Blueprint





 







Exhibit 10.1



PROMISSORY NOTE


 


	
 $2,000,000

	
 April 3,
2018







 


FOR
VALUE RECEIVED, BREKFORD TRAFFIC SAFETY, INC. (“BTS”),
a Delaware corporation, and NOVUME SOLUTIONS, INC.
(“Novume”), a Delaware corporation, (collectively
"Borrower"), promise to pay to CEDARVIEW OPPORTUNITIES MASTER FUND,
LP, a Delaware limited partnership ("Payee" or
“Lender”), in lawful money of the United States of
America, the principal sum of Two Million ($2,000,000) Dollars
(“Loan”), in the manner provided below.


 


SECTION
1. PAYMENTS


 


1.1
PRINCIPAL AND INTEREST


 


The
principal sum of Two Million ($2,000,000) Dollars, shall be due and
payable on May 1, 2019 (the “Maturity Date”) or upon an
Event of Default, both principal and interest payable in lawful
money of the United States of America at the offices of Payee at
the address listed below or such other address as Payee shall
designate in writing. Interest from the date hereof at the rate of
fifteen (15%) percent per annum shall be calculated and payable to
Payee in full the first day of each month from the date of this
Note through the Maturity Date. Borrower shall in all events pay to
Lender one full year’s interest. Lender shall be paid all
interest through the Maturity Date regardless of any prepayment by
Borrower of principal of this Loan.


 


1.2
MANNER OF PAYMENT


 


Payment
on this Note shall be made by certified or bank cashier's check or
by wire transfer of immediately available funds to an account
designated by Payee in writing. If any payment of principal, or
interest on this Note is due on a day which is not a Business Day,
such payment shall be due on the next succeeding Business Day, and
such extension of time shall be taken into account in calculating
the amount of interest payable under this Note. "Business Day"
means any day other than a Saturday, Sunday or legal holiday in the
State of New York.


 


SECTION
2. TRANSFER OF SHARES


 


In
consideration for making the Loan, Novume shall be obligated to
issue to Lender upon execution of this Note Thirty Five (35,000)
Thousand shares of restricted Novume stock with full registration
rights (the “Lender’s Shares”), subject to
approval of listing of additional shares by the Nasdaq Stock
Market. Novume agrees to include the Lender’s Shares on the
next registration statement filed with the Securities and Exchange
Commission with respect to shares to be sold by selling
stockholders (the “Selling Stockholder Registration
Statement”). In the event Novume does not include the
Lender’s Shares on the Selling Stockholder Registration
Statement, Novume shall be required to issue an additional 15,000
shares of Novume common stock to the Lender. Upon request of the
Lender at any time after six months from the date of this Note,
Novume shall cause its counsel to issue a legal opinion to permit
the sale of the Lender’s Shares in accordance with Rule 144
under the Securities Act of 1933, assuming satisfaction of all
requirements of such rule.


 


SECTION
3. ASSET SALE PARTICIPATION


 


3.1 In
the event the capital stock or the business and assets of BTS is
sold, either in whole or in part in the discretion of the Borrower
(the “Asset Sale”), the Lender shall participate in and
receive from the Asset Sale, in cash, an amount equal to seven (7)
percent of all consideration received by Borrower in excess of Five
Million ($5,000,000) Dollars from the proceeds or other
consideration received in connection with any Asset Sale,
regardless of whether each occurs prior or subsequent to the
Maturity Date (“Lender’s Participation”). In the
event the business and assets of BTS are sold or transferred in the
course of more than one Asset Sale, Lender shall receive a cash
payment(s) equal to a participation of seven (7) percent of the
cash value of the cumulative value in excess of Five Million
($5,000,000) Dollars of all such Asset Sales in the aggregate as
its Lender’s Participation. Borrower shall pay to Lender its
Lender’s Participation within thirty (30) days of the close
of each Asset Sale. In addition, commencing January 1, 2020,
Cedarview shall receive, on a quarterly basis, seven percent of
BTS’ cash flow, defined as “EBITDA less capital
expenditure less taxes”, and the distributions made to
Cedarview under this formula shall be credited against any payments
that might ultimately be paid to Cedarview as its Lender’s
Participation.


 


3.2 In
the event that a minority stake of BTS is sold at an implied
valuation that exceeds $5,000,000, the proceeds shall be applied as
follows: first, to pay all outstanding principal and interest of
this Loan and, second, to make a participation payment equal to the
difference between the implied value of the transaction and
$5,000,000 multiplied by the 7 percent Lender’s Participation
and further multiplied by the percentage of the assets as a whole
that are being sold. As an example – if 30 percent of BTS is
sold to a partner for $3,000,000, which gives the business as a
whole an implied $10,000,000 valuation, then Lender will receive
(i) the $2,000,000 of the outstanding principal it is owed, plus
interest, plus a payment of $105,000, which is $10,000,000, less
$5,000,000, X 7 percent, X 30 percent.



 

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SECTION
4. CREATION OF A SECURITY INTEREST


 


4.1 Security
Interest. BTS hereby grants to Lender to secure the payment
and performance in full of all of the obligations under this Note,
a continuing security interest in, and pledges to Lender, all of
BTS’s right, title and interest in, to and under all the
assets of BTS wherever located (the “Collateral”),
whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Borrower represents, warrants and
covenants that the security interest granted herein is and shall at
all times be a first priority perfected security interest in the
Collateral.


 


4.2 Authorization
to File Financing Statements. Borrower hereby authorizes
Lender to file financing statements, or any document similar
thereto including collateral agreements, without notice to
Borrower, with all appropriate jurisdictions to perfect or protect
Lender’s interest or rights hereunder. Such financing
statements may indicate the collateral as “all assets of the
Debtor (such Debtor being BTS)” or words of similar effect,
all in Lender’s discretion and in accordance with the
requirements of the Uniform Commercial Code (the
“Code”).


 


SECTION 5.
REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby
represents and warrants to Lender as of the date hereof as
follows:


 


5.1 Binding
Agreement. The Agreement and the other Loan Documents
constitute and will constitute, when issued and delivered valid and
binding obligations of Borrower, enforceable in accordance with
their respective terms.


 

 


5.2 Organization,
Power, Authorization. Each of the Borrowers is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of the Borrowers has the
requisite power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated
thereby.


 


5.3 Non-Contravention.
Neither the execution and the delivery of this Agreement and the
Loan Documents, nor the consummation of the transactions
contemplated hereby will (a) violate any injunction, order, decree,
ruling, charge or any provision of Borrower’s charter
documents or, any restriction of any government, governmental
agency, or court to which Borrower is subject, or (b) conflict
with, result in a material breach of , constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate , or cancel, any material agreement,
contract, lease, license, instrument, or other agreement to which
Borrower is a party or by which it is bound or to which any of its
assets are subject.


 


5.4 Collateral.
BTS has good title to, has rights in, and the power to transfer
each item of the Collateral upon which it purports to grant a Lien
hereunder, free and clear of any and all liens. The security
interests and Liens granted to Lender under this Agreement and the
other Loan Documents to which BTS is a party constitute valid and
perfected first priority liens and security interests in and upon
the Collateral to which BTS now has or hereafter acquires
rights.


 


SECTION
6. COVENANTS.


 


6.1
Encumbrances. BTS
shall not create, incur, allow, or suffer any Lien on any
Collateral, convey or permit any Collateral not to be subject to
the first priority security interest granted herein.


 


6.2
Reports. Borrower
shall provide Lender on a timely basis all quarterly financials of
BTS.


 


6.3
Further
Assurances.  Borrower shall execute any further
instruments and take further action as Lender reasonably requests
to perfect or continue Lender’s security interest in the
Collateral or to otherwise affect the purposes of this
Agreement.


 


SECTION
7. REPRESENTATIONS AND WARRANTIES OF LENDER.


 


7.1
Organization; Power;
Authorization.  Lender is limited partnership,
duly organized and in good standing under the laws of the State of
Delaware.  Lender has full power and authority to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.  


 


SECTION
8. EVENTS OF DEFAULT; REMEDIES UPON DEFAULT.


 


8.1
Events of
Default.  The occurrence of any of the following
events shall constitute an event of default (each, an
“Event of
Default”) hereunder:


 


(a)
Borrower fails to pay timely any interest payment within ten (10)
days when due hereunder, the principal and Lender’s
Partcipation, and any other amounts due under the Loan Documents
within ten (10) of when the same becomes due and
payable;


 


(b)
Borrower (A) files any petition or action for relief under any
bankruptcy, reorganization, insolvency or moratorium law, or any
other law for the relief of, or relating to, debtors, now or
hereafter in effect; (B) applies for or consents to the
appointment of a custodian, receiver, trustee, sequestrator,
conservator or similar official for Borrower or for a substantial
part of Borrower’s assets; (C) makes a general
assignment for the benefit of creditors; (D) becomes unable
to, or admits in writing its inability to, pay its debts generally
as they come due; or (E)  takes any corporate action in
furtherance of any of the foregoing;



 

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(c) An
involuntary petition is filed against Borrower (unless such
petition is dismissed or discharged within sixty (60) days) under
any bankruptcy statute now or hereafter in effect, or a custodian,
receiver, trustee, sequestrator, conservator, assignee for the
benefit of creditors (or other similar official) is appointed to
take possession, custody or control of any property of
Borrower;


 


(d) One
or more judgments for the payment of money in an amount,
individually or in the aggregate,  that could reasonably
be expected to have a material adverse effect on Borrower’s
business or operations (not covered by independent third-party
insurance as to which liability has been accepted by such insurance
carrier) are entered by a court of competent jurisdiction against
Borrower which judgment remains undischarged, unsatisfied,
unvacated or unstayed for a period of twenty (20) days after
such judgment becomes final and non-appealable;


 


(e)
Borrower breaches any representation, warranty or covenant set
forth herein, or any representation, warranty or other statement
made by Borrower in the Loan Documents, or any other agreement or
other document delivered in connection with any of the Loan
Documents, including without limitation Sections 2 and 3 herein,
which shall prove to have been false or misleading in any material
respect;



 


(f)
After the date hereof, Borrower grants any Person, other than
Lender, any Lien or other encumbrance on the Collateral or on all
or any substantial part of its assets, except for mechanic’s
liens and any such other liens which individually or in the
aggregate are not material. 



 


SECTION
9. Remedies Upon
Default. Upon the occurrence of an Event of Default
hereunder:


 


9.1 All
unpaid principal, unpaid interest, Lender’s Participation and
other amounts owing hereunder shall, at the option of Lender, be
immediately due and payable by Borrower.


 


9.2 Lender
shall have the right to exercise all the remedies of a secured
party under the Code, including without limitation the right to
require BTS to assemble the Collateral and to make it available
to Lender at a place designated by Lender. Borrower will pay
any reasonable expenses (including reasonable attorneys’
fees) incurred by Lender in connection with the exercise of any of
Lender’s rights hereunder, including without limitation any
expense incurred in disposing of the Collateral; and


 


9.3 Lender
may proceed to protect and enforce its right by suit in the
specific performance of any covenant or agreement contained in the
Loan Documents or in aid of the exercise of any power granted in
the Loan Documents or may proceed to enforce the payment of the
Loan Documents or to enforce any other legal or equitable rights as
Lender may have, including exercising any right or remedies
available to Lender under the Loan Documents and under the Code
(including disposal of the Collateral pursuant to the terms
thereof).


 


9.4 Any
and all amounts (including principal, interest, Lender’s
Participation and other amounts due and all reasonable costs and
expenses of collection, including reasonable attorneys’ fees)
outstanding hereunder after an Event of Default shall bear Default
Interest from the date due until paid at the rate of eighteen
percent (18%) per annum.


 


9.5 If
an Event of Default has occurred and is continuing, Borrower shall
have no right to specify the order or the accounts to which Lender
shall allocate or apply any payments required to be made by
Borrower to Lender or otherwise received by Lender under this
Agreement when any such allocation or application is not specified
elsewhere in this Agreement.  If an Event of Default has
occurred and is continuing, Lender may apply any funds in its
possession, whether from Borrower account balances, payments,
proceeds realized as the result of any collection of accounts or
other disposition of the Collateral, or otherwise, to the
obligations in such order as Lender shall determine in its sole
discretion.  


 


9.6 Lender’s
Liability for the Collateral.  So long as Lender complies
with reasonable practices regarding the safekeeping of the
Collateral in the possession or under the control of Lender
customary for Persons in possession or having control of items
similar to the Collateral, Lender shall not be liable or
responsible for: (i) any loss or damage to the Collateral; (ii) any
diminution in the value of the Collateral; or (iii) any act or
default of any carrier, warehouseman, bailee, or other Person.
Borrower bears all risk of loss, damage or destruction of the
Collateral.


 


SECTION
10. MISCELLANEOUS.


 


10.1 Governing
Law/Jurisdiction/Waiver. The interpretation and enforcement
of this Agreement and the Loan Documents shall be governed in all
respects by the laws of the State of New York, without giving
effect to conflict of laws principles thereof. Disputes arising out
of this Note or the performance thereof and/or any other agreement
made herewith including the Security Agreement shall be governed by
such laws and each party hereto irrevocably and unconditionally
submits to the exclusive jurisdiction of any federal or state court
sitting in the County of New York in the State of New York and
irrevocably agrees that all actions or proceedings arising out of
or relating to this Agreement shall be litigated exclusively in
such court.


 


10.2 EACH
OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREUNDER. The parties hereby submit to the exclusive
jurisdiction of the courts of the State of New York located in New
York County and the Federal courts located in the Southern District
of New York, with respect to any action or legal proceeding
commenced by either party with respect to this Agreement. Each
party irrevocably waives any objection it now has or hereafter may
have respecting the jurisdiction or venue of any such action or
proceeding or the inconvenience of such forum, and each party
consents to the service of process in any such action or proceeding
by overnight delivery only to the parties listed in Section 10.5
herein. Each party agrees that in any such action, the prevailing
party shall be entitled to its reasonable attorney’s
fees.



 

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10.3 Amendment
and Waiver. The provisions of this Agreement may be amended,
modified, or waived only with the prior written consent of the
parties hereto. No course of dealing or the failure of any party to
enforce any of the provisions of this Agreement shall in any way
operate as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision
of this Agreement in accordance with its terms.


 


10.4 Entire
Agreement. This Agreement including all Loan Documents
constitute the full and complete understanding of the parties, and
supersedes and terminates all other prior agreements and writings
between the parties hereto only with respect to their subject
matter.


 



10.5 Notices.
All notices, requests, claims, demands and other communications
between the parties shall be in writing. All such notices shall be
given either (i) by delivery in person (ii) by nationally
recognized next day courier service, or (iii) by electronic mail to
the address of the party specified in this agreement or such other
address as any party may specify in writing. All notices shall be
effective upon the earlier of (i) the day of delivery in person or
the day of delivery in the case of delivery by courier or (ii) on
the date any electronic mailing.


 


 


	
 

	

If to
the Lender:

	


CEDARVIEW OPPORTUNITIES MASTER FUND L.P.


	
 

	
 

	


One Penn Plaza, 45th Floor


	
 

	
 

	


New York, NY 10119


	
 

	
 

	


Email : Bweinstein@cedarviewcapital.com


	
 

	
 

	
 


	
 

	

with a
copy to:

	


LAW OFFICE OF MARK R. KOOK


	
 

	
 

	

270
Madison Avenue, Suite 1203


	
 

	
 

	

New
York, New York 10016


	
 

	
 

	

Email:
Mkook@kooklaw.com


	
 

	
 

	
 


	
 

	

If to
the Borrower:

	


NOVUME SOLUTIONS, INC.


	
 

	
 

	


BREKFORD TRAFFIC SAFETY, INC.


	
 

	
 

	

14420
Albemarle Point Place, Suite 200


	
 

	
 

	

Chantilly,
VA 20151


	
 

	
 

	

Tel:
(703) 953-3838


	
 

	
 

	

Attn:
Suzanne R. Loughlin


	
 

	
 

	

EVP,
General Counsel


	
 

	
 

	
 


	
 

	

with a
copy to:

	

SICHENZIA
ROSS FERENCE KESNER LLP


	
 

	
 

	

1185
Avenue of the Americas


	
 

	
 

	

New
York, NY 1003


	
 

	
 

	

Attn:
Thomas A. Rose, Esq.


	
 

	
 

	

Tel:
(212) 930-9700


	
 

	
 

	

Email:
trose@srfkllp.com







 


10.6 Severability.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to
be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Agreement
in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this
Agreement shall be reformed, construed and enforced in such
jurisdiction as if such valid, illegal or unenforceable provision
had never been contained herein.


 


10.7 Counterparts.
This Agreement may be executed in counterparts (including by means
of facsimile or electronic delivery), each of which shall be deemed
to be an original but all of which together shall constitute one
agreement. Fax and .pdf copies of signatures shall be treated as
originals for all purposes.


 


10.8 Representation
by Counsel. Each party agrees that it has had full
opportunity to have this Agreement and the Loan Documents reviewed
by its own counsel, and has not relied on the advice of the other
party's counsel.


 


10.9
 Usury.
In no event shall the amount of interest due or payable hereunder
exceed the maximum amount of interest allowed by applicable law. In
the event the interest provided for hereunder exceeds the maximum
lawful amount, then the interest rate provided herein shall be
deemed modified to the maximum lawful amount, and in the event any
payment is made which exceeds such maximum lawful amount, then the
amount of such excess sum shall be credited as a payment of
principal. It is the express intent hereof that Borrower shall not
pay and Lender shall not receive, directly or indirectly, interest
in excess of what may lawfully be paid by Borrower under applicable
law.


 


[Signature
page follows.]


 




 

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IN
WITNESS WHEREOF, the parties hereto have executed this Secured Loan
and Security Agreement as of the date first above
written.


 


 


	


BORROWER:

	
 

	


LENDER:


	
 

	
 

	
 


	


BREKFORD TRAFFIC SAFETY, INC.

	
 

	


CEDARVIEW OPPORTUNITIES MASTER FUND L.P.


	
 

	
 

	
 


	

By: /s/
Robert A. Berman

	
 

	

By: /s/
Burton Weinstein


	

Name:
Robert A. Berman

	
 

	

Name:
Burton Weinstein


	

Title:
Authorized Signatory

	
 

	

Title:
Managing Partner


	
 

	
 

	
 







 


	
 

	
 

	
 


	


NOVUME SOLUTIONS, INC.

	
 

	
 


	
 

	
 

	
 


	

By: /s/
Robert A. Berman

	
 

	
 


	

Name:
Robert A. Berman

	
 

	
 


	

Title:
Chief Executive Officer

	
 

	
 







 




 

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