EXECUTION COPY

 

FIFTH AMENDMENT TO

NOTE AND WARRANT PURCHASE AGREEMENT

and SECURED PROMISSORY NOTES

 

This Fifth Amendment (as amended, restated, supplemented or otherwise modified
from time to time, the “Fifth Amendment”) dated as of February 7, 2013, among
Marina Biotech, Inc., a Delaware corporation (the “Company”), MDRNA Research,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
(“Research”), and Cequent Pharmaceuticals, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company (“Cequent” and, together with the Company
and Research, the “Companies”), and each purchaser identified on the signature
pages hereto (each, including its successors and assigns, a “Purchaser” and
collectively the “Purchasers”), amends (i) that certain Note and Warrant
Purchase Agreement (as amended from time to time, the “Purchase Agreement”),
dated as of February 10, 2012, among the Companies and the Purchasers and (ii)
the Secured Promissory Notes (the “Notes”) issued to the Purchasers pursuant
thereto. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement.

 

WHEREAS, subject to the terms and conditions set forth in this Fifth Amendment,
the Companies and the Purchasers desire to amend the Purchase Agreement and the
Notes as set forth herein;

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Fifth
Amendment, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Companies and the Purchasers
hereby agree as follows:

 

Section 1. Satisfaction and Cancellation of Notes. By executing below, the
Companies and the Purchasers hereby acknowledge and agree that if the Company,
prior to April 30, 2013, effects any merger or consolidation of the Company
whereby the holders of the issued and outstanding shares of Common Stock
immediately prior to the consummation of such transaction hold less than fifty
percent (50%) of the issued and outstanding shares of the voting securities of
the surviving corporation immediately following the consummation of such
transaction, the Companies will have fully satisfied their obligations to repay
the entire unpaid principal balance under the Notes and all accrued and unpaid
interest thereon through the issuance to the Purchasers (on a pro rata basis) of
an aggregate number of shares of Common Stock calculated by converting the then
total outstanding principal and interest under the Notes at a value of $.28 per
share of Common Stock (the “Conversion Price”) (provided such Conversion Price
shall be adjusted for corporate events such as stock splits, and for subsequent
financings as set forth in this Fifth Amendment, and provided further that if
the effective price received by common shareholders of the Companies upon a
merger or consolidation is less than $0.38 per share, then the Conversion Price
solely with respect to principal and interest converted under the Notes will be
adjusted to 75% of that effective price) (provided that this condition shall be
deemed satisfied if the Purchasers have otherwise converted the Notes to Common
Stock as provided in this Fifth Amendment).

 

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In addition, and as further consideration for this Fifth Amendment, the Company
shall issue to the Purchasers (on a pro rata basis), promptly upon the execution
of this Fifth Amendment, warrants to purchase up to an aggregate of 1,000,000
shares of Common Stock (the “Warrants”). The Warrants will have an initial
exercise price of $0.28 per share, which is subject to adjustment (including as
a result of subsequent financings completed on or prior to June 30, 2014), will
be exercisable for a period of five years beginning six months and one day
following the issuance of the Warrants, and otherwise have substantially the
same terms and conditions as the warrants that were issued to the Purchasers
upon the closing of the Purchase Agreement. Immediately upon the issuance to the
Purchasers of the consideration described in this Section 1, the Notes shall be
deemed cancelled and of no further force and effect, and any obligations of the
Company to the Purchasers pursuant to the Notes shall be deemed satisfied in
full.

 

If the Company, at any time on or prior to August 11, 2014, 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 Conversion 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 Conversion Price, such issuance shall be deemed to have occurred for
less than the Conversion Price on such date of the Dilutive Issuance), then the
Conversion Price shall be reduced and only reduced to equal the Base Share
Price. Such adjustment shall be made whenever such Common Stock or Common Stock
Equivalents are issued or deemed issued. Notwithstanding the foregoing, no
adjustments shall be made, paid or issued under this Section 3(b) in respect of
an Exempt Issuance.

 

The Companies agree that at any time the Purchasers shall have the right, on
notice to the Companies, to convert the Notes to an aggregate number of shares
of Common Stock calculated by converting the then total outstanding principal
and interest under the Notes at a value equal to the Conversion Price in effect
at such time. This right may be exercised at any time and may be exercised in
lieu of accepting prepayment of the Notes.

 

Section 2. Amendment of Definitions. The following definitions contained in
Section 1.1 of the Purchase Agreement are hereby amended as set forth below:

 

(a) The definition of “Transaction Documents” is hereby amended to add this
“Fifth Amendment” as a Transaction Document.

 

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(b) The definition of “Warrants” is hereby amended to include the Warrants that
may be issued pursuant to this Fifth Amendment.

 

Section 3. Amendment of Maturity Date; Consent. The parties hereto hereby agree
that the Notes that were issued to the Purchasers on the Closing Date pursuant
to the Purchase Agreement are hereby further amended by replacing the reference
to “December 31, 2012” in clause (A) of the first paragraph thereof (as
previously amended on each of April 30, 2012, May 31, 2012 and August 3, 2012
relating to the Maturity Date of the Notes) with a reference to “April 30,
2013”.

 

Section 4. Miscellaneous.

 

4.1 No Other Amendments. Except as otherwise expressly provided by this Fifth
Amendment, all of the terms and conditions of each of the Transaction Documents
are, and shall continue to be, in full force and effect and are hereby ratified
and confirmed in all respects.

 

4.2 Headings. The headings herein are for convenience only, do not constitute a
part of this Fifth Amendment and shall not be deemed to limit or affect any of
the provisions hereof.

 

4.3 Execution. This Fifth Amendment may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that 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.

 

4.4 Severability. If any term, provision, covenant or restriction of this Fifth
Amendment is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

4.5 Choice of Law. This Fifth Amendment shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of laws thereof.

 

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4.6 Effectiveness. This Fifth Amendment shall be effective upon the Companies
execution and receipt of the same amendment executed by all of the undersigned.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to Note
and Warrant Purchase Agreement and Secured Promissory Notes to be duly executed
by their respective authorized signatories as of the date first indicated above.

 

 

  MARINA BIOTECH, INC.           By:  /s/ J. Michael French   Name:
Title: J. Michael French
President and Chief Executive Officer

 

  MDRNA RESEARCH, INC.           By:  /s/ J. Michael French   Name:
Title: J. Michael French
President

 

  CEQUENT PHARMACEUTICALS, INC.           By:  /s/ J. Michael French   Name:
Title: J. Michael French
President

 

 

[Remainder of page intentionally left blank; signature pages for Purchasers
follows]

 

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[PURCHASER SIGNATURE PAGES TO FIFTH AMENDMENT TO NOTE AND WARRANT PURCHASE
AGREEMENT and SECURED PROMISSORY NOTES]

 

IN WITNESS WHEREOF, the undersigned have caused this Fifth Amendment to Note and
Warrant Purchase Agreement and Secured Promissory Notes to be duly executed by
their respective authorized signatories as of the date first indicated above.

 

 

  GENESIS CAPITAL MANAGEMENT, LLC           By:  /s/ Shawn Rhynes   Name:
Title: Shawn Rhynes
Managing Director

 

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[PURCHASER SIGNATURE PAGES TO FIFTH AMENDMENT TO NOTE AND WARRANT PURCHASE
AGREEMENT and SECURED PROMISSORY NOTES]

 

IN WITNESS WHEREOF, the undersigned have caused this Fifth Amendment to Note and
Warrant Purchase Agreement and Secured Promissory Notes to be duly executed by
their respective authorized signatories as of the date first indicated above.

 

 

  PEAK CAPITAL ADVISORY LIMITED           By:  /s/ Feng Bai Ye   Name:
Title: Feng Bai Ye
Managing Director

 

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