ASTRATA GROUP INCORPORATED CO-PLACEMENT AGENTS AGREEMENT

 

EXHIBIT 10.15

 

                           ASTRATA GROUP INCORPORATED

 

                          CO-PLACEMENT AGENTS AGREEMENT

 

                              Dated: March 2, 2005

 

Westminster Securities Corporation

100 Wall Street

New York, NY  10007

 

Rodman & Renshaw, LLC

330 Madison Avenue, 27th Floor

New York, NY  10017

 

Ladies and Gentlemen:

 

         The undersigned,  Astrata Group Incorporated, a Nevada corporation (the

"Company"),  proposes to issue and sell a minimum of  $5,000,000  of  investment

units  ("Units") (the "Minimum  Offering") and a maximum of $10,000,000 of Units

(the "Maximum Offering").  The terms and conditions of the sale,  issuance,  and

rights  held by the  securities  underlying  these Units will be as set forth in

certain subscription  agreements and related documents,  which shall be prepared

by the Company and subject to the approval of the Co-Placement Agents (together,

with all exhibits and  supplements  thereto,  the "Investment  Documents").  The

Units, the common stock underlying the Units ("Shares"), the warrants underlying

the Units  ("Warrants"),  the common stock  underlying  the  Warrants  ("Warrant

Shares"), and the Placement Agent Warrants (as hereinafter defined) are referred

to collectively herein as the "Equity".

 

         The offering of Units in the Company (the "Offering") will be conducted

on a "best efforts,  all or none" basis with respect to the Minimum Offering and

on a "best efforts" basis with respect to the remainder of the Maximum  Offering

in excess of the Minimum  Offering.  Fractional  Units may be sold at the mutual

consent of the Co-Placement  Agents.  As used herein,  including with respect to

the  representations  and  warranties  contained  herein,   unless  the  context

otherwise  requires,  the term "Company" shall include the Company together with

all  of  its  direct  and   indirect   wholly   owned   subsidiaries,   and  all

representations  and  warranties of the Company herein shall also be deemed made

on behalf of and with  respect  to each such  subsidiary  of the  Company.  This

Co-Placement  Agent Agreement  ("Agreement") is to confirm the arrangements with

you (the  "Co-Placement  Agents"),  with respect to the sale of the Units by the

Co-Placement Agents as exclusive co-agents for the Company in the Offering.

 

         The Offering will not be registered  with the  Securities  and Exchange

Commission ("SEC") nor with any state securities  authority,  but rather will be

offered as a private placement  pursuant to an exemption from registration under

Regulation D ("Regulation D") promulgated under Section 4(2) and Rule 506 of the

Securities  Act of 1933, as amended  ("Securities  Act"),  and  available  state

securities  law  exemptions.  The Units are to be sold in the  Offering  only to

"accredited investors", as that term is defined in Regulation D, pursuant to the

Investment Documents.

 

         SECTION 1. DESCRIPTION OF COMMON STOCK. The Equity shall conform in all

respects to descriptions thereof contained in the Investment Documents.

 

         SECTION 2.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company

hereby  represents,  warrants  and  covenants  with the  Co-Placement  Agents as

follows:

 

                                      -1-

 

<PAGE>

 

         (a) The Investment Documents,  copies of which will be delivered to the

Co-Placement  Agents,  will be carefully  prepared to disclose  all  information

concerning  the Company which would be material to an  investment  decision by a

reasonable investor. The date on which the Offering is authorized by the Company

to commence is the date of the  Investment  Documents  and is herein  called the

"Commencement  Date." The time and date of each  issuance of Units  hereunder is

herein called the "Issuance Date" or the "Closing."

 

         (b)  The  Company  is  duly  incorporated  and  validly  existing  as a

corporation in good standing  under the laws of the state of its  incorporation,

having  corporate  power and  authority  to own its  properties  and conduct its

business and is duly qualified and in good standing in each foreign jurisdiction

where the conduct of its business so requires such  qualification.  No direct or

indirect  rights to acquire Common Stock exist,  except as have been  previously

disclosed to the public or as disclosed in the Investment Documents.

 

         (c) The  unaudited  financial  statements  of the  Company for the nine

months  ended  November  30, 2004 and the audited  financial  statements  of the

Company for two years  ended  February  28,  2004,  included  in the  Investment

Documents  (collectively,  the  "Financial  Statements"),   fairly  present  the

information  purported  to be shown  therein of the Company,  at the  respective

dates to which they apply;  and such Financial  Statements have been prepared in

conformity with GAAP  consistently  applied  throughout the periods involved and

are in  accordance  in all material  respects  with the books and records of the

Company.

 

         (d) The assets of the Company,  as shown in the  Financial  Statements,

are  owned  by the  Company  with  good  title,  free and  clear  of all  liens,

encumbrances and equities of record or otherwise,  except (i) those specifically

referred to in the  Investment  Documents,  (ii) those  which do not  materially

adversely  affect  the use or value of such  assets,  (iii) the lien of  current

taxes  not now due or which  are  being  contested  in good  faith and for which

adequate  reserves have been set aside and (iv) those disclosed in the Financial

Statements.  The Company has the full right, power and authority to maintain and

operate its business and  properties as the same are now operated or proposed to

be  operated  and  is  complying  with  all  laws,  ordinances  and  regulations

applicable  thereto,  except  where the  failure  to so comply  would not have a

material adverse effect on the Company.

 

         (e)  There are no  actions,  suits or  proceedings  at law or in equity

pending, or to the Company's knowledge threatened, against the Company before or

by any federal or state commission,  regulatory body,  administrative  agency or

other  governmental  body wherein,  either in any case or in the  aggregate,  an

unfavorable  ruling,  decision or finding would materially  adversely affect the

business, franchise, licenses, permits, operations or financial condition of the

Company which are not disclosed in the Investment Documents.

 

         (f) The  execution and delivery by the Company of this  Agreement,  the

consummation  and  performance  of the  transactions  herein  contemplated,  and

compliance with the terms of this Agreement and the Investment  Documents by the

Company will not conflict with,  result in a breach of, or constitute a material

default under, the Certificate or Articles of Incorporation or the bylaws of the

Company, in each case as amended, or any indenture,  mortgage,  deed of trust or

other agreement or instrument to which the Company is now a party or by which it

or  any of its  assets  or  properties  is  bound,  or  any  law,  order,  rule,

regulation, writ, injunction, judgment or decree of any government, governmental

instrumentality  or court,  domestic or foreign,  having  jurisdiction  over the

Company or any of its business or properties,  to the extent that such conflict,

breach or default might have a material  adverse effect on the Company,  and its

subsidiaries as a whole, or their respective businesses, properties or financial

condition on a consolidated basis.

 

         (g)  Except  as set forth in the  Investment  Documents,  all  material

licenses, permits, approval, leases, contracts and agreements referred to in the

Investment Documents (including the Financial Statements),  along with all other

material licenses,  permits,  approvals,  leases, governmental authorizations or

contracts to which the Company is a party,  have been obtained and are valid and

in full force and effect and neither the Company  nor, to the  knowledge  of the

Company,  any other party is in default thereunder,  and to the knowledge of the

Company,  no event has occurred  which with the passage of time or the giving of

notice, or both, would

 

                                      -2-

 

<PAGE>

 

constitute a default  thereunder.  There are no proceedings  pending,  or to the

knowledge of the Company threatened,  seeking to cancel, terminate or limit such

licenses, approvals or permits.

 

         (h) Except as described in the  Investment  Documents,  the Company has

timely  filed all  federal,  state and local tax  returns  required to be filed,

including without limitation,  all sales tax returns, or has obtained extensions

thereof and has paid, or is  contesting  in good faith,  all taxes shown on such

returns.

 

         (i) The Company  shall use the net proceeds  from the sale of the Units

hereunder  to repay the  $1,500,000  bridge loan made on or about  February  17,

2005,  and the balance for  business  expansion  and  working  capital  purposes

primarily.  The Company may use not more than ten (10) percent of gross proceeds

for the  satisfaction  of the  Company's  debt (other than payment of the bridge

loan and trade  payables in the ordinary  course of the  Company's  business and

prior practices,  with respect to which such limit shall not apply). The Company

will not use any proceeds  from the sale of the Units to redeem any Common Stock

or  securities  convertible  or  exercisable  into  Common  Stock to settle  any

litigation outstanding as of any Closing.

 

         (j) The Investment  Documents  shall set forth a true and complete list

of all material patents,  trademarks,  trade names, copyright  registrations and

applications therefor now or heretofore used or presently proposed to be used in

the  conduct  of the  business  of the  Company.  Except  as  set  forth  in the

Investment  Documents:  (i) the Company owns or possesses  adequate  licenses or

other valid  rights to use all patents,  patent  rights,  trademarks,  trademark

rights, trade names, trade name rights, trade secrets,  copyright registrations,

know-how and other proprietary information (collectively, "Rights") necessary to

the conduct of the business of the Company as presently  being  conducted;  (ii)

the  validity of such  Rights and the title  thereto of the Company has not been

questioned in any  litigation to which the Company is or has been a party,  nor,

to the best knowledge of the Company, is any such litigation  threatened,  other

than as set forth in the  Investment  Documents;  (iii) to the best knowledge of

the Company,  the conduct of the business of the Company as now  conducted  does

not and will not  conflict  with  Rights of others in any way which has or might

reasonably be deemed to have a material adverse effect on the Company;  and (iv)

no proceedings are pending against the Company nor, to the best knowledge of the

Company,  are any  proceedings  threatened  against the  Company,  alleging  any

violation  of Rights of any third  person.  The Company does not know of (X) any

use that has  heretofore  been or is now being made of any  Rights  owned by the

Company,  except by the  Company or by a person  duly  licensed by it to use the

same  under  an  agreement  described  in the  Investment  Documents  or (Y) any

material infringement of any Right owned by or licensed by or to the Company. To

the best knowledge of the Company,  all Rights  heretofore  owned or held by any

agent,  independent  contractor,  employee  or  officer  of the  Company  or any

subsidiary  thereof  and used in the  business of the Company in any manner have

been duly and effectively  transferred to the Company.  The  consummation of the

transactions  contemplated by this Agreement will not alter or impair the rights

and interests of the Company in any of the items  referred to in this  paragraph

or disclosed in the  Investment  Documents as it relates to intangible  property

rights.

 

         (k)  All of the  representations,  agreements  and  warranties  in this

Section 2 shall survive delivery of and payment for all or any part of the Units

for three years from and after such delivery and payment.

 

         (l) The Company has no  subsidiaries  other than those disclosed in the

Investment Documents.

 

         (m) All of the Company's  filings with the SEC were true and correct in

all material respects upon the dates of filing thereof

 

         SECTION 3.  ISSUANCE, SALE AND DELIVERY OF THE UNITS.

 

         (a) The Company  hereby agrees to sell the Units  directly  through the

Co-Placement  Agents on a "best efforts  all-or-none"  basis with respect to the

Minimum  Offering,  and thereafter on a "best efforts" basis with respect to the

remaining  Units up to the Maximum  Offering.  The Offering will commence on the

date of the Investment Documents. Pending the closing of the sale of the Minimum

Offering,  the  proceeds  of the  Offering  will be  deposited  in  escrow  in a

non-interest  bearing  account at Bryan Cave LLP  ("Escrow  Agent").

 

                                      -3-

 

<PAGE>

 

Unless the Minimum  Offering of Units is sold,  the Offering will  terminate and

all  funds  theretofore  received  from the sale of the Units  will be  promptly

returned to the subscribers  without  deduction  therefrom or interest  thereon.

During the period of escrow,  subscribers  will not be  entitled  to a return of

their  subscriptions,  except as required  by law.  If the  Minimum  Offering is

completed,  the remaining Units up to the amount of the Maximum Offering will be

offered on a "best efforts" basis until the first to occur of (i) the completion

of the Maximum Offering (unless increased by mutual agreement of the Company and

the  Co-Placement  Agents),  (ii) April 15, 2005 or (iii) the termination of the

Offering by mutual agreement of the Co-Placement  Agents and the Company ("Final

Closing").

 

         (b) All checks or wire  transfers  for the  purchase  of Units shall be

deposited  with the  Escrow  Agent in  accordance  with the  terms of an  escrow

agreement to be executed among the Company,  the  Co-Placement  Agents,  and the

Escrow Agent.  Upon receipt  thereof or on such  scheduled  Issuance Date as the

Company and the  Co-Placement  Agents may mutually  agree after the Escrow Agent

shall receive  subscriptions for the Minimum  Offering,  the Company shall issue

the Units and,  simultaneously  with the delivery of the Units, the Company,  or

its counsel,  shall  deliver to each of the  Co-Placement  Agents'  counsel such

opinions,  documents and certificates as are provided for herein. No funds shall

be  disbursed  from escrow in  connection  with any Closing  without the written

consent of both the Company and both of the Co-Placement Agents. Notwithstanding

anything  contained  herein  to the  contrary,  each  of  the  Company  and  the

Co-Placement  Agents, in their respective sole discretion,  shall have the right

to return any amount to any potential  investor  together  with the  appropriate

cancellation of any signed subscription agreements prior to consummation of such

potential  investors'  purchase of Units.  The Company may withdraw its offer to

sell the Units at any time prior to  acceptance of a  subscription.  No purchase

will be  effective  unless and until  accepted by the Company and  included in a

Closing.

 

         (c) The  parties  hereto  represent  that at each  Issuance  Date,  the

representations and warranties herein contained, and the statements contained in

all certificates theretofore or simultaneously delivered by any party to another

pursuant to this Agreement, shall be true and correct.

 

         SECTION 4. COVENANTS OF THE COMPANY.  The Company  covenants and agrees

with the Co-Placement Agents that:

 

         (a) On the Commencement Date, and on each Issuance Date, the Investment

Documents (as amended or as supplemented, if the same shall have been amended or

supplemented)  will not (i) contain an untrue  statement of a material  fact and

will not  omit to  state a  material  fact  required  to be  stated  therein  or

necessary in order to make the statements therein, in light of the circumstances

under  which they were made,  not  misleading  and (ii)  contain  any  material,

non-public  information  required to be disclosed to the general public in order

to comply with  Regulation FD promulgated  under the Securities  Exchange Act of

1934, as amended,  unless all recipients of the Investment  Documents  execute a

confidentiality  agreement in form and  substance  acceptable to the Company and

the Co-Placement Agents, prior to receipt of the Investment Documents.

 

         (b) The Company will prepare,  promptly upon the reasonable  request of

the  Co-Placement  Agents,  such  amendments or  supplements  to the  Investment

Documents,  in such form as in the opinion of counsel to the Co-Placement Agents

may be  reasonably  necessary or advisable in connection  with the Offering.  In

addition,  if at any time prior to the last date on which Units shall be issued,

(i) an event relating to or affecting the Company shall have occurred  which, in

the  judgment  of the  Company or in the  opinion  of counsel  for either of the

Co-Placement  Agents,  would cause the Investment Documents as then in effect to

include an untrue  statement  of a material  fact or to omit to state a material

fact required to be stated  therein or necessary in order to make the statements

therein,  in  light  of the  circumstances  under  which  they  were  made,  not

misleading,  or (ii) it is  otherwise  necessary  to  amend  or  supplement  the

Investment Documents,  the Company shall promptly notify each Co-Placement Agent

of the occurrence and shall  promptly  prepare and deliver to each  Co-Placement

Agent,  without  charge,   sufficient  copies  of  an  amended  or  supplemented

Investment  Documents,  and shall use its  reasonable  best efforts to cause the

appropriate state securities

 

                                      -4-

 

<PAGE>

 

authorities  to take any required  action with regard to any amendment as may be

necessary to permit the lawful use of the  Investment  Documents  in  connection

with the Offering.

 

         (c) The Company's counsel shall prepare and file any necessary filings,

in the  reasonable  opinion of  Company's  counsel or counsel  for either of the

Co-Placement  Agents,  under the state securities,  or so-called "blue sky" laws

and regulations  (the "Blue Sky Laws") and the Company shall pay the filing fees

and all  other  expenses  in  connection  with  any such  qualification  in such

jurisdictions as the Co-Placement  Agents shall collectively  designate,  and to

continue  such  qualification  in effect so long as required for the purposes of

the  Offering;  PROVIDED,  HOWEVER,  that the  Company  shall not be required to

qualify as a foreign  corporation  or to file a consent to service of process in

any  jurisdiction  in any action  other than one arising out of the  offering or

sale of the Units.  The Company will provide copies to each of the  Co-Placement

Agents of all documents,  exhibits and information  filed in connection with the

qualification of the Units for sale under the Blue Sky Laws.

 

         (d) The  Company,  at its own  expense,  will give and continue to give

such financial statements and other information to and as may be required by the

proper  public  bodies  of  the  jurisdictions  in  which  the  Offering  may be

qualified.

 

         (e) The Company will pay all cash and  security-based  compensation and

expenses  due  to the  Co-Placement  Agents  in  the  manner  set  forth  in the

engagement letter dated March 2, 2005,  between the Company and the Co-Placement

Agents  ("Engagement  Letter").  For clarification with respect to Section 4a of

the Engagement Letter,  the Co-Placement  Agents (or its assignees) will receive

warrants ("Placement Agent Warrants") to purchase eight (8%) of the total common

stock issued and issuable from the financing  (including common stock underlying

warrants and convertible securities),  exercisable at the lower of the price for