Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
FOREX365, INC. f/k/a SOLAR GROUP, INC.
AND
KIG INVESTORS II, LLC
DATED AS OF NOVEMBER 14, 2007
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of November 14, 2007, by and among KIG Investors II, LLC, a Delaware
limited liability company (the "Buyer") and Forex365, Inc. f/k/a Solar Group,
Inc., a Nevada corporation (the "Company").
RECITALS
A. The Company currently has 1,027,647 shares of common stock, $0.01 par
value, issued and outstanding.
B. The Company desires to issue to the Buyer 27,500,000 shares of common
stock, $0.01 par value ("Shares"), for a purchase price of $275,000, or $0.01
per share, and on such other terms and conditions set forth herein ("Stock
Issuance").
C. As a condition of the Stock Issuance, a portion of the proceeds of the
purchase price from the Stock Issuance shall be used to pay certain liabilities
and obligations of the Company, all as more specifically set forth herein.
D. In connection with the Stock Issuance, the Shares issued by the Company
to the Buyer will be granted registration rights pursuant to the terms and
conditions set forth in a certain registration rights agreement between the
Company and the Buyer, the form of which is attached hereto as Exhibit A
("Registration Rights Agreement").
E. The execution and delivery of this Agreement, the consummation of the
transactions contemplated under this Agreement and the execution and delivery of
the Registration Rights Agreement have been duly authorized and approved by the
directors of the Company, and no approval of the stockholders of the Company is
required with respect to any of the foregoing.
NOW, THEREFORE, in consideration of the above recitals, the covenants,
promises and representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
SALE AND PURCHASE
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1.1 Sale and Purchase of Shares; Registration Rights. At the Closing and
subject to and upon the terms and conditions of this Agreement, the Company
agrees to sell and issue to the Buyer, and the Buyer agrees to purchase from the
Company, the Shares. The Shares, when issued, shall have registration rights
pursuant to the terms and conditions of the Registration Rights Agreement, which
Registration Rights Agreement shall be executed and delivered by the Company and
the Buyer at Closing. As of Closing, the Shares shall constitute not less than
96.4% of the issued and outstanding shares of the Company's common stock. The
sale and purchase of the Shares contemplated hereunder shall be referred to
herein as the "Transaction" or the "Stock Issuance".
1.2 Closing. Unless this Agreement shall have been terminated pursuant to
Article VIII hereof, and subject to the satisfaction and waiver of the
conditions set forth in Article VI hereof, the closing of the Transaction (the
"Closing") shall take place at the offices of the Buyer on a date not later than
three (3) business following the satisfaction or and waiver of the conditions
set forth in Article VI hereof or such other date mutually agreeable to the
Buyer and the Company (the "Closing Date").
1.3 Purchase Price. The aggregate purchase price for the Shares shall be
Two Hundred Seventy-Five Thousand Dollars ($275,000) ("Purchase Price").
1.4 Issuance of Certificates Representing the Shares. At Closing, the
Company shall direct and cause the Company's transfer agent to deliver
certificate(s) representing the Shares with the restrictive legend under the
Securities Act of 1933, as amended ("Securities Act").
1.5 Taking of Necessary Action; Further Action. If, at any time after the
Closing, any further action is necessary or desirable to carry out the purposes
of this Agreement and to vest Buyer with full right, title and possession to the
Shares, the Company will take all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company hereby represents and warrants to, and covenants with, the
Buyer, as follows:
2.1 Organization and Qualification.
(a) Except as set forth in Schedule 2.1 hereto, the Company is a
corporation duly incorporated or organized, validly existing and in good
standing under the laws of the State of Nevada and has the requisite corporate
power and authority to own, lease and operate its assets and properties and to
carry on its business as it is now being conducted by the Company. The Company
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("Approvals") necessary
to own, lease and operate the properties it purports to own, operate or lease
and to carry on its business as it is now being by the Company. The Company is
duly qualified to conduct its business in each state and each foreign
jurisdiction in which is required to do so. Except as set forth above, the
Company has filed each annual corporate or information report ("Annual Report")
required to be filed by it in the state of Nevada and in each state and foreign
jurisdiction in which it is required to be qualified to do business as a foreign
corporation. Complete and correct copies of the articles of incorporation or
organization and by-laws (or other comparable governing instruments with
different names) (collectively referred to herein as "Charter Documents") of the
Company, as amended and currently in effect, and each Annual Report filed by the
Company have been heretofore delivered to the Buyer. Except as set forth on
Schedule 2.1 hereto, the Company is not in violation of any of the provisions of
the Company's Charter Documents.
(b) Minutes of all meetings and consents in lieu of meetings of its
Board of Directors (and any committees thereof), similar governing bodies and
stockholders ("Corporate Records") in the Company's possession have been
heretofore delivered to the Buyer, and such Corporate Records are true and
accurate.
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(c) The Company has heretofore delivered to the Buyer all records of
the ownership, including stock transfer and issuance ledgers and records, of the
Company's capital stock maintained by the transfer agent ("Stock Records") in
the Company's possession, and such Stock Records are true and accurate.
2.2 Subsidiaries. The Company has no subsidiaries.
2.3 Authority Relative to this Agreement. The Company has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated hereby
(including the Transaction). The execution and delivery of this Agreement and
the consummation by the Company of the transactions contemplated hereby
(including the Transaction) have been duly and validly authorized by all
necessary corporate action on the part of Company (including the approval by its
board of directors), and no other corporate proceedings on the part of the
Company (including the approval of the Company's stockholders) are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery thereof by the
Buyer, constitutes the legal and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
and public policy.
2.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company shall not: (i)
conflict with or violate the Company's Charter Documents, (ii) conflict with or
violate any Legal Requirements to which the Company is bound, or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or materially impair the Company's
rights or alter the rights or obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of the Company pursuant to any Contracts (as defined in Section 2.16)
except, with respect to clauses (ii) or (iii), for any such conflicts,
violations, breaches, defaults or other occurrences that would not, individually
and in the aggregate, have a Material Adverse Effect on the Company, taken as a
whole. For purposes of this Agreement, "Legal Requirements" means any federal,
state, local, municipal, foreign or other law, statute, constitution, principle
of common law, resolution, ordinance, code, edict, decree, rule, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental Entity
(as defined in Section 2.4(b)), and all requirements set forth in applicable
Contracts.
(b) The execution and delivery of this Agreement by the Company does,
and the performance of its obligations hereunder will not, require any consent,
approval, authorization or permit of, filing with, or notification to, any
court, administrative agency, commission, governmental or regulatory authority,
domestic or foreign (a "Governmental Entity"), except for applicable
requirements, if any, of the Securities Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), state securities laws ("Blue Sky Laws"),
and the rules and regulations thereunder, and appropriate documents with the
relevant authorities of other jurisdictions in which the Company is qualified to
do business.
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2.5 Capitalization.
(a) The authorized capital stock of the Company consists of 50,000,000
shares of common stock, $0.01 par value ("Common Stock") and 1,000,000 shares of
preferred stock, $0.01 par value ("Preferred Stock") of which no shares have
been designated by the Company's board of directors. At the close of business on
the business day prior to the date hereof:, (i) 1,027,647 shares of the
Company's common stock were issued and outstanding, all of which are validly
issued, fully paid and nonassessable; (ii) no shares of the Company's preferred
stock were issued and outstanding; (iii) except as set forth on Schedule 2.5
hereto, no options to purchase the Company's common stock were outstanding; (iv)
no warrants to purchase shares of the Company's common stock were outstanding;
and (v) except as set forth on Schedule 2.5 hereto, no notes, debentures or
securities convertible into the Company's common stock are outstanding. All
securities of the Company have been issued and granted in compliance with (i)
all applicable securities laws and regulations, (ii) all Legal Requirements, and
(iii) all requirements set forth in any applicable contracts.
(b) Except as set forth on Schedule 2.5 hereto, (i) there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which the Company is a party or by
which it is bound obligating the Company to issue, deliver or sell, or cause to
be issued, delivered or sold, or to repurchase, redeem or otherwise acquire, or
cause the repurchase, redemption or acquisition of, any shares of capital stock,
partnership interests or similar ownership interests of the Company or
obligating the Company to grant, extend, accelerate the vesting of or enter into
any such subscription, option, warrant, equity security, call, right, commitment
or agreement, (ii) there are no lock up agreements or other agreements affecting
the transfer of any equity security of any class of the Company, and (iii) there
are no bonds, debentures, notes or other indebtedness of the Company issued or
outstanding having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which the stockholders of
the Company may vote.
(c) Except as contemplated by this Agreement, there are no
registration rights, and there is no voting trust, proxy, rights plan,
anti-takeover plan, or other agreement or understanding to which the Company is
a party or by which the Company is bound with respect to any equity security of
any class of the Company.
(d) The Shares to be issued with respect to the Transaction
contemplated under this Agreement shall, when issued, be duly authorized,
validly issued, fully paid and nonassessable, shall be free and clear of all
liens, claims, charges, encumbrances, pledges, mortgages, security interests,
options, rights to acquire, proxies, voting trusts or similar agreements,
restrictions on transfer or adverse claims of any nature whatsoever ("Liens")
and shall have been issued in compliance with all Legal Requirements.
2.6 Compliance. The Company has complied with, are not in violation of, any
laws, rules or regulations of any Governmental Entity including, without
limitation, any and all applicable securities laws and regulations,
environmental laws and regulations, and laws and regulations regarding hazardous
and toxic substances and materials, except for failures to comply or violations
which, individually or in the aggregate, have not had and are not reasonably
likely to have a Material Adverse Effect on the Company.
2.7 Financial Statements; Filings.
(a) The Company has provided to the Buyer a correct and complete copy
of the audited financial statements (including, in each case, any related notes
thereto) of the Company for the fiscal years ended June 30, 1999, 2001, 2002,
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2003 and 2004, complied as to form in all material respects with the published
rules and regulations of any applicable Governmental Entity, prepared in
accordance with the generally accepted accounting principles of the United
States ("U.S. GAAP") applied on a consistent basis throughout the periods
involved, audited by a certifying accountant registered with the Public Company
Accounting Oversight Board ("PCAOB"), and each fairly presents in all material
respects the financial position of the Company at the respective dates thereof
and the results of its operations and cash flows for the periods indicated.
(b) The Company shall provide to the Buyer, prior to the Closing, a
correct and complete copy of the audited financial statements (including all
related notes thereto) of the Company for the fiscal years ended June 30, 2000,
2005, 2006 and 2007 ("Annual Financial Statements"), and such Annual Financial
Statements when delivered shall be complied as to form in all material respects
with the published rules and regulations of any applicable Governmental Entity,
prepared in accordance with U.S. GAAP applied on a consistent basis throughout
the periods involved, audited by a certifying accountant registered with the
PCAOB, and each shall fairly present in all material respects the financial
position of the Company at the date thereof and the results of its operations
and cash flows for the periods indicated.
(c) The Company shall provide to the Buyer, prior to the Closing, a
correct and complete copy of the unaudited financial statements (including all
related notes thereto) of the Company for the fiscal quarters ended September
30, 2006, December 31, 2006, March 31, 2007 and September 30, 2007 ("Interim
Financial Statements"), and such Interim Financial Statements shall be complied
as to form in all material respects with the published rules and regulations of
any applicable Governmental Entity, prepared in accordance with U.S. GAAP
applied on a consistent basis throughout the periods involved, reviewed by a
certifying accountant registered with the PCAOB, and shall each fairly present
in all material respects the financial position of the Company at the date
thereof and the results of its operations and cash flows for the periods
indicated.
(d) On August 4, 1987, the Company filed Form 15-12G ("Form 15") to
withdraw the registration of its common stock under the Exchange Act, the Form
15 was true, accurate and complete, and the Company did not receive any notice
or comment from the SEC with respect thereto. Accordingly, none of the Company's
securities are currently registered under Section 12(g) of the Exchange Act.
2.8 No Liabilities. Except as set forth in Schedule 2.8 hereto and except
for the obligations of the Company under the Registration Rights Agreement, the
Company has no Liabilities. For purposes of this Agreement, "Liability" or
"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. The
proceeds of the Purchase Price (not to exceed $200,000) will be sufficient to
pay and satisfy in full, at Closing, all Liabilities set forth on Schedule 2.8
hereto ("Scheduled Liabilities").
2.9 Absence of Certain Changes or Events. Since June 30, 2004, there has
not been: (i) any Material Adverse Effect on the Company, (ii) any declaration,
setting aside or payment of any dividend on, or other distribution (whether in
cash, stock or property) in respect of, any of the Company's capital stock, or
any purchase, redemption or other acquisition of any of the Company's capital
stock or any other securities of the Company or any options, warrants, calls or
rights to acquire any such shares or other securities, (iii) any split,
combination or reclassification of any of the Company's capital stock, (iv) any
granting by the Company of any increase in compensation or fringe benefits,
except for normal increases of cash compensation in the ordinary course of
business consistent with past practice, (v) any material change by the Company
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in its accounting methods, principles or practices, except as required by
concurrent changes in U.S. GAAP, (vi) any change in the auditors of the Company,
(vii) any issuance of capital stock of the Company, or (vii) any revaluation by
the Company of any of their respective assets, other than in the ordinary course
of business.
2.10 Litigation. Except as set forth in Schedule 2.10 hereto, there are no
claims, suits, actions or proceedings (at law or in equity) pending or
threatened against the Company, before any Governmental Entity or arbitrator
(including, without limitation, any allegation of criminal conduct or a
violation of the Racketeer and Influenced Corrupt Practices, as amended), and
the Company is not subject to any outstanding order, writ, judgment, injunction,
order, decree or arbitration order. There are no suits, actions, claims,
proceedings pending or threatened, seeking to prevent, hinder, modify or
challenge the transactions contemplated under this Agreement.
2.11 Employee Benefit Plans.
(a) The Company does not have in place any arrangement or policy
(written or oral) providing for insurance coverage, workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
severance or termination benefits, retirement or deferred compensation, profit
sharing, bonuses, stock options, stock appreciation rights, stock purchases or
other forms of incentive compensation or post-retirement insurance, compensation
or benefits which is maintained or administered by the Company, or to which the
Company contributes, and which covers any employee or former employee of the
Company or under which the Company has any liability, including any "employee
welfare benefit plan," "employee benefit plan" and "employee pension benefit
plan" as defined under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
(b) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will result in any payment
(including severance, unemployment compensation, golden parachute, bonus or
otherwise) becoming due to any stockholder, director, employee or consultant of
the Company.
2.12 Labor Matters. The Company is not a party to any collective bargaining
agreements or labor union contract. There are no strikes or labor disputes or
lawsuits, unfair labor or unlawful employment practice charges, contract
grievances or similar actions pending or threatened by any of the employees,
former employees or employment applicants of the Company. The Company has not
had any employees, and has not paid any compensation of any kind to any
employees, since prior to June 30, 2000.
2.13 Restrictions on Business Activities. There is no agreement,
commitment, judgment, injunction, order or decree binding upon Company or to
which Company is a party which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of the
Company, any acquisition of property by the Company or the current or future
conduct of business by the Company.
2.14 Taxes.
(a) Definition of Taxes. For the purposes of this Agreement, "Tax" or
"Taxes" refers to any and all federal, state, local and foreign taxes,
including, without limitation, gross receipts, income, profits, sales, use,
occupation, value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes, assessments, governmental
charges and duties together with all interest, penalties and additions imposed
with respect to any such amounts and any obligations under any agreements or
arrangements with any other person with respect to any such amounts and
including any liability of a predecessor entity for any such amounts.
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(b) Tax Returns and Audits.
(i) the Company has timely filed all federal, state, local and
foreign returns, estimates, information statements and reports relating to Taxes
("Returns") required to be filed by the Company with any Tax authority prior to
the date hereof, except such Returns which are not material to the Company and
except for income tax returns for the Company's fiscal years ended June 30,
1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006 and 2007 ("Income Tax Returns").
The Income Tax Returns shall be completed and filed prior to Closing and each
such return shall show no Taxes due. All such Returns, including the Income Tax
Returns when filed, are true, correct and complete in all material respects. The
Company has paid all Taxes shown to be due on such Returns.
(ii) All Taxes that the Company is required by law to withhold or
collect have been duly withheld or collected, and have been paid over to the
proper governmental authorities.
(iii) The Company has not been delinquent in the payment of any
material Tax nor is there any material Tax deficiency outstanding, proposed or
assessed against the Company, nor has the Company executed any unexpired waiver
of any statute of limitations on or extending the period for the assessment or
collection of any Tax.
(iv) No audit or other examination of any Return of the Company
by any Tax authority is presently in progress, nor has the Company been notified
of any request for such an audit or other examination.
(v) No adjustment relating to any Returns filed by the Company
has been proposed in writing, formally or informally, by any Tax authority to
the Company or any representative thereof.
(vi) The Company has no liability for any Taxes for its current
fiscal year, whether or not such Taxes are currently due and payable.
2.15 No Brokers; Third Party Expenses. Neither the Neither company nor the
principals of the Company have incurred, nor will they incur, directly or
indirectly, any liability for brokerage commissions in connection with this
Agreement or any transaction contemplated hereby.
2.16 Agreements, Contracts and Commitments. Except as set forth in Schedule
2.16, (a) there are no written employment agreements, termination or severance
agreements, or consulting agreements with the current or former officers,
directors, employees or consultants of the Company and to which the Company is a
party; (b) the Company is not a party to and is not bound by any commitment,
agreement or other instrument which contemplates payment of any monies or which
is otherwise material to the operations, assets or financial condition of the
Company, including but not limited to any royalty, franchising fees, or any
other fee based on a percentage of revenues or income; (c) the Company is not a
party to and is not bound by any commitment, agreement or instrument which
limits the freedom of the Company to compete in any line of business or with any
Person; and (d) the Company is not in default in any material respect under any
material lease, contract, mortgage, indentures, note, deed of trust, loan
agreement, bond, guaranty, liens, license, permit, franchise, purchase orders,
sales orders, arbitration awards, judgments, decrees, orders, documents,
instruments, understandings and commitments, or other instrument or obligation
of any kind, whether written or oral. True, correct and complete copies of each
contract, commitment, agreement, obligation or instrument to which the Company
is currently a party or bound under (or written summaries in the case of oral
contracts) have been heretofore delivered to the Buyer.
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2.17 Interested Party Transactions. Except as set forth on Schedule 2.17
hereto, no employee, officer, director or 5% or more stockholder of the Company
or a member of his or her immediate family is indebted to the Company, nor is
the Company indebted (or committed to make loans or extend or guarantee credit)
to any of them, other than (i) for payment of salary or consulting fees for
services rendered, (ii) reimbursement for reasonable expenses incurred on behalf
of the Company, and (iii) for other employee benefits made generally available
to all employees, and all of such transactions have been fully and properly
disclosed in the Annual Financial Statements.
2.18 Pink Sheet Quotation. The Company's common stock is quoted on the
"pink sheets' quotation system maintained by Pink Sheets, LLC under the name
Solar Group, Inc., the former name of the Company. There is no action or
proceeding pending or, to Company's knowledge, threatened against the Company by
NASDAQ or the National Association of Securities Dealers ("NASD") with respect
to any intention by such entities to prohibit or terminate the quotation of the
Company's Common Stock on the "pink sheets." There is no action pending or
threatened, to Company's knowledge, by any market maker in the Company's common
stock to discontinue their market making activities with respect thereto.
2.19 Investment Company Act. The Company is not an "investment company" or
an "affiliated person" of or "promoter" or "principal underwriter" or an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended, nor is the Company otherwise subject to regulation thereunder.
The Company is not a "holding company" as that term is defined in, and is not
otherwise subject to regulation under, the Public Utility Holding Company Act of
1935.
2.20 Bankruptcy and Criminal Proceedings. Neither the Company nor any of
its officers, directors, affiliates, promoters have, during the last five years,
been subject to or suffered any of the following:
(a) a petition under the Federal bankruptcy laws or any other
insolvency or moratorium law or has a receiver, fiscal agent or similar officer
been appointed by a court for such person, or any partnership in which such
person was a general partner at or within two years before the time of such
filing, or any corporation or business association of which such person was an
executive officer at or within two years before the time of such filing;
(b) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations which do not relate to
driving while intoxicated or driving under the influence);
(c) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring suspending or otherwise limiting such person's
involvement in any type of business, securities or banking activities; or
(d) been found guilty by a court of competent jurisdiction in a civil
action or by the U.S. Securities and Exchange Commission ("SEC"), the Commodity
Futures Trading Commission ("CFTC") or state securities regulators and
commissions to have violated any federal or state securities or commodities law,
regulation or decree and the judgment in such civil action or finding by the
SEC, CFTC or state securities regulators or commissions has not been
subsequently reversed, suspended or vacated.
2.21 Assets; Properties and Insurance. At Closing, the Company will not
have any assets, whether tangible or intangible, will not own any real or
personal property and will not maintain any insurance of any kind.
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2.22 Environmental Matters. The Company: (a) has not received any written
notice, citation, claim, assessment, proposed assessment or demand for abatement
alleging that it is responsible for the correction or cleanup of any condition
resulting from a violation of any law, ordinance or other governmental
regulation regarding environmental matters; (b) has no knowledge that any toxic
or hazardous substances or materials have been emitted, generated, disposed of
or stored on any real property owned or leased by it, or owned or controlled by
it as a trustee or fiduciary (collectively, the "Properties"), in any manner
that violates or, after the lapse of time may violate, any presently existing
federal, foreign, regional, state or local law or regulation governing or
pertaining to such substances and materials; and (c) has no knowledge that,
during its ownership or lease of such Properties, any of such Properties has
been operated in any manner that violated any applicable federal, foreign,
regional, state or local law or regulation governing or pertaining to toxic or
hazardous substances and materials.
2.23 Intellectual Property. There are no arrangements relating to the use
by the Company of any intellectual property owned by another Person, and the
Company has not at any time been in breach of such arrangements. The Company has
not granted and is not obligated to grant a license, assignment or other right
with respect to any intellectual property.
2.24 Representations and Warranties Complete. The representations and
warranties of the Company included in this Agreement and any list, statement,
document or information set forth in, or attached to, any Schedule provided
pursuant to this Agreement or delivered hereunder, are true and complete in all
material respects and do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements contained therein not misleading, under the circumstance under
which they were made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
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Buyer represents and warrants to, and covenants with, the Company, as
follows:
3.1 Organization. The Buyer is a limited liability company duly organized
and validly existing under the laws of the State of Delaware and has the
requisite power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being or currently planned
by the Buyer to be conducted.
3.2 Authority Relative to this Agreement. The Buyer has full power and
authority to: (i) execute, deliver and perform this Agreement, and each
ancillary document which the Buyer has executed or delivered or is to execute or
deliver pursuant to this Agreement, and (ii) carry out the Buyer's obligations
hereunder and thereunder and, to consummate the transactions contemplated hereby
(including the Transaction). The execution and delivery of this Agreement and
the consummation by the Buyer of the transactions contemplated hereby (including
the Transaction) have been duly and validly authorized by all necessary action
on the part of the Buyer (including the approval by its Board of Managers), and
no other proceedings on the part of the Buyer are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Buyer and, assuming the
due authorization, execution and delivery thereof by the Company, constitutes
the legal and binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity and public policy.
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3.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Buyer does
not, and the performance of this Agreement by the Buyer, shall not: (i) conflict
with or violate the Buyer's certificate of organization or operating agreement,
or (ii) subject to obtaining the adoption of this Agreement and the Transaction
by the Board of Managers, conflict with or violate any laws or regulations.
(b) The execution and delivery of this Agreement by the Buyer does
not, and the performance of its obligations hereunder will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity, except for applicable requirements, if any, of the
Exchange Act and the rules and regulations thereunder.
3.4 Brokers. The Buyer has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agent's commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.5 Approval. The Board of Managers of the Buyer has, as of the date of
this Agreement, unanimously declared the advisability of the Transaction and
approved this Agreement and the transactions contemplated hereby.
3.6 Acquisition of Shares for Investment. The Buyer is an "accredited
investor," as such term is defined in Section 2(15) of the Securities Act and
Rule 501 of Regulation D promulgated thereunder, the Buyer is purchasing the
Shares for the Buyer's own account, solely for investment purposes, and not with
a view to, or for resale in connection with, any distribution thereof or with
any present intention of distributing or selling any of the Shares, except as
allowed by the Securities Act, or any rules and regulations promulgated
thereunder. The Buyer understands and agrees that the Shares being acquired
pursuant to this Agreement have not been registered under the Securities Act or
under any applicable state securities laws and may not be sold, pledged,
assigned, hypothecated or otherwise transferred ("Transfer"), except pursuant to
an effective registration statement under the Securities Act or pursuant to an
exemption from registration under the Securities Act, the availability of which
shall be established to the satisfaction of the Company at or prior to the time
of Transfer. The Buyer acknowledges that it may have to bear the economic risk
of its investment in the Shares for an indefinite period of time since the
Shares have not been registered under the Securities Act and therefore cannot be
sold unless the Shares are subsequently registered or an exemption from
registration is available. The Buyer has received and reviewed such information
concerning the Company as it deems necessary to evaluate the risks and merits of
its investment in the Company. The Buyer has such knowledge and experience in
financial matters as to be capable of evaluating the merits and risks of an
investment in the Shares. The sale of the Shares to the Buyer is being made
without any public solicitation or advertisements.
3.7 Bankruptcy and Criminal Proceedings. Neither the Buyer nor its
managers, affiliates, promoters have, during the past five years, been subject
to or suffered any of the following:
(a) a petition under the Federal bankruptcy laws or any other
insolvency or moratorium law or has a receiver, fiscal agent or similar officer
been appointed by a court for such person, or any partnership in which such
person was a general partner at or within two years before the time of such
filing, or any corporation or business association of which such person was an
executive officer at or within two years before the time of such filing;
10
(b) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations which do not relate to
driving while intoxicated or driving under the influence);
(c) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring suspending or otherwise limiting such person's
involvement in any type of business, securities or banking activities; or
(d) been found guilty by a court of competent jurisdiction in a civil
action or by the U.S. Securities and Exchange Commission ("SEC"), the Commodity
Futures Trading Commission ("CFTC") or state securities regulators and
commissions to have violated any federal or state securities or commodities law,
regulation or decree and the judgment in such civil action or finding by the
SEC, CFTC or state securities regulators or commissions has not been
subsequently reversed, suspended or vacated.
3.8 Representations and Warranties Complete. The representations and
warranties of the Buyer included in this Agreement and any list, statement,
document or information set forth in, or attached to, any Schedule provided
pursuant to this Agreement or delivered hereunder, are true and complete in all
material respects and do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements contained therein not misleading, under the circumstance under
which they were made.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
-----------------------------------
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Closing, the Company, except to the extent that the Buyer shall otherwise
consent in writing, shall carry on its business in the usual, regular and
ordinary course consistent with past practices, in substantially the same manner
as heretofore conducted and in compliance with all applicable laws and
regulations, pay its debts and taxes when due subject to good faith disputes
over such debts or taxes, pay or perform other material obligations when due,
and use its commercially reasonable efforts consistent with past practices and
policies to preserve substantially intact its present business organization.
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
5.1 Payment of Company Closing Obligations. At Closing, the Company shall
pay the Scheduled Liabilities from the proceeds of the Purchase Price at Closing
(not to exceed $200,000).
5.2 Resignations and Appointments of Company's Officers and Directors. Upon
execution of this Agreement by the parties, the Company shall deliver to the
Buyer resignations, in a form and substance acceptable to the Buyer, providing
for the resignation of all of the current directors and officers of the Company
(the "Resignations") and appointing Kevin R. Keating as the sole director of the
Company (the "Appointment"). For purposes of this Agreement, the term "Change of
Control" means actions contemplated by the Resignations and the Appointment.
5.3 Undertaking by Company Accountants. At or prior to Closing, the Company
shall obtain, and deliver to the Buyer, an undertaking from Chisholm, Bierwolf &
Nilson, LLC, a registered public accounting firm ("Accountant"), in a form and
11
substance satisfactory to the Buyer, providing that: (i) the Accountant agrees
to an engagement with Company to serve as its registered public accounting firm
following the Closing for purposes of auditing the Company's financial
statements for the fiscal years ended June 30, 2008 and of reviewing the
quarterly financial statements for the fiscal quarters ended December 31, 2007
and March 31, 2008, at rates acceptable to the Buyer, (ii) the Accountant is
willing to act as the Company's registered public accounting firm for ongoing
reporting requirements under the Exchange Act including, without limitation, the
filing of Forms 10-QSB and 10-KSB, at the rates and charges acceptable to the
Buyer, (iii) the Accountant is duly registered with the U.S. Public Company
Accounting Oversight Board ("PCAOB"), and (iv) the Accountant shall provide its
consent to the use of its audited financial statements and accompanying report
in any regulatory filing by the Company prior to or following the Closing
including, without limitation, the Company's Form 10-SB to be filed by the
Company following the Closing ("Undertaking").
5.4 Compliance Matters. Prior to and as a condition of the Closing, the
Company shall: (i) prepare and have audited by the Accountant the Annual
Financial Statements, (ii) prepare and have reviewed by the Accountant the
Interim Financial Statements, (iii) provide the Buyer with any information
required to be included by the Company in a Form 10-SB to be filed by the
Company following the Closing, (iv) have the Tax Returns prepared by the
Accountant and have filed the same, (v) prepare and file the annual report for
the State of Nevada which was due March 1, 2007 and pay the annual and late fees
related thereto, (vi) pay the Company's registered agent in Nevada for statutory
representation fees for 2007, and (vii) deliver to the Buyer the audited
financial statements of the Company for the fiscal year ended June 30, 2000
(collectively, the "Compliance Matters").
5.5 Other Actions; Due Diligence Schedule. The Buyer and the Company shall
cooperate with each other and use their respective reasonable best efforts to
take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable on their part under this Agreement and applicable
laws to consummate the Transaction and the other transactions contemplated
hereby, including preparing and filing as soon as practicable all documentation
to effect all necessary notices, reports and other filings, and obtaining as
soon as practicable all consents, registrations, approvals, permits and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Transaction or any of the
other transactions contemplated hereby.
5.6 Confidentiality; Access to Information. Each party agrees to maintain
and hold in strict confidence any material, non-public information provided by
any other party in connection with transactions contemplated hereunder. The
Company shall afford the Buyer and its financial advisors, accountants, counsel
and other representatives reasonable access during normal business hours, upon
reasonable notice, to the properties, books, records and personnel of the
Company and its Subsidiaries during the period prior to the Closing to obtain
all information concerning the business, including financial condition,
properties, results of operations and personnel of the Company and its
Subsidiaries, as the Buyer may reasonably request. No information or knowledge
obtained by the Buyer in any investigation pursuant to this Section 5.6 will
affect or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the parties to consummate the Transaction.
5.7 No Solicitation. Other than with respect to the Transaction, the
Company agrees that it shall not, and shall direct and use its reasonable best
efforts to cause its officers, directors, employees, representatives, agents, or
affiliates (including, but not limited to any investment banker, attorney, or
accountant retained by the Company) to, directly or indirectly, solicit,
knowingly encourage, initiate discussions or negotiations with, or knowingly
provide any nonpublic information to, any corporation, partnership, person, or
other entity or group concerning any proposed Alternative Transaction (as
defined below), or otherwise knowingly facilitate any effort or attempt to make
or implement an Alternative Transaction. For purposes of this Agreement, the
term "Alternative Transaction" shall mean any of the following involving the
Company or any subsidiary: (i) any tender offer, exchange offer, merger,
consolidation, share exchange, business combination or similar transaction
12
involving capital stock of the Company; (ii) any transaction or series of
related transactions pursuant to which any person or entity (or its
shareholders), (a "Third Party") acquires shares (or securities exercisable for
or convertible into shares) representing more that 20% of the outstanding shares
of any class of capital stock of the Company; or (iii) any sale, lease,
exchange, licensing, transfer or other disposition pursuant to which a Third
Party acquires control of more than 20% of the assets (including, but not
limited to, intellectual property assets) of the Company (determined by
reference to the fair market value of such assets), in a single transaction or
series of related transactions. The Company shall immediately terminate all
discussions with Third Parties concerning any proposed Alternate Transaction,
and will request that such Third Parties promptly return any confidential
information furnished by the Company in connection with any proposed Alternative
Transaction.
5.8 Public Disclosure. The Buyer and the Company shall consult with each
other and agree in writing before issuing any press release or otherwise making
any public statement with respect to the Transaction or this Agreement and will
not issue any such press release or make any such public statement prior to such
consultation.
5.9 Business Records. Prior to and as a condition of the Closing, the
Company shall deliver to Buyer all records and documents relating to the
Company, wherever located, including, without limitation, books, records,
supplier and customer lists and files, government filings, the Returns, consent
decrees, orders, and correspondence, financial information and records,
electronic files containing any financial information and records, and other
documents used in or associated with the Company ("Business Records").
5.10 Ownership Records; Transfer Agent Undertaking. Prior to and as a
condition of the Closing, the Company shall deliver to Buyer a full and complete
listing of all stockholders of the Company, dated within three (3) business days
prior to Closing, from and certified by the Company's transfer agent showing the
name and address of each stockholder, the number of shares owned by each
stockholder, and the certificate number and issue dates for the shares owned by
each stockholder ("Stockholder List"). At or prior to Closing, the Company shall
obtain, and deliver to the Buyer, an undertaking from the transfer agent, in a
form and substance satisfactory to the Buyer, stating the amount of any and all
fees and charges owed to the transfer agent by the Company for services rendered
prior to Closing together with a copy of the current agreement in place between
the Company and the transfer agent ("Transfer Agent Undertaking").
ARTICLE VI
CONDITIONS TO THE TRANSACTION
-----------------------------
6.1 Conditions to Obligations of Each Party to Effect the Transaction. The
respective obligations of each party to this Agreement to effect the Transaction
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) No Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Transaction illegal or
otherwise prohibiting consummation of the Transaction, substantially on the
13
terms contemplated by this Agreement. All waiting periods, if any, under any law
in any jurisdiction in which the Company or the Buyer has material operations
relating to the transactions contemplated hereby will have expired or
terminated.
6.2 Additional Conditions to Obligations of the Company. The obligations of
the Company to consummate and effect the Transaction shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by the Company:
(a) Representations and Warranties. Each representation and warranty
of the Buyer contained in this Agreement (i) shall have been true and correct as
of the date of this Agreement and (ii) shall be true and correct on and as of
the Closing Date with the same force and effect as if made on the Closing Date.
The Company shall have received a certificate with respect to the foregoing
signed on behalf of the Buyer by an authorized manager of the Buyer ("Buyer
Closing Certificate").
(b) Agreements and Covenants. The Buyer shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, except to the extent that any failure to perform or comply (other than a
willful failure to perform or comply or failure to perform or comply with an
agreement or covenant reasonably within the control of the Buyer) does not, or
will not, constitute a Material Adverse Effect with respect to the Buyer taken
as a whole, and the Company shall have received the Buyer Closing Certificate to
such effect.
(c) Other Deliveries. At or prior to Closing, the Buyer shall have
delivered to the Company: (i) the resolutions by the Buyer's board of managers
approving this Agreement and the transactions contemplated hereunder, (ii) the
duly executed Registration Rights Agreement, and (iii) such other documents or
certificates as shall reasonably be required by the Company and its counsel in
order to consummate the transactions contemplated hereunder. At or prior to the
Closing, the Buyer shall have delivered the Purchase Price to the Company, and
the proceeds thereof shall be handled and disbursed in accordance with Section
5.1 hereof.
6.3 Additional Conditions to the Obligations of the Buyer. The obligations
of the Buyer to consummate and effect the Transaction shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by the Buyer:
(a) Representations and Warranties. Each representation and warranty
of the Company contained in this Agreement (i) shall have been true and correct
as of the date of this Agreement and (ii) shall be true and correct on and as of
the Closing Date with the same force and effect as if made on and as of the
Closing. The Buyer shall have received a certificate with respect to the
foregoing signed on behalf of the Company with respect to the warranties and
representations made by the Company under this Agreement ("Company Closing
Certificate").
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by the Company at or prior to
the Closing Date except to the extent that any failure to perform or comply
(other than a willful failure to perform or comply or failure to perform or
comply with an agreement or covenant reasonably within the control of the
Company) does not, or will not, constitute a Material Adverse Effect on the
Company, and the Buyer shall have received the Closing Certificate to such
effect.
(c) Contracts. The Company shall have delivered to the Buyer written
instruments evidencing that all agreements, contracts and commitments under
which the Company is a party or under which the Company has any obligations have
14
been cancelled or terminated without any further liability to the Company
including, without limitation, the termination of the Company's engagement with
its existing transfer agent and its existing legal counsel under terms and
conditions acceptable to the Buyer.
(e) Creditor Settlements. The Company and Leon Leibovich have executed
and delivered to the Buyer a certain Settlement and Release Agreement on terms
and conditions acceptable to the Buyer.
(f) Judgment Creditor. The Company shall have paid, satisfied or
settled all matters related to the action filed in Nevada District Court, Clark
County on August 7, 2007 captioned Benchmark Capital, LLC vs. Forex365, Inc.,
formerly known as Solar Group, Inc., Leon Leibovich and Does I-XV including,
without limitation, the default judgment filed against the Company in such
matter on October 31, 2007, all on terms and conditions acceptable to the Buyer.
(g) Corporate Matters; Compliance Matters. The Company shall have
delivered to the Buyer a certified copy of the Company's certificate of
incorporation, with any amendments thereto, a certified copy of the Company's
bylaws, with any amendments thereto, a certificate of good standing in the State
of Nevada. All of the Compliance Matters have been completed to the satisfaction
of the Buyer. The Stockholder List shall show that less than 100 stockholders of
record have an address shown in the State of Nevada.
(h) Other Deliveries. At or prior to Closing, the Company shall have
delivered to the Buyer: (i) the resolutions by the Company's board of directors
approving this Agreement and the transactions contemplated hereunder, (ii) the
duly executed Registration Rights Agreement, (iii) the Stockholder List, the
Business Records, the Transfer Agent Undertaking and the Undertaking, and (iv)
such other documents or certificates as shall reasonably be required by the
Buyer and its counsel in order to consummate the transactions contemplated
hereunder. At or prior to the Closing, the Company shall have caused the
certificates representing the Shares to be delivered to the Buyer.
ARTICLE VII
SURVIVAL
--------
All representations, warranties, agreements and covenants contained in or
made pursuant to this Agreement, or any Schedule hereto or thereto or any
certificate delivered at the Closing, shall not survive the Closing, and no
claims by virtue of the breach such representations, warranties, agreements and
covenants shall be made by the parties hereto after the Closing. Notwithstanding
anything contained in this Article to the contrary, the provisions of this
Article shall not be applicable to any indemnification agreement that that the
Company may separately enter into with any other parties with respect to the
Company's representations, warranties, agreements and covenants contained in or
made pursuant to this Agreement, or any Schedule hereto or thereto or any
certificate delivered at the Closing.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
8.1 Termination. This Agreement may be terminated at any time prior to the
Closing:
15
(a) by mutual written agreement of the Buyer and the Company;
(b) by either the Buyer or the Company if the Transaction shall not
have been consummated for any reason by January 31, 2008 or such other date
mutually agreeable to the Buyer and the Company; or
(c) by either the Buyer or the Company if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Transaction, which order, decree, ruling or other action is final and
nonappealable.
8.2 Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 8.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto.
In the event of the termination of this Agreement as provided in Section 8.1,
this Agreement shall be of no further force or effect and the Transaction shall
be abandoned, except (i) as set forth in this Section 8.2, Section 8.3 and
Article IX (General Provisions), each of which shall survive the termination of
this Agreement, and (ii) nothing herein shall relieve any party from liability
for any intentional or willful breach of this Agreement.
8.3 Fees and Expenses. Except as otherwise provided herein, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Transaction is consummated. Notwithstanding the foregoing, in the
event this Agreement is terminated by the Company or the Buyer in accordance
with Section 8.1 hereof, the Company will cause the resignation of the then
current directors of the Company and the appointment of Leon Leibovich as the
sole director, provided, however, that such resignations and appointments shall
only be made if Leon Leibovich has repaid in full the Bridge Loan, as more
specifically discussed in Schedule 2.9 hereof, within ten (10) days following
the termination of this Agreement.
8.4 Amendment. This Agreement may be amended by the parties hereto at any
time by execution of an instrument in writing signed on behalf of each of the
Buyer and the Company.
8.5 Extension; Waiver. At any time prior to the Closing, any party hereto
may, to the extent legally allowed, (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Delay in exercising any right under this Agreement shall
not constitute a waiver of such right.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
16
(a) if to the Buyer, to:
KIG Investors II, LLC
Attn: Timothy J. Keating, Manager
5251 DTC Parkway, Suite 1090
Denver, Colorado 80111
(720) 889-0135 fax
(b) if to the Company (prior to the Resignations and Appointments),
to:
Forex365, Inc.
Attn: Leon Leibovich, CEO
276 Park Avenue
Highland Park, IL 60035
(c) if to the Company (after the Resignations and Appointments), to:
Forex365, Inc.
Attn: Kevin R. Keating, CEO
936A Beachland Boulevard, Suite 13
Vero Beach, FL 32963
(772) 231-5947 fax
9.2 Interpretation.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
(b) For purposes of this Agreement, the term "Material Adverse Effect"
when used in connection with an entity means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with other
changes, events, violations, inaccuracies, circumstances or effects, that is
materially adverse to the business, assets (including intangible assets),
revenues, financial condition or results of operations of such entity and its
Subsidiaries, if any, taken as a whole (it being understood that neither of the
following alone or in combination shall be deemed, in and of itself, to
constitute a Material Adverse Effect: (a) changes attributable to the public
announcement or pendency of the transactions contemplated hereby, (b) changes in
general national or regional economic conditions or (c) changes affecting the
industry generally in which the Company or the Buyer operates).
(c) For purposes of this Agreement, the term "Person" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
17
(b) For purposes of this Agreement, all monetary amounts set forth
herein are referenced in United States dollars, unless otherwise noted.
9.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart. Facsimile and electronic signatures
to this Agreement by the parties shall be accepted and shall be treated as
original signatures hereto.
9.4 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Schedules hereto (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and (b) are not intended to confer upon any other person any rights or remedies
hereunder (except as specifically provided in this Agreement).
9.5 Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
9.6 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, USA, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof.
9.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
9.9 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the first sentence of this Section 9.9, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
9.10 Arbitration. Any disputes or claims arising under or in connection
with this Agreement or the transactions contemplated hereunder shall be resolved
by binding arbitration. Notice of a demand to arbitrate a dispute by either
18
party shall be given in writing to the other at their last known address.
Arbitration shall be commenced by the filing by a party of an arbitration demand
with the American Arbitration Association ("AAA") in its office in Chicago,
Illinois, USA. The arbitration and resolution of the dispute shall be resolved
by a single arbitrator appointed by the AAA pursuant to AAA rules. The
arbitration shall in all respects be governed and conducted by applicable AAA
rules, and any award and/or decision shall be conclusive and binding on the
parties. The arbitration shall be conducted in Chicago, Illinois. The arbitrator
shall supply a written opinion supporting any award, and judgment may be entered
on the award in any court of competent jurisdiction. Each party shall pay its
own fees and expenses for the arbitration, except that any costs and charges
imposed by the AAA and any fees of the arbitrator for his services shall be
assessed against the losing party by the arbitrator. In the event that
preliminary or permanent injunctive relief is necessary or desirable in order to
prevent a party from acting contrary to this Agreement or to prevent irreparable
harm prior to a confirmation of an arbitration award, then either party is
authorized and entitled to commence a lawsuit solely to obtain equitable relief
against the other pending the completion of the arbitration in a court having
jurisdiction over the parties. All rights and remedies of the parties shall be
cumulative and in addition to any other rights and remedies obtainable from
arbitration.
[Remainder of this page intentionally left blank.]
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.
KIG Investors II, LLC
By: /s/ Timothy J. Keating
---------------------------
Timothy J. Keating, Manager
Forex365, Inc.
By: /s/ Leon Leibovich
---------------------------
Leon Leibovich, CEO
20
Index of Exhibits
Exhibit A - Registration Rights Agreement
Schedules
Disclosure Schedules by the Company
21