Document:

Unassociated Document

    Exhibit
10.1

     

    
      

       

      Dated
this 18th day of May 2009

       

      Between

      Fame
Trading Ltd.

      as
Lender

       

      And

       

       

      Astrata
(Asia Pacific) Pte. Ltd.

       

       

      as
Borrower

       

       

      Facility
Agreement

       

      ABRAHAM

      Advocates
and Solicitors

      19,
Keppel Road

      #09-05,
Jit Poh Building

      Singapore
089058

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
 

      CONTENTS

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  Clause

                                                	
                                                  Heading

                                                	
                                                  Page

                                                
	 	 	 
	
                                                  1.

                                                	
                                                  Definitions
      and Interpretations

                                                	
                                                  1-5

                                                
	 	 	 
	
                                                  2.

                                                	
                                                  Facility

                                                	
                                                  5

                                                
	 	 	 
	
                                                  3.

                                                	
                                                  Conditions
      Precedent and Availability

                                                	
                                                  5-6

                                                
	 	 	 
	
                                                  4.

                                                	
                                                  Disbursement
      of Facility

                                                	
                                                  6-7

                                                
	 	 	 
	
                                                  5.

                                                	
                                                  Interest
      on Facility

                                                	
                                                  7

                                                
	 	 	 
	
                                                  6.

                                                	
                                                  Repayment
      of Facility

                                                	
                                                  7-8

                                                
	 	 	 
	
                                                  7.

                                                	
                                                  Facility
      Fee

                                                	
                                                  8

                                                
	 	 	 
	
                                                  8.

                                                	
                                                  Representations,
      Warranties and Covenants

                                                	
                                                  8

                                                
	 	 	 
	
                                                  9.

                                                	
                                                  Securities

                                                	
                                                  8

                                                
	 	 	 
	
                                                  10.

                                                	
                                                  Designated
      Bank Accounts

                                                	
                                                  8-9

                                                
	 	 	 
	
                                                  11.

                                                	
                                                  Set-off
      and Withholdings

                                                	
                                                  9

                                                
	 	 	 
	
                                                  12.

                                                	
                                                  Notices

                                                	
                                                  9-11

                                                
	 	 	 
	
                                                  13.

                                                	
                                                  Assignment

                                                	
                                                  11

                                                
	 	 	 
	
                                                  14.

                                                	
                                                  Partial
      Invalidity

                                                	
                                                  12

                                                
	 	 	 
	
                                                  15.

                                                	
                                                  Miscellaneous

                                                	
                                                  12-13

                                                
	 
      	 
      	 
      
	
                                                  Schedule

                                                	
                                                  Heading

                                                	
                                                  Page

                                                
	 
      	 
      	 
      
	
                                                  1

                                                	
                                                  Corporate
      Structure of Astrata Group Inc.

                                                	
                                                  14

                                                
	 	 	 
	
                                                  2

                                                	
                                                  Representations.
      Warranties and Covenants

                                                	
                                                  15-24

                                                
	 	 	 
	
                                                  3

                                                	
                                                  Borrowers
      Intellectual Property Rights

                                                	
                                                  25-26

                                                

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      This
Facility Agreement ("Agreement") is made the 18th
day of May, 2009 BETWEEN:-

      

      (1)           FAME
TRADING LTD., a company incorporated in British Virgin Islands and having its
registered office at Akara Building, 24 De Castro Street, Wickhams Cay 1, Road
Town, Tortola, British Virgin Islands ("Lender"); and

      

      (2)           ASTRATA
(ASIA PACIFIC) PTE LTD (Co. Reg No. 200309962E), a company incorporated in the
Republic of Singapore and having its registered office at 135 Joo Seng Road,
#02-01, Singapore 368363 ("Borrower").

      

      RECITAL:-

      

      (A)           The
Lender has, at the request of the Borrower. agreed to make available to the
Borrower, the Facility (as hereinafter defined) on the terms and conditions
contained in the Transaction Documents (as hereinafter defined).

      

      (B)           The
Borrower is a subsidiary of the Holding Company (as hereinafter defined), which
has a number of subsidiaries and associate companies as diagrammatically
illustrated in Schedule 1.

      

      IT IS
HEREBY AGREED as follows:

      

      1.           Definitions
and Interpretation

      

      1.1           In
this Agreement, unless the context otherwise admits, all words and expressions
shall have the following meanings respectively:-

      

      "Business
Day" means a day on which the banks are open for business in United States of
America and Singapore except Saturday, Sunday and public holidays in the said
countries;

      

      "Connected
Person" means –

       

      (a)           in
relation to an individual:

       

      
 

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      (i)           
the individual's spouse, son, adopted son, step-son, daughter, adopted daughter,
step-daughter, father, step-father, mother, step­mother, brother,
step-brother, sister or step-sister; and

      

      (ii)           a
firm, a limited liability partnership or a corporation in which the individual
or any of the persons mentioned in sub-paragraph (i) has control of not less
than 20 per cent of the voting power in the firm, limited liability partnership
or corporation, whether such control is exercised individually or
jointly

      

      (b)           in
relation to a firm, limited liability partnership or a corporation: another
firm, limited liability partnership or corporation in which the first-mentioned
firm, limited liability partnership or corporation has control of not less than
20 per cent of the voting power;

      

      "Debentures”
means:

      

      (i)           the
debenture executed or to be executed between the Lender and the Borrower;
and

      

      (ii)           the
debenture executed or to be executed between the Lender and the Second
Chargor,

      

      "Disbursement"
has the meaning ascribed to it in Clause 4.1;

      

      "Encumbrance"
means any claim, charge, mortgage, security, lien, option, equity, power of
sale, hypothecation or other third party rights, retention of title, right of
pre-emption, right of first refusal or security interest of any
kind;

      

      "Events
of Default" means the events of default as provided in the
Debentures;

      

      "Facility"
means the principal sum of US$8,500,000 (or such lesser sum as the case maybe)
that shall be advanced by the Lender to the Borrower pursuant and subject to
this Agreement;

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      
 

      "Facility
Fee" has the meaning ascribed to it in Clause 7;

      

      “Facility
Repayment Date" means the date immediately following the day on which the period
of 90 days expires from the date the Facility (or the first portion of the
Facility, as the case maybe) is disbursed by the Lender to the
Borrower;

      

      "Holding
Company" means Astrata Group Inc. (Co. Reg No. C55761996), a company
incorporated in the State of Nevada. United States of America, and having its
registered office at 1000 East William Street, Suite 204, Carson City, NV 89701,
United States of America, which is the holding company of the
Borrower;

      

      "Interest
Rate" means the rate equivalent to LIBOR plus 5 per cent per annum;

      

      "LIBOR"
means the daily reference rate based on the London Interbank Offer
Rate;

      

      “Parties"
mean the parties to this Agreement:

      

      "Second
Chargor" means Astrata (Singapore) Pte Ltd (Co. Reg. No. 200309965W), a company
incorporated in the Republic of Singapore and having its registered office at
135 Joo Seng Road #02-01, Singapore 368363.

      

      "Senior
Employee" means an employee of the Borrower whose monthly remuneration exceeds
US$ 10,000.00;

      

      "Total
Indebtedness" means collectively the principal sum of US$8.500.000 (or such
lesser sum that have been disbursed by the Lender to the Borrower) and all
interest, fees, costs. and other moneys whatsoever, whether actually or
contingently, which are expressed to be payable (whether at maturity or
otherwise) by the Borrower under or in connection with or which the Borrower has
covenanted to pay or discharge under the Transaction Documents;

       

      
 

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      "Transaction
Documents" means collectively this Agreement and the following
documents:-

      

      (i)           the
Debenture executed or to be executed between the Lender and the
Borrower;

      

      (ii)           the
Debenture executed or to be executed between the Lender and the Second
Chargor;

      

      (iii)           the
Pledge Agreement executed or to be executed between the Lender and the Holding
Company; and

      

      (iv)           the
Continuing Guarantee executed or to be executed between the Lender and the
Holding Company.

      

      any other
facility or security document or other document that may hereafter and from time
to time be executed in connection with the Facility including any amendments,
variations, supplements or modifications thereto and Transaction Document means
each and any one of them.

      

      "US$"
means the lawful currency of United States of America.

      

      1.2           Construction

      

      (a)           The
headings in this Agreement are inserted for convenience only and shall not
affect the construction of this Agreement;

      

      (b)           Any
reference in this Agreement to "this Agreement" includes all amendments.
additions, and variations thereto agreed between the parties
hereto;

      

      (c)           Unless
the context otherwise requires. words importing the singular shall include the
plural and vice versa; words importing a specific gender shall include the other
genders (male, female or neuter), and "person" shall include an individual,
corporation, company, partnership, firm, trustee,

       

      
 

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

      trust,
executor, administrator or other legal personal representative, unincorporated
association, joint venture, syndicate or other business enterprise, any
governmental, administrative or regulatory authority or agency (notwithstanding
that "person" may be sometimes used herein in conjunction with some of such
words), and their respective successors, legal personal representatives and
assigns, as the case may be, and pronouns shall have a similarly extended
meaning;

      

      (d)           A
reference to a "month" is a reference to a period starting on one day in a
calendar month and ending on the day immediately preceding the numerically
corresponding day in the next succeeding calendar month; and

      

      (e)           The
words "written" and "in writing" include any means of visible reproduction.
References to "Recitals", "Clauses", and "Schedules.' are to the recitals,
clauses of, and the schedules to. this Agreement (unless the context otherwise
requires). Any reference to a "paragraph" is to a reference to a paragraph of
the Clause in which such reference appears. The Schedules forms part of this
Agreement and have the same force and effect as if expressly set out in the body
of this Agreement.

      

      2.           Facility

      

      Subject
to the provisions of the Transaction Documents, the Lender hereby agrees to make
available to the Borrower the Facility at the time and in the manner herein
provided.

      

      3.           Conditions
Precedent and Availability

      

      3.1           The
Facility shall be made available to the Borrower subject to the fulfilment of
the following conditions precedent, that is to say:- 

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      (a)          the
Lender shall have received in form and substance satisfactory to it the
following:-

      

      (i)           the
Transaction Documents (other than this Agreement) duly executed by the Borrower;
and

      

      (ii)           any
other document which the Lender may reasonably require.

      

      (b)           all
representations, warranties and statements contained herein and in the
Transaction Documents or otherwise made in writing in connection herewith or in
any certificate or statement or document furnished pursuant to any provisions
hereof shall be true and correct with the same effect as though made on the date
on which the Facility or any portion thereof is made available by the Lender to
the Borrower; and

      

      (c)           there
shall not exist any Event of Default at or prior to the Disbursement of the
Facility or any portion thereof by the Lender to the Borrower.

      

      4.           Disbursement
of Facility

      

      4.1           The
Lender hereby agrees to disburse the Facility or any portion thereof as and when
the Borrower requisitions for it.

      

      4.2           The
Borrower shall produce to the Lender a requisition for Disbursement in writing
no later than 5 Business Days before the date such Disbursement is to be
effected.

      

      4.3           The
aforesaid requisition for Disbursement shall be accompanied by a budget of
income and capital expenditure that has been or is to be incurred and paid by
the Borrower in the month immediately following the month in which the
requisition is made supported by invoices or any other evidence demonstrating
that such expenditure is payable in the relevant month and shall additionally
include a requisition
for a portion of the Facility Fee representing a sum equal to 5 per cent of the
relevant Disbursement.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      
 

      4.4           The
Lender shall at its absolute discretion, determine whether or not any item of
expenditure shall be excluded from the relevant budget or the payment of which
shall be deferred to a later date and may accordingly exclude such item of
expenditure from any Disbursement that it may make to the Borrower.

      

      4.5          
Where a notice has been issued by the Lender to the Borrower pursuant to Clause
6.2 of this Agreement, the Lender shall no longer be obliged thenceforth to make
any further Disbursement (if any portion of the Facility is not disbursed as of
the date of the notice).

      

      5.           Interest
on Facility

      

      5.1           The
Borrower shall pay to the Lender interest on the Facility at the Interest Rate
for the period commencing from the date the Facility or any portion thereof is
made available by the Lender to the Borrower to the Facility Repayment
Date.

      

      5.2           In
the Event of Default by the Borrower in the payment of any sum due on the
Facility Repayment Date, the Borrower shall (in addition to the interest payable
under clause 5.1 above) pay an additional 5 per cent interest by way of default
interest on the Total Indebtedness for the period from the Facility Repayment
Date until the date the Total Indebtedness is received.

      

      5.3           All
interest payable pursuant to this Agreement shall accrue from day to day and
shall be calculated on the basis of a year of 365 days.

      

      6.           Repayment
of Facility

      

      6.1           Subject
to Clause 7 in the Debentures, the Borrower shall repay the Facility on the
Facility Repayment Date, provided that the Borrower may in its discretion,
repay the
Facility or any portion thereof at any date earlier than the Facility Repayment
Date, without any penalty or fee.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      
 

      6.2           Notwithstanding
anything herein contained, the Facility is repayable on demand by the Lender at
any time, by the Lender sending a written notice to the Borrower to repay the
Facility within 7 Business Days from the date of the notice.

      

      7.           Facility
Fee

      

      The
Borrower hereby acknowledge that Jaker Investments Limited ("Jaker) , a company
duly incorporated in Hong Kong and having its registered office at Suite 2302-3,
Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong had introduced the
Borrower to the Lender and had negotiated the terms of the Facility with the
Borrower and the Lender. In consideration therefor the Borrower shall pay to
Jaker by way of a Facility Fee, a sum equal to 10 per cent of the Facility; 5
per cent of which shall be payable as and when the Disbursements are made, and
the remaining 5 per cent shall be payable on or before the expiry of 180 days
from the date hereof.

      

      8.           Representations,
Warranties and Covenants

      

      The
Borrower's representations, warranties and covenants are as set out in Schedule
2.

      

      9.           Securities

      

      The
Borrower hereby agrees and declares that the Debentures, the Pledge Agreement
and the Continuing Guarantee shall be and remain as continuing securities for
the payment of the Total Indebtedness.

      

      10.           Designated
Bank Accounts

      

      10.1           Whether
or not an Event of Default shall have occurred, the Borrower shall at the
written request of the Lender forthwith cause a bank account to be opened in its
name and shall forthwith cause the Second Chargor to open a bank account in
its name
(collectively known as the "Designated Bank Accounts', and to do all things,
acts and deeds as shall be necessary for the said accounts to be operated
jointly by a director of the Borrower or of the Second Chargor (as the case may
be) and a person nominated by the Lender (Signatories"). The Borrower undertakes
to keep its Designated Bank Account opened and operated and cause the Second
Chargor to keep its Designated Bank Account opened and operated by the
Signatories, and to deposit and procure that the Second Charger deposits and/or
pay into the respective Designated Bank Accounts all monies that the Borrower
and the Second Chargor shall receive from time to time from their respective
debtors or otherwise, and continue to make such deposits or payments into the
said accounts until such time as the Borrower shall receive a notice in writing
from the Lender notifying the Borrower and the Second Chargor to do
otherwise.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      
 

      10.2           All
monies deposited into the Designated Bank Accounts shall be appropriated,
disbursed or otherwise dealt with in such manner as the Signatories to the
respective Designated Bank Accounts shall from time to time
determine.

      

      11.           Set-off
and Withholdings

      

      All sums
payable by the Borrower to the Lender pursuant to the Transaction Documents,
whether principal, interest or otherwise, shall be paid in full, free of any
restriction or condition, without set-off or counter-claim and without any
deduction or withholding for or on account of any taxes. All such taxes shall be
borne and paid by the Borrower.

      

      12.           Notices

      

      12.1           Any
notice or other communication given under this Agreement shall be in writing and
shall be served by delivering it personally or sending it by registered post or
by registered airmail (if posted to a country other than where the serving Party
is located) or courier or facsimile transmission to the address or electronic
transmission
to the answerback address and for the attention of the relevant Party. Any such
notice shall be deemed to have been received:

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      
 

      a)           if
delivered personally, at the time of delivery;

      

      b)           in
the case of registered post or by courier, 48 hours from the date of posting or
dispatch ;

      

      c)           in
the case of registered airmail, 5 days from the date of posting;
and

      

      d)           in
the case of facsimile or electronic transmission, at the time of
transmission

      

      Provided
that if deemed receipt occurs before 9 am on a Business Day the notice shall be
deemed to have been received at 9 am on that day, and if receipt occurs after 5
pm on a Business Day, or on a day which is not a Business Day, the notice shall
be deemed to have been received at 9 am on the next Business Day.

      

      12.2       
Addresses and fax numbers of the Parties are:

      

      
        	
                a)

              	
                In
      the case of the Lender:

              	 
      	 
      
	 
      	
                i)  
      

              	
                Attn:
      Mohan
      Raj Abraham

              	
                 

              
	 
      	
                 

              	
                      
                  Address:
      19, Keppel Road #09-05, Jit Poh Building

                

              	 
      
	 
      	 
      	
                Singapore
      089058

              	 
      
	 
      	
                 

              	
                Fax:
      +65 6323 0291

              	 
      
	 
      	
                 

              	
                Email:
      mohan@abrahamlawoffice.com

              	 
      
	 
      	
                and

              	 
      	 
      
	 
      	
                ii)  
      

              	
                Attn:
      Janet
      Cowgill

              	
                 

              
	 
      	
                 

              	
                Address:
      Wind Fields

              	 
      
	 
      	 
      	
                39850
      Snickersville Turnpike

              	 
      
	 
      	 
      	
                Middleburg
      VA 20117

              	 
      
	 
      	 
      	
                Fax:
      703
      940 4282

              	
                 

              
	 
      	 
      	
                Email:
      jancowoillaol.com

              	
                 

              

      

      

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      
 

      
        	
                b)

              	
                In
      the case of the Borrower:

              	 
      
	 
      	
                 

              	
                Attn:
      Anthony Harisson

              
	 
      	
                 

              	
                Address:
      135 Joo Seng Road #02-01, Singapore 368363

              
	 
      	
                 

              	
                Fax:
      +65 6338 5373

              
	 
      	
                 

              	
                Email:
      aharrison@astratagroup_com

              

      

      

      or such
other address or facsimile number as may be notified in writing from time to
time by the relevant Party to the other Party.

      

      12.3           Each
Party may change its address from time to time, provided notice of such change
of address is provided to the other Party in accordance with this
Clause.

      

      13.           Assignment

      

      13.1           This
Agreement shall benefit and be binding on the Parties, their permitted assignees
and their respective successors.

      

      13.2           The
Borrower may not assign or transfer any of its rights or obligations under the
Transaction Documents.

      

      13.3           The
Lender may assign all or part of its rights or transfer all or part of its
obligations under the Transaction Documents without the consent of the Borrower.
The assignee or transferee shall be and be treated as a party for all purposes
of the Transaction Documents and be entitled to the full benefit of the
Transaction Documents as it if were an original party in respect of the rights
and obligations assigned or transferred to it.

      

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      

      14.           Partial
Invalidity

      

      If at any
time, any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the laws of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions of this
Agreement nor of such provisions under the laws of any other jurisdiction shall
in any way be affected or impaired thereby.

      

      15.           Miscellaneous

      

      15.1         
Law

      

      This
Agreement shall be governed by and construed in accordance with the laws of
Singapore.

      

      15.2        
Jurisdiction

      

      In
relation to any legal action or proceedings arising out of or in connection with
this Agreement ("Proceedings"), each Party hereby irrevocably submits to the
exclusive jurisdiction of the courts of Singapore and waives any objection to
Proceedings on the ground of venue or on the ground that the Proceedings have
been brought in an inconvenient forum.

      

      15.3        
Costs

      

      All costs
and charges (including legal expenses) of the Lender incurred in connection with
this Agreement and the Transaction Documents and all administration costs and
charges of the Lender shall be on the account of and paid by the
Borrower.

      

      15.4       
Time is of Essence

      

      Time is
of the essence of this Agreement but no failure to exercise and no delay in
exercising. on the part of the Lender, any right, power, or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right,
power or privilege preclude any other or further exercise thereof, or the
exercise of any other power of right. The rights and remedies herein provided
are cumulative and not exclusive of any rights or remedies provided by
law.

      

      15.5        
Counterparts

      

      This
Agreement may be signed in any number of counterparts, all of which taken
together when delivered to the Lender shall constitute one and the same
instrument. Any party may enter into this Agreement by signing any such
counterpart.

      

      

      (This
space is intentionally left blank)

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

      
 

      Schedule
1

      

      Corporate
Structure of Astrata Group Inc.

      

      Astrata
Group Inc.

      

      
        
          
            
              
                	
                        Astrata
      (Europe) Ltd

                        100%

                      	
                        Astrata
      (Asia Pacific)

                        Pte
      Ltd

                        100%

                      	
                        Passtime
      Telematics Inc.

                        51%

                      

              

            

          

        

      

      

      
        
          
            
              
                
                  
                    	
                            Astrata

                            (Singapore)

                            Pte
      Ltd

                            100%

                          	
                            Astrata

                            (Malaysia)

                            Sdn
      Bhd

                            100%

                          	
                            Astrata

                            (Brunei)

                            Sdn
      Bhd

                            70%

                          	
                            Astrata

                            (New
      Zealand)

                            Ltd

                            49%

                          	
                            Astrata

                            (Middle
      East)

                            LLC

                            49%

                          

                  

                

              

            

          

        

      

      

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      
 

      Schedule
2

      Representations,
Warranties and Covenants

      

      1.           Borrower's
Representations, Warranties & Covenants

      

      The
Borrower hereby represents, warrants and covenants the following to the
Lender:

      

      1.1           Capital
Expenditure:

      

      that save
with the written consent of the Lender, the Borrower will not enter into any
agreement or incur any commitment involving any capital expenditure in excess of
US$250,000.00 in the aggregate;

      

      1.2           Contracts
& Commitments:

      

      that save
with the written consent of the Lender, the Borrower will not enter into or
amend any contract or incur any commitment which is not capable of being
terminated without compensation at any time with three months' notice or less
and which is not in the ordinary and usual course of business and which involves
or may involve total annual expenditure in excess of US$250,000.00 in each
case:

      

      1.3           Borrowings:

      

      that save
with the written consent of the Lender, the Borrower will not incur any
borrowings or any other indebtedness in excess of US$250.000 00 in the
aggregate;

      

      1.4           Senior
Employees:

      

      that the
Borrower will not, save as required by law or with the written consent of the
lender, make any amendment to the terms and conditions of employment (including,
without limitation, remuneration, pension entitlements and other benefits) of
Senior Employees, or provide or agree to provide any gratuitous payment or
benefit to any such person or any of their dependants, or dismiss any such
employee or engage or appoint any additional Senior Employees;

      

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      

      1.5           Increase,
Decrease or Repurchase of Capital:

      

      that the
Borrower will not allot, issue, redeem or repurchase any share or loan capital
(or grant options to subscribe for the same);

      

      1.6           Disclosure
of Information:

      

      that the
information contained in this Agreement and all other information which has been
or will be given in writing by the Borrower to the Lender, to the best of the
knowledge, information and belief of the Borrower was and will be when given,
(and remains if given prior to the date of this Agreement), true, complete and
accurate in all respects and not misleading and the Borrower is not aware of any
fact or matter or circumstances not disclosed in writing to the Lender which
renders any such information untrue, inaccurate or misleading or the disclosure
of which might reasonably affect the willingness of the Lender to grant the
Facility to the Borrower or impair the Facility;

      

      1.7           Accounts:

      that
copies of the audited and management accounts of the Borrower and the
constitutional documents of the Borrower that have been/are to be delivered or
made available to the Lender under this Agreement are/shall be complete and
are/shall be accurate in all respects and in the case of the constitutional
documents contain full details of the rights and restrictions attached to the
share capital of the Borrower;

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      
 

      1.8           Shareholders
Agreements:

      

      that
there is no shareholders' agreement or other agreement executed by the Borrower,
the terms of which supersede or prevail over the provisions of the
constitutional documents of the Borrower:

      

      1.9           Power
of Attorney:

      

      that the
Borrower has not given any power of attorney or any other authority (express,
implied or ostensible) which is still outstanding or effective, to any person to
enter into any contract or commitment or do anything on its behalf and shall not
hereafter give any such power of attorney or such authority;

      

      1.10           Granting
of Securities, etc:

      

      that
there shall be no indebtedness (actual or contingent) or any indemnity,
guarantee or security arrangement between the Borrower and any current or former
employee, current or former director or any current or former consultant of the
Borrower or any Connected Person of any of such persons as of this
date;

      

      1.11           Contracts
to Connected Person:

      

      that save
as disclosed in the audited and management accounts, the Borrower has not been a
party to any contract, arrangement or understanding (i) with any current or
former employee, any current or former director or any current or former
consultant of the Borrower or any Connected Person of any such person, or (ii)
in which any current or former employee, any current or former director or any
current or former consultant of the Borrower or any Connected Person of any of
such persons is interested (whether directly or indirectly);

      

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      

      1.12           Extraordinary
Contracts & Commitments:

      

      that the
Borrower has not been a party to any contract, commitment, arrangement,
transaction, understanding, obligation or liability which:

      

      (i)           is
outside the ordinary and usual course of business;

      

      (ii)           is
not wholly on an arm's length basis;

      

      (iii)           save
in the ordinary course of business is of a long-term nature (that is, unlikely
to have been fully performed in accordance with its terms more than six months
after the date it was entered into or undertaken or incapable of termination on
six months' notice or less);

      

      (iv)           cannot
readily be fulfilled or performed on time without undue or unusual expenditure
of money or effort; or

      

      (v)           involves,
or is likely to involve, obligations or liabilities which by reason of their
nature or magnitude, ought reasonably to be made known to the
Lender.

      

      1.13           Restrictive
Agreements or Joint Ventures

      

      that save
as disclosed to the Lender, the Borrower:

      

      (i)           is
not or has not been a party to any agreement or arrangement which restricts its
freedom to carry on its business in any part of the world;

      

      (ii)           is
not, or has not agreed to become, a member of any joint venture, consortium,
partnership or other unincorporated association; or

      

      (iii)           is
not, or has not agreed to become, a party to any agreement or arrangement for
participating with others in any business sharing commissions or other
income.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      
 

      1.14           Assets

      

      that all
assets (other than the Intellectual Property) of the Borrower, including all
debts due to the Borrower which are included in the audited and management
accounts or have otherwise been represented as being the property of or due to
the Debtors or at the balance sheet date used or held for the purposes of its
business, were at the balance sheet date the absolute property of the Borrower
and (save for those subsequently disposed of or realized in the ordinary and
usual course of business) all such assets and all assets and debts which have
subsequently been acquired or arisen are the absolute property of the Borrower
and none is the subject of any assignment or Encumbrance (excepting only liens
arising by operation of law in the normal course of trading) or the subject of
any factoring arrangement, hire purchase. conditional sale or credit sale
agreement to which the Borrower is a party;

      

      1.15           Stocks

      

      that the
stock (if any) currently held is not excessive but is adequate in relation to
the current trading requirements of the Borrower, is in good. undamaged and
merchantable condition, is not obsolete, slow-moving or inappropriate and is
capable of being sold in the ordinary and usual course of business in accordance
with its current price list, without rebate or allowance to a purchaser (or to
the extent that this is not the case, adequate provision or reserve has been
made therefor in the audited and management accounts of the
Borrower);

      

      1.16           Plant
& Machinery:

      

      that the
plant, machinery, vehicles and all other equipment owned or used in connection
with the business of the Borrower.

      

      (i)           are
(subject to normal wear and tear) in good repair and condition and reasonable
working order having regard to their age and use:

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      
 

      (ii)           have
been regularly and properly maintained where such maintenance is usually
required;

      

      (iii)           are
not dangerous, obsolete, inefficient or surplus to requirements and are in the
possession and control the Borrower and are not expected to require replacements
or additions at a cost in excess of US$100,000.00 within 12 months after the
date of this Agreement; and

      

      (iv)           are
capable and will (subject to normal wear and tear) remain capable throughout the
respective periods of time during which they are written down to a nil value in
the accounts of the Borrower of doing the work for which it was designed or
purchased.

      

      1.17           Maintenance
Contracts

      

      that the
maintenance contracts are in full force and effect in respect of all assets of
the Borrower which are normal or prudent to have maintained by independent or
specialist contractors and in respect of all assets which the Borrower is
obliged to maintain or repair under any agreement; and all such assets have been
maintained regularly to a good technical standard and in accordance with safety
regulations usually observed in relation thereto and in accordance with the
terms of any leasing or other agreement; and

      

      1.18           Proprietary
information:

      

      that the
following proprietary information are true and accurate at the date of this
Agreement:

      

      (i)           Definitions

      

      For the
purposes of this paragraph 1.18:

      

      "Business Information" means
all information, Know-how and records (whether or not confidential and in
whatever form held) including, without limitation, all formulae, designs,
specifications. drawings, data, manuals and instructions and all client lists,
sales information business plans and forecasts, and all technical or other
expertise and all computer software and all accounting and tax records,
correspondence, orders and inquiries;

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      
 

      "Business IP" means all rights
and interest owned by the Borrower (whether as owner, licensee or otherwise) in
Intellectual Property which is at or immediately before the date hereof used or
is capable of being used in or in connection with the business of the Borrower
including but not limited to the rights of the software and hardware more
particularly described in Schedule 3;

      

      "Confidential Business
Information" means Business Information which is confidential and which
is not accessible to or within the domain of the public at large;

      

      "Intellectual Property" means
trade marks, service marks, trade names, domain names, logos, get-up, patents,
inventions, registered and unregistered design rights, copyrights,
semi-conductor topography rights. database rights and all other similar rights
in any part of the world (including Know-how) where such rights are obtained or
enhanced by registration, any registration of such rights and applications and
rights to apply for such registrations; and

      

      "Know-how" means confidential
and proprietary industrial and commercial information and techniques in any form
including, without limitation, drawings. formulae, test results, reports,
project reports and testing procedures, instruction and training manuals, tables
of operating conditions, market forecasts, and lists and particulars of
customers and suppliers.

      

      (ii)           Ownership
etc.

      

      All
Intellectual Property (whether registered or not) and all pending applications
therefor which have been, are, or are capable of being used in or in relation to
or which are necessary for the business of the Borrower is (or, where
appropriate in the case of pending applications, will be):

      

      (a)           legally
and beneficially owned by the Borrower or lawfully used with the consent of the
owner under a licence;

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      
 

      (b)           valid
and enforceable:

      

      (c)           not
being infringed or attacked or opposed by any person:

      

      (d)           not
subject to any Encumbrance or any licence or authority save as disclosed in the
audited and management account or as disclosed in writing to the
Lender;

      

      (e)           in
the case of rights in such Intellectual Property as are registered or the
subject of applications for registration. and all renewal fees which are due and
steps which are required for their maintenance and protection have been paid and
taken; and

      

      (f)           in
the case of unregistered trademarks which are likely to be material to the
Borrower, and no claims have been made an no applications are pending, which if
pursued or granted might be material to the truth and accuracy of any of the
above.

      

      (iii)           Intellectual
Property

      

      (a)           All
rights in all Intellectual Property and Business Information owned, used by or
otherwise required for the business of the Borrower are vested in or validly
granted to the Borrower and are not subject to any limit as to time or any other
limitation, right of termination or restriction and all renewal fees and steps
required for their maintenance or protection have been paid and
taken.

      

      (b)           All
rights in the Intellectual Property and all Business Information owned, used by
or otherwise required for the business of the Borrower is in the possession of
the Borrower and the Borrower is not a party to any confidentiality or other
agreement or subject to any duty which restricts the free use or disclosure of
any of such Business Information.

      

      (c)           The
Borrower has not granted or is obliged to grant any licence, sub-licence or
assignment in respect of any Intellectual Property owned, used by or otherwise
required for the business of the Borrower or has disclosed or is obliged to
disclose any Confidential Business Information required for the business of the
Borrower to any person, other than its employees or those of the Borrower for
the purposes of carrying on its business.

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      
 

      (d)           The
Borrower nor any party with which the Borrower has contracted with is not in
breach of any licence, sub-licence or assignment granted to or by it in respect
of any Intellectual Property owned, used by or otherwise required for the
business of the Borrower or of any agreement under which any Business
Information was, or is to be made available to it.

      

      (e)           There
is no, nor has there been at any time any, unauthorized use or infringement by
any person of any of the Intellectual Property or Confidential Business
Information owned, used by or otherwise required for the business of the
Borrower.

      

      (iv)           Processes
etc.

      

      The
processes employed, the businesses conducted by the Borrower and the products
and services dealt in by the Borrower both now and at any time within the last
six years do and did not use, embody or infringe any rights or interests of
third parties in Intellectual Property (other than those belonging to or
licensed to the) and no claims of infringement of any such rights or interests
have been made by any third party.

      

      (v)           Licences

      

      Where
there are licences secured by the Borrower from third parties, such licences are
in full force and effect, no notice having been given on either side to
terminate them; the obligations of all parties have been fully complied with; no
disputes have arisen or are foreseeable in respect thereof: and where such
licences are of such a nature that they could be registered with the appropriate
authorities and where such registration would have the effect of strengthening
the Borrower's rights they have been so registered.

      

      (vi)           Know-how

      

      There is
and has been no misuse of Know-how by the Borrower and the Borrower has made no
disclosure of Know-how to any person except properly and in the ordinary and
usual course of business and on the basis that such disclosure is to be treated
as being of a confidential character.

       

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      
 

      (vii)           No
Assertion of Moral Rights

      

      No moral
rights have been asserted or are likely to be asserted which would affect the
use of any of the Intellectual Property in the business of the
Borrower.

      

      (viii)                      Patents

      

      All
patentable inventions made by employees of the Borrower and used or intended to
be used in the business of the Borrower were made in the normal course of the
duties of the employees concerned and there are no outstanding or potential
claims against the Borrower under any contract or law providing for employee
compensation or ownership in respect of any rights or interests in Intellectual
Property.

      

      (ix)           Sufficiency
of Business IP

      

      The
Business IP comprises all the rights and interests in Intellectual Property
necessary or convenient for the carrying on of the business of the Borrower in
and to the extent which it is presently conducted.

      

      2.           Subsidiaries

      

      The
Borrower hereby represents, warrants and covenants to cause its subsidiaries to
comply with and observe the representations, warranties and covenants in this
Schedule 2.

      

      (This
space is intentionally left blank)

      

      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      

      Schedule
3

      

      Borrower's
Intellectual Property Rights

      

      A.           Software
& Firmware IP

      

      
        	
                1.

              	
                Scalable
      high capacity system architecture.

              
	 
      	 
      
	
                2.

              	
                Fault
      tolerant system redundancy mechanisms for enhanced
      reliability.

              
	 
      	 
      
	
                3.

              	
                Backend
      scalable Zone management element/mechanism.

              
	 
      	 
      
	
                4.

              	
                Intelligent
      reverse-geo coding processing for enhanced scalability and data
      flow.

              
	 
      	 
      
	
                5.

              	
                Selectable
      immobilization methods (instant, gradual, deferred).

              
	 
      	 
      
	
                6

              	
                Over
      the air upgradability for firmware. settings and
  hardware.

              
	 
      	 
      
	
                7.

              	
                Flexible
      Zone event management means (device & backend, backend only, device
      only).

              
	 
      	 
      
	
                8.

              	
                Accelerometer
      self calibration algorithm for improved accuracy and installation
      flexibility. Settable via PDA or OTA.

              
	 
      	 
      
	
                9.

              	
                Adaptive
      3-axis accelerometer incline detection and recalibration for improved
      accuracy.

              
	 
      	 
      
	
                10.

              	
                Speed
      limiter algorithm using loosely coupled inertial navigation system with
      adaptive speed limiting settings.

              
	 
      	 
      
	
                11.

              	
                RFID
      based Mesh Network system using Neural Network
Concepts.

              
	 
      	 
      
	
                12.

              	
                E-Clamp
      mechanism for public traffic enforcement.

              
	 
      	 
      
	
                13.

              	
                RFID
      based Public Access Control system.

              
	 
      	 
      
	
                14.

              	
                RF
      Collision avoidance system using RFID Beacon, GPS and estimation
      algorithms for enhanced vehicle escort and VIP
  protection.

              
	 
      	 
      
	
                15.

              	
                Comprehensive
      device configuration and registration via Bluetooth or RS485 and PDA
      means.

              

      

      

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      

      

      
        	 
      	 
      
	
                16.

              	
                Battery
      level monitoring for internal and vehicle batteries with backend
      communication reporting (levels, duration estimates, fault
      events).

              
	 
      	 
      
	
                17.

              	
                Enhanced
      battery management means.

              
	 
      	 
      
	
                18.

              	
                Enhanced
      theft and fault recognition. Reporting to backend with autonomous vehicle
      immobilization option.

              
	 
      	 
      
	
                19.

              	
                Audio
      interface means using RS232 or RS485.

              
	 
      	 
      
	
                20.

              	
                Driver
      performance data/ management system for improved fleet resource and asset
      management.

              

      

      

      B.           Hardware/Device
IP

      

      
        	
                1.

              	
                Input/Output
      device with onboard immobilization and speed limiter.

              
	 
      	 
      
	
                2.

              	
                433MHz
      RF Beacon device for collision avoidance.

              
	 
      	 
      
	
                3.

              	
                E-Frame
      license plate mechanism for holding track and trace
    devices.

              
	 
      	 
      
	
                4

              	
                IP67
      compliant Advanced Track 8 Trace device with 3-axis accelerometer.
      RS232/485, 96OVdc, external i/o module, internal battery modular GPS. GSM
      and RFID transceivers.

              
	 
      	 
      
	
                5.

              	
                Motion
      detector with deep sleep state for enhanced battery
  life.

              
	 
      	 
      
	
                6.

              	
                Inertial
      Navigation System with Trailer ID.

              
	 
      	 
      
	
                7.

              	
                Tamper
      detection module for improved cable interconnect
  security.

              
	 
      	 
      
	
                8.

              	
                Remotely
      Deployable Unit system for as-required track and trace
      applications.

              
	 
      	 
      
	
                9.

              	
                Container
      tracking and management system for land transportation
      applications.

              
	 
      	 
      
	
                10.

              	
                Tag
      based Driver ID system for authentication and driver
      management.

              

      

      

      

      

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      

      

      IN
WITNESS WHEREOF, the Parties have executed and delivered this Agreement on the
day and year first above written.

      

      The
Lender

      

      
        	
                Signed
      by Mohan Raj Abraham

              	
                )

              	 
      
	
                Director,
      for and on behalf of

              	
                )

              	
                /s/
      Mohan Raj Abraham

              
	
                FAME
      TRADING LTD.

              	
                )

              	 
      
	
                in
      the presence of:

              	 
      	 
      

      

      

      /s/
Signature

      

      Tamul
Selvi Krishnaray

      Abraham
Advocates/

      Solicitors

      

      The
Borrower

      

      
        	
                Signed
      by

              	
                )

              	 
      
	
                for
      and on behalf of

              	
                )

              	
                /s/
      A. J. Harrison

              
	
                ASTRATA
      (ASIA PACIFIC)

                PTE,
      LTD.

              	
                )

              	 
      
	
                in
      the presence of:

              	 
      	 
      

      

      

      /s/ Choo
Bee Eng

       

       

       

       

       

      28Unassociated Document

    Exhibit
10.2

     

    
      CONTINUING
GUARANTEE

      

      This
Continuing Guarantee ("Guarantee") is made as of May 18th, 2009, by ASTRATA
GROUP, INC., a Nevada corporation ("Guarantor"), in favor of Fame Trading Ltd.,
a British Virgin Islands company ("Lender").

      

      RECITALS

      

      A. The
Guarantor is the owner of 100% of the equity interests of Astrata (Asia Pacific)
Pte Ltd ("Borrower"). Concurrently herewith, Borrower has executed a Loan
Letter, a Debenture and Facility Agreement ("Loan"), dated May 15, 2009, in
favor of the Lender for the principal sum of $8,500,000.

      

      B. In order to induce Lender to enter
into the Loan and make the loans provided for thereunder, and for other valuable
consideration, receipt of which is hereby acknowledged, Guarantor has agreed to
guarantee Borrower's obligations to Lender under the Loan and to indemnify
Lender as set forth in this Guarantee.

      

      GUARANTEE

      

      1. Guarantee of
Obligations. For valuable consideration, receipt of which is hereby
acknowledged. and subject to the provisions of this Guarantee, Guarantor hereby
irrevocably and unconditionally guarantees and promises to pay to Lender, or
order, on demand in lawful money of the United States of America, any and all of
Borrower's Obligations (as defined below) to Lender arising from or in
connection with the Loan in the event of Borrower's default under the Loan. The
word "Obligations" means (a) any and all existing and future obligations of
Borrower to Lender under the Loan and any and all other existing and future
obligations and liabilities of Borrower made, incurred or created in connection
with the Loan whether such obligations are absolute or contingent, voluntary or
involuntary, liquidated or unliquidated, determined or undetermined, whether
Borrower may be liable individually or jointly with others, whether recovery
upon such indebtedness may be or hereafter become barred by any statute of
limitations, or whether such indebtedness may be or hereafter become invalid or
otherwise unenforceable; (b) any and all amendments, modifications, renewals
and/or extensions of any of the foregoing, including, without limitation,
amendments, modifications, renewals or extensions which arc evidenced by a new
or additional instrument, document or agreement or which change the rate of
interest on any such indebtedness; and (c) any and all interest that accrues on
all or any part of such indebtedness after the filing of any petition or
pleading against Borrower or any other person for a proceeding under any chapter
or provision of any present or future federal bankruptcy legislation or
amendments thereto.

      

      2. Independent
Obligations. The Guarantor's obligations hereunder are independent of the
obligations of Borrower, any other guarantor or any other person, and upon the
occurrence of a default under the Loan, Lender may enforce any of its rights
hereunder independently of any other right or remedy that Lender may at any time
hold with respect to the Obligations or any security or other guarantee
therefor. Without limiting the generality of the foregoing, Lender may bring a
separate action against Guarantor without first proceeding against Borrower, any
other guarantor or any other person, or any security held by Lender, and
regardless of whether Borrower or any other guarantor or any other person is
joined in any such action. Guarantor's liability hereunder shall at all times
remain effective with respect to the full amount of the Obligations
notwithstanding any limitations on the liability of Borrower to Lender contained
in the Loan or elsewhere. Lender's rights hereunder shall not be exhausted by
any action taken by Lender until all Obligations have been hilly paid and
performed. The liability of Guarantor hereunder shall be reinstated and revived,
and the rights of Lender shall continue, with respect to any amount at any time
paid on account of the Obligations which shall thereafter be required to be
restored or returned by Lender upon the bankruptcy, insolvency or reorganization
of Borrower, any other guarantor or any other person, or otherwise, all as
though such amount had not been paid.

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
 

      This is an irrevocable and
unconditional Guarantee of payment and performance.

      

      3. Authority to Modify
Obligations. Guarantor authorizes Lender, at any time and from time to
time without notice to Guarantor and without affecting the liability of
Guarantor hereunder, to: (a) alter the terms of all or any part of the
Obligations and any security and Guarantee therefor, including, without
limitation, modification of times for payment and rates of interest; (b) accept
new or additional instruments, documents, agreements, security or guaranties in
connection with all or any part of the Obligations; (c) waive, release,
reconvey, terminate, abandon, subordinate, exchange, substitute, transfer,
compound, liquidate and enforce all or any part of the Obligations and any
security or guaranties therefor, and apply any such security and direct the
order or manner of sale thereof (and bid and purchase at any such sale), as
Lender in its discretion may determine; (d) release Borrower, any guarantor or
any other person from any personal liability with respect to all or any part of
the Obligations; and (e) assign this Guarantee in whole or in part.

      

      4. Waivers. Guarantor
hereby waives each of the following, to the fullest extent allowed by
law:

      

      (a)  all statutes of
limitations as a defense to any action brought against Guarantor;

      

      (b) any defense based
upon:

      

      (i) the
unenforceability or invalidity of all or any part of the Obligations or any
security or other guarantee for the Obligations or the lack of perfection or
failure of priority of any security for the Obligations; or

      

      (ii) any
act or omission of Lender or any other person that directly or indirectly
results in the discharge or release of Borrower or any other person with respect
to any of the Obligations or any security therefor; or

      

      (iii) any
disability or any other defense of Borrower or any other person with respect to
the Obligations, whether consensual or arising by operation of law or any
bankruptcy, insolvency or debtor-relief proceeding, or from any other
cause;

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      
 

      (c) any
right (whether now or hereafter existing) to require Lender, as a condition to
the enforcement of this Guarantee, to:

      

      (i)  accelerate the
Obligations; or

      

      (ii) give notice to Guarantor of
the terms, time and place of any public or private sale of any security for the
Obligations; or

      

      (iii) proceed against Borrower,
any other guarantor or any other person, or proceed against or exhaust any
security for the Obligations.

      

      (d) until
all Obligations are paid in full, (i) all rights of subrogation, (ii) all rights
to enforce any remedy that Lender now or hereafter has against Borrower or any
other person, and (iii) any benefit of, and right to participate in, any
security now or hereafter held by Lender with respect to the
Obligations;

      

      (e) presentment,
demand, protest and notice of any kind, including, without limitation, notices
of default and notice of acceptance of this Guarantee;

      

      (f) all
suretyship defenses of every nature otherwise available under California law and
the laws of any other state, including, without limitation, all defenses arising
under Sections 2787 through 2855 of the California Civil Code and any successor
provisions to these Sections, and any and all benefits which might otherwise be
available under California Civil Code Sections 2809, 2810, 2819, 2845, 2847,
2848, 2850, 2899 and 3433, or under California Code of Civil Procedure Sections
580(a), 580(b), 580(d) and 726 and any successor provisions to these
Sections;

      

      (g)  any
duty of Lender to disclose to Guarantor any facts that they presently have
knowledge of or may hereafter acquire knowledge of regardless of whether Lender
has reason to believe that had Guarantor known of such facts they would have
affected Guarantor's decision to enter into this Guarantee ; and

      

      (h) all
other rights and defenses the assertion or exercise of which would in any way
diminish the liability of Guarantor hereunder, except as otherwise specifically
provided in this Guarantee.

      

      (i) an
rights and remedies accorded by applicable law to guarantors (and Guarantor
agrees not to assert or take advantage of any such rights or remedies) to
require Lender to proceed against Borrower or any other person or to proceed
against or exhaust any security held by Lender at any time or to pursue any
other remedy in Lender's power before proceeding against Guarantor, any defense
that may arise by reason of the incapacity, lack of authority, death or
disability of any other person or persons or the failure of Lender to file or
enforce a claim against the estate (in administration, bankruptcy or any other
proceeding) of any other person or persons; demand, protest and notice of any
kind, including, without limitation, notice of the existence, creation or
incurring of any new or additional indebtedness or obligation or of any action
or non-action on the part of Borrower, Lender, any endorser or creditor of
Borrower or Guarantor or on the part of any other person whomsoever under this
or any other instrument in connection with any obligation or evidence of
indebtedness held by Lender or in connection with any Obligations hereby
guaranteed; all rights and defenses arising out of an election of remedies by
Lender, even though that election of remedies has destroyed the Guarantor's
rights of subrogation and reimbursement against the principal by operation of
applicable law; and any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal.

       

       

      
        
           

        

        
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      5. Relationship of
Parties. Guarantor represents and warrants to Lender that: (a) Guarantor
has received a copy of the Loan and is familiar with and fully understands all
of their terms and conditions; (b) Lender has not made any representation or
warranty to Guarantor regarding the creditworthiness of Borrower or the
prospects of repayment from sources other than Borrower; (c) this Guarantee is
executed at the request of Borrower; (d) Guarantor has established adequate
means of obtaining from Borrower on a continuing basis financial and other
information pertaining to the business of Borrower; and (e) Guarantor assumes
full responsibility for keeping fully informed with respect to the business,
operation, condition and assets of Borrower. Guarantor hereby agrees that Lender
shall have no duty to disclose or report to Guarantor any information now or
hereafter known to Lender relating to the business, operation, condition or
assets of Borrower. Lender shall have no duty to inquire into the authority or
powers of Borrower or any officer, employee or agent of Borrower with regard to
any Obligations, and all Obligations made or created in good faith reliance upon
the professed exercise of any such authority or powers shall be guaranteed
hereunder.

      

      6. Subordination. Until
all of the Obligations have been paid in full, Guarantor agrees that all
existing and future debts, obligations and liabilities of the Borrower to
Guarantor (hereinafter collectively referred to as "Subordinated Debt") shall be
and hereby are expressly subordinated to the Obligations, and the payment
thereof are expressly deferred in right of payment to the prior payment in full
of the Obligations. For purposes of this Section 6, the Obligations shaft not be
deemed paid in full unless and until they have been paid in full in
cash.

      

      (a)  Upon
any distribution of assets of Borrower, upon any dissolution, winding up,
liquidation or reorganization of Borrower, whether in bankruptcy, insolvency,
reorganization or receivership proceedings, or upon an assignment for the
benefit of creditors or any other marshalling of the assets or liabilities of
Borrower, or otherwise:

      

      (i)  the
holders of the Obligations shall be entitled to receive payment in full of the
Obligations before Guarantor is entitled to receive any payment on account of
the Subordinated Debt;

      

      (ii) any
payment by or distribution of assets of Borrower of any kind or character,
whether in cash, property or securities, to which Guarantor would be entitled
except for this subordination shall be paid or delivered by the person making
such payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee, or otherwise, directly to the holder of the Obligations to
be held as additional security for the Obligations in an interest bearing
account until the Obligations have been paid in full; and

       

       

      
        
           

        

        
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      (iii) if,
notwithstanding the foregoing, any payment by, or distribution of assets of,
Borrower of any kind or character, whether in cash, property or securities, in
respect of any Subordinated Debt shall be received by Guarantor before the
Obligations arc paid in full, such payment or distribution shall be held in
trust and immediately paid over in kind to the holders of the Obligations in an
interest bearing account until the Obligations have been paid in
full.

      

      (b)
Guarantor authorizes and directs Borrower to take such action as may be
necessary or appropriate to effectuate and maintain the subordination provided
herein.

      

      (c) No
rights of any holder of the Obligations to enforce the subordination herein
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of Borrower, Lender or any other person or by any
noncompliance by the Borrower, Lender or any other person with the terms,
provisions and covenants hereof or the Loan regardless of any knowledge thereof
that any such holder of the Obligations may have or be otherwise charged
with.

      

      (d) Nothing
express or implied herein shall give any person other than Borrower, Lender and
Guarantor any benefit or any legal or equitable right, remedy or claim
hereunder.

      

      (e) If
Guarantor shall institute or participate in any suit, action or proceeding
against Borrower in violation of the terms hereof, Borrower may interpose this
Guarantee as a complete defense and the Borrower and the holder of the
Obligations are irrevocably authorized to intervene and to interpose such
defense or pleading in their name or in Borrowers name.

      

      7.  
Representations and
Warranties. Guarantor represents and warrants to Lender
that:

      

      7.1 Execution, Delivery and
Performance of Guarantee. Guarantor has all requisite power and authority
to execute, deliver, and perform all of its obligations under this Guarantee.
The execution, delivery, and performance by Guarantor of all of its obligations
under this Guarantee do not and will not:

      

      (a)
result in or require the creation nor imposition of any lien, right of others,
or other encumbrance of any nature (other than under this Guarantee and any
related security documents) upon or with respect to any property now owned or
leased or hereafter acquired by Guarantor,

      

      (b)
violate any provision of any law, regulation, judgment, decree or award
presently in effect having applicability to this Guarantee; or

      

      (c) result
in a breach of, constitute a default under, cause or permit the acceleration of
any obligation owed under, any loan agreement, lease, or any other agreement or
instrument, to which Guarantor is a party or by which Guarantor or any of its
property is bound or affected.

       

      
        
           

        

        
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      7.3 Enforceability. This
Guarantee, when executed and delivered, shall constitute the valid and binding
obligation of Guarantor, enforceable in accordance with its terms.

      

      7.4 Compliance With
Agreements. Guarantor has complied in all material respects with all loan
agreements and all instruments to which Guarantor is a party or by which
Guarantor or any of its property is bound or affected.

      

      7.5 Litigation. There are
no material actions, suits or proceedings pending or threatened against or
affecting Guarantor or any property of Guarantor before any court or
governmental department, public body or authority.

      

      8.  Notice of Certain
Events. Guarantor shall give notice to Lender promptly (in any event
within five (5) days after Guarantor learns of same) of the institution of any
litigation or legal or administrative proceeding or investigation pending
against and materially affecting Guarantor, or any of Guarantor's
properties.

      

      9.  Security Agreement.
This Guarantee is secured by a pledge of all of Guarantor's stock in the
Borrower, as evidenced by that certain "Pledge Agreement" dated as of the date
hereof.

      

      10. Reasonableness and Effect of
Waivers. Guarantor warrants and agrees that each of the waivers set forth
in this Guarantee is made with full knowledge of its significance and
consequences and that, under the circumstances, the waivers are reasonable and
not contrary to public policy or law. if any of such waivers are determined to
be contrary to any applicable law or public policy, such waivers shall be
effective only to the maximum extent permitted by law.

      

      11.  Exercise of Remedies;
Cumulative Remedies: No Waiver. The rights, powers and remedies of Lender
hereunder are cumulative and not exclusive of any other right, power or remedy
which Lender would otherwise have. No failure or delay on the part of Lender in
exercising any such right, power or remedy may be, or may be deemed to be, a
waiver thereof; nor may any single or partial exercise of any such tight, power
or remedy preclude any other right, power or remedy hereunder or related
documents.

      

      12.  Costs and Expenses of
Enforcement. Guarantor agrees to pay to Lender, on demand, all costs and
expenses, including reasonable attorneys' fees, incurred by Lender in exercising
any right, power or remedy conferred by this Guarantee, or in the enforcement of
this Guarantee, whether or not any action is filed in connection therewith.
Until paid to Lender. such amounts shall bear interest. commencing with Lender's
demand therefor, at the default rate of interest set forth in the Note or if
there is no such default rate, at the rate of interest set forth in the
Note.

       

      
        
           

        

        
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      13.  Binding, Agreement;
Assignment; Amendment. This Guarantee and the terms, covenants and
conditions hereof shall be binding upon and inure to the benefit of Guarantor,
Lender and their respective successors and assigns, except that Guarantor shall
not be permitted to transfer, convey or assign this Guarantee or any right or
obligation hereunder without the prior written consent of Lender (and any
attempt to do so shall be void). Lender may assign its interest hereunder in
whole or in part. Neither this Guarantee nor any provision hereof may be
amended, modified, waived, discharged or terminated except by an instrument in
writing duly signed by or on behalf of Lender.

      

      14.  Severability. In the
event that any right or remedy of Lender hereunder is held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other right or remedy granted hereunder.

      

      15.  Governing Law. This
Guarantee shall be governed by, and construed and enforced in accordance with,
the laws of the State of California.

      

      16.  Meaning of Terms;
Interpretations. Unless otherwise defined herein, capitalized terms used
in this Guarantee have the meaning given to them in the Loan. Whenever the
context requires, all terms used herein in the singular shall be construed in
the plural and vice versa, and each gender shall include each other gender. The
term "Borrower" shall mean the named Borrower and any other person or entity at
any time and from time to time assuming or otherwise becoming primarily liable
on all or any part of the Obligations. Section headings in this Guarantee are
included for convenience of reference only and are not a part of this Guarantee
for any other purpose.

      

      IN WITNESS WHEREOF, Guarantor has
caused this Guarantee to be duly executed as of the date first written
above.

      

      "GUARANTOR"

      

      ASTRATA
GROUP, INC.

      A Nevada
corporation

      

      By: /s/
signature

      Its:
Chairman & CEO

       

       

       

       

       

      7

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