MUTUAL COOPERATION AND STRATEGIC TEAMING AGREEMENT By and between PASSTIME FLEET, LLC and ASTRATA GROUP INCORPORATED
EXHIBIT
99.1
By and
between
PASSTIME
FLEET, LLC
and
ASTRATA
GROUP INCORPORATED
THIS Mutual Cooperation and Strategic
Teaming Agreement (this “Agreement”) is made effective this 3rd day of
December, 2008 (the “Effective Date’).
BETWEEN:
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1.
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PassTime
Fleet, LLC, a wholly-owned subsidiary of ▇▇▇▇▇▇ · ▇▇▇▇▇▇ Associates,
Inc., a limited liability company to be formed under the laws of
the state of Colorado, with its principal office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
(“PassTime”);
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2.
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Astrata Group
Incorporated, a company incorporated under the laws of the state of
Nevada, with its principal office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Astrata");
and
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WHEREAS:
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A.
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PassTime
and Astrata (each a “Shareholder” or “Party” and jointly the
“Shareholders” or “Parties”) will incorporate a new entity in and under
the laws of the State of Nevada to be known as PassTime Telematics (the
“Company”).
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B.
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The
Shareholders are entering into this Agreement in order to record the basis
of their relationship as shareholders in the Company and to establish the
manner in which the Parties and the Company will conduct their business
and affairs.
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NOW THEREFORE IT IS AGREED
AS FOLLOWS:
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1.
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DEFINITIONS
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1.1
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As
used in this Agreement (including the recitals), the following terms shall
have the following meaning:
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“Affiliate”
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Means,
as to any Person, any other Person, that, directly or indirectly,
controls, is controlled by or is under common control with such Person;
for purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a
Person shall mean the possession, direct or indirect, of the power to vote
100% of the share capital of such Person, or ownership, direct or
indirect, of 100% of the equity interests in such Person.
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“Agreed Proportion”
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Shall
have the meaning ascribed to it in Clause 2.1.
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“Certificate
of Incorporation”
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Means
the Company’s certificate of incorporation dated_________, as adopted at
the Company’s initial organization meeting.
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“Board of Directors”
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Means
the Board of Directors of the Company.
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“Business”
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Means
the importing, marketing, selling and distributing to the Territory
electronic products and systems presently being produced by Astrata in the
field of tracking, monitoring and controlling of mobile assets and people,
covertly and overtly, using proprietary state-of-the-art technology of
both Shareholders (or their Affiliates), and any activities related or
ancillary thereto, and such other business as the Shareholders may
mutually agree from time to time in writing should be conducted by the
Company. The Business of the Company expressly excludes
products of PassTime’s Affiliates which are directed to users other than
the fleet user/customer to be targeted by the Business Plan.
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“Business
Day”
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Means
any day which is not a Saturday, Sunday or a public holiday in the United
States of America.
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“Business
Plan”
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Means
the business plan that outlines the basis for the operation of the
business and its expected goals to be adopted by the Parties no later than
January 15, 2009, and may be amended by the Board of Directors from time
to time.
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“Bylaws”
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Means
those written rules and procedures to be used to govern and manage the
Company, as adopted at the Company’s initial organization meeting, and as
modified from time to time according to procedures stated
therein.
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“Company Law”
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Means
the Bylaws, Articles of Incorporation and all applicable Federal or State
Laws, Regulations and Statutes pertaining to and/or governing the Company
which shall include such provisions as necessary to implement the terms of
this Agreement.
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“Fiscal Year”
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Means
the 12-month period ending upon the last day of February of each calendar
year unless otherwise determined by the Board of Directors.
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“President”
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Means
this individual, whom the Board of Directors shall name as the President
of the Company shall oversee the operations of the Company.
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“Independent
Accountant”
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Means
an independent accountant who is a PCAOB member and who is appointed from
time to time as the Company’s Independent Accountant by unanimous written
consent of the Shareholders.
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“PCAOB”
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Means
The Public Company Accounting Oversight Board, a private, nonprofit
corporation created by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 to oversee the
auditors of public companies.
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“Person”
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Means
any individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company,
trust, unincorporated association, joint venture or other entity domestic
or foreign or governmental body.
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“Shares”
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Means
shares of the Company’s common stock, no par value.
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“Territory”
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Means
the geographic area(s) set forth in Schedule 1 attached to this
Agreement.
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1.2
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For
purposes of this Agreement:
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1.2.1
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The
clause headings are inserted for convenience only and shall not affect the
construction of this Agreement.
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1.2.2
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Words
denoting the singular shall include the plural and vice
versa.
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1.2.3
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Words
denoting one gender shall include each gender and all
genders.
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1.3
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References
in this Agreement to “Clauses”, "Articles" and “Appendix” are references
to articles, clauses and appendices of this
Agreement.
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1.4
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References
in this Agreement to the provisions of any law shall, where the context so
admits, and unless expressly provided otherwise, be construed as
references to those provisions as respectively amended, consolidated,
extended or re-enacted from time to time and shall, where the context so
admits or requires, be construed as references to the corresponding
provisions of any earlier legislation (whether repealed or not) directly
or indirectly amended, consolidated, extended or replaced thereby or
re-enacted and shall include where appropriate any orders, rules,
regulations, instruments or other subordinate legislation made under the
relevant law.
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2.
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CAPITALIZATION AND
SHAREHOLDER REPRESENTATIONS
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2.1.
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The
Company shall be capitalized on Twenty Thousand (20,000) Shares of common
stock, no par value, for which the Shareholders shall pay $_____X_____ per
share. Astrata shall subscribe to and the Company shall issue
to Astrata Five Thousand One Hundred (5,100) Shares; and PassTime shall
subscribe to and the Company shall issue to PassTime Four Thousand Nine
Hundred (4,900) such Shares (“The Agreed
Proportion”).
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2.2
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Each
Party represents, warrants and undertakes to the other that it has taken
all necessary corporate and other actions to enable it to legally accept
the obligations imposed on it under the terms of this Agreement and that
performance of the provisions of this Agreement will not result in a
breach of or constitute a default under any agreement, statute, law,
regulation or other contractual restriction binding upon such
Party.
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2.3
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The
Shareholders agree and acknowledge that it is their intention that the
Company shall at all times be and remain self financing (such expression
to include for this purpose financing obtained from bank
borrowings); but, if and to the extent the Board of Directors agree that
additional capital, in amounts and upon terms unanimously acceptable to
them, is necessary and proper and in the best interests of the Company to
carry on the Business then, each Shareholder shall lend to the Company by
way of a loan in its Agreed Proportion, pursuant to Company Law,
especially but not limited to minimum statutory interest, if any, the
agreed amount of additional capital. The following terms shall
apply to any such loan:
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2.3.1
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no
demand shall be made by either Shareholder on the Company outside the
terms of the loan agreement;
and
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2.3.2
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all
loan agreements made with the Company by the Shareholders shall be
identical in substance and rank pari passu in all respects unless
otherwise agreed by all Shareholders in
writing.
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2.3.3
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For
the avoidance of any doubt, nothing contained in this clause 2.3 shall
obligate any Shareholder to make any loans or financial guarantees to the
Company upon or following the commencement of the winding up of the
Company for any reason.
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2.4
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Any
pricing of product or services provided by either Shareholder which is
contained or referred to in the Business Plan or that is charged at any
time during the term of this Agreement by Astrata and/or PassTime to the
Company shall be calculated at One hundred and Ten Percent (110%) of the
Shareholder’s direct cost plus allocated overhead plus any handling,
freight, drayage, taxes, duties, customs and similar
charges.
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2.5
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Each
Shareholder shall provide to the Company its or its Affiliates’ next
generation or new products pursuant to clause 2.4
above.
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2.6
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Each
Shareholder agrees to vote its shares so as to
ensure:
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2.6.1 That
the primary purpose of the Company shall be to carry on the
Business.
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2.6.2
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That
the Business shall be conducted in accordance with the Business Plan and
sound and good business practices and on sound commercial profit-making
principles to generate maximum achievable and maintainable profits
available for distribution to the shareholders. No Shareholder
shall enter into a commercial relationship with the Company, unless
otherwise unanimously and expressly agreed to by the Shareholders in
writing or in the Business Plan, and provided that any such commercial
arrangement between the Company and a Shareholder shall be on terms no
less favorable to the Company than it might expect when dealing on an arms
length commercial basis with a third party in the
USA.
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2.6.3
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That
the Business shall be conducted in accordance with the terms of this
Agreement and in accordance with any Business Plan as adopted from time to
time by the Board of Directors.
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2.6.4
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That,
subject to the provisions of this Agreement, the Company shall at all
times use all reasonable and proper means to maintain and improve the
Business.
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2.6.5
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That
no Shareholder will interfere with the Business of the Company and that
each such Shareholder will assist the Company and the Company’s Business
wherever reasonably possible and/or
practical.
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2.7
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Each
Shareholder acknowledges and agrees that, for a period commencing upon the
Effective Date of this Agreement and ending on either the first
anniversary or the third anniversary of the date on which such
Shareholder no longer holds Shares in the Company as detailed in Section
26.3.2.3, such Shareholder shall not compete, directly or indirectly, in
the Territory with the Business of the Company nor supply or provide any
goods or services in the Territory related to the Business to any Person
other than the Company, nor reverse engineer, copy or otherwise convert
the technology of the other Party or Shareholder (the “Non-Compete
Restriction”).
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2.8
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No
Shareholder shall solicit directly or indirectly or entice away, or
endeavour to solicit or entice away, for a period commencing upon the
Effective Date of this Agreement and ending on the third anniversary of
the date on which such Shareholder no longer holds Shares in the Company,
any director or employee of the Company or any subsidiary of the Company
or the other Party or its Affiliates, but without prejudice to the right
of the Shareholder to terminate arrangements under which any of its
employees is seconded to the Company or such
subsidiary.
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2.9
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Astrata
and the Company shall commence the process of testing and certifying
Astrata’s radio and communications for use in the United States by Company
upon execution of this Agreement on or about December 1, 2008, at
Astrata’s expense. PassTime shall pay its Agreed Proportion of
such expense, provided that its Agreed Proportion does not exceed
$25,000.00 (U.S.). In the event the Company is not organized
and operational by March 1, 2009, Astrata shall reimburse to PassTime its
advance of this amount, and Astrata, not the Company, shall own all rights
to the radio system in the United
States.
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2.10
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The
Board of Directors and Shareholders shall finalize a mutually acceptable
Business Plan no later than January 15, 2009, which time may be extended
by mutual agreement of the Parties.
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3.
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INDEPENDENT
ACCOUNTANT
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The
Company shall have one or more Independent Accountants, as recommended by
the Board of Directors and unanimously agreed by the
Shareholders.
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4.
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THE BOARD OF
DIRECTORS
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4.1
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Subject
to the Company Law, overall management of the Company shall vest in the
Board of Directors. The Board of Directors shall exercise all
such powers and do all such acts and things on behalf of the Company and
in the Company's interests as the Company is authorized to do unless
expressly reserved or prohibited by this
Agreement.
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4.2
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The
Board of Directors shall be comprised of four persons. At all
times, Astrata shall nominate two of the first four Directors, and
PassTime shall nominate two of the first four Directors. The
Shareholders will vote for the Directors as
appointed.
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4.3
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The
Chairman of the Board of Directors shall be unanimously selected by the
Board and shall serve in accordance with the Company’s Bylaws, Certificate
of Incorporation and other such
documents.
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4.4
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The
meetings of the Board of Directors shall be held at least four (4) times a
year. The quorum for a meeting of the Board of Directors shall be at least
three (3) Directors. Decisions of the Board of Directors shall
be made by three (3) of the four (4) Directors at a duly convened meeting
as provided in this Agreement. The Board shall maintain minutes of the
meetings in reasonable detail and which adequately summarize its
discussions. The minutes and all resolutions shall be recorded
and maintained by the company at its principal office as official Company
records. Any of the Shareholders may review the minutes and
resolutions personally or through an attorney or legal consultant at any
time, upon reasonable written notice to the Company’s Secretary, Chairman
or President.
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4.5
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A
resolution in writing, or facsimile copies thereof signed by all the
Directors entitled to attend a meeting of the Board of Directors shall be
as valid and effective as if it had been passed at a meeting of the Board
of Directors duly convened and held, and may consist of several documents
in like form signed by one or more of the
Directors.
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4.6
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No
Director shall be personally liable for any loss or damage occasioned by
an error of judgment or oversight on their part while diligently and
faithfully performing their duties on behalf of the Company unless the
same happens through their own willful misconduct or
dishonesty.
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4.7
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The
Company’s Bylaws shall hold harmless, indemnify and defend the Company’s
Officers, Directors and key personnel from any and all loss, injury and/or
claim to the fullest extent permitted by
law.
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4.8
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Notwithstanding
anything to the contrary contained in this Agreement, the following
matters are reserved to the Board of Directors for determination by them
and shall require three (3) of the four (4) Directors’
approval:
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(i)
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Appointment
and/or removal of the President, Secretary and other officers of the
Company, provided that the President shall be nominated by PassTime and
employed by Astrata and appointed by the Board of
Directors;
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(ii)
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Approval
and/or modification of the budget and/or the Business
Plan;
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(iii)
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Determination
of any distribution of profits to
Shareholders;
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(iv)
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Capitalizing
reserves;
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(v)
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Granting
of options; and
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(vi)
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Determination
or modification of the Company’s Fiscal
Year.
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4.9 Subject
to Company Law, the Board of Directors shall provide that:
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4.9.1
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The
Company shall at all times maintain proper accounting and other financial
records in accordance with the requirements of all applicable laws and
generally accepted accounting
principles;
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4.9.2
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Quarterly
management accounts containing such information as any Shareholder shall
reasonably require shall be prepared and dispatched by the Company to the
Shareholders within 7 days after the end of the quarter in question;
and
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4.9.3
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Each
Shareholder or its authorized representatives shall be allowed access at
reasonable times to examine the books and records of the Company at the
Company’s place of business.
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4.10
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The
Board of Directors shall develop and agree on a Business Plan for the
Company from time to time in writing which shall, at a minimum, provide
for the following:
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4.10.1
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An
estimate of the working capital requirements of the Company incorporated
within a cash flow statement, together with an indication of the amount
(if any) which is considered prudent to retain out of the previous Fiscal
Year's distributable profits to meet such working capital
requirements;
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4.10.2
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A
projected profit and loss account;
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4.10.3
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An
operating budget (including estimated capital expenditure requirements)
and balance sheet forecast;
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4.10.4
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A
review of projections for the Business;
and
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4.10.5
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A
summary of business objectives; and
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4.10.6
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Designation
of President as the Party in charge of the operations of the
Company.
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5.
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GENERAL MEETINGS OF
THE SHAREHOLDERS
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5.1
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A
General Meeting of the Shareholders may, subject to any specific
requirement of the Company Law, be held at any location as determined from
time to time by the Shareholders.
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5.2
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The
Shareholders shall hold the annual General Meeting at least once a year
and not later than four (4) months following the close of the preceding
Fiscal Year. The Board shall otherwise convene General Meetings
whenever it deems necessary or at the written request of Shareholders
holding not less than twenty-five percent (25%) of the
Shares. Written notice of every General Meeting shall be given
to all Shareholders at least twenty one (21) days prior to the date of the
General Meeting (unless a shorter period is agreed in writing by all of
the Shareholders). The notice shall be sent by registered mail
and shall state the place, date and time of the meeting and the agenda for
such meeting. Matters not referred to on the agenda sent with
the notice of the General Meeting may not be considered at the General
Meeting unless serious facts are disclosed during the meeting that
requires discussion.
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5.3
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The
presence of Shareholders, present in person or by proxy, holding at least
seventy-five percent (75%) of all of the Shares shall be necessary for a
quorum for any General Meeting.
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5.4
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Unless
a higher majority is specifically required by the Company Law with respect
to a particular matter, no resolution of any General
Meeting:
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5.4.1
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With
respect to any of the matters specified in Clause 5.7 of this Agreement
shall be valid unless it has been passed unanimously by the Shareholders;
and
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5.4.2
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With
respect to other matters shall be valid unless it has been passed by
Shareholders holding more than fifty percent (50%) of the Shares
represented at such meeting.
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5.5
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All
Shareholders shall be entitled to attend a General
Meeting. Each Shareholder shall be entitled to such number of
votes as is equal to the number of shares held by such
Shareholder. A Shareholder may, by written proxy, appoint
another individual to represent such Shareholder at a General
Meeting. A Shareholder may attend a meeting via electronic or
telephonic communications.
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5.6
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Notwithstanding
Clause 4.4 hereof, the Shareholders may, in lieu of a meeting, pass signed
written resolutions with respect to matters to be decided at a General
Meeting provided they are signed by all Shareholders for the time being
entitled to receive notice of, and to vote at, General Meetings, and any
such resolution shall be as valid and effective as if the same had been
passed at a General Meeting duly convened and held. Any such
resolution may consist of several documents in like form, each signed by
one (1) or more of the
Shareholders.
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5.7
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Notwithstanding
anything to the contrary in this Agreement, and in addition to the other
matters specified in this Agreement as requiring Shareholder approval, the
following matters are reserved to the Shareholders for determination by
them and shall require their unanimous
approval:
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(i)
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Appointment
and removal of the Independent Accountants of the
Company;
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(ii)
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Increase
or decrease in the authorized or issued share capital of the
Company;
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(iii)
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Dissolution
or liquidation of the Company;
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(iv)
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Admission
of any third person as a
Shareholder;
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(v)
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Sale,
mortgage or other transfer of all or substantially all of the assets of
the Company;
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(vi)
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Merger,
amalgamation or consolidation of the
Company;
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(vii)
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Change
of the legal form of the Company;
and
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(viii)
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The
Company conducting activities other than those set forth in this
Agreement; and
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(ix)
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Any
capital call or required loan from Shareholders;
and
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(x)
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Changes
to the Business Plan which remove operational control of the Company from
PassTime to Astrata or another.
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5.8
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The
Shareholders shall maintain minutes of the meetings in reasonable detail
and which adequately summarize their discussions. The minutes
and all resolutions shall be recorded and maintained at the Company’s
principal office as official Company records. Any of the
Shareholders may review the minutes and resolutions personally or through
an attorney or legal consultant during normal business hours, upon
reasonable written notice to the Company’s Secretary, Chairman or
President.
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6.
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EXERCISE OF VOTING
RIGHTS
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6.1
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Each
Shareholder undertakes with the others, under the Company Laws, as
follows:
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6.1.1
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To
exercise all voting rights available to it in relation to the Company so
as to give full effect to the terms and conditions of this
Agreement;
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6.1.2
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To
provide (insofar as each Shareholder is able by the exercise of its voting
rights) that the Directors nominated by it and its other representatives
will reasonably consider proposals put forward at a meeting of the Board
of Directors and other meetings of the Company for the proper development
and conduct of the Business as contemplated in this Agreement and at all
times to act and to procure that the Directors nominated by it and its
other representatives act in good faith with respect to the
Business and the Company;
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6.1.3
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To
ensure that all third parties directly or indirectly under their control
refrain from acting in a manner which hinders or prevents the Company from
carrying on the Business in a proper and reasonable manner;
and
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6.1.4
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To
generally use its best endeavors to promote the Business and the interests
of the Company.
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7. OFFICERS AND
STAFF
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7.1
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Pursuant
to the Company Law, the Board of Directors shall appoint the President who
is nominated by PassTime and employed by Astrata who shall have
responsibility for the day-to-day management of the Company in accordance
with the powers and authority granted by the Company Law and as the Board
of Directors may from time to time
resolve.
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7.2
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The
President shall be responsible for the recruitment and management of the
staff of the Company.
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7.3
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The
Shareholders shall, where practical (and if requested by the Board), lend
personnel to the Company on a full or part time basis upon mutually
acceptable terms and conditions as provided at Section 7.4. The
President may remove any employee loaned to the Company if the President,
with the Board’s advice and counsel, deems such person not suitable for
the required task. All compensation, expenses and benefits to
which a loaned person is entitled and all necessary employer’s pension and
social security or equivalent contributions shall, except where otherwise
agreed by the Shareholders, be borne by the
Company.
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7.4
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PassTime
and Astrata acknowledge and agree that the President and other employees
that are loaned by PassTime or Astrata to the Company are permitted to
report to PassTime and Astrata regarding the operations of the
Company. PassTime and Astrata acknowledge and agree that
each will not object to any such direct reporting based on duties of
loyalty or fiduciary duties to the Company or the Shareholders, or any
other grounds.
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7.5
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The
President shall cause separate books of accounts and records relating to
the Business to be kept in accordance with generally accepted accounting
principles of the United States (US-GAAP), and cause to be rendered to the
Board of Directors:
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7.5.1
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Quarterly
reports and accounts relating to the Business as soon as reasonably
practicable after the conclusion of the quarterly period to which they
relate;
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7.5.2
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As
soon as reasonably practicable before the last day of each Fiscal Year of
the Company estimates of capital and revenue expenditure and of the income
of the Company for the next Fiscal
Year;
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7.5.3
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As
soon as reasonably practicable following the end of each Fiscal Year a
draft statement of accounts in respect of the Business for such Fiscal
Year; and
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7.5.4
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Other
reports as the Board of Directors may from time to time reasonably
require.
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8.
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SHARE TRANSFER
RESTRICTIONS
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8.1
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Except
as expressly provided herein or otherwise with the prior written approval
of all of the other Shareholders, no Shareholder
shall:
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8.1.1
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Pledge,
mortgage (whether by way of fixed or floating charge) or otherwise
encumber its legal or beneficial interest in its Shares;
or
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8.1.2
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Enter
into any agreement in respect of the votes or other rights attached to its
Shares, except as necessary to comply with the terms of this Agreement;
or
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8.1.3
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Agree,
whether or not subject to any condition precedent or subsequent, to do any
of the foregoing; or
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8.1.4
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Sell,
transfer or otherwise dispose of any of such Shares (or any legal or
beneficial interest therein).
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8.2
|
Either
Party may sell, transfer or otherwise dispose of any of its Shares (or any
legal or beneficial interest therein) to any
Affiliate.
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8.3
|
No
transfer shall be valid as against the Company or third parties until it
is recorded in the Register of the Shareholders. The Company
may not refuse to record a transfer in the Register of the Shareholders
unless it contravenes the provisions of this Agreement or the Company
Law.
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9. DIVIDENDS
|
9.1
|
In
respect of each accounting period (and subject to the legal reserve
required by the Company Law), the Shareholders shall distribute not less
than sixty percent (60)% of the net profits available for distribution to
the Shareholders annually by way of cash dividends within thirty (30) days
after completion of the audit, unless otherwise determined by the General
Meeting of the Shareholders. Each Share entitles its registered
Shareholder to a proportionate amount of the dividends distributed by the
Company as approved by the Shareholders from time to
time.
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-8-
|
9.2
|
In
determining the extent to which a dividend should be proposed, account
shall be taken of the financial and trading position and prospects of the
Company (including in particular without limitation, the actual cash
position of the Company, the cash resources available to the Company, the
Company’s working capital requirements and any project proposal then under
consideration or in contemplation that requires additional
funding).
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|
9.3
|
In
the event of any dispute arising between the Shareholders as to whether
the declaration and payment of a proposed dividend is imprudent, the
matter shall be referred to the Independent Accountants of the Company for
binding resolution.
|
10. NON-DISCLOSURE OF
INFORMATION
The
Parties executed a certain NON-DISCLOSURE AGREEMENT effective ** (“NDA”)
attached at Schedule 3 hereof and which the Parties desire to retain in full
force and effect, and to apply to and govern their exchange of confidential
information under this Agreement. Nothing in this Agreement shall be
construed to diminish, alter, or void any term in the NDA and nothing in the NDA
shall be construed to diminish, alter, or void any term in this
Agreement.
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11.
|
DISSOLUTION
OF THE COMPANY
|
The
Articles of Incorporation shall state that the Company’s existence is
perpetual. Notwithstanding the foregoing, the Company shall be
dissolved upon the order of a court having competent jurisdiction or upon the
unanimous vote of the Shareholders. Upon the dissolution of the
Company, the Shareholders shall appoint a mutually acceptable receiver or
liquidator in accordance with the Law. The liquidator(s) shall effect
the liquidation of the Company in accordance with the relevant provisions of the
Law. If the liquidation takes place pursuant to a court order, the
liquidation shall be effected in the manner specified by the court
order.
12. PROTECTION OF
NAME
|
12.1
|
No
Shareholder will impinge, interfere with, or otherwise claim use or permit
the use of the Company’s name, trademarks, trade names, logos and/or
insignia or those of the other Shareholder and its
Affiliates.
|
|
12.2
|
The
Shareholders shall license the use of their respective trademarks and
trade names, logos and insignia to the
Company.
|
13. COUNTERPARTS
This
Agreement may be executed in four or more counterparts, each of which shall be
deemed to be an original, and which together shall constitute one and the same
Agreement. Unless otherwise provided in this Agreement, this
Agreement shall become effective and be dated (and each counterpart shall be
dated) on the date on which this Agreement (or a counterpart of this Agreement)
is signed by the last of the Shareholders to execute this Agreement or, as the
case may be, a counterpart thereof. This agreement may be executed
and delivered by telecopy machine or other form of electronic delivery by the
Parties hereto which shall be deemed for all purposes as an
original.
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14.
|
COSTS
|
|
14.1
|
Except
as provided elsewhere in this Agreement, the Company shall pay all costs,
legal fees, registration fees and other expenses incurred in the formation
of the Company and the preparation of all documents related
thereto. All other costs and expenses shall be borne by the
Shareholder or Party incurring such cost or
expense.
|
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15. ASSIGNMENT
This
Agreement may not be assigned or transferred by any Party without the express
written consent of the other. Astrata acknowledges that PassTime is
being formed as an Affiliate of ▇▇▇▇▇▇ · ▇▇▇▇▇▇ Associates, Inc.
for purposes of this Agreement.
|
16.
|
SUCCESSORS
|
|
|
This
Agreement shall be binding on and shall inure for the benefit of the
respective successors in title of each
Shareholder.
|
|
17.
|
WAIVER AND
FORBEARANCE
|
|
|
The
rights of any Shareholder hereto shall not be prejudiced or restricted by
any indulgence or forbearance extended to any other Shareholder and no
waiver by any Shareholder in respect of any breach shall operate as a
waiver in respect of any subsequent
breach.
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|
18.
|
ENTIRE AGREEMENT AND
VARIATION
|
|
18.1
|
This
Agreement (together with the appendices hereto)
supersede any previous agreement between the Shareholders in relation to
the matters dealt with herein and represents the entire understanding
between the Shareholders in relation
thereto.
|
|
18.2
|
Save
as otherwise expressly provided, no modifications, amendment or waiver of
any of the provisions of this Agreement shall be effective unless made in
writing specifically referring to this Agreement and duly signed by the
Parties hereto.
|
|
19
|
CONFLICT WITH COMPANY
LAW
|
|
|
In
the event of any ambiguity or conflict between the provisions of this
Agreement and the Bylaws or Articles, the provisions of this Agreement
shall prevail, in so far as permitted by the Company Law, and the Parties
shall exercise all voting and other rights and powers available to them so
as to give effect to the provisions of this Agreement and shall further if
necessary procure any required amendment as may be
necessary. The Company Law documentation shall be prepared so
as to make the terms of this Agreement enforceable under
law.
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20.
|
SEVERANCE
|
|
20.1
|
If
the final determination of a court of competent jurisdiction declares,
after the expiration of the time within which judicial review, that any
term or provision hereof is invalid or unenforceable, (i) the remaining
terms and provisions hereof shall be unimpaired and (ii) the invalid and
enforceable term or provision shall be replaced by a term or provision
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or
provision.
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|
21.
|
EXERCISE OF
POWERS
|
|
21.1
|
Where
the Shareholders are required under this Agreement to exercise their
powers in relation to the Company to procure a particular matter or thing,
such obligation shall be deemed to include the obligation to exercise
their powers as Shareholders of the Company and Directors of the Board of
Directors to procure such matter or
thing.
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21.2
|
In
order to discharge their obligations under this Agreement, each
Shareholder shall (without prejudice to the general nature of its
obligations under this Agreement) join with the other Shareholders to
convene meetings, propose resolutions and vote for resolutions and procure
that any Director appointed by it (whether alone or jointly with any other
person) shall exercise its or his votes as a Director to procure such
matter or thing referred to in this
Agreement.
|
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|
22.
|
REGISTER OF
SHAREHOLDERS
|
|
22.1
|
A
special register (the "Register") of the Shareholders shall be prepared by
the Company and be kept at its principal office which should include the
following:
|
|
(i)
|
The
full name of each Shareholder;
|
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(ii)
|
Nationality,
or if a body corporate, place of
incorporation
|
|
|
(iii)
|
Profession
(if an individual);
|
|
|
(iv)
|
Residential
address or, if a body corporate, principal office (together with details
of any address for service of
notices):
|
|
|
(v)
|
Number
and value of the Shares owned by each of them;
and
|
|
|
(vi)
|
Details
of all dealings carried out with regard to the Shares, together with the
dates thereof.
|
|
22.2
|
The
Board of Directors shall be liable for maintaining the Register and for
the accuracy of its contents and the Shareholders shall have the right to
review the Register.
|
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23.
|
NO BINDING
AUTHORITY
|
|
23.1
|
The
relationship between the Parties constitutes a contract on specific terms
and for a specific purpose. Nothing in this Agreement or the
acts of the Parties shall constitute or be deemed to construe a general
partnership, licensor-licensee, franchisor-franchisee, or other special
relationship between the Parties other than as expressly stated in this
Agreement. In no case shall either Party have the right or
prerogative to contract for, bind or make representations on the part of
the other.
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24. NOTICES
|
24.1
|
All
notices, requests, demands, and other communications under this Agreement
or in connection herewith shall be given or made upon the affected Party
or Parties in writing in the English language and shall be delivered
either personally by hand delivery, or by sending it by prepaid registered
mail or courier addressed to the Party at the address shown at the
beginning of this Agreement or by
facsimile.
|
|
24.2
|
Any
notice delivered by hand or Notary Public shall be deemed to have been
served at the time of delivery, and any notice sent by registered mail or
courier to have been served seven (7) Business Days after the date on
which it is posted, or in the case of facsimile upon registration with
proof of transmission.
|
|
25.
|
FURTHER ASSURANCE AND
GOOD FAITH
|
|
25.1
|
Each
Party shall co-operate with the other and execute and deliver to the other
such other instruments or documents and take such other actions as may be
reasonably requested from time to time in order to carry out, evidence and
confirm their rights and intended purpose of this
Agreement.
|
|
25.2
|
The
Parties shall at all times act in good faith towards each other in
fulfillment of their obligations hereunder and in relation to the Company
and this Agreement.
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26. BOARD OF DIRECTORS
DEADLOCK
|
26.1
|
If
the Board of Directors after full discussion is unable to agree
(“Deadlock”) upon any substantial matter of policy affecting the Business
(“Deadlock Matter”) then, after the second meeting of the Board of
Directors at which the Deadlock Matter was discussed and unresolved, any
Director may serve a notice in writing (“Deadlock Notice”) on the other
Directors and the Shareholders referring to the Deadlock
Matter.
|
|
26.2
|
If
a Deadlock Notice is issued, each Director, within fifteen (15) days after
service of such Deadlock Notice, shall prepare (in his own right or
jointly with other Directors) and circulate to the Shareholders and the
other Directors a memorandum setting out his or their position on the
Deadlock Matter and the reasons for adopting such
position. Each such memorandum shall be considered by each
Shareholder who shall respectively use its or his reasonable endeavors to
resolve such Deadlock Matter. If the Shareholders shall agree
upon a solution or disposition of the Deadlock Matter, they shall jointly
execute a statement setting forth the terms of such resolution or
disposition and the Shareholders shall exercise the voting rights and
other powers of control available to them in relation to the Company to
procure that such resolution or disposition is fully and promptly carried
into effect.
|
|
26.3
|
If
a resolution or disposition of the Deadlock Matter is not agreed in
accordance with the provisions of Clause 26.2, then within thirty (30)
Business Days after service of the Deadlock Notice or such longer period
as the Shareholders may agree in writing (“Deadlock Notice Period”), the
following provisions shall apply:
|
|
|
26.3.1
|
Any
Shareholder (“Offeror”) shall be entitled within the Deadlock Notice
Period to require that the Deadlock Sale Price (as defined below) be
determined. The "Deadlock Sale Price" shall mean the price for
each Share as may be agreed by the Shareholders, or if the Shareholders
are unable to agree on a price such amount as the Independent Accountant
shall determine to be in its opinion the fair value of each Share on the
basis of a sale as between a willing buyer and a willing seller
contracting at arm's length terms; but (b) without taking into account the
size of the shareholding or any restriction on the transfer of
Shares. The Offeror, via written notice to the other
Shareholders (“Offer Notice”), may seek to acquire for itself or its
designees from the other Shareholders ("Offeree") all of their Shares at
the Deadlock Sale Price, or in the alternative to sell to the Offeree (or
their designees) all of its Shares at the Deadlock Sale
Price.
|
26.3.2
The Offer Notice shall:
|
|
26.3.2.1
|
Constitute
an offer by the Offeror, open for acceptance by the Offeree for thirty
(30) Business Days (the “Offer Period”), to sell all of the Offeror’s
Shares at the Deadlock Sale Price to the Offeree (“Sell
Offer”);
|
|
|
26.3.2.2
|
Constitute
an alternative offer by the Offeror, open for acceptance by the Offeree
during the Offer Period, to purchase all of the Offeree’s Shares at the
Deadlock Sale Price (“Buy Offer”) if the Offeree does not elect to accept
the Sell Offer; and
|
|
|
26.3.2.3
|
Shall
expressly provide that the Shareholder who sells its Shares shall continue
to provide the products, services, licenses, trademarks, trade names,
logos and insignia to the Company upon the same terms and conditions
contemplated by this Agreement and in the current Business Plan of the
Company and in any agreements or practices then in place for a period of
one (1) year. Or for three (3) years if the Company continues
to consume 80% of the Company’s previous twelve (12) month (immediately
preceding the sale of the shares) purchased product services, licenses,
trademarks, trade names, logos and insignia if requested by the purchasing
Shareholder on an annual basis. If the level of 80% is not maintained
after the initial twelve months, the non-compete is eliminated;
and
|
|
26.3.2.4
|
Shall
expressly reaffirm the non-disclosure of this Agreement and any amendments
and similar agreements thereto; and
|
|
26.3.2.5
|
Shall
expressly require the non-purchasing Shareholder and its Affiliates to
refrain from direct or indirect competition with the Business of the
Company for one (1) or three (3) years from the date of such purchase of
the Shares in accordance with 26.3.2.3;
and
|
-12-
26.3.2.6 Not
contain any other terms or conditions whatsoever.
|
|
26.3.3
|
The
Offeror shall not be entitled to modify, vary or withdraw the Offer Notice
during the Offer Period.
|
|
|
26.3.4
|
The
Offeree may accept either the Sell Offer or the Buy Offer contained in the
Offer Notice at any time within the Offer
Period.
|
|
|
26.3.5
|
The
Offeree shall communicate in writing to the Offeror its acceptance of
either the Sell Offer or the Buy Offer contained in the Offer
Notice.
|
|
|
26.3.6
|
If
the Offeree fails to accept in writing either the Sell Offer or the Buy
Offer contained in the Offer Notice within the Offer Period, the Offeree
shall be deemed to have accepted the Buy
Offer.
|
|
|
26.3.7
|
If
each Shareholder shall receive an effective and properly delivered Offer
Notice, the following provisions shall
apply:
|
|
|
26.3.7.1
|
If
one Shareholder serves notice pursuant to this Agreement agreeing to
accept the other’s Buy Offer and/or the other Shareholder serves notice
pursuant to this Agreement agreeing to accept the other’s Sell Offer the
provisions of this Agreement shall
apply;
|
|
|
26.3.7.2
|
If
both Shareholders serve notice pursuant to this Agreement agreeing to
accept the other’s Buy Offer both Shareholders shall, within 10 days of
the end of the Offer Period, submit revised sealed Buy Offers to an
independent valuer and upon the expiration of such period, the Shareholder
submitting the highest Buy Offer shall have the right to buy the Shares of
the other and the provisions of this Agreement shall
apply;
|
|
|
26.3.7.3
|
If
both Shareholders serve notice pursuant to this Agreement agreeing to
accept the other’s Sell Offer, the Company shall be wound up and the
Shareholders shall be bound to take all such steps as may be necessary to
wind up the Company forthwith.
|
|
|
26.3.8
|
The
completion of the sale and purchase of Shares under this Section 26 shall
take place on or before thirty (30) Business Days after the end of the
Notice Period.
|
|
|
26.3.9
|
If
no Shareholder serves an Offer Notice on the other Shareholder during the
Deadlock Notice Period or if no Shareholder serves a revised Buy Offer
pursuant to the provisions of this Agreement, the Company shall be wound
up and the Shareholders shall be bound to take all such steps as may be
necessary to wind up the Company forthwith. All agreements for
non-compete become null and void.
|
|
26.4
|
Except
as otherwise provided herein or agreed by Purchaser and Seller (as defined
below), it shall be a term of any sale of any Shares pursuant to this
Agreement that:
|
|
|
26.4.1
|
The
selling Shareholder (“Seller”) shall sell the Shares with effect from the
date of delivery of the transfer relating thereto to the purchaser or
purchasers ("Purchaser") as beneficial owner free from any option, lien,
charge, equity or encumbrance and together with all rights attaching
thereto;
|
|
26.4.2
|
At
the date on which the sale is to take place the Purchaser and the Seller
shall:
|
|
|
26.4.2.1
|
Use
best endeavors to procure the discharge of all guarantees, security and
commitments and the repayment and discharge of any liability given by or
binding upon the Seller for the account of or on behalf of the Company in
favor of any person, and pending such discharge the Purchaser shall,
pro-rate to the number of Shares acquired, indemnify and keep indemnified
the Seller in respect of all liability or loss which it may incur in
respect of the same; and
|
|
|
26.4.2.2
|
Use
best endeavors to procure the repayment and discharge by the Company to
the Seller of all monies or obligations owed by the Company to the Seller
and its associates and, pending such discharge or repayment, the Purchaser
shall indemnify and keep indemnified the Seller and its associates in
respect of all liabilities or losses which they may incur in respect of
the same.
|
-13-
|
|
26.4.2.3
|
The
Seller shall procure the resignation of every Director nominated or
appointed by it, without compensation or claim for loss of office as a
Director against the Company (other than in respect of any rights pursuant
to any service agreement such Director may have with the Company), and the
Seller shall indemnify and keep indemnified the Company in respect of any
such claim.
|
|
|
26.4.2.4
|
The
sale and purchase of the Shares shall be completed at the registered
office of the Company and upon
completion:
|
|
|
26.4.2.4.1
|
The
Seller shall deliver to the Purchaser (i) a duly executed transfer of the
Shares to the Purchaser; and (ii) the resignations required to be procured
by the Seller hereunder; and
|
|
|
26.4.2.4.2
|
The
Purchaser shall pay to the Seller the sale price for the Shares in US
Dollars by wire transfer to a bank account anywhere so nominated by the
Seller for such purpose.
|
|
|
26.4.2.5
|
The
Parties shall execute licenses and contracts providing for the continued
sale of products, services, licenses, trade names, trademarks, logos and
insignia to the Company as provided herein, including Sections 2.4 and
26.3.2.
|
|
27.
|
APPLICABLE LAW AND
DISPUTE RESOLUTION
|
|
27.1
|
This
Agreement shall be governed by and construed in accordance with the laws
of the State of Nevada without giving effect to its conflicts of law
principles. PassTime and Astrata agree (i) that any legal suit,
action or proceeding arising out of or relating to this Agreement and/or
the transactions contemplated hereby shall be settled by binding
arbitration under the laws of commercial arbitration as promulgated by the
American Association of Arbitration; instituted exclusively in the City of
Carson City, Nevada (ii) waive any objection which it may have or
hereafter have to the venue of any such suit, action or, proceeding, (iii)
that any appeal of an Arbiter’s ruling shall be brought in and heard by a
court of competent jurisdiction sitting in Carson City, Nevada; and (iv)
irrevocably consent to the jurisdiction of arbitration in and the courts
of Nevada as set forth in this
paragraph.
|
|
27.2
|
This
Agreement does not create, and shall not be construed as creating, rights
enforceable by any person or entity not a party hereto, except those who
may entitled thereto by virtue of the provisions of this paragraph and
those persons and entities who are entitled to the benefits of the
indemnity provisions thereof. This Agreement shall inure to the
benefit of the parties hereto, their respective successors and assigns,
and to the indemnified parties hereunder and their successors and
representatives. This Agreement may not be assigned by any
party to an unaffiliated party without the express written consent of the
other party hereto.
|
|
27.3
|
The
Parties acknowledge that certain provisions of this Agreement must survive
any termination or expiration thereof in order to be fair and equitable to
the Party to whom any such promise or duty to perform is owed. Therefore,
the Parties agree that all provisions that need to survive the termination
or expiration of this Agreement in order to be fair and equitable shall
for the period required to meet and satisfy any obligations and promises
arising therein and hereunder.
|
-14-
IN WITNESS whereof this
Agreement has been duly executed and delivered the day and year first above
written.
PassTime
Fleet, LLC
/S/ ▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief
Executive Officer
Astrata
Group Incorporated
/S/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Title: Executive
Chairman and
Chief Executive Officer
-15-