Document:

Eighth Modification to the Loan Agreement - Eigh

Exhibit 10.40
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EIGHTH MODIFICATION TO THE LOAN AGREEMENT
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	Borrower:
	International Medication Systems, Limited
	​
	Lender:
	East West Bank
	​

		11570 6th Street
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		Loan Servicing Department
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		Rancho Cucamonga, CA  91730
	​
		9300 Flair Drive, 6th Floor
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	​
	​
	​
	​
	El Monte, CA  91731
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This EIGHTH MODIFICATION TO THE LOAN AGREEMENT is attached to and by this reference is made a part of the Business Loan Agreement (Loan #20002400) dated December 31, 2010, including all modifications thereto, and executed  in connection with a loan or other financial accommodations between Lender and Borrower.
The section entitled "Financial Statements" is hereby amended and restated as follows:
Financial Statements. Furnish Lender with the following:
Additional Requirements. Borrower understands and agrees that while this Agreement is in effect, Borrower will maintain a financial condition indicated by the following statements at all times, unless otherwise noted:
Agings.  Within sixty (60) days, or sooner, after the end of each fiscal quarter, Borrower shall provide Lender with a listing and aging by invoice due date of all accounts receivable and all accounts payable in detailed format acceptable to Lender.
Interim Statements.  As soon as available, but in no event later than sixty (60) days after the end of each quarter ending March 31st, June 30th, and September 30th, Borrower shall provide Lender with Borrower's balance sheet, income and expense statements, reconciliation of net worth and statement of cash flows, with notes thereto for the period ended, prepared by Borrower.
Inventory.  Within sixty (60) days, or sooner, after the end of each fiscal quarter, Borrower shall provide Lender with a listing of inventory in detailed format acceptable to Lender.
Corporate Guarantor Annual Statements.  As soon as available, but in no event later than one hundred fifty (150) days after the end of each fiscal year, Borrower shall provide Lender with Corporate Guarantor's balance sheet, income and expense statements, reconciliation of net worth and statement of cash flows, with notes thereto for the year ended, audited by a certified public accountant satisfactory to Lender.
All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct.
The section entitled "Financial Covenants and Ratios" is hereby amended and restated as follows:
Financial Covenants and Ratios. Comply with the following covenants and ratios:
Additional Requirements. Borrower understands and agrees that while this Agreement is in effect, Borrower will maintain a financial condition indicated by the following ratios at all times, unless otherwise noted:
Effective Tangible Net Worth.  Maintain an Effective Tangible Net Worth (defined as total book net worth plus minority interest minus due from officers/stockholders/affiliates minus intangible assets and accumulated amortization plus subordinated debt) of not less than $20,000,000.00, based on consolidated statements of Amphastar Pharmaceuticals, Inc.
Debt minus Subordinated Debt to Effective Tangible Net Worth.  Maintain a Debt minus Subordinated Debt to Effective Tangible Net Worth Ratio (defined as (total liabilities minus debt subordinated to Lender) divided by Effective Tangible Net Worth (defined as total book net worth plus minority interest minus due from officers/stockholders/affiliates minus intangible assets and accumulated amortization plus debt subordinated to Lender) not to exceed 1.30 to 1.00, based on consolidated statements of Amphastar Pharmaceuticals, Inc.
Debt Coverage Ratio. Maintain a Debt Coverage Ratio (defined as (earnings before interest, taxes, depreciation, and amortization ("EBITDA") divided by (interest expense plus current portion of long term debt plus current portion of capital lease plus distributions and/or dividends)) of not less than 1.45 to 1.00, tested at the end of each fiscal quarter, based on consolidated statements of Amphastar Pharmaceuticals, Inc. Debt Coverage Ratio violation will be waived automatically if borrower’s consolidated cash balances exceed $15,000,000.00.
Except as provided above, all computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct.
The section entitled "Cross Acceleration" is hereby amended and restated as follows:
Cross Acceleration. In addition to the due dates and maturity date set forth in the Note, all principal and accrued interest and other amounts owed under this Note shall become due in full at such earlier time, if any, the obligations of Borrower to Lender under that promissory note loan number 18700, 28933, 30011306, 239171688, 32599,30011277, 30011329 or 769619953 (as such notes may be amended or extended from time to time) are paid in full.
THIS EIGHTH MODIFICATION TO THE LOAN AGREEMENT IS EXECUTED AS OF DECEMBER 9, 2020.
BORROWER:
INTERNATIONAL MEDICATION SYSTEMS, LIMITED
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	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of International Medication Systems, Limited
	​
	William J. Peters, Chief Financial Officer of International Medication Systems, Limited

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LENDER:
EAST WEST BANK
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	X
	/s/REBECCA LEE
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	Authorized Signer
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LaserPro, Ver. 20.2.0.043  Copr. Finastra USA Corporation 1997, 2021.   All Rights Reserved.   - CA  E:\PROD\LOANDOC\CFI\LPL\G60.FC  TR-5159  PR-7 (M)
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CHANGE IN TERMS AGREEMENT
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	Borrower:
	International Medication Systems, Limited
	​
	Lender:
	East West Bank
	​

		11570 6th Street
	​
		Loan Servicing Department
	​

		Rancho Cucamonga, CA  91730
	​
		9300 Flair Drive, 6th Floor
	​

	​
	​
	​
	​
	El Monte, CA  91731
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​
	

	

	Principal Amount: $15,000,000.00
	Date of Agreement:  December 9, 2020

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DESCRIPTION OF EXISTING INDEBTEDNESS.  The Promissory Note dated December 31, 2010 for Loan Number 20002400 in the original Principal Amount of $10,000,000.00, along with any and all subsequent Change in Terms Agreements (collectively referred to as “Note”).
DESCRIPTION OF CHANGE IN TERMS.  
The maturity date of the Note is hereby extended from December 31, 2020 to December 31, 2022.
Effective December 31, 2020, the section entitled "VARIABLE INTEREST RATE" for Facility "A" is hereby modified and restated as follows:
VARIABLE INTEREST RATE.  The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the daily Wall Street Journal Prime Rate, as quoted in the "Money Rates" column of The Wall Street Journal (Western Edition) as determined by Lender (the "Index").  The Index is not necessarily the lowest rate charged by Lender on its loans.  Lender will tell Borrower the current Index rate upon Borrower's request.  The interest rate change will not occur more often than each day.  Borrower understands that Lender may make loans based on other rates as well.  The Index currently is 3.250% per annum.  Interest on the unpaid principal balance of this Note will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate equal to the Index, adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial rate of 3.250%.  If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying Borrower.  NOTICE:  Under no circumstances will the interest rate on this Note be less than 3.250% per annum or more than the maximum rate allowed by applicable law.
INTEREST CALCULATION METHOD.  Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.  All interest payable under this Note is computed using this method.
CONTINUING VALIDITY.  Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect.  Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms.  Nothing in this Agreement will constitute a satisfaction of the obligation(s).  It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing.  Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement.  If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it.  This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT.  BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
BORROWER:
INTERNATIONAL MEDICATION SYSTEMS, LIMITED
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	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of International Medication Systems, Limited
	​
	William J. Peters, Chief Financial Officer of International Medication Systems, Limited

​
LaserPro, Ver. 20.2.0.043  Copr. Finastra USA Corporation 1997, 2021.   All Rights Reserved.   - CA  E:\PROD\LOANDOC\CFI\LPL\D20C.FC  TR-5159  PR-7 (M)
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NOTICE OF FINAL AGREEMENT
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	Borrower:
	International Medication Systems, Limited
	​
	Lender:
	East West Bank
	​

		11570 6th Street
	​
		Loan Servicing Department
	​

		Rancho Cucamonga, CA  91730
	​
		9300 Flair Drive, 6th Floor
	​

	​
	​
	​
	​
	El Monte, CA  91731
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BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:  (A) THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES,  (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND  (C) THE WRITTEN LOAN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
As used in this Notice, the following terms have the following meanings:
Loan.  The term "Loan" means the following described loan:  Loan No. 20002400
Loan Agreement.  The term "Loan Agreement" means one or more promises, promissory notes, agreements, undertakings, security agreements, deeds of trust or other documents, or commitments, or any combination of those actions or documents, relating to the Loan, together with any subsequent written modification documents for this Loan evidenced by all Notice of Final Agreements executed in regards to the Loan, and including without limitation the following:
LOAN DOCUMENTS
-  Change in Terms Agreement
-  Eighth Modification to the Loan Agreement
-  Guarantor Consent
-  Disbursement Request and Authorization
-  Notice of Final Agreement
Parties.  The term "Parties" means East West Bank and any and all entities or individuals who are obligated to repay the loan or have pledged property as security for the Loan, including without limitation the undersigned.
Each Party who signs below, other than East West Bank, acknowledges, represents, and warrants to East West Bank that it has received, read and understood this Notice of Final Agreement.  This Notice is dated as of December 9, 2020.
BORROWER:
INTERNATIONAL MEDICATION SYSTEMS, LIMITED
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	​

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	​

	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of International Medication Systems, Limited
	​
	William J. Peters, Chief Financial Officer of International Medication Systems, Limited

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GUARANTOR:
AMPHASTAR PHARMACEUTICALS, INC.
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	​

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	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of Amphastar Pharmaceuticals, Inc.
	​
	William J. Peters, Chief Financial Officer of Amphastar Pharmaceuticals, Inc.

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GRANTOR:
INTERNATIONAL MEDICATION SYSTEMS, LIMITED
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	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of International Medication Systems, Limited
	​
	William J. Peters, Chief Financial Officer of International Medication Systems, Limited

AMPHASTAR PHARMACEUTICALS, INC.
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	​

	​

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	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of Amphastar Pharmaceuticals, Inc.
	​
	William J. Peters, Chief Financial Officer of Amphastar Pharmaceuticals, Inc.

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LENDER:
EAST WEST BANK
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	​

	​

	​

	​

	X
	/s/REBECCA LEE
	​
	​
	​

	Authorized Signer
	​
	​

LaserPro, Ver. 20.2.0.043  Copr. Finastra USA Corporation 1997, 2021.   All Rights Reserved.   - CA  E:\PROD\LOANDOC\CFI\LPL\G60.FC  TR-5159  PR-7 (M)

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DISBURSEMENT REQUEST AND AUTHORIZATION
	Borrower:
	International Medication Systems, Limited
	​
	Lender:
	East West Bank
	​

		11570 6th Street
	​
		Loan Servicing Department
	​

		Rancho Cucamonga, CA  91730
	​
		9300 Flair Drive, 6th Floor
	​

	​
	​
	​
	​
	El Monte, CA  91731
	​

LOAN TYPE.  This is a Variable Rate Nondisclosable Revolving Line of Credit Loan to a Corporation for $15,000,000.00 due on December 31, 2022.  This is a secured renewal loan.
PRIMARY PURPOSE OF LOAN.  The primary purpose of this loan is for:
​
 Personal, Family, or Household Purposes or Personal Investment.
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	X
	 Business (Including Real Estate Investment).

SPECIFIC PURPOSE.  The specific purpose of this loan is:  The specific purpose of this modification is to renew the line of credit for 2 years.
DISBURSEMENT INSTRUCTIONS.  Borrower understands that no loan proceeds will be disbursed until all of Lender's conditions for making the loan have been satisfied.  Please disburse the loan proceeds of $15,000,000.00 as follows:
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	Other Disbursements:
	$15,000,000.00

	$15,000,000.00 Renewal
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	Note Principal:
	$15,000,000.00

	​
	

AUTOMATIC PAYMENTS.  Borrower hereby authorizes Lender automatically to deduct from Borrower's Demand Deposit - Checking account, numbered 83106203, the amount of any loan payment.  If the funds in the account are insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment.  At any time and for any reason, Borrower or Lender may voluntarily terminate Automatic Payments.
REQUEST FOR ADVANCE. All requests for Advances and line pay downs received in Lender's Loan Service Dept. at 9300 Flair Drive, 6th Floor, El Monte, CA 91731 after 4:00 p.m. will be treated as having been requested on the next succeeding business day.
If this section is completed to include authorized individuals, any (1) of the following individuals are authorized to request advances and authorize payments under this loan, and take all additional actions such individual(s) may deem necessary or appropriate to implement the provisions of the documents relating to this loan.  The individuals named below hold the titles appearing after their respective names, and true specimens of their signatures appear after their respective names below.  If a number does not appear in the brackets shown herein, or if the brackets are left blank or marked with an “X” or other symbol, then any ONE of the following individuals shall be deemed authorized to request advances and take other actions stated herein.
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	Jack Zhang, CEO
	    
	/s/JACK ZHANG

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	Name/Title
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	Signature

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	William J. Peters, CFO
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	/s/WILLIAM J. PETERS

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	Name/Title
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	Signature

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	Albert Cuadra, Controller
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	/s/ALBERT CUADRA

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	Name/Title
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	Signature

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	Name/Title
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	Signature

PREPAID INTEREST/LOAN FEE DEDUCTION. Borrower authorizes Lender to deduct the prepaid interest, fees, charges, and any other costs and expenses related to the Loan and charges above from Borrower's checking account number _______________________ with Lender, all without further consent of Borrower.  Lender is fully entitled to take such actions even if Borrower gives contrary instructions or demands to Lender.
FINANCIAL CONDITION.  BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER.  THIS AUTHORIZATION IS DATED DECEMBER 9, 2020.
BORROWER:
INTERNATIONAL MEDICATION SYSTEMS, LIMITED
​
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	​

	​

	​

	​

	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of International Medication Systems, Limited
​
	​
	William J. Peters, Chief Financial Officer of International Medication Systems, Limited

LaserPro, Ver. 20.2.0.043  Copr. Finastra USA Corporation 1997, 2021.   All Rights Reserved.   - CA  E:\PROD\LOANDOC\CFI\LPL\I20.FC  TR-5159  PR-7 (M)

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GUARANTOR CONSENT
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	Borrower:
	International Medication Systems, Limited
	​
	Lender:
	East West Bank
	​

		11570 6th Street
	​
		Loan Servicing Department
	​

		Rancho Cucamonga, CA  91730
	​
		9300 Flair Drive, 6th Floor
	​

	​
	​
	​
	​
	El Monte, CA  91731
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​
Re: Loan #20002400
The undersigned ("Guarantor") has executed a Commercial Guaranty dated December 31, 2010, in favor of Lender ("Guaranty").  Guarantor hereby acknowledges its consent to the terms and provisions of the foregoing Change in Terms Agreement/Note and/or Modification Agreement and the transactions contemplated thereby.  Guarantor hereby reaffirms its obligations to Lender under the Guaranty.  Guarantor hereby reaffirms that its obligations under the Guaranty to Bank are separate and distinct from Borrower's obligations to Bank.  
Acknowledged and agreed as of December 9, 2020:.
GUARANTOR:
AMPHASTAR PHARMACEUTICALS, INC.
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	​

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	By:
	/s/JACK Y. ZHANG
	  
	By:
	/s/WILLIAM J. PETERS

	Jack Y. Zhang, CEO of Amphastar Pharmaceuticals, Inc.
	​
	William J. Peters, Chief Financial Officer of Amphastar Pharmaceuticals, Inc.

​
LaserPro, Ver. 20.2.0.043  Copr. Finastra USA Corporation 1997, 2021.   All Rights Reserved.   - CA  E:\PROD\LOANDOC\CFI\LPL\G60.FC  TR-5159  PR-7 (M)

​Document

Exhibit 4.3
DESCRIPTION OF REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
 
Pulmonx Corporation (“we,” “our,” “us,” or the “Company”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our common stock. The following summary of the terms of our common stock is based upon our amended and restated certificate of incorporation and our amended and restated bylaws, which are filed as exhibits to our Annual Report on Form 10-K, of which this Exhibit 4.3 is a part, and are incorporated by reference herein. This summary does not purport to be complete and is subject to, and is qualified in its entirety by express reference to, the applicable provisions of our amended and restated certificate of incorporation and our amended and restated bylaws. We encourage you to read our amended and restated certificate of incorporation and our amended and restated bylaws and the applicable provisions of the Delaware General Corporation Law (the “DGCL”) for more information.
DESCRIPTION OF CAPITAL STOCK
General
Our amended and restated certificate of incorporation provides for one class of common stock and undesignated preferred stock, the rights, preferences and privileges of which may be designated from time to time by our board of directors.
Our amended and restated certificate of incorporation authorizes us to issue up to 200,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share.
Common Stock
Voting Rights
Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders. In addition to any vote of holders of a specific class or series, or required by law or the amended and restated certificate of incorporation, the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of capital stock, voting as a single class, is required to amend certain provisions of our amended and restated certificate of incorporation, including provisions relating to amending our amended and restated bylaws, the classified board, the size of our board, removal of directors, director liability, vacancies on our board, special meetings, stockholder notices, actions by written consent and exclusive jurisdiction.
Dividends
Subject to preferences that may apply to any outstanding convertible preferred stock, holders of our common stock are entitled to receive ratably any dividends that our board of directors may declare out of funds legally available for that purpose.
Liquidation
In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any outstanding convertible preferred stock.
Rights and Preferences

Holders of our common stock have no preemptive, conversion, subscription or other rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of our convertible preferred stock that we may designate in the future.
Fully Paid and Nonassessable
All outstanding shares of our common stock are fully paid and nonassessable.
Preferred Stock
Our board of directors has the authority, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the number, rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control or other corporate action.
Anti-Takeover Provisions
Certificate of Incorporation and Bylaws
Our amended and restated certificate of incorporation and amended and restated bylaws include a number of provisions that may deter or impede hostile takeovers or changes of control or management. These provisions include:
•Issuance of Undesignated Preferred Stock: Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to make it more difficult to attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.
•Classified Board: Our amended and restated certificate of incorporation provides for a classified board of directors consisting of three classes of directors, with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. This provision may have the effect of delaying a change in control of our board.
•Board of Directors Vacancies: Our amended and restated certificate of incorporation and amended and restated bylaws authorize only our board of directors to fill vacant directorships. In addition, the number of directors constituting our board of directors may be set only by resolution adopted by a majority vote of our entire board of directors. These provisions prevent a stockholder from increasing the size of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.

•Stockholder Action; Special Meetings of Stockholders: Our amended and restated certificate of incorporation provides that our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders. Stockholders are not permitted to cumulate their votes for the election of directors. Our amended and restated bylaws provide that only the chairman of our board of directors, our chief executive officer, or a majority of our board of directors may call special meetings of our stockholders.
•Advance Notice Requirements for Stockholder Proposals and Director Nominations: Our amended and restated bylaws provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders. Our amended and restated bylaws also specify certain requirements as to the form and content of a stockholder’s notice. These provisions may make it more difficult for our stockholders to bring matters before our annual meeting of stockholders or to nominate directors at annual meetings of stockholders.
We designed these provisions to enhance the likelihood of continued stability in the composition of our board of directors and its policies, to discourage certain types of transactions that may involve an actual or threatened acquisition of us and to reduce our vulnerability to an unsolicited acquisition proposal. We also designed these provisions to discourage certain tactics that may be used in proxy fights. However, these provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they may also reduce fluctuations in the market price of our shares that could result from actual or rumored takeover attempts.
Section 203 of the Delaware General Corporation Law
We are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in a business combination with any interested stockholder for a period of three years following the date the person became an interested stockholder, with the following exceptions:
•before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested holder;
•upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (a) by persons who are directors and also officers and (b) pursuant to employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; and
•on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 662⁄3% of the outstanding voting stock that is not owned by the interested stockholder.
In general, Section 203 of the DGCL defines business combination to include the following:

•any merger or consolidation involving the corporation and the interested stockholder;
•any sale, lease, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
•subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
•any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and
•the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
In general, Section 203 of the DGCL defines an interested stockholder as an entity or person who, together with the entity’s or person’s affiliates and associates, beneficially owns, or is an affiliate of the corporation and within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
A Delaware corporation may opt out of these provisions with an express provision in its certificate of incorporation. We have not opted out of these provisions, which may as a result, discourage or prevent mergers or other takeover or change in control attempts of us.
Choice of Forum
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a breach of fiduciary duty owed by any director, officer or other employee to us or our stockholders; (iii) any action asserting a claim against us or any director or officer or other employee arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or amended and restated bylaws; or (iv) any action asserting a claim against us or any director or officer or other employee that is governed by the internal affairs doctrine. This provision would not apply to claims brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our amended and restated certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, subject to and contingent upon a final adjudication in the State of Delaware of the enforceability of such exclusive forum provision.
Transfer Agent and Registrar
Our transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. The transfer agent’s address is 6201 15th Avenue, Brooklyn, New York 11219.
The Nasdaq Global Select Market
Our common stock is listed on the Nasdaq Global Select Market under the trading symbol “LUNG.”

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