UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): December 3, 2015


FORU Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

  

333-146744

  

88-0338837

(State or other jurisdiction

of incorporation)

  

(Commission File Number)

  

(IRS Employer

Identifica­tion No.)


  

117 S. Cook Street #184

Barrington, IL 60010

  

  

(Address of Principal Executive Offices)

  


732-536-1600

Registrant’s telephone number, including area code


N/A

 Former name or former address, if changed since last report

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



















1





Item 1.01 Entry into a Material Definitive Agreement


On December 3, 2015, ForU Holdings, Inc., a Nevada corporation (the “Company”) entered into a share exchange agreement (the “Agreement”) with Life, 180, Inc. a Nevada corporation (“180”), SRD, Inc. a Nevada corporation which is the sole shareholder of 180 (the “Shareholder”), and John de Vries.  Pursuant to the Agreement, the Company agreed to purchase all of the outstanding equity interests of 180 (the “180 Shares”) from the Shareholder in exchange for 3,750,000 shares of the Company’s $.001 par value per share common stock (the “Common Stock”).  Also, prior to the signing date of the Agreement, the Company made advances to 180 of $1,850,000 and pursuant to the Agreement, such advanced funds are to be applied as part of the purchase price for the 180 Shares.  The Agreement also requires the Company is required to make available to 180 an additional $150,000 for use as working capital in the 180 business.  Although the Agreement has been executed, the transactions contemplated by the Agreement have yet to close.   A copy of the Agreement is filed herewith as Exhibit 10.1.


Item 4.01 Changes in Registrant’s Certifying Accountant


FORU Holdings, Inc. was notified that since the Company’s last audit of years ended December 31, 2010 and 2009, the Company’s independent registered public accounting firm, Moquist Thorvilson Kaufmann Kennedy & Pieper LLC (“MTK”) changed its name to Moquist Thorvilson Kaufmann & Pieper LLC and then to Moquist Thorvilson & Kaufman, LLC.  Then on July 1, 2013 MTK terminated all its employees and ceased operations.  All of the former employees and former partners of MTK became employees and partners of BDO USA, LLP (“BDO”).  Accordingly, the former firm of MTK no longer exists nor does it have a license to practice public accounting.  


On December 16, 2015, the board of directors appointed Heaton & Company, PLLC (“Heaton”) as the Company’s new independent registered public accounting firm for the fiscal years ended December 31, 2015, 2014, 2013, 2012 and 2011. Heaton is located at 250 North East Promontory, Suite 200, Farmington, Utah 84025.

 

During the registrant’s most recent fiscal years ended December 31, 2010 and 2009 and through December 16, 2015, the registrant did not consult with Heaton on (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on the registrant’s financial statements, and Heaton did not provide either a written report or oral advice to the registrant that was an important factor considered by the registrant in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) the subject of any disagreement, as defined in Item 304 (a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.


In connection with the audit of the registrant’s financial statements for the fiscal years ended December 31, 2010 and 2009 and through the date of this Current Report, there were: (i) no disagreements between the registrant and MTK on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of MTK, would have caused MTK to make reference to the subject matter of the disagreement in its reports on the registrant’s financial statements for such years, and (ii) no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K.


The Company provided BDO with a copy of this Current Report.  BDO advised that it is unable to request that the former MTK partners furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether or not the former firm agrees with the registrant’s statements in this Item 4.01 because MTK no longer exists nor does it have a license to practice public accounting.  




2





Item 5.02 Departure of Directors or Certain Officer; Election of Directors; Appointment of Certain Officers;

Compensatory Arrangements of Certain Officers.


On December 16, 2015, the Board appointed Mr. Diego E. Roca as the Company’s Chief Financial Officer, Corporate Secretary and Treasurer.


Diego E. Roca, age 48,   has over 20 years of experience in financial management, operations, public (SEC) filings, compliance, cash management and internal controls. From 1995 until 2004, he worked with Digitec 2000, Inc., a U.S. based telecommunications firm, where he began his career as Digitec's Controller. He was promoted to Chief Operating Officer and finally Senior Vice President and Chief Financial Officer. From 2004 to 2006, Mr. Roca served as a consultant to various companies, including Digitec and Dominion Minerals Corp. From 2007 to present he has held the office of Executive Vice President, Chief Financial Officer and Director for Dominion Minerals Corp, an international mining firm with projects in the republics of China and Panama.  From November 2013 to April 2014 and from August 2014 to October 2014, Mr. Roca served as the Chief Financial Officer and Chief Restructuring Officer, respectively, to Codesmart Holdings, Inc.  Mr. Roca received a Bachelor of Science degree in Accounting from Queens College in 1991.


There are no “family relationships” between Mr. Roca and any director or executive officer of the Company as such term is defined in Item 401(d) of Regulation S-K.  Mr. Roca has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.  


On February 1, 2016, the Company and Mr. Roca entered into an employment agreement (the “Employment Agreement”), pursuant to which the Company employed Mr. Roca as its Chief Financial Officer for a term of four years with a one-year automatic renewal term.  Pursuant to the Agreement, Mr. Roca is entitled to compensation consisting of $150,000, $175,000, $225,000 and $250,000 per year of base salary in 2016, 2017, 2018 and 2019, respectively and an annual bonus if certain performance targets are met at the discretion of the Board.  Pursuant to the Employment Agreement, Mr. Roca was granted an option (the “Option”) to purchase 150,000 shares of the Company’s Common Stock at $0.88 per share.  The Option carries a term of 5 years.  Additionally, the Employment Agreement contains a grant of shares of Common Stock of the Company to Mr. Roca in the amount of 150,000 shares, 150,000 shares and 200,000 shares that shall be issued in 2016, 2017 and 2018, respectively.  A copy of the Employment Agreement is filed herewith as Exhibit 10.2.


Item 8.01 Other Events


The Company has been delinquent in its filings with the SEC.  The last report filed with the SEC by the Company was its Form 10-Q for the nine months and three months ended September 30, 2011.  The Company is currently preparing a Comprehensive Form 10-K which shall include audited financial statements for the years ended December 31, 2015, 2014, 2013, 2012 and 2011 and will also include quarterly reports for the quarterly periods ended prior to the time of filing of the Comprehensive Form 10-K.  The Company anticipates that the Comprehensive Form 10-K shall be prepared and ready for filing no later than 120 days from the date of filing of this Form 8-K.


Item 9.01 Financial Statements and Exhibits.

 

(d)     Exhibits

 

EXHIBIT INDEX

 

Exhibit Number

 

Description


10.1

 

Share Exchange Agreement

 

 

10.2

 

Employment Agreement



3





SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  

  

 

FORU HOLDINGS, INC.

 

  

 

 

  

 

  

 

 

  

  

  

 

 

  

Date:

  March 8, 2016

 

By:

/s/ Diego E. Roca

  

  

 

  

Diego E. Roca

  

  

 

  

Chief Financial Officer




4





SHARE EXCHANGE AGREEMENT

THIS SHARE EXCHANGE AGREEMENT (this “ Agreement ”) is made and entered into as of December 3, 2015 (the “ Signing Date ”) to be effective as of the Closing Date (defined below), by and among ForU Holdings, Inc., a Nevada corporation (the “ Company ”), Life 180 Inc., a Nevada corporation (“ 180 ”), SRD, Inc., a Nevada Corporation which is the sole shareholder of 180 (the “ Shareholder ”) and John deVries (“ John ”).  Capitalized terms used herein and not otherwise defined shall have the definition ascribed thereto in Article I hereof.

W I T N E S S E T H :

WHEREAS , the Company desires to purchase all of the outstanding equity interests of 180 from the Shareholder (the “Shares ”) in exchange for three million seven hundred fifty thousand (3,750,000) shares (the “ ForU Shares ”) of the Company’s $.001 par value per share voting common stock (the “ Common Stock ") and in consideration of Advances and Additional Investment (as such terms are defined below) (the “ Share Exchange Transaction ”); and

WHEREAS , the Company believes it is in its best interests to acquire the Shares in exchange for the ForU Shares; and

WHEREAS , the Shareholder wishes to exchange the Shares to the Company for the ForU Shares; and

WHEREAS , it the intention of the parties that the Share Exchange Transaction shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “ Code ”); and

NOW, THEREFORE , in consideration of the mutual representations, warranties, covenants and agreements, and upon the terms and conditions hereinafter set forth, the parties do hereby agree as follows:

ARTICLE I
DEFINITIONS

1.1

Defined Terms .  For purposes of this Agreement, the following terms have the meanings specified or referred to in this Article I:

Action ” means any suit, action, judicial or administrative action or proceeding.

Affiliate ” shall mean (x) any Person directly or indirectly controlling, controlled by, or under common control with another Person, (y) any director, officer, manager, partner, Employee, shareholder or member of a Person, or (z) any father, mother, brother, sister or descendant of a natural person or any spouse thereof, however provided , that , that in the case of a company shareholder or noteholder which is a private equity firm, a portfolio company of such shareholder or noteholder which does not have any direct or indirect proprietary, leasehold or financial interest (other than financial interests consisting of arm’s length transactions) in any of the company assets or the



1





Business shall not be deemed an Affiliate of a company.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through ownership of voting securities, by contract, or otherwise.

 “ Business Day ” shall mean any day other than a Saturday, Sunday and all legal public holidays specified in 5 U.S.C. § 6103(a), as amended from time to time.

 “ Claims ” means all actions, suits, proceedings, investigations, claims or grievances.

Code ” means the Internal Revenue Code of 1986, as amended.

Contracts ” means all written and oral contracts, leases, sales, purchase orders, commitments and other agreements, and any amendments to any of the foregoing.

 “ NRS ” means the Nevada Revised Statutes, as amended from time to time.

Employee ” means any (i) officer or employee of 180 or the Company, and (ii) any independent contractor or consultant whose engagement by 180 or the Company accounts for the majority of their working time.


 “ Expenses ” means any and all legal, accounting, financial advisory, consulting and other similar fees and expenses of third parties that are incurred or paid by a party in connection with the preparation and negotiation of this Agreement and the other Transaction Documents and the consummation of transactions contemplated hereby and thereby.

 “ GAAP ” means U.S. generally accepted accounting principles.

Governmental Authority ” shall mean any governmental regulatory or administrative body, department, commission, board, bureau, agency or instrumentality, any court or judicial authority or any public, private or industry regulatory authority, in each case whether federal, state, local or foreign.

Improvements ” means all improvements of any and every nature (including without limitation all buildings, structures, fixtures and building systems) located in or affixed to real property, and all components thereof.

Indemnified Party ” shall mean (i) with respect to Losses described in Section 15.1, Shareholder, and (ii) with respect to Losses described in Section 15.2, Company.

Indemnifying Party ” shall mean (i) with respect to Losses described in Section 15.1, Company, and (ii) with respect to Losses described in Section 15.2, Shareholder.



2





Indebtedness ” means, with respect to 180, all indebtedness for borrowed money, whether current or funded, or secured or unsecured, including, without limitation: (a) all indebtedness of 180 secured by a purchase money mortgage or other Lien to secure all or part of the purchase price of property subject to such mortgage or Lien, (b) all obligations under leases which shall have been or must be, in accordance with generally accepted accounting principles, recorded as capital leases in respect of which 180 is liable as lessee, (c) any liability of 180 in respect of banker’s acceptances or letters of credit, (d) all interest, fees and other expenses owed with respect to the indebtedness referred to above, and (e) all indebtedness referred to above which is directly or indirectly guaranteed by 180 or which 180 has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss (excluding any contingent indemnification obligations or similar contingent obligations assuring against loss).

Intellectual Property ” means all worldwide intellectual property rights and all rights associated therewith, including without limitation: (i) all issued and existing letters patent U.S. or foreign, including, extensions (whether arising from patent or regulatory law), supplemental protection certificates, registrations, confirmations, reissues, reexaminations or renewals and all foreign equivalents thereof (all of the foregoing described in this subsection (i), collectively “Issued Patents”); (ii) all published or unpublished non-provisional and provisional patent applications, U.S and foreign, including any continuation, divisional, continuation in part or division thereof, or any substitute application therefore or foreign equivalent thereof (all of the foregoing described in this subsection (ii), collectively “Patent Applications” and, with the Issued Patents, the “Patents”); (iii) all copyrights and copyrightable works, including all rights of authorship, use, publication, reproduction, distribution, performance transformation and rights of ownership of copyrightable works, and all rights to register and obtain renewals and extensions of registrations, together with all other interests accruing by reason of international copyright conventions (collectively, “Copyrights”); (iv) trademarks, registered trademarks, applications for registration of trademarks, service marks, registered service marks, applications for registration of service marks, trade names, registered trade names and applications for registrations of trade names (collectively, “Trademarks”); (v) all trade secrets, know-how, techniques, data, inventions, practices, methods, and other confidential or proprietary technical, business, marketing, research, development, and other information, and (vi) all other intangible assets, properties and rights, including know how (whether or not appropriate steps have been taken to protect, under applicable law, such other intangible assets, properties or rights).  Intellectual Property includes all of the foregoing created or obtained through the efforts of third parties for or on behalf of 180.

Knowledge ” shall mean, with respect to the Shareholder, 180, and the Company, any fact, circumstance, event or other matter that (i) any of the officers or directors of 180 or the Company or the Shareholder actually knows “Actual Knowledge”), or (ii) any of the foregoing parties should reasonably know in the normal discharge of his or her assigned duties and responsibilities.

Laws ” shall mean any law, statute, ordinance, rule, regulation, order,



3





decree or mandatory guideline of any Governmental Authority, as the same may be amended or revised from time to time.

Liens ” means all liens, mortgages, pledges, security interests, charges, Claims, options, grant-backs, judgments, court orders or other encumbrances.

Losses ” means all damages, losses, obligations, liabilities, Claims, deficiencies, costs, Taxes, penalties, fines, interest, monetary sanctions and expenses  incurred by an Indemnified Party, including, without limitation, reasonable attorneys’ fees and costs incurred to comply with injunctions and other court and agency orders, and other costs and expenses incident to any suit, action, investigation, claim or proceeding or to establish or enforce an Indemnified Party’s right to indemnification hereunder.

Material Adverse Effect ” means any change or effect which, individually or in the aggregate with all other such changes and effects, is materially adverse to the business or to the condition (financial or otherwise), assets, operations, financial condition, results of operations or prospects of a company, taken as a whole or that would materially and adversely effect the ability of a party to perform its obligations hereunder or that would prevent or delay the consummation of the transactions contemplated hereunder; provided , however , that none of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (i) any change, event, state of facts or development generally affecting the general political, economic or business conditions of the United States; (ii) any change, event, state of facts or development generally affecting the generic multi-level-marketing industry; (iii) any change, event, state of facts or development arising from or relating to compliance with the terms of this Agreement, or action taken or failure to act, by one party to which the other party has consented in writing (excluding 180’s or the Shareholder’s actions or omissions in violation of this Agreement); (iv) acts of war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, sabotage or terrorism or other international or national calamity or any material worsening of such conditions; or (v) changes in Laws or Generally Accepted Accounting Principles after date hereof or interpretation thereof.

Permits ” means any licenses, certificates, approvals, permits and other authorizations issued or to be issued by any Governmental Authority.

Permitted Liens ” means Liens set forth in Section 7.9 of this Agreement.

Person ” means any corporation, partnership, association, trust, limited liability company, joint venture, Governmental Authority or natural person.

Representatives ” of a Person means their directors, officers, managers, partners, shareholders, members, Employees, consultants, contractors, representatives, agents, accountants, bankers, attorneys and other advisors.

SEC ” means the U.S. Securities and Exchange Commission.



4





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

Subsidiary ” or “ Subsidiaries ” of any Person means any other Person of which a majority of the outstanding voting securities or other voting equity interests, or a majority of any other interests having the power to direct or cause the direction of the management and policies of such other Person, are owned, directly or indirectly, by such first Person.

Tax ” or “ Taxes ” means any federal, foreign, state, county, and local income, gross receipts, excise, import, property, franchise, ad valorem, license, sales or use tax or other withholding, social security, Medicare, unemployment compensation or other employment-related tax, or any other tax, together with all deficiencies, penalties, additions, interest, assessments, and other governmental charges with respect thereto.

Transaction Documents ” means this Agreement (including the exhibits hereto), the Letter of Intent, and all other documents, instruments and certificates contemplated by this Agreement.

1.2

Other Definitions.  Other capitalized terms defined elsewhere in this Agreement shall have the meaning defined therein.


ARTICLE II

EXCHANGE OF SHARES


2.1

Agreement to Exchange the Shares for the ForU Shares .  Effective as of the Closing Date and upon the terms and subject to the conditions set forth in this Agreement, the Shareholder shall sell, assign, transfer, convey and deliver to the Company 70% of the Shares in consideration for the Advances and the Additional Advances.  On the Qualification Date (defined below), the Shareholder shall sell, assign, transfer, convey and deliver to the Company the remaining 30% of the Shares, and the Company shall accept such securities from the Shareholder in exchange for the issuance of the ForU Shares to the Shareholder and any additional consideration as may be required pursuant to the Earnout Agreement described in Article IV of this Agreement, and attached hereto as Exhibit B .


2.2

Capitalization .  On the Closing Date, immediately before the Share Exchange Transaction, the Company shall have authorized 500,000,000 shares, of common stock, par value $.001 per share, and 10,500,000 shares of preferred stock, par value $.05 per share of which 21,710,269 common shares and 1,420,000 preferred shares are outstanding as of the Signing Date.  


2.3

Closing .  The closing of the exchange to be made pursuant to this Agreement (the "Closing") shall be effective as of July 1, 2015 (the "Closing Date"). Within three (3) business days after the Signing Date, the Shareholder shall deliver to the Company the stock certificates representing the Shares, duly endorsed in blank for transfer or accompanied by appropriate stock powers duly executed in blank.  In full consideration for the Shares, the Company shall issue the ForU Shares to Shareholder on the Signing Date and, within three (3) business days after the



5





Closing, the Company shall deliver to Shareholder evidence that the ForU Shares have been registered in the name of Shareholder.  

ARTICLE III

INVESTMENT REPRESENTATIONS


3.1         Exempt Transaction .

The Shareholder understands that the issuance and exchange of the ForU Shares is intended to be exempt from registration under the Securities Act of 1933, as amended (the “ Act ”), and exempt from registration or qualification under any state securities law.

3.2

Purchase for Own Account .

The ForU Shares to be acquired by the Shareholder hereunder will be acquired for investment for the Shareholder’s own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof, and the Shareholder has no present intention of selling, granting any participation in, or otherwise distributing the same.  

3.3

Information Concerning the ForU Shares .

The Shareholder understands that acquiring the ForU Shares carries significant risk and has had the opportunity to conduct his own due diligence with respect to the ForU Shares The Shareholder has accepted the responsibility for conducting his own investigation and obtaining for himself such information as to the ForU Shares and all other subjects as the Shareholder deems relevant or appropriate in connection with this purchase.

3.4

No Oral Representations .

No oral or written representations have been made concerning the ForU Shares in addition to those stated in this Agreement and the Shareholder is not relying on any oral statements made by the Company in acquiring the ForU Shares

3.5

Accredited Investor Status .

The Shareholder is an “Accredited Investor” within the meaning of Rule 501 of Regulation D promulgated under the Act.  

3.6

Restricted Securities .

The Shareholder understands (i) that the ForU Shares are characterized as “restricted securities” under the Act inasmuch as they were acquired from the Company in a transaction not involving a public offering and that under the Act, and applicable regulations thereunder, (ii) that the ForU Shares are and will remain restricted in the hands of the Shareholder, and such securities may be resold without registration under the Act only in certain limited circumstances.  In this connection, the Shareholder represents that it is familiar with and understands the resale limitations imposed by the Act on the securities. Further, the following legend shall appear on the certificate(s) evidencing the ForU Shares (the “Securities”):

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES

ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS   AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE   OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED   UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS   EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES   LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE



6





HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE

REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES   MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE   MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION   STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.

3.7

Opinion Necessary .

The Shareholder acknowledges that if any transfer of the ForU Shares is proposed to be made in reliance upon an exemption under the Act, the Company may require an opinion of counsel satisfactory to the Company that such transfer may be made pursuant to an applicable exemption under the 1933 Act.  The Shareholder acknowledges that a restrictive legend appears on the ForU Shares and must remain on the ForU Shares until such time as it may be removed under the Act.

3.8

Further Limitations on Disposition .

Without in any way limiting the representations set forth above, the Shareholder further hereby acknowledges that Rule 144 is currently unavailable for the resale of the ForU Shares because of the limitations set forth in Rule 144 (i) and Rule 144 will remain unavailable until at least one year has elapsed from the time the Company files “Form 10 information” (as such term is defined in Rule 144(i)(3)) with the SEC.  AS A RESULT OF THE FOREGOING, THE SHAREHOLDER MAY NOT RESELL THE FORU SHARES IN THE PUBLIC MARKETS FOR AN INDEFINITE HOLDING PERIOD UNLESS AND UNTIL THE COMPANY FILES FORM 10 INFORMATION WHICH WILL BRING THEM CURRENT IN THEIR FILINGS WITH THE SEC AND THEN, NOT UNTIL THE EXPIRATION OF ONE YEAR AFTER SUCH DATE, IF THE COMPANY REMAINS CURRENT IN ITS FILINGS WITH THE SEC.

3.9    No Governmental Review .  The Shareholder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the ForU Shares or the fairness or suitability of the investment in the Company’s Common Stock.

3.10

Brokers’ Fees .  The Shareholder does not have any liability to pay any fees or commissions or other consideration to any broker, finder, or agent with respect to the issuance of the ForU Shares or the transfer of the Shares or any other transactions contemplated by this Agreement.


ARTICLE IV

EARNOUT AGREEMENT


4.1   Earnout Agreement .  As described in Article II Section 2.1 of this Agreement, a portion of the consideration to the Shareholder in exchange for the ForU Shares, is to be paid by the Company as an amount of shares of its Common Stock (the “ Bonus ”) as described in the Earnout Agreement, a copy of which is attached hereto as Exhibit B , between the Shareholder and the Company if certain conditions described therein are met.  


ARTICLE V

RIGHTS OF FIRST REFUSAL



7






5.1 Right of First Refusal .  


(a) In addition to any other rights granted to John by this Agreement, Shareholder (or its designee) shall have a right of first refusal (the “ROFR” ) upon the occurrence of any of the following events (each an “ROFR Event” and together the “ROFR Events” ):


 

(i) any proposed sale of the Company’s multi-level-marketing business which includes but is not limited to FUI and 180 (the “MLM Business” ) by the Company (the “Proposed Sale”); or


(ii) the Company receives an unsolicited written offer (the “Offer” ) from a bona fide third party seeking to purchase the MLM Business; or


(iii) the Company’s board of directors validly approves the Company’s exit (the “Exit” ) from the MLM Business; or


(iv) the Company is to be liquidated and a liquidator is appointed to sell of all of the assets and wind up the affairs of the Company (the “Liquidation Event” ); or


(v) the Company is unable to operate for a period exceeding sixty (60) Business Days (the “Operations Failure” ); or


(vi) the trading of the Company’s Common Stock is permanently halted by the SEC or other government entity with valid jurisdiction to enforce such a permanent hold or otherwise suspended for a period of more than 180 consecutive days (the “Permanent Hold”).  


(b) Upon the occurrence of any of the ROFR Events, the Company or the Company’s appointed liquidator if there is a Liquidation Event, shall within five (5) Business Days of the occurrence of such ROFR Event, provide Shareholder (or its designee)  a written notice of such ROFR Event (the “ROFR Notice” ).


(c)  In the event of an Offer or Proposed Sale, the ROFR Notice shall set forth the name and address of the proposed purchaser and include the proposed purchase price and material terms of the offer (the “ROFR Price” ).  In the event of an Exit, the ROFR Notice shall set forth the Company’s intent to offer Shareholder (or its designee) an opportunity to purchase the MLM Business at a price mutually agreed to between the Company and John (the “Agreed Upon Price” ).  Upon the occurrence of a Liquidation Event, Operations Failure or Permanent Hold the ROFR Notice shall set forth that such event has occurred and shall also set forth the Company’s or its liquidator’s intent to offer Shareholder (or its designee) an opportunity to purchase 180 at a twenty five percent (25%) discount to the fair market value price (the “Discounted FMV Price” ) as determined by a third party valuation firm mutually selected by Shareholder (or its designee) and either the Company or its appointed liquidator.  


(d) The Company or the Company’s appointed liquidator if there is a Liquidation Event, providing the ROFR Notice shall be deemed to constitute an offer to Shareholder (or its



8





designee) to purchase the MLM Business at a twenty-five percent (25%) discount to the ROFR price and on the same terms and conditions set forth in the ROFR Notice in the event of an Offer or Proposed Sale, or at the Agreed Upon Price in the event of an Exit; and in the event of an Operations Failure, Liquidation Event or Permanent Hold the ROFR Notice shall be deemed to constitute an offer to Shareholder (or its designee) to purchase 180 at the Discounted FMV price (for each ROFR Notice provided pursuant to an ROFR Event, the “ROFR Offer” ).


(e)  The ROFR Offer may be accepted only by written notice received by the Company and its liquidator if a Liquidation Event has occurred, within thirty (30) days after  Shareholder (or its designee)’s receipt of the ROFR Notice.  


(f)  Time is of the essence with respect to Shareholder (or its designee)’s obligation to notify the Company and its liquidator if a Liquidation Event has occurred, of his election within such thirty (30) day time period.  With regard to a Proposed Sale, Offer or Exit, if Shareholder (or its designee) fails to give its notice to the Company within the said thirty (30) days, the Company shall be free to consummate the sale of the MLM Business, at the terms set out in the ROFR Notice.  If the ROFR Price or the Agreed Upon Price of the proposed sale the MLM Business which was the subject of the ROFR Notice between the Company and the proposed third party purchaser in the event of an Offer or a bona fide third party with whom the Company has contracted for the sale of the MLM Business in the event of an Exit, are changed in negotiations from those contained in the ROFR Notice, the Company shall be obligated to give Shareholder (or its designee) written notice of the new proposed ROFR Price or Agreed Upon Price, as directed by this Section 5.1 of this Article V of this Agreement and  Shareholder (or its designee) shall have a ROFR with regard to the offer at the new proposed price.  With regard to a Liquidation Event, Operations Failure or Permanent Hold, if  Shareholder (or its designee) fails to give such notice within the said thirty (30) days, the Company, and its liquidator if applicable, shall have no further obligations to Shareholder (or its designee) pursuant to this Section 5.1 of this Article V of this Agreement.


ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE

COMPANY


6.1 Representation and Warranties .  To induce Shareholder and 180 to enter into and perform this Agreement, Company hereby represents and warrants that, each of the representations, warranties and statements in the following paragraphs of this Article VI is true and correct as of the Signing Date and, to the Knowledge of the Company, as of the Closing Date:


6.2 Existence and Good Standing .   The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and as currently contemplated to be conducted.  


6.3 Capitalization .  On the Closing Date, immediately before the exchange to be consummated pursuant to this Agreement, the Company shall have authorized 500,000,000



9





shares of common stock, par value $.001 per share, and 10,500,000 shares of preferred stock, par value $.05 per share of which 21,710,269 common shares and 1,420,000 preferred shares are outstanding as of the Signing Date.


6.4 Authorization . The Company has full power, capacity and authority to execute this Agreement and all other agreements and documents contemplated hereby to which it is or will be a party. The execution and delivery of this Agreement and such other agreements and documents by Company and the consummation by Company of the transactions contemplated hereby has been duly authorized by the Company and its board of directors, and no other action on the part of the Company is necessary to authorize the transactions contemplated hereby. This Agreement has been duly executed and delivered by Company and constitutes the valid and binding obligation of Company, enforceable in accordance with its terms.


6.5

No Violation .  The execution, delivery and performance of this Agreement and the other agreements and documents contemplated hereby by the Company and the consummation of the transactions contemplated hereby will not (i) violate any provision of the certificates of incorporation, bylaws or other governing documents of the Company, (ii) violate any Laws by which the Company or any of its properties or assets are bound, or (iii) result in a violation or breach of, or constitute a default under, or result in the creation of any Lien upon, or create any rights of termination, cancellation or acceleration in any Person with respect to any Contract to which the Company is a party.


6.6 Board Consents; Shareholder Approvals .  


(a)

Shareholder Approvals . If so required by the NRS, the Company shall have obtained the affirmative vote of a majority of the outstanding shares of Company’s Common Stock in favor of the adoption of this Agreement and the Transaction Documents by written consent in accordance with the applicable provisions of the NRS.


(b)

Board Approval . On or before the Signing Date, the Company shall have approved, through a written resolution of the Board of Directors of Company in accordance with the NRS, this Agreement and each of the Transaction Documents and shall authorize its officers to execute, deliver and consummate each of the transactions under each of the Transaction Documents.


6.7 Compliance with Laws .  The Company and its ownership and operation of its business are in compliance with all applicable Laws in all material respects.  The Company has no Knowledge of any changes to its business nor in any regulations, licensing requirements or orders to which the Company or any of the Company’s Employees (because of their activities on behalf of their employer) are subject that would have a Material Adverse Effect on the Company.


6.8   Employees; Employee Relations .


(a)

The Company is not a party to, nor bound by, the terms of any collective bargaining agreement, contract, letter of understanding (formal or informal) with any labor union or organization, and has never experienced any material labor difficulties.  There are no material



10





labor disputes existing, or to the Knowledge of Company, threatened involving, by way of example, strikes, work stoppages, slowdowns, picketing, or any other interference with work or production, or any other concerted action by Employees.  No grievance or other legal action arising out of any collective bargaining agreement or relationship exists, or to the Knowledge of Company, is threatened.  No charges or proceedings before the National Labor Relations Board, or similar agency, exist, or to the Knowledge of Company, are threatened.


(b)

No Actions or Claims exist under any Laws affecting the employment relationship, and to the Actual Knowledge of Company, no Actions or Claims are threatened under any such Laws and, to the Knowledge of Company, no facts or circumstances exist which would give rise to any such Actions or Claims.  


6.9 Absence of Certain Changes or Events .  Except as described herein, during the period from the execution of the Letter of Intent to the Closing Date:  (i) the business of the Company has been operated in the ordinary course, consistent with past practice and (ii) there has been no event, change or development which, individually or in the aggregate, has had a Material Adverse Effect on the Company.


6.10 No Insolvency or Bankruptcy .  The Company is not subject to any filed petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency.  No general assignment of property of the Company has been made for the benefit of creditors, and no receiver, master, liquidator or trustee has been applied for or appointed for the Company or any of its properties.  


6.11 Broker Fees .  No agent, advisor, broker or other Person acting on behalf of the Company or any of its Affiliates is, or will be, entitled to any commission or broker’s, advisor’s or finder’s fees from Company or the Shareholder, or from any of their respective Affiliates, in connection with any of the transactions contemplated hereby.


6.12 Availability of Documents .  Company has made available for inspection by Shareholder and its representatives true, correct, and complete copies of the certificates of incorporation, bylaws, and other organizational documents of the Company, all written agreements, arrangements, commitments, and documents of the Company as Shareholder has requested.


6.13   Financial Statements and Undisclosed Liabilities .


(a)

Financial Statements .  The Company’s financial statements are prepared in accordance with US GAAP applied on a basis consistent with prior periods (except as otherwise noted therein), and present fairly the consolidated financial position of The Company as of their respective dates of each financial statement, and the consolidated results of their operations and their cash flows for the periods presented.


 (b)

Undisclosed Liabilities .  Except (i) as reflected in the Company’s unaudited consolidated balance sheet as of September 30, 2015 attached hereto as Exhibit D of this



11





Agreement, or liabilities described in any notes thereto (or liabilities for which neither accrual nor footnote disclosure is required pursuant to US GAAP). The Company does not have any material liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by US GAAP to be set forth on any financial statement or in the notes thereto. Since the date of the Letter of Intent, the Company’s business has been conducted only in the ordinary course consistent with past practice and there has not been any change in the accounting methods, principles or practices of the Company.


6.14

Tax Matters .


(a)

Tax Returns .  The Company has not filed any state or federal Tax returns since 2012.  To the Company’s Knowledge, there are no Taxes due or owed by the Company.


(b)

Returns and Reports .  With the exception of the Company’s Tax returns as described in Section 6.14(a) of this Agreement, all Tax returns and reports required to be filed prior to the date hereof by or on behalf of the Company are true, correct and complete in all respects, have been duly and timely filed in accordance with the Code and all applicable Laws, and the income, activities, operations and transactions of the Company have been or will be properly included and correctly reflected thereon.


(c)

Payment .  With the exception of the Company’s Tax returns as described in Section 6.14(a) of this Agreement, the Company has paid all Taxes for which it is liable for payment and has paid all Tax deficiencies assessed against the Company for which it may be directly or indirectly liable as a result of any examination of Tax returns.   To the Company’s Knowledge, the Company is not, as of the date hereof, the subject of any audit or other proceeding in respect of payment of Taxes for which it may be directly or indirectly liable and no such proceeding has been threatened.


(d)

Extensions .  No agreements, waivers, or other arrangements exist providing for an extension of time or statutory periods of limitations with respect to payment by, or assessment against, the Company for any Tax for which it may be directly or indirectly liable and no written request for any such agreement, waiver or other arrangement has been made and is currently outstanding.


(e)

Proceedings .  To the Company’s Knowledge, no Actions or Claims have been asserted or are threatened against the Company in respect of any Tax for which it may be directly or indirectly liable.


(f)

Tax Liens .  To the Company’s Knowledge, there are no Tax Liens as of the date hereof upon any of the Assets, as defined below, of the Company.


(g)

Withholding .  With the exception of the Company’s Tax returns as described in Section 6.14(a) of this Agreement, the amounts of Taxes withheld by or on behalf of the Company with respect to all compensation paid to Employees and independent contractors of the Company for all periods ending on or before the date hereof and the Closing Date have been proper and accurate in all respects, and all deposits required with respect to compensation paid to



12





such Employees have been made in compliance in all respects with the provisions of all applicable Tax Laws.

6.15   Licenses and Permits .  The Company possesses all necessary Permits to conduct the Company Business in the manner in which and in the jurisdictions and places where such business is now conducted.  To the Knowledge of the Company, there are no other such Permits which are material to the Company or the Company Business, which the Company has not obtained or which in good industry practice the Company should hold for the conduct of the Company Business.  the Company is not in default, nor has it received any written notice of, nor is there, to the Knowledge of the Company, any Claim or, to the Knowledge of the Company, threatened Claim of default, with respect to any such Permit.  Except as otherwise governed by applicable Laws, each Permit is renewable by its terms or in the ordinary course of business without the need to comply with any special qualification procedures or to pay any amounts other than routine filing fees and will not be adversely affected by the closing of the transactions contemplated by this Agreement.  No present or former Representative, shareholder or Affiliate of the Company, and no other Person, owns or has any proprietary, financial or other interest (direct or indirect) in any Permit which the Company owns, possesses, operates under or pursuant to or uses.

6.16   Compliance with Laws .  The Company and its ownership and operation of the Company Business are in compliance with all applicable Laws in all material respects.  The Company has no Knowledge of any changes to the Company Business nor in any regulations, licensing requirements or orders to which the Company or the Company’s Employees (because of their activities on behalf of their employer) is subject that would have a Material Adverse Effect on the Company.


6.17

Litigation and Related Matters .  


(a) Except as set forth in Section 6.17(b) of this Agreement, there are no Claims pending against the Company or, to the Knowledge of the Company, threatened against the Company, the Company Business, Assets, or any property or rights of the Company, at law or in equity, before or by any Governmental Authority and all worker’s compensation Claims outstanding against the Company.  the Company is not subject to any continuing order, writ, injunction or decree of any Governmental Authority applicable specifically to the Company Business or its operations, assets or Employees, nor is the Company in default with respect to any order, writ, injunction or decree of any Governmental Authority with respect to the Company Business or its assets, operations or Employees.


(b) On December 23, 2014, Star Group Communications, Inc. filed suit in the U.S. District Court for the District of New Jersey (Camden) against ForU Holdings, Inc., White Hat Holdings, Inc., Guava Healthcare, Inc., and ForU International Corporation alleging that the defendants were in breach of contract, participated in fraudulent inducement and received unjust enrichment with regard to multiple contracts into which plaintiff and defendants entered into pursuant to which the plaintiff performed advertising and marketing services for the defendants.  The complaint alleged that the defendants failed to make sufficient payments as required by the various agreements. The plaintiff sought a total judgment of $311,747.92 along with interest,



13





court costs, and attorneys’ fees.   The plaintiff filed two motions seeking default judgment against the defendants, however plaintiffs filed a motion to withdraw the motions for default judgment and the court entered an order granting such withdrawal on July 28, 2015.  However, despite this withdrawal, because of the defendant’s failure to appear in this matter previously, the court entered a default against the defendants which is a preliminary step required before a plaintiff may move for default judgment.  Since the court’s order approving the withdrawal of the motions seeking default judgment, the parties have been and continue to be in negotiations to move the case out of federal court and resolve the matter through arbitration which is required under the parties’ agreements.  


6.18    Intellectual Property .

(a)  Company Intellectual Property. the Company (i) owns and has independently developed or (ii) has the valid right or license to any and all Intellectual Property used by the Company in the Company Business (the “the Company Intellectual Property”).  the Company has good and exclusive right or title to the Company Intellectual Property, free and clear of any Liens or other restrictions of any kind (other than Permitted Liens), and has the sole and exclusive right to bring actions for infringement or unauthorized use thereof.  the Company has not granted any third party rights to or under the Company Intellectual Property nor has the Company granted any third party the right to sublicense the Company Intellectual Property.  

(b)

Infringement or Misappropriation. To the Company’s Knowledge, there is no unauthorized use, disclosure, infringement or misappropriation of the Company Intellectual Property by any third party, including without limitation any Employee or former Employee of the Company.  No party has brought any Action for infringement or misappropriation of the Company Intellectual Property or breach of any license agreement, services agreement or other agreement involving the Company Intellectual Property against the Company.  the Company has not been sued (or received any notice or any threat of being sued) in any Action which involves a Claim of infringement or misappropriation of any Intellectual Property right of any third party (“Third Party Intellectual Property”) or which contests the validity, ownership or right of the Company to exercise the Company Intellectual Property.  To the Company’s Knowledge, the Company Intellectual Property does not and will not infringe or misappropriate any Third Party Intellectual Property.

(c)

Royalties. the Company does not owe any royalties or other payments to third parties in respect of the Company Intellectual Property.

6.19 Employees; Employee Relations .

(a) The Company is not a party to, nor bound by, the terms of any collective bargaining agreement, contract, letter of understanding (formal or informal) with any labor union or organization, and has ever experienced any material labor difficulties.  There are no material labor disputes existing, or to the Knowledge of the Company, threatened involving, by way of example, strikes, work stoppages, slowdowns, picketing, or any other interference with work or production, or any other concerted action by Employees.  No grievance or other legal action arising out of any collective bargaining agreement or relationship exists, or to the Knowledge of the Company, is threatened.  No charges or proceedings before the National Labor Relations



14





Board, or similar agency, exist, or to the Knowledge of the Company, are threatened.

(b)  No Actions or Claims exist under any Laws affecting the employment relationship, and to the Actual Knowledge of the Company. No Actions or Claims are threatened under any such Laws and, to the Knowledge of the Company, no facts or circumstances exist which would give rise to any such Actions or Claims.  

6.20   Insurance .  As of the date of this Agreement, the Company has no policies and contracts for fire, casualty, liability and other forms of insurance maintained by, or for the benefit of, the Company.

6.21 Absence of Certain Changes or Events .  Except as described herein, during the period from the execution of the Letter of Intent to the Closing Date: (i) the Company Business has been operated in the ordinary course, consistent with past practice and (ii) there has been no event, change or development which, individually or in the aggregate, has had a Material Adverse Effect on the Company.

6.22 No Insolvency or Bankruptcy .  The Company is not subject to any filed petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency.  No general assignment of property of the Company has been made for the benefit of creditors, and no receiver, master, liquidator or trustee has been applied for or appointed for the Company or any of its properties.


6.23 Disclosure .  To the Knowledge of Company, there is no fact (excluding facts with respect to general business, economic or political conditions and facts that are publicly known) which materially and adversely affects the business, assets, properties, operations, prospects, condition (financial or otherwise), results of operations or liabilities of the Company, that has not been set forth or disclosed in this Agreement.


ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF

180


7.1 Representation and Warranties .  To induce the Company to enter into and perform this Agreement, 180 hereby represents and warrants that, each of the representations, warranties and statements in the following paragraphs of this Article VII is true and correct as of the Signing Date and, to the Knowledge of 180, as of the Closing Date:


7.2 Existence and Good Standing .  180 is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and as currently contemplated to be conducted.


7.3 Capitalization .  The authorized capital stock and issued and outstanding capital stock of 180 are as



15





follows:____________________________________________________________________________________________________________________________________________________________.  All issued and outstanding stock of 180 has been duly authorized, validly issued and is fully paid and nonassessable and none of such capital stock, was issued in violation of any preemptive or preferential right.  There are no (i) outstanding conversion or exchange rights, subscriptions, options, warrants or other arrangements or commitments obligating 180 with regard to any capital stock or other securities of 180, (ii) outstanding or authorized stock appreciation, or similar rights with respect to 180, or (iii) agreements, written or oral, relating to the acquisition, disposition, voting or registration under applicable securities laws of any capital stock or other securities of 180.  


7.4 Authorization .   180 (and its Subsidiaries and Affiliates) has full power, capacity and authority to execute this Agreement and all other agreements and documents contemplated hereby to which it is or will be a party, and has obtained any required shareholder approval in accordance with the NRS in connection with this Agreement and the transactions contemplated thereby.  The execution and delivery of this Agreement and such other agreements and documents by 180 (and its Subsidiaries and Affiliates) and the consummation by 180 (and its Subsidiaries and Affiliates) of the transactions contemplated hereby has been duly authorized by 180 and its board of directors, and no other action on the part of 180 is necessary to authorize the transactions contemplated hereby, subject to receipt of any required shareholder approval in accordance with the NRS, and will not render this Agreement invalid, void or unenforceable in any material respect.  This Agreement has been duly executed and delivered by 180 and constitutes the valid and binding obligation of 180, enforceable in accordance with its terms.


7.5 Financial Statements and Undisclosed Liabilities .


(a)

Financial Statements .  180’s financial statements are prepared in accordance with GAAP applied on a basis consistent with prior periods (except as otherwise noted therein), and present fairly the consolidated financial position of 180 as of their respective dates of each financial statement, and the consolidated results of their operations and their cash flows for the periods presented.


 (b)

Undisclosed Liabilities .  Except (i) as reflected in 180’s unaudited consolidated balance sheet as of May 31, 2015 which shall be provided by 180 to the Company as a closing condition pursuant to Article XIII Section 13.2(i) of this Agreement, and shall be attached hereto as Exhibit C , or liabilities described in any notes thereto (or liabilities for which neither accrual nor footnote disclosure is required pursuant to GAAP), 180 does not have any material liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on any financial statement or in the notes thereto. Since the date of the Letter of Intent, the business (the “180 Business”) has been conducted only in the ordinary course consistent with past practice and there has not been any change in the accounting methods, principles or practices of 180.


7.6   No Violation .  The execution, delivery and performance of this Agreement and the other agreements and documents contemplated hereby by 180 and its Subsidiaries and Affiliates) and the consummation of the transactions contemplated hereby will not (i) violate any provision



16





of the certificate of incorporation, bylaws or other governing documents of 180, (ii) violate any Laws by which 180 or any of its properties or assets are bound, or (iii) result in a violation or breach of, or constitute a default under, or result in the creation of any Lien upon, or create any rights of termination, cancellation or acceleration in any Person with respect to any Contract to which 180 is a party or by which the Assets, as defined below, are bound.


7.7 Board Consents; Shareholder Approvals .  


(a)

Shareholder Approvals . If so required by the NRS, 180 shall have obtained the affirmative vote of a majority of the outstanding shares of 180 in favor of the adoption of this Agreement and the Transaction Documents by written consent in accordance with NRS.


(b)

Board Approval . If so required by the NRS, on or before the Signing Date, 180 shall have approved, through a written resolution of its Board of Directors of Company in accordance with the NRS, this Agreement and each of the Transaction Documents and shall authorize its officers to execute, deliver and consummate each of the transactions under each of the Transaction Documents.


7.8 Tax Matters .


(a)

Returns and Reports .  All Tax returns and reports required to be filed prior to the date hereof by or on behalf of 180 are true, correct and complete in all respects, have been duly and timely filed in accordance with the Code and all applicable Laws and such returns and reports required to be filed on or before the Closing Date will be, or have been, duly and timely filed or extensions of time within which to file such returns will have been obtained, and the income, activities, operations and transactions of 180 have been or will be properly included and correctly reflected thereon.


(b)

Payment .  180 has paid all Taxes for which it is liable for payment.  All Tax deficiencies assessed against 180 for which it may be directly or indirectly liable as a result of any examination of Tax returns of it has been paid.   180 is not, as of the date hereof, the subject of any audit or other proceeding in respect of payment of Taxes for which it may be directly or indirectly liable and no such proceeding has been threatened.


(c)

Extensions .  No agreements, waivers, or other arrangements exist providing for an extension of time or statutory periods of limitations with respect to payment by, or assessment against, 180 for any Tax for which it may be directly or indirectly liable and no written request for any such agreement, waiver or other arrangement has been made and is currently outstanding.


(d)

Proceedings .  No Actions or Claims have been asserted or are threatened against 180 in respect of any Tax for which it may be directly or indirectly liable.


(e)

Tax Liens .  There are no Tax Liens as of the date hereof upon any of the Assets, as defined below, of 180.


(f)

Withholding .  The amounts of Taxes withheld by or on behalf of 180 with respect



17





to all compensation paid to Employees and independent contractors of 180 for all periods ending on or before the date hereof and the Closing Date have been (or will be, as the case may be) proper and accurate in all respects, and all deposits required with respect to compensation paid to such Employees have been (or will be) made in compliance in all respects with the provisions of all applicable Tax Laws.


7.9       Real Property, Personal Property and Assets .


(a)

Assets .   At the Closing (as defined herein), all of the assets of 180 as well as assets that are acquired by 180 after the Signing Date or otherwise owned by 180 at the Closing Date (collectively, the “Assets”), are clear of all Liens, any security interests, mortgages, or other encumbrance other than those liens listed in a signed writing provided by 180 to the Company prior to the Signing Date of this Agreement, which shall be deemed as the “Permitted Liens.”


(b)

Real Property .

 

(i)

180 has good and valid title to all of its respective Owned Real Property, in each case free and clear of all Liens except Permitted Liens.


(ii)

Each Owned Real Property and Leased Real Property and each of the Improvements thereon (collectively, the “180 Real Property”), is in good operating condition and repair, ordinary wear and tear excepted, and is suited for the operation of the180 Business as presently conducted and as presently proposed to be conducted.  There is no condition or defect of the 180 Real Property thereon that could materially affect their use or operation in the 180 Business. 180 enjoys peaceful and undisturbed possession of all 180 Real Property.  No options have been granted by 180 to others to purchase, lease or otherwise acquire any interest in any 180 Real Property or any part thereof.  180 has the exclusive right of possession of all 180 Real Property.  


(iii)

To the Knowledge of 180, all aspects of the 180 Real Property and the present use, occupancy and operation thereof are in compliance, in all material respects, with all Laws and private restrictive covenants of record, and there has not been any proposed change thereto that would affect any of the 180 Real Property or its use, occupancy or operation.  180 has not received any written or oral communications alleging any conflict or dispute relating to any 180 Real Property or the activities thereon.  To the Knowledge of 180, no portion of the 180 Real Property is subject to any classification, designation or preliminary determination of any Government Authority or pursuant to any Law that would restrict its use, development, occupancy or operation in connection with the 180 Business.  Neither 180 nor any other Person have caused any work or Improvements to be performed upon or made to any of 180 Real Property for which there remains outstanding any payment obligation that would or might serve as the basis for any Lien in favor of the Person who performed the work.


(iv)

All requisite certificates of occupancy and other permits and approvals required to be obtained by 180 with respect to 180 Real Property and the use, occupancy and operation thereof have been obtained and paid for and are currently in effect and allow 180 to operate the 180 Business as presently conducted and as presently proposed to be conducted.



18






(c)

Personal Property .  180 owns all of its respective Inventory, Equipment and other personal property (both tangible and intangible) and all other personal property owned by 180 on the Closing Date, free and clear of any Lien, except for Permitted Liens.  Such equipment and other personal property are usable in the ordinary course of business and conform in all material respects to all applicable Laws relating to their use and operation as they are currently used in the conduct of the 180 Business and constitute all of the assets necessary to the operation of the 180 Business as currently conducted


(d)

Sufficiency of Assets .  The Assets constitute all of the assets, properties, licenses, rights, Permits and Contracts that are being used in and that are necessary or desirable for the operation of the 180 Business as presently conducted and as presently proposed to be conducted.


(e)

Ownership of Assets .  Notwithstanding anything to the contrary herein, no other party than 180 owns or has any interest in the Assets, the 180 Real Property, the Intellectual Property, as defined herein, and any other assets or properties whatsoever owned by 180 on the Closing Date.


7.10 Licenses and Permits .  180 possesses all necessary Permits to conduct the 180 Business in the manner in which and in the jurisdictions and places where such business is now conducted.  To the Knowledge of 180, there are no other such Permits which are material to 180 or the 180 Business, which 180 has not obtained or which in good industry practice 180 should hold for the conduct of the 180 Business.  180 is not in default, nor has it received any written notice of, nor is there, to the Knowledge of 180, any Claim or, to the Knowledge of 180,  threatened Claim of default, with respect to any such Permit.  Except as otherwise governed by applicable Laws, each Permit is renewable by its terms or in the ordinary course of business without the need to comply with any special qualification procedures or to pay any amounts other than routine filing fees and will not be adversely affected by the closing of the transactions contemplated by this Agreement.  No present or former Representative, shareholder or Affiliate of 180, and no other Person, owns or has any proprietary, financial or other interest (direct or indirect) in any Permit which 180 owns, possesses, operates under or pursuant to or uses.


7.11 Compliance with Laws .  180 and its ownership and operation of the 180 Business is in compliance with all applicable Laws in all material respects.  180 has no Knowledge of any changes to the180 Business nor in any regulations, licensing requirements or orders to which 180 or 180’s Employees (because of their activities on behalf of their employer) is subject that would have a Material Adverse Effect on 180.


7.12 Litigation and Related Matters .  There are no Claims pending against 180 or, to the Knowledge of 180, threatened against 180, the 180 Business, Assets, or any property or rights of 180, at law or in equity, before or by any Governmental Authority and (b) all worker’s compensation Claims outstanding against 180.  180 is not subject to any continuing order, writ, injunction or decree of any Governmental Authority applicable specifically to the 180 Business or its operations, assets or Employees, nor is 180 in default with respect to any order, writ, injunction or decree of any Governmental Authority with respect to the 180 Business or its assets, operations or Employees.



19






7.13 Intellectual Property .


(a) 180 Intellectual Property. 180 (i) owns and has independently developed or (ii) has the valid right or license to any and all Intellectual Property used by 180 in the 180 Business (the “180 Intellectual Property”).  180 has good and exclusive right or title to the 180 Intellectual Property, free and clear of any Liens or other restrictions of any kind (other than Permitted Liens), and has the sole and exclusive right to bring actions for infringement or unauthorized use thereof.  180 has not granted any third party rights to or under the 180 Intellectual Property nor has 180 granted any third party the right to sublicense 180 Intellectual Property.  


(b)

Infringement or Misappropriation . To 180’s Knowledge, there is no unauthorized use, disclosure, infringement or misappropriation of the 180 Intellectual Property by any third party, including without limitation any Employee or former Employee of 180.  No party has brought any Action for infringement or misappropriation of the 180 Intellectual Property or breach of any license agreement, services agreement or other agreement involving the 180 Intellectual Property against 180.  180 has not been sued (or received any notice or any threat of being sued) in any Action which involves a Claim of infringement or misappropriation of any Intellectual Property right of any third party (“Third Party Intellectual Property”) or which contests the validity, ownership or right of 180 to exercise the 180 Intellectual Property.  To 180’s Knowledge, the 180 Intellectual Property does not and will not infringe or misappropriate any Third Party Intellectual Property.


(c)

Royalties . 180 does not owe any royalties or other payments to third parties in respect of the 180 Intellectual Property.


(d)

Protection of Intellectual Property .  180 has implemented commercially reasonable steps in the physical and electronic protection of the 180 Intellectual Property from unauthorized disclosure, use or modification.


7.14 Employees; Employee Relations .


(a) 180 is not a party to, nor bound by, the terms of any collective bargaining agreement, contract, letter of understanding (formal or informal) with any labor union or organization, and has ever experienced any material labor difficulties.  There are no material labor disputes existing, or to the Knowledge of 180, threatened involving, by way of example, strikes, work stoppages, slowdowns, picketing, or any other interference with work or production, or any other concerted action by Employees.  No grievance or other legal action arising out of any collective bargaining agreement or relationship exists, or to the Knowledge of 180, is threatened.  No charges or proceedings before the National Labor Relations Board, or similar agency, exist, or to the Knowledge of 180, are threatened.


(b)  No Actions or Claims exist under any Laws affecting the employment relationship, and to the Actual Knowledge of 180. No Actions or Claims are threatened under any such Laws and, to the Knowledge of 180, no facts or circumstances exist which would give rise to any such Actions or Claims.  



20







7.15   Insurance .  As of the date of this Agreement, 180 has no policies and contracts for fire, casualty, liability and other forms of insurance maintained by, or for the benefit of, 180.


7.16 Absence of Certain Changes or Events .  Except as described herein, during the period from the execution of the Letter of Intent to the Closing Date:  (i) the 180 Business has been operated in the ordinary course, consistent with past practice and (ii) there has been no event, change or development which, individually or in the aggregate, has had a Material Adverse Effect on 180.


7.17 No Insolvency or Bankruptcy .  180 is not subject to any filed petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency.  No general assignment of property of 180 has been made for the benefit of creditors, and no receiver, master, liquidator or trustee has been applied for or appointed for 180 or any of its properties.

 

7.18 Broker Fees .  No agent, advisor, broker or other Person acting on behalf of 180 or any of its Affiliates is, or will be, entitled to any commission or broker’s, advisor’s or finder’s fees from 180 or the Shareholder, or from any of their respective Affiliates, in connection with any of the transactions contemplated hereby.


7.19 Availability of Documents .  180 has made available for inspection by the Company and its representatives true, correct, and complete copies of the certificates of incorporation, bylaws, certificates of formation, limited liability 180 operating agreements and other organizational documents of 180, all written agreements, arrangements, commitments, and documents of 180 as the Company has requested.


7.20 Company’s SEC Filings .  180 understands and acknowledges that the Company is not current in its reporting obligations under the Exchange Act of 1934, as amended (the “Exchange Act”) and the Company is not in compliance with the reporting requirements of Rule 144(c) and that therefore Rule 144 is currently unavailable for the resale of any securities of the Company; and that Rule 144 will remain unavailable until at least one year has elapsed from the time the Company files “Form 10 information” (as such term is defined in Rule 144(i)(3)) with the SEC.  



7.21 Disclosure .  To the Knowledge of 180, there is no fact (excluding facts with respect to general business, economic or political conditions and facts that are publicly known) which materially and adversely affects the business, assets, properties, operations, prospects, condition (financial or otherwise), results of operations or liabilities of 180, that has not been set forth or disclosed in this Agreement.


7.22 Use of Proceeds .  180 hereby acknowledges receipt of the Advances from the Company and hereby represents and warrants that the advances were utilized solely for bona fide 180 business expenses (including, without limitation, its development of the Youlab Global



21





brand and for wages, travel, software development, inventory etc., related thereto).



ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER

  8.1   Authorization .  Shareholder represents and warrants to Company as follows:


(a) The Shareholder has the power, capacity and authority to execute and deliver this Agreement and all other agreements and documents contemplated hereby.  The execution and delivery of this Agreement and such other agreements and documents by the Shareholder and the consummation by the Shareholder of the transactions contemplated hereby have been duly authorized by the Shareholder and no other action on the part of Shareholder is necessary to authorize the transactions contemplated hereby.  


(b) This Agreement has been duly executed and delivered by the Shareholder and constitutes the valid and binding obligation of the Shareholder, enforceable in accordance with its terms.


8.2 No Violation .  The execution and delivery of this Agreement and the other agreements and documents contemplated hereby by the Shareholder and the consummation of the transactions contemplated hereby will not violate any other binding legal obligation to which the Shareholder is subject.


8.3   Consents .  No consent, approval or other authorization of any Governmental Authority or third party is required as a result of or in connection with the execution and delivery of this Agreement and the other agreements and documents to be executed by the Shareholder or the consummation by the Shareholder of the transactions contemplated hereby.


8.4 Broker Fees .  No agent, advisor, broker, person or firm acting on behalf of Shareholder is, or will be, entitled to any commission or broker’s, advisor’s or finder’s fees from any of the parties hereto, or from any of their respective Affiliates in connection with any of the transactions contemplated hereby.  


8.5 Company’s SEC Filings .  The Shareholder understands and acknowledges that the Company is not current in its reporting obligations under Exchange Act and the Company is not in compliance with the reporting requirements of Rule 144(c) and that therefore Rule 144 is currently unavailable for the resale of any securities of the Company; and that Rule 144 will remain unavailable until at least one year has elapsed from the time the Company files “Form 10 information” (as such term is defined in Rule 144(i)(3)) with the SEC. 



8.6 Use of Proceeds .  The Shareholder hereby acknowledges receipt by 180 of the Advances from the Company and hereby represents and warrants that the advances were utilized solely for bona fide 180 business expenses (including, without limitation, its development of the Youlab Global brand and for wages, travel, software development, inventory etc., related



22





thereto).

 


ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF JOHN DEVRIES

9.1 Broker Fees .  No agent, advisor, broker, person or firm acting on behalf of John is, or will be, entitled to any commission or broker’s, advisor’s or finder’s fees from any of the parties hereto, or from any of their respective Affiliates in connection with any of the transactions contemplated hereby.  


9.2 Company’s SEC Filings .  John understands and acknowledges that the Company is not current in its reporting obligations under the Exchange Act and the Company is not in compliance with the reporting requirements of Rule 144(c) and that therefore Rule 144 is currently unavailable for the resale of any securities of the Company; and that Rule 144 will remain unavailable until at least one year has elapsed from the time the Company files “Form 10 information” (as such term is defined in Rule 144(i)(3)) with the SEC.  


9.3 Use of Proceeds .  John hereby acknowledges receipt by 180 of the Advances from the Company and hereby represents and warrants that the advances were utilized solely for bona fide 180 business expenses (including, without limitation, its development of the Youlab Global brand and for wages, travel, software development, inventory etc., related thereto).



ARTICLE X

180 BOARD AND CEO



10.1

Board of Directors.  On the Closing Date, the Company shall set the size of the 180 Board of Directors (the “ 180 Board ”) to be three (3) members and appoint Gil Peter and John to the 180 Board.  John and Gil Peter shall then, in good faith, agree on a third person whom shall then be appointed as the third member of the 180 Board (the “ Third Member ”).  Such Third Member may not be removed without John’s written agreement and in the event such members resigns, John and Gil Peter shall agree on a replacement, in good faith.    


10.2

CEO.  On the Closing Date the 180 Board shall appoint John as 180’s Chief Executive Officer and, as such, John shall have full operational control of the Company and its day to day operations and shall have the duties and functions that are generally associated with the position of Chief Executive Officer.  


10.3

Voting Agreement .  The Company agrees that, without the consent of John, it shall not increase the number of members of the 180 Board.  In addition, the Company shall vote, at any meeting of the shareholders of 180, or pursuant to any consent resolution in lieu of a meeting, consistently with the provisions of this Article X, including voting for John, Gil Peter and the Third Member annually to be the sole members of the 180 Board.  The provisions of



23





Article X of this Agreement are intended to be an agreement contemplated by NRS 78.365(3) and John is an intended third party beneficiary of the agreements of the Company under this Article X.  


ARTICLE XI
POST CLOSING COVENANTS OF THE PARTIES

11.1 SEC Reports .  


On or before the date is nine (9) months from the Signing Date, the Company shall make such filings as necessary to be current in its reporting obligations under the Exchange Act (including the filing of the Tax returns as described in Section 6.14(a) of this Agreement), which may include, if permitted by the SEC, a comprehensive Form 10-K for the fiscal years ending, December 31, 2013 through 2014 and subsequent periods (the “ Qualification Date ”).



11.2 Investigations .  180 and the Shareholder shall cause 180 to, provide to the Company and the Company shall similarly provide to 180 or the Shareholder and its representatives and agents such access to the books and records of 180 or the Company and furnish to Shareholder or the Company and its representatives and agents such financial and operating data and other information with respect to the 180 Business and the properties of 180 or the Company as they may reasonably request from time to time.   


11.3 Employee  Bonuses .   180 hereby covenants and agrees that, it will not pay or permit to be paid to any Employees or directors of 180 any bonuses otherwise payable upon a change of control of 180 or termination of employment or engagement.


11.4 Public Announcements and Disclosure .  The Company will notify the Shareholder one Business Day in advance prior to making any required press release or public announcement with respect to the transactions contemplated by this Agreement.  Without the prior written consent of the other party (which consent shall not be unreasonably withheld or conditioned, and the request for which shall be timely responded to), neither the Shareholder, 180 nor the Company, at any time make, and each will direct its Representatives not to make, directly or indirectly, any public comment, statement, or communication with respect to, or otherwise disclose or permit the disclosure of the existence of discussions regarding, the transactions contemplated by this Agreement or any of the terms of this Agreement or any other agreement among the parties (including without limitation those of the Letter of Intent).


11.5 Cooperation by Shareholder .  The Shareholder, and his representatives and assigns, hereby agree to cooperate in and to take any such necessary actions as required to effect the Share Exchange and any other transactions contemplated by this Agreement.



11.6

Additional Investment .

Within forty five (45) days of the Signing Date, ForU shall make available to 180 an additional $150,000 for use as working capital in the 180 business (the “Additional Investment” ).



24






11.7

  Post-Closing Covenants of John.


 (a)  John hereby covenants and agrees as follows:


(i)

Trade Secrets .

John acknowledges that his continuing position with Company is one of trust and confidence. John  further understands and acknowledges that, during the course of John 's duties with Company, John has been and will be entrusted with access to certain confidential information, specialized knowledge and trade secrets which belong to Company, or its subsidiaries, including, but not limited to, their methods of operation and developing customer base, its manner of cultivating customer relations, its practices and preferences, current and future market strategies, formulas, patterns, patents, devices, secret inventions, processes, compilations of information, records, and customer lists, all of which are regularly used in the operation of their business and which John acknowledges have been acquired, learned and developed by them only through the expenditure of substantial sums of money, time and effort, which are not readily ascertainable, and which are discoverable only with substantial effort, and which thus are the confidential and the exclusive property of the Company and its subsidiaries (hereinafter “Trade Secrets”). John covenants and agrees to use his best efforts and utmost diligence to protect those Trade Secrets from disclosure to third parties.  John further acknowledges that, absent the protections afforded Company and its subsidiaries in this Section 11.7(a), John would not be entrusted with any of such Trade Secrets. Accordingly, John agrees and covenants (which agreement and covenant shall survive the termination of this Agreement or John’s resignation regardless of the reason) as follows:  


(a) Disparagement. John will at no time take any action or make any statement that will disparage or discredit Company, any of its subsidiaries or their products or services; and


(b) Disclosure.  During the time that John is working for the Company and for thirty six (36) months immediately following John’s resignation or termination, John will not disclose or reveal to any person, firm or corporation other than in connection with the business of Company and its subsidiaries or as may be required by law, any Trade Secret used or useable by Company or any of its subsidiaries, divisions or affiliates (collectively, the “Companies”) in connection with their respective businesses, known to John  as a result of his employment by Company, or other relationship with the Company, and which is not otherwise publicly available. John further agrees that during the period he is employed by the Company and at all times thereafter, he will keep confidential and not disclose or reveal to any person, firm or corporation other than in connection with the business of the Companies or as may be required by applicable law, any information received by him during the course of his employment with regard to the financial, business, or other affairs of the Company, their respective officers, directors, customers or suppliers which is not publicly available; and


(c) Return of Information.   Upon the termination of John 's employment with Company or John’s resignation from same, John  will return to Company all documents, customer lists, customer information, product samples, presentation materials, drawing specifications, equipment and other materials relating to the business of any of the Companies, which John hereby acknowledges are the sole and exclusive property of the Companies or any



25





one of them.  Upon termination of John ’s employment by the Company or John ’s resignation from the Company, John shall not take any document, data, or other material of any nature containing or pertaining to the proprietary information of the Company.


(ii) Prohibitions on Solicitation.

During the time John is working with or for the Company and, for a period of two (2) years immediately following his resignation or termination, John will not:


(a) solicit or accept competing business from any customer of any of the Companies or any person or entity known by John  to be or have been, during the preceding twelve (12) months, a customer or prospective customer of any of the Companies without the prior written consent of the Company; or


(b) encourage, request or advise any such customer or prospective customer of any of the Companies to withdraw or cancel any of their business from or with any of the Companies; or


(c) conspire with any person employed by any of the Companies with respect to any of the matters covered by this Section 11.7(ii); or


(d) encourage, induce or solicit any person employed by any of the Companies to facilitate John's violation of the covenants contained in this 11.7(ii); or

 

(e) assist any entity to solicit the employment of any employee of any of the Companies; or


(f) employ or hire any employee of any of the Companies, or solicit or induce any such person to join John as a partner, investor or otherwise encourage or induce them to terminate their employment with any of the Companies; however, John may solicit any employee, agent or independent contractor who voluntarily terminates his or her employment with the Company after a period one year has elapsed since the termination date of such employee, agent or independent contractor.


(g)  John  expressly acknowledges that all of the provisions of this Section 11.7(ii) of this Agreement have been bargained for and John 's agreement hereto is an integral part of this Agreement, further, John acknowledges and agrees that a violation of any one of the covenants contained in this Section 11.7(a) shall cause irreparable injury to Company, that the remedy at law for such a violation would be inadequate and that Company shall thus be entitled to temporary injunctive relief to enforce that covenant until such time that a court of competent jurisdiction either (i) grants or denies permanent injunctive relief or (ii) awards other equitable remedy(s) as it sees fit.  None of the foregoing shall be deemed a waiver of any and all rights and remedies the Company may have under applicable law.  


 (iii) Noncompetition .     John covenants that John will not, directly or indirectly, during the term of John’s employment with the Company and for a period of two (2) years thereafter (the “Covenant Period”), render services or advice to any network marketing business whose



26





products or activities compete in the Territory (as defined below), directly or indirectly, with any products or services of the Company as of the time of John ’s termination or resignation. John agrees that this covenant is reasonable with respect to its duration, geographical area and scope. For purposes hereof, “Territory” shall mean any county of any state of the United States of America, including without limitation any county in the State of Nevada, and any international jurisdictions in which the Company is doing business at the time of John’s termination or resignation. John will, for the Covenant Period, within ten days after accepting any employment, advise the Company of the identity of any employer of John. The Company may serve notice upon each such employer that John is bound by this Agreement and furnish each such employer with a copy of this Agreement or relevant portions thereof, John additionally covenants not to, during the Covenant Period,  compete, or participate as a shareholder, director, officer, partner (limited or general), trustee, holder of a beneficial interest, employee, agent of or representative in any business competing directly with the Companies without the prior written consent of Company, which may be withheld in Company’s sole discretion; provided, however, that nothing contained herein shall be construed to limit or prevent the purchase or beneficial ownership by John of less than five percent of any security registered under Section 12 or 15 of the Securities Exchange Act of 1934.


 

(iv)

Enforcement . It is the intent of the Parties that the restrictive covenants contained in this Section 11.7 are severable and separate and the unenforceability of any individual provision shall not affect the enforceability of any other. If any covenant in this Section 11.7 is held to be unreasonable, arbitrary, or against public policy, such covenant will be considered to be divisible with respect to scope, time, and geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of competent jurisdiction may determine to be reasonable, not arbitrary, and not against public policy, will be effective, binding and enforceable against John.


(v)

Survival of Obligations . John agrees that the terms of this Section 11.7

shall survive the term of this Agreement and the termination of John D’s employment by the Company or John’s resignation from the Company.




ARTICLE XII

ADVANCES


12.1   Advances .  Prior to the Signing Date the Company has made advances to 180 of $1,850,000 (the “Advances” ).   Upon the execution of this Agreement, the Advances shall be applied as part of the purchase price for the Shares.


ARTICLE XIII
INTENTIONALLY OMITTED


ARTICLE XIV
INTENTIONALLY OMITTED



27





 


ARTICLE XV

INDEMNIFICATION


           15.1 Obligation of Company to Indemnify Shareholder .  Company hereby agrees to indemnify and hold harmless the Shareholder, 180 and its officers and executives against, against and from in respect of any and all Losses suffered, sustained, incurred or required to be paid by any of them by reason of:


          (a)  any legal actions arising from any activities involving FUI which may occur prior to the Closing Date from; and

 

          (b) any representation or warranty made by Company in or pursuant to this Agreement or any of the other Transaction Documents being untrue or incorrect in any respect; any failure by Company to observe or perform its covenants and agreements set forth in this Agreement or any other agreement or document executed by them in connection with the transactions contemplated hereby.


15.2 Obligation of Shareholder to Indemnify Company .   Shareholder agrees to indemnify and hold harmless Company and its Representatives from, against, for and in respect of any all Losses suffered, sustained, incurred or required to be paid by any of them by reason of:


(a)

any representation or warranty made by Shareholder in or pursuant to this Agreement being untrue or incorrect in any respect; and


(b)

any failure by Shareholder to observe or perform its covenants and agreements set forth in this Agreement or any other agreement or document executed by it in connection with the transactions contemplated hereby.



15.3  Claim Notice .  


(a)

Except to the extent set forth in the next sentence, a party will not have any liability under the indemnity provisions of this Agreement with respect to a particular matter unless (i) a written notice (the “Claim Notice”) setting forth in reasonable detail the specific nature of the Losses and the estimated amount of such Losses  (the “Claimed Amount”) has been given to the Indemnifying Party (as defined below) prior to the time that the representations, warranties, covenants or agreements which are the basis for such indemnification terminat e and, (ii) in addition, if such matter arises out of a third party suit, action, investigation, proceeding or claim, such Claim Notice is given promptly, but in any event within thirty (30) days after the Indemnified Party (as defined below) is given notice of the claim or the commencement of the suit, action, investigation or proceeding.  Notwithstanding the preceding sentence, failure of the Indemnified Party to give a Claim Notice hereunder shall not release the Indemnifying Party from its obligations under this Article XV, except to the extent the Indemnifying Party is materially prejudiced by such failure to give such Claim Notice.  



28






(b) With respect to Losses described in Section 15.1, the Company shall be the “Indemnifying Party” and Shareholder and its Representatives shall be the “Indemnified Parties”. With respect to Losses described in Section 15.2, Shareholder shall be the “Indemnifying Party” and Company and its Representatives shall be the “Indemnified Party”.


15.4 Defense of Third Party Claims .  


(a)

Upon receipt of Claim Notice of any third party suit, action, investigation, claim or proceeding for which indemnification might be claimed by an Indemnified Party, the Indemnifying Party shall be entitled to defend, contest or otherwise protect against any such suit, action, investigation, claim or proceeding at its own cost and expense, and the Indemnified Party must reasonably cooperate in any such defense or other action.  The Indemnified Party shall have the right, but not the obligation, to participate at its own expense in defense thereof by counsel of its own choosing, but the Indemnifying Party shall be entitled to control the defense unless the Indemnified Party has relieved the Indemnifying Party from liability with respect to the particular matter or the Indemnifying Party fails to assume defense of the matter.  


(b)

In the event the Indemnifying Party shall fail to defend, contest or otherwise protect in a timely manner against any such suit, action, investigation, claim or proceeding, the Indemnified Party shall have the right, but not the obligation, thereafter to defend, contest or otherwise protect against the same and make any compromise or settlement thereof and recover the entire cost thereof from the Indemnifying Party including, without limitation, reasonable attorneys’ fees, disbursements and all amounts paid as a result of such suit, action, investigation, claim or proceeding or the compromise or settlement thereof; provided , however , that the Indemnified Party must send a written notice to the Indemnifying Party of any such proposed settlement or compromise, which settlement or compromise the Indemnifying Party may reject within thirty (30) days of receipt of such notice.  Failure to reject such notice within such thirty (30) day period shall be deemed an acceptance of such settlement or compromise.  Consent of the Indemnifying Party to such proposed settlement or compromise may not be unreasonably withheld, delayed or conditioned. The Indemnified Party shall have the right to effect a settlement or compromise over the objection of the Indemnifying Party; provided, that if (i) the Indemnifying Party is contesting such claim in good faith or (ii) the Indemnifying Party has assumed the defense from the Indemnified Party, the Indemnified Party waives any right to indemnity therefor unless consent of the Indemnifying Party to such proposed settlement or compromise was unreasonably withheld, delayed or conditioned.  


(c)

If the Indemnifying Party undertakes the defense of such matters then the Indemnified Party shall not, so long as the Indemnifying Party does not abandon the defense thereof, be entitled to recover from the Indemnifying Party any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than the reasonable costs of investigation undertaken by the Indemnified Party with the prior written consent of the Indemnifying Party.


(d)

 Shareholder and the  Company, and each of their successors and assigns shall cooperate with each other in the defense of any suit, action, investigation, proceeding or claim by



29





a third party, shall keep each other informed of all settlement negotiations with third parties and the progress of any litigation and, during normal business hours, shall afford each other access to their books and records and employees relating to such suit, action, investigation, proceeding or claim and shall furnish each other all such further information that they have the right and power to furnish as may reasonably be necessary to defend such suit, action, investigation, proceeding or claim.


15.5

Claims Between Company and Shareholder .  


(a)

Company Claims Against Shareholder . In the case of a claim for indemnification hereunder which is brought by the Company as the Indemnified Party against Shareholder as the Indemnifying Party, this Section 15.5 shall apply. Upon the Claim Notice having been given to the Indemnifying Party, the Indemnifying Party shall have thirty (30) days in which to notify the Indemnified Party in writing (the “Dispute Notice”) that the claim for indemnification is in dispute, setting forth in reasonable detail the basis of such dispute.  In the event that a Dispute Notice is not given to the Indemnified Party within the required thirty (30) days, the Indemnifying Party shall be obligated to pay the Indemnified Party the Claimed Amount within sixty (60) days after the date that the Claim Notice had been given to the Indemnifying Party.  In the event that a Dispute Notice is timely given to an Indemnified Party, the parties hereto shall have thirty (30) days to resolve any such dispute.  In the event that such dispute is not resolved by such parties within such period, the parties shall have the right to pursue all available remedies to resolve such dispute.


(b)

Shareholder Claims Against Company . In the case of a claim for indemnification hereunder which is brought by Shareholder as the Indemnified Party against the Company as the Indemnifying Party, this Section 15.5(b) shall apply. Upon the Claim Notice having been given to the Indemnifying Party, the Indemnifying Party shall have thirty (30) days in which to notify the Indemnified Party in writing (the “Dispute Notice”) that the claim for indemnification is in dispute, setting forth in reasonable detail the basis of such dispute.  In the event that a Dispute Notice is not given to the Indemnified Party within the required thirty (30) days, the Indemnifying Party shall be obligated to pay the Indemnified Party the Claimed Amount within sixty (60) days after the date that the Claim Notice had been given to the Indemnifying Party.  In the event that a Dispute Notice is timely given to an Indemnified Party, the parties hereto shall have thirty (30) days to resolve any such dispute.  In the event that such dispute is not resolved by such parties within such period, the parties shall have the right to pursue all available remedies to resolve such dispute.


15.6   Company’s Knowledge is Not Waiver .  Notwithstanding any right of the Company to fully investigate the affairs of 180 and notwithstanding any knowledge of facts determined or determinable by the Company pursuant to such investigation or right of investigation, the Company has the right to rely fully upon the representations, warranties, covenants and agreements of  the Shareholder and 180 contained in this Agreement (including the schedules), or in any document delivered to the Company by 180, the Shareholder or its Representatives in connection with the transactions contemplated by this Agreement, and such knowledge (except in a qualification contained in a provision of this Agreement or a schedule



30





hereto) shall not constitute a waiver of any Claims for indemnified Losses which the Company may make under this Article XV or estop the Company from making any such Claims.  


15.7 Survival .  Notwithstanding anything to the contrary in this Agreement, the representations and warranties of each of the parties set forth in this Agreement shall survive the Closing, and such representations and warranties shall terminate on the one (1) year  anniversary of the Closing; provided , however , that any representation or warranty that is the subject of a Claim Notice delivered in good faith in compliance with the requirements of this Agreement prior to the one (1) year anniversary of the Closing shall survive with respect only to the specific matters described in such Claim Notice until the earlier to occur of (y) the date on which a final nonappealable resolution of the matter described in such Claim Notice has been reached or (z) the date on which the matter described in such Claim Notice has otherwise reached final resolution.  All covenants and agreements of each of the parties set forth in this Agreement shall survive the Closing indefinitely.


15.8 Indemnity Basket .  Notwithstanding anything to the contrary in this Agreement, no Indemnifying Party shall have any obligation to indemnify any Indemnified Party under this Article XV until and unless the aggregate amount incurred by all Indemnified Parties exceeds Fifty thousand Dollars ($50,000) in the aggregate (the “Basket” ), after which point the Indemnifying Parties will be obligated to indemnify the Indemnified Parties from and against the full amount of such Losses (including the Basket).


ARTICLE XVI
MISCELLANEOUS

16.1 Notices .


(a)

Any notice, consent, request or other communication required or provided for by this Agreement shall be in writing and shall be deemed to have been duly and properly given or served for any purpose only if (i) delivered personally (with written confirmation of receipt), (ii) sent by telecopier or email (with written confirmation of receipt), (iii) sent by registered or certified mail, return receipt requested, or (iv) sent by an internationally recognized courier service, postage and charges prepaid, in each case to the appropriate addresses, emails and telecopier numbers set forth below:


If to Shareholder:

SRD, Inc.

10624 S. Eastern Avenue

#A307

Henderson, NV 89052




And with a copy to:

Life, 180, Inc.

3132 Airway Avenue

Costa Mesa, CA 92626



31







If to the Company:     ForU Holdings, Inc.

117 S. Cook Street

#184

Barrington, IL 60010


If to John:

John deVries

175 Trilhum

Irvine, CA 92618



A party may change his or her address for the purpose of this Section 16.1 by written notice to the other parties in the manner provided for above.


(b)

All such notices, requests, consents and other communications shall be deemed to have been given (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of mailing by an internationally recognized express courier service, if sent by next day delivery providing receipt of delivery, on the second Business Day following the date of such mailing, (iii) in the case of registered or certified mailing, postage and charges prepaid, return receipt requested, on the third Business Day following the date of such mailing and (iv) in the case of telecopy or email, when received.


16.2 Entire Agreement .  This Agreement together with the other Transaction Documents constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, between the parties hereto with respect to the subject matter hereof including, but not limited to, that certain Letter of Intent, which is attached hereto as Exhibit A , and no party shall be liable or bound to the other in any manner by any representations or warranties not set forth herein or in the Earnout Agreement referenced in Article IV of this Agreement.


16.3 Successors and Assigns .  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.  Neither this Agreement nor any rights, interests, or obligations hereunder may be assigned by any party hereto without the prior written consent of all other parties hereto.


16.4 Headings .  The headings of the articles and sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.


16.5 Modification and Waiver .  Any of the terms or conditions of this Agreement may be waived in writing at any time by the party which is entitled to the benefits thereof, and this Agreement may be modified or amended by a written instrument executed by all parties hereto.  No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor



32





shall such waiver constitute a continuing waiver.


16.6 Exhibits .  All Exhibits annexed hereto are expressly made a part of this Agreement as though fully set forth herein.


16.7 Governing Law .  This Agreement shall be construed, enforced, and governed by the internal laws of the State of Nevada, without regard to its conflicts of laws principles.


16.8 Consent to Jurisdiction. Each party to this Agreement irrevocably consents and agrees that any legal action or proceeding with respect to this Agreement and any action for enforcement of any judgment in respect thereof will be brought in the federal courts located in the State of Nevada, and, by execution and delivery of this Agreement, each party to this Agreement hereby submits to and accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts and appellate courts from any appeal thereof.  Each party to this Agreement further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof in the manner set forth in Section 16.1.  Each party to this Agreement hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement brought in the courts referred to above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.  Nothing in this Section 16.8 shall be deemed to constitute a submission to jurisdiction, consent or waiver with respect to any matter not specifically referred to herein.


16.9 Invalid Provisions .  If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable, this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement.


16.10 Responsibility for Taxes .  Each party shall be responsible for any Taxes that such party may incur pursuant to the transactions contemplated hereby.


16.11 Fees and Expenses .  Each party shall pay all of its own fees and Expenses incurred by it in connection with the transactions contemplated hereby.


16.12 Confidentiality Agreement .  The terms of the Confidentiality Clause of the Letter of Intent, which is expressly incorporated herein, shall survive any termination of this Agreement.


16.13 Third Party Beneficiaries .  Except as otherwise specifically provided in herein, no Person shall be a third-party beneficiary of the representations, warranties, covenants and agreements made by any party hereto.




33





16.14 Further Assurances .  From time to time after the Closing, at the request of any other party but at the expense of the requesting party, the parties hereto shall execute and deliver any such other instruments of conveyance, assignment and transfer, and take such other action as such requesting party may reasonably request in order to consummate the transactions contemplated hereby.


16.15 Counterparts; Facsimile Signatures .  This Agreement may be executed in one or more counterparts, including by means of facsimile, electronic mail or similar means, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument.


16.16    Waiver of Jury Trial.  EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES TO THIS AGREEMENT IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.


[SIGNATURE PAGE FOLLOWS]




34





IN WITNESS WHEREOF, the parties have executed and delivered this Asset Purchase Agreement as of the date first above written.



Company:


FORU HOLDINGS, INC.


By:

/s/ Steven Grubner _________________

Name: Steven Grubner

Title: President

Date: 12/3/2015


Shareholder:


SRD, INC.


By:

/s/ Lynyon Felton __________________

Name:  Lynyon Felton

Title:

Date: 12/3/2015



180:


LIFE 180, INC.

By:

/ s / John De Vries ___________________

Name: John DeVries

Title:  President

Date: 12/3/2015



John:



/ s / John De Vries __________________   

John DeVries

Date: 12/3/2015




[SIGNATURE PAGE TO SHARE EXCHANGE AGREEMENT]








36



EMPLOYMENT AGREEMENT


This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of February 1, 2016 (the “Effective Date”), is entered into by and among ForU Holdings, Inc., a Nevada Corporation and ForU International, Inc., a Nevada Corporation (“ForU H” and “ForU I” respectively and together  the "Company"), and Diego Roca (the "Executive").


W  I  T  N  E  S  S  E  T  H:


WHEREAS, ForU I is a wholly owned subsidiary of ForU H, each of which is in the business of marketing, selling and distributing customized nutritional supplements and similar products; and


WHEREAS, the Executive has represented that he has the experience, background and expertise necessary to enable him to be the Chief Financial Officer of the Company; and


WHEREAS, based on such representation, and the Company’s reasonable due diligence, the Company wishes to employ Executive as its Chief Financial Officer, and Executive wishes to be so employed, in each case, upon the terms hereinafter set forth.


NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:


1.

Employment .  


1.1

Agreement to Employ . Effective as of the Effective Date, the Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of this Agreement, as the Chief Financial Officer of the Company.


1.2

Term . The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company, in accordance with the terms and conditions set forth herein, commencing as of the Effective Date until December 31, 2019 (the “ Term”); subject, however, to earlier termination as expressly provided herein..


2.

Position and Responsibilities .  During the term of this Agreement, the Executive shall serve as the Chief Financial Officer of the Company.  The Executive shall have the duties and functions that are generally associated with the position of Chief Financial Officer and will be responsible for such other duties as may from time to time be reasonably assigned to him by the ForU H or ForU I Chief Executive Officer and Board of Directors (the “Board”).  The Executive’s duties shall be as assigned from time-to-time by the Board, but shall include, but not be limited to, the following:  diligently perform to the best of the Executive’s ability all of the duties required in the day-to-day management and internal control and compliance of the Company as its Chief Financial Officer, prepare financial statements of the Company, review



Page:  1



and complete financial reports and filings as required by the Securities and Exchange Commissions (the “SEC”), federal and state regulations, tax authorities and any other regulatory authorities, provide a report of the Company’s financial operations, and communicate with the Company’s shareholders and investors, all of which shall be under the direction and supervision of the Executive Chairman, the Chief Executive Officer and the Board, and to perform any other matter as enumerated in the Company’s By-laws.   


3.

Performance of Duties .  During the term of this Agreement, the Executive shall devote substantially all of his working time to the performance of his responsibilities and duties hereunder and shall comply with the policies of the Company with respect to conflict of interest and business ethics from time to time in effect. For the term of this Agreement, the Executive shall not, without the prior advance notice to the Board, render services, whether or not compensated, to any other person or entity as an Executive, independe nt contractor or otherwise; provided , however , nothing contained herein shall restrict the Executive from: (i) rendering services to charitable organizations and from managing his personal investments and companies existing as of the date of this Agreement in such manner as shall not interfere with the performance by the Executive of his duties hereunder; (ii) serving as an Executive Officer or as a director on the board of directors of any other entity so long as such entity is not in a business which is competitive with that of the Company, or (iii) providing services to other entities or people so long as the Executive provides advance notice to the Board with respect to such service.  The Executive currently holds offices, executive titles and serves on the Board of Directors of the entities as provided in Exhibit A.  Executive shall continue to hold office and titles and serve on the Board of Directors for the entities.  Executive represents that (i) any duties or functions carried out by the Executive for these entities shall not interfere with the Executive’s duties of the Company; and (ii) none of the entities that the Executive currently holds office or provides services to is in direct competition with the Company or any of its subsidiaries..


4.

Compensation .  As remuneration for all services to be rendered by the Executive during the Term of this Agreement, and as consideration for complying with the covenants herein, the Company shall pay and provide to the Executive the following:


4.1

Base Salary . Executive shall receive a base salary (the “Base Salary”) as set forth below, and be included in the payroll of ForU I:  

 (a) From February 1, 2016 to December 31, 2016, Executive shall receive $150,000 per annum payable in monthly installments of $12,500 per installment, no later than the 15 th calendar day of each month;

(c) From January 1, 2017 to December 31, 2017, Executive shall receive $175,000 per annum payable in monthly installments of $14,584 per installment, no later than the 15 th calendar day of each month;

(d) From January 1, 2018 to December 31, 2018, Executive shall receive $225,000 per annum payable in monthly installments of $18,750 per installment, no later than the 15 th calendar day of each month; and



Page:  2



(e) From January 1, 2019 to December 31, 2019, Executive shall receive $250,000 per annum payable in monthly installments of $20,834 per installment, no later than the 15 th calendar day of each month.

The Board will review the Executive’s Base Salary at least once per year and may, in its discretion, increase (but not decrease) the Base Salary in accordance with the Company’s compensation policies.

4.2

Annual Bonus .  In addition to his Base Salary, the Executive shall be eligible to receive an annual cash bonus (the "Bonus") in respect of each fiscal year during the term of this Agreement on the basis of a formula or criteria calculated based on performance of Company and its financial operations, which is attached as Exhibit B.  The Bonus shall be payable to the Executive in cash as promptly as practical after the completion by the Company of an audit of its financial statements for the fiscal year to which such bonus relates.  The Bonus amount shall be recommended by the Company’s CEO (after considering the Executive’s performance, the performance of the Company and any other factors considered significant or relevant to the decision) and it shall be subject to approval by the Board.


4.3

Compensation Plans .  The Executive shall be eligible to participate in such profit-sharing, 401K, stock option, bonus and performance award programs as are made available generally to executive officers of the Company, such participation to be on a basis which is commensurate with the Executive's position with the Company.


4.4

Health Care and Other Benefits .  The Executive shall receive full family plan coverage under any health and dental insurance plans established for the Company as of the Effective Date, but in no circumstances later than April 1, 2016.  In addition to the foregoing, the Executive shall also be entitled to participate in all other benefit programs that the Company establishes and makes available to its executives to the extent the Executive’s position, tenure, salary, age, health and other qualifications make him eligible to participate, and shall be entitled to receive such perquisites as are made available generally to executive officers of the Company.


 4.5    Options .   On the Effective Date, the Executive shall be granted options (the “Options”) to purchase 150,000 shares of common stock of the Company, par value $.001 per share (“Common Stock”) at an exercise price of $.88, exercisable on or before January 31, 2021,   pursuant to the vesting schedule as determined by the Board of Directors. The Options shall have a cashless exercise feature, where in lieu of exercising the Options by payment of cash, the Executive may exercise the Options by a cashless exercise with a properly endorsed notice of exercise.


            4.6     Grant of Shares . Without limiting the foregoing, the Executive shall be granted by the Company a number of shares of ForU H Common Stock (“Incentive Shares”) as compensation for his service as its Chief Financial Officer hereunder, pursuant to the schedules as follows:




Page:  3



(a)

On or before March 1, 2016, the Company shall issue 150,000 shares of Common Stock to the Executive;


(b)

On or before January 1, 2017, the Company shall issue 150,000 shares of Common Stock to the Executive;


(c)

On or before January 1, 2018, the Company shall issue 200,000 shares of Common Stock to the Executive.


 

Executive shall be entitled to receive the Shares on an earlier date at the sole discretion of the Board.


4.7    Vacations . The Executive shall be entitled to four (4) weeks per year of paid vacation. The Executive shall take his vacation at such time or times as the Executive and the Company shall determine is mutually convenient. Any vacation not taken in one (1) year shall not accrue, provided that if vacation is not taken due to the Company’s business necessities, up to three (3) weeks’ vacation may carry over to the subsequent year.


5.

Expenses/Stipend Allowance .  The Company shall reimburse the Executive for reasonable, ordinary and necessary documented expenses such as travel, office lease, automobile, stationary, and other out-of-pocket expenses that the Executive incurs on behalf of the Company in the course of his employment hereunder in accordance with the Company’s normal policies and provisions regarding such reimbursements.  Any single expense or series of expenses in any month aggregating more than $1,000 shall require written approval.  


6.

Employment Terminations.


6.1

Termination Due to Death .  In the event the Executive's employment is terminated while this Agreement is in force by reason of death, the Executive's benefits shall be determined in accordance with the Company's retirement, survivor's benefits, insurance, and other applicable programs of the Company then in effect.  Upon the effective date of such termination, the Company's obligation under this Agreement to pay and provide to the Executive the elements of unvested pay described in Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6 shall immediately expire, except to the extent that the benefits described in Section 4.4 continue thereafter under the terms of the benefit plans and programs which apply generally to the Company's executives and except that the Executive shall receive all other rights and benefits that he is vested in pursuant to Section 4.4 and 4.6 and other plans and programs of the Company and the Board may award.  In addition, the Company shall pay to the Executive's beneficiaries, estate, or trust, as applicable, a pro rata share of any vested Based Salary or Bonus to which the Executive would have been entitled for the fiscal year in which employment termination occurs, based on the results of the Company for such fiscal year.  This pro rata Bonus amount shall be determined by multiplying the Bonus which otherwise would apply for such full fiscal year by a fraction, the numerator of which is the number of days in such fiscal year prior to the date of employment termination and the denominator of which is the total number of days in such fiscal year.



Page:  4




6.2

Termination Due to Disability .  In the event that the Executive becomes Disabled (as defined below) during the term of this Agreement and is, therefore, unable to perform his duties herein for more than one hundred eighty (180) total calendar days during any period of twelve (12) consecutive months, or in the event of the Board's reasonable expectation that the Executive's Disability will exist for more than a period of one hundred eighty (180) calendar days, the Company shall have the right to terminate the Executive's active employment as provided in this Agreement.  However, the Board shall deliver written notice to the Executive of the Company's intent to terminate for Disability at least thirty (30) calendar days prior to the effective date of such termination.  A termination for Disability shall become effective upon the end of the thirty (30) day notice period. Upon such effective date, the Company's obligation to pay and provide to the Executive the elements of pay described in Sections 4.1, 4.2, 4.3, 4.4, 4.5, and 4.6 shall immediately expire, except to the extent that the benefits described in Section 4.4 continue after Disability under the terms of the benefit plans and programs which apply generally to the Company's executives and except that the Executive shall receive all rights and benefits that he is vested in pursuant to Section 4.5 and 4.6 and other plans and programs of the Company and the Board may award. In addition, the Company shall pay to the Executive a pro rata share of his Bonus for the fiscal year in which employment termination occurs, based on the results for such fiscal year, determined as provided in Section 6.1, and may award him equity under the Company’s other equity incentive plan.


The term "Disability" shall mean, for all purposes of this Agreement, the incapacity of the Executive, due to injury, illness, disease, or bodily or mental infirmity, to engage in the performance of substantially all of the usual duties of employment with the Company as contemplated by Section 2 herein, such Disability to be determined by the Board of Directors of the Company upon receipt and in reliance on competent medical advice from one (1) or more individuals, selected by the Board, who are qualified to give such professional medical advice.


It is expressly understood that the Disability of the Executive for a period of one hundred eighty (180) calendar days or less in the aggregate during any period of twelve (12) consecutive months, in the absence of any reasonable expectation that his Disability will exist for more than such a period of time, shall not constitute a failure by his to perform his duties hereunder and shall not be deemed a breach or default and the Executive shall receive full compensation for any such period of Disability or for any other temporary illness or incapacity during the term of this Agreement.


6.3

Voluntary Termination by the Executive .  The Executive may terminate this Agreement at any time by giving the Board written notice of intent to terminate, delivered at least ninety (90) days prior to the effective date of such termination.


Upon the expiration of the ninety (90) day notice period, the termination by the Executive shall become effective.  The Company shall pay the Executive his Base Salary, at the rate then in effect as provided in Section 4.1 herein, through the effective date of termination (the “Date of Termination”), plus all other benefits to which the Executive has a vested right to at that time (for this purpose, the Executive shall not be paid any Bonus with respect to the fiscal year in



Page:  5



which voluntary termination under this Section 6.3 occurs).  The Company and the Executive shall have no further obligations under this Agreement after the effective date of such termination, except as set forth in Sections 8 or 9 hereof.


6.4

Termination by the Company for Cause. The Company may terminate Executive’s employment hereunder for Cause by delivery of written notice to Executive specifying the Cause or Causes relied upon for such termination. If The Company terminates Executive’s employment hereunder for Cause, Executive shall be entitled only to (a) Executive’s accrued and unpaid Base Salary and vacation through the Date of Termination; and (b) all other compensation and benefits that were vested through the Date of Termination, including, but not limited to, any vested and unpaid or granted and unpaid annual bonus and equity award(s) through the Date of Termination.


         For purposes of this Agreement, the term “Cause” shall mean:


(i)

Executive’s failure to perform his duties and responsibilities as set forth in Section 3 of this Agreement or as designated by the Board;

(ii)

Executive’s participation in any activity that is competitive with or injurious to the Company;

(iii)

Executive’s commission of any fraud against the Company, or unauthorized use or appropriation of any funds or properties of the Company for Executive’s personal gain;

(iv)

Executive’s conviction of a felony offense involving moral turpitude; or

(v)

Executive’s misappropriation of trade secrets or proprietary information of the Company, the Company customers, suppliers or other third parties, who have provided confidential or proprietary information to the Company pursuant to an effective confidentiality agreement with the Company;

(vi)

Executive’s violation of any material provision of a Company employee handbook.

            6.5

  Termination Without Cause .

The Company may terminate the Executive’s employment hereunder without Cause, which shall include The Company’s delivery of a written notice of termination to Executive delivered at least ninety (90) days prior to the effective date of such termination. If The Company terminates the Executive’s employment hereunder without Cause, other than due to death or Disability, the Executive shall be entitled to only the following:


6.5.1

Executive’s accrued and unpaid Base Salary through the Date of Termination; and




Page:  6



6.5.2

all other compensation and benefits that were granted through the Date of Termination, including but not limited to, any granted and unpaid annual bonus and equity award(s) through the Date of Termination. All such granted equity awards(s) that have not vested shall immediately vest upon the Date of Termination; and


6.5.3

Company shall continue or cause to be continued at the expense of Company the Executive’s health and medical insurance benefits in effect immediately prior to the Date of Termination until the earlier of: (a) one (1) year from the Date of Termination, (b) the date Executive reaches normal retirement age, (c) the date on which Executive becomes eligible for coverage under another employer’s plan, or (d) Executive’s cancellation of such coverage in writing; and


6.5.4

Executive shall be entitled to Severance Payments as set forth below:


6.5.4.1

In the event that during the Term, Company terminates Executive’s employment hereunder without Cause, Executive shall be entitled to the severance payments (the “Severance Payments”) in the amount equal to the Base Salary that he would have received for a period of one year immediately after the Date of Termination;


6.5.4.2

In the event that during the Term, Executive terminates the employment for Good Reason, as defined below in Section 6.6, Executive shall be entitled to the severance payments (the “Severance Payments”) in the amount equal to the Base Salary that he would have received for the remaining term of the Agreement after the Date of Termination;


6.5.4.3

All Severance Payments set forth in this Section 6.5.4 are subject to the following conditions: (a) Executive shall perform such reasonable duties as may be requested by Company during the period the Severance Payments set forth in this Section 6.5.4 are made; (b) Executive shall refrain from disparaging Company, Company and any of their directors, officers, employees or affiliates and Company shall refrain from denigrating Executive; and (c) Executive cooperates with Company in all reasonable requests to transition Executive’s replacement.  Subject to Executive’s compliance with the foregoing, all Severance Payments set forth in this Section 6.5.4 shall be made on regularly scheduled payroll dates and in accordance with Company’s standard payroll practices.


6.6

Termination for Good Reason .  At any time during the term of this Agreement, the Executive may terminate this Agreement for Good Reason (as defined below) by giving the Board of Directors of the Company thirty (30) calendar days written notice of intent to terminate, which notice sets forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination.  Upon the expiration of the thirty (30) day notice period, the Good Reason termination shall become effective. A termination for Good Reason shall have the same effect as a termination by the Company without Cause.  




Page:  7



“Good Reason” shall mean, without the Executive's express written consent, the occurrence of any one or more of the following:


(a)

the assignment of the Executive to duties materially inconsistent with the Executive's authorities, duties, responsibilities and status (including offices, titles, and reporting requirements) as an executive of the Company, or a reduction or alteration in the nature or status of the Executive's authorities, duties, or responsibilities from those in effect during the immediately preceding fiscal year, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Executive;


(b)

a reduction by the Company in the Executive's Base Salary as in effect on the Effective Date, as provided in Section 4.1 herein; or


(c)

the failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform this Agreement, as contemplated in Section 7 herein.


The Executive's right to terminate employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness.  The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason herein.


      7.      Change of Control . Upon a Change of Control (as hereinafter defined), the Executive shall receive all monies and compensation due for the Term of this Agreement. This Agreement will be enforceable but the duties and responsibilities may change for the Executive subject to mutual agreement between the Executive and the new ownership or the executive may exercise his termination clause and be entitled to all compensation as stated above. The Executive (or his estate) shall receive a lump sum of all amounts provided by this Agreement herein, including the Incentive Shares pursuant to Section 4.6 of this Agreement within ten (10) days from the date of  termination.


For purposes of this Agreement “Change of Control” means the occurrence of any of the following events:


(a) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power of the Company’s then outstanding voting securities or 50% or more of the fair market value of the Company;


Or


(b) The Company has sold all or substantially all of its assets to another person or entity that is not a majority-owned subsidiary of the Company.



Page:  8




Notwithstanding the preceding, the above-listed events must satisfy the requirements of Treasury Regulation Section 1.409A-3(i)(5) in order to be deemed a Change of Control.


8. Section 409A .


(a) Notwithstanding anything to the contrary contained in this Agreement, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified Executive” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20% additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six months and one day after the Executive’s separation from service, or (ii) the Executive’s death (the “Six Month Delay Rule”).


(b) For purposes of this Section 8, amounts payable under the Agreement should not be considered a deferral of compensation subject to Section 409A to the extent provided in Treasury Regulation Section 1.409A-1(b)(4) (i.e., short-term deferrals), Treasury Regulation Section 1.409A-1(b)(9) (i.e., separation pay plans, including the exception under subparagraph (iii)), and other applicable provisions of Treasury Regulations Sections 1.409A-1 through A-6.


(c) To the extent that the Six Month Delay Rule applies to payments otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of the Six Month Delay Rule, and the balance of the installments shall be payable in accordance with their original schedule.


(d) To the extent that the Six Month Delay Rule applies to the provision of benefits (including, but not limited to, life insurance and medical insurance), such benefit coverage shall nonetheless be provided to the Executive during the first six months following his separation from service (the “Six Month Period”), provided that, during such Six-Month Period, the Executive pays to the Company, on a monthly basis in advance, an amount equal to the Monthly Cost (as defined below) of such benefit coverage. The Company shall reimburse the Executive for any such payments made by the Executive in a lump sum not later than 30 days following the sixth month anniversary of the Executive’s separation from service. For purposes of this subparagraph, “Monthly Cost” means the minimum dollar amount which, if paid by the Executive on a monthly basis in advance, results in the Executive not being required to recognize any federal income tax on receipt of the benefit coverage during the Six Month Period.


(e) The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this



Page:  9



Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.


(f) The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.


9.

Non-Competition; Non-Disclosure; Non-Solicitation; Inventions .


9.1

Trade Secrets .

Executive acknowledges that his employment position with Company is one of trust and confidence. Executive further understands and acknowledges that, during the course of Executive's employment with Company, Executive will be entrusted with access to certain confidential information, specialized knowledge and trade secrets which belong to Company, or its subsidiaries, including, but not limited to, their methods of operation and developing customer base, its manner of cultivating customer relations, its practices and preferences, current and future market strategies, formulas, patterns, patents, devices, secret inventions, processes, compilations of information, records, and customer lists, all of which are regularly used in the operation of their business and which Executive acknowledges have been acquired, learned and developed by them only through the expenditure of substantial sums of money, time and effort, which are not readily ascertainable, and which are discoverable only with substantial effort, and which thus are the confidential and the exclusive property of Company and its subsidiaries (hereinafter “Trade Secrets”). Executive covenants and agrees to use his best efforts and utmost diligence to protect those Trade Secrets from disclosure to third parties.  Executive further acknowledges that, absent the protections afforded Company and its subsidiaries in this Section 9, Executive would not be entrusted with any of such Trade Secrets. Accordingly, Executive agrees and covenants (which agreement and covenant shall survive the termination of this Agreement regardless of the reason) as follows:  


9.1.1

Executive will at no time take any action or make any statement that will disparage or discredit Company, any of its subsidiaries or their products or services;


9.1.2

During the Term and for twelve (12) months immediately following the termination of such employment, Executive will not disclose or reveal to any person, firm or corporation other than in connection with the business of Company and its subsidiaries or as may be required by law, any Trade Secret used or useable by Company or any of its subsidiaries, divisions or affiliates (collectively, the “Companies”) in connection with their respective businesses, known to Executive as a result of his employment by Company, or other relationship with the Company, and which is not otherwise publicly available. Executive further agrees that during the Term of this Agreement and at all times thereafter, he will keep confidential and not disclose or reveal to any person, firm or corporation other than in connection with the business of the Companies or as may be required by applicable law, any information received by him during the course of his employment with regard to the financial, business, or other affairs of the



Page:  10



Company, their respective officers, directors, customers or suppliers which is not publicly available;


9.1.3

Upon the termination of Executive's employment with Company, Executive will return to Company all documents, customer lists, customer information, product samples, presentation materials, drawing specifications, equipment and other materials relating to the business of any of the Companies, which Executive hereby acknowledges are the sole and exclusive property of the Companies or any one of them. Nothing in this Agreement shall prohibit Executive from retaining, at all times any document relating to his personal entitlements and obligations, his rolodex, his personal correspondence files; and any additional personal property;


9.1.4

During the Term of the Agreement and, for a period of thirty (30) days immediately following the termination of the Executive's employment with Company, Executive will not: compete, or participate as a shareholder, director, officer, partner (limited or general), trustee, holder of a beneficial interest, employee, agent of or representative in any business competing directly with the Company without the prior written consent of Company, which may be withheld in Company’s sole discretion; provided , however , that nothing contained herein shall be construed to limit or prevent the purchase or beneficial ownership by Executive of less than five percent of any security registered under Section 12 or 15 of the Securities Exchange Act of 1934;

9.2

Non-Solicitation . During the Term of the Agreement and, for a period of thirty (30) days immediately following the termination of the Executive's employment with Company, Executive will not:


9.2.1

solicit or accept competing business from any customer of any of the Companies or any person or entity known by Executive to be or have been, during the preceding twelve (12) months, a customer or prospective customer of any of the Companies without the prior written consent of Company;


9.2.2

encourage, request or advise any such customer or prospective customer of any of the Companies to withdraw or cancel any of their business from or with any of the Companies.


9.2.3

 Executive will not during the period of his employment with the Company and, subject to the provisions hereof for a period of thirty (30) days immediately following the termination of Executive's employment with Company:


9.2.3.1

conspire with any person employed by any of the Companies with respect to any of the matters covered by this Section 9;


9.2.3.2

encourage, induce or solicit any person employed by any of the Companies to facilitate Executive's violation of the covenants contained in this Section 9;




Page:  11



9.2.3.3

assist any entity to solicit the employment of any Executive of any of the Companies; or


9.2.3.4

employ or hire any employee of any of the Companies, or solicit or induce any such person to join the Executive as a partner, investor or otherwise encourage or induce them to terminate their employment with any of the Companies.


9.3

Executive expressly acknowledges that all of the provisions of this Section 9 of this Agreement have been bargained for and Executive's agreement hereto is an integral part of the consideration to be rendered by the Executive which justifies the rate and extent of the compensation provided for hereunder.


9.4

Executive acknowledges and agrees that a violation of any one of the covenants contained in this Section 9 shall cause irreparable injury to Company, that the remedy at law for such a violation would be inadequate and that Company shall thus be entitled to temporary injunctive relief to enforce that covenant until such time that a court of competent jurisdiction either (i) grants or denies permanent injunctive relief or (ii) awards other equitable remedy(s) as it sees fit.


9.5

Inventions and Patents . Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in drugs, products, processes, or other things that may be made or discovered by Executive while he is in the service of the Company and all patents for the same. During the Term, Executive shall do all acts necessary or required by Company to give effect to this section and, following the Term, Executive shall do all acts reasonably necessary or required by Company to give effect to this section.  In all cases, Company shall pay all costs and fees associated with such acts by Executive.


10.

Miscellaneous .


10.1

Indemnification .  The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executive harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result of Executive’s negligence or willful misconduct.  The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’s fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law.  Such costs and expenses incurred by Executive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that Executive is not entitled to be indemnified by the Company or any subsidiary thereof. The Company will



Page:  12



provide Executive with coverage under all director’s and officer’s liability insurance policies which is has in effect during the Term, with no deductible to Executive.


10.2

Applicable Law .

Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws of the State of New York, applied without reference to principles of conflict of laws.


10.3

Amendments .

This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors or legal representatives.  


10.4

Notices .  All notices and other communications hereunder shall be in writing and shall be given by hand-delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:


If to the Executive:


Diego Roca

1 Marion Court

Old Bridge, NJ 08857

Tel: (732)536-1600



If to the Company:


ForU Holdings, Inc./ForU International, Inc.

Address:


With a copy to (which shall not constitute notice):


Ofsink, LLC

230 Park Ave, Suite 851

New York, NY 10169

Attn: Darren Ofsink

Tel: 646-627-7326


10.5

Withholding .

The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, social security and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law or regulation.


10.6

Severability .

The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.



Page:  13




10.7

Captions . The captions of this Agreement are not part of the provisions and shall have no force or effect.


10.8

Entire Agreement .

This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.


10.9

Survivorship .  The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employment hereunder to the extent necessary to the intended preservation of such rights and obligations.


10.10

Waiver .  Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.


10.11

Joint Efforts/Counterparts .

Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed more severely against any party.  This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.


[Signature Page Follows]



Page:  14



IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement as of the date first above written.



FORU HOLDINGS, INC.:                 

 

 

 

By:

/s/ Steve Grubner_______________   

            Name: Steve Grubner                                                 

Title: President

 

 

 

FORU INTERNATIONAL, INC.

 

 

 

By:

/s/ Steve Grubner_______________   

            Name: Steve Grubner                                                 

Title: President

 

 

 

EXECUTIVE:

 

/s/ Diego Roca__ _____________________

 

Diego Roca

 




Page:  15