SUBSCRIPTION AGREEMENT
SUBSCRIPTION
AGREEMENT made as of the 1st day of April, 2005 between WAKO LOGISTICS GROUP,
INC., a Delaware corporation with its principal offices at 3606-8,
36/F, Citibank Tower, Xxxxxxxx Xxxxx, 0 Xxxxxx Xxxx Xxxxxxx, Xxxx
Xxxx
(the “Company”),
and XXXXXXXXXXX XXXX, the Chief Executive Officer, Chief Financial Officer and
sole director of the Company, also having an address at 3606-8,
36/F, Citibank Tower, Xxxxxxxx Xxxxx, 0 Xxxxxx Xxxx Xxxxxxx, Xxxx
Xxxx
(the “Executive”).
WHEREAS,
the Company intends to enter into a certain Membership Interest Purchase
Agreement, pursuant to which it will acquire the business of Xxx X’Xxxxx (USA)
LLC (“Xxx
X’Xxxxx”),
for the purchase price of $1,000,000; and
WHEREAS,
the Executive has agreed to provide funds to the Company, in the amount of
$1,000,000, for the purpose of financing the Company’s purchase of Xxx X’Xxxxx
(the “Financing”);
and
WHEREAS,
the Company and the Executive have agreed to provide for the Financing through
the Executive’s purchase, from the Company, of a convertible note, in the
principal amount of $1,000,000, which shall be issued by the Company to the
Executive on the terms and conditions contained herein; and
WHEREAS,
the Company has agreed to grant to the Executive certain registration rights
with respect to the shares of its common stock, $.001 par value per share (the
“Common
Stock”)
which may be issuable to the Executive upon the conversion of such convertible
note;
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as
follows:
|
I. |
SUBSCRIPTION
FOR CONVERTIBLE NOTES AND REGISTRATION
RIGHTS |
1.1 Subject
to the terms and conditions hereinafter set forth, the Executive hereby
irrevocably subscribes for and agrees to purchase from the Company a $1,000,000
principal amount convertible promissory note, in the form annexed hereto as
Exhibit A (the “Convertible
Note”),
and the Company agrees to issue the Convertible Note to the Executive in
consideration for his providing the Financing in the amount of $1,000,000. The
purchase price for the Convertible Note is payable by certified check made
payable to Wako Logistics, Inc. or by wire transfer, contemporaneously with the
execution and delivery of this Subscription Agreement. The Convertible Note will
be delivered by the Company within ten (10) business days following the date on
which the funds clear.
1.2 The
Company will provide the Executive with certain registration rights, with
respect to the shares of Common Stock issuable upon any conversion of the
Convertible Note (the “Underlying
Securities”),
pursuant to the provision of a Registration Rights Agreement, in the form
annexed hereto as Exhibit B.
| II. | REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVE |
2.1 The
Executive recognizes that the purchase of the Convertible Note involves a high
degree of risk in that (a) an investment in the Company is highly
speculative; (b) he may not be able to liquidate his investment;
(c) transferability of the Convertible Note is extremely limited; and
(d) in the event of a disposition or otherwise, the Executive could sustain
the loss of his entire investment.
2.2 The
Executive acknowledges that this private offering of securities by the Company
has not been reviewed by the United States Securities and Exchange Commission
("SEC")
because of the Company's representations that this is intended to be a nonpublic
offering pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Act”).
The Subscriber represents that the Convertible Note is being purchased for his
own account, for investment and not for distribution or resale to others. The
Executive agrees that he will not sell or otherwise transfer the Convertible
Note, or any of the Underlying Securities unless they are registered under the
Act or unless an exemption from such registration is available. The Convertible
Note and the Underlying Securities are sometimes hereinafter collectively
referred to as the “Securities.”
2.3 The
Executive understands that the Convertible Note has not been registered under
the Act by reason of a claimed exemption under the provisions of the Act which
depends, in part, upon his investment intention. In this connection, the
Executive understands that it is the position of the SEC that the statutory
basis for such exemption would not be present if his representation merely meant
that his present intention was to hold the Convertible Note for a short period,
such as the capital gains period of tax statutes, for a deferred sale, for a
market rise, assuming that a market develops, or for any other fixed period. The
Executive realizes that, in the view of the SEC, a purchase now with an intent
to resell would represent a purchase with an intent inconsistent with his
representation to the Company, and the SEC might regard such a sale or
disposition as a deferred sale to which such exemptions are not
available.
2.4 The
Executive consents to the placement of the following legend, or a legend similar
thereto, on any certificate or other document evidencing the Securities until
such time, if ever, that such legend is no longer required:
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THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”)
SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE
COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.
2.5 The
Executive hereby represents that, except as set forth in this Subscription
Agreement, no representations or warranties have been made to him by the Company
or any agent, employee or affiliate of the Company and in entering into this
transaction, he is not relying on any information, other than that contained in
this Subscription Agreement and the results of his independent
investigation.
| III. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
The
Company represents and warrants to the Executive as follows:
3.1 The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power to conduct
the business which it conducts and proposes to conduct, to execute and deliver
this Subscription Agreement and to carry out the transactions contemplated by
this Subscription Agreement, as appropriate.
3.2 The
execution, delivery and performance of this Subscription Agreement by the
Company will have been duly approved by the Board of Directors of the Company
and all other actions required to authorize and effect the offer and sale of the
Securities will have been duly taken and approved.
3.3 The
Securities, when issued, sold, delivered and paid for in accordance with the
terms hereof, will be validly issued and outstanding, fully paid and
nonassessable, and will not be subject to preemptive or any other similar rights
of the stockholders of the Company or others.
| IV. | MISCELLANEOUS |
4.1 Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by registered or certified mail, return receipt requested,
addressed to the Company, at its principal office, Attention: President, and to
the Executive at his address set forth at the beginning of this Subscription
Agreement. Notices shall be deemed to have been given on the date of mailing,
except notices of change of address, which shall be deemed to have been given
when received.
3
4.2 This
Subscription Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged, and this Subscription Agreement may
not be discharged except by performance in accordance with its terms or by a
writing signed by the party to be charged.
4.3 This
Subscription Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns. This Subscription Agreement, including the exhibits and schedules
annexed hereto, sets forth the entire agreement and understanding between the
parties as to the subject matter thereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among
them.
4.4 This
Subscription Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this Subscription
Agreement, shall be brought solely in a federal or state court located in the
City, County and State of New York. By its execution hereof, the parties hereby
covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in
personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and disbursements in an amount
judicially determined.
4.5 This
Subscription Agreement may be executed in counterparts, all of which taken
together shall constitute one and the same instrument.
4.6 The
holding of any provision of this Subscription Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Subscription Agreement, which shall remain in full force and
effect.
4.7 It
is agreed that a waiver by either party of a breach of any provision of this
Subscription Agreement shall not operate, or be construed, as a waiver of any
subsequent breach by that same party.
4.8 The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Subscription
Agreement.
4
IN
WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the
day and year first written above.
|
WAKO
LOGISTICS GROUP, INC.
By:
___/s/
Xxxxxxxxxxx Wood______________
Name:
Xxxxxxxxxxx Xxxx
Title: CEO
______/s/
Xxxxxxxxxxx Wood________________
XXXXXXXXXXX
XXXX |
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EXHIBIT
A TO SUBSCRIPTION AGREEMENT
Form
of Convertible Note
EXHIBIT
B TO SUBSCRIPTION AGREEMENT
Form of Registration Rights Agreement
