Document:

Unassociated Document

Bonds.com 8-K

 

Exhibit 10.3

 

SERIES D STOCKHOLDERS’ AGREEMENT

 

This SERIES D STOCKHOLDERS’ AGREEMENT (this “Agreement”) is entered into as of February 2, 2011, by and among Bonds.com Group, Inc., a Delaware corporation (the “Company”), the stockholders set forth on Schedule A hereto and each other stockholder who shall, subsequent to the date hereof, join in and become a party to this Agreement (each a “Stockholder” and together with the stockholders set forth on Schedule A, the “Stockholders”).

 

WHEREAS:

 

A.           The Company and certain of the Stockholders are parties to that certain Unit Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which such Stockholders are purchasing certain Units (as defined therein) of the Company (the “Transaction”).

 

B.           The Company and certain of the Stockholders are parties to that certain Series B Stockholders’ Agreement dated as of October 19, 2010 (the “Prior Agreement”).

 

C.           Contemporaneously with (or prior to) the execution hereof, (i) each share of the Company’s Series B Convertible Preferred Stock shall be exchanged for not more than one share of the Company’s Series D Convertible Preferred Stock and (ii) each share of the Company’s Series B-1 Convertible Preferred Stock shall be exchanged for not more than one share of the Company’s Series D-1 Convertible Preferred Stock pursuant to an Exchange Agreement.

 

D.           This Agreement supersedes and replaces in its entirety the Prior Agreement.

 

E.           The execution of this Agreement by the Company and the Stockholders is a condition precedent to the consummation of the Transaction.

 

F.           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.  Capitalized terms used by not defined herein shall have the meanings set forth in the Purchase Agreement.  As used in this Agreement, the terms set forth below shall have the following meanings:

 

(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)           “Change of Control” means (i) a consolidation, merger, reorganization or other form of acquisition of or by the Company in which the Company’s stockholders immediately prior to the transaction retain less than 50% of the voting power of, or economic interest in, the surviving or resulting entity (or its parent), (ii) a sale of more than a majority of the Company’s assets, (iii) the acquisition by any person or group of persons of more than 50% of the Company’s outstanding voting securities or (iv) during any period of twenty-four (24) consecutive months, Continuing Directors (as defined below) cease for any reason to constitute a majority of the directors of the Board or the board of directors of the surviving or resulting entity (or its parent);  “Continuing Director” means, as of any determination date, any member of the Board or the board of directors of the surviving or resulting entity (or its parent) who: (A) was a member of the Board as of the date hereof, (B) was a member of the Board on the date that was twenty-four (24) months prior to such determination date, (C) was the Series D Designee or the Oak Designee, (D) was nominated with the approval of a majority of the Continuing Directors who were members of the Board at the time of such nomination or (E) was elected with the approval of holders of at least a majority of the Series D Preferred Stock.

 

(d)           “Common Securities” means shares of Common Stock or Warrants to purchase shares of Common Stock.

 

(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 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 such transaction constitutes a Public Sale, in each case, occurring on an exchange or other recognized market (the “Market”) where the average daily volume of the Company’s stock over the four week period preceding such transfer or other disposition has been at least 50,000 shares; provided, however, that any sale, transfer or other disposition of Securities made pursuant to Rule 144 shall not be deemed to be a “Market Sale.”

 

(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 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;

  

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(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)           “Preferred Securities” means the Series A Securities, the Series C Preferred Stock, the Series D Securities and the shares of Common Stock issued to a Stockholder upon the conversion of shares of Series C Preferred Stock or Series D Preferred Stock.

 

(k)           “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.

 

(l)           “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 Stockholders participates as a selling stockholder, or (ii) a secondary sale of equity securities of the Company by Stockholders pursuant to a registration statement filed either by the Company for the benefit of such Stockholders or by such Stockholders.  For the avoidance of doubt, a Public Sale may also be a Market Sale if it satisfies clause (ii) of the definition thereof.

 

(m)           “Required Stockholders” means the holder(s) of at least 93% of the Series D Securities.

 

(n)           “Rule 144” means Rule 144 (or any successor provisions) promulgated under the Securities Act of 1933, as amended.

 

(o)           “Sales” means Private Sales, Public Sales and Market Sales, and includes Derivative Transactions.

 

(p)           “Securities” means Shares and Warrants.

  

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(q)           “Series A Preferred Stock” means the Series A Participating Preferred Stock, par value $0.0001 per share, of the Company.

 

(r)           “Series A Securities” means shares of Series A Preferred Stock and Warrants to purchase shares of Series A Preferred Stock.

 

(s)           “Series C Certificate of Designation” means that certain Certificate of Designation of Series C Convertible Preferred Stock of the Company adopted by the Company and filed with the Delaware Secretary of State prior to the execution hereof.

 

(t)           “Series C Preferred Stock” means the Series C Convertible Preferred Stock, par value $0.0001 per share, of the Company.

 

(u)           “Series D Certificate of Designation” means that certain Certificate of Designation of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock of the Company adopted by the Company and filed with the Delaware Secretary of State prior to the execution hereof.

 

(v)           “Series D Preferred Stock” means the Series D Convertible Preferred Stock, par value $0.0001 per share, of the Company.

 

(w)           “Series D Securities” means shares of Series D Preferred Stock and Series D-1 Preferred Stock and Warrants to purchase shares of Series D Preferred Stock or Series D-1 Preferred Stock.

 

(x)           “Series D Stockholder” means each holder of Series D Securities.

 

(y)           “Series D-1 Preferred Stock” means the Series D-1 Convertible Preferred Stock, par value $0.0001 per share, of the Company.

 

(z)           “Shares” means the shares of Series D Preferred Stock, Series D-1 Preferred Stock, Series C Preferred Stock, Series A Preferred Stock and Common Stock.

 

(aa)           “Warrants” means warrants and other rights issued by the Company to purchase shares of Common Stock, Series A Preferred Stock, Series D Preferred Stock or Series D-1 Preferred Stock.

 

2.           Tag-Along Rights With Respect to Sales of Series D Preferred Stock.

 

(a)           Tag-Along Rights.

  

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(i)           If, at any time after the date of this Agreement, a Series D Stockholder desires to sell or otherwise transfer, directly or indirectly, through a Derivatives Transaction or otherwise, in a Private Sale 10% or more of the Series D Securities owned by such Series D Stockholder as of the date of this Agreement (or, if the Series D Stockholder has joined this Agreement after the date hereof, as of the date of such joinder) (a “Selling Stockholder”), then each of the Series D Stockholders 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 “Series D Tag-Along Notice”) to each of the Series D Stockholders of each proposed Sale of such Series D Securities 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 Series D Securities that the Selling Stockholder proposes to sell (the “Offered Series D Securities”), the proposed timing of such Private Sale, the consideration to be paid for the Offered Series D Securities, the identity of the proposed purchaser, and all other material terms and conditions of such Private Sale, including the proposed form of written agreement, if any.  Each of the other Series D Stockholders shall have the right to sell to such transferee(s) a portion of its Series D Securities equal to the product of (A) the number of Series D Securities then held by such Series D Stockholder and (B) a fraction (1) the numerator of which shall be the number of Offered Series D Securities, and (2) the denominator of which shall be the total number of Series D Securities held as of the date of this Agreement by the Series D Stockholders (including the Selling Stockholder) participating in such Sale (as adjusted for stock splits, combinations and the like and as reduced by any Sales previously made by such Series D Stockholder(s) (including any that are Selling Stockholder(s)) subsequent to the date of this Agreement).

 

(ii)          Each Series D Stockholder that desires to exercise the tag-along rights to participate in the proposed Private Sale as provided in this Section 2(a) (a “Series D Tagging Stockholder” and, collectively, the “Series D Tagging Stockholders”) must exercise such tag-along rights within ten (10) days after its receipt of the Series D Tag-Along Notice, by delivery of a written notice to the Selling Stockholder, with a copy to the Company, indicating such Series D Tagging Stockholder’s desire to exercise its rights and specifying the number of Series D Securities (the “Tagging Series D Securities”) it wishes to sell.  The Tagging Series D Securities shall be in the same proportion of Shares and Warrants as the Offered Series D Securities.  The number of Series D Securities that the Selling Stockholder may sell pursuant to this Section 2 shall be reduced by the equivalent amount of the Tagging Series D Securities, unless (A) the transferee(s) have indicated their willingness to buy all of the Series D Securities that the Selling Stockholder and Series D Tagging Stockholders desire to sell, (B) the Company, at its sole option, elects to redeem such Tagging Series D Securities or (C) the Selling Stockholder elects to purchase such Tagging Series D Securities. At the closing of such Sale, each Series D Tagging Stockholder shall deliver (A) all documents required to be executed in connection with such Private Sale and (B) the certificates for the Series D 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 Series D Securities pursuant to this Section 2(a), (A) the Company may, at its sole option, elect to redeem such Tagging Series D 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 Series D 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 a Series D Tagging Stockholder properly exercises its tag-along rights under this Section 2(a) and the Tagging Series D Securities are not (A) purchased by the purchaser of the Offered Series D 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 Series D Securities, and any such attempted Sale shall be null and void.

 

(v)          Any notice given by a Series D Tagging Stockholder 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, as the case may be) or submit for redemption to the Company such Tagging Series D Securities as are included therein on the terms and conditions applicable to such sale or redemption.

 

(b)           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, (iii) to any lien or pledge outstanding as of the date of this Agreement, (iv) to any sale, transfer or other disposition of Securities pursuant to Rule 144 or (v) to a transfer of the Series C Preferred Stock pursuant to the Beacon APA (as defined in Section 4(a)) (A) from the Company to the escrow agent, (B) from the escrow agent to the Company or any of its affiliates or to Beacon (as defined in Section 4(a)) or any of its stockholders or (C) from Beacon to any of its stockholders; provided that in the case of clause(s) (i) or (ii), the Stockholder shall deliver notice to each of the Series D Stockholders 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 Series D Securities held as of the date of this Agreement, such calculations shall, for a transferee pursuant to this Section 2(b), instead use the number of Series D Securities received by such transferee pursuant hereto.

 

3.           Tag-Along Rights With Respect to Sales of Common Stock.

 

(a)           Private Sales.

  

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(i)           If, at any time after the date of this Agreement, a 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 Stockholder’s Common Securities (a “Common Selling Stockholder”), then each holder of Preferred Securities shall have the right to participate in the proposed Private Sale by such Common Selling Stockholder as provided in this Section 3(a).  The Common Selling Stockholder shall give written notice (the “Tag-Along Notice”) to each holder of Preferred Securities of each proposed Private Sale of such Common Securities 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 Common Securities that the Common Selling Stockholder proposes to sell (the “Offered Securities”), the proposed timing of such 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.  Each holder of Preferred Securities shall have the right to sell to such transferee(s) a portion of its Preferred Securities equal to the product of (A) the number of Preferred Securities then held by such Stockholder 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 Common Securities held as of the date of this Agreement by the holders of Preferred Securities, including the Common Selling Stockholder participating in such Sale (as adjusted for stock splits, combinations and the like and as reduced by any Sales previously made by such holder of Preferred Securities and the Common Selling Stockholder 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).  The price per share of Series C Preferred Stock to be paid by such transferee(s) shall be equal to (X) the Conversion Shares (as defined in the Series C Certificate of Designation) divided by the number of shares of Series C Preferred Stock issued and outstanding as of the Series C Original Issue Date (as defined in the Series C Certificate of Designation) times (Y) 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 C Preferred Stock where no corresponding adjustment is made to the Common Stock).  The price per share of Series D Preferred Stock and Series D-1 Preferred Stock to be paid by such transferee(s) shall be equal to the Conversion Rate (as defined in the Series D Certificate of Designation) 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 D Preferred Stock or Series D-1 Preferred Stock, as applicable, where no corresponding adjustment is made to the Common Stock).

 

(ii)          Each holder of Preferred Securities that desires to exercise the tag-along rights to participate in the proposed Private Sale as provided in Section 2(a) (a “Preferred Tagging Stockholder” and, collectively, the “Preferred Tagging Stockholders”) must exercise such tag-along rights within ten (10) days after its receipt of the Tag-Along Notice, by delivery of a written notice to the Common Selling Stockholder, with a copy to the Company, indicating the desire of such Preferred Tagging Stockholder to exercise its rights and specifying the number and series of Preferred  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 Common Securities that the Common Selling Stockholder may sell pursuant to this Section 3 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 Common Securities and Preferred Securities that the Common Selling Stockholder and Preferred Tagging Stockholders desire to sell, (B) the Company, at its sole option, elects to redeem such Tagging Securities or (C) the Common Selling Stockholder elects to purchase such Tagging Securities. At the closing of such Sale, each of the Preferred Tagging Stockholders shall deliver (A) all documents required to be executed in connection with such Private Sale and (B) the certificates for the Tagging Securities being sold to the purchaser(s) thereof against receipt of the purchase price therefor paid by certified or bank check or wire transfer.

  

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(iii)         In lieu of the transferee(s) purchasing the Tagging Securities pursuant to this Section 3(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 3(a) and/or (B) the Common 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 3(a).  Any such redemption by the Company or purchase by the Common Selling Stockholder shall be completed prior to or simultaneously with the proposed Sale.

 

(iv)         If a Preferred Tagging Stockholder properly exercises its tag-along rights under this Section 3(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 Common Selling Stockholder, then the Common Selling Stockholder shall not be permitted to consummate the proposed Sale of the Common Securities, and any such attempted Sale shall be null and void.

 

(v)          Any notice given by a Preferred Tagging Stockholder in which it elects to exercise its tag-along rights provided in this Section 3(a) shall be irrevocable and shall constitute a binding agreement to sell (to either the proposed transferee(s) or the Common Selling Stockholder, as the case may be) 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 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 Stockholder’s Common Securities (a “Market Selling Stockholder”) then each of the holders of Preferred Securities may request that the Company redeem certain Preferred Securities held by such holder of Preferred Securities as provided in this Section 3(b), and the right of the Market Selling Stockholder to sell or otherwise transfer any Common Securities in such Market Sale shall be subject to the Company agreeing, at its sole option, to redeem such Preferred Securities pursuant to this Section 3(b).  The Market Selling Stockholder shall give written notice (the “Market Tag-Along Notice”) to each of the holders of Preferred Securities 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 3(b)(iii) below.  The Market 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

 

  

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respective Preferred Securities will be redeemed (which, in the case of (a) the Series A Securities 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), (b) the Series C Preferred Stock shall be equal to (X) the Conversion Shares (as defined in the Series C Certificate of Designation) divided by the number of shares of Series C Preferred Stock issued and outstanding as of the Series C Original Issue Date (as defined in the Series C Certificate of Designation) times (Y) 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 C Preferred Stock where no corresponding adjustment is made to the Common Stock) and (c) the Series D Securities shall be equal to Conversion Rate (as defined in the Series D Certificate of Designation) 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 D Preferred Stock or Series D-1 Preferred Stock, as applicable, where no corresponding adjustment is made to the Common Stock)).  The Market Tag-Along Notice shall be delivered by hand delivery to the addresses and confirmed telephonically to the individuals set forth on Schedule B hereto, as such addresses and telephone numbers may be updated from time to time by each of the holders of Preferred Securities upon written notice to the Company and the Stockholders.

 

(ii)           If a Stockholder exercises its tag-along redemption rights in accordance with Section 3(b)(iii) below, such Stockholder shall request the Company to redeem a portion of its Preferred Securities equal to the product of (A) the number of Preferred Securities then held by such Stockholder 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 Common Securities held as of the date of this Agreement by the Market Selling Stockholder and the holders of Preferred Securities participating in such Sale (as adjusted for stock splits, combinations and the like and as reduced by any Sales previously made by the Market Selling Stockholder and such holders of Preferred Securities subsequent to the date of this Agreement).

 

(iii)          If the Market Tag-Along Notice is delivered prior to 10 a.m. New York time, the tag-along redemption rights provided in this Section 3(b) must be exercised in respect of the Preferred Securities by the holders of Preferred Securities prior to 5 p.m., New York time, on the date of the Market Tag-Along Notice and if the Market Tag-Along Notice is delivered at or after 10 a.m. New York time, the tag-along redemption rights provided in this Section 3(b) must be exercised by the holders of Preferred Securities prior to 5 p.m., New York time, on the Business Day following its receipt of the Market Tag-Along Notice.  The tag-along redemption rights shall be exercised by delivery of a written notice (the “Redemption Notice”) to the Market Selling Stockholder, with a copy to the Company, indicating such Stockholder’s desire to exercise its rights and specifying the number and series of Preferred Securities it requests to have the Company redeem.  The Preferred Securities shall be in the same proportion of Shares and Warrants as the Offered Securities.  The Company must notify the Market Selling Stockholder and each of the holders of Preferred Securities whether it agrees, in its sole option, to effect the requested redemption within the following applicable timeframe: (A) if the Company receives such holder of Preferred Securities’ 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 such holder of Preferred Securities’ 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 such Redemption Notice.  If the Company agrees, at its sole option, to redeem such Preferred 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 MarketTag-Along Notice; provided, however, that if the Market Selling Stockholder does not consummate the Market Sale set forth in the Market Tag-Along Notice, the Company shall not be required to redeem the Preferred Securities and for the purposes of this Agreement, the Market Tag-Along Notice shall be treated as having been withdrawn.

 

  

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(iv)          If a Stockholder properly exercises its tag-along redemption rights under this Section 3(b) and the Company does not agree to redeem the Preferred Securities, then the Market Selling Stockholder may elect to purchase the Preferred Securities at a price per share equal to the Redemption Price.

 

(v)           If a Stockholder properly exercises its tag-along redemption rights under this Section 3(b) and (A) the Company does not agree to redeem the Preferred Securities and (B) the Market Selling Stockholder does not elect to purchase such Preferred Securities, then the Market Selling Stockholder(s) shall not be permitted to consummate the proposed Sale of the Common Securities, and any such attempted Sale shall be null and void.

 

(vi)          If a Stockholder properly exercises its tag-along redemption rights under this Section 3(b) and the Company agrees to redeem the Preferred Securities but fails to do so for any reason, then the Market Selling Stockholder(s) shall, within two Business Days of such failure by the Company, purchase the Preferred Securities at the Redemption Price.

 

(vii)         Any notice given by a Stockholder in which it elects to exercise its tag-along redemption rights provided in this Section 3(b) shall be irrevocable and shall constitute a binding agreement to submit for redemption or sell to the Market Selling Stockholder such Preferred Securities as are included therein on the terms and conditions applicable to such redemption or sale.

 

(c)           Public Sales.  If at any time any Stockholder proposes a Public Sale that is not also a Market Sale (a “Subject Public Sale”), the Company or such Stockholder, as the case may be, shall provide written notice (the “Offering Notice”) of the Subject Public Sale to the holders of Preferred Securities 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, each holder of Preferred Securities may elect to request that the Company redeem a portion of its Preferred Securities equal to the product of (i) the number of Preferred Securities then held by such Stockholder and (ii) a fraction (A) the numerator of which shall be the number of Common Securities to be sold by the Stockholder proposing such Public Sale (a “Public Sale Selling Stockholder”), and (B) the denominator of which shall be the total number of Common Securities held by the Public Sale Selling Stockholder and holders of Preferred Securities 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 the Public Sale Selling Stockholder and such holders of Preferred Securities).  The redemption rights provided in this Section 3(c) must be exercised by such holder of Preferred Securities 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 Public Sale Selling Stockholder, stating the number and series of Preferred Securities requested to be redeemed pursuant thereto. The Preferred Securities requested to be redeemed shall be in the same proportion of Shares and Warrants as the Common Securities proposed to be sold in the Subject Public Sale.  The redemption price per share in the case of (a) the Series A Securities shall be equal to one hundred (100) times the price per share of Common Stock received in the Public Sale by the Public Sale Selling Stockholder, 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), (b) the Series C Preferred Stock shall be equal to (X) the Conversion Shares (as defined in the Series C Certificate of Designation) divided by the number of shares of Series C Preferred Stock issued and outstanding as of the Series C Original Issue Date (as defined in the Series C Certificate of Designation) times (Y) the price per share of Common Stock received in the Public Sale by the Public Sale Selling Stockholder, before underwriter discounts or commissions (subject to equitable adjustment for stock splits, combinations and the like that are made with respect to the Series C Preferred Stock, where no corresponding adjustment is made to the Common Stock) and (c) the Series D Securities shall be equal to Conversion Rate (as defined in the Series D Certificate of Designation) times the price per share of Common Stock received in the Public Sale by the Public Sale Selling Stockholder, before underwriter discounts or commissions (subject to equitable adjustment for stock splits, combinations and the like that are made with respect to the Series D Preferred Stock or Series D-1 Preferred Stock, where no corresponding adjustment is made to the Common Stock) (the respective “Offering Redemption Price”).  Upon receiving an Offering Redemption Notice pursuant to this Section 3(c), the Company shall have two (2) Business Days to notify the holders of Preferred Securities and the Public Sale 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 respective “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 Preferred Securities subject to an Offering Redemption, then the Selling Stockholder may elect to purchase such Preferred Securities at a price per share equal to the Offering Redemption Price.  If (A) the Company does not agree to redeem any Preferred Securities subject to an Offering Redemption and (B) the Public Sale Selling Stockholder does not elect to purchase such Preferred Securities, or if after having so agreed, the Company fails to redeem or the Public Sale Selling Stockholder fails to purchase, any Preferred Securities subject to an Offering Redemption Notice pursuant to this Section 3(c), the Public Sale Selling Stockholder(s) may not consummate the Subject Public Sale.  Any notice given by a Stockholder in which it elects to exercise its offering redemption rights provided in this Section 3(c) shall be irrevocable and shall constitute a binding agreement to submit for redemption or sell to the Public Sale Selling Stockholder such Preferred Securities as are included therein on the terms and conditions applicable to such redemption or sale.

 

  

10

  

(d)           Exclusions.  The tag-along and redemption rights provided in this Section 3 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, (iii) to any lien or pledge outstanding as of the date of this Agreement, (iv) to any sale, transfer or other disposition of Securities pursuant to Rule 144 or (v) to a transfer of the Series C Preferred Stock pursuant to the Beacon APA (A) from the Company to the escrow agent, (B) from the escrow agent to the Company or any of its affiliates or to Beacon or any of its stockholders or (C) from Beacon to any of its stockholders; provided that in the case of clause(s) (i) or (ii), the Stockholder shall deliver notice to the holders of Preferred Securities of such pledge, gift or transfer and such Common 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 3 using the number of Common Securities or Preferred Securities held as of the date of this Agreement, such calculations shall, for a transferee pursuant to this Section 3(d), instead use the number of Securities received by such transferee pursuant hereto.

 

(e)           Volume Exclusions.  In addition to the exclusions set forth in Section 3(d) above, the tag-along rights and related obligations of the Company with respect to redemptions provided in Sections 3(a), 3(b) and 3(c) shall not apply to Sales by a Stockholder of up to 10% of the Common Securities held by such Stockholder as of the date that such Stockholder first became party to this Agreement in any consecutive twelve month period.  The following calculation shall be used in determining the percentage of a Stockholder’s Common Securities that are being sold or otherwise transferred in any given Sale: (x) the number of Common Securities previously sold pursuant to this Section 3(e) by such Stockholder and proposed to be sold by such Stockholder divided by (y) the total number of Common Securities held by such Stockholder as of the date of this Agreement (as adjusted for stock splits, combinations and the like).

 

4.           Preemptive Rights.

 

(a)           If the Company or any of its Subsidiaries proposes to issue additional equity securities, including any warrants, options or other rights to acquire equity of the Company or any of its subsidiaries or debt securities that are convertible into or exchangeable or exercisable for equity securities of the Company or any of its Subsidiaries (with the exception of any issuance (i) in connection with any acquisition of assets or another Person by the Company or any of its Subsidiaries, whether by purchase of stock, merger, consolidation, purchase of all or substantially all of the assets of such Person or otherwise (excluding any issuance for purposes of financing such transaction) approved by the Board and the requisite holders of the Series D Preferred Stock to the extent required under the Series D Certificate of Designation, including in connection with the transactions contemplated by and among the Company, one of its Subsidiaries and Beacon Capital Strategies, Inc. (“Beacon”) pursuant to that certain Asset Purchase Agreement, dated as of February 2, 2011 (the “Beacon APA”), (ii) Exempted Securities (as such term is defined in the Certificate of Designation), (iii) in an underwritten public offering with gross proceeds of $50,000,000 and a market capitalization of $175,000,000 and (iv) approved by holders of the majority of the Series D Preferred Stock (in each case, having been approved in accordance with the terms of this Agreement and the Series D Certificate of Designation, to the extent applicable)) (“Preemptive Securities”), the Company shall provide written notice (an “Issuance Notice”) to each holder of Preferred Securities of such anticipated issuance no later than twenty-two (22) Business Days prior to the anticipated issuance date.  Such notice shall set forth the principal terms and conditions of the issuance, including a description of the Preemptive Securities proposed to be issued, the proposed purchase price for such Preemptive Securities and the anticipated issuance date.  Each holder of Preferred Securities shall have the right to purchase a number of Preemptive Securities determined by multiplying (i) the number of Preemptive Securities proposed to be issued, by (ii) a fraction, the numerator of which is the number of shares of Preferred Stock held by such Stockholder on an as-converted basis at the time the Issuance Notice for such Preemptive Securities is given and the denominator of which is the total number of shares of the Company’s Common Stock issued and outstanding on a fully-diluted, as converted, basis on the date of the Issuance Notice (the “Pro Rata Portion”).  Each holder of Preferred Securities that desires to purchase Preemptive Securities at the price and on the terms and conditions specified in the Company’s notice must deliver an irrevocable written notice to the Company (a “Preemptive Exercise Notice”) no later than ten (10) Business Days after the delivery of the Issuance Notice, setting forth (x) the number of such Preemptive Securities for which such right is exercised (which such number shall not exceed such Stockholder’s Pro Rata Portion of such Preemptive Securities) and (y) the maximum number of additional Preemptive Securities that such Stockholder would be willing to purchase in excess of such Stockholder’s Pro Rata Portion in the event that any other Stockholder or other Person entitled to exercise preemptive rights with respect to such issuance elects not to purchase its full Pro Rata Portion of such Preemptive Securities.

 

  

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(b)           In the event the Stockholders with preemptive rights pursuant to clause (a) above do not purchase all such Preemptive Securities in accordance with the procedures set forth in such clause (a), the Company shall have one hundred twenty (120) days after the anticipated issuance date to sell to other Persons the remaining Preemptive Securities at the price and on such terms and conditions that are no more favorable to such other Persons than those specified in the Company’s notices to the Stockholders pursuant to Section 4(a).  If the Company fails to sell such Preemptive Securities within one hundred twenty (120) days of the anticipated issuance date provided in the notices given to the Stockholders pursuant to Section 4(a), the Company shall not thereafter issue or sell any Preemptive Securities without first offering such Preemptive Securities to the holders of Preferred Securities in the manner provided in this Section 4.

 

(c)           The election by a Stockholder not to exercise its preemptive rights under this Section 4 in any one instance shall not affect such Stockholder’s right (other than in respect of a reduction in its Pro Rata Portion) as to any future issuances under this Section 4.

 

(d)           All costs and expenses incurred by the Company in connection with its obligations under this Section 4, including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be paid by the Company.

(e)           Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section 4, the Company may elect to give the Issuance Notice to the Stockholders with preemptive rights pursuant to Section 4(a) within ten (10) days after the issuance of Preemptive Securities and thereafter give such Stockholders the right to purchase such number of Preemptive Securities as would provide them with the same ownership as if the Issuance Notice and preemptive rights had been provided prior to the issuance of the Preemptive Securities, all on the same terms and conditions as would otherwise apply under this Section 4.

 

  

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(f)           The preemptive rights under this Section 4 shall terminate on such date as of which less than 25% of the shares of Series D Preferred Stock issued in the Series D Financing remain outstanding.

 

5.           Certain Sales.  At any time on or after February 2, 2016, to the extent a Stockholder holds any Preferred Securities (the “Remaining Securities”), such Stockholder 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 such Stockholder 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 (x) the number of shares of Common Stock into which a share of the Remaining Securities would be convertible pursuant to the certificate of designation relating to such series of Shares, multiplied by (y) the fair market value of a share of Common Stock as determined in accordance with the terms of the certificate of designation relating to such series of Shares.

 

6.           No Mandatory Redemption.  For the 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.           Series D and Oak Board Designees.

 

(a)           For so long as the Stockholders set forth on Schedule C hereto (the “Series D Designee Holders”) collectively own (within the meaning of Rule 13d-3 under the Securities Exchange Act, as amended (the “Exchange Act”)) at least (A) 25% of the Series D Preferred Stock issued in the Series D Financing or (B) in the event of a conversion of the Series D Preferred Stock, 25% of the Common Stock  underlying the Series D Preferred Stock issued in the Series D Financing, (i) the Company will nominate and use its reasonable best efforts to cause to be elected and cause to remain a director on the Board and (ii) each Stockholder, at each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board are to be elected, or whenever members of the Board are to be elected by written consent, agrees to vote or act with respect to all shares of voting capital stock of the Company registered in its name or beneficially owned by it as of the date hereof and any and all securities of the Company legally or beneficially acquired by such Stockholder after the date hereof, so as to elect, and not to vote to remove, one person designated in writing collectively by the Series D Designee Holders (the “Series D Designee”).   Subject to the following sentence, the consent of each of the Series D Designee Holders holding at least 8% of the outstanding shares of Series D Preferred Stock as of the Closing Date, as set forth on Schedule C hereto (each, an “8% Series D Designee Holder”), shall be required in respect of the designation of the Series D Designee, for so long as such 8% Series D Designee Holder shall hold at least 25% of the shares of Series D Preferred Stock it acquired as of the Closing Date.  Notwithstanding the foregoing,  for so long as Oak Investment Partners XII, Limited Partnership (“Oak”) continues to own at least 25% of the shares of Series D Preferred Stock acquired by it in the Series D Financing (or, in the event of a conversion of the Series D Preferred Stock, 25% of the Common Stock  underlying the Series D Preferred Stock it acquired in the Series D Financing), the Series D Designee shall be designated by Oak in its sole discretion, and in such event Oak shall be deemed to be the “Series D Designee Holders.”  Patricia Kemp shall be the initial Series D Designee.

 

  

13

  

 

(b)           Subject to applicable law and the rules and regulations of the Securities and Exchange Commission and any securities exchange or quotation system on which the Company’s securities are listed or quoted, the Series D Designee shall have a right to be a member of each principal committee of the Board.

 

(c)           For so long as Oak continues to own at least 25% of the shares of Series D Preferred Stock acquired by it in the Series D Financing (or, in the event of a conversion of the Series D Preferred Stock, 25% of the Common Stock underlying the Series D Preferred Stock it acquired in the Series D Financing), (i) the Company will nominate and use its reasonable best efforts to cause to be elected and cause to remain a director on the Board and (ii) each Stockholder, at each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board are to be elected, or whenever members of the Board are to be elected by written consent, agrees to vote or act with respect to all shares of voting capital stock of the Company registered in its name or beneficially owned by it as of the date hereof and any and all securities of the Company legally or beneficially acquired by such Stockholder after the date hereof, so as to elect, and not to vote to remove, one person designated by Oak (the “Oak Designee”), which Oak Designee shall, for the avoidance of doubt, be in addition to Oak’s rights in respect of the Series D Designee pursuant to Section 7(a) hereof.  Eugene Lockhart shall be the initial Oak Designee.

 

(d)           It shall be a condition precedent to the Company’s obligations under Section 7(a) and (c), respectively, that (i) the Series D Designee Holders and the Series D Designee, and Oak and the Oak Designee, respectively, shall timely furnish to the Company such information regarding the Series D Designee Holders and the Series D Designee, and Oak and the Oak Designee, respectively, as shall be reasonably necessary for the Company to comply with its disclosure and other obligations under applicable law and the rules and regulations of the Securities and Exchange Commission and any securities exchange or quotation system on which the Company’s securities are listed or quoted, (ii) the Series D Designee Holders and Oak, respectively, shall comply with applicable law and the rules and regulations of the Securities and Exchange Commission with respect to their right to designate the Series D Designee and the Oak Designee, respectively, and (iii) the Series D Designee and the Oak Designee, respectively, shall comply with applicable law and the rules and regulations of the Securities and Exchange Commission with respect to his or her membership on the Board.

(e)           In addition to the foregoing rights set forth in this Section 7, so long as any Stockholder holding at least 8% of the outstanding shares of Series D Preferred Stock or Series D-1 Preferred Stock as of the Closing Date owns at least 25% of the shares of Series D Preferred Stock or Series D-1 Preferred Stock, respectively, acquired by it in the Series D Financing, such Stockholder shall have the right to appoint one non-voting representative to attend each meeting of the Board and each committee thereof (an “Investor Observer”).  Each Investor Observer will be entitled to receive copies of all notices, minutes, consents and other materials and information that the Company provides to the Board; provided that (a) the Investor Observer shall execute a confidentiality agreement in a form reasonably acceptable to the Company and the investor designating such Investor Observer, and (b) the Company may require such Investor Observer to be recused from any meeting and may redact such materials on advice of counsel in connection with matters involving the attorney-client privilege or conflicts of interest.

 

8.           Treatment of Series C Preferred Stock.  The rights to which any holder of Series C Preferred Stock that is a party hereto shall be entitled to hereunder with respect to such securities as of any date prior to the Determination Date (as defined in the Series C Certificate of Designation) shall be those rights to which such holder of Series C Preferred Stock would be entitled if the determination of the Conversion Value (as defined in the Series C Certificate of Designation) was as of such date (or if such date is not the last day of a month, the last day of the immediately preceding month).

 

  

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9.           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.

529 5th Avenue, 8th Floor

New York, New York 10017

Fax No:  (212) 946-3999

Attention:  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

Fax No.:  (813) 221-2900

Attention:   Mark A. Danzi, Esq.

	  	  	  
	  	
If to any Stockholder, at the address and facsimile number set forth on Schedule 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.

 

  

15

  

 

(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 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 person or entity acquires Series A Securities or Series D Securities, 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 Series D Securities (i) without the prior written consent of each of the holders of Series D Securities (provided, however, that the Company may issue additional securities in accordance with the terms of Section 4(i) of the Purchase Agreement without obtaining such prior written consent) and (ii) unless the purchaser thereof 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 of 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.

 

(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.

 

  

16

  

 

(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).

 

(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 (including, without limitation, the Prior Agreement), 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 or waived other than by an instrument in writing signed by the Company and the Required Stockholders.  Notwithstanding the foregoing, no amendment to this Agreement shall disproportionately and adversely affect the rights of any Stockholder relative to the rights of all of the Stockholders without such affected Stockholder’s consent.

 

(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 that the Stockholders no longer own any Shares or (ii) a Change of Control pursuant to which Preferred Securities are treated in accordance with Section 3 of the Series D Certificate of Designation.

[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/ Michael O. Sanderson 
	  	  	
Name:

	Michael O. Sanderson  
	  	  	
Title:

	CEO  

[Signature Page to Series D Stockholders’ Agreement]

  

  

  

Schedule 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.

 

ROBERT JONES

 

BONDS MX, LLC

c/o Laidlaw & Company (UK) Ltd.

90 Park Avenue, 31st floor

New York, New York 10016

Facsimile: (212) 297-0670

Attention: Hugh Regan

with a copy (for informational purposes only) to:

Gibson, Dunn & Crutcher LLP

2029 Century Park East

Los Angeles, California 90067-3026

Facsimile:  (310) 552-7038

Attention: Mark Lahive

  

  

  

 

GFINET INC.

c/o GFI Group Inc.

55 Water Street

New York, NY 10041

Attn:  General Counsel

Telecopy:  (212) 968-2965

with a copy (for informational purposes only) to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York  10019

Attn:  Jeffrey R. Poss, Esq.

Telecopy:  (212) 728-8111

 

OAK INVESTMENT PARTNERS XII, LIMITED PARTNERSHIP

One Gorham Island

Westport, Connecticut 06880

Fax No.:  (203) 227-0327

Attn:  Ann H. Lamont

with a copy (for informational purposes only) to:

 

Finn Dixon & Herling LLP

177 Broad Street

Stamford, Connecticut 06901

Fax No.:  (203) 325-5001

Attn:  Michael J. Herling

  

  

  

Schedule 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.

ROBERT JONES

BONDS MX, LLC

c/o Laidlaw & Company (UK) Ltd.

90 Park Avenue, 31st floor

New York, New York 10016

Facsimile: (212) 297-0670

Attention: Hugh Regan

GIBSON, DUNN & CRUTCHER LLP

2029 Century Park East

Los Angeles, California 90067-3026

Facsimile:  (310) 552-7038

Attention: Mark Lahive

  

  

  

GFINET INC.

c/o GFI Group Inc.

55 Water Street

New York, NY 10041

Attn:           General Counsel

Telecopy:  (212) 968-2965

WILLKIE FARR & GALLAGHER LLP

787 Seventh Avenue

New York, New York  10019

Attention:  Jeffrey R. Poss, Esq.

OAK INVESTMENT PARTNERS XII, LIMITED PARTNERSHIP

One Gorham Island

Westport, Connecticut 06880

Fax No.:  (203) 227-0327

Attn:  Ann H. Lamont

FINN DIXON & HERLING LLP

177 Broad Street

Stamford, Connecticut 06901

Fax No.:  (203) 325-5001

Attn:  Michael J. Herling

  

  

  

Schedule C

Stockholders in Series D Financing

BONDS MX, LLC

GFINET INC.

 

OAK INVESTMENT PARTNERS XII, LIMITED PARTNERSHIP

ROBERT JONES

UBS AMERICAS INC.Unassociated Document

Bonds.com 8-K

 

Exhibit 10.4

 

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

 

This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of February 2, 2011, by and among Bonds.com Group, Inc., a Delaware corporation (the “Company”), the investors set forth on Schedule I hereto (the “Original Investors”), the investors set forth on Schedule II hereto (the “New Investors”), and each other investor who shall, subsequent to the date hereof, join in and become a party to this Agreement by execution of a Joinder substantially in the form attached hereto as Exhibit A (a “Joinder”) (each an “Investor” and collectively, the “Investors”).

 

WHEREAS:

 

A.           On October 19, 2010, pursuant to one or more Unit Purchase Agreements (each, an “Original Unit Purchase Agreement”), the Company agreed, upon the terms and subject to the conditions set forth in the Original Unit Purchase Agreements, to issue and sell to the Original Investors units consisting of (i) shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) or Series B-1 Preferred Stock (the “Series B-1 Preferred Stock”), as the case may be; (ii) warrants which are exercisable to purchase shares of the Company’s Common Stock or Series A Participating Preferred Stock, as the case may be (the “Prior Warrants”), and (iii) the right to receive shares of the Company’s Common Stock or Series A Participating Preferred Stock, as the case may be, if the Company fails to meet the performance targets set forth therein (the “Performance Shares”).

 

B.           The Company and the Original Investors are parties to that certain Registration Rights Agreement (the “Original Agreement”), dated as of October 19, 2010, by and among the Company and each of the Original Investors.

 

C.           Contemporaneously with (or prior to) the execution hereof, (i) each share of Series B Preferred Stock shall be exchanged for not more than one share of the Company’s Series D Convertible Preferred Stock (the “Series D Preferred Stock”), (ii) each share of Series B-1 Preferred Stock shall be exchanged for not more than one share of the Company’s Series D-1 Convertible Preferred Stock (the “Series D-1 Preferred Stock”), (iii) the Prior Warrants shall be exchanged for new warrants with substantially similar terms, and (iv) the Original Investors shall waive all claims to the Performance Shares.

 

D.           Contemporaneously with the execution hereof, pursuant to a Unit Purchase Agreement (the “Second Unit Purchase Agreement” and, together with the Original Unit Purchase Agreement, the “Unit Purchase Agreements”), the Company has agreed, upon the terms and subject to the conditions set forth in the Second Unit Purchase Agreement, to issue and sell to the New Investors units consisting of (i) shares of Series D Preferred Stock and (ii) warrants exercisable for shares of the Company’s Common Stock.

 

E.           In accordance with Section 9 of the Original Agreement, the Company and Original Investors holding a majority of the Registrable Securities held by all of the Original Investors have agreed, as a condition precedent to the New Investors’ entering into the Second

 

  

  

  

Unit Purchase Agreement, to amend and restate the Original Agreement to provide for registration rights for the Investors as set forth herein.

 

F.           To induce the Investors to execute and deliver the Unit Purchase Agreements, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Investors hereby agree as follows:

 

1.           Definitions. As used in this Agreement, the following terms shall have the following meanings:

 

a.           “1933 Act” means the Securities Act of 1933, as amended.

 

b.           “1934 Act” means the Exchange Act of 1934, as amended.

 

c.           “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

 

d.           “Closing Date” has the meaning ascribed to such term in the Second Unit Purchase Agreement.

 

e.           “Effective Date” means the date a Registration Statement is declared effective by the SEC.

 

f.           “Effectiveness Deadline” means the date that is 150 days after the date of the Filing Deadline.

 

g.           “Investor” means an Investor or any transferee or assignee thereof to whom an Investor assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 8 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 8.

 

h.           “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

 

i.           “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

 

  

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j.           “Registrable Securities” means (i) any Securities that are shares of Common Stock and (ii) any shares of Common Stock that are issued or issuable upon conversion or exercise of Securities.

 

k.           “Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities.

 

l.           “Required Holders” means the holders of at least a majority of the Registrable Securities.

 

m.            “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

 

n.           “SEC” means the United States Securities and Exchange Commission.

 

o.           “Securities” means, collectively, the Series D Preferred Stock, the Series D-1 Preferred Stock and the warrants issued in connection with the Unit Purchase Agreements, together with any capital stock of the Company issued thereon as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise.

 

2.           Registration.

 

a.           Mandatory Registration.

 

(i)           The Company agrees, as soon as practicable after the date that is six months after the Closing Date but no later than five (5) business days after such date (the “Filing Deadline”), to file with the SEC a Registration Statement under the Act covering the resale of all of the Registrable Securities; provided, that the Company shall not be required to register for resale pursuant to this Section 2(a) any Registrable Securities that both (A) may be sold without restriction by an Investor pursuant to Rule 144 promulgated under the 1933 Act and (B) with respect to which, if requested by the Investor, the Securities Act restrictive legend on the certificates representing such Registrable Securities shall have been removed pursuant to the Series D Stockholders’ Agreement, dated as of the date hereof, by and among the Company, the New Investors and the other parties thereto. The Company shall use commercially reasonable efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline. By 9:30 am New York City Time on the Business Day following the Effective Date, the Company shall file with the SEC, in accordance with Rule 424 under the 1933 Act, the final prospectus to be used in connection with sales pursuant to such Registration Statement. The Company and each Investor hereby acknowledge that in accordance with Rule 415, the Company may not be allowed to register all of the Registrable Securities in the Registration Statement. If this occurs, the Company, upon a request by the Required Holders, shall be required to file additional Registration Statements to include any of the Registrable Securities that were not registered in the Registration Statement, provided that such Registrable Securities can be registered at such time to comply with Rule 415.

 

(ii)           Ineligibility for Form S-3. In the event that Form S-3 under the 1933 Act is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form

 

  

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reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 under the 1933 Act as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 under the 1933 Act covering the Registrable Securities has been declared effective by the SEC.

 

(iii)           Delay at Company’s Option.  Notwithstanding the foregoing obligations, if the Company furnishes to the Investors a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for a Registration Statement contemplated by Section 2(a) to either become effective or remain effective for as long as such Registration Statement(s) otherwise would be required to remain effective, because such action would (A) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (B) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (C) render the Company unable to comply with requirements under the 1933 Act or 1934 Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than one hundred twenty (120) days after the Filing Deadline.

 

b.           Piggy Back Registration Rights.  If at any time there is not an effective Registration Statement covering the Registrable Securities, and the Company shall determine to prepare and file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to the Investors a written notice of such determination at least twenty (20) days prior to the filing of any such Registration Statement and shall automatically include in such Registration Statement all Registrable Securities for resale and offer on a continuous basis pursuant to Rule 415; provided, however, that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such registration, the Company determines for any reason not to proceed with such registration, the Company will be relieved of its obligation to register any Registrable Securities in connection with such registration, (ii) in case of a determination by the Company to delay registration of its securities, the Company will be permitted to delay the registration of Registrable Securities for the same period as the delay in registering such other securities, (iii) each Investor is subject to confidentiality obligations with respect to any information gained in this process or any other material non-public information he, she or it obtains, (iv) each Investor is subject to all applicable laws relating to insider trading or similar restrictions; and (v) if all of the Registrable Securities of the Investors cannot be so included due to Rule 415, then the Company may reduce the number of the Investors’ Registrable Securities covered by such Registration Statement to the maximum number which would enable the Company to conduct such offering in accordance with the provisions of Rule 415.  The Company shall cause any Registration Statement filed under Section 2(a) of this Agreement0 to be declared effective under the 1933 Act as promptly as possible after the filing

 

  

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thereof. By 5:00 p.m. Eastern Time on the business day immediately following the Effective Date of such Registration Statement, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement (whether or not such filing is technically required under such Rule).

 

c.           Allocation of Registrable Securities; Cut Back. The initial number of Registrable Securities included in any Registration Statement and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors according to the total amount of securities entitled to be included therein owned by each Investor or in such other proportions as shall mutually be agreed to by such Investors. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement without the prior written consent of the Required Holders; provided, that to the extent required by any agreement or covenant of the Company in effect on the date hereof granting registration rights to any holder of its securities, the Company may include such securities on any Registration Statement without the consent of the Required Holders, provided that such inclusion does not reduce the number of Registrable Securities covered by such Registration Statement.  In the event all of the Registrable Securities cannot be included in a Registration Statement under this Section 2 due to Rule 415 or underwriter cutbacks, then the Company, unless otherwise prohibited by the SEC, shall cause the Registrable Securities of the Investors to be included in such Registration Statement to be reduced pro rata based on the number of Registrable Securities held by all of the Investors.

 

3.           Registration Procedures. At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2, the Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

 

a.           The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which each Investor may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144 (or any successor thereto) promulgated under the 1933 Act and is not otherwise prohibited by the SEC or any statute, rule, regulation or other applicable law from selling any such Registrable Securities pursuant to such Rule or (ii) the date on which each Investor shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”). The Company shall use commercially reasonable efforts to ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall 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 the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

 

b.           The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all

 

  

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 Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-Q, Form 10-K or any analogous report under the 1934 Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

 

c.           The Required Holders shall have the right to select one legal counsel to review and oversee any registration pursuant to this Agreement (“Legal Counsel”), as designated by the Required Holders. The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company’s obligations under this Agreement.  The Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-K, and Reports on Form 10-Q and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by the Investors, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto.

 

d.           The Company shall furnish to the Investors, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by the Investors, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as the Investors may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Investors may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investors.

 

e.           The Company shall use commercially reasonable efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those 

 

  

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jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and Investors of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

 

f.           The Company shall notify Legal Counsel and Investors in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(o), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to Legal Counsel and Investors (or such other number of copies as Legal Counsel or Investors may reasonably request). The Company shall also promptly notify Legal Counsel and Investors in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and Investors by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

 

g.           The Company shall use commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify Legal Counsel and Investors of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

h.           The Company shall notify the Investors in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not 

 

  

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misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(o), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to the Investors (or such other number of copies as the Investors may reasonably request).

 

i.           The Company shall promptly notify the Investors in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Investors by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

 

j.           The Company shall hold in confidence and not make any disclosure of information concerning the Investors provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

k.           The Company shall cooperate with the Investors and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

 

l.           If requested by an Investor, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as the Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

 

  

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m.           The Company shall use commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

 

n.           The Company shall otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

 

o.           Notwithstanding anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed sixty (60) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of one hundred twenty (120) days and the first day of any Grace Period must be at least two (2) trading days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale, and delivered a copy of the prospectus included as part of the applicable Registration Statement (unless an exemption from such prospectus delivery requirements exists), prior to the Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.

 

p.           The Company shall (i) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering; (ii) use its commercially reasonable efforts to cause all such Registrable Securities covered by a Registration Statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed; (iii) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration; and (iv) subject to reasonable confidentiality agreements, promptly make available for inspection by selling Investors, any underwriter(s) participating in

 

  

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any disposition pursuant to such Registration Statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Investors, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith.

 

q.           With a view to making available to the Investors the benefits of Rule 144 and other rules and regulations of the SEC that may at any time permit an Investor to sell securities of the Company to the public without registration, the Company covenants that it shall (i) file in a timely manner all reports and other documents required to be filed by it under the 1933 Act and the 1934 Act and the rules and regulations adopted by the SEC thereunder and (ii) take such further action as each Investor may reasonably request (including, but not limited to, providing any information necessary to comply with Rule 144, if available, with respect to resales of the Registrable Securities under the 1933 Act), at all times from and after the date hereof, all to the extent required from time to time to enable such Investor to sell Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by (x) Rule 144, as may be amended from time to time or (y) any other rules or regulations now existing or hereafter adopted by the SEC. Upon the written request of an Investor, the Company shall deliver to the Investor a written statement as to whether it has complied with such requirements.

 

4.           Obligations of the Investors.

 

a.           At least five Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from such Investor if such Investor elects to have any of such Investor’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of an Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

 

b.           Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.

 

c.           Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of Section 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the

 

  

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first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Unit Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale prior to such Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of Section 3(f) and for which such Investor has not yet settled.

 

d.           Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

 

5.           Expenses of Registration. All reasonable expenses, other than underwriting discounts, commissions and stock transfer taxes with respect to the Registrable Securities, incurred in connection with registrations, filings or qualifications pursuant to Section 2(a), including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company and one counsel for the Investors (including the Legal Counsel) shall be paid by the Company.

 

6.           Indemnification.  In the event any Registrable Securities are included in a Registration Statement under this Agreement:

 

a.           To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, managers, members, partners, employees, agents, representatives of, and each Person, if any, who controls each Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the 

 

  

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offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): shall not apply to a Claim (a) arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Investor expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto or the omission or alleged omission in such written information to state a material fact required to be stated therein or necessary to make the statements therein not misleading, if such prospectus was timely made available by the Company pursuant to Section 3(d); (b) to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely made available by the Company pursuant to Section 3(d); (c) in which amounts are paid in settlement of any Claim and such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed; (d) in which an Investor fails to cease all offers and sales of Registrable Securities in accordance with Section 4(c) herein; and (e) arising out of or based upon a breach by any Investor of such Investor’s obligations set forth herein. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 8.

 

b.           In connection with any Registration Statement in which any Investor is participating, to the fullest extent permitted by law, such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor will reimburse any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 8.  The obligations of each Investor under this Section 6(b) shall be limited in amount to the net amount of proceeds received by such Investor from the sale of Registrable Securities pursuant to such Registration Statement. 

 

 

  

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c.           Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Required Holders. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

 

d.           The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

 

e.           The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

 

  

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7.           Contribution. To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

 

8.           Assignment of Registration Rights. The rights under this Agreement shall be automatically assignable by an Investor to any transferee of at least 25% of such Investor’s Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, contemporaneous with such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) such transfer is made pursuant to a privately negotiated, non-market disposition of Registrable Securities and immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws; and (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein.

 

9.           Amendment of Registration Rights. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Required Holders; provided, however, that the addition of a new Investor as a party to the Agreement shall not be deemed an amendment hereof if such Investor has been approved by the Board and the Required Holders and has executed a Joinder.  Any amendment or waiver effected in accordance with this Section 9 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities.  Notwithstanding the foregoing, no amendment to this Agreement shall disproportionately and adversely affect the rights of any Investor relative to the rights of all of the Investors without such affected Investor’s consent.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

 

10.           Miscellaneous.

 

a.           A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities.

 

b.           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

 

  

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by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party), so long as such facsimile is followed by mail delivery of the same information contained in such facsimile, or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:

 

If to Company:

 

Bonds.com Group, Inc.

529 5th Avenue, 8th Floor

New York, New York 10017

Facsimile:  (212) 946-3999

Attention:  Chief Executive Officer

 

with a copy 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 an Investor, to the address set forth underneath such Investor’s name on the signature page hereto.

 

Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, or (B) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, or receipt from a nationally recognized overnight delivery service in accordance with clause (i) or (iii) above, respectively.

 

c.           Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

 

d.           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 

  

15

  

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.

 

e.           This Agreement and the instruments referenced herein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the instruments referenced herein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

 

f.           Subject to the requirements of Section 8, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

 

g.           The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

h.           This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

i.           Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

j.           All consents and other determinations required to be made by any Investor pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders.

k.           The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

 

l.           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.

 

m.           Currency. As used herein, “Dollar”, “US Dollar” and “$” each mean the lawful money of the United States.

 

Remainder of Page Intentionally Left Blank.

 

  

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IN WITNESS WHEREOF, each Investor and the Company have caused their respective signature page to this Amended and Restated Registration Rights Agreement to be duly executed as of the date first written above.

 

 

	  	  	
COMPANY:

	 	 	 
	 	 	BONDS.COM GROUP, INC.
	 	 	 
	  	  	  
	  	  	
By:

	

 /s/ Michael O. Sanderson

	  	  	
Name:

	Michael O. Sanderson  
	  	  	
Title:

	CEO  

[Amended and Restated Registration Rights Agreement]

  

  

  

 

Schedule I

 

Original Investors

 

 

 

UBS Americas Inc.

 

Bonds MX, LLC

 

Robert Jones

 

  

  

  

Schedule II

 

New Investors

 

GFINet Inc.

 

Oak Investment Partners XII, Limited Partnership

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