Document:

REGISTRATION RIGHTS AGREEMENT
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      This Registration Rights Agreement (this "Agreement") is made and entered
into as of October 13, 2006, by and among Astrata Group Incorporated, a Nevada
corporation (the "Company"), and the purchasers listed on Schedule I hereto (the
"Purchasers").

      This Agreement is being entered into pursuant to the Series A Convertible
Preferred Stock Purchase Agreement dated as of the date hereof among the Company
and the Purchasers (the "Purchase Agreement").

      The Company and the Purchasers hereby agree as follows:

      1. Definitions.

      Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:

      "Advice" shall have meaning set forth in Section 3(m).

      "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.

      "Board" shall have meaning set forth in Section 3(n).

      "Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to close.

      "Closing Date" means the date of the closing of the purchase and sale of
the Preferred Stock and the Warrants pursuant to the Purchase Agreement.

      "Commission" means the Securities and Exchange Commission.

      "Common Stock" means the Company's Common Stock, par value $0.0001 per
share.

      "Effectiveness Date" means with respect to the Registration Statement the
earlier of (A) the ninetieth (90th) day following the Closing Date (or in the
event the Registration Statement receives a "full review" by the Commission, the
one hundred twentieth (120th) day following the Closing Date) or (B) the date
which is within three (3) Business Days after the date on which the Commission
informs the Company (i) that the Commission will not review the Registration
Statement or (ii) that the Company may request the acceleration of the
effectiveness of the Registration Statement and the Company makes such request;
provided that, if the Effectiveness Date falls on a Saturday, Sunday or any
other day which shall be a legal holiday or a day on which the Commission is
authorized or required by law or other government actions to close, the
Effectiveness Date shall be the following Business Day.

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      "Effectiveness Period" shall have the meaning set forth in Section 2.

      "Event" shall have the meaning set forth in Section 7(e).

      "Event Date" shall have the meaning set forth in Section 7(e).

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Filing Date" means the thirtieth (30th) day following the Closing Date;
provided that, if the Filing Date falls on a Saturday, Sunday or any other day
which shall be a legal holiday or a day on which the Commission is authorized or
required by law or other government actions to close, the Filing Date shall be
the following Business Day.

      "Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.

      "Indemnified Party" shall have the meaning set forth in Section 5(c).

      "Indemnifying Party" shall have the meaning set forth in Section 5(c).

      "Losses" shall have the meaning set forth in Section 5(a).

      "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

      "Preferred Stock" means shares of the Company's Series A Convertible
Preferred Stock issued to the Purchasers pursuant to the Purchase Agreement.

      "Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

      "Prospectus" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.

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      "Registrable Securities means (i) the shares of Common Stock issuable upon
conversion of the Preferred Stock and (ii) the shares of Common Stock issuable
upon exercise of the Warrants.

      "Registration Statement" means the registration statements and any
additional registration statements contemplated by Section 2, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference in such registration
statement.

      "Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Rule 158" means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

      "Securities Act" means the Securities Act of 1933, as amended.

      "Special Counsel" means Kramer Levin Naftalis & Frankel LLP, for which the
Holders will be reimbursed by the Company pursuant to Section 4.

      "Warrants" means the warrants to purchase shares of Common Stock issued to
the Purchasers pursuant to the Purchase Agreement.

      2. Resale Registration.

      On or prior to the Filing Date, the Company shall prepare and file with
the Commission a "resale" Registration Statement providing for the resale of all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form SB-2 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form SB-2, in which case such registration shall be on another appropriate
form in accordance herewith and the Securities Act and the rules promulgated
thereunder). Such Registration Statement shall cover to the extent allowable
under the Securities Act and the rules promulgated thereunder (including Rule
416), such indeterminate number of additional shares of Common Stock resulting
from stock splits, stock dividends or similar transactions with respect to the
Registrable Securities. The Company shall (i) not permit any securities other
than the Registrable Securities and the securities listed on Schedule II hereto
to be included in the Registration Statement and (ii) use its best efforts to
cause the Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event prior to
the Effectiveness Date, and to keep such Registration Statement continuously
effective under the Securities Act until such date as is the earlier of (x) the
date when all Registrable Securities covered by such Registration Statement have
been sold or (y) the date on which the Registrable Securities may be sold
without any restriction pursuant to Rule 144(k) as determined by the counsel to

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<PAGE>

the Company pursuant to a written opinion letter, addressed to the Company's
transfer agent to such effect (the "Effectiveness Period"). The Company shall
request that the effective time of the Registration Statement is 4:00 p.m.
Eastern Time on the effective date. If at any time and for any reason, an
additional Registration Statement is required to be filed because at such time
the actual number of shares of Common Stock into which the Preferred Stock is
convertible and the Warrants are exercisable plus the number of shares of Common
Stock exceeds the number of shares of Registrable Securities remaining under the
Registration Statement, the Company shall have twenty (20) Business Days to file
such additional Registration Statement, and the Company shall use its best
efforts to cause such additional Registration Statement to be declared effective
by the Commission as soon as possible, but in no event later than sixty (60)
days after filing.

      3. Registration Procedures.

      In connection with the Company's registration obligations hereunder, the
Company shall:

      (a) Prepare and file with the Commission, on or prior to the Filing Date,
a Registration Statement on Form SB-2 (or if the Company is not then eligible to
register for resale the Registrable Securities on Form SB-2 such registration
shall be on another appropriate form in accordance herewith and the Securities
Act and the rules promulgated thereunder) in accordance with the plan of
distribution as set forth on Exhibit A hereto and in accordance with applicable
law, and cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than five (5)
Business Days prior to the filing of the Registration Statement or any related
Prospectus or any amendment or supplement thereto, the Company shall (i) furnish
to the Holders and any Special Counsel, copies of all such documents proposed to
be filed, which documents will be subject to the review of such Holders and such
Special Counsel, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of Special Counsel, to conduct a
reasonable review of such documents. The Company shall not file the Registration
Statement or any such Prospectus or any amendments or supplements thereto to
which the Holders of a majority of the Registrable Securities or any Special
Counsel shall reasonably object in writing within three (3) Business Days of
their receipt thereof.

      (b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with
the Commission such additional Registration Statements as necessary in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible, but in no event later
than ten (10) Business Days, to any comments received from the Commission with
respect to the Registration Statement or any amendment thereto and as promptly
as possible provide the Holders true and complete copies of all correspondence
from and to the Commission relating to the Registration Statement; (iv) file the
final prospectus pursuant to Rule 424 of the Securities Act no later than 9:00
a.m. Eastern Time on the Business Day following the date the Registration
Statement is declared effective by the Commission; and (v) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the Effectiveness Period in accordance with the
intended methods of disposition by the Holders thereof set forth in the
Registration Statement as so amended or in such Prospectus as so supplemented.

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      (c) Notify the Holders of Registrable Securities and any Special Counsel
as promptly as possible (and, in the case of (i)(A) below, not less than three
(3) Business Days prior to such filing, and in the case of (iii) below, on the
same day of receipt by the Company of such notice from the Commission) and (if
requested by any such Person) confirm such notice in writing no later than one
(1) Business Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation or threatening of any
Proceedings for that purpose; (iv) if at any time any of the representations and
warranties of the Company contained in any agreement contemplated hereby ceases
to be true and correct in all material respects; (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

      (d) Use its best efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of, as promptly as possible, (i) any order suspending the
effectiveness of the Registration Statement or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction.

      (e) If requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.

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      (f) If requested by any Holder, furnish to such Holder and any Special
Counsel, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by
reference, and all exhibits to the extent requested by such Person (including
those previously furnished or incorporated by reference) promptly after the
filing of such documents with the Commission.

      (g) Promptly deliver to each Holder and any Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and subject to the provisions of Sections 3(m) and 3(n), the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

      (h) Prior to any public offering of Registrable Securities, use its best
efforts to register or qualify or cooperate with the selling Holders and any
Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.

      (i) Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement, which certificates, to the extent permitted by the
Purchase Agreement and applicable federal and state securities laws, shall be
free of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any Holder may request in
connection with any sale of Registrable Securities.

      (j) Upon the occurrence of any event contemplated by Section 3(c)(vi), as
promptly as possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

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      (k) Use its best efforts to cause all Registrable Securities relating to
the Registration Statement to be listed or quoted on the OTC Bulletin Board or
any other securities exchange, quotation system or market, if any, on which
similar securities issued by the Company are then listed or traded as and when
required pursuant to the Purchase Agreement.

      (l) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders all documents filed or required to be filed with the Commission,
including, but not limited, to, earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 not later than 45 days after
the end of any 12-month period (or 90 days after the end of any 12-month period
if such period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company after the effective date of the Registration Statement,
which statement shall conform to the requirements of Rule 158.

      (m) The Company may require each selling Holder to furnish to the Company
information regarding such Holder and the distribution of such Registrable
Securities as is required by law to be disclosed in the Registration Statement,
Prospectus, or any amendment or supplement thereto, and the Company may exclude
from such registration the Registrable Securities of any such Holder who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.

      If the Registration Statement refers to any Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall have the
right to require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.

      Each Holder covenants and agrees that it will not sell any Registrable
Securities under the Registration Statement until the Company has electronically
filed the Prospectus as then amended or supplemented as contemplated in Section
3(g) and notice from the Company that the Registration Statement and any
post-effective amendments thereto have become effective as contemplated by
Section 3(c).

      Each Holder agrees by its acquisition of such Registrable Securities that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi) or
3(n), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

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      (n) If (i) there is material non-public information regarding the Company
which the Company's Board of Directors (the "Board") determines not to be in the
Company's best interest to disclose and which the Company is not otherwise
required to disclose, (ii) there is a significant business opportunity
(including, but not limited to, the acquisition or disposition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or other similar transaction) available to the Company which the Board
determines not to be in the Company's best interest to disclose, or (iii) the
Company is required to file a post-effective amendment to the Registration
Statement to incorporate the Company's quarterly and annual reports and audited
financial statements on Forms 10-QSB and 10-KSB, then the Company may (x)
postpone or suspend filing of a registration statement for a period not to
exceed thirty (30) consecutive days or (y) postpone or suspend effectiveness of
a registration statement for a period not to exceed twenty (20) consecutive
days; provided that the Company may not postpone or suspend effectiveness of a
registration statement under this Section 3(n) for more than forty-five (45)
days in the aggregate during any three hundred sixty (360) day period; provided,
however, that no such postponement or suspension shall be permitted for
consecutive twenty (20) day periods arising out of the same set of facts,
circumstances or transactions.

      4. Registration Expenses.

      All fees and expenses incident to the performance of or compliance with
this Agreement by the Company, except as and to the extent specified in this
Section 4, shall be borne by the Company whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the OTC
Bulletin Board and each other securities exchange or market on which Registrable
Securities are required hereunder to be listed, if any (B) with respect to
filing fees required to be paid to the National Association of Securities
Dealers, Inc. and the NASD Regulation, Inc. (including, without limitation,
pursuant to NASD Rule 2710) and (C) in compliance with state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for
the Holders in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the Holders of a majority
of Registrable Securities may designate)), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and Special Counsel for the Holders, in
the case of the Special Counsel, up to a maximum amount of $7,500, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement, including, without limitation, the Company's independent public
accountants (including the expenses of any comfort letters or costs associated
with the delivery by independent public accountants of a comfort letter or
comfort letters). In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange if required hereunder. The Company shall not be responsible
for any discounts, commissions, transfer taxes or other similar fees incurred by
the Holders in connection with the sale of the Registrable Securities.

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      5. Indemnification.

      (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, managers, partners, members, shareholders, agents, brokers,
investment advisors and employees of each of them, each Person who controls any
such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and attorneys' fees) and
expenses (collectively, "Losses"), as incurred, arising out of or relating to
any violation of securities laws or untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Prospectus or any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that such
untrue statements or omissions are based solely upon information regarding such
Holder or such other Indemnified Party furnished in writing to the Company by
such Holder expressly for use therein. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of which the
Company is aware in connection with the transactions contemplated by this
Agreement.

      (b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents and employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review), as incurred, arising solely out of or based solely upon
any untrue statement of a material fact contained in the Registration Statement,
any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or form of prospectus or supplement
thereto, in the light of the circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by such Holder
or other Indemnifying Party to the Company specifically for inclusion in the
Registration Statement or such Prospectus. Notwithstanding anything to the
contrary contained herein, each Holder shall be liable under this Section 5(b)
for only that amount as does not exceed the net proceeds to such Holder as a
result of the sale of Registrable Securities pursuant to such Registration
Statement.

      (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the "Indemnifying Party) in writing, and the
Indemnifying Party shall be entitled to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.

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<PAGE>

      An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such parties shall have
been advised by counsel that a conflict of interest is likely to exist if the
same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any
such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened Proceeding in respect of which any Indemnified Party is a party
and indemnity has been sought hereunder, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

      All fees and expenses of the Indemnified Party (including reasonable fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnified Party shall reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).

      (d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is due but unavailable to an Indemnified Party because of a failure or
refusal of a governmental authority to enforce such indemnification in
accordance with its terms (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party on the one hand and the Indemnified
Party on the other from the offering of the Preferred Stock and Warrants. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault, as applicable, of the
Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms. In no
event shall any selling Holder be required to contribute an amount under this
Section 5(d) in excess of the net proceeds received by such Holder upon sale of
such Holder's Registrable Securities pursuant to the Registration Statement
giving rise to such contribution obligation.

                                      -10-
<PAGE>

      The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

      The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties pursuant to the law.

      6. Rule 144.

      As long as any Holder owns Preferred Stock, Warrants or Registrable
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to Section
13(a) or 15(d) of the Exchange Act. As long as any Holder owns Preferred Stock,
Warrants or Registrable Securities, if the Company is not required to file
reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare
and furnish to the Holders and make publicly available in accordance with Rule
144(c) promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial statements
in form and substance substantially similar to those that would otherwise be
required to be included in reports required by Section 13(a) or 15(d) of the
Exchange Act, as well as any other information required thereby, in the time
period that such filings would have been required to have been made under the
Exchange Act. The Company further covenants that it will take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable such Person to sell Conversion Shares and Warrant Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including
providing any legal opinions relating to such sale pursuant to Rule 144. Upon
the request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with
such requirements.

                                      -11-
<PAGE>

      7. Miscellaneous.

      (a) Remedies. In the event of a breach by the Company or by a Holder, of
any of their obligations under this Agreement, such Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

      (b) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has, as of the date hereof entered into and currently in effect,
nor shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as disclosed in Schedule
2.1(c) of the Purchase Agreement or Schedule II hereto, neither the Company nor
any of its subsidiaries has previously entered into any agreement currently in
effect granting any registration rights with respect to any of its securities to
any Person. Without limiting the generality of the foregoing, without the
written consent of the Holders of a majority of the then outstanding Registrable
Securities, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company under the Securities Act
unless the rights so granted are subject in all respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict with the
provisions of this Agreement.

      (c) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto or as
disclosed in Schedule 2.1(c) of the Purchase Agreement or Schedule II hereto)
may include securities of the Company in the Registration Statement, and the
Company shall not after the date hereof enter into any agreement providing such
right to any of its securityholders, unless the right so granted is subject in
all respects to the prior rights in full of the Holders set forth herein, and is
not otherwise in conflict with the provisions of this Agreement.

      (d) Piggy-Back Registrations. If at any time when there is not an
effective Registration Statement covering (i) Conversion Shares or (ii) Warrant
Shares, the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, the Company shall send to each holder of Registrable Securities written
notice of such determination and, if within thirty (30) days after receipt of
such notice, or within such shorter period of time as may be specified by the
Company in such written notice as may be necessary for the Company to comply
with its obligations with respect to the timing of the filing of such
registration statement, any such holder shall so request in writing, (which
request shall specify the Registrable Securities intended to be disposed of by
the Purchasers), the Company will cause the registration under the Securities
Act of all Registrable Securities which the Company has been so requested to
register by the holder, to the extent requisite to permit the disposition of the
Registrable Securities so to be registered, provided that if at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 7(d) for the same period as the delay in registering such other

                                      -12-
<PAGE>

securities. The Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered;
provided, however, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 7(d) that are eligible for sale
pursuant to Rule 144(k) of the Securities Act. In the case of an underwritten
public offering, if the managing underwriter(s) or underwriter(s) should
reasonably object to the inclusion of the Registrable Securities in such
registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Registrable
Securities would materially adversely affect the offering contemplated in such
registration statement, and based on such determination recommends inclusion in
such registration statement of fewer or none of the Registrable Securities of
the Holders, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced pro-rata among such
Holders (based upon the number of Registrable Securities requested to be
included in the registration), if the Company after consultation with the
underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y)
none of the Registrable Securities of the Holders shall be included in such
registration statement, if the Company after consultation with the
underwriter(s) recommends the inclusion of none of such Registrable Securities;
provided, however, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable securities intended to be offered
by the Holders than the fraction of similar reductions imposed on such other
persons or entities (other than the Company).

      (e) Failure to File Registration Statement and Other Events. The Company
and the Purchasers agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and not
declared effective by the Commission on or prior to the Effectiveness Date and
maintained in the manner contemplated herein during the Effectiveness Period or
if certain other events occur. The Company and the Holders further agree that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (A) the Registration Statement is not filed on or prior to the
Filing Date, or (B) the Registration Statement is not declared effective by the
Commission on or prior to the Effectiveness Date, or (C) the Company fails to
file with the Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act within three (3) Business Days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the
Commission that a Registration Statement will not be "reviewed," or not subject
to further review, or (D) the Registration Statement is filed with and declared
effective by the Commission but thereafter ceases to be effective as to all
Registrable Securities at any time prior to the expiration of the Effectiveness
Period, without being succeeded immediately by a subsequent Registration
Statement filed with and declared effective by the Commission, or (E) the
Company has breached Section 3(n), or (F) trading in the Common Stock shall be
suspended or if the Common Stock is no longer quoted on or is delisted from the
OTC Bulletin Board (or other principal exchange on which the Common Stock is
traded) for any reason for more than three (3) Business Days in the aggregate
(any such failure or breach being referred to as an "Event," and for purposes of
clauses (A) and (B) the date on which such Event occurs, or for purposes of
clause (C) the date on which such three (3) Business Day period is exceeded, or
for purposes of clause (D) after more than fifteen (15) Business Days, or for
purposes of clause (F) the date on which such three (3) Business Day period is
exceeded, being referred to as "Event Date"), the Company shall pay an amount in
cash as liquidated damages to each Holder equal to two percent (2%) of the
amount of the Holder's initial investment in the Preferred Stock for each
calendar month or portion thereof thereafter from the Event Date until the
applicable Event is cured; provided, however, that in no event shall the amount
of liquidated damages payable at any time and from time to time to any Holder
pursuant to this Section 7(e) exceed an aggregate of ten percent (10%) of the
amount of the Holder's initial investment in the Preferred Stock.
Notwithstanding anything to the contrary in this paragraph (e), if (a) any of
the Events described in clauses (A), (B), (C), (D) or (F) shall have occurred,
(b) on or prior to the applicable Event Date, the Company shall have exercised
its rights under Section 3(n) hereof and (c) the postponement or suspension
permitted pursuant to such Section 3(n) shall remain effective as of such
applicable Event Date, then the applicable Event Date shall be deemed instead to
occur on the second Business Day following the termination of such postponement
or suspension. Liquidated damages payable by the Company pursuant to this
Section 7(d) shall be payable on the first (1st) Business Day of each thirty
(30) day period following the Event Date. Notwithstanding anything to the
contrary contained herein, in no event shall any liquidated damages be payable
with respect to the Warrants or the Warrant Shares.

                                      -13-
<PAGE>

      (f) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of seventy-five percent (75%) of the Registrable Securities outstanding.

      (g) Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery, telecopy or facsimile at the address or number
designated below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:

        If to the Company:            Astrata Group Incorporated
                                      1801 Century Park East, Suite 1830
                                      Los Angeles, California 90067-2320
                                      Attention: Chief Executive Officer
                                      Tel. No.: (310) 282-8646
                                      Fax No.:  (310) 226-8553

                                      -14-
<PAGE>

        with copies (which shall      Anslow & Jaclin, LLP
        not constitute notice) to:    195 Route 9 South, Suite 204
                                      Manalapan, New Jersey 07726
                                      Attention: Richard I. Anslow, Esq.
                                      Tel. No.: (732) 409-1212
                                      Fax No.: (732) 577-1188

        If to any Purchaser:          At the address of such Purchaser set
                                      forth on Exhibit A to this Agreement,
                                      with copies to Purchaser's counsel
                                      as set forth on Exhibit A or as
                                      specified in writing by such:

        with copies (which shall      Kramer Levin Naftalis & Frankel LLP
        not constitute notice) to:    1177 Avenue of the Americas
                                      New York, New York 10036
                                      Attention: Christopher S. Auguste
                                      Tel No.: (212) 715-9100
                                      Fax No.: (212) 715-8000

      Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other party hereto.

      (h) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns and
shall inure to the benefit of each Holder and its successors and assigns. The
Company may not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of each Holder. Each Purchaser may
assign its rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.

      (i) Assignment of Registration Rights. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any Person of all or a portion of the
Preferred Stock, the Common Shares or the Registrable Securities if: (i) the
Holder agrees in writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment, (ii) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such securities
by the transferee or assignees is restricted under the Securities Act and
applicable state securities laws unless such securities are registered in a
Registration Statement under this Agreement (in which case the Company shall be
obligated to amend such Registration Statement to reflect such transfer or
assignment) or are otherwise exempt from registration, (iv) at or before the
time the Company receives the written notice contemplated by clause (ii) of this
Section, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions of this Agreement, and (v) such transfer shall
have been made in accordance with the applicable requirements of the Purchase
Agreement. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.

                                      -15-
<PAGE>

      (j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or scanned electronic mail (e-mail) attachment, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile or scanned signature were the original thereof.

      (k) Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any of the conflicts of law principles which would result in
the application of the substantive law of another jurisdiction. This Agreement
shall not be interpreted or construed with any presumption against the party
causing this Agreement to be drafted. The Company and the Holders agree that
venue for any dispute arising under this Agreement will lie exclusively in the
state or federal courts located in New York County, New York, and the parties
irrevocably waive any right to raise forum non conveniens or any other argument
that New York is not the proper venue. The Company and the Holders irrevocably
consent to personal jurisdiction in the state and federal courts of the state of
New York. The Company and the Holders consent to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7(k) shall affect or limit any right to serve
process in any other manner permitted by law. The Company and the Holders hereby
agree that the prevailing party in any suit, action or proceeding arising out of
or relating to this Agreement or the Purchase Agreement, shall be entitled to
reimbursement for reasonable legal fees from the non-prevailing party. The
parties hereby waive all rights to a trial by jury.

      (l) Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

      (m) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable in any respect,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

      (n) Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

                                      -16-
<PAGE>

      (o) Shares Held by the Company and its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its Affiliates
(other than any Holder or transferees or successors or assigns thereof if such
Holder is deemed to be an Affiliate solely by reason of its holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

      (p) Independent Nature of Purchasers. The Company acknowledges that the
obligations of each Purchaser under the Transaction Documents are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under the Transaction Documents. The Company acknowledges that the
decision of each Purchaser to purchase Securities pursuant to the Purchase
Agreement has been made by such Purchaser independently of any other Purchaser
and independently of any information, materials, statements or opinions as to
the business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company or of
its Subsidiaries which may have made or given by any other Purchaser or by any
agent or employee of any other Purchaser, and no Purchaser or any of its agents
or employees shall have any liability to any Purchaser (or any other person)
relating to or arising from any such information, materials, statements or
opinions. The Company acknowledges that nothing contained herein, or in any
Transaction Document, and no action taken by any Purchaser pursuant hereto or
thereto (including, but not limited to, the (i) inclusion of a Purchaser in the
Registration Statement and (ii) review by, and consent to, such Registration
Statement by a Purchaser) shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. The Company acknowledges that each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. The Company
acknowledges that for reasons of administrative convenience only, the
Transaction Documents have been prepared by counsel for one of the Purchasers
and such counsel does not represent all of the Purchasers. The Company
acknowledges that it has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it
was required or requested to do so by the Purchasers. The Company acknowledges
that such procedure with respect to the Transaction Documents in no way creates
a presumption that the Purchasers are in any way acting in concert or as a group
with respect to the Transaction Documents or the transactions contemplated
hereby or thereby.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -17-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.

                           ASTRATA GROUP INCORPORATED

                           By: _____________________________________
                               Name:  Martin George Euler
                               Title: Chief Executive Officer

                           PURCHASER:

                           By: _____________________________________
                               Name:
                               Title:

                                      -18-
<PAGE>

                                   Schedule I
                                   Purchasers

<TABLE>
<CAPTION>
Names and Addresses                         Number of Preferred Shares          Dollar Amount of
of Purchasers                               & Warrants Purchased                Investment
-------------------                         --------------------------          ----------------

<S>                                         <C>                                 <C>
Vision Opportunity Master Fund, Ltd.        Preferred Shares:                           $2,500,000
20 W 55th St., 5th floor                    Series A Warrants:
New York, NY 10019                          Series B Warrants:
                                            Series J Warrants:
                                            Series C Warrants:
                                            Series D Warrants:
</TABLE>

                                      -19-
<PAGE>

                                   Schedule II
          Other Securities to be Included on the Registration Statement

                                      -20-
<PAGE>

                                    Exhibit A
                              Plan of Distribution

      The selling security holders and any of their pledgees, donees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock being offered under this prospectus on any stock
exchange, market or trading facility on which shares of our common stock are
traded or in private transactions. These sales may be at fixed or negotiated
prices. The selling security holders may use any one or more of the following
methods when disposing of shares:

      o     ordinary brokerage transactions and transactions in which the
            broker-dealer solicits purchasers;

      o     block trades in which the broker-dealer will attempt to sell the
            shares as agent but may position and resell a portion of the block
            as principal to facilitate the transaction;

      o     purchases by a broker-dealer as principal and resales by the
            broker-dealer for its account;

      o     an exchange distribution in accordance with the rules of the
            applicable exchange;

      o     privately negotiated transactions;

      o     to cover short sales made after the date that the registration
            statement of which this prospectus is a part is declared effective
            by the Commission;

      o     broker-dealers may agree with the selling security holders to sell a
            specified number of such shares at a stipulated price per share;

      o     a combination of any of these methods of sale; and

      o     any other method permitted pursuant to applicable law.

      The shares may also be sold under Rule 144 under the Securities Act of
1933, as amended ("Securities Act"), if available, rather than under this
prospectus. The selling security holders have the sole and absolute discretion
not to accept any purchase offer or make any sale of shares if they deem the
purchase price to be unsatisfactory at any particular time.

      The selling security holders may pledge their shares to their brokers
under the margin provisions of customer agreements. If a selling security holder
defaults on a margin loan, the broker may, from time to time, offer and sell the
pledged shares.

      Broker-dealers engaged by the selling security holders may arrange for
other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated, which commissions as to a particular broker or dealer
may be in excess of customary commissions to the extent permitted by applicable
law.

                                      -21-
<PAGE>

      If sales of shares offered under this prospectus are made to
broker-dealers as principals, we would be required to file a post-effective
amendment to the registration statement of which this prospectus is a part. In
the post-effective amendment, we would be required to disclose the names of any
participating broker-dealers and the compensation arrangements relating to such
sales.

      The selling security holders and any broker-dealers or agents that are
involved in selling the shares offered under this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with these
sales. Commissions received by these broker-dealers or agents and any profit on
the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Any broker-dealers or agents
that are deemed to be underwriters may not sell shares offered under this
prospectus unless and until we set forth the names of the underwriters and the
material details of their underwriting arrangements in a supplement to this
prospectus or, if required, in a replacement prospectus included in a
post-effective amendment to the registration statement of which this prospectus
is a part.

      The selling security holders and any other persons participating in the
sale or distribution of the shares offered under this prospectus will be subject
to applicable provisions of the Exchange Act, and the rules and regulations
under that act, including Regulation M. These provisions may restrict activities
of, and limit the timing of purchases and sales of any of the shares by, the
selling security holders or any other person. Furthermore, under Regulation M,
persons engaged in a distribution of securities are prohibited from
simultaneously engaging in market making and other activities with respect to
those securities for a specified period of time prior to the commencement of
such distributions, subject to specified exceptions or exemptions. All of these
limitations may affect the marketability of the shares.

      If any of the shares of common stock offered for sale pursuant to this
prospectus are transferred other than pursuant to a sale under this prospectus,
then subsequent holders could not use this prospectus until a post-effective
amendment or prospectus supplement is filed, naming such holders. We offer no
assurance as to whether any of the selling security holders will sell all or any
portion of the shares offered under this prospectus.

      We have agreed to pay all fees and expenses we incur incident to the
registration of the shares being offered under this prospectus. However, each
selling security holder and purchaser is responsible for paying any discounts,
commissions and similar selling expenses they incur.

      We and the selling security holders have agreed to indemnify one another
against certain losses, damages and liabilities arising in connection with this
prospectus, including liabilities under the Securities Act.

                                      -22-CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES
                                     OF THE
                      SERIES A CONVERTIBLE PREFERRED STOCK
                                       OF
                           ASTRATA GROUP INCORPORATED

      The undersigned, the Chief Executive Officer of Astrata Group
Incorporated, a Nevada corporation (the "Company"), in accordance with the
provisions of the Nevada Revised Statutes, does hereby certify that, pursuant to
the authority conferred upon the Board of Directors by the Articles of
Incorporation of the Company, the following resolution creating a series of
preferred stock, designated as Series A Convertible Preferred Stock, was duly
adopted on October 12, 2006, as follows:

      RESOLVED, that pursuant to the authority expressly granted to and vested
in the Board of Directors of the Company by provisions of the Articles of
Incorporation of the Company (the "Articles of Incorporation"), there hereby is
created out of the shares of the Company's preferred stock, par value $0.0001
per share, of the Company authorized in Article IV of the Articles of
Incorporation (the "Preferred Stock"), a series of Preferred Stock of the
Company, to be named "Series A Convertible Preferred Stock," consisting of Five
Million Five Hundred Thousand (5,500,000) shares, which series shall have the
following designations, powers, preferences and relative and other special
rights and the following qualifications, limitations and restrictions:

      1. Designation and Rank. The designation of such series of the Preferred
Stock shall be the Series A Convertible Preferred Stock, par value $0.0001 per
share (the "Series A Preferred Stock"). The maximum number of shares of Series A
Preferred Stock shall be Five Million Five Hundred Thousand (5,500,000) shares.
The Series A Preferred Stock shall rank senior to the Company's common stock,
par value $0.0001 per share (the "Common Stock"), and to all other classes and
series of equity securities of the Company which by their terms do not rank
senior to the Series A Preferred Stock ("Junior Stock"). The Series A Preferred
Stock shall be subordinate to and rank junior to all indebtedness of the Company
now or hereafter outstanding.

      2. Dividends.

      (a) Payment of Dividends. Commencing on the date of the initial issuance
(the "Issuance Date") of the Series A Preferred Stock, the holders of record of
shares of Series A Preferred Stock shall be entitled to receive, out of any
assets at the time legally available therefor and as declared by the Board of
Directors, cash dividends at the rate of eight percent (8%) of the stated
Liquidation Preference Amount (as defined in Section 4 hereof) per share per
annum (the "Dividend Payment"), and no more, payable on the date of payment of
the Liquidation Preference Amount to the holders of Series A Preferred Stock,
pursuant to Section 4 hereof, in the event of a dissolution, liquidation or
winding up of the Company. In the case of shares of Series A Preferred Stock
outstanding for less than a full year, dividends shall be pro rated based on the
portion of each year during which such shares are outstanding. Dividends on the
Series A Preferred Stock shall be cumulative, shall accrue and be payable in the
event of a dissolution, liquidation or winding up of the Company pursuant to
Section 4 hereof. Dividends on the Series A Preferred Stock are prior and in
preference to any declaration or payment of any distribution (as defined below)
on any outstanding shares of Junior Stock. Such dividends shall accrue on each
share of Series A Preferred Stock from day to day whether or not earned or
declared so that if such dividends with respect to any previous dividend period
at the rate provided for herein have not been paid on, or declared and set apart
for, all shares of Series A Preferred Stock at the time outstanding, the
deficiency shall be fully paid on, or declared and set apart for, such shares on
a pro rata basis with all other equity securities of the Company ranking pari
passu with the Series A Preferred Stock as to the payment of dividends before
any distribution shall be paid on, or declared and set apart for Junior Stock.

<PAGE>

      (b) So long as any shares of Series A Preferred Stock are outstanding, the
Company shall not declare, pay or set apart for payment any dividend or make any
distribution on any Junior Stock (other than dividends or distributions payable
in additional shares of Junior Stock), unless at the time of such dividend or
distribution the Company shall have paid all accrued and unpaid dividends on the
outstanding shares of Series A Preferred Stock.

      (c) In the event of (i) a mandatory redemption pursuant to Section 9
hereof or (ii) a redemption upon the occurrence of a Major Transaction (as
defined in Section 8(c) hereof) or a Triggering Event (as defined in Section
8(d) hereof), all accrued and unpaid dividends on the Series A Preferred Stock
shall be payable on the date of such redemption. In the event of a conversion
pursuant to Section 5(a) hereof, all accrued and unpaid dividends on the Series
A Preferred Stock being converted shall be payable on the Conversion Date (as
defined in Section 5(b)(i) hereof).

      (d) For purposes hereof, unless the context otherwise requires,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, payable other than in
shares of Common Stock or other equity securities of the Company, or the
purchase or redemption of shares of the Company (other than redemptions set
forth in Section 8 below or repurchases of Common Stock held by employees or
consultants of the Company upon termination of their employment or services
pursuant to agreements providing for such repurchase or upon the cashless
exercise of options held by employees or consultants) for cash or property.

      3. Voting Rights.

      (a) Class Voting Rights. So long as any shares of the Series A Preferred
Stock remain outstanding, the Company shall not, without the affirmative vote or
consent of the holders of at least seventy-five percent (75%) of the shares of
the Series A Preferred Stock outstanding at the time, given in person or by
proxy, either in writing or at a meeting, in which the holders of the Series A
Preferred Stock vote separately as a class: (i) authorize, create, issue or
increase the authorized or issued amount of any class or series of stock,
including but not limited to the issuance of any more shares of Preferred Stock,
ranking pari passu or senior to the Series A Preferred Stock, with respect to
the distribution of assets on liquidation, dissolution or winding up; (ii)
amend, alter or repeal the provisions of the Series A Preferred Stock, whether
by merger, consolidation or otherwise, so as to adversely affect any right,
preference, privilege or voting power of the Series A Preferred Stock; provided,
however, that any creation and issuance of another series of Junior Stock shall
not be deemed to adversely affect such rights, preferences, privileges or voting
powers; (iii) repurchase, redeem or pay dividends on, shares of Common Stock or
any other shares of the Company's Junior Stock (other than de minimus
repurchases from employees of the Company in certain circumstances, and any
contractual redemption obligations existing as of the date hereof as disclosed
in the Company's public filings with the Securities and Exchange Commission);
(iv) amend the Articles of Incorporation or By-Laws of the Company so as to
affect materially and adversely any right, preference, privilege or voting power
of the Series A Preferred Stock; provided, however, that any creation and
issuance of another series of Junior Stock shall not be deemed to adversely
affect such rights, preferences, privileges or voting powers; (v) effect any
distribution with respect to Junior Stock other than as permitted hereby; (vi)
reclassify the Company's outstanding securities; (vii) voluntarily file for
bankruptcy, liquidate the Company's assets or make an assignment for the benefit
of the Company's creditors; or (viii) materially change the nature of the
Company's business.

                                       2
<PAGE>

      (b) General Voting Rights. Except with respect to transactions upon which
the Series A Preferred Stock shall be entitled to vote separately as a class
pursuant to Section 3(a) above and except as otherwise required by Nevada law,
the Series A Preferred Stock shall have no voting rights. The Common Stock into
which the Series A Preferred Stock is convertible shall, upon issuance, have all
of the same voting rights as other issued and outstanding Common Stock of the
Company, and none of the rights of the Preferred Stock.

      4. Liquidation Preference.

      (a) In the event of the liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, the holders of shares
of Series A Preferred Stock then outstanding shall be entitled to receive, out
of the assets of the Company available for distribution to its stockholders, an
amount equal to $1.00 per share (the "Liquidation Preference Amount") of the
Series A Preferred Stock plus any accrued and unpaid dividends before any
payment shall be made or any assets distributed to the holders of the Common
Stock or any other Junior Stock. If the assets of the Company are not sufficient
to pay in full the Liquidation Preference Amount plus any accrued and unpaid
dividends payable to the holders of outstanding shares of the Series A Preferred
Stock and any series of Preferred Stock or any other class of stock ranking pari
passu, as to rights on liquidation, dissolution or winding up, with the Series A
Preferred Stock, then all of said assets will be distributed among the holders
of the Series A Preferred Stock and the other classes of stock ranking pari
passu with the Series A Preferred Stock, if any, ratably in accordance with the
respective amounts that would be payable on such shares if all amounts payable
thereon were paid in full. The liquidation payment with respect to each
outstanding fractional share of Series A Preferred Stock shall be equal to a
ratably proportionate amount of the liquidation payment with respect to each
outstanding share of Series A Preferred Stock. All payments for which this
Section 4(a) provides shall be in cash, property (valued at its fair market
value as determined by an independent appraiser reasonably acceptable to the
holders of a majority of the Series A Preferred Stock) or a combination thereof;
provided, however, that no cash shall be paid to holders of Junior Stock unless
each holder of the outstanding shares of Series A Preferred Stock has been paid
in cash the full Liquidation Preference Amount plus any accrued and unpaid
dividends to which such holder is entitled as provided herein. After payment of
the full Liquidation Preference Amount plus any accrued and unpaid dividends to
which each holder is entitled, such holders of shares of Series A Preferred
Stock will not be entitled to any further participation as such in any
distribution of the assets of the Company.

                                       3
<PAGE>

      (b) A consolidation or merger of the Company with or into any other
corporation or corporations, or a sale of all or substantially all of the assets
of the Company, or the effectuation by the Company of a transaction or series of
related transactions in which more than 50% of the voting shares of the Company
is disposed of or conveyed, shall not be deemed to be a liquidation,
dissolution, or winding up within the meaning of this Section 4. In the event of
the merger or consolidation of the Company with or into another corporation, the
Series A Preferred Stock shall maintain its relative powers, designations and
preferences provided for herein and no merger shall result which is inconsistent
therewith unless otherwise approved by at least seventy-five percent (75%) of
the then outstanding shares of Series A Preferred Stock.

      (c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, stating a payment date
and the place where the distributable amounts shall be payable, shall be given
by mail, postage prepaid, no less than forty-five (45) days prior to the payment
date stated therein, to the holders of record of the Series A Preferred Stock at
their respective addresses as the same shall appear on the books of the Company.

      5. Conversion. The holder of Series A Preferred Stock shall have the
following conversion rights (the "Conversion Rights"):

      (a) Right to Convert. At any time on or after the Issuance Date, the
holder of any such shares of Series A Preferred Stock may, at such holder's
option, subject to the limitations set forth in Section 7 herein, elect to
convert (a "Conversion") all or any portion of the shares of Series A Preferred
Stock held by such person into a number of fully paid and nonassessable shares
of Common Stock equal to the quotient of (i) the Liquidation Preference Amount
of the shares of Series A Preferred Stock being converted by (ii) the Conversion
Price (as defined in Section 5(d) below) then in effect as of the date of the
delivery by such holder of its notice of election to convert. In the event of a
notice of redemption of any shares of Series A Preferred Stock pursuant to
Section 8 hereof, the Conversion Rights of the shares designated for redemption
shall terminate at the close of business on the last full day preceding the date
fixed for redemption, unless the redemption price is not paid on such redemption
date, in which case the Conversion Rights for such shares shall continue until
such price is paid in full. In the event of a liquidation, dissolution or
winding up of the Company, the Conversion Rights shall terminate at the close of
business on the last full day preceding the date fixed for the payment of any
such amounts distributable on such event to the holders of Series A Preferred
Stock. In the event of such a redemption or liquidation, dissolution or winding
up, the Company shall provide to each holder of shares of Series A Preferred
Stock notice of such redemption or liquidation, dissolution or winding up, which
notice shall (i) be sent at least fifteen (15) days prior to the termination of
the Conversion Rights (or, if the Company obtains lesser notice thereof, then as
promptly as possible after the date that it has obtained notice thereof) and
(ii) state the amount per share of Series A Preferred Stock that will be paid or
distributed on such redemption or liquidation, dissolution or winding up, as the
case may be.

                                       4
<PAGE>

      (b) Mechanics of Conversion. The Conversion of Series A Preferred Stock
shall be conducted in the following manner:

            (i) Holder's Delivery Requirements. To convert Series A Preferred
Stock into full shares of Common Stock on any date (the "Conversion Date"), the
holder thereof shall (A) transmit by facsimile (or otherwise deliver), for
receipt on or prior to 5:00 p.m., New York time on such date, a copy of a fully
executed notice of conversion in the form attached hereto as Exhibit I (the
"Conversion Notice"), to the Company at (310) 226-8553, Attention: Chief
Executive Officer, and (B) surrender to a common carrier for delivery to the
Company as soon as practicable following such Conversion Date the original
certificates representing the shares of Series A Preferred Stock being converted
(or an indemnification undertaking with respect to such shares in the case of
their loss, theft or destruction) (the "Preferred Stock Certificates") and the
originally executed Conversion Notice.

            (ii) Company's Response. Upon receipt by the Company of a facsimile
copy of a Conversion Notice, the Company shall immediately send, via facsimile,
a confirmation of receipt of such Conversion Notice to such holder. Upon receipt
by the Company of a copy of the fully executed Conversion Notice, the Company or
its designated transfer agent (the "Transfer Agent"), as applicable, shall,
within three (3) business days following the date of receipt by the Company of
the fully executed Conversion Notice, issue and deliver to the Depository Trust
Company ("DTC") account on the Holder's behalf via the Deposit Withdrawal Agent
Commission System ("DWAC") as specified in the Conversion Notice, or via
physical certificate if so specified in the Conversion Notice, registered in the
name of the holder or its designee, for the number of shares of Common Stock to
which the holder shall be entitled. Notwithstanding the foregoing to the
contrary, the Company or its Transfer Agent shall only be obligated to issue and
deliver the shares to the DTC on a holder's behalf via DWAC if a registration
statement providing for the resale of the shares of Common Stock issuable upon
conversion of the Series A Preferred Stock is effective or such shares are
otherwise eligible for legend removal, and if the Transfer Agent is a
participant in the DWAC system. If the shares of Common Stock to be received
pursuant to the Conversion Notice are not registered or otherwise eligible for
legend removal, the Transfer Agent shall issue a physical certificate in the
name of the holder representing such shares with a restrictive legend as set
forth in the Purchase Agreement and a notation that such shares are deemed owned
by the holder as of the Issuance Date for purposes of determining the holder's
holding period under Rule 144 of the Securities Act of 1933, as amended. If the
number of shares of Preferred Stock represented by the Preferred Stock
Certificate(s) submitted for conversion is greater than the number of shares of
Series A Preferred Stock being converted, then the Company shall, as soon as
practicable and in no event later than three (3) business days after receipt of
the Preferred Stock Certificate(s) and at the Company's expense, issue and
deliver to the holder a new Preferred Stock Certificate representing the number
of shares of Series A Preferred Stock not converted.

            (iii) Dispute Resolution. In the case of a dispute as to the
arithmetic calculation of the number of shares of Common Stock to be issued upon
conversion, the Company shall cause its Transfer Agent to promptly issue to the
holder the number of shares of Common Stock that is not disputed and shall
submit the arithmetic calculations to the holder via facsimile as soon as
possible, but in no event later than two (2) business days after receipt of such
holder's Conversion Notice. If such holder and the Company are unable to agree
upon the arithmetic calculation of the number of shares of Common Stock to be
issued upon such conversion within one (1) business day of such disputed
arithmetic calculation being submitted to the holder, then the Company shall
within one (1) business day submit via facsimile the disputed arithmetic
calculation of the number of shares of Common Stock to be issued upon such
conversion to the Company's independent, outside accountant. The Company shall
cause the accountant to perform the calculations and notify the Company and the
holder of the results no later than seventy-two (72) hours from the time it
receives the disputed calculations. Such accountant's calculation shall be
binding upon all parties absent manifest error. The reasonable expenses of such
accountant in making such determination shall be paid by the Company, in the
event the holder's calculation was correct, or by the holder, in the event the
Company's calculation was correct, or equally by the Company and the holder in
the event that neither the Company's or the holder's calculation was correct.
The period of time in which the Company is required to effect conversions or
redemptions under this Certificate of Designation shall be tolled with respect
to the subject conversion or redemption pending resolution of any dispute by the
Company made in good faith and in accordance with this Section 5(b)(iii).

                                       5
<PAGE>

            (iv) Record Holder. The person or persons entitled to receive the
shares of Common Stock issuable upon a conversion of the Series A Preferred
Stock shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on the Conversion Date.

            (v) Company's Failure to Timely Convert. If within three (3)
business days of the Company's receipt of an executed copy of the Conversion
Notice (so long as the applicable Preferred Stock Certificates and original
Conversion Notice are received by the Company on or before such third business
day) (the "Delivery Date") the Transfer Agent shall fail to issue and deliver to
a holder the number of shares of Common Stock to which such holder is entitled
upon such holder's conversion of the Series A Preferred Stock or to issue a new
Preferred Stock Certificate representing the number of shares of Series A
Preferred Stock to which such holder is entitled pursuant to Section 5(b)(ii) (a
"Conversion Failure"), in addition to all other available remedies which such
holder may pursue hereunder and under the Series A Convertible Preferred Stock
Purchase Agreement (the "Purchase Agreement") among the Company and the initial
holders of the Series A Preferred Stock (including indemnification pursuant to
Section 6 thereof), the Company shall pay additional damages to such holder on
each business day after such third (3rd) business day that such conversion is
not timely effected in an amount equal to 0.5% of the product of (A) the sum of
the number of shares of Common Stock not issued to the holder on a timely basis
pursuant to Section 5(b)(ii) and to which such holder is entitled and, in the
event the Company has failed to deliver a Preferred Stock Certificate to the
holder on a timely basis pursuant to Section 5(b)(ii), the number of shares of
Common Stock issuable upon conversion of the shares of Series A Preferred Stock
represented by such Preferred Stock Certificate, as of the last possible date
which the Company could have issued such Preferred Stock Certificate to such
holder without violating Section 5(b)(ii) and (B) the Closing Bid Price (as
defined below) of the Common Stock on the last possible date which the Company
could have issued such Common Stock and such Preferred Stock Certificate, as the
case may be, to such holder without violating Section 5(b)(ii). If the Company
fails to pay the additional damages set forth in this Section 5(b)(v) within
five (5) business days of the date incurred, then such payment shall bear
interest at the rate of 2.0% per month (pro rated for partial months) until such
payments are made. The term "Closing Bid Price" shall mean, for any security as
of any date, the last closing bid price of such security on the OTC Bulletin
Board or other quotation venue or principal exchange on which such security is
traded as reported by Bloomberg, or, if no closing bid price is reported for
such security by Bloomberg, the last closing trade price of such security as
reported by Bloomberg, or, if no last closing trade price is reported for such
security by Bloomberg, the average of the bid prices of any market makers for
such security as reported by the Pink Sheets LLC. If the Closing Bid Price
cannot be calculated for such security on such date on any of the foregoing
bases, the Closing Bid Price of such security on such date shall be the fair
market value as mutually determined by the Company and the holders of a majority
of the outstanding shares of Series A Preferred Stock.

                                       6
<PAGE>

            (vi) Buy-In Rights. In addition to any other rights available to the
holders of Series A Preferred Stock, if the Company fails to cause its Transfer
Agent to transmit to the holder a certificate or certificates representing the
shares of Common Stock issuable upon conversion of the Series A Preferred Stock
on or before the Delivery Date, and if after such date the holder is required by
its broker to purchase (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the holder of the shares of
Common Stock issuable upon conversion of Series A Preferred Stock which the
holder anticipated receiving upon such conversion (a "Buy-In"), then the Company
shall (1) pay in cash to the holder the amount by which (x) the holder's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Common Stock issuable upon conversion of Series A Preferred
Stock that the Company was required to deliver to the holder in connection with
the conversion at issue times (B) the price at which the sell order giving rise
to such purchase obligation was executed, and (2) at the option of the holder,
either reinstate the shares of Series A Preferred Stock and equivalent number of
shares of Common Stock for which such conversion was not honored or deliver to
the holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its conversion and delivery obligations
hereunder. For example, if the holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay to the holder $1,000.
The holder shall provide the Company written notice indicating the amounts
payable to the holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Company. Nothing
herein shall limit a holder's right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver certificates representing shares of Common Stock upon
conversion of the Series A Preferred Stock as required pursuant to the terms
hereof.

      (c) Intentionally omitted.

      (d) Conversion Price.

            (i) The term "Conversion Price" shall mean $0.50, subject to
adjustment under Section 5(e) hereof. Notwithstanding any adjustment hereunder,
at no time shall the Conversion Price be greater than $0.50 per share except if
it is adjusted pursuant to Section 5(e)(i).

                                       7
<PAGE>

            (ii) Notwithstanding the foregoing to the contrary, if during any
period (a "Black-out Period"), a holder of Series A Preferred Stock is unable to
trade any Common Stock issued or issuable upon conversion of the Series A
Preferred Stock immediately due to the postponement of filing or delay or
suspension of effectiveness of the Registration Statement or because the Company
has otherwise informed such holder of Series A Preferred Stock that an existing
prospectus cannot be used at that time in the sale or transfer of such Common
Stock (provided that such postponement, delay, suspension or fact that the
prospectus cannot be used is not due to factors solely within the control of the
holder of Series A Preferred Stock or due to the Company exercising its rights
under Section 3(n) of the Registration Rights Agreement (as defined in the
Purchase Agreement)), such holder of Series A Preferred Stock shall have the
option but not the obligation on any Conversion Date within ten (10) trading
days following the expiration of the Black-out Period of using the Conversion
Price applicable on such Conversion Date or any Conversion Price selected by
such holder of Series A Preferred Stock that would have been applicable had such
Conversion Date been at any earlier time during the Black-out Period or within
the ten (10) trading days thereafter.

      (e) Adjustments of Conversion Price.

            (i) Adjustments for Stock Splits and Combinations. If the Company
shall at any time or from time to time after the Issuance Date, effect a stock
split of the outstanding Common Stock, the Conversion Price shall be
proportionately decreased. If the Company shall at any time or from time to time
after the Issuance Date, combine the outstanding shares of Common Stock, the
Conversion Price shall be proportionately increased. Any adjustments under this
Section 5(e)(i) shall be effective at the close of business on the date the
stock split or combination becomes effective.

            (ii) Adjustments for Certain Dividends and Distributions. If the
Company shall at any time or from time to time after the Issuance Date, make or
issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock, then, and in each event, the Conversion Price shall be decreased as of
the time of such issuance or, in the event such record date shall have been
fixed, as of the close of business on such record date, by multiplying the
Conversion Price then in effect by a fraction:

                  (1) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date; and

                  (2) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution.

                                       8
<PAGE>

            (iii) Adjustment for Other Dividends and Distributions. If the
Company shall at any time or from time to time after the Issuance Date, make or
issue or set a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in securities of
the Company other than shares of Common Stock, then, and in each event, an
appropriate revision to the applicable Conversion Price shall be made and
provision shall be made (by adjustments of the Conversion Price or otherwise) so
that the holders of Series A Preferred Stock shall receive upon conversions
thereof, in addition to the number of shares of Common Stock receivable thereon,
the number of securities of the Company which they would have received had their
Series A Preferred Stock been converted into Common Stock on the date of such
event and had thereafter, during the period from the date of such event to and
including the Conversion Date, retained such securities (together with any
distributions payable thereon during such period), giving application to all
adjustments called for during such period under this Section 5(e)(iii) with
respect to the rights of the holders of the Series A Preferred Stock; provided,
however, that if such record date shall have been fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed therefor,
the Conversion Price shall be adjusted pursuant to this paragraph as of the time
of actual payment of such dividends or distributions; and provided further,
however, that no such adjustment shall be made if the holders of Series A
Preferred Stock simultaneously receive (i) a dividend or other distribution of
shares of Common Stock in a number equal to the number of shares of Common Stock
as they would have received if all outstanding shares of Series A Preferred
Stock had been converted into Common Stock on the date of such event or (ii) a
dividend or other distribution of shares of Series A Preferred Stock which are
convertible, as of the date of such event, into such number of shares of Common
Stock as is equal to the number of additional shares of Common Stock being
issued with respect to each share of Common Stock in such dividend or
distribution.

            (iv) Adjustments for Reclassification, Exchange or Substitution. If
the Common Stock issuable upon conversion of the Series A Preferred Stock at any
time or from time to time after the Issuance Date shall be changed to the same
or different number of shares of any class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than by way of a
stock split or combination of shares or stock dividends provided for in Sections
5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale of
assets provided for in Section 5(e)(v)), then, and in each event, an appropriate
revision to the Conversion Price shall be made and provisions shall be made (by
adjustments of the Conversion Price or otherwise) so that the holder of each
share of Series A Preferred Stock shall have the right thereafter to convert
such share of Series A Preferred Stock into the kind and amount of shares of
stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock
into which such share of Series A Preferred Stock might have been converted
immediately prior to such reclassification, exchange, substitution or other
change, all subject to further adjustment as provided herein.

            (v) Adjustments for Reorganization, Merger, Consolidation or Sales
of Assets. If at any time or from time to time after the Issuance Date there
shall be a capital reorganization of the Company (other than by way of a stock
split or combination of shares or stock dividends or distributions provided for
in Section 5(e)(i), (ii) and (iii), or a reclassification, exchange or
substitution of shares provided for in Section 5(e)(iv)), or a merger or
consolidation of the Company with or into another corporation where the holders
of outstanding voting securities prior to such merger or consolidation do not
own over 50% of the outstanding voting securities of the merged or consolidated
entity, immediately after such merger or consolidation, or the sale of all or
substantially all of the Company's properties or assets to any other person (an
"Organic Change"), then as a part of such Organic Change an appropriate revision
to the Conversion Price shall be made if necessary and provision shall be made
if necessary (by adjustments of the Conversion Price or otherwise) so that the
holder of each share of Series A Preferred Stock shall have the right thereafter
to convert such share of Series A Preferred Stock into the kind and amount of
shares of stock and other securities or property of the Company or any successor
corporation resulting from Organic Change. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section
5(e)(v) with respect to the rights of the holders of the Series A Preferred
Stock after the Organic Change to the end that the provisions of this Section
5(e)(v) (including any adjustment in the Conversion Price then in effect and the
number of shares of stock or other securities deliverable upon conversion of the
Series A Preferred Stock) shall be applied after that event in as nearly an
equivalent manner as may be practicable.

                                       9
<PAGE>

            (vi) Adjustments for Issuance of Additional Shares of Common Stock.

            (A) In the event the Company, shall, at any time, from time to time,
issue or sell any additional shares of Common Stock (otherwise than as provided
in the foregoing subsections (i) through (v) of this Section 5(e) or pursuant to
Common Stock Equivalents (hereafter defined) granted or issued prior to the
Issuance Date) (the "Additional Shares of Common Stock"), at a price per share
less than the Conversion Price, or without consideration, the Conversion Price
then in effect upon each such issuance shall be adjusted to that price (rounded
to the nearest cent) determined by multiplying the Conversion Price by a
fraction:

                  (1) the numerator of which shall be equal to the sum of (A)
the number of shares of Common Stock outstanding immediately prior to the
issuance of such Additional Shares of Common Stock plus (B) the number of shares
of Common Stock (rounded to the nearest whole share) which the aggregate
consideration for the total number of such Additional Shares of Common Stock so
issued would purchase at a price per share equal to the then Conversion Price,
and

                  (2) the denominator of which shall be equal to the number of
shares of Common Stock outstanding immediately after the issuance of such
Additional Shares of Common Stock

; provided, however, that in no event shall the Conversion Price be adjusted
pursuant to this Section 5(e)(vi) to a price less than $0.40.

No adjustment of the number of shares of Common Stock shall be made under
paragraph (A) of Section 5(e)(vi) upon the issuance of any Additional Shares of
Common Stock which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any Common Stock Equivalents (as defined below), if any such
adjustment shall previously have been made upon the issuance of such warrants or
other rights or upon the issuance of such Common Stock Equivalents (or upon the
issuance of any warrant or other rights therefore) pursuant to Section
5(e)(vii).

                                       10
<PAGE>

            (vii) Issuance of Common Stock Equivalents. The provisions of this
Section 5(e)(vii) shall apply if (a) the Company, at any time after the Issuance
Date, shall issue any securities convertible into or exchangeable for, directly
or indirectly, Common Stock ("Convertible Securities"), other than the Series A
Preferred Stock, or (b) any rights or warrants or options to purchase any such
Common Stock or Convertible Securities (collectively, the "Common Stock
Equivalents") shall be issued or sold. If the price per share for which
Additional Shares of Common Stock may be issuable pursuant to any such Common
Stock Equivalent shall be less than the applicable Conversion Price then in
effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable thereafter
is amended or adjusted, and such price as so amended shall be less than the
applicable Conversion Price in effect at the time of such amendment or
adjustment, then the applicable Conversion Price upon each such issuance or
amendment shall be adjusted as provided in the first sentence of subsection (vi)
of this Section 5(e). No adjustment shall be made to the Conversion Price upon
the issuance of Common Stock pursuant to the exercise, conversion or exchange of
any Convertible Security or Common Stock Equivalent where an adjustment to the
Conversion Price was made as a result of the issuance or purchase of any
Convertible Security or Common Stock Equivalent.

            (viii) Consideration for Stock. In case any shares of Common Stock
or Convertible Securities other than the Series A Preferred Stock, or any rights
or warrants or options to purchase any such Common Stock or Convertible
Securities, shall be issued or sold:

                  (1) in connection with any merger or consolidation in which
the Company is the surviving corporation (other than any consolidation or merger
in which the previously outstanding shares of Common Stock of the Company shall
be changed to or exchanged for the stock or other securities of another
corporation), the amount of consideration therefore shall be, deemed to be the
fair value, as determined reasonably and in good faith by the Board of Directors
of the Company, of such portion of the assets and business of the nonsurviving
corporation as such Board may determine to be attributable to such shares of
Common Stock, Convertible Securities, rights or warrants or options, as the case
may be; or

                  (2) in the event of any consolidation or merger of the Company
in which the Company is not the surviving corporation or in which the previously
outstanding shares of Common Stock of the Company shall be changed into or
exchanged for the stock or other securities of another corporation, or in the
event of any sale of all or substantially all of the assets of the Company for
stock or other securities of any corporation, the Company shall be deemed to
have issued a number of shares of its Common Stock for stock or securities or
other property of the other corporation computed on the basis of the actual
exchange ratio on which the transaction was predicated, and for a consideration
equal to the fair market value on the date of such transaction of all such stock
or securities or other property of the other corporation. If any such
calculation results in adjustment of the applicable Conversion Price, or the
number of shares of Common Stock issuable upon conversion of the Series A
Preferred Stock, the determination of the applicable Conversion Price or the
number of shares of Common Stock issuable upon conversion of the Series A
Preferred Stock immediately prior to such merger, consolidation or sale, shall
be made after giving effect to such adjustment of the number of shares of Common
Stock issuable upon conversion of the Series A Preferred Stock. In the event any
consideration received by the Company for any securities consists of property
other than cash, the fair market value thereof at the time of issuance or as
otherwise applicable shall be as determined in good faith by the Board of
Directors of the Company. In the event Common Stock is issued with other shares
or securities or other assets of the Company for consideration which covers
both, the consideration computed as provided in this Section (5)(e)(viii) shall
be allocated among such securities and assets as determined in good faith by the
Board of Directors of the Company.

                                       11
<PAGE>

            (ix) Record Date. In case the Company shall take record of the
holders of its Common Stock or any other Preferred Stock for the purpose of
entitling them to subscribe for or purchase Common Stock or Convertible
Securities, then the date of the issue or sale of the shares of Common Stock
shall be deemed to be such record date.

            (x) Certain Issues Excepted. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any adjustment to the
Conversion Price upon (i) securities issued (other than for cash) in connection
with a merger, acquisition, or consolidation, (ii) securities issued pursuant to
the conversion or exercise of convertible or exercisable securities issued or
outstanding on or prior to the date of the Purchase Agreement or issued pursuant
to the Purchase Agreement (so long as the conversion or exercise price in such
securities are not amended to lower such price and/or adversely affect the
holders), (iii) securities issued in connection with bona fide strategic license
agreements or other partnering arrangements so long as such issuances are not
for the purpose of raising capital, (iv) Common Stock issued or the issuance or
grants of options to purchase Common Stock pursuant to the Issuer's stock option
plans and employee stock purchase plans outstanding as they exist on the date of
the Purchase Agreement, and (v) any warrants issued to the placement agent and
its designees for the transactions contemplated by the Purchase Agreement.

      (f) No Impairment. The Company shall not, by amendment of its Articles of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Section 5 and in
the taking of all such action as may be necessary or appropriate in order to
protect the Conversion Rights of the holders of the Series A Preferred Stock
against impairment. In the event a holder shall elect to convert any shares of
Series A Preferred Stock as provided herein, the Company cannot refuse
conversion based on any claim that such holder or any one associated or
affiliated with such holder has been engaged in any violation of law, unless (i)
an order from the Securities and Exchange Commission prohibiting such conversion
or (ii) an injunction from a court, on notice, restraining and/or adjoining
conversion of all or of said shares of Series A Preferred Stock shall have been
issued and the Company posts a surety bond for the benefit of such holder in an
amount equal to 120% of the Liquidation Preference Amount of the Series A
Preferred Stock such holder has elected to convert, which bond shall remain in
effect until the completion of arbitration/litigation of the dispute and the
proceeds of which shall be payable to such holder in the event it obtains
judgment.

                                       12
<PAGE>

      (g) Certificates as to Adjustments. Upon occurrence of each adjustment or
readjustment of the Conversion Price or number of shares of Common Stock
issuable upon conversion of the Series A Preferred Stock pursuant to this
Section 5, the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
such Series A Preferred Stock a certificate setting forth such adjustment and
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon written request of the holder of
such affected Series A Preferred Stock, at any time, furnish or cause to be
furnished to such holder a like certificate setting forth such adjustments and
readjustments, the Conversion Price in effect at the time, and the number of
shares of Common Stock and the amount, if any, of other securities or property
which at the time would be received upon the conversion of a share of such
Series A Preferred Stock. Notwithstanding the foregoing, the Company shall not
be obligated to deliver a certificate unless such certificate would reflect an
increase or decrease of at least one percent of such adjusted amount.

      (h) Issue Taxes. The Company shall pay any and all issue and other taxes,
excluding federal, state or local income taxes, that may be payable in respect
of any issue or delivery of shares of Common Stock on conversion of shares of
Series A Preferred Stock pursuant hereto; provided, however, that the Company
shall not be obligated to pay any transfer taxes resulting from any transfer
requested by any holder in connection with any such conversion.

      (i) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by facsimile or
three (3) business days following being mailed by certified or registered mail,
postage prepaid, return-receipt requested, addressed to the holder of record at
its address appearing on the books of the Company. The Company will give written
notice to each holder of Series A Preferred Stock at least twenty (20) days
prior to the date on which the Company closes its books or takes a record (I)
with respect to any dividend or distribution upon the Common Stock, (II) with
respect to any pro rata subscription offer to holders of Common Stock or (III)
for determining rights to vote with respect to any Organic Change, dissolution,
liquidation or winding-up and in no event shall such notice be provided to such
holder prior to such information being made known to the public. The Company
will also give written notice to each holder of Series A Preferred Stock at
least twenty (20) days prior to the date on which any Organic Change,
dissolution, liquidation or winding-up will take place and in no event shall
such notice be provided to such holder prior to such information being made
known to the public.

      (j) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the Company
shall round the number of shares to be issued upon conversion up to the nearest
whole number of shares.

      (k) Reservation of Common Stock. The Company shall, so long as any shares
of Series A Preferred Stock are outstanding, reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Series A Preferred Stock, such number of shares of Common
Stock that are not issued or reserved for issuance as of the Issuance Date;
provided, however, upon the Company filing the Charter Amendment (as defined in
the Purchase Agreement), the Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, free of
preemptive rights and other similar contractual rights of stockholders, a number
of shares of Common Stock equal to one hundred fifty percent (150%) of the
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all of the shares of Series A Preferred Stock then
outstanding. The initial number of shares of Common Stock reserved for
conversions of the Series A Preferred Stock and any increase in the number of
shares so reserved shall be allocated pro rata among the holders of the Series A
Preferred Stock based on the number of shares of Series A Preferred Stock held
by each holder of record at the time of issuance of the Series A Preferred Stock
or increase in the number of reserved shares, as the case may be. In the event a
holder shall sell or otherwise transfer any of such holder's shares of Series A
Preferred Stock, each transferee shall be allocated a pro rata portion of the
number of reserved shares of Common Stock reserved for such transferor.

                                       13
<PAGE>

      (l) Retirement of Series A Preferred Stock. Conversion of Series A
Preferred Stock shall be deemed to have been effected on the Conversion Date.
Upon conversion of only a portion of the number of shares of Series A Preferred
Stock represented by a certificate surrendered for conversion, the Company shall
issue and deliver to such holder at the expense of the Company, a new
certificate covering the number of shares of Series A Preferred Stock
representing the unconverted portion of the certificate so surrendered as
required by Section 5(b)(ii).

      (m) Regulatory Compliance. If any shares of Common Stock to be reserved
for the purpose of conversion of Series A Preferred Stock require registration
or listing with or approval of any governmental authority, stock exchange or
other regulatory body under any federal or state law or regulation or otherwise
before such shares may be validly issued or delivered upon conversion, the
Company shall, at its sole cost and expense, in good faith and as expeditiously
as possible, endeavor to secure such registration, listing or approval, as the
case may be.

      6. No Preemptive Rights. Except as provided in Section 5 hereof and in the
Purchase Agreement, no holder of the Series A Preferred Stock shall be entitled
to rights to subscribe for, purchase or receive any part of any new or
additional shares of any class, whether now or hereinafter authorized, or of
bonds or debentures, or other evidences of indebtedness convertible into or
exchangeable for shares of any class, but all such new or additional shares of
any class, or any bond, debentures or other evidences of indebtedness
convertible into or exchangeable for shares, may be issued and disposed of by
the Board of Directors on such terms and for such consideration (to the extent
permitted by law), and to such person or persons as the Board of Directors in
their absolute discretion may deem advisable.

      7. Conversion Restriction. Notwithstanding anything to the contrary set
forth in Section 5 of this Certificate of Designation, at no time may a holder
of shares of Series A Preferred Stock convert shares of the Series A Preferred
Stock if the number of shares of Common Stock to be issued pursuant to such
conversion would cause the number of shares of Common Stock owned by such holder
at such time to exceed, when aggregated with all other shares of Common Stock
owned by such holder at such time, the number of shares of Common Stock which
would result in such holder beneficially owning (as determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the
rules thereunder) in excess of 9.9% of the then issued and outstanding shares of
Common Stock outstanding at such time; provided, however, that upon a holder of
Series A Preferred Stock providing the Company with sixty-one (61) days notice
(pursuant to Section 5(i) hereof) (the "Waiver Notice") that such holder would
like to waive Section 7 of this Certificate of Designation with regard to any or
all shares of Common Stock issuable upon conversion of Series A Preferred Stock,
this Section 7(a) shall be of no force or effect with regard to those shares of
Series A Preferred Stock referenced in the Waiver Notice.

                                       14
<PAGE>

      8. Redemption.

      (a) Redemption Option Upon Major Transaction. In addition to all other
rights of the holders of Series A Preferred Stock contained herein, simultaneous
with the occurrence of a Major Transaction (as defined below), each holder of
Series A Preferred Stock shall have the right, at such holder's option, to
require the Company to redeem all or a portion of such holder's shares of Series
A Preferred Stock at a price per share of Series A Preferred Stock equal to one
hundred percent (100%) of the Liquidation Preference Amount, plus any accrued
but unpaid dividends and liquidated damages (the "Major Transaction Redemption
Price"); provided that the Company shall have the sole option to pay the Major
Transaction Redemption Price in cash or shares of Common Stock. If the Company
elects to pay the Major Transaction Redemption Price in shares of Common Stock,
the price per share shall be based upon the Conversion Price then in effect on
the day preceding the date of delivery of the Notice of Redemption at Option of
Buyer Upon Major Transaction (as hereafter defined) and the holder of such
shares of Common Stock shall have demand registration rights with respect to
such shares.

      (b) Redemption Option Upon Triggering Event. In addition to all other
rights of the holders of Series A Preferred Stock contained herein, after a
Triggering Event (as defined below), each holder of Series A Preferred Stock
shall have the right, at such holder's option, to require the Company to redeem
all or a portion of such holder's shares of Series A Preferred Stock at a price
per share of Series A Preferred Stock equal to one hundred twenty percent (120%)
of the Liquidation Preference Amount, plus any accrued but unpaid dividends and
liquidated damages the "Triggering Event Redemption Price" and, collectively
with the "Major Transaction Redemption Price," the "Redemption Price"); provided
that with respect to the Triggering Events described in clauses (i), (ii), (iii)
and (vii) of Section 8(d), the Company shall have the sole option to pay the
Triggering Event Redemption Price in cash or shares of Common Stock; and
provided, further, that with respect to the Triggering Event described in
clauses (iv), (v), (vi) and (viii) of Section 8(d), the Company shall pay the
Triggering Event Redemption Price in cash. If the Company elects to pay the
Triggering Event Redemption Price in shares of Common Stock in accordance with
this Section 8(b), the price per share shall be based upon the Conversion Price
then in effect on the day preceding the date of delivery of the Notice of
Redemption at Option of Buyer Upon Triggering Event and the holder of such
shares of Common Stock shall have demand registration rights with respect to
such shares.

                                       15
<PAGE>

      (c) "Major Transaction". A "Major Transaction" shall be deemed to have
occurred at such time as any of the following events:

            (i) the consolidation, merger or other business combination of the
Company with or into another Person (other than (A) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company or (B) a consolidation, merger or other business
combination in which holders of the Company's voting power immediately prior to
the transaction continue after the transaction to hold, directly or indirectly,
the voting power of the surviving entity or entities necessary to elect a
majority of the members of the board of directors (or their equivalent if other
than a corporation) of such entity or entities).

            (ii) the sale or transfer of more than 50% of the Company's assets
other than inventory in the ordinary course of business in one or a related
series of transactions; or

            (iii) closing of a purchase, tender or exchange offer made to the
holders of more than fifty percent (50%) of the outstanding shares of Common
Stock in which more than fifty percent (50%) of the outstanding shares of Common
Stock were tendered and accepted.

      (d) "Triggering Event". A "Triggering Event" shall be deemed to have
occurred at such time as any of the following events:

            (i) so long as any shares of Series A Preferred Stock are
outstanding, the effectiveness of the Registration Statement, after it becomes
effective, (i) lapses for any reason (including, without limitation, the
issuance of a stop order) and such lapse continues for a period of twenty (20)
consecutive trading days, or (ii) is unavailable to the holder of the Series A
Preferred Stock for sale of the shares of Common Stock, and such lapse or
unavailability continues for a period of twenty (20) consecutive trading days,
and the shares of Common Stock into which such holder's Series A Preferred Stock
can be converted cannot be sold in the public securities market pursuant to Rule
144(k) ("Rule 144(k)") under the Securities Act of 1933, as amended, provided
that the cause of such lapse or unavailability is not due to factors solely
within the control of such holder of Series A Preferred Stock.

            (ii) the suspension from listing or trading, without subsequent
listing on any one of, or the failure of the Common Stock to be listed or traded
on at least one of, the OTC Bulletin Board, the Nasdaq National Market, the
Nasdaq Global Market, the New York Stock Exchange, Inc. or the American Stock
Exchange, Inc., for a period of five (5) consecutive trading days;

            (iii) the Company's notice to any holder of Series A Preferred
Stock, including by way of public announcement, at any time, of its inability to
comply (including for any of the reasons described in Section 9) or its
intention not to comply with proper requests for conversion of any Series A
Preferred Stock into shares of Common Stock; or

                                       16
<PAGE>

            (iv) the Company's failure to comply with a Conversion Notice
tendered in accordance with the provisions of this Certificate of Designation
within ten (10) business days after the receipt by the Company of the Conversion
Notice and the Preferred Stock Certificates; or (v) the Company deregisters its
shares of Common Stock and as a result such shares of Common Stock are no longer
publicly traded; or

            (v)  the Company deregisters its shares of Common Stock and as a
result such shares of Common Stock are no longer publicly traded; or

            (vi) the Company consummates a "going private" transaction and as a
result the Common Stock is no longer registered under Sections 12(b) or 12(g) of
the Securities Exchange Act of 1934, as amended; or

            (vii) the Company breaches any representation, warranty, covenant or
other term or condition of the Purchase Agreement, this Certificate of
Designation or any other agreement, document, certificate or other instrument
delivered in connection with the transactions contemplated thereby or hereby,
except to the extent that such breach would not have a Material Adverse Effect
(as defined in the Purchase Agreement) and except, in the case of a breach of a
covenant which is curable, only if such breach continues for a period of a least
ten (10) business days; or

            (viii) the Share Increase (as defined in the Purchase Agreement) has
not been effected within ninety (90) days following the Issuance Date.

      (e) Mechanics of Redemption at Option of Buyer Upon Major Transaction. No
sooner than thirty (30) days nor later than ten (10) days prior to the
consummation of a Major Transaction, but not prior to the public announcement of
such Major Transaction, the Company shall deliver written notice thereof via
facsimile and overnight courier ("Notice of Major Transaction") to each holder
of Series A Preferred Stock. At any time after receipt of a Notice of Major
Transaction (or, in the event a Notice of Major Transaction is not delivered at
least ten (10) days prior to a Major Transaction, at any time within ten (10)
days prior to a Major Transaction), any holder of Series A Preferred Stock then
outstanding may require the Company to redeem, effective immediately prior to
the consummation of such Major Transaction, all of the holder's Series A
Preferred Stock then outstanding by delivering written notice thereof via
facsimile and overnight courier ("Notice of Redemption at Option of Buyer Upon
Major Transaction") to the Company, which Notice of Redemption at Option of
Buyer Upon Major Transaction shall indicate (i) the number of shares of Series A
Preferred Stock that such holder is electing to redeem and (ii) the applicable
Major Transaction Redemption Price, as calculated pursuant to Section 8(a)
above.

      (f) Mechanics of Redemption at Option of Buyer Upon Triggering Event.
Within one (1) business day after the Company obtains knowledge of the
occurrence of a Triggering Event, the Company shall deliver written notice
thereof via facsimile and overnight courier ("Notice of Triggering Event") to
each holder of Series A Preferred Stock. At any time after the earlier of a
holder's receipt of a Notice of Triggering Event and such holder becoming aware
of a Triggering Event, any holder of Series A Preferred Stock then outstanding
may require the Company to redeem all of the Series A Preferred Stock by
delivering written notice thereof via facsimile and overnight courier ("Notice
of Redemption at Option of Buyer Upon Triggering Event") to the Company, which
Notice of Redemption at Option of Buyer Upon Triggering Event shall indicate (i)
the number of shares of Series A Preferred Stock that such holder is electing to
redeem and (ii) the applicable Triggering Event Redemption Price, as calculated
pursuant to Section 8(b) above.

                                       17
<PAGE>

      (g) Payment of Redemption Price. Upon the Company's receipt of a Notice(s)
of Redemption at Option of Buyer Upon Triggering Event or a Notice(s) of
Redemption at Option of Buyer Upon Major Transaction from any holder of Series A
Preferred Stock, the Company shall immediately notify such holder of Series A
Preferred Stock by facsimile of the Company's receipt of such Notice(s) of
Redemption at Option of Buyer Upon Triggering Event or Notice(s) of Redemption
at Option of Buyer Upon Major Transaction and each holder which has sent such a
notice shall promptly submit to the Company such holder's Preferred Stock
Certificates which such holder has elected to have redeemed. Other than with
respect to the Triggering Event described in clause (iv) of Section 8(d), the
Company shall have the sole option to pay the Redemption Price in cash or shares
of Common Stock in accordance with Sections 8(a) and (b) and Section 9 of this
Certificate of Designation. The Company shall deliver the applicable Major
Transaction Redemption Price immediately prior to the consummation of the Major
Transaction; provided that a holder's Preferred Stock Certificates shall have
been so delivered to the Company; provided further that if the Company is unable
to redeem all of the Series A Preferred Stock to be redeemed, the Company shall
redeem an amount from each holder of Series A Preferred Stock being redeemed
equal to such holder's pro-rata amount (based on the number of shares of Series
A Preferred Stock held by such holder relative to the number of shares of Series
A Preferred Stock outstanding) of all Series A Preferred Stock being redeemed.
If the Company shall fail to redeem all of the Series A Preferred Stock
submitted for redemption (other than pursuant to a dispute as to the arithmetic
calculation of the Redemption Price), in addition to any remedy such holder of
Series A Preferred Stock may have under this Certificate of Designation and the
Purchase Agreement, the applicable Redemption Price payable in respect of such
unredeemed Series A Preferred Stock shall bear interest at the rate of 1.0% per
month (prorated for partial months) until paid in full. Until the Company pays
such unpaid applicable Redemption Price in full to a holder of shares of Series
A Preferred Stock submitted for redemption, such holder shall have the option
(the "Void Optional Redemption Option") to, in lieu of redemption, require the
Company to promptly return to such holder(s) all of the shares of Series A
Preferred Stock that were submitted for redemption by such holder(s) under this
Section 8 and for which the applicable Redemption Price has not been paid, by
sending written notice thereof to the Company via facsimile (the "Void Optional
Redemption Notice"). Upon the Company's receipt of such Void Optional Redemption
Notice(s) and prior to payment of the full applicable Redemption Price to such
holder, (i) the Notice(s) of Redemption at Option of Buyer Upon Major
Transaction or Notice(s) of Redemption at Option of Buyer Upon Triggering Event
(as applicable) shall be null and void with respect to those shares of Series A
Preferred Stock submitted for redemption and for which the applicable Redemption
Price has not been paid and (ii) the Company shall immediately return any Series
A Preferred Stock submitted to the Company by each holder for redemption under
this Section 8(d) and for which the applicable Redemption Price has not been
paid; provided that no adjustment shall be made if such adjustment would result
in an increase of the Conversion Price then in effect. A holder's delivery of a
Void Optional Redemption Notice and exercise of its rights following such notice
shall not effect the Company's obligations to make any payments which have
accrued prior to the date of such notice other than interest payments. Payments
provided for in this Section 8 shall have priority to payments to other
stockholders in connection with a Major Transaction.

                                       18
<PAGE>

      (h) Demand Registration Rights. If the Redemption Price upon the
occurrence of a Major Transaction or a Triggering Event is paid in shares of
Common Stock and such shares have not been previously registered on a
registration statement under the Securities Act, a holder of Series A Preferred
Stock may make a written request for registration under the Securities Act
pursuant to this Section 8(h) of all of its shares of Common Stock issued upon
such Major Transaction or Triggering Event. The Company shall use its reasonable
best efforts to cause to be filed and declared effective as soon as reasonably
practicable (but in no event later than the ninetieth (90th) day after such
holder's request is made) a registration statement under the Securities Act,
providing for the sale of all of the shares of Common Stock issued upon such
Major Transaction or Triggering Event by such holder. The Company agrees to use
its reasonable best efforts to keep any such registration statement continuously
effective for resale of the Common Stock for so long as such holder shall
request, but in no event shall the Company be required to maintain the
effectiveness of such registration statement later than the date that the shares
of Common Stock issued upon such Major Transaction or Triggering Event may be
offered for resale to the public pursuant to Rule 144(k).

      9. Inability to Fully Convert.

      (a) Holder's Option if Company Cannot Fully Convert. If, upon the
Company's receipt of a Conversion Notice, the Company cannot issue shares of
Common Stock registered for resale under the Registration Statement for any
reason, including, without limitation, because the Company (w) does not have a
sufficient number of shares of Common Stock authorized and available, (x) is
otherwise prohibited by applicable law or by the rules or regulations of any
stock exchange, interdealer quotation system or other self-regulatory
organization with jurisdiction over the Company or its securities from issuing
all of the Common Stock which is to be issued to a holder of Series A Preferred
Stock pursuant to a Conversion Notice or (y) subsequent to the effective date of
the Registration Statement, fails to have a sufficient number of shares of
Common Stock registered for resale under the Registration Statement, then the
Company shall issue as many shares of Common Stock as it is able to issue in
accordance with such holder's Conversion Notice and pursuant to Section 5(b)(ii)
above and, with respect to the unconverted Series A Preferred Stock, the holder,
solely at such holder's option, can elect, within five (5) business days after
receipt of notice from the Company thereof to:

            (i) require the Company to redeem from such holder those Series A
Preferred Stock for which the Company is unable to issue Common Stock in
accordance with such holder's Conversion Notice ("Mandatory Redemption") at a
price per share equal to the Major Transaction Redemption Price as of such
Conversion Date (the "Mandatory Redemption Price"); provided that the Company
shall have the sole option to pay the Mandatory Redemption Price in cash or,
subject to Section 7 hereof, shares of Common Stock;

            (ii) if the Company's inability to fully convert Series A Preferred
Stock is pursuant to Section 9(a)(y) above, require the Company to issue
restricted shares of Common Stock in accordance with such holder's Conversion
Notice and pursuant to Section 5(b)(ii) above;

                                       19
<PAGE>

            (iii) void its Conversion Notice and retain or have returned, as the
case may be, the shares of Series A Preferred Stock that were to be converted
pursuant to such holder's Conversion Notice (provided that a holder's voiding
its Conversion Notice shall not effect the Company's obligations to make any
payments which have accrued prior to the date of such notice); or

            (iv) exercise its Buy-In rights pursuant to and in accordance with
the terms and provisions of Section 5(b)(vi) hereof.

      (b) Mechanics of Fulfilling Holder's Election. The Company shall
immediately send via facsimile or overnight courier to a holder of Series A
Preferred Stock, upon receipt of an original or facsimile copy of a Conversion
Notice from such holder which cannot be fully satisfied as described in Section
9(a) above, a notice of the Company's inability to fully satisfy such holder's
Conversion Notice (the "Inability to Fully Convert Notice"). Such Inability to
Fully Convert Notice shall indicate (i) the reason why the Company is unable to
fully satisfy such holder's Conversion Notice, (ii) the number of Series A
Preferred Stock which cannot be converted and (iii) the applicable Mandatory
Redemption Price. Such holder shall notify the Company of its election pursuant
to Section 9(a) above by delivering written notice via facsimile to the Company
("Notice in Response to Inability to Convert").

      (c) Payment of Redemption Price. If such holder shall elect to have its
shares redeemed pursuant to Section 9(a)(i) above, the Company shall pay the
Mandatory Redemption Price to such holder within thirty (30) days of the
Company's receipt of the holder's Notice in Response to Inability to Convert,
provided that prior to the Company's receipt of the holder's Notice in Response
to Inability to Convert the Company has not delivered a notice to such holder
stating, to the satisfaction of the holder, that the event or condition
resulting in the Mandatory Redemption has been cured and all Conversion Shares
issuable to such holder can and will be delivered to the holder in accordance
with the terms of Section 2(g). If the Company shall fail to pay the applicable
Mandatory Redemption Price to such holder on a timely basis as described in this
Section 9(c) (other than pursuant to a dispute as to the determination of the
arithmetic calculation of the Redemption Price), in addition to any remedy such
holder of Series A Preferred Stock may have under this Certificate of
Designation and the Purchase Agreement, such unpaid amount shall bear interest
at the rate of 2.0% per month (prorated for partial months) until paid in full.
Until the full Mandatory Redemption Price is paid in full to such holder, such
holder may (i) void the Mandatory Redemption with respect to those Series A
Preferred Stock for which the full Mandatory Redemption Price has not been paid,
(ii) receive back such Series A Preferred Stock, and (iii) require that the
Conversion Price of such returned Series A Preferred Stock be adjusted to the
lesser of (A) the Conversion Price and (B) the lowest Closing Bid Price during
the period beginning on the Conversion Date and ending on the date the holder
voided the Mandatory Redemption.

                                       20
<PAGE>

      (d) Pro-rata Conversion and Redemption. In the event the Company receives
a Conversion Notice from more than one holder of Series A Preferred Stock on the
same day and the Company can convert and redeem some, but not all, of the Series
A Preferred Stock pursuant to this Section 9, the Company shall convert and
redeem from each holder of Series A Preferred Stock electing to have Series A
Preferred Stock converted and redeemed at such time an amount equal to such
holder's pro-rata amount (based on the number shares of Series A Preferred Stock
held by such holder relative to the number shares of Series A Preferred Stock
outstanding) of all shares of Series A Preferred Stock being converted and
redeemed at such time.

      10. Vote to Change the Terms of or Issue Preferred Stock. The affirmative
vote at a meeting duly called for such purpose or the written consent without a
meeting, of the holders of not less than seventy-five percent (75%) of the then
outstanding shares of Series A Preferred Stock (in addition to any other
corporate approvals then required to effect such action), shall be required (a)
for any change to this Certificate of Designation or the Company's Articles of
Incorporation which would amend, alter, change or repeal any of the powers,
designations, preferences and rights of the Series A Preferred Stock or (b) for
the issuance of shares of Series A Preferred Stock other than pursuant to the
Purchase Agreement.

      11. Lost or Stolen Certificates. Upon receipt by the Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing the shares of Series A Preferred
Stock, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the holder to the Company that is reasonably acceptable to the
Company and, in the case of mutilation, upon surrender and cancellation of the
Preferred Stock Certificate(s), the Company shall execute and deliver new
preferred stock certificate(s) of like tenor and date; provided, however, that
the Company shall not be obligated to re-issue Preferred Stock Certificates if
the holder contemporaneously requests the Company to convert such shares of
Series A Preferred Stock into Common Stock.

      12. Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief. The remedies provided in this Certificate of Designation
shall be cumulative and in addition to all other remedies available under this
Certificate of Designation, at law or in equity (including a decree of specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy and
nothing herein shall limit a holder's right to pursue actual damages for any
failure by the Company to comply with the terms of this Certificate of
Designation. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the holder thereof and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the holders of the Series A Preferred
Stock and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the holders of the Series A Preferred Stock shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or
other security being required.

      13. Specific Shall Not Limit General; Construction. No specific provision
contained in this Certificate of Designation shall limit or modify any more
general provision contained herein. This Certificate of Designation shall be
deemed to be jointly drafted by the Company and all initial purchasers of the
Series A Preferred Stock and shall not be construed against any person as the
drafter hereof.

                                       21
<PAGE>

      14. Failure or Indulgence Not Waiver. No failure or delay on the part of a
holder of Series A Preferred Stock in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

                                       22
<PAGE>

      IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and does affirm the foregoing as true this 12th day of October,
2006.

                                 ASTRATA GROUP INCORPORATED

                                 By: _________________________________
                                     Name:  Martin George Euler
                                     Title: Chief Executive Officer

                                       23
<PAGE>

                           ASTRATA GROUP INCORPORATED
                                CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and
Preferences of the Series A Preferred Stock of Astrata Group Incorporated (the
"Certificate of Designation"). In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the number
of shares of Series A Preferred Stock, par value $0.0001 per share (the
"Preferred Shares"), of Astrata Group Incorporated, a Nevada corporation (the
"Company"), indicated below into shares of Common Stock, par value $0.0001 per
share (the "Common Stock"), of the Company, by tendering the stock
certificate(s) representing the share(s) of Preferred Shares specified below as
of the date specified below.

      Date of Conversion:
                                         --------------------------------------

      Number of Preferred Shares to be converted:
                                                  ---------

      Stock certificate no(s). of Preferred Shares to be converted:
                                                                    ---------

      The Common Stock are being contemporaneously sold pursuant to the
Registration Statement: YES ____ NO____

Please confirm the following information:

      Conversion Price:
                                         --------------------------------------

      Number of shares of Common Stock
      to be issued:
                                        ---------------------------------------

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the Date of Conversion: _________________________

Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

      Issue to:
                                         --------------------------------------
                                         --------------------------------------

      Facsimile Number:
                                         --------------------------------------

      Authorization:
                                         --------------------------------------
                                         By:
                                               --------------------------------
                                         Title:
                                               --------------------------------

Dated:

                                       24

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