Exhibit 4.6


 


CERTIFICATE OF DESIGNATION


 


OF


 


SERIES B CONVERTIBLE PREFERRED STOCK


 


OF


 


MXENERGY HOLDINGS INC.


 


Pursuant to Section 151(g) of the


Delaware General Corporation Law


 


MxEnergy Holdings Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the “Corporation”), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:


 


That pursuant to the authority vested in the Board of Directors of the
Corporation (the “Board of Directors”) in accordance with the provisions
of the Certificate of Incorporation of Corporation (the “Certificate of
Incorporation”), the Board of Directors duly adopted the following
resolution on November 17, 2008 creating a series of 1,500,000 shares of
Preferred Stock designated as “Series B Convertible Preferred Stock”:


 


RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate of Incorporation
of the Corporation, a series of Preferred Stock, par value $.01 per share, of
the Corporation be and hereby is created, and that the designation and number
of shares thereof, and the voting and other powers, preferences and relative,
participating, optional or other rights of the shares of such series, and the
qualifications, limitations and restrictions thereof, are as follows:


 


SERIES B CONVERTIBLE PREFERRED STOCK


 


A.            Designation and Amount.  The designation of this series of convertible
preferred stock shall be “Series B Convertible Preferred Stock,” with a
par value of $.01 per share (hereinafter called the “Series B Stock”).


 


B.            Rights, Preferences, Privileges and
Restrictions of Series B Stock. 
The rights, preferences, privileges and restrictions granted to and
imposed on the Series B Stock are as follows:


 


1.                             Dividend
Provisions.


 


a.             The holders of shares
of Series B Stock shall be entitled to receive, prior and in preference to
the declaration or payment of any dividend or distribution to the holders of
the Corporation’s common stock, par value $0.01 per share (the “Common Stock”),
or any other shares or securities of the Corporation ranking junior to the Series B
Stock with respect


 

















 


to the payment
of dividends or the distribution of assets on liquidation (“Junior
Securities”), but pari passu with the holders of the Corporation’s Series A
Convertible Preferred Stock, par value $0.01 per share (the “Series A
Stock”), and in addition to and not in limitation of the dividend rights
provided in subsection (B)1(b) below, dividends which shall accrue cumulatively
on each share of Series B Stock at the rate and in the manner prescribed
in subsection (B)1(a)(i) below from and including the date of issuance of
such share of Series B Stock to but excluding the date on which any
conversion of such share of Series B Stock shall have been effected, and
payable when, as and if any dividend or distribution is declared by the Board
of Directors on any share of any class of stock.


 


(i)            Dividends shall accrue
on each share of Series B Stock at a rate per annum (computed on the basis
of a 365-day year for the actual number of days elapsed) equal to twenty
percent (20%) of the Original Series B Stock Issue Price (as defined
below) for such share, compounded annually; provided, however,
that the minimum amount of dividend declared, paid or payable on each share of Series B
Stock shall not be less than the product of (A) the Original Series B
Stock Issue Price and (B) 1.5 (hereinafter referred to the “Minimum
Dividend Amount”); provided, further, that dividends shall
stop accruing as of the Redemption Date (as defined below) with respect to any
and all shares for which the Corporation has deposited the Redemption Price (as
defined below) on or before the Redemption Date pursuant to Section (B)3(d) hereof.  Dividends shall be payable when, as and if
any dividend or distribution is declared or paid by the Corporation on any
share of any class of stock.  In the
event of any liquidation, dissolution or winding up of the Corporation or the
bankruptcy of the Corporation, all accrued and unpaid dividends on a share of Series B
Stock (taking into account the Minimum Dividend Amount) shall be added (as
contemplated by Section (B)2(a) below) to the liquidation preference
of such share on the payment date, or upon the bankruptcy of the Corporation,
as the case may be, accrued cumulatively to but excluding such payment date or
bankruptcy on a daily basis.


 


(ii)           No dividend or other
distribution (other than a dividend or distribution payable solely in Common
Stock) shall be paid on or set apart for payment on Common Stock or any other
Junior Securities, nor shall any payment be made on account of the purchase,
redemption or retirement of any Common Stock or other Junior Securities, unless
all accrued and unpaid dividends on the Series B Stock (taking into
account the Minimum Dividend Amount) have been or contemporaneously are paid or
set apart for payment in accordance herewith; provided, however,
that, with the prior approval of the outstanding shares of Series B Stock
to the extent required by Section (B)6 below, the Corporation may
repurchase Common Stock owned by terminated employees of, or consultants to,
the Corporation or its subsidiaries.  A
conversion or exercise of a convertible security which by its terms is
convertible into, exercisable for or exchangeable into Common Stock by the
holder thereof shall not be deemed a purchase, redemption or retirement of the
security so converted for purposes of this Section (B)1(a).


 


b.             Except for dividends
or distributions in which the Conversion Price (as defined below) in effect for
the Series B Stock shall be subject to adjustment pursuant to Sections
(B)4(e) or (f) below, in addition to and not in limitation of the
dividends provided for in Section (B)1(a), the holders of Series B
Stock shall be entitled to receive dividends and other distributions equivalent
to those declared or paid on Common Stock or any other Junior


 


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Securities,
determined as if the Series B Stock had been converted into Common Stock
at the then effective Conversion Price (or, in the case of dividends or
distributions on securities other than Common Stock, determined on a comparable
basis), and payable when, as and if declared by the Board of Directors on such
Common Stock or other Junior Securities.


 


c.             Notwithstanding
anything herein to the contrary, in no event shall holders of Series B
Stock receive any dividends or distributions in a lesser amount than the amount
received by holders of any Junior Securities or less than they would have
received if they had converted such Series B Stock into Common Stock
immediately prior to such distribution (other than dividends or distributions
payable solely in shares of Common Stock as part of a stock split).


 


d.             The repurchase,
redemption or other acquisition or retirement for value of any shares of
capital stock of the Corporation deemed to occur upon the exercise or exchange
of stock options, warrants or other similar rights to the extent such shares of
capital stock represent a portion of the exercise or exchange price of those
stock options, and the repurchase, redemption or other acquisition or
retirement of shares of capital stock made in lieu of withholding taxes
resulting from the exercise or exchange of stock options, warrants or other
similar rights, shall not constitute a dividend for purposes of this Section (B)1.


 


e.             Notwithstanding
anything herein to the contrary, on each date on which the Corporation proposes
to pay any dividends or distributions in respect of the Series B Stock or
the Series A Stock, the Corporation shall apply the aggregate amount to be
so paid:


 


(i)            first, to the payment
to the holders of the Series A Stock, share and share alike, until there
shall have been received under this clause (i) an amount equal to the
aggregate dividends accrued on the Series A Stock through the Original
Issue Date (as defined in Section (B)4(d) below) to the extent such
accrued dividends are unpaid as of the date of the payment being made pursuant
to this clause (i), and


 


(ii)           then, to the payment to
the holders of the Series A Stock, share and share alike within such
series, and to the holders of the Series B Stock, share and share alike
within such series, with the aggregate amount being so paid pursuant to this
clause (ii) to be allocated between the holders of the Series A Stock
as a class and the holders of the Series B Stock as a class pro rata in
proportion to the amount of dividends accrued and unpaid as of the date of such
payment on each of such Series, taking into account the payment in clause (i) above.


 


2.                             Liquidation
Preference.


 


a.             In the event of a
Liquidation Event (as defined in Section (B)2(c) below), the holders
of Series B Stock shall be entitled to receive, prior and in preference to
any distribution of any of the assets or surplus funds of the Corporation to
the holders of Common Stock or any other Junior Securities by reason of their
ownership thereof, but pari passu with the holders of the Series A Stock
as provided in Section (B)2(h) below, an amount per share in cash
equal to the greater of (i) the sum of (x) the Original Series B
Stock Issue Price (as defined in Section (B)4(a) below)) for each
share of Series B Stock then held by them (as adjusted for any stock
splits, stock dividends, stock combinations, recapitalizations and similar
transactions), plus


 


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(y) all
accrued or declared but unpaid dividends on such Series B Stock as of the
date of such event ((x) and (y) collectively, the “Series B
Stock Liquidation Preference”) or (ii) the amount per share of Series B
Stock that each holder would have received if such holder had converted its
shares of Series B Stock into Common Stock immediately prior to such
Liquidation Event.


 


b.             In the event of a
Liquidation Event, following completion of the distributions required by the
first sentence of paragraph (a) of this Section (B)2, if assets or
surplus funds remain in the Corporation, the holders of Common Stock shall
share ratably in all remaining assets and surplus funds of the Corporation,
based on the number of shares of Common Stock then held by each such holder.


 


c.             For purposes of this Section (B)2,
unless waived by the holders of a majority of the outstanding shares of Series B
Stock, a “Liquidation Event” shall mean the occurrence of any of the
following events:


 


(i)            Any liquidation,
dissolution or winding up of the Corporation, either voluntary or involuntary;


 


(ii)           any consolidation or
merger of the Corporation with or into any other corporation or other entity or
person, or any other corporate reorganization, in which either (A) the
outstanding shares of Common Stock are exchanged for other securities or
consideration and the stockholders of the Corporation immediately prior to such
event hold less than 50% of the voting securities of the Corporation (or other
surviving entity) immediately after such event or (B) the Corporation
shall not be the continuing or surviving entity of such consolidation, merger
or reorganization, unless as a result of such consolidation, merger or
reorganization the holders of the Series B Stock receive in exchange for
such Series B Stock, shares of preferred stock of the surviving entity of
such consolidation, merger or reorganization having the same rights,
preferences, privileges and restrictions as the Series B Stock;


 


(iii)          any transaction or
series of related transactions occurring after the Initial Original Issue Date
(as defined in Section (B)4) in which a person or group of persons (as
defined under the Securities Exchange Act of 1934) acquires beneficial
ownership (as defined under the Securities Exchange Act of 1934) of more than
50% of the Corporation’s voting power, except for acquisitions of securities of
the Corporation by an existing stockholder; or


 


(iv)          any sale, conveyance,
exchange, lease or transfer (including, without limitation, by merger,
consolidation or reorganization) in any transaction or series of related
transactions of all or substantially all of the assets or property of the
Corporation.


 


For the avoidance of doubt, any redemption pursuant to Section (B)3
hereof shall not be deemed to be a Liquidation Event.  In addition, following the payment in full of
the amount required in Section (B)2(a) upon a Liquidation Event
described in Section (B)2(c)(iii) hereof, such Series B Stock
shall no longer be considered outstanding.


 


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d.             In the event of a
Liquidation Event, if the consideration received by the Corporation is other
than cash, its value will be deemed its fair market value.  Any securities received as consideration
shall be valued as follows:


 


(i)            Securities not subject
to investment letter or other similar restrictions on free marketability
covered by (ii) below:


 


(1)           If traded on a
securities exchange or through the Nasdaq National Market, the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the 30-business day period ending three (3) business days
prior to the closing;


 


(2)           If actively traded
over-the-counter, the value shall be deemed to be the average of the closing
bid or sale prices (whichever is applicable) over the 30-business day period
ending three (3) business days prior to the closing; and


 


(3)           If there is no active
public market, the value shall be the fair market value thereof, as determined
in good faith by the Board of Directors of the Corporation.


 


(ii)           The method of valuation
of securities subject to investment letter or other restrictions on free
marketability (other than restrictions arising solely by virtue of a
stockholder’s status as an affiliate or former affiliate) shall be to make an
appropriate discount from the market value determined as above in (i)(1), (2) or
(3) to reflect the approximate fair market value thereof, as determined in
good faith by the Board of Directors of the Corporation.


 


e.             At any time before
the second anniversary of the Initial Original Issue Date (as defined in Section (B)4(d)),
the Corporation may not effect or enter into any agreement in principle, letter
of intent, acquisition agreement or other similar agreement to effect a
Liquidation Event described in Section (B)2(c) above (other than in
connection with a Qualified Public Offering (as defined herein)) without the
prior written consent of the holders a majority of the voting power of the
outstanding shares of the Series B Stock and Series A Stock, voting
together as a single class on an as-converted basis, unless the aggregate
amount payable in such Liquidation Event in respect of each share of Series B
Stock is an amount such that the aggregate amount received by the holders of
the Series B Stock for their shares of Series B Stock as a result of
the Liquidation Event shall be (x) no less than one and three-quarters
(1.75) times the Original Series B Stock Issue Price, for a Liquidation
Event that is consummated before the first anniversary of the Initial Original
Issue Date or (y) no less than two and one-half (2.5) times the
Original Series B Stock Issue Price, for a Liquidation Event that is
consummated after the first anniversary of the Initial Original Issue Date and
on or before the second anniversary of the Initial Original Issue Date.


 


f.              The Corporation
shall mail to each holder of Series B Stock, at least twenty (20) days
prior to the occurrence of a Liquidation Event of the type described in Section (B)2(c)(i),
(ii) and (iv) and promptly after becoming aware of the occurrence of
a Liquidation Event of the type described in Section (B)2(c)(iii), a
notice setting forth the date on which such Liquidation Event is expected to
become effective and the type and amount of


 


5

















 


anticipated
proceeds per share of Series B Stock and Common Stock to be distributed
with respect thereto.


 


g.             In the event that, immediately
prior to the closing of a transaction described in Section (B)2(c)(i), (ii) and
(iv) the cash distribution required by Section (B)2(a) has not
been made, to the extent cash is available for such distribution, the
Corporation shall forthwith either:


 


(i)            cause such closing to
be postponed until such time as such cash distributions have been made, or


 


(ii)           cancel such
transaction, in which event the rights, preferences and privileges of the
holders of the Series B Stock shall revert to and be the same as such
rights, preferences and privileges existing immediately prior to the date of
the first notice referred to in subsection (B)4(j) hereof.


 


h.             Notwithstanding
anything herein to the contrary, if, upon the occurrence of a Liquidation
Event, the assets and/or funds to be distributed among the holders of Series B
Stock and Series A Stock shall be insufficient to permit the payment to
such holders of the full amount of the Series B Stock Liquidation
Preference and the Series A Stock Liquidation Preference (as defined in
the Certificate of Designation for the Series A Stock), as applicable,
then the entire assets and/or funds of the Corporation legally available for
distribution shall be allocated between the holders of the Series A Stock
as a class and the holders of the Series B Stock as a class pro rata in
proportion to the aggregate liquidation preference of each of the Series B
Stock as a class and the Series A Stock as a class and shall be
distributed to the holders of the Series A Stock, share and share alike
within such series, and to the holders of the Series B Stock, share and
share alike within such series.


 


3.                             Redemption
Rights.


 


a.             Subject to Section (B)3(c) below,
the Corporation shall have the right at any time, and from time to time, during
the Redemption Period (as defined below) to redeem all, and not less than all,
of the outstanding shares of Series B Stock (the “Redemption Shares”)
at a per share price (the “Redemption Price”) in cash equal to the Series B
Stock Liquidation Preference as of the Redemption Date (as defined below).


 


b.             The redemption right
set forth in Section (B)3(a) above shall be exercised by the
Corporation by providing written notice of such redemption (the “Redemption
Notice”), first class postage prepaid, to each holder of record (as of the
close of business on the business day preceding the date of the Redemption
Notice) of shares of Series B Stock at the address last shown on the
records of the Corporation for such holder or given by the holder to the
Corporation for the purpose of notice, at least 30 (thirty) days, but no more
than 60 (sixty) days prior to the date on which such redemption shall take
place (“Redemption Date”).  The
Redemption Notice shall specify the number of shares that will be redeemed, the
Redemption Price, the place at which payment may be obtained for redeemed
shares and such other information as the Corporation may deem advisable to
provide regarding the redemption of the Redemption Shares.


 


6

















 


c.             If, within (x) twenty
(20) days after receipt of the Redemption Notice (assuming no dispute regarding
the calculation of Fair Market Value (as defined below)) or (y) ten (10) days
after the Appraiser(s) have calculated Fair Market Value in accordance with
Section (B)3(e) below, the holders of a majority of the voting power
of the outstanding shares of the Series B Stock (voting on an as-converted
basis) (the “Majority Series B Owners”) determine in good faith that the
Fair Market Value (as calculated in accordance with Section (B)3(e) below)
on the date of the Redemption Notice of the shares of Common Stock into which
the Redemption Shares may be converted would not provide the Majority Series B
Owners with an internal rate of return on an annualized basis (computed on the
basis of a 365-day year for the actual number of days elapsed, using a terminal
value equal to the Company Value (as defined herein) and including previously
paid dividends and distributions) (“IRR”) of at least 40% on their
respective investments in the Series B Stock, then such Majority Series B
Owners shall mail (first class postage prepaid) or deliver personally or by
telecopier to the Corporation at its then principal office, a response stating
such fact (the “Response”).  If
the Corporation receives a Response to the Redemption Notice from the Majority Series B
Owners, the Corporation may not exercise the redemption right set forth in Section (B)3(a) above
and the Redemption Notice shall be null and void.


 


d.             Three (3) days
prior to the Redemption Date, the Corporation shall deposit the Redemption
Price for all Redemption Shares not yet redeemed or converted, with a bank or
trust company having aggregate capital and surplus in excess of $500,000,000 as
a trust fund for the benefit of the respective holders of the shares designated
for redemption and not yet redeemed or converted.  Simultaneously, the Corporation shall deposit
irrevocable instructions and authority with such bank or trust company to pay,
on and after the Redemption Date, the Redemption Price of the Redemption Shares
to the holders thereof upon surrender of their certificates.  The balance of any monies deposited by the
Corporation pursuant to this paragraph remaining unclaimed at the expiration of
six (6) months following the Redemption Date (or in the event of a
disagreement as to Fair Market Value, six (6) months following the date of
the final Fair Market Value determination, if later) shall thereafter be
returned to the Corporation, provided that the stockholder to whom such
monies would be payable hereunder shall be entitled to receive such monies upon
proof of ownership of the Series B Stock.


 


e.             The “Fair Market
Value” of each share of Series B Stock shall mean the amount per share
that would be distributable to a holder of such share of Series B Stock
pursuant to Section (B)2 above if an amount equal to the Company Value (as
defined below) was available for distribution; provided, however,
that an arm’s-length sale for cash or Common Stock (the exercise or conversion
of Options or Convertible Securities (as defined in Section (B)4(d)) shall
not be considered a sale) within the six months prior to the date on which Fair
Market Value is to be determined shall be dispositive as to the calculation of
Fair Market Value.  The “Company Value”
shall mean the fair market value of the Corporation on the date of delivery of
the Redemption Notice, or Election Notice of the conversion date, as
applicable, determined by the amount a willing buyer would pay in cash to a
willing seller under no compulsion to sell for all outstanding Common Stock on
a fully diluted basis (but excluding any Common Share Equivalents (as defined
in Section (B)4(e)(i) below) which on the date of determination the
issuance of which would be antidilutive), as determined in good faith by the
Board of Directors; provided, however, that if the Majority Series B
Owners object in good faith to the Company Value determination of the Board of
Directors (and thereby the Fair Market


 


7

















 


Value
determination of the Board of Directors) within twenty (20) days after receipt
thereof, such Majority Series B Owners may request that the Company Value
determination (and thereby the Fair Market Value determination), be made by an independent
investment banking firm selected by agreement of the Majority Series B
Owners and the Board of Directors.  In
the absence of an agreed upon selection of such independent investment banking
firm, the Board of Directors may select an independent investment banking firm
(the “First Appraiser”) and the Majority Series B Owners may select
an independent investment banking firm (the “Second Appraiser”) and the
final Fair Market Value determination shall be the price agreed upon by the
First Appraiser and Second Appraiser, or if they cannot agree, the First and
Second Appraiser shall select a third independent investment banking firm (the “Third
Appraiser,” collectively with the First and Second Appraisers, the “Appraisers”)
to choose one of the two values determined by the First and Second Appraiser
and no other value.  If the Fair Market
Value determination of the Appraisers is more than five percent (5%) greater
than the Fair Market Value determination of the Board of Directors, then all
expenses incurred in connection with such Appraisers in the determination of
the Fair Market Value shall be borne by the Corporation; otherwise, such costs
shall be borne pro rata by the Majority Series B Owners.


 


f.              The “Redemption
Period” shall mean any time after the fifth anniversary of the Original
Issue Date (as defined in Section (B)4(d) herein) with respect to any
share of Series B Stock and prior to the consummation of a Liquidation
Event or a Qualified Public Offering (as defined below).


 


g.             Redemption
Option.


 


(i)            Notwithstanding the
Corporation’s redemption right set forth in Section (B)3(a) above, at
any time during the Redemption Period, the Majority Series B Owners shall
have the right (the “Redemption Option”), by the giving of written
notice to the Corporation (an “Election Notice”), to require that the
Corporation offer to redeem all outstanding shares of Series B Stock (the “Redemption
Option Shares”) at a per share price (the “Redemption Option Price”)
in cash equal to the greater of (i) the Fair Market Value (calculated as
set forth in Section (B)3(e) above) of the shares of Common Stock
into which such Redemption Option Shares may be converted on the date of the
Election Notice or (ii) the Series B Stock Liquidation Preference as
of the date of an Election Notice.  This
Redemption Option may be exercised only if the Fair Market Value (calculated as
set forth in Section (B)3(e) above) of the shares of Common Stock
into which the Series B Stock may be converted on the date of the Election
Notice would not provide the Majority Series B Owners with an IRR of at
least 25% on their respective investments in the Series B Stock.


 


(ii)           As promptly as
practicable after the Corporation receives an Election Notice (and in any event
within 45 days after receipt of an Election Notice), the Corporation shall mail
written notice (the “Company Notice”), first class postage prepaid, to
each holder of record (as of the close of business on the business day
preceding the day on which the Corporation received such Election Notice) of
shares of Series B Stock at the address last shown on the records of the
Corporation for such holder or given by the holder to the Corporation for the
purpose of notice, notifying such holder of either (x) the right of such
holder to have its shares of Series B Stock redeemed, specifying the
number of shares which such holder may require be redeemed, the Redemption
Option Price, the date the redemption is to


 


8

















 


commence (the “Redemption Option Date”)
(which shall be no later than 120 days after receipt by the Corporation of the
Election Notice), the place at which payment may be obtained for redeemed
shares and such other information as the Corporation may deem advisable to
provide regarding the redemption of the Redemption Option Shares or (y) the
Corporation’s election to grant the Exercising Holders (as defined below) the
right set forth in Section (B)5(c) below.


 


(iii)          Within ten (10) days
after receipt of a Company Notice, each holder of shares of Series B Stock
desiring to have all or any portion of such shares redeemed (each an “Exercising
Holder” and, collectively, the “Exercising Holders”) shall mail
(first class postage prepaid) or deliver personally or by telecopier to the
Corporation at its then principal office, a response specifying whether and to
what extent such holder elects to have shares redeemed (the “Response”).  Any holder of Series B Stock that fails
to provide its Response in a timely manner or that elects not to have its
shares redeemed shall not be eligible to have such shares redeemed unless and
until a subsequent Election Notice is delivered.


 


(iv)          The Corporation shall
deposit the Redemption Option Price for all Redemption Option Shares not yet
redeemed or converted in the same manner as set forth in Section (B)3(d) above
with respect to such Redemption Option Shares.


 


(v)           [Reserved.]


 


(vi)          In the event that any
holder of Series B Stock opts not to participate in the Redemption Option
granted to the Majority Series B Owners pursuant to this Section (B)3(g) as
of the Redemption Option Date, each such non-participating holder shall
irrevocably and unconditionally forever waive any and all rights to exercise
the Redemption Option hereunder.


 


4.             Conversion.  The holders of Series B Stock shall have
conversion rights as follows (the “Conversion Rights”):


 


a.             Right to Convert.  Each share of Series B Stock shall be
convertible, at the option of the holder thereof at any time after the date of
issuance of such share, in each case at the office of the Corporation or any
transfer agent for the Series B Stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the Original Series B
Stock Issue Price by the Conversion Price at the time in effect for such
shares.  The initial “Conversion Price”
per share for shares of Series B Stock shall be determined in accordance
with the following formula (and the quotient of such formula as of each
applicable Original Issue Date is referred to herein as the “Original Series B
Stock Issue Price”):


 


9

















 


Company Value (as defined below for purposes
of this Section (B)4(a))


 


The total number of shares of Common Stock on
a fully diluted basis (but excluding any Common Share Equivalents (as defined
in Section (B)4(e)(i) below) which on the date of determination the
issuance of which would be antidilutive) as of the applicable Original Issue
Date


 


where


 


“Company
Value” shall mean the fair market value of the Corporation on the
applicable Original Issue Date (as defined in Section (B)4(d)), determined
by the amount a willing buyer would pay in cash to a willing seller under no
compulsion to sell, for all of the Common Stock of the Corporation on a fully
diluted basis (but excluding any Common Share Equivalents which on the date of
determination the issue of which would be antidilutive) as determined in good
faith by the Board of Directors; provided, however, that if the
Majority Series B Owners object in good faith to the Original Series B
Stock Issue Price determination of the Board of Directors within twenty (20)
days after receipt thereof, such Majority Series B Owners may request that
the determination of Company Value (and/or the number of shares of Common
Stock) be made by an independent investment banking firm selected by agreement
of the Majority Series B Owners and the Board of Directors.  In the absence of an agreed upon selection of
such independent investment banking firm, the Board of Directors may select an independent
investment banking firm (the “First Appraiser”) and the Majority Series B
Owners may select an independent investment banking firm (the “Second
Appraiser”) and the final determination of Company Value (and/or the number
of shares of Common Stock) shall be the amount(s) agreed upon by the First
Appraiser and Second Appraiser, or if they cannot agree, the First and Second
Appraiser shall select a third independent investment banking firm (the “Third
Appraiser,” collectively with the First and Second Appraisers, the “Appraisers”)
to choose one of the two computations determined by the First and Second
Appraiser and no other computations.  If
the determination of Company Value (and/or the number of shares of Common
Stock) of the Appraisers is more than five percent (5%) greater than the
determination  of Company Value (and/or
the number of shares of Common Stock) of the Board of Directors, then all
expenses incurred in connection with such Appraisers in the determination of
Company Value (and/or the number of shares of Common Stock) shall be borne by
the Corporation; otherwise, such costs shall be borne pro rata by the Majority Series B
Owners;


 


provided, however, that the Conversion
Price in effect from time to time for the Series B Stock shall be subject
to adjustment pursuant to Sections (B)4(d), (e), (f) and (g) below.  Notwithstanding the foregoing, if the Fair
Market Value of the Common Stock (calculated as set forth above as of the
conversion date ) is at a level that would provide the Majority Series B
Owners an IRR of less than 20% on their respective investments in the Series B
Stock, then each share of Series B Stock shall be convertible into such
number of fully paid and nonassessable shares of shares of Common Stock as is
determined by dividing the Series B Stock Liquidation Preference by the
Conversion Price then in effect for such shares.


 


10
















 


b.             Automatic
Conversion.  Each share of Series B
Stock shall automatically be converted into that number of fully paid and
nonassessable shares of Common Stock as set forth in Section (B)4(a) above
immediately upon the consummation of the Corporation’s sale of shares of its
Common Stock in a bona fide firm commitment underwritten public offering
pursuant to a registration statement on Form S-1 (or a successor form)
under the Securities Act of 1933, as amended, which results in an aggregate
offering price of not less than $75,000,000 and a per share offering price of
not less than (x) one and three-quarters (1.75) times the Conversion Price
for offerings occurring on or prior to the first anniversary of the Initial
Original Issue Date (as defined in Section (B)4(d)) and (y) two and
one-half (2.5) times the Conversion Price for offerings occurring after the
first anniversary of the Initial Original Issue Date (as defined in Section (B)4(d))
(a “Qualified Public Offering”).


 


c.             Mechanics of
Conversion.


 


(i)            If the conversion is
pursuant to Section (B)4(a), each conversion of shares of Series B
Stock into shares of Common Stock shall be effected by the surrender of the
certificate(s) evidencing the shares of 
Series B Stock to be converted (the “Converting Shares”) at
the principal office of the Corporation (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the
holders of Series B Stock) at any time during its usual business hours,
together with written notice by the holder of such Converting Shares, (i) stating
that the holder desires to convert the Converting Shares, or a specified number
of such Converting Shares, evidenced by such certificate(s) into shares of
Common Stock (the “Converted Shares”), and (ii) giving the name(s) (with
addresses) and denominations in which the certificate(s) evidencing the
Converted Shares shall be issued, and instructions for the delivery
thereof.  Upon receipt of the notice
described in the first sentence of this subsection (B)4(c)(i), together with
the certificate(s) evidencing the Converting Shares, the Corporation shall
be obligated to, and shall, issue and deliver in accordance with such
instructions the certificate(s) evidencing the Converted Shares issuable
upon such conversion and a certificate (which shall contain such legends, if
any, as were set forth on the surrendered certificate(s)) representing any
shares which were represented by the certificate(s) surrendered to the
Corporation in connection with such conversion but which were not Converting
Shares and, therefore, were not converted. 
Such conversion, to the extent permitted by law, shall be deemed to have
been effected as of the close of business on the date on which such certificate(s) shall
have been surrendered and such written notice shall have been received by the
Corporation, and at such time the rights of the holder of such Converting
Shares as such holder shall cease, and the person(s) in whose name or
names any certificate(s) evidencing the Converted Shares are to be issued
upon such conversion shall be deemed to have become the holder(s) of
record of the Converted Shares.


 


(ii)           If the conversion is
pursuant to Section (B)4(b), each conversion of shares of Series B
Stock into shares of Common Stock shall be automatic.  Upon such conversion, each holder of Series B
Stock shall surrender the certificate(s) evidencing such holder’s
Converting Shares at the principal office of the Corporation (or such other
office or agency of the Corporation as the Corporation may designate by notice
in writing to the holders of Series B Stock) at any time during its usual
business hours, together with written notice by such holder of such Converting
Shares giving the name(s) (with addresses) and denominations in which the
certificate(s) evidencing the Converted Shares shall be issued, and
instructions for the 


 


11

















 


delivery thereof.  Upon receipt of such notice, together with
the certificate(s) evidencing the Converting Shares, the Corporation shall
be obligated to, and shall, issue and deliver in accordance with such
instructions the certificate(s) evidencing the Converted Shares issuable
upon such conversion.


 


(iii)          Upon the issuance of the
Converted Shares in accordance with this Section (B)4, such shares shall
be deemed to be duly authorized, validly issued, fully paid and non-assessable.


 


(iv)          If the conversion is
pursuant to Section (B)4(a) and the conversion is in connection with
an underwritten offering of securities registered pursuant to the Securities
Act of 1933, as amended, the conversion may, at the option of any holder
tendering Series B Stock for conversion as permitted herein, be
conditioned upon the closing of such underwritten sale of securities pursuant
to such offering in which event the person(s) entitled to receive the
shares issuable upon such conversion shall not be deemed to have converted such
shares until immediately prior to the closing of such sale of securities.


 


d.             Adjustments to
Conversion Price of Series B Stock for Certain Diluting Issues.


 


(i)            Special Definitions.  For purposes of this Section (B)4, the
following definitions shall apply:


 


(1)           “Options” shall
mean rights, options or warrants to subscribe for, purchase or otherwise
acquire either Common Stock or Convertible Securities (as defined below).


 


(2)           “Original Issue Date”
shall mean, with respect to each share of Series B Stock, the date on
which such share was issued upon conversion of any of those certain Bridge
Notes (collectively, the “Bridge Notes”), dated as of November 17,
2008, made by MxEnergy Inc. and MxEnergy Electric Inc. in favor of Charter MX
LLC, Denham Commodity Partners Fund LP and certain members of the Corporation’s
senior management (and the date on which any Bridge Note is first converted
into Series B Stock is referred to as the “Initial Original Issue Date”).


 


(3)           “Convertible
Securities” shall mean any evidence of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.


 


(4)           “Additional Common
Stock” shall mean all Common Stock issued (or, pursuant to subsection
(B)4(d)(iii), deemed to be issued) by the Corporation after the Original Issue
Date, including in connection with the exercise of antidilution rights provided
in that certain Third Amended and Restated Stockholders’ Agreement dated as of June 25,
2004 among the Corporation and the stockholders listed thereon, as amended (the
“Stockholders’ Agreement”), other than Common Stock issued or issuable:


 


(A)          upon conversion of the Series A Stock or
the Series B Stock;


 


12

















 


(B)           to officers, directors or employees of, or
consultants to, the Corporation pursuant to (i) stock options or warrants
outstanding on the Original Issue Date, or (ii) stock agreements, purchase
plans, employee incentive programs or stock options granted after the Original
Issue Date on terms approved by the Board of Directors;


 


(C)           [Reserved];


 


(D)          as all or part of the consideration for the
acquisition (whether by merger or otherwise) by the Corporation of stock or
assets of any other entity in a transaction approved by the Board of Directors;


 


(E)           pursuant to any transaction determined by
the Board of Directors to be strategic, up to an aggregate of twenty percent
(20%) of the then outstanding shares of Common Stock on a fully diluted basis; provided,
however, that such issuance is approved by a majority of the Board of
Directors, and such issuance is not for the principal purpose of raising equity
capital;


 


(F)           pursuant to Options approved by the Board of
Directors and issued to vendors, lenders or equipment lessors; in each case
either (x) representing in the aggregate less than 5% of the outstanding
capital stock of the Corporation, or (y) approved by the Board of
Directors;


 


(G)           upon conversion or exercise of Options or
Convertible Securities, the issuance of which has been approved by the Board of
Directors;


 


(H)          [Reserved];


 


(I)            in connection with a Qualified Public
Offering;


 


(J)            as a dividend or distribution on the Series A
Stock or Series B Stock;


 


(K)          as a dividend in kind on any series of
preferred stock of the Corporation; and


 


(L)           for which adjustment of the Conversion Price
of the Series B Stock is made pursuant to subsection (B)4(e).


 


(ii)           No Adjustment of
Conversion Price.  No adjustment in
the Conversion Price of the Series B Stock shall be made in respect of the
issuance of Additional Common Stock unless the consideration per share
(determined pursuant to subsection (B)4(d)(v) hereof) for Additional
Common Stock issued or deemed to be issued (pursuant to subsection
(B)4(d)(iii)) by the Corporation is less than the Conversion Price for such
share of Series B Stock in effect on the date of, and immediately prior
to, such issue.


 


13

















 


(iii)          Deemed Issue of Additional Common Stock.  In
the event the Corporation at any time or from time to time after the Original
Issue Date shall issue any Options or Convertible Securities or shall fix a
record date for the determination of holders of any class of securities then
entitled to receive any such Options or Convertible Securities, then the
maximum number of shares of Common Stock (as set forth in the instrument
relating thereto without regard to any provisions contained therein designed to
protect against dilution) issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be Additional Common Stock
(unless the Common Stock issuable pursuant to such Options or Convertible
Securities are excluded from the definition of Additional Common Stock by any
subpart of subsection (B)4(d)(i)(4)), issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on
such record date, provided that Additional Common Stock shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to subsection (B)4(d)(v) hereof) of such Additional Common Stock
would be less than the Conversion Price in effect on the date of and
immediately prior to such issue, or such record date, as the case may be, and provided  further
that in any such case in which Additional Common Stock is deemed to be issued:


 


(1)           no further adjustments
in the Conversion Price of the Series B Stock shall be made upon the
subsequent issue of Convertible Securities or Common Stock upon the exercise of
such Options or conversion or exchange of such Convertible Securities;


 


(2)           if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Corporation, or decrease or
increase in the number of shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (including any such increase or decrease under
or by reason of provisions designed to protect against dilution), the
applicable Conversion Price computed upon the original issue thereof (or upon
the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities (provided,  however, that no such adjustment of the
Conversion Price shall affect Common Stock previously issued upon conversion of
any shares of Series B Stock);


 


(3)           upon the expiration of
any such Options or any rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the Conversion Price computed
upon the original issue thereof (or upon the occurrence of a record date with
respect thereto), and any subsequent adjustments based thereon, shall, upon
such expiration, be recomputed as if:


 


(A)          in the case of Convertible Securities or
Options for Common Stock, the only Additional Common Stock issued was the
Common Stock, if any, actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation
for the issue of all such Options, whether or not exercised, plus the
consideration actually received by the Corporation 


 


14

















 


upon such exercise, or for the issue of all
such Convertible Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by the Corporation upon
such conversion or exchange (provided, however, that no such adjustment of the
Conversion Price shall affect Common Stock previously issued upon conversion of
any shares of Series B Stock), and


 


(B)           in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of the issuance of such Options, and
the consideration received by the Corporation for the Additional Common Stock
deemed to have been then issued was the consideration actually received by the
Corporation for the issue of all such Options, whether or not exercised, plus
the consideration deemed to have been received by the Corporation (determined
pursuant to subsection (B)4(d)(v)(2)) upon the issue of the Convertible
Securities with respect to which such Options were actually exercised (provided,  however,
that no such adjustment of the Conversion Price shall affect Common Stock
previously issued upon conversion of any shares of Series B Stock);


 


(4)           no readjustment
pursuant to clause (2) or (3) above shall have the effect of
increasing the Conversion Price to an amount which exceeds the lower of (a) the
applicable Conversion Price on the original adjustment date, or (b) the
applicable Conversion Price that would have resulted from any issuance of
Additional Common Stock between the original adjustment date and such
readjustment date; and


 


(5)           in the case of any
Options which expire by their terms not more than 90 days after the date of
issue thereof, no adjustment of the Conversion Price shall be made until the
expiration or exercise of all such Options, whereupon such adjustment shall be
made in the same manner provided in clause (3) above.


 


(iv)          Adjustment of Series B
Stock Conversion Prices Upon Issuance of Additional Common Stock.  In the event the Corporation at any time
after any Original Issue Date shall issue Additional Common Stock (including
Additional Common Stock deemed to be issued pursuant to subsection (B)4(d)(iii) but
subject to the exclusions of subsection (B)4(d)(i)(4)) without consideration or
for a consideration per share less than the Conversion Price in effect on the
date of and immediately prior to such issue for the Series B Stock, then
and in such event each applicable Conversion Price shall be reduced,
concurrently with such issue, to the Conversion Price (calculated to the
nearest cent) determined by multiplying such Conversion Price by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of shares of Common
Stock which the aggregate consideration received by the Corporation for the
total number of shares of Additional Common Stock so issued would purchase at
such Conversion Price; and the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issue plus the
number of shares of Additional Common Stock so issued; provided that,
for the purposes of this subsection (B)4(d)(iv), all Common Stock issuable upon
conversion of all outstanding shares of Series B Stock shall be deemed to
be outstanding.


 


15

















 


(v)           Determination of
Consideration.  For purposes of this
subsection (B)4(d), the consideration received by the Corporation for the issue
of any Additional Common Stock shall be computed as follows:


 


(1)           Cash and Property.  Such consideration shall:


 


(A)          insofar as it consists of cash, be computed
at the aggregate amount of cash received by the Corporation excluding amounts
paid or payable for accrued interest or accrued dividends;


 


(B)           insofar as it consists of property other
than cash, be computed at the fair market value thereof at the time of such
issue, as reasonably determined in good faith by the Board of Directors; and


 


(C)           in the event shares of Additional Common
Stock are issued together with other shares or securities or other assets of
the Corporation for consideration which covers both, be the proportion of such
consideration so received for the shares of Additional Common Stock, computed
as provided in clauses (A) and (B) above, as reasonably determined in good
faith by the Board of Directors.


 


(2)           Options and
Convertible Securities.  The
consideration per share received by the Corporation for Additional Common Stock
deemed to have been issued pursuant to subsection (B)4(d)(iii), relating to
Options and Convertible Securities, shall be determined by dividing:


 


(A)          the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein designed to protect against dilution)
payable to the Corporation upon the exercise in full of such Options or the
conversion or exchange of all such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise in full of such Options for
Convertible Securities and the conversion or exchange of all such Convertible
Securities, by


 


(B)           the maximum number of shares of Common Stock
(as set forth in the instruments relating thereto, without regard to any provision
contained therein designed to protect against dilution) issuable upon the
exercise of such Options or conversion or exchange of such Convertible
Securities.


 


(vi)          Applicability of
Certain Adjustments.  For the
avoidance of doubt, any adjustment which is otherwise required to be made in
respect of the Series B Stock as a consequence of any of the provisions in
this Section (B)4(d) shall only be made with respect to shares of Series B
Stock for which the Original Issue Date has occurred on or prior to the date of
the event or circumstance which give rise to any adjustment pursuant to this Section (B)4(d).


 


e.             Conversion Price
Adjustments for Subdivisions, Combinations or Consolidations of Common Stock.


 


16

















 


(i)            In the event the
Corporation should at any time or from time to time after the date hereof fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of shares of Common
Stock entitled to receive a dividend or other distribution payable in
additional Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
Common Stock (hereinafter referred to as “Common Share Equivalents”),
without payment of any consideration by such holder for the additional Common
Stock or the Common Share Equivalents (including the additional Common Stock
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such dividend distribution, split or subdivision if no record date
is fixed), the Conversion Price of the Series B Stock shall be
appropriately decreased so that the number of shares of Common Stock issuable
on conversion of each share of such Series B Stock shall be increased in
proportion to such increase of outstanding shares of Common Stock and shares
issuable with respect to Common Share Equivalents.


 


(ii)           If the number of shares
of Common Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price of the Series B
Stock shall be appropriately increased so that the number of shares of Common Stock
issuable on conversion of each share of such Series B Stock shall be
decreased in proportion to such decrease in outstanding shares of Common Stock.


 


f.              Other
Distributions.  In the event the
Corporation shall declare a distribution payable in securities of other
entities or persons, evidences of indebtedness issued by the Corporation or
other entities or persons, assets (excluding cash dividends) or options or
rights not referred to in subsection (B)4(e)(i), the holders of the Series B
Stock shall be entitled to a proportionate share of any such distribution as
though they were the holders of the number of shares of Common Stock of the
Corporation into which their shares of Series B Stock are convertible as
of the record date fixed for the determination of the holders of Common Stock
of the Corporation entitled to receive such distribution or, if no such record
date is fixed, as of the date such distribution is made.


 


g.             Recapitalizations.  If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination, merger or sale of assets transaction provided for elsewhere in
this Section (B)4), provision shall be made so that the holders of Series B
Stock shall thereafter be entitled to receive upon conversion of the Series B
Stock the number of shares of stock or other securities or property of the
Corporation to which a holder of Common Stock would have been entitled on
recapitalization.  In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section (B)4 with respect to the rights of the holders of the Series B
Stock after the recapitalization to the end that the provisions of this Section (B)4
(including adjustment of the Conversion Price then in effect and the number of
shares issuable upon conversion of the Series B Stock) shall be applicable
after that event as nearly equivalent as may be practicable.


 


h.             No Impairment.  The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid


 


17

















 


or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section (B)4 and
in the taking of all such actions as may be necessary or appropriate in order
to protect the Conversion Rights of the holders of the Series B Stock
against impairment.


 


i.              No Fractional
Shares and Certificate as to Adjustments.


 


(i)            In lieu of any
fractional shares to which a holder of Series B Stock would otherwise be
entitled upon conversion, the Corporation shall pay cash equal to such fraction
multiplied by the fair market value of one share of Common Stock, as determined
in good faith by the Board of Directors of the Corporation.  Whether or not fractional shares are issuable
upon such conversion shall be determined on the basis of the total number of
shares of Series B Stock of each holder at the time converting into Common
Stock and the number of shares of Common Stock issuable upon such aggregate
conversion.


 


(ii)           Upon the occurrence of
each adjustment or readjustment of the Conversion Price of any Series B
Stock pursuant to this Section (B)4, the Corporation, at its expense,
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of such Series B Stock
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based.  The Corporation shall, upon the written request
at any time of any holder of Series B Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such
adjustment and readjustment, (B) the Conversion Price of the Series B
Stock at the time in effect, and (C) the number of shares of Common Stock
and the amount, if any, of other property which at the time would be received
upon the conversion of such holder’s shares of Series B Stock.


 


j.              Notices of Record
Date.  In the event that the
Corporation shall propose at any time:  (i) to
declare any dividend or distribution upon any class or series of capital stock,
whether in cash, property, stock or other securities; (ii) to effect any
reclassification or recapitalization of its Common Stock outstanding involving
a change in the Common Stock; or (iii) to merge or consolidate with or
into any other corporation, to sell, lease or convey all or substantially all
of its property or business, to liquidate, dissolve or wind up or to effect any
other Liquidation Event; then, in connection with each such event, the
Corporation shall mail to each holder of Series B Stock:


 


(1)           at least twenty (20)
days’ prior written notice of the date on which a record shall be taken for
such dividend or distribution (and specifying the date on which the holders of
the affected class or series of capital stock shall be entitled thereto) or for
determining the rights to vote, if any, in respect of the matters referred to
in clauses (ii) and (iii) above; and


 


(2)           in the case of the
matters referred to in clauses (ii) and (iii) above, written notice
of such impending transaction not later than twenty (20) days prior to the
stockholders’ meeting called to approve such transaction, or twenty (20) days
prior to the closing of such transaction, whichever is earlier, and shall also
notify such holder in writing of


 


18

















 


the final approval of such
transaction.  The first of such notices
shall describe the material terms and conditions of the impending transaction
(and specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
the occurrence of such event) and the Corporation shall thereafter give such
holders prompt notice of any material changes. 
The transaction shall in no event take place sooner than twenty (20)
days after the Corporation has given the first notice provided for herein or
sooner than ten (10) days after the Corporation has given notice of any
material changes provided for herein.


 


k.             Reservation of
Stock Issuable Upon Conversion.  The
Corporation shall at all times reserve and keep available out of its authorized
but unissued Common Stock,  solely for
the purpose of effecting the conversion of the shares of the Series B
Stock, such number of its Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of the Series B Stock;
and if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then outstanding shares
of the Series B Stock, in addition to such other remedies as shall be
available to the holders of such Series B Stock, the Corporation will take
such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.


 


l.              Notices.  Any notice required by the provisions of this
Section (B)4 to be given to the holders of shares of Series B Stock
shall be deemed given if deposited in the United States mail, first class
postage prepaid, and addressed to each holder of record at his, her or its
address appearing on the books of the Corporation.


 


m.            Taxes and Costs.  The issue of certificates evidencing Common
Stock upon conversion of Series B Stock in accordance with the terms
provided herein shall be made without charge to the holders of such shares for
any issue tax in respect thereof or other cost incurred by the Corporation in
connection with such conversion; provided, however, the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a
name other than that of the holder of the Series B Stock so converted.


 


5.                             Voting
Rights.


 


a.             In addition to any
voting rights required by law and the special voting rights provided in this
Certificate, the holders of Series B Stock shall have the right to one
vote for each share of Common Stock into which such share of Series B
Stock could then be converted (with any fractional share determined on an
aggregate conversion basis being rounded to the nearest whole share), and with
respect to such vote such holder shall have full voting rights and powers equal
to the voting rights and powers of the holders of shares of Common Stock, and
shall be entitled, notwithstanding any provision hereof, to notice of any
stockholders’ meeting in accordance with the by-laws of the Corporation, and shall
be treated for all purposes (including without limitation the determination of
the presence of a quorum), and entitled to vote, together with holders of
Common Stock as a single class, with respect to any issue, election, question
or matter upon which holders of Common Stock have the right to vote.


 


19

















 


b.             The holders of the Series B
Stock, the Series A Stock and the Common Stock, together with the holders
of any other outstanding class, if any, to the extent provided in the related
certificate of designation, voting together as a single class, shall be
entitled to elect the number of directors authorized, including the director
designated by Lathi LLC as provided in the Stockholders’ Agreement.  In the case of any vacancy in the office of a
director elected by the holders of a particular class or classes of stock, a
successor shall be elected to hold office for the unexpired term of such
director by the affirmative vote of the holders of a majority of the shares of
that class or classes, as applicable, given at a special meeting of such
stockholders duly called or by an action by written consent for that purpose
or, in the absence of action by such holders, by action of the remaining
directors elected by the holders of that class or classes, as applicable.  Any director who shall have been elected by
the holders of a particular class or classes of stock may be removed from the
Board of Directors during such director’s term of office, either for or without
cause by, and only by, the affirmative vote of the holders of a majority of the
shares of such class or classes, as applicable, given at a special meeting of
the stockholders duly called or by an action by written consent for that
purpose.


 


c.             [Reserved]


 


6.                             Protective
Provisions.


 


a.             In addition to any
other rights provided by law or set forth herein, so long as any shares of Series B
Stock are outstanding, the Corporation shall not without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of 75%
of the outstanding shares of Series B Stock must be obtained (except as
provided in clause (v) below):


 


(i)            create, authorize,
designate or issue any shares of any class or series of capital stock of the
Corporation that is senior to or on a parity with the Series B Stock as to
dividends, the distribution of assets on a Liquidation Event, voting or
otherwise;


 


(ii)           alter, change or amend
the preferences or rights of the Series B Stock or class or series of
capital stock of the Corporation that is senior to or on a parity with the Series B
Stock as to dividends, the distribution of assets on a Liquidation Event,
voting or otherwise;


 


(iii)          create, authorize,
designate or issue any shares of the Series B Stock which are in addition
to the number of shares initially authorized hereunder;


 


(iv)          purchase, redeem (other
than pursuant to equity incentive agreements with non-officer employees giving
the Corporation the right to repurchase shares upon the termination of
services) or set aside any sums for the purchase or redemption of, or declare
or pay any dividend (including a dividend payable in stock of the Corporation)
or make any other distribution with respect to, any shares of capital stock or
any other securities that are convertible into or exercisable for such stock,
other than dividends on the Series B Stock; provided, however,
that the Corporation may redeem shares of Series B Stock as provided in Section (B)3;


 


20

















 


(v)           amend this Certificate
of Designation, provided, however, that if the amendment will
materially and adversely affect any Series B stockholder in a manner that
is disproportionate to the treatment of all Series B stockholders, then
the approval of holders of 85% of the outstanding shares of Series B Stock
must first be obtained; or


 


(vi)          cause or permit any
subsidiary of the Corporation directly or indirectly to take any actions
described in clauses (i) through (v) above, other than issuing
securities to the Corporation.


 


b.             In addition to any
other rights provided by law or set forth herein, so long as any shares of Series B
Stock are outstanding, the Corporation shall not without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of a
majority of the voting power of the outstanding shares of the Series B
Stock and Series A Stock, voting together as a single class on an
as-converted basis:


 


(i)            effect any liquidation
or dissolution of the Corporation or any other Liquidation Event;


 


(ii)           amend the Certificate
of Incorporation or the Corporation’s By-Laws in any manner, except as required
by law;


 


(iii)          change the nature of the
Corporation’s business to any business which is fundamentally distinct and
separate from the business currently conducted by the Company; or


 


(iv)          cause or permit any
subsidiary of the Corporation directly or indirectly to take any actions
described in clauses (i) through (iii) above, other than issuing
securities to the Corporation.


 


c.             Notwithstanding anything
herein to the contrary, for so long as at least $5,000,000 of original
principal amount of Bridge Notes remains outstanding, the Corporation shall not
take any action referred to in Section (B)6(a) hereof, whether or not
it has obtained the requisite approval of the holders of the Series B
Stock, without first obtaining the written consent of holders of Bridge Notes
who own not less than seventh-five percent (75%) of the indebtedness then
outstanding under the Bridge Notes.


 


7.             Status of
Converted and/or Redeemed Stock.  In
the event any shares of Series B Stock shall be redeemed pursuant to Section (B)3
hereof or converted pursuant to Section (B)4 hereof, such shares shall be
canceled and shall not be re-issuable by the Corporation.


 


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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be executed by its duly authorized officer this 17th day of
November, 2008.


 


 


	
   

  	
  MXENERGY HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Jeffrey A. Mayer

  
	
   

  	
  Name: 

  	
  Jeffrey A. Mayer

  
	
   

  	
  Title:

  	
  President

  
				



 


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