Exhibit 10.3
 
AGREEMENT OF SUBORDINATION AND ASSIGNMENT
 
In order to induce ROSENTHAL & ROSENTHAL, INC., a New York corporation
(hereinafter called "Lender"), its successors, or assigns, from time to time to
make loans and advances and extend other financial accommodations to or for the
account of Brekford Corp., a Delaware corporation having a principal place of
business at 7020 Dorsey Road, Bldg C, Hanover, MD 21076, its successors or
assigns (hereinafter called "Debtor),___________ an individual having a
residence address at ____________, (hereinafter called the "Creditor"), and who,
if two or more in number,
 
shall be jointly and severally bound hereunder, hereby agrees that all
indebtedness now or hereafter due to Creditor from Debtor, and all interest
accrued or that may hereafter accrue thereon (the “Junior Debt”) shall not be
payable, and that no payment on account of the Junior Debt (except for regularly
scheduled payments of principal and interest, provided that no Default has
occurred and is continuing), nor any security therefor, nor any loan from
Debtor, nor any offset by Debtor, has been or shall be received, accepted or
retained by Creditor unless and until Debtor has indefeasibly paid and satisfied
in full all of its Obligations (as defined in the Financing Agreement between
Debtor and Lender, dated May 27, 2014);
 
and Debtor agrees not to make payment or to give any security to Creditor except
in conformity herewith and in the event that it has been or hereafter is granted
any security interest in or collateral for the Junior Debt such security
interest in and/or collateral for is hereby deemed to be and shall be subject
and subordinate in all respect to the interests of Lender therein and Creditor
shall not be entitled to exercise any remedies as secured Lender with respect
thereto. Creditor waives any and all notice of the creation, modification,
renewal or extension or accrual of any Obligations. Creditor hereby consents
that, without notice to or further assent by Creditor, the Obligations may from
time to time, in whole or in part, be renewed, extended, modified, compromised
or released by Lender, as it may deem advisable, and that any collateral for the
Obligations may from time to time, in whole or in part, be exchanged, sold,
surrendered or released by Lender, as it may deem advisable, all without
impairing, abridging, affecting or releasing the subordination contained in this
agreement.
 
Creditor does hereby transfer and assign the Junior Debt to Lender as collateral
security for the Obligations, with the full and irrevocable right on the part of
Lender, in its own name or in the name of Creditor, to collect and enforce the
Junior Debt by suit, proof of debt in bankruptcy, or other liquidation
proceedings or any reorganization or arrangement, or otherwise and to vote the
full amount of the Junior Debt in any such proceedings, reorganization or
arrangement for or against any proposal or resolution, for a trustee or trustees
or for a committee of creditors or for the acceptance or rejection of any
proposed arrangement, plan or reorganization, wage earners' plan, composition,
settlement or extension.  Should any payment or distribution or security or
proceeds on or for the Junior Debt be received by Creditor for or on account of
the Junior Debt (except for regularly scheduled payments of principal and
interest, provided no Default has occurred and is continuing), prior to the
satisfaction of the Obligations, Creditor will forthwith assign, endorse and
deliver same to Lender, in precisely the form received (except for Creditor's
endorsement where necessary), for application to payment of the Obligations, and
until so delivered, same shall be held in trust by Creditor as the property of
Lender; in the event of the failure of Creditor to endorse or assign any
security or instrument for the payment of money, so received by Creditor or
payable to Creditor's order, Lender or any officer or employee thereof is hereby
irrevocably constituted and appointed attorney-in-fact for Creditor, with full
power to make any such endorsement or assignment and with full power of
substitution.
 
Creditor represents and warrants to Lender that Creditor is solvent and has
granted no security interest in and has made no prior transfer or assignment of
the Junior Debt; Creditor further covenants and agrees that Creditor will grant
no security interest in or transfer of (except to Lender) any Junior Debt,
whether now existing or hereafter arising unless and until the Obligations have
been paid in full. Creditor and Debtor represent to Lender that the presently
outstanding amount of the Junior Debt is $250,000, which is owing without
counterclaim, defense or offset.  Creditor hereby agrees to endorse to the order
of Lender and deliver to Lender any note or other instrument, which now or
hereafter evidences any or all the Junior Debt, or, at the option of Lender, to
mark prominently each such note or instrument with a legend, referring to this
agreement, in form and substance satisfactory to Lender. Debtor and Creditor
each agree, upon request of Lender, to execute such further documents and
instruments, as Lender may require.
 
Debtor hereby agrees that it will render to Lender upon demand from time to time
a statement of the unpaid balance of the Junior Debt and that it will duly
comply with and perform each and every of the terms of this agreement on its
part required to be performed.  Debtor agrees that in any action by Lender to
enforce payment of the Junior Debt by Debtor, Debtor shall not assert against
Lender any offsets, defenses or counterclaims it may have against Creditor or
Lender. DEBTOR AND CREDITOR AGREE THAT THEIR BOOKS AND RECORDS WILL
APPROPRIATELY SHOW THAT THE JUNIOR DEBT IS SUBJECT TO THIS AGREEMENT.  CREDITOR
AND DEBTOR WAIVE A TRIAL BY JURY AND A RIGHT TO INTERPOSE ANY COUNTERCLAIM OR
OFFSET OF ANY NATURE OR DESCRIPTION IN ANY LITIGATION ARISING OUT OF OR RELATING
TO THE JUNIOR DEBT OR THIS SUBORDINATION.  In the event Lender shall retain or
engage an attorney or attorneys to collect or enforce or protect its interests
with respect to this agreement or the Junior Debt, all of the costs and expenses
of such collection, enforcement or protection, including reasonable attorneys'
fees, shall be payable by each Creditor or Debtor against whom such collection,
enforcement or protection is sought.
 
In the event of a breach by either Debtor or Creditor in the performance of any
of the terms of this agreement, all of the Obligations shall, any other
agreement to the contrary notwithstanding and without notice or demand, become
immediately due and payable, at Lender's option.
 
No waiver shall be deemed to be made by Lender of any of its rights hereunder
unless same shall be in writing and each waiver, if any, shall be a waiver only
with respect to the specific instance involved and shall in no way impair
Lender's rights and/or the obligations of Creditor to it in any other respect or
at any other time, nor shall same establish a course of conduct. This agreement
may not be modified or amended without the prior written consent of Lender.
 
Each Creditor or Debtor not a resident of the State of New York or qualified to
do business in New York, hereby irrevocably consents to the jurisdiction of the
Courts of the State of New York and of any Federal Court located in such State
in connection with any action or proceeding arising out of or relating to this
agreement or the Junior Debt.  In any such litigation such Creditor or Debtor,
as the case may be, waives personal service of any summons, complaint or other
process and agrees that the service thereof may be made by certified or
registered mail directed to such party at the last known address appearing on
the records of Lender.  Within 30 days after such mailing, the party so served
shall appear or answer to such summons, complaint or other process.  Should the
party so served fail to appear or answer within said 30-day period, such party
shall be deemed in default and judgment may be entered by Lender against such
party for the amount as demanded in any summons, complaint or other process so
served.
 
This agreement shall be binding upon the undersigned and the legal
representatives, successors and assigns of the undersigned and shall be governed
by and construed in accordance with the Laws of the State of New York.
 
[signature page to follow on page 3]

 
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IN WITNESS WHEREOF, each of the undersigned has caused these presents to be
properly executed on May 27, 2014
 

  BREKFORD CORP. (Debtor)          
 
By:
       
 
                                 

 
 
 
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$250,000     New York, NY                          May 27, 2014

 
For Value Received ON DEMAND after date we promise to pay to the order of
______________
 
Two Hundred Fifty Thousand Dollars and No Cents
 
At                                              
 
BREKFORD CORP. (Debtor)
 
By: /s/ Rodney Hillman
Rodney Hillman, President/COO

The undersigned and each of them hereby waives presentment, demand, protest,
notice of protest and notice of dishonor and consents without notice to any and
all extensions of time or terms of payment made by the holder of this note.
 
PAY TO THE ORDER OF ROSENTHAL & ROSENTHAL, INC.

 
/s/                                           
___________________
 
 
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