Document:

Exhibit 4.2

 

 

June 28, 2018

 

Trude Amick

Director, Technology Department

Office of Commercialization & Economic Development

The University of North Carolina at Chapel Hill

100 Europa Drive, Suite 430

Chapel Hill, NC 27517

(p) 919-962-6289; (f) 919-962-0646

 

RE: 3rd Amendment to the 2016 Letter Agreement and Promissory Note between The University of North Carolina at Chapel Hill (“UNC”) and Liquidia Technologies, Inc. (“Liquidia”)

 

Dear Trude,

 

As you know, UNC and Liquidia entered into a letter agreement dated June 10, 2016, amended by a 1st Amendment, effective December 1, 2017 (the “1st Amendment”), as amended by a 2nd Amendment, effective June 15, 2018 (the “2nd Amendment” and, collectively with the 1st Amendment, the “2016 Letter Agreement”), which, in part, included an agreement to enter a promissory note on monies owed by Liquidia to UNC, which was also entered on June 10, 2016 (the “Promissory Note”).  The Promissory Note originally had a maturity date of December 31, 2017, which maturity date was subsequently extended to June 30, 2018 and December 31, 2018 pursuant to the 1st Amendment and 2nd Amendment, respectively.

 

Pursuant to Section 7.4 of that certain Loan and Security Agreement, dated as of January 6, 2016, as amended (the “LSA”), by and between Liquidia and Pacific Western Bank, a California state chartered bank (the “Bank”), Liquidia may not, without the Bank’s prior written consent, prepay any Indebtedness (as defined in the LSA) or take any actions which impose on Liquidia an obligation to prepay any Indebtedness, except Indebtedness to the Bank.  UNC and Liquidia understand that the Bank has provided written consent to the prepayment modifications to the 2016 Letter Agreement and the Promissory Note set forth below.

 

This letter agreement shall serve as a third amendment to the 2016 Letter Agreement and the Promissory Note, whereby Liquidia and UNC hereby acknowledge and agree that, in the event that Liquidia consummates an initial public offering of its common stock in the United States in 2018 and (i) gross proceeds from such offering are at least $75 million, the entire outstanding loan amount under the Promissory Note shall become immediately due and payable; or (ii) the gross proceeds from such offering are greater than $50 million and less than $75 million, $600,000 of the outstanding loan amount under the Promissory Note shall become due and payable, with the remaining balance of the loan to be amortized and payable in equal monthly installments over the remaining term of the LSA until the loan amount is fully paid on October

 

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10, 2020.  In the event that Liquidia does not consummate an initial public offering of its common stock in the United States in 2018 or the gross proceeds from such offering are not greater than $50 million, Liquidia and UNC hereby acknowledge and agree that the entire outstanding loan amount under the Promissory Note shall be due and payable on December 31, 2018.

 

The parties intend for all other terms and conditions of the 2016 Letter Agreement, the Promissory Note and the subordination agreement between UNC and the Bank to continue in full force and effect.

 

The understandings set forth in this 3rd Amendment shall be effective on the date first written above upon countersigning by UNC below.

 

	
Sincerely,
    	
 
    	
Acknowledged & Agreed:
    
	
 
    	
 
    	
University of North Carolina at Chapel Hill
    
	
 
    	
 
    	
 
    
	
/s/   Shawn Glidden
    	
 
    	
 
    
	
Shawn   Glidden
    	
 
    	
By:
    	
/s/ Jacqueline Quay
    
	
VP   Legal Affairs & Secretary
    	
 
    	
Name:
    	
Jacqueline Quay
    
	
Liquidia   Technologies, Inc.
    	
 
    	
Title:
    	
Director of Licensing, OTC
    

 

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June 15, 2018

 

Trude Amick

Director, Technology Development

Office of Commercialization & Economic Development

The University of North Carolina at Chapel Hill

100 Europa Drive Suite 430

Chapel Hill, NC 27517

(p) 919-962-6289; (f) 919-962-0646

 

Dear Trude:

 

Re: 2nd Amendment to the 2016 Letter Agreement and Promissory Note between the University of North Carolina at Chapel Hill (“UNC”) and Liquidia Technologies, Inc. (“Liquidia”)

 

As you will recall, UNC and Liquidia entered into a letter agreement dated June 10, 2016, amended by a 1st Amendment, effective December 1, 2017, (collectively the “2016 Letter Agreement”), which, in part, included an agreement to enter a promissory note on monies owed by Liquidia to UNC, which was also entered on June 10, 2016, (the “Promissory Note”). As you will also recall, that Promissory Note includes a maturity date of December 31, 2017. Moreover, the 1st Amendment to the 2016 Letter Agreement extended such maturity date of the Promissory Note to June 30, 2018.

 

This letter agreement shall serve as an amendment to the 2016 Letter Agreement and the Promissory Note, whereby Liquidia and UNC hereby agree to extend the maturity date of the Promissory Note from June 30, 2018, to December 31, 2018 (the “2nd Amendment”). The parties intend for all other terms and condition of the 2016 Letter Agreement and the Promissory Note to continue in force as adjusted through the new maturity date of December 31, 2018, including but not limited to the continuation of interest under the applicable terms of the 2016 Letter Agreement (Section B) and the Promissory Note (Interest).

 

The understandings set forth in this 2nd Amendment shall be effective on the date first written above upon countersigning by UNC below.

 

Sincerely,

 

	
/s/ Shawn Glidden
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Shawn Glidden
    	
 
    	
UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL
    
	
VP Legal Affairs & Secretary
    	
 
    	
ACCEPTED AND AGREED
    
	
Liquidia Technologies, Inc
    	
 
    	
By:
    	
/s/ Jacqueline Quay
    
	
 
    	
 
    	
Name:
    	
Jacqueline Quay
    
	
 
    	
 
    	
Title:
    	
Director of Licensing, OTC
    

 

 

 

December 1, 2017

 

Trude Amick

Director, Technology Development

Office of Commercialization & Economic Development

The University of North Carolina at Chapel Hill

100 Europa Drive Suite 430

Chapel Hill, NC 27517

(p) 919-962-6289; (f) 919-962-0646

 

Dear Trude:

 

Re: 1st Amendment to the 2016 Letter Agreement and Promissory Note between the University of North Carolina at Chapel Hill (“UNC”) and Liquidia Technologies, Inc. (“Liquidia”)

 

As you will recall, UNC and Liquidia entered into a letter agreement dated June 10, 2016, the 2016 Letter Agreement, which, in part, included an agreement to enter a promissory note on monies owed by Liquidia to UNC, which was also entered on June 10, 2016, the Promissory Note. As you will also recall, that Promissory Note includes a maturity date of December 31, 2017.

 

This letter agreement shall serve as an amendment to the 2016 Letter Agreement and the Promissory Note, whereby Liquidia and UNC hereby agree to extend the maturity date of the Promissory Note from December 31, 2017, to June 30, 2018 (the “1st Amendment”). The parties intend for all other terms and condition of the 2016 Letter Agreement and the Promissory Note to continue in force as adjusted through the new maturity date of June 30, 2018, including but not limited to the continuation of interest under the applicable terms of the 2016 Letter Agreement (Section B) and the Promissory Note (Interest).

 

The understandings set forth in this 1st Amendment shall be effective on the date first written above upon countersigning by UNC below.

 

Sincerely,

 

	
/s/ Shawn Glidden
    	
 
    	
 
    
	
Shawn Glidden

VP Legal Affairs & Secretary

Liquidia Technologies, Inc
    	
UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL

 

ACCEPTED AND AGREED 
    
	
 
    	
 
    
	
 
    	
By 
    	
/s/ Jacqueline Quay
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Jacqueline Quay
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Director of Licensing, OTC
    

 

 

2016 LETTER AGREEMENT PROMISSORY NOTE

 

	
$ 2,165,179.81 (“Net Amount Due”)
    	
June 10, 2016 (“Effective Date”)
    

 

FOR VALUE RECEIVED, the undersigned, (the “Maker”), hereby promises to pay to the order of The University of North Carolina at Chapel Hill, (“Payee”), the principal sum of $2,165,179.81 pursuant to the terms and conditions set forth herein.

 

PAYMENT OF PRINCIPAL.  The principal amount of this Promissory Note (the “Note”) and any accrued but unpaid interest shall be due and payable in full no later than December 31, 2017.

 

INTEREST.  This Note shall bear interest at the lesser of (i) the one-year LIBOR rate plus two percent or (ii) five percent in total, with such interest rate being reset annually on the anniversary of the issuance of the Promissory Note and interest compounding annually on such anniversary date.

 

PREPAYMENT.  The Maker shall have the right at any time and from time to time to prepay this Note in whole or in part without premium or penalty.

 

REMEDIES.  No delay or omission on part of the holder of this Note in exercising any right hereunder shall operate as a waiver of any such right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion.

 

EVENTS OF ACCELERATION.  The occurrence of the Maker becoming insolvent, filing for bankruptcy or entering receivership shall constitute an “Event of Acceleration” by Maker under this Note.

 

ACCELERATION.  Upon the occurrence of an Event of Acceleration under this Note, and in addition to any other rights and remedies that Payee may have, Payee shall have the right, at its sole and exclusive option, to declare this Note immediately due and payable.

 

SUBORDINATION.  The Maker’s obligations under this Promissory Note are subordinated to all indebtedness, if any, of Maker, to any unrelated third party lender to the extent such indebtedness is outstanding on the date of this Note and such subordination is required under the loan documents providing for such indebtedness.

 

WAIVERS BY MAKER.  All parties to this Note including Maker and any sureties, endorsers, and guarantors hereby waive protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to continue to remain bound for the payment of principal, interest and all other sums due under this Note notwithstanding any change or changes by way of release, surrender, exchange, modification or substitution of any security for this Note or by way of any extension or extensions of time for the payment of principal and interest; and all such parties waive all and every kind of notice of such change or changes and agree that the same may be made without notice or consent of any of them.

 

EXPENSES.  In the event any payment under this Note is not paid in accord with the terms herein, the Maker agrees to pay, in addition to the principal and interest hereunder, reasonable attorneys’ fees, plus all other reasonable expenses incurred by Payee in exercising any of its rights and remedies upon default.

 

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GOVERNING LAW.  This Note shall be governed by, and construed in accordance with, the laws of the State of North Carolina.

 

SUCCESSORS.  All of the foregoing is the promise of Maker and shall bind Maker and Maker’s successors, heirs and assigns.

 

IN WITNESS WHEREOF, Maker has executed this Promissory Note as of the day and year first above written.

 

 

	
Maker: 
    	
Liquidia Technologies, Inc.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed:
    	
/s/ Shawn Glidden
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
Shawn Glidden
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
VP Legal   Affairs & Secretary
    	
 
    

 

2Exhibit 4.3

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

WARRANT TO PURCHASE STOCK

 

Company:  Liquidia Technologies, Inc., a Delaware corporation

Number of Shares:  24,199, subject to adjustment

Class of Stock:  Series B Convertible Preferred Stock, $0.001 par value per share

Warrant Price:  $3.558, subject to adjustment

Issue Date:                   March 28, 2008

Expiration Date:      As set forth in Section 5.1 below

Credit Facility:    This Warrant is issued in connection with that certain Loan and Security Agreement of even date herewith between Silicon Valley Bank and the Company.

 

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (Silicon Valley Bank, together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, is referred to hereinafter as “Holder”) is entitled to purchase the number of fully paid and nonassessable shares (the “Shares”) of the class of securities (the “Class”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.

 

ARTICLE 1. EXERCISE.

 

1.1                               Method of Exercise. Holder may exercise this Warrant by delivering the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Article 1.2, Holder shall also deliver to the Company a check, wire transfer (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

 

1.2                               Conversion Right. In lieu of exercising this Warrant as specified in Article 1.1, Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant to Article 1.3.

 

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1.3                               Fair Market Value. If the Company’s common stock is traded in a public market and the Shares are common stock, the fair market value of a Share shall be the closing price of a share of common stock reported for the business day immediately before Holder delivers this Warrant together with its Notice of Exercise to the Company (or in the instance where the Warrant is exercised immediately prior to the effectiveness of the Company’s initial public offering (“IPO”), the “price to public” per share price specified in the final prospectus relating to such offering). If the Company’s common stock is traded in a public market and the Shares are preferred stock, the fair market value of a Share shall be the closing price of a share of the Company’s common stock reported for the business day immediately before Holder delivers this Warrant together with its Notice of Exercise to the Company (or, in the instance where the Warrant is exercised immediately prior to the effectiveness of the IPO, the initial “price to public” per share price specified in the final prospectus relating to such offering), in both cases, multiplied by the number of shares of the Company’s common stock into which a Share is convertible. If the Company’s common stock is not traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment.

 

1.4                               Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant Price, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so acquired.

 

1.5                               Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

 

1.6                               Treatment of Warrant Upon Acquisition of Company.

 

1.6.1                     “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale, license, or other disposition of all or substantially all of the assets of the Company, or any reorganization, consolidation, merger or sale of outstanding capital stock of the Company where the holders of the Company’s securities before the transaction beneficially own less than a majority of the outstanding voting securities of the surviving entity after the transaction.

 

1.6.2                     Treatment of Warrant at Acquisition.

 

A)                                   Upon the written request of the Company, Holder agrees that, in the event of an Acquisition in which the sole consideration is cash, either (a) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The Company shall provide the Holder with written notice of its request relating to the foregoing (together with such reasonable information as the Holder may request in connection with such contemplated Acquisition giving rise to such notice),

 

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which is to be delivered to Holder not less than ten (10) days prior to the closing of the proposed Acquisition.

 

B)                                   Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that is an “arms length” sale of all or substantially all of the Company’s assets (and only its assets) to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset Sale”), either (a) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Date if the Company continues as a going concern following the closing of any such True Asset Sale. The Company shall provide the Holder with written notice of its request relating to the foregoing (together with such reasonable information as the Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than ten (10) days prior to the Closing of the proposed Acquisition.

 

C)                                   Upon the closing of any Acquisition other than those particularly described in subsections (A) and (B) above, the successor entity shall assume the obligations of this Warrant, and this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price and/or number of Shares shall be adjusted accordingly.

 

As used in this Section 1.6, “Affiliate” shall mean any person or entity that owns or controls directly or indirectly ten percent (10%) or more of the stock of Company, any person or entity that controls or is controlled by or is under common control with such persons or entities, and each of such person’s or entity’s officers, directors, joint venturers or partners, as applicable.

 

D)                                   Notwithstanding the foregoing provisions of Section 1.6.2(C), in the event that the acquiror in an Acquisition does not agree to assume this Warrant at and as of the closing thereof, this Warrant, to the extent not exercised or converted on or prior to such closing, shall terminate and be of no further force or effect as of immediately following such closing if all of the following conditions are met: (i) the acquiror is subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended or is otherwise a public reporting company under the laws of Israel or any other nation, (ii) the class and series of shares or other security of the acquiror that would be received by Holder in connection with such Acquisition were Holder to exercise or convert this Warrant on or prior to the closing thereof is listed for trading on a national securities exchange or approved for quotation on an automated inter-dealer quotation system, (iii) the value (determined as of the closing of such Acquisition in accordance with the definitive agreements therefor) of the acquiror shares and/or other securities that would be received by Holder in respect of each Share were Holder to exercise or convert this Warrant on or prior to the closing of such Acquisition is equal to or greater than seven (7) times the then-effective Warrant Price, and (iv) Holder would be able to publicly resell, during the three (3) month period immediately following the closing of such Acquisition, without contractual restriction or restriction under applicable securities laws, all of the acquiror shares and/or other securities that would be received by Holder

 

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in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing thereof.

 

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

 

2.1                               Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the outstanding shares of the Class payable in common stock or other securities, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend occurred. If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares or takes any other action which increase the amount of common stock into which the one share of the Class is convertible, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.

 

2.2                               Reclassification, Exchange, Combinations or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. Such an event shall include, without limitation, any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Company’s Articles or Certificate (as applicable) of Incorporation. The Company or its successor shall promptly issue to Holder an amendment to this Warrant setting forth the number and kind of such new securities or other property issuable upon exercise or conversion of this Warrant as a result of such reclassification, exchange, substitution or other event that results in a change of the number and/or class of securities issuable upon exercise or conversion of this Warrant. The amendment to this Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Article 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.

 

2.3                               Adjustments for Diluting Issuances. The number of shares of common stock issuable upon conversion of the Shares shall be subject to adjustment, from time to time in the manner set forth in the Company’s Articles or Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment. The provisions set forth for the Class in the Company’s Articles or Certificate (as applicable) of Incorporation relating to the above in effect as of the Issue Date may not be amended, modified or waived, without the prior written consent of Holder unless such amendment, modification or waiver affects the rights associated with the Shares in the same manner as such amendment, modification or waiver affects the rights associated with all other shares of the Class.

 

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2.4                               No Impairment. The Company shall not, by amendment of its Articles or Certificate (as applicable) of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Article against impairment.

 

2.5                               Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder the amount computed by multiplying the fractional interest by the fair market value of a full Share.

 

2.6                               Certificate as to Adjustments. Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company shall promptly notify Holder in writing, and, at the Company’s expense, promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price, Class and number of Shares in effect upon the date thereof and the series of adjustments leading to such Warrant Price, Class and number of Shares.

 

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

 

3.1                               Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows:

 

(a)                                 The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the same class and series as the Shares were last issued in an arms-length transaction in which at least $500,000 of such shares were sold.

 

(b)                                 All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

 

(c)                                  The Company’s capitalization table attached hereto as Schedule 1 is true and complete as of the Issue Date.

 

3.2                               Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon the outstanding shares of the same class and series as the Shares, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to offer for subscription or sale pro rata to the holders of the outstanding shares of the same class and series as the Shares any additional shares of any class or series of the Company’s stock; (c) to effect any reclassification, reorganization or recapitalization of any of its stock; (d) to effect an

 

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Acquisition or to liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the Company’s securities for cash, then, in connection with each such event, the Company shall give Holder: (1) at least 10 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of shares of the same class and series as the Shares will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above; (2) in the case of the matters referred to in (c) and (d) above at least 10 days prior written notice of the date when the same will take place (and specifying the date on which the holders of shares of the same class and series as the Shares will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights.

 

3.3                               Registration Under Securities Act of 1933, as amended. The Company agrees that the Shares or, if the Shares are convertible into common stock of the Company, such common stock, shall have certain incidental, or “Piggyback,” and S-3 registration rights pursuant to and as set forth in the Company’s Investor Rights Agreement or similar agreement. The provisions set forth in the Company’s Investor Rights Agreement or similar agreement relating to the above in effect as of the Issue Date may not be amended, modified or waived without the prior written consent of Holder unless such amendment, modification or waiver affects the rights associated with the Shares in the same manner as such amendment, modification, or waiver affects the rights associated with all other shares of the same series and class as the Shares granted to the Holder.

 

3.4                               No Shareholder Rights. Except as provided in this Warrant, Holder will not have any rights as a shareholder of the Company until the exercise of this Warrant.

 

3.5                               Certain Information. The Company agrees to provide Holder at any time and from time to time with such information as Holder may reasonably request for purposes of Holder’s compliance with regulatory, accounting and reporting requirements applicable to Holder.

 

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and warrants to the Company as follows:

 

4.1                               Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder will be acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.

 

4.2                               Disclosure of Information. Holder has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company

 

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possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.

 

4.3                               Investment Experience. Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

4.4                               Accredited Investor Status. Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

 

4.5                               The Act. Holder understands that this Warrant and the Shares issuable upon exercise or conversion hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder understands that this Warrant and the Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.

 

ARTICLE 5. MISCELLANEOUS.

 

5.1                               Term: Subject to Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before the earlier to occur (the “Expiration Date”) of (i) the tenth (10th) anniversary of the Issue Date hereof, or (ii) the date that is five (5) years following the effective date of the Company’s registration statement filed in connection with the IPO, and shall be void thereafter.

 

5.2                               Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form:

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE ACT, OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 OF THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE COMPANY TO SILICON VALLEY BANK DATED AS OF MARCH 28, 2008, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR

 

7

 

HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

5.3                               Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act.

 

5.4                               Transfer Procedure. After receipt by Silicon Valley Bank (“Bank”) of the executed Warrant, Bank will transfer all of this Warrant to SVB Financial Group, Holder’s parent company. Subject to the provisions of Article 5.3 and upon providing the Company with written notice, SVB Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable directly or indirectly, upon conversion of the Shares, if any) to any transferee, provided, however, in connection with any such transfer, SVB Financial Group or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable). The Company may refuse to transfer this Warrant or the Shares to any person who directly competes with the Company, unless, in either case, the stock of the Company is publicly traded.

 

5.5                               Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or Holder, as the case may (or on the first business day after transmission by facsimile) be, in writing by the Company or such holder from time to time. All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

 

SVB Financial Group

Attn: Treasury Department

3003 Tasman Drive, HA 200

Santa Clara, CA 95054

Telephone: 408-654-7400

Facsimile: 408-496-2405

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

 

Liquidia Technologies, Inc.

Attn:

(ADDRESS)

Telephone:

 

8

 

Facsimile:

 

5.6                               Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

 

5.7                               Attorney’s Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

 

5.8                               Automatic Conversion upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be converted pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised or converted, and the Company shall promptly deliver a certificate representing the Shares (or such other securities) issued upon such conversion to Holder.

 

5.9                               Counterparts. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.

 

5.10                        Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law.

 

9

 

	
“COMPANY”
    	
 
    
	
 
    	
 
    
	
LIQUIDIA TECHNOLOGIES, INC.
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Bruce Boucher
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Bruce Boucher
    	
 
    
	
 
    	
(Print)
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
President
    	
 
    
	
 
    	
 
    
	
“HOLDER”
    	
 
    
	
 
    	
 
    
	
SILICON VALLEY BANK
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Corey Waters
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Corey Waters
    	
 
    
	
 
    	
(Print)
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Relationship   Manager
    	
 
    

 

10

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.             Holder elects to purchase                  shares of the Common/Series           Preferred [strike one] Stock of                               pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the shares in full.

 

[or]

 

1.             Holder elects to convert the attached Warrant into Shares/cash [strike one] in the manner specified in the Warrant. This conversion is exercised for                        of the Shares covered by the Warrant.

 

[Strike paragraph that does not apply.]

 

2.             Please issue a certificate or certificates representing the Shares in the name specified below:

 

 

	
 
    	
 
    	
 
    
	
 
    	
Holders Name
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Address)
    	
 
    

 

3.      By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Article 4 of the Warrant as of the date hereof.

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Date):
    	
 
    

 

11

 

SCHEDULE 1

 

Company Capitalization Table

 

See attached

 

12

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