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Bonds.com Group, Inc. 8-K [bonds-8k_0112.htm]

Exhibit 10.3

 
EXECUTION VERSION

 
STOCKHOLDERS’ AGREEMENT
 
This STOCKHOLDERS’ AGREEMENT (this “Agreement”) is entered into as of January
11, 2010, by and among Bonds.com Group, Inc., a Delaware corporation (the
“Company”), Fund Holdings LLC, a Florida limited liability company (“Holdings”),
John J. Barry III and Holly A.W. Barry (“John & Holly Barry”), Duncan Family,
LLC, a Florida limited liability company (“Duncan LLC”), John J. Barry III and
Holly A.W. Barry, as co-trustees of the Duncan Family Revocable Trust (“Duncan
Trust” and, collectively with John & Holly Barry and Duncan LLC, the “JBIII
Stockholders”), Otis Angel, LLC, a Florida limited liability company (“Otis
Angel”), Siesta Capital, LLC, a Florida limited liability company (“Siesta
Capital”), Bond Partners, LLC, a Florida limited liability company (“Bond
Partners”), John J. Barry IV, as trustee of the John J. Barry IV Revocable Trust
u/a/d November 9, 2001 (“J. Barry IV Trust” and, collectively with Otis Angel,
Siesta Capital and Bond Partners, the “JBIV Stockholders”), Laidlaw Venture
Partners III, LLC, a Delaware limited liability company (“LVCIII”), Laidlaw &
Company (UK) Ltd. (“LCUK” and, collectively with LVCIII, “Laidlaw”), and UBS
Americas Inc., a Delaware corporation (“UBS” and together with Holdings, the
JBIII Stockholders and the JBIV Stockholders, the “Stockholders”).
 
A.           The Company and UBS are parties to that certain Unit Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to
which UBS is purchasing certain Units (as defined therein) of the Company (the
“Transaction”).
 
B.           The execution of this Agreement by the Company and the Stockholders
is a condition precedent to the consummation of the Transaction.
 
C.           In consideration of the benefits to be derived by the Company and
the Stockholders from the consummation of the Transaction, the Company and the
Stockholders desire to enter into this Agreement.
 
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
 
1.           Definitions.
 
(a)           “Board” means the Company’s board of directors.
 
(b)           “Business Day” means a day on which the New York Stock Exchange is
open for business.
 
(c)           “Certificate of Designation” means that certain Certificate of
Designation for the Series A Preferred Stock of the Company.
 
(d)           “Change of Control” means (i) a sale, transfer, lease, license or
other disposition of all or substantially all of the Company’s assets or
business, (ii) any merger, consolidation, reorganization or other business
combination transaction of the Company with or into another Person, other than a
transaction in which the holders of at least a majority of the shares of voting
capital stock of the Company outstanding immediately prior to such transaction
continue to hold (either by such shares remaining
 

 
 

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outstanding or by their being converted into shares of voting equity of the
surviving Person) a majority of the total voting power represented by the shares
of voting capital stock or other voting equity of the Company or the surviving
Person outstanding immediately after such transaction, or (iii) the direct or
indirect acquisition (including by way of new issuance by the Company (other
than issuances of shares in respect of options or warrants existing as of the
date hereof, but solely to the extent that the issuance triggered a Change of
Control without factoring in any additional purchases made by such Person
subsequent to the date hereof (other than purchases pursuant to the foregoing
options and warrants)), re-sales of stock by existing shareholders to persons or
entities that are not then parties to this Agreement, or a tender or exchange
offer), in a single transaction or series of related transactions, by any
Person, or Persons acting as a group, of beneficial ownership or a right to
acquire beneficial ownership of shares of the Company’s capital stock
representing at least a majority of the voting power of the then outstanding
shares of capital stock of the Company.
 
(e)           “Common Stock” means the common stock, par value $0.0001 per
share, of the Company.
 
(f)           “Derivatives Transaction” means the sale, purchase or grant of any
contract to purchase, contract to sell, option, forward, swap, warrant, scrip,
right to subscribe to, call or commitment of any character whatsoever or in any
combination, relating to, or securities or rights convertible into, or
exercisable or exchangeable for, or the value of which is dependent (in whole or
in part) on the value of, any shares of capital stock of the Company, whether
such transaction may be settled in cash, securities or otherwise.
 
(g)           “Market Sale” means any sale, transfer or other disposition of
Securities in (i) a “brokers’ transaction” (as defined in Rule 144 promulgated
under the Securities Act of 1933, as amended, but excluding clause (4) of such
definition for purposes hereof), or (ii) a Public Sale using a broker and where
clauses (1) and (3) of such definition of “brokers’ transaction” would be
satisfied notwithstanding that it’s a Public Sale, in each case, occurring in an
exchange or other recognized market (the “Market”) where the average daily
volume of the Company’s stock over the prior four weeks has been at least 50,000
shares.
 
(h)           “Permitted Transferee” means:
 
 
(i)           as to any Stockholder who is a natural person, (A) the successors
in interest to such Stockholder, in the case of a transfer upon the death of
such Stockholder, provided that such successors in interest would be a Permitted
Transferee under clauses (i)(B) or (i)(D) of this definition, (B) such
Stockholder’s spouse, parents and descendants (whether by blood or adoption, and
including stepchildren) and the spouses of such persons, (C) such Stockholder,
with respect to the disposition of the community property interest of such
Stockholder’s spouse in all or any part of the Securities upon the death of such
spouse, and any transfer occasioned by the incompetence of such Stockholder and
(D) in the case of a transfer during such Stockholder’s lifetime, any Person in
which no Person has any interest (directly or indirectly) except for any of such
Stockholder, such Stockholder’s spouse, parents and descendants (whether by
blood or adoption, and including stepchildren) and the spouses

 
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of such persons; provided, however, that in respect of any transfer by any
Stockholder during such Stockholder’s lifetime pursuant to clause (B) or (D),
such Stockholder shall retain voting power over all of the outstanding Shares
being transferred;
 
(ii)          as to any Stockholder that is a trust, all the beneficiaries of
which are natural persons, such beneficiaries or the grantor of the trust;
provided, however, that if such trust is a Permitted Transferee under
clause (i)(A) or (i)(D) of this definition, each such beneficiary or grantor of
such trust is a Person who would be permitted to have an interest in such trust
under such clause (i)(A) or (i)(D);
 
(iii)         as to any Stockholder that is a limited partnership or limited
liability company, (A) any limited or general partner, member, officer, employee
or affiliate of such Stockholder or (B) any affiliate of any limited or general
partner or member of such Stockholder; and
 
(iv)         as to any Stockholder that is a corporation, all affiliates of such
Stockholder.
 
(i)            “Person” means an individual, corporation, partnership, limited
partnership, trust, association or other legal entity.
 
(j)            “Private Sale” means any sale, transfer or other disposition of
Securities by a Selling Stockholder that is not a Market Sale or a Public Sale.
 
(k)           “Public Sale” means (i) a primary sale of any equity securities of
the Company by the Company pursuant to a registration statement in which one or
more Selling Stockholders participates as a selling stockholder, or (ii) a
secondary sale of equity securities of the Company by Selling Stockholders
pursuant to a registration statement filed either by the Company for the benefit
of such Selling Stockholders or by such Selling Stockholders.  For avoidance of
doubt, a Public Sale may also be a Market Sale if it satisfies clause (ii) of
the definition thereof.
 
(l)            “Sales” means Private Sales, Public Sales and Market Sales, and
includes Derivative Transactions.
 
(m)          “Securities” means Shares and Warrants.
 
(n)           “Selling Stockholder” means any Stockholder other than UBS and
Laidlaw.
 
(o)           “Series A Preferred Stock” means the Series A Participating
Preferred Stock, par value $0.0001 per share, of the Company.
 
(p)           “Shares” means the shares of Series A Preferred Stock and the
shares of Common Stock.
 

 
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(q)           “Warrants” means warrants and other rights issued by the Company
to purchase Shares.
 
2.           UBS Tag-Along Rights.
 
(a)           Private Sales.
 
(i)           If, at any time after the date of this Agreement, a Selling
Stockholder desires to sell or otherwise transfer, directly or indirectly,
through a Derivatives Transaction or otherwise, in a Private Sale all or any
portion of such Selling Stockholder’s Securities then UBS shall have the right
to participate in the proposed Private Sale by such Selling Stockholder as
provided in this Section 2(a).  The Selling Stockholder shall give written
notice (the “Tag-Along Notice”) to UBS of each proposed Sale at least ten (10)
days prior to the proposed effective date of such Private Sale.  The Tag-Along
Notice shall set forth the terms and conditions of the Private Sale, including
the number of Securities that the Selling Stockholder proposes to sell (the
“Offered Securities”), the proposed timing of the Private Sale, the
consideration to be paid for the Offered Securities, the identity of the
proposed purchaser, and all other material terms and conditions of the Private
Sale, including the proposed form of written agreement, if any.  UBS shall have
the right to sell to such transferee(s) a portion of its Securities equal to the
product of (A) the number of Securities then held by UBS and (B) a fraction (1)
the numerator of which shall be the number of Offered Securities, and (2) the
denominator of which shall be the total number of Securities held as of the date
of this Agreement by the Selling Stockholder(s) participating in such Sale (as
adjusted for stock splits, combinations and the like and as reduced by any Sales
previously made by such Selling Stockholder(s) subsequent to the date of this
Agreement).  The price per share of Series A Preferred Stock to be paid by such
transferee(s) shall be equal to one hundred (100) times the price to be paid by
such transferee(s) for each share of Common Stock (subject to equitable
adjustment for stock splits, combinations and the like that are made with
respect to the Series A Preferred Stock where no corresponding adjustment is
made to the Common Stock).
 
(ii)          The tag-along rights provided in this Section 2(a) must be
exercised by UBS within ten (10) days after its receipt of the Tag-Along Notice,
by delivery of a written notice to the Selling Stockholder, with a copy to the
Company, indicating UBS’ desire to exercise its rights and specifying the number
of Securities (the “Tagging Securities”) it wishes to sell.  The Tagging
Securities shall be in the same proportion of Shares and Warrants as the Offered
Securities.  The number of Securities that the Selling Stockholder may sell
pursuant to this Section 2 shall be reduced by the equivalent amount of the
Tagging Securities, unless (A) the transferee(s) have indicated their
willingness to buy all of the Securities that the Selling Stockholder and UBS
desire to sell, (B) the Company, at its sole option, elects to redeem such
Tagging Securities or (C) the Selling Stockholder elects to purchase such
Tagging Securities. At the closing of such Sale, UBS shall deliver (A) all
documents required to be executed in connection with such Private Sale and (B)
the certificates for the Securities being sold to the purchaser(s) thereof
against receipt of the purchase price therefor paid by certified or bank check
or wire transfer.
 
(iii)         In lieu of the transferee(s) purchasing the Tagging Securities
pursuant to this Section 2(a), (A) the Company may, at its sole option, elect to
redeem such Tagging Securities at the same price per share as such transferee(s)
would have paid pursuant to the provisions of Section 2(a) and/or (B) the
Selling Stockholder may elect to purchase such Tagging Securities at the same
price per share as such transferee(s) would have paid pursuant to the provisions
of Section 2(a).  Any such redemption by the Company or purchase by the Selling
Stockholder shall be completed prior to or simultaneously with the proposed
Sale.
 

 
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(iv)         If UBS properly exercises its tag-along rights under this Section
2(a) and the Tagging Securities are not (A) purchased by the purchaser of the
Offered Securities, (B) redeemed by the Company or (C) purchased by the Selling
Stockholder, then the Selling Stockholder shall not be permitted to consummate
the proposed Sale of the Securities, and any such attempted Sale shall be null
and void.
 
(v)          Any notice given by UBS in which it elects to exercise its
tag-along rights provided in this Section 2(a) shall be irrevocable and shall
constitute a binding agreement to sell (to either the proposed transferee(s) or
the Selling Stockholder) or submit for redemption to the Company such Tagging
Securities as are included therein on the terms and conditions applicable to
such sale or redemption.
 
(b)           Market Sales.
 
(i)           If, at any time after the date of this Agreement, a Selling
Stockholder desires to sell or otherwise transfer, directly or indirectly,
through a Derivatives Transaction or otherwise, in a Market Sale all or any
portion of such Selling Stockholder’s Securities then UBS may request that the
Company redeem certain Securities held by UBS as provided in this Section 2(b),
and the right of the Selling Stockholder to sell or otherwise transfer any
Securities in such Market Sale shall be subject to the Company agreeing, at its
sole option, to redeem such Securities pursuant to this Section 2(b).  The
Selling Stockholder shall give a Tag-Along Notice to UBS and the Company of each
proposed Market Sale at least one (1) Business Day prior to the proposed
effective date of such Market Sale, subject to the timing set forth in Section
2(b)(iii) below.  The Tag-Along Notice shall set forth the terms and conditions
of the Market Sale, including the number of Offered Securities and the proposed
timing of the Market Sale and the price per share (the “Redemption Price”) at
which the shares of Series A Preferred Stock will be redeemed (which shall be
equal to one hundred (100) times the volume weighted average for shares of
Common Stock on the Market on the proposed date of such Market Sale (subject to
equitable adjustment for stock splits, combinations and the like that are made
with respect to the Series A Preferred Stock where no corresponding adjustment
is made to the Common Stock)).  The Tag-Along Notice shall be delivered by hand
delivery to the addresses set forth on Exhibit B hereto and confirmed
telephonically to the Head of Strategic Investments for Equities and Fixed
Income at (203) 719-4155, as such addresses and telephone numbers may be updated
from time to time by UBS upon written notice to the Company and the
Stockholders.
 
(ii)          If UBS exercises its tag-along redemption rights in accordance
with Section 2(b)(iii) below, UBS shall request the Company to redeem a portion
of its Securities equal to the product of (A) the number of Securities then held
by UBS and (B) a fraction (1) the numerator of which shall be the number of
Offered Securities, and (2) the denominator of which shall be the total number
of Securities held as of the date of this Agreement by the Selling
Stockholder(s) participating in such Sale (as adjusted for stock splits,
combinations and the like and as reduced by any Sales previously made by such
Selling Stockholder(s) subsequent to the date of this Agreement).
 

 
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(iii)         If the Tag-Along Notice is delivered prior to 10 a.m. New York
time, the tag-along redemption rights provided in this Section 2(b) must be
exercised by UBS prior to 5 p.m., New York time, on the date of the Tag-Along
Notice and if the Tag-Along Notice is delivered at or after 10 a.m. New York
time, the tag-along redemption rights provided in this Section 2(b) must be
exercised by UBS prior to 5 p.m., New York time, on the Business Day following
its receipt of the Tag-Along Notice.  The tag-along redemption rights shall be
exercised by delivery of a written notice (the “Redemption Notice”) to the
Selling Stockholder, with a copy to the Company, indicating UBS’ desire to
exercise its rights and specifying the number of Tagging Securities it requests
to have the Company redeem.  The Tagging Securities shall be in the same
proportion of Shares and Warrants as the Offered Securities.  The Company must
notify the Selling Stockholder and UBS whether it agrees, in its sole option, to
effect the requested redemption within the following applicable timeframe: (A)
if the Company receives UBS’ Redemption Notice at least two hours prior to 5
p.m., New York time, on the date of the Redemption Notice, then it must provide
such notification prior to 5 p.m., New York time, on such date, or (B) if the
Company receives UBS’ Redemption Notice less than two hours prior to 5 p.m. or
after 5 p.m., New York time, on the date of the Redemption Notice, then it must
provide such notification prior to 11:00 AM, New York time, on the Business Day
following the date on which it received UBS’ Redemption Notice.  If the Company
agrees, at its sole option, to redeem such Tagging Securities, it shall do so
within four Business Days of the receipt by the Company of the Redemption Notice
at the price per share set forth in the Tag-Along Notice; provided, however,
that if the Selling Stockholder does not consummate the Market Sale set forth in
the Tag-Along Notice, the Company shall not be required to redeem the Tagging
Securities and for the purposes of this Agreement, the Tag-Along Notice shall be
treated as having been withdrawn.
 
(iv)         If UBS properly exercises its tag-along redemption rights under
this Section 2(b) and the Company does not agree to redeem the Tagging
Securities, then the Selling Stockholder(s) may elect to purchase the Tagging
Securities at a price per share equal to the Redemption Price.
 
(v)          If UBS properly exercises its tag-along redemption rights under
this Section 2(b) and (A) the Company does not agree to redeem the Tagging
Securities and (B) the Selling Stockholder(s) does not elect to purchase such
Tagging Securities, then the Selling Stockholder(s) shall not be permitted to
consummate the proposed Sale of the Securities, and any such attempted Sale
shall be null and void.
 
(vi)         If UBS properly exercises its tag-along redemption rights under
this Section 2(b) and the Company agrees to redeem the Tagging Securities but
fails to do so for any reason, then the Selling Stockholder(s) shall, within two
Business Days of such failure by the Company, purchase the Tagging Securities at
the Redemption Price.
 
(vii)        Any notice given by UBS in which it elects to exercise its
tag-along redemption rights provided in this Section 2(b) shall be irrevocable
and shall constitute a binding agreement to submit for redemption or sell to the
Selling Stockholder such Tagging Securities as are included therein on the terms
and conditions applicable to such redemption or sale.
 

 
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(c)           Public Sales.  If at any time any Selling Stockholder proposes a
Public Sale that is not also a Market Sale (a “Subject Public Sale”), the
Company or the Selling Stockholder, as the case may be, shall provide written
notice (the “Offering Notice”) of the Subject Public Sale to UBS at least twenty
(20) Business Days prior to the proposed effective date of the Subject Public
Sale (the “Offering Date”), setting forth the anticipated terms and conditions
of the Subject Public Sale.  Upon receipt of an Offering Notice, UBS may elect
to request that the Company redeem a portion of its Securities equal to the
product of (i) the number of Securities then held by UBS and (ii) a fraction (A)
the numerator of which shall be the number of Securities to be sold by the
Selling Stockholder(s), and (B) the denominator of which shall be the total
number of Securities held by the Selling Stockholder(s) participating in such
Sale as of the date of this Agreement (as adjusted for stock splits,
combinations and the like and as reduced by any Sales previously made by such
Selling Stockholder(s)).  The redemption rights provided in this Section 2(c)
must be exercised by UBS within ten (10) Business Days of the delivery of the
Offering Notice by delivering a written notice (an “Offering Redemption Notice”)
to the Company, with a copy to the Selling Stockholder, stating the number of
Securities requested to be redeemed pursuant thereto. The Securities requested
to be redeemed shall be in the same proportion of Shares and Warrants as the
Securities proposed to be sold in the Subject Public Sale.  The redemption price
per share shall be equal to one hundred (100) times the price per share of
Common Stock received in the Public Sale by the Selling Stockholder(s), before
underwriter discounts or commissions (subject to equitable adjustment for stock
splits, combinations and the like that are made with respect to the Series A
Preferred Stock where no corresponding adjustment is made to the Common Stock)
(the “Offering Redemption Price”).  Upon receiving an Offering Redemption Notice
pursuant to this Section 2(c), the Company shall have two (2) Business Days to
notify UBS and the Selling Stockholder whether it will, at its sole option,
redeem the Securities requested in the Offering Redemption Notice.  If it agrees
to redeem such Securities, it shall also within such time frame set a date for
redemption (the “Redemption Date”), which date shall be no later than five (5)
Business Days prior to the Offering Date.  If the Company does not agree to
redeem any Securities subject to an Offering Redemption, then the Selling
Stockholder may elect to purchase such Securities at a price per share equal to
the Offering Redemption Price.  If (A) the Company does not agree to redeem any
Securities subject to an Offering Redemption and (B) the Selling Stockholder
does not elect to purchase such Securities, or if after having so agreed, the
Company fails to redeem or the Selling Stockholder fails to purchase, any
Securities subject to an Offering Redemption Notice pursuant to this Section
2(c), the Selling Stockholder(s) may not consummate the Subject Public
Sale.  Any notice given by UBS in which it elects to exercise its offering
redemption rights provided in this Section 2(c) shall be irrevocable and shall
constitute a binding agreement to submit for redemption or sell to the Selling
Stockholder such Securities as are included therein on the terms and conditions
applicable to such redemption or sale
 
(d)           Exclusions.  The tag-along and redemption rights provided in this
Section 2 shall not apply: (i) in the case of a transfer to a Permitted
Transferee, (ii) to a pledge that creates a mere security interest, provided
that the pledgee thereof agrees in writing in advance to be bound by and comply
with all applicable provisions of this Agreement to the same extent as if it
were the Stockholder making such pledge, or (iii) any lien or pledge outstanding
as of the date of this Agreement; provided that in the case of clause(s) (i) or
(ii), the Stockholder shall deliver notice to UBS of such pledge, gift or
transfer and such Securities shall at all times remain subject to the terms and
restrictions set forth in this Agreement and such transferee shall, as a
condition to such transfer or pledge, deliver a counterpart signature page to
this Agreement as confirmation that such transferee shall be bound by all the
terms and conditions of this Agreement as a Stockholder (but only with respect
to the securities so transferred to the transferee).  For the purposes of any
calculation in this Section 2 using the number of Securities held as of the date
of this Agreement, such calculations shall, for a transferee pursuant to this
Section 2(c), instead use the number of Securities received by such transferee
pursuant hereto.
 

 
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(e)           Volume Exclusions.  In addition to the exclusions set forth in
Section 2(d) above, the tag-along rights and related obligations of the Company
with respect to redemptions provided in Sections 2(a), 2(b) and 2(c) shall not
apply to (i) Sales by Holdings of up to (A) 17.5% of the Securities held by such
Stockholder as of the date that such Stockholder first became party to this
Agreement in any consecutive twelve month period and (B) 35% in the aggregate of
the Securities held by such Stockholder as of the date that such Stockholder
first became party to this Agreement, (ii) Sales by the JBIII Stockholders of up
to (A) 25% in the aggregate of the Securities held by such Stockholders as of
the date that such Stockholders first became party to this Agreement in any
consecutive twelve month period and (B) 45% each in the aggregate of the
Securities held by such Stockholders as of the date that such Stockholders first
became party to this Agreement, and (iii) Sales by the JBIV Stockholders of up
to (A) 25% in the aggregate of the Securities held by such Stockholders as of
the date that such Stockholders first became party to this Agreement in any
consecutive twelve month period and (B) 45% each in the aggregate of the
Securities held by such Stockholders as of the date that such Stockholders first
became party to this Agreement.  The following calculation shall be used in
determining the percentage of a Stockholder’s Securities that are being sold or
otherwise transferred in any given Sale: (x) the number of Securities previously
sold pursuant to this Section 2(e) and proposed to be sold by a Stockholder
divided by (y) the total number of Securities held by the Selling Stockholder as
of the date of this Agreement (as adjusted for stock splits, combinations and
the like).
 
3.           Sales to UBS Competitors.
 
(a)           Restriction on Sale of Shares.  The Company and each Stockholder
agrees that, prior to the first anniversary of the date of this Agreement, it
will not issue, sell or otherwise transfer, directly or indirectly, any
Securities to any bank, bank holding company, broker-dealer or any Person
controlling, controlled by or under common control with any of them (a “UBS
Competitor”) unless agreed in writing by UBS.
 
(b)           Exclusions.  The restriction contained in Section 3(a) shall not
apply to:
 
(i)           Market Sales (including Public Sales that are Market Sales) so
long as the Selling Stockholder is reasonably unaware that it is selling
Securities to a UBS Competitor;
 
(ii)          The sale by the Company of up to an additional 690 Common Units
(as defined below) for $690,000 to LVCIII only if (x) such securities are sold
by the Company on economic terms not more favorable to LVCIII than those
contemplated by the Unit Purchase Agreement, dated as of December 31, 2009 (the
“Unit Purchase Agreement”), by and among the Company and LVCIII and (y) the
Non-Competition Agreement between the Company and LCUK remains in full force and
effect and has not been amended since the date hereof without UBS’ consent.
 

 
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(iii)         On a Change of Control; provided that holders of Common Stock
receive cash consideration of at least $4.00 per share and holders of Series A
Preferred Stock receive cash consideration for all of their shares of Series A
Preferred Stock equal to no less than the greater of (i) $400.00 per share or
(ii) 100 times the consideration per share received by holders of Common Stock
in such Change of Control.  For the avoidance of doubt, the exclusion set forth
in this Section 3(b)(iii) shall only apply if all shares of Series A Preferred
Stock then held by UBS are being purchased.  The prices set forth in this
Section 3(b)(iii) are subject to equitable adjustment for stock splits,
combinations and the like.
 
(iv)         The issuance by the Company of shares of Common Stock upon the
exercise of Warrants which were acquired by LVCIII or LCUK pursuant to the
transactions described in the Unit Purchase Agreement or any additional Warrants
which are acquired pursuant to clause (ii) above; provided that the Warrants to
be issued to LCUK may be allocated to its officers and employees.
 
(v)          The distribution of the Securities owned by Laidlaw to its members.
 
(c)           Definitions.  For purposes of this Section 3, a “Common Unit shall
consist of (i) 2,667 shares of Common Stock and (ii) the right, within three
years from the date of sale of the Common Units, to purchase 7,200 additional
shares of Common Stock.
 
4.           Board Composition.  The Company and each Stockholder hereby agrees
that at no time while UBS continues to own any Shares will the Company and/or
the Stockholders appoint or vote in favor of, as applicable, any nominee to the
Board that is affiliated with a UBS Competitor unless UBS agrees thereto in
writing; provided, however, that the foregoing restriction shall not apply to
Edwin L. Knetzger or Michael Sanderson.
 
5.           Certain Sales.  At any time on or after January 11, 2015, to the
extent UBS holds  any shares of Series A Preferred Stock or Warrants for shares
of Series A Preferred Stock (the “Remaining Securities”), UBS may provide notice
to the Company of its desire to sell all or any portion of the Remaining
Securities.  Upon receipt of such notice, the Company will use its commercially
reasonable efforts to assist UBS in facilitating a sale, transfer or other
disposition of the Remaining Securities (which, for avoidance of doubt, shall
not include any obligation to pursue or consummate a Change of
Control).  Alternatively, upon receipt of such notice, the Company may, at its
sole option, redeem the Remaining Securities at a price per share equal to 100
times the fair market value of a share of Common Stock as determined in
accordance with Section 3(d) of the Certificate of Designation (subject to
equitable adjustment for stock splits, combinations and the like that are made
with respect to the Series A Preferred Stock where no corresponding adjustment
is made to the Common Stock).
 

 
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6.           No Mandatory Redemption.  For avoidance of doubt and
notwithstanding anything to the contrary herein, any redemption of Shares or
other securities by the Company referenced herein shall not be mandatory and
shall be made only at the Company’s sole and exclusive option, unless and then
only to the extent specifically agreed to by the Company (at its sole and
exclusive option) in writing in response to a redemption request made under this
Agreement.
 
7.           Increase of Authorized Common Stock.  Each of the JBIII
Stockholders and JBIV Stockholders hereby covenant and agree that he, she or it,
as the case may be, will not withdraw his, her or its consent to the adoption
and approval of the Certificate of Amendment to Certificate of Incorporation of
the Company to increase the authorized shares of Common Stock to 300,000,000.
 
8.           [Intentionally Omitted]
 
9.           Non-Competition Agreement.  The Company hereby agrees that it will
not amend or waive, or otherwise approve any exception to, any provision of the
Non-Competition Agreement, dated as of the date hereof, by and between the
Company and LCUK, without the prior written consent of UBS (the “Non-Competition
Agreement”).
 
10.         Miscellaneous
 
(a)           Notices.  Any notices, consents, 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 business day after deposit with
an overnight courier service prior to such service’s deadline for next-business
day delivery to the recipient (all delivery charges prepaid), 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:

Bonds.com Group, Inc.
1515 Federal Highway
Suite 212
Boca Raton, Florida 33432
Phone:  (561) 953-5343
Fax:  (561) 395-3212
Attention: Chief Executive Officer

 
10

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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.
 
If to any Stockholder, at the address and facsimile number set forth on Exhibit
A hereto,
 
or to such other address, facsimile number and/or email address and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
 
(b)           Further Instruments and Actions.  The Company and each Stockholder
shall execute such further instruments and take such further action as may
reasonably be necessary to carry out the intent of this Agreement and to enforce
rights and obligations pursuant hereto.  No Stockholder shall vote any Shares,
or to take any other action, that would defeat, impair, be inconsistent with or
adversely affect the stated intentions of the parties under this Agreement.
 
(c)           Additional Stockholders.  Notwithstanding anything to the contrary
contained herein, if after the date hereof, any stockholder of the Company
acquires additional Shares so that such stockholder owns twenty percent (20%) or
more of any class of the outstanding voting capital stock of the Company, the
Company shall use its reasonable best efforts to have such stockholder become a
party to this Agreement by executing and delivering an additional counterpart
signature page to this Agreement and such stockholder shall thereafter be deemed
a “Stockholder” for all purposes hereunder.  In addition, the Company will not
issue any Shares such that the recipient thereof would own twenty percent (20%)
or more of any class of the outstanding voting capital stock of the Company
unless such stockholder becomes a party to this Agreement by executing and
delivering an additional counterpart signature page to this Agreement and such
stockholder shall thereafter be deemed a “Stockholder” for all purposes
hereunder  No action or consent by the Stockholders shall be required for such
joinder to this Agreement by such additional stockholder(s), so long as such
additional stockholder has agreed in writing to be bound by all of the
obligations as a “Stockholder” hereunder.
 
(d)           Successors and Assigns.  This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal
representatives.  The rights of the Stockholders hereunder are only assignable
or transferable in connection with the transfer of any shares held by such
Stockholder.  The rights of UBS hereunder shall only be transferable to an
affiliate of UBS.
 

 
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(e)           Governing Law; Jurisdiction; Jury Trial.  All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York.  Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 
(f)           Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile 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 signature.
 
(g)           Headings.  The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
 
(h)           Severability.  If any provision of this Agreement is prohibited by
law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Agreement so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the
parties.  The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the
effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).
 

 
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(i)           Entire Agreement; Amendments.  This supersedes all other prior
oral or written agreements between the Company, the Stockholders, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement contains the entire understanding of the
parties with respect to the matters covered herein and therein.  No provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company, the Stockholders and any of their respective successors or
assigns.  No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought.
 
(j)           No Third Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
 
(k)           Injunctive Relief.  Without limiting the right of any party to
seek any remedy available to such party for the breach or threatened breach of
this Agreement, the parties agree that injunctive relief may be sought by any
party to enjoin any breach or threatened breach of this Agreement without having
to prove irreparable harm or actual damages and each party hereto waives any
defense to any such action for injunctive relief that there is an adequate
remedy at law for such breach or threatened breach.
 
(l)           Copies of this Agreement.  The Company shall supply, free of
charge, a copy of this Agreement to any Stockholder upon written request from
such Stockholder to the Company at its principal office.
 
(m)           Termination. The provisions of this Agreement shall terminate upon
the earlier to occur of (i) the date UBS no longer owns any Shares or (ii) a
Change of Control pursuant to which UBS Securities are treated in accordance
with Section 3 of the Certificate of Designation relating to the Series A
Preferred Stock.
 
[The remainder of this page has been intentionally left blank.]
 

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

   
BONDS.COM GROUP, INC.
         
By:
/s/ Christopher Loughlin    
Name:
Christopher Loughlin    
Title:
Chief Operating Officer

   
UBS AMERICAS INC.
         
By:
/s/ Carolyn Wind    
Name:
Carolyn Wind    
Title:
Managing Director

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

[Signature Page to the Stockholders’ Agreement]

 
 

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FUND HOLDINGS LLC
         
By:
/s/ Edwin L. Knetzger, III    
Name:
Edwin L. Knetzger, III    
Title:
Manager

[Signature Page to the Stockholders’ Agreement]

 
 

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JOHN J. BARRY III AND HOLLY A.W. BARRY
          /s/ John J. Barry III    
John J. Barry III

    /s/ Holly A.W. Barry    
Holly A.W. Barry

   
DUNCAN FAMILY, LLC
         
By:
/s/ John J. Barry III      
John J. Barry III, Managing Member

   
By:
/s/ Holly A.W. Barry      
Holly A.W. Barry, Managing Member

   
DUNCAN FAMILY REVOCABLE TRUST
         
By:
/s/ John J. Barry III      
John J. Barry III, Co-Trustee

   
By:
/s/ Holly A.W. Barry      
Holly A.W. Barry, Co-Trustee

   
OTIS ANGEL, LLC
         
By:
/s/ John J. Barry IV      
John J. Barry IV, Authorized Person

[Signature Page to the Stockholders’ Agreement]

 
 

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SIESTA CAPITAL, LLC
         
By:
/s/ John J. Barry IV      
John J. Barry IV, Authorized Person

   
BOND PARTNERS, LLC
         
By:
/s/ John J. Barry IV      
John J. Barry IV, Authorized Person

   
JOHN J. BARRY IV REVOCABLE TRUST
U/A/D NOVEMBER 9, 2001
         
By:
/s/ John J. Barry IV      
John J. Barry IV, Trustee

   
LAIDLAW VENTURE PARTNERS III, LLC
         
By:
/s/ Michael Sanderson    
Name:
Michael Sanderson    
Title:
Executive Director

[Signature Page to the Stockholders’ Agreement]

 
 

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LAIDLAW & COMPANY (UK) LTD.
         
By:
/s/ Hugh Regan    
Name:
Hugh Regan    
Title:
President

[Signature Page to the Stockholders’ Agreement]

 
 

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Exhibit A

Stockholders

Stockholder Name and Notice Address

UBS AMERICAS INC.

677 Washington Boulevard
Stamford, CT 06901
Telephone:  (203) 719-5427
Facsimile: (203) 719-5627
Attention:  Head of Traded Products – Legal

with a copy (for informational purposes only) to:

Bingham McCutchen LLP
399 Third Avenue
New York, New York  10022
Telephone:  (212) 705-7278
Facsimile:  (212) 702-3645
Attention:  Kenneth A. Kopelman, Esq.

FUND HOLDINGS LLC

c/o DivcoWest
575 Market Street, 35th Floor
San Francisco, California  94105
Telephone:  (415) 284-5700
Facsimile:  (415) 995-5555
Attention:  Edwin L. Knetzger, III

with a copy (for informational purposes only) to:

Gibson, Dunn & Crutcher LLP
2029 Century Park East
Los Angeles, California  90067
Telephone:  (310) 552-8580
Facsimile:  (310) 552-7038
Attention:  Mark S. Lahive, Esq.

 
 

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TO ANY OF THE JBIII STOCKHOLDERS:

c/o Bonds.com Group, Inc.
1515 Federal Highway
Suite 212
Boca Raton, Florida 33432 
Phone:  (561) 953-5343
Fax:  (561) 395-3212
Attention: John Barry, III and John J. Barry IV

TO ANY OF THE JBIV STOCKHOLDERS:

c/o Bonds.com Group, Inc.
1515 Federal Highway
Suite 212
Boca Raton, Florida 33432
Phone:  (561) 953-5343
Fax:  (561) 395-3212
Attention:  John J. Barry IV

LAIDLAW VENTURE PARTNERS III, LLC

90 Park Avenue, 31st Floor
New York, NY 10016
Attn:  Hugh Regan, President
Phone:  (212) 697-5200
Fax:  (212) 297-0670

LAIDLAW & COMPANY (UK) LTD.

90 Park Avenue, 31st Floor
New York, NY 10016
Attn:  Hugh Regan, President
Phone:  (212) 697-5200
Fax:  (212) 297-0670

 
 

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Exhibit B
 
Notice Addresses for Tag-Along Notice
 

UBS AMERICAS INC.
677 Washington Blvd.
Stamford, CT 06901
Attention:  Head of Strategic Investments for Equities and Fixed Income

UBS AMERICAS INC.
100 Liverpool St.
EC2M 2RH London, UK
Attention:  Head of Global eBusiness, Fixed Income

UBS AMERICAS INC.
677 Washington Boulevard
Stamford, CT 06901
Attention:  Head of Traded Products – Legal

BINGHAM MCCUTCHEN LLP
399 Third Avenue
New York, New York  10022
Attention:  Kenneth A. Kopelman, Esq.