<PAGE>   1
                                                                     EXHIBIT 3.1

                              AMENDED AND RESTATED

                                     BYLAWS

                                       OF

                     SECURITY ASSOCIATES INTERNATIONAL, INC.

                                TABLE OF CONTENTS

<TABLE>
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                                                                    Page
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<S>                                                                 <C>
1. STOCKHOLDER.......................................................1
   1.1.  PLACE OF MEETINGS...........................................1
   1.2.  ANNUAL MEETINGS.............................................1
   1.3.  SPECIAL MEETINGS............................................1
   1.4.  NOTICE OF MEETINGS..........................................1
   1.5.  VOTING LIST.................................................1
   1.6.  QUORUM......................................................2
   1.7.  ADJOURNMENTS................................................2
   1.8.  VOTING PROXIES..............................................2
   1.9.  ACTION AT MEETING...........................................2
   1.10. ACTION WITHOUT MEETING......................................2
2. DIRECTORS.........................................................3
   2.1.  GENERAL POWERS..............................................3
   2.2.  NUMBER: ELECTION AND QUALIFICATION..........................3
   2.3.  ENLARGEMENT OF THE BOARD....................................3
   2.4.  TENURE......................................................3
   2.5.  VACANCIES...................................................3
   2.6.  RESIGNATION.................................................3
   2.7.  REGULAR MEETINGS............................................3
   2.8.  SPECIAL MEETINGS............................................4
   2.9.  NOTICE OF SPECIAL MEETINGS..................................4
   2.10. MEETINGS BY TELEPHONE CONFERENCE CALLS......................4
   2.11. QUORUM......................................................4
   2.12. ACTION AT MEETING...........................................4
   2.13. ACTION BY CONSENT...........................................4
   2.14. REMOVAL.....................................................4
   2.15. COMMITTEES..................................................5
   2.16. COMPENSATION OF DIRECTORS...................................5
3. OFFICERS..........................................................6
   3.1.  GENERAL.....................................................6
   3.2.  ELECTION....................................................6
   3.3.  QUALIFICATION...............................................6
   3.4.  TENURE......................................................6
   3.5.  RESIGNATION AND REMOVAL.....................................6
   3.6.  VACANCIES...................................................6
   3.7.  CHAIRMAN OF THE BOARD AND VICE CHAIRMAN OF THE BOARD........7
   3.8.  PRESIDENT...................................................7
   3.9.  VICE PRESIDENTS.............................................7
   3.10. SECRETARY AND ASSISTANT SECRETARIES.........................7
   3.11. TREASURER AND ASSISTANT TREASURERS..........................8
   3.12. SALARIES....................................................8
4. CAPITAL STOCK.....................................................8
   4.1.  ISSUANCE OF STOCK...........................................8
   4.2.  CERTIFICATES OF STOCK.......................................8
   4.3.  TRANSFERS...................................................9
   4.4.  LOST, STOLEN OR DESTROYED CERTIFICATES......................9
   4.5.  RECORD DATE.................................................9
5.  INDEMNIFICATION OF OFFICERS AND DIRECTORS.......................10
   5.1.  ACTIONS AGAINST A PERSON...................................10
   5.2.  ACTIONS BY OR IN THE RIGHT OF THE CORPORATION..............10
   5.3.  INDEMNIFICATION IN EVENT OF SUCCESSFUL DEFENSE.............11
   5.4.  BOARD OF DIRECTORS' APPROVAL...............................11
   5.5.  ADVANCE INDEMNITY PAYMENTS.................................11
   5.6.  NON-EXCLUSIVITY............................................11
   5.7.  INDEMNITY INSURANCE........................................11
   5.8.  CONSOLIDATION..............................................11
6.  GENERAL PROVISIONS..............................................12
   6.1.  FISCAL YEAR................................................12
   6.2.  CORPORATE SEAL.............................................12
   6.3.  WRITTEN NOTICE OF MEETINGS.................................12
   6.4.  WAIVER OF NOTICE...........................................12
   6.5.  VOTING OF SECURITIES.......................................13
   6.6.  EVIDENCE OF AUTHORITY......................................13
   6.7.  CERTIFICATE OF INCORPORATION...............................13
   6.8.  TRANSACTIONS WITH INTERESTED PARTIES.......................13
   6.9.  SEVERABILITY...............................................14
   6.10. PRONOUNS...................................................14
7.  AMENDMENTS......................................................14
   7.1.  BY THE BOARD OF DIRECTORS..................................14
   7.2.  BY THE STOCKHOLDERS........................................14
</TABLE>



<PAGE>   2

                              Amended and Restated
                                     Bylaws

                     Security Associates International, Inc.

                                     ARTICLE
                                        1

                                  Stockholders

         1.1 Place of Meetings. All meetings of stockholders shall be held at
such place within or without the State of Delaware as may be designated from
time to time by the board of directors or the president or, if not so
designated, at the registered office of the corporation.

         1.2 Annual Meetings. The annual meeting of stockholders for the
election of directors and for the transaction of such other business as may
properly be brought before the meeting, shall be held on the second Tuesday of
the third month after the end of the Corporation's fiscal year, at a time fixed
by the board of directors or the president. If this date shall fall upon a legal
holiday, then such meeting shall be held on the next succeeding business day at
the same hour. If no annual meeting is held in accordance with the foregoing
provisions, the board of directors shall cause the meeting to be held as soon
thereafter as convenient or a special meeting may be held in lieu of the annual
meeting, and any action taken at that special meeting shall have the same effect
as if it had been taken at the annual meeting, and in such case all references
in these Bylaws to the annual meeting of the stockholders shall be deemed to
refer to such special meeting.

         1.3 Special Meetings. Special meetings of stockholders may be called at
any time by the chairman of the board of directors, by the board of directors or
by the holders of not less than one-fourth (1/4) of all the shares entitled to
vote at the meeting. Business transacted at any special meeting of stockholders
shall be limited to matters relating to the purpose or purposes stated in the
notice of meeting.

         1.4 Notice of Meetings. Except as otherwise provided by law, written
notice of each meeting of stockholders, whether annual or special, shall be
given not less than 10 nor more than 60 days before the date of the meeting to
each stockholder entitled to vote at such meeting. The notices of all meetings
shall state the place, date and hour of the meeting. The notice of a special
meeting shall state, in addition, the purpose or purposes for which the meeting
is called.
<PAGE>   3

         1.5 Voting List. The officer who has charge of the stock ledger of the
Corporation shall prepare, at least 10 days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.

         1.6 Quorum. Except as otherwise provided by law, the Certificate of
Incorporation or these Bylaws, the holders of a majority of the shares of the
capital stock of the Corporation issued and outstanding are entitled to vote at
the meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of business.

         1.7 Adjournments. Any meeting of stockholders may be adjourned to any
other time and to any other place at which a meeting of stockholders may be held
under these Bylaws by the stockholders present or represented at the meeting and
entitled to vote, although less than a quorum, or, if no stockholders is
present, by any officer entitled to preside at or to act as secretary of such
meeting. If the adjournment is for more than 30 days, or if after the
adjournment, a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting. At the adjourned meeting, the Corporation may transact any
business which might have been transacted at the original meeting.

         1.8 Voting and Proxies. Each stockholder shall have one vote for each
share of stock entitled to vote held of record by such stockholder and a
proportionate vote for each fractional share so held, unless otherwise provided
in the Certificate of Incorporation. Each stockholder of record entitled to vote
at a meeting of stockholders, or to express consent or dissent to corporate
action in writing without a meeting, may vote or express such consent or dissent
in person or may authorize another person or persons to vote or act for him by
written proxy executed by the stockholder or his authorized agent and delivered
to the secretary of the Corporation. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. No proxy
shall be voted or acted upon after three years from the date of its execution,
unless the proxy expressly provides for a longer period.

         1.9 Action at Meeting. When a quorum is present at any meeting, the
holders of a majority of the stock present or represented and voting on a matter
(or if there are two or more classes of stock entitled to vote as separate
classes, then in the case of each such class, the holders of a majority of the
stock of that class present or represented and voting on a matter) shall decide
any matter to be voted upon by the stockholders at such meeting, except when a
different vote is required by express provision of law, the Certificate of
Incorporation or these Bylaws. Any election by stockholders shall be determined
by a plurality of the votes case by the stockholders entitled to vote at the
election.

         1.10 Action Without Meeting. Any action required or permitted to be
taken at any annual or special meeting of stockholders of the Corporation may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote on such action were present and voted. Prompt notice of the
taking of corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders which have not consented in
writing.

<PAGE>   4
                                     ARTICLE
                                        2

                                    Directors

         2.1 General Powers. The business and affairs of the Corporation shall
be managed by or under the direction of a board of directors, who may exercise
of all other powers of the Corporation except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws. In the event of a vacancy on the
board of directors, the remaining directors, except as otherwise provided by
law, may exercise the powers of the full board of directors until the vacancy is
filled.

         2.2 Number: Election and Qualification. The number of directors of the
Corporation shall not be less than three (3) nor more than seven (7) as
determined by resolution of the Board of Directors from time to time. The
directors shall be elected at the annual meeting of stockholders by such
stockholders as have the right to vote in such election. Directors need not be
stockholders of the corporation.

         2.3 Enlargement of the Board. The number of directors may be increased
at any time and from time to time by the stockholders or by a majority of the
directors then in office.

         2.4 Tenure. Each director shall hold office until the next annual
meeting and until such time as his successor is elected and qualified, or until
his earlier death, resignation or removal.

         2.5 Vacancies. Unless and until filled by the stockholders, any vacancy
in the board of directors, however occurring, including a vacancy resulting from
an increase in the number of directors, may be filled by vote of a majority of
the directors then in office, although less than a quorum, or by a sole
remaining director. A director elected to fill a vacancy shall be elected for
the unexpired term of his predecessor in office, and a director chosen to fill a
position resulting from an increase in the number of directors shall hold office
until the next annual meeting of stockholders and until his successor is elected
and qualified, or until his earlier death, resignation or removal.

         2.6 Resignation. Any director may resign by delivering his written
resignation to the Corporation at its principal office or to the secretary. Such
resignation shall be effective upon receipt unless it is specified to be
effective at some other time or upon the happening of some other event.

         2.7 Regular Meetings. Regular meetings of the board of directors may
beheld without notice at such time and place, either within or without the State
of Delaware, as shall be determined from time to time by the board of directors,
provided that any director who is absent from such a determination is made shall
be given notice of the determination. A regular meeting of the board of
directors may be held without notice immediately after and at the same place as
the annual meeting of stockholders.

         2.8 Special Meetings. Special meetings of the board of directors may be
held at any time and place, within or without the State of Delaware, designated
in a call by the chairman of the Board, president or two or more directors, or
by one director in the event that there is only a single director in office.

         2.9 Notice of Special Meetings. Notice of any special meeting of
directors shall be given to each director by the secretary or one of the
directors call the meeting. Notice shall be duly given to each director (i) by
giving notice to such director in person or by telephone at least 48 hours in
advance of the meeting, (ii) by sending a telegram or telex, or delivering
written notice by hand to his last known business or home address at least 48
hours in advance of the meeting, or (iii) by mailing written notice to his last
known business or home address at least 72 ours in advance of the meeting. A
notice or waiver of notice of a meeting of the board of directors need not
specify the purpose of the meeting.


<PAGE>   5

         2.10 Meetings by Telephone Conference Calls. Directors or any members
of any committee designated by the directors may participate in a meeting of the
board of directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation by such means shall constitute
presence in person at such meeting.

         2.11 Quorum. A majority of the whole board of directors shall
constitute a quorum at all meetings of the board of directors. In the event one
or more of the directors shall be disqualified to vote at any meeting, then the
required quorum shall be reduced by one for each such director so disqualified;
provided, however, that in no case shall less than one-third (1/3) of the whole
board of directors constitute a quorum. In the absence of a quorum at any such
meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice other than announcement at the meeting, until a
quorum shall be present.

         2.12 Action at Meeting. At any meeting of the board of directors at
which a quorum is present, the vote of a majority of those present shall be
sufficient to take any action, unless a different vote is specified by law, the
Certificate of Incorporation or these Bylaws.

         2.13 Action by Consent. Any action required or permitted to be taken at
any meeting of the board of directors or of any committee of the board of
directors may be taken without a meeting, if all members of the board of
directors or committee, as the case may be, consent to the action in writing,
and the written consents are filed with the minutes of proceedings of the board
of directors or committee.

         2.14 Removal. Any one or more or all of the directors may be removed,
with or without cause, by the holders of a majority of the shares then entitled
to vote at an election of directors, except that (i) the directors elected by
the holders of a particular class or series of stock may be removed without
cause only by vote of the holders of a majority of the outstanding shares of
such class or series and (ii) in the case of a corporation having cumulative
voting, if less than the entire board is to be removed, no director may be
removed without cause if the votes cast against his removal would be sufficient
to elect him if then cumulatively voted at an election of the entire board of
directors.

         2.15 Committees. The board of directors may, by resolution passed by a
majority of the whole board of directors, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member of any meeting of the
committee. In the absence or disqualification of a member of a committee, the
member or members of the committee present at any meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member. Any such committee, to the
extent provided in the resolution of the board of directors and subject to the
provisions of the General Corporation Law of the State of Delaware, shall have
any may exercise all the powers and authority of the board of directors in the
management of the business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the board of directors as provided in subsection (a) of
Section 151 of the General Corporation Law of the State of Delaware, fix the
designations and any of the preferences of rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes of stock holder the Corporation or fix the number


<PAGE>   6

of shares of any series of stock or authorize the increase or decrease of the
shares of any series), adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending Bylaws of the Corporation; and, unless the resolution, Bylaws or
Certificate of Incorporation expressly so provides, no such committee shall have
the power or authority to declare a dividend, to authorize the issuance of stock
or to adopt a certificate of ownership and merger. Each such committee shall
keep minutes and make such reports as the board of directors may from time to
time request. Except as the board of directors may otherwise determine, any
committee may make rules for the conduct of its business, but any committee may
make rules for the conduct of its business, but unless otherwise provided by the
directors or in such rules, its business shall be conducted as nearly as
possible in the same manner as is provided in these Bylaws for the board of
directors.

         2.16 Compensation of Directors. Directors may be paid such compensation
for their services and such reimbursement for expenses of attendance at meetings
as the board of directors may from time to time determine. No such payment shall
preclude any director from serving the Corporation or any of its parent or
subsidiary corporations in any other capacity and receiving compensation for
such service.

                                     ARTICLE
                                        3

                                     Officers

         3.1 General. The officers of the Corporation shall consist of a
chairman of the board, a president, a secretary, a treasurer and such other
officers with such other titles as the board of directors may determine,
including a vice chairman of the board, and one or more vice presidents,
assistant treasurers, and assistant secretaries. The board of directors may
appoint such other officers with such other powers and duties as it may deem
appropriate.

         3.2 Election. The chairman of the board, president, treasurer and
secretary shall be elected annually by the board of directors at its first
meeting following the annual meeting of stockholders. Other officers may be
appointed by the board of directors at such meeting or at any other meeting.

         3.3 Qualification. No officer need by a stockholder. Any two or more
offices may be held by the same person.

         3.4 Tenure. Except as otherwise provided by law, by the Certificate of
Incorporation or by these Bylaws, each officer shall hold office until his
successor is elected and qualified, unless a different term is specified in the
vote choosing or appointing him, or until his earlier death, resignation or
removal.

         3.5 Resignation and Removal. Any officer may resign by delivering his
written resignation to the Corporation at its principal office or to the
president or secretary. Such resignation shall be effective upon receipt unless
it is specified to be effective at some other time or upon the happening of some
other event.

         Any officer may be removed at any time, with or without cause, by vote
of a majority of the entire number of directors then in office.

         Except as the board of directors may otherwise determine, no officer
who resigns or is removed shall have any right to any compensation as an officer
for any period following his resignation or removal, or any right to damages on
account of such removal, whether his compensation be by the month or



<PAGE>   7

by the year or otherwise, unless such compensation is expressly provided in a
duly authorized written agreement with the corporation.

         3.6 Vacancies. The board of directors may fill any vacancy occurring in
any office for any reason and may, in its discretion, leave unfilled for such
period as it may determine any offices other than those of president, treasurer
and secretary. Each such successor shall hold office for the unexpired term of
his predecessor and until his successor is elected and qualified, or until his
earlier death, resignation or removal.

         3.7 Chairman of the Board and Vice Chairman of the Board. The chairman
of the board of directors shall perform such duties and possess such powers as
are assigned to him from time to time by the board of directors. Unless
otherwise provided by the board of directors, the chairman of the board of
directors shall preside at all meetings of the stockholders and the board of
directors. The board of directors may appoint a vice chairman of the board of
directors who may, in the absence or disability of the chairman, perform the
duties and exercise the powers of the chairman and perform such other duties and
possess such other powers as from time to time are authorized by the board of
directors.

         3.8 President. The president shall be the chief executive officer of
the Corporation, shall have charge and supervision of the business operations of
the Corporation, and shall have full authority to take all lawful actions
necessary to implement corporate and business policy established by the board of
directors. Unless the board of directors shall otherwise direct, all executive
officers of the Corporation shall report, directly or through their immediate
superior officers, to the president. The president shall perform such other
duties and shall have such other powers as the board of directors may from time
to time prescribe and shall be subject at all times to the authority of the
board of directors in the performance of his duties.

         3.9 Vice Presidents. The vice president shall perform such duties and
shall have such powers as the board of directors, chairman of the board of
directors or the president may from time to time prescribe. The vice president
shall discharge the duties of the president when the president, for any reason,
cannot discharge the duties of his office. He shall have such other powers and
perform such other duties as shall be prescribed by the directors.

         Any assistant vice presidents shall perform such duties and possess
such powers as the board of directors, the chairman of the board of directors,
the president or the vice president may from time to time prescribe.

         3.10 Secretary and Assistant Secretaries. The secretary shall perform
such duties and shall have such powers as the board of directors, chairman of
the board of directors or the president may from time to time prescribe. In
addition, the secretary shall perform such duties and have such powers as are
incident to the office of the secretary, including without limitation, the duty
and power to giving notices of all meetings of stockholders and special meetings
of the board of directors, to attend all meetings of stockholders and the board
of directors and keep a record of the proceedings, to maintain a stock ledger
and prepare lists of stockholders and their addresses as required, to be
custodian of corporate records and the corporate seal, if any, and to affix and
attest to the same on documents.

         Any assistant secretary shall perform such duties and possess such
powers as the board of directors, the chairman of the board of directors, the
president or the secretary may from time to time prescribe. In the event of the
absence, inability or refusal to act of the secretary, the assistant secretary
(or if there be more than one, the assigned secretaries in the order determined
by the board of directors) shall perform the duties and exercise the powers of
the secretary.

         In the absence of the secretary or any assistant secretary at any



<PAGE>   8

meeting of stockholders or directors, the person presiding at the meeting shall
designate a temporary secretary to keep a record of the meeting.

         3.11 Treasurer and Assistant Treasurers. The treasurer shall perform
such duties and shall have such powers as from time to time be assigned to him
by the board of directors, the chairman of the board of directors or the
president. In addition, the treasurer shall perform such duties and have such
powers as are incident to the office of treasurer, including without limitation
the duty and power to keep and be responsible for all funds and securities of
the Corporation, to deposit funds of the Corporation in depositories selected in
accordance with these Bylaws, to disburse such funds as ordered by the board of
directors, the chairman of the board of directors, the president or any vice
president of the Corporation so authorized to act by specific authorization of
the board of directors or chairman of the Directors, to make proper accounts of
such funds, and to render, as required by the board of directors, chairman of
the board of directors or president, statements of all such transactions and of
the financial condition of the Corporation.

         The assistant treasurers shall perform such duties and possess such
powers as the board of directors, the chairman of the board of directors, the
president or the treasurer may from time to time prescribe. In the event of the
absence, inability or refusal to act of the treasurer, the assistant treasurer
(or if there shall be more than one, the assistant treasurer (or if there shall
be more than one, the assistant treasurers in the order determined by the board
of directors) shall perform the duties and exercise the powers of the treasurer.

         3.12 Salaries. Officers of the Corporation shall be entitled to such
salaries, compensation or reimbursement as shall be fixed or allowed from time
to time by the board of directors.

                                     ARTICLE
                                        4

                                  Capital Stock

         4.1 Issuance of Stock. Unless otherwise voted by the stockholders and
subject to the provisions of the Certificate of Incorporation, the whole or any
part of any unissued balance of the authorized capital stock of the Corporation
or the whole or any part of any unissued balance of the authorized capital stock
of the Corporation held in its treasury may be issued, sold, transferred or
otherwise disposed of by vote of the board of directors in such manner, for such
consideration and on such terms as the board of directors may determine.

         4.2 Certificates of Stock. Every holder of stock of the Corporation
shall be entitled to have a certificate, in such form as may be prescribed by
law and by the board of directors, certifying the number and class of shares
owned by him in the Corporation. Each such certificate shall be signed by, or in
the name of the Corporation by the chairman or vice chairman, if any, of the
board of directors, or the president or a vice president, and the treasurer or
an assistant treasurer, or the secretary or an assistant secretary of the
Corporation. Any or all of the signatures on the certificate may be a facsimile.

         Each certificate for shares of stock which are subject to any
restriction on transfer pursuant to the Certificate of Incorporation, the
Bylaws, applicable securities laws or any agreement among any number of
shareholders or among such holders and the Corporation shall have conspicuously
noted on the face or back of the certificate either the full text of the
restriction or a statement of the existence of such restriction.

         4.3 Transfers. Except as otherwise established by rules and regulations
adopted by the board of directors, and subject to applicable laws, shares of
stock may be transferred on the books of the Corporation by the surrender to the
Corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney



<PAGE>   9

properly executed, and with such proof authority or the authenticity of
signature as the Corporation or its transfer agent may reasonable require.
Except as may be otherwise required by law, by the Certificate of Incorporation
or by these Bylaws, the Corporation shall be entitled to treat the record holder
of stock as shown on its books as the owner of such stock for all purposes,
including the payment of dividends and the right to vote with respect to such
stock, regardless of any transfer, pledge or other disposition of such stock
until the shares have been transferred on the books of the Corporation in
accordance with the requirements of these Bylaws.

         4.4 Lost, Stolen or Destroyed Certificates. The Corporation may issue a
new certificate of stock in place of any previously issued certificate of stock
in place of any previously issued certificate alleged to have been lost, stolen
or destroyed, upon such terms and conditions as the board of directors may
prescribe, including the presentation of reasonable evidence of such loss, theft
or destruction and the giving such indemnity as the board of directors may
require for the protection of the Corporation or any transfer agent or
registrar.

         4.5 Record Date. The board of directors may fix in advance a date as
record date for the determination of the stockholders entitled notice of or to
vote at any meeting of stockholders or to express consent (or dissent) to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action. Such record date shall not be more than 60 days prior to any other
action to which such record date relates.

         If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day before the day on which notice is given,
or, if notice is waived, at the close of business on the day before the day on
which the meeting is held. The record date for determining stockholders entitled
to express consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is necessary, shall be the day on which
the first written consent is expressed. The record date for determining
stockholders for any other purpose shall be at the close of business on the date
on which the board of directors adopts the resolution relating to such purpose.

         A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
providing, however, that the Board of Directors may fix a new record date for
the adjourned meeting.

                                     ARTICLE
                                        5

                    Indemnification of Officers and Directors

         5.1 Actions Against a Person. The Corporation shall indemnify any
person who or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
(Corporation) by reason of the fact that he is or was a director or officer
employee or agent, of the corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any

<PAGE>   10

action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

         5.2 Actions by or in the Right of the Corporation. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.

         5.3 Indemnification in Event of Successful Defense. To the extent that
a director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in sections 5.1 and 5.2 hereof, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.

         5.4 Board Of Directors' Approval. Any indemnification under Sections
5.1 and 5.2 of these By-Laws (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 5.1 and 5.2 hereof. Such determination shall be made (1) by the Board
of Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable but a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.

         5.5 Advance Indemnity Payments. Expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent, to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized in this Article.

         5.6 Non-Exclusivity. The indemnification and advancement of expenses
provided by or granted pursuant to, Article SIXTH, Section 2(A) of the
Corporation's Certificate of Incorporation, the Delaware General Corporation Law
and this Article shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
and By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.

         5.7 Indemnity Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer, of the,
Corporation, or is or was serving at the request of the Corporation as a




<PAGE>   11

director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not he is indemnified against such liability under the provisions of
this Article.

         5.8 Consolidation. For the purposes of this Article, references to "the
Corporation" include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and employees
or agents, so that any person who is or was serving as a director, officer,
employee or agent, of such constituent corporation or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Article with respect to the resulting or surviving corporation as he would have
with respect to such constituent corporation if its separate existence had
continued.

         For the purposes of this Article, references to "other enterprises
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.

         The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer,
and shall inure to the benefit of the heirs, executors and administrators of
such a person.

                                     ARTICLE
                                        6

                               General Provisions

         6.1 Fiscal Year. The fiscal year of the Corporation shall be
determined by the board of directors.

         6.2 Corporate Seal. The corporate seal, if any, shall be in such form
as shall be approved by the board of directors.

         6.3 Written Notice of Meetings. Whenever written notice is required to
be given to any person pursuant to law, the Certificate of Incorporation or
these Bylaws, it may be given to such person, either personally or by sending a
copy thereof by first class mail, or by telegram, charges prepaid, to his
address appearing on the books of the Corporation, or to his business or other
address supplied by him to the Corporation for the purpose of notice. If the
notice is sent by first class mail or by telegraph, it shall be deemed to have
been given to the person entitled thereto when deposited in the United States
mail or with a telegraph office for transmission to such person. Such notice
shall specify the place, day and hour of the meeting and, in case of a special
meeting of the shareholders, the general nature of the business to be
transacted.

         6.4 Waiver of Notice. Whenever any notice whatsoever is required to be




<PAGE>   12

given by law, by the Certificate of Incorporation or by these Bylaws, a waiver
of such notice either in writing signed by the person entitled to such notice or
such person's duly authorized attorney, or by telegraph, cable or any other
available method, whether before, at or after the time stated in such waiver, or
the appearance of such person or persons at such meeting in person or by proxy,
shall be deemed equivalent to such notice.

         6.5 Voting of Securities. Except as the directors may otherwise
designate, the president or treasurer may waive notice of, and act as, or
appoint any person or persons to act as, proxy or attorney-in-fact for this
corporation (with or without power of substitution) at any meeting of
stockholders or shareholders of any other Corporation or organization, the
securities of which may be held by this Corporation.

         6.6 Evidence of Authority. A certificate by the secretary, or an
assistant secretary, or a temporary secretary, as to any action taken by the
stockholders, directors, a committee or any officer of representative of the
Corporation shall as to all persons who rely on the certificate in good faith be
conclusive evidence of such action.

         6.7 Certificate of Incorporation. All references in these Bylaws to the
certificate of Incorporation shall be deemed to refer to the certificate of
Incorporation of the Corporation, as amended and in effect from time to time.

         6.8 Transactions with Interested Parties. No contract or transaction
between the Corporation and one or more of the directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of the directors or officers are directors or
officers, or have a financial interest, shall be void or violable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the board of directors or a committee of the
board of directors which authorizes the contract or transaction or solely
because his or their votes are counted for such purpose, if:

         The material facts as to his relationship or interest as to the
contract or transaction are disclosed or are known to the board of directors or
the committee, and the board of directors or committee in good faith authorized
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum;

         The material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitle
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or

         The contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified by the board of directors, a
committee of the board of directors, or the stockholders,

         Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.

         6.9 Severability. Any determination that any provision of these Bylaws
is for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these Bylaws.

         6.10 Pronouns. All pronouns used in these Bylaws shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person or persons may require.


<PAGE>   13

                                     ARTICLE
                                        7

                                   Amendments

         7.1 By the Board of Directors. These Bylaws may be altered, amended or
repealed or new Bylaws may be adopted by the affirmative vote of a majority of
the directors present at any regular or special meeting of the board of
directors at which a quorum is present.

         7.2 By the Stockholders. These Bylaws may be altered, amended or
repealed or new Bylaws may be adopted by the affirmative vote of the holders of
a majority of the shares of the capital stock of the Corporation issued and
outstanding and entitled to vote at any regular meeting of stockholders, or at
any special meeting of stockholders, provided notice of such alternation,
amendment, repeal or adoption of new Bylaws shall have been stated in the notice
of such special meeting.

         ADOPTED THIS 6th day of August, 2001

                            By:  /s/ James S. Brannen
                               ---------------------------
                                     James S. Brannen
                                        President

ATTEST:

By:  /s/ Stephen Rubin
     -----------------
       Secretary