Attached files
Exhibit 4.1
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED
STOCK
OF
NOVUME SOLUTIONS, INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware
Novume
Solutions, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter
called the “Corporation”), hereby
certifies that the following resolution (the “Resolution”) was adopted
by the Board of Directors of the Corporation (hereinafter called
the “Board of
Directors”) on August 21, 2017 by unanimous written
consent, in accordance with the provisions of Section 151(g) of the
General Corporation Law of the State of Delaware (the
“DGCL”):
NOW, THEREFORE, BE IT RESOLVED, that
pursuant to the authority expressly granted to and vested in the
Board of Directors in accordance with the provisions of the Amended
and Restated Certificate of Incorporation of the Corporation and
the DGCL, the Board of Directors hereby creates a series of
Preferred Stock, par value $0.0001 per share (the
“Preferred
Stock”) of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights,
powers and preferences, and qualifications, limitations and
restrictions thereof as follows:
Section 1.
Designation; Number of
Shares. The shares of such series shall be classified and
designated as Series A Cumulative Convertible Redeemable Preferred
Stock, par value $0.0001 per share (the “Series A Preferred
Stock”), and the number of shares constituting such
series shall be five hundred and five thousand (505,000). That
number may from time to time be increased or decreased (but not
below the number of Shares then outstanding) by the Board of
Directors in accordance with the Amended and Restated Certificate
of Incorporation and applicable law. The Series A Preferred Stock
may be issued in certificated form.
Section 2.
Defined Terms. For
purposes hereof, the following terms shall have the following
meanings:
“Amended and Restated Certificate of
Incorporation” means the Amended and Restated
Certificate of Incorporation as filed with the Secretary of State
of the State of Delaware on August 21, 2017.
“Applicable Dividend Rate”
shall equal seven percent (7.00%).
“Base Redemption Price”
has the meaning set forth in Section 7.1.
“Board of
Directors” has the meaning set forth in the
Preamble.
“Business Day” means a day
other than Saturday, Sunday or other day on which commercial banks
in New York, New York, United States of America, are required to or
may be closed.
“Certificate of
Designations” means this Certificate of Designations
creating the Series A Preferred Stock.
“Common
Stock” means the common stock, par value $0.0001
per share, of the Corporation.
“Conversion Price” has the
meaning set forth in Section 9.1.
“Conversion Ratio” has the
meaning set forth in Section 9.1.
“Corporation” has
the meaning set forth in the Preamble.
“DGCL” has the meaning set
forth in the Preamble.
“Dividend Payment
Date” has the meaning set forth in Section 4.1.
“Dividend Period” has the
meaning set forth in Section 4.1.
“Junior
Securities” means, collectively, the Common Stock
and any other class of securities hereafter authorized that is
specifically designated as ranking junior to the Series A Preferred
Stock.
“Liquidation Event” has
the meaning set forth in Section 5.1.
“Liquidation Preference”
means, with respect to any Share on any given date, the sum of
(i) the Liquidation Value and (ii) the amount of any
accrued but unpaid dividends thereof, if any, whether or not
declared, to and including such date.
“Liquidation
Value” means, with respect to any Share on any
given date, the Series A Original Issue Price.
“Parity
Securities” means any class of securities
hereafter authorized that is specifically designated as ranking
pari passu with the Series
A Preferred Stock.
“Person” means an
individual, firm, corporation, partnership, limited liability
company, incorporated or unincorporated association, joint venture,
joint stock company, trust or other entity or organization of any
kind, including a governmental authority.
“Preferred Stock” has
the meaning set forth in the Resolution set forth
above.
“Qualified IPO” has the
meaning set forth in Section 9.2.
“Securities
Act” means the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and
regulations thereunder, which shall be in effect at the
time.
“Senior
Securities” means any class of securities
hereafter authorized that is specifically designated as ranking
senior to the Series A Preferred Stock.
“Series A Liquidation Preference
Amount” has the meaning set forth in Section 5.1.
“Series A Original Issue
Price” means $10.00 per Share.
“Series A Redemption” has
the meaning set forth in Section 8.1.
“Series A Redemption
Price” has the meaning set forth in Section 7.1.
“Share” means a share of
Series A Preferred Stock.
“Subsidiary” or
“subsidiary” means, with
respect to any Person: (a) any other Person of which such
Person beneficially owns, either directly or indirectly, more than
fifty percent (50%) of (i) the total combined voting
power of all classes of voting securities of such other Person,
(ii) the total combined equity interests of such other Person,
or (iii) the capital or profit interests of such other Person;
or (b) any other Person of which such Person has the power to
vote, either directly or indirectly, sufficient securities to elect
a majority of the board of directors or similar governing body of
such other Person.
Section 3.
Rank. With respect
to payment of dividends and distribution of assets upon
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, all Shares of the Series A Preferred
Stock shall rank (i) pari
passu with all Parity Securities, (ii) senior to all
Junior Securities and (iii) junior to all Senior
Securities.
Section 4.
Dividends.
4.1
Accrual and Payment of
Dividends. From and after the issuance date of any Share,
cumulative dividends on such Share shall accrue, whether or not
declared by the Board of Directors and whether or not there are
funds legally available for the payment of dividends, in arrears at
a per annum rate equal to the Applicable Dividend Rate on the
Liquidation Preference. The dividends on the Series A Preferred
Stock shall accrue from the issuance date thereof and shall be
payable quarterly in arrears within five (5) Business Days
following the last day of March, June, September and December of
each calendar year (each such date, a “Dividend Payment Date”)
to the holders of record of the Series A Preferred Stock on such
Dividend Payment Date, except that if any such date is not a
Business Day, then such dividend shall be payable on the next
Business Day. All accrued dividends on any Share shall be paid in
cash only when, as and if declared by the Board of Directors out of
funds legally available therefor or upon a liquidation or
redemption of the Series A Preferred Stock in accordance with the
provisions of Section 5, Section 7 or Section 8. All accrued and
accumulated dividends on the Shares shall be prior and in
preference to any dividend on any Junior Securities and shall be
fully declared and paid before any dividends are declared and paid,
or any other distributions or redemptions are made, on any Junior
Securities, other than to declare or pay any dividend or
distribution payable on Junior Securities in shares of Junior
Securities.
Each
dividend period (a “Dividend Period”) shall
commence on and include a Dividend Payment Date and shall end on
and include the calendar day preceding the next Dividend Payment
Date, except that (x) the initial Dividend Period for Series A
Preferred Stock issued on December 23, 2016 shall commence on and
include December 23, 2016, (y) the initial Dividend Period for
any Series A Preferred Stock issued after December 23, 2016 shall
commence on and include such date as the Board of Directors shall
determine and disclose at the time such additional shares are
issued, or if no such determination is made, the date of issuance
of such Series A Preferred Stock, and (z) the final Dividend
Period with respect to redeemed Shares shall end on and include the
calendar day preceding the date of redemption. Dividends payable on
the Series A Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
If, on
any Dividend Payment Date, the Corporation fails to pay dividends
in respect of the Shares equal to all dividends on the Shares
accrued but unpaid as of such date, the accrued but unpaid
dividends on the Shares shall nonetheless accumulate and compound
at the Applicable Dividend Rate on such Dividend Payment Date and
shall remain accumulated, compounding dividends on such Applicable
Dividend Rate, until paid pursuant hereto.
Section 5.
Liquidation.
5.1
Liquidation. In the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation (a “Liquidation Event”), the
holders of Shares of Series A Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, before any payment
shall be made to the holders of Junior Securities by reason of
their ownership thereof, with respect to each Share of Series A
Preferred Stock, an amount equal to the Liquidation Preference (the
“Series A
Liquidation Preference Amount”). The Series A
Liquidation Preference Amount shall be paid to the holders of
Series A Preferred Stock in cash and the holders of Series A
Preferred Stock shall not be entitled to any further payments in
the event of any Liquidation Event other than what is expressly
provided for in this Section 5.
5.2
Insufficient
Assets. If upon any Liquidation Event the remaining assets
of the Corporation available for distribution to its stockholders
shall be insufficient to pay the holders of the Shares of Series A
Preferred Stock the full Series A Liquidation Preference Amount and
the holders of any Parity Securities the full preferential amount
to which they are entitled under the terms of the relevant
instrument governing such Parity Securities, (a) the holders
of the Shares and any Parity Securities shall share ratably in any
distribution of the remaining assets and funds of the Corporation
in proportion to the respective full preferential amounts which
would otherwise be payable in respect thereof upon such Liquidation
Event if all amounts payable on or with respect to such Shares and
Parity Securities were paid in full, and (b) the Corporation
shall not make or agree to make any payments to the holders of
Junior Securities.
5.3
Residual
Distributions. If the Liquidation Preference has been paid
in full to all holders of Series A Preferred Stock and all other
amounts payable upon a Liquidation Event have been paid in full to
all holders of any Parity Stock, the holders of Common Stock and
any other Junior Securities shall be entitled to receive all
remaining assets of the Corporation according to their respective
rights and preferences.
5.4
Merger, Consolidation and
Sale of Assets Not Liquidation. For purposes of this
Section 5, the
sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of
the property and assets of the Corporation shall not be deemed a
Liquidation Event, nor shall the merger, consolidation or any other
business combination transaction of the Corporation into or with
any other corporation or person or the merger, consolidation or any
other business combination transaction of any other Person into or
with the Corporation be deemed to be a Liquidation
Event.
Section 6.
Voting
Rights.
6.1
Voting Generally.
The holders of Series A Preferred Stock shall not have any voting
rights except as expressly set forth below or as otherwise from
time to time required by law.
6.2
Amendment of Series A
Preferred Stock; Dividends; Material Acquisitions; Mergers and
Consolidations. So long as any Shares are outstanding, in
addition to any other vote or consent of stockholders required by
law or by the Certificate of Incorporation, the vote or consent of
the holders of a majority of the Shares at the time outstanding and
entitled to vote thereon, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating, either
directly or indirectly by amendment, merger, consolidation or
otherwise:
(i) Any
amendment, alteration or repeal, as applicable, of any provision of
the Certificate of Incorporation or Bylaws of the Corporation so as
to adversely affect the rights, preferences, privileges or voting
powers of the Series A Preferred Stock;
(ii) At
any time until November 8, 2018, (x) any declaration or
payment of cash dividends on any Common Stock or other Junior
Securities, (y) any purchase, redemption or other acquisition
for consideration of any Common Stock or other Junior Securities,
whether directly or indirectly; or (z) if and only if the
Corporation is delinquent in the payment of dividends on the
Shares, any declaration or payment of cash dividends or purchase,
redemption or other acquisition for consideration of any Parity
Securities, whether directly or indirectly; provided, further, however, that the consent of
the holders of the Series A Preferred Stock shall not be required
in connection with any repurchase of any Junior Securities
(A) held by any employee or consultant of the Corporation
(x) upon any termination of such employee’s or
consultant’s employment or consultancy pursuant to any
agreement providing for such repurchase or (y) otherwise
permitted pursuant to an agreement between the Corporation and an
employee or consultant thereof; or
(iii)
Any consummation of a binding share exchange or reclassification
involving the Series A Preferred Stock, or of a merger or
consolidation of the Corporation with another corporation or other
entity, unless in each case (x) the Shares remain outstanding
or, in the case of any such merger or consolidation with respect to
which the Corporation is not the surviving or resulting entity, are
converted into or exchanged for preference securities of the
surviving or resulting entity or its ultimate parent, in each case,
that is an entity organized and existing under the laws of the
United States of America, any state thereof or the District of
Columbia and (y) such Shares remaining outstanding or such
preference securities, as the case may be, have such rights,
preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not less favorable
to the holders thereof than the rights, preferences, privileges and
voting powers, and limitations and restrictions thereof, of the
Series A Preferred Stock immediately prior to such consummation,
taken as a whole; provided, further, that no vote by the
holders of Series A Preferred Stock under this clause
(iii) shall be required to the extent a plan of merger,
binding share exchange or similar event provides that the holders
of Series A Preferred Stock would receive an amount of cash in such
merger, share exchange or similar event equal to the Liquidation
Preference as of the consummation of such merger, share exchange or
similar event.
Section 7.
Redemption by the
Corporation.
7.1 At
any time from and after November 8, 2019, the Corporation may, upon
thirty (30) days’ notice, redeem all or any portion of
the then outstanding Shares for cash at a redemption price per
Share equal to the sum of (i) the corresponding redemption
price below (the “Base Redemption Price”)
plus (ii) the
amount of any accrued but unpaid dividends on such Shares being
redeemed, if any, whether or not declared, to and including the
date immediately prior to such date of redemption (such sum, the
“Series A Redemption
Price”):
Redemption
Period | Base Redemption Price |
November 8,
2019 to November 7, 2020 | $14.00 |
From
and after November 8, 2020 | $15.00 |
7.2 In
order to exercise its right of redemption, the Corporation shall,
not less than thirty (30) days prior to the redemption date
give to each holder of record of the Series A Preferred Stock, at
such holder’s address as it shall appear upon the stock
register of the Corporation on such date, notice by first class
mail, postage prepaid. Each such notice of redemption shall be
irrevocable and shall specify the date that is the redemption date,
the redemption price, the number of Shares to be redeemed, the
place or places of payment and that payment will be made upon
presentation and, to the extent that such Shares are certificated,
surrender of the certificate(s) evidencing the Shares to be
redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require).
Section 8.
Redemption by the
Holders.
8.1 At
any time from and after November 8, 2021, the holders of the then
outstanding Shares shall have the right (a “Series A Redemption”), to
require the Corporation to redeem all, but not less than all of
such holder’s Series A Preferred Stock, out of funds legally
available therefor, at the Series A Redemption Price. In exchange
for the surrender to the Corporation by the respective holders of
Shares of Series A Preferred Stock of their certificate or
certificates representing such Shares (to the extent that such
Shares are certificated) in accordance with Section 8.4 below, the
aggregate Series A Redemption Price for all Shares held by each
holder of Shares shall be payable in cash in immediately available
funds to the respective holders of the Series A Preferred Stock on
the applicable Series A Redemption Date and the Corporation shall
contribute all of its assets to the payment of the Series A
Redemption Price, and to no other corporate purpose, except to the
extent prohibited by applicable Delaware law.
8.2
Redemption. The
date of the closing of any such redemption of Shares pursuant to
Section 8.1
shall be no later than ninety (90) days following receipt by
the Corporation of the request to effect a redemption of such
Shares of Series A Preferred Stock (the “Series A Redemption
Date”).
8.3
Insufficient Funds;
Remedies For Nonpayment.
(a)
Insufficient Funds.
If on any Series A Redemption Date, the assets of the Corporation
legally available are insufficient to pay the full Series A
Redemption Price for the total number of Shares elected to be
redeemed pursuant to Section 8.1, the
Corporation shall (i) redeem out of all such assets legally
available therefor on the applicable Series A Redemption Date the
maximum possible number of Shares that it can redeem on such date,
pro rata among the holders of such Shares to be redeemed in
proportion to the aggregate number of Shares elected to be redeemed
by each such holder on the applicable Series A Redemption Date and
(ii) following the applicable Series A Redemption Date, at any
time and from time to time when additional assets of the
Corporation become legally available to redeem the remaining
Shares, the Corporation shall immediately use such assets to pay
the remaining balance of the aggregate applicable Series A
Redemption Price.
(b)
Remedies For
Nonpayment. If on any Series A Redemption Date, all of the
Shares elected to be redeemed pursuant to Section 8.1 are not
redeemed in full by the Corporation by paying the entire Series A
Redemption Price, until such Shares are fully redeemed and the
aggregate Series A Redemption Price paid in full, (i) all of
the unredeemed Shares shall remain outstanding and continue to have
the rights, preferences and privileges expressed herein, including
the accrual and accumulation of dividends thereon as provided in
Section 4,
(ii) interest on the portion of the aggregate Series A
Redemption Price applicable to the unredeemed Shares shall accrue
daily in arrears at a rate equal to the lesser of (x) 5.0% or
(y) the prime rate, as published in the Eastern Edition of the
Wall Street Journal per
annum, compounded quarterly.
8.4
Surrender of
Certificates. To the extent that such Shares are
certificated, on or before the Series A Redemption Date, each
holder of Shares shall surrender the certificate or certificates
representing such Shares to the Corporation, in the manner and
place designated by the Corporation, duly assigned or endorsed for
transfer to the Corporation (or accompanied by duly executed stock
powers relating thereto), or, in the event the certificate or
certificates are lost, stolen or missing, shall deliver an
affidavit of loss, in the manner and place designated by the
Corporation. To the extent that such Shares are certificated, each
surrendered certificate shall be canceled and retired
and the
Corporation shall thereafter make payment of the applicable Series
A Redemption Price by certified check or wire transfer to the
holder of record of such certificate; provided, however, that if less than all
the Shares represented by a surrendered certificate are redeemed,
then a new stock certificate representing the unredeemed Shares
shall be issued in the name of the applicable holder of record of
canceled stock certificate.
8.5
No Rights Subsequent to
Redemption. If on the applicable Series A Redemption Date,
the Series A Redemption Price is paid (or tendered for payment) for
any of the Shares to be redeemed on such Series A Redemption Date,
then on such date all rights of the holder in the Shares so
redeemed and paid or tendered, including any rights to dividends on
such Shares, shall cease, and such Shares shall no longer be deemed
issued and outstanding.
Section 9.
Conversion. Each
holder of Shares of Series A Preferred Stock shall have conversion
rights as follows:
9.1
Right to Convert.
Subject to Section 9.3, (i) each
Share shall be convertible, at the option of the holder thereof, at
any time from and after November 8, 2019, at the office of the
Corporation or any transfer agent for such stock, into such number
of fully paid and nonassessable shares of Common Stock as is
determined by dividing (i) the sum of (x) the Series A
Original Issue Price (as adjusted pursuant hereto for stock splits,
stock dividends, reclassifications and the like) plus (y) the amount of any
accrued but unpaid dividends on such Shares being converted, if
any, whether or not declared, to and including the date immediately
prior to such date of conversion, by (ii) the Conversion Price
applicable to such Share, in effect on the date the certificate is
surrendered for conversion. The number of shares of Common Stock
into which each Share is convertible, after taking into account any
such adjustments, is hereinafter referred to as the
“Conversion
Ratio.” Upon any decrease or increase in the
Conversion Price as described below and in Section 9.4, the
Conversion Ratio shall be appropriately increased or decreased. The
“Conversion
Price” per Share shall be equal to the price
corresponding in the table below:
Conversion
Period | Conversion Price |
November 8,
2019 to November 7, 2020 | $7.22 |
From
and after November 8, 2020 | $7.74 |
9.2
Automatic
Conversion. Each Share shall automatically be converted into
shares of Common Stock in accordance with the then-effective
Conversion Ratio upon the earlier of (i) except as provided
below in Section 9.4, immediately
prior to the closing of the Corporation’s sale of its Common
Stock in a firm commitment underwritten public offering pursuant to
an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”),
(A) which results in aggregate cash proceeds to the
Corporation of not less than $30,000,000 (net of underwriting
discounts and commissions) (B) is made at an offering price
per share of at least the then applicable Conversion Price (as
adjusted and subject to the last paragraph of this Section 9.2) and
(C) following such offering, the Common Stock is listed for
trading on a national securities exchange (a “Qualified IPO”), or
(ii) the date specified by written consent or agreement of the
holders of at least 662/3% of the then
outstanding Shares. Notwithstanding the foregoing, if the closing
of a Qualified IPO or an automatic conversion due to the written
consent or agreement of the holders of at least 66 2/3% of the then
outstanding Shares occurs prior to November 8, 2019, the
Conversion Price per Share applicable to the conversion effected
pursuant to this Section 9.2 shall be the
price corresponding in the table below:
Conversion
Period | Conversion Price |
November 8,
2016 to November 7, 2017 | $5.68 |
November 8,
2017 to November 7, 2018 | $6.19 |
November 8,
2018 to November 8, 2019 | $6.71 |
9.3
Mechanics of
Conversion. Before any holder of Series A Preferred Stock
shall be entitled to convert such Series A Preferred Stock into
shares of Common Stock, the holder shall surrender the certificate
or certificates therefor, duly endorsed (or a reasonably acceptable
affidavit and indemnity undertaking in the case of a lost, stolen
or destroyed certificate), at the office of the Corporation or of
any transfer agent for such Series A Preferred Stock, and shall
give written notice to the Corporation at its principal corporate
office, of the election to convert the same and shall state therein
the name or names in which the certificate or certificates for
shares of Common Stock are to
be
issued. The Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such holder of Series A
Preferred Stock, or to the nominee or nominees of such holder, a
certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid, and a
certificate for the remaining number of Shares if less than all of
such Series A Preferred Stock evidenced by the certificates were
surrendered. Such conversion shall be deemed to have been made
immediately prior to the close of business on (i) the date of
such surrender of the Shares to be converted or (ii) if
applicable, the date of automatic conversion specified in
Section 9.2
above, and the Person or Persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common
Stock as of such date. If the conversion is in connection with an
underwritten public offering of securities registered pursuant to
the Securities Act the conversion may, at the option of any holder
tendering such Series A Preferred Stock for conversion, be
conditioned upon the closing with the underwriters of the sale of
securities pursuant to such offering, in which event any Persons
entitled to receive Common Stock upon conversion of such Series A
Preferred Stock shall not be deemed to have converted such Series A
Preferred Stock until immediately prior to the closing of such sale
of securities.
9.4
Conversion Price
Adjustments of Preferred Stock for Splits and Combinations.
If the Corporation at any time after the date of issue of the
Series A Preferred Stock (a) declares a dividend or makes a
distribution on Common Stock payable in Common Stock,
(b) subdivides or splits the outstanding Common Stock,
(c) combines or reclassifies the outstanding Common Stock into
a smaller number of shares, (d) issues any shares of its
capital stock in a reclassification of Common Stock (including any
such reclassification in connection with a consolidation or merger
in which the Corporation is the continuing corporation), or
(e) consolidates with, merges with or into or is converted
into any other Person, the Conversion Price in effect at the time
of the record date for such dividend or distribution or of the
effective date of such subdivision, split, combination or
reclassification shall be adjusted so that the conversion of the
Series A Preferred Stock after such time shall entitle the holder
to receive the aggregate number of shares of Common Stock or other
securities of the Corporation (or shares of any security into which
such shares of Common Stock have been combined, consolidated,
merged, converted or reclassified pursuant to Sections 9.4(a),
9.4(d) or
9.4(e)) which, if
this Series A Preferred Stock had been converted immediately prior
to such time, such holder would have owned upon such conversion and
been entitled to receive by virtue of such dividend, distribution,
subdivision, split, combination, consolidation, merger, conversion
or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
9.5
Other
Distributions. In the event the Corporation shall declare a
distribution in respect of the Common Stock (other than a
subdivision, combination or merger or sale of assets transaction
provided for in Section 9.4) payable in
securities of other Persons, evidences of indebtedness issued by
the Corporation or other Persons, assets (excluding cash dividends)
or options or rights not referred to in Section 9.4(a), then, in
each such case for the purpose of this Section 9.5, the holders
of Series A Preferred Stock shall be entitled to a proportionate
share of any such distribution as though they were the holders of
the number of shares of Common Stock of the Corporation into which
their shares of Series A Preferred Stock are convertible as of the
record date fixed for the determination of the holders of Common
Stock of the Corporation entitled to receive such
distribution.
9.6
Recapitalizations.
If at any time or from time to time there shall be a
recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for in
Section 9.4)
provision shall be made so that the holders of Series A Preferred
Stock shall thereafter be entitled to receive upon conversion of
such Series A Preferred Stock the number of shares of stock or
other securities or property of the Corporation or otherwise, to
which a holder of Common Stock deliverable upon conversion would
have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the
provisions of this Section 9 with respect to
the rights of the holders of such Series A Preferred Stock after
the recapitalization to the end that the provisions of this
Section 9
(including adjustment of the Conversion Ratio then in effect and
the number of shares purchasable upon conversion of such Preferred
Stock) shall be applicable after that event and be as nearly
equivalent as practicable.
9.7
No Fractional Shares and
Certificate as to Adjustments.
(a) No
fractional shares shall be issued upon the conversion of any Share,
and the number of shares of Common Stock to be issued shall be
rounded down to the nearest whole share. The number of shares
issuable upon such conversion shall be determined on the basis of
the total number of shares of Series A Preferred Stock the holder
is at the time converting into Common Stock and the number of
shares of Common Stock issuable upon such aggregate conversion. If
the conversion would result in any fractional share, the
Corporation shall, in lieu of issuing any such fractional share,
pay the holder thereof an amount in cash equal to the fair market
value of such fractional share on the date of conversion, as
determined in good faith by the Board of Directors.
(b)
Upon the occurrence of each adjustment or readjustment of the
Conversion Price of any series of Preferred Stock pursuant to this
Section 9, the
Corporation, at its expense, shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred Stock a certificate
setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any
holder of Series A Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth
(A) such adjustment and readjustment, (B) the Conversion
Price for the Series A Preferred Stock at the time in effect and
(C) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the
conversion of a share of Series A Preferred Stock.
9.8
Notices of Record
Date. In the event of any taking by the Corporation of a
record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any
right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to
receive any other right, the Corporation shall mail to each holder
of Series A Preferred Stock, at least ten (10) days prior to
the date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such
dividend, distribution or right.
9.9
Reservation of Stock
Issuable Upon Conversion. The Corporation shall at all times
reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series A Preferred Stock, such number
of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of
the Series A Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares
of Series A Preferred Stock, in addition to such other remedies as
shall be available to the holder of Series A Preferred Stock, the
Corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes, including, without limitation,
engaging in best efforts to obtain the requisite stockholder
approval of any necessary amendment to this Certificate of
Designations.
Section 10.
Reissuance of Series A
Preferred Stock. Any Shares redeemed or otherwise acquired
by the Corporation or any Subsidiary shall become authorized but
unissued shares of Preferred Stock and may be reissued as part of a
new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 11.
Notices. Except as
otherwise provided herein, all notices, requests, consents, claims,
demands, waivers and other communications hereunder shall be in
writing and shall be deemed to have been given: (a) when
delivered by hand (with written confirmation of receipt);
(b) when received by the addressee if sent by a nationally
recognized overnight courier (receipt requested); or (c) on
the third day after the date mailed, by certified or registered
mail, return receipt requested, postage prepaid. Such
communications must be sent (a) to the Corporation, at its
principal executive offices and (b) to any stockholder, at
such holder’s address at it appears in the stock records of
the Corporation (or at such other address for a stockholder as
shall be specified in a notice given in accordance with this
Section 11).
Section 12.
Waiver. The holders
of at least a majority of the outstanding Shares, voting as one
class, may also amend and waive compliance with any provision of
this Certificate of Designations.
Section 13.
No Preemptive
Rights. No Share shall have any rights of preemption
whatsoever as to any securities of the Corporation, or any
warrants, rights or options issued or granted with respect thereto,
regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.
Section 14.
No Sinking Fund. No
sinking fund shall be created for the redemption or purchase of
shares of the Series A Preferred Stock.
Section 15.
Transfer Taxes. The
Corporation shall pay any and all stock transfer, documentary,
stamp and similar taxes that may be payable in respect of any
initial issuance or delivery of the Series A Preferred Stock or
certificates representing such Shares, if any. The Corporation
shall not, however, be required to pay any such tax that may be
payable in respect of any transfer involved in the issuance or
delivery of Shares in a name other than that in which the Shares
were registered, or in respect of any payment to any Person other
than a payment to the initial registered holder
thereof.
Section 16.
Other Rights. The
Shares shall not have any rights, preferences, privileges or voting
powers or relative, participating, optional or other special
rights, or qualifications, limitations or restrictions thereof,
other than as expressly set forth herein or in the Certificate of
Incorporation or as required by applicable law.
[SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF, Novume Solutions,
Inc. has caused its corporate seal to be hereunto affixed and this
Certificate of Designations to be signed by its Chief Executive
Officer this 21st day of August,
2017.
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NOVUME SOLUTIONS, INC.
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By:
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/s/
Robert A. Berman
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Name:
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Robert
A. Berman
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Title:
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Chief
Executive Officer
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