**Exhibit3.1**

 

**RESTATED CERTIFICATE OF INCORPORATION**OFOPTIONSXPRESS HOLDINGS, INC.

 

**    *    *   *Adopted in accordance with the provisionsof Section 242 and Section 245 of the General Corporation Law of the State of Delaware*    *   *    **

 

The undersigned,on behalf of optionsXpress Holdings, Inc., a corporation duly organized andexisting under and by virtue of the General Corporation Law of the State ofDelaware (the “Corporation”), DOES HEREBY CERTIFY as follows:

 

**FIRST:**               TheCorporation filed its original Certificate of Incorporation with the DelawareSecretary of State on June 8, 2004 (the “Original Certificate”) under the nameof optionsXpress Holdings, Inc.

 

**SECOND:**          The Boardof Directors of the Corporation duly adopted resolutions in accordance withSection 242 and Section 245 of the General Corporation Law of the State ofDelaware authorizing the Corporation to amend, integrate and restate theCertificate of Incorporation in its entirety to read as set forth in ***Exhibit A***attached hereto and made a part hereof (the “Restated Certificate”).

 

**THIRD:**              Inaccordance with Section 228, Section 242 and Section 245 of the GeneralCorporation Law of the State of Delaware, the Restated Certificate was dulyapproved and adopted pursuant to a written consent signed by the holders of atleast a majority of the issued and outstanding shares of capital stock entitledto vote as a class, whether to not entitled to vote thereon, of theCorporation.  Written notice is being givento the stockholders who have not consented in writing.

 

*     *    *     *     *

 

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IN WITNESSWHEREOF, the undersigned on behalf of the Corporation for the purpose ofamending and restating the Restated Certificate of Incorporation of theCorporation pursuant to the General Corporation Law of the State of Delaware,under penalties of perjury does hereby declare and certify that this is the actand deed of the Corporation and the facts stated herein are true, andaccordingly has hereunto signed this Certificate of Restated Certificate of Incorporationthis 26th day of January, 2005.

 

 
|   | optionsXpress Holdings,  Inc., |
|--------|--------------------------------|
|   | a Delaware corporation         |
|   |                           |
|   |                           |
|   | By:                            | */s/  David A. Fisher* | * * |
|   |                           | Name: | David A. Fisher |
|   |                           | Title: | Chief Financial Officer |
|        |                                |  |  |  |

 

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***EXHIBIT A***

 

**AMENDED AND RESTATEDCERTIFICATE OF INCORPORATION OF**

**OPTIONSXPRESSHOLDINGS, INC.**

 

# **ARTICLE INAME**

 

The name of theCorporation is optionsXpress Holdings, Inc. (the “Corporation”).

 

# **ARTICLE IIREGISTERED OFFICE AND AGENT**

 

The address of theCorporation’s registered office in the State of Delaware is 9 East LoockermanStreet, Suite #1B, in the City of Dover, County of Kent, 19901.  The name of its registered agent at suchaddress is National Registered Agents, Inc.

 

# **ARTICLE IIIPURPOSE**

 

The purpose of theCorporation is to engage in any lawful act or activity for which corporationsmay be organized under the DGCL.

 

# **ARTICLE IV**

**CAPITALSTOCK**

 

The total number ofshares of all classes of capital stock which the Corporation shall haveauthority to issue is three hundred twenty-five million (325,000,000) shares,of which:

 

two hundred fifty million(250,000,000) shares, par value $0.0001 per share, shall be authorized asshares of common stock (the “Common Stock”); and

 

seventy five million(75,000,000) shares, par value $0.0001 per share, shall be authorized as sharesof preferred stock (the “Preferred Stock”), of which 25,000,000 sharesshall be authorized as shares of the Corporation’s existing Series A PreferredStock.

 

## (A)          CommonStock.  Except as (1) otherwiserequired by law or (2) expressly provided in this Amended and RestatedCertificate of Incorporation (as amended from time to time), each share ofCommon Stock shall have the same powers, rights and privileges and shall rankequally, share ratably and be identical in all respects as to all matters.

 

### (1)           Dividends.  Subject to the rights of the holders ofPreferred Stock, and to the other provisions of this Amended and RestatedCertificate of Incorporation (as amended from time to time), holders of CommonStock shall be entitled to receive equally, on a per share basis, suchdividends and other distributions in cash, securities or other property of theCorporation as

 

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### may be declared thereon by the Board of Directors fromtime to time out of assets or funds of the Corporation legally available therefore.

 

### (2)           VotingRights.  At every annual or specialmeeting of stockholders of the Corporation, each holder of Common Stock shallbe entitled to cast one (1) vote for each share of Common Stock standing insuch holder’s name on the stock transfer records of the Corporation.

 

### (3)           LiquidationRights.  In the event of anyliquidation, dissolution or winding up of the affairs of the Corporation,whether voluntary or involuntary, after payment or provision for payment of theCorporation’s debts and amounts payable upon shares of Preferred Stock entitledto a preference, if any, over holders of Common Stock upon such dissolution,liquidation or winding up, the remaining net assets of the Corporation shall bedistributed among holders of shares of Common Stock equally on a per sharebasis.  A merger or consolidation of theCorporation with or into any other corporation or other entity, or a sale orconveyance of all or any part of the assets of the Corporation (which shall notin fact result in the liquidation of the Corporation and the distribution ofassets to its stockholders) shall not be deemed to be a voluntary orinvoluntary liquidation or dissolution or winding up of the Corporation withinthe meaning of this Paragraph (A)(3).

 

### (4)           FutureIssuances.  The Board of Directors isauthorized, subject to limitations prescribed by law, to provide by resolutionor resolutions for the issuance of additional shares of Common Stock.

 

## (B)           PreferredStock.  The Board of Directors isauthorized, subject to limitations prescribed by law, to provide by resolutionor resolutions for the issuance of shares of Preferred Stock in one or moreseries, to establish the number of shares to be included in each such series,and to fix the voting powers (if any), designations, powers, preferences, andrelative, participating, optional or other rights, if any, of the shares ofeach such series, and any qualifications, limitations or restrictionsthereof.  Irrespective of the provisionsof Section 242(b)(2) of the Delaware General Corporation Law (the “DGCL”),the number of authorized shares of Preferred Stock may be increased ordecreased (but not below the number of shares thereof then outstanding) by theaffirmative vote of the holders of a majority in voting power of the stock ofthe Corporation entitled to vote, without the separate vote of the holders ofthe Preferred Stock as a class.

 

## (C)           Splitof Common Stock and Series A Preferred Stock; Conversion of Series A PreferredStock.

 

### (1)           Split.  Upon the effectiveness of this Amended andRestated Certificate (“the Effective Time”), each then outstanding shareof the Corporation’s Common Stock (the “Existing Common Stock”) andSeries A Preferred Stock shall be, without further action by the Corporation orany of the holders thereof, changed and converted into 7.5 shares of CommonStock and 7.5 shares of Series A Preferred Stock, respectively (the “Split”).  Each certificate then outstandingrepresenting shares of Existing Common Stock or Series A Preferred Stock shallautomatically represent from and after the Effective Time that number of sharesof Common

 

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### Stock or Series A Preferred Stock, respectively, equalto the number of shares shown on the face of the certificate multiplied by 7.5.

 

### (2)           FractionalShares.  Notwithstanding theforegoing, in the event that the Split of the Existing Common Stock and SeriesA Preferred Stock described above in paragraph (1) would result in any holderof shares of Existing Common Stock or Series A Preferred Stock holding a shareof Common Stock or Series A Preferred Stock that is not an integral multiple ofone, the effect of the Split shall be such that the shares of Common Stock andSeries A Preferred Stock issued as a result of the Split shall be the integralmultiple of one closest to the number of shares of Common Stock and Series APreferred Stock that would otherwise result from the Split, with fractions of0.50 and greater being rounded up to the next higher integral multiple of oneand fractions less than 0.50 being rounded down to the next lower integralmultiple of one.  No consideration willbe paid in lieu of fractions that are rounded down.

 

### (3)           Conversion.  In accordance with the terms of the existingSeries A Preferred Stock as set forth on Annex A attached hereto, after the Splithas been effected and effective at the time of and subject to the closing ofthe public offering of shares of the Corporation’s Common Stock being effectedpursuant to the Corporation’s Registration Statement on Form S-1, as amended(File No. 333-119967), each then outstanding share of Series A Preferred Stockshall be (after giving effect to the Split), without further action by theCorporation or any holders thereof or the payment of any further consideration,converted into one share of Common Stock on a one-for-one basis (the “Conversion”).  Prior to the Conversion, each share of SeriesA Preferred Stock shall remain outstanding and shall continue to have theexisting rights and preferences with respect thereto as set forth in Annex Aattached hereto.  After the Conversion,each certificate then outstanding representing shares of existing Series APreferred Stock shall represent that number of shares of Common Stock (theCorporation’s sole outstanding class of capital stock after the Conversion)shown on the face of the certificate (as adjusted to reflect the Split).  Shares of Series A Preferred Stock soconverted shall revert to authorized but unissued shares of Preferred Stock,undesignated as to series.

###  

### (4)           Assoon as possible after the Split and Conversion, the Corporation shall deliverto each of the former holders of Existing Common Stock and Series A PreferredStock a certificate or certificates representing the number of shares of CommonStock issuable by reason of such transactions in such name or names and suchdenomination or denominations as such holder has specified.

 

### (5)           Theissuance of certificates for shares of Common Stock upon the Split andConversion shall be made without charge to the holders of Existing Common Stockand Series A Preferred Stock for any issuance tax in respect thereof or othercost incurred by the Corporation in connection with such transactions.  Upon the Split and Conversion, the Corporationshall take all such actions as are necessary in order to insure that the CommonStock issuable with respect to such transactions shall be validly issued, fullypaid and nonassessable, free and clear of all taxes, liens, charges andencumbrances with respect to the issuance thereof.

 

### (6)           TheCorporation shall not close its books against the transfer of the ExistingCommon Stock or Series A Preferred Stock or of Common Stock issued or issuable

 

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### upon the Split and Conversion in any manner whichinterferes with the timely completion of the Split and Conversion.  The Corporation shall assist and cooperatewith any holder of shares required to make any governmental filings or obtainany governmental approval prior to or in connection with the Split andConversion (including, without limitation, making any filings required to bemade by the Corporation).

 

### (7)           Allshares of Common Stock which are so issuable shall, when issued, be duly andvalidly issued, fully paid and nonassessable and free from all taxes, liens andcharges.  The Corporation shall take allsuch actions as may be necessary to assure that all such shares of Common Stockmay be so issued without violation of any applicable law or governmental regulationor any requirements of any domestic securities exchange upon which shares ofCommon Stock may be listed (except for official notice of issuance which shallbe immediately delivered by the Corporation upon each such issuance).  The Corporation shall not take any actionwhich would cause the number of authorized but unissued shares of Common Stockor Series A Preferred Stock to be less than the number of such shares requiredto be reserved hereunder for issuance upon the Split and Conversion.

 

# **ARTICLE VBOARD OF DIRECTORS**

 

## (A)          Management.  The business and affairs of the Corporationshall be managed by or under the direction of the Board of Directors.  The Board of Directors may exercise all suchauthority and powers of the Corporation and do all such lawful acts and thingsas are not by statute or this Amended and Restated Certificate of Incorporationdirected or required to be exercised or done by the stockholders.

 

## (B)           Numberof Directors.  The number ofdirectors of the Corporation shall be fixed from time to time in the mannerprovided in the Amended and Restated By-laws. Subject to any rights of the holders of any class or series of PreferredStock to elect additional directors under specified circumstances, the numberof directors which shall constitute the Board of Directors shall be fixed fromtime to time by resolution adopted by the affirmative vote of two-thirds of thetotal number of directors then in office.

 

## (C)           Newly-CreatedDirectorships and Vacancies.  Subjectto the rights of the holders of any series of Preferred Stock then outstanding,newly created directorships resulting from any increase in the number ofdirectors or any vacancies in the Board of Directors resulting from death,resignation, retirement, disqualification, removal from office or any othercause may be filled by the Board of Directors, provided that a quorum is thenin office and present, or by a majority of the directors then in office, ifless than a quorum is then in office, or by the sole remaining director.  Directors elected to fill a newly createddirectorship or other vacancies shall hold office until such director’ssuccessor has been duly elected and qualified or until his or her earlierdeath, resignation or removal as hereinafter provided.

 

## (D)          Removalof Directors.  Subject to the rightsof the holders of any series of Preferred Stock then outstanding, any directormay be removed from office at any time for cause, at a meeting called for thatpurpose, and only by the affirmative vote of the holders of at least 66-2/3%

 

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## of the voting power of all shares of Common Stockentitled to vote generally in the election of directors, voting together as asingle class.

 

## (E)           Rightsof Holders of Preferred Stock. Notwithstanding the foregoing provisions of this Article V, whenever theholders of one or more series of Preferred Stock issued by the Corporationshall have the right, voting separately or together by series, to electdirectors at an annual or special meeting of stockholders, the election, termof office, filling of vacancies and other features of such directorship shallbe governed by the rights of such Preferred Stock as set forth in thecertificate of designations governing such series.

 

## (F)           WrittenBallot Not Required.  Elections ofdirectors need not be by written ballot unless the Amended and Restated By-lawsof the Corporation shall otherwise provide.

 

## (G)           By-laws.  The Board of Directors is expresslyauthorized to adopt, amend, alter, change or repeal the by-laws of theCorporation.  Any by-laws made by thedirectors under the powers conferred hereby may be amended, altered, changed orrepealed by the directors or by the stockholders.  Notwithstanding the foregoing and anythingcontained in this Amended and Restated Certificate of Incorporation to thecontrary, the by-laws of the Corporation shall not be amended altered, changedor repealed by the stockholders, and no provision inconsistent therewith shallbe adopted by the stockholders, without the affirmative vote of the holders of66-2/3% of the voting power of all shares of the Corporation entitled to votegenerally in the election of directors, voting together as a single class.

 

## (H)          Classificationof Directors.  At each annual meetingof stockholders, directors of the Corporation shall be elected to hold officeuntil the expiration of the term for which they are elected, and until theirsuccessors have been duly elected and qualified; except that if any suchelection shall be not so held, such election shall take place at a stockholders’meeting called and held in accordance with the DGCL.  The directors of the Corporation shall bedivided into three classes as nearly equal in size as is practicable, herebydesignated Class I, Class II and Class III.  The term of office of the initialClass I directors shall expire at the next succeeding annual meeting ofstockholders, the term of office of the initial Class II directors shallexpire at the second succeeding annual meeting of stockholders and the term ofoffice of the initial Class III directors shall expire at the thirdsucceeding annual meeting of the stockholders. For the purposes hereof, the initial Class I, Class II andClass III directors shall be those directors elected by the stockholdersof the Corporation in connection with the adoption of this Amended and RestatedCertificate of Incorporation.  At eachannual meeting after the first annual meeting of stockholders, directors toreplace those of a Class whose terms expire at such annual meeting shall beelected to hold office until the third succeeding annual meeting and untiltheir respective successors shall have been duly elected and qualified.  If the number of directors is hereafterchanged, any newly created directorships or decrease in directorships shall beso apportioned among the classes as to make all classes as nearly equal innumber as practicable.

 

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# **ARTICLE VILIMITATION OF LIABILITY**

 

A director of theCorporation shall not be personally liable to the Corporation or its stockholdersfor monetary damages for breach of fiduciary duty as a director; *provided, however*, that the foregoingshall not eliminate or limit the liability of a director (i) for any breach ofthe director’s duty of loyalty to the Corporation or its stockholders, (ii) foracts or omissions not in good faith or which involve intentional misconduct ora knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) forany transaction from which the director derived an improper personal benefit.  If the DGCL is hereafter amended to permitfurther elimination or limitation of the personal liability of directors, thenthe liability of a director of the Corporation shall be eliminated or limitedto the fullest extent permitted by the DGCL as so amended.  Any repeal or modification of this Article VIby the stockholders of the Corporation or otherwise shall not adversely affectany right or protection of a director of the Corporation existing at the timeof such repeal or modification.

 

# **ARTICLE VIIINDEMNIFICATION**

 

Each person who was or ismade a party or is threatened to be made a party to or is involved (including,without limitation, as a witness) in any actual or threatened action, suit orproceeding, whether civil, criminal, administrative or investigative(hereinafter a “proceeding”), by reason of the fact that he is or was adirector or officer of the Corporation or is or was serving at the request ofthe Corporation as a director or officer of another corporation or of apartnership, limited liability company, joint venture, trust or otherenterprise, including service with respect to an employee benefit plan(hereinafter an “Indemnitee”), whether the basis of such proceeding isalleged action in an official capacity as a director or officer or in any othercapacity while so serving, shall be indemnified and held harmless by theCorporation to the fullest extent authorized by the DGCL, as the same exists ormay hereafter be amended (but, in the case of any such amendment, only to theextent that such amendment permits the Corporation to provide broaderindemnification rights than said law permitted the Corporation to provide priorto such amendment), or by other applicable law as then in effect, against allexpense, liability and loss (including attorneys’ fees and relateddisbursements, judgments, fines, excise taxes or penalties under the EmployeeRetirement Income Security Act of 1974, as amended from time to time (“ERISA”),penalties and amounts paid or to be paid in settlement) actually and reasonablyincurred or suffered by such Indemnitee in connection therewith, and suchindemnification shall continue as to a person who has ceased to be a director,officer, partner, member or trustee and shall inure to the benefit of his orher heirs, executors and administrators. Each person who is or was serving as a director or officer of asubsidiary of the Corporation shall be deemed to be serving, or have served, atthe request of the Corporation.

 

## (A)          Procedure.  Any indemnification (but not advancement ofexpenses) under this Article VII (unless ordered by a court) shall be made bythe Corporation only as authorized in the specific case upon a determinationthat indemnification of the director or officer is proper in the circumstancesbecause he has met the applicable standard of conduct set forth in the DGCL, asthe same exists or hereafter may be amended (but, in the case of any suchamendment, only to the extent that such amendment permits the Corporation toprovide broader indemnification rights than said law permitted the Corporationto provide prior to such amendment). Such determination shall be made with respect to a person who is adirector or officer at the time of

 

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## such determination (a) by a majority vote of thedirectors who were not parties to such proceeding (the “DisinterestedDirectors”), even though less than a quorum, (b) by a committee ofDisinterested Directors designated by a majority vote of DisinterestedDirectors, even though less than a quorum, (c) if there are no suchDisinterested Directors, or if such Disinterested Directors so direct, byindependent legal counsel in a written opinion, or (d) by the stockholders.

 

## (B)           Advancesfor Expenses.  Expenses (includingattorneys’ fees, costs and charges) incurred by a director or officer of theCorporation in defending a proceeding shall be paid by the Corporation inadvance of the final disposition of such proceeding upon receipt of anundertaking by or on behalf of the director or officer to repay all amounts soadvanced in the event that it shall ultimately be determined that such directoror officer is not entitled to be indemnified by the Corporation as authorizedin this Article VII.  The majority of theDisinterested Directors may, in the manner set forth above, and upon approvalof such director or officer of the Corporation, authorize the Corporation’scounsel to represent such person, in any proceeding, whether or not theCorporation is a party to such proceeding.

 

## (C)           Procedurefor Indemnification.  Anyindemnification or advance of expenses (including attorney’s fees, costs andcharges) under this Article VII shall be made promptly, and in any event within60 days upon the written request of the director or officer (and, in the caseof advance of expenses, receipt of a written undertaking by or on behalf ofIndemnitee to repay such amount if it shall ultimately be determined thatIndemnitee is not entitled to be indemnified therefor pursuant to the terms ofthis Article VII).  The right toindemnification or advances as granted by this Article VII shall be enforceableby the director or officer in any court of competent jurisdiction, if theCorporation denies such request, in whole or in part, or if no dispositionthereof is made within 60 days.  Suchperson’s costs and expenses incurred in connection with successfullyestablishing his/her right to indemnification, in whole or in part, in any suchaction shall also be indemnified by the Corporation.  It shall be a defense to any such action(other than an action brought to enforce a claim for the advance of expenses(including attorney’s fees, costs and charges) under this Article VII where therequired undertaking, if any, has been received by the Corporation) that theclaimant has not met the standard of conduct set forth in the DGCL, as the sameexists or hereafter may be amended (but, in the case of any such amendment,only to the extent that such amendment permits the Corporation to providebroader indemnification rights than said law permitted the Corporation toprovide prior to such amendment), but the burden of proving such defense shallbe on the Corporation.  Neither thefailure of the Corporation (including its Board of Directors, its independentlegal counsel and its stockholders) to have made a determination prior to thecommencement of such action that indemnification of the claimant is proper inthe circumstances because he/she has met the applicable standard of conduct setforth in the DGCL, as the same exists or hereafter may be amended (but, in thecase of any such amendment, only to the extent that such amendment permits theCorporation to provide broader indemnification rights than said law permittedthe Corporation to provide prior to such amendment), nor the fact that therehas been an actual determination by the Corporation (including its Board ofDirectors, its independent legal counsel and its stockholders) that theclaimant has not met such applicable standard of conduct, shall be a defense tothe action or create a presumption that the claimant has not met the applicablestandard of conduct.

 

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## (D)          OtherRights; Continuation of Right to Indemnification.  The indemnification and advancement ofexpenses provided by this Article VII shall not be deemed exclusive of anyother rights to which a person seeking indemnification or advancement ofexpenses may be entitled under any law (common or statutory), by-law,agreement, vote of stockholders or disinterested directors or otherwise, bothas to action in his/her official capacity and as to action in another capacitywhile holding office or while employed by or acting as agent for theCorporation, and shall continue as to a person who has ceased to be a directoror officer, and shall inure to the benefit of the estate, heirs, executors andadministers of such person.  All rightsto indemnification under this Article VII shall be deemed to be a contractbetween the Corporation and each director or officer of the Corporation who servesor served in such capacity at any time while this Article VII is ineffect.  Any repeal or modification ofthis Article VII or any repeal or modification of relevant provisions of theDGCL or any other applicable laws shall not in any way diminish any rights toindemnification of such director or officer or the obligations of theCorporation arising hereunder with respect to any proceeding arising out of, orrelating to, any actions, transactions or facts occurring prior to the finaladoption of such modification or repeal. For the purposes of this Article VII, references to “the Corporation”include all constituent corporations absorbed in a consolidation or merger aswell as the resulting or surviving corporation, so that any person who is orwas a director or officer of such a constituent corporation or is or wasserving at the request of such constituent corporation as a director or officerof another corporation, partnership, joint venture, trust or other enterpriseshall stand in the same position under the provisions of this Article VII, withrespect to the resulting or surviving corporation, as he would if he/she hadserved the resulting or surviving corporation in the same capacity.

 

## (E)           Insurance.  The Corporation shall have power to purchaseand maintain insurance on our own behalf and on behalf of any person who is orwas or has agreed to become a director or officer of the Corporation, or is orwas serving at the request of the Corporation as a director or officer ofanother corporation, partnership, joint venture, trust or other enterprise,against any liability asserted against him and incurred by him or on his behalfin any such capacity, or arising out of his status as such, whether or not theCorporation would have the power to indemnify him against such liability underthe provisions of this Article VII; *provided,however*, that such insurance is available on acceptable terms, whichdetermination shall be made by a vote of a majority of the Board of Directors.

 

## (F)           SavingsClause.  If this Article VII or anyportion hereof shall be invalidated on any ground by any court of competentjurisdiction, then the Corporation shall nevertheless indemnify each personentitled to indemnification under the first paragraph of this Article VII as toall expense, liability and loss (including attorneys’ fees and relateddisbursements, judgments, fines, ERISA excise taxes and penalties, penaltiesand amounts paid or to be paid in settlement) actually and reasonably incurredor suffered by such person and for which indemnification is available to suchperson pursuant to this Article VII to the full extent permitted by anyapplicable portion of this Article VII that shall not have been invalidated andto the full extent permitted by applicable law.

 

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# **ARTICLE VIIIACTION BY WRITTEN CONSENT/SPECIAL MEETINGS OF STOCKHOLDERS**

 

For so long as either theCorporation’s Common Stock is registered under Section 12 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), or theCorporation is required to file periodic reports with the Securities andExchange Commission pursuant to Section 15(d) of the Exchange Act withrespect to the Corporation’s Common Stock: (i) the stockholders of the Corporation may not take any action bywritten consent in lieu of a meeting, and must take any actions at a dulycalled annual or special meeting of stockholders and the power of stockholdersto consent in writing without a meeting is specifically denied and(ii) special meetings of stockholders of the Corporation may be calledonly by the Chairman of the Board of Directors or pursuant to a resolutionadopted by the affirmative vote of the majority of the total number ofdirectors then in office.

 

# **ARTICLE IXAMENDMENT**

 

The Corporation reservesthe right to amend, alter, change or repeal any provision contained in thisAmended and Restated Certificate of Incorporation, in the manner now orhereafter prescribed herein and by the laws of the state of Delaware, and allrights conferred upon stockholders herein are granted subject to thisreservation.  Notwithstanding any otherprovision of this Amended and Restated Certificate of Incorporation or theAmended and Restated By-laws of the Corporation, and notwithstanding the factthat a lesser percentage or separate class vote may be specified by law orotherwise, but in addition to any affirmative vote of the holders of anyparticular class or series of the capital stock required by law or otherwise,the affirmative vote of the holders of at least 66 2/3% of the voting power ofall shares of the Corporation entitled to vote generally in the election ofdirectors, voting together as a single class, shall be required to adopt anyprovision inconsistent with, to amend, alter change or repeal any provision of,or to adopt a by-law inconsistent with, Articles V, VI, VII, VIII or IX of thisAmended and Restated Certificate of Incorporation.

 

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**ANNEX A**

 

### A.                                    SeriesA Preferred Stock. The Series A Preferred Stock shall have the followingrights and preferences:

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#### Section 1                Dividends.The holders of the Series A Preferred Stock (the “Series A Preferred”) shall beentitled to receive dividends at such times and in such amounts as may bedeclared on each share of the Series A Preferred (a “Share”) by theCorporation’s Board of Directors. In addition to any other dividends declaredon the Series A Preferred, in the event that the Corporation declares or paysany dividends upon the Common Stock (whether payable in cash, securities orother property), other than (i) dividends payable solely in shares of CommonStock issued upon the Corporation’s outstanding shares of Common Stock, (ii)the Net Book Value Dividend and (iii) any Stock Option Proceeds Dividend, thenthe Corporation shall also declare and pay to the holders of the Series APreferred at the same time that it declares and pays such dividends to theholders of the Common Stock, the dividends which would have been declared andpaid with respect to the Common Stock issuable upon conversion of the Series APreferred had all of the outstanding Series A Preferred been convertedimmediately prior to the record date for such dividend, or if no record date isfixed, the date as of which the record holders of Common Stock entitled to suchdividends are to be determined. Notwithstanding the foregoing or anything tothe contrary herein, in the event that the Option Adjustment Amount is apositive number, then immediately prior to, and contingent upon, the conversionof the Series A Preferred, the Corporation shall be permitted (one time only)to declare and pay a dividend (the “Option Adjustment Dividend”) in the form ofshares of Common Stock on each share of Common Stock, but excluding the SeriesA Preferred, then outstanding equal to (a) the Option Adjustment Amount as ofthe time immediately prior to the conversion of the Series A Preferred, dividedby (b) the aggregate number of shares of Common Stock, but excluding the SeriesA Preferred, issued and outstanding immediately prior to such conversion. Nofractional shares of Common Stock shall be issued in connection with suchOption Adjustment Dividend and all fractional interests in shares of CommonStock otherwise issuable in connection therewith shall be rounded up or down tothe nearest whole share number (except that the total number of shares ofCommon Stock issued pursuant to such Option Adjustment Dividend shall notexceed the Option Adjustment Amount). If any fractional interest in a share ofCommon Stock would, but for the immediately preceding sentence, be delivered toany holders of outstanding Common Stock in connection with such OptionAdjustment Dividend, the Corporation shall, in lieu of delivering a fractionalshare therefor, pay an amount to the holder thereof equal to the Market Priceof such fractional interest as of the date of such Option Adjustment Dividend.

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#### Section 2                Liquidation.Upon any liquidation, dissolution or winding up of the Corporation (whethervoluntary or involuntary), each holder of Series A Preferred shall be entitledto be paid, before any distribution or payment is made upon any JuniorSecurities, an amount in cash equal to the greater of (i) the aggregateLiquidation Value of all Shares held by such holder (plus all declared and/oraccrued and unpaid dividends thereon) and (ii) the amount which such holderwould be entitled to receive upon such liquidation, dissolution or winding upif all of such holder’s Series A Preferred Stock were converted into ConversionStock immediately prior to such event, and the holders of Series A Preferredshall not be entitled to any

 

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#### further payment in respect thereof (providedthatthe Series A Preferred shall be subject to conversion at the option of theholder thereof pursuant to Section 6 below at any time prior to theconsummation of such liquidation, dissolution or winding up). If upon any suchliquidation, dissolution or winding up of the Corporation the Corporation’sassets to be distributed among the holders of the Series A Preferred areinsufficient to permit payment to such holders of the aggregate amount whichthey are entitled to be paid under this Section 2, then the entire assetsavailable to be distributed to the Corporation’s stockholders shall bedistributed pro rata among such holders of Series A Preferred based upon theaggregate Liquidation Value (plus all declared and/or accrued and unpaiddividends thereon) of the Series A Preferred held by each such holder. Not lessthan 30 days prior to the payment date stated therein, the Corporation shalldeliver written notice of any such liquidation, dissolution or winding up toeach record holder of Series A Preferred, setting forth in reasonable detailthe amount of proceeds to be paid with respect to each Share and each share ofJunior Securities in connection with such liquidation, dissolution or windingup. Neither the consolidation or merger of the Corporation into or with anyother entity or entities (whether or not the Corporation is the survivingentity), nor the sale or transfer by the Corporation of all or any part of itsassets, nor the reduction of the capital stock of the Corporation nor any otherform of recapitalization or reorganization affecting the Corporation shall bedeemed to be a liquidation, dissolution or winding up of the Corporation withinthe meaning of this Section 2.

####  

#### Section 3                Priorityof Series A Preferred on Dividends and Redemptions. So long as any Series APreferred remains outstanding, without the prior written consent of the holdersof a majority of the outstanding shares of Series A Preferred, the Corporationshall not, nor shall it permit any Subsidiary to, redeem, purchase or otherwiseacquire directly or indirectly any Junior Securities, nor shall the Corporationdirectly or indirectly pay or declare any dividend or make any distributionupon any Junior Securities, except, in each case, as expressly permittedpursuant to the terms of the Investor Rights Agreement or pursuant to an OptionAdjustment Dividend.

####  

#### Section 4                Redemptions.

####  

##### 4A.          SpecialRedemptions.

#####  

###### (i)            Ifa Change in Ownership has occurred or the Corporation obtains knowledge that aChange in Ownership is proposed to occur, the Corporation shall give promptwritten notice of such Change in Ownership describing in reasonable detail thematerial terms and date of consummation thereof to each holder of Series APreferred, and the Corporation shall give each holder of Series A Preferredprompt written notice of any material change in the terms or timing of suchtransaction. The holder or holders of a majority of the Series A Preferred thenoutstanding may require the Corporation to redeem all or any portion of theSeries A Preferred owned by such holder or holders at a price per Share equalto the Liquidation Value thereof (plus all declared and/or accrued and unpaiddividends thereon) by giving written notice to the Corporation of such electionprior to the later of (a) 15 days after receipt of the Corporation’s notice and(b) ten days prior to the consummation of the Change in Ownership (the “ExpirationDate”). The Corporation shall give prompt written notice of any such electionto all other holders of Series A Preferred within five days after the receiptthereof, and each such holder shall have until the later of (a) the ExpirationDate or (b) five days after receipt of such second notice to

 

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###### request redemption hereunder (by giving written noticeto the Corporation) of all or any portion of the Series A Preferred owned bysuch holder. Upon receipt of such election(s), the Corporation shall beobligated to redeem the aggregate number of Shares specified therein on theoccurrence of the Change in Ownership. If any proposed Change in Ownership doesnot occur, all requests for redemption in connection therewith shall beautomatically rescinded, or if there has been a material change in the terms orthe timing of the transaction, any holder of Series A Preferred may rescindsuch holder’s request for redemption by giving written notice of such rescissionto the Corporation prior to the consummation of such transaction.

######  

###### (ii)           Ifa Fundamental Change is proposed to occur, the Corporation shall give writtennotice of such Fundamental Change describing in reasonable detail the materialterms and date of consummation thereof to each holder of Series A Preferred notmore than 30 days nor less than 15 days prior to the consummation of suchFundamental Change, and the Corporation shall give each holder of Series APreferred prompt written notice of any material change in the terms or timingof such transaction. The holder or holders of a majority of the Series APreferred then outstanding may require the Corporation to redeem all or anyportion of the Series A Preferred owned by such holder or holders at a priceper Share equal to the Liquidation Value thereof (plus all declared and/oraccrued and unpaid dividends thereon) by giving written notice to theCorporation of such election prior to the later of (a) ten days prior to theconsummation of the Fundamental Change or (b) ten days after receipt of noticefrom the Corporation. The Corporation shall give prompt written notice of suchelection to all other holders of Series A Preferred (but in any event withinfive days prior to the consummation of the Fundamental Change), and each suchholder shall have until two days after the receipt of such notice to requestredemption (by written notice given to the Corporation) of all or any portionof the Series A Preferred owned by such holder. Upon receipt of such election(s),the Corporation shall be obligated to redeem the aggregate number of Sharesspecified therein upon the consummation of such Fundamental Change. If anyproposed Fundamental Change does not occur, all requests for redemption inconnection therewith shall be automatically rescinded, or if there has been amaterial change in the terms or the timing of the transaction, any holder ofSeries A Preferred may rescind such holder’s request for redemption bydelivering written notice thereof to the Corporation prior to the consummationof the transaction.

######  

###### (iii)          Inthe event of a Qualified Sale, the Corporation shall have the right (but notthe obligation) to redeem all (but not less than all) of the Series A Preferredthen outstanding (subject to the right of the holders thereof to convert suchSeries A Preferred pursuant to Section 6 below at any time prior to suchredemption) from the holders thereof at a price per Share equal to theLiquidation Value thereof (plus all declared and/or accrued and unpaid dividendsthereon) by giving written notice to the holders of the Series A Preferred ofsuch election at least 14 days prior to the consummation of such QualifiedSale. Upon receipt of such election notice, each holder of Series A Preferredshall be obligated to sell to the Corporation (subject to the right of eachsuch holder to convert such Series A Preferred pursuant to Section 6 below atany time prior to such redemption) all of its outstanding Shares of Series APreferred upon the consummation of such Qualified Sale. If any proposedQualified Sale does not occur, all elections to so redeem by the Corporation inconnection therewith shall be automatically rescinded, or if there has been amaterial change in the terms or the timing of the transaction, the Corporationmay rescind such election for redemption by delivering written notice thereofto the holders of the Series A Preferred prior to the consummation of thetransaction.

 

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##### 4B.          Redemptionsupon Request. At any time after January 15, 2009 but prior to the date thatis ten years after such date, in the event that a Qualified Sale, liquidation,dissolution or winding up of the Corporation (whether voluntary or involuntary)or Qualified Public Offering has not occurred prior to such date, the holdersof a majority of the outstanding Series A Preferred may request redemption ofall or any portion of their Shares of Series A Preferred by delivering writtennotice of such request to the Corporation. Within five days after receipt ofsuch request, the Corporation shall give written notice of such request to allother holders of Series A Preferred, and such other holders may requestredemption of all or any portion of their Shares of Series A Preferred bydelivering written notice to the Corporation within ten days after receipt ofthe Corporation’s notice. The Corporation shall be required to redeem allShares with respect to which such redemption requests have been made at a priceper Share equal to the Liquidation Value thereof (plus all declared and/oraccrued and unpaid dividends thereon) within 30 days after receipt of theinitial redemption request.

#####  

##### 4C.          RedemptionPayments. For each Share which is to be redeemed hereunder pursuant toSections 4A, 4B or 8B, the Corporation shall be obligated on the RedemptionDate to pay to the holder thereof (upon surrender by such holder at theCorporation’s principal office of the certificate representing such Share dulyendorsed for transfer or accompanied by a duly executed stock power) an amountin immediately available funds equal to the Liquidation Value of such Share(plus all declared and/or accrued and unpaid dividends thereon), and suchholder shall be obligated to deliver the certificate representing such Share,duly endorsed (or accompanied by a duly executed stock power) for transfer tothe Corporation. If the funds of the Corporation legally available forredemption of Shares on any Redemption Date pursuant to Section 4(A)(i) or4A(ii) are insufficient to redeem the total number of Shares to be redeemed onsuch date, those funds which are legally available shall (subject to regulatorycapital requirements) be used to redeem the maximum possible number of Sharespro rata among the holders of the Shares to be redeemed based upon theaggregate Liquidation Value of such Shares held by each such holder (plus alldeclared and/or accrued and unpaid dividends thereon). At any time thereafterwhen additional funds of the Corporation are legally available for theredemption of Shares, such funds shall (subject to regulatory capitalrequirements) immediately be used to redeem the balance of the Shares which theCorporation has become obligated to redeem on any Redemption Date but which ithas not redeemed.

#####  

##### 4D.          Determinationof the Number of Each Holder’s Shares to be Redeemed. Except as otherwiseprovided herein, the number of Shares of Series A Preferred to be redeemed fromeach holder thereof in redemptions hereunder pursuant to Sections 4A, 4B or 8Bshall be the number of Shares determined by multiplying the total number ofShares to be redeemed times a fraction, the numerator of which shall be thetotal number of Shares then held by such holder and the denominator of whichshall be the total number of Shares then outstanding. In case fewer than thetotal number of Shares represented by any certificate are redeemed, a newcertificate representing the number of unredeemed Shares shall be issued to theholder thereof without cost to such holder within five business days after surrenderof the certificate representing the redeemed Shares.

#####  

##### 4E.           Redeemedor Otherwise Acquired Shares.  AnyShares which are redeemed or otherwise acquired by the Corporation shall becanceled and retired to authorized but unissued shares and shall not bereissued, sold or transferred.

 

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#### Section 5                VotingRights.

####  

##### 5A.          Electionof Directors. In the election of directors of the Corporation, the holdersof the Series A Preferred, voting separately as a single class to the exclusionof all other classes and series of the Corporation’s capital stock and witheach Share of Series A Preferred entitled to one vote, shall be entitled toelect (by majority vote) one director to serve on the Corporation’s Board ofDirectors until his successor is duly elected by the holders of the Series APreferred or he is removed (by majority vote) from office by the holders of theSeries A Preferred. If the holders of the Series A Preferred for any reasonfail to elect anyone to fill any such directorship, such position shall remainvacant until such time as the holders of the Series A Preferred elect adirector to fill such position and shall not be filled by resolution or vote ofthe Corporation’s Board of Directors or the Corporation’s other stockholders.

#####  

##### 5B.          OtherVoting Rights. The holders of the Series A Preferred shall be entitled tonotice of all stockholders meetings in accordance with the Corporation’sBylaws, and in addition to any circumstances in which the holders of the SeriesA Preferred shall be entitled to vote as a separate class under the GeneralCorporation Law of Delaware, the holders of the Series A Preferred shall beentitled to vote on all matters submitted to the stockholders for a votetogether with the holders of the Common Stock voting together as a single classwith each share of Common Stock entitled to one vote per share and each Shareof Series A Preferred entitled to one vote for each share of Common Stockissuable upon conversion of the Series A Preferred as of the record date forsuch vote or, if no record date is specified, as of the date of such vote; provided,however, that with respect to the election of Directors, other thanpursuant to Section 5A above, the Series A Preferred shall only vote with respectto the election of the Other Stockholder Directors and the Outside Director (aseach such term is defined in the Stockholders Agreement) as and to the extentprovided in the Stockholders Agreement.

#####  

#### Section 6                Conversion.

####  

##### 6A.          ConversionProcedure.

#####  

###### (i)            Atany time and from time to time (including, if a redemption notice has beendelivered by the Corporation pursuant to Section 4A(iii) above, at any timeprior to the consummation of any such Qualified Sale), any holder of Series APreferred may convert all (but not less than all) of the Series A Preferredheld by such holder into a number of shares of Conversion Stock computed bymultiplying the number of Shares to be converted by $36.4324 and dividing theresult by the Conversion Price then in effect. The initial Conversion Price(prior to any adjustment thereof pursuant to Section 6B below) shall equate toeach Share of Series A Preferred converting into one share of Conversion Stock.

######  

###### (ii)           Exceptas otherwise provided herein, each conversion of Series A Preferred shall bedeemed to have been effected as of the close of business on the date on whichthe certificate or certificates representing the Series A Preferred to beconverted have been surrendered for conversion at the principal office of the Corporation.At the time any such conversion has been effected, the rights of the holder ofthe Shares converted as a holder of Series A Preferred shall cease and thePerson or Persons in whose name or names any certificate or certificates forshares of Conversion Stock are to be issued upon such conversion shall be

 

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###### deemed to have become the holder or holders of recordof the shares of Conversion Stock represented thereby.

######  

###### (iii)          Theconversion rights of any Share subject to redemption hereunder shall terminateon the Redemption Date for such Share unless the Corporation has failed to payto the holder thereof the Liquidation Value of such Share (plus all declaredand/or accrued and unpaid dividends thereon), other than due to the failure ofthe holder of such Share to present the certificate therefor, duly endorsed fortransfer or accompanied by a duly executed stock power, against such payment.

######  

###### (iv)          Notwithstandingany other provision hereof, if a conversion of Series A Preferred is to be madein connection with a Public Offering, a Change in Ownership, a FundamentalChange or other transaction affecting the Corporation or a holder of Series APreferred, the conversion of any Shares of Series A Preferred may, at theelection of the holder thereof, be conditioned upon the consummation of suchevent or transaction, in which case such conversion shall not be deemed to beeffective until immediately prior to (but conditioned upon) the consummation ofsuch event or transaction.

######  

###### (v)           Assoon as reasonably possible after a conversion has been effected (but in anyevent within three (3) business days in the case of subparagraph (a) below),the Corporation shall deliver to the converting holder:

######  

(a)           acertificate or certificates representing the number of shares of ConversionStock issuable by reason of such conversion in such name or names and suchdenomination or denominations as the converting holder has specified;

 

(b)           paymentin an amount equal to all declared and/or accrued dividends with respect toeach Share converted which have not been paid prior thereto, (provided thatdividends declared prior to such conversion but payable on a date after suchconversion is effected shall be paid with respect to each Share so convertedwhen payable pursuant to such declaration), plus the amount payable undersubparagraph (ix) below with respect to such conversion; and

 

(c)           acertificate representing any Shares of Series A Preferred which wererepresented by the certificate or certificates delivered to the Corporation inconnection with such conversion but which were not converted.

 

###### (vi)          Theissuance of certificates for shares of Conversion Stock upon conversion ofSeries A Preferred shall be made without charge to the holders of such Series APreferred for any issuance tax in respect thereof or other cost incurred by theCorporation in connection with such conversion and the related issuance ofshares of Conversion Stock. Upon conversion of each Share of Series APreferred, the Corporation shall take all such actions as are necessary inorder to insure that the Conversion Stock issuable with respect to suchconversion shall be validly issued, fully paid and nonassessable, free andclear of all taxes, liens, charges and encumbrances with respect to theissuance thereof.

######  

###### (vii)         TheCorporation shall not close its books against the transfer of Series APreferred or of Conversion Stock issued or issuable upon conversion of Series APreferred in any

 

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###### manner which interferes with the timely conversion ofSeries A Preferred. The Corporation shall assist and cooperate with any holderof Shares required to make any governmental filings or obtain any governmentalapproval prior to or in connection with any conversion of Shares hereunder(including, without limitation, making any filings required to be made by theCorporation and the Corporation shall pay all filing fees and expenses payableby the Corporation in connection therewith).

######  

###### (viii)        TheCorporation shall at all times reserve and keep available out of its authorizedbut unissued shares of Conversion Stock, solely for the purpose of issuanceupon the conversion of the Series A Preferred, such number of shares ofConversion Stock issuable upon the conversion of all outstanding Series APreferred. All shares of Conversion Stock which are so issuable shall, whenissued, be duly and validly issued, fully paid and nonassessable and free fromall taxes, liens and charges created by or through the Corporation. TheCorporation shall take all such actions as may be reasonably necessary toassure that all such shares of Conversion Stock may be so issued withoutviolation by the Corporation of any applicable law or governmental regulationor any requirements of any domestic securities exchange upon which shares ofConversion Stock may be listed (except for official notice of issuance whichshall be immediately delivered by the Corporation upon each such issuance);provided, however, that no registrations under applicable federal or statesecurities laws shall be required in connection therewith pursuant to thissubparagraph (viii). The Corporation shall not take any action which wouldcause the number of authorized but unissued shares of Conversion Stock to beless than the number of such shares required to be reserved hereunder forissuance upon conversion of the Series A Preferred.

######  

###### (ix)           Ifany fractional interest in a share of Conversion Stock would, except for theprovisions of this subparagraph, be delivered upon any conversion of the SeriesA Preferred, the Corporation, in lieu of delivering the fractional sharetherefor, shall pay an amount to the holder thereof equal to the Market Priceof such fractional interest as of the date of conversion.

######  

##### 6B.          ConversionPrice. The initial Conversion Price shall be $36.4324. If the Corporationat any time subdivides (by any stock split, stock dividend (other than anOption Adjustment Dividend), recapitalization or otherwise) one or more classesof its outstanding shares of Common Stock into a greater number of shares, theConversion Price in effect immediately prior to such subdivision shall beproportionately reduced, and if the Corporation at any time combines (byreverse stock split or otherwise) one or more classes of its outstanding sharesof Common Stock into a smaller number of shares, the Conversion Price in effectimmediately prior to such combination shall be proportionately increased.

#####  

##### 6C.          OrganicChange. Prior to the consummation of any Organic Change (other than aQualified Sale in connection with which a redemption election notice isdelivered by the Corporation to the holders of the Series A Preferred pursuantto Section 4A(iii) above), the Corporation shall make appropriate provisions(in form and substance satisfactory to the holders of a majority of the SeriesA Preferred then outstanding) to insure that the Series A Preferred shall notbe cancelled or retired as a result of such Organic Change and each of theholders of the Series A Preferred shall thereafter have the right to acquireand receive, in lieu of or in addition to (as the case may be) the shares ofConversion Stock immediately theretofore acquirable and receivable upon theconversion of such holder’s Series A Preferred, such shares of stock,

 

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##### securities or assets as such holder would havereceived in connection with such Organic Change if such holder had convertedits Series A Preferred immediately prior to such Organic Change. In each suchcase, the Corporation shall also make appropriate provisions (in form andsubstance satisfactory to the holders of a majority of the Series A Preferredthen outstanding) to insure that the provisions of this Section 6 and Sections7 and 8 hereof shall thereafter be applicable to the Series A Preferred. TheCorporation shall not effect any such consolidation, merger or sale (other thana Qualified Sale in connection with which a redemption election notice isdelivered by the Corporation to the holders of the Series A Preferred pursuantto Section 4A(iii) above), unless prior to the consummation thereof, thesuccessor entity (if other than the Corporation) resulting from consolidationor merger or the entity purchasing such assets assumes by written instrument(in form and substance satisfactory to the holders of a majority of the SeriesA Preferred then outstanding), the obligation to deliver to each such holdersuch shares of stock, securities or assets as, in accordance with the foregoingprovisions, such holder may be entitled to acquire.

#####  

##### 6D.          Notices.Immediately upon any adjustment of the Conversion Price, the Corporation shallgive written notice thereof to all holders of Series A Preferred, setting forthin reasonable detail and certifying the calculation of such adjustment. TheCorporation shall give written notice to all holders of Series A Preferred atleast 20 days prior to the date on which the Corporation closes its books ortakes a record (a) with respect to any dividend or distribution upon CommonStock, (b) with respect to any pro rata subscription offer to holders of CommonStock or (c) for determining rights to vote with respect to any Organic Change,dissolution or liquidation.  TheCorporation shall also give written notice to the holders of Series A Preferredat least 20 days prior to the date on which any Organic Change shall takeplace.

#####  

##### 6E.           MandatoryConversion. The Corporation may at any time require the conversion of allof the outstanding Series A Preferred hereunder if the Corporation is at suchtime effecting a firm commitment underwritten Public Offering of shares of itsCommon Stock which is underwritten by a nationally recognized investment bankin which (i) the aggregate price paid by the public for the shares shall be at least$75,000,000 and (ii) the price per share paid by the public for such sharesshall be at least 200% of the Conversion Price in effect immediately prior tothe closing of the sale of such shares pursuant to the Qualified PublicOffering (a “Qualified Public Offering”). Any such mandatory conversion shallonly be effected at the time of and subject to the closing of the sale of suchshares pursuant to such Qualified Public Offering and upon written notice ofsuch mandatory conversion delivered to all holders of Series A Preferred atleast seven days prior to such closing. Any such mandatory conversion shalloccur automatically without the need for any further action or the payment ofany further consideration.

#####  

#### Section 7                PurchaseRights. If at any time the Corporation grants, issues or sells any Options,Convertible Securities or rights to purchase stock, warrants, securities orother property pro rata to the record holders of any class of Common Stockother than pursuant to an Option Adjustment Dividend (the “Purchase Rights”),then each holder of Series A Preferred shall be entitled to acquire, upon theterms applicable to such Purchase Rights, the aggregate Purchase Rights whichsuch holder could have acquired if such holder had held the number of shares ofConversion Stock acquirable upon conversion of such holder’s Series A Preferredimmediately before the date on which a record is taken for the grant, issuanceor sale of such

 

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#### Purchase Rights, or if no such record is taken, thedate as of which the record holders of Common Stock are to be determined forthe grant, issue or sale of such Purchase Rights.

####  

#### Section 8                Eventsof Noncompliance.

####  

##### 8A.          Definition. An Event of Noncompliance shall have occurred if:

#####  

###### (i)            theCorporation fails to make any redemption or any other payment with respect tothe Series A Preferred which it is required to make hereunder, whether or notsuch payment is legally permissible or is prohibited by any agreement to whichthe Corporation is subject; or

######  

###### (ii)           theCorporation or any material Subsidiary makes an assignment for the benefit ofcreditors or admits in writing its inability to pay its debts generally as theybecome due; or an order, judgment or decree is entered adjudicating theCorporation or any material Subsidiary bankrupt or insolvent; or any order forrelief with respect to the Corporation or any material Subsidiary is enteredunder the Federal Bankruptcy Code; or the Corporation or any materialSubsidiary petitions or applies to any tribunal for the appointment of acustodian, trustee, receiver or liquidator of the Corporation or any materialSubsidiary or of any substantial part of the assets of the Corporation or anymaterial Subsidiary, or commences any proceeding (other than a proceeding forthe voluntary liquidation and dissolution of a Subsidiary) relating to theCorporation or any material Subsidiary under any bankruptcy, reorganization,arrangement, insolvency, readjustment of debt, dissolution or liquidation law ofany jurisdiction; or any such petition or application is filed, or any suchproceeding is commenced, against the Corporation or any material Subsidiary andeither (a) the Corporation or any such Subsidiary by any act indicates itsapproval thereof, consent thereto or acquiescence therein or (b) such petition,application or proceeding is not dismissed within 60 days. For purposes of thissubparagraph 8A(ii), neither bX Holdings, Inc. nor brokersXpress, Inc. (ortheir successors) shall be considered a material Subsidiary of the Corporation.

######  

##### 8B.          Consequencesof Events of Noncompliance.

#####  

###### (i)            Ifany Event of Noncompliance of the type described in subparagraph 8A(i) hasoccurred and is continuing, the Series A Preferred shall thereafter accruedividends on a daily basis at the rate of 7.0% per annum of the LiquidationValue thereof (compounded annually). Thereafter, until such time as no Event ofNoncompliance exists, such dividend rate shall increase automatically at theend of each succeeding 90-day period by an additional increment of two (2)percentage points (but in no event shall such dividend rate exceed 11%). Anydividend accrual resulting from the operation of this subparagraph shallterminate as of the close of business on the date on which no Event ofNoncompliance exists and any dividends which have accrued on the Series APreferred pursuant to this paragraph shall be payable as and when provided inthis Article IV.

######  

###### (ii)           Ifan Event of Noncompliance of the type described in subparagraph 8A(ii) has occurred,the holder or holders of a majority of the Series A Preferred then outstandingmay demand (by written notice delivered to the Corporation) immediateredemption of all or any portion of the Series A Preferred owned by such holderor holders at a price per

 

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###### Share equal to the Liquidation Value thereof (plus alldeclared and/or accrued and unpaid dividends thereon). The Corporation shallgive prompt written notice of such election to the other holders of Series APreferred (but in any event within five days after receipt of the initialdemand for redemption), and each such other holder may demand immediateredemption of all or any portion of such holder’s Series A Preferred by givingwritten notice thereof to the Corporation within seven days after receipt ofthe Corporation’s notice. The Corporation shall redeem all Series A Preferredas to which rights under this paragraph have been exercised within 15 daysafter receipt of the initial demand for redemption.

######  

###### (iii)          Ifany Event of Noncompliance exists, each holder of Series A Preferred shall alsohave any other rights which such holder is entitled to under any contract oragreement at any time and any other rights which such holder may have pursuantto applicable law. The matters described in paragraph 8A shall constituteEvents of Noncompliance whatever the reason or cause for any such Event ofNoncompliance and whether it is voluntary or involuntary or is effected byoperation of law or pursuant to any judgment, decree or order of any court orany order, rule or regulation of any administrative or governmental body andregardless of the effects of any subordination provisions.

######  

#### Section 9                Registrationof Transfer. The Corporation shall keep at its principal office a registerfor the registration of Series A Preferred. Upon the surrender of anycertificate representing Series A Preferred at such place, the Corporationshall, at the request of the record holder of such certificate, execute anddeliver (at the Corporation’s expense) a new certificate or certificates inexchange therefor representing in the aggregate the number of Sharesrepresented by the surrendered certificate.

####  

#### Section 10              Replacement.Upon receipt of evidence reasonably satisfactory to the Corporation (anaffidavit of the registered holder shall be satisfactory) of the ownership andthe loss, theft, destruction or mutilation of any certificate evidencing Sharesof Series A Preferred, and in the case of any such loss, theft or destruction, uponreceipt of indemnity reasonably satisfactory to the Corporation (providedthat if the holder is a financial institution or other institutionalinvestor its own agreement shall be satisfactory), or, in the case of any suchmutilation upon surrender of such certificate, the Corporation shall (at itsexpense) execute and deliver in lieu of such certificate a new certificate oflike kind representing the number of Shares of such class represented by suchlost, stolen, destroyed or mutilated certificate and dated the date of suchlost, stolen, destroyed or mutilated certificate.

####  

#### Section 11              Definitions.

####  

“**Change in Ownership**”means any sale, transfer or issuance or series of sales, transfers and/orissuances of shares of the Corporation’s capital stock by the Corporation orany holders thereof (other than in connection with a Qualified Public Offering)which results in any Person or group of Persons (as the term “group” is usedunder the Securities Exchange Act of 1934), other than the holders of CommonStock and Series A Preferred as of the closing under the RecapitalizationAgreement, owning more than 50% of the Corporation’s Common Stock (assumingconversion of the Series A Preferred) at the time of such sale, transfer orissuance or series of sales, transfers and/or issuances.

 

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“**Common Stock**”means the Corporation’s Common Stock and any capital stock of any class of theCorporation hereafter authorized which is not limited to a fixed sum orpercentage of par or stated value in respect to the rights of the holdersthereof to participate in dividends or in the distribution of assets upon anyliquidation, dissolution or winding up of the Corporation.

 

“**Conversion Stock**”means shares of the Corporation’s Common Stock, par value $.0001 per share; providedthat if there is a change such that the securities issuable uponconversion of the Series A Preferred are issued by an entity other than theCorporation or there is a change in the type or class of securities soissuable, then the term “Conversion Stock” shall mean one share of the securityissuable upon conversion of the Series A Preferred if such security is issuablein shares, or shall mean the smallest unit in which such security is issuableif such security is not issuable in shares.

 

“**ConvertibleSecurities**” means any stock or securities (other than Options)directly or indirectly convertible into or exchangeable for Common Stock.

 

“**Fundamental Change**”means (a) any sale or transfer of more than 50% of the assets of theCorporation and its Subsidiaries on a consolidated basis (measured either bybook value in accordance with generally accepted accounting principlesconsistently applied or by fair market value determined in the reasonable goodfaith judgment of the Corporation’s Board of Directors) in any transaction orseries of transactions (other than sales in the ordinary course of businessconsistent with past practice) and (b) any merger or consolidation to which theCorporation is a party, except for a merger in which the Corporation is thesurviving corporation, the terms and relative priorities of the Series APreferred are not changed and the Series A Preferred is not exchanged for cash,securities or other property, and after giving effect to such merger, theholders of Common Stock and Series A Preferred as of the closing under theRecapitalization Agreement shall continue to own more than 50% of theCorporation’s Common Stock (assuming conversion of the Series A Preferred).

 

“**Investor RightsAgreement**” means that certain Investor Rights Agreement, dated as ofJanuary 15, 2004 by and among the Corporation and the other Persons namedtherein, as such agreement may be amended or modified from time to time inaccordance with its terms.

 

“**Junior Securities**”means any capital stock or other equity securities of the Corporation, exceptfor the Series A Preferred.

 

“**Liquidation Value**”of any Share as of any particular date shall be equal to $36.4324.

 

“**Market Price**”of any security means the average of the closing prices of such security’ssales on all securities exchanges on which such security may at the time belisted, or, if there has been no sales on any such exchange on any day, theaverage of the highest bid and lowest asked prices on all such exchanges at theend of such day, or, if on any day such security is not so listed, the averageof the representative bid and asked prices quoted in the NASDAQ System as of4:00 P.M., New York time, or, if on any day such security is not quoted in theNASDAQ System, the average of the highest bid and lowest asked prices on suchday in the

 

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domestic over-the-countermarket as reported by the National Quotation Bureau, Incorporated, or anysimilar successor organization, in each such case averaged over a period of 21days consisting of the day as of which “Market Price” is being determined andthe 20 consecutive business days prior to such day. If at any time suchsecurity is not listed on any securities exchange or quoted in the NASDAQSystem or the over-the-counter market, the “Market Price” shall be the fairvalue thereof determined jointly by the Corporation and the holders of amajority of the Series A Preferred. If such parties are unable to reachagreement within a reasonable period of time, such fair value shall bedetermined by an independent appraiser experienced in valuing securitiesjointly selected by the Corporation and the holders of a majority of the SeriesA Preferred. The determination of such appraiser shall be final and bindingupon the parties, and the Corporation shall pay the fees and expenses of suchappraiser.

 

“**Net Book ValueDividend**” has the meaning given to such term in the RecapitalizationAgreement.

 

“**Option AdjustmentAmount**” means a number of shares of Common Stock equal to (a)398,216 (providedthat, if the Corporation at any time subdivides(by any stock split, stock dividend or otherwise) or combines (by reverse stocksplit or otherwise) its outstanding shares of Common Stock into a greater orlesser number of shares, such number shall be proportionally increased ordecreased, as applicable), less (b) the aggregate number of shares ofCommon Stock issued by the Corporation pursuant to exercise of Options byemployees, directors, independent contractors or consultants of the Corporationafter the date of the Recapitalization Agreement and the aggregate number ofshares of Common Stock issued by the Corporation as “restricted stock” toemployees, directors, independent contractors or consultants of the Corporationafter the date of the Recapitalization Agreement and the total number ofRepurchased Options repurchased and cancelled pursuant to the RecapitalizationAgreement, less (c) the aggregate number of shares of Common Stock issuable uponexercise of Options issued to employees, directors, independent contractors orconsultants of the Corporation and outstanding as of the date of determination.In the event that the Option Adjustment Amount otherwise determined pursuant toclauses (a), (b) and (c) above results in a number of shares of Common Stockgreater than 141,000 (as such number may be proportionately increased ordecreased under the circumstances described in the parenthetical clause inclause (a) above), then the Option Adjustment Amount shall be further reduced(but not below 141,000 shares (as such number may be subject to proportionateincreases or decreases as described above)) by an aggregate number of shares ofCommon Stock determined by dividing (x) the aggregate “strike” price for (A)all of the Corporation’s granted but unvested options as of the Closing Date(as defined in the Recapitalization Agreement) which were not exercised priorto the date of determination and (B) all of the Corporation’s vested optionsnot exercised as of the Closing Date (as defined in the RecapitalizationAgreement) which were not exercised prior to the date of determination, plusinterest on such aggregate “strike” prices at the Applicable Rate (as definedin the Recapitalization Agreement) from the Closing Date (as defined in theRecapitalization Agreement) to the date of such determination, by (y) theMarket Price per share of Common Stock as of such date of determination.

 

“**Options**”means any rights, warrants or options to subscribe for or purchase Common Stockor Convertible Securities.

 

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“**Organic Change**”means any recapitalization, reorganization, reclassification, consolidation,merger, sale of all or substantially all of the Corporation’s assets or othertransaction, in each case which is effected in such a manner that the holdersof Common Stock are entitled to receive (either directly or upon subsequentliquidation) stock, securities or assets with respect to or in exchange forCommon Stock.

 

“**Person**”means an individual, a partnership, a corporation, a limited liability company,a limited liability, an association, a joint stock company, a trust, a jointventure, an unincorporated organization and a governmental entity or anydepartment, agency or political subdivision thereof.

 

“**Public Offering**”means any offering by the Corporation of its capital stock or equity securitiesto the public pursuant to an effective registration statement under theSecurities Act of 1933, as then in effect, or any comparable statement underany similar federal statute then in force.

 

“**Qualified PublicOffering**” has the meaning given to such term in Section 6E.

 

“**Qualified Sale**”has the meaning given to such term in the Investor Rights Agreement.

 

“**RecapitalizationAgreement**” means that certain Stock Purchase and RecapitalizationAgreement, dated as of December 17, 2003 by and among the Corporation and theother Persons named therein, as such agreement may be amended or modified fromtime to time in accordance with its terms.

 

“**Redemption Date**”as to any Share means the close of business on the date specified in the noticeof any redemption at the holder’s option or the applicable date specifiedherein in the case of any other redemption; provided that no such date shall bea Redemption Date unless the Liquidation Value of such Share (plus all declaredand/or accrued and unpaid dividends thereon) is actually paid in full on suchdate, and if not so paid in full, the Redemption Date shall be the date onwhich such amount is fully paid.

 

“**StockholdersAgreement**” means that certain Stockholders Agreement, dated as ofJanuary 15, 2004 by and among the Corporation and the other Persons namedtherein, as such agreement may be amended or modified from time to time inaccordance with its terms.

 

“**Stock OptionProceeds Dividend**” means a cash dividend declared and paid by theCorporation, from time to time prior to the conversion of the Series APreferred, upon the then-outstanding shares of Common Stock (but specificallyexcluding any shares of Common Stock issuable upon conversion of the Series APreferred) in an aggregate amount equal to the cash proceeds received by theCorporation at such time upon the exercise of stock options granted by theCorporation after the Closing (as defined in the Recapitalization Agreement)for the purchase of not more than an aggregate of 141,000 shares of CommonStock (as such number of shares shall be appropriately adjusted for any stocksplits or stock combinations following such Closing).

 

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“**Subsidiary**”means, with respect to any Person, any corporation, limited liability company,partnership, association or other business entity of which (i) if acorporation, a majority of the total voting power of shares of stock entitled(without regard to the occurrence of any contingency) to vote in the electionof directors, managers or trustees thereof is at the time owned or controlled,directly or indirectly, by that Person or one, or more of the other Subsidiariesof that Person or a combination thereof, or (ii) if a limited liabilitycompany, partnership, association or other business entity, a majority of thepartnership or other similar ownership interest thereof is at the time owned orcontrolled, directly or indirectly, by any Person or one or more Subsidiariesof that person or a combination thereof. For purposes hereof, a Person orPersons shall be deemed to have a majority ownership interest in a limitedliability company, partnership, association or other business entity if suchPerson or Persons shall be allocated a majority of limited liability company,partnership, association or other business entity gains or losses or shall beor control the managing general partner of such limited liability company,partnership, association or other business entity.

 

#### Section 12              Amendmentand Waiver. No amendment, modification, alteration, repeal or waiver of anyprovision of Sections 1 to 13 hereof shall be binding or effective without theprior written consent of the holders of a majority of the Series A Preferredoutstanding at the time such action is taken; providedthat noamendment, modification, alteration, repeal or waiver of the terms or relativepriorities of the Series A Preferred may be accomplished by the merger,consolidation or other transaction of the Corporation with another corporationor entity unless the Corporation has obtained the prior written consent of theholders of a majority of the Series A Preferred then outstanding.

####  

#### Section 13              Notices.Except as otherwise expressly provided hereunder, all notices referred toherein shall be in writing and shall be delivered by registered or certifiedmail, return receipt requested and postage prepaid, or by reputable overnightcourier service, charges prepaid, and shall be deemed to have been given whenso mailed or sent (i) to the Corporation, at its principal executive officesand (ii) to any stockholder, at such holder’s address as it appears in thestock records of the Corporation (unless otherwise indicated by any suchholder).

 

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