sc13da707974002_08102010.htm

0000921895-10-001259.txt : 20100813 0000921895-10-001259.hdr.sgml : 20100813 20100813131138 ACCESSION NUMBER: 0000921895-10-001259 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20100813 DATE AS OF CHANGE: 20100813 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FORWARD INDUSTRIES INC CENTRAL INDEX KEY: 0000038264 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 131950672 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-45773 FILM NUMBER: 101014241 BUSINESS ADDRESS: STREET 1: 1801 GREEN ROAD STREET 2: SUITE E CITY: POMPANO BEACH STATE: FL ZIP: 33064 BUSINESS PHONE: 9544199544 MAIL ADDRESS: STREET 1: 1801 GREEN RD STREET 2: SUITE E CITY: POMPANO BEACH STATE: FL ZIP: 33064 FORMER COMPANY: FORMER CONFORMED NAME: PROGRESS HEAT SEALING CO INC DATE OF NAME CHANGE: 19721111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LaGrange Capital Partners LP CENTRAL INDEX KEY: 0001324023 IRS NUMBER: 134106878 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 570 LEXINGTON AVENUE, 27TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: (212) 218-5154 MAIL ADDRESS: STREET 1: 570 LEXINGTON AVENUE, 27TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 sc13da707974002_08102010.htm AMENDMENT NO. 7 TO THE SCHEDULE 13D sc13da707974002_08102010.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 7)1

Forward Industries, Inc.

(Name of Issuer)

Common Stock, par value $0.01

(Title of Class of Securities)

349862300

(CUSIP Number)

Frank LaGrange Johnson,

570 Lexington Avenue, 27th Floor

New York, New York 10022

(212) 993-7057

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

August 10, 2010

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 349862300

1	NAME OF REPORTING PERSON LAGRANGE CAPITAL PARTNERS, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 1,606,139
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 1,606,139
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,606,139
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.0%
14	TYPE OF REPORTING PERSON PN

CUSIP NO. 349862300

1	NAME OF REPORTING PERSON LAGRANGE CAPITAL MANAGEMENT, L.L.C.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 1,606,139
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 1,606,139
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,606,139
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.0%
14	TYPE OF REPORTING PERSON IA

CUSIP NO. 349862300

1	NAME OF REPORTING PERSON LAGRANGE CAPITAL PARTNERS OFFSHORE FUND, LTD.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 340,131
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 340,131
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 340,131
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.2%
14	TYPE OF REPORTING PERSON CO

CUSIP NO. 349862300

1	NAME OF REPORTING PERSON LAGRANGE SPECIAL SITUATIONS YIELD MASTER FUND, LTD.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 165,119
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 165,119
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 165,119
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.1%
14	TYPE OF REPORTING PERSON CO

CUSIP NO. 349862300

1	NAME OF REPORTING PERSON LAGRANGE CAPITAL ADMINISTRATION, L.L.C.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 505,250
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 505,250
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 505,250
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.3%
14	TYPE OF REPORTING PERSON IA

CUSIP NO. 349862300

1	NAME OF REPORTING PERSON FRANK LAGRANGE JOHNSON
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 2,111,389
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 2,111,389
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,111,389
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 26.3%
14	TYPE OF REPORTING PERSON IN

CUSIP NO. 349862300

The following constitutes Amendment No. 7 to the Schedule 13D filed by the undersigned (“Amendment No. 7”). This Amendment No. 7 amends the Schedule 13D as specifically set forth.

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated to read as follows:

The Shares purchased by Capital Partners, Capital Partners Offshore Fund and Special Situations Master Fund were purchased with working capital in open market purchases, except as otherwise noted herein. The aggregate purchase price of the 2,111,389 Shares beneficially owned in the aggregate by Capital Partners, Capital Partners Offshore Fund and Special Situations Master Fund is approximately $7,524,316, including brokerage commissions.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On August 10, 2010, the LaGrange Group (as defined in the Settlement Agreement) and the Issuer entered into a Settlement Agreement. Pursuant to the terms of the Settlement Agreement, the Issuer confirmed that as of August 10, 2010, three current members of the Board, Douglas W. Sabra, Michael Schiffman and Bruce Galloway, have resigned as members of the Board and agreed to appoint Frank LaGrange Johnson, Stephen L. Key and Owen P.J. King (collectively, the “New Appointees”) to fill the ensuing vacancies. The Issuer further confirmed pursuant to the Settlement Agreement that as of August 10, 2010, Mr. Sabra has resigned as President, Chief Executive Officer and Chairman of the Board and that the Issuer has appointed Frank LaGrange Johnson as the new Chairman of the Board. The Issu er also agreed to appoint Brett M. Johnson as the Issuer’s President and Chief Executive Officer.

In connection with the 2010 Annual Meeting, the Issuer agreed that it will nominate, recommend, support and solicit proxies for the election of the New Appointees in the same manner as for the Issuer’s other nominees up for election at the 2010 Annual Meeting. The LaGrange Group agreed that it will vote all of its shares in favor of, and otherwise support, the election of John F. Chiste, Fred Hamilton and Louis Lipschitz (collectively, the “Continuing Directors”) at the 2010 Annual Meeting.

Under the Settlement Agreement, the Issuer further agreed (i) not to increase the size of the Board above six (6) members prior to the final certification of the results of the 2010 Annual Meeting unless such increase is approved by a majority of the Board; (ii) to appoint Owen P.J. King as Chairman of the Nominating and Governance Committee; and (iii) to appoint Messrs. Johnson, Key and King to the committees of the Board (and any future committee of the Board) so as to be in equal number to the Continuing Directors on each committee.

In the event that any of Messrs. Johnson, Key or King leaves the Board before the conclusion of the Issuer’s 2011 Annual Meeting, the LaGrange Group can nominate replacement director(s), who qualify as “independent” pursuant to NASDAQ listing standards for approval by the Nominating and Governance Committee, which approval may not be unreasonably withheld. Similarly, if any of the continuing directors leaves the Board before the conclusion of the 2011 Annual Meeting, the remaining continuing directors can nominate replacement director(s), who qualify as “independent” pursuant to NASDAQ listing standards for approval by the Nominating and Governance Committee, which approval may not be unreasonably withheld. In addition, the Issuer confirmed that Mr. Sabra has resigned as President, C hief Executive Officer and Chairman and will be replaced by Brett M. Johnson as President and Chief Executive Officer of the Issuer.

In connection with the Settlement Agreement, the Issuer repealed all provisions of its Amended and Restated Bylaws that became effective after February 13, 2008 and terminated its Shareholder Protection Rights Agreement, dated June 9, 2010. Contemporaneously with the entry into the Settlement Agreement, the Issuer executed a Severance and Release Agreement with Mr. Sabra and a Retention Agreement and an Employment Agreement with James O. McKenna, the Issuer’s Chief Financial Officer.

The LaGrange Group agreed (i) to withdraw its preliminary consent materials; (ii) until fourteen (14) days prior to the nomination deadline for the 2011 Annual Meeting, not to seek additional Board representation or call a special meeting of the Issuer’s shareholders.

CUSIP NO. 349862300

The foregoing description of the Settlement Agreement is qualified in its entirety by reference to the full text of the Settlement Agreement, which is attached as exhibit 99.1 hereto and is incorporated herein by reference.

Item 5.

Interest in Securities of the Issuer.

Item 5(a) is hereby amended and restated to read as follows:

(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 8,021,775 Shares outstanding as of August 6, 2010, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 10, 2010.

As of the close of business on August 12, 2010, Capital Partners, Capital Partners Offshore Fund and Special Situations Master Fund beneficially owned 1,606,139, 340,131 and 165,119 Shares, respectively, constituting approximately 20.0%, 4.2% and 2.1%, respectively, of the Shares outstanding.

Capital Management, as the general partner of Capital Partners, may be deemed to beneficially own the 1,606,139 Shares beneficially owned by Capital Partners. Capital Management disclaims beneficial ownership of the Shares beneficially owned by Capital Partners, except to the extent of its pecuniary interest therein.

Capital Administration, as the investment manager of each of Capital Partners Offshore Fund and Special Situations Master Fund, may be deemed to beneficially own the 505,250 Shares beneficially owned in the aggregate by Capital Partners Offshore Fund and Special Situations Master Fund, representing approximately 6.3% of the Shares outstanding. Capital Administration disclaims beneficial ownership of the Shares beneficially owned in the aggregate by Capital Partners Offshore Fund and Special Situations Master Fund, except to the extent of its pecuniary interest therein.

Frank LaGrange Johnson, as the sole member of Capital Management and the managing member of Capital Administration may be deemed to beneficially own the 2,111,389 Shares beneficially owned in the aggregate by Capital Partners, Capital Partners Offshore Fund and Special Situations Master Fund, representing approximately 26.3% of the Shares outstanding. Mr. Johnson disclaims beneficial ownership of the Shares beneficially owned in the aggregate by Capital Partners, Capital Partners Offshore Fund and Special Situations Master Fund, except to the extent of his pecuniary interest therein.

Item 5(c) is hereby amended and restated to read as follows:

(c) Schedule A annexed hereto lists all transactions in securities of the Issuer since the filing of Amendment No. 6 to the Schedule 13D by the Reporting Persons.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended to add the following:

On August 10, 2010, the Reporting Persons entered into a Settlement Agreement with the Issuer, the terms of which are described in Item 4.

Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.

CUSIP NO. 349862300

Item 7.

Material to be Filed as Exhibits.

Item 7 has been amended to add the following exhibit:

99.1

Settlement Agreement by and among LaGrange Capital Partners, L.P., LaGrange Capital Partners Offshore Fund, Ltd., LaGrange Special Situations Yield Master Fund, Ltd., LaGrange Capital Management, L.L.C., LaGrange Capital Administration, L.L.C., Frank LaGrange Johnson and Forward Industries, Inc., dated August 10, 2010.

CUSIP NO. 349862300

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this Statement is true, complete and correct.

Dated: August 13, 2010	LaGrange Capital Partners, L.P.

	By:	LaGrange Capital Management, L.L.C. its General Partner

	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its sole Member

	LaGrange Capital Management, L.L.C.

	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its sole Member

	LaGrange Capital Partners Offshore Fund, Ltd.

	By:	LaGrange Capital Administration, L.L.C. its Investment Manager

	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its Managing Member

	LaGrange Special Situations Yield Master Fund, Ltd.

	By:	LaGrange Capital Administration, L.L.C. its Investment Manager

	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its Managing Member

	LaGrange Capital Administration, L.L.C.

	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its Managing Member

		/s/ Frank LaGrange Johnson
		FRANK LAGRANGE JOHNSON

CUSIP NO. 349862300

SCHEDULE A

Transactions in the Shares Since the Filing of Amendment No. 6 to the Schedule 13D

Class of Security

Quantity

Purchased / (Sold)

Price Per Share ($)

Date of

Purchase / (Sale)

LAGRANGE CAPITAL PARTNERS, L.P.

Common Stock

6,565

3.4951

06/21/2010

LAGRANGE CAPITAL PARTNERS OFFSHORE FUND, LTD.

Common Stock

1,382

3.4951

06/21/2010

LAGRANGE SPECIAL SITUATIONS YIELD MASTER FUND, LTD.

Common Stock

691

3.4951

06/21/2010

EX-99.1 2 ex991to13da707974002_081010.htm SETTLEMENT AGREEMENT ex991to13da707974002_081010.htm

Exhibit 99.1

EXECUTION VERSION

SETTLEMENT AGREEMENT

This Settlement Agreement (this “Agreement”) is made and entered into as of August 10, 2010, by and among Forward Industries, Inc. (the “Company” or “FORD”) and the entities and natural persons listed on Exhibit A hereto (collectively, the “LaGrange Group”) (each of the Company and the LaGrange Group, a “Party” to this Agreement, and collectively, the “Parties”).

RECITALS:

WHEREAS, the Company and the LaGrange Group have engaged in various discussions and communications during the past several weeks concerning, among other things, (i) the Company’s business, financial performance and strategic plans and (ii) the LaGrange Group’s strategic plans for operating the Company under new leadership.

WHEREAS, the LaGrange Group has filed preliminary consent materials with the Securities & Exchange Commission (the “SEC”) seeking to request that the Company call a special meeting of the Company’s shareholders for the purpose of, among other things, to remove all members of the current Board of Directors of the Company (the “Board”).

WHEREAS, the Company and the members of the LaGrange Group have determined that the interests of the Company and its shareholders would be best served at this time by, among other things, (i) avoiding a Board contest at a special meeting or the 2010 annual meeting (the “2010 Annual Meeting”) and the expense and disruption that may result therefrom and (ii) making certain changes to the composition of the Company’s Board and management team and to come to an agreement with respect to these and certain matters related to the 2010 Annual Meeting and certain other matters, as provided in this Agreement.

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

1. Board Matters; Board Appointments; 2010 Annual Meeting; Committee Appointments; Resignation of President, Chief Executive Officer and Chairman; Appointment of new Chief Executive Officer; Repeal Bylaw Amendments; Termination of Rights Agreement.

(a) Upon execution of this Agreement, the Company hereby confirms that three current members of the Board, Douglas W. Sabra, Michael Schiffman and Bruce Galloway, have resigned as members of the Board and agrees it shall take all necessary actions to appoint Frank LaGrange Johnson, Stephen L. Key and Owen P.J. King (the “New Appointees”) to fill the ensuing vacancies.

(b) Upon execution of this Agreement, the LaGrange Group hereby withdraws its preliminary consent materials filed with the SEC in connection with seeking to call a special meeting of the Company’s shareholders.

(c) The Company hereby confirms that effective as of the execution of this Agreement Douglas W. Sabra has resigned as President, Chief Executive Officer and Chairman of the Board of the Company. Upon execution of this Agreement, in accordance with the Company’s Amended and Restated Bylaws, the Company shall take all action necessary in furtherance of the appointment of Mr. Johnson as the new Chairman of the Board.

(d) Upon execution of this Agreement, in accordance with the Company’s Amended and Restated Bylaws, the Company shall take all action necessary in furtherance of the appointment of Brett M. Johnson as the Company’s President and Chief Executive Officer on an at-will basis and with the same base compensation and benefits as the Company’s previous President and Chief Executive Officer pending the negotiation of a long-term employment agreement by the Company’s Compensation Committee.

(e) The Company agrees that prior to the time that it mails its definitive proxy statement for the 2010 Annual Meeting it shall take all necessary actions to nominate the New Appointees for election to the Board at the 2010 Annual Meeting. The Company further agrees it shall take no action to increase the size of the Board above six (6) members prior to the final certification of the results of the 2010 Annual Meeting unless such increase is approved by a majority of the Board.

(f) The Company agrees that it will recommend, support and solicit proxies for the election of the New Appointees in the same manner as for the Company’s other 2010 Nominees up for election at the 2010 Annual Meeting. The LaGrange Group agrees that it will vote all of its shares of Company stock in favor of, and otherwise support, the election of John F. Chiste, Fred Hamilton and Louis Lipschitz (collectively, the “Continuing Directors”) at the 2010 Annual Meeting.

(g) At the first meeting of the Board following the execution of this Agreement, the Company shall cause (i) the appointment of the New Appointees to the committees of the Board such that the New Appointees have at least an equal number of members as the Continuing Directors on each committee and (ii) the appointment of Owen P.J. King as Chairman of the Nominating and Governance Committee. For any committee of the Board which is created after the date of this Agreement, the Company agrees that the New Appointees shall have at least an equal number of members as the Continuing Directors on any such newly established committee.

(h) If any New Appointee leaves the Board (whether by resignation or otherwise) before the conclusion of the 2011 annual meeting (the “2011 Annual Meeting”), the LaGrange Group will be entitled to recommend to the Board’s Nominating and Governance Committee replacement director(s) (each of whom will be deemed a New Appointee for purposes of this Agreement) who will qualify as “independent” pursuant to NASDAQ listing standards. The Board’s Nominating and Governance Committee will not unreasonably withhold acceptance of any replacement director(s) recommen ded by the LaGrange Group. In the event the Nominating and Governance Committee does not accept a replacement director(s) recommended by the LaGrange Group, the LaGrange Group will have the right to recommend additional replacement director(s) for consideration by the Nominating and Governance Committee. The Company will cause the Board to appoint such replacement director(s) to the Board no later than five (5) business days after the Nominating and Governance Committee’s recommendation of such replacement director(s).

(i) If any Continuing Director leaves the Board (whether by resignation or otherwise) before the conclusion of the 2011 Annual Meeting, the remaining Continuing Director(s) will be entitled to recommend to the Board’s Nominating and Governance Committee replacement director(s) (each of whom will be deemed a Continuing Director for purposes of this Agreement) who will qualify as “independent” pursuant to NASDAQ listing standards. The Board’s Nominating and Governance Committee will not unreasonably withhold acceptance of any replacement director(s) recommended by the aforementioned remaining Continuing Directors. In the event the Nominating and Governance Committee d oes not accept a replacement director(s) recommended by the remaining Continuing Directors, the remaining Continuing Directors will have the right to recommend additional replacement director(s) for consideration by the Nominating and Governance Committee. The Company will cause the Board to appoint such replacement director(s) to the Board no later than five (5) business days after the Nominating and Governance Committee’s recommendation of such replacement director(s).

(j) The LaGrange Group agrees that before the date that is fourteen (14) days prior to the last date on which a shareholder of the Company may nominate, in accordance with the applicable procedures set forth in the Company's Bylaws, a person for election as a member of the Board at the 2011 Annual Meeting, it shall not take any action in furtherance of seeking (i) additional Board representation other than as provided herein or (ii) to call a special meeting of the Company’s shareholders for any purpose. The LaGrange Group shall not enter into any agreement, understanding or arrangement with the purpose or effect to cause or further any of the foregoing or otherwise engage in any act ivities with the purpose or effect to cause or further any of the foregoing.

(k) Upon execution of this Agreement, the Company hereby agrees it shall take all necessary actions to (i) repeal any provision of the Amended and Restated Bylaws of FORD (“the Bylaws”) in effect as of the date hereof that was not included in the Bylaws that became effective on February 13, 2008 and were filed with the Securities and Exchange Commission on December 5, 2007 and (ii) terminate that certain Shareholder Protection Rights Agreement, dated as of June 9, 2010, by and between the Company and American Stock Transfer & Trust Company LLC, as Rights Agent.

(l) Upon execution of this Agreement, the Company shall have entered into (i) the Severance and Release Agreement with Douglas W. Sabra in the form attached hereto as Exhibit B, (ii) the Retention Agreement with James O. McKenna III in the form attached hereto as Exhibit C and (iii) the Employment Agreement with James O. McKenna III in the form attached hereto as Exhibit D.

2. Representations and Warranties of the Company.

The Company represents and warrants to the LaGrange Group that (a) the Company has the corporate power and authority to execute the Agreement and to bind it thereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles and (c) the execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or trigger a change in control under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound, other than any agreement relating to the employment by the Company of Mr. Sabra as its President and Chief Executive Officer.

3. Representations and Warranties of the LaGrange Group.

The LaGrange Group shall cause its Affiliates to comply with the terms of this Agreement. Each member of the LaGrange Group represents and warrants to the Company that (a) this Agreement has been duly authorized, executed and delivered by each member of the LaGrange Group, and is a valid and binding obligation of each member of the LaGrange Group, enforceable against each member of the LaGrange Group in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (b) the execution of this Agreement, the consummation of any of the transactions contemplated hereby , and the fulfillment of the terms hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach or violation of the organizational documents of any member of the LaGrange Group as currently in effect and (c) the execution, delivery and performance of this Agreement by each member of the LaGrange Group does not and will not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound.

4. Press Release.

Promptly following the execution of this Agreement, the Company and the LaGrange Group shall jointly issue a mutually agreeable press release (the “Mutual Press Release”) announcing the terms of this Agreement, in the form attached hereto as Exhibit E. Prior to the issuance of the Mutual Press Release, neither the Company nor the LaGrange Group shall issue any press release or public announcement regarding this Agreement without the prior written consent of the other party.

5. Specific Performance.

Each of the members of the LaGrange Group, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other party hereto would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable in damages. It is accordingly agreed that the members of the LaGrange Group or any of them, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, and the other party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity.

6. Expenses.

The Company shall reimburse the LaGrange Group for its reasonable, documented out-of-pocket fees and expenses (including legal expenses) incurred in connection with the matters related to its consent solicitation, its Schedule 13D position and related filings and the negotiation and execution of this Agreement, provided that such reimbursement shall not exceed $150,000 in the aggregate.

7. Severability.

If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that the parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is h eld invalid, void or enforceable by a court of competent jurisdiction.

8. Notices.

Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Forward Industries, Inc.

1801 Green Road, Suite E

Pompano Beach, FL 30064

Attention: Chairman, Nominating and Governance

Committee of the Board of Directors

Facsimile: (954) 360-6409

With a copy to:

Duane Morris LLP

30 South 17th Street

Philadelphia, PA 19103

Attention: Richard A. Silfen, Esquire

Facsimile: 215-689-4385

If to the LaGrange Group or any member of the LaGrange Group:

LaGrange Capital Partners, L.P.

570 Lexington Avenue, 27th Floor

New York, New York 10022

Attention: Frank LaGrange Johnson

Telephone:

Facsimile:

With a copy to:

Olshan Grundman Frome Rosenzweig & Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

Attention: Steven Wolosky, Esq.

Facsimile: (212) 451-2222

9. Applicable Law.

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York without reference to the conflict of laws principles thereof. Each of the Parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the New York courts and any state appellate court therefrom within the State of New York. Each of the Parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by applicable legal requirements, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is imprope r or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

10. Counterparts.This Agreement may be executed in one or more counterparts which together shall constitute a single agreement.

11. Entire Agreement; Amendment and Waiver; Successors and Assigns.

This Agreement contains the entire understanding of the parties hereto with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the parties other than those expressly set forth herein. No modifications of this Agreement can be made except in writing signed by an authorized representative of each the Company and the LaGrange Group. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedi es hereunder are cumulative and are not exclusive of any other remedies provided by law. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns. No party shall assign this Agreement or any rights or obligations hereunder without, with respect to any member of the LaGrange Group, the prior written consent of the Company, and with respect to the Company, the prior written consent of the LaGrange Group.

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof.

FORWARD INDUSTRIES, INC.

By:	/s/ Fred Hamilton
	Name:	Fred Hamilton
	Title:	Director, duly authorized by the Board

THE LAGRANGE GROUP:

	LaGrange Capital Partners, L.P.

	By:	LaGrange Capital Management, L.L.C. its General Partner


	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its sole Member

	LaGrange Capital Management, L.L.C.

	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its sole Member

	LaGrange Capital Partners Offshore Fund, Ltd.

	By:	LaGrange Capital Administration, L.L.C. its Investment Manager


	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its Managing Member

	LaGrange Special Situations Yield Master Fund, Ltd.

	By:	LaGrange Capital Administration, L.L.C. its Investment Manager


	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its Managing Member

	LaGrange Capital Administration, L.L.C.

	By:	/s/ Frank LaGrange Johnson
		Frank LaGrange Johnson, its sole Member



		/s/ Frank LaGrange Johnson
		FRANK LAGRANGE JOHNSON

SCHEDULE A

The LaGrange Group

LAGRANGE CAPITAL PARTNERS, L.P.

LAGRANGE CAPITAL PARTNERS OFFSHORE FUND, LTD.

LAGRANGE SPECIAL SITUATIONS YIELD MASTER FUND, LTD.

LAGRANGE CAPITAL MANAGEMENT, L.L.C.

LAGRANGE CAPITAL ADMINISTRATION, L.L.C.

FRANK LAGRANGE JOHNSON