Document:

Exhibit 10.4

 

Execution Version 

 

PROMISSORY NOTE 

 

	$400,000.00	August 12, 2021

 

FOR VALUE RECEIVED, Specialty
Systems, Inc., a New Jersey corporation (the “Maker”) promises to pay to the order of Emil Kaunitz, a resident
of the State of New Jersey (the “Holder”), the principal sum of Four Hundred Thousand Dollars ($400,000.00)
(the “Principal”), together with interest at the rate provided in this promissory note (this “Note”),
in accordance with the terms and conditions contained herein. This Note is being delivered in connection with that certain Agreement
and Plan of Merger, dated as of the date hereof, by and among Castellum, Inc., a Nevada corporation, KC Holdings Company, Inc.,
a Delaware corporation, the Maker, and the other parties thereto (the “Merger Agreement”).

 

1.           Interest.
The unpaid Principal shall bear interest at a fixed rate equal to five percent (5%) per annum (the “Interest Rate”)
from the date hereof until the Principal is paid in full. All interest payable under the terms of this Note shall be calculated
on the basis of a three hundred sixty-five (365) day year. Interest shall begin to accrue on the Principal on the day on which
this Note is made.

 

		2.	Payments.

 

2.1       Commencing
on September 1, 2021, and continuing on the 1st day of each succeeding month thereafter until the Principal is paid in full, the
Maker will make payments of interest only at the Interest Rate.

 

2.2       The
outstanding Principal balance, unless sooner paid due to prepayment, demand or default shall be due and payable at maturity on
December 31, 2024.

 

2.3       Subject
to Section 2.5 below, Maker shall have the right to prepay this Note in whole or in part at any time without penalty. Prepayments
will first be applied to any interest due and any sums then remaining shall be applied to the Principal.

 

2.4       All
payments made pursuant to this Note shall be made in lawful money of the United States of America by wire transfer or immediately
available funds to an account designated in writing by the Holder. All payments made hereunder shall be applied first to the payment
of any fees or charges outstanding hereunder, second to accrued interest, and third to the payment of the Principal.

 

2.5       Notwithstanding
anything else herein to the contrary, all of Holder’s rights to payment hereunder shall be subject in all respects to the
terms of the Subordination and Standby Agreement, dated as of August 12, 2021 between, inter alios, Holder, Maker and Live Oak
Banking Company.

 

    			 

     

    

 

3.        Events
of Default; Remedies. If any payment due hereunder is not paid within fifteen (15) days after the date due, it shall constitute
an event of default under this Note (a “Default”). Upon the occurrence of a Default, at the option of the Holder,
all amounts payable by the Maker to the Holder under the terms of this Note shall immediately become due and payable by the Maker
to the Holder without notice to the Maker or any other person, and the Holder shall have all of the rights, powers, and remedies
available under the terms of this Note, and all applicable laws. The Maker hereby waives presentment, protest and demand, notice
of protest, notice of demand and of dishonor and non-payment of this Note and expressly agrees that this Note or any payment hereunder
may be extended from time to time without in any way affecting the liability of the Maker.

 

4.        Notice.
All notices, requests, demands and other communications under this Note shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is to be given, when delivered if sent via electronic
mail (receipt acknowledged; and each party agrees to provide such acknowledgement if requested), or on the third (3rd)
day after mailing if mailed to the party to whom notice is to be given by certified mail, postage prepaid and properly addressed
as follows:

 

	If to Holder:	Emil Kaunitz
	 	242 Oval Road,
	 	Manasquan, NJ 08736
	 	Email: ekaunitz@specialtysystems.com
	 	 
	If to Maker:	Specialty Systems, Inc.
	 	c/o Castellum, Inc.
	 	3 Bethesda Metro Center, Suite 700,
	 	Bethesda, MD 20814
	 	Email: mfuller@castellumus.com

 

Either party hereto may change the address for notices set forth
above by providing the other party with written notice of such change.

 

5.        Assignment.
This Note may be assigned by the Holder at any time or from time to time. The Maker may not assign or transfer this note or any
of its rights or obligations hereunder without the prior written consent of the Holder. This Note shall inure to the benefit of
and be enforceable by the Holder and the Holder’s successors and assigns and any other person to whom the Holder may grant
an interest in the Maker’s obligations to the Holder, and shall be binding and enforceable against the Maker and the Maker’s
successors and assigns.

 

6.        Amendment.
No term of this Note may be waived, modified or amended except by an instrument in writing signed by both of the parties hereto.
Any waiver of the terms hereof shall be effective only in the specific instance and the specific purpose given.

 

7.        Cumulative
Remedies; No Waiver by the Holder. Each right, power, and remedy of the Holder as provided for in this Note, or now or hereafter
existing under any applicable law or otherwise, shall be cumulative and concurrent and shall be in addition to every other right,
power, or remedy provided for in this Note or now or hereafter existing under any applicable law, and the exercise or beginning
of the exercise by the Holder of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later
exercise by the Holder of any or all such other rights, powers, or remedies. No failure or delay by the Holder to insist upon the
strict performance of any term, condition, covenant, or agreement of this Note, or to exercise any right, power, or remedy consequent
upon a breach thereof, shall constitute a waiver of any such term, condition, covenant, or agreement or of any such breach, or
preclude the Holder from exercising any such right, power, or remedy at a later time or times.

 

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8.        Evidence
of Indebtedness. This Note is given and accepted as evidence of indebtedness only, and not in payment or satisfaction of any
indebtedness or obligation.

 

9.        Severability.
If, for any reason, any of the terms or provisions (or any part of any provision) of this Note are found to be invalid, illegal,
unenforceable, or contrary to any applicable law, that invalidity, illegality, or unenforceability shall not affect any other provisions
(or any remaining part of any provision) of this Note, but this Note shall be construed as if that invalid, illegal, or unenforceable
provision (or any part of that provision) had never been contained in this Note, and the undersigned agrees that this Note shall
still remain in full force and effect subject only to the exclusion of those terms or provisions (and only to the extent to which
those terms or provisions) shall have been found invalid, illegal, unenforceable, or contrary to any applicable law.

 

10.       Maximum
Rate of Interest. If any provision of this Note shall ever be construed to require the payment of any amount of interest in
excess of that permitted by applicable law, then the interest to be paid pursuant to this Note shall be held subject to reduction
to the amount allowed under applicable law, and any sums paid in excess of the interest rate allowed by law shall be applied in
reduction of the outstanding Principal pursuant to this Note.

 

11.       Time
of the Essence. Time is of the essence.

 

12.       Headings.
The headings used in this Note are for convenience only and are not to be interpreted as a part of this Note.

 

13.       Governing
Law. The laws of the State of New Jersey shall govern the validity and construction of this Note and any dispute arising out
of or relating to this Note, without regard to the principles of conflict of laws.

 

14.       Waiver
of Jury Trial. THE MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

 

15.       Entire
Agreement. This Note, along with the Merger Agreement, constitutes the entire agreement between the Maker and the Holder in
any way relating to the loan evidenced hereby. This Note supersedes all prior and contemporaneous agreements, understandings, negotiations,
and discussions, written or oral, of the parties, relating to the loan evidenced hereby, including without limitation that certain
Officer Loan Note Payable, dated as of January 1, 2019 by and between the Maker and the Holder.

 

[Signatures contained on following page.]

 

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IN WITNESS WHEREOF, Maker has executed and
delivered this Note as of the date first written above.

 

	 	MAKER:
	 	 
	 	SPECIALTY SYSTEMS, INC.
	 	 
	 	by: its sole Member, CASTELLUM, INC.
	 	 
	 	By:	/s/ Mark Fuller
	 	Name: 	Mark Fuller
	 	Title: 	Chairman/President & Chief
	 	 	Executive Officer

 

	ACKNOWLEDGED AND ACCEPTED:	 
	 	 
	HOLDER:	 
	 	 
	Emil Kaunitz	 

 

[Signature Page to Promissory Note (Kaunitz)]

 

    			 

     

    

 

IN
WITNESS WHEREOF, Maker has executed and delivered this Note as of the date first written above.

 

	 	MAKER:
	 	 
	 	SPECIALTY SYSTEMS, INC.
	 	 
	 	by: its sole Member, CASTELLUM, INC.
	 	 
	 	By:	
	 	Name: 	Mark Fuller
	 	Title: 	Chairman/President & Chief
	 	 	Executive Officer

 

	ACKNOWLEDGED AND ACCEPTED:	 
	 	 
	HOLDER:	 
	 	 
	/s/ Emil Kaunitz	 
	Emil Kaunitz	 

 

[Signature Page to Promissory Note (Kaunitz)]Exhibit 10.5

 

THIS PROMISSORY NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

	Face Value: $500,000	Issued on February 28, 2022 (“Issuance Date”)

 

PROMISSORY NOTE

(hereinafter referred to as this
“Promissory Note”)

 

FOR VALUE RECEIVED,
Corvus Consulting, LLC (“Corvus”) and Castellum, Inc. (“Parent”) (collectively, the “Obligors”),
hereby jointly and severally promise to pay to the order of Robert Eisiminger or any future permitted holder of this promissory
note (the “Holder”), the principal sum of FIVE HUNDRED THOUSAND DOLLARS AND NO/lOO ($500,000.00) (the “Principal
Amount”) plus any accrued but unpaid interest thereon at the rate of TEN PERCENT (10%) per annum (the “Interest
Rate”) until the Principal Amount is paid in full. All payments made under this Promissory Note will be made to the Holder,
at such address as the Holder may designate, in monies of the United States of America.

 

1.           Interest.

 

 Subject to
Section 1.1. below, interest accrued at the Interest Rate shall be payable in monthly installments (with interest accruing from
the Issuance Date and with payments commencing with the month ended March 31, 2022 on or before the last business day of each month
or upon mandatory prepayment in cash from the date of this Promissory Note unless the Principal Amount and all interest accrued
thereon and all other amounts owed hereunder are prepaid as provided for herein.

 

1.1       Subordination
of Payments. Notwithstanding anything else herein to the contrary, all of Holder’s rights to payment and the other terms
and conditions hereunder shall be subject in all respects to the terms of the Subordination and Standby Agreement, dated as of
August 10, 2021 between, inter alios, Holder, the Obligors and Live Oak Banking Company (the “Subordination Agreement”).

 

2.           Maturity.

 

2.1. The Obligors
shall repay in full the entire principal balance then outstanding plus any accrued but unpaid interest under this Promissory Note
on the earliest to occur of (i) September 30, 2024 or (ii) the acceleration of the obligations as contemplated by this Promissory
Note (see, e.g., Section 5.2 hereof).

 

    	 		 

     

    

 

3.           Equity.

 

3.1. As partial
consideration for making the loan underlying this Promissory Note, Parent is issuing to the Holder 2,500,000 common shares of stock.
Together with prior equity issued to the Holder, Holder shall be below 2.0% of the fully diluted capitalization of the Parent as
of the date hereof. Holder hereby grants a proxy, valid until November 21, 2023, to Mr. Mark Fuller, CEO of the Obligor, to vote
such shares as Mr. Fuller deems appropriate. Holder shall have no right to vote such shares during the continuance of the proxy,
and shall have no right to appoint directors, or otherwise control the management of the Obligor.

 

4.          Representations.

 

The Obligors
hereby represent and warrant to the Holder as follows:

 

4.1       Due
Incorporation; Good Standing; Due Authorization. The Obligors are each duly formed and validly existing as entities in good
standing under the laws of the state of each of its formation. The Obligors have the requisite power and authorization to enter
into this Promissory Note and all necessary action has been taken by the Obligors to do so.

 

4.2       Use
of Proceeds. The proceeds of this Promissory Note shall be used to acquire Lexington Solutions Group, LLC and for working capital,

 

4.3       Capitalization.
There has been no material change in the capitalization of the Parent since the issuance of the Parent’s third quarter 2021
report with OTC Markets.

 

4.4       Articles
of Incorporation. The Articles of Incorporation of the Parent have not been amended since August 1, 2021.

 

4.5       Litigation.
Other than one (1) employment related matter concerning a former mid-level employee, The Obligors hereby confirm that, as of the
Issuance Date, neither of the Obligors is subject to either any actual or threatened litigation.

 

4.6       Liabilities.
Except as previously disclosed to Holder and as disclosed in the Parent’s 3rd quarter 2021 report with OTC Markets,
each of the Obligors hereby confirm that, as of the Issuance Date, neither of the Obligors is subject to any liabilities.

 

5.           Remedies.

 

5.1         Events
of Default. “Event of Default” wherever used herein, means any one of the following events:

 

5.1.1       default
in the payment of the principal of this Promissory Note at its maturity or any interest payment required to be made hereunder;
or

 

5.1.2       the
entry by a start having jurisdiction in the premises of (A) a decree or order for relief in respect of the Obligors in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree
or order adjudging either one of the Obligors a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Obligors under any applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Obligors or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effete for a period of sixty (60) consecutive days; or

 

    	 		 

     

    

 

5.1.3         the
commencement by either one of the Obligors of a voluntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in respect of the Obligors in an involuntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Obligors
or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Obligors
in furtherance of any such action; or

 

5.1.4         
the dissolution of the Obligors; or

 

5.1.5        
any representation or warranty made to the Holder by the Obligors pursuant to this Promissory Note is false or misleading in any
material respect; or

 

5.1.6         the
Obligors fail to observe or perform any material covenant or agreement made by the Obligors to the Holder pursuant to this Promissory
Note.

 

5.2         Acceleration
of Maturity; Secondary offering. If any Event of Default occurs and is continuing, then and in every such case the Holder may
(subject to the Subordination Agreement) declare the principal on this Promissory Note to be due and payable immediately, by a
notice in writing-to the Obligors, and upon any such declaration such principal shall become immediately due and payable, and such
accelerated amount shall thereafter bear interest at the rate equal to twelve percent (12%) per annum. This Note shall become immediately
due and owing upon the successful completion of a secondary offering of equity by the Parent with gross proceeds of at least Fifteen
million dollars ($15,000,000).

 

5.3         Payment
of Expenses. If any part of the balance is not paid when due, or if the Obligors fail to perform any obligation required hereunder,
the Obligors shall (subject to the Subordination Agreement) pay any and all reasonable costs of collection or enforcement of all
outstanding obligations under this Promissory Note incurred by the. Holder, including reasonable attorneys’ fees and expenses.

 

6.           Negative
Covenants.

 

6.1.       As long as
the Holder is owed principal and interest hereunder, the Parent shall not, either directly or indirectly by amendment, merger,
consolidation or otherwise, do any of the following without the written consent of the Holder given in writing, and any such act
or transaction entered into without such consent shall be null and void ab initio, and of no force or effect.

 

    	 		 

     

    

 

6.1       liquidate,
dissolve or wind-up the business and affairs of the Parent, adopt effect or enter into any merger or consolidation, dissolution,
liquidation, reorganization or recapitalization of the Company or any of its subsidiaries or any other Change of Control, or consent
to any of the foregoing;

 

6.2       amend,
alter or repeal any provision of Parent’s Articles of incorporation or Bylaws of the Parent, except that Parent shall increase
its authorized common stock to a total of 3 billion shares after the Corvus Closing;

 

6.3       create,
or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock,
or increase the authorized number of shares of Common Stock (except as provided in Section 6.2) or any Preferred Stock or increase
the authorized number of shares of any additional class or series of capital stock of the Parent;

 

6.4       (i)
reclassify, alter or amend any existing security of the Parent in respect of the distribution of assets on the liquidation, dissolution,
voting or winding up of the Parent or (ii) reclassify, alter or amend any existing security of the Parent at in respect of the
distribution of assets on the liquidation, dissolution, voting or winding up of the Parent, the payment of dividends or rights
of redemption in a way adverse to the Holder’s interests;

 

6.5       purchase
or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend in cash or securities, or make any distribution
on, any shares of capital stock of the Parent other than repurchases of stock from former employees, officers, directors, consultants
or other persons who performed services for the Parent or any subsidiary in connection with the cessation of such employment or
service at no greater than the original purchase price thereof except for dividends on existing preferred stock of the Parent.

 

6.6       Other
than with Live Oak Bank and the Crom Cortana Fund, create, or authorize the creation of, or issue, or authorize the issuance of
any debt security, incur or maintain any debt, or create any lien or security interest (except purchase money liens or statutory
liens of landlords, mechanics, materialmen, workmen, warehousemen and other similar persons arising or incurred in the ordinary
course of business) or incur other indebtedness for borrowed money, including but not limited to obligations and contingent obligations
under guarantees, or permit any subsidiary to take any such action with respect to any debt security or debt lien, security interest
or other indebtedness for borrowed money.

 

6.7       dissolve,
wind-up or liquidate itself or initiate a bankruptcy proceeding involving itself; or

 

6.8       agree
to do any of the foregoing;

 

provided that, notwithstanding
anything to the contrary herein, if any of the covenants described in this Section 6 is not otherwise expressly prohibited by the
Loan Agreement (as defined in the Subordination Agreement) for so long as the Loan Agreement is in effect, no breach of any of
the foregoing covenants in this Section 6 will constitute a default or Event of Default hereunder.

 

    	 		 

     

    

 

7.           [intentionally
omitted]

 

Prepayment.

 

7.1.     The Obligors
may not prepay this Promissory Note without the Holder’s consent. If the Obligors choose to prepay this Promissory Note,
such prepayment will be subject to Section 1.1 herein.

 

9.           Various
Definitions.

 

9.1       “Change
of Control” shall mean (A) any consolidation or merger of the Parent or Corvus with or into any other corporation or
other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which
the stockholders of Parent or Corvus immediately prior to such consolidation, merger or reorganization continue to hold at least
a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a
wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization; or (B) any transaction or
series of related transactions to which the Parent or Corvus is a party in which in excess of 50% of the Parent or Corvus’
voting power is transferred; and (ii) a sale, lease, exclusive license or other disposition of all or substantially all of the
assets of the Parent or Corvus.

 

9.2       [Reserved].

 

10.         Notices.

 

10.1       All
notices and communications provided for herein or made hereunder shall be delivered, or mailed first class with postage prepaid,
addressed in each case as follows, until some other address shall have been designated in a written notice given in like manner,
and shall he deemed to have been given or made when so delivered or mailed:

 

	The Holder:	Robert Eisiminger

 

or to such other person or address as the Obligors shall furnish
to the Holder in writing.

 

	The Obligor:	Castellum, Inc. and
	 	Corvus Consulting, LLC
	 	9812 Fall Rd H114-299
	 	Potomac, MD 20854

 

or to such other person or address
as the Holder shall furnish to the Obligors in writing.

 

    	 		 

     

    

 

		11.	Miscellaneous.

 

11.1       This
Promissory Note may be amended only by writing signed by both the Obligors and the Holder. All covenants and agreements in this
Promissory Note by the Obligors shall bind its successors and assigns.

 

11.2       In
case any provision in this Promissory Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

 

11.3       This
Promissory Note shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia in without regard
to the principles of conflicts of laws thereof.

 

11.4       This
Promissory Note (and related agreements, exhibits, certificates and schedules) constitutes the full and entire understanding between
the Obligors and the Holder with respect to the subject matter hereof and thereof.

 

11.5       This
Promissory Note is binding on the Obligor; and the Obligors hereby waive presentment, demand, notice and protest and any defense
by reason of an extension of time for payment or other indulgences. Failure of, or delay by, the Holder to assert any right herein
shall not be deemed to be a waiver thereof, nor shall any such failure or delay on any one or more occasions be deemed to prohibit
or waive the same or any other right on any future occasion.

 

[Signature Page Follows]

 

    	 		 

     

    

 

IN WITNESS WHEREOF, the Obligors have caused this instrument
to be duly executed as of the date first referenced above.

 

	OBLIGORS;	 
	 	 
	Corvus Consulting, LLC	 
	 	 	 
	By:	/s/ Mark C. Fuller   	 
	 	 	 
	Castellum, Inc.	 
	 	 	 
	By:	/s/ Mark C. Fuller	 
	 	 	 
	Accepted:	ROBERT EISIMINGER	 
	 	 	 
	By:	/s/ Robert Eisiminger

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