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Exhibit 10.2
 

SEPARATION AGREEMENT, RELEASE AND COVENANT NOT TO SUE
 
This is a SEPARATION AGREEMENT, RELEASE AND COVENANT NOT TO SUE (this
“Agreement”) dated as of September 29, 2010, between Joseph Nikolson, and his
heirs, assigns, and any person claiming any interest in his employment or
employment related compensation or benefits (collectively and individually
referred to as “Employee”) and Bonds.com Group Inc., on behalf of itself, its
parent, subsidiaries and affiliates, and each of their respective directors,
officers, agents, attorneys, present and former employees, partners,
shareholders, insurers, predecessors, successors, assigns, and representatives
(collectively and individually referred to as “Company”).
 
Background
 
A.           Employee was employed by the Company.  The Company and the Employee
were parties to an Employment Agreement dated July 7, 2009 (the “Prior
Employment Agreement”).  The Company and the Employee have agreed to end their
relationship on terms that are mutually agreeable.
 
B.           Employee and the Company agree that Employee’s separation from the
Company is effective as of his last day of work, June 18, 2010 (the “Separation
Date”).  The Employee acknowledges and agrees that he was paid his normal salary
through the Separation Date, less all legally required deductions.
 
C.           The Company has already paid to Employee $15,457.12 of severance
compensation, which shall be credited to the amounts to be paid under Section 2.
 
D.           The Company will provide Employee with financial benefits and other
consideration in return for Employee’s execution of this Agreement and the
release Employee is providing under this Agreement.  .
 
Accordingly, in consideration of the mutual promises set forth below, the
Company and the Employee agree as follows:
 
1.            Recitals.  The parties agree that the above Recitals are true and
correct and are incorporated into this Agreement by reference.
 
2.            Severance Compensation.
 
2.1.          The Company shall pay to Employee the total gross amount of
$484,542.88 (less payroll deductions and required withholding) (“the Severance
Compensation”), which equals $500,000 minus $15,457.12 previously paid (this
does not include any default payment(s) for the month of July).  The Severance
Compensation will be paid as follows until the aggregate Severance Compensation
is paid in full:
 
 
(a)
prior to the completion of the Qualified Financing (as defined below) and/or the
achievement of the First Revenue Target or Second Revenue Target (each as
defined below), $4,167 semi-monthly;

 
 
 
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(b)
upon the Company’s completion of its proposed equity capital financing in the
amount at least $4,000,000 (the “Qualified Financing”), and prior to the
achievement of the First Revenue Target or Second Revenue Target, such
semi-monthly payment shall increase to $5,000 (which payment increase will begin
on the first available payroll cycle following the deposit of all net proceeds
of the Qualified Financing);

 
 
(c)
upon the Company’s achievement of consolidated aggregated pre-tax profit of at
least $3,000,000 (based on the Company’s consolidated, audited or unaudited
financing statements) (the “First Revenue Target”), and prior to the achievement
of the Second Revenue Target, such semi-monthly payment shall increase to
$10,416.66 (which payment increase will begin on the first available payroll
cycle following the issuance of the applicable consolidated, audited annual
financial statements); and

 
 
(d)
upon the Company’s achievement of consolidated aggregated pre-tax profit of at
least $10,000,000 (based on the Company’s consolidated, audited or unaudited
financing statements) (the “Second Revenue Target”), the entire unpaid portion
of the Severance Compensation shall be paid in full in a single, lump-sum
payment (which payment will be made on the first available payroll cycle
following the issuance of the applicable consolidated, audited annual financial
statements).

 
2.2.          Additionally, at such time as the Company pays (or is required to
pay) the final installment of the Severance Compensation, the Company shall also
pay Employee an additional $75,000.
 
2.3.          Payment of the Severance Compensation has already commenced and
will continue in accordance with the foregoing Section 2.1.  All severance
payments shall be made via direct deposit in accordance with the Company’s
normal payroll cycle, as may be amended from time to time.  It is Employee’s
obligation to keep the Company informed as to Employee’s direct deposit account
information.
 
2.4.          The Company’s obligations under this Agreement, including without
limitation the payment of the Severance Compensation and other amounts and
benefits hereunder, are contingent upon there being no breach by Employee of the
terms, provisions, covenants, representations, warranties and obligations under
this Agreement and/or the restrictive covenants in Sections 7, 9, and 10 of the
Prior Employment Agreement (provided however that such restrictive covenants
shall run from Employee’s Separation Date (June 18, 2010)).  Specifically, in
the event of any such breach, the Company shall not be obligated to perform its
obligations hereunder, and
 

 
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Employee shall be required to reimburse the Company in the full all amounts
previously paid.
 
2.5.          In the event the Company is found by a court of competent
jurisdiction to have breached any of its obligations under this Agreement (other
than breach of the non-disparagement provision in Section 4.3 of this Agreement)
and such court finds that the Employee has satisfied his notice and cure
obligations set forth below, the Company shall pay Employee a lump sum of
$100,000 allocated as liquidated damages plus the remaining balance of the
Severance Compensation owed, Employee’s attorney’s fees and costs, and interest
on each missed payment at the Florida statutory interest rate.  The Company
shall not be in default of its obligation to pay any payment to Employee unless
the Company fails, within thirty (30) days of its receipt of a Default Notice
(as defined below), to cure such payment default.  For purposes of this Section,
a “Default Notice” shall mean a written notice setting forth the amount of the
claimed payment default and its due date, and such notice is given to the
Company by Employee in the manner set forth in Section 18 of this Agreement.
 
3.           Return of All Company Property.  No later than two (2) days after
signing this Agreement, Employee shall return to the Company all property of the
Company in his possession or under his control, including but not limited to all
Company records, files, equipment, supplies, keys, confidential or proprietary
information, computers, parking and/or security passes, cellular telephone,
Blackberry, and the like.  In addition, Employee shall return to the Company on
a computer disk any electronically stored information that is the property of
the Company, including but not limited to any data and files Employee has stored
on his home or other computer or on a portable storage device; Employee shall
also permanently and completely delete and remove such electronically stored
information from wherever it is stored and provide written verification of doing
so.
 
4.           Miscellaneous.
 
4.1.        Effective as of the Separation Date, Employee agrees that he shall
have no authority to and shall not enter or attempt to enter into any agreements
with third-parties on behalf of or purportedly on behalf of the
Company.  Employee shall also not represent himself as being employed by or
associated with the Company.
 
4.2.        If Employee is enrolled in the 401(k) plan at the time of separation
and Employee has questions regarding his 401(k) plan, he is advised to contact
the plan administrator, ADP Total Source or successor plan administrator as the
case may be.  Employee is eligible to receive matched contributions per the
Company plan through the Separation Date.
 
4.3.          Employee shall refrain from knowingly making any disparaging
statements, written or oral, in any forum or media, regarding the Company or its
executives, managers, directors, officers, employees, shareholders, affiliates,
policies, products, processes, operations, or facilities.  Both parties agree
that the damages to the Company that would result from a breach by Employee of
this non-disparagement provision are not reasonably capable of measurement.  In
the event that a Court finds Employee to have breached this non-disparagement
provision after Employee executes this Agreement, the parties agree that the
Court shall award the Company the minimum sum of $5,000.00 per occurrence as
liquidated damages or whatever damages the Company proves in Court, whichever is
greater.
 

 
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4.4.          Michael Sanderson, Ted Knetzger and David Bensol (“the Company
Executives”) shall refrain from knowingly making any disparaging statements,
written or oral, in any forum or media, regarding Employee or his performance as
an Employee of the Company; provided that, it shall not be considered a breach
of this section for any of the Company Executives to make disparaging statements
to each other about Employee and/or his performance in their capacity in
operating the business.  Both parties agree that the damages to Employee that
would result from a breach by the Company Executives of this non-disparagement
provision are not reasonably capable of measurement.  In the event that a Court
finds the Company Executives to have breached this non-disparagement provision
after Employee executes this Agreement, the parties agree that the Court shall
award Employee the minimum sum of $5,000.00 per occurrence as liquidated damages
or whatever damages Employee proves in Court, whichever is greater.
 
4.5.          Employee further acknowledges that he is not aware of any
unreported work related illness or injury that he has suffered that would
entitle his to Workers’ Compensation benefits.
 
4.6.          In the event Employee’s testimony or court appearance is required
concerning any litigation the Company is now or may be involved in, or, if in
the Company’s opinion, his appearance or testimony would be beneficial to the
Company’s position, Employee agrees to make himself reasonably available to the
Company and its counsel.
 
4.7.          Employee agrees that he will preserve the confidentiality of this
Agreement and not discuss or disclose its existence, substance, or contents to
anyone except his attorney, his immediate family or as compelled or authorized
by law; provided that such persons also maintain strict confidentiality as
stated above, and any confidentiality breaches by such persons shall be
considered breaches by the Employee.
 
4.8.          The parties will amend the Stock Option Agreement governing
Employee’s non-statutory stock option granted to him on July 7, 2009, pursuant
to and on the terms and conditions of an Amendment to Stock Option Agreement in
the form of Exhibit A attached hereto (the “Current Option Amendment”), under
which (a) any options that are not vested as of the date of this Agreement shall
terminate, (b) any options that have vested as of the date of this Agreement
shall remain fully vested and exercisable, and (c) such vested options will
remain exercisable until their scheduled expiration date (July 7, 2019) without
regard to the 90-day Termination Period set forth in the Notice of Non Statutory
Stock Option Grant.
 
5.           Release and Covenant Not to Sue.
 

 
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5.1.             Employee’s Release of Company.  Employee, for himself and his
heirs, successors, and assigns, and anyone claiming by or through them
(collectively, the “Releasing Parties”), irrevocably and unconditionally
releases, waives, and forever discharges the Company, Bonds.com Holdings, Inc.,
Bonds.com Inc., each of their respective parents, subsidiaries and affiliates,
and each of their and their respective parents’, subsidiaries’ and affiliates’
directors, officers, agents, attorneys, present and former employees, partners,
investors, shareholders, insurers, predecessors, successors, assigns, and
representatives, from any and all actual or potential claims, complaints,
liabilities, obligations, promises, actions, causes of action, liabilities,
agreements, damages, costs, debts, and expenses of any kind, whether known or
unknown, that the Releasing Parties have ever had or now have from the beginning
of time through the date Employee executes this Agreement (collectively, the
“Released Claims”).  Without limitation, the Released Claims include all claims
arising out of, related to or connected with Employee’s employment, the
termination of his employment, or the payment of wages, salary, or any other
benefit Employee received or claims he should have received in connection with
his employment; all claims related to any breaches of the Prior Employment
Agreement up to the date of this Amendment; and all claims under Title VII of
the Civil Rights Act of 1964, as amended (42 U.S. C. § 2000e, et seq.); the
Civil Rights Acts of 1866, 1871 and 1991, all as amended; 42 U.S.C. § 1981; the
Family and Medical Leave Act of 1993, as amended (29 U.S.C. § 2601, et seq.);
the Americans With Disabilities Act, as amended (42 U.S.C. § 12101, et seq.);
the Rehabilitation Act of 1973, as amended (29 U.S.C. § 793-94); the Fair Labor
Standards Act, as amended (29 U.S.C. § 201, et. seq.); the Equal Pay Act of
1963, as amended (29 U.S.C. § 206); the Employee Retirement Income Security Act,
as amended (29 U.S.C. § 1001, et seq.); the Consolidated Omnibus Budget
Reconciliation Act of 1985 (29 U.S.C. § 1161, et seq.); the Age Discrimination
in Employment Act (29 U.S.C. § 621 et seq.); the Older Workers Benefit
Protection Act of 1990 (29 U.S.C. § 623); the National Labor Relations Act
(NLRA); the Occupational Safety and Health Act (OSHA); and any other federal or
state whistle-blower statute or regulation; Chapter 760 of the Florida Civil
Rights Act of 1992, as amended; any provision of Chapters 250, 440, 443, 447,
448, and 760 of Florida Statutes; the Florida General Labor Regulations, as
amended; any law, rule or regulation of the State of New York, including but not
limited to, the New York Human Rights Law; any other state law, rule or
regulation of any other state; any local ordinance; workers' compensation
statutes; unemployment compensation laws; and any other federal, state or local
statute, rule, regulation or ordinance; any obligations under, arising out of,
or related to the Prior Employment Agreement, any prior versions of this
Agreement, or any other actual or quasi-contracts, including but not limited to,
salary payments, bonus payments, vacation, sick, or other forms of employee
leave or time off, benefits, stock, or stock options; common law claims,
including but not limited to claims of intentional or negligent infliction of
emotional distress, negligent hiring, retention, training or supervision,
defamation, invasion of privacy, breach of a covenant of good faith and fair
dealing, breach of fiduciary duty, breach of express or implied contract,
promissory estoppel, negligence or wrongful termination of employment; any
claims for or to past or future unpaid salary, commissions, bonuses, incentive
payments, expense reimbursements, health care benefits, life insurance,
disability insurance and any other income or benefits the Releasing Parties
received or claim they should receive; and all other claims of any kind,
including but not limited to any claims for attorneys’ fees.
 

 
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5.2.       The Releasing Parties covenant not to sue any Released Party for any
Released Claim.  The Releasing Parties warrant that they have not filed any
complaint, claim or charge against a Released Party with any local, state or
federal agency or court.  The Releasing Parties agree that, if any such agency
or court assumes the prosecution or jurisdiction of any complaint or charge
against a Released Party, the Releasing Parties will immediately dismiss the
complaint or charge and/or will immediately request such agency or court to
dismiss and withdraw from the matter, and the Releasing Parties will not support
the effort of anyone else or any entity that might file an action against a
Released Party.  In the event the Releasing Parties fail or refuse to undertake
these obligations, the Releasing Parties agree that this Agreement shall operate
to effectuate his/their dismissal or withdrawal of such complaint, charge or
claim and that the Releasing Parties will forward to the Released Party any
monies the Releasing Parties receive from such complaint, charge or claim.
 
5.3.       The Releasing Parties have not assigned or otherwise transferred any
interest in any Released Claim.  The Releasing Parties shall not commence, join
in, or in any manner seek relief through any suit arising out of, based upon, or
relating to any Released Claim.
 
5.4.       If any provision of this release is held invalid, unenforceable or
void to any extent by a court of competent jurisdiction, the provision shall be
modified, if possible, by reducing its duration and scope to allow enforcement
of the maximum permissible duration and scope.
 
5.5.            Company’s Release of Employee.  The Company, for itself and for
its successors and assigns, irrevocably and unconditionally releases, waives,
and forever discharges Employee from any and all actual or potential claims,
complaints, liabilities, obligations, promises, actions, causes of action,
liabilities, agreements, damages, costs, debts, and expenses of any kind,
whether known or unknown, that the Releasing Parties have ever had or now have
from the beginning of time through the date the Company executes this Agreement;
provided however that such release does not include any claims related to or
arising out of any covenants contained in this Agreement or the restrictive
covenants in Sections 7, 9, and 10 of the Prior Employment Agreement.  For
purposes of this Section 5.5, Sections 5.2, 5.3, and 5.4 apply with equal force
and effect to Employee and the Company.
 
6.           Review of this Agreement.
 
6.1.       Employee acknowledges that he has read each section of this
Agreement, that the Agreement is written in a manner calculated to be understood
by him, and that Employee in fact understands his rights and obligations under
it, including the fact that he is waiving and releasing his rights to sue the
Company pursuant to Section 5 of this Agreement.
 

 
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6.2.       Employee acknowledges that the money being paid pursuant to this
Agreement and any other consideration is in excess of all monies or anything
else of value owed to him.
 
6.3.       Employee acknowledges and agrees that he is advised by the Company to
obtain, and has had the opportunity to obtain, advice of legal counsel and tax
advisors of his choosing with respect to the terms and provisions of this
Agreement, the compensation and benefits to be received by him hereunder and the
tax consequences thereof to him.
 
7.           Governing Law; Venue; Dispute Resolution.  This Agreement has been
delivered in the State of Florida and shall be governed by and construed in
accordance with the laws of the State of Florida.  Any action based upon or
arising out of this Agreement shall lie exclusively in the federal or state
courts located in New York County, New York.  Employee does not agree to waive
any right to have any issue resolved by a jury and cede to the Court all matters
of law and fact for resolution.  This Agreement shall not be construed to waive
any right of removal that may apply to any action filed in any court by either
Party.
 
8.           Entire Agreement; Modification.
 
8.1.           Employee acknowledges, agrees, and understands that the
restrictive covenants in Sections 7, 9, and 10 of the Prior Employment Agreement
survive, continue in full force and effect and remain applicable and enforceable
and that nothing contained in this Agreement shall be interpreted to make these
previous agreements void; provided however that such restrictive covenants shall
run from Employee’s Separation Date (June 18, 2010).
 
8.2.           With the exception of the Sections 7, 9, and 10 of the Prior
Employment Agreement (as referenced above) (which Sections remain in full force
and effect, and are not nullified, replaced or modified by this Agreement), (a)
the Prior Employment Agreement is hereby terminated and of no further force or
effect, and (b) this Agreement represents the entire agreement of the parties
with respect to the subject matters addressed herein and may not be modified or
amended except upon a written agreement signed by both parties.
 
9.           No Fraud.  The parties agree that no inducements, statements or
representations have been made that are not set forth in this Agreement and that
they did not rely on any inducements, statements or representations not set
forth herein.
 
10.           Binding Effect.  This Agreement shall be binding upon the parties
and their respective heirs, devisees, legal representatives, personal
representatives, successors, and assigns.
 
11.           Counterparts and Originals.  The parties may execute this
Agreement in counterparts.  Each executed counterpart shall be deemed an
original, and all of them together shall constitute one document.
 

 
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12.           Successors and Assigns.  This Agreement is not assignable by any
party without the prior written consent of the other parties, and any attempted
assignment without the prior written consent of the other parties shall be
invalid and unenforceable against the other parties.  This Agreement is binding
upon, and inures to the benefit of, the respective heirs, authorized assignees,
successors and personal representatives of the parties.
 
13.           Titles and Headings.  The titles and headings of the various
sections of this Agreement are intended solely for convenience of reference and
are not intended to explain, modify or place any interpretation upon any of the
provisions of this Agreement.
 
14.           Severability.  If any term or provision of this Agreement is
determined to be illegal or unenforceable, to the extent possible, such term or
provision shall be severed from this Agreement and all other terms and
provisions shall be remain in full force and effect.
 
15.           Gender and Number.  As used in this Agreement, the masculine,
feminine or neuter gender, and the singular or plural number, shall each include
the others whenever the context so requires.
 
16.           Interpretation.  The language used in this Agreement shall not be
construed in favor of or against any of the parties, but shall be construed as
if all parties participated jointly in the preparation of this Agreement.  The
language used in this Agreement shall be deemed to be the language chosen by the
parties to express their mutual intent, and no rule of strict construction shall
be applied against any party.
 
17.           Legal Fees and Costs.  In any litigation that arises from this
Agreement, the prevailing party (or parties) may recover its legal fees and
costs from the non-prevailing party (or parties).

18.           Notices.  Except as otherwise specified in this Agreement, every
demand, notice, consent, or approval required or permitted to be given by a
party under this Agreement will be valid only if it is (a) in writing, (b)
delivered personally or by telecopy, commercial courier, or first class, postage
prepaid, United States mail (whether or not certified or registered and
regardless of whether a return receipt is requested or received by the sender),
and (c) addressed by the sender to the intended recipient as follows:

 
If to the Company, to:

 
Bonds.com Group, Inc.

 
529 5th Avenue, 8th Floor

 
New York, New York 10017

 
Fax: (212) 946-3999

 
Attention: Chief Executive Officer

 
If to Employee, to Employee’s last known address on Company’s personal records
or to such other name or address as any designated recipient shall specify by
notice to the other designated recipients in the manner specified in the
Employment Agreement.
 

 
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Or such other address as the intended recipient may designate by written notice
given to every other party to this Agreement in the manner provided in this
Section.  Each party to this Agreement shall promptly notify every other party
of any change in its mailing address.

19.           Tax Considerations. The Company and the Employee make no
representations of any character regarding the character of the Severance
Compensation or any of its components for purposes of local, state or federal
tax purposes, including income tax.  Each party to this Agreement is responsible
for his/its own tax obligations.

20.           Withholding.  The Company shall have the right to deduct from any
payment made under this Agreement any amount deemed necessary by the Company in
order to permit the Company to satisfy its past, present or future
obligations for any federal, state or local income, employment or other tax
withholding or other customary withholding with respect to the amounts payable
under this Agreement.

21.           Necessary Action.  At all times after the execution of this
Agreement, each party hereto agrees to take or cause to be taken all such
necessary action including, without limitation, the execution and delivery of
such further instruments and documents, as may be reasonably requested by any
party for such purposes or otherwise necessary to complete or perfect the
transaction contemplated hereby.

22.           Attorney’s Fees Reimbursement.  The Company shall reimburse
Employee all reasonable legal fees Employee has paid with respect to the
negotiation and preparation of this Agreement and his separation from employment
with the Company up to a maximum of $5,000.00 and contingent upon Employee’s
submitting written documentation of invoicing. At the Employee’s discretion, the
Company will pay the Employee or his counsel directly (based sufficient to prove
that Employee has paid such fees to his legal counsel).  The Company shall pay
such fees by check made payable to Joseph Nikolson or ‘named’ legal counsel
within fifteen (15) days of the Company’s receipt of such supporting
documentation.

23.           Payment Obligations.  The parties acknowledge and agree that only
Bonds.com Group, Inc., its parent, subsidiaries and affiliates (except
Bonds.com, Inc.) have any payment obligations under Sections 2, 4.8, and 22 of
this Agreement.

PLEASE READ CAREFULLY.  THIS GENERAL RELEASE INCLUDES
A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 
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IN WITNESS WHEREOF, the Company and Employee have executed this Agreement as of
the date first above written.
 
Executed this 29th day of September, 2010.

   
/s/ Joseph Nikolson
WITNESS
 
Joseph Nikolson

Executed this 29th day of September, 2010.

 
Bonds.com Group, Inc.
         
By:
/s/ Michael O. Sanderson
WITNESS
Title:
CEO

 
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