Attached files
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): January 11, 2010
____________________________
BONDS.COM
GROUP, INC.
(Exact
name of registrant as specified in its charter)
____________________________
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Delaware
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000-51076
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38-3649127
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1515
S. Federal Highway, Suite 212
Boca
Raton, FL 33432
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(Address
of principal executive offices) (Zip
Code)
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(561)
953-5343
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(Registrant’s
telephone number, including area
code)
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01. Entry Into a Material Definitive
Agreement.
On
January 11, 2010, Bonds.com Group, Inc. (“we,” “us,” and the “Company”) entered
into a Unit Purchase Agreement (the “UBS Purchase Agreement”) with UBS Americas
Inc. (“UBS”). Pursuant to the UBS Purchase Agreement, the Company
issued and sold to UBS 1,760 units, with each unit consisting of 26.67 shares of
our Series A Participating Preferred Stock (“Series A Preferred”) and rights
(the “Preferred Stock Purchase Rights”) to purchase 72 shares of Series A
Preferred (collectively, the “Units”). UBS paid $1,000 per Unit for
an aggregate purchase price of $1,760,000 (before deduction of transaction fees
and expenses). Each Preferred Stock Purchase Right gives UBS the
right to purchase 72 shares of Series A Preferred at a purchase price of $37.50
per share (payable in cash or by net exercise). In the event the
Company issues shares of its common stock at a price per share less than $0.375,
the exercise price of the Preferred Stock Purchase Rights shall be decreased to
a purchase price equal to such lower price per share of common stock multiplied
by 100 (subject to certain exceptions). The Preferred Stock Purchase
Rights must be exercised on or before January 11, 2013. The 1,760
Units purchased by UBS constitute an aggregate of 46,939.2 shares of Series A
Preferred and Preferred Stock Purchase Rights to purchase an aggregate of
126,720 additional shares of Series A Preferred (plus 10,560 additional shares
of Series A Preferred as described below).
In
addition to the purchase and sale of units as described above, the UBS Purchase
Agreement contained representations and warranties of the Company in favor of
UBS as well as other covenants and obligations binding on the
Company. Those additional covenants and obligations
include:
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For
so long as UBS owns any shares of Series A Preferred or Preferred Stock
Purchase Rights, the Company is required to timely file all reports
required to be filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934 (the “Exchange Act”), and the
Company is prohibited from terminating its status as an issuer required to
file such reports without UBS’
consent.
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The
Company is required to use the proceeds from the sale of the Units for
general corporate and for working capital purposes and not for (a) the
repayment of any outstanding indebtedness of the Company or any of its
subsidiaries or (b) the redemption or repurchase of any of its or its
subsidiaries’ equity securities.
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The
Company is required, in the six months following the closing to take such
steps as are commercially reasonable to address the material weaknesses in
its internal control over financial
reporting.
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The
Company is required to and to cause its subsidiaries to operate the
BondStation Pro platform in compliance with the requirements of Regulation
ATS under the Exchange Act.
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The
Company is prohibited from (a) paying any indebtedness owed to officers
and directors of the Company until the Company has at least twelve months
cash reserve for working capital and applicable regulatory capital
requirements, as determined in good faith by the Company’s Board of
Directors, except for up to $60,000 of accrued interest on its outstanding
indebtedness to John Barry III and (b) entering into any new indebtedness
for borrowed money with affiliates that is payable by the Company prior to
the Company having at least twelve months cash reserve for working capital
and applicable regulatory capital requirements, as determined in good
faith by the Company’s Board of Directors, except that such restriction
does not apply to intercompany loans, accounts and advances between the
Company and its consolidated
subsidiaries.
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The
Company is required to indemnify UBS and its affiliates from any breaches
of its representations and warranties set forth in the UBS Purchase
Agreement and other documents entered into by the Company and its
subsidiaries in connection with the transactions contemplated
thereby. Such indemnification obligation is subject to a twelve
month survival period, a $100,000 deductible and a cap equal to the
purchase price for the Units purchased by UBS. The Company also
provided UBS a separate indemnification, which is not subject to the
foregoing limitations, pursuant to which the Company agreed to protect UBS
from any dilution it suffers from any settlement or judgment resulting
from certain pending litigation.
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The
Company agreed to pay fifty percent of UBS’ legal fees and expenses in
connection with the transaction, but not to exceed
$130,000.
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Pursuant
to the previously disclosed amendment letter to the Unit Purchase Agreement (the
“Fund Holdings Unit Purchase Agreement”), dated August 28, 2009, between the
Company and Fund Holdings, LLC (“Fund Holdings”), Fund Holdings was entitled to
purchase from the Company rights to purchase 2,397 shares of our common stock
for each Unit purchased by UBS for an aggregate purchase price payable by Fund
Holdings for such rights of $1,760. The terms of such purchase rights
(the “Fund Holdings Ordinary Purchase Rights”) would be the same as the Ordinary
Purchase Rights issued to Fund Holdings pursuant to the Fund Holdings Unit
Purchase Agreement, as previously disclosed by the Company, including an
exercise price per share of common stock of $0.375 (payable in cash or by net
exercise), a three-year exercise period and a provision providing for the
reduction of the exercise price to any lower price per share at which the
Company sells its common stock (subject to certain exceptions). As a
condition to UBS’ consummation of its investment pursuant to the UBS Purchase
Agreement, UBS and Fund Holdings entered into a letter agreement pursuant to
which Fund Holdings relinquished its rights to purchase Fund Holdings Ordinary
Purchase Rights with respect to 1,056,000 shares of our common stock and
requested that the Company instead issue UBS additional Preferred Stock Purchase
Rights with respect to 10,560 shares of Series A Preferred. Pursuant
to such side letter, the Company agreed to issue (and issued) such additional
Preferred Stock Purchase Rights to UBS.
The
Company issued a certificate to UBS representing the Preferred Stock Purchase
Rights (the “Preferred Stock Rights Certificate”) acquired by it in connection
with such closing and the related letter agreement between the Company, Fund
Holdings and UBS.
3
As a
requirement of UBS’ investment, on January 11, 2010, the Company, UBS, Fund
Holdings, affiliates of John J. Barry, IV, our chief executive officer and a
member of our board of directors (the “JBIV Stockholders”), affiliates of John
Barry III, a member of our board of directors (the “JBIII Stockholders”),
Laidlaw Venture Partners III, LLC and Laidlaw & Company (UK) Ltd. entered
into a Stockholders’ Agreement setting forth certain agreements among and
between the Company and such stockholders (the “Stockholders’
Agreement”). The Stockholders’ Agreement contains the following
agreements and obligations, among others:
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In
the event that Fund Holdings, the JBIV Stockholders or the JBIII
Stockholders seek to sell their shares of Common Stock, UBS shall have the
right to sell a pro rata portion of its shares along with such
stockholders. Alternatively, the Company, at its option, may
redeem the applicable shares of Series A Preferred from UBS and the
stockholder would be permitted to sell his, her or its shares free of such
obligation. The foregoing obligations do not apply to transfers
to certain permitted transferees, bona fide pledges and pledges
outstanding as of the date of the Stockholders’ Agreement. Such
obligations also do not apply to sales by (a) Fund Holdings of up to 17.5%
of the securities held by Fund Holdings as of the date of the
Stockholders’ Agreement in any consecutive twelve month period and 35% in
the aggregate of the securities held by Fund Holdings as of the date of
the Stockholders’ Agreement, (b) the JBIV Stockholders of up to 25% in the
aggregate of the securities held by such stockholders as of the date of
the Stockholders’ Agreement and 45% each in the aggregate of the
securities held by the JBIV Stockholders as of the date of the
Stockholders’ Agreement, and (c) the JBIII Stockholders of up to 25% in
the aggregate of the securities held by such stockholders as of the date
of the Stockholders’ Agreement and 45% each in the aggregate of the
securities held by the JBIII Stockholders as of the date of the
Stockholders’ Agreement.
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The
Company and each stockholder party to the Stockholders’ Agreement (other
than UBS) are prohibited from selling their securities to any bank, bank
holding company, broker or dealer prior January 11, 2011, unless agreed in
writing by UBS. Such restriction shall not apply to (a)
market-based sales so long as the selling stockholder is reasonably
unaware that it is selling to a bank, bank holding company, broker or
dealer, (b) the sale by the Company of up to an additional 690 units
pursuant to the Unit Purchase Agreement (the “Laidlaw Unit Purchase
Agreement”), dated as of December 31, 2009, by and among the Company and
Laidlaw Venture Partners III, LLC (subject to certain conditions), (c) a
change of control transaction in which the holders of the Company’s common
stock receive cash consideration of at least $4.00 per share and holders
of Series A Preferred receive cash consideration for all of their shares
of Series A Preferred Stock equal to no less than the greater of $400.00
per share or 100 times the consideration per share received by holders of
common stock, (d) the issuance by the Company of shares of common stock
upon the exercise of purchase rights which were acquired by Laidlaw
Venture Partners III, LLC or Laidlaw & Company (UK) Ltd. pursuant to
the transactions described in the Laidlaw Unit Purchase Agreement, and (e)
the distribution of securities owned by Laidlaw Venture Partners III, LLC
or Laidlaw & Company (UK) Ltd. to its
members.
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The
Company and each stockholder party to the Stockholders’ Agreement (other
than UBS) is prohibited from appointing or voting in favor of, as
applicable, any nominee to the Company’s board of directors that is
affiliated with another bank, bank holding company, broker or dealer
unless UBS agrees in writing, except that the foregoing restriction shall
not apply to Edwin L. Knetzger III or Michael
Sanderson.
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The
JBIV Stockholders and JBIII Stockholders are prohibited from withdrawing
their consent to the adoption and approval of the Certificate of Amendment
to Certificate of Incorporation of the Company to increase the authorized
shares of Common Stock to
300,000,000.
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If,
after the date of the Stockholders’ Agreement, any stockholder of the
Company acquires additional shares of common stock or Series A Preferred
such that such stockholder owns twenty percent or more of any class of the
outstanding voting capital stock of the Company, the Company is required
to use its reasonable best efforts to have such stockholder become a party
to the Stockholders’ Agreement. Additionally, the Company is
prohibited from issuing any shares of its common stock or Series A
Preferred such that the recipient thereof would own twenty percent or more
of any class of the outstanding voting capital stock of the Company unless
such stockholder becomes a party to the Stockholders’
Agreement.
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In
connection with the Stockholders’ Agreement, on January 11, 2010, the Company,
Fund Holdings, the Barry IV Stockholders and the Barry III Stockholders entered
into a letter agreement. Pursuant to this letter agreement, the
company agreed that (a) in the event the Company, at its option, redeems shares
of Series A Preferred from UBS to facilitate Fund Holdings, the Barry IV
Stockholders or the Barry III Stockholders selling shares without being
obligated to provide tag-along rights to UBS, then it shall redeem the same
number of shares from UBS in connection with any sale by the other stockholders
within six months; and (b) to the extent it may do so without causing the Series
A Preferred stock to be classified other than as equity on the Company’s
financial statements, the Company would exchange shares of common stock for any
shares of Series A Preferred acquired by Fund Holdings, the Barry IV
Stockholders or the Barry III Stockholders in connection with UBS’ tag-along
rights.
As part
of the transactions contemplated by the UBS Purchase Agreement, on January 11,
2010, the Company, Bonds.com, Inc. (the Company’s wholly-owed broker-dealer
subsidiary) and UBS Securities LLC entered into a Licensing and Services
Agreement (the “LS Agreement”). Pursuant to the LS Agreement, the
Company, Bonds.com, Inc. and UBS Securities LLC have agreed to work together to
develop a platform for the trading of fixed-income securities among their
customers and others. The LS Agreement contains covenants and
obligations on the part of the parties with respect to such efforts, including
covenants regarding each party’s obligations with respect to the development of
and operation of such platform, non-solicitation and exclusivity obligations and
obligations on the part of the Company to provide certain intellectual property
rights to UBS Securities LLC if and when the Company has the right to do
so.
The
foregoing descriptions of the UBS Purchase Agreement, Preferred Stock Purchase
Rights and Stockholders’ Agreement are a summary only and are qualified in their
entirety by reference to the UBS Purchase Agreement, Preferred Stock Rights
Certificate and Stockholders’ Agreement, copies of which are included as
Exhibits 10.1, 10.2 and 10.3, respectively, to this Current
Report.
5
Edwin L.
Knetzger, III, who is co-chairman of the Company’s Board of Directors, is the
sole manager of Fund Holdings. Mr. Knetzger currently holds a 16.3%
membership interest in Fund Holdings. Additionally, Fund
Holdings has assigned to Mr. Knetzger (a) a portion of its Ordinary
Purchase Rights consisting of the right to purchase 5,200,550 shares of our
common stock, (b) a portion of its “Special Purchase Rights” under the Purchase
Agreement, consisting of the right to purchase 333,334 shares of our common
stock, and (c) a portion of its “Additional Purchase Rights” under the Purchase
Agreement, consisting of the right to purchase up to 8,964,527 shares of our
common stock upon the exercise or conversion of other outstanding rights to
acquire shares of our common stock. Mr. Knetzger also received
one-third of the Fund Holdings Ordinary Purchase Rights acquired by Fund
Holdings as part of the UBS investment. Additionally, Mr. Knetzger,
in his capacity as chairman of our Board of Directors, previously was issued a
stock option to purchase 500,000 shares of our common stock.
Additionally,
Michael Sanderson, who was elected to the Company’s Board of Directors to serve
as co-chairman and appointed as Chief Operating Officer of our New York office
and BondStation Pro line of business (subject to regulatory requirements), is a
manager of Laidlaw Venture Partners III, LLC and a director of Laidlaw &
Company (UK) Ltd.
Copies of
the UBS Purchase Agreement, Preferred Stock Rights Certificate and Stockholders’
Agreement have been included as exhibits to this Current Report on Form 8-K to
provide investors and security holders with information regarding their terms.
They are not intended to provide any other factual information about the Company
or its subsidiaries or affiliates. The representations, warranties, covenants
and obligations summarized above and contained in the agreements were made only
for purposes of such agreements and as of specific dates, were solely for the
benefit of the parties to the agreements, and are subject to limitations agreed
upon by the contracting parties. The representations and warranties may have
been made for the purposes of allocating contractual risk between the parties to
the agreements instead of establishing the represented matters as facts, may be
qualified by disclosures made to the investor and may be subject to standards of
materiality applicable to the contracting parties that differ from those
applicable to investors. Investors are not third-party beneficiaries under the
those agreements or the representations and warranties and should not rely on
the representations, warranties, covenants or obligations as characterizations
of the actual state of facts or condition of the Company, the investor or any of
their respective subsidiaries or affiliates. Moreover, information concerning
the subject matter of the representations, warranties, covenants and obligations
may change after the date of the agreements, which subsequent information may or
may not be fully reflected in the Company’s public
disclosures. Additionally, the Company’s agreement to the covenants
and obligation set forth in the agreements should in no way be considered a
disclosure by the Company that it shall always perform or be in compliance with
such covenants and obligations. Accordingly, the representations,
warranties, covenants and obligations contained in the agreements should not be
viewed or relied upon as statements of actual or future facts or the actual
state of current or future affairs of the Company or its subsidiaries or
affiliates.
6
Item
3.02. Unregistered Sales of Equity
Securities.
Pursuant
to the UBS Purchase Agreement and the transactions described in Item 1.01 above,
on January 11, 2010, the Company issued (a) 46,939.2 shares of its Series A
Preferred and rights to purchase an aggregate of 137,280 additional shares of
Series A Preferred (comprised of the 126,720 Preferred Purchase Rights pursuant
to the UBS Purchase Agreement and the additional 10,560 purchase rights pursuant
to the letter agreement described above) to UBS for a purchase price of
$1,760,000 (before deduction of fees and expenses payable or reimbursable by the
Company pursuant to the UBS Purchase Agreement), and (b) rights to purchase an
aggregate of 3,162,720 shares of its common stock to Fund Holdings for a
purchase price per right of $1,760 (the “Fund Holdings Rights”). The
Preferred Stock Purchase Rights are exercisable pursuant to the terms described
in Item 1.01 above, including the payment of a $37.50 per share of Series A
Preferred exercise price (in cash or through a cashless
exercise). The Fund Holdings Rights are exercisable pursuant to the
same terms as the “Ordinary Purchase Rights” as described in the Company’s
Current Reports on Form 8-K filed with the Securities and Exchange Commission on
September 3, 2009 and January 7, 2010, including an exercise price per share of
common stock of $0.375 (payable in cash or by net exercise) and a three year
exercise period. The foregoing issuances were made in reliance on the
exemptions from registration set forth in Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated under the Securities Act, in each case,
based on representations and warranties made by the purchasers and other
factors.
As previously disclosed, on December 31, 2009, the Company and
Laidlaw Venture Partners III, LLC entered into a Unit Purchase Agreement (the
“LVPIII Purchase Agreement”) contemplating an investment by Laidlaw Venture
Partners III, LLC of up to $2,000,000. Also as previously reported,
on the same date, Laidlaw Venture Partners III, LLC made an initial investment
of $1,310,000 (before deduction of fees and expenses payable or reimbursable by
the Company pursuant to the LVP III Purchase Agreement). On
January 13, 2010, Laidlaw Venture Partners III, LLC invested the $690,000
balance of the total investment contemplated by the LVPIII Purchase
Agreement. Pursuant to that investment, on January 13, 2010, the
Company issued (a) 1,840,230 shares of common stock to Laidlaw Venture Partners
III, LLC, (b) rights to purchase 3,680,460 shares of common stock to
Laidlaw Venture Partners III, LLC, and (c) rights to purchase 1,701,540
shares of common stock to Laidlaw & Company (UK) Ltd. (upon assignment by
Laidlaw Venture Partners III, LLC). Additionally, in connection with
that investment and pursuant to the terms of the LVPIII Purchase Agreement, the
Company issued to Fund Holdings rights to purchase 1,653,930 shares of common
stock for a purchase price of $690 of which 414,000 were assigned to Laidlaw
& Company (UK) Ltd. in accordance with the LPV III Purchase
Agreement. The foregoing purchase rights issued to Laidlaw Venture
Partners III, LLC Laidlaw & Company (UK) Ltd. and Fund Holdings have
the same terms as the purchase rights previously issued to each of them as
disclosed in the Company’s Current Reports on Form 8-K filed with the Securities
and Exchange Commission on September 3, 2009, December 30, 2009 and January 7,
2010, including a $0.375 per share exercise price (in cash or through a cashless
exercise). The foregoing issuances were made in reliance on the
exemptions from registration set forth in Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated under the Securities Act, in each case,
based on representations and warranties made by the purchasers and other
factors.
7
The
offer and sale of securities described above by the Company have not been and
will not be registered under the Securities Act of 1933 and may not be offered
or sold in the United States absent registration or an applicable exemption from
registration requirements. The information provided in this current
report is not an offer to sell nor is it a solicitation of an offer for the
purchase of any of our securities and is intended to comply with Rule 135c of
the Securities Act of 1933.
Item
5.03. Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal Year.
In
connection with the UBS Purchase Agreement and the transactions described in
Item 1.01 above, on January 11, 2010, the Company amended its Certificate of
Incorporation by filing a Certificate of Designation of Series A Participating
Preferred Stock (the “Certificate of Designation”) which authorized and created
200,000 shares of Series A Participating Preferred Stock. The shares
of Series A Participating Preferred Stock (as referenced above, the “Series A
Preferred) have the following rights, privileges and preferences, among others,
as more fully set forth in the Certificate of Designation:
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Subject
to the liquidation preference described below, the Series A Preferred
ranks pari passu with the Company’s common stock with respect to dividends
and distributions upon liquidation, winding-up and dissolution of the
Company and junior to any class or series of capital stock that ranks
senior to the Series A Preferred as to dividends or distributions upon
liquidation, winding-up and dissolution of the Company that is created in
accordance with the consent rights described
below.
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The
Company may not declare, pay or set aside any dividends on shares of its
common stock unless the holders of the Series A Preferred then outstanding
shall first receive, or simultaneously receive, a dividend on each
outstanding share of Series A Preferred in an amount at least equal to a
rate per share of Series A Preferred determined by multiplying the amount
of the dividend payable on each share of common stock by one hundred (100)
(subject to appropriate adjustment in the event of any stock split, stock
dividend, combination or other similar recapitalization with respect to
the Series A Preferred if there is no proportionate action taken with
respect to the common stock).
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In
the event of any liquidation, dissolution or winding up of the Company
(including certain changes of control that are deemed a liquidation),
subject to the rights of any series of preferred stock which may from time
to time come into existence, the holders of Series A Preferred shall be
entitled to receive, prior and in preference to any distribution of any of
the assets of the Company to the holders of common stock or the holders of
any series of preferred stock expressly made junior to the Series A
Preferred, an amount per share equal to $.01 (subject to appropriate
adjustment in the event of any stock split, stock dividend, combination or
other similar recapitalization with respect to the Series A
Preferred). Thereafter, subject to the rights of any series of
preferred stock which may from time to time come into existence, the
remaining assets of the Company available for distribution to its
stockholders are required to be distributed among the holders of shares of
Series A Preferred and common stock, pro rata based on the number of
shares held by each such holder, treating for this purpose each such share
of Series A Preferred as if it had been converted into one hundred (100)
shares of common stock (subject to appropriate adjustment in the event of
any stock split, stock dividend, combination or other similar
recapitalization with respect to the Series A Preferred if there is no
proportionate action taken with respect to the common stock) immediately
prior to such liquidation (including a deemed liquidation), dissolution or
winding up of the Company.
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The
Series A Preferred is non-voting capital stock of the Company, except as
may otherwise be required by applicable law or pursuant to the consent
rights described below. Additionally, the number of authorized
shares of preferred stock (other than Series A Preferred) may be increased
or decreased (but not below the sum of the number of shares thereof then
outstanding and the number of shares required for exercise of any rights
to purchase or otherwise acquire shares of preferred stock) by the
affirmative vote of the holders of shares of capital stock of the Company
representing a majority of the votes represented by all outstanding shares
of capital stock of the Company entitled to vote, irrespective of the
provisions of Section 242(b)(2) of the Delaware General Company Law, and
the holders of Series A Preferred shall not have any separate class vote
with respect thereto unless expressly required by the consent rights
described below.
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For
so long as any shares of Series A Preferred are outstanding, the Company
is prohibited from taking any of the following actions (directly or
indirectly), without first obtaining the affirmative vote or written
consent of the holders of at least a majority of the Series A Preferred
then outstanding, voting together as a single class: (a) alter the rights,
preferences or privileges of the Series A Preferred; (b) create any new
class or series of shares, or issue any such shares or options or
convertible securities exercisable or convertible into such shares, that
have a preference over the Series A Preferred with respect to dividends or
liquidation preferences to the extent such shares are issued or to be
issued by the Company pro rata in respect of outstanding shares of common
stock; (c) increase or decrease the authorized number of shares of Series
A Preferred; (d) reclassify shares of common stock into shares having a
preference over or parity with the Series A Preferred with respect to
dividends or liquidation preferences; (e) authorize or pay any dividend or
other distribution with respect to the common stock without payment in
full of dividends on the Series A Preferred; (f) any action that results
in (i) the consolidation or merger of the Company with or into any other
corporation or business entity (other than with or into a wholly-owned
domestic subsidiary of the Company or with respect to such consolidation
or merger where not more than 50% of the voting power of the Company is
transferred to any party or parties other than the existing stockholders
of the Company), (ii) the sale or other transfer in a single transaction
or a series of related transactions of all or substantially all of the
assets of the Company, or (iii) the liquidation, dissolution, winding-up
or reorganization of the Company if, in each case, such transaction would
result in any disproportionate adverse consequences for the holders of
Series A Preferred (solely in the respect to their rights as
stockholders); (g) commence or consent to certain bankruptcy or
insolvency-related proceedings or actions if such proceeding or action
would result in any disproportionate adverse consequences for the holders
of Series A Preferred (solely in the respect to their rights as
stockholders); or (h) alter or amend the foregoing consent
rights.
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The
foregoing is a summary only, and is qualified in its entirety by reference to
the Certificate of Designation, which is incorporated herein by
referenced. A copy of the Certificate of Designation is included as
Exhibit 3.1 to this Current Report.
9
Item
8.01. Other Events.
On
December 31, 2009, the Company entered into a Restated Revenue Sharing Agreement
(the “Revenue Sharing Agreement”) with Radnor Research and Trading Company, LLC
(“Radnor”). While the Revenue Sharing Agreement was entered into and
did not become binding until December 31, 2009, it is dated as of November 13,
2009. Pursuant to the Revenue Sharing Agreement, the Company is
obligated to pay Radnor revenue sharing in an amount equal to 14% of all
revenues generated from referrals made by Radnor (except with respect to
pre-existing Company’s customers that actively traded with the Company during
the six weeks preceding the referral date) (“Radnor Referrals”). The
Company’s Licensing and Services Agreement with UBS Securities LLC described in
Item 1.01 above is considered a Radnor Referral. In the event Georg
O’Krepkie (whose employment agreement is described below) ceases to be an
employee of the Company, such revenue share percentage shall be increased to 35%
minus the compensation paid to his replacement (but in no event less than
14%). The Revenue Sharing Agreement has an initial term of three
years, which term is automatically renewed for successive one year terms unless
ninety days notice of termination is provided by either party before the
termination date. Either party may also terminate the agreement for a
material breach by the other party. In the event of a termination of
the Revenue Sharing Agreement, other than for material breach, the Company is
required to continue paying the revenue sharing amounts to Radnor for a period
of eighteen months. It is anticipated that Radnor will enter into an
agreement with Mr. Knetzger, who is co-chairman of the Company's Board of
Directors, pursuant to which Radnor will pay Mr. Knetzger a percentage of the
proceeds received by Radnor from the Company under the Revenue Sharing
Agreement. As of the date of this Current Report, such an agreement had
not been finalized or executed.
On
December 31, 2009, the Company entered into an Employment Agreement with George
O'Krepkie pursuant to which Mr. O’Krepkie was engaged as the Company’s Head of
Credit Sales. While the employment agreement was entered into and did
not become binding until December 31, 2009, it is dated as of November 13,
2009. Pursuant to this employment agreement, the Company is required
to pay Mr. O’Krepkie compensation equal to 21% of all revenue from Radnor
Referrals plus an amount equal to 7% (the “Override Amount”) of all gross
revenue production from sales resources hired by Mr. O’Krepkie (but excluding
any such revenue that would also constitute revenue from Radnor
Referrals). The Company understands that Mr. O’Krepkie has agreed to
pay 40% of the Override Amount to Radnor. Mr. O’Krepkie’s employment
is at will and such employment and the employment agreement may be terminated by
the Company at any time.
Item
9.01. Financial Statements and
Exhibits.
(d) Exhibits
|
Exhibit No.
|
Description
|
|
10
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated:
January 13, 2010
|
BONDS.COM
GROUP, INC.
|
|||
|
By:
|
/s/
John J. Barry,
IV
|
||
|
Name:
|
John
J. Barry, IV
|
||
|
Title:
|
Chief
Executive Officer
|
||
11
EXHIBIT
INDEX
|
Exhibit No.
|
Description
|
|