MARINA BIOTECH, INC.

17870 Castleton Street, Suite 250

City of Industry, California 91748

 

July 3, 2017

 

EOS Holdings LLC

2560 Highvale Drive

Las Vegas, NV 89134

 

Peak Capital Advisory Limited

Flat F, 9/F, Tower 1

Harbour Green

8 Sham Mong Road

Kowloon, Hong Kong

 

Dear Sir / Madam:

 

Reference is hereby made to: (i) that certain Note Purchase Agreement dated June
20, 2016 (the “Purchase Agreement”) by and among Marina Biotech, Inc., a
Delaware corporation (the “Company”), and the undersigned purchasers (the
“Purchasers”); (ii) the promissory notes of the Company in the aggregate
principal amount of $300,000 that the Company issued to the undersigned
Purchasers pursuant to the Purchase Agreement (each a “Note” and collectively
the “Notes”); and (iii) those certain warrants to purchase up to an aggregate of
9,512,633 shares of the common stock of the Company that were originally issued
pursuant to that certain Note and Warrant Purchase Agreement dated as of
February 10, 2012 by and among the Company, MDRNA Research, Inc., Cequent
Pharmaceuticals, Inc. and the purchasers identified on the signature pages
thereto (as such agreement was amended from time to time) and that were amended
concurrently with the Purchase Agreement to, among other things, extend the
anti-dilution protection afforded thereunder to June 19, 2017 (such warrants, as
so amended, the “Amended Prior Warrants”).

 

By executing below, the Company and the undersigned Purchasers hereby agree
that:

 

  (i) the reference to “June 20, 2017” in clause (A) of the third sentence of
the introductory paragraph of the Notes shall be amended to be a reference to
“December 31, 2017”;         (ii) the first two sentence of Section 5(a) of the
Notes shall be deleted in their entirety and replaced in their entirety with the
following:

 

“The Borrower shall provide the Holder with written notice not less than five
(5) business days prior to the closing of any Financing Transaction yielding
aggregate gross proceeds to the Borrower of not less than $3 million that occurs
while this Note is outstanding. Upon the closing of any such Financing
Transaction while this Note is outstanding, including, without limitation, the
Financing Transaction contemplated by the Registration Statement on Form S-1
that the Borrower filed with the Commission on June 26, 2017 (No. 333-218982),
the Holder shall convert the entire outstanding Principal balance under this
Note and accrued interest thereon into New Securities to be issued and sold at
the closing of such Financing Transaction at the most favorable price and terms
at which the New Securities are sold to investors in the Financing Transaction.”

 

 

  

 

  (iii)

the first sentence of Section 3(b) of the Amended Prior Warrants shall be
deleted in its entirety and replaced in its entirety with the following:

 

“If the Company or any Subsidiary thereof, as applicable, at any time prior to
the Termination Date, shall sell or grant any option to purchase, or sell or
grant any right to reprice, or otherwise dispose of or issue or agree to reprice
(or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock, at an effective price per share less than the
then Exercise Price (such lower price, the “Base Share Price” and such issuances
collectively, a “Dilutive Issuance”) (it being understood for purposes of the
foregoing that if the holder of the Common Stock or Common Stock Equivalents so
issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share which is less than the Exercise Price, such issuance
shall be deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance), then the Exercise Price shall be reduced and only
reduced to equal the Base Share Price.”

 

; and

 

  (iv) the definition of “Exempt Issuance” contained in the Purchase Agreement
shall be amended to remove the word “and” appearing immediately before subclause
(e), and to add the following to the end of such definition as new subclauses
(f) and(g):

 

“, (f) securities issued to investors pursuant to the offering contemplated by
the Registration Statement on Form S-1 that the Company filed with the
Commission on June 26, 2017 (No. 333-218982) or, if there is no closing with
respect to such offering, any other offering that would qualify as an Applicable
Financing Transaction (as hereinafter defined in this letter agreement), and (g)
and securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company, provided
that any such issuance shall only be to a Person (or to the equityholders of a
Person) which is, itself or through its subsidiaries, an operating company or an
owner of an asset in a business synergistic with the business of the Company and
shall provide to the Company significant additional benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.”

 

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In connection with, and as partial consideration for, the amendments to the
Notes and to the Amended Prior Warrants described herein, the Company hereby
agrees to issue to the undersigned Purchasers, on a pro rata basis (based on the
aggregate principal amount of the Notes issued to the Purchasers as set forth on
Exhibit A to this letter agreement), such number of the securities of the
Company as are being issued to investors pursuant to the Financing Transaction
contemplated by the Registration Statement on Form S-1 that the Company filed
with the Commission on June 26, 2017 (No. 333-218982), or (and only if there is
no closing with respect to such transaction) any Financing Transaction
thereafter while the Notes remain outstanding yielding aggregate gross proceeds
to the Company of not less than $3 million (such transaction, the “Applicable
Financing Transaction”), as have an aggregate purchase price equal to $375,000
(the “Consideration Securities”), with such Consideration Securities being
issued on the closing date of the Applicable Financing Transaction. The
Purchasers hereby agree to execute all agreements relating to the purchase and
sale of the Consideration Securities, as well as all agreements relating to
registration rights, rights of first refusal and co-sale, rights of first offer
and voting rights, if any, relating to the Consideration Securities as are
executed by purchasers in the Applicable Financing Transaction, to the extent
that such agreements are applicable. The Company shall use its commercially
reasonable efforts to cause the issuance of the Consideration Securities to the
Purchasers to be registered on the same registration statement (if any) that is
being utilized in the Applicable Financing Transaction (it being understood and
agreed that if the placement agent with respect to the Applicable Financing
Transaction advises the Company that the registration of the Consideration
Securities on the same registration statement that is being utilized in the
Applicable Financing Transaction would adversely impact the Company’s ability to
complete the Applicable Financing Transaction, then the Company shall have no
obligation to register the Consideration Securities on such registration
statement); provided, that if the issuance of the Consideration Securities to
the Purchasers is not registered on such registration statement, then the
Company shall file with the SEC, within forty-five (45) days following the
closing date of the Applicable Financing Transaction, a registration statement
on Form S-1 (or such other form as the Company is then eligible to use for such
registration) to register the resale of the Consideration Securities (or, with
respect to any Consideration Securities that are exercisable or convertible for
Common Stock, the shares of Common Stock issuable to the Purchasers upon the
exercise or conversion of such the Consideration Securities), and shall use its
commercially reasonable efforts to cause such registration statement to be
declared effective by the Commission within sixty (60) days of the filing
thereof.

 

In connection with the foregoing, the undersigned Purchasers hereby: (i) agree
to fully and forever waive, on behalf of the undersigned Purchasers and each of
their respective present and former corporate parents, subsidiaries, affiliates,
partners, joint venturers, members, shareholders, partners, directors,
employees, officers, agents, representatives, attorneys, executors,
administrators, predecessors, successors and assigns (x) any claim (whether
known or unknown, or suspected or unsuspected) that the undersigned Purchasers
(or any of their present and former corporate parents, subsidiaries, affiliates,
partners, joint venturers, members, shareholders, partners, directors,
employees, officers, agents, representatives, attorneys, executors,
administrators, predecessors, successors and assigns) have, had or may have had,
that the Exercise Price of the Amended Prior Warrants should be reduced to an
amount less than $0.28 as a result of any Dilutive Issuance that occurred, or
that may have occurred, while the Amended Prior Warrants were outstanding and
prior to the date of this letter agreement, including, without limitation, the
transactions effected pursuant to that certain Agreement and Plan of Merger
between and among IThenaPharma, Inc., IThena Acquisition Corporation and Vuong
Trieu, Ph.D. as the IThena Representative, and (y) any Event of Default arising
under the Notes as a result of the failure by the Company to pay the principal
and interest due thereunder on the Maturity Date (prior to the change in the
Maturity Date pursuant to clause (i) of this letter agreement); and (ii)
acknowledge and agree that the Exercise Price of the Amended Prior Warrants as
of the date of this letter agreement is $0.28; provided, that the foregoing
waiver shall not be construed as a waiver with respect to any future
transactions that may reduce the Exercise Price of the Amended Prior Warrants
pursuant to Section 3(b) thereof.

 

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In addition, each of the undersigned Purchasers hereby agree that they shall
not, beginning ninety (90) days following the closing of the Applicable
Financing Transaction, sell, in the aggregate (i.e., including sales by both
Purchasers), on any given Trading Day:

 

  (i) for so long as the closing price of the Common Stock on the Trading Market
is less than or equal to two hundred percent (200%) of the per share purchase
price of the Consideration Securities in the Applicable Financing Transaction on
the immediately preceding Trading Day, such number of Consideration Securities
(or shares of Common Stock issuable upon exercise or conversion of the
Consideration Securities) as is equal to more than five percent (5%) of the
total number of shares of Common Stock traded on the Trading Market on such
Trading Day; and         (ii) for so long as the closing price of the Common
Stock on Trading Market is greater than two hundred percent (200%) of the per
share purchase price of the Consideration Securities in the Applicable Financing
Transaction on the immediately preceding Trading Day, such number of
Consideration Securities (or shares of Common Stock issuable upon exercise or
conversion of the Consideration Securities) as is equal to more than ten percent
(10%) of the total number of shares of Common Stock traded on the Trading Market
on such Trading Day.

 

If the Consideration Securities include both Common Stock and Warrants, the
price per share of Common Stock shall be determined as follows: the total
purchase price for the Consideration Securities shall be allocated first to the
Warrants using the Black Sholes valuation method used by the Company as
reflected in its audited financial statements for the year ended December 31,
2016, and the balance shall be allocated to the purchase price of the Common
Stock.

 

 4 

 

 

For the avoidance of doubt, the stock prices referenced in items (i) and (ii)
above shall be subject to appropriate adjustments as a result of any splits,
combinations, subdivisions or reclassifications of the Common Stock that occur
following the date of this letter agreement. If the Purchasers desire to sell
such number of shares of Common Stock on any given Trading Day as exceed the
limitations set forth in this letter agreement, the Purchasers may request a
waiver of the limitations set forth in this letter agreement (which request may
be made, and which waiver may be granted, orally or in writing), and the Company
shall use its best efforts to respond to any such requests (if made during (or
within two hours prior to) the hours of operation of the Trading Market) within
two (2) hours following any such request by the Purchasers (which request shall
be made by phone or email to either Vuong Trieu (vtrieu@autotelicinc.com;
Lawrence Remmel (lremmel@pryorcashman.com, (212) 326-0881); or Michael T.
Campoli (mcampoli@pryorcashman.com, (212) 326-0468). Any waiver of the
limitations set forth in this letter agreement shall be made in the sole
discretion of the Company. Moreover, the undersigned Purchasers hereby agree
that they shall not, for a period of 90 days after the closing of the Applicable
Financing Transaction, offer, sell, contract to sell, pledge, grant any option
to purchase, make any short sale or otherwise dispose of, directly or indirectly
any Consideration Securities (or any securities issuable upon exercise or
conversion of the Consideration Securities) without the prior written consent of
the placement agent with respect to the Applicable Financing Transaction.

 

Further, each undersigned Purchaser hereby agrees that, prior to one year before
the Termination Date of the Prior Amended Warrants, it shall not exercise any of
the Prior Amended Warrants at such time as such Purchase holds any Consideration
Securities (or any securities issued upon the exercise or conversion of any
Consideration Securities), and that, in furtherance thereof, it shall not
transfer or assign all or any portion of the Prior Amended Warrants unless and
until the transferee or assignee with respect to such Prior Amended Warrants
agrees to be bound by the restrictions set forth in this letter agreement (and
that any transfer or assignment of all or any portion of the Prior Amended
Warrants in contravention of the foregoing requirement shall be null and void
and of no effect).

 

Capitalized terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Purchase Agreement, the Notes or the Amended Prior
Warrants, as applicable.

 

Except as expressly set forth herein, all of the other terms, conditions,
covenants and provisions contained in the Purchase Agreement, the Notes and the
Amended Prior Warrants are, and shall continue to be, in full force and effect.

 

This letter agreement and its enforcement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to
conflicts-of-law principles.

 

This letter agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, admissible into evidence, and all of
which together shall be deemed to be a single instrument. If any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

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Please acknowledge your agreement with the foregoing by signing in the space
provided below.

 

  MARINA BIOTECH, INC.         By: /s/ Vuong Trieu   Name:  Vuong Trieu   Title:
Chairman

 

AGREED AND ACCEPTED:

 

EOS HOLDINGS LLC

 

By: /s/ Jon Carnes   Name:  Jon Carnes   Title: Manager  

 

PEAK CAPITAL ADVISORY LIMITED

 

By: /s/ Feng Bai Ye   Name:  Feng Bai Ye   Title: Director  

 

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EXHIBIT A

Aggregate principal amount of the Notes issued to Each Purchaser

 

Purchaser   Aggregate Amount of Notes Held ($)

 

EOS HOLDINGS LLC

 

PEAK CAPITAL ADVISORY LIMITED

 

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