EFTA01092591.pdf

Delaware PAGE 1 The First State I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF "COINBASE GLOBAL, INC.", FILED IN THIS OFFICE ON THE SEVENTH DAY OF APRIL, A.D. 2014, AT 4:20 O'CLOCK P.M. A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY RECORDER OF DEEDS. jeffreywAtmocksecrewyorstate 5465078 8100 AUTHE TION: 1274513 140438284 DATE: 04-08-14 You may verify this certificate online at corp.delaware.gov/authver.ahtfal EFTA01092591  AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF COINBASE GLOBAL, INC. (Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware) Coinbase Global, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the "General Corporation Law"), DOES HEREBY CERTIFY: 1. That the name of this corporation is Coinbase Global, Inc., and that this corporation was originally incorporated pursuant to the General Corporation Law on January 27, 2014 under the name Coinbase Global, Inc. 2. That the Board of Directors duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as follows: FIRST: The name of this corporation is Coinbase Global, Inc. (the "Corporation"). SECOND: The address of the Corporation's registered office in the State of Delaware is 3500 S. DuPont Hwy, in the City of Dover, County of Kent, Zip Code 19901. The name of its registered agent at such address is Incorporating Services, Ltd. THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law. FOURTII: The total number of shares of all classes of stock which the Corporation shall have authority to issue is (1) 25,000,000 shares of Common Stock, $0.00001 par value per share ("Common Stock"), (ii) 1,820,000 shares of FF Preferred Stock, 0.00001 par value per share ("Founders Preferred Stock') and (iii) 9,405,110 shares of Preferred Stock, $0.00001 par value per share ("Preferred Stock"). The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation. State of Delaware Secretary of State Division of Corporations Delivered 04:30 PM 04/07/2014 FILED 04:20 PH 04/07/2014 OHSUSA:756169986.2 SW 140438284 - 5465078 FILE 28154-I EFTA01092592  A. COMMON STOCK 1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein. 2. Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). There shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law. B. PREFERRED STOCK 5,163,353 shares of the authorized Preferred Stock of the Corporation are hereby designated "Series A Preferred Stock" and 4,241,757 shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated "Series B Preferred Stock", each with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations. Unless otherwise indicated, references to "sections" or 'subsections" in this Part B of this Article Fourth refer to sections and subsections of Part B of this Article Fourth. 1. Dividends. The holders of shares of Preferred Stock shall be entitled to receive dividends, on a pail passu basis, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock and FF Preferred Stock of the Corporation, at the rate of (i) 6% of the Series A Original Issue Price (as adjusted for stock splits, stock dividends, reclassification and the like) per annum on each outstanding share of Series A Preferred Stock then held by them and (ii) 6% of the Series B Original Issue Price (as adjusted for stock splits, stock dividends, reclassification and the like) per annum on each outstanding share of Series B Preferred Stock then held by them; in each case payable when, as and if declared by the Board of Directors of the Corporation (the "Board of Directors"), calculated on the record date for determination of holders entitled to such dividend. Such dividends shall not be cumulative. After payment of such dividends, any additional dividends shall be distributed among the holders of Preferred Stock, Common Stock and FF Preferred Stock pro rata based on the number of shares of Common Stock then held by each holder (assuming conversion of all such Preferred Stock into Common Stock), calculated on the record date for determination of holders entitled to such dividend. 2. Liquidation, Dissolution or Winding Us; Certain Mergers, Consolidations and Asset Sales. OHS1JSA:756169986.2 28154-1 -2- EFTA01092593  2.1 Preferential Payments to Holders of Preferred Stock. In the event of any Liquidation Event, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders before any payment shall be made to the holders of Common Stock or FF Preferred Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) one (1) times the applicable Original Issue Price for such series, plus any dividends declared but unpaid thereon, for each share of Preferred Stock then held by them, or (ii) such amount per share as would have been payable had such share of Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such Liquidation Event, for each share of Preferred Stock then held by them (the amount payable pursuant to this sentence is hereinafter referred to as the "Series A Liquidation Amount" with respect to the Series A Preferred Stock and the "Series B Liquidation Amount" with respect to the Series B Preferred Stock); for clarity, the determination as to which of (i) or (ii) of the foregoing clause is greater shall be made at the time of the decision to liquidate, dissolve, or wind up, or upon consummation of a Liquidation Event, assuming any escrowed amounts will be paid out to the stockholders of the Corporation. If upon any such Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1, the holders of shares of Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. "Series A Original Issue Price" shall mean $1.18326, subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Series A Preferred Stock, and "Series B Original Issue Price" shall mean $6.04054, subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Series B Preferred Stock. 2.2 Payments to Holders of Common Stock and FF Preferred Stock. In the event of any Liquidation Event, after the payment of all preferential amounts required to be paid to the holders of shares of Preferred Stock, the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of shares of Common Stock and FF Preferred Stock, pro rata based on the number of shares held by each such holder. 2.3 Liquidation Events. 2.3.1 Definition. Each of the following events shall be considered a "Liquidation Event" unless the holders of at least a majority of the outstanding shares of Series B Preferred Stock (such consent, the "Series B Approval") elect otherwise by written notice sent to the Corporation prior to the effective date of any such event: (a) a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a direct or indirect subsidiary of the Corporation is a constituent party and either OHSUSA:756165986.2 28154-1 -3- EFTA01092594  the Corporation or its subsidiary, Coinbase, Inc. (the "Key Subsidiary"), issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly-owned subsidiary of another corporation immediately following such merger or consolidation, the ultimate parent corporation of such surviving or resulting corporation; (b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly-owned subsidiary of the Corporation; (c) any voluntary or involuntary liquidation, dissolution or winding up of the Key Subsidiary; and (d) any voluntary or involuntary liquidation, dissolution or winding up of the Corporation. 2.3.2 Effecting a Liquidation Event (a) The Corporation shall not have the power to effect a Liquidation Event referred to in Subsection 2.3.1(a)(i) unless the agreement or plan of merger or consolidation for such transaction (the "Merger Agreement") provides that the consideration payable to the stockholders of the Corporation shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 and 2.2. (b) In the event of a Liquidation Event referred to in Subsection 2.3.1(aXii), 2.3.1(b) or 2.3.1(c), if the Corporation does not effect a dissolution of the Corporation under the General Corporation Law within 90 days after such Liquidation Event, then (1) the Corporation shall send a written notice to each holder'of Preferred Stock no later than the 90th day after the Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause (ii) to require the redemption of such shares of Preferred Stock, and (ii) if the holders of at least a majority of the then-outstanding shares of Preferred Stock so request in a written instrument delivered to the Corporation not later than 120 days after such Liquidation Event, the Corporation shall use the consideration received by the Corporation for such Liquidation Event OHSUSk1561699862 28154-1 -4- EFTA01092595 (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation), together with any other assets of the Corporation available for distribution to its stockholders, all to the extent permitted by Delaware law governing distributions to stockholders (the "Available Proceeds"), on the 150th day after such Liquidation Event, to redeem all outstanding shares of Preferred Stock at a price per share equal to (i) the Series A Liquidation Amount, with regard to each share of Series A Preferred Stock then outstanding, and (ii) the Series B Liquidation Amount, with regard to each share of Series B Preferred Stock then outstanding. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Preferred Stock, the Corporation shall ratably redeem each holder's shares of Preferred Stock to the fullest extent of such Available Proceeds, and shall redeem the remaining shares as soon as it may lawfully do so under Delaware law governing distributions to stockholders. Prior to the distribution or redemption provided for in this Subsection 2.3.2(b), the Corporation shall not expend or dissipate the consideration received for such Liquidation Event, except to discharge expenses incurred in connection with such Liquidation Event or in the ordinary course of business. 2.3.3 Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license, other disposition or redemption shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board of Directors of the Corporation. 2.3.4 Allocation of Escrow Consideration. In the event of a Liquidation Event pursuant to Subsection 2.3.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such Liquidation Event, and payable only upon certain conditions (the "Escrow Consideration"), the Merger Agreement shall provide that the Escrow Consideration be included with the consideration to be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 and 2.2 in connection with such Liquidation Event 3. Voting. 3.1 General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Certificate of Incorporation, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class, with the holders of Preferred Stock voting on as-converted to Common Stock basis. 3.2 Election of Directors. The holders of record of the shares of Series A Preferred Stock, exclusively and as a separate class, shall be entitled to elect one (1) OHSUSA:756169986.2 28154-1 -5- EFTA01092596 director of the Corporation (the "Series A Director"). The holders of record of the shares of Series B Preferred Stock, exclusively and as a separate class, shall be entitled to elect one (1) director of the Corporation (the "Series B Director" and, together with the Series A Director, the "Preferred Directors"). The holders of record of the shares of Common Stock, exclusively and as a separate class, shall be entitled to elect two (2) directors of the Corporation. The holders of record of the shares of Preferred Stock, Common Stock and FF Preferred Stock voting together shall be entitled to elect directors to fill any remaining vacancies on the Board of Directors of the Corporation. Any director elected as provided in this Subsection 3.2 may be removed without cause by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. If the holders of shares of Series A Preferred Stock, Series B Preferred Stock or Common Stock, as the case may be, fail to elect a sufficient number of directors to fill all directorships for which they are entitled to elect directors, voting exclusively and as a separate class, pursuant to the first sentence of this Subsection 3.2, then any directorship not so filled shall remain vacant until such time as the holders of the A Preferred Stock, Series 13 Preferred Stock or Common Stock, as the case may be, elect a person to fill such directorship by vote or written consent in lieu of a meeting; and no such directorship may be filled by stockholders of the Corporation other than by the stnckbolders of the Corporation that are entitled to elect a person to fill such directorship, voting exclusively and as a separate class. The holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Preferred Stock), exclusively and voting together as a single class, shall be entitled to elect the balance of the total number of directors of the Corporation. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director. Except as otherwise provided in this Subsection 3.2, a vacancy in any directorship filled by the holders of any class or series shall be filled only by vote or written consent in lieu of a meeting of the holders of such class or series or by any remaining director or directors elected by the holders of such class or series pursuant to this Subsection 3.2. 3.3 Preferred Stock Protective Provisions. At any time when shares of Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Preferred Stock (for the avoidance of doubt, not including any shares of Founders Preferred Stock) given in writing or by vote at a meeting, consenting or voting (as the case 'nay be) together as a class on an as-converted to Common Stock basis, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect: 3.3.1 amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation or authorize the amendment, alteration or repeal of any provisions of the Certificate of Incorporation or Bylaws of the Key Subsidiary; 3.3.2 increase the authorized number of shares of Preferred Stock or increase the authorized number of shares of any additional class or series of capital stock of the Corporation or authorize any increase to the authorized shares of common stock or the ORSUSA:756I69986.2 28154-1 -6- EFTA01092597  creation or issuance of shares of any additional class or series of capital stock of the Key Subsidiary; 3.3.3 create, or authorize the creation of, or issue or obligate itself to issue shares ot, any additional class or series of capital stock unless the same ranks junior to each existing series of Preferred Stock with respect to the distribution of assets on a Liquidation Event, the payment of dividends and rights of redemption and not senior to any existing series of Preferred Stock with respect to voting; 3.3.4 (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with an existing series of Preferred Stock in respect of the distribution of assets on a Liquidation Event, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to an existing series of Preferred Stock in respect of any such right, preference or privilege, or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to an existing series of Preferred Stock in respect of the distribution of assets on a Liquidation Event, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to or pan passu with an existing series of Preferred Stock in respect of any such right, preference or privilege, provided that this Subsection 3.3.4 shall not apply to the conversion of FF Preferred Stock into Subsequent Preferred Stock pursuant to Subsection 4.7 of Part C of this Article Fourth; 3.3.5 purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock of the Corporation other than (i) redemptions of or dividends or distributions on the Preferred Stock as expressly authorized herein, (ii) dividends or other distributions payable on the Common Stock solely in the form of additional shares of Common Stock, (iii) repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Corporation or any subsidiary in connection with the cessation of such employment or service at the lower of the original purchase price or the then-current fair market value thereof, (iv) repurchases of stock in connection with the exercise of any right of first refusal held by the Corporation, or (v) as otherwise approved by the Board of Directors including a Preferred Director, 3.3.6 create, or hold capital stock in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries) by the Corporation, or sell, transfer or otherwise dispose of any capital stock of any direct or indirect subsidiary of the Corporation, or permit any direct or indirect subsidiary to sell, lease, transfer, exclusively license or otherwise dispose (in a single transaction or series of related transactions) of all or substantially all of the assets of such subsidiary; 3.3.7 liquidate, dissolve or wind-up the business and affairs of the Corporation or authorize the liquidation, dissolution and winding up of the business and affairs of the Key Subsidiary, effect any merger or consolidation or any other Liquidation Event, or consent to any of the foregoing; OHSUSA:756169986.2 28154-I -7- EFTA01092598  3.3.8 increase or decrease the authorized number of directors constituting the Board of Directors; 3.3.9 create, or authorize the creation of, or issue, or authorize the issuance of any debt security, or permit any subsidiary to take any such action with respect to any debt security, if the aggregate indebtedness of the Corporation and its subsidiaries for borrowed money following such action would exceed $2,000,000, unless approved by the Board of Directors; 3.3.10 increase the number of shares reserved for issuance under the Corporation's equity compensation plans or arrangements; or 3.3.11 enter into a contract or transaction between the Corporation and any other corporation, partnership, association or other organization in which one or more of the officers or directors of the Corporation is an officer or director of, or has a financial interest in, such other corporation, partnership, association or other organization, unless approved by the Board (including a majority of disinterested directors). 3.4 Series A Preferred Stock Protective Provisions. At any time when at least 1,000,000 shares of Series A Preferred Stock are outstanding the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, increase or decrease the authorized number of shares of Series A Preferred Stock or amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation in a manner that adversely affects the rights and preferences of the Series A Preferred Stock in a manner different than the other series of Preferred Stock without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting separately as a series, given in writing or by vote at a meeting, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect. 3.5 Series B Preferred Stock Protective Provisions. At any time when at least 1,000,000 shares of Series B Preferred Stock are outstanding the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the approval of the holders of at least two-thirds of the Series B Preferred Stock given in writing or by vote at a meeting (the "Series B 2/3rds Approver), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect: 3.5.1 increase or decrease the authorized number of shares of Series B Preferred Stock; 3.5.2 amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation or authorize the amendment, alteration or repeal of any provisions of the Certificate of Incorporation or Bylaws of the Key Subsidiary, in either case, in a manner that adversely affects the rights and preferences of the Series B Preferred Stock in a manner different than the other series of Preferred Stock; MUSA:7561699862 -8- 281541 EFTA01092599  3.53 waive the treatment of a Liquidation Event pursuant to Subsection 2.3.1; 3.5.4 waive the price-based antidilution provisions applicable to the Series B Preferred Stock in Section 4.4 hereof; 3.5.5 amend the mandatory conversion provisions in Section 5 hereof; 3.5.6 alter or permit the Key Subsidiary's board of directors to alter the composition of the board of directors of the Key Subsidiary; or 3.5.7 permit the Key Subsidiary's board of directors to take any action without the approval of the Corporation's board of directors. 4. Optional Conversion. The holders of the Preferred Stock shall have conversion rights as follows (the "Conversion Rights"): 4.1 Right to Convert. 4.1.1 Conversion Ratio. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Series A Original Issue Price or Series B Original Issue Price, as applicable, by the Series A Conversion Price (as defined below) or Series B Conversion Price (as defined below), as applicable, in effect at the time of conversion. The "Series A Conversion Price" shall initially be equal to the Series A Original Issue Price and the "Series B Conversion Price" shall initially be equal to the Series B Original Issue Price. Such initial Conversion Prices, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided below. 4.1.2 Termination of Conversion Rights. In the event of a Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Preferred Stock. 4.2 Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board of Directors of the Corporation. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion. ONSUSA:7561699862 -9- 28154-1 EFTA01092600  4.3 Mechanics of Conversion. 4.3.1 Notice of Conversion. In order for a holder of Preferred Stock to voluntarily convert shares of Preferred Stock into shares of Common Stock, such holder shall surrender the certificate or certificates for such shares of Preferred Stock (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Preferred Stock represented by such certificate or certificates and, if applicable, any event on which such conversion is contingent. Such notice shall state such holder's name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such certificates (or lost certificate affidavit and agreement) and notice shall be the time of conversion (the "Conversion Time"), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time, (1) issue and deliver to such holder of Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (iii) pay all declared but unpaid dividends on the shares of Preferred Stock convened. 4.3.2 Reservation of Shares. The Corporation shall at all times when the Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred 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 Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. Before taking any action which would cause an adjustment reducing the Series A Conversion Price or Series B Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock or Series B Preferred Stock, as applicable, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly OHSUSA:7561699862 28151-1 -10- EFTA01092601 and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Series A Conversion Price or Series B Conversion Price, as applicable. 4.3.3 Effect of Conversion. All shares of Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Subsection 4.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly. 4.3.4 No Further Adjustment. Upon any such conversion, no adjustment to the Series A Conversion Price or Series B Conversion Price shall be made for any declared but unpaid dividends on the Series A Preferred Stock or Series B Preferred Stock surrendered for conversion or on the Common Stock delivered upon conversion. 4.3.5 Taxes. The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Preferred Stock pursuant to this Section 4. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid. 4.4 Adjustments to Conversion Price for Diluting Issues. 4.4.1 Special Definitions. For purposes of this Article Fourth, the following definitions shall apply: (a) "Option" shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities. (b) "Original Issue Date" shall mean the date on which the first share of Series B Preferred Stock was issued. (c) "Convertible Securities" shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options. (d) "Additional Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Subsection 4.4.3 below, deemed to be issued) by the Corporation after the Original Issue Date, other than (1) the following shares of OHSUSk7561699862 -11- 28154-1 EFTA01092602 Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, "Exempted Securities"): (i) shams of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors of the Corporation; (ii) shares of Common Stock, Options or Convertible Securities issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Directors of the Corporation, including at least one Preferred Director; (iii) shares of Common Stock, Options or Convertible Securities issued pursuant to the acquisition of another corporation by the Corporation by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided that such issuances are approved by the Board of Directors of the Corporation, including at least one Preferred Director; (iv) shares of Common Stock, Options or Convertible Securities issued in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the Board of Directors of the Corporation, including at least one Preferred Director, (v) shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Subsection 4.5, 4.6, 4.7 or 4.8; OHSUSA:7561699862 281544 -12- EFTA01092603  (vi) Common Stock issued or issuable in a Qualified IPO; (vii) shares of Common Stock, Options or Convertible Securities issued upon conversion of or as a dividend or distribution on Preferred Stock; (viii) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security; or (ix) securities issued or issuable in any other transaction for which exemption from these price-based antidilution provisions is approved before or after issuance of the securities by the Board of Directors of the Corporation, including at least one Preferred Director. 4.4.2 No Adjustment of Conversion Price. No adjustment in the Series A Conversion Price or Series B Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives Series B 2/3rds Approval agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock. 4.4.3 Deemed Issue of Additional Shares of Common Stock. (a) If the Corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities (excluding Options, or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities 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, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) 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 Shares of Common Stock 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. OHSUSA:7361699862 -13- 28134-1 EFTA01092604  (b) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Series A Conversion Price or Series B Conversion Price pursuant to the terms of Subsection 4.4.4, arc revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding aut