Exhibit 10.3

 
THIS PLEDGE AGREMEENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AND
INTERCREDITOR AGREEMENT, DATED AS OF FEBRUARY 28, 2017, BY AND AMONG THE
PLEDGOR, THE SECURED PARTY AND M&T BANK.
 
PLEDGE AGREEMENT
 
This Pledge Agreement (the “Pledge Agreement”) is entered into this 28th day of
February 2017 by LB&B Associates Inc., a North Carolina corporation (the
“Pledgor”) in favor of Brekford Corp., a Delaware corporation (the “Secured
Party”).
 
WHEREAS, pursuant to the terms of that certain Subordinated Note dated as of
February 28, 2017 (as amended and in effect from time to time, the “Note”)
issued by Pledgor in favor of the Secured Party, the Secured Party has agreed to
make a loan to the Pledgor upon and subject to the terms and conditions set
forth therein;
 
WHEREAS, it is a condition precedent to the obligation of the Secured Party to
make the loan to the Pledgor under the Note that the Pledgor shall have executed
and delivered this Pledge Agreement to the Secured Party for the purpose of
securing the Pledgor’s obligations to the Secured Party;
 
WHEREAS, the Pledgor is the legal and beneficial owner of the LLC Interests (as
hereinafter defined) in Global Public Safety, LLC (the “Company”);
 
NOW, THEREFORE, in consideration of the foregoing premises and to induce the
Secured Party to enter into the Note and to make the loan to the Pledgor under
the Note, the Pledgor agrees as follows:
 
SECTION 1. DEFINITIONS.
 
All capitalized terms used herein without definition shall have the respective
meanings ascribed thereto in the Note. Any term used in this Pledge Agreement
which is defined in the UCC (as defined below) and not otherwise defined in this
Pledge Agreement or the Note shall have the meaning ascribed thereto in the UCC.
The following terms shall have the following meanings:
 
“Collateral” means the LLC Interests.
 
“Default” means the occurrence of an event of default under the Note or a
material default by the Pledgor under this Agreement that is not cured within 10
days written notice from the Secured Party of such breach.
 
“LLC Agreement” means any limited liability agreement, operating agreement,
membership agreement, partnership agreement or similar agreement relating to any
LLC Interests, as amended and in effect from time to time.
 
 
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“LLC Interests” means the 801 Units of ownership interest in the Company
purchased by the Pledgor from the Secured Party on the date hereof pursuant to
that certain Contribution and Unit Purchase Agreement by, between and among the
Pledger, the Secured Party and the Company as of the date hereof.
 
“Loan Documents” refers to this Pledge Agreement and the Note.
 
“Obligations” means any and all obligations of the Pledgor to make payments of
principal and interest under the Note.
 
“Pledge Agreement” means this Pledge Agreement, as amended, restated,
supplemented or otherwise modified from time to time in accordance herewith.
 
“Proceeds” means all “Proceeds” as such term is defined in Article 9 of the UCC
and, in any event, shall include, without limitation, all dividends or other
income from the LLC Interests, collections thereon, proceeds of sale thereof or
distributions with respect thereto.
 
“Security Interest” means the security interest granted pursuant to Section 2.
 
“UCC” means the Uniform Commercial Code as presently and hereafter enacted in
the State of Delaware.
 
SECTION 2. PLEDGE AND GRANT OF SECURITY INTEREST.
 
The Pledgor hereby grants to the Secured Party a continuing second priority lien
and security interest in the LLC Interests and all other Collateral, free and
clear of any liens other than liens granted to M&T Bank by the Pledgor (the
“Senior Liens”), as collateral security for the prompt, timely and complete
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations. At the time the Collateral becomes subject to the lien and
security interest created by this Agreement, the Pledgor will be the sole,
direct, legal and beneficial owner thereof, free and clear of any lien, security
interest, encumbrance, claim, option or right of others except for the Senior
Liens, the security interest created by this Agreement or otherwise created by
the Secured Party.
 
SECTION 3. UCC FILING.
 
Pursuant to the UCC and any other applicable law, the Pledgor authorizes the
Secured Party to file or record financing statements and other documents or
instruments with respect to the LLC Interests and all other Collateral without
the signature of the Pledgor in such form and in such offices as the Secured
Party determines appropriate to perfect the Security Interest granted to the
Secured Party under this Pledge Agreement. Such financing statements may
describe the Collateral in the same manner as described herein or may contain an
indication or description of Collateral that describes such property in any
other manner as the Secured Party may reasonably determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of such
Security Interest.
 
 
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SECTION 4. REPRESENTATIONS AND WARRANTIES.
 
To induce the Secured Party to execute the Note and make any extensions of
credit and to accept the security contemplated hereby, the Pledgor hereby
represents and warrants that:
 
A. The Security Interest granted by the Pledgor will constitute a valid and
perfected second priority lien on the Collateral described herein.
 
B. The LLC constitute all of the issued and outstanding ownership interests of
the Company purchased from the Secured Party in which the Pledgor has any right,
title or interest.
 
C. The Pledgor is the record and beneficial owner of, and has good and
marketable title to, the LLC Interests free and clear of any and all liens or
options in favor of, or claims of, any other person, except the Senior Liens,
the Security Interest created by this Pledge Agreement or liens or options in
favor of, or claims of, any other person that were created by the Secured Party
prior to the Pledgor’s purchase of the such LLC Interests from the Secured
Party. The Pledgor is entitled to pledge its LLC Interests to, and grant and
collaterally assign to, the Secured Party a security interest in its LLC
Interests without any further consent, approval or action by any other party,
including, without limitation, any other party to any LLC Agreement.
 
D. The name and address of the Pledgor listed in Section 22F are the Pledgor’s
exact legal name and address. Pledgor is a North Carolina corporation. There has
been no change in the name of the Pledgor within the five (5) years preceding
the date hereof except as previously reported in writing to the Secured Party.
The Pledgor has not moved its state of formation within the five (5) years
preceding the date hereof except as previously reported in writing to the
Secured Party.
 
E. Upon the filing of financing statements in the appropriate offices pursuant
to the UCC with respect to LLC Interests, the Security Interest granted pursuant
to this Pledge Agreement will constitute a valid, perfected second priority lien
on the Collateral, enforceable as such against all creditors of the Pledgor
other than M&T Bank and any persons purporting to purchase any of the Collateral
from the Pledgor.
 
SECTION 5. CERTAIN COVENANTS.
 
The Pledgor covenants and agrees with the Secured Party that, from and after the
date of this Pledge Agreement until the Obligations are paid in full:
 
A. The Pledgor shall promptly notify the Secured Party, in writing, of any lien
(other than the Security Interest granted pursuant to this Pledge Agreement or
any Senior Liens) on any of the Collateral.
 
B. Without the prior written consent of the Secured Party, the Pledgor will not
(i) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Collateral, or (ii) create, incur or permit to exist
any lien or option in favor of, or any claim of any person with respect to, any
of the Collateral, or any interest therein, except the Senior Liens and the
Security Interest granted pursuant to this Pledge Agreement. The Pledgor shall
maintain the Security Interest created by this Pledge Agreement as a perfected
lien and defend the right, title and interest of the Secured Party in and to the
Collateral against the claims and demands of all other persons other than M&T
Bank.
 
 
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C. The Pledgor will not, except upon prior written notice to the Secured Party
and delivery to the Secured Party of all additional instruments and documents
reasonably requested by the Secured Party to maintain the validity, perfection
and priority of the Security Interest granted by the Pledgor:
 
(i) change its name or state of formation; or
 
(ii) permit any Collateral to be held by any securities intermediary, held or
maintained in the form of a securities entitlement or credited to any securities
account.
 
D. At any time and from time to time, upon the written request of the Secured
Party, and at the sole expense of the Pledgor, the Pledgor will promptly and
duly execute and deliver such further instruments and documents and take such
further actions as the Secured Party may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and of the
rights and powers herein granted.
 
SECTION 6. CASH DIVIDENDS AND DISTRIBUTIONS; VOTING RIGHTS.
 
Unless a Default shall have occurred and be continuing and the Secured Party
shall have given notice to the Pledgor of the Secured Party’s intent to exercise
its rights pursuant to Section 7 of this Pledge Agreement, the Pledgor shall be
permitted to receive all cash dividends and partnership or ownership
distributions paid in respect of the Collateral and to exercise all voting and
partnership or ownership rights, as applicable, with respect to the Collateral.
For so long as the Pledgor shall be entitled to exercise voting rights with
respect to the Collateral, the Pledgor covenants and agrees not to vote or take
any consensual action which would cause a Default to occur.
 
SECTION 7. RIGHTS OF THE SECURED PARTY.
 
If a Default shall occur and be continuing and the Secured Party shall give
notice of its intent to exercise such rights to the Pledgor, (i) the Secured
Party shall have the right to receive any and all cash dividends paid in respect
of the partnership or ownership distributions made in respect of the LLC
Interests and apply such amounts to the Obligations in the manner determined by
the Secured Party and (ii) all the LLC Interests shall be registered in the name
of the Secured Party and the Secured Party may thereafter exercise (A) all
voting, partnership, ownership, membership and other rights pertaining to such
LLC Interests at any meeting of partners or members of the Company or otherwise
and (B) any and all rights, privileges or options pertaining to such LLC
Interests as if it were the absolute owner thereof, all without liability except
to account for property actually received by it, but the Secured Party shall
have no duty to the Pledgor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing. The LLC
Agreement is amended by this Section 7A to permit Pledgor to pledge all of its
LLC Interests to and grant and collaterally assign to M&T Bank and the Secured
Party a lien and security interest in its LLC Interests without any further
consent, approval or action by any other party, including, without limitation,
any other party to the LLC Agreement or otherwise. The rights, powers and
benefits granted pursuant to this Section 7A shall inure to the benefit of the
Secured Party and its successors and assigns and designated agents, as intended
third party beneficiaries.
 
 
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SECTION 8. REMEDIES.
 
If a Default shall occur and be continuing, the Secured Party, in addition to
all other rights and remedies granted to it in this Pledge Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, have all rights and remedies of a secured party under the UCC or
any other applicable law. Without limiting the generality of the foregoing with
regard to the scope of the Secured Party’s remedies, the Secured Party, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by any applicable law referred to
below) to or upon the Pledgor, the Company or any other person (all of which are
hereby waived), may in such circumstances collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may sell, assign, give
options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker’s board or office of the Secured Party or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Secured Party shall have the right upon any such public sale or
sales, and, to the extent permitted by any applicable law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in the Pledgor, which right or equity is
hereby waived or released. To the extent permitted by any applicable law, the
Pledgor waives all claims, damages and demands it may acquire against the
Secured Party arising out of the exercise of any rights hereunder, other than
claims arising out of the gross negligence or willful misconduct of the Secured
Party as determined by a court of competent jurisdiction by final and
nonappealable judgment. If any notice of a proposed sale or other disposition of
Collateral shall be required by any applicable law, such notice shall be deemed
reasonable and proper if given at least ten (10) days before such sale or other
disposition.
 
SECTION 9. SECURED PARTY’S APPOINTMENT AS ATTORNEY-IN-FACT.
 
A. The Pledgor hereby irrevocably constitutes and appoints the Secured Party 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 place
and stead of the Pledgor and in the name of the Pledgor or in its own name, for
the purpose of carrying out the terms of this Pledge Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this Pledge
Agreement, and, without limiting the generality of the foregoing, the Pledgor
hereby gives the Secured Party the power and right, on behalf of the Pledgor,
without notice to or assent by the Pledgor, to do any or all of the following
upon the occurrence and continuation of a Default:
 
 
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(i) pay or discharge taxes and liens levied or placed on or threatened against
the Collateral;
 
(ii) execute, in connection with any sale provided for in this Pledge Agreement,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and
 
(iii) (A) commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any Collateral; (B)
defend any suit, action or proceeding brought against the Pledgor with respect
to any Collateral; (C) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as the
Secured Party may deem appropriate; and (D) generally sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Secured Party were the absolute owner
thereof for all purposes, and do, at the Secured Party’s option and the
Pledgor’s expense, at any time, or from time to time, all acts and things which
the Secured Party deems necessary to protect, preserve or realize upon the
Collateral and the Secured Party’s Security Interest therein and to effect the
intent of this Pledge Agreement, all as fully and effectively as the Pledgor
might do.
 
B. If the Pledgor fails to perform or comply with any of its agreements
contained herein, the Secured Party, at its option, but without any obligation
so to do, may perform or comply, or otherwise cause performance or compliance,
with such agreement in accordance with the provisions of Section 9A.
 
C. The expenses of the Secured Party incurred in connection with actions taken
pursuant to the terms of this Pledge Agreement shall be payable by the Pledgor
to the Secured Party on demand.
 
D. The Pledgor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof in accordance with Section 9A. All powers,
authorizations and agencies contained in this Pledge Agreement are coupled with
an interest and are irrevocable until this Pledge Agreement is terminated and
the Security Interests created hereby are released.
 
SECTION 10. REGISTRATION RIGHTS; PRIVATE SALES.
 
A. The Pledgor recognizes that the Secured Party may be unable to effect a
public sale of any or all the Collateral, by reason of certain prohibitions
contained in applicable Federal and state securities laws or otherwise, and may
be compelled to resort to one or more private sales thereof to a restricted
group of purchasers which will be obliged to agree, among other things, to
acquire such securities for their own account for investment and not with a view
to the distribution or resale thereof. The Pledgor acknowledges and agrees that
any such private sale may result in prices and other terms less favorable than
if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Secured Party shall be under no obligation to delay a
sale of any of the Collateral for the period of time necessary to permit the
Company to register such securities for public sale under applicable Federal and
state securities laws, even if the Company would agree to do so.
 
 
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B. The Pledgor further agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Collateral pursuant to this Section 10 valid and binding and in
compliance with any and all other applicable law. The Pledgor further agrees
that a breach of any of the covenants contained in this Section 10 will cause
irreparable injury to the Secured Party not compensable in damages, that the
Secured Party has no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 10 shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Default has occurred.
 
SECTION 11. CHANGES WITH RESPECT TO THE OBLIGATIONS.
 
The Pledgor shall remain obligated hereunder, and the Collateral shall remain
subject to the Security Interest granted herein, notwithstanding that, without
any reservation of rights against the Pledgor, and without notice to or further
assent by the Pledgor, any demand for payment of any of the Obligations made by
the Secured Party may be rescinded by the Secured Party, and any of the
Obligations continued, and the Obligations, or the liability of the Pledgor or
any other person upon or for any part thereof, or any collateral security or
guarantee therefor, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered, or
released by the Secured Party, and the Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or part, as the Secured Party may deem
advisable from time to time, and any guarantee or other collateral security at
any time held by the Secured Party for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. The Secured Party shall not
have any obligation to protect, secure, perfect or insure any other lien at any
time held by it as security for the Obligations or any property subject thereto.
The Pledgor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Secured Party upon this Pledge Agreement. The Obligations shall conclusively be
deemed to have been created, contracted or incurred in reliance upon this Pledge
Agreement and all dealings between the Pledgor, on the one hand, and the Secured
Party, on the other, shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Pledge Agreement. The Pledgor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Pledgor with respect to the Obligations.
 
SECTION 12. NO SUBROGATION.
 
Notwithstanding any payment or payments made by the Pledgor hereunder, or the
receipt of any amounts by the Secured Party with respect to any of the
Collateral, the Pledgor shall not be entitled to be subrogated to any of the
rights of the Secured Party against any guarantor or against any other
collateral security held by the Secured Party for the payment of the
Obligations, nor shall the Pledgor seek any reimbursement from any guarantor in
respect of payments made by the Pledgor in connection with the Collateral, or
amounts realized by the Secured Party in connection with the Collateral, until
all amounts owing to the Secured Party on account of the Obligations are paid in
full. If any amount shall be paid to the Pledgor on account of such subrogation
rights at any time when all of the Obligations shall not have been paid in full,
such amount shall be held by the Pledgor in trust for the Secured Party,
segregated from other funds of the Pledgor, and shall, forthwith upon receipt by
the Pledgor, be turned over to the Secured Party in the exact form received by
the Pledgor (duly indorsed by the Secured Party, if required) to be applied
against the Obligations, whether matured or unmatured, in such order or manner
determined by the Secured Party or in the order or preference as is provided in
the Note.
 
 
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SECTION 13. LIMITATION ON DUTIES REGARDING COLLATERAL.
 
The Secured Party’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession shall be to deal with
it in the same manner as the Secured Party deals with similar securities and
property for its own account. Neither the Secured Party nor any of its
directors, officers, managers, members, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Pledgor or otherwise. The powers
conferred on the Secured Party hereunder are solely to protect the Secured
Party’s interests in the Collateral and shall not impose any duty on the Secured
Party to exercise any such powers. The Secured Party shall be accountable only
for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its directors, officers, managers, members,
employees or agents shall be responsible to the Pledgor for any act or failure
to act hereunder, except for its gross negligence or willful misconduct as
determined by a court of competent jurisdiction by final and nonappealable
judgment.
 
SECTION 14. APPLICATION OF PROCEEDS.
 
Upon the occurrence and during the continuance of a Default, the proceeds of any
sale of, or other realization upon, all or any part of the Collateral shall be
applied by the Secured Party in such order and manner as the Secured Party may
determine. Any balance of such Proceeds remaining shall be paid over to the
Pledgor, or to whomsoever may be lawfully entitled to receive the same. Only
after (a) payment by the Secured Party of any other amount required by any
provision of law, including, without limitation, Section 9-608 and Section 9-615
of the UCC and (b) the payment in full of the Obligations, shall the Secured
Party account for the surplus, if any, to the Pledgor, or to whomever may be
lawfully entitled to receive the same. The Secured Party may make distribution
hereunder in cash or in kind or, on a ratable basis, in any combination thereof.
 
SECTION 15. WAIVER, DEFICIENCY.
 
The Pledgor hereby waives, to the extent permitted by applicable law, all rights
of redemption, appraisement, valuation, stay, extension or moratorium now or
hereafter in force under any applicable law in order to prevent or delay the
enforcement of this Pledge Agreement or the absolute sale of the Collateral or
any portion thereof. The Pledgor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Secured Party to collect such deficiency.
 
 
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SECTION 16. ALL POWERS COUPLED WITH INTEREST.
 
All powers of attorney and other authorizations granted to the Secured Party
pursuant to any provisions of this Pledge Agreement shall be deemed coupled with
an interest and shall be irrevocable so long as any of the Obligations remain
unpaid or unsatisfied.
 
SECTION 17. NO WAIVERS, CUMULATIVE REMEDIES.
 
No waiver of any Default shall be a waiver of any other Default. No failure on
the part of the Secured Party to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege under this
Pledge Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. No remedy, right or power conferred upon the Secured Party is
intended to be exclusive of any other remedy, right or power given hereunder or
now or hereafter existing at law, in equity, or otherwise, and all such
remedies, rights and powers shall be cumulative.
 
SECTION 18. EXPENSES AND INDEMNIFICATION.
 
A. The Pledgor agrees to indemnify the Secured Party from and against any and
all claims, losses and liabilities, as finally determined by a court of
competent jurisdiction, arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except to the extent such
claims, losses or liabilities result solely from the Secured Party’s negligence
or willful misconduct as finally determined by a court of competent
jurisdiction.
 
B. The Pledgor shall pay to the Secured Party upon demand the amount of any and
all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that the Secured Party may incur in
connection with (i) the exercise or enforcement of any of the rights of the
Secured Party hereunder or (ii) the failure by Pledgor to perform or observe any
of the provisions hereof.
 
SECTION 19. INJUNCTIVE RELIEF; PUNITIVE OR INDIRECT DAMAGES.
 
A. The Pledgor recognizes that, in the event the Pledgor fails to perform,
observe or discharge any of its obligations or liabilities under this Pledge
Agreement, any remedy of law may prove to be inadequate relief to the Secured
Party. Therefore, the Pledgor agrees that the Secured Party shall be entitled to
seek temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
 
B. The Secured Party and the Pledgor hereby agree that it shall not have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and to the extent permitted by law hereby waives any right or claim to
punitive or exemplary damages that it may now have or that may arise in the
future in connection with any dispute, whether such dispute is resolved through
arbitration or judicially.
 
 
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C. Without limiting the generality of any provisions set forth herein relating
to indemnification or reimbursement by the Pledgor, each of the Secured Party
and the Pledgor hereby agrees that it shall not have a remedy of consequential
or indirect damages against any other party to a Loan Document, and to the
extent permitted by law it hereby waives any right or claim to consequential or
indirect damages that it may now have or that may arise in the future in
connection with any dispute, whether such dispute is resolved through
arbitration or judicially.
 
SECTION 20. CONTROL AGREEMENT; ACKNOWLEDGEMENT BY THE COMPANY.
 
A. The Pledgor hereby authorizes and instructs the Company to comply, and the
Company hereby agrees to so comply, with any instruction received thereby from
the Secured Party in accordance with the terms of this Pledge Agreement with
respect to the Collateral, without any consent or further instructions from the
Pledgor (or other registered owner), and the Pledgor agrees that the Company
shall be fully protected in so complying. The Company agrees that its agreement
set forth in the preceding sentence shall be sufficient to create in favor of
the Secured Party, “control” of the LLC Interests within the meaning of such
term under the UCC.
 
B. The Company acknowledges receipt of a copy of this Pledge Agreement and
agrees to be bound thereby and to comply with the terms thereof insofar as such
terms are applicable to it. The Company further agrees that the terms of Section
10 of this Pledge Agreement shall apply to it with respect to all actions that
may be required of it under or pursuant to or arising out of Section 10 of this
Pledge Agreement.

 
SECTION 21. RELEASES.
 
At such time as the Obligations shall have been paid in full, this Pledge
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Secured Party and the Pledgor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party. Upon
any such termination, the Secured Party shall execute and deliver to the
Pledgor, at the Pledgor’s expense, such documents as the Pledgor shall
reasonably request to evidence such termination, and the Pledgor shall be
entitled to the return, upon its reasonable request, of such of the Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof.
 
SECTION 22. MISCELLANEOUS.
 
A. Amendments and Waivers. No waiver, amendment or modification of any provision
of this Pledge Agreement shall be valid unless in writing and signed by all of
the parties hereto.
 
 
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B. Successors and Assigns. This Pledge Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of the
Pledgor (and shall bind all persons who become bound as a Pledgor under this
Pledge Agreement), the Secured Party and its successors and assigns; provided
that the Pledgor may not assign, transfer or delegate any of its rights or
obligations under this Pledge Agreement without the prior written consent of the
Secured Party.
 
C. Governing Law; Jurisdiction. This Pledge Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Delaware,
without reference to the conflicts or choice of law principles thereof. The
Pledgor hereby irrevocably consents to non-exclusive personal jurisdiction in
the State of Delaware.
 
D. Waiver of Jury Trial. THE PLEDGOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS PLEDGE AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER,
OR THE PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF. The Pledgor (i) certifies
that neither the Secured Party nor any representative, agent or attorney of the
Secured Party has represented, expressly or otherwise, that the Secured Party
would not, in the event of litigation, seek to enforce the foregoing waiver or
other waivers contained in this Pledge Agreement, and (ii) acknowledges that, in
entering into the Loan Documents, the Secured Party is relying upon, among other
things, the waivers and certifications contained in this Section.
 
E. Severability. Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
 
Notices. Any notices to the Pledgor shall be sufficiently given, if in writing
and mailed or delivered to LB&B Associates, Inc., 9891 Broken Land Parkway,
Suite 400, Columbia, MD 21046, ATTN: Rick Franz or such other address as
provided hereunder; and to the Secured Party, if in writing and mailed or
delivered to Brekford Corp, 7020 Dorsey Rd., Bldg. C, Hanover, MD 21076, ATTN:
Rodney W. Hillman or such other address as the Secured Party may specify in
writing from time to time. In the event that the Pledgor changes its mailing
address at any time prior to the date the Obligations are paid in full, the
Pledgor agrees to promptly give written notice of said change of address by
registered or certified mail, return receipt requested, all charges prepaid.
 
F. Titles and Captions. Titles and captions of Articles, Sections and
subsections in, and the table of contents of, this Pledge Agreement are for
convenience only, and neither limit nor amplify the provisions of this Pledge
Agreement
 
G. Counterparts; Integration; Effectiveness. This Pledge Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and assigns,
and all of which taken together shall constitute one and the same agreement.
This Pledge Agreement, together with the Note, comprises the complete and
integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter.
Delivery of an executed counterpart of a signature page of this Pledge Agreement
by telecopy or electronic mail shall be effective as delivery of a manually
executed counterpart of this Pledge Agreement. This Pledge Agreement shall
remain in effect through and including the date upon which all Obligations shall
have been indefeasibly and irrevocably paid and satisfied in full.
 
[NEXT PAGE IS SIGNATURE PAGE]
 
 
 
 
 
 
 
 

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IN WITNESS WHEREOF, the undersigned have caused this Pledge Agreement to be duly
executed and delivered as of the date first above written
      
 
PLEDGOR:
 
LB&B ASSOCIATES INC.
 
By: /s/ Frederick Franz                                 

Name: Frederick Franz                       

Title: Executive Senior Vice President

 
 
 
SECURED PARTY:
 
BREKFORD CORP.
 
By: /s/ Rodney W. Hillman

Name: Rodney W. Hillman
Title: President and COO   

        
 
ACKNOWLEDGED AND AGREED:
 
GLOBAL PUBLIC SAFETY, LLC
 
By: /s/ Rodney W. Hillman

Name: Rodney W. Hillman
Title: President                    

 
 
 
[Signature Page to Pledge Agreement]
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