Document:

Blueprint

Exhibit
4.2

 

FORM OF

 

 CERTIFICATE OF DESIGNATIONS

OF

SERIES B CUMULATIVE CONVERTIBLE 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  [●] 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 B Cumulative Convertible Preferred Stock, par
value $0.0001 per share (the “Series B Preferred
Stock”), and the number of shares constituting such
series shall be [●].
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 B 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 ____________, 2017.

 

“Applicable Dividend Rate”
shall be a percentage amount equal to the quotient of
108,0001 divided by [●]2,
and multiplied by 100 (rounding to nearest third significant
digit).

 

“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 B Preferred Stock.

 

 “Common
Stock” means the common stock, par value $0.0001
per share, of the Corporation.

 

“Conversion Price” means
$5.

 

“Conversion Ratio” means
the number of fully paid and nonassessable shares of Common Stock
into which each Share is convertible, after taking into account any
such adjustments, determined by dividing (i) the sum of
(x) the Series B 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 per Share
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.

 

“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 B 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 B Original Issue Price.

 

 “Parity
Securities” means any class of securities
hereafter authorized that is specifically designated as ranking
pari passu with the Series
B 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.

 

“Principal Market” means
the Nasdaq Capital Market.

 

“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 the Series A Preferred Stock of
the Corporation and any class of securities hereafter authorized
that is specifically designated as ranking senior to the Series B
Preferred Stock.

 

“Series B Liquidation Preference
Amount” has the meaning set forth in Section 5.1.

 

“Series B Original Issue
Price” means $10 per Share.

 

“Share” means a share of
Series B 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.

 

“Transfer Agent” means
Issuer Direct Corporation, or such other agent or agents of the
Corporation as may be designated by the Board of Directors or its
designee as the transfer agent for the Series B Preferred
Shares.

 

“VWAP” means, for any
security as of any date, the dollar volume-weighted average price
for such security on the Principal Market (or, if the Principal
Market is not the principal trading market for such security, then
on the principal securities exchange or securities market on which
such security is then traded) during the period beginning at
9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York
time, as reported by Bloomberg through its “AQR”
function or, if the foregoing does not apply, the dollar
volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such
security during the period beginning at 9:30:01 a.m., New York
time, and ending at 4:00:00 p.m., New York time, as reported by
Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average
of the highest closing bid price and the lowest closing ask price
of any of the market makers for such security as reported in the
“pink sheets” by OTC Markets Group Inc. (formerly Pink
Sheets LLC). All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination,
recapitalization or other similar transaction during such
period.

 

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 B 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 B 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 B 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, at
the option of each holder of Series B Preferred Stock, either (x)
in cash when, as and if declared by the Board of Directors out of
funds legally available therefor or upon a liquidation of the
Series B Preferred Stock in accordance with the provisions of
Section 5, or
(y) in kind by issuance of additional shares of Series B Preferred
Stock having an aggregate Liquidation Value at the time of such
payment equal to the amount of the dividend to have been paid. 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 B
Preferred Stock issued on [●]
shall commence on and include [●],
(y) the initial Dividend Period for any Series B Preferred
Stock issued after [●]
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 B 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 B 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 B 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 B
Preferred Stock, an amount equal to the Liquidation Preference (the
“Series B
Liquidation Preference Amount”). The Series B
Liquidation Preference Amount shall be paid to the holders of
Series B Preferred Stock in cash and the holders of Series B
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 B
Preferred Stock the full Series B 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 B Preferred Stock and all other
amounts payable upon a Liquidation Event have been paid in full to
all holders of any Parity Securities, 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 B Preferred Stock shall not have any voting
rights except as expressly set forth below or as otherwise from
time to time required by law. Notwithstanding the foregoing, only
in the case of a vote to be taken for the election of members of
the Board of Directors, each holder of shares of Series B Preferred
Stock shall have such number of votes per share of Series B
Preferred Stock held by such holder on an as converted basis in
accordance with Section
7.1.

 

6.2
Amendment of Series B
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 B 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, , however, that the consent of
the holders of the Series B Preferred Stock shall not be required
in connection with any repurchase of any Junior Securities 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 B 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 B Preferred Stock immediately prior to such consummation,
taken as a whole; provided, further, that no vote by the
holders of Series B 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 B 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. Conversion. Each
holder of Shares of Series B Preferred Stock shall have conversion
rights as follows:

 

7.1
Right to Convert.
Subject to Section 7.3, each Share
shall be convertible, at the option of the holder thereof, at the
office of the Corporation or any transfer agent for such stock, in
accordance with the then effective Conversion Ratio (as adjusted
appropriately for stock splits, stock dividends and the similar
events described in Section 7.4).

 

7.2        Automatic
Conversion. Each Share shall automatically be converted into
shares of Common Stock in accordance with the then effective
Conversion Ratio on the last day of any period of thirty (30)
consecutive trading days, in which, during a period of twenty (20)
trading days (whether consecutive or not), the VWAP per share of
Common Stock equals or exceeds $7.50 (as adjusted appropriately for
stock splits, stock dividends and the similar events described in
Section 7.4). Any
such determination shall be made by the Corporation and shall be
evidenced by an officer’s certificate setting forth the data
supporting such determination, which certificate shall be
conclusive evidence of such determination absent manifest error and
filed with the Transfer Agent. If the Corporation exercises its
right to cause the conversion of Series B Preferred Stock in whole
or from time to time in part, it shall furnish notice thereof to
the Transfer Agent and shall mail such notice to the holders of
each outstanding Series B Preferred Stock being converted at such
holder’s last address as shown on the stock records of the
Corporation, together with a determination as to the number of
Series B Preferred Stock to be converted.

 

7.3
Mechanics of
Conversion. Before any holder of Series B Preferred Stock
shall be entitled to convert such Series B 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 B 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 B
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 B 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 7.2 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.

 

7.4
Conversion Price
Adjustments of Preferred Stock for Splits and Combinations.
If the Corporation at any time after the date of issue of the
Series B 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 B 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 7.4(d) or 7.4(e)) which, if this Series B
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.

 

7.5
Other
Distributions. In the event the Corporation shall declare a
distribution in respect of the Common Stock (other than a
subdivision, combination or merger provided for in Section 7.4) payable in
securities of other Persons, evidences of indebtedness issued by
the Corporation or other Persons, assets (excluding cash
dividends), then, in each such case for the purpose of this
Section 7.5, the
holders of Series B 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 B 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.

 

7.6
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 provided for in Section 7.4) provision shall be
made so that the holders of Series B Preferred Stock shall
thereafter be entitled to receive upon conversion of such Series B
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 7 with
respect to the rights of the holders of such Series B Preferred
Stock after the recapitalization to the end that the provisions of
this Section 7
(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.

 

7.7
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 B 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 7, 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 B 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 B 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 B 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 B Preferred Stock.

 

7.8
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 B 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.

 

7.9
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 B 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 B 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 B Preferred Stock, in addition to such other remedies as
shall be available to the holder of Series B 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
8. Reissuance of Series B
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
9. 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
9).

 

Section
10. 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
11. 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
12. No Sinking
Fund. No sinking fund shall be created for the redemption or
purchase of shares of the Series B Preferred Stock.

 

Section
13. 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 B 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
14. 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]

 

1 NTD: 1.8mm
multiplied by 6% equals $108,000

2 NTD: Insert such
amount equal to ten (10) multiplied by the number of shares of
Series B Preferred Stock equal to (i) 180,000 (1.8mm divided by
original issue price of $10) plus (ii) such number of shares of
Series B Preferred Stock representing a value (based on a $10 face
value per share) equal to the difference between (x) 1.2mm and (y)
the product of (1) the average 5 day VWAP of Common Stock prior to
the Closing Date, multiplied by (2) 300,000, but only to the extent
that “(y)” is a lower amount than “(x)” and
not vice versa. By way of example, if the average 5 day VWAP of the
Common Stock prior to the Closing Date is $2, then the shortfall
will be $600,000, which is 60,000 shares of Series B Preferred
Stock. The number to be provided in the bracket in the Applicable
Dividend Rate is: 10 multiplied by (180,000 + 60,000) = 2,400,000.
The Applicable Dividend Rate is: 108,000 divided by 2,400,000 and
multiplied by 100 = 4.5%.

 

 

 

 

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 [●],
this [●]
day of  [●]
2017.

 

	
 

	
 

	
 

	

NOVUME SOLUTIONS, INC.

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Title:EX-10.1

 Exhibit 10.1 
  

 
 September 19,
2017                     
 Dr. Nassim Usman,
Ph.D. 
 Dear Dr. Usman: 
 This letter hereby amends
and restates the terms of your employment as President and Chief Executive Officer of Catalyst Biosciences, Inc. (the “Company”) and supersedes your previous employment agreement dated February 13, 2006. In this role, you
report directly to the Board of Directors of the Company. 
 While employed by the Company, you agree to perform your duties faithfully and to the best of
your abilities and to devote your full business efforts and time to the Company. Except upon the prior written consent of the Board of Directors, you will not, during your employment with the Company, (i) accept any other employment, or
(ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that might interfere with your duties and responsibilities as President and Chief Executive Officer or create a conflict of
interest with the Company. This consent will not be unduly withheld. 
 Your base compensation will be $38,899.66 per month ($466,796, annualized), paid
periodically in accordance with normal Company payroll practices and subject to the usual, required withholding. You will be eligible for a review of your salary in connection with the regular review of executive salaries in 2018. You will also have
the opportunity to earn an annual performance-based bonus up to 50% of your annual salary. To receive your bonus, you must be employed by the Company at the time the bonus is paid. 

During your employment with the Company, you will be eligible to participate in the Company’s employee benefit plans including, but not limited to, Life,
Disability, Medical, Dental and Vision Insurance, 401(k), Section 125 Flexible Spending Accounts. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time. 

As a full-time employee, you will be eligible for paid-time-off benefits, for such things as sick leave, vacation time
or time for personal needs, in accordance with our policies for similarly situated employees.

 You will be eligible to receive stock option or other equity compensation as determined from time to time by the
Compensation Committee of the Board of Directors. 
 In the event your employment with us is terminated for any reason other than death or Disability (as
defined in the Company’s 2015 Stock Incentive Plan, as amended (the “2015 Stock Incentive Plan”)), you will have three months following the termination of employment to exercise the vested portion of any option grant. In the
event your employment with us is terminated due to your death or Disability, the vested portion of any option grant may be exercised within the one-year period following the termination of your employment. In
no event may your initial option grant be exercised after the expiration of its ten-year term. 
 You should be
aware that your employment with the Company is for no specified period and constitutes “at will” employment. As a result, you are free to terminate your employment at any time, for any reason or for no reason. Similarly, the Company is
free to terminate your employment at any time, for any reason or for no reason. The at-will employment policy can only be changed by a written document approved by the Board and signed on behalf of the Board.

 Should your employment with the Company be terminated without Cause or as a result of Constructive Termination (each as defined below) before a Change of
Control (as defined in the 2015 Stock Incentive Plan), (i) you shall be eligible to receive severance payments, equal to the rate of base salary which you were receiving at the time of such termination, during the period from the date of your
termination until the date that is twelve (12) months after the effective date of the termination (the “Severance Period”), which payments shall be paid during the Severance Period (or applicable shorter period) in accordance
with the Company’s standard payroll practice following the effective date of the release described below and which shall be subject to applicable withholding taxes, and (ii) accelerated vesting as of the time of such termination with
respect to the unvested options held by you that would have vested during the Severance Period. 
 Should your employment with the Company be terminated
without Cause or as a result of Constructive Termination in each case after a Change of Control, (i) you shall be eligible to receive severance payments, equal to the rate of base salary which you were receiving at the time of such termination,
during the period from the date of your termination until the date that is twelve (12) months after the effective date of the termination (the “Post-COC Severance Period”), which payments
shall be paid during the Post-COC Severance Period (or applicable shorter period) in accordance with the Company’s standard payroll practice following the effective date of the release described below and
which shall be subject to applicable withholding taxes, and (ii) 100% percent of any unvested options held by you will vest as of the time of such termination. 

  
 2 

 Any severance benefits under this Agreement are conditioned upon (a) your execution of a release of claims
in a form provided by the Company, and any severance payments shall commence on the 60th day following your separation, so long as you have signed a release that has become irrevocable during such
period, with the initial payment including payments that otherwise would have been made during the sixty day period, and (b) your agreement not to compete with the Company, or its successors or assigns, during the period in which you are
receiving these severance payments. If you engage in any business activity competitive with the Company or its successors or assigns during this period, all severance payments shall cease immediately. 

Notwithstanding anything to the contrary in this offer letter, any cash severance payment due to you under this offer letter or otherwise will not be paid
during the six (6) month period following your termination of employment unless the Company determines, in its good faith judgment, that paying such amounts at the time or times indicated above would not cause you to incur an additional tax
under Section 409A of the Internal Revenue Code and any temporary or final treasury regulations and internal revenue service guidance thereunder (“Section 409A”). If the payment of any amounts are delayed as
a result of the previous sentence, any cash severance payments due to you pursuant to this offer letter or otherwise during the first six (6) months after your termination will accrue during such six month period and will become payable in a
lump sum payment on the date six (6) months and one (1) day following the date of your termination. Thereafter, payments will resume in accordance with the applicable schedule set forth in this offer letter. You agree to work in good faith
with the Company to consider amendments to this offer letter which are necessary or appropriate to avoid imposition of any additional tax or income recognition under Section 409A prior to the actual payment to you of payments or benefits under
this offer letter. Notwithstanding the foregoing, this offer letter will be deemed amended, without any consent required from you, to the extent necessary to avoid imposition of any additional tax or income recognition pursuant to Section 409A
prior to actual payments to you under this offer letter. You and the Company agree to cooperate with each other and to take reasonably necessary steps in this regard. 

This Agreement is intended to comply with the requirements of Section 409A, including the exceptions thereto, and shall be construed and administered in
accordance with such intent. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a 

  
 3 

 
manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an
involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated
as a separate payment. Any payments to be made under this Agreement in connection with a termination of employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A. To the
extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A, (i) such expenses or other
reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred, (ii) no right to such reimbursement or in-kind
benefits shall be subject to liquidation or exchange for another benefit, and (iii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in
any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year. Notwithstanding the foregoing, the Company makes no representations that the payments and
benefits provided under this Agreement comply with Section 409A and in no event shall the Company, any Company affiliates, or their respective employees, officers, directors, agents and representatives (including, without limitation, legal
counsel) be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A. 

“Cause” shall mean (i) your failure to perform your assigned duties or responsibilities as an employee of the Company after notice
thereof from the Company describing your failure to perform such duties or responsibilities, (ii) your engaging in any act of dishonesty, fraud or misrepresentation, (iii) your violation of any federal or state law or regulation applicable
to the Company’s business, (iv) your breach of any confidentiality agreement or invention assignment agreement between you and the Company, or (v) your being convicted of or entering a plea of nolo contendere to, any crime or
committing any act of moral turpitude. 
 “Constructive Termination” shall be deemed to occur if, without your written consent, within 90
days following any of the conditions below, you terminate your employment in accordance with this provision: (A) the Company’s material breach of this Agreement resulting from the failure of the Company to require any successor to the
Company upon a Change of Control to assume the Company’s obligations under this offer letter, (B) a material reduction or other adverse change in your job duties, reporting relationships, responsibilities and requirements inconsistent with
your position with the Company and prior duties, reporting relationships, responsibilities and requirements, provided that neither a mere change in title alone nor reassignment following a Change of Control to a position that is substantially
similar to the position 

  
 4 

 
held prior to the Change of Control in terms of job duties, responsibilities or requirements shall constitute a material reduction in job responsibilities, or (C) the request by the Company
or its successor to relocate the principal place for performance of your Company duties to a location more than thirty (30) miles from your then-current principal business location; provided that (i) you have provided written notice of
your intent to terminate employment on the basis of a Constructive Termination within sixty (60) days after the Constructive Termination condition first occurs, and (ii) the Company fails to correct the Constructive Termination within
thirty (30) days after receipt of your written notice. 
 In the event that the severance and other payments or benefits provided for in this offer
letter or otherwise payable to you (i) constitute “parachute payments” within the meaning, of Section 280G of the Code, and (ii) but for this paragraph would be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), then your benefits under this offer letter shall be either 
  

	 	A.	delivered in full, or 

  

	 	B.	delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, 

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by you
on an after tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. If a reduction is required and no parachute payments constitute nonqualified
deferred compensation under Section 409A, you shall be able to select which payments and/or benefits are reduced and the order of reduction. If a reduction is required and any parachute payments constitute nonqualified deferred compensation
under Section 409A, the reduction shall occur in the following order: (i) options whose exercise price exceeds the fair market value of the optioned equity, (ii) Full Credit Payments (as defined below) that are payable in cash, (iii) non-cash Full Credit Payments that are taxable, (iv) non-cash Full Credit Payments that are not taxable (v) Partial Credit Payments (as defined below) and
(vi) non-cash employee welfare benefits. In each case, reductions shall be made in reverse chronological order such that the payment or benefit owed on the latest date following the occurrence of the
event triggering the excise tax will be the first payment or benefit to be reduced (with reductions made pro-rata in the event payments or benefits are owed at the same time). The term “Full Credit
Payment” means a payment or benefit that if reduced in value by one dollar reduces the amount of the parachute payment (as defined in Section 280G of the Code) by one dollar. “Partial Credit Payment” means any payment or benefit
that is not a Full Credit Payment. 
 You understand and agree that by accepting this offer of employment, you represent to the Company that your
performance will not breach any other agreement to which 

  
 5 

 
you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or written agreement in conflict with any of the provisions of this
letter or the Company’s policies. You are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or proprietary information belonging to any former employer or other person or entity
with respect to which you owe an obligation of confidentiality under any agreement or otherwise. The Company does not need and will not use such information. Also, we expect you to abide by any obligations to refrain from soliciting any person
employed by or otherwise associated with any former employer. 
 This offer letter and the confidential information and/or inventions assignment agreement
between you and the Company represent the entire agreement and understanding between you and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior agreements and understandings
concerning your employment relationship with the Company, whether written or oral. Except as specifically provided in this offer letter, this offer letter can only be amended in a writing approved by the Board and signed by you and a duly authorized
officer of the Company. Any waiver of a right under this offer letter must be in writing. The Company will require any successor to all or substantially all of its assets or businesses to assume this Agreement and perform the Company’s
obligations hereunder. This offer letter will be governed by California law. 
 For purposes of federal immigration laws, you will be required to provide to
the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided within three (3) business days of the effective date of your employment, or your employment relationship
with the Company may be terminated. 
 I look forward to your participation in the Company’s future success. 

[Signature Page Follows] 

  
 6 

 Sincerely, 
 /s/
Harold E. “Barry” Selick, Ph.D. 
 Harold E. “Barry” Selick, Ph.D. 

On behalf of the Board of Directors of 
 Catalyst Biosciences,
Inc. 
 Accepted and agreed to this 
 19 day of September,
2017 
   /s/ Nassim Usman,
Ph.D.                                        

 Nassim Usman, Ph.D. 

  
 7

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