Exhibit
4.1
 CERTIFICATE
OF DESIGNATIONS,
 PREFERENCES
AND RIGHTS OF
 SERIES
A CONVERTIBLE PREFERRED STOCK
 OF
 VELOCITY
ENERGY INC.
 
 A
Delaware Corporation
 
 Pursuant
to Section 151 of the
 Delaware
General Corporation Law
 
 
 Velocity
Energy Inc., a corporation organized and existing under the laws of the State of
Delaware (the "Corporation"), hereby certifies that the following resolutions
were duly adopted on February 9, 2009, by the Board of Directors of the
Corporation pursuant to the authority of the Board of Directors as required by
Section 151 of the Delaware General Corporation Law:
 
 RESOLVED,
that, pursuant to the authority conferred upon the Board of Directors by Article
IV of the Certificate of Incorporation of the Corporation, there is hereby
established a series of authorized preferred stock of the Corporation having a
par value of $0.001 per share (the "Preferred Stock"), which series shall be
designated as Series A Convertible Preferred Stock (the "Series A Preferred
Stock") and shall consist of twenty million (20,000,000) shares;
 
 RESOLVED
FURTHER, that the relative rights and preferences of the shares of the Series A
Preferred Stock of the Corporation shall be as follows:
 
 1. Designation and Number of
Shares. There shall hereby be created and established a series of
Preferred Stock designated as "Series A Convertible Preferred Stock". The
authorized number of shares of Series A Preferred Stock shall be 20,000,000
shares.
 
 2. Conversion
Price.  The holders of shares of Series A Preferred Stock shall
have the right to convert each share of Series A Preferred Stock into one share
of common stock, par value $0.001 per share ("Common Stock") of the Corporation
at a price equal to $1.20 per share of Common Stock.
 
 3. Dividends. Except as
provided herein, the holders of the Series A Preferred Stock shall not be
entitled to receive cash, stock or other property, as dividends, except if
declared by the Board of Directors of the Corporation. Series A Preferred Stock
shall not participate in any dividend declared with respect to the Common
Stock.
 
 4. Liquidation Rights.
Upon the dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, the holders of the then outstanding shares of Series A
Preferred Stock shall be entitled to receive out of the assets of the
Corporation the sum of $0.001 per share (the "Liquidation Rate") before any
payment or distribution shall be made on any other class of capital stock of the
Corporation ranking junior to the Series A Preferred Stock.
 
 1
 (a) The
sale, conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all the property and assets of the Corporation shall be
deemed a dissolution, liquidation or winding up of the Corporation for purposes
of this Paragraph 4, but the merger, consolidation, or other combination of the
Corporation into or with any other corporation, or the merger, consolidation, or
other combination of any other corporation into or with the Corporation, shall
not be deemed a dissolution, liquidation or winding up, voluntary or
involuntary, for purposes of this Paragraph 4. As used herein, the "merger,
consolidation, or other combination" shall include, without limitation, a
forward or reverse triangular merger, or stock exchange of the Corporation and
any of its subsidiaries with any other corporation.
 
 (b) After
the payment to the holders of shares of the Series A Preferred Stock of the full
preferential amounts fixed by this Paragraph 4 for shares of the Series A
Preferred Stock, the holders of the Series A Preferred Stock as such shall have
no right to claim to any of the remaining assets of the
Corporation.
 
 (c) In
the event the assets of the Corporation available for distribution to the
holders of the Series A Preferred Stock upon dissolution, liquidation or winding
up of the Corporation shall be insufficient to pay in full all amounts to which
such holders are entitled pursuant to this Paragraph 4, no distribution shall be
made on account of any shares of a class or series of capital stock of the
Corporation ranking on a parity with the shares of Series A Preferred Stock, if
any, upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of the Series A
Preferred Stock, ratably, in proportion to the full distributive amounts for
which holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
 
 5. Preferred Status. The
rights of the shares of the Common Stock shall be subject to the preferences and
relative rights of the shares of the Series A Preferred Stock. Without the prior
written consent of the holders of not less than a majority of the outstanding
shares of the Series A Preferred Stock, the Corporation shall not hereafter
authorize or issue additional or other capital stock that is of senior or equal
rank to the shares of the Series A Preferred Stock in respect of the preferences
as to distributions and payments upon the Liquidation, dissolution and winding
up of the Corporation described in Paragraph 4 above.
 
 6. Vote to Change the Terms of
the Series A Preferred Stock.   Without the prior
written consent of the holders of not less than a majority of the outstanding
shares of the Series A Preferred Stock, the Corporation shall not amend, alter,
change or repeal any of the powers, designations, preferences and rights of the
Series A Preferred Stock.
 
 2
 7. Lost or Stolen
Certificates. Upon receipt by the Corporation of evidence satisfactory to
the Corporation of the loss, theft, destruction or mutilation of any Preferred
Stock Certificates representing shares of the Series A Preferred Stock, and, in
the case of loss, theft or destruction, of any indemnification undertaking or
bond, in the Corporation's discretion, by the holder to the Corporation and, in
the case of mutilation, upon surrender and cancellation of the Preferred Stock
Certificate(s), the Corporation shall execute and deliver new Series A Preferred
Stock Certificate(s) of like tenor and date.
 
 8. Voting. Series A
Preferred Stock shall not have voting rights.
 
 9. No Reissuance of Series A
Preferred Stock. No share or shares of Series A Preferred Stock acquired
by the Corporation by reason of redemption, purchase or otherwise shall be
reissued, and all such shares of Series A Preferred Stock shall be cancelled,
retired and eliminated from the shares of Series A Preferred Stock, as
applicable which the Corporation shall be authorized to issue. Any such shares
of Series A Preferred Stock acquired by the Corporation shall have the status of
authorized and unissued shares of Preferred Stock issuable in undesignated
Series and may be redesignated and reissued in any series other than as Series A
Preferred Stock.
 
 10. Registered Holders. A
holder of Series A Preferred Stock registered on the Corporation's stock
transfer books as the owner of shares of Series A Preferred Stock, as
applicable, shall be treated as the owner of such shares of all purposes. All
notices and all payments required to be mailed to a holder of shares of Series A
Preferred Stock shall be mailed to such holder's registered address on the
Corporation's stock transfer books, and all dividends and redemption payments to
a holder of Series A Preferred Stock made hereunder shall be deemed to be paid
in compliance hereof on the date such payments are deposited into the mail
addressed to such holder at such holder's registered address on the
Corporation's stock transfer books.
 
 11. Certain Remedies. Any
registered holder of shares of Series A Preferred Stock shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Certificate of Designations and to enforce specifically the terms and provisions
of this Certificate of designations in any court of the United States or any
state thereof having jurisdiction, this being in addition to any other remedy to
which such holder may be entitled at law or in equity.
 
 12. Headings of
Subdivisions. The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
 
 13. Severability of
Provisions. If any right, preference or limitation of the Series A
Preferred Stock set forth herein (as may be amended) from time to time is
invalid, unlawful or incapable of being enforced by reason of any rule of law or
public policy, such right, preference or limitation (including, without
limitation, the dividend rate) shall be enforced to the maximum extent permitted
by law and all other rights, preferences and limitations set forth herein (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable right, preference or limitation herein set forth shall not be
deemed dependent upon any other such right, preference or limitation unless so
expressed herein.
 
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 14. Ranking. The Series A
Preferred Stock shall rank, as to rights upon liquidation, dissolution or
winding up, pari passu to each other and shall rank senior and prior to (i) the
Common Stock and (ii) each other class or series of capital stock of the
Corporation hereafter created which does not expressly rank pari passu with or
senior to the Series A Preferred Stock, as applicable.
 
 IN
WITNESS WHEREOF, the undersigned, being the Chief Executive Officer of the
Corporation, has executed this Certificate of Designations, Preferences and
Rights of Series A Convertible Preferred Stock effective as of March 2,
2009.
 
 
  
 Velocity
Energy Inc.
  By:   /s/ Donald E.
Vandenberg
 Name:
Donald E. Vandenberg
 Title:  Chief
Executive Officer
 
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