Document:

Exhibit 4.2

 

	
NUMBER
    	
SHARES
    

 

TWO PRE

 

TWO HARBORS INVESTMENT CORP.

 

INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND

 

7.50% SERIES E CUMULATIVE REDEEMABLE PREFERRED STOCK

 

SEE REVERSE FOR CERTAIN DEFINITIONS 
 AND IMPORTANT NOTICE ON TRANSFER 
 RESTRICTIONS AND OTHER INFORMATION

 

	
This   Certifies that
    	
CUSIP 90187B 705
    
	
 
    	
 
    
	
is   the owner of
    	
 
    

 

FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $.01 EACH OF THE 7.50% SERIES E CUMULATIVE REDEEMABLE PREFERRED STOCK OF

 

TWO HARBORS INVESTMENT CORP.

 

transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
 This Certificate and the Shares represented hereby are issued and shall be subject to all of the provisions of the charter and bylaws of the Corporation, each as may be amended from time to time (copies of which are on file with the Corporation and the transfer agent), to all of which the Holder by acceptance hereof assents.
 This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
 Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.

 

Dated:  **SPECIMEN**

 

	
 
    	

    	
 
    
	
PRESIDENT
    	
SECRETARY
    

 

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
TEN COM — 
    	
as tenants in common
    	
UNIF GIFT MIN ACT -
    	
Custodian
    
	
TEN ENT — 
    	
as tenants by the entireties
    	
 
    	
(Cust)                     (Minor)
    
	
JT TEN —
    	
as joint tenants with right of survivorship and not as tenants in   common
    	
 
    	
under Uniform Gifts to Minors

 

Act

(State)
    

 

 

Additional Abbreviations may also be used though not in the above list.

 

Two Harbors Investment Corp.

 

The Corporation will furnish to any stockholder, on request and without charge, a full statement of the information required by Section 2-211(b) of the Corporations and Associations Article of the Annotated Code of Maryland with respect to the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemptions of the stock of each class which the Corporation has authority to issue and, with respect to any preferred or special class in series, (i) the differences in the relative rights and preferences between the shares of each series to the extent set, and (ii) the authority of the Board of Directors to set such rights and preferences of subsequent series.  The foregoing summary does not purport to be complete and is subject to and qualified in its entirety by reference to the Charter of the Corporation, as the same may be amended from time to time, a copy of which will be sent without charge to each stockholder who so requests.  Such request must be made to the Secretary of the Corporation at its principal office.

 

The shares represented by this certificate are subject to restrictions on Beneficial Ownership and Constructive Ownership and Transfer for the purpose, among others, of the Corporation’s maintenance of its qualification as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended (the “Code”).  Subject to certain further restrictions and except as expressly provided in the Corporation’s Charter, (i) no Person may Beneficially Own or Constructively Own shares of the Corporation’s Common Stock in excess of 9.8 percent (in value or number of shares) of the outstanding shares of Common Stock of the Corporation unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially Own or Constructively Own shares of Capital Stock of the Corporation in excess of 9.8 percent (in value or number of shares) of the total outstanding shares of Capital Stock of the Corporation, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (iii) no Person may Beneficially Own or Constructively Own Capital Stock that would result in the Corporation being “closely held” under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; and (iv) no Person may Transfer shares of Capital Stock if such Transfer would result in the Capital Stock of the Corporation being owned by fewer than 100 Persons.  Any Person who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or Constructively Own shares of Capital Stock which causes or will cause a Person to Beneficially Own or Constructively Own shares of Capital Stock in excess or in violation of the above limitations must immediately notify the Corporation.  If the restrictions on transfer or ownership provided in (i), (ii) or (iii) above are violated, the shares of Capital Stock in excess or in violation of the above limitations will be automatically transferred to a Trustee of a Trust for the benefit of one or more Charitable Beneficiaries.  In addition, the Corporation may redeem shares upon the terms and conditions specified by the Board of Directors in its sole discretion if the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above.  Furthermore, if the ownership restriction provided in (iv) above would be violated or upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio.  All capitalized terms in this legend have the meanings defined in the Charter of the Corporation, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Capital Stock of the Corporation on request and without charge.  Requests for such a copy may be directed to the Secretary of the Corporation at its principal office.

 

	
For value received,
    	
hereby sell, assign and   transfer unto
    

 

PLEASE INSERT SOCIAL SECURITY OR OTHER
 IDENTIFYING NUMBER OF ASSIGNEE

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

 

shares

of the 7.50% Series E Cumulative Redeemable Preferred Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

 

Attorney

to transfer the said stock on the books of the within named Corporation will full power of substitution in the premises.

 

2

 

	
Dated
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Notice:  The   signature to this assignment must correspond with the name as written upon   the face of the certificate in every particular, without alteration or   enlargement or any change whatever.
    
	
 
    	
 
    
	
Signature(s) Guaranteed:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
    
	
ELIGIBLE GUARANTOR INSTITUTION
    
	
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
    
	
ASSOCIATIONS AND CREDIT UNIONS WITH
    
	
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
    
	
MEDALLION PROGRAM,
    
	
PURSUANT TO S.E.C. RULE 17Ad-15).
    

 

KEEP THIS CERTIFICATE IN A SAFE PLACE.  IF IT IS LOST, STOLEN, OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

 

3Exhibit

SECOND AMENDMENT  
TO 
LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement (this “Amendment”) is made and entered into as of July 27, 2018 by and between PACIFIC WESTERN BANK, a California state chartered bank (“Bank”), and CIDARA THERAPEUTICS, INC. (“Borrower”).
RECITALS
Borrower and Bank are parties to that certain Loan and Security Agreement dated as of October 3, 2016 (as amended from time to time, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
		
	1)
	Section 2.1(b)(iii) of the Agreement is hereby amended and restated, as follows:

(iii)    Repayment.  Interest shall accrue from the date of each Term Loan at the rate specified in Section 2.3(a), and prior to the Interest-Only End Date shall be payable monthly beginning on the 3rd day of the month next following the date such Term Loan is funded, and continuing on the same day of each month thereafter.  Any Term Loans that are outstanding on the Interest-Only End Date shall be payable in equal monthly installments of principal, plus all accrued interest, beginning on the Amortization Start Date and continuing on the same day of each month thereafter through the Term Loan Maturity Date, at which time all amounts due in connection with the Term Loans and any other amounts due under this Agreement shall be immediately due and payable.  Term Loans, once repaid, may not be reborrowed.

		
	2)
	Section 2.3(a) of the Agreement is hereby amended and restated, as follows:

(a)    Interest Rate for Term Loans.  Except as set forth in Section 2.3(b), the Term Loans shall bear interest, on the outstanding daily balance thereof, at a variable annual rate equal to the greater of (A) 0.75% above the Prime Rate then in effect or (B) 4.50%.

		
	3)
	Section 6.6 of the Agreement is hereby amended and restated, as follows:

6.6    Primary Depository.  Borrower shall maintain all of its depository and operating accounts with Bank and all of its investment accounts with Bank or Bank’s Affiliates.  Notwithstanding the foregoing, Borrower may maintain Cash in one or more accounts outside of Bank (the “Outside Accounts”), provided that the total aggregate amount of Cash maintained in the Outside Accounts does not exceed $100,000 at any time.  For the avoidance of doubt, no control agreements shall be required for the Outside Accounts.  In addition, commencing on July 27, 2018, on approximately the fifteenth day and the last day of each month, Borrower shall transfer funds at Bank’s Affiliates to Bank as current securities mature, with all such funds transferred to Bank by November 3, 2018 (with the exception of (a) accrued interest on securities maturing on or about November 3, 2018, (b) funds intended to cover management and custodian 

fees associated with the accounts in which such securities are held, and (c) any residual amounts in such accounts, all of which Borrower shall transfer to Bank on or before December 3, 2018).  After December 3, 2018, except for funds in the Outside Accounts as permitted above, Borrower shall no longer maintain any funds in accounts with Bank’s Affiliates or in any accounts outside of Bank.   
		
	4)
	Section 7.8 of the Agreement is hereby amended and restated, as follows:

7.8    Capitalized Expenditures.  Make Capitalized Expenditures in excess of $1,000,000 in the aggregate in any fiscal year of Borrower; provided, however, that Capitalized Expenditures in connection with any leasehold improvements shall not be subject to the foregoing limitation.
		
	5)
	The following defined terms in Exhibit A to the Agreement are hereby amended and restated, as follows: 

“Amortization Start Date” means the 3rd day of the month immediately following the Interest-Only End Date.
“Interest-Only End Date” means July 31, 2019; provided, however, that if Borrower achieves the Milestone Covenant, the defined term “Interest-Only End Date” shall instead mean October 31, 2019.
“Term Loan Maturity Date” means January 3, 2022.
“Tranche B Draw Period” means the period on or before October 3, 2018.
		
	6)
	The defined term “Availability End Date” and its definition in Exhibit A to the Agreement are hereby deleted.

		
	7)
	Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement.  The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

		
	8)
	Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment. 

		
	9)
	This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

		
	10)
	As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

a)    this Amendment, duly executed by Borrower;
b)    payment of all Bank Expenses, including Bank’s reasonable expenses for the documentation of this Amendment, and any UCC, good standing and intellectual property search or filing fees, which may be debited from any of Borrower’s accounts with Bank; and 
c)    such other documents and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

	
					
	CIDARA THERAPEUTICS, INC.
	 
	PACIFIC WESTERN BANK

	By:
	/s/ Matt Onaitis
	 
	By:
	/s/ Sean Noonan

	Name:
	Matt Onaitis
	 
	Name:
	Sean Noonan

	Title:
	CFO and General Counsel
	 
	Title:
	Vice President

[Signature Page to Second Amendment to Loan and Security Agreement]

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