SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D

 

Under the Securities Exchange Act of 1934
(Amendment No. 4)

 

(Name of Company)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

SCHEDULE 13D

 

 

* Represents the number of shares of common stock that would be beneficially owned upon full conversion of the shares of Series E Preferred Stock and Series E-2 Preferred Stock (in each case, assuming conversion as of February 28, 2014), and the exercise of all common stock warrants held as of February 28, 2014.  See Item 5.

 

** Calculated based on 243,438 shares of common stock outstanding as of March 5, 2014, as represented by the Company in the Merger Agreement (as defined in Item 4 below). The Reporting Persons have not effected any acquisition or disposition of any securities of the Company since the filing of Amendment No. 3 to Schedule 13D on March 7, 2013. The beneficial ownership percentage reflected herein represents a change in the beneficial ownership percentage from that set forth in Amendment No. 3 to Schedule 13D that primarily relates to a change in the number of outstanding shares of common stock and an increase in the number of shares of common stock issuable upon conversion of preferred stock due to accruing dividends.  See the Explanatory Note below.

 

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SCHEDULE 13D

 

 

* Represents the number of shares of common stock that would be beneficially owned upon full conversion of the shares of Series E Preferred Stock and Series E-2 Preferred Stock (in each case, assuming conversion as of February 28, 2014), and the exercise of all common stock warrants held as of February 28, 2014.  See Item 5.

 

** Calculated based on 243,438 shares of common stock outstanding as of March 5, 2014, as represented by the Company in the Merger Agreement (as defined in Item 4 below). The Reporting Persons have not effected any acquisition or disposition of any securities of the Company since the filing of Amendment No. 3 to Schedule 13D on March 7, 2013. The beneficial ownership percentage reflected herein represents a change in the beneficial ownership percentage from that set forth in Amendment No. 3 to Schedule 13D that primarily relates to a change in the number of outstanding shares of common stock and an increase in the number of shares of common stock issuable upon conversion of preferred stock due to accruing dividends.  See the Explanatory Note below.

 

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Pursuant to Rule 13d-2 promulgated under the Act, this Schedule 13D/A (this “Amendment No. 4”) amends the Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on July 8, 2011, as amended by Amendment No. 1 filed on December 9, 2011, Amendment No. 2 filed on June 15, 2012, and Amendment No. 3 filed on March 7, 2013 (such Schedule 13D, as so amended, the “Original Schedule 13D”).  The Original Schedule 13D, together with this Amendment No. 4, are collectively referred to herein as the “Schedule 13D”.  This Amendment No. 4 relates to the common stock, par value $0.0001 per share (the “Common Stock”), of Bonds.com Group, Inc., a Delaware corporation (the “Company” or the “Company”). The address of the Company’s principal executive offices is 1500 Broadway, 31st Floor, New York, New York 10036.  Unless the context otherwise requires, references herein to the “Common Stock” are to such common stock of the Company.  Capitalized terms used but not defined herein shall have the meanings given to them in the Original Schedule 13D.

 

Explanatory Note:  The Reporting Persons have not effected any acquisition or disposition of any securities of the Company since the filing of Amendment No. 3 to Schedule 13D on March 7, 2013. The purpose of this Amendment No. 4 is to update certain information contained in the Schedule 13D in order to reflect certain transactions that were affected by GFINet Inc. and the Company since the filing of Amendment No. 3 on March 7, 2013, specifically:

 

·                 A change in the number of outstanding shares of Common Stock that resulted from a 1-for-400 reverse stock split that was effected by the Company on April 25, 2013, as disclosed by the Company in its Current Report on Form 8-K filed by the Company on April 30, 2013;

 

·                 The issuance of a secured promissory note by Bonds.com Holdings, Inc., a wholly owned subsidiary of the Company, to GFINet Inc. and the related execution of the Pledge Agreement (as defined in Item 4 below); and

 

·                  The execution by the Company of the Merger Agreement (as defined in Item 4 below) and the related execution of the Stockholder Consent (as defined in Item 4 below) by GFINet Inc.

 

Item 2.   Identity and Background

 

Subparagraph (a) of Item 2 of the Original Schedule 13D is hereby amended and restated in its entirety as follows:

 

(a)           This Schedule 13D is filed on behalf of GFI Group Inc. (“GFI Group”), a Delaware corporation, and GFINet Inc. (“GFINet”), a Delaware corporation and a wholly owned subsidiary of GFI Group (each, a “Reporting Person,” and collectively, the “Reporting Persons”).  Schedule I hereto, with respect to GFI Group, and Schedule II hereto, with respect to GFINet, set forth lists of all of the directors and executive officers or persons holding equivalent positions (the “Scheduled Persons”) of each such Reporting Person.  As a result of certain of the matters described in Item 4, it is possible that the Reporting Persons may be deemed to constitute a “group,” within the meaning of Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated thereunder by the Securities and Exchange Commission, with other stockholders of the Company owning shares of the Company’s Series C Preferred Stock, Series E Convertible Preferred Stock (the “Series E Preferred Stock”), Series E-1 Convertible Preferred Stock (the “Series E-1 Preferred Stock”) and/or Series E-2 Convertible Preferred Stock (the “Series E-2 Preferred Stock”) and that are parties to the Amended and Restated Series E Stockholders’ Agreement (as defined below) (the “Non-Reporting Person Stockholders”). If the Reporting Persons were deemed to constitute a “group” with the Non-Reporting Person Stockholders, the aggregate number of shares of Common Stock that would be deemed beneficially owned collectively by the Reporting Persons and the Non-Reporting Person Stockholders, based on available information, is approximately 2,493,637 which represents approximately 91.1% of the shares of Common Stock outstanding.  The shares of Common Stock outstanding is based upon 243,438 shares of Common Stock outstanding as of March 5, 2014, as represented by the Company in the Merger Agreement (as defined below in Item 4), plus shares of Common Stock issuable upon conversion of the Series C Preferred Stock, Series E Preferred Stock, Series E-1 Preferred Stock and Series E-2 Preferred Stock (in each case, assuming conversion as of February 28, 2014), and the exercise of warrants to purchase Common Stock, in each case, owned by the Reporting Persons and the Non-Reporting Person Stockholders. The ownership of Common Stock reported by the Reporting Persons in this Schedule 13D does not include any shares of Common Stock owned by the Non-Reporting Person Stockholders.  Each Reporting Person disclaims beneficial ownership of all shares of Common Stock or securities convertible or exercisable into Common Stock other than any shares or other securities reported herein as being owned by such Reporting Person.

 

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Item 4.   Purpose of the Transaction

 

Item 4 of the Original Schedule 13D is hereby amended by the addition of the following information:

 

Notes and Pledge Agreement

 

On February 26, 2014, following a request by the Company to certain of the holders of its Series E-2 Preferred Stock to provide certain financing to the Company, Bonds.com Holdings, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Holdings”), issued to GFINet, and GFINet purchased from Holdings, a secured promissory note in the original principal amount of $271,275 (the “GFI Note”). In addition, certain of the other holders of the Company’s Series E-2 Preferred Stock were issued and purchased secured promissory notes in the following original principal amounts: (i) Oak Investment Partners XII, Limited Partnership in the principal amount of $271,275; (ii) Mida Holdings in the principal amount of $542,550; (iii) Daher Bonds Investment Company in the principal amount of $361,700 and (iv) Trimarc Capital Fund, L.P. in the principal amount of $53,200 (together with the GFI Note, the “Notes”).

 

The Notes accrue interest at a rate of 10% per annum and are due and payable on the earlier of (a) the date that is three months after the date of the Notes, and (b) (i) a consolidation, merger, reorganization or other form of acquisition of or by the Company or Holdings in which the Company’s or Holdings’ 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) immediately after the transaction, (ii) a sale of more than a majority of the Company’s or Holdings’ assets, or (iii) the acquisition by any person or group of persons of more than 50% of the Company’s or Holdings’ outstanding voting securities (such date, the “Maturity Date”).

 

In connection with the issuance of the Notes, on February 26, 2014, Holdings entered into that certain Pledge Agreement (the “Pledge Agreement”), by and among BCA LLC (“Secured Party”), as collateral agent and secured party for the benefit of the holders of the Notes, Holdings, as pledgor, and Mida Holdings, Daher Bonds Investment Company, GFINet Inc., Oak Investment Partners XII, Limited Partnership and Trimarc Capital Fund, L.P., each as holders of the Notes. Pursuant to the Pledge Agreement, among other things, Holdings granted to the Secured Party, for the benefit of the holders of the Notes, a first priority security interest and lien upon all of Holdings’ right, title and interest in, whether now existing or hereafter acquired, Holdings’ shares in Bonds.com, Inc., a Delaware corporation and indirect wholly owned subsidiary of the Company, and the proceeds of such shares (collectively, the “Collateral”), in order to secure Holdings’ obligations under the Notes.

 

The foregoing description of the Notes is qualified in its entirety by reference to the full text of the GFI Note, a copy of which is incorporated herein by reference as more specifically described under Item 7 hereof. The foregoing description of the Pledge Agreement is qualified in its entirety by reference to the full text of the Pledge Agreement, a copy of which is incorporated herein by reference as more specifically described under Item 7 hereof.

 

Merger Agreement and Stockholder Consent

 

On March 5, 2014, the Company, MTS Markets International, Inc. (“MTS”), an affiliate of the London Stock Exchange Group, and MMI Newco Inc., a wholly owned subsidiary of MTS (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Reporting Persons are not affiliated with MTS or Merger Sub. On the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of MTS (the “Merger”). As disclosed by the Company, the aggregate consideration for the mergers is approximately $15 million in cash, subject to certain adjustments described in the Merger Agreement.

 

Pursuant to the Merger Agreement, MTS will place $1.5 million of proceeds pursuant to the Merger into escrow to cover the purchase price adjustment and certain potential indemnity claims. In the absence of claims, these funds will be released to the stockholders entitled thereto under the terms of the Merger Agreement, including the Reporting Persons, in increments of $500,000 beginning on the first anniversary of the closing of the Merger and continuing on the 18 and 24 month anniversaries of the closing of the Merger. In addition, an amount of not less than $100,000 nor more than $200,000 will be set aside and held as a reserve for expenses incurred by a stockholder representative in connection with such person’s duties as a stockholder representative.

 

In connection with the Merger Agreement, certain of the Company’s stockholders, including the Reporting Persons, have executed a Written Consent of Certain Stockholders of Bonds.com Group, Inc. (the “Stockholder Consent”) on or about March 11, 2014, pursuant to which those stockholders, including GFINet, have approved the Merger Agreement and the transactions contemplated thereby. In addition, pursuant to the Stockholder Consent, among other things, GFINet has agreed not to transfer, at any time prior to the effective time of the Merger, any shares of the Common Stock or Preferred Stock of the Company held by GFINet.

 

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If the Merger is consummated, the outstanding shares of Common Stock will cease to be registered under the Exchange Act, and the Company will become a wholly owned subsidiary of MTS.

 

The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is incorporated herein by reference as more specifically described under Item 7 hereof. The foregoing description of the Stockholder Consent is qualified in its entirety by reference to the full text of the Stockholder Consent, a copy of which is incorporated herein by reference as more specifically described under Item 7 hereof.

 

Additional Disclosure

 

Except as set forth above in this Schedule 13D, none of the Reporting Persons nor, to the knowledge of the Reporting Persons, any of the Scheduled Persons, has any plans or proposals that relate to or would result in: (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company’s business or corporate structure; (g) changes in the Company’s charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to any of those enumerated above.

 

Item 5.   Interest in Securities of the Company

 

Item 5 of the Original Schedule 13D is hereby amended and restated in its entirety as follows:

 

Except as otherwise noted herein, the percentages used herein are calculated based on information provided by the Company that there were 243,438 shares of Common Stock outstanding as of March 5, 2014, as represented by the Company in the Merger Agreement. Except as otherwise noted herein, the number of shares of Common Stock that may be deemed to be beneficially owned by the Reporting Persons, and the percentage of the outstanding shares represented thereby, in each case as reported in this Schedule 13D, are based on the number of shares of Common Stock owned by the Reporting Persons on February 28, 2014.

 

(a)           As of the close of business on February 28, 2014, the Reporting Persons directly held or beneficially owned 2,667 shares of Series E Preferred Stock, 3,000 shares of Series E-2 Preferred Stock, and warrants to purchase an aggregate of 207,233 shares of Common Stock.  As of February 28, 2014, such shares of Series E Preferred Stock are convertible into 112,285 shares of Common Stock, and such shares of Series E-2 Preferred Stock are convertible into 124,558 shares of Common Stock.  As a result of certain of the matters described in Item 4, it is possible that the Reporting Persons may be deemed to constitute a “group,” within the meaning of Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated thereunder by the Securities and Exchange Commission, with the Non-Reporting Person Stockholders (as defined in Item 2 above).  On February 28, 2014, if the Reporting Persons were deemed to constitute a “group” with the Non-Reporting Person Stockholders, the aggregate number of shares of Common Stock that would be deemed beneficially owned collectively by the Reporting Persons and the Non-Reporting Person Stockholders, based on available information, is approximately 2,493,637, which represents approximately 91.1% of the shares of Common Stock outstanding. The shares of Common Stock outstanding is based upon 243,438 shares of Common Stock outstanding as of March 5, 2014, as represented by the Company in the Merger Agreement (as defined below in Item 4), plus shares of Common Stock issuable upon conversion of the Series C Preferred Stock, Series E Preferred Stock, Series E-1 Preferred Stock and Series E-2 Preferred Stock (in each case, assuming conversion as of February 28, 2014), and the exercise of warrants to purchase Common Stock, in each case, owned by the Reporting Persons and the Non-Reporting Person Stockholders.  The ownership of Common Stock reported by the Reporting Persons in this Schedule 13D does not include any shares of Common Stock owned by the Non-Reporting Person Stockholders.  Each Reporting Person disclaims beneficial ownership of all shares of Common Stock or securities convertible or exercisable into Common Stock other than any shares or other securities reported herein as being owned by such Reporting Person.

 

(b)           Each Reporting Person may be deemed to share the power to (a) dispose or to direct the disposition of the 444,077 shares of Common Stock the Reporting Persons may be deemed to beneficially own (and convert into) as of February 28, 2014 and (b) vote or direct the vote of the 444,077 shares of Common Stock the Reporting Persons may be deemed to beneficially own for voting purposes as of February 28, 2014.

 

(c)           Except as set forth in Item 4 above, none of the Reporting Persons, nor, to the Reporting Persons’ knowledge, any of the Scheduled Persons, has effected any transaction in Common Stock during the past sixty (60) days.

 

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(d)           Not applicable.

 

(e)           Not applicable.

 

Item 7.   Material to be Filed as Exhibits

 

The following is a list of exhibits filed by the Reporting Persons as part of this Schedule 13D.  For exhibits that previously have been filed, the Reporting Persons incorporate those exhibits herein by reference.  The exhibit table below includes the Form Type and Filing Date of the previous filing and the original exhibit number in the previous filing which is being incorporated by reference herein.  Documents which are incorporated by reference to filings by parties other than GFI are identified as such.

 

Exhibit 99.1		Joint Filing Agreement, dated as of July 1, 2011, by and among GFI Group Inc. and GFINet Inc. (incorporated herein by reference to Exhibit 1 of the Schedule 13D filed by the Reporting Persons on July 8, 2011 (SEC File No. 005-80545)).
Exhibit 99.2		Exchange Agreement, dated as of December 5, 2011, by and among Bonds.com Group, Inc., GFINet Inc., Oak Investment Partners XII, Limited Partnership, UBS Americas, Inc., Jefferies & Company, Inc., Bonds MX, LLC and the other parties thereto (incorporated herein by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on December 9, 2011 (SEC File No. 000-51076)).
Exhibit 99.3		Unit Purchase Agreement, dated as of December 5, 2011, by and among Bonds.com Group, Inc., GFINet Inc., Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership and certain other investors named therein (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on December 9, 2011 (SEC File No. 000-51076)).
Exhibit 99.4		Certificate of Designation of Series E Convertible Preferred Stock, Series E-1 Convertible Preferred Stock and Series E-2 Convertible Preferred Stock of Bonds.com Group, Inc., dated December 5, 2011 (incorporated herein by reference to Exhibit 3.2 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on December 9, 2011 (SEC File No. 000-51076)).
Exhibit 99.5		Common Stock Warrant, dated February 2, 2011 (incorporated herein by reference to Exhibit 10.5 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on February 8, 2011 (SEC File No. 000-51076)).
Exhibit 99.6		Common Stock Warrant, dated December 5, 2011 (incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on December 9, 2011 (SEC File No. 000-51076)).
Exhibit 99.7		Second Amended and Restated Registration Rights Agreement, dated as of December 5, 2011, by and among Bonds.com Group, Inc., GFINet Inc., Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership, UBS Americas, Inc., Jefferies & Company, Inc., Bonds MX, LLC and the other parties thereto (incorporated herein by reference to Exhibit 10.5 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on December 9, 2011 (SEC File No. 000-51076)).
Exhibit 99.8		Series E Stockholders’ Agreement, dated as of December 5, 2011, by and among Bonds.com Group, Inc., GFINet Inc., Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership, UBS Americas, Inc., Jefferies & Company, Inc., Bonds MX, LLC and the other parties thereto (incorporated herein by reference to Exhibit 10.4 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on December 9, 2011 (SEC File No. 000-51076)).
Exhibit 99.9		Letter Agreement, dated as of June 8, 2012, by and among Bonds.com Group, Inc., GFINet Inc., Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership and the other parties thereto (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on June 13, 2012 (SEC File No. 000-51076)).
Exhibit 99.10		Common Stock Warrant, dated June 8, 2012. Except with respect to the date of issuance, the expiration date and the number of shares of Common Stock into which it is exercisable, the terms of the Common Stock Warrant, dated June 8, 2012, is substantially the same as those of the Common Stock Warrant, dated December 5, 2011 and incorporated herein by reference as Exhibit 99.6.
Exhibit 99.11		Amendment No. 1 to Series E Stockholders’ Agreement, dated as of May 16, 2012, by and among Bonds.com Group, Inc., GFINet Inc., Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership, UBS Americas, Inc., Jefferies & Company, Inc., Bonds MX, LLC and the other parties thereto (incorporated herein by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Bonds.com

 

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		Group, Inc. on May 16, 2012 (SEC File No. 000-51076)).
Exhibit 99.12		Unit Purchase Agreement, dated as of February 28, 2013, by and between Bonds.com Group, Inc. and Trimarc Capital Fund, L.P. (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on March 6, 2013 (SEC File No. 000-51076)).
Exhibit 99.13		Amended and Restated Series E Stockholders’ Agreement, dated as of February 28, 2013, by and among Bonds.com Group, Inc., GFINet Inc., Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership, Trimarc Capital Fund, L.P. and the other parties thereto (incorporated herein by reference to Exhibit 10.3 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on March 6, 2013 (SEC File No. 000-51076)).
Exhibit 99.14		Amendment No. 1 to Second Amended and Restated Registration Rights Agreement, dated as of February 28, 2013, by and among Bonds.com Group, Inc., GFINet Inc., Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership and the other parties thereto (incorporated herein by reference to Exhibit 10.4 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on March 6, 2013 (SEC File No. 000-51076)).
Exhibit 99.15		Secured Promissory Note, dated February 26, 2014, issued by Bonds.com Holdings, Inc. to GFINet Inc.
Exhibit 99.16		Pledge Agreement, dated as of February 26, 2014, by and among BCA LLC, as collateral agent for the Bridge Note Holders (as defined therein), Bonds.com Holdings, Inc., Mida Holdings, Daher Bonds Investment Company, GFINet Inc., Oak Investment Partners XII, Limited Partnership and Trimarc Capital Fund, L.P.
Exhibit 99.17		Agreement and Plan of Merger, dated as of March 5, 2014, by and among Bonds.com Group, Inc., MTS Markets International, Inc. and MMI Newco Inc. (incorporated herein by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by Bonds.com Group, Inc. on March 7, 2014 (SEC File No. 000-51076)).
Exhibit 99.18		Written Consent of Certain Stockholders of Bonds.com Group, Inc., signed by GFINet Inc. on March 11, 2014.

 

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SIGNATURES

 

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

 

Dated: March 20, 2014	GFI GROUP INC.
	By:	/s/ Christopher D’Antuono
		Name: Christopher D’Antuono
		Title: General Counsel and Corporate Secretary
Dated: March 20, 2014	GFINET INC.
	By:	/s/ Christopher D’Antuono
		Name: Christopher D’Antuono
		Title: General Counsel and Corporate Secretary

 

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SCHEDULE I

 

GFI Group Inc.

 

Name and Position of Officer or Director		Principal Business Address		Citizenship
Michael Gooch (Chairman of the Board)			(1)	U.S.
Colin Heffron (Chief Executive Officer, President and Director)			(1)	U.S.
John Ward (Director)			(1)	U.S.
Marisa Cassoni (Director)			(1)	U.K.
Frank Fanzilli, Jr. (Director)			(1)	U.S.
Richard Magee (Director)			(1)	U.S.
James Peers (Chief Financial Officer)			(1)	U.S.
Ronald Levi (Chief Operating Officer)			(1)	U.K.
J. Christopher Giancarlo (Executive Vice President)			(1)	U.S.
Christopher D’Antuono (General Counsel and Corporate Secretary)			(1)	U.S.

 

(1) GFI Group Inc., 55 Water Street, New York, NY 10041

 

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SCHEDULE II

 

GFINet Inc.

 

Name and Position of Officer or Director		Principal Business Address		Citizenship
Colin Heffron (Chief Executive Officer, President and Director)			(1)	U.S.
James Peers (Chief Financial Officer)			(1)	U.S.
Ronald Levi (Chief Operating Officer)			(1)	U.K.

 

(1) GFINet Inc., 55 Water Street, New York, NY 10041

 

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Exhibit 99.15

 

SECURED PROMISSORY NOTE

 

$271,275.00

Dated: February 26, 2014

 

FOR VALUE RECEIVED, BONDS.COM HOLDINGS, INC., a Delaware corporation (“Maker”), promises to pay to GFINET INC., a Delaware corporation (“Holder”), the principal sum of Two Hundred Seventy-One Thousand Two Hundred Seventy-Five and 00/100 Dollars ($271,275.00), or any lesser amount that is the outstanding principal amount hereof (the “Principal Balance”), plus any applicable interest on the unpaid Principal Balance from time to time outstanding pursuant to the terms and conditions set forth in this Secured Promissory Note (this “Note”).

 

1.                                      Payment Terms.

 

(a)                                 Interest. As of the effective date of this Note and continuing thereafter, simple interest will accrue on the unpaid Principal Balance at a rate of ten percent (10%) per annum (the “Interest Rate”), computed on the basis of a 365-day year.

 

(b)                                 Payment Upon Maturity Date. Subject to acceleration under Section 2 below, Maker shall pay to Holder the outstanding Principal Balance plus all accrued and unpaid interest or other amounts due hereunder in full on the Maturity Date.  The “Maturity Date” means the earlier of (i) the date that is three (3) months after the date of this Note and (ii) the date of any Change of Control (defined below).  All payments hereunder shall be applied as follows: (i) first, to the payment of all accrued and unpaid interest; and (ii) second, to the reduction of the Principal Balance.

 

(c)                                  Change of Control. A “Change of Control” means (a) a consolidation, merger, reorganization or other form of acquisition of or by Bonds.com Group, Inc. (“BDCG”) or Maker in which BDCG’s or Maker’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) immediately after the transaction, (b) a sale of more than a majority of BDCG’s or Maker’s assets, or (c) the acquisition by any person or group of persons of more than 50% of BDCG’s or Maker’s outstanding voting securities.

 

(d)                                 Prepayment. Maker may prepay any accrued interest and the Principal Balance of this Note at any time, in whole or in or part, without any penalty or premium; provided, that, all prepayments shall be applied to all Bridge Notes (as defined below) on a pro rata basis.

 

2.                                      Events of Default.  The occurrence of any of the following events constitutes an “Event of Default” under this Note:

 

(a)                                 Failure to Pay. Maker fails to make any payment of principal or any applicable interest as and when due under the terms of this Note;

 

(b)                                 Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of BDCG or Maker or of all or a substantial part of the property of BDCG or Maker, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to BDCG or Maker or the debts of BDCG or Maker under any bankruptcy, insolvency or other similar law now or hereafter in effect are commenced and an order for relief entered or such proceeding is not dismissed or discharged within 90 days of such commencement; or

 

(c)                                  Voluntary Bankruptcy or Insolvency Proceedings. BDCG or Maker (i) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a

 

 

substantial part of its property, (ii) makes a general assignment for the benefit of its or any of its creditors, (iii) is dissolved or liquidated, (iv) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consents to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it.

 

(d)                                 Breaches of Covenants.  Maker fails to observe or perform any covenant under this Note or the Pledge Agreement (defined below) and such failure shall continue for ten (10) business days after the earlier of (i) Maker’s knowledge of such failure and (ii) Maker’s receipt of Holder’s written notice to Maker of such failure; provided, however, that with respect to the covenant not to create, incur, assume or become liable for Indebtedness in Section 6 below, such ten (10) business day cure period shall not apply.

 

(e)                                  Representations and Warranties.  Any representation and warranty made by Maker in this Note or the Pledge Agreement shall be false or inaccurate in any material respect when made by Maker.

 

(f)                                   Other Bridge Notes.  Maker fails to make any payment required under any other Bridge Note (defined below).

 

(g)                                  Other Indebtedness.  If there is a default in any Indebtedness to which Maker is a party with a third party or parties resulting in a right by such third party or parties to accelerate the maturity of such Indebtedness.

 

(h)                                 Judgments.  If a final, uninsured judgment or judgments of the payment of money in an amount, individually or in the aggregate, of at least $250,000 shall be rendered against Maker and shall remain unsatisfied and unstayed for at least ten (10) business days.

 

3.                                      Security.  This Note is secured by a pledge granted under the Pledge Agreement, dated as of the date hereof, by and among Maker, BCA LLC, and the Bridge Note Holders (the “Pledge Agreement”).

 

4.                                      Rights of Holder on Default.  On the occurrence or existence of any Event of Default and at any time thereafter during the continuance of such Event of Default, Holder may, by written notice to Maker, declare the outstanding Principal Balance, together with any then accrued and unpaid interest and other charges, payable by Maker (the “Outstanding Balance”) to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are expressly waived; provided, however, in the case of Section 2(b) and 2(c) above, the Outstanding Balance shall be immediately due and payable automatically without the need for any notice by Holder. Consistent with the limitations in Section 11 below, default interest shall accrue on the Outstanding Balance at the highest rate of interest permitted by applicable law, and such default interest shall be immediately due and payable.  Maker acknowledges that it would be extremely difficult or impracticable to determine Holder’s actual damages resulting from any late payment or Event of Default under this Note, and such default interest or other charges are reasonable estimates of those damages and do not constitute a penalty.  In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right, power or remedy permitted to it by law, either by suit in equity or by action at law, or both. All of the rights, powers and remedies of Holder shall be cumulative, and may be exercised independently, concurrently or successively in Holder’s sole discretion. No waiver by Holder of any default shall operate as a waiver of any other default or of the same default on a future occasion.  No delay or omission on the part of Holder in exercising any right or remedy shall operate as a waiver thereof and no

 

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single or partial exercise by Holder of any right or remedy shall preclude any other or future exercise thereof or the exercise of any other right or remedy.

 

5.                                      Payment of Costs.  Maker shall pay all costs incurred by Holder in enforcing or collecting this Note, including without limitation all attorneys’ fees, costs, and expenses incurred in all matters of interpretation, enforcement, and collection, before, during and after demand, suit, proceeding, trial, appeal, in post-judgment collection efforts.

 

6.                                      Covenants.  This Note is issued as part of a series of similar notes (collectively, the “Bridge Notes”) issued by the Company on the date hereof.  The holders of such Bridge Notes (collectively, the “Bridge Note Holders”) and the principal amount of each of the Bridge Notes held thereby are each listed on the Schedule of Holders attached hereto.  All payments of principal and interest on the Bridge Notes (including any prepayments) shall be made pro rata (based on principal amount) among all Bridge Note Holders.  The Company may not grant a security interest to any of the Bridge Note Holders for the obligations under the Bridge Notes unless such security interest is granted pro rata to all Bridge Note Holders.  Maker and Bonds.com Inc. shall not create, incur, assume, or become directly or indirectly liable with respect to any Indebtedness, except for the obligations under the Bridge Notes with respect to Maker. The proceeds from this Note shall be used for working capital purposes by Maker and its subsidiaries.  Until the closing of any Change of Control transaction, no part of the proceeds hereunder shall be used for (a) the payment of severance liabilities or (b) the payment of investment banking expenses other than the payment to Hyde Park Capital Partners of a fee for a fairness opinion in the amount of $100,000.

 

7.                                      Representations and Warranties.  Maker and its subsidiary, Bond.com, Inc., are corporations duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Delaware.  Maker has all requisite power and authority to execute and deliver this Note and the Pledge Agreement and to assume and perform its obligations hereunder and thereunder.  The execution and delivery of this Note and the Pledge Agreement and the performance by Maker of its obligations hereunder and thereunder have been duly authorized by all necessary action of Maker.  Neither Maker nor Bonds.com, Inc. is obligated for any Indebtedness as of the date hereof. For purposes of this Note, “Indebtedness” means: (i) all obligations for borrowed money; (ii) all obligations evidenced by bonds, notes, debentures, or other similar instruments; (iii) all debt or other obligations of others guaranteed by Maker and/or Bonds.com, Inc.; (iv) all obligations secured by a lien existing on property owned by Maker and/or Bonds.com, Inc., whether or not the obligations secured thereby have been assumed by Maker or are non-recourse to the credit of Maker and/or Bonds.com, Inc.; (v) any other obligation for borrowed money or other financial accommodations which in accordance with generally accepted accounting principles would be shown as a liability on the balance sheet of Maker and/or Bonds.com, Inc.; (vi) any repurchase obligation or liability of Maker and/or Bonds.com, Inc. with respect to accounts, chattel paper or notes receivable sold by Maker and/or Bonds.com, Inc.; (vii) any obligation arising with respect to any other transaction that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheets of Maker and/or Bonds.com, Inc.; and (viii) all payment and reimbursement obligations of Maker and/or Bonds.com, Inc. (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments; in each case of (i) through (viii), except the “Excluded Indebtedness” set forth on Exhibit A attached hereto.

 

8.                                      Waivers.  No provision of this Note will be deemed waived by Holder, unless waived in a writing executed by Holder, which expressly refers to this Note, and no such waiver shall be implied from any act or conduct of Holder, or any omission by Holder to take action with respect to any provision of this Note.  No such express written waiver shall affect any other provision of this Note, or cover any default or time period or event, other than the matter as which as express written waiver has been given.  Maker shall not assign or otherwise transfer any rights or obligations under this Note without the prior

 

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written consent of Holder.  Maker waives presentment, protest, notice of protest, notice of dishonor, diligence in collection, the benefit of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement and/or exemption, in each case as applicable, and any and all other notices and matters of a like nature.

 

9.                                      Payments.  Payments shall be made in lawful tender of the United States to Holder at the address set forth below, or such other address as Holder may designate. If any payment date under this Note occurs on a day that is a Saturday, Sunday, or bank holiday in New York, NY, that payment date will be extended automatically to the next succeeding day that is not a Saturday, Sunday, or bank holiday in New York, NY.

 

10.                               Notices. Every notice, demand, consent, or other communication required or permitted under this Note will be valid only if it is in writing (whether or not this Note expressly states that it must be in writing) and shall be deemed to have been given and received on the day when personally delivered, one business day after being deposited with a reputable overnight courier service or three business days after being mailed by first class mail, return receipt requested, to the party’s address set forth below:

 

If to Maker:		Bonds.com Holdings, Inc.
		c/o Bonds.com Group, Inc.
		1500 Broadway, 31st Floor
		New York, New York 10036
If to Holder:		GFINET Inc.
		c/o GFI Group Inc.
		55 Water Street
		New York, New York 10041
		Attn: General Counsel

 

Either party may change its address for notice purposes by sending notice thereof to the other party in accordance with this Section 10.

 

11.                               Usury.  Nothing herein shall be construed or so operate as to require Maker to pay interest at a greater rate than shall be lawful.  Should any interest or other charges paid by Maker in connection with the loan evidenced by this Note result in the computation or earning of interest in excess of the maximum contract rate of interest which is legally permitted under applicable law or federal preemption statutes, if Holder shall elect the benefit thereof, then any and all such excess shall be, and the same is, hereby waived by Holder, and any and all such excess shall be automatically credited against and in reduction of the balance due under this indebtedness and any portion which exceeds the balance due under this Note shall be paid by Holder to Maker.

 

12.                               Expenses. In any mediation, arbitration, or legal proceeding arising out of or related to this Agreement, the non-prevailing party, as determined by a final order, judgment or decree, shall reimburse the prevailing party, on demand, for all costs expenses, and fees incurred by such prevailing party therein, including all reasonable attorneys’ fees.

 

13.                               Governing Law.  This Note shall be governed and enforced in accordance with laws of the State of New York (without regard to conflicts of laws principles). Maker and Holder (i) consent to the personal jurisdiction of the state and federal courts having jurisdiction in New York, NY, (ii) stipulate that the exclusive jurisdiction and venue for any legal proceeding arising out of this Note is the state and federal courts having jurisdiction in New York, NY, and (iii) waive any defense, whether asserted by motion or pleading, that any such venue is an improper or inconvenient venue.

 

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14.                               Waiver of Jury Trial. MAKER AND HOLDER EACH WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.

 

15.                               Amendment; Severability. The terms of this Note may be amended or waived in whole or in part by the written consent of Maker and a Supermajority of the Bridge Note Holders; provided, however, that (i) the Principal Balance and Interest Rate hereunder may not be amended or modified, and (ii) no amendment may disproportionately and adversely affect the rights of Holder relative to the rights of all Bridge Note Holders, in each case without the written consent of Maker and Holder.  In case any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such other provisions of this Note and this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.  A “Supermajority” means the approval or consent of Bridge Note Holders holding collectively at least sixty-six and two-thirds percent (66.67%) in principal amount of the Bridge Notes.  This Note shall not be assigned in whole or in part by Maker or Holder without the prior written consent of the other party; provided, however, that Holder may assign all rights under this Note to one or more of its affiliates without prior written consent of Maker.

 

16.                               Headings.  All headings in this Note are for convenience only and shall be disregarded in construing the substantive provisions of this Note.

 

*                                         *                                         *

 

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IN WITNESS WHEREOF, Maker has caused this Note to be issued as of the date first written above.

 

 

	BONDS.COM HOLDINGS, INC.
	By:	/s/ John Ryan
	Name:   John Ryan
	Title:

 

[Promissory Note Signature Page]

 

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Schedule of Holders

 

·                  $904,250 Promissory Note of even date herewith by Pledgor, as “Maker,” and Mida Holdings / Daher Bonds Investment Company, as “Holder”

 

·                  $271,275  Promissory Note of even date herewith by Pledgor, as “Maker,” and GFINet Inc., as “Holder”

 

·                  $271,275 Promissory Note of even date herewith by Pledgor, as “Maker,” and Oak Investment Partners XII, Limited Partnership, as “Holder”

 

·                  $53,200  Promissory Note of even date herewith by Pledgor, as “Maker,” and Trimarc Capital Fund, L.P., as “Holder”

 

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Exhibit A

 

Excluded Indebtedness

 

1.              Financing with respect to general ledger system

 

2.              Financing with respect to D&O and E&O insurance policies

 

3.              Financing with respect to office equipment

 

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Exhibit 99.16

 

PLEDGE AGREEMENT

 

This Pledge Agreement (this “Agreement”) is entered into as of February 26, 2014, by and among BCA LLC (the “Secured Party”), as collateral agent for the Bridge Note Holders under the Notes (each as defined below), BONDS.COM HOLDINGS, INC., a corporation formed under the laws of the State of Delaware, with a chief executive office located at 1500 Broadway, 31st Floor, New York, New York 10036 (the “Pledgor”), MIDA HOLDINGS, DAHER BONDS INVESTMENT COMPANY, GFINET INC., OAK INVESTMENT PARTNERS XII, LIMITED PARTNERSHIP, and TRIMARC CAPITAL FUND, L.P. (each a “Holder” or “Bridge Note Holder” and collectively, the “Holders” or “Bridge Note Holders”).

 

Reference is made herein to that certain (a) $904,250 Promissory Note of even date herewith by Pledgor, as “Maker,” and Mida Holdings / Daher Bonds Investment Company, as “Holder”, (b) $271,275  Promissory Note of even date herewith by Pledgor, as “Maker,” and  GFINet Inc., as “Holder”, (c) $271,275 Promissory Note of even date herewith by Pledgor, as “Maker,” and Oak Investment Partners XII, Limited Partnership, as “Holder”, and (d) $53,200  Promissory Note of even date herewith by Pledgor, as “Maker,” and Trimarc Capital Fund, L.P., as “Holder” (collectively, as any of the foregoing may be amended, modified, supplemented or restated from time to time, the “Notes”, and each, a “Note”). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Notes.

 

WHEREAS, each Bridge Note Holder has required, as a condition to its obligation to make the loan under the applicable Note, that Pledgor execute and deliver this Agreement; and

 

WHEREAS, Pledgor has agreed to grant a security interest in, and pledge and assign as applicable, the Collateral (hereinafter defined) to Secured Party, for the benefit of Bridge Note Holders, as herein provided.

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, the parties hereto agree as follows:

 

1.              Security Interest.  For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Pledgor hereby pledges, assigns and grants to Secured Party, for the benefit of the Bridge Note Holders, a first priority security interest and lien in the Collateral to secure the payment and the performance of the Obligations (hereinafter defined).

 

2.              Collateral.  As security for the full and prompt payment, performance and discharge when due (whether at stated maturity, by acceleration or otherwise) of the Obligations, the security interest is granted to Secured Party, for the benefit of the Bridge Note Holders, in the following collateral (the “Collateral”), in each case, whether now existing or hereafter acquired: (a) all of Pledgor’s shares  in BONDS.COM, INC., a Delaware corporation (the “Pledged Entity”), and the certificates, if any, representing Pledgor’s shares in the Pledged Entity, as such interests may be increased or otherwise adjusted from time to time; and (b) the proceeds of any of the foregoing.  Any investment property and/or securities received by Pledgor, which shall comprise such additions, substitutes and replacements for, or proceeds of, the Collateral, shall be held in trust for Secured Party and shall be delivered immediately to Secured Party, for the benefit of the Bridge Note Holders. Any cash proceeds of the Collateral shall be held in trust for Secured Party and shall be delivered immediately to Secured Party, for the benefit of the Bridge Note Holders.

 

3.              Obligations. The following obligations (“Obligations”) are secured by this Agreement: All present and future indebtedness, obligations and liabilities of Pledgor incurred under or arising out of this Agreement and the Notes (as any of this Agreement and the Notes may be amended, modified, supplemented, restated, increased, renewed or extended from time to time) whether now or hereafter existing and whether for

 

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principal, interest (including interest that accrues after any bankruptcy, insolvency or similar proceeding), fees, expenses or otherwise, and all costs and expenses of enforcing the rights of the Secured Party under this Agreement and the Notes.

 

4.              Pledgor’s Warranties.  Pledgor represents and warrants to Secured Party as follows:

 

a)            Pledgor owns 100% of the shares of the Pledged Entity, all of which have been duly and validly issued, are fully paid and non-assessable. Pledgor owns all the Collateral free and clear from any set-off, claim, restriction, lien, security interest or encumbrance, except the security interest hereunder. Pledgor has full power and authority to grant to Secured Party the security interest in such Collateral pursuant hereto. The execution, delivery and performance by Pledgor of this Agreement have been duly and validly authorized by all necessary company action and constitutes a legal, valid, and binding obligation of Pledgor and creates a security interest which is enforceable against Pledgor in all now owned and hereafter acquired Collateral, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity.

 

b)            Neither the execution and delivery by Pledgor of this Agreement, the creation and perfection of the security interest in the Collateral granted hereunder, nor compliance with the terms and provisions hereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Pledgor or any contracts or agreements to which Pledgor is a party or is subject, or by which Pledgor, or its property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any lien pursuant to the terms of any such contract or agreement (other than any lien of Secured Party). There is no litigation, investigation or governmental proceeding threatened against Pledgor or any of its properties which if adversely determined would result in a material adverse effect on the Collateral or Pledgor.

 

c)             No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption or waiver by, any governmental authority or any other third party (except as have been obtained or made and are in full force and effect), is required to authorize, or is required in connection with, (i) the execution, delivery and performance by Pledgor of this Agreement or the Notes or (ii) the legality, validity, binding effect or enforceability of this Agreement or the Notes.

 

d)            Pledgor has no outstanding Indebtedness, and all amounts secured by the Convertible Note Financing Statement (defined below) have been paid in full.

 

5.               Pledgor’s Covenants.  Until full payment and performance of all of the Obligations:

 

a)            Obligations and this Agreement. Pledgor shall perform all of its agreements herein and in the Notes.

 

b)            Collateral.  The security interest granted pursuant to this Agreement is a valid and binding first priority security interest in the Collateral subject to no other liens or security interests, and Pledgor shall keep the Collateral free from all liens and security interests, except the security interest hereby created.  Pledgor shall defend the Collateral against all claims and demands of all persons at any time claiming any interest therein adverse to Secured Party.

 

c)             Financing Statements. Except for the financing statement on record for certain convertible notes which were paid and satisfied by BDCG prior to the date hereof (Delaware UCC filing #2010 2506891) (the “Convertible Note Financing Statement”), no financing statement, register of mortgages, charges and other encumbrances or similar document covering the Collateral or any part thereof is or shall be maintained at the registered office of Pledgor or on file in any public office (except in favor of Secured Party), and Pledgor will, at the request of Secured Party, join the Secured Party in (i) filing one or more financing

 

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statements pursuant to the UCC (as defined below) naming Secured Party, for the benefit of the Bridge Note Holders, as secured party, (ii) executing control agreements with respect to Collateral, in each case naming the Secured Party, for the benefit of the Bridge Note Holders, as secured party, and (iii)executing and/or filing such other documents required under the laws of all jurisdictions necessary or appropriate in the judgment of Secured Party to obtain, maintain and perfect its first priority security interest in, and lien on, the Collateral.  The Company will cause a UCC-3 termination statement to be filed to terminate the Convertible Note Financing Statement as soon as reasonably practicable and in any event within 30 days after the date of this Agreement.

 

d)            Information. Pledgor shall promptly furnish Secured Party and each Bridge Note Holder any information with respect to the Collateral requested by Secured Party and each Bridge Note Holder.

 

e)             Notice of Changes. Pledgor’s jurisdiction of organization and organization identification number are each set forth on the signature page hereto. Pledgor shall notify Secured Party and each Bridge Note Holder immediately of (i) any change in such information, (ii) any change in Pledgor’s chief executive office (which, as set forth in the preamble hereto, is accurate as of the date hereof), or (iii) a change in any matter warranted or represented by Pledgor in this Agreement.

 

f)             Possession of Collateral.  Pledgor shall deliver all investment securities and other instruments and documents which are a part of the Collateral to Secured Party, for the benefit of the Bridge Note Holders, immediately, or if hereafter acquired, immediately following acquisition, in a form suitable for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank with signatures appropriately guaranteed in form and substance suitable to Secured Party.

 

g)             Change of Name/Status.  Pledgor shall not, without prior written notice to Secured Party and each Bridge Note Holder, change its name, change its corporate status, use any trade name or engage in any business not reasonably related to its business as presently conducted.

 

h)            Voting Rights. After the occurrence of an Event of Default, Secured Party, for the benefit of the Bridge Note Holders, is entitled to exercise all voting rights pertaining to any Collateral. Prior to the occurrence of an Event of Default, Pledgor may vote the Collateral, provided, however, that no vote shall be cast or consent, waiver, or ratification given or action taken without the prior written consent of Secured Party which would (i) be inconsistent with or violate any provision of this Agreement or the Notes or (ii) amend, modify, or waive any term, provision or condition of any charter document, or other agreement relating to, evidencing, providing for the issuance of, or securing any Collateral. If an Event of Default occurs and if Secured Party elects to exercise such right, the right to vote any pledged securities shall be vested exclusively in Secured Party. To this end, Pledgor hereby irrevocably constitutes and appoints Secured Party, for the benefit of the Bridge Note Holders, the proxy and attorney-in-fact of Pledgor, with full power of substitution, to vote, and to act with respect to, any and all Collateral standing in the name of Pledgor or with respect to which Pledgor is entitled to vote and act, subject to the understanding that such proxy may not be exercised unless an Event of Default has occurred. The proxy herein granted is coupled with an interest, is irrevocable, and shall continue until the Obligations have been paid and performed in full or the Event of Default has been cured or waived, whichever comes first.

 

i)              Other Parties and Other Collateral.  No renewal or extensions of or any other indulgence with respect to the Obligations or any part thereof, no modification of the document(s) evidencing the Obligations, no release of any security, no release of any person (including any maker, indorser, guarantor or surety) liable on the Obligations, no delay in enforcement of payment, and no delay or omission or lack of diligence or care in exercising any right or power with respect to the Obligations or any security therefor or guaranty thereof or under this Agreement shall in any manner impair or affect the rights of Secured Party under any law, hereunder, or under any other agreement pertaining to the Collateral.  Secured Party need not file suit or assert

 

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a claim for personal judgment against any person for any part of the Obligations or seek to realize upon any other security for the Obligations, before foreclosing or otherwise realizing upon the Collateral.

 

j)             Further Assurances.  Pledgor agrees that, from time to time upon the written request of Secured Party, Pledgor will execute and deliver such further documents and diligently perform such other acts and things in any jurisdiction as Secured Party may reasonably request to fully effect the purposes of this Agreement or to further assure the first priority status of the lien granted pursuant hereto

 

6.              Power of Attorney.  Pledgor hereby irrevocably constitutes and appoints Secured Party, for the benefit of the Bridge Note Holders, and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the name of Pledgor or in its own name, to take after the occurrence of an Event of Default and from time to time thereafter, any and all action and to execute any and all documents and instruments which Secured Party at any time and from time to time deems necessary or desirable to accomplish the purposes of this Agreement, including, without limitation, selling any of the Collateral on behalf of Pledgor as agent or attorney in fact for Pledgor and applying the proceeds received therefrom in accordance with the Notes; however, nothing in this paragraph shall be construed to obligate Secured Party to take any action hereunder nor shall Secured Party be liable to Pledgor for failure to take any action hereunder. This appointment shall be deemed a power coupled with an interest, is irrevocable, and shall continue until the Obligations have been paid and performed in full or the Event of Default has been cured or waived, whichever comes first.

 

7.              Rights and Powers of Secured Party.  Upon the occurrence of an Event of Default, Secured Party, for the benefit of the Bridge Note Holders, without liability to Pledgor, may: take control of proceeds, including stock received as dividends or by reason of stock splits; collect all payment receivables; release the Collateral in its possession to Pledgor, temporarily or otherwise; require additional Collateral; reject as unsatisfactory any property hereafter offered by Pledgor as Collateral; take control of funds generated by the Collateral, such as cash dividends, interest and proceeds, and use same to reduce any part of the Obligations and exercise all other rights which an owner of such Collateral may exercise; and at any time transfer any of the Collateral or evidence thereof into its own name or that of its nominee. Secured Party shall not be liable for failure to collect any account or instruments, or for any act or omission on the part of Secured Party, its officers, agents or employees, except for any act or omission arising out of their own willful misconduct or fraud. The foregoing rights and powers of Secured Party will be in addition to, and not a limitation upon, any rights and powers of Secured Party given by law, elsewhere in this Agreement, or otherwise.

 

8.               Default.

 

a)            Event of Default.  As used herein, “Event of Default” means any “Event of Default” under the Notes.

 

b)            Rights and Remedies.  If any Event of Default occurs, then, subject to the applicable notice and cure periods set forth in the Notes, in each and every such case, Secured Party shall at the direction of a Supermajority of the Bridge Note Holders, without (i) presentment, demand, or protest, (ii) notice of default, dishonor, demand, non-payment, or protest, (iii) notice of intent to accelerate all or any part of the Obligations, (iv) notice of acceleration of all or any part of the Obligations, or (v) notice of any other kind, all of which Pledgor hereby expressly waives (except for any notice required under this Agreement, any other Facility Document or which may not be waived under applicable law), at any time thereafter exercise and/or enforce any of the following rights and remedies:

 

a.                                      Acceleration.  The Obligations shall become immediately due and payable.

 

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b.             Liquidation of Collateral.  Sell, or instruct any agent or broker to sell, all or any part of the Collateral in a public or private sale, direct any agent or broker to liquidate all or any part of any account and deliver all proceeds thereof to Secured Party, for the benefit of the Bridge Note Holders, and apply all proceeds to the payment of any or all of the Obligations in such order and manner as set forth in the Notes.

 

c.             Uniform Commercial Code.  All of the rights, powers and remedies of a secured creditor under the Uniform Commercial Code (“UCC”) as the same may, from time to time, be in effect in the State of New York, provided, however, in any event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority (or terms of similar import in any applicable jurisdiction) of Secured Party’s security interest in any Collateral is governed by the Uniform Commercial Code (or other similar Law) as in effect in a jurisdiction (whether within or outside the United States) other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code (or other similar law) as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority (or terms of similar import in such jurisdiction) and for purposes of definitions related to such provisions, and any and all rights and remedies available to it as a result of this Agreement or the Notes. including, without limitation, the right, to the maximum extent permitted by law, to exercise all voting, consensual and other powers of ownership pertaining to the Collateral (including, without limitation, the right to sell, transfer, pledge or redeem any and all of the Collateral, which right shall be exercised in a commercially reasonable manner) as if Secured Party, for the benefit of the Bridge Note Holders, was the sole and absolute owner thereof (and Pledgor agrees to take all such action as may be appropriate to give effect to such right).

 

Pledgor specifically understands and agrees that any sale by Secured Party of all or part of the Collateral pursuant to the terms of this Agreement may be effected by Secured Party at times and in manners which could result in the proceeds of such sale being significantly and materially less than what might have been received if such sale had occurred at different times or in different manners, and Pledgor hereby releases Secured Party and its officers and representatives from and against any and all obligations and liabilities arising out of or related to the timing or manner of any such sale. If, in the opinion of Secured Party, there is any question that a public sale or distribution of any Collateral will violate any state or federal securities law, Secured Party may offer and sell such Collateral in a transaction exempt from registration under federal securities law, and any such sale made in good faith by Secured Party shall be deemed “commercially reasonable.” Furthermore, Pledgor acknowledges that any such restricted or private sales may be at prices and on terms less favorable to Pledgor than those obtainable through a public sale without such restrictions, but agrees that such sales are commercially reasonable. Pledgor further acknowledges that any specific disclaimer of any warranty of title or the like by Secured Party will not be considered to adversely affect the commercial reasonableness of any sale of Collateral. Any notice made shall be deemed reasonable if sent to Pledgor at the address above at least ten (10) days prior to (i) the date of any public sale or (ii) the time after which any private sale or other disposition may be made.

 

Secured Party’s duty of care with respect to Collateral in its possession (as imposed by law) shall be deemed fulfilled if it exercises reasonable care in physically safekeeping such Collateral or, in the case of Collateral in the custody or possession of a bailee or other third party, exercises reasonable care in the selection of the bailee or other third person, and the Secured Party need not otherwise preserve, protect, insure or care for any Collateral.  Secured Party shall not be obligated to preserve any rights Pledgor may have against prior parties, to realize on the Collateral at all or in any particular manner or order, or to apply any cash proceeds of Collateral in any particular order of application.

 

Secured Party shall distribute all proceeds from the sale or other disposition of Collateral to all of the Bridge Note Holders on a pro rata basis based on the outstanding principal amount of the Bridge Notes.  Secured

 

5

 

Party is acting for the benefit of the Bridge Note Holders and all actions taken or omitted by Secured Party shall be done at the direction of a Supermajority of the Bridge Note Holders, including, without limitation, any waiver, exercise of remedies, and the like.

 

d.             Deficiencies. If any Obligations remain after the application of the proceeds of the Collateral, Secured Party may continue to enforce its remedies under this Agreement or the Notes to collect the deficiency.

 

9.              General.

 

a)            Parties Bound. Secured Party’s rights hereunder shall inure to the benefit of its successors and assigns. A party may not assign any of its rights and obligations under this Agreement to any person without the prior written consent of the other party and any assignment in violation of the foregoing shall be null and void, except that Secured Party may assign its rights under this Agreement to another Bridge Note Holder in connection with any assignment of its Note to such Bridge Note Holder.

 

b)            Waiver.  No delay of Secured Party in exercising any power or right shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude other or further exercise thereof or the exercise of any other power or right. No waiver by Secured Party of any right hereunder or of any default by Pledgor shall be binding upon Secured Party unless in writing, and no failure by Secured Party to exercise any power or right hereunder or waiver of any default by Pledgor shall operate as a waiver of any other or further exercise of such right or power or of any further default. Each right, power and remedy of Secured Party as provided for herein related to the Obligations, or which shall now or hereafter exist at law or in equity or by statute or otherwise, shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by Secured Party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by Secured Party of any or all other such rights, powers or remedies.

 

c)             Definitions.  Unless the context indicates otherwise, definitions in the UCC apply to words and phrases in this Agreement; if UCC definitions conflict, Article 8 and/or 9 definitions apply.

 

d)            Notice.  Every notice, demand, consent, or other communication required or permitted under this Agreement will be valid only if it is in writing (whether or not this Agreement expressly states that it must be in writing) and shall be deemed to have been given and received on the day when personally delivered, one business day after being deposited with a reputable overnight courier service or three business days after being mailed by first class mail, return receipt requested, to the party’s address set forth below:

 

If to Pledgor:		c/o Bonds.com Group, Inc.
		1500 Broadway, 31st Floor
		New York, New York 10036
If to Secured Party:

 

e)             Modifications.  No provision hereof shall be modified or limited except by a written agreement expressly referring hereto and to the provisions so modified or limited and signed by Pledgor and Secured Party.  The provisions of this Agreement shall not be modified or limited by course of conduct or usage of trade.

 

6

 

f)             Severability. In case any provision in this Agreement shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement, as the case may be, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

g)             Applicable Law.  This Agreement shall be governed by and enforced in accordance with laws of the State of New York (without regard to conflicts of laws principles).

 

h)            Financing Statement. Pledgor hereby irrevocably authorizes Secured Party (or its designee) at any time and from time to time to file in any jurisdiction any financing or continuation statement and amendment thereto or any registration of charge, mortgage or otherwise, containing any information required under the UCC or the law of any other applicable jurisdiction (in each case, without the signature of Pledgor to the extent permitted by applicable law), necessary or appropriate in the judgment of Secured Party to perfect or evidence its first priority security interest in and lien on the Collateral.  Pledgor hereby irrevocably ratifies and approves any such filing, registration or recordation in any jurisdiction by Secured Party (or its designee) that has occurred prior to the date hereof, of any financing statement, registration of charge, mortgage or otherwise.  Pledgor agrees to provide to the Secured Party (or its designees) any and all information required under the UCC or the law of any other applicable jurisdiction for the effective filing of a financing statement and/or any amendment thereto or any registration of charge, mortgage or otherwise.

 

i)              Cooperation with Change of Control.  Secured Party shall cooperate with Pledgor in connection with any Change of Control.  In particular, Secured Party shall execute and deliver in a prompt manner all documents (including, without limitation, preparing and delivering payoff letters, delivering Collateral and preparing and filing UCC-3 termination statements) and diligently perform such other acts and things as Pledgor may reasonably request to fully effect the prompt release of all liens and Collateral upon indefeasible repayment of the Obligations in connection with a Change of Control transaction.

 

j)             Regulatory Filing Acknowledgment.  Secured Party and the Holders acknowledge that Pledgor does not intend to make any regulatory filings by reason of the execution of the pledge of Collateral hereunder (including, without limitation, any amendment of its Form BD or any Change in Membership Application with FINRA under Rule 1017) and agree that they will not declare a breach or default under this Agreement or the Notes as a result of Pledgor not making such filing at such time.   Notwithstanding the above, to the extent Pledgor becomes obligated to file pursuant to applicable law in connection with any actual change of control or ownership anticipated in connection with a default under this Agreement or any Note or in connection with any Change of Control (as defined in the Note), Pledgor will promptly make any such required regulatory filings and any such failure shall be a default under this Agreement and the Note.

 

k)            Appointment of Secured Party.  Each of the Holders hereby irrevocably appoints Secured Party as its agent and authorizes Secured Party to take such actions on its behalf, and to exercise such powers as are delegated to Secured Party by the terms hereof, together with such actions and powers as are reasonably incidental thereto. Secured Party shall have the same rights and powers in its capacity as a Holder as any other Holder and may exercise the same as though it were not Secured Party.  Secured Party shall not have any duties or obligations except those expressly set forth herein.  Without limiting the generality of the foregoing, (a) Secured Party shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (b) Secured Party shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated herein, and (c) except as expressly set forth herein, Secured Party shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Maker or any of its affiliates that is communicated to or obtained by Secured Party in any capacity.  Secured Party shall not be liable for any action taken or not taken by it with the consent or at the request of the Holders. Secured Party shall be deemed

 

7

 

not to have knowledge of any Event of Default unless and until written notice thereof is given to Secured Party by Maker or another Holder, and Secured Party shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection herewith or pursuant to any Note, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Note, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any Note, (iv) the validity, enforceability, effectiveness or genuineness hereof or of any Note or any other agreement, instrument or document, (v) the creation, perfection or priority of liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth herein or elsewhere in any Note. Secured Party shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper person. Secured Party also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper person, and shall not incur any liability for relying thereon. Secured Party may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

NOTICE OF FINAL AGREEMENT.  THIS AGREEMENT AND THE NOTES CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY AND ALL PREVIOUS AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF.

 

[Signature Page Follows]

 

8

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written.

 

 

PLEDGOR:
BONDS.COM HOLDINGS, INC.
By:		/s/ John Ryan
Name:		John Ryan
Title:
Organizational ID:  File Number: 4047289
Jurisdiction of Organization:      Delaware
SECURED PARTY:
BCA LLC
By:	/s/ Mark Daher
Name:	Mark Daher
Title:	Manager
HOLDERS:
MIDA HOLDINGS
By:	/s/ Michel Daher
Name:	Michel Daher
Title:	Chairman

 

Signature Page to Pledge Agreement

 

 

DAHER BONDS INVESTMENT COMPANY
By:	/s/ Michel Daher
Name:	Michel Daher
Title:	Chairman
GFINET INC.
By:	/s/ Christopher D’Antuono
Name:	Christopher D’Antuono
Title:	General Counsel and Secretary
OAK INVESTMENT PARTNERS XII, LIMITED PARTNERSHIP
By: Oak Associates XII, LLC, its general partner
By:	/s/ Ann H. Lamont
Name:	Ann H. Lamont
Title:	Managing Member
TRIMARC CAPITAL FUND, L.P.
By:	/s/ Michael Trica
Name:	Michael Trica
Title:	Portfolio Manager

 

Signature Page to Pledge Agreement

 

Exhibit 99.18

 

WRITTEN CONSENT

 

OF CERTAIN STOCKHOLDERS OF

 

BONDS.COM GROUP, INC.

 

Pursuant to Section 228 of the Delaware General Corporation Law (the “DGCL”) and the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws of Bonds.com Group, Inc., a Delaware corporation (the “Company”), the undersigned, being the holder of the number of shares of the Company’s common stock, par value $0.0001 per share (the “Company Common Stock”), Series A participating preferred stock, par value $0.0001 per share (the “Series A Stock”), Series C convertible preferred stock, par value $0.0001 per share (the “Series C Stock”), Series E convertible preferred stock, par value $0.0001 per share (the “Series E Stock”), Series E-1 convertible preferred stock, par value $0.0001 per share (the “Series E-1 Stock”), and/or Series E-2 convertible preferred stock, par value $0.0001 per share (the “Series E-2 Stock” and, collectively with the Series A Stock, Series C Stock, Series E Stock and Series E-1 Stock, the “Company Preferred Stock”) set forth on the signature page below, does hereby irrevocably consent as follows:

 

Adoption of the Merger Agreement

 

WHEREAS, the Board of Directors of the Company has (a) approved and declared advisable (i) the Agreement and Plan of Merger, dated as of March 5, 2014, among MTS Markets International, Inc., a Delaware corporation (“Parent”), MMI Newco Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and the Company, which is attached hereto as Exhibit A (the “Merger Agreement”), pursuant to which, among other things, Merger Sub will be merged with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly-owned subsidiary of Parent (the “Merger”), (ii) the Merger and (iii) the other transactions contemplated by the Merger Agreement, including execution of the Escrow Agreement (as defined in the Merger Agreement), (b) declared that it is in the best interests of the Company’s stockholders that the Company enter into the Merger Agreement and consummate the Merger and the other transactions contemplated by the Merger Agreement on the terms and subject to the conditions set forth in the Merger Agreement, (c) declared that the consideration to be paid to the Company’s stockholders in the Merger is fair to such stockholders and (d) recommended that the Company’s stockholders adopt the Merger Agreement;

 

WHEREAS, the Merger Agreement provides that each share of Company Common Stock and Company Preferred Stock issued and outstanding immediately prior to the Effective Time (as defined in the Merger Agreement) (other than shares of Company Common Stock and Company Preferred Stock that are held by a holder who has sought appraisal rights pursuant to the DGCL) shall be cancelled and shall be converted automatically into the right to receive the Merger Consideration (as defined in the Merger Agreement);

 

 

WHEREAS, the undersigned has reviewed the Merger Agreement and such other information as it believes necessary to make an informed decision concerning its vote on the adoption of the Merger Agreement, and the undersigned has had the opportunity to consult with its own legal, tax and/or financial advisor(s) regarding the consequences to it of the Merger, the Merger Agreement and the execution of this written consent;

 

WHEREAS, the undersigned desires to waive any rights to appraisal of the fair value of its shares of Company Common Stock and Company Preferred Stock and rights to dissent from the Merger that the undersigned may have, whether pursuant to the DGCL or otherwise;

 

WHEREAS, the undersigned desires to waive certain other rights in connection with this written consent, the Merger Agreement and the Merger all as set forth herein;

 

WHEREAS, the undersigned agrees not to transfer, at any time prior to the Effective Time (as defined in the Merger Agreement), any shares of Company Common Stock or Company Preferred Stock held by it;

 

WHEREAS, the undersigned, if a holder of Series E-2 Stock (“Series E-2 Holder”), acknowledges and agrees that $1,500,000 of Merger Consideration (as defined in the Merger Agreement) (the “Escrow Amount”) will be placed in escrow for the purpose of (a) paying any amount owed, if any, as a result of a downward adjustment to the Merger Consideration pursuant to Section 2.8 of the Merger Agreement and (b) satisfying any indemnification claims that may arise under Section 9.2 of the Merger Agreement, subject in each case to the terms of the Merger Agreement, including Section 9.6, with it being understood that all such obligations set forth in (a) and (b) above shall be satisfied solely by the Escrow Amount and that any portion of the Escrow Amount not used to satisfy such obligations shall be released to the Stockholder Representative (as defined in the Merger Agreement) for distribution to the Series E-2 Holders over a period of two years pursuant to the terms of the Merger Agreement and the Escrow Agreement;

 

WHEREAS, the undersigned, if a Series E-2 Holder, acknowledges and agrees that up to $200,000 of Merger Consideration (the “Reserve Amount”) will be disbursed to the Stockholder Representative to be used to pay any expenses (including reasonable legal fees, accounting fees, consulting fees, and other out-of-pocket expenses) incurred by the Stockholder Representative in that capacity; and

 

WHEREAS, the undersigned, if a Series E-2 Holder, agrees to the appointment of the Stockholder Representative by the Required Series E-2 Stockholders, with the power and authority to act on behalf of the Series E-2 Holders as set forth in the Merger Agreement.

 

1.              NOW, THEREFORE, BE IT RESOLVED, that after consideration of the terms and conditions of the Merger Agreement and the Escrow Agreement, the Merger Agreement, the Escrow Agreement and the transactions and agreements contemplated thereby, including the Merger, be, and the same hereby are, adopted and approved in all respects;

 

 

2.              FURTHER RESOLVED, that, the undersigned hereby irrevocably waives any rights to appraisal of the fair value of its shares of Company Common Stock and Company Preferred Stock with respect to the Merger and any rights to dissent from the Merger that the undersigned may have, whether pursuant to the DGCL or otherwise;

 

3.              FURTHER RESOLVED, that, conditioned on the Closing (as defined in the Merger Agreement) and effective as of the Effective Time, the undersigned (on its own behalf and on behalf of its successors-in-interest, transferees or assignees) hereby irrevocably waives any and all claims it may have against the Company or the Surviving Corporation in its capacity as a stockholder of the Company, including, without limitation, any claim relating to any prior purchases by such stockholder of debt or equity of the Company, including pursuant to the Unit Purchase Agreement dated December 5, 2011 and the Unit Purchase Agreement dated February 28, 2013, and agrees to take all necessary steps to affirmatively waive and release any right or claim of recovery or recovery in any settlement or judgment related to any such action reasonably requested by the Parent in writing;  provided, however, nothing in this written consent constitutes a waiver of (a) rights or claims under the Merger Agreement, the Escrow Agreement, and other Ancillary Agreements, (b) for the avoidance of doubt, rights or claims under indemnification or similar agreements and indemnification, exculpation and advancement of expense provisions in the Company’s Certificate of Incorporation and Bylaws, (c) for the avoidance of doubt, rights to repayment of the Bridge Loans (as defined in the Merger Agreement), or (d) for the avoidance of doubt, any rights or claims in the event the Closing does not occur;

 

4.              FURTHER RESOLVED, that the undersigned hereby agrees not to transfer any shares of Company Common Stock or Company Preferred Stock held by it at any time prior to the Effective Time (as defined in the Merger Agreement), unless and until the Merger Agreement is validly terminated in accordance with its terms;

 

5.              FURTHER RESOLVED, that, if the undersigned is a Series E-2 Holder, the undersigned hereby acknowledges and agrees (on its own behalf and on behalf of its successors-in-interest, transferees or assignees) that the Escrow Amount will be placed in escrow for the purpose of (a) paying any amount owed, if any, as a result of a downward adjustment to the Merger Consideration pursuant to Section 2.8 of the Merger Agreement and (b) satisfying any indemnification claims that may arise under Section 9.2 of the Merger Agreement, subject in each case to the terms of the Merger Agreement, including Section 9.6, with it being understood that all such obligations set forth in (a) and (b) above shall be satisfied solely by the Escrow Amount and that any portion of the Escrow Amount not used to satisfy such obligations shall be released to the Stockholder Representative (as defined in the Merger Agreement) for distribution to the Series E-2 Holders over a period of two years pursuant to the terms of the Merger Agreement and the Escrow Agreement;

 

 

6.              FURTHER RESOLVED, that the Required Series E-2 Stockholders are authorized to designate the Stockholder Representative (as defined in the Merger Agreement), with the power and authority to act on behalf of the Series E-2 Holders as set forth in the Merger Agreement and with the rights set forth in the Merger Agreement;

 

7.              FURTHER RESOLVED, that, if the undersigned is a Series E-2 Holder, the undersigned acknowledges and agrees that the Reserve Amount will be disbursed to the Stockholder Representative to be used to cover and liabilities and pay any expenses (including reasonable legal fees, accounting fees, consulting fees, and other out-of-pocket expenses) incurred by the Stockholder Representative in that capacity in accordance with the terms of Section 10.2 of the Merger Agreement;

 

8.              FURTHER RESOLVED, that, if the undersigned is a Series E-2 Holder, the undersigned agrees to all the provisions relating to the Reserve Amount and the Stockholder Representative (including, without limitation, Sections 2.3, 2.9, 10.2 and 10.6) of the Merger Agreement and that the other Series E-2 Holders may rely upon such agreement as being binding against the undersigned; and

 

9.              FURTHER RESOLVED, that Parent and the Stockholder Representative may rely upon the shareholder consent in resolution 1, above, and the waivers and agreements in resolutions 2 through 8 above, as being binding as a shareholder consent, waivers and agreements, as applicable, against the undersigned.

 

The undersigned hereby waives compliance with any and all notice requirements imposed by the Amended and Restated Certificate of Incorporation of the Company, the Company’s Amended and Restated Bylaws, the DGCL and any other applicable law. This written consent is effective upon execution and may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[Stockholder Consent Signature Page Follows]

 

 

IN WITNESS WHEREOF, the undersigned has executed this written consent on the date first set forth opposite its name below.

 

 

		GFINet Inc.
		By:	/s/ Christopher D’Antuono
Date: March 11, 2014			Name:	Christopher D’Antuono
			Title:	General Counsel
			Number of shares of Series E Stock:		2,667
			Number of shares of Series E-2 Stock:		3,000

 

[Stockholder Consent Signature Page]