Document:

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                                                                    Exhibit 10.1

                                 ORTHOVITA, INC.
                          1997 EQUITY COMPENSATION PLAN
                          -----------------------------

                     As Amended and Restated on May 27, 1998
                     ---------------------------------------
                        and amended through June 12, 2003

     The purpose of the Orthovita, Inc. 1997 Equity Compensation Plan (the
"Plan") is to provide (i) designated key employees of Orthovita, Inc. (the
"Company") and its subsidiaries, (ii) consultants who perform valuable services
for the Company or its subsidiaries and (iii) non-employee members of the Board
of Directors of the Company (the "Board") with the opportunity to receive grants
of incentive stock options, nonqualified stock options, stock appreciation
rights and restricted stock. The Company believes that the Plan will cause the
participants to contribute materially to the growth of the Company, thereby
benefitting the Company's shareholders, and will align the economic interests of
the participants with those of the shareholders.

     1.   Administration
          --------------

     (a)  The Plan shall be administered and interpreted by the Board or by a
committee consisting of two or more persons appointed by the Board. However, the
Board must approve all grants made to members of the Board who are not employees
of the Company. Except as provided in the preceding sentence, if the Company has
a public offering of Company stock as described in Section 19(b) ("Public
Offering"), the Plan shall be administered by a committee appointed by the
Board, which may consist of "outside directors" as defined under section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code") and related
Treasury regulations, and "non-employee directors" as defined in Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
references in the Plan to the "Board," as they relate to administration of the
Plan, shall be deemed to refer to the committee.

     (b)  The Board shall have the sole authority to (i) determine the
individuals to whom grants shall be made under the Plan, (ii) determine the
type, size and terms of the grants to be made to each such individual, (iii)
determine the time when the grants will be made and the duration of any
applicable exercise or restriction period, including the criteria for vesting
and the acceleration of vesting, (iv) establish the terms of any non-compete
provisions applicable to grants and the terms of any applicable shareholder's
agreement, and (v) deal with any other matters arising under the Plan.

     (c)  The Board shall have full power and authority to administer and
interpret the Plan, to make factual determinations and to adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and for
the conduct of its business as it deems necessary or advisable, in its sole
discretion. The Board's interpretations of the Plan and all determinations made
by the Board pursuant to the powers vested in it hereunder shall be

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conclusive and binding on all persons having any interest in the Plan or in any
awards granted hereunder. All powers of the Board shall be executed in its sole
discretion, in the best interest of the Company and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.

     (d)  Delegation of Authority. Notwithstanding the foregoing, the Board may
delegate to the Chief Executive Officer, in his capacity as a Board member of
the Company, the authority to make grants under the Plan, which grants shall not
exceed 20,000 option shares to any person per year, to employees of the Company
and its subsidiaries who are not subject to the restrictions of section 16(b) of
the Exchange Act and who are not expected to be subject to the limitations of
section 162(m) of the Code. The grant of authority under this subsection 1(d)
shall be subject to such conditions and limitations as may be determined by the
Board.

     2.   Grants
          ------

     Awards under the Plan shall consist of grants of Incentive Stock Options
and Nonqualified Stock Options as described in Section 5 (Incentive Stock
Options and Nonqualified Stock Options are collectively referred to as
"Options"), restricted stock as described in Section 6 ("Restricted Stock") and
stock appreciation rights as described in Section 7 ("SARs") (hereinafter
collectively referred to as "Grants"). All Grants shall be subject to the terms
and conditions set forth herein and to those other terms and conditions
consistent with this Plan as the Board deems appropriate and as are specified in
writing by the Board to the individual in a grant instrument (the "Grant
Instrument") or in an amendment to the Grant Instrument. The Board shall approve
the form and provisions of each Grant Instrument. Grants under a particular
Section of the Plan need not be uniform as among the grantees.

     3.   Shares Subject to the Plan
          --------------------------

     (a)  Subject to the adjustment specified below, the aggregate number
of shares of common stock of the Company ("Company Stock") that may be issued
under the Plan is 4,850,000 shares. After the effective date of a Public
Offering, the maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any individual during any calendar year
shall be 300,000 shares. The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan. If and to the extent
Options or SARs granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised, or if any
shares of Restricted Stock are forfeited, the shares subject to such Grants
shall again be available for purposes of the Plan.

     (b)  If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization,
stock split, or combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation in which the Company is the surviving
corporation, (iii) by reason of a reclassification or change in par value, or
(iv) by reason of any other extraordinary or unusual event affecting the
outstanding

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Company Stock as a class without the Company's receipt of consideration, or if
the value of outstanding shares of Company Stock is substantially reduced as a
result of a spinoff or the Company's payment of an extraordinary dividend or
distribution, the maximum number of shares of Company Stock available for
Grants, the maximum number of shares of Company Stock that any individual
participating in the Plan may be granted in any year, the number of shares
covered by outstanding Grants, the kind of shares issued under the Plan, and the
price per share or the applicable market value of such Grants may be
proportionately adjusted by the Board to reflect any increase or decrease in the
number or kind of issued shares of Company Stock to preclude the enlargement or
dilution of rights and benefits under such Grants; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated. The
adjustments determined by the Board shall be final, binding and conclusive.

     4.   Eligibility for Participation
          -----------------------------

     (a)  All key employees of the Company and its subsidiaries ("Employees"),
including Employees who are officers or members of the Board, shall be eligible
to participate in the Plan. Any consultants who perform valuable services to the
Company or any of its subsidiaries ("Consultants") and members of the Board who
are not Employees ("Non-Employee Directors") shall be eligible to participate in
the Plan, but shall not be eligible to receive Incentive Stock Options.
Consultants who perform services to the Company or any of its subsidiaries shall
be eligible to participate in the Plan if the Consultants refer bona fide
services and such services are not in connection with the offer or sale of
securities in a capital-raising transaction.

     (b)  The Board shall select the Employees, Consultants and Non-Employee
Directors to receive Grants and shall determine the number of shares of Company
Stock subject to a particular Grant in such manner as the Board determines.
Employees, Consultants and Non-Employee Directors who receive Grants under this
Plan shall hereinafter be referred to as "Grantees". If a committee is appointed
to administer the Plan, the Board shall nevertheless approve all Grants to
Non-Employee Directors.

     (c)  Nothing contained in this Plan shall be construed to (i) limit the
right of the Board to make Grants under this Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including options
granted to employees thereof who become Employees of the Company, or for other
proper corporate purpose, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan.

     5.   Stock Options
          -------------

     (a)  Number of Shares. The Board shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to Employees,
Consultants and Non-Employee Directors.

     (b)  Type of Option and Price.

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          (i)   The Board may grant Options intended to qualify as "incentive
stock options" within the meaning of section 422 of the Code ("Incentive Stock
Options") or options that are not intended so to qualify ("Nonqualified Stock
Options") or any combination of Incentive Stock Options and Nonqualified Stock
Options, all in accordance with the terms and conditions set forth herein.

          (ii)  The purchase price (the "Exercise Price") of Company Stock
subject to an Option shall be determined by the Board and may be equal to,
greater than, or less than the Fair Market Value (as defined below) of a share
of Company Stock on the date the Option is granted; provided, however, that (x)
the Exercise Price of an Incentive Stock Option shall be equal to, or greater
than, the Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (y) an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary of the Company, unless the Exercise
Price per share is not less than 110% of the Fair Market Value of Company Stock
on the date of grant.

          (iii) If the Company Stock is traded in a public market, then the
Fair Market Value per share shall be determined as follows: (x) if the principal
trading market for the Company Stock is a national securities exchange or the
National Market segment of the Nasdaq Stock Market, the last reported sale price
thereof on the relevant date or (if there were no trades on that date) the
latest preceding date upon which a sale was reported, or (y) if the Company
Stock is not principally traded on such exchange or market, the mean between the
last reported "bid" and "asked" prices of Company Stock on the relevant date, as
reported on Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Board determines. If the Company Stock is not
traded in a public market or subject to reported transactions or "bid" or
"asked" quotations as set forth above, the Fair Market Value per share shall be
as determined by the Board.

     (c)  Option Term. The Board shall determine the term of each Option,
which shall not exceed ten years from the date of grant. However, an Incentive
Stock Option may not be granted to an Employee who, at the time of grant, owns
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary of the Company,
unless the Option term does not exceed five years from the date of grant.

     (d)  Exercisability of Options. Options shall become exercisable in
accordance with the terms and conditions determined by the Board and specified
in the Grant Instrument. The Board may accelerate the exercisability of any or
all outstanding Options at any time for any reason.

     (e)  Termination of Employment, Disability or Death.

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          (i)   Except as provided below, an Option may only be exercised while
the Grantee is employed by the Company as an Employee, Consultant or member of
the Board. In the event that a Grantee ceases to be employed by the Company for
any reason other than a "disability", death, or "termination for cause", any
Option which is otherwise exercisable by the Grantee shall terminate unless
exercised within 90 days of the date on which the Grantee ceases to be employed
by the Company (or within such other period of time as may be specified in the
Grant Instrument), but in any event no later than the date of expiration of the
Option term. Any of the Grantee's Options that are not otherwise exercisable as
of the date on which the Grantee ceases to be employed by the Company shall
terminate as of such date.

          (ii)  In the event the Grantee ceases to be employed by the Company on
account of a "termination for cause" by the Company, any Option held by the
Grantee shall terminate as of the date the Grantee ceases to be employed by the
Company.

          (iii) In the event the Grantee ceases to be employed by the Company
because the Grantee is "disabled", any Option which is otherwise exercisable by
the Grantee shall terminate unless exercised within one year after the date on
which the Grantee ceases to be employed by the Company (or within such other
period of time as may be specified in the Grant Instrument), but in any event no
later than the date of expiration of the Option term. Any of the Grantee's
Options which are not otherwise exercisable as of the date on which the Grantee
ceases to be employed by the Company shall terminate as of such date.

          (iv)  If the Grantee dies while employed by the Company or within 90
days after the date on which the Grantee ceases to be employed on account of a
termination of employment specified in Section 5(e)(i) above (or within such
other period of time as may be specified in the Grant Instrument), any Option
that is otherwise exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to be employed by the
Company (or within such other period of time as may be specified in the Grant
Instrument), but in any event no later than the date of expiration of the Option
term. Any of the Grantee's Options that are not otherwise exercisable as of the
date on which the Grantee ceases to be employed by the Company shall terminate
as of such date.

          (v)   For purposes of this Section 5(e) and Sections 6 and 7:

                (A)  The term "Company" shall mean the Company and its
     subsidiaries.

                (B)  "Employed by the Company" shall mean employment as an
     Employee, Consultant or member of the Board (so that, for purposes of
     exercising Options and SARs and satisfying conditions with respect to
     Restricted Stock, a Grantee shall not be considered to have terminated
     employment until the Grantee ceases to be an Employee, Consultant and
     member of the Board), unless the Board determines otherwise in the Grant
     Instrument.

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                (C)  "Disability" shall mean a Grantee's becoming disabled
     within the meaning of section 22(e)(3) of the Code.

                (D)  "Termination for cause" shall mean, except to the extent
     otherwise provided in a Grantee's Grant Instrument, a finding by the Board,
     after full consideration of the facts presented on behalf of both the
     Company and the Grantee, that the Grantee has breached his or her
     employment or service contract with the Company, or has been engaged in
     disloyalty to the Company, including, without limitation, fraud,
     embezzlement, theft, commission of a felony or proven dishonesty in the
     course of his or her employment or service, or has disclosed trade secrets
     or confidential information of the Company to persons not entitled to
     receive such information. In the event a Grantee's employment is terminated
     for cause, in addition to the immediate termination of all Grants, the
     Grantee shall automatically forfeit all Option shares for any exercised
     portion of an Option for which the Company has not yet delivered the share
     certificates, upon refund by the Company of the Exercise Price paid by the
     Grantee for such shares.

     (f)  Exercise of Options.

          (i)  The Grantee shall pay the Exercise Price for an Option as
specified in the Grant Instrument (x) in cash, (y) with the approval of the
Board, by delivering shares of Company Stock owned by the Grantee (including
Company Stock acquired in connection with the exercise of an Option, subject to
such restrictions as the Board deems appropriate) and having a Fair Market Value
on the date of exercise equal to the Exercise Price or (z) through any
combination of (x) and (y). The Grantee shall pay the Exercise Price and the
amount of any withholding tax due (pursuant to Section 8) at the time of
exercise. Shares of Company Stock shall not be issued upon exercise of an Option
until the Exercise Price is fully paid and any required withholding is made.

          (ii)  After the effective date of a Public Offering, a Grantee may
exercise an Option by delivering to the Company, with payment of the Exercise
Price in accordance with Subsection (i) above, a notice of exercise instructing
the Company to deliver shares of Company Stock due upon the exercise of the
Option to any registered broker or dealer designated by the Board in lieu of
delivery to the Grantee. Such instructions shall designate the account into
which the shares are to be deposited.

     (g)  Limit on Incentive Stock Options. Each Incentive Stock Option shall
provide that, if the aggregate Fair Market Value of the stock on the date of the
grant with respect to which Incentive Stock Options are exercisable for the
first time by a Grantee during any calendar year, under the Plan or any other
stock option plan of the Company or a parent or subsidiary, exceeds $100,000,
then the option, as to the excess, shall be treated as a Nonqualified Stock
Option. An Incentive Stock Option shall not be granted to any person who is not
an Employee of the Company or a parent or subsidiary (within the meaning of
section 424(f) of the Code).

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     6.   Restricted Stock Grants
          -----------------------

     The Board may issue shares of Company Stock to an Employee, Consultant or
Non-Employee Director under a Grant of Restricted Stock, upon such terms as the
Board deems appropriate. The following provisions are applicable to Restricted
Stock:

     (a)  General Requirements. Shares of Company Stock issued pursuant to
Restricted Stock Grants may be issued for consideration or for no consideration,
as determined by the Board. The Board shall establish conditions under which
restrictions on shares of Restricted Stock shall lapse over a period of time or
according to such other criteria as the Board deems appropriate. The period of
time during which the Restricted Stock will remain subject to restrictions will
be designated in the Grant Instrument as the "Restriction Period".

     (b)  Number of Shares. The Board shall determine the number of shares of
Company Stock to be issued pursuant to a Restricted Stock Grant and the
restrictions applicable to such shares.

     (c)  Requirement of Employment. If the Grantee ceases to be employed by the
Company (as defined in Section 5(e)) during a period designated in the Grant
Instrument as the Restriction Period, or if other specified conditions are not
met, the Restricted Stock Grant shall terminate as to all shares covered by the
Grant as to which the restrictions have not lapsed, and those shares of Company
Stock must be immediately returned to the Company. The Board may, however,
provide for complete or partial exceptions to this requirement as it deems
appropriate.

     (d)  Restrictions on Transfer and Legend on Stock Certificate. During the
Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Restricted Stock except to a Successor
Grantee under Section 9(a). Each certificate for a share of Restricted Stock
shall contain a legend giving appropriate notice of the restrictions in the
Grant. The Grantee shall be entitled to have the legend removed from the stock
certificate covering the shares when all restrictions on such shares have
lapsed. The Board may determine that the Company will not issue certificates for
shares of Restricted Stock until all restrictions on such shares have lapsed, or
that the Company will retain possession of certificates for shares of Restricted
Stock until all restrictions on such shares have lapsed.

     (e)  Right to Vote and to Receive Dividends. Unless the Board determines
otherwise, during the Restriction Period, the Grantee shall have the right to
vote shares of Restricted Stock and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Board.

     (f)  Lapse of Restrictions. All restrictions imposed on Restricted Stock
shall lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Board. The Board may determine, as
to any or all Restricted Stock Grants, that the restrictions shall lapse without
regard to any Restriction Period.

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     7.   Stock Appreciation Rights
          -------------------------

     (a)  General Requirements. The Board may grant SARs to an Employee,
Consultant or Non-Employee Director separately or in tandem with any Option (for
all or a portion of the applicable Option). Tandem SARs may be granted either at
the time the Option is granted or at any time thereafter while the Option
remains outstanding; provided, however, that, in the case of an Incentive Stock
Option, SARs may be granted only at the time of the Grant of the Incentive Stock
Option. The Board shall establish the base amount of the SAR at the time the SAR
is granted. Unless the Board determines otherwise, the base amount of each SAR
shall be equal to the per share Exercise Price of the related Option or, if
there is no related Option, the Fair Market Value of a share of Company Stock as
of the date of Grant of the SAR.

     (b)  Tandem SARs. In the case of tandem SARs, the number of SARs granted to
a Grantee that shall be exercisable during a specified period shall not exceed
the number of shares of Company Stock that the Grantee may purchase upon the
exercise of the related Option during such period. Upon the exercise of an
Option, the SARs relating to the Company Stock covered by such Option shall
terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.

     (c)  Exercisability. An SAR shall be exercisable during the period
specified by the Board in the Grant Instrument and shall be subject to such
vesting and other restrictions as may be specified in the Grant Instrument. The
Board may accelerate the exercisability of any or all outstanding SARs at any
time for any reason. SARs may only be exercised while the Grantee is employed by
the Company or during the applicable period after termination of employment as
described in Section 5(e). A tandem SAR shall be exercisable only during the
period when the Option to which it is related is also exercisable.

     (d)  Value of SARs. When a Grantee exercises SARs, the Grantee shall
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised, payable in cash, Company Stock or
a combination thereof. The stock appreciation for an SAR is the amount by which
the Fair Market Value of the underlying Company Stock on the date of exercise of
the SAR exceeds the base amount of the SAR as described in Subsection (a).

     (e)  Form of Payment. The Board shall determine whether the appreciation in
an SAR shall be paid in the form of cash, shares of Company Stock, or a
combination of the two, in such proportion as the Board deems appropriate. For
purposes of calculating the number of shares of Company Stock to be received,
shares of Company Stock shall be valued at their Fair Market Value on the date
of exercise of the SAR. If shares of Company Stock are to be received upon
exercise of an SAR, cash shall be delivered in lieu of any fractional share.

     8.   Withholding of Taxes
          --------------------

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     (a)  All Grants under the Plan shall be subject to applicable federal
(including FICA), state and local tax withholding requirements. The Company
shall have the right to deduct from all Grants paid in cash, or from other wages
paid to the Grantee, any federal, state or local taxes required by law to be
withheld with respect to such Grants. In the case of Options and other Grants
paid in Company Stock, the Company may require the Grantee or other person
receiving such shares to pay to the Company the amount of any such taxes that
the Company is required to withhold with respect to such Grants, or the Company
may deduct from other wages paid by the Company the amount of any withholding
taxes due with respect to such Grants.

     (b)  If the Grant Instrument (or an amendment) so provides, a Grantee may
elect to satisfy the Company's income tax withholding obligation with respect to
an Option, SAR or Restricted Stock by having shares withheld up to an amount
that does not exceed the Grantee's minimum applicable withholding tax rate for
federal (including FICA), state and local tax liabilities. The election must be
in a form and manner prescribed by the Board and may be subject to the prior
approval of the Board.

     9.   Transferability of Grants
          -------------------------

     (a)  Only the Grantee may exercise rights under a Grant during the
Grantee's lifetime. The Grantee may not transfer those rights except by will or
by the laws of descent and distribution or, with respect to Grants other than
Incentive Stock Options, if permitted in any specific case by the Board pursuant
to a domestic relations order (as defined under the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the regulations
thereunder). When a Grantee dies, the representative or other person entitled to
succeed to the rights of the Grantee ("Successor Grantee") may exercise such
rights. A Successor Grantee must furnish proof satisfactory to the Company of
his or her right to receive the Grant under the Grantee's will or under the
applicable laws of descent and distribution.

     (b)  Notwithstanding the foregoing, the Board may provide, in a Grant
Instrument, that a Grantee may transfer Nonqualified Stock Options to family
members or other persons or entities according to such terms as the Board may
determine, provided that the Grantee receives no consideration for the transfer
of an Option and the transferred Option continues to be subject to the same
terms and conditions as were applicable to the Option immediately before the
transfer.

     10.  Change of Control of the Company
          --------------------------------

     As used herein, a "Change of Control" shall be deemed to have occurred if:

     (a)  Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) (other than a person who is a shareholder of the Company as of the
effective date of this Plan) becomes a "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly

                                      -9-

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or indirectly, of securities of the Company representing more than 50% of the
voting power of the then outstanding securities of the Company; or

     (b)  The shareholders of the Company approve (or, if shareholder approval
is not required, the Board approves) an agreement providing for (i) the merger
or consolidation of the Company with another corporation where the shareholders
of the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to more than 50% of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), or where the members of the Board,
immediately prior to the merger or consolidation, would not, immediately after
the merger or consolidation, constitute a majority of the board of directors of
the surviving corporation, (ii) the sale or other disposition of all or
substantially all of the assets of the Company, or (iii) a liquidation,
dissolution or statutory exchange of the Company.

     11.  Consequences of a Change of Control
          -----------------------------------

     (a)  Upon a Change of Control, unless the Board determines otherwise, (i)
the Company shall provide each Grantee who holds outstanding Grants written
notice of such Change of Control, (ii) all outstanding Options and SARs shall
automatically accelerate and become fully exercisable and (iii) the restrictions
and conditions on all outstanding Restricted Stock shall immediately lapse.

     (b)  Unless the Board determines otherwise, upon a Change of Control where
the Company is not the surviving corporation (or survives only as a subsidiary
of another corporation), all outstanding Grants shall be assumed by, or replaced
with comparable options, rights or stock by, the surviving corporation.

     (c)  Notwithstanding the foregoing, subject to subsection (d) below, in the
event of a Change of Control, the Board may take one or both of the following
actions: the Board may (i) require that Grantees surrender their outstanding
Options and SARs in exchange for a payment by the Company, in cash or Company
Stock as determined by the Board, in an amount equal to the amount by which the
then Fair Market Value of the shares of Company Stock subject to the Grantee's
outstanding Options and SARs exceeds the Exercise Price of the Options or the
base amount of the SARs, as applicable, or (ii) after giving Grantees an
opportunity to exercise their outstanding Options and SARs, terminate any or all
unexercised Options and SARs at such time as the Board deems appropriate. Such
surrender or termination shall take place as of the date of the Change of
Control or such other date as the Board may specify.

     (d)  Notwithstanding anything in the Plan to the contrary, in the event of
a Change of Control, the Board shall not have the right to take actions
described in the Plan (including without limitation actions described in
Subsection (c) above) that would make the Change of Control ineligible for
pooling of interests accounting treatment or that would make the Change of
Control ineligible for desired tax treatment if, in the absence of such right,
the Change of Control

                                      -10-

<PAGE>

would qualify for such treatment and the Company intends to use such treatment
with respect to the Change of Control.

     12.  Requirements for Issuance of Shares
          -----------------------------------

     (a)  The Board may require that a Grantee execute a shareholder's
agreement, with such terms as the Board deems appropriate, with respect to any
Company Stock distributed pursuant to this Plan.

     (b)  No Company Stock shall be issued or transferred in connection
with any Grant hereunder unless and until all legal requirements applicable to
the issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Board. The Board shall have the right to condition any Grant
made to any Grantee hereunder on such Grantee's undertaking in writing to comply
with such restrictions on his or her subsequent disposition of such shares of
Company Stock as the Board shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued under the Plan will be
subject to such stop-transfer orders and other restrictions as may be applicable
under such laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.

     13.  Amendment and Termination of the Plan
          -------------------------------------

     (a)  Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that any amendment that increases the aggregate number of
shares of Company Stock that may be issued under the Plan (other than by
operation of Section 3(b)) shall be subject to approval by the shareholders of
the Company, and provided, further, that, after the effective date of a Public
Offering, the Board shall not amend the Plan without shareholder approval if
such approval is required by Section 162(m) of the Code.

     (b)  Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or unless it is extended by the Board with the
approval of the shareholders.

     (c)  Termination and Amendment of Outstanding Grants. A termination
or amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the Board
acts under Section 19(b). The termination of the Plan shall not impair the power
and authority of the Board with respect to an outstanding Grant. Whether or not
the Plan has terminated, an outstanding Grant may be terminated or amended under
Section 19(b) or may be amended by agreement of the Company and the Grantee
consistent with the Plan.

     (d)  Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the

                                      -11-

<PAGE>

Plan in any manner. The Plan shall be binding upon and enforceable against the
Company and its successors and assigns.

     14.  Funding of the Plan
          -------------------

     This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Grants under this Plan. In no event shall interest be
paid or accrued on any Grant, including unpaid installments of Grants.

     15.  Rights of Participants
          ----------------------

     Nothing in this Plan shall entitle any Employee, Consultant, Non-Employee
Director or other person to any claim or right to be granted a Grant under this
Plan. Neither this Plan nor any action taken hereunder shall be construed as
giving any individual any rights to be retained by or in the employ of the
Company or any other employment rights.

     16.  No Fractional Shares
          --------------------

     No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Grant. The Board shall determine whether cash, other awards
or other property shall be issued or paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.

     17.  Headings
          --------

     Section headings are for reference only. In the event of a conflict between
a title and the content of a Section, the content of the Section shall control.

     18.  Effective Date of the Plan.
          ---------------------------

     (a)  Subject to the approval of the Company's shareholders, this Plan
shall be effective as of January 21, 1997. The amended Plan is effective as of
May 27, 1998.

     (b)  The provisions of the Plan that are applicable after a Public
Offering of Company stock shall be effective, if at all, upon the initial
registration of the Company stock under Section 12(g) of the Exchange Act, and
shall remain effective thereafter for so long as such stock is so registered.

                                      -12-

<PAGE>

     19.  Miscellaneous
          -------------

     (a)  Substitute Grants. The Board may make a Grant to an employee of
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted stock grant made by such corporation. The terms and
conditions of the substitute grant may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives. The
Board shall prescribe the provisions of the substitute grants.

     (b)  Compliance with Law. The Plan, the exercise of Options and SARs
and the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, after a Public Offering, it is the
intent of the Company that the Plan and all transactions under the Plan comply
with all applicable provisions of Rule 16b-3 or its successors under such Act.
The Board may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation. The
Board may also adopt rules regarding the withholding of taxes on payments to
Grantees. The Board may, in its sole discretion, agree to limit its authority
under this Section.

     (c)  Ownership of Stock. A Grantee or Successor Grantee shall have no
rights as a shareholder with respect to any shares of Company Stock covered by a
Grant until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.

     (d)  Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the Commonwealth of
Pennsylvania.

                                      -13-<PAGE>

                                                                     Exhibit 4.1

                          CERTIFICATE OF DESIGNATIONS,
                         POWERS, PREFERENCES AND RIGHTS
                   OF THE SERIES A CONVERTIBLE PREFERRED STOCK

                                       OF

                               ANALEX CORPORATION

                         Pursuant to Section 151 of the
                        Delaware General Corporation Law

     Analex Corporation (the "Corporation"), organized and existing under the
laws of the State of Delaware, does, by its President and under its corporate
seal, hereby certify that pursuant to the authority contained in Article Fourth
of its Certificate of Incorporation and in accordance with the provisions of
Section 151 of the Delaware General Corporation Law, its Board of Directors has
adopted the following resolution creating the following classes and series of
the Corporation's $0.02 par value Convertible Preferred Stock and determining
the voting powers, designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations and restrictions thereof, of such classes and series:

     RESOLVED, that, pursuant to authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation"), there is hereby created the following series of Preferred
Stock:

     .    12,000,000 shares shall be designated Series A Convertible Preferred
          Stock, par value $0.02 per share (the "Series A Preferred Stock").

     The designations, powers, preferences, and rights and the qualifications,
limitations and restrictions of the Series A Preferred Stock in addition to
those set forth in the Certificate of Incorporation shall be as follows:

          Section 1. Designation and Amount. 12,000,000 shares of the unissued
convertible preferred stock of the Corporation shall be designated as Series A
Convertible Preferred Stock (the "Series A Preferred Stock"). The Series A
Preferred Stock shall initially be issued at a purchase price of $2.23 per share
(the "Series A Original Issue Price").

          Section 2. Rank. The Series A Preferred Stock shall rank: (i) subject
to the requirements of Section 7, junior to any other class or series of capital
stock of the Corporation hereafter created specifically ranking as to dividend
rights, redemption rights, liquidation preference and other rights senior to the
Series A Preferred Stock (the "Senior Securities"); (ii) subject to the
requirements of Section 7, senior to all of the Corporation's common stock, $.02

                                       1

<PAGE>

                                                                     Exhibit 4.1

par value per share (the "Common Stock"); (iii) senior to any class or series of
capital stock of the Corporation hereafter created not specifically ranking as
to dividend rights, redemption rights, liquidation preference and other rights
senior to or on parity with any Series A Preferred Stock of whatever subdivision
(collectively, with the Common Stock, the "Junior Securities"); and (iv) subject
to the requirements of Section 7, on parity with any class or series of capital
stock of the Corporation hereafter created specifically ranking as to dividend
rights, redemption rights, liquidation preference and other rights on a parity
with the Series A Preferred Stock (the "Parity Securities").

          Section 3. Dividends. Beginning on September 30, 2003, and continuing
on the last day of each calendar quarter thereafter, so long as shares of Series
A Preferred Stock remain outstanding, the holders of each share of the Series A
Preferred Stock (the "Holders") shall be entitled, from and after the date of
issuance of such share, to receive, and shall be paid quarterly in arrears in
cash out of funds legally available therefor, cumulative dividends, of an amount
equal to 6% of the Series A Original Issue Price per share, (as appropriately
adjusted for any stock splits, stock dividends, combinations, and the like), per
annum with respect to each share of the Series A Preferred Stock; provided,
however, if, at any time after the date of the initial issuance of the Series A
Preferred Stock (the "Series A Closing") the Corporation's available cash for
operations for the following 12-month period, in each case calculated from the
date such quarterly dividend installment would otherwise be paid, is less than
One Million Dollars ($1,000,000) in excess of the business projections for the
Corporation approved by the Board of Directors of the Corporation (the "Board")
for such 12-month period (which projections will be updated and presented to the
Board for each calendar quarter) or the Corporation's payment of such dividend
in cash will result in an event of default under the Senior Indebtedness (as
defined below), such dividend may, at the option of the Corporation, be paid to
the Holders in shares of the Series A Preferred Stock valued at the Series A
Original Issue Price. The Holders of shares of Series A Preferred Stock shall be
entitled to receive such dividends, immediately after the payment of any
dividends to Senior Securities required by the Corporation's Certificate of
Incorporation, as amended or amended and restated and in effect, including for
this purpose any certificate(s) of designation, (the "Charter") prior and in
preference to any dividends required to be paid to Junior Securities and Common
Stock but in parity with any distribution to the holders of Parity Securities.

          Section 4. Liquidation Preference.

               (a) In the event of any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, the Holders shall be entitled
to be paid out of the assets of the Corporation available for distribution to
its stockholders, whether from capital, surplus or earnings, immediately after
any distributions to Senior Securities required by the Charter, and prior and in
preference to any distribution to Junior Securities and Common Stock but in
parity with any distribution to the holders of Parity Securities, an amount per
share equal to the sum of the Series A Original Issue Price (as appropriately
adjusted for any stock splits,

                                       2

<PAGE>

                                                                     Exhibit 4.1

stock dividends, combinations, and the like) and any accrued but unpaid dividend
on the Series A Preferred Stock. If upon the occurrence of such event, and after
the payment in full of the preferential amounts with respect to the Senior
Securities, the assets and funds available to be distributed among the holders
of the Series A Preferred Stock and any Parity Securities shall be insufficient
to permit the payment to such holders of the full preferential amounts due to
the holders of the Series A Preferred Stock and the Parity Securities,
respectively, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed among the holders of the Series
A Preferred Stock and the Parity Securities, pro rata, based on the amount each
such holder would receive if such full preferential amounts were paid unless
otherwise provided in the Charter.

               (b) Upon the completion of the distribution required by Section
4(a), if assets remain in the Corporation, they shall be distributed in
accordance with the Charter.

               (c) Upon the completion of the distributions required by Section
4(a) and Section 4(b), if assets remain in the Corporation, they shall be
distributed pro rata, on an as-converted to Common Stock basis, to the holders
of the Common Stock.

               (d) A sale, conveyance or disposition of all or substantially all
of the capital stock or assets of the Corporation or a merger, consolidation or
other transaction or series of related transactions (whether involving the
Corporation or a subsidiary thereof) in which the Corporation's stockholders
immediately prior to such transaction do not retain a majority of the voting
power in the surviving entity (a "Transaction"), shall be deemed to be a
liquidation, dissolution or winding up within the meaning of this Section 4,
unless the holders of a majority of the then outstanding shares of the Series A
Preferred Stock vote affirmatively or consent in writing that such transaction
shall not be treated as a liquidation, dissolution or winding up within the
meaning of this Section 4.

               (e) Prior to the closing of a Transaction described in Section
4(d) which would constitute a liquidation, dissolution or winding up within the
meaning of this Section 4, the Corporation shall, at its sole option, either (i)
make all distributions of cash or other property that it is required to make to
the Holders pursuant to the first sentence of Section 4(a), (ii) set aside
sufficient funds or other property from which the distributions required to be
made to such Holders can be made, or (iii) in connection with a sale of all or
substantially all the assets of the Corporation, establish an escrow or other
similar arrangement with a third party pursuant to which the proceeds payable to
the Corporation from a sale of all or substantially all the assets of the
Corporation will be used to make the liquidating payments to such Holders
immediately after the consummation of such sale. In the event that the
Corporation is unable to fully comply with any of the foregoing alternatives,
the Corporation shall either: (x) cause such closing to be postponed until the
Corporation complies with one of the foregoing alternatives, or (y) cancel such
Transaction, in which event the rights of the Holders shall be the same as
existing immediately prior to

                                       3

<PAGE>

                                                                     Exhibit 4.1

such proposed Transaction.

          Section 5. Conversion of Series A Preferred Stock. The Corporation and
the record Holders of the Series A Preferred Stock shall have conversion rights
as follows:

               (a) Right to Convert. Each record Holder of Series A Preferred
Stock shall be entitled to convert whole shares of Series A Preferred Stock for
the Common Stock issuable upon conversion of the Series A Preferred Stock, as
follows: each outstanding share of Series A Preferred Stock is convertible, at
any time at the option of the holder thereof, into one fully-paid and
non-assessable share of Common Stock, subject to adjustment as provided in
Section 5(d) hereof. Each share of Series A Preferred Stock shall be convertible
into such number of fully paid and nonassessable shares of Common Stock as
obtained by (i) multiplying the number of shares of Series A Preferred Stock so
to be converted by, initially, the applicable Series A Original Issue Price and
(ii) dividing the result by the conversion price equal to, initially, the
applicable Series A Original Issue Price per share or, in case an adjustment of
such price has taken place pursuant to this Section 5, then by the conversion
price as last adjusted and in effect at the date any share or shares of Series A
Preferred Stock are surrendered for conversion (such price, or such price last
adjusted, hereafter referred to as the "Conversion Price"). Accrued but unpaid
dividends will be paid in cash upon any such conversion.

               (b) Automatic Conversion.

               (i) After the date that is 18 months following the Series A
Closing, each share of outstanding Series A Preferred Stock shall be
automatically converted into Common Stock at the Conversion Price then in effect
(A) on the date on which the average closing price for the immediately preceding
twenty (20) consecutive trading days of the Common Stock trading on the American
Stock Exchange (or other stock exchange approved by the holders of a majority of
the then outstanding shares of Series A Preferred Stock) exceeds
two-and-one-half (2.5) times the Conversion Price or (B) on the sixty-first
(61st) day following the date on which the Corporation delivers a Notice of
Conversion (as defined below) pursuant to Section 5(c) below to each Holder and
offers to pay to such Holder an amount per share equal to or greater than
two-and-one-half (2.5) times the Conversion Price (the "Cash Offer") for each
share of the Series A Preferred Stock held by such Holder if such Holder does
not accept such offer by written notice of acceptance to the Corporation within
60 days of the date of such Notice of Conversion. Except as otherwise provided
Section 3 above, accrued but unpaid dividends shall be paid in cash on any such
automatic conversion. For the avoidance of doubt, only the shares of Series A
Preferred Stock held by Holders that do not accept the Cash Offer within 60 days
of the Notice of Conversion with respect thereto shall be automatically
converted in accordance with Section 5(b)(i)(B) and those Holders that do accept
the Cash Offer shall have their shares of Series A Preferred Stock repurchased
by the Corporation pursuant to the terms of the Cash Offer.

                                       4

<PAGE>

                                                                     Exhibit 4.1

               (ii) Each share of outstanding Series A Preferred Stock
automatically shall be converted into Common Stock at the Conversion Price then
in effect on any date after the Series A Closing that a majority of the then
outstanding shares of Series A Preferred Stock agree in writing shall be the
conversion date of all of the then outstanding shares of Series A Preferred
Stock. Except as provided otherwise in Section 3 above, accrued but unpaid
dividends will be paid in cash on any such conversion.

               (iii) Notwithstanding anything to the contrary herein, no shares
of outstanding Series A Preferred Stock shall be automatically converted into
Common Stock pursuant to this Section 5(b) unless at the time of such proposed
conversion the Corporation shall have on file with the Securities and Exchange
Commission an effective registration statement with respect to the shares of
Common Stock issued or issuable to the Holders (A) on conversion of the Series A
Preferred Stock then issued or issuable to such Holders, (B) on conversion of
the secured subordinated convertible promissory notes dated on or about the date
of this Certificate of Designations issued pursuant to the Note Purchase
Agreement (the "Notes") and (C) on exercise of all of the warrants to purchase
Common Stock of the Corporation dated on or about the date of this Certificate
of Designations issued pursuant to the Note Purchase Agreement (the "Warrants")
and such shares of Common Stock have been approved by and listed on the American
Stock Exchange (or other stock exchange approved by the holders of a majority of
the then outstanding shares of Series A Preferred Stock).

               (c) Mechanics of Conversion. In order to convert Series A
Preferred Stock into full shares of Common Stock if (i) such conversion is
pursuant to Section 5(a), the Holder shall (A) fax a copy of a fully executed
notice of conversion ("Notice of Conversion") to the Corporation at the office
of the Corporation or to the Corporation's designated transfer agent (the
"Transfer Agent") for the Series A Preferred Stock stating that the Holder
elects to convert, which notice shall specify the date of conversion, the number
of shares of Series A Preferred Stock to be converted, the Conversion Price and
a calculation of the number of shares of Common Stock issuable upon such
conversion (together with a copy of the front page of each certificate to be
converted) and (B) surrender to a common courier for either overnight or two (2)
day delivery to the office of the Corporation or its transfer agent, the
original certificates representing the Series A Preferred Stock being converted
(the "Preferred Stock Certificates"), duly endorsed for transfer, and (ii) such
conversion is pursuant to Section 5(b), the Corporation shall fax a copy of a
Notice of Conversion to the Holders stating that the shares of Series A
Preferred Stock have been automatically converted into Common Stock, which
notice shall specify the date of such automatic conversion, the number of shares
of Series A Preferred Stock that have been converted, the Conversion Price and a
calculation of the number of shares of Common Stock issuable upon such
conversion (together with a copy of the front page of each certificate to be
converted); provided, however, that the Corporation's failure to issue a Notice
of Conversion shall not effect the automatic conversion of such shares of Series
A Preferred Stock and the automatic cancellation of the certificates
representing such shares of Series A Preferred Stock. In the event of an
automatic conversion pursuant to Section 5(b), the outstanding shares

                                       5

<PAGE>

                                                                     Exhibit 4.1

of Series A Preferred Stock shall be converted automatically without any further
action by the Holders of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent and the Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such conversion unless
either the Preferred Stock Certificates are delivered to the Corporation or the
Transfer Agent as provided above, or the Holder notifies the Corporation or its
Transfer Agent that such certificates have been lost, stolen or destroyed
(subject to the requirements of Section 5(c)(i) below).

                    (i) Lost or Stolen Certificates. Upon receipt by the
Corporation of evidence of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing shares of Series A Preferred Stock,
and (in the case of loss, theft or destruction) of indemnity or security
reasonably satisfactory to the Corporation, and upon surrender and cancellation
of the Preferred Stock Certificates, if mutilated, the Corporation shall execute
and deliver new Preferred Stock Certificates of like tenor and date. However,
the Corporation shall not be obligated to re-issue such lost or stolen Preferred
Stock Certificates if the Holder contemporaneously requests the Corporation to
convert such Series A Preferred Stock into Common Stock or if such shares of
Series A Preferred Stock have been automatically converted into Common Stock.

                    (ii) Delivery of Common Stock Upon Conversion. The
Corporation no later than 6:00 p.m. (New York City time) on the third (3rd)
business day after receipt by the Corporation or its transfer agent of all
necessary documentation duly executed and in proper form required for
conversion, including the original Preferred Stock Certificates to be converted
(or after provision for security or indemnification in the case of lost, stolen
or destroyed certificates, if required), shall issue and surrender to a common
courier for either overnight or (if delivery is outside the United States) two
(2) day delivery to the Holder as shown on the stock records of the Corporation
a certificate for the number of shares of Common Stock to which the Holder shall
be entitled as aforesaid.

                    (iii) Date of Conversion. The date on which a voluntary
conversion pursuant to Section 5(a) occurs (the "Date of Voluntary Conversion")
shall be deemed to be the date the applicable Notice of Conversion is faxed to
the Corporation or the Transfer Agent, as the case may be, provided that the
advance copy of the Notice of Conversion is faxed to the Corporation on or prior
to 6:00 p.m., New York City time, on the Date of Conversion. An automatic
conversion pursuant to Section 5(b) shall occur on the date on which such
automatic conversion is deemed to occur pursuant to Section 5(b) (the "Date of
Automatic Conversion", and together with the Date of Voluntary Conversion, the
"Date of Conversion"). The original Preferred Stock Certificates representing
the shares of Series A Preferred Stock to be converted shall be surrendered by
depositing such certificates with a common courier for either overnight or two
(2) day delivery, as soon as practicable following the Date of Voluntary
Conversion or as soon as practicable following the date such holder receives
notice of the Date of Automatic Conversion. The person or persons entitled to
receive the shares of Common Stock

                                       6

<PAGE>

                                                                     Exhibit 4.1

issuable upon such conversion shall be treated for all purposes as the record
Holder or Holders of such shares of Common Stock on the Date of Conversion.

                    (iv) No Fractional Shares on Conversion. No fractional
shares of Common Stock shall be issued upon conversion of the Series A Preferred
Stock. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Corporation shall (after aggregating all shares into which shares
of Series A Preferred held by each Holder could be converted) pay cash equal to
such fraction multiplied by the market price per share of Common Stock (as
determined in a reasonable manner by the Board) at the close of business on the
Date of Conversion.

               (d) Adjustment of Conversion Price.

               (i) Adjustments of Conversion Rate Upon Issuance of Common Stock.
If at any time after the Series A Closing, the Corporation shall issue or sell,
or is, in accordance with Section 5(d)(i)(A) through (G) below, deemed to have
issued or sold, any shares of Common Stock for a consideration per share less
than the Conversion Price in effect immediately prior to the time of such issue
or sale or deemed issue or sale, then, forthwith upon such issue or sale or
deemed issue or sale, the Conversion Price shall be reduced to the net
consideration per share received or deemed received by the Corporation pursuant
to Sections 5(d)(i)(A) through (G), as applicable ("Full-Ratchet Anti-Dilution
Protection").

               (A) Issuance of Rights or Options. In case at any time the
Corporation shall in any manner grant (whether directly or by assumption in a
merger or otherwise) any warrants or other rights to subscribe for or to
purchase, or any options for the purchase of, Common Stock or any stock or
security convertible into or exchangeable for Common Stock (such warrants,
rights or options being called "Options" and such convertible or exchangeable
stock or securities being called "Convertible Securities") whether or not such
Options or the right to convert or exchange any such Convertible Securities are
immediately exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon the conversion or exchange of
such Convertible Securities (determined by dividing (i) the total amount, if
any, received or receivable by the Corporation as consideration for the granting
of such Options, plus the minimum aggregate amount of additional consideration
payable to the Corporation upon the exercise of all such Options, plus, in the
case of such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the issue or
sale of such Convertible Securities and upon the conversion or exchange thereof
(in all cases excluding the effect of a net issue election), by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Conversion
Price in effect immediately prior to the time of the granting of such Options,
then the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total

                                       7

<PAGE>

                                                                     Exhibit 4.1

maximum amount of such Convertible Securities issuable upon the exercise of such
Options shall be deemed to have been issued for such price per share as of the
date of granting of such Options and thereafter shall be deemed to be
outstanding. Except as otherwise provided in Section 5(d)(i)(C), no adjustment
of the Conversion Price shall be made upon the actual issue of such Common Stock
or of such Convertible Securities upon exercise of such Options or upon the
actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.

               (B) Issuance of Convertible Securities. In case the Corporation
shall in any manner issue (whether directly or by assumption in a merger or
otherwise) or sell any Convertible Securities, whether or not the rights to
exchange or convert any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon such conversion
or exchange (determined by dividing (i) the total amount received or receivable
by the Corporation as consideration for the issue or sale of such Convertible
Securities, plus the aggregate amount of additional consideration, if any,
payable to the Corporation upon the conversion or exchange thereof, by (ii) the
total maximum number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities) shall be less than the Conversion
Price in effect immediately prior to the time of such issue or sale, then the
total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to have been issued
for such price per share as of the date of the issue or sale of such Convertible
Securities and thereafter shall be deemed to be outstanding; provided that (a)
except as otherwise provided in Section 5(d)(i)(C), no adjustment of the
Conversion Price shall be made upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) if any such issue
or sale of such Convertible Securities is made upon exercise of any Options to
purchase any such Convertible Securities for which adjustments of the B
Conversion Price have been or are to be made pursuant to other provisions of
this Section 5(d)(i), no further adjustment of the Series A Conversion Price
shall be made by reason of such issue or sale.

               (C) Change in Option Price or Conversion Rate. Upon the happening
of any of the following events, namely, if (1) the purchase price or exercise
price provided for in any Option referred to in Section 5(d)(i)(A), (2) the
number of shares into which the Option is exercisable, (3) the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in Section 5(d)(i)(A) or (B), or (4) the rate
at which Convertible Securities referred to in Section 5(d)(i)(A) or (B) are
convertible into or exchangeable for Common Stock shall change at any time
(including, but not limited to, changes under or by reason of provisions
designed to protect against dilution), the Conversion Price in effect at the
time of such event shall forthwith be readjusted to the Conversion Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold; and on the termination or expiration of any
such Option or any such right to convert or exchange such Convertible
Securities, the Conversion Price then in effect hereunder shall forthwith be
increased to the

                                       8

<PAGE>

                                                                     Exhibit 4.1

Conversion Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding immediately
prior to such termination, never been issued.

               (D) Stock Dividends. In case the Corporation shall declare a
dividend or make any other distribution upon any stock of the Corporation (other
than Common Stock or Series A Preferred Stock) payable in Common Stock, then any
Common Stock issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration, unless the holders of
at least a majority of the then outstanding Series A Preferred Stock shall have
consented to such dividend or distribution.

               (E) Consideration for Stock. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by the
Corporation therefor, without deduction therefrom of any expenses incurred or
any underwriting commissions or concessions paid or allowed by the Corporation
in connection therewith. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the
Corporation shall be deemed to be the fair value of such consideration as
determined in good faith by the Board, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the
Corporation in connection therewith. In case any Options shall be issued in
connection with the issue and sale of other securities of the Corporation,
together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for such consideration as determined in good faith by
the Board.

               (F) Record Date. In case the Corporation shall take a record of
the holders of its Common Stock for the purpose of entitling them (i) to receive
a dividend or other distribution payable in Common Stock, Options or Convertible
Securities or (ii) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

               (G) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation, and the disposition of any such shares shall be
considered an issue or sale of Common Stock for the purpose of this Section
5(d)(i).

               (ii) Certain Issues of Common Stock Excepted. Anything herein to
the contrary notwithstanding, the Corporation shall not be required to make any
adjustment of the

                                       9

<PAGE>

                                                                     Exhibit 4.1

Conversion Price in the case of the issuance or sale from and after the date of
filing of this Certificate of Designation of Anti-Dilution Excluded Securities
(as defined below).

               (iii) Adjustments for Subdivisions, Common Stock Dividends,
Combinations or Consolidations of Common Stock. If the outstanding shares of
Common Stock shall be subdivided or increased, by stock split, stock dividend or
otherwise, into a greater number of shares of Common Stock, the Conversion Price
shall concurrently with the effectiveness of such subdivision or payment of such
stock dividend, be proportionately decreased. If the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Conversion Price
shall, concurrently with the effectiveness of such combination or consolidation,
be proportionately increased.

               (iv) Adjustments for Reclassification, Exchange and Substitution.
If the Common Stock issuable upon conversion of the Series A Preferred Stock
shall be changed into the same or a different number of shares of any other
class or classes of stock, whether by capital reorganization, reclassification
or otherwise (other than a subdivision or combination of shares provided for
above), the Conversion Price shall, concurrently with the effectiveness of such
reorganization or reclassification, be proportionately adjusted such that the
Series A Preferred Stock shall be convertible into, in lieu of the number of
shares of Common Stock which the holders would otherwise have been entitled to
receive, a number of shares of such other class or classes of stock equivalent
to the number of shares of Common Stock that would have been subject to receipt
by the holders upon conversion of the Series A Preferred Stock immediately
before that change.

               (v) Adjustments for Merger, Sale, Lease or Conveyance. In case of
any consolidation with or merger of the Corporation with or into another
corporation, or in case of any sale, lease or conveyance to another Corporation
of the assets of the Corporation as an entirety or substantially as an entirety,
which is not treated as a liquidation, dissolution or winding up pursuant to
Section 4(d) above, the Series A Preferred Stock shall after the date of such
consolidation, merger, sale, lease or conveyance be convertible into the number
of shares of stock or other securities or property (including cash) to which the
Common Stock issuable (at the time of such consolidation, merger, sale, lease or
conveyance) upon conversion of the Series A Preferred Stock would have been
entitled upon such consolidation, merger, sale, lease or conveyance; and in any
such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the holders of the Series A Preferred Stock
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or property thereafter
deliverable on the conversion of the shares of Series A Preferred Stock.

               (vi) Fractional Shares. If any adjustment under this Section 5(d)
would create a fractional share of Common Stock or a right to acquire a
fractional share of Common

                                       10

<PAGE>

                                                                     Exhibit 4.1

Stock, such fractional share shall be rounded to the nearest whole number of
shares with one-half share being rounded up.

          Section 6. Voting Rights. Except to the extent otherwise expressly
provided by law or in Section 7, the Series A Preferred Stock shall vote
together with all other classes and series of voting stock of the Corporation as
a single class on all actions to be taken by the stockholders of the
Corporation. Each share of Series A Preferred Stock shall entitle the Holder
thereof to that number of votes on each such action as is equal to the number of
shares of Common Stock (excluding fractions of a share) into which it is
convertible pursuant to Section 5 on all matters to be voted on by the
stockholders of the Corporation and shall vote along with the holders of Common
Stock as a single class.

          Section 7. Protective Provisions.

                    So long as at least 50% of the shares of Series A Preferred
Stock issued at the Series A Closing remain outstanding (as adjusted for any
stock splits, stock dividends, combinations, recapitalizations involving equity
of the Corporation, reclassifications of other similar events involving a change
with respect to the Series A Preferred Stock) or, if the Corporation has failed
to comply with its obligations to redeem the shares of Series A Preferred Stock
in accordance with Section 11, so long as any shares of Series A Preferred Stock
issued at the Series A Closing remain outstanding, the Corporation shall not,
without first obtaining the written consent of the Holders of at least a
majority of the then outstanding shares of Series A Preferred Stock:

                    (a) merge or consolidate with one or more corporations or
sell all or substantially all of the capital stock or assets of the Corporation;

                    (b) make an acquisition or series of related acquisitions
for consideration aggregating more than $10,000,000 in value;

                    (c) alter or amend the Charter or the Corporation's bylaws
so as to affect adversely the voting powers, preferences or other rights of the
Holders of the Series A Preferred Stock;

                    (d) issue any Senior Securities or any Parity Securities or
securities that are convertible into Senior Securities or Parity Securities;

                    (e) pay any dividends or distributions on the capital stock
of the Corporation, except for dividends paid on the Series A Preferred Stock as
contemplated in this Certificate of Designation;

                                       11

<PAGE>

                                                                     Exhibit 4.1

                    (f) voluntarily liquidate or dissolve, recapitalize or
reorganize the Corporation;

                    (g) borrow funds (in one or a series of related borrowings)
in an amount more than $1,000,000 other than revolving lines of credit provided
by lenders based upon the Corporation's accounts receivable;

                    (h) redeem or purchase any of the capital stock of the
Corporation, except repurchases of employee Common Stock upon termination of
employment pursuant to employment agreements in effect at the time of the Series
A Closing;

                    (i) increase or decrease the number of members of the Board;
or

                    (j) elect, appoint or remove the Chief Executive Officer,
Chief Financial Officer, President or Chief Operating Officer of the
Corporation.

          Section 8. Status of Converted Stock. In the event any shares of
Series A Preferred Stock shall be converted pursuant to Section 5 hereof, the
shares so converted shall be canceled, shall return to the status of authorized
but unissued Preferred Stock of no designated series, and shall not be issuable
by the Corporation as Series A Preferred Stock.

          Section 9. Preemptive Rights. Each Holder of Series A Preferred Stock
or debt or equity of the Corporation that is convertible into shares of Series A
Preferred Stock shall be entitled to purchase its pro rata share (calculated by
multiplying the number of securities issued in such equity offering including
those issued pursuant this Section 9 by a fraction, the numerator of which is
the number of shares of Common Stock held by such holder on a Fully Diluted
Basis and the denominator of which is the number of shares of Common Stock held
by all such holders of securities of the Corporation on a Fully Diluted Basis)
of any future private equity offering by the Corporation, except for the
Preemptive Rights Excluded Securities.

          Section 10. Reservation of Stock. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock and Series A Preferred Stock: (a) solely for the purpose of effecting the
conversion of shares of Series A Preferred Stock issued or issuable to the
Holders, such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series A
Preferred Stock and rights to acquire shares of Series A Preferred Stock, (b)
solely for the purpose of effecting the exercise of all of the Warrants, such
number of shares of Common Stock as shall from time to time be sufficient to
effect the exercise of all of the outstanding Warrants and (c) solely for the
purpose of effecting the conversion of the Notes, such number of shares of
Series A Preferred Stock and Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Notes; and if at any time
the number of authorized but unissued shares of Common Stock or Series A
Preferred Stock shall not be sufficient to effect the

                                       12

<PAGE>

                                                                     Exhibit 4.1

conversion of all then outstanding shares of Series A Preferred Stock and rights
to acquire shares of Series A Preferred Stock, the exercise of the Warrants and
the conversion of the Notes issued or issuable to the Holders, in addition to
such other remedies as shall be available to the Holder of Series A Preferred
Stock or such rights, the Corporation shall take such corporate action as may,
in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock and Series A Preferred Stock, as applicable, to
such number as shall be sufficient for such purposes, including, without
limitation, using best efforts to obtain stockholder approval of any necessary
amendment to the Charter.

          Section 11. Redemption Rights. The record Holders of the Series A
Preferred Stock shall have redemption rights as follows:

                    (a) The Series A Preferred Stock shall be subject to
redemption, at the option of the holders of a majority of the then outstanding
shares of Series A Preferred Stock at any time after the fourth anniversary of
the Series A Closing, in four equal quarterly installments, with the first
installment being made within sixty (60) days of the date of exercise of such
option and the last installment on the date that is 9 months thereafter, in
whole or in part, at a per share redemption price equal to the Series A Original
Issue Price (as adjusted for any stock splits, stock dividends, combinations,
recapitalizations involving equity securities of the Corporation,
reclassifications of other similar events involving a change with respect to the
Series A Preferred Stock or the Common Stock) per share plus any accrued but
unpaid dividends, payable in immediately available funds.

                    (b) If the funds legally available to the Corporation for
the payment of the redemption price of the Series A Preferred Stock are not
sufficient to redeem all of the shares of the Series A Preferred Stock required
to be redeemed on any date, such funds shall be used to redeem the number of
shares of Series A Preferred Stock which may be redeemed from such amount on a
pro rata basis. If, at the end of each calendar quarter, thereafter (or more
often than quarterly at the option of the Corporation), additional funds become
available for the redemption of additional shares of Series A Preferred Stock
required to be so redeemed, the Corporation shall immediately use such funds to
redeem shares of Series A Preferred Stock until such time as all of the shares
of Series A Preferred Stock required to be redeemed pursuant to this Section 11
have been redeemed.

                    (c) If, on the dates established for redemption pursuant to
Section 11(a), all of the shares of Series A Preferred Stock to be redeemed on
each such date are not redeemed in full, all rights in respect of such shares of
Series A Preferred Stock that have not been redeemed, including the right to
receive the applicable redemption price, plus accrued and unpaid dividends,
shall continue to be outstanding as evidenced by the certificates representing
such shares. The exercise by the Holders of the option to redeem any shares of
Series A Preferred Stock which were not redeemed on the dates established for
redemption pursuant to Section 11(a), may be rescinded by such Holders at any
time following the date established for

                                       13

<PAGE>

                                                                     Exhibit 4.1

such redemption by written notice to the Corporation. All shares of Series A
Preferred Stock redeemed pursuant to Section 11(a) shall be retired and shall be
restored to the status of authorized and unissued shares of Preferred Stock,
without designation as to series or class and may thereafter be reissued,
subject to compliance with the terms hereof, as shares of any series of
Preferred Stock other than shares of Series A Preferred Stock.

                    (d) If the Corporation does not, or is unable to, redeem the
Series A Preferred Stock as required by this Section 11, the Holders shall have
the right, but not the obligation, to pursue all remedies available to them at
law or in equity and shall have the right to designate additional members to the
Board such that the directors designated by such Holders constitute a majority
of the members of the Board if the Corporation is unable to effect any such
quarterly redemption installment for a period of nine (9) consecutive months
after such installment was required to be paid pursuant to Section 11(a) hereof;
provided, that if any such installment remains unpaid for a period of nine (9)
consecutive months after such installment was required to be paid, such Holders
shall be entitled to such increased Board representation unless all such
installments that are then past due are paid. Such additional members of the
Board shall be designated and elected in accordance with the provisions of
Section 2.1 of the Stockholders' Voting Agreement.

          Section 12. Definitions. As used in this Certificate, the following
capitalized terms have the following meanings.

          "Anti-Dilution Excluded Securities" mean any of the following
securities: (1) securities issued to employees, consultants, officers or
directors of the Corporation or options to purchase Common Stock granted by the
Corporation to employees, consultants, officers, or directors of the Corporation
pursuant to any option plan, agreement or other arrangement duly adopted by the
Corporation and approved by the compensation committee of the Board; (2)
securities issued on exercise of the Warrants; (3) securities issued on
conversion of the Notes; (4) the Series A Preferred Stock and any Common Stock
issued upon conversion of the Series A Preferred Stock; (5) for the avoidance of
doubt, securities issued on the conversion of any Convertible Securities or the
exercise of any Options, in each case, outstanding on the date of the filing
hereof; (6) for the avoidance of doubt, securities issued in connection with a
stock split, stock dividend, combination, reorganization, recapitalization or
other similar event for which adjustment is made in accordance with Section
5(d)(iii) or (iv); and (7) securities issued to financial institutions in
connection with commercial credit transactions, equipment credit financings or
similar credit transactions approved by the Board, including each member of the
Board which may be designated by a Pequot Majority in Interest pursuant to
Section 2.1(a)(ii) of the Stockholders' Voting Agreement.

          "Fully Diluted Basis" means when used in reference to the number of
shares of Common Stock held by a person or entity at any time, a number of
shares of Common Stock equal to the sum of (x) the number of issued and
outstanding shares of Common Stock then held

                                       14

<PAGE>

                                                                     Exhibit 4.1

by or such person or entity, plus (y) the total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all Convertible Securities
[and Options] issued and outstanding at such time that are then held by such
person or entity.

          "Note Purchase Agreement" means that certain Subordinated Note and
Series A Convertible Preferred Stock Purchase Agreement, dated July 18, 2003,
between the Corporation and the purchasers named therein.

          "Pequot Majority in Interest" shall have the meaning ascribed to it in
the Stockholders' Voting Agreement.

          "Preemptive Rights Excluded Securities" mean an of the following
securities: (1) securities issued to employees, consultants, officers or
directors of the Corporation or options to purchase Common Stock granted by the
Corporation to employees, consultants, officers, or directors of the Corporation
pursuant to any option plan, agreement or other arrangement duly adopted by the
Corporation and approved by the compensation committee of the Board; (2)
securities issued on exercise of the Warrants; (3) securities issued on
conversion of the Notes; (4) the Series A Preferred Stock and any Common Stock
issued on conversion of the Series A Preferred Stock; (5) for the avoidance of
doubt, securities issued on the conversion of any Convertible Securities or the
exercise of any Options, in each case, outstanding on the date of the filing
hereof; (6) for the avoidance of doubt, securities sold by the Corporation in
any public offering; (7) for the avoidance of doubt, securities issued in
connection with a stock split, stock dividend, combination, reorganization,
recapitalization or other similar event for which adjustment is made in
accordance with Section 5(d)(iii), (iv) or (v); (8) securities issued to
financial institutions in connection with commercial credit transactions,
equipment credit financings or similar credit transactions approved by the Board
including each member of the Board designated by a Pequot Majority in Interest
pursuant to Section 2.1(a)(ii) of the Stockholders' Voting Agreement, and the
issuance of Common Stock upon the conversion or exercise of any such securities
constituting Convertible Securities or Options; and (9) the issuance of
securities of the Corporation issued for consideration other than cash pursuant
to a merger, consolidation, acquisition or similar business combination by the
Corporation approved by the Board.

          "Senior Indebtedness" means the indebtedness of the Corporation under
that certain Credit Agreement dated November 2, 2001, as amended, by and between
the Corporation and Bank of America, N.A. and any other Senior Indebtedness as
such term is defined in the Note Purchase Agreement.

          "Stockholders' Voting Agreement" means that certain Stockholders'
Voting Agreement effective on or about the date hereof by and among the
Corporation and certain stockholders of the Corporation listed on the signature
pages thereto.

                                       15

<PAGE>

                                                                     Exhibit 4.1

                          Signature on following page.

                                       16

<PAGE>

          IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
duly executed on its behalf by its President this     day of          , 2003.
                                                  ---        ---------

                                         ANALEX CORPORATION

                                         By:
                                            ------------------------------------
                                              Name:  Sterling E. Phillips, Jr.
                                              Title: President

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