matechexh4_1.htm


    
      
        
 
Exhibit 4.1

     

     

    MATERIAL
TECHNOLOGIES, INC.

    (a
Delaware corporation)

     

    CLASS A
CONVERTIBLE PREFERRED STOCK

    CERTIFICATE
OF DESIGNATIONS

     

    Material
Technologies, Inc., organized and existing under Delaware General Corporation
Law (the "Corporation") by its President and Secretary, does hereby certify
that, pursuant to authority conferred on the Board of Directors (the
"Board")
by Paragraph 4 of the Corporation's Certificate of Incorporation authorizing
a class of Nine Hundred Thousand (900,000) shares Preferred Stock with a
par value of one mill ($.001) per share, and pursuant to Section 151 of
the
Delaware General Corporation  Law, as amended, the Board duly adopted
a resolution
providing as follows for the issuance out of such class the series of
up to
three hundred fifty thousand (350,000) shares of Class A Convertible
Preferred
Stock, and setting forth the designations and powers, preferences and
rights,
including voting rights, if any, and the qualifications, limitations or
restrictions
thereof:

     

    WHEREAS,
the Corporation's Certificate of Incorporation states, among other things,
that the Corporation is authorized to issue up to Nine Hundred Thousand
(900,000)
shares of Preferred Stock, of the par value of one mill ($.001) per share,
and that the Board is granted the authority to fix, by resolution, the
designations
and powers, preferences, and rights, including voting rights, if any, and
the qualifications, limitations or restrictions thereof, if any, of such
shares;

     

    NOW,
THEREFORE, BE IT RESOLVED that the Board does hereby designate Three
Hundred
fifty Thousand (350,000) shares of its authorized but previously unissued
Preferred Stock as "Class A Convertible Preferred Stock" which may be
issued
from time to time.  The designations and the powers, preferences and
rights,
including voting rights of the Class A Convertible Preferred Stock and
the
qualifications, limitations and restrictions thereof, shall be as
follows::

     

    1.    
LIQUIDATION PREFERENCE

     

    1.1   
In the event of liquidation, dissolution or winding up of the Corporation,
whether such be voluntary or involuntary, the holders of shares of
Class A Convertible Preferred Stock (the "Shares") shall be entitled
to receive out of the Corporation's assets, an amount equal to seventy-two
cents ($.72) per Share (the "Liquidation Preference").  Such
amount
shall be paid upon all outstanding Shares before any payment shall be made
or any assets distributed to the holders of shares of common stock or any
other stock of any other series or class ranking junior to the Shares as
to dividends or assets.  The holders of Shares shall not be
entitled
to any further payment.

     

    1.2   
A merger or consolidation of the Corporation with another corporation
shall not
be deemed to be a liquidation, dissolution or winding up within the
meaning of this Section 1.

     

    1.3   
While the Shares are outstanding the Corporation shall not, without the prior
consent of the holders of a majority of the outstanding Shares, issue any
Preferred Stock which is senior to or parri passu with the Shares with
respect to liquidation preference.

     

    2.    
CONVERSION

     

    2.1   
RIGHT TO CONVERT: CONVERSION PRICE   Subject to and upon
compliance with this
Section 2, at the option of the holder thereof, each outstanding Share may
at any time be converted into duly authorized, validly issued, fully
paid and nonassessable shares of the Corporation's common stock, par
value one
Mil ($.001) per share ("Common Stock") at Seventy-two cents ($.72)
per share (The "Initial Conversion Price") or, in case an adjustment
in the
conversion price has taken place pursuant to Section 3 below, then at the
applicable conversion price as so adjusted (the "Conversion Price"),
upon
surrender of the certificate

     

     

    
      
         

      

      
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    representing
the Shares to be converted to the Corporation at any time during
usual business hours at the Corporation's principal executive, accompanied
by a written notice of election to convert as provided in Section
2.2 below.  All Shares surrendered for conversion shall be restored
to the
status of authorized but unissued and undesignated shares of Preferred
Stock.  The number of shares of Common Stock to be issued on
conversion
shall be determined by dividing (i) an amount equal to the sum of the
aggregate Liquidation Preference of the converted Shares by (ii) the
Conversion
Price as in effect on the date the Shares are surrendered for conversion.

     

    2.2    ISSUANCE
OF COMMON STOCK ON CONVERSION.  As promptly as practicable
after
surrender of any Shares for conversion, the Corporation shall deliver
or cause
to be delivered to, or upon the written order of, the holder of surrendered
Shares a certificate or certificates representing the number of duly
authorized, validly issued, fully paid, and nonassessable shares of Common
Stock into which such Shares have been converted in accordance with this
Section 2.  Prior to delivery of such certificate or certificates, the
Corporation
shall require written notice at its said office from the holder of the
Shares so surrendered stating that the holder irrevocably elects to convert
such shares.  Such notice shall also state the name or names (with
address
and social security or other taxpayer identification number) in which
said certificate or certificates are to be issued.  Such conversion
shall be
deemed to have been made at the time that such shares shall have been
surrendered for conversion and such notice shall have been received by
the
Corporation (the "Conversion Date").  The Corporation shall have the
right to
pay cash or to round up to the next whole share in lieu of issuing fractional
shares of Common Stock.

     

    3.    
ADJUSTMENT OF CONVERSION PRICE.  The kind of securities issuable upon
conversion
of Shares and Conversion Price shall be subject to adjustment from time to
time upon the happening of certain events as follows:

     

    3.1   
RECLASSIFICATION, CONSOLIDATION OF MERGER.  In case of any
reclassification
or change of outstanding securities of the class of securities
which are issuable upon conversion of the Shares (other than as a result
of subdivision or combination or an increase or decrease in the number of
such securities outstanding) or in case of any consolidation or merger of
the Corporation with or into another corporation (other than a merger
with another corporation in which the Corporation is the surviving corporation
and which does not result in any reclassification or change, other
than a subdivision or combination of outstanding securities issuable
upon the
conversion of Shares or an increase or decrease in the number of such
securities outstanding), or in case of any sale or transfer to another
corporation
of all or substantially all of the Corporation's assets, the holders
of the Shares shall have the right to receive upon conversion, in lieu of
Common Stock issuable upon such conversion, the kind and amount of shares of
stock, other securities, money, or property receivable upon such reclassification,
change, consolidation, merger, sale, or transfer by the holder of
shares of Common Stock issuable upon conversion of such Shares had such
Shares been converted immediately prior to such reclassification, change,
consolidation, merger, sale, or transfer.  The Corporation shall
not
permit any such reclassification, change, consolidation, merger, sale,
or
transfer to take place without adequate and lawful provisions to protect
the
rights of the holders of Shares, including provisions assuring that this
Section 3 shall thereafter be applicable, as nearly as may be, with respect
to shares of stock, securities, or assets deliverable upon conversion
of the Shares.  This Section 3.1 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales, and transfers.

     

    3.2   
SUBDIVISION OR COMBINATION.  If the Corporation at any time while
Shares
are outstanding, shall subdivide or combine its outstanding securities
of the class of securities which are issuable upon conversion of Shares,
the conversion price shall be proportionately reduced, in case of subdivision
of such securities, as of the effective date of such subdivision,
or shall be proportionately increased, in the case of combination
of such securities, as of the effective date of such combination.

     

    3.3   
STOCK DIVIDENDS.  If the Corporation at any time while Shares are
outstanding
shall pay a dividend or make any other distribution on its Common
Stock payable in shares of its common stock, then the conversion price
shall be adjusted, as of the date of such payment or other distribution
to that price determined by multiplying the conversion price in effect
immediately prior to such payment or other distribution by a fraction
(a) the numerator of which shall be the total number of shares of Common
Stock

     

    
      
         

      

      
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    outstanding
immediately prior to such dividend or distribution, and (b) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution.

     

    3.4   
NOTICE OF ADJUSTMENTS.  Whenever the Conversion Price shall be
adjusted
under Section 3 hereof, the Corporation shall make a certificate signed by
its president or a vice president and by its chief financial officer,
treasurer, assistant treasurer, secretary or assistant secretary setting
forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the conversion price after giving effect to such adjustment,
and shall cause copies of such certificate to be mailed (by first
class mail postage prepaid) to the holders of Shares promptly after each
adjustment.  A determination of any adjustment to the Conversion Price
or the
number or kind of shares or other securities issuable upon conversion
of Shares, by independent certified public accountants selected by the
Corporation, shall be final and binding on all parties.

     

    4.  VOTING
RIGHTS.  Each holder of Shares shall have the right to vote on all
matters
on which the holders of Common Stock have the right to vote and to cast
that
number of votes which the holder would have been entitled to cast had such
holder
converted his Shares immediately prior to the record  date for such
vote (or if
there be no record date, immediately prior to the vote).

     

    5.  DIVIDENDS.  The
Shares shall participate in all dividends declared and paid with
respect to the Common Stock to the same extent as if the Shares had been
converted
immediately prior to the record date for the payment of such dividend
(or if
there be no record date, immediately prior to the dividend), except for
dividends
or distributions on the Common Stock payable in shares of Common Stock
(to which
Section 3.3 applies) and dividends or distributions in liquidation or
partial
liquidation (to which Section 3.4 applies).

     

    IN
WITNESS WHEREOF, Material Technologies, Inc., has caused this certificate of
Designation
to be signed by its President and attested by its Secretary on this 9th day
of March, 1997, and each of such persons hereby affirms under penalty of
perjury
that this Certificate of Designation is the act and deed of Material
Technologies,
Inc. and that the facts stated herein are true and correct.

     

     

    MATERIAL
TECHNOLOGIES, INC.

     

    By /s/
Robert M.
Bernstein             


    Robert M.
Bernstein, President

     

     

    Attest:

     

    /s/
Joel R.
Freedman                         


    Joel R.
Freedman, Secretary

     

     

     


    
      
         


      

      
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