Ex 10.1

bvfexchangeagreementimage1.gif [bvfexchangeagreementimage1.gif]
March 22, 2019

Cidara Therapeutics, Inc.
6310 Nancy Ridge Drive, Suite 101
San Diego, California 92121
Attn: Jessica Oien, General Counsel
Re:     3(a)(9) Exchange Agreement 
Ladies and Gentlemen:
This letter agreement (this “Agreement”) confirms the agreement of Cidara
Therapeutics, Inc., a Delaware corporation (the “Company”), and the holders of
the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”),
listed on Schedule I attached hereto (the “Stockholders”), pursuant to which the
Stockholders have agreed to exchange an aggregate of 1,200,000 shares of Common
Stock (the “Shares”) beneficially owned by the Stockholders for an aggregate of
120,000 shares of the Company’s Series X Convertible Preferred Stock, par value
$0.0001 per share (the “Preferred Shares”), which have the rights, preferences
and privileges set forth in the Certificate of Designation of Preferences,
Rights and Limitations of Series X Convertible Preferred Stock set forth on
Exhibit A attached hereto (the “COD”). The Preferred Shares are convertible into
an aggregate of 1,200,000 shares of Common Stock (subject to adjustment as
provided in the COD), subject to beneficial ownership conversion limitations set
forth in the COD.
In consideration of the foregoing, the Company and the Stockholders agree as
follows:
(1)No later than the close of business on the first business day after the date
hereof (the “Closing Date”) and subject to the satisfaction or waiver of the
conditions set forth herein, the Stockholders shall exchange the Shares for the
Preferred Shares (the “Exchange”) in the respective amounts listed on Schedule
I. The Exchange shall be consummated pursuant to Section 3(a)(9) of the
Securities Act of 1933, as amended (the “Securities Act”). On the Closing Date:
(a) the Company and the Stockholders shall jointly and irrevocably instruct
American Stock Transfer & Trust Company, LLC (the “Transfer Agent”) to cancel
the direct registration book-entry statements from the Transfer Agent evidencing
the Shares; and (b) the Company shall irrevocably instruct the Transfer Agent to
issue and deliver to the Stockholders the Preferred Shares in book-entry form,
in the amounts and in the names set forth on Schedule I.
(2)The Company represents and warrants to each Stockholder as follows:
(a)Neither the Company nor any of its affiliates nor any person acting on behalf
of or for the benefit of any of the foregoing, has paid or given, or agreed to
pay or give, directly or indirectly, any commission or other remuneration
(within the meaning of Section 3(a)(9) of the Securities Act and the rules and
regulations of the U.S. Securities and Exchange Commission (the “Commission”)
promulgated thereunder) in connection with the Exchange. Assuming the
representations and warranties of the Stockholders contained herein are true and
complete, the Exchange will qualify for the registration exemption contained in
Section 3(a)(9) of the Securities Act.
(b)It has the requisite corporate power and authority and power to enter into
this Agreement and to consummate the Exchange and such transactions shall not
contravene any contractual, regulatory, statutory or other obligation or
restriction applicable to the Company.

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(c)It has reserved a sufficient number of shares of Common Stock as may be
necessary to fully permit the issuance of the Common Stock issuable upon
conversion of the Preferred Shares, without regard to any beneficial ownership
limits.
(3)Each Stockholder, as to itself only, represents and warrants to the Company
as follows:
(a)It has the requisite power and authority to enter into this Agreement and
consummate the Exchange.
(b)It is the record and beneficial owner of, and has valid and marketable title
to, the Shares being exchanged by it pursuant to this Agreement, free and clear
of any lien, pledge, restriction or other encumbrance (other than restrictions
arising pursuant to applicable securities laws), and has the absolute and
unrestricted right, power and capacity to surrender and exchange the Shares
being exchanged by it pursuant to this Agreement, free and clear of any lien,
pledge, restriction or other encumbrance. It is not a party to or bound by, and
the Shares being exchanged by it pursuant to this Agreement are not subject to,
any agreement, understanding or other arrangement (i) granting any option,
warrant or right of first refusal with respect to such Shares to any person,
(ii) restricting its right to surrender and exchange such Shares as contemplated
by this Agreement, or (iii) restricting any other of its rights with respect to
such Shares.
(c)Neither it nor any of its affiliates nor any person acting on behalf of or
for the benefit of any of the forgoing, has paid or given, or agreed to pay or
give, directly or indirectly, any commission or other remuneration (within the
meaning of Section 3(a)(9) of the Securities Act and the rules and regulations
of the Commission promulgated thereunder) for soliciting the Exchange.
(4)This Agreement, and any action or proceeding arising out of or relating to
this Agreement, shall be exclusively governed by the laws of the State of New
York.
(5)In the event that any part of this agreement is declared by any court or
other judicial or administrative body to be null, void or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the
other provisions of this agreement shall remain in full force and effect. In
such an event, the Stockholders and the Company shall endeavor in good faith
negotiations to modify this agreement so as to affect the original intent of the
parties as closely as possible.
(6)This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party hereto and delivered to the other
parties.
[SIGNATURE PAGE FOLLOWS]

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Please sign to acknowledge agreement with the above terms and return to the
undersigned.
 
Common Stockholder:
 
Biotechnology Value Fund, L.P.
 
By: BVF Partners L.P., General Partner
 
 
By:
 
BVF, Inc., General Partner
 
 
By:
 
/s/ Mark Lampert
Name:
 
Mark Lampert
Title:
 
President

 
Biotechnology Value Fund II, L.P.
 
By: BVF Partners L.P., General Partner
 
 
By:
 
BVF, Inc., General Partner
 
 
By:
 
/s/ Mark Lampert
Name:
 
Mark Lampert
Title:
 
President

Biotechnology Value Trading Fund OS, L.P.
 
By: BVF Partners OS, Ltd., General Partner
 
By: BVF Partners L.P., Sole Member
 
 
By:
 
BVF, Inc. General Partner
 
 
By:
 
/s/ Mark Lampert
Name:
 
Mark Lampert
Title:
 
President

MSI BVF SPV, L.L.C.
 
 
 
c/o Magnitude Capital
 
 
 
By:
 
/s/ Mark Lampert
Name:
 
Mark Lampert
Title:
 
President BVF Inc., itself General Partner of BVF Partners L.P., itself
attorney-in-fact for MSI BVF SPV, L.L.C.

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Acknowledged and agreed to:

Cidara Therapeutics, Inc.
By:
 
/s/ Jessica Oien
Name:
 
Jessica Oien
Title:
 
General Counsel

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SCHEDULE I

Stockholder
Shares of Common Stock
to be Exchanged
Shares of Series X Preferred Stock
to be Received
Biotechnology Value Fund, L.P.
643,600
64,360
Biotechnology Value Fund II, L.P.
383,420
38,342
Biotechnology Value Trading Fund OS, L.P.
103,790
10,379
MSI BVF SPV, LLC
69,190
6,919
Total
1,200,000
120,000

 

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EXHIBIT A

CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES X CONVERTIBLE PREFERRED STOCK

[ATTACHED]

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CIDARA THERAPEUTICS, INC.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES X CONVERTIBLE PREFERRED STOCK

PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW

CIDARA THERAPEUTICS, INC., a Delaware corporation (the “Corporation”), in
accordance with the provisions of Section 103 of the Delaware General
Corporation Law (the “DGCL”) does hereby certify that, in accordance with
Sections 141(c) and 151 of the DGCL, the following resolution was adopted by a
duly authorized committee of the Board of Directors of the Corporation on May
20, 2018:

RESOLVED, pursuant to authority expressly set forth in the Amended and Restated
Certificate of Incorporation of the Corporation (the “Certificate of
Incorporation”), the issuance of a series of Preferred Stock designated as the
Series X Convertible Preferred Stock, par value $0.0001 per share, of the
Corporation is hereby authorized and the designation, number of shares, powers,
preferences, rights, qualifications, limitations and restrictions thereof (in
addition to any provisions set forth in the Certificate of Incorporation, as
amended, that are applicable to the Preferred Stock of all classes and series)
are hereby fixed, and the Certificate of Designation of Preferences, Rights and
Limitations of Series X Convertible Preferred Stock is hereby approved as
follows:

SERIES X CONVERTIBLE PREFERRED STOCK
Section 1. Definitions. For the purposes hereof, the following terms shall have
the following meanings:

“Affiliate” means any Person or entity that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a person or entity, as such terms are used in and construed under Rule 144
under the Securities Act. With respect to a Holder, any investment fund or
managed account that is managed on a discretionary basis by the same investment
manager as such Holder will be deemed to be an Affiliate of such Holder.

“Business Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

“Closing Sale Price” means, for any security as of any date, the last closing
trade price for such security prior to 4:00 p.m., New York City time, on the
principal securities exchange or trading market where such security is listed or
traded, as reported by Bloomberg, L.P. (or an equivalent, reliable reporting
service mutually acceptable to and hereafter designated by Holders of a majority
of the then-outstanding Series X Preferred Stock and the Corporation), or if the
foregoing do not apply, the last trade price of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, L.P., or, if no last trade price is reported for such
security by Bloomberg, L.P., the average of the bid prices of any market makers
for such security as reported on the OTC Pink Market by OTC Markets Group, Inc.
If the Closing Sale Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Closing Sale Price of such security on
such date shall be the fair market value as determined in good faith by the
Board of Directors of the Corporation.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the Corporation’s common stock, par value $0.0001 per
share, and stock of any other class of securities into which such securities may
hereafter be reclassified or changed into.

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“Common Stock Equivalents” means any securities of the Corporation or the
subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

“Conversion Price” shall mean $1.00, as adjusted pursuant to paragraph 7 hereof.

“Conversion Shares” means, collectively, the shares of Common Stock issuable
upon conversion of the shares of Series X Preferred Stock in accordance with the
terms hereof.

“Daily Failure Amount” means the product of (x) .005 multiplied by (y) the
Closing Sale Price of the Common Stock on the applicable Share Delivery Date.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Holder” means any holder of Series X Preferred Stock.

“Issuance Date” May 23, 2018.

“Person” means any individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Stated Value” shall mean $10.00 per share.

“Trading Day” means a day on which the Common Stock is traded for any period on
the principal securities exchange or if the Common Stock is not traded on a
principal securities exchange, on a day that the Common Stock is traded on
another securities market on which the Common Stock is then being traded.

Section 2. Designation, Amount and Par Value; Assignment.

(a) The series of preferred stock designated by this Certificate of Designation
shall be designated as the Corporation’s Series X Convertible Preferred Stock
(the “Series X Preferred Stock”) and the number of shares so designated shall be
5,000,000. Each share of Series X Preferred Stock shall have a par value of
$0.0001 per share. The Series X Preferred Stock may be issued in certificated
form or in book-entry form, as requested by a Holder. To the extent that any
shares of Series X Preferred Stock are issued in book-entry form, references
herein to “certificates” shall instead refer to the book-entry notation relating
to such shares.

(b) The Corporation shall register shares of the Series X Preferred Stock, upon
records to be maintained by the Corporation for that purpose (the “Series X
Preferred Stock Register”), in the name of the Holders thereof from time to
time. The Corporation may deem and treat the registered Holder of shares of
Series X Preferred Stock as the absolute owner thereof for the purpose of any
conversion thereof and for all other purposes. The Corporation shall register
the transfer of any shares of Series X Preferred Stock in the Series X Preferred
Stock Register, upon surrender of the certificates evidencing such shares to be
transferred, duly endorsed by the Holder thereof, to the Corporation at its
address specified herein. Upon any such registration or transfer, a new
certificate evidencing the shares of Series X Preferred Stock so transferred
shall be issued to the transferee and a new certificate evidencing the remaining
portion of the shares not so transferred, if any, shall be issued to the
transferring Holder, in each case, within two Business Days. The provisions of
this Certificate of Designation are intended to be for the benefit of all
Holders from time to time and shall be enforceable by any such Holder.

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Section 3. Dividends. Holders shall not be entitled to receive any dividends in
respect of the Series X Preferred Stock, except to the extent that dividends are
paid on the Corporation’s Common Stock, in which case the Holders of the Series
X Preferred Stock shall be entitled to participate in such dividends, on an
as-converted basis (without regard to the Beneficial Ownership Limitation).

Section 4. Voting Rights Amendments.
(a) Except as otherwise provided herein or as otherwise required by the DGCL,
the Series X Preferred Stock shall have no voting rights.

(b) Notwithstanding Section 4(a), so long as at least 50% of the authorized
shares of Series X Preferred Stock are outstanding, the Corporation shall not,
without the affirmative vote of the Holders of a majority of the then
outstanding shares of the Series X Preferred Stock: (a) alter or amend this
Certificate of Designation, amend or repeal any provision of, or add any
provision to, the Certificate of Incorporation or bylaws of the Corporation, or
file any articles of amendment, certificate of designation, preferences,
limitations and relative rights of any series of preferred stock, if such action
would adversely alter or change the preferences, rights, privileges or powers
of, or restrictions provided for the benefit of the Series X Preferred Stock,
regardless of whether any of the foregoing actions shall be by means of
amendment to the Certificate of Incorporation or by merger, consolidation or
otherwise, or (b) increase or decrease (other than by conversion) the number of
authorized shares of Series X Preferred Stock.

(c) Any vote required or permitted under Section 4(b) may be taken at a meeting
of the Holders of the Series X Preferred Stock or through the execution of an
action by written consent in lieu of such meeting, provided that the consent is
executed by Holders representing a majority of the outstanding shares of Series
X Preferred Stock.

Section 5. Rank; Liquidation.

(a) The Series X Preferred Stock shall rank: (i) senior to any class or series
of capital stock of the Corporation hereafter created specifically ranking by
its terms junior to any Series X Preferred Stock (“Junior Securities”); (ii) on
parity with the Common Stock and any other class or series of capital stock of
the Corporation hereafter created specifically ranking by its terms on parity
with the Series X Preferred Stock (the “Parity Securities”); and (iii) junior to
any class or series of capital stock of the Corporation hereafter created
specifically ranking by its terms senior to any Series X Preferred Stock
(“Senior Securities”), in each case, as to distributions of assets upon
liquidation, dissolution or winding up of the Corporation, whether voluntarily
or involuntarily (all such distributions being referred to collectively as
“Distributions”).

(b) Subject to the prior and superior rights of the holders of any Senior
Securities of the Corporation, upon liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, each Holder of shares of
Series X Preferred Stock shall be entitled to receive, in preference to any
Distributions of any of the assets or surplus funds of the Corporation to the
holders of the Junior Securities, and pari passu with any Distribution to the
holders of the Parity Securities, an equivalent amount of Distributions as would
be paid on the Common Stock underlying the Series X Preferred Stock, determined
on an as-converted basis (without regard to the Beneficial Ownership
Limitation), plus an additional amount equal to any dividends declared but
unpaid on such shares, before any payments shall be made or any assets
distributed to holders of any class of Junior Securities. If, upon any such
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation shall be insufficient to pay the Holders of shares of the Series X
Preferred Stock the amount required under the preceding sentence, then all
remaining assets of the Corporation shall be distributed ratably to Holders of
the shares of the Series X Preferred Stock and holders of Parity Securities.

Section 6. Conversion.

(a) Conversions at Option of Holder. Each share of Series X Preferred Stock
shall be convertible, at any time and from time to time from and after the
Issuance Date, at the option of the Holder thereof, into a number of shares of
Common Stock equal to the Conversion Ratio. Holders shall effect conversions by
providing the Corporation with the form of conversion notice attached hereto
as Annex A (a “Notice of Conversion”), duly completed and executed. Other than a
conversion following a Fundamental Transaction or following a notice provided
for under Section 7(d)(ii) hereof, the Notice of Conversion must specify at
least a number of shares of Series X Preferred Stock to be converted

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equal to the lesser of (x) 100 shares (such number subject to appropriate
adjustment following the occurrence of an event specified in Section 7(a)
hereof) and (y) the number of shares of Series X Preferred Stock then held by
the Holder. Provided the Corporation’s transfer agent is participating in the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, the
Notice of Conversion may specify, at the Holder’s election, whether the
applicable Conversion Shares shall be credited to the account of the Holder’s
prime broker with DTC through its Deposit Withdrawal Agent Commission system (a
“DWAC Delivery”). The “Conversion Date”, or the date on which a conversion shall
be deemed effective, shall be defined as the Trading Day that the Notice of
Conversion, completed and executed, is sent by facsimile or e-mail to, and
received during regular business hours by, the Corporation; provided that the
original certificate(s) (if applicable) representing such shares of Series X
Preferred Stock being converted, duly endorsed, and the accompanying Notice of
Conversion, are received by the Corporation within two (2) Trading Days
thereafter. In all other cases, the Conversion Date shall be defined as the
Trading Day on which the original share certificate(s) (if applicable) of Series
X Preferred Stock being converted, duly endorsed, and the accompanying Notice of
Conversion, are received by the Corporation. The calculations set forth in the
Notice of Conversion shall control in the absence of manifest or mathematical
error.

(b) Conversion Ratio. The “Conversion Ratio” for each share of Series X
Preferred Stock shall be equal to the Stated Value divided by the Conversion
Price.

(c) Beneficial Ownership Limitation. Notwithstanding anything herein to the
contrary, the Corporation shall not effect any conversion of the Series X
Preferred Stock, and a Holder shall not have the right to convert any portion of
the Series X Preferred Stock, to the extent that, after giving effect to an
attempted conversion set forth on an applicable Notice of Conversion, such
Holder (together with such Holder’s Affiliates, and any other Person whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) or Section 16 of the Exchange Act and the applicable
regulations of the Commission, including any “group” of which the Holder is a
member (the foregoing, “Attribution Parties”)) would beneficially own a number
of shares of Common Stock in excess of the Beneficial Ownership Limitation (as
defined below). For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by such Holder and its Attribution Parties shall
include the number of shares of Common Stock issuable upon conversion of the
Series X Preferred Stock subject to the Notice of Conversion with respect to
which such determination is being made, but shall exclude the number of shares
of Common Stock which are issuable upon (A) conversion of the remaining,
unconverted Series X Preferred Stock beneficially owned by such Holder or any of
its Attribution Parties, and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Corporation (including any
warrants) beneficially owned by such Holder or any of its Attribution Parties
that are subject to a limitation on conversion or exercise similar to the
limitation contained herein. For purposes of this Section 6(c), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act and the applicable regulations of the Commission. In addition, for purposes
hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act
and the applicable regulations of the Commission. For purposes of this
Section 6(c), in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as stated in
the most recent of the following: (A) the Corporation’s most recent periodic or
annual filing with the Commission, as the case may be, (B) a more recent public
announcement by the Corporation that is filed with the Commission, or (C) a more
recent notice by the Corporation or the Corporation’s transfer agent to the
Holder setting forth the number of shares of Common Stock then outstanding. Upon
the written request of a Holder (which may be by email), the Corporation shall,
within two (2) Trading Days thereof, confirm in writing to such Holder (which
may be via email) the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after
giving effect to any actual conversion or exercise of securities of the
Corporation, including shares of Series X Preferred Stock, by such Holder or its
Attribution Parties since the date as of which such number of outstanding shares
of Common Stock was last publicly reported or confirmed to the Holder. The
“Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of
shares of Common Stock pursuant to such Notice of Conversion (to the extent
permitted pursuant to this Section 6(c)). The Corporation shall be entitled to
rely on representations made to it by the Holder in any Notice of Conversion
regarding its Beneficial Ownership Limitation.

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(d) Mechanics of Conversion

i. Delivery of Certificate or Electronic Issuance Upon Conversion. Not later
than two Trading Days after the applicable Conversion Date, or if the Holder
requests the issuance of physical certificate(s), two Trading Days after receipt
by the Corporation of the original certificate(s) representing such shares of
Series X Preferred Stock being converted, duly endorsed, and the accompanying
Notice of Conversion (the “Share Delivery Date”), the Corporation shall either:
(a) deliver, or cause to be delivered, to the converting Holder a physical
certificate or certificates representing the number of Conversion Shares being
acquired upon the conversion of shares of Series X Preferred Stock; or (b) in
the case of a DWAC Delivery, electronically transfer such Conversion Shares by
crediting the account of the Holder’s prime broker with DTC through its DWAC
system. If in the case of any Notice of Conversion such certificate or
certificates are not delivered to or as directed by or, in the case of a DWAC
Delivery, such shares are not electronically delivered to or as directed by, the
applicable Holder by the Share Delivery Date, the applicable Holder shall be
entitled to elect to rescind such Notice of Conversion by written notice to the
Corporation at any time on or before its receipt of such certificate or
certificates for Conversion Shares or electronic receipt of such shares, as
applicable, in which event the Corporation shall promptly return to such Holder
any original Series X Preferred Stock certificate delivered to the Corporation
and such Holder shall promptly return to the Corporation any Common Stock
certificates or otherwise direct the return of any shares of Common Stock
delivered to the Holder through the DWAC system, representing the shares of
Series X Preferred Stock unsuccessfully tendered for conversion to the
Corporation.

ii. Obligation Absolute. Subject to Section 6(c) hereof and subject to Holder’s
right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, the
Corporation’s obligation to issue and deliver the Conversion Shares upon
conversion of Series X Preferred Stock in accordance with the terms hereof are
absolute and unconditional, irrespective of any action or inaction by a Holder
to enforce the same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by such Holder or any other Person of any obligation to
the Corporation or any violation or alleged violation of law by such Holder or
any other Person, and irrespective of any other circumstance which might
otherwise limit such obligation of the Corporation to such Holder in connection
with the issuance of such Conversion Shares. Subject to Section 6(c) hereof and
subject to Holder’s right to rescind a Notice of Conversion pursuant to
Section 6(d)(i) above, in the event a Holder shall elect to convert any or all
of its Series X Preferred Stock, the Corporation may not refuse conversion based
on any claim that such Holder or anyone associated or affiliated with such
Holder has been engaged in any violation of law, agreement or for any other
reason, unless an injunction from a court, on notice to Holder, restraining
and/or enjoining conversion of all or part of the Series X Preferred Stock of
such Holder shall have been sought and obtained by the Corporation, and the
Corporation posts a surety bond for the benefit of such Holder in the amount of
125% of the value of the Conversion Shares into which would be converted the
Series X Preferred Stock which is subject to such injunction, which bond shall
remain in effect until the completion of arbitration/litigation of the
underlying dispute and the proceeds of which shall be payable to such Holder to
the extent it obtains judgment. In the absence of such injunction, the
Corporation shall, subject to Section 6(c) hereof and subject to Holder’s right
to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, issue
Conversion Shares upon a properly noticed conversion. If the Corporation fails
to deliver to a Holder such certificate or certificates, or electronically
deliver (or cause its transfer agent to electronically deliver) such shares in
the case of a DWAC Delivery, pursuant to Section 6(d)(i) on or prior to the
fifth Trading Day after the Share Delivery Date applicable to such conversion
(other than a failure caused by incorrect or incomplete information provided by
Holder to the Corporation), then, unless the Holder has rescinded the applicable
Notice of Conversion pursuant to Section 6(d)(i) above, the Corporation shall
pay (as liquidated damages and not as a penalty) to such Holder an amount
payable, at the Corporation’s option, either (a) in cash or (b) to the extent
that it would not cause the Holder or its Attribution Parties to exceed the
Beneficial Ownership Limitation, in shares of Common Stock that are valued for
these purposes at the Closing Sale Price on the date of such calculation, in
each case equal to the product of (x) the number of Conversion Shares required
to have been issued by the Corporation on such Share Delivery Date, (y) an
amount equal to the Daily Failure Amount and (z) the number of Trading Days
actually lapsed after such fifth Trading Day after the Share Delivery Date
during which such certificates have not been delivered, or, in the case of a
DWAC Delivery, such shares have not been electronically delivered; provided,
however, the Holder shall only receive up to such amount of shares of Common
Stock such that Holder and its Attribution Parties and any other persons or
entities whose beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d)

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of the Exchange Act (including shares held by any “group” of which the Holder is
a member, but excluding shares beneficially owned by virtue of the ownership of
securities or rights to acquire securities that have limitations on the right to
convert, exercise or purchase similar to the limitation set forth herein) shall
not collectively beneficially own greater than the Beneficial Ownership
Limitation. Nothing herein shall limit a Holder’s right to pursue actual damages
for the Corporation’s failure to deliver Conversion Shares within the period
specified herein and such Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief; provided that Holder
shall not receive duplicate damages for the Corporation’s failure to deliver
Conversion Shares within the period specified herein. The exercise of any such
rights shall not prohibit a Holder from seeking to enforce damages pursuant to
any other Section hereof or under applicable law.

iii. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Conversion. If the Corporation fails to deliver to a Holder the applicable
certificate or certificates or to effect a DWAC Delivery, as applicable, by the
Share Delivery Date pursuant to Section 6(d)(i) (other than a failure caused by
incorrect or incomplete information provided by Holder to the Corporation), and
if after such Share Delivery Date such Holder is required by its brokerage firm
to purchase (in an open market transaction or otherwise), or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by such Holder of the Conversion Shares which such Holder
was entitled to receive upon the conversion relating to such Share Delivery Date
(a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in
addition to any other remedies available to or elected by such Holder) the
amount by which (x) such Holder’s total purchase price (including any brokerage
commissions) for the shares of Common Stock so purchased exceeds (y) the product
of (1) the aggregate number of shares of Common Stock that such Holder was
entitled to receive from the conversion at issue multiplied by (2) the actual
sale price at which the sell order giving rise to such purchase obligation was
executed (including any brokerage commissions) and (B) at the option of such
Holder, either reissue (if surrendered) the shares of Series X Preferred Stock
equal to the number of shares of Series X Preferred Stock submitted for
conversion or deliver to such Holder the number of shares of Common Stock that
would have been issued if the Corporation had timely complied with its delivery
requirements under Section 6(d)(i). For example, if a Holder purchases shares of
Common Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted conversion of shares of Series X Preferred Stock with
respect to which the actual sale price (including any brokerage commissions)
giving rise to such purchase obligation was a total of $10,000 under clause
(A) of the immediately preceding sentence, the Corporation shall be required to
pay such Holder $1,000. The Holder shall provide the Corporation written notice,
within two (2) Trading Days after the occurrence of a Buy-In, indicating the
amounts payable to such Holder in respect of such Buy-In together with
applicable confirmations and other evidence reasonably requested by the
Corporation. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Corporation’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of the shares of Series X Preferred Stock
as required pursuant to the terms hereof; provided, however, that the Holder
shall not be entitled to both (i) require the reissuance of the shares of Series
X Preferred Stock submitted for conversion for which such conversion was not
timely honored and (ii) receive the number of shares of Common Stock that would
have been issued if the Corporation had timely complied with its delivery
requirements under Section 6(d)(i).

iv. Reservation of Shares Issuable Upon Conversion. The Corporation covenants
that it will at all times reserve and keep available out of its authorized and
unissued shares of Common Stock for the sole purpose of issuance upon conversion
of the Series X Preferred Stock, free from preemptive rights or any other actual
contingent purchase rights of Persons other than the Holders of the Series X
Preferred Stock, not less than such aggregate number of shares of the Common
Stock as shall be issuable (taking into account the adjustments of Section 7)
upon the conversion of all outstanding shares of Series X Preferred Stock. The
Corporation covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid and
non-assessable.

v. Fractional Shares. No fractional shares or scrip representing fractional
shares of Common Stock shall be issued upon the conversion of the Series X
Preferred Stock. As to any fraction of a share which a Holder would otherwise be
entitled to receive upon such conversion, the Corporation shall pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Conversion Price.

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vi. Transfer Taxes. The issuance of certificates for shares of the Common Stock
upon conversion of the Series X Preferred Stock shall be made without charge to
any Holder for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificates, provided that 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 such certificate
upon conversion in a name other than that of the registered Holder(s) of such
shares of Series X Preferred Stock and the Corporation shall not be required to
issue or deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Corporation the amount of
such tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.

(e) Status as Stockholder. Upon each Conversion Date, (i) the shares of Series X
Preferred Stock being converted shall be deemed converted into shares of Common
Stock and (ii) the Holder’s rights as a holder of such converted shares of
Series X Preferred Stock shall cease and terminate, excepting only the right to
receive certificates for such shares of Common Stock and to any remedies
provided herein or otherwise available at law or in equity to such Holder
because of a failure by the Corporation to comply with the terms of this
Certificate of Designation. In all cases, the Holder shall retain all of its
rights and remedies for the Corporation’s failure to convert Series X Preferred
Stock.

Section 7. Certain Adjustments.

(a) Stock Dividends and Stock Splits. If the Corporation, at any time while this
Series X Preferred Stock is outstanding: (A) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by
the Corporation upon conversion of this Series X Preferred Stock or upon the
exercise of warrants) with respect to the then outstanding shares of Common
Stock; (B) subdivides outstanding shares of Common Stock into a larger number of
shares; or (C) combines (including by way of a reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, then the Conversion
Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding any treasury shares of the
Corporation) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event (excluding any treasury shares of the Corporation).
Any adjustment made pursuant to this Section 7(a) shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision or combination.

(b) Fundamental Transaction. If, at any time while this Series X Preferred Stock
is outstanding, (A) the Corporation effects any merger or consolidation of the
Corporation with or into another Person or any stock sale to, or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off, share exchange or scheme of arrangement) with or into another Person
(other than such a transaction in which the Corporation is the surviving or
continuing entity and its Common Stock is not exchanged for or converted into
other securities, cash or property), (B) the Corporation effects any sale of all
or substantially all of its assets in one transaction or a series of related
transactions, (C) any tender offer or exchange offer (whether by the Corporation
or another Person) is completed pursuant to which more than 50% of the Common
Stock not held by the Corporation or such Person is exchanged for or converted
into other securities, cash or property, or (D) the Corporation effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
(other than as a result of a dividend, subdivision or combination covered by
Section 7(a) above) to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
“Fundamental Transaction”), then, upon any subsequent conversion of this Series
X Preferred Stock the Holders shall have the right to receive, in lieu of the
right to receive Conversion Shares, for each Conversion Share that would have
been issuable upon such conversion immediately prior to the occurrence of such
Fundamental Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of one share of Common Stock (the “Alternate
Consideration”). For purposes of any such subsequent conversion, the
determination of the Conversion Ratio shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Corporation shall adjust the Conversion Ratio in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holders shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Series

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X Preferred Stock following such Fundamental Transaction. To the extent
necessary to effectuate the foregoing provisions, any successor to the
Corporation or surviving entity in such Fundamental Transaction shall file a new
Certificate of Designation with the same terms and conditions and issue to the
Holders new preferred stock consistent with the foregoing provisions and
evidencing the Holders’ right to convert such preferred stock into Alternate
Consideration. The terms of any agreement to which the Corporation is a party
and pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this Section 7(b) and insuring that this Series X Preferred Stock (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction. The Corporation shall cause
to be delivered to each Holder, at its last address as it shall appear upon the
stock books of the Corporation, written notice of any Fundamental Transaction at
least 10 calendar days prior to the date on which such Fundamental Transaction
is expected to become effective or close.

(c) Calculations. All calculations under this Section 7 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 7, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of
Common Stock (excluding any treasury shares of the Corporation) issued and
outstanding.

(d) Notice to the Holders.

i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted
pursuant to any provision of this Section 7, the Corporation shall promptly
deliver to each Holder a notice setting forth the Conversion Ratio after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

ii. Other Notices. If: (A) the Corporation shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the Corporation
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock, (C) the approval of any stockholders of the Corporation shall be
required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Corporation is a party, any sale or
transfer of all or substantially all of the assets of the Corporation, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (D) the Corporation shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Corporation, then, in each case, the Corporation shall cause to be filed
at each office or agency maintained for the purpose of conversion of this Series
X Preferred Stock, and shall cause to be delivered to each Holder at its last
address as it shall appear upon the stock books of the Corporation, at least 10
calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share
exchange, provided that the failure to deliver such notice or any defect therein
or in the delivery thereof shall not affect the validity of the corporate action
required to be specified in such notice.

Section 8. Miscellaneous.

(a) Notices. Any and all notices or other communications or deliveries to be
provided by the Holders hereunder including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, or sent
by a nationally recognized overnight courier service, addressed to the
Corporation, at 6310 Nancy Ridge Drive, Suite 101, San Diego, California 92121,
or by email: corporatesecretary@cidara.com, or such other email address as the
Corporation may specify for such purposes by notice to the Holders delivered in
accordance with this Section. Any and all notices or other communications or
deliveries to be provided by the Corporation hereunder shall be in writing and
delivered personally, by email, or sent by a nationally recognized overnight
courier service addressed to each Holder at the email address of such Holder
appearing on the books of the Corporation, or if no such email address appears
on the books of the Corporation, at the principal place of business of such
Holder. Any notice or other communication or deliveries hereunder shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice

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or communication is delivered via email at the email address specified in this
Section prior to 5:30 p.m. (Pacific Time) on any date, (ii) the date immediately
following the date of transmission, if such notice or communication is delivered
via email at the email address specified in this Section between 5:30 p.m. and
11:59 p.m. (Pacific Time) on any date, (iii) the second Business Day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given.

(b) Lost or Mutilated Series X Preferred Stock Certificate. If a Holder’s Series
X Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the
Corporation shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated certificate, or in lieu of or in substitution for a
lost, stolen or destroyed certificate, a new certificate for the shares of
Series X Preferred Stock so mutilated, lost, stolen or destroyed, but only upon
receipt of evidence of such loss, theft or destruction of such certificate, and
of the ownership thereof, reasonably satisfactory to the Corporation and, in
each case, customary and reasonable indemnity, if requested. Applicants for a
new certificate under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable third-party
costs as the Corporation may prescribe.

(c) Waiver. Any waiver by the Corporation or a Holder of a breach of any
provision of this Certificate of Designation shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach
of any other provision of this Certificate of Designation or a waiver by any
other Holders. The failure of the Corporation or a Holder to insist upon strict
adherence to any term of this Certificate of Designation on one or more
occasions shall not be considered a waiver or deprive that party (or any other
Holder) of the right thereafter to insist upon strict adherence to that term or
any other term of this Certificate of Designation. Any waiver by the Corporation
or a Holder must be in writing. Notwithstanding any provision in this
Certificate of Designation to the contrary, any provision contained herein and
any right of the Holders of Series X Preferred Stock granted hereunder may be
waived as to all shares of Series X Preferred Stock (and the Holders thereof)
upon the written consent of the Holders of not less than a majority of the
shares of Series X Preferred Stock then outstanding, unless a higher percentage
is required by the DGCL, in which case the written consent of the Holders of not
less than such higher percentage shall be required.

(d) Severability. If any provision of this Certificate of Designation is
invalid, illegal or unenforceable, the balance of this Certificate of
Designation shall remain in effect, and if any provision is inapplicable to any
Person or circumstance, it shall nevertheless remain applicable to all other
Persons and circumstances. If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum rate of interest permitted under applicable law.

(e) Next Business Day. Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

(f) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designation and shall not be deemed to
limit or affect any of the provisions hereof.

(g) Status of Converted Series X Preferred Stock. If any shares of Series X
Preferred Stock shall be converted or reacquired by the Corporation, such shares
shall resume the status of authorized but unissued shares of preferred stock and
shall no longer be designated as Series X Preferred Stock.

********************
 

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IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation
this 21st day of May 2018.
 
 /s/ Jeffrey L. Stein
Jeffrey L. Stein, Ph.D.
President and Chief Executive Officer

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ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES X
PREFERRED STOCK)

The undersigned Holder hereby irrevocably elects to convert the number of shares
of Series X Preferred Stock indicated below, represented by stock certificate
No(s).          (the “Preferred Stock Certificates”), into shares of common
stock, par value $0.0001 per share (the “Common Stock”), of Cidara Therapeutics,
Inc., a Delaware corporation (the “Corporation”), as of the date written below.
If securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Capitalized terms utilized but not defined herein shall have the
meaning ascribed to such terms in that certain Certificate of Designation of
Preferences, Rights and Limitations of Series X Convertible Preferred Stock (the
“Certificate of Designation”) filed by the Corporation with the Secretary of
State of the State of Delaware on May 21, 2018.

As of the date hereof, the number of shares of Common Stock beneficially owned
by the undersigned Holder (together with such Holder’s Affiliates, and any other
Person whose beneficial ownership of Common Stock would be aggregated with the
Holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act and the
applicable regulations of the Commission, including any “group” of which the
Holder is a member (the foregoing, “Attribution Parties”)), including the number
of shares of Common Stock issuable upon conversion of the Series X Preferred
Stock subject to this Notice of Conversion, but excluding the number of shares
of Common Stock which are issuable upon (A) conversion of the remaining,
unconverted Series X Preferred Stock beneficially owned by such Holder or any of
its Attribution Parties, and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Corporation (including any
warrants) beneficially owned by such Holder or any of its Attribution Parties
that are subject to a limitation on conversion or exercise similar to the
limitation contained in Section 6(c) of the Certificate of Designation, is
    %. For purposes hereof, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the applicable regulations
of the Commission. In addition, for purposes hereof, “group” has the meaning set
forth in Section 13(d) of the Exchange Act and the applicable regulations of the
Commission.

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Conversion calculations:
Date to Effect Conversion:
 
Number of shares of Series X Preferred Stock owned prior to Conversion:
 
Number of shares of Series X Preferred Stock to be Converted:
 
Number of shares of Common Stock to be Issued:
 
Address for delivery of physical certificates:
 
or
 
for DWAC Delivery:
 
DWAC Instructions:
 
Broker no:
 
Account no:

HOLDER
 
 
By:
 
 
 
 
Name:
 
 
Title:
 
 
Date: