Varitek Industries Establishing Co-Development Agreement with Leading 24/7 Security Monitoring Center.

Business Editors &Technology Writers

HOUSTON--(BUSINESS WIRE)--Feb. 3, 2000

Memorandum of Understanding brings Varitek closer to launching its new

product in the $15 billion security industry

Varitek Industries, Inc. (OTCBB:VATK) announced today that it has signed a memorandum of understanding to create a co-development agreement with Houston-based InterStar Systems. Under the agreement, InterStar Systems will provide Varitek with continuous, 24-hour security and monitoring and response services for Varitek's wireless auto security and navigational system, The Sentinel(TM).

&uot;This agreement with InterStar brings us one step closer to releasing The Sentinel(TM), by securing a proven security monitoring and response facility,&uot; says Randy S. Bayne, Chairman and CEO of Varitek Technologies Group. &uot;The core of our system is a dedicated and reliable cellular service center that is always ready to inform, help and respond to any emergency or situations that arises with our users. Our wireless security and navigational system relies on this service and InterStar's monitoring facilities have met the demand.&uot;

Varitek Industries has recently expanded into the auto safety and communications market through the development, manufacture and distribution of a new telematics system, The Sentinel(TM). The Sentinel(TM), similar to GM's (NYSE:GM) OnStar System, offers the combination of cellular service; Global Positioning Satellite (GPS) technology; and an advanced, ultra-small, single-component on-vehicle hardware, with 24-hour real-time monitoring service.

Last year, Americans spent nearly $15 billion on security systems, an increase of nearly $3 billion from $12.4 billion four years ago, according to SecurityLink, Inc., a major security manufacturer for Ameritech Corp. Varitek's The Sentinel(TM) will be the first product on the market to bring the affordability and simplicity of the common home-security system (inexpensive hardware plus an on-going monitoring contract) to the auto security market.

&uot;We have been extremely pleased with InterStar's monitoring and security services, since our co-demonstration at the Consumer Electronics Show (CES) 2000 earlier this month,&uot; adds Bayne. &uot;CES is where we first introduced The Sentinel(TM) and realized the potential that InterStar could provide us with round-the-clock security and rapid response from their monitoring facilities. We have met numerous times with InterStar and have discussed a mutually beneficial working relationship. In fact, Varitek was recently in attendance with InterStar at the National Auto Dealer Conference in Orlando, Florida.&uot;

InterStar Systems provides remote monitoring of real-time closed circuit video and audio transmissions for security applications. Operating in 35 states, InterStar Systems clients include major oil companies and some of the largest automotive dealerships in the United States. InterStar Systems allows end users to integrate their existing closed-circuit television (CCTV) systems with the InterSTAR 5000 transmitter to provide total control of on-site security systems. By integrating InterSTAR Systems, Inc. technology, firms can better control losses through loss prevention measures, risk management, exposed liability, as well as reduce fraudulent worker's compensation claims, employee pilferage, etc. The InterSTAR 5000 system can be customized to fit and operate within almost any security system environment.

&uot;Working with Varitek provides us with the opportunity to offer our customers an increased array of security services,&uot; says William Elliot, CEO of InterStar Systems. &uot;Varitek is a natural fit for our core business and just the type of security device that can add real incremental value to our existing monitoring services.&uot;

Varitek Industries, Inc. and its wholly owned subsidiary, Varitek Technology Group, develops, acquires, markets and distributes cutting-edge wireless data systems and technologies, in response to identified consumer, commercial and/or institutional needs and demands. Market-driven products and solutions are derived from proprietary technologies developed in-house via the company's R& subsidiaries, as well as through emerging strategic partnerships with third party manufacturing and development firms. Varitek has developed an affordable telematics system for the auto safety and communications markets, offering on-board, 24-hour monitored security, surveillance and information services for auto owners.

The statements made by Varitek Industries may be forward-looking in nature. Actual results may differ materially from those projected in forward-looking statements. This information is not a recommendation to buy or sell securities Varitek. The statements and opinions presented are the views of Varitek and are subject to change. Merger Communications (Merger) is a media relations firm employed by the Company. Merger and Varitek believe that all information in this release has been obtained from sources considered reliable, but cannot guarantee that the statements presented herein are accurate or complete. Varitek believes that its primary risk factors include, but are not limited to: the need for substantial financial requirements; the need to develop effective internal processes and systems; changes in the overall economy; changes in technology; the number and size of competitors in its markets; continued and future strategic alliances; changes in the law and regulatory policy; and the mix of product and services offered in Varitek's target markets. Merger Communications, its officers, directors and employees don't currently own any VATK shares. However, Merger's compensation for its services consists of cash and 63,333 shares of company stock over the course of the next six months. Merger typically has a long position in the securities of the companies in which it publishes information, and Merger may be buying or selling securities in the course of its regular business.