan; (x) all COBRA forms and related  notices;  (xi) all
policies  pertaining to fiduciary  liability  insurance covering the fiduciaries
for each Company Employee Plan; (xii) all discrimination  tests for each Company
Employee  Plan for the most  recent  plan  year;  and  (xiii)  all  registration
statements,   annual  reports  (Form  11-K  and  all  attachments  thereto)  and
prospectuses prepared in connection with each Company Employee Plan.

     (d) Employee Plan Compliance. (i) The Company has performed all obligations
         ------------------------
required to be performed by it under, is not in default or violation of, and has
no  Knowledge  of any default or  violation  by any other party to each  Company
Employee  Plan,  and  each  Company  Employee  Plan  has  been  established  and
maintained in accordance  with its terms and in compliance  with all  applicable
laws,  statutes,  orders,  rules and  regulations,  including but not limited to
ERISA or the Code;  (ii) each Company  Employee  Plan  intended to qualify under
Section  401(a) of the Code and each trust  intended  to qualify  under  Section
501(a) of the Code has  either  received  a  favorable  determination,  opinion,
notification  or advisory  letter from the IRS with respect to each such Plan as
to its qualified  status under the Code,  including  all  amendments to the Code
effected  by the Tax  Reform  Act of 1986  and  subsequent  legislation,  or has
remaining  a  period  of  time  under  applicable  Treasury  regulations  or IRS
pronouncements  in  which to apply  for  such a letter  and make any  amendments
necessary to obtain a favorable determination as to the qualified status of each
such  Company  Employee  Plan;  (iii) no  "prohibited  transaction,"  within the
meaning of Section  4975 of the Code or Sections  406 and 407 of ERISA,  and not
otherwise  exempt under  Section 408 of ERISA,  has occurred with respect to any

                                       19
<PAGE>

Company Employee Plan; (iv) there are no actions,  suits or claims pending,  or,
to the  Knowledge of the Company or the  Shareholders,  threatened or reasonably
anticipated  (other  than  routine  claims for  benefits)  against  any  Company
Employee  Plan or against  the assets of any  Company  Employee  Plan;  (v) each
Company Employee Plan can be amended, terminated or otherwise discontinued after
the Effective Time in accordance  with its terms,  without  liability to Parent,
Sub, the Company or any Affiliate (other than ordinary administration expenses);
(vi) there are no audits,  inquiries or proceedings pending or, to the Knowledge
of the Company or the  Shareholders or any Affiliates,  threatened by the IRS or
DOL with respect to any Company Employee Plan; and (vii) neither the Company nor
any  Affiliate  is subject to any  penalty  or tax with  respect to any  Company
Employee Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the
Code.

     (e)  Pension  Plan.   Neither  the  Company  nor  any  Affiliate  has  ever
          -------------
maintained,  established,  sponsored,  participated  in, or contributed  to, any
Pension  Plan that is subject  to Title IV of ERISA or Section  412 of the Code.

     (f)  Multi-employer  Plans.  At no time has the  Company  or any  Affiliate
          -------------
contributed to or been required to contribute to any Multi-employer Plan.

     (g) No Post-Employment  Obligations.  No Company Employee Plan provides, or
         ------------------
reflects or represents any liability to provide, retiree life insurance, retiree
health or other retiree  employee welfare benefits to any person for any reason,
except as may be required by COBRA or other applicable statute,  and the Company
has never represented,  promised or contracted (whether in oral or written form)
to any Employee  (either  individually  or to Employees as a group) or any other
person that such Employee(s) or other person would be provided with retiree life
insurance,  retiree health or other retiree employee welfare benefit,  except to
the extent required by statute.

     (h)  COBRA.  Neither  the  Company  nor any  Affiliate  has,  prior  to the
          -----
Effective  Time,  violated any of the health care  continuation  requirements of
COBRA,  the  requirements  of  FMLA  or any  similar  provisions  of  state  law
applicable to its Employees.

     (i)  Effect of Transaction.
          ---------------------

          (i)   The execution  of  this  Agreement  and  the consummation of the
transactions  contemplated  hereby will not (either alone or upon the occurrence
of any  additional or subsequent  events)  constitute an event under any Company
Employee Plan, Employee Agreement,  trust or loan that will or may result in any
payment  (whether of severance pay or otherwise),  acceleration,  forgiveness of
indebtedness,  vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.

     (ii) No payment or benefit  which will or may be made by the Company or its
Affiliates  with  respect  to any  Employee  as a  result  of  the  transactions
contemplated  by  this  Agreement  or  otherwise  will  be  characterized  as  a
"parachute  payment," within the meaning of Section  280G(b)(2) of the Code (but
without regard to clause (ii) thereof).

                                       20
<PAGE>


     (j)  Employment  Matters.  The  Company:  (i)  is in  compliance  with  all
          -------------------
applicable  foreign,  federal,  state and  local  laws,  rules  and  regulations
respecting employment,  employment practices, terms and conditions of employment
and wages and hours, in each case, with respect to Employees;  (ii) has withheld
and  reported  all amounts  required by law or by  agreement  to be withheld and
reported with respect to wages, salaries and other payments to Employees;  (iii)
is not liable for any  arrears of wages or any taxes or any  penalty for failure
to comply with any of the  foregoing;  and (iv) is not liable for any payment to
any  trust or other  fund  governed  by or  maintained  by or on  behalf  of any
governmental  authority,  with respect to  unemployment  compensation  benefits,
social  security or other  benefits or  obligations  for  Employees  (other than
routine payments to be made in the normal course of business and consistent with
past practice). There is no pending,  threatened or reasonably anticipated claim
or  action  against  the  Company  under  any  worker's  compensation  policy or
long-term disability policy.

     (k) Labor. No work stoppage or labor strike against the Company is pending,
         -----
or to the Knowledge of the Company or the Shareholders, threatened or reasonably
anticipated.  The Company does not know of any  activities or proceedings of any
labor union to organize  any  Employees.  There are no actions,  suits,  claims,
labor disputes or grievances pending, or, to the Knowledge of the Company or the
Shareholders, threatened or reasonably anticipated relating to any labor, safety
or discrimination matters involving any Employee, including, without limitation,
charges of unfair labor  practices  or  discrimination  complaints.  Neither the
Company nor any of its  subsidiaries  has engaged in any unfair labor  practices
within the  meaning of the  National  Labor  Relations  Act.  The Company is not
presently,  nor has it been in the past, a party to, or bound by, any collective
bargaining  agreement  or  union  contract  with  respect  to  Employees  and no
collective bargaining agreement is being negotiated by the Company.

     (l) International  Employee Plan. Each International Employee Plan has been
         ----------------------------
established,  maintained  and  administered  in  compliance  with its  terms and
conditions  and with the  requirements  prescribed  by any and all  statutory or
regulatory  laws  that  are  applicable  to such  International  Employee  Plan.
Furthermore, no International Employee Plan has unfunded liabilities, that as of
the Effective Time, will not be offset by insurance or fully accrued.  Except as
required by law, no  condition  exists that would  prevent the Company or Parent
from terminating or amending any International Employee Plan at any time for any
reason.

     (m) No  Interference  or Conflict.  To the Knowledge of the Company and the
         -----------------------------
Shareholders, no shareholder,  officer, employee or consultant of the Company is
obligated  under any contract or agreement  subject to any  judgment,  decree or
order of any court or  administrative  agency  that  would  interfere  with such
person's efforts to promote the interests of the Company or that would interfere
with  the  Company's  business.  Neither  the  execution  nor  delivery  of this
Agreement,  nor the carrying on of the Company's business as presently conducted
or proposed  to be  conducted  nor any  activity  of such  officers,  directors,
employees or  consultants  in  connection  with the carrying on of the Company's
business  as  presently  conducted  or proposed to be  conducted,  will,  to the
Company's and the Shareholders'  Knowledge,  conflict with or result in a breach
of the terms,  conditions or provisions of, or constitute a default  under,  any
contract or agreement under which any of such officers, directors,  employees or
consultants is now bound.

                                       21
<PAGE>

     2.23  Insurance.  Schedule 2.23 lists all  insurance  policies and fidelity
           ---------
bonds  covering  the  assets,  business,  equipment,   properties,   operations,
employees,  officers and directors of the Company or any Affiliate.  There is no
claim by the  Company or any  Affiliate  pending  under any of such  policies or
bonds as to which  coverage  has been  questioned,  denied  or  disputed  by the
underwriters  of such policies or bonds.  All premiums due and payable under all
such  policies  and bonds  have been  paid,  and the  Company  is  otherwise  in
compliance  with the terms of such  policies  and bonds (or other  policies  and
bonds providing  substantially similar insurance coverage).  The Company and the
Shareholders  have no Knowledge  of any  threatened  termination  of, or premium
increase with respect to, any of such policies.

     2.24  Compliance  with Laws.  The  Company  has  complied  with,  is not in
           ---------------------
violation of, and has not received any notices of violation with respect to, any
foreign, federal, state or local statute, law or regulation.

     2.25  Warranties;  Indemnities.  Except for the warranties and  indemnities
           ------------------------
contained in those contracts and agreements set forth in Schedule  2.13(h),  the
Company  has not given any  warranties  or  indemnities  relating to products or
technology sold or licensed or services rendered by the Company.

     2.26  Complete  Copies of  Materials.  The  Company has  delivered  or made
           ------------------------------
available true and complete  copies of each document (or summaries of same) that
has been requested by Parent or its counsel.

     2.27  Representations  Complete.  None of the representations or warranties
           -------------------------
made  by the  Company  or  the  Shareholders  (as  modified  by  the  Disclosure
Schedule),  nor any statement made in any Schedule or  certificate  furnished by
the  Company or the  Shareholders  pursuant to this  Agreement  contains or will
contain at the Effective Time any untrue  statement of a material fact, or omits
or will omit at the Effective Time to state any material fact necessary in order
to make  the  statements  contained  herein  or  therein,  in the  light  of the
circumstances under which made, not misleading.

                                   ARTICLE III

                REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB

     Parent and Sub represent and warrant to the Company that on the date hereof
and as of the Effective Time as though made at the Effective Time as follows:

     3.1  Organization,  Standing  and  Power.  Each  of  Parent  and  Sub  is a
          -----------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada.  Each of Parent and Sub has the  corporate  power to own
its properties  and to carry on its business as now being  conducted and is duly
qualified to do business and is in good standing in each  jurisdiction  in which
the  failure to be so  qualified  would have a  material  adverse  effect on the
ability of Parent and Sub to consummate the transactions contemplated hereby.

                                       22
<PAGE>

     3.2 Authority. Each of Parent and Sub has all requisite power and authority
         ---------
to enter into this  Agreement and any Related  Agreements to which it is a party
and  to  consummate  the  transactions  contemplated  hereby  and  thereby.  The
execution and delivery of this Agreement and any Related  Agreements to which it
is a party and the  consummation  of the  transactions  contemplated  hereby and
thereby have been duly authorized by all necessary  corporate action on the part
of Parent and Sub,  and no further  action is  required on the part of Parent or
Sub to authorize this Agreement,  any Related  Agreements to which it is a party
and the transactions  contemplated hereby and thereby.  This Agreement has been,
and any Related  Agreements  to which Parent or Sub is a party have been or will
have been prior to the Effective Time, duly executed and delivered by Parent and
Sub and,  assuming the due  authorization,  execution  and delivery by the other
parties hereto,  constitute the valid and binding obligations of Parent and Sub,
enforceable  in  accordance  with  their  respective   terms,   except  as  such
enforceability  may be limited by principles of public policy and subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing  specific  performance,  injunctive relief or
other equitable remedies.

     3.3 Merger Shares.  The shares of Parent Common Stock to be issued pursuant
         -------------
to  the  Merger  will  be  duly  authorized,   validly  issued, fully-paid,  and
non-assessable.

     3.4 Parent Financial Statements. Schedule 3.4 sets forth Parent's unaudited
         ---------------------------
balance  sheet as of December 31, 2001 and the related  unaudited  statements of
income and cash flow for the three month  period  ended  December  31, 2001 (the
"Parent  Financials").  The Parent  Financials  have been prepared in accordance
with GAAP applied on a basis  consistent  throughout  the periods  indicated and
consistent  with  each  other.   The  Parent   Financials   present  fairly  the
consolidated  financial condition and operating results and cash flows of Parent
and its subsidiaries as of the dates and during the periods indicated therein.

     3.5 No  Conflict.  The  execution  and delivery of this  Agreement  and any
         ------------
Related  Agreement  to which  Parent or Sub is a party by Parent or Sub,  as the
case may be,  do not,  and the  consummation  of the  transactions  contemplated
hereby and thereby will not,  conflict  with,  or result in any violation of, or
default under (with or without  notice or lapse of time, or both),  or give rise
to a Conflict  under (i) any provision of the  Certificate of  Incorporation  or
Bylaws of Parent or Sub, (ii) any mortgage,  indenture, lease, contract or other
agreement  or  instrument,  permit,  concession,  franchise  or license to which
Parent or Sub or any of their  respective  properties or assets are subject,  or
(iii) any judgment,  order, decree, statute, law, ordinance,  rule or regulation
applicable to Parent or Sub or their  respective  properties  or assets,  except
where such  Conflict  will not have a material  adverse  effect on the business,
assets  (including  intangible  assets),  financial  conditions  or  results  of
operations of Parent and Sub, taken as a whole.

     3.6 Consents. No consent,  waiver,  approval, order or authorization of, or
         --------
registration,  declaration or filing with any  Governmental  Entity or any third
party is required  by or with  respect to Parent or Sub in  connection  with the
execution and delivery of this Agreement and any Related Agreements to which the
Company or Sub is a party or the consummation of the  transactions  contemplated
hereby and thereby, except for (i) such consents,  waivers,  approvals,  orders,
authorizations, registrations, declarations and filings as may be required under
applicable  securities laws, and (ii) the filing of the Merger  Certificate with
the  Secretary of State of the State of Nevada and the Secretary of State of the
State of California.

                                       23
<PAGE>



                                   ARTICLE IV

                       CONDUCT PRIOR TO THE EFFECTIVE TIME

     4.1 Conduct of Business of the Company.  During the period from the date of
         ----------------------------------
this  Agreement  and  continuing  until the earlier of the  termination  of this
Agreement or the Effective Time, each of the Company and the Shareholders  agree
(except to the extent that Parent shall otherwise consent in writing),  to carry
on  the  Company's  business  in the  usual,  regular  and  ordinary  course  in
substantially  the same  manner as  heretofore  conducted,  to pay the debts and
Taxes of the Company  when due, to pay or perform  other  obligations  when due,
and,  to the extent  consistent  with such  business,  use its  reasonable  best
efforts  consistent  with past  practice  and  policies to  preserve  intact the
Company's  present  business  organizations,  keep available the services of the
Company's  present  officers  and  key  employees  and  preserve  the  Company's
relationships with customers, suppliers, distributors, licensors, licensees, and
others  having  business  dealings  with it,  all  with  the goal of  preserving
unimpaired the Company's  goodwill and ongoing businesses at the Effective Time.
The Company shall promptly notify Parent of any event or occurrence or emergency
not in the  ordinary  course of business of the Company and any  material  event
involving the Company. Except as expressly contemplated by this Agreement as set
forth in Schedule 4.1, the Company shall not,  without the prior written consent
of Parent:



        (a) (i)  Sell  any  Company  Intellectual  Property  or  enter  into any
license  agreement  with respect to the Company  Intellectual  Property with any
person or entity or (ii) buy any Intellectual Property or enter into any license
agreement with respect to the Intellectual Property of any person or entity;

        (b) Transfer to any person  or  entity  any  rights   to   the   Company
Intellectual Property;

        (c) Enter into or amend any Contract pursuant to which any  other  party
is granted  marketing,  distribution or similar rights of any type or scope with
respect to any products or technology of the Company;

        (d) Amend  or  otherwise   modify  (or  agree  to do so),  except in the
ordinary  course of business,  or violate the terms of, any of the Contracts set
forth or described in the Disclosure Schedule;

        (e) Commence or settle any litigation;

        (f) Declare, set aside or  pay  any  dividends  on  or  make  any  other
distributions  (whether  in cash,  stock or  property)  in respect of any of its
capital stock, or split, combine or reclassify any of its capital stock or issue
or authorize  the issuance of any other  securities in respect of, in lieu of or
in  substitution  for shares of capital  stock of the  Company,  or  repurchase,
redeem or otherwise acquire,  directly or indirectly,  any shares of the capital
stock  of  the  Company  (or  options,  warrants  or  other  rights  exercisable
therefore);

                                       24
<PAGE>

        (g)  Issue,  grant,  deliver or  sell  or  authorize  or   propose   the
issuance,  grant,  delivery or sale of, or purchase or propose the  purchase of,
any  shares  of  its  capital   stock  or   securities   convertible   into,  or
subscriptions,  rights,  warrants or options to acquire,  or other agreements or
commitments of any character  obligating it to issue or purchase any such shares
or other convertible securities.

        (h)  Cause  or permit any amendments to its Articles of Incorporation or
Bylaws;

        (i) Acquire or agree to acquire by merging or consolidating with, or  by
purchasing  any  assets or equity  securities  of, or by any other  manner,  any
business  or  any  corporation,   partnership,  association  or  other  business
organization or division  thereof,  or otherwise acquire or agree to acquire any
assets which are material,  individually  or in the aggregate,  to the Company's
business;

        (j) Sell, lease, license or otherwise dispose of any of  its  properties
or assets,  except properties or assets which are not Intellectual  Property and
only in the ordinary course of business and consistent with past practices;

        (k) Incur  any  indebtedness  for borrowed  money or guarantee  any such
indebtedness  or  issue  or sell  any  debt  securities  or  guarantee  any debt
securities of others;

        (l)  Grant any  loans to others or purchase debt securities of others or
amend the terms of any outstanding loan agreement;

        (m) Grant any severance or termination pay (i)to any director or officer
or (ii) to any other employee except payments made pursuant to standard  written
agreements  outstanding  on the date  hereof  and  disclosed  in the  Disclosure
Schedule;

        (n) Adopt any employee  benefit  plan,  or  enter  into  any  employment
contract,  pay or agree to pay any special bonus or special  remuneration to any
director or employee, or increase the salaries or wage rates of its employees;

        (o) Revalue any of its assets, including without limitation writing down
the value of inventory or writing off notes or accounts receivable other than in
the ordinary course of business;

        (p) Pay, discharge or satisfy, in an amount in excess of $5,000  (in any
one case) or $10,000 (in the  aggregate),  any claim,  liability  or  obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment,  discharge or  satisfaction  in the ordinary  course of business of
liabilities reflected or reserved against in the Current Balance Sheet;

        (q) Make or change any material election in respect of Taxes,  adopt  or
change  any  accounting  method in  respect  of Taxes,  enter  into any  closing
agreement, settle any claim or assessment in respect of Taxes, or consent to any
extension  or  waiver  of the  limitation  period  applicable  to any  claim  or
assessment in respect of Taxes;

        (r) Enter into any strategic alliance or joint marketing arrangement  or
agreement;

                                       25
<PAGE>

        (s) Make any  expenditures or enter into any commitments or transactions
exceeding  $25,000 in the aggregate or any commitment or transaction of the type
described in Section 2.9 hereof; or

        (t) Take, or agree in writing or otherwise to take, any of  the  actions
described in Sections  4.1(a) through (s) above,  or any other action that would
prevent  the  Company  from  performing  or cause the Company not to perform its
covenants hereunder.

     4.2 No Solicitation. Until the earlier of the Effective Time or the date of
         ---------------
termination of this Agreement  pursuant to the provisions of Section 8.1 hereof,
neither the Company nor the Shareholders (nor will the Company permit any of its
officers,  directors,  agents,  representatives  or  affiliates  to) directly or
indirectly,  take any of the following  actions with any party other than Parent
and its  designees:  (a)  solicit,  encourage,  initiate or  participate  in any
negotiations  or  discussions  with respect to, any offer or proposal to acquire
all,  substantially  all or a  significant  portion of the  Company's  business,
properties  or  technologies  or any  portion  of the  Company's  capital  stock
(whether or not outstanding) whether by merger, purchase of assets, tender offer
or otherwise,  or effect any such transaction,  (b) disclose any information not
customarily   disclosed  to  any  person  concerning  the  Company's   business,
technologies  or  properties  or  afford to any  person or entity  access to its
properties,  technologies,  books or records,  (c) assist or cooperate  with any
person to make any proposal to purchase all or any part of the Company's capital
stock or assets,  or (d) enter into any agreement with any person  providing for
the acquisition of all or any significant portion of the Company (whether by way
of merger,  purchase of assets,  tender offer or otherwise).  In addition to the
foregoing,  if the Company or the Shareholders receives,  prior to the Effective
Time or the  termination  of this  Agreement,  any offer,  proposal,  or request
relating to any of the above,  the Company or the  Shareholders,  as applicable,
shall  immediately  notify  Parent  thereof,  including  information  as to  the
identity of the offeror or the party  making any such offer or proposal  and the
specific  terms of such  offer or  proposal,  as the case may be, and such other
information related thereto as Parent may reasonably request. The parties hereto
agree that  irreparable  damage would occur in the event that the  provisions of
this Section 4.2 were not performed in accordance  with their  specific terms or
were otherwise  breached.  It is  accordingly  agreed by the parties that Parent
shall be entitled to seek an injunction or  injunctions  to prevent  breaches of
the  provisions  of this Section 4.2 and to enforce  specifically  the terms and
provisions  hereof  in any  court  of the  United  States  or any  state  having
jurisdiction,  this being in addition to any other remedy to which Parent may be
entitled at law or in equity.

                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

     5.1 Sale of  Shares.  The  parties  hereto  acknowledge  and agree that the
         ---------------
shares of Parent Common Stock issuable to the  Shareholders  pursuant to Section
1.2 shall  constitute  "restricted  securities"  within the  meaning of Rule 144
under  Securities  Act  of  1933,  as  amended  (the   "Securities   Act").  The
                                                        -----------------
certificates  for the shares of Parent  Common  Stock to be issued in the Merger
shall bear appropriate legends to identify such privately placed shares as being

                                       26
<PAGE>

restricted  under the Securities Act, to comply with applicable state securities
laws and, if applicable, to notice the restrictions on transfer of such shares.

     5.2  Access  to  Information.  The  Company  shall  afford  Parent  and its
          -----------------------
accountants, counsel and other representatives,  reasonable access during normal
business  hours during the period prior to the Effective  Time to (a) all of the
Company's properties,  books, contracts,  commitments and records, (b) all other
information  concerning  the  business,  properties  and  personnel  (subject to
restrictions  imposed by applicable law) of the Company as Parent may reasonably
request and (c) all key employees of the Company as  identified  by Parent.  The
Company  agrees to  provide  to Parent and its  accountants,  counsel  and other
representatives  copies of internal financial statements  (including returns and
supporting  documentation)  promptly upon request.  No  information or knowledge
obtained in any  investigation  pursuant to this  Section 5.2 shall affect or be
deemed  to  modify  any  representation  or  warranty  contained  herein  or the
conditions to the obligations of the parties to consummate the Merger.

     5.3  Expenses.  Whether  or not the  Merger  is  consummated,  all fees and
          --------
expenses incurred in connection with the Merger including,  without  limitation,
all legal,  accounting,  financial  advisory,  consulting and all other fees and
expenses of third parties incurred by a party in connection with the negotiation
and  effectuation  of the  terms  and  conditions  of  this  Agreement  and  the
transactions  contemplated  hereby,  shall be the  obligation of the  respective
party incurring such fees and expenses.

     5.4 Public  Disclosure.  Unless  otherwise  required by law,  neither party
         ------------------
hereto shall make,  prior to the Effective Time, any disclosure  (whether or not
in  response  to an inquiry)  of the  subject  matter of this  Agreement  unless
approved by Parent prior to release,  provided that such  approval  shall not be
unreasonably withheld.

     5.5  Consents.  The  Company  shall  use its best  efforts  to  obtain  the
          --------
consents,  waivers,  assignments and approvals under any of the Contracts as may
be required in  connection  with the Merger (all of such  consents,  waivers and
approvals are set forth in the Disclosure Schedule) so as to preserve all rights
of, and benefits to, the Company there under.

     5.6 FIRPTA  Compliance.  On the Closing Date,  the Company shall deliver to
         ------
Parent a properly executed  statement in a form reasonably  acceptable to Parent
for  purposes of  satisfying  Parent's  obligations  under  Treasury  Regulation
Section 1.1445-2(c)(3).

     5.7 Reasonable  Efforts.  Subject to the terms and  conditions  provided in
         -------------------
this  Agreement,  each of the parties hereto shall use  commercially  reasonable
efforts to take promptly, or cause to be taken, all actions, and to do promptly,
or cause to be done, all things necessary,  proper or advisable under applicable
laws  and  regulations  to  consummate  and  make  effective  the   transactions
contemplated hereby, to obtain all necessary waivers, consents and approvals and
to effect all necessary  registrations and filings and to remove any injunctions
or other impediments or delays,  legal or otherwise,  in order to consummate and
make effective the  transactions  contemplated by this Agreement for the purpose
of securing to the parties hereto the benefits  contemplated  by this Agreement;
provided that Parent shall not be required to agree to any divestiture by Parent
or the  Company  or any of  Parent's  subsidiaries  or  affiliates  of shares of

                                       27
<PAGE>

capital  stock  or of  any  business,  assets  or  property  of  Parent  or  its
subsidiaries or affiliates or of the Company, its affiliates,  or the imposition
of any  material  limitation  on the  ability  of any of them to  conduct  their
businesses or to own or exercise control of such assets, properties and stock.

     5.8 Notification of Certain Matters. The Company and the Shareholders shall
         -------------------------------
give prompt  notice to Parent of (i) the  occurrence  or  non-occurrence  of any
event,  the  occurrence  or  non-occurrence  of which  is  likely  to cause  any
representation  or warranty of the  Company or the  Shareholders,  respectively,
contained  in this  Agreement  to be  untrue  or  inaccurate  at or prior to the
Effective Time and (ii) any failure of the Company or the  Shareholders,  as the
case may be, to comply with or satisfy any  covenant,  condition or agreement to
be complied  with or  satisfied by it  hereunder;  provided,  however,  that the
delivery of any notice pursuant to this Section 5.9 shall not limit or otherwise
affect any remedies  available to the party receiving such notice. No disclosure
by the Company or the Shareholders pursuant to this Section 5.9, however,  shall
be deemed to amend or supplement the Disclosure  Schedule or prevent or cure any
misrepresentations, breach of warranty or breach of covenant.

     5.9 Additional Documents and Further Assurances.  Each party hereto, at the
         -------------------------------------------
request  of  another  party  hereto,   shall  execute  and  deliver  such  other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting  completely the  consummation  of this Agreement and the
transactions contemplated hereby.

     5.10 Tax-Free  Reorganization.  The parties  intend to adopt this Agreement
          ------------------------
and the Merger as a tax-free plan of reorganization  under Section  368(a)(1)(A)
of the Code by virtue of the provisions of Section 368(a)(2)(D) of the Code. The
Merger  Consideration issued in the Merger will be issued solely in exchange for
the  Company  Capital  Stock,  and no other  transaction  other  than the Merger
represents, provides for or is intended to be an adjustment to the consideration
paid for the Company Capital Stock. In the Merger,  no consideration  that could
constitute  "other property"  within the meaning of Section  356(a)(1)(B) of the
Code is being  transferred by Parent for the Company Capital Stock.  The parties
shall not take a position on any tax return inconsistent with this Section 5.10.
From and after the Effective Time, none of Parent, Sub or the Company shall take
any  action  that could  reasonably  be  expected  to cause the Merger not to be
treated as a reorganization within the meaning of Section 368 of the Code.

     5.11 Shareholder Approval. The Company shall promptly submit this Agreement
          --------------------
and the  transactions  contemplated  hereby to its Shareholders for approval and
adoption as provided by California Law, its Articles of Incorporation and Bylaws
and such other  documents  necessary  in order to satisfy  the  requirements  of
Section 4(2) of the  Securities  Act and  Regulation D there under in connection
with the  issuance and sale of Parent  Common  Stock in the Merger.  The Company
shall use its best efforts to obtain the consent of its Shareholders  sufficient
to approve the Merger and this  Agreement  and to enable the Closing to occur as
soon as possible.

     5.12 Employee Plans. A list of the Company's Employee Plans is set forth in
          --------------
Schedule 5.12.

                                       28
<PAGE>


                                   ARTICLE VI

                            CONDITIONS TO THE MERGER

     6.1  Conditions  to  Obligations  of  Company  and  the  Shareholders.  The
          ----------------------------------------------------------------
obligations  of the Company and the  Shareholders  to consummate and effect this
Agreement  and the  transactions  contemplated  hereby  shall be  subject to the
satisfaction  at or  prior  to the  Effective  Time  of  each  of the  following
conditions, any of which may be waived, in writing, exclusively by the Company:

             (a) Representations, Warranties and Covenants. The  representations
                 -----------------------------------------
and warranties of Parent and Sub in this Agreement  shall be true and correct in
all  material  respects  on  and  as  of  the  Effective  Time  as  though  such
representations  and  warranties  were  made on and as of such  time and each of
Parent and Sub shall have  performed and complied in all material  respects with
all covenants and  obligations  of this  Agreement  required to be performed and
complied with by it as of the Effective Time.

             (b) No Material Adverse Changes. There shall not have occurred  any
                 ---------------------------
material adverse change in the business,  assets (including  intangible assets),
condition  (financial  or  otherwise),  results of  operations of Parent and its
subsidiaries, taken as a whole, since the date of this Agreement.

             (c) Legal  Opinion. The Company shall have received a legal opinion
                 --------------
from  Jeffers,  Shaff & Falk,  LLP,  legal counsel  to  Parent, substantially in
the form of Exhibit B-1 hereto.
            -----------

             (d) Certificate  of  Parent. The Company shall have  been  provided
                 ----------------------
with a  certificate  executed on behalf of Parent by the President to the effect
that, as of the Effective Time:

                 (i)   All  representations  and  warranties  made by Parent and
Sub in this Agreement are true and correct in all material respects on and as of
the Effective Time as though such  representations  and warranties  were made on
and as of such time;

                 (ii)  All covenants  and  obligations  of this  Agreement to be
performed  by  Parent on or before  such  date  have  been so  performed  in all
material respects; and

                 (iii) The  conditions  set  forth in this Section 6.1 have been
satisfied.

     6.2  Conditions to the  Obligations  of Parent and Sub. The  obligations of
          -------------------------------------------------
Parent and Sub to  consummate  and effect this  Agreement  and the  transactions
contemplated  hereby  shall be  subject to the  satisfaction  at or prior to the
Effective Time of each of the following conditions,  any of which may be waived,
in writing, exclusively by Parent:

             (a) Representations, Warranties and Covenants. The  representations
                 -----------------------------------------
and warranties of the Company and the  Shareholders  in this Agreement  shall be
true and correct in all  material  respects on and as of the  Effective  Time as
though such  representations and warranties were made on and as of the Effective
Time and the Company and the  Shareholders  shall have performed and complied in

                                       29
<PAGE>

all material  respects  with all  covenants and  obligations  of this  Agreement
required to be performed and complied with by it as of the Effective Time.

             (b) Claims. There shall not have occurred any Claims(whether or not
                 ------
or not asserted in  litigation)  that may  materially  and adversely  affect the
consummation  of the  transactions  contemplated  hereby or may have a  Material
Adverse Effect on the Company.

             (c) Third   Party   Consents.  Any  and   all   consents,  waivers,
                 ------------------------
assignments  and approvals  listed in the  Disclosure  Schedule  shall have been
obtained.

             (d)  No  Injunction   or   Restraints;   Illegality.   No temporary
                  ----------------------------------------------
restraining order,  preliminary or permanent injunction or other order issued by
any court of competent  jurisdiction  or other legal  restraint  or  prohibition
preventing  the  consummation  of the Merger  shall be in effect,  nor shall any
proceeding  brought  by  an  administration,   agency  or  commission  or  other
governmental authority or instrumentality,  domestic or foreign,  seeking any of
the foregoing be pending;  nor shall there be any action taken,  or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal.

             (e)  Governmental  Approval.  Approvals  from Governmental Entities
                  ----------------------
(if any) deemed  appropriate or necessary by any party to this  Agreement  shall
have been timely obtained.

             (f) Litigation. There shall be no bona fide action, suit, claim  or
                 ----------
proceeding of any nature pending, or overtly threatened,  against Parent, Sub or
the Company,  their respective properties or any of their officers or directors,
arising  out  of,  or in any  way  connected  with,  the  Merger  or  the  other
transactions contemplated by the terms of this Agreement.

             (g) Legal Opinion.  Parent shall have received a legal opinion from
                 -------------
legal counsel to the Company, substantially in the form of Exhibit B-2 hereto.


             (h) Shareholders'  Certificate.  Shareholders  shall  have executed
                 --------------------------
and delivered to Parent a Shareholders'  Certificate in  substantially  the form
attached hereto as Exhibit C.


             (i) No  Material Adverse Changes. There shall not have occurred any
                 ----------------------------
material adverse change in the business,  assets (including  intangible assets),
results of operations,  liabilities (contingent or accrued), financial condition
or prospects of the Company since the date of this Agreement.

             (j) Shareholder  Approval.  Shareholders  shall  have approved this
                 ---------------------
Agreement,  the Merger and the  transactions  contemplated  hereby  and thereby.

             (k) Certificate of the Company and Shareholders. Parent shall  have
                 -------------------------------------------
been provided with a certificate  executed by the  Shareholders  and executed on
behalf of the Company by its Chief  Executive  Officer  and its Chief  Financial
Officer to the effect that, as of the Effective Time:


                                       30
<PAGE>

               (i)  All  representations  and  warranties  made  by the  Company
and the  Shareholders  in  this  Agreement  are true and correct in all material
respects on  and  as  of  the Effective Time as though such  representations and
warranties were made on and as of such time;

               (ii)  All  covenants  and  obligations  of  this  Agreement to be
performed  by  the  Company  and  the Shareholders  on  or before such date have
been so performed in all material respects; and

               (iii) The provisions set forth in Sections 6.2 (b),  (c), (j) and
(k) have been satisfied.


                                   ARTICLE VII

           SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

     7.1 Survival of  Representations  and Warranties.  All of the Company's and
         --------------------------------------------
the  Shareholders'  representations  and  warranties in this Agreement or in any
instrument  delivered  pursuant to this  Agreement  shall survive the Merger and
continue until the earlier of the date which is the date of the auditor's report
for the first audit of Parent's  financial  statements after the Closing Date or
the date which is one year following the Closing Date (the  "Expiration  Date").
All of Parent's and Sub's  representations and warranties contained herein or in
any  instrument  delivered  pursuant to this  Agreement  shall  terminate at the
Closing.

     7.2   Indemnification   by   Shareholders.   Following  the  Closing,   the
           -----------------------------------
Shareholders agree,  jointly and severally,  to protect,  defend,  indemnify and
hold  the  Parent  and the Sub  harmless  with  respect  to any and all  claims,
demands,   suits,  actions,   administrative   proceedings,   losses,   damages,
obligations,  liabilities,  costs and  expenses,  including  without  limitation
reasonable legal and other costs and expenses of investigating and defending any
actions or threatened actions,  which arise as a result of or are related to (i)
any  active or  passive  act,  omission,  occurrence,  event or  condition  that
occurred  prior to the  Closing  in  connection  with (a) the  ownership  of the
Company Capital Stock; (b) the Company's compliance with federal, state or local
laws,  regulations or orders; (c) any environmental or hazardous material claim,
personnel claim or product  liability claim relating to the Company;  or (d) any
dispute or controversy  between the Company's  customers and other  parties,  or
(ii) any  material  misrepresentation  or breach of any of the  representations,
covenants or warranties of the Company or the  Shareholders  contained herein or
any material  misstatements  or failure to state a material  fact required to be
stated  with  respect  to  the  information  provided  by  the  Company  or  the
Shareholders,  provided that the Parent and/or the Sub (the "Indemnified Party")
complies with the following indemnification procedure:

     (a) The Indemnified  Party shall, as soon as practicable  (but in any event
within  sixty (60) days)  after it learns of a claim for  indemnification  under
this  Section  7.2,  give written  notice to the  Shareholders  of its claim for
indemnification,  which notice shall set forth the amount  involved in the claim
for indemnification  and contain a reasonably thorough  description of the facts
constituting the basis of such claim.

                                       31
<PAGE>


     (b) The  Shareholders  shall  have a period  of  thirty  (30) days from the
receipt of the notice referred to above to respond to the indemnity claim to the
satisfaction  of  the  Indemnified   Party.   During  such  30-day  period,  the
Indemnified  Party,  on the one hand, and the  Shareholders,  on the other hand,
shall use their respective best efforts to attempt in good faith to agree upon a
mutually acceptable resolution as to their respective rights with respect to any
such claim for indemnification, in which case the parties shall promptly prepare
and sign a memorandum setting forth such agreement.

     (c) In the event  that no  agreement  is reached  during the 30-day  period
specified in Subsection 7.2(b) above,  then the Shareholders  shall be obligated
to pay such  claim.  The  Indemnified  Party may elect to pay such claim and the
Shareholders  shall be obligated to reimburse the  Indemnified  Party the amount
thereof.

     (d) The  Indemnified  Party shall not settle or  compromise  any such claim
without the prior  written  consent of the  Shareholders  unless suit shall have
been instituted  against the Indemnified  Party and the Shareholders  shall have
failed,  after reasonable  notice of institution of the suit, to take control of
such suit on behalf  of the  Indemnified  Party.  If the  Shareholders  admit in
writing  that they will be liable to the  Indemnified  Party with respect to the
full amount and as to all  material  elements  of a third  party claim  alleging
damages should the third party prevail in such suit, then the Shareholders shall
have the right to assume  full  control of the  defense of such  claim,  and the
Indemnified  Party shall be entitled to participate in the defense of such claim
only with the consent of the Shareholders.

     (e) The  Indemnified  Party shall be  entitled  to recover all costs,  fees
(including  attorneys' fees),  expenses and other damages to enforce against the
Shareholders its indemnification rights under this Section 7.2.


                                  ARTICLE VIII

                        TERMINATION, AMENDMENT AND WAIVER

     8.1  Termination.  Except as provided in Section 8.2, this Agreement may be
          -----------
terminated and the Merger abandoned at any time prior to the Effective Time:

          (a)  By mutual consent of the Company and Parent.

          (b) By Parent or the Company  if:  (i)  the  Effective  Time  has  not
occurred by May 31st, 2002; provided,  however, that the right to terminate this
                            --------   -------
Agreement under this Section 8.1(b)(i) shall not be available to any party whose
action  or  failure  to act has been a  principal  cause of or  resulted  in the
failure of the Merger to occur on or before such date and such action or failure
to act  constitutes  a breach of this  Agreement;  (ii)  there  shall be a final
non-appealable   order  of  a  federal  or  state  court  in  effect  preventing
consummation  of  the  Merger;  or  (iii)  there  shall  be any  statute,  rule,
regulation or order enacted,  promulgated or issued or deemed  applicable to the
Merger by any  Governmental  Entity that would make  consummation  of the Merger
illegal.


                                       32
<PAGE>

           (c) By Parent if there shall be  any  action  taken,  or any statute,
rule, regulation or order enacted, promulgated or issued or deemed applicable to
the Merger by any Governmental  Entity,  which would:  (i) prohibit  Parent's or
Sub's  ownership  or  operation of any portion of the business of the Company or
(ii)  compel  Parent or the  Company  to dispose  of or hold  separate  all or a
portion of the  business  or assets of the  Company or Parent as a result of the
Merger.

           (d) By  Parent  if  it  is  not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty,  covenant or agreement  contained in this Agreement on the part of the
Company or the  Shareholders  and such breach has not been cured within ten (10)
calendar days after written notice to the Company;  provided,  however, that, no
                                                    --------   -------
cure period shall be required for a breach which by its nature cannot be cured.

          (e) By the Company if neither it nor the Shareholders is  in  material
breach of their respective obligations under this Agreement and there has been a
material breach of any representation, warranty, covenant or agreement contained
in this  Agreement  on the part of  Parent or Sub and such  breach  has not been
cured within ten (10) calendar days after  written  notice to Parent;  provided,
however,  that no cure period shall be required for a breach which by its nature
cannot be cured.

          (f) By Parent or Sub if an event having a Material  Adverse  Effect on
the Company shall have occurred after the date of this Agreement.

     Where action is taken to terminate this Agreement  pursuant to this Section
8.1, it shall be  sufficient  for such action to be  authorized  by the Board of
Directors (as applicable) of the party taking such action.

     8.2 Effect of Termination. In the event of termination of this Agreement as
         ---------------------
provided in Section 8.1, this Agreement  shall  forthwith  become void and there
shall be no liability or obligation  on the part of Parent,  Sub or the Company,
or their  respective  officers,  directors or  shareholders,  provided that each
party  shall  remain  liable for any  breaches  of this  Agreement  prior to its
termination;  and provided  further that,  the  provisions of Sections 5.3, 5.4,
5.5,  Article IX and this  Section 8.2 shall remain in full force and effect and
survive any termination of this Agreement.

     8.3  Amendment.  The parties hereto may amend this Agreement at any time by
          ---------
execution of an  instrument  in writing  signed on behalf of each of the parties
hereto.

     8.4 Extension;  Waiver. At any time prior to the Effective Time, Parent and
         ------------------
Sub, on the one hand, and the Company and the  Shareholders,  on the other hand,
may, to the extent legally  allowed,  (i) extend the time for the performance of
any of the obligations of the other party hereto, (ii) waive any inaccuracies in
the representations and warranties made to such party contained herein or in any
document  delivered  pursuant hereto, and (iii) waive compliance with any of the
agreements or conditions  for the benefit of such party  contained  herein.  Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an  instrument  in  writing  signed on behalf of such
party.

                                       33
<PAGE>

                                   ARTICLE IX

                               GENERAL PROVISIONS

     9.1 Notices.  All notices and other  communications  hereunder  shall be in
writing  and shall be deemed  given if  delivered  personally  or by  commercial
messenger or courier service,  or mailed by registered or certified mail (return
receipt  requested)  or sent via  facsimile  (with  acknowledgment  of  complete
transmission)  to the  parties  at the  following  addresses  (or at such  other
address for a party as shall be specified by like  notice),  provided,  however,
that notices sent by mail will not be deemed given until received:

       (a)   If to Parent or Sub, to:       Gateway International Holdings, Inc.
                                            3840 E. Eagle Drive
                                            Anaheim, California 92807
                                            Facsimile: (714) 630-3119
                                            Attn.: Brent Mouton

             With a copy to:                Jeffers, Shaff & Falk, LLP
                                            18881 Von Karman Avenue, Suite 1400
                                            Irvine, California 92612
                                            Facsimile: (949) 660-7799
                                            Attn.: Mark R. Ziebell

       (b)   If to the Company, to:         Bechler Cams, Inc.
                                            1313 S. State College Parkway
                                            Anaheim, California 92806
                                            Facsimile:
                                                      -------------------------
                                            Attn.:
                                                  -----------------------------

             With a copy to:
                                            -----------------------------------
                                            -----------------------------------
                                            -----------------------------------

                                            Facsimile:
                                                      -------------------------
                                            Attn.:
                                                  -----------------------------

       (c)   If to the Shareholders, to:
                                            -----------------------------------
                                            -----------------------------------
                                            -----------------------------------

                                            Facsimile:
                                                     -------------------------

     9.2  Interpretation.  The words "include,"  "includes" and "including" when
          --------------
used herein  shall be deemed in each case to be  followed by the words  "without
limitation." The headings contained in this Agreement are for reference purposes
only and  shall not  affect in any way the  meaning  or  interpretation  of this
Agreement.

                                       34
<PAGE>

     9.3   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
           ------------
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and  delivered  to the other  party,  it being  understood  that all
parties need not sign the same counterpart.

     9.4 Entire Agreement;  Assignment. This Agreement, the Exhibits hereto, the
         ----------------
Disclosure  Schedule,  and the documents and  instruments  and other  agreements
among the parties hereto referenced  herein: (a) constitute the entire agreement
among the parties with respect to the subject  matter  hereof and  supersede all
prior  agreements and  understandings  both written and oral,  among the parties
with respect to the subject matter  hereof;  (b) are not intended to confer upon
any other person any rights or remedies hereunder; and (c) shall not be assigned
(other than by  operation  of law),  except that Parent and Sub may assign their
respective rights and delegate their respective  obligations  hereunder to their
respective affiliates.

     9.5 Severability.  In the event that any provision of this Agreement or the
         ------------
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal,  void or  unenforceable,  the  remainder of this  Agreement  will
continue in full force and effect and the application of such provision to other
persons or  circumstances  will be  interpreted  so as  reasonably to effect the
intent of the parties hereto.  The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve,  to the extent  possible,  the  economic,  business and other
purposes of such void or unenforceable provision.

     9.6  Other  Remedies.  Except as  otherwise  provided  herein,  any and all
          ---------------
remedies herein expressly  conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party,  and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.

     9.7  Governing  Law. This  Agreement  shall be governed by and construed in
          --------------
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto  irrevocably  consents to the exclusive  jurisdiction
and venue of any court within Orange County,  California, in connection with any
matter based upon or arising out of this  Agreement or the matters  contemplated
herein,  agrees that process may be served upon them in any manner authorized by
the laws of the State of  California  for such persons and waives and  covenants
not to assert or plead any  objection  which they might  otherwise  have to such
jurisdiction, venue and such process.

     9.8 Rules of  Construction.  The parties  hereto  agree that they have been
         ----------------------
represented  by counsel during the  negotiation  and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction  providing that  ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.


                            [SIGNATURES ON NEXT PAGE]


                                       35
<PAGE>



         IN WITNESS WHEREOF, Parent, Sub, the Company and the Shareholders have
caused this Agreement to be signed, all as of the date first written above.

                       "Company"

                        BECHLER CAMS, INC.,
                        a California corporation


                        By:    /s/ Daniel Lennert   /s/ Laura Stearman
                               ---------------------------------------------
                        Name:   Daniel Lennert,     Laura Stearman
                               ---------------------------------------------
                        Its:   President & CEO,     Secretary & Treasurer
                               ---------------------------------------------


                       "Parent"

                        GATEWAY INTERNATIONAL HOLDINGS,
                        a Nevada corporation


                        By:      /s/ Joseph Gledhill,  Lawrence Consalvi
                               ---------------------------------------------
                        Name:    Joseph Gledhill,  Lawrence Consalvi
                               ---------------------------------------------
                        Its:     Vice-President,  President & CEO
                               ---------------------------------------------

                        "Sub"

                        GWIH ACQUISITION CORP.,
                        a Nevada corporation


                        By:    /s/ Brent Mouton
                               ---------------------------------------------
                        Name:   Brent Mouton
                               ---------------------------------------------
                        Its:   President & CEO
                               ---------------------------------------------


                    "Shareholders"


                               /s/ Daniel Lennert
                               ---------------------------------------------
                                Daniel Lennert


                              /s/ Laura Stearman
                               ----------------------------------------------
                                Laura Stearman