Document:

Exhibit
10.2

 

FIRST
AMENDMENT TO

EARN
OUT AGREEMENT

 

FIRST
AMENDMENT TO EARN OUT AGREEMENT (this “Amendment”)
dated as of August 23, 2008, by and among InfoLogix Systems Corporation, a
Delaware corporation (“InfoLogix Systems”)
and Healthcare Informatics Associates, Inc., a Delaware corporation (“HIA”).

 

Background

 

A.                                   InfoLogix Systems and HIA are parties to
that certain Asset Purchase Agreement, dated as of September 30, 2007 (the
“Asset Purchase Agreement”), pursuant to
which InfoLogix Systems purchased substantially all of the assets of HIA.

 

B.                                     In connection with the Asset Purchase
Agreement, InfoLogix Systems and HIA entered into an Earn Out Agreement, dated
as of September 30, 2007 (the “Earn Out Agreement”),
that provides for the payment of contingent consideration to HIA by InfoLogix
Systems if certain performance targets are satisfied following the closing of
the transactions contemplated by the Asset Purchase Agreement.

 

C.                                     InfoLogix Systems and HIA desire to amend
the Earn Out Agreement as set forth herein to (i) change the earn out
periods defined in the Earn Out Agreement for purposes of determining whether
the performance targets established under the Earn Out Agreement have been
satisfied and (ii) to modify the manner in which the Net Contribution
Amount (as defined in the Earnout Agreement) is calculated.

 

NOW,
THEREFORE, in
consideration of the mutual promises, agreements and covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:

 

1.                                       Amendments.

 

1.1                                 The definition of the term “Earn Out Period” set forth in Section 1 of the Earn Out
Agreement is hereby amended and restated to read in its entirety as follows:

 

“Earn Out
Period” shall mean the fifteen month period from October 1, 2007
through December 31, 2008 and the twelve calendar month period from January 1,
2009 through December 31, 2009.

 

1.2                                 Exhibit A to the Earnout Agreement shall be amended
and restated in its entirety to read as set forth on Exhibit A to
this Amendment.

 

2.                                       Counterparts. 
This Amendment may be executed in several counterparts each of which
shall be an original and all of which taken together shall constitute a single
instrument.

 

 

3.                                       Governing Law. 
This Amendment is made pursuant to, and shall be construed and enforced
in accordance with, the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law in
that or any other jurisdiction.

 

4.                                       Section Headings. 
The section headings herein have been inserted for convenience of
reference only and shall in no way modify or restrict any of the terms or
provisions hereof.

 

5.                                       Earn Out Agreement in Full Force and
Effect as Amended.  Except as specifically amended hereby, all of
the terms and conditions of the Earn Out Agreement shall be in full force and
effect.  All references to the Earn Out
Agreement in any other document or instrument shall be deemed to mean such Earn
Out Agreement as amended by this Amendment. 
The parties hereto agree to be bound by the terms and obligations of the
Earn Out Agreement, as amended by this Amendment, as though the terms and
obligations of the Earn Out Agreement were set forth herein.

 

[Signatures
of the parties intentionally appear on the next page.]

 

2

 

IN
WITNESS WHEREOF,
this Amendment has been executed as of the day and year first above written.

 

 

	
   

  	
  INFOLOGIX SYSTEMS CORPORATION

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David T. Gulian

  
	
   

  	
  Name: David T. Gulian

  
	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HEALTHCARE INFORMATICS ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gerry Bartley

  
	
   

  	
  Name: Gerry Bartley

  
	
   

  	
  Title: President

  

 

 

	
  Acknowledged and agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Gerry Bartley

  	
   

  
	
  Gerry Bartley

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Mary Ann Bartley

  	
   

  
	
  Mary Ann Bartley

  	
   

  

 

 

EXHIBIT A

 

Calculation
of Net Contribution Amount

 

Net Contribution Amount shall equal:

 

1.               all HIA revenues  relating to consulting
services;

 

minus

 

2.               all direct costs of billable and non-billable labor related to the
Business;

 

minus

 

3.               all direct allocable
overhead costs associated with the Business, including, without limitation, (a) all
travel, entertainment and convention costs, (b) rental payments under any
lease or sublease for office space and\or equipment used by the Business, (c) all
training costs incurred for employees or consultants of the Business, and (d) commissions
paid by the Company in connection with successful sales of the services of the
Business by the Company;

 

minus

 

4.               an indirect overhead charge
of $15,000 for each full-time equivalent related to the Business;

 

plus

 

5.               5% commissions on any revenue earned by the Business for the sale of the
Company’s products or services to hospitals located in the United States,
excluding any products or services offered by the Business;

 

plus

 

6.               all recruiting fees, and signing bonuses paid to new employees hired for
the Business during the period from May 1, 2008 through and including December 31,
2008 (collectively, the “2008 Hires”);

 

plus

 

7.               the amount of any salary and/or training expenses paid to or on behalf of
any 2008 Hire for periods in which such 2008 Hire was attending a formal
training program required by HIA with respect to the Business;

 

 

plus

 

8.               an amount equal to $140 per hour (pro rated for any periods less than a
full hour) for each hour billed by employees of the Business with respect to
providing e-learning content for the Multicare project commenced in June 2008;

 

plus

 

9.               an amount equal to 50% of all salary, benefits and related payroll
expenses incurred by the Business for Georgene Snyder for the period from June 1,
2008 through and including December 31, 2009.

 

5Exhibit 4.5

 

AMENDED
AND RESTATED

 

CERTIFICATE
OF DESIGNATION

 

OF

 

SERIES
A CONVERTIBLE PREFERRED STOCK

 

OF

 

MXENERGY
HOLDINGS INC.

 

Pursuant
to Section 151(g) of the

Delaware
General Corporation Law

 

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

 

That pursuant to the authority vested in the
Board of Directors of the Corporation (the “Board of Directors”) in
accordance with the provisions of the Certificate of Incorporation of
Corporation (the “Certificate of Incorporation”), the Board of Directors
duly adopted the following resolution on June 30, 2005 creating a series
of 1,451,310 shares of Preferred Stock designated as “Series A
Convertible Preferred Stock”:

 

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

 

SERIES
A CONVERTIBLE PREFERRED STOCK

 

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

 

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

 

1.                                      Dividend
Provisions.

 

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

 

 

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

 

(i)                                    Dividends
shall accrue on each share of Series A Stock at a rate per annum (computed
on the basis of a 365-day year for the actual number of days elapsed) of twelve
percent (12%) of the Original Series A Stock Issue Price (as defined
below), compounded annually; provided, however, that dividends shall stop
accruing as of the Redemption Date (as defined below) with respect to any and
all shares for which the Corporation has deposited the Redemption Price (as
defined below) on or before the Redemption Date pursuant to Section (B)3(d) hereof.  Dividends shall be payable when, as and if
any dividend or distribution is declared or paid by the Corporation on any
share of any class of stock.  In the
event of any liquidation, dissolution or winding up of the Corporation or the
bankruptcy of the Corporation, all accrued and unpaid dividends on a share of Series A
Stock shall be added to the liquidation preference of such share on the payment
date under Section (B)2 below, or upon the bankruptcy of the Corporation,
as the case may be, accrued cumulatively to but excluding such payment date or
bankruptcy on a daily basis.

 

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

 

b.                                     Except
for dividends or distributions in which the Conversion Price in effect for the Series A
Stock shall be subject to adjustment pursuant to Sections (B)4(e) or (f) below,
in addition to and not in limitation of the dividends provided for in Section (B)1(a),
the holders of Series A Stock shall be entitled to receive dividends and
other distributions equivalent to those declared or paid on Common Stock or any
other Junior Securities, determined as if the Series A Stock had been
converted into Common Stock at the then effective Conversion Price (as
hereinafter defined) (or, in the case of dividends or distributions on
securities other than Common Stock, determined on a comparable basis), and
payable when, as and if declared by the Board of Directors on such Common Stock
or other Junior Securities.

 

2

 

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

 

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

 

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

 

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

 

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

 

2.                                      Liquidation
Preference.

 

a.                                      In
the event of a Liquidation Event (as defined in Section (B)2(c) below),
the holders of Series A Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets or surplus funds of the
Corporation to the holders of Common Stock or any other Junior Securities by
reason of their ownership thereof, but pari passu with the holders of the Series B
Stock, an amount per share in cash equal to the greater of (i) the sum of (x) $21.36
for each share of Series A Stock then held by them (as adjusted for any
stock splits, stock dividends, stock combinations, recapitalizations and
similar transactions) (the “Original Series A Stock Issue Price”),
plus (y) all accrued or declared but unpaid dividends on such Series A
Stock as of the date of such event ((x) and (y) collectively, the “Series A
Stock Liquidation Preference”) or (ii) the amount per share of Series A
Stock that each holder would have received if such holder had converted its
shares of Series A Stock into Common Stock immediately prior to such
Liquidation Event.

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

e.                                      At
any time before the second anniversary of the Original Issue Date (as defined
in Section (B)4(d)), the Corporation may not effect or enter into any
agreement in principle, letter of intent, acquisition agreement or other
similar agreement to effect a Liquidation Event described in Section (B)2(c) above
(other than in connection with a Qualified Public Offering (as defined herein))
without the prior written consent of the holders of a majority of the voting
power of the outstanding shares of the Series B Stock and Series A
Stock, voting together as a single class on an as – converted basis, unless the
aggregate amount payable in such Liquidation Event in respect of each share of Series A
Stock is an amount such that the aggregate amount received by the holders of
the Series A Stock for their shares of Series A Stock as a result of
the Liquidation Event shall be (x) no less than one and one-half (1.5)
times the Original Series A Stock Issue Price, for a Liquidation Event
that is consummated before the first anniversary of the Original Issue Date or (y) no
less than two (2) times the Original Series A Stock Issue Price, for
a Liquidation Event that is consummated after the first anniversary of the
Original Issue Date and on or before the second anniversary of the Original
Issue Date.

 

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

 

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

 

5

 

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

 

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

 

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

 

3.                                      Redemption
Rights.

 

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

 

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

 

c.                                      If,
within (x) twenty (20) days after receipt of the Redemption Notice
(assuming no dispute regarding the calculation of Fair Market Value (as defined
below)) or (y) ten (10) days after the Appraiser(s) have
calculated Fair Market Value in accordance with Section (B)3(e) below,
the holders of a majority of the voting power of the outstanding shares of the Series A
Stock (voting on an as – converted basis) (the “Majority Series A Owners”)
determine in good faith that the Fair Market Value (as calculated in accordance
with Section (B)3(e) below) on the date of the Redemption Notice of
the shares of Common Stock into which

 

6

 

the Redemption Shares may be converted would not provide the Majority Series A
Owners with an internal rate of return on an annualized basis (computed on the
basis of a 365-day year for the actual number of days elapsed; using a terminal
value equal to the Company Value (as defined herein) and including previously
paid dividends and distributions) (“IRR”) of at least 40% on their
respective investments in the Series A Stock, then such Majority Series A
Owners shall mail (first class postage prepaid) or deliver personally or by
telecopier to the Corporation at its then principal office, a response stating
such fact (the “Response”).  If
the Corporation receives a Response to the Redemption Notice from the Majority Series A
Owners, the Corporation may not exercise the redemption right set forth in Section (B)3(a) above
and the Redemption Notice shall be null and void.

 

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

 

e.                                      The
“Fair Market Value” of each share of Series A Stock shall mean the
amount per share that would be distributable to a holder of such share of Series A
Stock pursuant to Section (B)2 above if an amount equal to the Company
Value (as defined below) was available for distribution; provided, however,
that an arm’s-length sale for cash of Common Stock (the exercise or conversion
of Options or Convertible Securities (as defined in Section (B)4(d)) shall
not be considered a sale) within the six months prior to the date on which Fair
Market Value is to be determined shall be dispositive as to the calculation of
Fair Market Value.  The “Company Value”
shall mean the fair market value of the Corporation on the date of delivery of
the Redemption Notice, or Election Notice of the conversion date, as
applicable, determined by the amount a willing buyer would pay in cash to a
willing seller under no compulsion to sell for all outstanding Common Stock on
a fully diluted basis (but excluding any Common Share Equivalents (as defined
in Section (B)4(e)(i) below) which on the date of determination the
issuance of which would be antidilutive), as determined in good faith by the
Board of Directors; provided, however, that if the Majority Series A
Owners object in good faith to the Company Value determination of the Board of
Directors (and thereby the Fair Market Value determination of the Board of
Directors) within twenty (20) days after receipt thereof, such Majority Series A
Owners may request that the Company Value determination (and thereby the Fair
Market Value determination), be made by an independent investment banking firm
selected by agreement of the Majority Series A Owners and the Board of
Directors.  In the absence of an agreed
upon selection of such independent investment banking firm, the Board of
Directors may select an independent investment banking firm (the “First
Appraiser”) and the Majority Series A Owners may select an independent
investment banking firm (the “Second

 

7

 

Appraiser”) and the final Fair Market Value
determination shall be the price agreed upon by the First Appraiser and Second
Appraiser, or if they cannot agree, the First and Second Appraiser shall select
a third independent investment banking firm (the “Third Appraiser,”
collectively with the First and Second Appraisers, the “Appraisers”) to
choose one of the two values determined by the First and Second Appraiser and
no other value.  If the Fair Market Value
determination of the Appraisers is more than five percent (5%) greater than the
Fair Market Value determination of the Board of Directors, then all expenses
incurred in connection with such Appraisers in the determination of the Fair
Market Value shall be borne by the Corporation; otherwise, such costs shall be
borne pro rata by the Majority Series A Owners.

 

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

 

g.                                     Redemption
Option.

 

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

 

(ii)                                 As
promptly as practicable after the Corporation receives an Election Notice (and
in any event within 45 days after receipt of an Election Notice), the
Corporation shall mail written notice (the “Company Notice”), first
class postage prepaid, to each holder of record (as of the close of business on
the business day preceding the day on which the Corporation received such Election
Notice) of shares of Series A Stock at the address last shown on the
records of the Corporation for such holder or given by the holder to the
Corporation for the purpose of notice, notifying such holder of either (x) the
right of such holder to have its shares of Series A Stock redeemed,
specifying the number of shares which such holder may require be redeemed, the
Redemption Option Price, the date the redemption is to commence (the “Redemption
Option Date”) (which shall be no later than 120 days after receipt by the
Corporation of the Election Notice), the place at which payment may be obtained
for redeemed shares and such other information as the Corporation may deem
advisable to provide regarding the redemption of the Redemption Option Shares
or (y) the Corporation’s election to grant the Exercising Holders (as
defined below) the right set forth in Section (B)5(c) below.

 

(iii)                              Within
ten (10) days after receipt of a Company Notice, each holder of shares of Series A
Stock desiring to have all or any portion of such shares

 

8

 

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

 

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

 

(v)                                If
as of the Redemption Option Date, the Corporation fails to pay the full
Redemption Price for all Redemption Option Shares payable as of such Redemption
Option Date (a “Default”) then notwithstanding anything else to the
contrary contained in this Certificate of Designation, the holders of the Series A
Stock shall be entitled to the rights set forth in Section (B)5(c).

 

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

 

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

 

a.                                      Right
to Convert.  Each share of Series A
Stock shall be convertible, at the option of the holder thereof at any time
after the date of issuance of such share, in each case at the office of the
Corporation or any transfer agent for the Series A Stock, into such number
of fully paid and nonassessable shares of Common Stock as is determined by
dividing the Original Series A Stock Issue Price by the Conversion Price
at the time in effect for such shares. 
The initial “Conversion Price” per share for shares of Series A
Stock shall be the Original Series A Stock Issue Price; provided, however,
that the Conversion Price in effect from time to time for the Series A
Stock shall be subject to adjustment pursuant to Sections (B)4(d), (e), (f) and
(g) below.  Notwithstanding the
foregoing, if the Fair Market Value of the Common Stock (calculated as set
forth in Section (B)3(e) above as of the conversion date ) is at a
level that would provide the Majority Series A Owners an IRR of less than
12% on their respective investments in the Series A Stock, then each share
of Series A Stock shall be convertible into such number of fully paid and
nonassessable shares of shares of Common Stock as is determined by dividing the
Series A Stock Liquidation Preference by the Conversion Price then in
effect for such shares.

 

b.                                     Automatic
Conversion.  Each share of Series A
Stock shall automatically be converted into that number of fully paid and
nonassessable shares of Common Stock as set forth in Section (B)4(a) above
(i) upon the request of the Majority Series A Owners, which Series A
Stock shall vote as a separate class or (ii) immediately upon the
consummation of

 

9

 

the Corporation’s sale of shares of its Common Stock in a bona fide
firm commitment underwritten public offering pursuant to a registration
statement on Form S-1 (or a successor form) under the Securities Act of
1933, as amended, which results in an aggregate offering price of not less than
$75,000,000 and a per share offering price of not less than (x) one and
one-half (1.5) times the Conversion Price for offerings occurring on or prior
to the first anniversary of the Original Issue Date (as defined in Section (B)4(d))
and (y) two (2) times the Conversion Price for offerings occurring
after the first anniversary of the Original Issue Date (as defined in Section (B)4(d))
(a “Qualified Public Offering”).

 

c.                                      Mechanics
of Conversion.

 

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

 

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

 

10

 

accordance with such instructions the certificate(s) evidencing
the Converted Shares issuable upon such conversion.

 

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

 

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

 

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

 

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

 

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

 

(2)                                 “Original
Issue Date” shall mean June 25, 2004.

 

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

 

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

 

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

 

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

 

11

 

(C)           to Lathi LLC (“Lathi”)
or its permitted transferees pursuant to warrants issued after the Original
Issue Date pursuant to that certain Loan Agreement dated as of September 1,
2001 between Lathi and MxEnergy Inc., as amended on July 2, 2002, as
amended and restated by that certain Amended and Restated Loan Agreement dated
as of November 14, 2003 between Lathi and MxEnergy Inc., as amended on March 25,
2004, and as the same may be amended from time to time (the “Lathi Loan
Agreement”);

 

(D)          as all or part of the
consideration for the acquisition (whether by merger or otherwise) by the
Corporation of stock or assets of any other entity in a transaction approved by
the Board of Directors, which approval shall include the approval of the
director appointed by the holders of Series A Stock (the “Series A
Director”);

 

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

 

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

 

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

 

(H)          upon conversion or
exercise of warrants owned by Lathi or its permitted transferees as of the
Original Issue Date;

 

(I)            in connection with a
Qualified Public Offering;

 

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

 

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

 

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

 

(ii)           No Adjustment of
Conversion Price.  No adjustment in
the Conversion Price of the Series A Stock shall be made in respect of the
issuance of Additional

 

12

 

Common Stock unless the consideration per
share (determined pursuant to subsection (B)4(d)(v) hereof) for Additional
Common Stock issued or deemed to be issued (pursuant to subsection (B)4(d)(iii))
by the Corporation is less than the Conversion Price for such share of Series A
Stock in effect on the date of, and immediately prior to, such issue.

 

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

 

 

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

 

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

 

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

 

13

 

(A)          in the case of Convertible Securities or
Options for Common Stock, the only Additional Common Stock issued was the
Common Stock, if any, actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation
for the issue of all such Options, whether or not exercised, plus the
consideration actually received by the Corporation upon such exercise, or for
the issue of all such Convertible Securities which were actually converted or
exchanged, plus the additional consideration, if any, actually received by the
Corporation upon such conversion or exchange (provided,
however, that no such adjustment of the
Conversion Price shall affect Common Stock previously issued upon conversion of
any shares of Series A Stock), and

 

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

 

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

 

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

 

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

 

14

 

outstanding immediately prior to such issue
plus the number of shares of Additional Common Stock so issued; provided that,
for the purposes of this subsection (B)4(d)(iv), all Common Stock issuable upon
conversion of all outstanding shares of Series A Stock shall be deemed to
be outstanding.

 

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

 

(1)           Cash and Property.  Such consideration shall:

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

16

 

h.             No
Impairment.  The Corporation will
not, by amendment of its Certificate of Incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Section (B)4
and in the taking of all such actions as may be necessary or appropriate in
order to protect the Conversion Rights of the holders of the Series A Stock
against impairment.

 

i.              No
Fractional Shares and Certificate as to Adjustments.

 

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

 

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

 

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

 

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

 

17

 

(2)           in the case of the
matters referred to in clauses (ii) and (iii) above, written notice
of such impending transaction not later than twenty (20) days prior to the
stockholders’ meeting called to approve such transaction, or twenty (20) days
prior to the closing of such transaction, whichever is earlier, and shall also
notify such holder in writing of the final approval of such transaction.  The first of such notices shall describe the
material terms and conditions of the impending transaction (and specify the
date on which the holders of Common Stock shall be entitled to exchange their
Common Stock for securities or other property deliverable upon the occurrence
of such event) and the Corporation shall thereafter give such holders prompt
notice of any material changes.  The
transaction shall in no event take place sooner than twenty (20) days after the
Corporation has given the first notice provided for herein or sooner than ten (10) days
after the Corporation has given notice of any material changes provided for
herein.

 

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

 

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

 

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

 

5.             Voting
Rights.

 

a.             In addition to any
voting rights required by law and the special voting rights provided in this
Certificate, the holders of Series A Stock shall have the right to one
vote for each share of Common Stock into which such share of Series A
Stock could then be converted (with any fractional share determined on an
aggregate conversion basis being rounded to the nearest whole share), and with
respect to such vote such holder shall have full voting rights and powers equal
to the voting rights and powers of the holders of shares of Common Stock, and
shall be entitled, notwithstanding any provision hereof, to notice of any
stockholders’ meeting in accordance with the by-laws of the Corporation, and
shall be treated for all purposes (including

 

18

 

without limitation the determination of the
presence of a quorum), and entitled to vote, together with holders of Common
Stock as a single class, with respect to any issue, election, question or
matter upon which holders of Common Stock have the right to vote.

 

b.             For so long as the
outstanding Series A Stock (calculated on an as converted basis)
represents 10% or more of the outstanding Common Stock of the Corporation on a
fully diluted basis, the holders of the outstanding shares of Series A Stock,
voting as a separate class, shall be entitled to elect a number of directors
equal to the largest whole number that is less than or equal to the number of
directors comprising the entire Board of Directors divided by five, but in no
event less than one (1) director. 
The holders of the Series A Stock, the Series B Stock and the
Common Stock, together with the holders of any other outstanding class, if any,
to the extent provided in the related certificate of designation, voting
together as a single class, shall be entitled to elect the remaining number of
directors authorized, including the director designated by Lathi as provided in
the Stockholders’ Agreement.  In the case
of any vacancy in the office of a director elected by the holders of a particular
class or classes of stock, a successor shall be elected to hold office for the
unexpired term of such director by the affirmative vote of the holders of a
majority of the shares of that class or classes, as applicable, given at a
special meeting of such stockholders duly called or by an action by written
consent for that purpose or, in the absence of action by such holders, by
action of the remaining directors elected by the holders of that class or
classes, as applicable.  Any director who
shall have been elected by the holders of a particular class or classes of
stock may be removed from the Board of Directors during such director’s term of
office, either for or without cause by, and only by, the affirmative vote of
the holders of a majority of the shares of such class or classes, as
applicable, given at a special meeting of the stockholders duly called or by an
action by written consent for that purpose.

 

c.             If the Corporation
makes the election described in Section (B)3(g)(ii) above or during
the existence of a Default (as defined in Section (B)3(g)(v) above),
the Corporation shall grant to the holders of the Series A Stock the right
either (A) to appoint a majority of the members of the Board of Directors
or (B) to cause the Corporation to establish the director(s) appointed
by the holders of Series A Stock in accordance with Section (B)5(b) above
as a separate class of director within the meaning of Section 141(d) of
the Delaware General Corporation Law, and such director(s) shall be
entitled to cast a number of votes on each matter considered by the Board of
Directors (including for purposes of determining the existence of a quorum)
equal to the sum of (i) the number of votes entitled to be cast by all
other members of the Board of Directors plus (ii) one (1).

 

6.             Protective
Provisions.

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

21

 

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

 

 

	
   

  	
  MXENERGY HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey A. Mayer

  
	
   

  	
  Name:

  	
  Jeffrey A. Mayer

  
	
   

  	
  Title:

  	
  President

  
				

 

22

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