Document:

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, Citibank Plaza, 3 Garden Road Central, Hong
Kong
(the “Company”),
and CHRISTOPHER WOOD, the Chief Executive Officer, Chief Financial Officer and
sole director of the Company, also having an address at 3606-8,
36/F, Citibank Tower, Citibank Plaza, 3 Garden Road Central, Hong
Kong
(the “Executive”).

WHEREAS,
the Company intends to enter into a certain Membership Interest Purchase
Agreement, pursuant to which it will acquire the business of Kay O’Neill (USA)
LLC (“Kay
O’Neill”),
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 Kay O’Neill
(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:

2

 

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/
      Christopher Wood______________

      Name:
      Christopher Wood

      Title: CEO

       

      ______/s/
      Christopher Wood________________
      

      CHRISTOPHER
      WOOD

 

5

 

EXHIBIT
A TO SUBSCRIPTION AGREEMENT

 

Form
of Convertible Note

 

EXHIBIT
B TO SUBSCRIPTION AGREEMENT

Form
of Registration Rights AgreementREGISTRATION
RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”)
is made and entered into as of April 1, 2005, by and among WAKO
LOGISTICS GROUP, INC.,
a Delaware corporation (the “Company”)
and CHRISTOPHER
WOOD
(the “Executive”).

 

This
Agreement is made pursuant to the Subscription Agreement, dated as of the date
hereof, by and between the Company and the Executive (the “Subscription
Agreement”),
submitted in accordance with and subject to the terms and conditions described
in the Subscription Agreement and the 6% Convertible Promissory Note annexed as
Exhibit A thereto (the “Convertible
Note”).

 

The
Company and the Executive hereby agree as follows:

 

1.  Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the
Subscription
Agreement shall have the meanings given such terms therein. As used in this
Agreement, the following terms shall have the following meanings:

 

“Commission”
means the Securities and Exchange Commission.

 

“Common
Stock”
means common stock of the Company, $.001 par value per share.

 

“Effectiveness
Period”
shall have the meaning set forth in Section
3(b).

 

“Exchange
Act”
means the Securities Exchange Act of 1934, as amended.

 

“Holder”
or “Holders”
means the holder or holders, as the case may be, from time to time of
Registrable Securities (including any permitted assignee).

 

“Indemnified
Party”
shall have the meaning set forth in Section
5(c).

 

“Indemnifying
Party”
shall have the meaning set forth in Section
5(c).

 

“Losses”
shall have the meaning set forth in Section
5(a).

 

“Person”
means an individual, corporation, partnership, limited liability company or
other entity.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

 

“Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

 

“Registrable
Securities”
means all (i) shares of Common Stock issued upon any conversion of the
Convertible Note and (ii) any shares of Common Stock issued or issuable upon any
stock split, dividend or other distribution, recapitalization pursuant to
anti-dilution provisions or similar event with respect to the
foregoing.

 

“Registration
Statement”
means a registration statement filed by the Company with the Commission,
including (in each case) the Prospectus, amendments and supplements to the
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in the registration
statement.

 

“Rule
144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

 

“Rule
424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar Rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.

 

“Securities
Act”
means the Securities Act of 1933, as amended.

 

“Trading
Day”
means
(i) a day on which the Common Stock is traded on a Trading Market on which it is
listed, or (ii) if the Common Stock is not listed on a Trading Market, a day on
which the Common Stock is traded on the over-the-counter market, as reported by
the OTC Bulletin Board, or (iii) if trades of the Common Stock are not reported
by the OTC Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
or reporting prices); provided that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a business day.

 

“Trading
Market”
means the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the American Stock Exchange, the New
York Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market or
the Over-the-Counter Market.

 

2.  Piggyback
Registrations Rights.

 

(a)  
Each time that the Company proposes to file a Registration Statement other than
pursuant to a Registration Statement on Form S-4 or Form S-8 or similar or
successor forms, the Company shall promptly give written notice of the filing of
such Registration Statement to all Holders of Registrable Securities, which
shall offer such Holders the right to request inclusion of any Registrable
Securities in such Registration Statement.

2

 

(b)  Each
Holder of Registrable Securities shall have ten (10) days or such longer period
as shall be set forth in the notice, from the receipt of such notice, to deliver
to the Company a written request specifying the number of shares of Registrable
Securities such Holder intends to sell and the Holder's intended plan of
disposition.

 

(c)  Upon
receipt of a written request pursuant to Section
2(b),
the Company shall promptly use its best efforts to cause all such Registrable
Securities to be registered, to the extent required to permit sale or
disposition as set forth in the written request.

 

(d)  If
a Registration Statement with respect to which the Company gives notice under
Section
2(a)
pertains to an underwritten offering, then the Company shall so advise the
Holders. In such event, the right of each Holder to have its Registrable
Securities included in a Registration Statement pursuant to this Section
2
shall be conditioned upon each Holder’s participation in such underwriting and
the inclusion of the Registrable Securities in the underwriting to the extent
provided herein. The Holders shall enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, then the managing underwriter may
exclude shares (including Registrable Securities) from the registration and the
underwriting, and the number of shares that may be included in the registration
and the underwriting shall be allocated, first, to any shares being sold by the
Company, and second, to the Holders of Registrable Securities and any other
selling stockholders electing to sell their shares of Common Stock, under such
Registration Statement, on a pro-rata basis based on the total number of shares
of Common Stock held by each such stockholder. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from such Registration Statement and shall be withheld from the market by the
Holders thereof for a period deemed necessary by the managing underwriter in
order to effect the underwritten offering, but in no event to exceed twelve (12)
months following the effective date of such Registration Statement.

 

3.  Registration
Procedures.
In connection with the Company's registration obligations hereunder, the Company
shall:

 

(a)  Not
less than five (5) business days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto,
furnish to the Holders a draft of the Registration Statement.

 

(b)  (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for a period of least
twelve (12) months (the “Effectiveness
Period”);
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; and (iii) respond to any comments received from the Commission with
respect to the Registration Statement or any amendment thereto.

 

3

 

(c)  Notify
the Holders of Registrable Securities to be sold as promptly as reasonably
possible: (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a “review” of
the Registration Statement and whenever the Commission comments in writing on
the Registration Statement (the Company shall upon request provide true and
complete copies thereof and all written responses thereto to each of the
Holders, subject, if appropriate, to the execution of confidentiality agreements
in form acceptable to the Company); and (C) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority during the period of effectiveness of the Registration Statement for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

 

(d)  Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of (i) any order suspending the effectiveness of the Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.

 

(e)  Promptly
deliver to each Holder no later than five (5) business days after the date of
effectiveness of the Registration Statement, without charge, two (2) copies of
the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto (and, upon the request of the Holder such
additional copies as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities). The Company hereby consents to
the use of such Prospectus and each amendment or supplement thereto by the
Holder in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving of any notice pursuant to Section
3(c).

 

(f)  Prior
to any resale of Registrable Securities by a Holder, use its best efforts to
register or qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from the registration or
qualification) of such Registrable Securities for the resale by the Holder under
the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder reasonably requests in writing, to keep such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided,
however,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject itself to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.

 

4

 

(g)  Upon
the occurrence of any event contemplated by Section
3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.

 

(h)  Use
its best efforts to comply with all applicable rules and regulations of the
Commission relating to the registration of the Registrable Securities pursuant
to the Registration Statement or otherwise.

 

(i)  The
Company shall either (a) cause all the Registrable Securities covered by a
Registration Statement to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed, if
any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (b) secure designation and quotation of all the
Registrable Securities covered by the Registration Statement on the Nasdaq
National Market or the Nasdaq SmallCap Market, or, (c) if the Company is
unsuccessful in satisfying the preceding clauses (a) or (b), the Company shall
secure the inclusion for quotation on the American Stock Exchange, Inc. or if it
is unable to, the Over
The Counter
Bulletin Board for such Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two (2) market makers to
register with the National Association of Securities Dealers, Inc.
(“NASD”)
as such with respect to such Registrable Securities. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section
3(i).

 

(j)  The
Company covenants that it shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder so long as any Holder owns any Registrable
Securities; provided,
however,
the Company may delay any such filing but only pursuant to Rule 12b-25 under the
Exchange Act, and the Company shall take such further reasonable action as the
Holder may reasonably request (including, without limitation, promptly obtaining
any required legal opinions from Company counsel necessary to effect the sale of
Registrable Securities under Rule 144 and paying the related fees and expenses
of such counsel), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder of Registrable Securities, the Company will deliver to such Holder
a written statement as to whether it has complied with such
requirements.

 

5

 

4.  Registration
Expenses.
All fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement, other
than fees and expenses of counsel or any other advisor retained by the Holders
and discounts and commissions with respect to the sale of any Registrable
Securities by the Holders. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement.

 

5.  Indemnification

 

(a)  Indemnification
by the Company.
The Company shall, notwithstanding any termination of this Agreement, indemnify
and hold harmless each Holder, the officers, directors, agents and employees of
it, each Person who controls such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys' fees) and expenses (including the cost (including without limitation,
reasonable attorneys’ fees) and expenses relating to an Indemnified Party’s
actions to enforce the provisions of this Section
5)
(collectively, “Losses”),
as incurred, to the extent arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished (or in the case of an omission, not furnished)
in writing to the Company by or on behalf of such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose), (2) in the case of an occurrence of
an event of the type specified in Section
3(c)(ii)-(v),
the use by such Holder of an outdated or defective Prospectus after the Company
has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in
Section
6(b),
or (3) the failure of the Holder to deliver a Prospectus prior to the
confirmation of a sale. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is aware
in connection with the transactions contemplated by this Agreement.

 

6

 

(b)  Indemnification
by Holder.
The Holder shall indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based upon: (x) the Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading
(i) to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished (or in the case of an
omission, not furnished) in writing by or on behalf of such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus or (ii) to the extent that (1) such untrue statements or omissions
are based solely upon information regarding such Holder furnished (or in the
case of an omission, not furnished) in writing to the Company by or on behalf of
such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder's proposed method of distribution of
Registrable Securities, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto, or (2) in the case of an occurrence of an event
of the type specified in Section
3(c)(ii)-(v),
the use by such Holder of an outdated or defective Prospectus after the Company
has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of the Advice contemplated in
Section
6(b),
or (3) the failure of the Holder to deliver a Prospectus prior to the
confirmation of a sale. In
no event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net
proceeds received by such Holder from the sale of the Registrable Securities
sold by it.

 

(c)  Conduct
of Indemnification Proceedings.
If any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an “Indemnified
Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying
Party”)
in writing, and the Indemnifying Party shall have the right to assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that such failure shall have
materially prejudiced the Indemnifying Party.

 

An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and the reasonable fees and expenses of one separate counsel for all Indemnified
Parties in any matters related on a factual basis shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding affected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such
Proceeding.

 

7

 

All
reasonable fees and expenses of the Indemnified Party (including reasonable fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Trading Days of written notice thereof to the Indemnifying Party; provided,
that the Indemnified Party shall promptly reimburse the Indemnifying Party for
that portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined based
upon the relative faults of the parties.

 

(d)  Contribution.
If a claim for indemnification under Section
5(a)
or Section
5(b)
is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section
5(c),
any reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its
terms.

 

The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section
5(d)
were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section
5(d),
no Holder shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the proceeds actually received by such Holder from
the sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission, except in the case of fraud by such Holder.

 

8

 

The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.

 

6.  Miscellaneous.

 

(a)  Compliance.
The Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.

 

(b)  Discontinued
Disposition.
The Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section
3(c),
such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or
until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.

 

(c)  Amendments
and Waivers.
The provisions of this Agreement, including the provisions of this sentence, may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and each Holder of the then outstanding Registrable
Securities.

 

(d)  Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the Trading Day following the date of mailing,
if sent by nationally recognized overnight courier service, or (ii) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be delivered and addressed as set
forth in the Subscription
Agreement.

 

(e)  Successors
and Assigns.
This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of each of the parties and shall inure to the benefit of
the Holder.

 

(f)  Execution.
By execution of the Subscription Agreement, each Purchaser agrees to all terms
and conditions set forth in this Agreement as if such Purchaser had executed
this Agreement directly.

 

(g)  Governing
Law.
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 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.

 

9

 

(h)  Severability.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

(i)  Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

 

(j)  Remedies.
In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.

 

IN
WITNESS WHEREOF,
the undersigned has executed this Registration Rights Agreement, on behalf of
the Company as of the date first written above.

 

	 	WAKO
      LOGISTICS GROUP, INC.
      

      By:
      __/s/
      Christopher Wood __________

      Name:
      Christopher Wood

      Title:
      CEO

      

      ______/s/
      Christopher Wood __________

      CHRISTOPHER
      WOOD

 

10

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