**Exhibit 3.1**

 

**AMENDED AND RESTATED**

** **

**CERTIFICATE OF INCORPORATION**

** **

**OF**

** **

**CLEARSTORYSYSTEMS, INC.**

 

ClearStorySystems, Inc., a corporation organized and existing under and by virtue of theGeneral Corporation Law of the State of Delaware (the “Corporation”), doeshereby certify as follows:

 

1.             Thename of the Corporation is ClearStory Systems, Inc.  The original Certificate of Incorporation ofthe Corporation was filed with the Secretary of State of the State of Delawareon December 20, 1989 under the name IMTECH Optical Systems, Inc.

 

2.             ThisAmended and Restated Certificate of Incorporation has been duly adopted byunanimous written consent of the Board of Directors (the “Board”) and dulyadopted by the stockholders of the Corporation in accordance with the applicableprovisions of Sections 141, 228, 242 and 245 of the General Corporation Law ofthe State of Delaware.

 

3.             ThisAmended and Restated Certificate of Incorporation restates, integrates andamends the Certificate of Incorporation, and the text of the Certificate ofIncorporation is hereby amended and restated to read as herein set forth infull:

 

**FIRST:****           **The name of theCorporation is ClearStory Systems, Inc.

 

**SECOND:****     **The address of the Corporation’s registeredoffice in the State of Delaware is 2711 CentervilleRoad, Suite 400, in the City of Wilmington, County of New Castle.  The name of the Corporation’s registeredagent at such address is Corporation Service Company.

 

**THIRD:****         **The nature of thebusiness and purposes to be conducted or promoted by the Corporation is asfollows:

 

To engage in any lawfulact or activity for which corporations may be organized under the GeneralCorporation Law of the State of Delaware.

 

**FOURTH:****      **The total number of shares of all classes ofstock which the Corporation shall have authority to issue is 60,000,000 shares,consisting of (i) 50,000,000 shares of Common Stock, $.01 par value per share(the “Common Stock”), and (ii) 10,000,000 shares of Preferred Stock, $.01 parvalue per share, of which 500,000 shares shall be designated “Series AConvertible Preferred Stock” (the “Series A Preferred Stock”), 200,000 sharesshall be designated “Series B Convertible Preferred Stock” (the “Series BPreferred Stock”), 6,000,000 shares shall be designated “Series C ConvertiblePreferred Stock” (the “Series C Preferred Stock”) and 3,300,000 shares shall beundesignated.

 

----

 

The following is astatement of the designations and the powers, preferences and rights, and thequalifications, limitations or restrictions thereof in respect of each class ofcapital stock of the Corporation.

 

**A.****            COMMONSTOCK.**

 

**1.****             General.**  Thevoting, dividend and liquidation rights of the holders of the Common Stock aresubject to and qualified by the rights of the holders of any outstandingPreferred Stock of any series as may be designated by the Board upon anyissuance of the Preferred Stock of any series.

** **

**2.****             Voting. **Theholders of the Common Stock are entitled to one vote for each share held at allmeetings of stockholders (and any written actions in lieu of a meeting).  There shall be no cumulative voting.

 

Thenumber of authorized shares of Common Stock may be increased or decreased (butnot below the number of shares thereof then outstanding) by the affirmativevote of the holders of the majority of the stock of the Corporation entitled tovote, irrespective of the provisions of Section 242(b)(2) of the GeneralCorporation Law of the State of Delaware.

** **

**3.****             Dividends.** Dividends may be declared and paid on the Common Stock from fundslawfully available therefor as and when determined by the Board and subject toany preferential dividend rights of any then outstanding Preferred Stock.

** **

**4.****             Liquidation.** Upon the dissolution or liquidation of theCorporation, whether voluntary or involuntary, holders of Common Stock shall beentitled to receive all assets of the Corporation available for distribution toits stockholders, subject to any preferential rights of any then outstandingPreferred Stock.

** **

**B.****            PREFERREDSTOCK**.

 

Preferred Stockmay be issued from time to time in one or more series, each of such series tohave such terms as stated or expressed herein and in the resolution orresolutions providing for the issue of such series adopted by the Board of theCorporation as hereinafter provided.  Anyshares of Preferred Stock which may be redeemed, purchased or acquired by theCorporation may be reissued except as otherwise provided by law.  Different series of Preferred Stock shall notbe construed to constitute different classes of shares for the purposes ofvoting classes unless expressly provided.

 

Authority ishereby expressly granted to the Board from time to time to issue the PreferredStock in one or more series, and in connection with the creation of any suchseries, by resolution or resolutions providing for the issue of the sharesthereof, to determine and fix such voting powers, full or limited, or no votingpowers, and such designations, preferences and relative participating, optionalor other special rights, and qualifications, limitations or restrictions thereof,including without limitation, dividend rights, conversion rights, redemptionprivileges and liquidation preferences, as shall be stated and expressed insuch resolutions, all to

 

2

----

 

the full extent now orhereafter permitted by the General Corporation Law of the State ofDelaware.  Without limiting thegenerality of the foregoing, the resolutions providing for issuance of anyseries of Preferred Stock may provide that such series shall be superior to,rank equally with or be junior to the Preferred Stock of any other series tothe extent permitted by law. Except as otherwise provided in this Amended andRestated Certificate of Incorporation, no vote of the holders of the PreferredStock or Common Stock shall be a prerequisite to the designation or issuance ofany shares of any series of the Preferred Stock authorized by and complyingwith the conditions of this Amended and Restated Certificate of Incorporation,the right to have such vote being expressly waived by all present and futureholders of the capital stock of the Corporation.

 

**C.****            SERIESA, SERIES B AND SERIES C CONVERTIBLE PREFERRED STOCK.**

 

The Series APreferred Stock, the Series B Preferred Stock and the Series C Preferred Stockare collectively referred to herein as the “Preferred Stock”.  The Preferred Stock shall have the followingrights, preferences, powers, privileges and restrictions, qualifications andlimitations.

 

**1.****             Dividend Rights.**

 

a.             Dividends.  The holders of the Preferred Stock shall beentitled to receive dividends in the manneras follows:

 

### (1)           SeriesA Preferred Stock.  The holders ofSeries A Preferred Stock, in preference to the holders of the Common Stock,shall be entitled to receive cumulative dividends, but only out of funds thatare legally available therefor (as defined by the General Corporation Law ofthe State of Delaware), at an annual floating rate equal to the Prime Rate ofinterest (as reflected in the Money Rates Table Eastern Edition of the WallStreet Journal) plus 2.5% of the Series A Original Issue Price (as definedbelow) per annum on each outstanding share of Series A Preferred Stock (asadjusted for any stock dividends, combinations, splits, recapitalizations andthe like with respect to such shares). Such dividends shall accrue and be payable at the end of each fiscalquarter of the Corporation in shares of Series A Preferred Stock (valued at theSeries A Original Issue Price, as adjusted for any stock dividends,combinations, splits, recapitalizations and the like with respect to suchshares).  The original issue price of theSeries A Preferred Stock shall be $1.30 (the “Series A Original Issue Price”).

 

### (2)           SeriesB Preferred Stock. The holders of Series B Preferred Stock, in preferenceto the holders of the Common Stock and the Series A Preferred Stock, shall beentitled to receive cumulative dividends, but only out of funds that arelegally available therefor (as defined by the General Corporation Law of theState of Delaware), at the rate of 1.915% of the Series B Original Issue Price(as defined below) per annum on each outstanding share of Series B PreferredStock (as adjusted for any stock dividends, combinations, splits,recapitalizations and the like with respect to such shares).  Such dividends shall accrue and be payablemonthly, and, at the option of the holders of the Series B Preferred Stock,shall be payable either (a) in cash or (b) in shares of Series C PreferredStock (valued at the Series C

 

3

----

 

### Original Issue Price (asdefined below), as adjusted for any stock dividends, combinations, splits,recapitalizations and the like with respect to such shares).  Shares of Series C Preferred Stock issued inlieu of the cash dividend are sometimes referred to as “PIK Shares”.  Upon any conversion of the Series B PreferredStock, all accrued but unpaid dividends on the Series B Preferred Stock shallbe paid immediately prior to such shares being surrendered for conversion.  If the holders of the Series B PreferredStock request a cash dividend, but the Corporation cannot declare or pay cashdividends due to a lack of available surplus or insufficient net profits forthe fiscal year in which the dividend is to be paid and/or the preceding fiscalyear, then the holders of the Series B Preferred Stock may elect to receive (a)PIK Shares in lieu of the cash dividend or (b) all undeclared and unpaiddividends that accrue until such time as the Corporation determines that it hassufficient funds to declare and pay the dividends.  The original issue price of the Series BPreferred Stock shall be $67.886 (the “Series B Original Issue Price”).

 

### (3)           SeriesC Preferred Stock.  The holders ofSeries C Preferred Stock, in preference to the holders of the Common Stock, theSeries A Preferred Stock and the Series B Preferred Stock, shall be entitled toreceive cumulative dividends, but only out of funds that are legally availabletherefor (as defined by the General Corporation Law of the State of Delaware),at the rate of 8% of the Series C Original Issue Price (as defined below) perannum on each outstanding share of Series C Preferred Stock (as adjusted forany stock dividends, combinations, splits, recapitalizations and the like withrespect to such shares).  Such dividendsshall accrue and be payable semi-annually on September 1 and March l of eachyear, and, at the option of the Corporation shall be payable either (a) in cashor (b) in shares of Series C Preferred Stock (valued at the Series C OriginalIssue Price, as adjusted for any stock dividends, combinations, splits,recapitalizations and the like with respect to such shares).  Shares of Series C Preferred Stock issued inlieu of the cash dividend are sometimes referred to as “PIK Shares”.  Upon any conversion of the Series C PreferredStock, all accrued but unpaid dividends on the Series C Preferred Stock shallbe paid immediately prior to such shares being surrendered for conversion. Theoriginal issue price of the Series C Preferred Stock shall be $1.9396 (the “SeriesC Original Issue Price”).

 

### b.             Consentof Series C Preferred Stock Holders. So long as any shares of Series C Preferred Stock shall be outstanding,without the prior written consent of the holders of a majority of the thenissued and outstanding shares of Series C Preferred Stock, until all dividends(set forth in subsection a above) on the Series C Preferred Stock shall havebeen paid or declared and set apart:

 

### (1)           nodividend, whether in cash or property, shall be paid or declared, nor shall anyother distribution be made, to any holder of Common Stock, Series A PreferredStock or Series B Preferred Stock; provided, however, that no consent of theholders of the Series C Preferred Stock shall be required prior to the paymentof any cash dividend requested by the holders of the Series B Preferred Stockpursuant to subsection a.(2) above; and

 

### (2)           noshares of any Common Stock, Series A Preferred Stock or any Series B PreferredStock shall be purchased, redeemed, or otherwise acquired for value by the Corporation

 

4

----

 

### c.             CommonStock Dividends.  In addition to thedividends set forth in subsections a.(1), (2) and (3) above, each holder of theSeries A Preferred Stock, Series B Preferred Stock and Series C Preferred Stockshall be entitled to receive, when, as and if declared by the Board of theCorporation, out of the assets of the Corporation legally available therefore(as defined by the General Corporation Law of the State of Delaware), dividendsand distributions on parity and pro rata with the holders of the Common Stockcalculated based on the number of shares as shall be equal to the whole numberof shares of Common Stock into which such holder’s aggregate number of sharesof Series A Preferred Stock, Series B Preferred Stock or Series C PreferredStock, as applicable, are convertible pursuant to subsection 4 belowimmediately after the close of business on the record date fixed for thedetermination of the holders of the Common Stock entitled to receive suchdividend or distribution.

 

### **2.**             **Voting Rights.**

 

### a.**            **General Rights.  Except as otherwise provided herein or asrequired by law, each holder of Preferred Stock shall be entitled to vote onall matters, and shall be entitled to that number of votes equal to the largestnumber of whole shares of Common Stock into which such holder’s shares ofPreferred Stock could be converted pursuant to the provisions of subsection 4below at the record date for the determination of stockholders entitled to voteon such matter, or if no such record date is established, on the date of themeeting that such vote is taken or any written consent of stockholders issolicited.  Except as otherwise providedby law, by the terms of this Amended and Restated Certificate of Incorporationor by the provisions establishing any other series of Preferred Stock, theholders of shares of Preferred Stock and Common Stock shall vote together as asingle class on all matters.

 

### b.             SeparateVote of Series C Preferred Stock.  Inaddition to any other vote or consent required herein or by law, the vote ofthe holders of a majority of the outstanding Series C Preferred Stock shall benecessary for effecting or validating the following actions:

 

### (1)           anyauthorization or issuance of any other capital stock having any rights,preferences or privileges senior to or *pari passu*withthe Series C Preferred Stock;

 

### (2)           anyamendment, alteration, waiver or repeal of any provision of this Amended andRestated Certificate of Incorporation or the Bylaws of the Corporation thatalters, changes or adversely affects the voting rights or other powers,preferences or other special rights or privileges, or restrictions of theSeries C Preferred Stock;

 

### (3)           anyincrease or decrease in the number of authorized or outstanding shares ofSeries C Preferred Stock;

 

### (4)           anyreclassification or recapitalization of any outstanding shares of securities ofthe Corporation into shares having rights, preferences or privileges senior toor *pari passu* with the Series CPreferred Stock, or otherwise effecting any change to the rights, preferencesand privileges of the Series C Preferred Stock, or any other class or series ofcapital stock of the Corporation which would adversely affect the Series CPreferred Stock;

 

5

----

 

### (5)           anyincrease or decrease in the number of directors constituting the entire Board;

 

### (6)           anyredemption, purchase or other acquisition by the Corporation, either direct orindirect, of any Common Stock, Series A Preferred Stock or Series B PreferredStock;

 

### (7)           anytransaction with any party related to or affiliated with the Corporation,including but not limited to, any transaction that would result in therepayment of a stockholder loan;

 

### (8)           anyaction that would permit any subsidiary or affiliate of the Corporation to sellor issue shares of capital stock to any party other than the Corporation;

 

### (9)           anyaction that would increase the number of shares of capital stock available forissuance by the Corporation (a) to employees, consultants or other thirdparties; or (b) in connection with acquisitions; or

 

### (10)         anyaction that would result in the Corporation incurring or assuming more than$3,000,000 of indebtedness in the aggregate.

 

### c.             Boardof Directors.  Notwithstandingsubsections a and b above or any provision to the contrary contained herein,(1) the holders of the Series C Preferred Stock shall be entitled, votingtogether as a separate single class, to elect two (2) members of the Board ateach election of directors, to be designated by SCP Private Equity Partners II,L.P., a Delaware limited partnership (“SCP”), so long as SCP holds any sharesof Series C Preferred Stock; (2) the holders of the Series B Preferred Stockshall be entitled, voting together as a separate single class, to elect two (2)members of the Board at each election of directors, to be designated by arepresentative determined by a majority of the holders of the Series BPreferred Stock (the “Series B Representative”); and (3) the holders of the SeriesA Preferred Stock shall be entitled, voting together as a separate singleclass, to elect three (3) members of the Board at each election of directors,to be designated by a representative determined by a majority of the holders ofthe Series A Preferred Stock (the “Series A Representative” and together withSCP and the Series B Representative, the “Representatives”).  Each of the Representatives shall notify theCorporation in writing of the identities of its designees for election to theBoard, which notice shall be conclusive evidence of the consent of suchdesignees to serve as directors of the Corporation.  In the event that any Representative fails toprovide such notice, the designees currently serving on the Board shall bedeemed to be such Representative’s applicable designees.  If none of the Representatives has designeesserving (or otherwise designated to serve in the event of the designee’sresignation, death, removal or inability to serve, as provided in the lastsentence of this subsection) on the Board, then the Board shall be entitled tomake the nomination for each such Representative for which such notice wasrequired.  In the event SCP fails to holdany Series C Preferred Stock, the holders of Series C Preferred Stock, votingtogether as a separate single class, shall be entitled to the director electionrights previously held by SCP.  In theevent of any vacancy arising by reason of the resignation, death or removal ofa designee of a Representative (which may include a removal by the holders ofthe applicable series of Preferred

 

6

----

 

### Stock, with or withoutcause, or at the written request of such Representative) or any designee’sinability to serve, then such Representative shall notify the Corporation ofits choice to fill such vacancy, and the Board shall appoint such person tofill such vacancy and serve until the next meeting of the Corporation’sstockholders for the election of directors. The class voting rights granted tothe holders of the Preferred Stock pursuant to this subsection c shall be inaddition to, and not in lieu of, the voting rights granted to such holdersunder subsections a and b above. Accordingly, the holders of the PreferredStock shall be entitled to vote together with the holders of shares of theCommon Stock as a single class with respect to the election of those directorsfor which the holders of the Preferred Stock do not have class voting rights.

 

### **3.****             Liquidation Rights.**

 

### a.             Uponany liquidation, dissolution, or winding up of the Corporation, whethervoluntary or involuntary, before any distribution or payment shall be made tothe holders of Common Stock, by reason of their ownership thereto, an amountequal to (1) in the case of the Series A Preferred Stock, the greater of (a)the Series A Original Issue Price (as adjusted for any stock dividends,combinations, splits, recapitalizations and the like with respect to suchshares) plus an amount equal to all accrued and unpaid dividends for each shareof Series A Preferred Stock held by each such holder or (b) the price per sharea holder of Series A Preferred Stock would have been entitled to receive hadall shares of outstanding Preferred Stock (including the Series C PreferredStock) been converted into Common Stock immediately preceding such liquidation,dissolution or winding up of the Corporation (the greater of (1)(a) or (1)(b)being referred to herein as the “Series A Liquidation Amount”); (2) in the caseof the Series B Preferred Stock, the greater of (a) 51.6% of the Series BOriginal issue Price (as adjusted for any stock dividends, combinations,splits, recapitalizations and the like with respect to such shares) plus anamount equal to all accrued and unpaid dividends for each share of Series BPreferred Stock held by each such holder or (b) the price per share a holder ofSeries B Preferred Stock would have been entitled to receive had all shares ofoutstanding Preferred Stock (including the Series B Preferred Stock) beenconverted into Common Stock immediately preceding such liquidation, dissolutionor winding up of the Corporation (the greater of (2)(a) or (2)(b) beingreferred to herein as the “Series B Liquidation Amount”); and (3) in the caseof the Series C Preferred Stock, the greater of (a) 200% of the Series COriginal Issue Price (as adjusted for any stock dividends, combinations,splits, recapitalizations and the like with respect to such shares) plus anamount equal to all accrued and unpaid dividends for each share of Series CPreferred Stock held by each such holder or (2) the price per share a holder ofSeries C Preferred Stock would have been entitled to receive had all shares ofoutstanding Preferred Stock (including the Series C Preferred Stock) beenconverted into Common Stock immediately preceding such liquidation, dissolutionor winding up of the Corporation (the greater of (3)(a) or (3)(b) beingreferred to herein as the “Series C Liquidation Amount”).  If, upon any such liquidation, dissolution,or winding up, the assets of the Corporation shall be insufficient to makepayment of the Series A Liquidation Amount, Series B Liquidation Amount and theSeries C Liquidation Amount, then such assets shall be distributed first amongthe holders of Series C Preferred Stock at the time outstanding,

 

7

----

 

### pro rata (or if theassets of the Corporation are insufficient to make payment in full to allholders of the Series C Preferred Stock, then such assets will be distributedratably to such holders in proportion to the full amounts to which they wouldotherwise be respectively entitled), then to the holders of the Series BPreferred Stock at the time outstanding, pro rata (or if the assets of theCorporation are insufficient to make payment in full to all holders of theSeries B Preferred Stock, then such assets will be distributed ratably to suchholders in proportion to the full amounts to which they would otherwise berespectively entitled) and finally to the holders of the Series A PreferredStock, pro rata (or if the assets of the Corporation are insufficient to makepayment in full to all holders of the Series A Preferred Stock, then suchassets will be distributed ratably to such holders in proportion to the fullamounts to which they would otherwise be respectively entitled).

 

### b.             DeemedLiquidation.  The following eventsshall be considered a liquidation under this subsection b, unless the holdersof the Series C Preferred Stock, by majority vote or written consent, deem suchevents not to be a liquidation:

 

### (1)           anyconsolidation or merger of the Corporation with or into any other corporationor other entity or person (or any other corporate reorganization), resulting inthe stockholders of the Corporation immediately prior to such consolidation,merger or reorganization, owning less than 50% of the Corporation’s votingpower immediately after such consolidation, merger or reorganization; or anytransaction or series of related transactions to which the Corporation is aparty in which an excess of 50% of the Corporation’s voting power istransferred, excluding any consolidation or merger effected exclusively tochange the domicile of the Corporation (an “Acquisition”);

 

### (2)           anytransaction or a series of related transactions, other than transactions involvinga holder of Preferred Stock, in which a majority of the voting power istransferred to a third party (or group of affiliated third parties) who werenot previously stockholders of the Corporation; or

 

### (3)           anysale, lease or other disposition of all or substantially all of the assets ofthe Corporation (an “Asset Transfer”).

 

### c.             Non-CashConsideration.  In the event that anyof the transactions set forth in subparagraph b above occurs, if theconsideration received by the Corporation is other than cash, its value will bedeemed to be its fair market value as determined in good faith by theBoard.  Any securities shall be valued asfollows:

 

### (1)           Securitiesnot subject to restrictions on free marketability covered by subparagraph (2) below:

 

#### (a)           Iftraded on a securities exchange or through the Nasdaq National Market (or asimilar national quotation system), the value shall be deemed to be the averageof the closing prices of the securities on such quotation system over thethirty (30) day period ending three (3) days prior to the closing of thetransaction;

 

#### (b)           Ifactively traded over-the-counter, the value shall be deemed to be the averageof the closing bid or sale prices (whichever is applicable) over the thirty(30) day period ending three (3) days prior to the closing of the transaction;and

 

8

----

 

#### (c)           Ifthere is no active public market, the value shall be deemed to be the fairmarket value thereof, as determined in good faith by the Board.

####  

#### (2)           Themethod of valuation of securities subject to restrictions and freemarketability (other than restrictions arising solely by virtue of astockholder’s status as an affiliate or former affiliate) shall be to make anappropriate discount from the market value as determined above in subsections(1)(a), (b) or (c) above to reflect the approximate fair market value thereof,as determined in good faith by the Board.

####  

#### d.             Notice.     Written notice of any such liquidation,dissolution or winding up (or deemed liquidation, dissolution or winding up) ofthe Corporation within the meaning of this subsection 3, which states thepayment date, the place where said payments shall be made and the date on whichconversion rights as set forth herein terminate as to such shares (which shallbe not less than ten (10) days after the date of such notice) shall be given byfirst class mail, postage prepaid, or by telecopy or facsimile, not less thantwenty (20) days prior to the payment date stated therein, to the then holdersof record of Series A Preferred Stock, Series B Preferred Stock and Series CPreferred Stock.  Such notice shall beaddressed to each such holder at its address as shown on the records of theCorporation.

#### ** **

#### **4.****             Conversion****. **The holders of the Preferred Stockshall have the conversion rights as follows:

####  

#### a.             OptionalConversion. Subject to and in compliance with the provisions of thissubsection 4, any shares of Preferred Stock may, at the option of the holder,be converted at any time into fully-paid and nonassessable shares of CommonStock. The number of shares of Common Stock to which a holder of PreferredStock shall be entitled upon conversion shall be as follows: (1) for holders ofSeries A Preferred Stock, the number of shares equal to the product obtained bymultiplying the “Series A Conversion Rate” then in effect (determined asprovided in subsection b.(1) below) by the number of shares of Series APreferred Stock being converted; (2) for holders of Series B Preferred Stock,the number of shares equal to the product obtained by multiplying the “Series BConversion Rate” then in effect (determined as provided in subsection b.(2)below) by the number of shares of Series B Preferred Stock being converted; (3)for holders of Series C Preferred Stock, the number of shares equal to theproduct obtained by multiplying the “Series C Conversion Rate” then in effect(determined as provided in subsection b.(3) below) by the number of Shares ofSeries C Preferred Stock being converted.

 

#### b.             PreferredStock Conversion Rate.  The conversionrate in effect at any time for conversion of the Preferred Stock is as follows:

 

### (1)           Series A PreferredStock.  In the case of the Series APreferred Stock, the conversion rate in effect at any time for conversion ofthe Series A Preferred Stock (the “Series A Conversion Rate”) shall be thequotient obtained by dividing the Series A Original Issue Price by the “SeriesA Conversion Price,” as calculated in subsection c.(1) below.

 

### (2)           SeriesB Preferred Stock.  In the case ofthe Series B Preferred Stock, the conversion rate in effect at any time forconversion of the Series B Preferred Stock

 

9

----

 

### (the “Series B ConversionRate”) shall be the quotient obtained by dividing the Series B Original IssuePrice by the “Series B Conversion Price,” as calculated in subsection c.(2)below.

 

### (3)           SeriesC Preferred Stock.  In the case ofthe Series C Preferred Stock, the conversion rate in effect at any time forconversion of the Series C Preferred Stock (the “Series C Conversion Price”)shall be the quotient obtained by dividing the Series C Original Issue Price bythe “Series C Conversion Price” as calculated in subsection c.(2) below.

 

### c.             PreferredStock Conversion Price.  Theconversion price for the Preferred Stock is as follows:

 

### (1)           SeriesA Preferred Stock.  The conversionprice for the Series A Preferred Stock shall initially be $0.11 (the “Series AConversion Price”).  Such initial SeriesA Conversion Price shall be adjusted from time to time in accordance with thissubsection 4.  All references to theSeries A Conversion Price herein shall mean the Series A Conversion Price as soadjusted.

 

### (2)           SeriesB Preferred Stock.  The conversionprice for the Series B Preferred Stock shall initially be $.096980 (the “SeriesB Conversion Price”).  Such initialSeries B Conversion Price shall be adjusted from time to time in accordancewith this subsection 4.  All referencesto the Series B Conversion Price herein shall mean the Series B ConversionPrice as so adjusted.

 

### (3)           SeriesC Preferred Stock.  The conversionprice for the Series C Preferred Stock shall initially be $.096980 (the “SeriesC Conversion Price”).  Such initialSeries C Conversion Price shall be adjusted from time to time in accordancewith this subsection 4.  All referencesto the Series C Conversion Price herein shall mean the Series C ConversionPrice as so adjusted.

 

### d.             Mechanicsof Conversion. Each holder of Preferred Stock who desires to convert thesame into shares of Common Stock pursuant to this subsection 4 shall surrenderthe certificate or certificates therefor, duly endorsed, at the office of theCorporation or at any transfer agent for the Preferred Stock and shall givewritten notice to the Corporation at such office that such holder elects toconvert the same.  Such notice shallstate the number of shares of Preferred Stock being converted.  Thereupon, the Corporation shall promptlyissue and deliver at such office to such holder a certificate or certificatesfor the number of shares of Common Stock to which such holder is entitled andshall promptly pay in cash (at the Common Stock’s fair market value determinedby the Board as of the date of conversion) the value of any fractional share ofCommon Stock otherwise issuable to any holder of Preferred Stock. Suchconversion shall be deemed to have been made at the close of business on thedate of such surrender of the certificates representing the shares of PreferredStock to be converted, and the person entitled to receive the shares of Common Stockissuable upon such conversion shall be treated for all purposes as the recordholder of such shares of Common Stock on such date.

 

### e.             AdjustmentUpon Common Stock Event.  Upon thehappening of a Common Stock Event (as hereinafter defined) at any time or fromtime to time after the date that

 

10

----

 

### the first share of SeriesC Preferred Stock is issued (the “Original Issue Date”), the Series AConversion Price, Series B Conversion Price and Series C Conversion Priceshall, simultaneously with the happening of such Common Stock Event, beadjusted by multiplying the Series A Conversion Price, Series B ConversionPrice or Series C Conversion Price, as applicable, in effect immediately priorto such Common Stock Event by a fraction, (1) the numerator of which shall bethe number of shares of Common Stock issued and outstanding immediately priorto such Common Stock Event, and (2) the denominator of which shall be thenumber of shares of Common Stock issued and outstanding immediately after suchCommon Stock Event, and the product so obtained shall thereafter be the SeriesA Conversion Price, Series B Conversion Price or Series C Conversion Price, asapplicable.  The applicable conversionprices of each of the series of Preferred Stock shall be readjusted in the samemanner upon the happening of each subsequent Common Stock Event. As used inthis subsection 4, the term “Common Stock Event” shall mean (1) the issue bythe Corporation of additional shaves of Common Stock as a dividend or otherdistribution on outstanding Common Stock, (2) a subdivision of the outstandingshares of Common Stock into a greater number of shares of Common Stock (bystock split, reclassification or otherwise), or (3) a combination or consolidation,by reclassification or otherwise, of the outstanding shares of Common Stockinto a smaller number of shares of Common Stock.

 

### f.              Adjustmentfor Other Dividends and Distributions. If at any time or from time to timeafter the Original Issue Date the Corporation pays a dividend or makes anotherdistribution to the holders of the Common Stock (or fixes a record date for thedetermination of holders of Common Stock entitled to receive such dividend orother distribution) payable in securities of the Corporation or any of itssubsidiaries, then in each such event a provision shall be made so that theholders of Preferred Stock shall receive upon conversion thereof in addition tothe number of shares of Common Stock receivable upon conversion thereof, the amountof securities of the Corporation which they would have received had theirPreferred Stock been converted into Common Stock on the date of such event (orsuch record date, as applicable) and had they thereafter, during the periodfrom the date of such event (or such record date, as applicable) to andincluding the conversion date, retained such securities receivable by them asaforesaid during such period, subject to all other adjustments called forduring such period under this subsection 4 with respect to the rights of theholders of the Preferred Stock or with respect to such other securities bytheir terms.

 

### g.             Adjustmentfor Reclassification, Exchange and Substitution.  If at any time or from time to time after theOriginal Issue Date, the Common Stock issuable upon the conversion of thePreferred Stock is changed into the same or a different number of shares of anyclass or classes of stock, whether by recapitalization, reclassification orotherwise (other than an Acquisition or Asset Transfer as defined in subsection3 above or a subdivision or combination of shares or stock dividend or areorganization, merger, consolidation or sale of assets provided for elsewherein this subsection 4), then each holder of Preferred Stock shall have the rightthereafter to convert such stock into the kind and amount of stock and othersecurities and property receivable upon such recapitalization, reclassificationor other change by holders of the maximum number of shares of Common Stock intowhich such shares of Preferred Stock could have been converted immediatelyprior to such recapitalization, reclassification or change, all

 

11

----

 

### subject to furtheradjustment as provided herein or with respect to such other securities orproperty by the terms thereof.

 

### h.             Adjustmentfor Reorganizations, Mergers or Consolidations.  If at any time or from time to time after theOriginal Issue Date, there is a capital reorganization of the Common Stock orthe merger or consolidation of the Corporation with or into another corporationor another entity or person (other than an Acquisition or Asset Transfer asdefined in subsection 3 above or a recapitalization, subdivision, combination,reclassification, exchange or substitution of shares provided for elsewhere inthis subsection 4), as a part of such capital reorganization, provision shallbe made so that the holders of the Preferred Stock shall thereafter be entitledto receive upon conversion of the Preferred Stock the number of shares of stockor other securities or property of the Corporation to which a holder of thenumber of shares of Common Stock deliverable upon conversion would have beenentitled on such capital reorganization, subject to adjustment in respect ofsuch stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in theapplication of the provisions of this subsection 4 with respect to the rightsof the holders of Preferred Stock after the capital reorganization to theextent that the provisions of this subsection 4 (including adjustment of theSeries A Conversion Price, Series B Conversion Price and Series C ConversionPrice then in effect and the number of shares issuable upon conversion of theSeries A Preferred Stock, Series B Preferred Stock and Series C PreferredStock) shall be applicable after that event and be as nearly equivalent aspracticable.

 

### i.              Saleof Shares Below Preferred Conversion Price.

 

### (1)           Ifat any time or from time to time after the Original Issue Date, the Corporationissues or sells, or is deemed by the express provisions of this subsection i tohave issued or sold, Additional Shares of Common Stock (as defined insubsection (2)(a) below), other than (a) as a dividend or distribution on thePreferred Stock, (b) in connection with a Common Stock Event as provided insubsection e above, (c) as a dividend or other distribution on any class ofstock as provided in subsection f above, and (d) a subdivision or combinationof shares of Common Stock as provided in subsection g above, for an EffectivePrice (as defined in subsection (2)(d) below) less than the then effectiveSeries A Conversion Price, Series B Conversion Price, or Series C ConversionPrice, then and in each such case the then existing Series A Conversion Price,Series B Conversion Price or Series C Conversion Price, as applicable, shall bereduced, as of the opening of business on the date of such issue or sale, to aprice equal to the price paid per share for such Additional Shares of CommonStock.

 

### (2)           Forthe purpose of making any adjustment required under this subsection i:

 

#### (a)           “AdditionalShares of Common Stock” shall mean all shares of Common Stock issued (or,pursuant to this subsection 4, deemed to be issued) by the Corporation, whetheror not subsequently reacquired or retired by the Corporation, other than: (A)upon conversion of shares of Preferred Stock and (B) shares of Common Stockissued or issuable by the Corporation or any subsidiary to employees, officers,directors or consultants pursuant to stock option plans that are approved bythe Board (“Incentive Stock”), provided that

 

12

----

 

#### the number of shares ofIncentive Stock does not exceed an aggregate of 30,000,000 shares (as adjustedfor any stock dividends, combinations, splits or similar events) regardless ofwhether issued by the Corporation prior to the date hereof.

 

#### (b)           The“Aggregate Consideration Received” by the Corporation for any issue or sale (ordeemed issue or sale) of securities shall (i) (A) to the extent it consists ofcash, be computed at the gross amount of cash received by the Corporationbefore deduction of any underwriting or similar commissions, compensation orconcessions paid or allowed by the Corporation in connection with such issue orsale and without deduction of any expenses payable by the Corporation; (B) tothe extent it consists of property other than cash, be computed at the fairvalue of that property at the time of such issue as determined in good faith bythe Board; and (C) if Additional Shares of Common Stock, Convertible Securitiesor Rights or Options are issued or sold together with other stock or securitiesor other assets of the Corporation for a consideration which covers both, becomputed as the portion of the consideration so received that may be reasonablydetermined in good faith by the Board to be allocable to such Additional Sharesof Common Stock, Convertible Securities or Rights or Options or (ii) beconsidered zero, if no consideration is received by the Corporation;

 

#### (c)           “ConvertibleSecurities” shall mean any evidence of indebtedness, stock or other securitiesdirectly or indirectly convertible into or exchangeable for shares of CommonStock;

 

#### (d)           The“Effective Price” of Additional Shares of Common Stock shall mean the quotientdetermined by dividing the total number of Additional Shares of Common Stockissued or sold, or deemed to have been issued or sold by the Corporation by theprovisions of subsection (a) above, into the Aggregate Consideration Received,or deemed to have been received by the Corporation by the provisions of thissubsection (d), for such issue or sale of such Additional Shares of CommonStock; and

 

#### (e)           “Rightsor Options” shall mean warrants, options or other rights to purchase orotherwise acquire shares of Common Stock or Convertible Securities.

 

### (3)           Forthe purpose of making any adjustment to the Series A Conversion Price, Series BConversion Price or Series C Conversion Price required under this subsection i,if the Corporation issues or sells any Rights or Options or ConvertibleSecurities (or shall fix a record date for the determination of holders of anyclass of securities then entitled to receive any such Rights or Options orConvertible Securities), then the Corporation shall be deemed (a) to haveissued, at the time of the issuance of such Rights or Options or ConvertibleSecurities, that number of Additional Shares of Common Stock that is equal tothe maximum number of shares of Common Stock issuable upon exercise of suchRights or Options or conversion or exchange of such Convertible Securities upontheir issuance (or, in the case such a record date shall have been fixed, as ofthe close of business on such record date) and (b) to have received, as theAggregate Consideration Received for the deemed issuance of such additionalshares of Common Stock, an amount equal to the total amount of theconsideration, if any, received by the Corporation for the issuance of suchRights or Options or Convertible Securities, plus, in the case of such Rightsor Options, the minimum total amount of consideration, if any,

 

13

----

 

### payable to theCorporation upon the exercise in full of such Rights or Options (including,with respect to Rights or Options for Convertible Securities, the minimumaggregate amount of consideration payable to the Corporation (other than bycancellation of liabilities or obligations evidenced by such Rights or Options)upon the conversion or exchange of such underlying Convertible Securities),plus, in the case of Convertible Securities, the minimum total amount ofconsideration, if any, payable to the Corporation (other than by cancellationof liabilities or obligations evidenced by such Convertible Securities) uponthe conversion or exchange thereof; *providedthat*:

 

#### (a)           ifthe minimum amounts of such consideration cannot be ascertained, but are afunction of antidilution or similar protective clauses, then the Corporationshall be deemed to have received the minimum amounts of consideration withoutreference to such clauses;

 

#### (b)           ifthe minimum amount of consideration payable to the Corporation upon theexercise of such Rights or Options or the conversion or exchange of suchConvertible Securities is reduced or the maximum number of shares of CommonStock issuable upon the exercise of such Rights or Options or the conversion orexchange of such Convertible Securities is increased over time or upon theoccurrence or non-occurrence of specified events, other than by reason ofantidilution or similar protective adjustments, then the Series A ConversionPrice, Series B Conversion Price and Series C Conversion Price computed uponthe original issue or deemed issue thereof (or upon the occurrence of a recorddate with respect thereto), and any subsequent adjustments based thereon,shall, upon any such decrease or increase becoming effective, be recomputed toreflect such decrease or increase, as the case may be (provided, however, thatno such adjustment of the Series A Conversion Price, Series B Conversion Priceand Series C Conversion Price shall affect Common Stock previously issued uponconversion of the Series A Preferred Stock, Series B Preferred Stock and SeriesC Preferred Stock, respectively); and

 

#### (c)           ifthe minimum amount of consideration payable to the Corporation upon theexercise of such Rights or Options or the conversion or exchange of suchConvertible Securities is subsequently increased or the maximum number ofshares of Common Stock issuable upon the exercise of such Rights or Options orthe conversion or exchange of such Convertible Securities is subsequentlydecreased, then the Series A Conversion Price, Series B Conversion Price andSeries C Conversion Price computed upon the original issue or deemed issuethereof (or upon the occurrence of a record date with respect thereto), and anysubsequent adjustments based thereon, shall, upon any such increase or decreasebecoming effective, be recomputed to reflect such increase or decrease, as thecase may be, (provided, however, that no such adjustment of the Series AConversion Price, Series B Conversion Price or Series C Conversion Price shallaffect Common Stock previously issued upon conversion of the Series A PreferredStock, Series B Preferred Stock or Series C Preferred Stock, respectively, andfurther provided that no readjustment pursuant to this subsection (c) shallhave the effect of increasing the Series A Conversion Price, Series BConversion Price or Series C Conversion Price, as applicable, to an amountwhich exceeds the lower of (i) the Series A Conversion Price, Series BConversion Price or Series C Conversion Price, as applicable, or (ii) theSeries A Conversion Price, Series B Conversion Price or Series C ConversionPrice, as applicable, that would have

 

14

----

 

#### resulted from anyissuance of Additional Shares of Common Stock between the original adjustmentdate and such readjustment date).

 

(4)           Nofurther adjustment of the Series A Conversion Price, Series B Conversion Priceor Series C Conversion Price, adjusted upon the issuance of such Rights orOptions or Convertible Securities, shall be made as a result of the actualissuance of shares of Common Stock on the exercise of any such Rights orOptions or the conversion or exchange of any such Convertible Securities.  If any such Rights or Options or theconversion rights represented by any such Convertible Securities shall expirewithout having been fully exercised, then the Series A Conversion Price, SeriesB Conversion Price or Series C Conversion Price, as adjusted upon the issuanceof such Rights or Options or Convertible Securities (or upon the occurrence ofthe record date with respect thereto), and any subsequent adjustments basedthereon, shall be readjusted to the Series A Conversion Price, Series BConversion Price or Series C Conversion Price which would have been in effecthad an adjustment been made on the basis that (a) the only Additional Shares ofCommon Stock so issued were the shares of Common Stock, if any, that wereactually issued or sold on the exercise of such Rights or Options or rights ofconversion or exchange of such Convertible Securities and (b) the considerationreceived with respect to Additional Shares of Common Stock was the considerationactually received by the Corporation upon such exercise of such Rights orOptions, plus the consideration, if any, actually received by the Corporationfor the granting of all such Rights or Options, whether or not exercised, plusthe consideration received for issuing or selling all such ConvertibleSecurities actually converted or exchanged, plus the consideration, if any,actually received by the Corporation (other than by cancellation of liabilitiesor obligations evidenced by such Convertible Securities) on the conversion orexchange of such Convertible Securities provided, however, that no suchadjustment of the Series A Conversion Price, Series B Conversion Price orSeries C Conversion Price shall affect Common Stock previously issued uponconversion of the Preferred Stock. In the case of any Rights or Options whichexpire by their terms not more than 30 days after the date of issue thereof, noadjustment of the Series A Conversion Price; Series B Conversion Price orSeries C Conversion Price shall be made (except as to shares of Preferred Stockconverted in such period) until the expiration or exercise of all such Rightsor Options, whereupon such adjustment shall be made in the same manner providedabove. If any such record date shall have been fixed and such Rights or Optionsor Convertible Securities are not issued on the date fixed thereof, theadjustment previously made in the Series A Conversion Price, Series BConversion Price or Series C Conversion Price which became effective on suchrecord date shall be canceled as of the close of business on such record date,and shall instead be made on the actual date of issuance, if any.

 

j.              Preferred StockWarrants.  Notwithstanding anythingcontained herein, in the event that any warrants for the Series A PreferredStock outstanding as of the Original Issue Date are exercised (a “WarrantExercise”), the Corporation shall immediately issue to each holder of Series CPreferred Stock such additional shares of Series C Preferred Stock so that suchholder’s percentage ownership of the Corporation’s Common Stock on afully-diluted basis after the Warrant Exercise is equal to its percentageownership of the Corporation’s Common Stock on a fully-diluted****basis immediately prior to such Warrant Exercise.  The holders of Series C Preferred Stock shallbe entitled to receive additional shares of Series C Preferred Stock pursuantto this subsection j upon each Warrant Exercise.

 

15

----

 

k.             Certificate ofAdjustment.  In each case of anadjustment or readjustment of the Series A Conversion Price, Series BConversion Price or Series C Conversion Price for the number of shares ofCommon Stock or other securities issuable upon conversion of the PreferredStock, or if the Preferred Stock is then convertible pursuant to thissubsection 4 the Corporation, at its expense, shall compute such adjustment orreadjustment in accordance with the provisions hereof and prepare a certificateshowing such adjustment or readjustment, and shall mail such certificate, byfirst class mail, postage prepaid, to each registered holder of Preferred Stockat the holders address as shown in the Corporation’s books.  The certificate shall set forth suchadjustment or readjustment, showing in detail the facts upon which suchadjustment or readjustment is based, including a statement of (1) theconsideration received or deemed to be received by the Corporation for anyAdditional Shares of Common Stock issued or sold or deemed to have been issued orsold, (2) the Series A Conversion Price, Series B Conversion Price or Series CConversion Price at the time in effect, (3) the number of Additional Shares ofCommon Stock and (4) the type and amount, if any, of other property which atthe time would be received upon conversion of the Preferred Stock.

 

l.              Notices of RecordDate.  Upon (1) any taking by theCorporation of a record of the holders of any class of securities for thepurpose of determining the holders thereof who are entitled to receive any dividendor other distribution, or (2) any Acquisition (as defined subsection 3 above)or other capital reorganization of the Corporation, any reclassification orrecapitalization of the capital stock of the Corporation, any merger orconsolidation of the Corporation with or into any other corporation, or anyAsset Transfer (as defined in subsection 3 above), or any voluntary orinvoluntary dissolution, liquidation or winding up of the Corporation, theCorporation shall mail to each holder of Preferred Stock at least ten (10) daysprior to the record date specified therein (or such shorter period approved bya majority of the outstanding Preferred Stock) a notice specifying (1) the dateon which any such record is to be taken for the purpose of such dividend or distributionand a description of such dividend or distribution, (2) the date on which anysuch Acquisition, reorganization, reclassification, transfer, consolidation,merger, Asset Transfer, dissolution, liquidation or winding up is expected tobecome effective, and (3) the date, if any, that is to be fixed as to when theholders of record of Common Stock (or other securities) shall be entitled toexchange their shares of Common Stack (or other securities) for securities orother property deliverable upon such Acquisition, reorganization,reclassification, transfer, consolidation, merger, Asset Transfer, dissolution,liquidation or winding up.

 

m.            Fractional Shares.  No fractional shares of Common Stock shall beissued upon conversion of Preferred Stock. All shares of Common Stock (including fractions thereof) issuable uponconversion of more than one share of Preferred Stock by a holder thereof shallbe aggregated for purposes of determining whether the conversion would resultin the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result inthe issuance of any fractional share, the Corporation shall, in lieu of issuingany fractional share, pay cash equal to the product of such fraction multipliedby the Common Stock’s fair market value (as determined by the Board) on thedate of conversion.

 

n.             Reservation ofStock Issuable Upon Conversion. The Corporation shall at all times reserveand keep available out of its authorized but unissued shares of Common Stock,

 

16

----

 

solely for thepurpose of effecting the conversion of the shares of the Preferred Stock, suchnumber of its shares of Common Stock as shall from time to time be sufficientto effect the conversion of all outstanding shares of the Preferred Stock.  If at any time the number of authorized butunissued shares of Common Stock shall not be sufficient to effect theconversion of all then outstanding shares of the Preferred Stock, theCorporation will take such corporate action as may be necessary to increase itsauthorized but unissued shares of Common Stock to such number of shares asshall be sufficient for such purpose.

 

o.             Notices.  Any notice required by the provisions of thissubsection 4 shall be in writing and shall be deemed effectively given: (1)upon personal delivery to the parry to be notified; (2) when sent by confirmedelectronic mail or facsimile if sent during normal business hours of therecipient; if not, then on the next business day; (3) five (5) days afterhaving been sent by registered or certified mail, return receipt requested,postage prepaid; or (4) one (l) day after deposit with a nationally recognizedovernight courier, specifying next day delivery with verification of receipt.  All notices shall be addressed to each holderof record at the address of such holder appearing on the books of theCorporation.

 

p.             Payment of Taxes.The Corporation will pay all taxes (other than taxes based upon income) andother governmental charges that may be imposed with respect to the issue ordelivery of shares of Common Stock upon conversion of shares of PreferredStock, excluding any tax or other charge imposed in connection with anytransfer involved in the issue and delivery of shares of Common Stock in a nameother than that in which the shares of Preferred Stock so converted wereregistered.

 

q.             No Impairment.The Corporation shall not avoid or seek to avoid the observance or performanceof any of the terms to be observed or performed hereunder by the Corporation,but shall at all times in good faith assist in carrying out all such actions asmay be reasonably necessary or appropriate in order to protect the conversionrights of the holders of the Preferred Stock against impairment.

 

**5.****             Mandatory Redemption.**

 

a.**            **Request by Holders of Preferred Stock.

 

### (1)           SeriesA Preferred Redemption.  Upon theprior written request of the holders of at least twenty-five percent (25%) ofthe Series A Preferred Stock, on a date that is five (5) years following the Corporation’sfirst issuance of Series A Preferred Stock (the “Series A Redemption Date”),the Corporation shall redeem for cash, out of legally available funds, all ofthe issued and outstanding shares of the Series A Preferred Stock.

 

### (2)           SeriesB Preferred Redemption.  Upon theprior written request of the holders of at least twenty-five percent (25%) ofthe Series B Preferred Stock, on March 31, 2006 (the “Series B Redemption Date”),the Corporation shall redeem for cash, out of legally available funds, all ofthe issued and outstanding shares of the Series B Preferred Stock.

 

17

----

 

### (3)           Series C Preferred Redemption.  Upon the prior written request of the holdersof a majority in interest of the Series C Preferred Stock on September 1, 2009(the “Series C Redemption Date”), the Corporation shell redeem for cash, out oflegally available funds, all of the issued and outstanding shares of the SeriesC Preferred Stock

 

### b.             RedemptionPrice of Preferred Stock.  The priceat which the Preferred Stock shall be redeemed is as follows:

 

### (1)           SeriesA Redemption Price.  The price atwhich the Series A Preferred Stock shall be redeemed (the “Series A RedemptionPrice”) shall be equal to the Series A Original Issue Price (as adjusted forany stock dividends, combinations, splits, recapitalizations and the like withrespect to such shares) for each share of Series A Preferred Stock plus anamount equal to all unpaid dividends which shall have accrued for each share ofSeries A Preferred Stock so redeemed.

 

### (2)           SeriesB Redemption Price.  The price atwhich the Series B Preferred Stock shall be redeemed (the “Series B RedemptionPrice”) shall be equal to $10.00 (as adjusted for any stock dividends,combinations, splits, recapitalizations and the like with respect to suchshares) for each share of Series B Preferred Stock plus an amount equal to allunpaid dividends which shall have accrued for each share of Series B PreferredStock so redeemed.

 

### (3)           SeriesC Redemption Price.  The price atwhich the Series C Preferred Stock shall be redeemed (the “Series C RedemptionPrice”) shall be equal to the Series C Original Issue Price (as adjusted forany stock dividends, combinations, splits, recapitalizations and the like withrespect to such shares) for each share of Series C Preferred Stock plus anamount equal to all unpaid dividends which shall have accrued for each share ofSeries C Preferred Stock so redeemed.

 

### c.             Paymentof Redemption Price.  To receive theapplicable Redemption Price the holder of shares of Preferred Stock mustpresent and surrender the certificate or certificates representing such shares(duly endorsed for transfer) to the Corporation at the principal executiveoffices of the Corporation no later than three (3) business days prior to theapplicable Redemption Date. The Corporation shall pay the Redemption Price to,or to the order of, the person whose name appears on such certificate orcertificates as the owner thereof. The Corporation shall pay the entire RedemptionPrice on the Redemption Date.

 

### d.             Effectof Redemption.  From and after theapplicable Redemption Date, unless the Corporation shall default in providingfor the payment of the applicable Redemption Price, all dividends on suchshares as are accepted for redemption pursuant to this subsection 5 shall ceaseto accrue, and all rights of the holders of any such shares subject toredemption as stockholders of the Corporation with respect to such shares,except the right to receive the Redemption Price, shall cease and terminate.Any shares of Preferred Stock that are redeemed by the Corporation shall beretired and shall not be reissued.

 

### **6.****             WAIVER**.              Anyrights of the holders of Series A Preferred Stock, Series B Preferred Stock andSeries C Preferred set forth herein may be waived by the affirmative vote or

 

18

----

 

### consent of the holders ofa majority of the shares of the Series A Preferred Stock, Series B PreferredStock and Series C Preferred Stock, respectively, then outstanding.

 

**FIFTH:**            In furtherance and notin limitation of powers conferred by statute, it is further provided:

 

1.             Electionof directors need not be by written ballot unless so provided in the Bylaws ofthe Corporation.  Any director may beremoved from office, either with our without cause, at any time by theaffirmative vote of the stockholders of record holding a majority of theoutstanding shares of the stock of the Corporation entitled to vote, given at ameeting of the stockholders called for that purposes or by written consent ofsuch number of stockholders given without a meeting.

 

2.             TheBoard is expressly authorized to make, adopt, alter, amend or repeal the Bylawsof the Corporation.

 

**SIXTH:**           No director of theCorporation shall be personally liable to the Corporation or to any stockholderfor monetary damages for breach of fiduciary duty as a director, except to theextent that exculpation from liability is not permitted under the GeneralCorporation Law of the State of Delaware as in effect when such breachoccurred.  Neither the amendment norrepeal of this Article SIXTH nor the adoption of any provision of this Amendedand Restated Certificate of Incorporation inconsistent with this Article SIXTHshall reduce, eliminate or adversely affect the effect of this Article SIXTH inrespect of any matter occurring, or any cause of action, suit or claim that,but for this Article SIXTH, would accrue or arise, prior to the effectivenessof such amendment, repeal or adoption.

 

**SEVENTH:**      TheCorporation reserves the right to amend, alter, change or repeal any provisioncontained in this Amended and Restated Certificate of Incorporation, in themanner now or hereafter prescribed by statute and by this Amended and RestatedCertificate of Incorporation, and all rights conferred upon stockholders hereinare granted subject to this reservation.

 

19

----

 

IN WITNESSWHEREOF, the Corporation has caused this Amended and Restated Certificate ofIncorporation to be duly executed by its president on this 13th day of December2005.

 
|   | By:    |                  |   |
|--------|--------|-----------------------|--------|
|   |   | Name: Henry F. Nelson |
|   |   | Title: President      |

 

----