CONVERSION AGREEMENT
This
Conversion Agreement
(the
“Agreement”)
is
entered into on this ____ day of November, 2005, by and between Wako Logistics
Group, Inc., a Delaware corporation (the “Company”),
and
Xxxxxxxxxxx Xxxx, with respect to the conversion into equity by Xx. Xxxx, of
certain outstanding Loans (as defined below) previously made by Xx. Xxxx to
the
Company.
A. Xx.
Xxxx
loaned to the Company U.S. $1,000,000 (the “$1,000,000
Loan”),
as
evidenced by the Company’s 6% $1,000,000 aggregate principal amount Convertible
Promissory Note, dated April 1, 2005, in favor of Xx. Xxxx, annexed hereto
as
Exhibit
1
(the
“Wood
Note”).
B. Xx.
Xxxx
has made certain other loans to the Company (the “Other
Loans”).
C. In
September 2005, the Company requested Xx. Xxxx and Xx. Xxxx agreed to convert
(i) the US$1,000,000 Loan, and (ii) US$500,000 of the Other Loans (collectively,
the “$1,500,000
Loans”),
into
2,000,000 shares of the Company’s 6% Series A Convertible Preferred Stock (the
“A
Shares”),
which
A Shares have the terms set forth in the Certificate of Designations,
Preferences and Rights of Series A Convertible Preferred Stock of Wako Logistics
Group, Inc., annexed hereto as Exhibit
2
(the
“Certificate
of Designations”).
AGREEMENT
Now,
Therefore,
in
consideration of the foregoing facts, the mutual promises of the parties
contained herein and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to
be legally bound, hereby agree as follows:
1. Conversion
of Loans.
Not
later than ten (10) days following the date that the Certificate of Designations
is accepted for filing with the Secretary of State of the State of Delaware
(the
“Delaware
Secretary”),
the
Company will cause to be delivered to Xx. Xxxx one or more certificates
representing the A Shares into which the $1,500,000 Loans shall be converted
pursuant to this Agreement. The Company agrees to file immediately upon
execution of this Agreement by the parties hereto, the Certificate of
Designations.
2. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to Xx. Xxxx that it has taken all
necessary corporate action to authorize the execution and delivery of this
Agreement, and that this Agreement, once executed and delivered, will upon
the
Effective Date be a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms. The A Shares shall be duly
authorized, validly issued and fully paid and non-assessable shares of capital
stock of the Company; Xx. Xxxx will acquire complete and clean title to the
Shares, and not be subject directly and/or indirectly to any liens, encumbrances
and/or other clouds on title and no person has any pre-emptive rights, rights
of
first refusal and/or any similar rights with respect to the A
Shares.
3. Representations
and Warranties of Xx. Xxxx.
Xx.
Xxxx represents and warrants to the Company that this Agreement, and that this
Agreement, once executed and delivered, will upon the Effective Date be a valid
and binding agreement of Xx. Xxxx enforceable against Xx. Xxxx in accordance
with its terms. In addition, Xx. Xxxx represents and warrants to the Company
that he:
(a) acknowledges
and understands that an investment in the A Shares represents a speculative
investment involving a high degree of risk;
(b) is
acquiring the A Shares for its own account and not for resale and can bear
the
economic risk of an investment in the A Shares for an indefinite period of
time;
(c) acknowledges
and understands that the issuance to him of the A Shares will not be registered
under the Securities Act of 1933, as amended (the “Act”),
or
any state securities laws and, as a result, certificates representing the A
Shares and the shares of Common Stock issuable upon the conversion of the A
Shares (the “Conversion
Shares”),
will
contain a legend, substantially stating that they have not been registered
under
the Act or any State securities laws, and that neither the Conversion Shares
nor
the A Shares (collectively, the “Securities”)
may be
transferred in the absence of either (i) an opinion of counsel satisfactory
to
the Company that such proposed transfer may be made lawfully without the
registration under the Act and applicable state securities laws, or (ii)
registration of such Securities with respect to the subject
transfer;
(d) is
an
“accredited investor,” as that term is defined in Rule 501(a) under the
Act;
(e) acknowledges
and understands that the Company will rely on DCI’s representations and
warranties contained herein for purposes of claiming an exemption from the
registration requirements under the Act and state securities laws;
and
(f) has
reviewed and fully understands the Certificate of Designations.
5. Jurisdiction,
Etc.
This
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 irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this 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 expressly
and irrevocably 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.
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6. General
Provisions.
This
Agreement constitutes the entire agreement of the parties with respect to its
subject matter, and all agreements and understandings among the parties with
respect to its subject matter are embodied and expressed herein. This Agreement
may be modified, amended, waived or revoked only in a writing signed by all
parties. This Agreement may be executed in one or more counterparts and by
facsimile, each of which shall be enforceable against the party actually
executing such counterparts and all of which together shall constitute one
instrument. This Agreement may not be assigned or otherwise transferred without
the prior express written consent of the other party hereto. The rights, duties
and obligations set forth herein shall inure to the benefit of and be binding
upon any and all predecessors, successors and permitted assigns of the parties
hereto.
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In
Witness Whereof,
the
parties have caused their duly authorized representatives to set their hands
to
this Agreement as of the date first set forth above, to be effective as of
the
Effective Date.
| WAKO GROUP LOGISTICS, INC.: | ||
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| By: | /s/ Xxxxxxxxxxx Xxxx | |
|
Xxxxxxxxxxx Xxxx,
Chief Executive Officer
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| By: | /s/ Xxxxxxxxxxx Xxxx | |
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Xxxxxxxxxxx Xxxx,
for himself
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