Exhibit 10.6
CERTIFICATE TO SET FORTH DESIGNATIONS, VOTING POWERS,
PREFERENCES, LIMITATIONS, RESTRICTIONS, AND RELATIVE
RIGHTS OF SERIES I CUMULATIVE CONVERTIBLE
PREFERRED STOCK, $.01 PAR VALUE PER SHARE
     It is hereby certified that:
     I. The name of the corporation is JMAR Technologies, Inc. (the
“Corporation”), a Delaware corporation.
     II. The certificate of incorporation of the Corporation, as amended,
authorizes the issuance of 5,000,000 shares of Preferred Stock, $.01 par value
per share, and expressly vests in the Board of Directors of the Corporation the
authority provided therein to issue all of said shares in one or more Series by
resolution or resolutions, to establish the designation and number and to fix
the relative rights and preferences of each series to be issued.
     III. The Board of Directors of the Corporation, pursuant to the authority
expressly vested in it, has adopted the following resolution creating a class of
Series I Preferred Stock:
     RESOLVED, that a portion of the authorized shares of Preferred Stock of the
Corporation shall be designated as a separate series possessing the rights and
preferences set forth below:
     1. Designation: Number of Shares. The designation of said series of
Preferred Stock shall be Series I Cumulative Convertible Preferred Stock (the
“Series I Preferred Stock”). The number of shares of Series I Preferred Stock
shall be 639,398. Each share of Series I Preferred Stock shall have a stated
value equal to $10 (as adjusted for any stock dividends, combinations or splits
with respect to such shares) (the “Stated Value”), and $.01 par value.
     2. Ranking. The Series I Preferred Stock shall rank (i) prior to the
Corporation’s common stock, par value $.01 per share (“Common Stock”);
(ii) prior to any class or series of capital stock of the Corporation hereafter
created (unless such class or series of capital stock specifically, by its
terms, ranks senior to or Pari Passu with the Series I Preferred Stock); (iii)
on a parity with any class or series of capital stock of the Corporation
hereafter created specifically ranking, by its terms, on parity with the
Series I Preferred Stock (“Pari Passu Securities”); and (iv) junior to any class
or series of capital stock of the Corporation hereafter created specifically
ranking, by its terms, senior to the Series I Preferred Stock (“Senior
Securities”), in each case as to distribution of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
     3. Dividends.
          (a) The Holders of outstanding shares of Series I Preferred Stock
shall be entitled to receive preferential dividends in cash out of any funds of
the Corporation legally available at the time for declaration of dividends
before any dividend or other distribution will be paid or declared and set apart
for payment on any shares of any Common Stock, or other class of stock presently
authorized or to be authorized, other than the Corporation’s Series G Preferred
Stock which shall be Senior Securities (the Common Stock, and such other stock
being hereinafter collectively the "Junior Stock”), at a per annum rate equal to
the “prime rate” published in the Wall Street Journal from time to time, on the
Stated Value per share of Series I Preferred Stock (the “Dividend Rate”) then
outstanding payable monthly commencing April 1, 2006 and on the first business
day of each consecutive calendar month thereafter

 

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(each a “Monthly Dividend Payment”); provided, however, that dividend payments
may be made in fully paid and non assessable registered shares of the
Corporation’s Common Stock at the Conversion Price (as defined herein) then in
effect, and the issuance of such additional shares shall constitute full payment
of such dividend.
          (b) The dividends on the Series I Preferred Stock at the rates
provided above shall be cumulative whether or not earned so that, if at any time
full cumulative dividends at the rate aforesaid on all shares of the Series I
Preferred Stock then outstanding from the date from and after which dividends
thereon are cumulative to the end of the monthly dividend period next preceding
such time shall not have been paid or declared and set apart for payment, or if
the full dividend on all such outstanding Series I Preferred Stock for the then
current dividend period shall not have been paid or declared and set apart for
payment, the amount of the deficiency shall be paid or declared and set apart
for payment (but without interest thereon) before any sum shall be set apart for
or applied by the Corporation or a subsidiary of the Corporation to the
purchase, redemption or other acquisition of the Series I Preferred Stock or
Parri Passu Securities and before any dividend or other distribution shall be
paid or declared and set apart for payment on any Junior Stock and before any
sum shall be set aside for or applied to the purchase, redemption or other
acquisition of Junior Stock.
          (c) Dividends on all shares of the Series I Preferred Stock shall
begin to accrue and be cumulative from and after the date of issuance thereof. A
dividend period shall be deemed to commence on the day following a Monthly
Dividend Payment date herein specified and to end on the next succeeding Monthly
Dividend Payment date herein specified.
     4. Liquidation Rights.
          (a) Upon the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, the Holders of the Series I
Preferred Stock shall be entitled to receive before any payment or distribution
shall be made on the Junior Stock, out of the assets of the Corporation
available for distribution to stockholders, the Stated Value per share of
Series I Preferred Stock then outstanding and all accrued and unpaid dividends
to and including the date of payment thereof. Upon the payment in full of all
amounts due to Holders of the Series I Preferred Stock, the holders of the
Common Stock of the Corporation and any other class of Junior Stock shall
receive all remaining assets of the Corporation legally available for
distribution. If the assets of the Corporation available for distribution to the
holders of the Series I Preferred Stock shall be insufficient to permit payment
in full of the amounts payable as aforesaid to the holders of Series I Preferred
Stock upon such liquidation, dissolution or winding-up, whether voluntary or
involuntary, then all such assets of the Corporation shall be distributed
ratably among the holders of the Series I Preferred Stock.
          (b) Neither the purchase nor the redemption by the Corporation of
shares of any class of stock nor the merger or consolidation of the Corporation
with or into any other corporation or corporations nor the sale or transfer by
the Corporation of all or any part of its assets shall be deemed to be a
liquidation, dissolution or winding-up of the Corporation for the purposes of
this Section 4.
     5. Conversion into Common Stock. Shares of Series I Preferred Stock shall
have the following conversion rights and obligations:
          (a) Subject to the further provisions of this Section 5, each holder
of shares of Series I Preferred Stock shall have the right at any time
commencing after the issuance of the Series I Preferred Stock to such holder to
convert such shares into fully paid and non-assessable shares of Common Stock of
the Corporation (as further subject to the limitation set forth in Section 5(i)
below) at the Conversion

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Price provided in Section 5(b) below. All issued or accrued but unpaid dividends
may be converted at the election of the holder simultaneously with the
conversion of the Series I Preferred Stock being converted.
     Notwithstanding anything contained herein to the contrary, no holder of
Series I Preferred Stock shall be entitled to convert pursuant to the terms of
this Section 5(a) that amount of the Preferred Stock convertible into that
number of shares of Common Stock which would result in the Holder’s beneficial
ownership (as defined below) of the Corporation’s Common Stock being in excess
of 4.99% of the outstanding shares of Common Stock of the Company. For the
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and
Regulation 13d-3 thereunder. Subject to the foregoing, a holder of Series I
Preferred Stock shall not be limited to aggregate conversions of only 4.99%. A
holder of Series I Preferred Stock may void the conversion limitation described
in this Section 5(a) upon 75 days prior notice to the Corporation or upon an
Event of Default hereunder.
          (b) The number of shares of Common Stock issuable upon conversion of
each share of Series I Preferred Stock shall equal (i) the sum of (A) the Stated
Value per share, as adjusted pursuant to Section 5 hereof, and (B) at the
holder’s election, accrued and unpaid dividends on such share, divided by (ii)
1.16 (the “Conversion Price”).
          (c) The holder of any certificate for shares of Series I Preferred
Stock desiring to convert any of such shares may give notice of its decision to
convert the shares into common stock by delivering, along with the
certificate(s) representing the shares of Series I Preferred Stock to be
converted if requested by the Corporation, an executed and completed notice of
conversion (“Notice of Conversion”) to the Corporation (the “Conversion Date”).
Each date on which a notice of conversion is delivered or telecopied to the
Corporation in accordance with the provisions hereof shall be deemed a
Conversion Date. A form of Notice of Conversion that may be employed by a holder
is annexed hereto as Exhibit A. The Corporation will cause the transfer agent to
transmit the certificates representing the shares of the Corporation’s Common
Stock issuable upon conversion of the Series I Preferred Stock (and a
certificate representing the balance of the Preferred Stock not so converted, if
requested by Purchaser) to the holder by (i) to the extent permitted by the
transfer agent for the Common Stock, crediting the account of the Holder’s prime
broker with the Depository Trust Corporation (“DTC”) through its Deposit
Withdrawal Agent Commission (“DWAC”) system, or (ii) otherwise, by delivery to
the Holder of a stock certificate representing such shares of Common Stock,
within three (3) business days after receipt by the Corporation of the Notice of
Conversion and the certificate(s) representing the shares of Series I Preferred
Stock to be converted (the “Delivery Date”). The Corporation is obligated to
deliver to the holder simultaneously with the aforedescribed Common Stock, at
the election of the Holder, additional Common Stock representing the conversion
at the Conversion Price, of dividends accrued on the Series I Preferred Stock
being converted.
          The Corporation understands that a delay in the delivery of the Common
Stock in the form required pursuant to this Section beyond the Delivery Date
could result in economic loss to the Holder. In the event that the Corporation
fails to direct its transfer agent to deliver the Common Stock to the Holder
within the time frame set forth in Section 5 and the Common Stock is not
delivered to the Holder by the Delivery Date, as compensation to the Holder for
such loss, the Corporation agrees to pay late payments to the Holder for late
issuance of the Common Stock in the form required pursuant to this Section 5 in
the amount equal to $500 per business day after the Delivery Date. The
Corporation shall pay any payments incurred under this Section in immediately
available funds upon demand and, in the case of actual damages, accompanied by
reasonable documentation of the amount of such damages.
          In the case of the exercise of the conversion rights set forth in
Section 5(a) the conversion privilege shall be deemed to have been exercised and
the shares of Common Stock issuable upon such

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conversion shall be deemed to have been issued upon the date of receipt by the
Corporation of the Notice of Conversion. The person or entity entitled to
receive Common Stock issuable upon such conversion shall, on the date such
conversion privilege is deemed to have been exercised and thereafter, be treated
for all purposes as the record holder of such Common Stock and shall on the same
date cease to be treated for any purpose as the record holder of such shares of
Series I Preferred Stock so converted.
          Upon the conversion of any shares of Series I Preferred Stock no
adjustment or payment shall be made with respect to such converted shares on
account of any dividend on the Common Stock, except that the holder of such
converted shares shall be entitled to be paid any dividends declared on shares
of Common Stock after conversion thereof.
          The Corporation shall not be required, in connection with any
conversion of Series I Preferred Stock, and payment of dividends on Series I
Preferred Stock to issue a fraction of a share of its Series I Preferred Stock
and shall instead deliver a stock certificate representing the next whole
number.
          In the event of any conversions of shares of Series I Preferred Stock
in part pursuant to this Section 5, such conversions shall be deemed to
constitute conversions of outstanding redemption amount applying to Monthly
Amounts (as defined in Section 10 below) for the Repayment Dates (as defined in
Section 10 below) in chronological order. By way of example, if the original
stated amount of the Series I Preferred Stock is $6,393,980, the Monthly Amount
is $122,178 and the Holder converted $200,000 of such original stated amount
prior to the first Repayment Date, then (1) the principal amount of the Monthly
Amount due on the first Repayment Date would equal $0, (2) the principal amount
of the Monthly Amount due on the second Repayment Date would equal $44,356 and
(3) the principal amount of the Monthly Amount due on each of the remaining
Repayment Dates would be $122,178.
          (d) The Conversion Price determined pursuant to Section 5(b) shall be
subject to adjustment from time to time as follows:
               (i) In case the Corporation shall at any time (A) declare any
dividend or distribution on its Common Stock or other securities of the
Corporation other than the Series G Preferred Stock, (B) split or subdivide the
outstanding Common Stock, (C) combine the outstanding Common Stock into a
smaller number of shares, or (D) issue by reclassification of its Common Stock
any shares or other securities of the Corporation, then in each such event the
Conversion Price shall be adjusted proportionately so that the holders of
Series I Preferred Stock shall be entitled to receive the kind and number of
shares or other securities of the Corporation which such holders would have
owned or have been entitled to receive after the happening of any of the events
described above had such shares of Series I Preferred Stock been converted
immediately prior to the happening of such event (or any record date with
respect thereto). Such adjustment shall be made whenever any of the events
listed above shall occur. An adjustment made to the Conversion Price pursuant to
this Section 5(d)(i) shall become effective immediately after the effective date
of the event for the event.
          (e) (i) In case of any merger of the Corporation with or into any
other corporation (other than a merger in which the Corporation is the surviving
or continuing corporation and which does not result in any reclassification,
conversion, or change of the outstanding shares of Common Stock) then unless the
right to convert shares of Series I Preferred Stock shall have terminated, as
part of such merger lawful provision shall be made so that holders of Series I
Preferred Stock shall thereafter have the right to convert each share of
Series I Preferred Stock into the kind and amount of shares of stock and/or
other securities or property receivable upon such merger by a holder of the
number of shares of Common Stock into which such shares of Series I Preferred
Stock might have been convertible by the holder immediately prior to such
consolidation or merger. Such provision shall also provide for adjustments that
shall be as

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nearly equivalent as may be practicable to the adjustments provided for in
Section (d) of this Section 5. The foregoing provisions of this Section 5(e)
shall similarly apply to successive mergers.
               (ii) In case of any sale or conveyance to another person or
entity of the property of the Corporation as an entirety, or substantially as an
entirety, in connection with which shares or other securities or cash or other
property shall be issuable, distributable, payable, or deliverable for
outstanding shares of Common Stock, then, unless the right to convert such
shares shall have terminated, lawful provision shall be made so that the holders
of Series I Preferred Stock shall thereafter have the right to convert each
share of the Series I Preferred Stock into the kind and amount of shares of
stock or other securities or property that shall be issuable, distributable,
payable, or deliverable upon such sale or conveyance with respect to each share
of Common Stock immediately prior to such conveyance.
          (f) Whenever the number of shares to be issued upon conversion of the
Series I Preferred Stock is required to be adjusted as provided in this
Section 5, the Corporation shall forthwith compute the adjusted number of shares
to be so issued and prepare a certificate setting forth such adjusted conversion
amount and the facts upon which such adjustment is based; and the Corporation
shall mail to each holder of record of Series I Preferred Stock notice of such
adjusted conversion price.
          (g) In case at any time the Corporation shall propose:
               (i) to pay any dividend or distribution payable in shares upon
its Common Stock or make any distribution (other than cash dividends) to the
holders of its Common Stock; or
               (ii) to offer for subscription to the holders of its Common Stock
any additional shares of any class or any other rights; or
               (iii) any capital reorganization or reclassification of its
shares or the merger of the Corporation with another corporation (other than a
merger in which the Corporation is the surviving or continuing corporation and
which does not result in any reclassification, conversion, or change of the
outstanding shares of Common Stock); or
               (iv) the voluntary dissolution, liquidation or winding-up of the
Corporation;
then, and in any one or more of said cases, the Corporation shall cause at least
fifteen (15) days prior notice of the date on which (A) the books of the
Corporation shall close or a record be taken for such stock dividend,
distribution, or subscription rights, or (B) such capital reorganization,
reclassification, merger, dissolution, liquidation or winding-up shall take
place, as the case may be, to be mailed to the Transfer Agent for the Series I
Preferred Stock and to the holders of record of the Series I Preferred Stock.
          (h) So long as any shares of Series I Preferred Stock shall remain
outstanding and the holders thereof shall have the right to convert the same in
accordance with provisions of this Section 5 the Corporation shall at all times
reserve from the authorized and unissued shares of its Common Stock a sufficient
number of shares to provide for such conversions.
          (i) Overall Limit on Common Stock Issuable. The number of shares of
Common Stock issuable by the Corporation and acquirable by the Holder under all
securities issued by the Company to the Holder, shall not exceed an aggregate of
7,011,900 shares, subject to appropriate adjustment for stock splits, stock
dividends, or other similar recapitalizations affecting the Common Stock (the
“Maximum Common Stock Issuance”), unless the issuance of shares hereunder in
excess of the Maximum Common Stock Issuance shall first be approved by the
Corporation’s shareholders provided,

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however, that any shares of Common Stock issued to Holder upon conversion of
convertible securities or upon exercise of warrants and subsequently sold by the
Holder shall be excluded from the calculation of the aggregate Maximum Common
Stock Issuance. If at any point in time and from time to time the number of
shares of Common Stock issued pursuant to conversion of the Preferred Stock,
together with the number of shares of Common Stock that would then be issuable
by the Corporation in the event of the conversion or exercise of all other
securities issued by the Company, would exceed the Maximum Common Stock Issuance
but for this Section, the Corporation shall promptly call a shareholders meeting
to obtain shareholder approval for the issuance of the shares of Common Stock
hereunder in excess of the Maximum Common Stock Issuance if required by the
NASDAQ Capital Market listing requirements.
          (j) The Corporation shall pay the amount of any and all issue taxes
(but not income taxes) which may be imposed in respect of any issue or delivery
of stock upon the conversion of any shares of Series I Preferred Stock, but all
transfer taxes and income taxes that may be payable in respect of any change of
ownership of Series I Preferred Stock or any rights represented thereby or of
stock receivable upon conversion thereof shall be paid by the person or persons
surrendering such stock for conversion.
          (k) Required Conversions. In the event that the volume weighted
average price (as determined using the AQR function on the Bloomberg terminal)
of the Corporation’s Common Stock for all trades during any consecutive eleven
(11) day trading period on the Principal Market is at a price greater than 118%
of the Conversion Price, then the Corporation may, at its sole option, provide
the Holder irrevocable written notice (“Call Notice”) within three (3) business
days following such eleven (11) day period requiring the conversion at the
Conversion Price of all or a portion of the Stated Value held by the Holder as
of the date set forth in such Call Notice (the “Call Date”), which such date
shall be at least 11 trading days following the date of the Call Notice,
provided a registration statement covering resales of that number of shares of
Common Stock then issuable upon conversion of this Preferred Stock pursuant to
such Call Notice has been declared effective and is available for use, or the
shares are tradable under Rule 144(k). The amount of Common Stock to be issued
in connection with any such conversion pursuant to a particular Call Notice
pursuant to this Section 5(k) shall not exceed 25% of the aggregate dollar
trading volume of the Common Stock for the 11 trading days immediately preceding
the Call Date. If the volume weighted average price (as determined using the AQR
function on the Bloomberg terminal) of the Common Stock for all trades during
such consecutive eleven (11) day trading period preceding the Call Date falls
below 118% of the Conversion Price, then the Holder will no longer be required
to convert the Preferred Stock pursuant to such Call Notice.
     6. Voting Rights. The shares of Series I Preferred Stock shall not have
voting rights.
     7.  Events of Default.
     The occurrence of any of the following events of default (each, an “Event
of Default”) shall, after the applicable period to cure the Event of Default,
cause the then applicable Dividend Rate described in Section 3 hereof to become
20% from and after the occurrence of such event, and the Holder shall have the
option to require the Corporation to redeem the Series I Preferred Stock held by
such Holder by the immediate payment to the Holder by the Corporation of a sum
of money equal to 120% of the outstanding Stated Value, plus accrued and unpaid
dividends:
          7.1 Failure to Make Payment. The Corporation fails to pay any payment
required to be paid pursuant to the terms of hereof or the failure to timely pay
any other sum of money due to the Holder from the Corporation and such failure
continues for a period of three (3) days after written notice to the Corporation
from the Holder.

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          7.2 Breach of Covenant. The Corporation breaches any material covenant
or other term or condition of this Certificate of Designations or the Purchase
Agreement in any material respect and such breach, if subject to cure, continues
for a period of five (5) days after written notice to the Corporation from the
Holder.
          7.3 Breach of Representations and Warranties. Any material
representation or warranty of the Corporation made herein, or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
therewith shall have been false or misleading when made.
          7.4 Receiver or Trustee. The Corporation shall make an assignment for
the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business; or such a receiver or trustee shall otherwise be appointed.
          7.5 Judgments. Except for judgments related to obligations of JMAR
Semiconductor, Inc., which are reflected on the Corporation’s balance sheet, any
money judgment, writ or similar final process shall be entered or filed against
Corporation or any of its property or other assets for more than $250,000, and
shall remain unvacated, unbonded or unstayed for a period of forty-five
(45) days.
          7.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Corporation.
          7.7 Stop Trade. An SEC stop trade order or Principal Market trading
suspension.
          7.8 Default Under Related Agreements. An Event of Default occurs under
and as defined in any one or more of the following agreements which is not cured
during any applicable cure or grace period: (i) Security Agreement dated
March 27, 2006 between the Corporation, certain of its subsidiaries, and Laurus
Master Fund, Ltd., (ii) Secured Non-Convertible Revolving Note, dated March 27,
2006, (iii) Stock Pledge Agreement dated March 14, 2003 between the Corporation
and Laurus Master Fund, Ltd. and (iv) Pledge and Security Agreement dated
March 14, 2003 between the Corporation and Laurus Master Fund, Ltd., as each
such agreement may be amended, modified and supplemented from time to time.
     8. Mandatory Redemption. In the event any shares of Series I Preferred
Stock are outstanding on August 5, 2008, any remaining Stated Value of such
shares shall be redeemed and such shares shall be cancelled.

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     9. Optional Redemption. The Corporation will have the option of redeeming
any outstanding amount of the Stated Value of the Preferred Stock (“Optional
Redemption”) by paying to the holder 118% of such amount, together with accrued
but unpaid dividends thereon and any and all other sums due, accrued or payable
to the holder arising under this certificate or any other document delivered
herewith (“Redemption Amount”) outstanding on the day notice of redemption
(“Notice of Redemption") is delivered to a holder (“Redemption Date”). A Notice
of Redemption may not be given in connection with any portion of Preferred Stock
for which a Notice of Conversion has been given by the holder at any time before
receipt of a Notice of Redemption or given pursuant to the following sentence.
The holder may elect within five (5) business days after receipt of a Notice of
Redemption to give the Corporation a Notice of Conversion in connection with
some or all of the amount which was the subject of the Notice of Redemption. The
Redemption Amount must be paid in good funds to the holder no later than the
seventh (7th) business day after the Redemption Date (“Optional Redemption
Payment Date”). In the event the Corporation fails to pay the Redemption Amount
by the Optional Redemption Payment Date, then the Redemption Notice will be null
and void. A Notice of Redemption may be given by the Corporation, provided no
Event of Default shall have occurred or be continuing.
     10. Amortization.
               (a) Monthly Payments. Subject to the terms of this Section 10,
the Corporation shall repay $122,178.00 of the original Stated Value of the
Series I Preferred Stock (to the extent such amount has not been converted
pursuant to Section 5 above), together with the dividend accrued to date on such
portion of the original Stated Value then due and payable (collectively the
“Monthly Amount”), in accordance with Section 10(b) below, on the first business
day of each of the six consecutive calendar months (each, a “Repayment Date”)
beginning on August 1, 2007 and continuing through and including January 1,
2008.
               (b) Cash or Common Stock. Subject to the terms hereof, the
Corporation has the sole option to determine whether to satisfy payment of the
Monthly Amount in full on each Repayment Date either in cash or in registered
shares of Common Stock, or a combination of both. The Corporation shall deliver
to the Holder a written irrevocable notice in the form of Exhibit B attached
hereto electing to pay such Monthly Amount in full on such Repayment Date in
either cash or registered Common Stock, or a combination of both (“Repayment
Election Notice”). Such Repayment Election Notice shall be delivered to the
Holder at least ten (10) days prior to the applicable Repayment Date (the date
of such notice being hereinafter referred to as the “Notice Date”). If such
Repayment Election Notice is not delivered within the prescribed period set
forth in the preceding sentence, then the repayment shall be made in either cash
or shares of Common Stock on the same terms hereunder at the Holder’s sole
option. If the Corporation elects or is required to repay all or a portion of
the Monthly Amount in cash on a Repayment Date, then on such Repayment Date the
Corporation shall pay to the Holder an amount equal to 102% of the Monthly
Amount in satisfaction of such obligation. If the Corporation repays all or a
portion of the Monthly Amount in shares of Common Stock, the number of such
shares to be issued for such Repayment Date shall be the number determined by
dividing (x) the portion of the Monthly Amount to be paid in shares of Common
Stock, by (y) the Conversion Price (as defined herein) as of such date.
               (c) No Effective Registration. Notwithstanding anything to the
contrary herein, the Corporation shall be prohibited from exercising its right
to repay the Monthly Amount in shares of Common Stock (and must deliver cash in
respect thereof) on the applicable Repayment Date if at any time from the Notice
Date until the time at which the Holder receive such shares (i) there fails to
exist an effective registration statement or the holder cannot sell the shares
pursuant to Rule 144(k), or (ii) an Event of Default hereunder exists or occurs,
unless otherwise waived in writing by the Holder in whole or in part at the
Holder’s option.

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               (d) Share Price/Issuance Limitations. Notwithstanding anything to
the contrary herein, if the closing price of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market for any of the 11 trading days preceding
a Repayment Date was less than 118% of the Conversion Price, and the Corporation
has elected to pay all or a portion of the Monthly Amount in shares of Common
Stock, then, in lieu of the Corporation delivering the required number of shares
of Common Stock on the Repayment Date, Corporation shall pay the Monthly Amount,
or the unconverted part thereof, in cash.
               (e) Deemed Conversions. Any repayment of the Monthly Amount in
shares of Common Stock pursuant to the terms hereof shall constitute and be
deemed a conversion of such portion of the applicable Stated Value of the
Series I Preferred Stock for all purposes under this Certificate and the
Purchase Agreement (as defined herein) (except as otherwise provided herein).
               (f) Deemed Ownership. In the case of the exercise of the
conversion rights or payment of the Monthly Amount set forth herein the
conversion privilege shall be deemed to have been exercised and the shares of
Common Stock issuable upon such conversion or Repayment shall be deemed to have
been issued upon the date of receipt by the Corporation of the Notice of
Conversion or on the Repayment Date if the Monthly Amount is paid in shares of
Common Stock, as the case may be. The person or entity entitled to receive
Common Stock issuable upon such conversion shall, on the date such conversion
privilege is deemed to have been exercised and thereafter, be treated for all
purposes as the record holder of such Common Stock.
     11. Status of Converted or Redeemed Stock. In case any shares of Series I
Preferred Stock shall be redeemed or otherwise repurchased or reacquired, the
shares so redeemed, converted, or reacquired shall resume the status of
authorized but unissued shares of Preferred Stock and shall no longer be
designated as Series I Preferred Stock.
     In witness whereof, JMAR Technologies, Inc. has caused this Certificate to
be executed by Dennis E. Valentine, its Vice President of Finance and Chief
Financial Officer, this 28th day of March, 2006.
JMAR TECHNOLOGIES, INC.
By: /s/ DENNIS E. VALENTINE

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EXHIBIT A
NOTICE OF CONVERSION
(To Be Executed By the Registered Holder in Order to Convert the Series I
Convertible Preferred Stock of JMAR Technologies, Inc.)
     The undersigned hereby irrevocably elects to convert                     
shares of Series I Convertible Preferred Stock and $                     of the
dividend due, into shares of Common Stock of JMAR Technologies, Inc. (the
“Corporation”) according to the conditions hereof, as of the date written below.

             
Date of Conversion:
               
 
            Applicable Conversion Price Per Share:                 
 
            Number of Common Shares Issuable Upon This Conversion:    
 
         

         
Signature: 
           
 
        Print Name:     
 
   
 
       
Address:
           
 
       
 
         
 
        Deliveries Pursuant to this Notice of Conversion Should Be Made to:
 
       
 
         
 
       
 
         
 
       
 
         

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EXHIBIT B
FORM OF REPAYMENT ELECTION NOTICE
To: [HOLDER AT HOLDER’S ADDRESS]
     Pursuant to Section 10(b) of the Certificate to Set Forth Designations of
Series I Convertible Preferred Stock (“Preferred Stock”) of JMAR Technologies,
Inc. issued on March 27, 2006, we hereby notify you that we are irrevocably
electing to repay the outstanding Monthly Amount (as defined in the Preferred
Stock) due on the Repayment Date (as defined in the Preferred Stock) which
occurs on                     , 20___(CHECK ONE):

  ______   In full in cash on such Repayment Date.     ______   In full in
shares of the Company’s Common Stock within three (3) trading days following
such Repayment Date.     ______   In part in cash in the amount of $
                     on such Repayment Date, and in part in shares of the
Company’s Common Stock (in the amount of                     shares) within
three (3) trading days following such Repayment Date.

              JMAR Technologies, Inc.
 
  By:    
 
          Name:
Title:

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