Document:

SEPARATION AGREEMENT AND

FULL AND FINAL WAIVER, RELEASE AND DISMISSAL OF ALL CLAIMS

This Separation Agreement and Full and Final Waiver, Release and Dismissal of All Claims ("Agreement") is entered into by and among Jason W. Ross (the "Executive"), Standard AVB Financial Corp. (the "Company") and Standard Bank, PaSB (the "Bank") on April 6, 2018.  For purposes of this Agreement, the term "Company" and "Bank" shall also include the Company's and Bank's successors, and all of their respective parent companies, subsidiaries, affiliates, officers, directors, employees and agents.

WHEREAS, Executive is employed as Executive Vice President and Chief Business Development Officer of the Company and the Bank; and

WHEREAS, Executive, Company, as successor to Allegheny Valley Bancorp, Inc., and Bank, as successor to Allegheny Valley Bank, are parties to a change in control agreement dated May 19, 2008, amended as of August 29, 2016 (the "Change in Control Agreement"); and

WHEREAS, Executive wishes to resign from his employment with the Company and Bank.

NOW, THEREFORE, in consideration of the mutual covenants and other good and valuable consideration described herein, the parties agree as follows:

1. Resignation.  Executive hereby resigns from his employment with the Company and Bank as of April 6, 2018 (the "Date of Resignation") under the terms and conditions of this Agreement.  Commencing on the Date of Resignation, and except as expressly provided in this Agreement, Executive shall not accrue any further compensation or benefits of any kind beyond the Date of Resignation, including any wages, bonuses, profit sharing, incentive, retirement or salary payments, as well as any compensation for vacation, holiday, sick or personal days, but shall receive all such compensation and benefits accrued through the Date of Resignation.

2. Consideration.  In full and complete satisfaction of the cash severance otherwise payable under the Change in Control Agreement and in consideration of Executive's resignation and full and final waiver, release and dismissal of all claims, and his other agreements and promises herein, the Company, Bank and Executive agree to the following:

(a) Severance Pay.  The Bank will pay Executive a lump sum severance payment in the amount of $510,000.00 (the "Severance Pay").  The payment will be made on the Bank's next regularly scheduled payroll date following the expiration of the seven (7) day revocation period as described in Section 10 of this Agreement (the "Expiration Date"); and for purposes of clarity, no payments or benefits will be made under Section 2(a) if the Executive revokes this Agreement prior to the Expiration Date.  Applicable withholding taxes shall be deducted from the Severance Pay and the Severance Pay shall be reported on a Form W-2.  Executive, Company and Bank acknowledge that the Severance Pay is not related to the merger of Allegheny Valley Bancorp, Inc. with and into the Company.

3. Mutual Release and Waiver.

(a) Executive, on behalf of himself, his executors, heirs, administrators, assigns and anyone else claiming by, through or under him, hereby waives, releases, covenants not to sue, and forever discharges the Company, Bank, and their respective Affiliates, successors, and present and former officers, directors, agents, employees, attorneys, and representatives ("Bank Releasees") from and with respect to any and all debts, demands, actions, causes of action, suits, covenants, contracts, agreements, promises, torts, damages, claims, and liabilities whatsoever of any name and nature, both in law and/or in equity (hereinafter "Claims") which he or they now has, ever had or may in the future have against each or any of the Bank Releasees by reason of any matter, cause or thing whatsoever from the beginning of time to the date of the signing of this Agreement, including, but not limited to, any Claims arising out of, based upon or connected with Executive's employment with the Bank and Company, the compensation and working conditions for that employment, and/or the termination of that employment.  This necessarily includes but is not limited to any Claims that might exist under federal, state, and/or local laws, including, but not limited to, any Claims based on race, national origin, ethnicity, handicap, color, age, sex, sexual preference, military status, genetic status or information, other protected status, retaliation, or anything else.  The waiver and release includes, but is not limited to, any claims Executive may have or have had based on promises, contracts, common law, laws regarding unfair or bad faith conduct and wrongful discharge, and state and federal statutory protections against discrimination in employment, specifically including, among all the others and without limitation, any rights or claims that Executive may have under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act (29 U.S.C. § 621 et seq.), which prohibits age discrimination in employment; Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, national origin, religion or sex; the Americans with Disabilities Act, which prohibits discrimination against qualified individuals with disabilities; the Family and Medical Leave Act, which provides for leave of absence under certain specified circumstances; and all other statutes, rules, and common law, and all other theories of recovery.  This waiver and release thus applies to all claims of any nature that may now exist, whether or not now known to the undersigned; provided, however, that this release does not apply to any claims Executive may have under any tax-qualified retirement plan of the Bank in which Executive is or was a participant.

(b) Executive agrees that amounts to be paid to him under this Agreement are in addition to of anything presently owed to him, and that he has no pending or known claims against the Bank or the Company.  Executive also agrees that he will not bring any federal or state lawsuit, or file any administrative or other claims, against the Company or Bank, or any other party based on his employment or the termination of his employment, except that nothing in this Agreement is intended to prevent the undersigned from filing a claim for unemployment compensation, or from exercising any right that cannot be waived by law, including the right to file a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC").  If Executive does file a charge of discrimination or retaliation, however, he agrees that he will not seek or accept reinstatement, attorney's fees, or any amount of monetary damages in connection with such charge.  Notwithstanding anything in this Agreement to the contrary, nothing contained in this Agreement limits Executive's ability to file a charge or complaint with the Securities and Exchange Commission ("SEC") and this Agreement does not limit Executive's right to receive an award for information provided to the SEC.

(c) Company, Bank and their respective Affiliates, on their behalf and on behalf of their respective, predecessors, successors, assigns and present and former officers, directors, agents, employees, attorneys, representatives, and anyone else claiming by, through or under any of them, hereby release, waive, covenant not to sue and forever discharge the Executive and his executors, heirs, administrators, successors and assigns ("Executive Releasees") from and with respect to any and all debts, demands, actions, causes of action, suits, covenants, contracts, agreements, promises, torts, damages, claims, and liabilities whatsoever of any name and nature, both in law and/or in equity (hereinafter "Claims") which he or they now has, ever had or may in the future have against each or any of the Executive Releasees or the Executive by reason of any matter, cause or thing whatsoever from the beginning of time to the date of the signing of this Agreement, including, but not limited to, any Claims arising out of, based upon or connected with Executive's employment with the Bank and Company.  This waiver and release thus applies to all claims of any nature that may now exist, whether or not now known to Company, Bank the Executive.

 

(d) Executive agrees not to institute, nor has Executive instituted, a lawsuit against the Bank or Company and their respective directors, officers, employees and agents, affiliates, subsidiaries, and the heirs, successors and assigns of all of them, based on any waived claims or rights to the extent set forth above.  The Company and Bank also agree not to institute, nor has the Company or Bank instituted, a lawsuit against the Executive based on any waived claims or rights to the extent set forth above.  Nothing in this paragraph shall prevent the Company, Bank or Executive from enforcing the terms of this Agreement.

 

(e) Executive agrees that the Severance Pay is in full and complete satisfaction of any amounts payable under the Change in Control Agreement and that Executive is not entitled to any additional amounts, except compensation and benefits accrued through the Date of Resignation.

(f) EXECUTIVE ACKNOWLEDGES AND AGREES THAT THIS RELEASE IS A FULL AND FINAL BAR TO ANY AND ALL CLAIM(S) OF ANY TYPE THAT EXECUTIVE MAY NOW HAVE AGAINST THE COMPANY, BANK OR ANY AFFILIATE OF THE BANK AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AFFILIATES, SUBSIDIARIES, AND THE HEIRS, SUCCESSORS AND ASSIGNS, TO THE EXTENT PROVIDED ABOVE, BUT THAT IT DOES NOT RELEASE ANY CLAIMS THAT MAY ARISE AFTER THE DATE OF THIS AGREEMENT.   COMPANY AND BANK ACKNOWLEDGE AND AGREE THAT THIS RELEASE IS A FULL AND FINAL BAR TO ANY AND ALL CLAIM(S) OF ANY TYPE THAT COMPANY OR BANK MAY NOW HAVE AGAINST EXECUTIVE AND EXECUTIVE'S HEIRS, SUCCESSORS AND ASSIGNS, TO THE EXTENT PROVIDED ABOVE, BUT THAT IT DOES NOT RELEASE ANY CLAIMS THAT MAY ARISE AFTER THE DATE OF THIS AGREEMENT.

4. References.  The parties agree that, if requested, the Company and Bank will only confirm the Executive's dates of employment and positions held with the Company and Bank and their respective predecessors.  The parties hereby agree that the release of said references does not violate the terms of any confidentiality provision, or any other provision, contained in this Agreement, and that no further information will be provided.

5. Return of Materials.  Executive will promptly return to the Bank or the Company all equipment (except the iPhone, provided Executive deletes Company's and Bank's proprietary information), documents and other materials in Executive's possession that are the property of the Bank or the Company, whether created by Executive or by others, and including the originals and all copies thereof, whether electronic, paper or any other form, without maintaining any copies thereof whether electronic, paper or any other form.

6. Confidentiality.  Executive acknowledges that Executive has had access to trade secrets and other confidential information regarding the Bank and their businesses that are unique and irreplaceable and that the use of such trade secrets and other confidential information by a competitor, or certain other persons, would cause irreparable harm to the Bank.  Accordingly, Executive will not disclose or use to the detriment of the Bank any such trade secrets or other confidential information.  Confidential information includes any information, whether or not reduced to written or other tangible form, which is defined as confidential under the Company's or Bank's confidentiality policies or (i) is not generally known to the public or within the industry; (ii) has been treated by the Company or the Bank as confidential or proprietary; and (iii) is of competitive advantage to the Company or the Bank.

7. Mutual Non-Disparagement.  Executive covenants that, except to the extent required by law, Executive will not make to any person or entity any statement, whether written or oral, that directly or indirectly impugns the integrity of, or reflects negatively on the Company, the Bank or any of their employees, officers or directors, or that denigrates, disparages or results in detriment to the Company or the Bank.  The Company and Bank covenant that, except to the extent required by law, they and their boards of directors and management will not make to any person or entity any statement, whether written or oral, that directly or indirectly impugns the integrity of, or reflects negatively on Executive.  This section does not prohibit any truthful statement made to any government agency, or as part of a judicial process brought by the disclosing party.

8. Post-Employment Obligations.  Executive agrees that for a period of one (1) year from the Date of Resignation: (i) he shall not hire or attempt to hire any employee of the Company, Bank or any affiliate of the Bank, and (ii)  Executive will not, directly or indirectly, on his own behalf or on behalf of any third person or entity, and whether through his own efforts or through the efforts or assistance of any other person or entity (including, without limitation, any person employed by or associated with any entity with whom Executive is or may become employed or associated): (1) solicit, directly or indirectly, any banking, lending, wealth management investment, or similar services being provided by Company or Bank to an individual or entity that was a client or customer of Company or Bank at any time during the twelve (12) months immediately prior to the Date of Resignation, or (2) participate in hiring, hire or employ an employee of the Company or Bank, or solicit, encourage or induce any such employee or consultant to terminate his or her employment or other relationship with the Company or Bank.

9. Acceptance of Agreement.

(a) Executive acknowledges that Executive has been advised by the Bank and the Company that Executive has at least 21 calendar days from the date Executive receives this Agreement (the "Acceptance Period") to consider whether or not to accept this Agreement and seek counsel to advise Executive about signing this Agreement.  This Agreement was provided to Executive on April 6, 2018.  Any modifications or changes to this Agreement agreed upon by the parties will not restart or affect Executive's 21-day review period.  This Agreement will not become effective or enforceable until the cancellation period described in Section 10 below has expired without Executive cancelling this Agreement.

(b) Executive acknowledges that, before signing this Agreement, Executive was advised by the Bank and the Company to consult with an attorney.  Executive agrees that Executive had an adequate opportunity to review this Agreement with persons of Executive's choice, including Executive's attorney, that Executive fully understands the terms of this Agreement, and that Executive has signed it knowingly and voluntarily.

10. Cancellation of Agreement. Executive has the right to cancel this Agreement at any time within the seven calendar (7) day period immediately following Executive's acceptance of the Agreement.  If Executive decides to cancel this Agreement, Executive must do so by mailing notice of cancellation, by certified mail, return receipt requested, postmarked within the seven calendar (7) day cancellation period to Timothy K. Zimmerman, Chief Executive Officer, Standard Bank, PaSB, 2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146. This Agreement will not be effective until the 8th calendar day after Executive signs and does not cancel Agreement.

11. No Admission of Liability.  This Agreement is not an admission by any party of any liability to the other party.

12. Governing Law and Jurisdiction.  This Agreement shall be governed and conformed in accordance with the laws of the Commonwealth of Pennsylvania without regard to its conflict of laws provision.

13. Savings Clause.  If any provision of this Agreement is determined to by void or unenforceable, the remaining provisions of this Agreement will remain in full force and effect.

14. Entire Agreement.  This Agreement represents the entire understanding of Executive, the Bank and the Company with respect to the subject matter hereof and supersedes all prior agreements and understandings, written or oral.

15. Counterparts. This Agreement may be signed in counterparts, and all of the counterpart copies shall be treated as a single agreement.

16. Assignment; Modification of Agreement.  This Agreement will inure to the benefit of the Bank and the Company and any successors and assigns.  Executive may not assign Executive's rights, duties or obligations under this Agreement.  None of the terms of this Agreement may be changed or modified except in a writing signed by both Executive and the Bank and the Company. Any such agreed upon change or modification to this Agreement will not restart or otherwise affect the original 21 calendar day consideration period referred to in Section 9 above.

17. Representation. Company and Bank hereby represent the Severance Pay will not result in additional taxes, penalties, interest, costs or expenses to the Executive under Section 280G of the Internal Revenue Code of 1986, as amended, and in the event that a claim is made for additional taxes, penalties, interest, costs or expenses to the Executive under Section 280G of the Internal Revenue Code of 1986, as amended, Company and Bank, jointly and severally, at their sole cost and expense, shall defend, indemnify and hold Executive harmless from any such additional taxes, penalties, interest, costs or expenses.

PLEASE INDICATE EXECUTIVE'S, COMPANY'S AND BANK'S ACCEPTANCE OF THIS AGREEMENT BY SIGNING THE FOLLOWING PAGE.

 

IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the on the date first above written and Executive hereby declares that the terms of this Agreement have been completely read, are fully understood, and are voluntarily accepted after complete consideration of all facts and legal claims.

EXECUTIVE

/s/ Jason W. Ross

Jason W. Ross

STANDARD AVB FINANCIAL CORP.

By:    /s/ Timothy K. Zimmerman

Timothy K. Zimmerman

Chief Executive Officer

STANDARD BANK, PASB

By:    /s/ Timothy K. Zimmerman

Timothy K. Zimmerman

Chief Executive OfficerBlueprint

 

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.

 

1

 

 

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;

 

2

 

 

(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.

 

3

 

 

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.]

 

 

4

 

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

	
 

	
 

 

 

5

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