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Bonds.com Group, Inc. 10-K [bonds-10k_0327.htm]
 
 
Exhibit 10.63
 

Execution Version

 

 
PORTIONS OF THIS EXHIBIT MARKED “[* * *]” HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND THE OMITTED PORTIONS HAVE BEEN FILED
SEPARATELY IN PAPER FORM WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

 
LICENSING AND SERVICES AGREEMENT AMONG
 
BONDS.COM, INC.
 
AND BONDS.COM GROUP, INC.,
 
ON BEHALF OF THEMSELVES AND THEIR CONTROL AFFILIATES,
 
AND
 
UBS SECURITIES LLC

 
DATED

 
JANUARY 11, 2009

 
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Execution Version

LICENSING AND SERVICES AGREEMENT
 
This Licensing and Services Agreement (“Agreement”) is entered into effective as
of the 11th day of January, 2010 (“Effective Date”), by and between Bonds.com
Group, Inc., a publicly traded company, and Bonds.com, Inc., a broker-dealer
registered with the SEC under the Exchange Act and a member firm of FINRA (on
behalf of themselves and their Control Affiliates) (collectively referred to
herein as “Bonds.com”), and UBS Securities LLC, a broker-dealer registered with
the SEC under the Exchange Act and a member firm of FINRA (“UBS”).
 
RECITALS
 
WHEREAS, Bonds.com operates BondStation Pro that permits Bonds.com Users to
anonymously display indications of interest to purchase or sell Securities
to/from other Bonds.com Users through Bonds.com, acting as riskless principal,
and to effect Transactions;
 
WHEREAS, Bonds.com intermediates any transaction effected by Bonds.com Users on
the Bonds.com Platform by acting in a riskless principal capacity for any
Security that is purchased or sold on the Bonds.com Platform; and
 
WHEREAS, contemporaneously with the execution of this Agreement, UBS will enter
into the InterDealer Agreement;
 
 
WHEREAS, contemporaneously with the execution and delivery of this Agreement,
Bonds.com Group, Inc. and UBS Americas, Inc. are executing and delivering a Unit
Purchase Agreement and related documents.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties, on the basis of the
representations, warranties, and covenants contained in this Agreement, agree,
subject to the terms and conditions contained herein, as follows:
 
AGREEMENT
 
1.           Definitions
 
For the purposes of this Agreement:
 
a.           “Access Code” means an access code that corresponds to the
Authorized User Identification assigned by either Party to an Authorized User.
 
b.           “Affiliate” means any Person controlling, controlled by, or under
common control with a Person within the meaning of the Exchange Act.
 
c.           “Agreement” means this Licensing and Services Agreement and all
annexes, schedules and exhibits thereto.
 
d.           “Applicable Law” means any domestic or foreign, federal, state or
local statute, law, ordinance, policy, guidance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment, decree
or other legal requirement, of any Governmental Authority or Self-Regulatory
Organization applicable the Transactions contemplated under this Agreement,
including without limitation, any of the following:  (a) the Securities Act, (b)
the Exchange Act, (c) the Investment Company Act of 1940, as amended, (d) the
Investment Advisers Act of 1940, as amended, and (e) the USA PATRIOT Act, as
amended.
 
 
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e.           “Authorized User” means any person authorized by UBS or Bonds.com
to access the System on behalf of Bonds.com, Bonds.com Users, UBS, UBS Users and
UBS Customers.
 
f.           “Authorized User Identification” means a unique user identification
assigned by a Party to an Authorized User.
 
g.           “Bonds.com” means Bonds.com, Inc. and Bonds.com Group, Inc. and the
Control Affiliates.
 
h.           “Bonds.com Platform” means BondStation Pro or any iteration or
successor system that is designed to serve the same functions as BondStation Pro
and operated by Bonds.com or any successor entity.
 
i.           “Bonds.com Software” means object code and source code and any
related documentation used in connection with the Bonds.com Platform.
 
j.           “Bonds.com Users” means any U.S. Person, other than UBS and the UBS
Users, that is an SEC registered broker or dealer, bank, credit union,
registered investment adviser, trust company, municipality, hedge fund,
registered or unregistered investment company, private fund, pension fund or
insurance company that has been approved by Bonds.com to transact on the
Bonds.com Platform or the System.
 
k.           “BondStation Pro” means a web-based, fixed income, electronic
trading platform designed to permit Bonds.com Users to electronically trade
Securities with other Bonds.com Users through Bonds.com acting as riskless
principal.
 
l.           “Broker Dealer Entity” and “Broker Dealer Entities” means
Bonds.com, Inc. and/or each Affiliate, respectively, that is required to be
registered as a broker or a dealer with a “Governmental Authority.”
 
m.           “Bylaws” means the Bonds.com Inc. Bylaws, as amended and as in
effect on the Effective Date, that have been furnished or made available to UBS
upon UBS’s request.
 
n.           “Certificate of Incorporation” means true, correct and complete
copies of the Bonds.com Inc. Certificate of Incorporation, as amended and as in
effect on the Effective Date, that has been furnished or made available to UBS
upon UBS’s request.
 
o.           “Confi­dential Information” means: (a) any infor­mation regarding
the specific business terms of this Agree­ment; (b) any docu­mentation,
software, specifications or other information provided by either Party
con­cern­ing the Sys­tem, the Bonds.com Platform or UBS Platform; (c) any
information related to UBS Customers including, without limitation, the UBS
Customer’s identity; and (d) any and all technical, business and other
information of or relating to either Party, the System, the Bonds.com Platform
or the UBS Platform that derives value (actual, potential, economic or
otherwise) from not being generally known to other Persons, including technical
or non-technical data, compositions, devices, methods, techniques, drawings,
inventions, processes, financial data, financial plans, product plans, lists of,
or information relating to, actual or potential customers, Users or Authorized
Users, or suppliers, and strategies, business plans or operations of either
Party.
 
 
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p.           “Control Affiliates” means any corporation, partnership or other
legal entity that is controlled by Bonds.com Group, Inc.
 
q.           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
 
r.           “FINRA” means the Financial Industry Regulatory Authority, Inc.,
together with any successor entity.
 
s.           “Governmental Authority” means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government, arbitral tribunal, commission,
tribunal or organization or any regulatory, administrative or other agency, or
any political or other subdivision, department or branch of any of the
foregoing, including without limitation, the SEC or other similar securities
commission.
 
t.           “Intellectual Property Rights” mean rights or licenses to use all
trademarks, trade names, service marks, service mark registrations, service
names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets ,
inventions, invention disclosures, statutory invention registrations, designs,
trade secrets, confidential business information, proprietary business
information, know-how, processes and techniques, research and development
information, drawings, plans and product specifications, software, financial,
marketing and business data, pricing and cost information, business and
marketing plans, customer, supplier, vendor and distributor lists and
information, and other intellectual or proprietary property rights (including
remedies against infringement thereof and rights of protection of interest
therein under the laws of all jurisdictions) and all applications and
registrations related to any of the foregoing.
 
u.           “InterDealer Agreement” means the source code software license
agreement entered into among UBS and InterDealer Securities, LLC, InterDealer
Information Technologies, LLC and InterDealer IP Holding, LLC (collectively,
“InterDealer”), pursuant to which UBS will obtain a license to BondStation Pro.
 
v.           “IOI” means an indication of interest, not a commitment, to
purchase or sell a Security through the System.
 
w.           “Material Adverse Effect” means any material adverse effect on the
business, properties, assets, operations, results of operations, or condition
(financial or otherwise) of either Party, individually or taken as a whole, or
on the activities contemplated under this Agreement or by the agreements and
instruments to be entered into in connection herewith or therewith, or on the
authority or ability of either Party to perform its obligations under this
Agreement.
 
x.           “Party” means Bonds.com or UBS or both as applicable in the context
of this Agreement.  “Parties” shall refer to both Bonds.com and UBS.
 
y.           “Person” means a natural person or entity.
 
z.           “Personal Information” means personally identifiable information or
data concerning or relating to the other Party's customers or prospective
customers, or any such information or data that the Parties collect or derive
from interactions with the other Party or its customers or prospective customers
 
aa.           “SEC” means the U.S. Securities and Exchange Commission.
 
 
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bb.           “SEC Documents” means all reports, schedules, forms, statements
and other documents required to be filed by Bonds.com with the SEC pursuant to
the reporting requirements of the Exchange Act.
 
cc.           “Securities Act” means the Securities Act of 1933, as amended.
 
dd.           “Security” or “Securities” means: (1) corporate bonds that are
registered under the Securities Act or issued in accordance with Rule 144A or
Regulation S, as promulgated under the Securities Act, that are investment grade
and non-investment grade, secondary and primary offerings and callable and
non-callable; (2) securities issued by U.S. agencies including Ginnie Mae, the
Tennessee Valley Authority, and the Agency for International Development that
are exempt from registration under the Securities Act; (3) government sponsored
enterprise bonds including bonds issued by Federal Home Loan Banks, Federal Home
Loan Mortgage Corp., Federal Agricultural Mortgage Corporation, Federal National
Mortgage Association, Federal Farm Credit Banks, Resolution Funding Corp.,
Government Trust Certificates, and Sallie Mae that are exempt from registration
under the Securities Act, (4) U.S. Treasury Securities that are exempt from
registration under the Securities Act; (5) any municipal security as defined
under Section 3(a)(29) of the Exchange Act; (6) credit default swaps and
interest rate swaps; and (7) any such other security or instrument as the
Parties may mutually agree from time to time.
 
ee.           “Self-Regulatory Organization” means FINRA and any other
commission, board, agency or body that is not a Governmental Authority but is
charged with the supervision or regulation of the brokers and dealers that are
its members.
 
ff.           “Services” means those services provided by Bonds.com to UBS as
provided under this Agreement.
 
gg.           “System” means the interoperable matched principal trading system
to be constructed and/or operated by the Parties, to permit the UBS Platform and
the Bonds.com Platform to communicate with one another, in accordance with the
terms of this Agreement and all software, hardware and systems associated
therewith.  In the event UBS exercises its option to “white label” or “private
label” the Bonds.com Software or System under Section 3 of this Agreement, UBS’s
said use of the Bonds.com Software and any resulting modifications or
enhancements to the Bonds.com Software or System will be included in the
definition of System for purposes of this Agreement.
 
hh.           “Term of this Agreement” means the Initial Term and any Successor
Term as defined under Section 8 of this Agreement.
 
ii.           “Transaction” means any agreement by the Parties to effect a trade
through the System.
 
jj.           “UBS” means UBS Securities LLC.
 
kk.           “UBS Customers” means any Person domiciled outside of the U.S.,
excluding those Persons that are sell-side Persons, including “market makers,”
as the Parties may mutually agree as provided in Section 5.a. of this Agreement,
and those current and prospective UBS customers identified on Schedule A to this
Agreement (“UBS Customer List”) which schedule UBS, in its sole discretion, may
amend by providing an amended UBS Customer List to Bonds.com in accordance with
Section 2.d. of this Agreement. Unless the Parties otherwise agree in writing,
the number of UBS Customers identified on the UBS Customer List shall not exceed
[***].  For the avoidance of doubt, any current customers indentified on the UBS
Customer List are also UBS Users.
 
 
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Execution Version

ll.           “UBS Fixed Income Matched Principal Trading Desk” means the
discrete matched principal trading desk, or any successor thereof, within UBS
that trades, at its discretion, certain fixed income securities on a principal
basis for its own account or on a matched principal basis with UBS customers who
permit the trading desk to disclose their indications of interest to other
market participants.
 
mm.           “UBS Platform” means the web-based, electronic trading platform,
or any successor system, operated by the UBS Fixed Income Matched Principal
Trading Desk through which the UBS Users may enter indications of interest to
purchase or sell securities or instruments.  Such securities or instruments may
include Securities and those securities or instruments that UBS, in its sole
discretion, permit to be traded on the UBS Platform. The UBS Platform and the
Bonds.com Platform are sometimes collectively referred to herein as the
“Platforms” and each a “Platform.”
 
nn.           “UBS Users” means any U.S. Person, other than Bonds.com and the
Bonds.com Users, that is an SEC registered broker or dealer, bank, credit union,
registered investment advisor, trust company, municipality, hedge fund, a
registered and unregistered investment company, private fund, pension fund or
insurance company that is a client of the UBS Fixed Income Matched Principal
Trading Desk and has been approved by UBS, in its reasonable discretion, to
transact on the UBS Platform or the System.
 
oo.           “Unit Purchase Agreement” means the agreement dated as of even
date herewith entered into by Bonds.com Group, Inc. and UBS Americas, Inc.,
substantially in the form attached hereto as Exhibit A.
 
pp.           “Users” means collectively the UBS Users and Bonds.com Users.
 
2.
The System

 
a.           Development of the System; Ongoing Interoperability; and
Functionality of the System.  UBS and Bonds.com agree to reasonably cooperate
with one another and to use good faith, diligent and commercially reasonable
efforts to develop, program, configure, modify, adapt and implement their
respective computer, network and software systems so as to construct, maintain
and operate the System, including ensuring the continued interoperability of the
Bonds.com Platform and the UBS Platform.  The Parties agree to the following:
 
i.           [***]
 
ii.           [***]
 
iii.           Negotiate Transactions.  The Parties shall use the System to
negotiate and agree to Transactions in accordance with terms and conditions
agreed to by the Parties and set forth in Section 2.b. of this Agreement.
 
iv.           Ongoing Cooperation and Further Assurances.  During the term of
this Agreement, the Parties will meet or otherwise confer on an as-needed basis
to decide the developmental work to be performed by each Party with respect to
the System.  It is the intent of this Agreement that the Parties will work with
each other in good faith during the development of the System and continue to
work with one other to ensure the continued interoperability and functionality
of the System.
 
v.           Ownership of the System and Related Intellectual Property
Rights.  Each Party shall retain ownership of and control of its respective
Platform, and nothing in this Agreement shall be deemed to grant to the other
Party any right or interest in or to the other Party’s Platform or Intellectual
Property Rights related thereto, except as otherwise specified in this Agreement
or otherwise mutually agreed to by the Parties; provided that during the Term of
this Agreement the Parties agree to cooperate with one another to ensure that
each Party has the necessary rights and licenses to the other Party’s
Intellectual Property Rights as may be necessary for each Party to operate and
use the System as contemplated herein.  In carrying out the intent of this
Section 2.a., the Parties acknowledge and agree that each Party may be
responsible for the development and creation of Intellectual Property Rights
related to the System.  However, the Parties agree that to the extent either
Party or InterDealer (as used herein InterDealer shall also include any
successor licensor or service provider) proposes additional developments,
enhancements or modifications to improve the interoperability and functionality
of the System (the “New Developments”), Bonds.com will have the first option to
create (whether or not through services provided by InterDealer) and pay for
such New Developments.  If Bonds.com notifies UBS in writing that it elects not
to exercise its option to create the New Developments, UBS shall have the option
to do so (whether or not through services provided by InterDealer).  Unless the
Parties later mutually agree otherwise, (x) any New Developments created solely
through the efforts of and at the expense of Bonds.com or Bonds.com’s
independent contractors or consultants (regardless of whether or not such New
Developments were developed as a result of discussions with UBS) shall be owned
solely and exclusively by Bonds.com and (y) any Intellectual Property Rights
developed solely by the efforts of UBS or UBS’s independent contractors or
consultants (regardless of whether or not such New Developments were developed
as a result of discussions with Bonds.com) shall be owned solely and exclusively
by UBS.  In addition, if during the Term of this Agreement, if either Party
creates New Developments, such Party shall grant to the other Party a royalty
free license to use such New Developments in the other Party’s Platform and in
connection with the System for the Term of this Agreement.
 
 
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Execution Version
 
vi.           Other Activities.  The System will permit the Parties to engage in
any other activities as the Parties may mutually agree from time to time.
 
b.           Terms and Conditions of IOIs and Transactions Effected Through the
System.  The Parties agree to the following terms and conditions with respect to
the IOIs transmitted through the System.
 
 
i.
[***]

 
 
ii.
[***]

 
 
iii.
[***]

 
c.           Transaction Fees, etc.  [***]  Each Party shall be permitted to
establish, and modify from time to time, its own mark-ups or mark-downs, as the
case may be, with respect to its own Users in accordance with Applicable Law and
without involvement from the other Party.
 
d.           UBS Customers and UBS Customer List.  Within thirty days of the
Effective Date of this Agreement, UBS shall deliver to Bonds.com the initial UBS
Customer List, which shall be attached to this Agreement as Schedule A.  The
Parties agree that the purpose of the UBS Customer List is to identify those
actual and potential customers which Bonds.com may not solicit to become a
Bonds.com User in accordance with Section 5.a. of this Agreement.  Upon the one
(1) year anniversary of the Effective Date of this Agreement and thereafter, UBS
shall remove from the UBS Customer List those prospective customers that have
been on the UBS Customer List for four (4) months and with whom UBS has not
entered into a definitive relationship to become a UBS User.  In the event that
UBS is unable to enter into such definitive relationship within such four (4)
month period, the prospective customer will be removed from the UBS Customer
List and Bonds.com shall be free to solicit the prospective customer to become a
Bonds.com User on the Bonds.com Platform.  At least every fourteen (14) calendar
days during the Term of this Agreement, including during the first twelve (12)
months from the Effective Date, UBS agrees to discuss with Bonds.com the status
of and progress with respect to its discussions with any prospective customers
currently on the UBS Customer List.  In addition, UBS may also continue to
solicit the prospective customer and to the extent UBS enters into a definitive
relationship with such prospective customer, UBS may add the prospective
customer to the UBS Customer List.  Further, if UBS identifies a prospective
customer on the UBS Customer List that is already a Bonds.com User, UBS agrees
that this Section 2.d. will not preclude Bonds.com from maintaining the
prospective customer as a Bonds.com User or otherwise expanding the services
provided by Bonds.com to such prospective customer.  Notwithstanding the
foregoing, UBS may not update the UBS Customer List at any time following the
delivery of a termination notice in accordance with Section 8 of this
Agreement.  In addition to the foregoing, UBS agrees to act in good faith not to
update the UBS Customer List after it knows or reasonably believes it will send
Bonds.com a termination notice in the upcoming one (1) month period. The Parties
acknowledge that at no time will the aggregate number of prospective and current
customers on the UBS Customer List exceed [***].

 
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e.           Costs and Expenses.  Unless the Parties otherwise mutually agree,
each Party shall be responsible for its own costs and expenses associated with
the System.
 
f.           Equipment. Except as otherwise provided in Section 3 and subject to
Section 2.a. of this Agreement, each Party acknowledges and agrees that it is
solely responsible for acquiring, installing, maintaining, and supporting any
hardware and/or software necessary to implement and operate its Platform and the
System. Each Party shall provide reasonable assistance to the other in
determining the hardware and/or software necessary to access its Platform and
the System and in maintaining and supporting software necessary to access its
Platform and the System in accordance with the terms of this Agreement, and each
Party agrees to act in good faith in order to do so.
 
g.           Principal Nature of Transactions.  The Parties understand and agree
that each Party shall act as principal (including riskless principal) in each
Transaction negotiated through the System.  In doing so, each Party shall assume
full responsibility for the performance of each Transaction negotiated through
the System.
 
h.           Limitation to Transactions in Securities.  Each Party shall be
limited to using the System for accessing information relating to Securities and
facilitating Transactions in such Securities and any other activities as the
Parties may agree in accordance with Section 2.a.vi.  The Parties agree that UBS
shall not be obligated to enter IOIs through the System for any Security,
indication of interest, or UBS customer that UBS elects not to trade on the UBS
Platform for reasons such as, client direction, size of order, and market
impact. The UBS Matched Principal Fixed Income Trading Desk shall use good faith
efforts to solicit other UBS business units to use the UBS Platform for the
purpose of providing additional liquidity on the System.
 
i.           Clearance and Settlement.  Each Party agrees to take all steps
necessary to establish an account(s) with the other Party for the purpose of
clearing and settling Transactions including, among other things, entering into
a brokerage account agreement.  Any such account(s) shall be subject to the
terms and conditions of the relevant account agreements.  In the event there is
any conflict between the account agreement and this Agreement, this Agreement
shall govern.
 
j.           System Security.  Each Party shall assign to each Authorized User
an Authorized User Identification and a corresponding Access Code in accordance
with each Party’s respective security procedures as may be in place from time to
time. Each Party agrees to take reasonable steps not to permit any Person other
than an Authorized User to access the System and shall promptly notify the other
Party of any unauthorized access to, or use of, any of its Access Codes.  Each
Party shall be responsible for determining and maintaining all levels of
security residing on its respective hardware or systems including each Party’s
respective Platform.
 
 
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k.           Records.  UBS and Bonds.com shall be responsible for maintaining
any records required by Applicable Law of information sent and received by it on
the System.  In the event of a dispute between the Parties with respect to a
Transaction (including whether, in fact, a Transaction has been agreed upon),
each Party shall promptly provide to the other Party any available supporting
documentation, records and information pertain­ing to such Transac­tion or
possible Transaction.
 
l.           ATS Registration of the Bonds.com Platform.  Bonds.com agrees that
it will operate the Bonds.com Platform in compliance with the requirements of
Regulation ATS under the Exchange Act. The Parties agree that UBS will have no
obligations with respect to the System until the filing of the Bonds.com’s Form
ATS is effective.
 
3.
UBS Options

 
From and after the Effective Date, subject to their respective terms and
conditions below, UBS shall have the following three (3) options.  Each option
may be exercised individually or collectively from time to time or at any time
after the Effective Date by written notice by UBS to Bonds.com.
 
a.           Intellectual Property Rights Option.  From and after such time as
Bonds.com has the lawful right to do so, an option for UBS to obtain a
worldwide, fully paid, royalty free, non-exclusive, perpetual, irrevocable,
non-terminable right and license under all present and future intellectual
property rights owned or controlled by Bonds.com to the Bonds.com Software on
similar terms (except being perpetual and non-terminable and except that Section
2.3 of the InterDealer Agreement will not apply) as those currently provided or
to be provided to UBS under the InterDealer Agreement.  UBS’s license shall not
be limited by the number of Authorized Users of UBS whose data UBS processes,
the amount of data or transactions processed or the number, type or size of
hardware, networks or operating systems upon which the Bonds.com Software is
installed and run. Upon UBS’s exercise of such option, within 10 days
thereafter, Bonds.com shall deliver to UBS a then current version of all such
object code, source code and documentation.  If UBS wishes to modify or adapt
the source code or the Bonds.com Software, Bonds.com will have the option to
undertake those modifications or adaptations at its sole cost and expense and
own any resulting intellectual property rights arising therefrom and all such
modified or adapted source code and Bonds.com Software shall be included in the
term “Bonds.com Software” for all purposes under this Agreement and shall be
subject to the license to UBS as contemplated in this Section 3(a);
 
b.           “White Label” Option.  From and after the Effective Date, an option
for UBS and its Authorized Users to use the Bonds.com Software running on
computer systems owned, controlled or operated by or for Bonds.com in the same
manner as used by Bonds.com.  Such use shall include the right to brand such
system as a trademarked UBS system.  UBS’s and its Authorized Users’ use of the
Bonds.com Software as described herein shall be fully paid, royalty free,
perpetual, irrevocable, non-terminable and unlimited with respect to the number
of Authorized Users that may use the Bonds.com Software or the amount of data or
trades processed by the Bonds.com Software; and/or
 
c.           Consulting Services.  From and after the Effective Date, UBS shall
have an option on terms and pricing to be mutually agreed to by the Parties to
obtain consulting services from Bonds.com from time to time or at any time to
configure, modify, adapt and implement the UBS Platform, and UBS’s computer,
network and software systems so as to interoperate with the Bonds.com Platform
and Bonds.com’s computer, network and software systems for the purpose of
implementing and operating the System in the manner and for the purposes
contemplated by this Agreement including those Services contemplated by Section
2.a.v. and any hosting services that UBS may desire for Bonds.com to perform
with respect to the UBS Platform.
 
 
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Execution Version
 
4.
Representations, Warranties and Covenants

 
a.           UBS Representations.  Each day during the Term of this Agreement,
UBS hereby represents, warrants and covenants to Bonds.com that:
 
i.           This Agreement has been duly and validly authorized, executed and
delivered on behalf of UBS and shall constitute the legal, valid and binding
obligations of UBS enforceable against UBS in accordance with its terms, except
as such enforceability may be limited by general principles of equity or its
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.
 
ii.           UBS has all requisite powers and govern­mental licenses,
autho­ri­zations, permits, consents and approvals required to perform its
obligations hereun­der, and will comply with the foregoing throughout the Term
of this Agreement.
 
iii.           The execution, delivery and performance of this Agreement by UBS
and the consummation by UBS of the Transactions contemplated hereby will not (i)
result in a violation of the organizational docu­ments of UBS, any memorandum of
association, certificate of incorporation, articles of association, bylaws,
certificate of formation, any certificate of designations or other constituent
documents of UBS, or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which UBS is
a party, or (iii) result in a violation of any Applicable Law, order, judgment
or decree.
 
iv.           UBS represents and warrants that it is authorized to enter into
the Transactions that are facilitated by the System, and that any Transactions
effected through the System shall create legal, valid, and binding obligations
on UBS enforceable by Bonds.com.
 
v.           UBS shall perform all of its obligations under this Agreement in
material compliance with all Applicable Laws, court orders, judgments, or
decrees having jurisdiction over the subject matter of this Agreement and/or
UBS’s performance hereunder.  UBS shall perform its obligations under this
Agreement in such a way that it does not cause Bonds.com to be in violation of
any Applicable Law.
 
vi.           UBS is not, and as a result of the transactions contemplated by
this Agreement will not be, in violation of its organizational documents,
including its charter or certificate of organization or bylaws or operating
agreement, as applicable.  UBS is not, and as a result of the transactions
contemplated by this Agreement will not be, in violation of any Applicable Law,
and will not conduct its business in violation of any of the foregoing, except
for possible violations which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  UBS possesses all
certificates, approvals, authorizations and permits required by Governmental
Authorities or Self-Regulatory Organizations necessary to conduct its
businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and UBS has not received any notice of proceedings
relating to the revocation or modification of any such certificate, approval,
authorization or permit.
 
 
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vii.           UBS further covenants that it shall promptly notify Bonds.com if
it has actual knowledge that any of the foregoing representations and warranties
cease to be true at any time during the Term of this Agreement.
 
b.           Bonds.com Representations.  Each day during the Term of this
Agreement, Bonds.com hereby covenants, represents and warrants to UBS that:
 
i.           Bonds.com shall perform all of its obligations under this Agreement
(including, without limitation, the provision of the Services) in material
compliance with all Applicable Laws, court orders, decrees, or judgments having
jurisdiction over the subject matter of this Agreement and/or Bonds.com’s
performance hereunder.  Bonds.com shall perform its obligations under this
Agreement in such a way that it does not cause UBS to be in violation of any
Applicable Law.
 
ii.           Each of the Bonds.com entities are entities duly organized and
validly existing in good standing under the laws of the jurisdiction in which
they are formed, and have the requisite power and authorization to own their
properties and to carry on their businesses as now being conducted and as
proposed to be conducted in accordance with the terms of this Agreement.  Each
of the Bonds.com entities is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not reasonably be expected to have a Material Adverse
Effect.
 
iii.           Bonds.com has the requisite corporate power and authority to
enter into and perform its obligations under this Agreement and each of the
other agreements entered into by the Parties hereto in connection with the
Transactions contemplated by this Agreement.  This Agreement has been duly
executed and delivered by Bonds.com, and constitutes the legal, valid and
binding obligations of Bonds.com, enforceable against Bonds.com in accordance
with its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.
 
iv.           The execution, delivery and performance of this Agreement by
Bonds.com and the consummation by Bonds.com of the Transactions contemplated
hereby will not (i) result in a violation of the Certificate of Incorporation or
Bylaws, any memorandum of association, certificate of incorporation, articles of
association, bylaws, certificate of formation, any certificate of designations
or other constituent documents of Bonds.com or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which Bonds.com is a party, or (iii) result in a violation of Applicable Law
or any order, judgment or decree.
 
v.           Bonds.com is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court, governmental
agency or any regulatory or Self-Regulatory Organization or agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Agreement, in each case in accordance with the
terms hereof or thereof except with respect to the filing required by Regulation
ATS under the Exchange Act, which must be completed in accordance with Section
2.l.  All consents, authorizations, orders, filings and registrations which
Bonds.com is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the Effective Date.  Bonds.com is unaware of
any facts or circumstances that might prevent Bonds.com from obtaining or
effecting any of the registrations, applications or filings pursuant to the
preceding sentence.
 
 
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vi.           The Bonds.com entities are not, and as a result of the
Transactions contemplated by this Agreement will not be, in violation of their
Certificates of Incorporation or Bylaws or their organizational charters or
certificates of incorporation or bylaws, as applicable.  Bonds.com is not, and
as a result of the transactions contemplated by this Agreement will not be, in
violation of Applicable Law, and will not conduct its business in violation of
any of the foregoing, except for possible violations which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Bonds.com possesses all certificates, approvals, authorizations
and permits required by the appropriate Governmental Authorities or
Self-Regulatory Organizations necessary to conduct their businesses, except
where the failure to possess such certificates, authorizations or permits would
not have, individually or in the aggregate, a Material Adverse Effect, and
Bonds.com has not received any notice of proceedings relating to the revocation
or modification of any such certificate, approval, authorization or permit.
 
vii.           Other than as specifically disclosed to UBS in writing prior to
the Effective Date of this Agreement, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, Self-Regulatory Organization or body pending or, to the knowledge of
Bonds.com, threatened against or affecting Bonds.com or any of Bonds.com’s
officers, directors or employees, whether of a civil or criminal nature or
otherwise, except where such action, suit, proceeding inquiry or investigation
would not have, individually or in the aggregate, a Material Adverse Effect.
 
viii.           Each Broker Dealer Entity is duly registered as a broker and/or
dealer in all required jurisdictions and is a member of all Self-Regulatory
Organizations where such registration or membership is required and all such
memberships and registrations are in full force and effect, and each Broker
Dealer Entity is a member in good standing with all applicable Self-Regulatory
Organizations.  Each Broker Dealer Entity’s Uniform Application for Broker
Dealer Registration on Form BD (“Form BD”), as amended as of the date hereof,
and each of its other registrations, forms and other reports filed with any
Governmental Authority or Self-Regulatory Organization in connection with its
activities as a broker or a dealer is in compliance in all material respects
with the applicable requirements of the Exchange Act and other applicable laws
and rules and does not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  No Broker Dealer Entity has exceeded in any material way with
respect to its business, the business activities enumerated in any
Self-Regulatory Organization membership agreements or other limitations imposed
in connection with its registrations, forms (including Form BD) and other
reports filed with any Governmental Authority or Self-Regulatory Organization.
 
ix.           Since October 4, 2007, none of the Broker Dealer Entities or any
of their respective “associated persons of a broker or dealer” (as defined in
the Exchange Act) has been, or currently is, ineligible or disqualified pursuant
to Section 15, Section 15B or Section 15C of the Exchange Act to serve as a
broker or dealer or as an “associated person of a broker or dealer” (as defined
in the Exchange Act), nor is there any legal, administrative, arbitral, or other
proceedings, suits, actions, claims, investigations, complaints or hearings by
or before a Governmental Authority or Self-Regulatory Organization pending, or
threatened in writing, by any Governmental Authority or Self-Regulatory
Organization, which would reasonably be expected to become the basis for any
such ineligibility or disqualification, nor is there any reasonable basis for a
proceeding or investigation, whether formal or informal, preliminary or
otherwise, that is reasonably likely to result in any such ineligibility or
disqualification.
 
x.           Each of the Broker Dealer Entities is in compliance in all material
respects with Regulation T of the Board of Governors of the Federal Reserve
System, and the margin rules or similar rules of any Self-Regulatory
Organization of which such Broker Dealer Entity is a member, including the rules
governing the extension or arrangement of credit to customers, and Bonds.com,
other than the Broker Dealer Entities, has not and does not extend or arrange
credit for any customer within the meaning of Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System.
 

 
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xi.           Each of the Broker Dealer Entities is in compliance with all
applicable regulatory net capital requirements and no distribution of cash from
a Broker Dealer Entity following the Effective Date will result in such Broker
Dealer Entity not being in compliance with applicable regulatory net capital
requirements.
 
xii.           To Bonds.com’s knowledge, no facts or circumstances exist that
would prevent Bonds.com from entering into or performing under this Agreement or
cause any Self-Regulatory Organization or other Governmental Authority to revoke
or restrict the Broker Dealer Entities’ licenses, permits, approvals,
authorizations, consents, registrations, certificates and orders to operate in
any jurisdiction as a broker or a dealer.
 
xiii.           Bonds.com is authorized to enter into the Transactions that are
facilitated by the System, and represents and warrants that any Transactions
effected through the System create legal, valid, and binding obligations on
Bonds.com enforceable by UBS.
 
xiv.           Bonds.com further covenants that it shall promptly notify UBS if
it has actual knowledge that any of the foregoing representations and warranties
cease to be true at any time during the term of this Agreement.
 
5.
Covenant not to Solicit; Exclusivity.

 
a.           No Solicitation.  During the Term of this Agreement and for a
period of one (1) year following the termination of this Agreement, Bonds.com,
their respective officers, directors, employees, agents and representatives,
including, without limitation, any third party engaged by Bonds.com to refer
customers to Bonds.com, shall not target or solicit UBS Customers to become a
Bonds.com User or otherwise a customer of Bonds.com; however, this limitation
shall not apply to those prospective customers that were removed from the UBS
Customer List in accordance with Section 2.d. because UBS was unable to enter
into a definitive relationship to become a UBS User.  This provision is not
intended to preclude Bonds.com from responding to questions or inquiries from
UBS Customers.  In the event a UBS Customer seeks to become a customer of
Bonds.com on an unsolicited basis, Bonds.com agrees to promptly notify
UBS.  Nothing in this Section shall restrict Bonds.com during the Term of this
Agreement from targeting, soliciting recruiting or entering into other
arrangements with those UBS Customers (including those Persons domiciled outside
of the U.S.) that are sell-side Persons, including “market makers,” as the
Parties may mutually agree and which agreement UBS agrees not to unreasonably
withhold.
 
b.           No Redistribution.
 
i.           Bonds.com.  Except as otherwise expressly permitted in this
Agreement, during the Term of this Agreement, Bonds.com, their respective
officers, directors, employees, agents and representatives, will not solicit,
encourage submission of a proposal for, negotiate, or enter into any arrangement
or agreement with any User or any other party, other than UBS, that would permit
the redistribution of any IOI or any data related thereto to any other Person,
other than to UBS, and Bonds.com will include a provision, in a form
satisfactory to UBS, prohibiting such redistribution in all agreements entered
into between Bonds.com and any and all Users and, if applicable, amend any prior
agreements with any User to include such provision.  Nothing in this Agreement
shall restrict Bonds.com’s ability to link to and recruit those Persons as the
Parties may mutually agree which may include unique liquidity outlets (sell-side
Users and “market makers”), such as trust portals, accounting systems or large
bank retail networks.  During the Term of this Agreement, without the prior
written consent of UBS, Bonds.com agrees not to distribute the Bonds.com order
book with depth of market or partial depth of market, directly or indirectly, to
any third party order matching engine via an API Market Data Connection.  For
this purpose, an "API Market Data Connection" shall mean a connection to a third
party software system using a pre-agreed computer to computer messaging
interface such as the "FIX" industry standard or other similar protocol with
written or electronic specifications shared between Bonds.com and the third
party, where the order book is shared from the Bonds.com Platform to or from the
third party's system.
 
 
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ii.           UBS.  Except as otherwise expressly permitted in this Agreement,
during the Term of this Agreement, UBS, their respective officers, directors,
employees, agents and representatives, will not solicit, encourage submission of
a proposal for, negotiate, or enter into any arrangement or agreement with any
other party, other than UBS or its Affiliates, that would permit the
redistribution of any IOI or any data related thereto to any other Person, other
than to UBS or its Affiliates.
 
c.           Exclusivity.
 
i.           Bonds.com.  During the Term of this Agreement and for a period of
six (6) months following termination of this Agreement by Bonds.com upon the
provision of six (6) months notice to UBS pursuant to Section 8.a. of this
Agreement or by UBS in accordance with Sections 8.a.i - 8.a.vi., Bonds.com shall
not solicit, encourage submission of a proposal for, negotiate, or license the
Bonds.com Platform or the Bonds.com Software to any other party, or otherwise
permit any other party to use the Bonds.com Platform or Bonds.com Software, on a
“white label” or “private label” basis or in the manner used by UBS.  During the
Term of this Agreement, and for a period of six (6) months following termination
of this Agreement by Bonds.com upon the provision of six (6) months notice to
UBS pursuant to Section 8.a. of this Agreement or by UBS in accordance with
Sections 8.a.i - 8.a.vi., Bonds.com agrees that Bonds.com, their respective
officers, directors, employees, agents and representatives, will not solicit,
encourage submission of a proposal for, negotiate, or enter into any arrangement
or agreement with any other broker or dealer or bank that provides for a system
or other arrangement that is similar to that contemplated under Section 2.a. of
this Agreement.
 
ii.           UBS.  During the term of this Agreement, the UBS Fixed Income
Matched Principal Trading Desk will not solicit, encourage submission of a
proposal for, negotiate, or enter into an arrangement or agreement with any
other broker or dealer or bank that provides for a system or other arrangement
that is similar to that contemplated under Section 2.a. of this Agreement.
 
6.
Confidentiality.

 
a.           Non-Disclosure. Except as otherwise provided in this Agreement,
both Parties shall maintain as confidential and shall not disclose (except for
those employees, attorneys, accountants and other advisors of the Receiving
Party (as defined below) and its Affiliates who need to know such information in
connection with the Receiving Party’s performance of its obligations under the
Agreement, and have in turn been advised of the confidentiality obligation
hereunder), copy, or use for purposes other than the performance of this
Agreement, any Confidential Information received by a Party (“Receiving Party”)
from the other party (“Disclosing Party”) and such Receiving Party agrees to
protect that Confidential Information with the same degree of care a prudent
person would exercise to protect its own confidential information and to prevent
the unauthorized, negligent, or inadvertent use, disclosure, or publication
thereof. Breach of confidentiality may cause irreparable damage and therefore,
in addition to all other remedies available at law or in equity, the injured
Party shall have the right to seek equitable and injunctive relief, and to
recover the amount of damages (including reasonable attorneys' fees and
expenses) incurred in connection with such unauthorized use. The Receiving Party
shall be liable under this Agreement to the Disclosing Party for any use or
disclosure in violation of this Section 6 by it or its Affiliates' employees,
attorneys, accountants or other advisors.
 
 
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b.           Exclusions. Subject to applicable consumer privacy laws and
regulations, the Parties shall have no obligation under this Agreement with
respect to any Confidential Information of the other Party that is: (a) already
known by the Receiving Party at the time of the disclosure; (b) publicly known
at the time of the disclosure or becomes publicly known through no wrongful act
of the Receiving Party; (c) subsequently disclosed by a third party not having a
confidential relationship with the Disclosing Party known to the Receiving Party
and which third party rightfully acquired such information; (d) independently
developed by the Receiving Party; (e) communicated to a third party with the
express written consent of the Disclosing Party; or (f) required to be disclosed
to any Governmental Authority or Self-Regulatory Organization or as required by
any subpoena, summons, order or other judicial process.
 
c.           Other Confidential Information. The Parties acknowledge that, as
financial institutions, the Parties may be subject to certain laws and
regulations regarding the privacy and protection of consumer information, and
that any receipt or use of personal information by the other Party may also be
subject to compliance with such laws and regulations. Each Party agrees that any
Personal Information shall be treated as Confidential Information hereunder and
shall be used solely for the purpose of carrying out the intent of this
Agreement. Each Party also agrees to treat such Personal Information in
accordance with the other Party's published privacy policy, a copy of which will
be provided to such Party from time to time.
 
d.           Restrictions on Other Confidential Information. In no event shall
any such Personal Information be used by either Party for any other purpose
other than as permitted under this Section whatsoever (including, without
limitation, the marketing of the Party's other products or services), and
Bonds.com is expressly prohibited from soliciting or marketing to UBS Customers
through any means for any purpose. Each Party agrees that any Personal
Information shall not be given, bartered, sold, traded, transferred or exchanged
in any way to other Persons for any uses; and if this were to occur it would
cause irreparable harm to the other Party.
 
e.           Permission to Share. Should one Party wish to share any Personal
Information with an Affiliate or a third party for the purpose of carrying out
the intent of this Agreement, that Party shall (a) obtain the advance written
approval of the other Party, and (b) obtain the agreement of any such Affiliate
or third party not to re-disclose the Personal Information or to use the
Personal Information.
 
f.           Destruction or Return. Except as provided in Section 3 of this
Agreement, each Party shall, upon termination or expiration of this Agreement,
or upon demand by the Disclosing Party, whichever is earlier, promptly return to
the Disclosing Party or destroy any and all Confidential Information (including
Personal Information) of the Disclosing Party, together with any copies or
reproductions thereof, and destroy all related data in its computer and other
electronic files. The recipient shall at such time provide the Disclosing Party
with a certificate signed by an officer of the recipient certifying that all
such Confidential Information has been returned to the Disclosing Party or
destroyed. The Parties agree to ensure that all data received from the other
Party will be erased from all forms of magnetic and electronic media using a
method which ensures that it cannot be recovered. The recipient shall state in
writing the method of data destruction and the date completed.
 
g.           Survival. The provisions of this Section 6 shall survive the
termination or expiration of this Agreement.
 
 
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7.
Contingency Planning.

 
Each Party shall have in place contingency plans and a disaster recovery plan
with respect to the System.  Such plans shall be provided to other Party within
thirty (30) days of the Effective Date of this Agreement.
 
8.           Term and Termination.
 
a.           Term.  This Agreement will become effective on the Effective Date
and, unless sooner terminated as provided herein, will continue in effect for
two (2) years from the Effective Date (“Initial Term”) and for an indefinite
period thereafter unless terminated as provided herein (“Successor
Term”).  Beginning six months prior to the conclusion of the Initial Term and at
any time during the Successor Term, either Party may terminate this Agreement
upon six (6) months prior written notice to the other Party.  If such notice has
been received by a Party prior to the last calendar day of any calendar month,
such notice shall be deemed effective as of the last calendar day of the
calendar month in which it is received and this Agreement shall terminate on the
last calendar day of the sixth month following such date.  In addition, this
Agreement may also be terminated as follows:
 
i.           Either Party may immediately terminate this Agreement if the other
Party, including any Bonds.com entity, either commences a voluntary proceeding,
or has commenced against it an involuntary proceeding, under the Bankruptcy
Code, or other similar law, or if such party makes a general assignment on
behalf of its creditors or becomes unable to pay its debts when they become due
or takes any other similar action;
 
ii.           Either Party may immediately terminate this Agreement if the other
Party materially fails to perform or materially breaches any of its covenants or
agreements set forth in this Agreement during the Term of this Agreement, and
such failure or breach cannot be or has not been cured within ten (10) days
after the provision of written notice by such Party to the other Party
specifying such failure or breach;
 
iii.           Either Party may immediately terminate this Agreement if any of
the representations or warranties of the other Party are breached, and such
breach has or can reasonably be expected to have a Material Adverse Effect on
the performance or fulfillment of this Agreement or on the non-breaching Party
and such breach cannot be or has not been cured within five (5) business days
after the provision of written notice by such Party to the other Party
specifying such breach;
 
iv.           Either Party may immediately terminate this Agreement if any
arrangements, licenses, registrations or qualifications are terminated,
canceled, suspended or limited for any reason which makes the business of the
other Party impractical to operate and such arrangements, licenses,
registrations or qualifications are not reinstated within five (5) business days
from such termination, cancellation, suspension or limitation and such
termination, cancellation, suspension or limitation has a Material Adverse
Effect on the performance or fulfillment of this Agreement or on the
non-breaching Party;
 
v.           UBS may immediately terminate this Agreement if any investigation
or inquiry by a federal, state, or non-US governmental authority or
Self-Regulatory Organization concerning Bonds.com, or its respective employees’
has been initiated that in UBS’s sole and reasonable discretion may have a
Material Adverse Effect on Bonds.com or UBS; and
 
 
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vi.           UBS shall have the right to terminate this Agreement if it
reasonably believes that the Form ATS filings required by Section 2.l. has not
been approved by the SEC in a reasonable period of time, the sufficiency of such
approval shall be subject to the review and approval of UBS (which shall not be
unreasonably withheld).
 
b.           Termination of this Agreement in any manner shall not release UBS
or Bonds.com from any liability or responsibility with respect to any
Transaction effected under this Agreement prior to the date of such termination.
 
c.           Following the termination of this Agreement for any reason, each
Party shall retain the right to sue for damages including, but not limited to,
the right to recover for any losses as provided under Section 9 of this
Agreement.
 
9.
Indemnification.

 
a.            Bonds.com’s Obligations. Bonds.com will indemnify, defend, and
hold harmless UBS and UBS’s Affiliates, and their respective directors,
officers, employees, and agents, from and against any and all claims, demands,
proceedings, suits, actions, liabilities, expenses, and reasonable attorney’s
fees, and costs in connection therewith arising out of (i) a claim that the
Bonds.com Software, Bonds.com Platform, and/or documentation, software, hardware
or other Intellectual Property Rights provided to UBS by Bonds.com infringes,
misappropriates, or otherwise violates any Intellectual Property Rights of a
third party; or (ii) Bonds.com's or its respective directors’, officers’,
employees’ or agents’ material breach of this Agreement, or fraud, gross
negligence, willful misconduct, or breach of confidentiality related to this
Agreement or the transactions contemplated hereby.  Additionally, Bonds.com
Group, Inc. will indemnify, defend, and hold harmless UBS and UBS’s Affiliates,
and their respective directors, officers, employees, and agents, from and
against any and all claims, demands, proceedings, suits, actions, liabilities,
expenses, and reasonable attorney’s fees, and costs in connection therewith
arising out of its or its respective directors’, officers’, employees’ or
agents’ material breach of any other agreement between the Parties, fraud, gross
negligence, willful misconduct, or breach of confidentiality.
 
b.           Continued Right to Use. In the event that UBS has exercised its
option in either Section 3.a. or 3.b., Bonds.com agrees that, should use of the
Bonds.com Software, Bonds.com Platform, and/or documentation be enjoined by any
court, or in Bonds.com's opinion is likely to be enjoined, without any fault by
UBS, that Bonds.com will, at its sole option, use reasonable efforts to (i)
promptly obtain the right to continue to use the items so enjoined, or (ii)
provide UBS promptly with substitute items that are functionally equivalent to
the enjoined items; or (iii) modify the item so that it is non-infringing.
 
c.           UBS’s Obligations. UBS shall indemnify, defend, and hold harmless
Bonds.com, and its respective directors, officers, employees, and agents, from
and against any losses, damages, liability, costs and expenses (including, but
not limited to, reasonable fees for attorneys and other professionals) relating
to or arising from UBS’s or its directors’, officers’, employees’ or agents’
material breach of this Agreement or from UBS’s fraud, gross negligence, willful
misconduct, or breach of confidentiality.
 
d.           Notice of Claims. If a third party asserts any claim against a
party (“Third Party Assertion”) for which such Party seeks indemnification under
this Section 9, that Party (“Indemnified Party”) shall give the other Party
(“Indemnifying Party”) written notice promptly after Indemnified Party has
actual knowledge of such claim.
 
e.           Assumption of De­fense. Within thirty (30) days of receipt of
written notice pursuant to Section 9.d, the Indemnifying Party will have the
right, exercisable by written notice to the Indemni­fied Party, to assume the
defense of a Third Person Assertion.  If the Indemnifying Party assumes such
defense, the Indemnifying Party may select counsel, which counsel will be
reasonably acceptable to the Indemnified Party.
 
 
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f.           Failure to Defend. If the Indemnifying Party:  (a) does not assume
the defense of any Third Person Asser­tion in accordance with Section 9.e; (b)
having so assumed such defense, unrea­sonably fails to defend against such Third
Person Assertion; or (c) has been advised by the written opinion of counsel to
the Indemnified Party that the use of the same counsel to represent both the
Indem­nifying Party and the Indemni­fied Party would present a conflict of
interest, then, in each case upon five (5) days’ written notice to the
Indemni­fy­ing Party, the Indemnified Party may assume the de­fense of such
Third Person Assertion.  In such event, the Indem­nified Party will be entitled
under this Section 9 as part of its damages to indem­nifica­tion for the costs
of such defense.
 
g.           Settlement.  The Party controlling the defense of a Third Person
Assertion will have the right to consent to the entry of judgment with respect
to, or other­wise settle, such Third Person Assertion with the prior written
con­sent of the other Party, which consent will not be unreasonably with­held or
delayed; provided, how­ever, that such other Party may withhold its consent if
any such judgment or settle­ment imposes a monetary obligation on such other
Party that is not covered by the indem­nification, imposes any material non
monetary obligation, or does not include an uncondi­tional release of such other
Party and its Affiliates from all claims of the Third Person Assertion.
 
h.           Participation. The Indemnifying Party and the Indemnified Party
will cooper­ate, and cause their respec­tive Affiliates to coop­erate, in the
defense of any Third Person Assertion.  The In­demnifying Party or the
Indemnified Party, as the case may be, will have the right to participate, at
its own ex­pense, in the de­fense or settlement of any Third Person Assertion.
 
10.
Limitation of Liabilities.

 
a.           Limitation. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR
ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, ANY DAMAGES ARISING FROM LOSS OF USE OR LOST BUSINESS, REVENUE,
PROFITS, DATA OR GOODWILL) ARISING IN CONNECTION WITH THIS AGREEMENT, WHETHER IN
AN ACTION IN CONTRACT, TORT, STRICT LIABILITY OR NEGLIGENCE, EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
 
b.           Exclusions. NEITHER PARTY'S LIMITATION OF LIABILITY IN THE
FOREGOING SECTION 10.a. SHALL APPLY TO CLAIMS FOR PERSONAL INJURY, DAMAGE TO
REAL PROPERTY OR TO TANGIBLE PERSONAL PROPERTY, INFRINGEMENT OF INTELLECTUAL
PROPERTY RIGHTS, OR BREACH OF CONFIDENTIALITY.
 
11.
Bonds.com Consent, etc.

 
Pursuant to Section 7.5 of the Software License, Hosting, Joint Marketing and
Service Agreement among InterDealer and Bonds.com dated July 8, 2009, as amended
(the "InterDealer-Bonds.com License Agreement") or otherwise, Bonds.com hereby
irrevocably agrees to consent and hereby consents to InterDealer granting UBS or
its Affiliates one or more present or future licenses to any software or
documentation as InterDealer and UBS may agree from time to time; provided that
this consent shall not apply to any license that excludes Bonds.com from being
granted the same license.  In addition, during the Term of this Agreement,
Bonds.com agrees not to grant InterDealer any other consent contemplated by
Section 7.5 of the InterDealer-Bonds.com License Agreement without the prior
written consent of UBS. Although Bonds.com may acquire the intellectual property
of InterDealer that is the subject of the InterDealer Agreement (subject to the
InterDealer Agreement and to InterDealer retaining the right to use such
intellectual property to perform its obligations under the InterDealer
Agreement), UBS acknowledges and agrees that Bonds.com shall not be deemed to
have assumed the obligations of InterDealer under the InterDealer Agreement
unless and until Bonds.com shall have assumed such obligations and Agreement in
writing.
 
 
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12.
Miscellaneous Provisions.

 
a.           Injunctive Relief. Each Party acknowledges that a breach of any
provision of this Agreement may cause the other Party irreparable injury and
damage and, therefore, any such breach may be enjoined through injunctive
proceedings in addition to any other rights and remedies which may be available
to other Party at law or in equity.
 
b.           Assignment; Binding Nature. The Agreement may not be assigned by
either Party without prior written consent of the other Party, which consent
will not be unreasonably withheld. Notwithstanding the foregoing, either Party
may assign this Agreement in its entirety to any purchaser of all of its assets
or business subject to the other Party’s consent which shall not be unreasonably
withheld.  Any attempt to assign this Agreement other than in accordance with
this provision shall be null and void. The Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective permitted
successors and permitted assigns.
 
c.           Notices.  All notices required or permitted hereunder shall be in
writing and shall be hand-delivered or sent by registered or certified mail,
return receipt requested, to the Parties at the addresses set forth below (as
may be changed by either Party by written notice to the other at any time), and
shall be deemed given and received on the date such notice is issued.
 
To Bonds.com
 
1515 S. Federal Highway, Suite #212
Boca Raton , FL 33432
Tel: 561-953-5343
Fax: 561.395.3212
Attention: John Barry IV, Chief Executive Officer

with a copy (for informational purposes only) to:
 
Hill Ward Henderson
3700 Bank of America Plaza
101 East Kennedy Boulevard
Tampa, Florida 33602
Telephone: (813) 227-8484
Facsimile:  (813) 221-2900
Attention:  Mark A. Danzi, Esq.
 
To UBS:
 
Head of Traded Products - Legal
677 Washington Blvd.
Stamford, CT 06901
 
d.           Amendments; Waivers. The Agreement may not be amended or modified
unless expressly agreed to in writing by both Parties. No provision hereof may
be waived except by an instrument in writing executed by the Party against whom
the waiver is to be effective. The failure of either Party at any time or times
to require full performance of any provision hereof will in no manner affect the
right of such Party at a later time to enforce the same provision or any other
provision.
 
 
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e.           Severability. If any provision or term of this Agreement is held to
be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remainder of the Agreement: shall not be affected.
 
f.           Entire Agreement. This Agreement, together with the Unit Purchase
Agreement and the agreements and documents delivered in connection herewith,
constitute the entire agreement between Bonds.com and UBS with respect to the
subject matter of this Agreement and supersede all other oral, written, or other
communications between the parties concerning this subject matter.  In the event
of conflict between this Agreement and any other agreement, this Agreement shall
govern and control.
 
g.           Headings. The headings in the Agreement are intended for
convenience of reference and shall not affect its interpretation.
 
h.           Governing Law. The Agreement is deemed entered into in New York,
New York and shall be governed by the laws of the state of New York, without
reference to the conflict-of-laws rules thereof. The parties hereby consent to
personal jurisdiction of, and venue in, the state and federal courts in New York
County, New York and agree that, except to the extent the arbitration rules of
any Self-Regulatory Organization are mandatorily applicable thereto, that all
actions relating to or arising from, directly or indirectly, this Agreement
shall be brought exclusively in such courts.
 
i.           Force Majeure. Neither Party shall be liable for any delay or
failure in the performance of its obligations hereunder if and to the extent
such delay or failure is caused, directly or indirectly, by fire, flood,
explosion, war, terrorism, earthquake, elements of nature, or acts of God or the
public enemy; riots, civil disorders, rebellions, or revolutions in any country,
embargo, strikes, lockouts, or labor difficulties, civil or military authority,
inability to secure materials or transportation facilities, act or omission of
carriers or supplier, inability to obtain any relevant data, access links, or
other communication facilities, any governmental requirements or any acts, or
failures to act, of any governmental authority; any party so delayed in its
performance shall immediately notify the other by telephone, confirm in writing,
and describe in reasonable detail the circumstances causing such delay. During
the time that any of the events specified above continue to exist, each of the
obligations of each Party hereto, other than those affected by the events listed
above, shall remain in full force and effect and each Party shall continue to
perform such obligations hereunder. If such force majeure event continues for
more than sixty (60) days, the non-invoking Party has the right to terminate
this Agreement without penalty.
 
j.           Publicity. Bonds.com shall not use, without the prior written
approval of UBS, the name or any trade name, trademark, trade device, service
mark, symbol or any abbreviation, contraction or simulation thereof of UBS or
any Affiliate of UBS in any advertising, promotional literature, customer list
or any other material, whether in written, electronic or other form. Bonds.com
shall not represent, directly or indirectly, that any Services provided by
Bonds.com has been approved or endorsed by UBS or any Affiliate thereof.
 
k.           Affiliates.  To the extent that any term or provision of this
Agreement grants rights to or contemplates, permits, or requires performance of
any Affiliate of a Party, such Affiliate shall be considered to be an intended
third party beneficiary of this Agreement and such Party shall cause such
Affiliate to perform each and every such obligation of such Party under this
Agreement in accordance with the terms and conditions hereof.
 
l.           Survival. The provisions of Sections 3, 5.a. (as specified under
Section 5.a), 5.c.i. (as specified under Section 5.c.i.), 6, 9, 10, and 11 of
this Agreement shall survive any termination of the Agreement.
 
m.           Counterparts. The Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, and all of
which together shall constitute one agreement.  A facsimile or electronic
signature shall be considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an
original, not a facsimile or electronic signature.
 
 
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.
 

 
BONDS.COM, INC.
       
By:
/s/ John J. Barry IV
 
Name:
John J. Barry IV
 
Title:
Chief Executive Officer
 
Address: 1515 S. Federal Highway, Suite #212
Boca Raton , FL 33432
 

BONDS.COM GROUP, INC.
       
By:
/s/ John J. Barry IV
 
Name:
John J. Barry IV
 
Title:
Chief Executive Officer
 
Address: 1515 S. Federal Highway, Suite #212
Boca Raton , FL 33432
 

UBS SECURITIES LLC
       
By:
/s/ Joan Lavis
 
Name:
Joan Lavis
 
Title:
Managing Director
Strategy & Business Development
 

Address:_________________________________

By:
/s/ Ric Elvir
 
Name:
Ric Elvir
 
Title:
Director
MPT Trading
 

Address:_________________________________

 
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Execution Version

Schedule A
List of UBS Customers
 
[***]

 
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Execution Version

Exhibit A
Unit Purchase Agreement
 

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