UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 8, 2010

Commission File Number 333-161795 
 
FOREX INTERNATIONAL TRADING CORP.
(Exact name of small business issuer as specified in its charter)
 
Nevada 
27-0603137
(State or other jurisdiction of incorporation or organization) 
(I.R.S. Employer Identification No.)
 
1618 N. Fairfax Avenue, Los Angeles, California 90046
(Address of principal executive offices)
 
323-822-1750
(Issuer’s telephone number)

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 (see General Instructions A.2. below):
 

/_/ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
/_/ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

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

 
 
 

Item 1.01                      Entry Into a Material Definitive Agreement
Item 2.03                      Creation of a Direct Financial Obligation
Item 3.02                      Unregistered Sales of Equity Securities

On July 8, 2010, Forex International Trading Corp. (the "Company") issued a Convertible Promissory Note to A.T. Limited (“ATL”) in aggregate principal amounts of $500,000 (the “Forex Note”).  In consideration for the Company issuing the ATL Note, ATL issued the Company a Secured and Collateralized Promissory Note in the principle amount of $400,000 (the “ATL Note”).

The Forex Note bears interest at 10%, matures two years from the date of issuance and is convertible into our common stock, at ATL’s option, at a conversion price of $0.20 subject to adjustment.  On the 21 st trading day following each conversion, the number of shares of common stock issuable to ATL pursuant to the Forex Note shall be adjusted such that the aggregate number of shares of common stock issuable to ATL is equal to the amount converted divided by 75% of the average of the three lowest closing bid prices during the 20 trading days following delivery of the shares of common stock upon the initial conversion.  Concurrent with the conversion of the Forex Note, ATL must make a payment to the Company reducing a pro rata amount owed to the Company under theATL Note.  As of July 12, 2010, the Company is received a trading symbol (FXIT) but has not commenced trading.  Based on fixed conversion price of $0.20, the Forex Note in the aggregate amount of $500,000, excluding interest, is convertible into 2,500,000 shares of our common stock.

ATL has agreed to restrict their ability to convert the Forex Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock.

The ATL Note bears interest at the rate of 12% per annum and matures one year from the date of issuance.    No interest or principal payments are required until the maturity date, but both principal and interest may be prepaid prior to maturity date and ATL is required to pay down an amount equal to any amounts converted under the Forex Note.  The ATL Note is secured by shares of common stock of a publicly listed company on the Tel Aviv and London Stock Exchanges with an approximate market value of $400,000 (the “ATL Collateral”).  In the event that ATL defaults on the ATL Note, the Company may take possession of the ATL Collateral and, in the event that the ATL Collateral is insufficient to pay the full debt owed under the ATL Note, the Company may pursue further remedies against ATL.

The Forex Note was offered and sold to ATL in a private placement transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933 and Rule 506 promulgated thereunder. ATL is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933.

The foregoing information is a summary of each of the agreements involved in the transactions described above, is not complete, and is qualified in its entirety by reference to the full text of those agreements, each of which is attached an exhibit to this Current Report on Form 8-K.  Readers should review those agreements for a complete understanding of the terms and conditions associated with this transaction.

Item 9.01                      Financial Statements and Exhibits.
 
 
Exhibit Number   Description
     
4.1
 
Convertible Promissory Note issued by the Company to A.T. Limited dated July 8, 2010
     
4.2      Secured and Collateralized Promissory Note issued by A.T. Limited to the Company dated July 8, 2010
     
4.3     Collateral and Security Agreement by and between Forex International Trading Group and A.T. Limited dated July 7, 2010
 

              
 
 
 
 
                              
 
SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  FOREX INTERNATIONAL TRADING CORP.  
       
Date: July 12, 2010
By:
/s/ Darren Dunckel  
Los Angeles, California   Name:  Darren Dunckel  
    CEO, President, CFO, Secretary, Treasurer and Director  
       
 

                                                    
Exhibit 4.1
CONVERTIBLE PROMISSORY NOTE
 
$500,000 PLUS INTEREST DUE AND PAYABLE
 
THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.
 
FOR VALUE RECEIVED, Forex International Trading Corp. (“Borrower,” or “Obligor”), hereby promises to pay to the Lender on the Maturity Date, as defined below, the Principal Sum, as defined below, along with the Interest Rate, as defined below, according to the terms herein.

 
The “Effective Date” shall be:
 
July 8, 2010
     
The “Lender” or the “Holder” shall be:
 
A.T. Limited
     
The “Principal Sum” shall be:
 
$500,000
     
The “Consideration” shall be:
 
$400,000 in the form of the Secured and Collateralized Promissory Note (the “Secured Note”) (including the related Security and Collateral Agreement)(the “Security Agreement”)) payable by the Lender to the Borrower date as of the date hereof.
     
The “Interest Rate” shall be:
 
10% per annum.  No interest or principal payments are required until the Maturity Date, but both principal and interest may be included in conversion prior to maturity date.
     
The “Conversion Price” shall be:
 
$0.2 (Twenty cents) subject to adjustment as set forth below.
     
The “Maturity Date” is the date upon which the Principal Sum of this Note, as well as any unpaid interest shall be due and payable, and that date shall be:
 
July 8, 2012
     
The “Prepayment Terms” shall be:
 
See Section 1.2
 
 
 
 
1
 
 
ARTICLE 1 PAYMENT-RELATED PROVISIONS
 
1.1. Interest Rate. Subject to the Holder’s right to convert, interest payable on this Note will accrue interest at the Interest Rate and shall be applied to the Principal Sum.
 
1.2. Prepayment Terms. Prepayment is permitted; provided, however, the prepayment amount shall equal all amounts due and owing under this note multiplied by 1.30.
 
(a) Prepayment By Cash or Other Negotiated Form. Prepayment is permitted at any time by payment in the form of either (1) cash, or (2) other negotiated form of payment mutually agreed to in writing.
 
(b) Prepayment By Surrender of the Secured Note. Prepayment is permitted by surrender of the Secured  Note.
 
ARTICLE 2 CONVERSION RIGHTS
 
The Holder will have the right to convert the Principal Sum and accrued interest under this Note into shares of the Borrower’s Common Stock as set forth below.
 
2.1 Conversion Rights.  Subject to the terms set forth in Section 2.7, the Holder will have the right at its election from and after the Effective Date, and then at any time, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest into shares of fully paid and nonassessable shares of Common Stock of the Obligor (as such stock exists on the date of issuance of this Note, or any shares of capital stock of the Obligor into which such stock is hereafter changed or reclassified, (the “Common Stock”) as per the Conversion Formula set forth in Section 2.2. Any such conversion shall be cashless, and shall not require further payment from Holder. Unless otherwise agreed in writing by both the Borrower and the Holder, at no time will the Holder convert any amount of the Note into common stock that would result in the Holder owning more than 4.99% of the common stock outstanding of the Obligor.  The shares of Common Stock from any such conversion will be delivered to Holder within two business days of conversion notice delivery via 10:30am priority overnight delivery service.
 
2.2. Conversion Formula. The number of shares issued through conversion is the conversion amount divided by the conversion price.
 
# Shares = Conversion Amount
 
Conversion Price
 
On the 21 st trading day following each conversion, the number of shares of Common Stock issuable to the Holder pursuant to  this Note  shall be adjusted such that the aggregate number of shares of Common Stock issuable to the Holder is equal to (a) the Conversion Amount, divided by (b) 75% of the average of the three (3) lowest closing bid prices during the 20 trading days following delivery of the shares of Common Stock.  If this adjustment requires the issuance of additional shares of Common Stock to the Holder (i.e. if a total issuance of more than the original amount of shares of Common Stock is required), such additional shares of Common Stock shall be issued to the Holder or its designee within three business days.  If this adjustment requires the return of original amount of shares of Common Stock to the Company (i.e. if an aggregate issuance of less than the original amount shares of Common Stock is required), such shares of Common Stock shall be returned to the Company within three business days.
 
2.3 Intentionally left blank.
 
2.4. Intentionally Left Blank
 
2.5 Reservation of Shares. As of the issuance date of this Note and for the remaining period during which the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.  The Borrower agrees that its issuance of this Note constitutes full authority to its officers, agents and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.
 
 
 
2
 
 
 
2.6. Delivery of Conversion Shares. Shares from any such conversion will be delivered to Holder within 2 (two) business days of conversion notice delivery (see 3.1) via 10:30am priority overnight delivery service (see “Share Delivery” attachment). If those shares are not delivered in accordance with this timeframe stated in this Section 2.6, at any time for any reason prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower.
 
2.7. Discharge By Payment. Conversions under this Convertible Promissory Note  are available only after the Conversion Amount described herein is discharged by payment of a pro rata value from the Secured Note by either, at the Obligor’s choice, cash payment, or surrender of security/collateral, or other negotiated form of payment mutually agreed to in writing.
 
ARTICLE 3 MISCELLANEOUS
 
3.1. Notices. Any notice required or permitted hereunder must be in writing and either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.
 
3.2. Amendment Provision. The term “Note” and all reference thereto, as used throughout this instrument, means this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.
 
3.3. Assignability. This Note will be binding upon the Borrower and its successors and permitted assigns, and will inure to the benefit of the Holder and its successors and permitted assigns, and may be assigned by the Holder.
 
3.4. Governing Law. This Note will be governed by, and construed and enforced in accordance, with the laws of the State of California, without regard to the conflict of laws principles thereof.
 
3.5. Maximum Payments. Nothing contained herein may be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum will be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.
 
3.6. Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.
 
3.7. No Public Announcement. Except as required by applicable securities law, no public announcement may be made regarding this Note, payments, or conversions without written permission by both Borrower and Holder.
 
3.8. Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Holder has the right to have any such opinion provided by its counsel. Holder also has the right to have any such opinion provided by Borrower’s counsel.
 
3.9. Director’s Resolution. Once effective, Borrower will execute and deliver to Holder a copy of a Board of Director’s resolution resolving that this note is validly issued, paid, and effective.
 
 
 
 
3
 
 
 
3.10 Holder’s Representation.  The Holder hereby represents that it is an accredited investor as such term is defined under Regulation D as promulgated under the Securities Act of 1933, as amended.
 
 
BORROWER     HOLDER
     
Forex International Trading Corp.      A.T. Limited
     
     
     
By:/s/ Darren C. Dunckel      By: Tiran Avgi
Name: Darren C. Dunckel     Name: Tiran Avgi
Title: CEO     Title: Director
     
 
 
 
 
 
 
4
              
Exhibit 4.2
SECURED AND COLLATERALIZED PROMISSORY NOTE
 
$400,000 PLUS INTEREST DUE AND PAYABLE
 
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.
 
FOR VALUE RECEIVED, A.T.  Limited (the “Borrower”), hereby promises to pay to the Holder, as defined below, the Principal Sum, as defined below, along with the Interest Rate, as defined below, according to the terms herein.
 
The “Effective Date” shall be:
 
July 8, 2010
 
       
The “Holder” shall be:
 
Forex International Trading Corp.
       
The “Principal Sum” shall be:
 
$400,000
 
       
The “Consideration” shall be:
 
$500,000 in the form of the $500,000 Convertible Promissory Note payable by the Holder to the Borrower dated the same date hereof.
       
The “Interest Rate” shall be:
 
12% one-time interest charge on the Principal Sum.  No interest or principal payments are required until the Maturity Date, but both principal and interest may be prepaid prior to maturity date.
       
The “Recourse” terms shall be:
 
This is a full recourse Note such that, if the Borrower defaults on the payment of this Note, forcing the Holder to foreclose on the security/collateral and there is a deficiency between (1) the outstanding principal and interest amount and (2) the foreclosure liquidation amount; then the Holder has the right to pursue additional claims against the Borrower for that deficiency.
       
The “Collateral” or “Security” shall be:
 
Free Tradable Securities, of a publicly listed company on the Tel Aviv Stock and London Exchanges, as memorialized and evidenced by the attached Exhibit A Collateral and Security Agreement.
       
The “Maturity Date” is the date upon which the Principal Sum of this Note, as well as any unpaid interest shall be due and payable, and that date shall be:
 
July 8, 2011
 
       
The “Prepayment Terms” shall be:
 
Prepayment is permitted at any time by payment in the form of any of the following: (1) cash or (2) other negotiated form of payment mutually agreed to in writing or (3) by surrender of the Collateral.
 
 

 
 
1
 

 
 
ARTICLE 1 PAYMENT-RELATED PROVISIONS
 
1.1 Interest Rate. Interest payable on this Note will accrue interest at the Interest Rate and shall be applied to the Principal Sum.
 
1.2 Application of Payment. Unless otherwise specified in writing by Holder, all payments made on this Note will be first applied to the Principal Sum.
 
ARTICLE 2 MISCELLANEOUS
 
2.1. Notices. Any notice required or permitted hereunder must be in writing and be either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.
 
2.2. Amendment Provision. The term “Note” and all reference thereto, as used throughout this instrument, means this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.
 
2.3. Assignability. This Note will be binding upon the Borrower and its successors and permitted assigns, and will inure to the benefit of the Holder and its successors and permitted assigns, and may be assigned by the Holder only with written consent by Borrower.
 
2.4. Governing Law. This Note will be governed by, and construed and enforced in accordance, with the laws of the State of California, without regard to the conflict of laws principles thereof.
 
2.5. Maximum Payments. Nothing contained herein may be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum will be credited against amounts owed by the Borrower to the Holder.
 
 
 
 
 
2
 
 
   
 
2.6. Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.
 
2.7. No Public Announcement. Except as required by applicable securities law, no public announcement may be made regarding this Note, payments, or conversions without written permission by both Borrower and Holder.
 
2.8. Transfer, Pledge, Sale, Collateral, Offer. Holder may not transfer, pledge, sell, use as collateral, offer, or hypothecate this Note to any third party without written approval from Holder.
 
BORROWER        HOLDER  
         
A.T. Limited       Forex International Trading Corp.  
         
         
/s/ Tiran Avgi  
   
/s/ Darren C. Dunckel
 
Name: Tiran Avgi    
   
Name: Darren C. Dunckel
 
Title: Director  
   
Title: CEO
 

 
                                                                                
 
 
3
Exhibit 4.3
 
COLLATERAL AND SECURITY AGREEMENT
 
 
 
1. Security Interest . A.T. Limited (“Borrower”) hereby grants to Forex International Trading Corp. (“Holder”) a security interest in the following described property (“Security” or “Collateral” or “Security Interest”):
 
3,000,000 shares of common stock of ATIA Group Ltd., a publicly listed company on the Tel Aviv and London Stock Exchanges
 
This Collateral and security interest will secure the payment and performance of the Borrower’s Secured AND Collateralized Promissory Note in the amount of $400,000.
 
2. Warranties and Covenants of Borrower . Borrower makes the following warranties and covenants to Holder:
 
(A)  Borrower is not the sole owner of the Collateral, though has power of attorney from its beneficiary owners to pledge the Collateral free from any lien, security interest, or encumbrance, and Borrower will defend the Collateral against all claims and demands of all parties at any time claiming interest therein.
 
(B)  This Collateral has not been pledged, assigned, or hypothecated for any other purpose, and no financing statement is on file in any local, state, or federal institution, bureau, government, or public office.
 
(C)  While the principal and interest balance of the Secured and Collateralized Promissory Note remains outstanding, Borrower will not transfer, sell, offer to sell, assign, pledge, liquidate, spend, or otherwise transfer to any party an amount of the Collateral equal to or greater than the outstanding balance of the Secured and Collateralized Promissory Note.
 
(D)  Borrower will pay promptly when due all taxes, expenses, and assessments upon the Collateral.
 
3. Perfection . Holder has the right, upon its election, to perfect the Collateral and security and this Collateral and Security Agreement by filing a financing statement or like instrument with its proper local, state, or federal institution, bureau, government, or public office or take other such action as may be required by applicable law. Holder is encouraged to perfect this instrument, and Borrower will reasonably assist in Holder’s doing so.
 
4. Remedies Upon Default . In the event of Borrower’s default on the Secured and Collateralized Promissory Note  C-02152008, Holder may declare all obligations secured hereby immediately due and payable and shall have the remedies of a secured party, including without limitation the right to take immediate and exclusive possession of the Collateral or any part thereof, or to obtain a court order to do so; and the Borrower must surrender the security and Collateral to the Holder within 5 (five) business days of receiving written notice that Holder is taking possession of the Collateral as remedy of default.
 
5. Normal Course of Business . Provided that no default has occurred on the Secured and Collateralized Promissory Note, Borrower will use and possess the Collateral in the normal course of business. Further, Borrower may liquidate, transfer, or exchange the Collateral into another viable investment vehicle with equal or greater market value, such as liquidation of money market fund into cash, or liquidation of money market fund for purposes of investing in other viable investment vehicles including but not limited to bonds, other money market funds, mutual funds, or stocks. However, any liquidation, transfer, or exchange into another viable investment vehicle will not affect Holder’s security, rights, or claims to the underlying Collateral.  Borrower will at all times take the necessary reasonable steps to maintain the perfection of Holder’s security interest in the pledged account, and at any time upon Holder’s request, Borrower will promptly provide update on the investment vehicle placement of this Collateral.
 
6.   Termination of Security . At the time of prepayment or payoff of the Secured and Collateralized Promissory Note to Holder by Borrower, Holder’s security interest in this Collateral shall automatically terminate. In the event that the Collateral and security interest were perfected by Holder as set forth in Section 3, upon termination of security as set forth in this section 6, the Holder will withdraw any and all perfection instruments on the collateral and security within 5 (five) business days.
 
7.   Governing Law .  This agreement will be governed by, and construed and enforced in accordance, with the laws of the State of California, without regard to the conflict of laws principles thereof.
 
8.   No Public Announcement . Except as required by applicable securities laws, no public announcement may be made regarding this Collateral and Security Agreement without written permission by both Borrower and Holder.
 
BORROWER       HOLDER  
         
A.T. Limited       Forex International Trading Corp.  
         
         
         
By:/s/ Tiran Avgi 
   
By:/s/ Darren C. Dunckel
 
Name: Tiran Avgi 
   
Name: Darren C. Dunckel
 
Title: Director 
   
Title: CEO