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Bonds.com 8-K [bonds-8k_020112.htm]
 
Exhibit 10.1
 
Bonds.com Group, Inc.
529 5th Avenue
New York, NY 10017

January 31, 2012

Burton W. Wiand, as Receiver
c/o: Wiand Guerra King
3000 Bayport Drive, Suite 600
Tampa, Florida 33607
 

       Re: 
 
Letter Agreement Regarding Repayment of
Indebtedness, Termination of Rights and Repurchase of Securities

Dear Mr. Wiand:

This letter (this “Letter Agreement”) confirms the agreement between you, in
your capacity as the receiver (the “Receiver”) appointed by the United States
District Court for the Middle District of Florida, Tampa Division (the “Court”)
in the action styled Securities and Exchange Commission v. Arthur Nadel, et.
al., Case No. 8:09-cv-87-T-26TBM, Bonds.com Group, Inc., a Delaware corporation
(the “Company”), and Bonds.com Holdings, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company (“Holdings”), regarding the retirement of
certain indebtedness, the termination of certain rights and the repurchase of
securities owned beneficially or of record by the Receiver as set forth in more
detail below.  Subject to the conditions set forth elsewhere in this Letter
Agreement, the Receiver, the Company and Holdings agree as follows:

(a)  
In consideration of the Company’s payment to the Receiver of an aggregate amount
of $2,250,000, the Receiver shall (i) cancel, terminate, retire and agree that
all indebtedness of the Company and Holdings evidenced by the instruments
identified on Schedule I and any other indebtedness owed by the Company or
Holdings to or for the benefit of the Receivership (collectively, the
“Receivership Debt”) are satisfied in full; and (ii) terminate and cancel any
rights, contingent or otherwise, which the Receiver may have to receive shares
of the Company’s Common Stock, par value $0.0001 per share (“Common Stock”),
pursuant to the Section 17 of the Secured Convertible Promissory Notes dated on
or about September 22, 2008, October 20, 2008, and December 12, 2008, as
amended, and the Amendment No. 2 to Secured Convertible Promissory Notes, dated
as of October 19, 2010, by and among the Receiver and the Company (the
“Contingent Performance Shares”).  The foregoing transactions are referred to in
this Letter Agreement as the “Debt Retirement.”

(b)  
In consideration of the Company’s obligation to pay the Receiver an additional
$5,000 (the “Stock Repurchase Price”), the Receiver shall transfer, convey,
assign and deliver to the Company all outstanding shares of the Company’s equity
securities held of record or beneficially by the receiver, including without
limitation all of the Receiver’s right, title and interest in and to the shares
of Common Stock identified on Schedule II to this Letter Agreement (the
“Receivership Shares”).  The foregoing transaction is referred to in this Letter
Agreement as the “Stock Repurchase” and, collectively with the Debt Retirement,
the “Transactions.”

Notwithstanding the foregoing, neither the Receiver, the Company nor Holdings
shall be obligated to consummate the Transactions unless and until the Court
enters an order approving the Receiver’s consummation of the Transactions, which
order shall be satisfactory to the Receiver and the Company in their respective
sole and absolute discretion and shall have been issued based on a motion of the
Receiver that is not opposed by any party (the “Court Order Condition”).

 
 

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As promptly as practicable after the date of this Letter Agreement, the Receiver
shall prepare and file a motion seeking the entry of the order described
immediately above.  The Receiver, the Company and Holdings agree to consummate
the Debt Retirement and the Stock Repurchase promptly upon the satisfaction of
the Court Order Condition; provided, that if, at the time of the consummation of
the satisfaction of the Court Order Condition, the Company does not have
sufficient legally available funds to pay the Stock Repurchase Price in
accordance with the provisions of the Delaware General Corporation Law, then (a)
the Debt Retirement shall nevertheless be consummated, (b) the Company shall be
obligated to pay the Stock Repurchase Price to the Receiver and consummate the
Stock Repurchase promptly after such date on which it has sufficient legally
available funds in accordance with the provisions of the Delaware General
Corporation Law, and (c) the Receiver shall be required to consummate the Stock
Repurchase upon payment of the Stock Repurchase Price by the Company.  At the
consummation of the Debt Retirement, the Company shall pay the Receiver
$2,250,000 within five days of the entry of the Court Order approving this
Letter Agreement and the Receiver shall execute and deliver to the Company the
Termination and Release attached hereto as Exhibit A.  At the consummation of
the Stock Repurchase, the Company shall pay the Receiver the Stock Repurchase
Price and the Receiver shall deliver to the Company the stock certificates
representing the Receivership Shares and a duly executed stock power assigning
all of the Receiver’s right, title and interest in and to the Receivership
Shares to the Company.

If the Company has not paid the Stock Repurchase Price within one year after the
entry of the Court Order approving this Letter Agreement, the Company shall,
promptly from time to time upon demand from the Receiver, reimburse the Receiver
for all out-of-pocket costs and expenses incurred by him in respect of the
arrangement to defer consummation of the Stock Repurchase.  Notwithstanding
anything to the contrary herein, the Receiver’s and the Company’s respective
obligations to consummate the Stock Repurchase shall terminate if the Company
shall not have delivered the Stock Repurchase Price on or prior to the date two
years after the date of this Letter (the “Stock Repurchase Deadline”).  The
Receiver shall not assign, transfer, convey or encumber the Receivership Shares
prior to the earlier to occur of the Repurchase Deadline and the consummation of
the Stock Repurchase.

This Letter Agreement shall be governed by the internal laws of the State of
Florida, without reference to the conflicts of laws provisions thereof.  This
Letter Agreement may be executed in counterparts and execution and delivery of
this Letter Agreement by facsimile or .pdf shall be effective for all purposes
and such executed copies shall be as valid as originals.

The Receiver hereby defers the right to receive any Contingent Performance
Shares and any obligation of the Company to issue such Contingent Performance
Shares for a period of forty-five (45) days from the date of this Letter
Agreement.

This Letter Agreement is non-transferable by either the Company, Holdings or the
Receiver.

Accepted and agreed to as of the date first set forth above by:
 
 
BONDS.COM GROUP, INC.
BONDS.COM HOLDINGS, INC.
 
 
       
By:
/s/ John Ryan
 
/s/ Burton W. Wiand
Name:
John Ryan   BURTON W. WIAND, as Receiver appointed
Title:
Chief Financial Officer   by the United States District Court for the      
Middle District of Florida, Tampa Division
in the action styled Securities and Exchange
Commission v. Arthur Nadel, et. al.,
Case No. 8:09-cv-87-T-26TBM

 
 
 

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Exhibit A

Termination and Release

Dated as of _____________, 2012

Reference is made to the “Receivership Debt,” as such term is defined in the
letter agreement (the “Letter Agreement”), dated as of January ___, 2012, by and
among Burton W. Wiand as receiver appointed by the United States District Court
for the Middle District of Florida, Tampa Division in the action styled
Securities and Exchange Commission v. Arthur Nadel, et. al., Case No.
8:09-cv-87-T-26TBM (the “Receiver”), Bonds.com Group, Inc., a Delaware
corporation (the “Company”), and Bonds.com Holdings, Inc., a Delaware
corporation and wholly-owned subsidiary of the Company (“Holdings”).  Reference
is further made to the loan agreements, investment agreements, note purchase
agreements, notes, guaranty agreements, security agreements and other
agreements, documents and instruments executed in connection therewith,
including, without limitation, the Second Amended and Restated Security
Agreement dated as of May 28, 2009, the Secured Convertible Note and Warrant
Purchase Agreement dated on or about September 24, 2008, the Secured Convertible
Promissory Note dated on or about September 22, 2008, as amended, and the letter
agreement dated April 30, 2009 (collectively, the “Financing Documents”).

This Termination and Release confirms that: (a) the Receiver has no further
rights to any Contingent Performance Shares (as defined in the Letter Agreement)
and any such rights are hereby terminated, cancelled and of no further force or
effect; (b) all of the Receivership Debt is cancelled, terminated, retired and
satisfied in full; and (c) all of the Company’s and Holdings’ obligations to the
Receiver pursuant to the Financing Documents are terminated, satisfied in full
and of no further force or effect.  The Receiver will deliver to the Company all
instruments evidencing Receivership Debt that are in the Receiver’s possession.

The Receiver acknowledges and agrees that any lien, security interest or other
encumbrance on the assets of the Company or Holdings in favor of the Receiver
are hereby terminated, released and discharged, and the Receiver agrees to
execute and deliver, and does hereby authorize the filing by the Company and
Holdings and their respective agents of, any Uniform Commercial Code termination
statements, lien releases, mortgage releases, re-assignments of trademarks,
patents and web or internet domains, discharges of security interests, and other
similar discharge or release documents (and if applicable, in recordable form)
as are reasonably necessary to release, as of record, the security interests,
financing statements, and all other notices of security interests and liens
previously filed by the Receiver with respect to the assets of the Company and
Holdings.

       
 
  BURTON W. WIAND, as Receiver appointed
by the United States District Court for the
Middle District of Florida, Tampa Division
in the action styled Securities and Exchange
Commission v. Arthur Nadel, et. al.,
Case No. 8:09-cv-87-T-26TBM
     

 

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