Amended and Restated Limited Liability Company Agreement

ARTICLE I DEFINITIONS		1
1.01	Definitions.	1
1.02	Terms Defined Elsewhere.	5
1.03	Successor Statutes and Agencies; Global Terms	6
ARTICLE II ORGANIZATIONAL MATTERS		7
2.01	Formation and Organization.	7
2.02	Limited Liability Company Agreement.	7
2.03	Name.	7
2.04	Offices and Registered Agent.	8
2.05	Purpose.	8
2.01	Term.	8
2.02	Income Tax Classification of Company.	8
2.03	Nature of Units and Interests.	8
2.04	Class B Units.	9
ARTICLE III MEMBERS, UNITS AND CAPITAL CONTRIBUTIONS		10
3.01	Members, Units and Capital Contributions.	10
3.02	Capital Accounts.	11
3.03	Withdrawal or Reduction of Contributions to Capital.	12
3.04	Right to Participate in Additional Issuances.	12
ARTICLE IV ALLOCATIONS AND DISTRIBUTIONS		13
4.01	Allocation of Income and Loss..	13
4.02	Distributions.	15
4.03	Allocations for Tax Purposes; Effect of Change of Units.	17
4.04	Partnership Tax Items and Modifications to Allocations.	17
4.05	Tax Withholding.	20
4.06	Books of Account; Member Inspection Rights.	20
ARTICLE V MANAGEMENT		22
5.01	Duties and Authority of Board of Representatives.	22
5.02	Election, Term and Removal of Representatives.	22
5.03	Meetings of the Board.	23
5.04	Officers.	25
ARTICLE VI ACTIONS OF THE MEMBERS		29
6.01	Meetings and Actions of Members.	29
ARTICLE VII LIMITATION OF LIABILITY AND INDEMNIFICATION		29
7.01	Limitation of Liability.	29
7.02	Reimbursements; Indemnification.	29
7.03	Other Rights.	30
ARTICLE VIII TRANSFERABILITY OF UNITS		30
8.01	Transferability of Units.	30

8.02	Drag-Along Rights.	31
8.03	Repurchase Option for Class B Units..	32
ARTICLE IX DISSOLUTION AND TERMINATION		32
9.01	Dissolution Events.	32
9.02	Certificate of Cancellation.	33
9.03	Liquidation Priorities.	34
9.04	Winding Up.	34
9.05	Resignation.	35
9.06	No Deficit Restoration Obligation.	35
9.07	Return of Capital Contributions Nonrecourse to Other Members.	35
ARTICLE X MISCELLANEOUS		35
10.01	Amendment.	35
10.02	Severability.	36
10.03	Delaware Law.	36
10.04	Integrated Agreement.	36
10.05	Creditors.	36
10.06	Gender.	36
10.07	Waiver.	36
10.08	Binding Agreement.	37
10.09	Captions.	37
10.1	Counterparts; Delivery.	37
10.11	Notice.	37
10.12	Member Representations and Agreements.	38
10.13	Headings; Interpretation ..	38
10.14	Legal Counsel.	39
EXHIBIT A – Unit Ownership Ledger
EXHIBIT B – Representatives
EXHIBIT C – Nonrecourse Debt and Other Allocations

 

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF GLOBAL PUBLIC SAFETY, LLC is hereby adopted and entered into by and among GLOBAL PUBLIC SAFETY, LLC, a Delaware limited liability company (the “Company”), LB&B ASSOCIATES, INC., a North Carolina corporation (the “Majority Member”) and BREKFORD CORP., a Delaware corporation (the “Minority Member”), effective as of February 28, 2017.

WHEREAS, the Company was formed as a Delaware limited liability company on January 27, 2017, upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware pursuant to the Act;

WHEREAS, at the time of its formation, the Minority Member was the sole Member of the Company;

WHEREAS, the Minority Member, as the sole Member of the Company, entered into that certain Limited Liability Company Agreement of the Company, dated as of February 5, 2017 (the “Original Agreement”);

WHEREAS, effective as of the date hereof, the Majority Member has purchased an Interest from the Minority Member, and the Company has admitted the Majority Member as a Member of the Company;

WHEREAS, the parties desire to enter into this Agreement to amend and restate the Original Agreement in its entirety.

NOW, THEREFORE, in consideration for the mutual covenants, promises and agreements contained herein, the parties agree as follows:

 Unless otherwise expressly provided herein, the following terms with initial capital letters shall have the meanings set forth below whenever used in this Agreement:

“Act” means the Delaware Limited Liability Company Act, as amended from time to time.

“Affiliate” means any Person that, directly or indirectly, Controls any other Person or that is Controlled by or is under common Control with such other Person.

“Agreement” means this Amended and Restated Limited Liability Company Agreement of the Company and all schedules and exhibits hereto, as from time to time hereafter amended in accordance with its terms.

“BBA Provisions” means the provisions in the Code for coordinated audit proceedings enacted by section 1101 of the Bipartisan Budget Act of 2015, Public Law 114-74, as they may be thereafter amended and in effect from time to time.

“Capital Contribution” means any contribution to the capital of the Company in cash or property by a Member, whenever made.

“Certificate of Formation” means the Certificate of Formation of the Company filed with the Secretary of State, as amended or restated from time to time.

“Class” means and refers to a particular class of Units, as more fully described in Section 2.08 and the other provisions of this Agreement. As of the date of this Agreement, the Company has two authorized Classes of Units: Class A Units and Class B Units.

“Class A Member” means any Member holding any Class A Units.

“Class A Unit” means any Unit that has the respective rights, benefits and obligations specified with respect to the Class A Units in this Agreement.

“Class B Member” means any Member holding any Class B Units.

“Class B Unit” means any Unit that has the respective rights, benefits and obligations specified with respect to the Class B Units in this Agreement.

“Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time.

“Control” (including, with correlative meanings, the terms “Controlled by” and “under common Control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“CUP Agreement” means that certain Contribution and Unit Purchase Agreement dated on or about the date of this Agreement by, between and among the Minority Member, the Majority Member and the Company.

“Distributable Cash” means, with respect to the Company for a period of time, all funds of the Company from all sources other than Capital Contributions, whether derived from revenues or otherwise, on hand or in bank or other financial accounts of the Company, after payment or provision for payment has been made for (i) all expenses of the Company as of such time, (ii) all outstanding and unpaid current and anticipated obligations and liabilities of the Company as of such time, (iii) repairs and maintenance of the Company’s property, and (iv) desired working capital levels and reserves, all as the Board deems necessary or appropriate for Company operations or for the benefit of the Members as a group.

“Entity” means any foreign or domestic corporation, partnership, limited liability company, trust, unincorporated organization, joint venture, association or other entity, governmental body, or regulatory authority.

“Income” and “Loss” means, for each fiscal year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code section 703(a)(1) will be included in taxable income or loss), with the adjustments set forth below.

After taking into account the foregoing adjustments to taxable income, if the result is an excess of income and gains over expenditures, losses and deductions, the Company shall be treated as having “Net Income”, and if the result is an excess of expenditures, losses and deductions over income and gains, the Company shall be treated as having “Net Loss”. In addition, the amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Exhibit C of this Agreement shall be determined by applying rules analogous to those set forth above in clauses (i) through (vi)).

“Interest” means all of a Member’s legal and equitable rights as an owner in the Company, including, without limitation, the rights and benefits to which such Member is entitled.

“IRS” means the United States Internal Revenue Service.

“Majority in Interest” means, with respect to all or any referenced group of Members, a combination of any of such Members that, in the aggregate, own more than fifty percent (50%) of the total outstanding Units owned by all or such referenced group of Members. If not otherwise specified or restricted, a “Majority in Interest of the Members” means and refers to Members holding of a majority of the Company's total outstanding Class A Unit owned by Members at any particular time.

Person” means an individual, a custodian for any individual under any jurisdiction’s Uniform Transfers to Minors Act or similar statute, a trust or a trustee on behalf of a trust, an estate, or any Entity.

“Regulations” means the temporary and final regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code, as such regulations may be amended from time to time.

“Securities Act” means the federal Securities Act of 1933, as amended, and the rules and regulations thereunder.

“Unit” means a fractional part of an Interest in the Company representing the relative interest, rights and obligations such Member has with respect to certain economic rights, voting, and other items pertaining to the Company as set forth in this Agreement. Whole, as well as fractional, Units may be issued by the Company and/or owned by Members. Each Member’s numbers of and Class of Units are set forth in Exhibit B attached hereto, as such Exhibit B may be amended from time to time to reflect Transfers or additional issuances of Units in accordance with the terms of this Agreement.

Each of the following capitalized terms, when used in this Agreement, has the meaning provided for such term in the Section of this Agreement set forth beside such term below:

 

. Any reference contained in this Agreement to specific statutory or regulatory provisions or to specific governmental agencies or Entities includes any successor statute or regulation, or agency or Entity, as the case may be. Unless otherwise specified, the references to “Section” and “Article” in this Agreement are to the Sections and Articles of this Agreement. When used in this Agreement, words such as “herein”, “hereinafter”, “hereof”, “hereto”, and “hereunder” refer to this Agreement as a whole, unless the context clearly requires otherwise. The use of the words “include” or “including” in this Agreement is by way of example rather than by limitation.

  The Company was formed as a limited liability company pursuant to the Act on January 27, 2017, upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware. This Agreement hereby confirms that the Minority Member became the initial Member of the Company as of the effectiveness of the filing of the Certificate of Formation. The Majority Member is hereby admitted as an additional Member of the Company as of the date of this Agreement. The Majority Member and the Minority Member, being all of the Members of the Company as of the date hereof, hereby set forth and adopt this Amended and Restated Limited Liability Company Agreement of the Company in its entirely under the Act.

  This Agreement is hereby adopted as the "limited liability company agreement" of the Company within the meaning of the Act, for the purpose of governing and regulating the affairs of the Company and the conduct of its business in accordance with the provisions of the Act. The rights and obligations of the Members of the Company and the administration and termination of the Company shall be governed by this Agreement, the Certificate of Formation, and the Act. It is hereby acknowledged and affirmed that, during the term of the Company set forth in Section 2.06, (i) the rights and obligations of the Members with respect to the Company and any subject matter covered in this Agreement will be determined in accordance with the terms and conditions of this Agreement to the greatest extent permitted under applicable law; (ii) where the Act provides that such rights and obligations specified in the Act shall apply "unless otherwise provided in a limited liability company agreement", the "limited liability company agreement may provide" for such rights and obligations, or words of similar effect, such rights and obligations shall be as set forth in this Agreement, none of those statutory default provisions shall apply or have any effect whatsoever; and (iii) therefore, by way of illustration and not in limitation of the foregoing, appraisal rights permitted under section 18-210 of the Act shall not apply or be incorporated into this Agreement, and no Member or assignee of a limited liability company interest in the Company shall have any of the appraisal rights described therein except to the extent expressly provided herein. The Company shall have no oral limited liability company agreements, and this Agreement may only be amended in accordance with Section 11.01.

The name of the Company is “Global Public Safety, LLC”, and its operations shall be conducted under such name; provided, however, that the operations of the Company may be conducted under any other name deemed necessary or desirable by the Board or as may be necessary to comply with the requirements of any jurisdiction in which the Company may conduct operations.

The principal office of the Company is to be located at such place as may be determined by the Board. In addition, the Company may maintain such other offices as the Board may deem advisable at any other place or places. The initial registered office of the Company under the Act is at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the initial registered agent of the Company under the Act for service of process at such address is The Corporation Trust Company. The Board may change the registered agent and registered office of the Company to such other agent or office as may be permitted under the Act, upon satisfaction of the requirements for making such a change as are set forth under the Act.

The term of the Company commenced on January 27, 2017, the effective date of the filing of the Certificate of Formation of the Company pursuant to the Act. The Company shall continue in existence in perpetuity, unless the Company’s Certificate of Formation is amended to provide for a definite period of duration, in which case the Company shall continue in existence until the close of business on the last day of such period, or unless the Company is sooner dissolved and its affairs wound up in accordance with the provisions of this Agreement or the Act.

At such time or times as the Company may be treated for purposes of federal income taxation as having more than one owner, the Company shall be classified as a partnership for purposes of federal income taxation in accordance with Regulations section ###-###-####-3, unless and until a Majority in Interest of the Members gives written consent to the Company’s making an affirmative election with the IRS to be classified for federal income tax purposes as an association taxable as a corporation.

(a)           The Board is hereby authorized to cause the Company to issue Class B Units to employees, officers, directors, and other service providers of or to the Company, under such terms and conditions and for such, or no, amounts of Capital Contribution per Unit, as the Board may determine. The Board is authorized to issue any number of Class B Units under this Section as long as the total outstanding Class B Units at any time does not exceed 111 Class B Units, provided that, without the prior written consent of all of the Class A Members, the total outstanding Class B Units shall never exceed 10% of the outstanding equity of the Company.

(b)           The Company and each Member agree to treat each Class B Unit granted to a Class B Member as a separate “profits interest” within the meaning of IRS Revenue Procedure 93-27, 1993-2 C.B. 343 (“Rev. Proc. 93-27”). In accordance with IRS Revenue Procedure 2001-43, 2001-2 CB 191 (“Rev. Proc. 2001-43”), the Company will treat each Class B Member as the owner of its Class B Units from the date such Class B Units are granted, and shall file its IRS Form 1065, and issue appropriate Schedules K-1 (Form 1065), to such Class B Member, allocating to such Class B Member his, her, or its distributive share of all items of income, gain, loss, deduction and credit associated with such Class B Units (including any unvested Class B Units as if they were vested Units). Each holder of Class B Units agrees to take into account such distributive share in computing such holder’s United States federal income tax liability for the entire period during which he, she, or it holds such Class B Units. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the fair market value of any Class B Unit issued to a Class B Member, either at the time of the grant of such Unit or when such Unit vests pursuant to any restrictions placed on the Unit in connection with its issuance. The undertakings contained in this Section 2.09 shall be construed in accordance with section 4 of Rev. Proc. 2001-43. Accordingly, upon the issuance of Class B Units to a Class B Member, (i) the gross book value of all noncash assets of the Company shall be adjusted to equal their respective gross fair market values, as determined by the Board, pursuant to Regulations section 1.704-1(b)(2)(iv)(f), and (ii) pursuant to paragraph (vi) of the definition in Section 1.01 of “Income” and “Loss” and this Section 2.09, such aggregate adjustments to the gross book value of all noncash assets shall be treated as if the Company recognized gain or loss equal to the amount of such aggregate adjustments, and then such amounts of deemed gain or loss shall be simultaneously allocated to the Capital Accounts of all Persons who are holders of Units immediately prior to such issuance by adjusting the Capital Accounts to reflect their respective shares of such deemed gain or loss as if it arose from a Capital Transaction.

(c)           Each Class B Unit shall be issued subject to a Distribution Threshold. A “Distribution Threshold” means, unless otherwise determined by the Board, an amount equal to the amount that would be distributed to all holders of Units under Section 4.02(a)(ii) if, immediately before the time the Class B Unit is issued, the Company were to (i) sell all of its assets at their fair market values in a Capital Transaction, (ii) settle all of its liabilities to the extent of the Company’s available assets (but limited, in the case of nonrecourse liabilities as to which the creditors’ rights to repayment are limited solely to one or more assets of the Company, to the value of such assets), and (iii) distribute any remaining cash and other proceeds to the holders of Units in accordance with the distribution provisions of Section 4.02(a) for proceeds arising from Capital Transactions; provided, however, that the Distribution Threshold for any Class B Unit shall not be less than zero dollars. The Board shall have the discretion to set any Class B Unit’s Distribution Threshold at an amount that is greater than the amount determined in the immediately preceding sentence. There are no outstanding Class B Units issued as of the date of this Agreement, and the Board shall determine the Distribution Threshold for each Class B Unit issued after the date of this Agreement.

(d)           The intent of this Section 2.09 is to ensure that all Class B Units qualify as “profits interests” under Rev. Proc. 93-27 and Rev. Proc. 2001-43 when issued, and this Section 2.09 and the other provisions of this Agreement shall be interpreted and applied consistently therewith. Each Class B Member who receives any unvested Class B Unit (whether issued on or after the date hereof) agrees to timely and properly make an election under section 83(b) of the Code with respect to each such unvested Class B Unit received. The provisions of this Section 2.09 shall apply regardless of whether or not the Class B Member files an election pursuant to section 83(b) of the Code with respect to such Class B Units. Any Class B Unit that is repurchased by the Company, whether pursuant to the terms of any agreement with the Company or otherwise, shall no longer be deemed to be outstanding for any purpose under this Agreement.

The Company shall maintain a separate capital account (each a “Capital Account”) for each Member pursuant to the principles of this Section 3.02 and Regulations section 1.704-1(b)(2)(iv). As of the date of this Agreement, the initial Capital Account of each of the Majority Member and the Minority Member shall be the amount set forth as its “Deemed Initial Capital Contribution” on Exhibit B attached hereto. Thereafter, in the maintenance of Capital Accounts for the Members, the following provisions will apply:

 Subject to any nondiscretionary restrictions or limitations regarding distributions imposed on the Company by the Act or under any loan agreements, other financing documents, or other contracts or agreements to which the Company or its property may be subject or hereunder, the Board may, in its sole discretion, cause the Company to distribute to the Members Distributable Cash or other property in such aggregate amounts as the Board may determine, at any time and from time to time, and any such distributions shall be made to and among the Members as set forth in the remaining provisions of this Section. Notwithstanding the foregoing, unless otherwise agreed to in writing by both the Minority Member and the Majority Member, the Board beginning with fiscal year 2017 shall cause the Company to distribute no less than sixty-percent (60%) and no more than eighty-percent (80%) of the Distributable Cash of the Company during each fiscal year (the “Distribution Limitation”), which distributions shall be made within sixty (60) days following January 1 of each year.

Notwithstanding anything in this Agreement to the contrary, distributions to holders of Class B Units pursuant to this Section 4.02(a) may be modified by the Board to the extent necessary, in the reasonable discretion of the Board after consultation with the Company’s tax advisors, in order to cause such distributions and permit such Class B Units to comply with the requirements of Section 2.09.

 Except as otherwise provided herein, each item of income, gain, loss, or expense of the Company shall be allocated to the Members in the same manner as allocations are made of Net Income, Net Loss and other items of income, gain, loss, or expense pursuant to Section 4.01 and Exhibit C. If (i) there is a Transfer of, or issuance of any additional, Units in the Company other than as of the end of a calendar year, and (ii) after such Transfer or additional issuance the Company is treated as a partnership for federal income tax purposes, then all items to be allocated, credited, charged or distributed for such year shall be prorated in accordance with section 706 of the Code, using any convention permitted by law and selected by the Board; provided, however, that if the Company utilizes the cash method of accounting, certain “allowable cash basis items” as defined in Code section 706(d)(2) shall be allocated as therein specified. Selection of the specific allowable method will be made by the Board, unless a transferor Member and a transferee themselves specify, with respect to the transferred Units, a method that is permitted under the Code. A Representative will have no liability to any Member in connection with the determination of each Member’s share of prorated allocations of income or losses if such allocations were made in good faith in accordance with the terms of this Agreement or in reliance on the advice of the Company’s accountants or tax counsel.

At all times during which the Company is treated as a partnership for federal income tax purposes, the following provisions shall apply.

 The Board is hereby authorized to cause the Company to pay, on behalf of or with respect to any Member, any amounts to a federal, foreign, state or local taxing authority as may be necessary for the Company to comply with tax withholding provisions of the Code or other income tax or revenue laws of any applicable taxing authority, whether because the Member is considered a nonresident for any state or local income tax purposes or not to be a “United States person” for federal income tax purposes or for any other reason. Any such amount paid by the Company shall be treated as a distribution by the Company to such Member, and shall be offset against any distributions otherwise due to the Member. In addition, if the amount of any such tax withholding or payment exceeds the amount of unpaid distributions otherwise owing to such Member with respect to the year or other period for which such tax payment was made, the Company shall, in the sole discretion of the Board, either (i) treat such excess amount as an offset against any future distributions to be made to such Member, or (ii) require the Member on whose behalf such payments were made to reimburse the Company for such excess amount.

4.07           Incentive Interest Safe Harbor Election. In furtherance and not derogation of the authority granted to the Board under Article V, subject to the terms hereof, the Board is hereby authorized to cause the Company to make the safe harbor election for valuing Interests issued in connection with the performance of services by any employee (or other service provider) as contemplated in IRS Notice 2005-43 (the “Safe Harbor Election”), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations section 1.83-3(1) and IRS Notice 2005-43, whether promulgated in the form of one or more final Regulations, revenue rulings, revenue procedures, notices, and/or other IRS guidance (collectively, the “Ultimate Rules”). Such Safe Harbor Election shall be made if, and at such time as, the Board may determine in its sole discretion. In connection with any Safe Harbor Election, the provisions below in this Section also shall apply.

(f)           Binding on Transferees and Assignees. No transfer, assignment, or other disposition of any Units or other Interest by a holder of any Interest shall be effective unless prior to such transfer, assignment, or disposition the transferee, assignee, or intended recipient of such Units or other Interest shall have agreed in writing to be bound by the provisions of this Section 4.07, in a form satisfactory to the Board.

(a)           Execution of Contracts and Instruments. Any instrument regarding a matter approved by the Board, as appropriate, in accordance with this Article V may be executed and delivered on behalf of the Company by any Representative, officer or agent to whom such signatory authority has been delegated by the Board, including any deed, deed of trust, note or other evidence of indebtedness, lease agreement, security agreement, financing statement, contract of sale, or other instrument purporting to convey or encumber, in whole or in part, any or all of the assets of the Company, at any time held in its name, or any receipt or compromise or settlement agreement with respect to the accounts receivable and claims of the Company; no other signature shall be required for any such instrument to be valid, binding, and enforceable against the Company in accordance with its terms. The Board may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Company, and such authority may be general or confined to specific instances. Any resolution of the Board authorizing the execution of documents by the proper officers of the Company or by the officers generally will be deemed to authorize such execution by the Chairman of the Board, the President, any Vice President, or the Treasurer, or any other officer if such execution is generally within the scope of the duties of his or her office. No Representative, however, will have the authority to bind the Company, unless such authority has been granted to such Representative by the Board. The Board may by resolution authorize such execution by means of one or more facsimile signatures.

(b)           Loans. No loans may be contracted on behalf of the Company and no evidence of indebtedness may be issued in the Company’s name unless authorized by a resolution or other approval of the Board or Members, in accordance with this Agreement. Such authority may be general or confined to specific instances.

(c)           Checks and Drafts. All checks, drafts or other orders for the payment of money issued in the name of the Company shall be signed by such officer or officers, or agent or agents, of the Company and in such manner as from time to time may be determined by resolution of the Board.

(d)           Deposits. All funds of the Company not otherwise employed shall be deposited from time to time to the credit of the Company in such depositories as the Board may select or authorize.

5.08           Limitation on Liability.

(a)           Except as otherwise provided herein or in an agreement entered into by such Person and the Company, no Representative will be liable to the Company or to any Member for any act or omission performed or omitted by such Person in his or her capacity as a member of the Board pursuant to authority granted to such Person by this Agreement; provided, however, that, except as otherwise provided herein or in an agreement entered into by such Person and the Company, such limitation of liability will not apply to the extent the act or omission was attributable to such Person’s gross negligence, willful misconduct or knowing violation of law. The Board may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and no Representative or any of such Representative’s Affiliates will be responsible for any misconduct or negligence on the part of any such agent appointed by the Board (so long as such agent was selected in good faith and with reasonable care). The Board will be entitled to rely upon the advice of legal counsel, independent public accountants and other experts, including financial advisors, and any act of or failure to act by the Board in good-faith reliance on such advice will in no event subject the Board or any Representative thereof to liability to the Company or any Member.

(b)           Whenever in this Agreement or any other agreement contemplated herein, the Board is permitted or required to take any action or to make a decision in its “sole discretion” or “discretion,” with “complete discretion” or under a grant of similar authority or latitude, the Board and each Representative shall be entitled to consider such interests and factors as it desires.

(c)           Whenever in this Agreement or any other agreement contemplated herein the Board is permitted or required to take any action or to make a decision in its “good faith” or under another express standard, the Board shall act under such express standard and, to the extent permitted by applicable law, shall not be subject to any other or different standards imposed by this Agreement or any other agreement contemplated herein, and, notwithstanding anything contained herein to the contrary, so long as the Board acts in good faith, the resolution, action, or terms so made, taken, or provided by the Board will not constitute a breach of this Agreement or any other agreement contemplated herein or impose liability upon the Board, any Representative, or any of such Representative’s Affiliates.

5.09           Resignation of Brekford.. Brekford Corp., by entering into this Agreement as a Member of the Company, hereby resigns as Manager of the Company effective as of the date of this Agreement.

There are no required meetings of the Members, whether annually or otherwise. Any actions taken by the Members, shall be in accordance with the affirmative vote or written consent of the Members holding the requisite percentage of Units necessary to take such action. Unless action by Members holding a different percentage of Units or action by any single Member is specifically required in this Agreement or in the Act, all actions taken by the Members shall be in accordance with the decision of Members constituting a Majority in Interest of the Members. A Member’s consent hereunder may be provided in electronic form and may be delivered by electronic mail or other electronic means. Any reasonable manifestation of a Member’s assent shall be considered such Member’s “written consent” for this purpose.

No Member, Representative or officer shall be liable for the debts, obligations, and liabilities of the Company beyond, in the case of the Member, the Capital Contributions the Member has made or agreed to make herein or in writing as required under Section 3.01. Except as otherwise expressly provided herein, a Member shall not be required to contribute to the capital of, or to loan any funds to, the Company. However, a Member will be required to return to the Company any distribution made to it in clear and manifest accounting or similar error. The immediately preceding sentence constitutes a compromise to which all Members have consented within the meaning of the Act. The failure by the Company or any of its Members, Representatives or officers to observe any formalities or requirements relating to the exercise of the powers and management of the Company’s business and affairs under this Agreement or the Act shall not be grounds for imposing personal liability on any Member, Representative or officer. If the Act is amended to authorize action further eliminating or limiting the liability of the Board, Members or officers, then the liability of the Board, Members or officers of the Company will be eliminated or limited to the fullest extent permitted by the Act as so amended. Any repeal or modification of this Section shall not adversely affect the right or protection of a Representative, Member or officer existing at the time of such repeal or modification.

The Company shall indemnify the Representatives, Members and officers to the fullest extent permitted or required by the Act, as amended from time to time; provided, however, that no Member or other holder of Units is to be reimbursed or indemnified by the Company for any federal, state or local income, estate, gift or other taxes imposed on the Member, or other holder, or the ultimate owners thereof by reason of (i) such Member’s, or other holder’s, having, selling or otherwise transferring any Units or (ii) allocation of income or gain from the Company or the Company’s being treated as a flow-through entity, and not a separate taxable entity, for purposes of income tax laws. The Company may advance expenses to be incurred by a Representative, Member or officer upon application therefor and the receipt by the Company of an agreement by the Representative, Member or officer to repay the Company for such advances, if the Representative, Member or officer receiving such advances is found by a court of competent jurisdiction, upon entry of a final judgment, to have violated any of the exceptions to limitation of liability or indemnification contained in Section 7.01, in this Section 7.02 or in the Act, which shall be deemed to preclude indemnification. The Company may also indemnify its employees and other representatives or agents up to the fullest extent permitted under the Act or other applicable law. Any promissory note executed by or in connection with a request for indemnification shall be deemed paid and satisfied in full if it is ultimately determined that such Person is entitled to be indemnified by the Company against such expenses. Notwithstanding the foregoing, except as otherwise specifically approved by the Board, the indemnity provided in this Section will be operative only (i) in the context of third-party suits or claims, and not in connection with demands, claims, suits, actions or proceedings either (A) initiated by any Member, other holder of Units or any Affiliate thereof against another Member, other holder of Units or any Affiliate, or (B) between the Company and a Member, Representative or officer, and (ii) with respect to courses of action or inaction of the party seeking indemnification that did not constitute gross negligence, fraud, willful misconduct, malfeasance, breach of such party’s fiduciary duty, or material breach of any representation, warranty, covenant or agreement set forth in this Agreement.

The indemnification provided by this Agreement shall: (i) be deemed exclusive of any other rights to which a Person seeking indemnification may be entitled under any statute, agreement, vote of Members or disinterested Representatives, or otherwise, both as to action in official capacities and as to action in another capacity while holding such office; (ii) continue as to a Person who ceases to be a Representative, Member or officer; (iii) inure to the benefit of the estate, heirs, executors, administrators, or other successors of an indemnitee; and (iv) not be deemed to create any rights for the benefit of any other Person.

The term “Transfer” when used in this Agreement with respect to a Unit includes a direct or indirect sale (including a change of control), assignment, gift, exchange, or other disposition. Except as otherwise provided in the Act or other applicable law, no Member or other holder of Units shall, subject to Article X, at any time Transfer all or any portion of its Units except with the prior written consent of the Board, provided, that, the Minority Member may Transfer all (but not less than all) of its Units to Public Safety Vehicle Upfitting, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Minority Member (“Public Safety”) so long as (i) Public Safety is a wholly-owned subsidiary of the Minority Member on the date of such Transfer, (ii) Public Safety complies with the other provisions of this Section 8.01 prior to being admitted as Member and (iii) the Brekford Corp. agrees to remain liable for Public Safety’s pro rata portion of additional Capital Contributions required hereunder following the transfer. Any attempted Transfer of Units that does not comply with the provisions of this Section 8.01 shall be void ab initio and shall not be recognized by the Company for any purpose. Unless and until admitted as a substituted Member in accordance with this Section 8.01, the transferee shall not have the rights, powers or privileges of a Member with respect to the Transferred Units, and the transferee shall be entitled only to receive the distributions and allocations of Income, gains, expenses and Losses to which the transferor would be entitled but for the transfer of the Units, subject to all terms and conditions of this Agreement. A transferee of Units may be admitted as a Member of the Company upon the satisfaction of the following conditions: (a) the transferee has executed and delivered all documents reasonably deemed appropriate by the Board to reflect the transferee’s admission to the Company and agreement to be bound by this Agreement; and (b) if requested by the Board, payment has been made to the Company of all reasonable costs and expenses of admitting such transferee as a substituted Member.

Notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution Event as set forth above. None of the termination events set forth in section 18-801 of the Act shall cause the dissolution of the Company. This Section 9.01 is expressly intended to override and replace the provisions of Section 18-801(a)(3) of the Act, to the greatest extent permitted by law.

Upon completion of the distribution of Company assets as provided in this Article IX, the Company is terminated (and shall not be terminated prior to such time), and the Board (or such other Person or Persons as the Act may require or permit) shall file a Certificate of Cancellation with the Secretary of State, cancel any other filings made pursuant to Article II hereof and take such other actions as may be necessary to terminate the Company. The Company shall be deemed to continue in existence for all purposes of this Agreement until it is terminated pursuant to this Section 9.02.

In settling accounts after dissolution of the Company, the assets of the Company shall be paid in the following order and priority:

Distributions upon liquidation of the Company (or any Member’s Interest in the Company) and related adjustments shall be made by the end of the taxable year of the liquidation (or, if later, within ninety (90) days after the date of such liquidation) or at such other time as may be permitted by the Regulations. Notwithstanding anything to this Agreement to the contrary, distributions to holders of Class B Units pursuant to Section 9.03(b) above may be modified by the Board to the extent necessary, in the reasonable discretion of the Board after consultation with the Company’s tax advisors, in order to cause such distributions and permit the Class B Units to comply with the requirements of Section 2.09.

A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets pursuant to Section 9.03 in order to minimize any losses otherwise attendant upon such winding up and liquidation. The Company shall set aside adequate reserves to discharge all costs, expenses, and liabilities theretofore incurred or for which the Company has committed prior to the date of termination so that all distributions in kind to Members and other holders of Units will be free and clear of such costs, expenses, and liabilities. The distribution of cash and/or property to a Member or other holder of Units in accordance with the provisions of Section 9.03 constitutes a complete return to the Members and other holders of Units of their Capital Contributions and a complete distribution to the Members and other holders of Units of and with respect to their Interests. To the extent that a Member or other holder of Units returns funds to the Company, it has no claim against any other Member or other holder of Units for those funds.

A Member or other holder of Units shall not have the right or power to effect a voluntary resignation from the Company or withdraw any amount out of his, her or its Capital Account prior to the dissolution and winding up of the Company pursuant to this Article IX, except as otherwise expressly permitted by this Agreement. Any such unpermitted attempted resignation shall be null and void, and, notwithstanding any provision in the Act, the Company shall not be required to make any payment or distribution in connection with the attempted resignation. This Section 9.05 expressly overrides any rights to distributions or other payments to which a Member or any assignee thereof might otherwise be entitled under the default provisions of section 18-604 of the Act or any other provisions of the Act. Any Member or other holder of Units that attempts to resign in contravention of this Section 9.05 shall indemnify, defend, and hold harmless the Company and all other Members (other than a Member who is, at the time of such resignation, in default under this Agreement) from and against any losses, expenses, judgments, fines, settlements, or damages suffered or incurred by the Company or any such other Member arising out of, or resulting from, such attempted resignation.

Notwithstanding anything to the contrary in this Agreement, upon a liquidation within the meaning of Regulations section 1.704-1(b)(2)(ii)(g), if any Member has a deficit Capital Account balance (after giving effect to all contributions, distributions, allocations, and other Capital Account adjustments for all fiscal years, including the fiscal year in which the liquidation occurs), such Member shall not have any obligation to make any Capital Contribution to the Company, and the negative balance of such Member’s Capital Account shall not be considered a debt owed by such Member to the Company or to any other Person for any purpose whatsoever.

Except as provided by law or as expressly provided in this Agreement, upon dissolution each Member or other holder of Units may look solely to the assets of the Company for the return of any Capital Contribution with respect to his, her, or its Units. If the Company’s property remaining after the payment or discharge of the debts and liabilities of the Company is insufficient to return the Capital Contributions to one or more Members or other holders of Units, such Members or other holders of Units shall not have any recourse against any other Member or Representative except as otherwise provided in Section 7.01.

 

Except as otherwise specifically provided in this Agreement or as required by applicable law (in which case the Board may amend this Agreement to the extent necessary to comply with such law), this Agreement may be amended in whole or in part only upon the written consent of all of the Class A Members; provided, however, that (i) any modifications or amendments that materially increase any Member’s obligations under this Agreement beyond the obligations the Member would have without such amendment, or that are not applicable proportionately to all Members, or that have a material and disproportionate adverse effect on any Member, will not be effective against any adversely affected Member without such Member’s written consent; (ii) any provision requiring the consent of a specified Member, level or group of Members may not be amended to a lesser voting or consent requirement without the consent of the specified Member, level or group of the Members and (iii) any amendment that adversely affects the rights of a Member materially and disproportionately to other Members will require the written consent of such Member.

Each provision of this Agreement is intended to be severable. If any term or provision of this Agreement or the application thereof to any Person or circumstance is held to be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other Persons or circumstances shall not be affected thereby, and the intent of this Agreement shall be enforced to the greatest extent permitted by law.

The substantive laws of the State of Delaware govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

 This Agreement supersedes any and all prior agreements or dealings between the parties hereto and their agents, employees, or officers with respect to the subject matter hereof (except as contained in any other agreements contemplated herein). This Agreement constitutes the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no agreements, understandings, restrictions, representations, or warranties among the parties other than those set forth or provided for herein.

None of the provisions of this Agreement are for the benefit of or may be enforceable by any creditors of the Company or of any of its Affiliates, and no creditor that makes a loan to the Company or any of its Affiliates may have or acquire (except pursuant to the terms of a separate agreement executed by the Company in favor of such creditor) at any time, as a result of making the loan, any direct or indirect interest in Company profits, losses, gains, distributions, capital, or property other than as a secured creditor or unsecured creditor, as the case may be.

Unless the context clearly indicates otherwise, the masculine, feminine, and neuter genders will be deemed to be interchangeable, and the singular includes the plural and vice versa.

No consent or waiver, express or implied, by the Company, any Representative, or any Member to or for any breach or default by the Company, any Representative, or any other Member in the performance by the Company, any Representative, or such other Member of his, her, or its obligations under this Agreement may be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by the Company, any Representative, or such other Member of the same or any other obligations of the Company, the Representative, or such other Member under this Agreement. Failure on the part of the Company, any Representative, or any Member to complain of any act or failure to act of the Company, any Representative, or any of the other Member or to declare the Company, any Representative, or any of the other Members in default, regardless of how long such failure continues, will not constitute a waiver by the Company, a Representative, or such Member of his, her, or its rights hereunder.

Subject to the restrictions on transferability set forth in this Agreement, this Agreement inures to the benefit of and is binding upon the Company, the Members and their successors, and assigns.

Captions are included solely for convenience of reference; if there is any conflict between captions and the text of this Agreement, the text shall control.

This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document. All counterparts are to be construed together and shall constitute one Agreement. This Agreement and any signed agreement or instrument entered into in connection with this Agreement or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile or electronic transmission, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto agrees to, and must, re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument may raise the use of facsimile or electronic transmission to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of facsimile or electronic transmission as a defense to the formation of a contract, and each such party forever waives any such defense.

Notwithstanding anything contained in this Agreement to the contrary, each Member hereby represents and warrants to the Company, the Board, and to each other that: (a) the Units of such Member are acquired for investment purposes only, for the Member’s own account, and not with a view to or in connection with any distribution, reoffer, resale, or other disposition not in compliance with the Securities Act and applicable state securities laws; (b) such Member (i) is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, and/or (ii) either alone or together with the Member’s representatives, possesses such expertise, knowledge, and sophistication in financial and business matters generally, and in the type of transactions in which the Company proposes to engage in particular, that the Member is capable of evaluating the merits and economic risks of acquiring and holding the Units and is able to bear all such economic risks now and in the future; (c) such Member has had access to all of the information with respect to the Units acquired by the Member under this Agreement that the Member deems necessary to make a complete evaluation thereof and has had the opportunity to question the other Members and the Company concerning such Units; (d) such Member’s decision to acquire the Units for investment has been based solely upon the evaluation made by the Member; (e) such Member is aware that the Member must bear the economic risk of an investment in the Company for an indefinite period of time because Units in the Company have not been registered under the Securities Act or under the securities laws of the various states and, therefore, cannot be sold unless such Units are subsequently registered under the Securities Act and any applicable state securities laws or an exemption from registration is available; (f) such Member is aware that only the Company may take action to register Units and that the Company is under no such obligation and does not propose to attempt to do so; (g) such Member is aware that this Agreement provides restrictions on the ability of a Member to sell, Transfer, assign, mortgage, hypothecate, or otherwise encumber the Member’s Units; (h) such Member agrees that the Member will truthfully and completely answer all questions and make all covenants that the Company or the Board may, contemporaneously or hereafter, ask or demand for the purpose of establishing compliance with the Securities Act and applicable state securities laws; and (i) if that Member is an Entity, it is duly organized, validly existing, and in good standing under the laws of its state of organization, and it has full organizational power and authority to execute and agree to this Agreement and to perform its obligations hereunder.

This Agreement was prepared by Wyrick, Robbins, Yates & Ponton LLP, (the “Firm”), which is counsel for the Majority Member. Each Member acknowledges that the Firm was counsel solely to the Majority Member, and not to any other Member, and that each other Member had the opportunity to consult his, her, or its own counsel prior to signing this Agreement. Each Member acknowledges and agrees that the Firm representing the Majority Member does not represent and will not be deemed under the applicable codes of professional responsibility to have represented or to be representing any or all of the Member, other than the Majority Member, in any respect.

IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Amended and Restated Limited Liability Company Agreement of Global Public Safety, LLC as of the date first above written; do hereby agree that any of the initial Representatives identified in Section 5.02 above is hereby authorized to execute and deliver this Agreement on behalf of the Company; and do hereby assume and agree to be bound by and to perform all of the terms and provisions set forth in this Agreement.

COMPANY:   GLOBAL PUBLIC SAFETY, LLC   By: /s/ Rodney W. Hillman Name: Rodney W. Hillman Title: President                        MEMBERS:     LB&B ASSOCIATES INC.   By: /s/ Frederick Franz                                  Name: Frederick Franz                        Title: Executive Senior Vice President   BREKFORD CORP.   By: /s/ Rodney W. Hillman Name: Rodney W. Hillman Title: President and COO

By attaching his or her signature hereto, the undersigned does hereby consent and agree to serve as a Representative of Global Public Safety, LLC pursuant to the Amended and Restated Limited Liability Company Agreement of Global Public Safety, LLC, as such Amended and Restated Limited Liability Company Agreement may be hereafter amended, until such time as the undersigned's death (if a human being), dissolution and liquidation (if an Entity), removal, resignation, or successor(s) have been duly elected and qualified to serve.

This consent shall be effective as of the ____ day of ___________ 2017.

Name:     _________________ Address:  _________________                 _________________                 _________________

The provisions of this Exhibit C shall apply to the Company and its Members at all times during which the Company is treated as a partnership for federal tax purposes.

Section C.1          Definitions. The following defined terms used in this Exhibit C have the meanings specified below.

Unless otherwise defined, other terms with initial capital letters used in this Exhibit C have the same meaning as ascribed to them in the main text of the Amended and Restated Limited Liability Company Agreement of the Company, as such agreement may be further amended or restated from time to time in accordance with the provisions thereof (the “Agreement”). This Exhibit C shall be treated for all purposes as being fully a part of, and incorporated within, the Agreement, as if the provisions of this Exhibit C were set forth in the main text of the Agreement.

Section C.2                                 Special Allocations. The following special allocations shall be made in the following order:

Section C.3           Curative Allocations. The allocations set forth in Section C.2 hereof (the “Regulatory Allocations”) are intended to comply with certain requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section C.3. Therefore, notwithstanding any other provision of this Exhibit C (other than the Regulatory Allocations), such offsetting special allocations of Company income, gain, loss, or deduction shall be made in whatever manner the Board determines appropriate (based on the advice of the Company’s tax advisors) so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to other Sections of the Agreement. In exercising its discretion under this Section, the Board shall take into account future Regulatory Allocations that, although not yet made, are likely to be made and offset other prior Regulatory Allocations.

Section C.4           Compliance with Regulations. It is the intent of the Members that, to the greatest extent possible, the allocations of all items of income, gain, loss, deduction, and credit under this Agreement (i) have “substantial economic effect” within the meaning of, or otherwise be in accordance with, Code section 704(b) and the Regulations promulgated thereunder, and/or (ii) be consistent with the Members’ interests in the Company. Accordingly, to the extent adjustment to the allocations under this Agreement is necessary in order to be in compliance with the provisions of Code section 704(b) and the Regulations thereunder, such necessary adjustments in the allocations shall be made, but only to the smallest extent necessary. Furthermore, if there has been any adjustment in the allocations to the Members on account of the preceding sentence, subsequent allocations of income, gain, loss, deduction, or credit shall, to the extent possible, be allocated to the Members in the order and in a manner designed to result in each Member’s having a Capital Account balance equal to what such balance would have been had the allocation(s) pursuant to the preceding sentence not occurred, and in a manner that is likely to minimize any economic distortions that otherwise might result.