Exhibit 10.8
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement ("Agreement") is entered into and
dated effective as of this 14th day of November, 2007 by and between Leon
Leibovich, an adult resident of the State of Illinois ("Leibovich") and
Forex365, Inc. f/k/a Solar Group, Inc., Nevada corporation ("Forex").
RECITALS
WHEREAS, the Company acknowledges that Leibovich has performed consulting
services for the Company since July 1, 2004, which services have included, among
other things, managing the corporate, administrative and financial affairs of
the Company, taking actions to make the Company more attractive as a shell
company for a business combination with a private operating business, seeking
and investigating potential private operating companies that may be interested
in a business combination with the Company, and seeking and negotiating with
potential third parties interested in acquiring an interest in the Company
("Consulting Services");
WHEREAS, the Company's board of directors has approved the Consulting
Services provided by Leibovich and has agreed that the fair consideration for
such Consulting Services is $3,500 per month;
WHEREAS, Leibovich has provided the Company his invoice for the Consulting
Services for the period from July 1, 2004 through October 31, 2007 for aggregate
consulting fees of $140,000 ("Outstanding Fees"), a copy of said invoice is
attached hereto as Exhibit A;
WHEREAS, the Company has insufficient financial resources to pay Leibovich
the Outstanding Fees;
WHEREAS, the Company and KIG Investors II, LLC ("KIG Investors") have
entered into a Securities Purchase Agreement dated November 14, 2007 ("Purchase
Agreement");
WHEREAS, pursuant to the Purchase Agreement, (i) Forex will issue a total
of 27,500,000 shares of common stock to KIG Investors ("Shares") for a purchase
price of $275,000 ("Purchase Price"), and (ii) a portion of the Purchase Price
will be used by the Company to pay certain liabilities and obligations of Forex,
including the payment of the Outstanding Fees subject to the reductions as set
forth in this Agreement;
WHEREAS, the Company and Leibovich desire to terminate Leibovich's
engagement by the Company as a consultant effective October 31, 2007;
WHEREAS, the Company and Leibovich desire to settle and satisfy all claims,
liabilities and obligations between them, including, without limitation, the
Outstanding Fees, pursuant to the terms and conditions hereof;
WHEREAS, the Company and Leibovich further desire to terminate and cancel
all prior contracts and agreements between them, whether oral or written,
without further liability or obligation on behalf of either of them, pursuant to
the terms and conditions of this Agreement;
WHEREAS, Leibovich agrees to release the Company any and all liabilities
and obligations of any kind or nature, whether known or unknown, except for the
Company's obligations under this Agreement;
WHEREAS, KI Investors has required that an indemnification be provided by
Leibovich under which the Company will be held harmless from any liabilities or
obligations of the Company arising out of or related to the period prior to the
Change of Control (as defined in the Purchase Agreement), pursuant to the terms
and conditions of this Agreement;
WHEREAS, the execution and closing of the transactions contemplated under
this Agreement are a condition to the Closing of the transactions contemplated
under the Purchase Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the above recitals, the following
representations, warranties, covenants and conditions, and other good and
valuable consideration, the receipt of which is acknowledged, the parties agree
as follows:
1. Termination of Contracts. With effect from and after the receipt of the
Cash Payment set forth in Section 3 hereof and the consummation of the
transactions contemplated by this Agreement, Leibovich and the Company hereby:
(i) mutually terminate and cancel any and all agreements and contracts (whether
oral or written) between Forex, on the one hand, and Leibovich, on the other
hand, pertaining to any matters between such parties including, without
limitation, the Consulting Services (collectively, the "Contracts'), and (ii)
release each other from any further liability and obligations under the
Contracts. Notwithstanding the above, the Company and Leibovich acknowledge and
agree that Leibovich's engagement by the Company as a consultant shall terminate
effective October 31, 2007, and Leibovich shall not be entitled to any further
fees or compensation from the Company for any services that may be rendered by
Leibovich from and after October 31, 2007.
2. Waiver and Release. With effect from and after the receipt of the Cash
Payment set forth in Section 3 hereof and the consummation of the transactions
contemplated by this Agreement, Leibovich hereby waives, and forever and
irrevocably releases and discharges the Company and its respective successors
and assigns, and their respective past and present officers and directors,
employees, shareholders, members, consultants, attorneys, accountants, other
professionals, insurers, agents and all other related entities, including, but
not limited to, assigns, predecessors, successors, controlling corporations,
subsidiaries or other affiliates, from all liabilities and obligations owed by
the Company to Leibovich, and from any and all claims, demands, and causes of
action of every kind and nature, including, without limitation, those relating
to or arising out of any federal, state or local laws, and common law, claims
for advances or other loans, claims for unpaid fees, interest, penalties,
expense reimbursement or other compensation including, without limitation, the
Outstanding Fees for the Consulting Services; provided, however, that nothing
contained herein shall be construed to limit in any way the rights of Leibovich
to enforce the terms of this Agreement. Further, Leibovich irrevocably agrees to
refrain from directly or indirectly asserting any claim or demand or commencing
(or causing to be commenced) any suit, action, or proceeding of any kind, in any
court or before any tribunal, against the Company and the other released parties
based upon any released claim.
3. Cash Payment. In full and complete satisfaction of all obligations and
liabilities of Forex owed to Leibovich including, without limitation, the
Outstanding Fees for Consulting Services rendered, and as further consideration
for the indemnification provisions set forth in Section 5 hereof, Forex hereby
agrees to pay Leibovich an amount equal to the following: (A) the sum of
$140,000 representing the Outstanding Fees, less (B) the sum of the following:
(i) all outstanding liabilities and obligations of the Company arising out of or
related to the period prior to the Change of Control, determined as of the
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closing of the transactions under the Purchase Agreement (the "Closing")
(collectively, the "Legacy Liabilities"), (ii) all liabilities and obligations
of the Company arising out of or related to the period prior to the Change of
Control which have been paid by or on behalf of the Company on or after the date
hereof through the date of Closing (collectively, the "Paid Legacy
Liabilities"), and (iii) all liabilities, obligations, losses, costs, damages
and claims imposed on, incurred by or asserted against the Company, with respect
or arising out of the Benchmark Action (as defined in the Purchase Agreement)
including, without limitation, reasonable attorneys' fees and court costs,
determined as of the Closing ("Benchmark Costs"). Notwithstanding the foregoing,
solely for purposes of the foregoing calculation, the Legacy Liabilities and the
Paid Legacy Liabilities shall not include the following amounts as set forth on
Schedule 3.8 of the Purchase Agreement: (i) $14,700 owed to transfer agent, (ii)
$10,000 owed to the auditor, (iii) $30,000 owed for legal services, and (iv)
$5,000 owed for miscellaneous items.
For purposes of this Agreement, the term "Cash Payment" shall mean: (A) the
sum of $140,000 representing the Outstanding Fees, less (B) the sum of: (i) the
Legacy Liabilities, (ii) the Paid Legacy Liabilities, and (iii) the Benchmark
Costs, as calculated in accordance with the immediately preceding paragraph.
The completion of the transactions contemplated by this Agreement
(including the payment of the Cash Payment) is contingent upon the Closing of
the transactions under the Purchase Agreement. At the Closing, the Cash Payment,
subject to Indemnity Escrow provided for under Section 5 hereof, shall be paid
to Leibovich, by wire transfer to the U.S. bank account designated by Leibovich.
In the event the Purchase Agreement is terminated in accordance with the
provisions of the Purchase Agreement, this Agreement shall terminate without any
further action of the parties and shall become null and void.
Leibovich understands and agrees that the Company shall not withhold or
contribute on behalf of Leibovich, and Leibovich shall be solely responsible for
the payment of, any social security, social benefits, unemployment compensation,
worker's compensation insurance premiums, taxes of any kind, or any other
contributions or payments required by governmental authorities applicable to
employees which arise out of or relate to the performance of the Consulting
Services by Leibovich. The parties hereto acknowledge and agree that the
Consulting Services performed by Leibovich were in his capacity as an
independent contractor, not as an employee.
4. Cooperation. From and after the date hereof and following the Closing,
Leibovich agrees to cooperate with the Company as commercially reasonable under
the then existing circumstances, and provide any information and documentation
reasonably requested by the Company or its advisors, to allow the Company to
prepare and file a Form 10-SB or its periodic reports with the SEC (or any
amendments thereto) in a timely manner, to respond to any comment letters from
the SEC in a timely manner, to comply with the reporting requirements of the
Exchange Act of 1934, as amended, to allow the Company to provide market makers
with the information to obtain or maintain a quotation on the Pink Sheets or
Over-the-Counter Bulletin Board, and to allow the Company to prepare and file
any tax returns.
5. Indemnification.
(a) Leibovich agrees to indemnify and hold harmless, the Company (from and
after the Closing) against (i) any and all liabilities, obligations, losses,
damages, claims, actions, liens and deficiencies which exist, or which may be
imposed on, incurred by or asserted against the Company ("Asserted Claims")
based upon, resulting from or arising out of: (a) the Liabilities (as defined
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herein) of the Company related to the period prior to the Change of Control, (b)
any breach or inaccuracy of any representation or warranty by the Company under
the Purchase Agreement, (c) any breach of any agreement or covenant made by the
Company in or pursuant to the Purchase Agreement requiring performance by the
Company prior to Closing, and (d) any breach of any agreement or covenant made
by Leibovich in or pursuant to this Agreement, and (ii) any cost or expense
(including reasonable attorneys' fees and court costs) incurred by the Company
in connection with the foregoing (including, without limitation, any cost or
expense incurred by the Company in enforcing its rights pursuant to this
Agreement) (collectively, the "Damages").
(b) Leibovich acknowledges and agrees that he has received a copy of the
Purchase Agreement, has carefully reviewed and fully understands the terms and
conditions of the Purchase Agreement and fully understands that he may be held
liable for breaches of representations, warranties and agreements of the Company
contained in the Purchase Agreement.
(c) For purposes of this Agreement, the term "Liabilities" shall mean all
debts, liabilities and obligations, direct, indirect, absolute or contingent of
the Company, whether accrued, vested or otherwise, whether known or unknown and
whether or not reflected, or required in accordance with U.S. GAAP to be
reflected, in the Company's balance sheet. Notwithstanding any other provision
of this Agreement, the Liabilities shall not include any of the obligations of
the Company under this Agreement.
(d) If at any time the Company determines to assert a right to
indemnification under this Section, the Company shall give to Leibovich or
whoever indemnification is being asserted against, prompt written notice
describing the matter for which indemnification is sought in reasonable detail
so as to allow the party receiving said notice full understanding of the
Asserted Claims received by the Company and the extent of the Company's access
to books and records that may be reasonably necessary or useful in the defense
against any Asserted Claims. In the event that a demand or claim for
indemnification is made hereunder with respect to a matter the amount or extent
of which is not yet known or certain, the notice of demand for indemnification
shall so state, and, where practicable, shall include an estimate of the amount
of the matter. The failure of the Company to give notice of any matter to
Leibovich shall not relieve him of any liability which he may have to the
Company, except to the extent such failure to notify shall have resulted or
caused prejudice to Leibovich or results in a material adverse impact on the
ability of Leibovich to respond to any Asserted Claims, conduct discovery,
assert any affirmative defenses against said Claims, or prevent Leibovich from
obtaining a convenient and commercially reasonable forum and venue to
adjudicate, mediate, or arbitrate any said Asserted Claims. Within 10 days after
receipt of the notice referred to above, Leibovich shall (i) acknowledge in
writing its responsibility for all or part of such matter, and shall pay or
otherwise satisfy the portion of such matter as to which responsibility is
acknowledged or take such other action as is reasonably satisfactory to the
Company to resolve any such matter that involves anyone not a party hereto, or
(ii) give written notice to the Company of its intention to dispute or contest
all or part of such responsibility. Upon delivery of such notice of intention to
contest, the parties shall negotiate in good faith to resolve as promptly as
possible any dispute as to responsibility for, or the amount of, any such
matter. If such dispute is not resolved within 10 days, such dispute shall be
submitted to arbitration as provided under Section 8.h. hereof.
(e) Leibovich shall have the authority and the right to select legal
counsel and to satisfy and/or settle any indemnity claims, without notice or
cost to the Company, and the Company shall cooperate with Leibovich as
reasonably requested to dispute and defend against any indemnification claim as
determined by Leibovich, at Leibovich's expense, and the Company shall promptly,
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after written request of Leibovich, supply any necessary confirmation or
available documentation as related to the defense of any indemnification claim
involving a third party; provided, however, that any settlement or satisfaction
of any indemnity claim by Leibovich shall include a release of the Company,
which shall be reasonably acceptable to the Company.
(f) Leibovich hereby agrees that $12,500 of the Cash Payment to be paid to
him under this Agreement shall be held by Renan Sugarman, Esq. as escrow agent
("Escrow Agent") in the Escrow Agent's client trust account to satisfy any
indemnification claims asserted against Leibovich under this Agreement
("Indemnity Escrow"). Notwithstanding anything contained in this Agreement to
the contrary, the establishment of the Indemnity Escrow, and the use of it to
satisfy indemnification claims under this Agreement, shall not in any way limit
or restrict the indemnification rights or other rights or remedies of the
Company under this Agreement or otherwise. On the 120th day following the
Closing, any remaining monies in the Indemnity Escrow (the "Indemnity Escrow
Residuary") shall be promptly disbursed by the Escrow Agent to Leibovich,
provided, however, no monies shall be disbursed to Leibovich unless and until
all indemnification claims for which notice had previously been provided in
accordance with this Section 5 are resolved. Any such disbursement of funds from
the Indemnity Escrow Residuary shall be paid to Leibovich pursuant to the joint
written instruction of the Company and Leibovich to the Escrow Agent at
expiration of the corresponding, applicable period of escrow hereunder. The
parties hereby appoint Renan Sugarman, Esq. as the Escrow Agent, and the Escrow
Agent hereby accepts such appointment and agrees to the terms of the escrow
established hereunder.
(g) The indemnification provided by Leibovich under this Agreement shall
not in the aggregate exceed $12,500, and no demand or claim for indemnification
under this Agreement may be made after 11:59 p.m., Central time, on the date
which is 120 days following the Closing Date (the "Claim Period").
6. Representations and Warranties of Forex. Forex represents and warrants
to Leibovich that: (i) on the date of this Agreement, Forex has all necessary
authority to execute this Agreement; (ii) there is no claim, action, suit or
other proceeding pending, threatened or known, which, if decided adversely,
would interfere with the consummation of the transaction contemplated hereby;
(iii) no approval or consent of any governmental authority or third party is
required for Forex to enter into or perform this Agreement; (iv) this Agreement
is enforceable in accordance with its terms, subject to the laws of insolvency
and general principles of equity; and (v) this Agreement has been duly
authorized and adopted by Forex.
7. Representations and Warranties of Leibovich. Leibovich represents and
warrants to Forex that: (i) there is no claim, action, suit or other proceeding
pending, threatened or known, which, if decided adversely, would interfere with
the consummation of the transaction contemplated hereby; (ii) no approval or
consent of any governmental authority or third party is required for him to
enter into or perform this Agreement; and (iii) this Agreement is enforceable
against him in accordance with its terms, subject to the laws of insolvency and
general principles of equity.
8. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors, personal representatives, heirs
and permitted assigns.
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(b) Survival of Covenants and Representations. All agreements, covenants,
representations and warranties made by the parties herein shall survive the
delivery of this Agreement.
(c) Severability. Should any part of this Agreement for any reason be
declared invalid or unenforceable, such decision will not affect the validity or
enforceability of any remaining portion, which remaining portion will remain in
force and effect as if this Agreement had been executed with the invalid portion
thereof eliminated, and it is hereby declared as the intention of the parties
hereto that the parties would have executed the remaining portion of this
Agreement without including therein any such part or portion that may, for any
reason, be hereafter declared invalid or unenforceable.
(d) Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without reference
to choice of law principles.
(e) Captions. The descriptive headings of the various Sections or parts of
this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
(f) Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto concerning the subject matter contained herein, and
supersedes all prior agreements or understanding of the parties. No provision of
this Agreement may be waived or amended except in a writing signed by both
parties. A waiver or amendment of any term or provision of this Agreement shall
not be construed as a waiver or amendment of any other term or provision.
(g) Counterparts. This Agreement may be executed by facsimile or electronic
signatures and in multiple counterparts, each of which shall be deemed an
original. It shall not be necessary that each party executes each counterpart,
or that any one counterpart be executed by more than one party so long as each
party executes at least one counterpart.
(h) Arbitration. All disputes, controversies or claims ("Disputes") arising
out of or relating to this Agreement shall in the first instance be the subject
of a meeting between a representative of each party who has decision-making
authority with respect to the matter in question. Should the meeting either not
take place or not result in a resolution of the Dispute within twenty (20)
business days following notice of the Dispute to the other party, then the
Dispute shall be resolved in a binding arbitration proceeding to be held in
Chicago, Illinois in accordance with the international rules of the American
Arbitration Association. The arbitrators may award attorneys' fees and other
related arbitration expenses, as well as pre- and post-judgment interest on any
award of damages, to the prevailing party or parties, in their sole discretion.
The parties agree that a panel of three arbitrators shall be required, all of
whom shall be fluent in the English language, and that the arbitration
proceeding shall be conducted entirely in the English language. Any award of the
arbitrators shall be deemed confidential information for a minimum period of
five years.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.
FOREX365, INC.
By: /s/ Leon Leibovich
-------------------------------
Leon Leibovich, CEO
/s/ Leon Leibovich
-----------------------------------
Leon Leibovich, Individually
SSN:
The undersigned hereby accepts the appointment as Escrow Agent under Section 5
hereof and agrees to abide by the terms of the escrow established under Section
5 hereto.
/s/ Renan Sugarman
- ------------------
Renan Sugarman, Esq.
Date: _________________________________
Exhibit A - Invoice (follows next page)
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Leon Leibovich
As Independent Consultant
276 Park Avenue
Highland Park, IL 60035
November 14, 2007
Forex365, Inc. f/k/a Solar Group, Inc.
Attn: Leon Leibovich, CEO
276 Park Avenue
Highland Park, IL 60035
Re: Invoice for Consulting Services
For quarter
ended
-----------
Quarterly consulting fee 9/30/2004 10,500.00
Quarterly consulting fee 12/31/2004 10,500.00
Quarterly consulting fee 3/31/2005 10,500.00
Quarterly consulting fee 6/30/2005 10,500.00
Quarterly consulting fee 9/30/2005 10,500.00
Quarterly consulting fee 12/31/2005 10,500.00
Quarterly consulting fee 3/31/2006 10,500.00
Quarterly consulting fee 6/30/2006 10,500.00
Quarterly consulting fee 9/30/2006 10,500.00
Quarterly consulting fee 12/31/2006 10,500.00
Quarterly consulting fee 3/31/2007 10,500.00
Quarterly consulting fee 6/30/2007 10,500.00
Quarterly consulting fee 9/30/2007 10,500.00
Monthly consulting fee 10/31/2007 3,500.00
Balance due 140,000.00
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