Document:

Promissory Note

 Exhibit 10.5 
 PROMISSORY NOTE 
 Note No. 10 
  

			
	 U.S. $6,000,000.00
 Maturity Date: September 5, 2009

 Interest Rate: LIBO Rate (3.17875%) + Margin
	  	September 5, 2008

 Reference is hereby made to (1) that certain Stock Purchase Agreement, dated as of
August 25, 2008 (the “SPA”), by and among S.A. La Nación, a sociedad anónima organized under the laws of Argentina (“SALN”), Hispanoamerican Educational Investments BV, a corporation
organized under the laws of Holland (“HEI”), Hammer.com, LLC, a Delaware limited liability company (“Hammer”), MercadoLibre, Inc. a Delaware corporation (“ML” or the “Debtor”) (but
solely with respect to Section 8.4 thereof), DeRemate.com de Argentina S.A., a sociedad anónima organized under the laws of Argentina, DeRemate.com Chile S.A., a sociedad anónima organized under the laws of Chile,
Interactivos y Digitales México S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Mexico and Compañía de Negocios Interactiva de Colombia E.U., a empresa unipersonal organized
under the laws of Colombia and (2) that certain Asset Purchase Agreement (this “APA”), dated as of August 25, 2008, by and among HEI, SALN, Intangible Assets LLC, a Delaware limited liability company, Emprendimientos Veta,
S.A., a sociedad anónima organized under the laws of Argentina (but solely with respect to Article III, Article VI, Section 7.1(o) and Section 8.2 thereof), Hammer and ML. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the SPA. 
 As a condition precedent to the closing of the transactions contemplated by
the SPA, Hammer has agreed to deliver this promissory note issued by ML (the “Note”). 
 FOR GOOD AND VALUABLE
CONSIDERATION, the undersigned, ML, subject to the terms and conditions in this Note, promises to pay to the order of Hispanoamerican Educational Investments BV (the “Creditor”), the principal sum of SIX MILLION UNITED STATES
DOLLARS (U.S. $6,000,000.00) on the Maturity Date (as defined below). 
 The Debtor also promises to pay interest on the unpaid balance of
the Note from the Closing Date through the Maturity Date or the date of the prepayment in full of this Note (as applicable), at a rate per annum for such period equal to the LIBO Rate (as such term is defined below) plus the Margin (as such term is
defined below). Accrued interest shall be payable on the Maturity Date or any Prepayment Date (as such term is defined below) (as applicable). 
 All payments hereunder shall be made in U.S. Dollars and in immediately available funds. 

 1. Certain Definitions. As used herein, the following terms shall have the corresponding meanings.

 (a) “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with such Person. 
 (b) “Banking Day” means any day
on which commercial Creditors are not authorized or required to close in New York City or Buenos Aires, Argentina and which is also a day on which dealings in U.S. Dollar deposits are carried out in the London interbank market. 
 (c) “LIBO Rate” means the rate per annum as determined on the Interest Rate Determination Date on the basis of the offered rates for
deposits in U.S. dollars, for a period of time comparable to the relevant period, which appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that is two (2) Banking Days preceding the Closing Date; provided, however, if the
rate described above does not appear on the Telerate System on any applicable Interest Rate Determination Date, the LIBO Rate shall be the rate (rounded upward, if necessary, to the nearest one hundred-thousandth of a percentage point) determined on
the basis of the offered rate for deposits in U.S. dollars for a period of time comparable to such relevant period that are offered by the Reference Bank in the London interbank market at approximately 11:00 a.m. London time, on the day that is two
(2) Banking Days preceding the Closing Date. The principal London office of the Reference Bank will be requested to provide a quotation of its U.S. Dollar deposit offered rate for a period of time comparable to the relevant period. If no
quotation is provided, the rate for that date will be determined on the basis of the rate quoted for loans in U.S. dollars to leading European banks for a period of time comparable to the relevant period offered by the Reference Bank in New York
City at approximately 11:00 a.m. New York City time, on the day that is two (2) Banking Days preceding the Closing Date. 
 (d)
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness
or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business. 
 (e) “Indebtedness” means (i) any indebtedness for borrowed money,
(ii) any indebtedness evidenced by any note, bond, debenture or other debt security, (iii) any liabilities or obligations for the deferred purchase price of property or services with respect 

  

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to which Debtor is liable, contingently or otherwise, as obligor or otherwise, (iv) any commitment by which Debtor assures a creditor against loss
(including contingent reimbursement obligations with respect to letters of credit), (v) any indebtedness guaranteed in any manner by Debtor (including guarantees in the form of an agreement to repurchase or reimburse), (vi) any liabilities
or obligations under capitalized leases with respect to which Debtor is liable, contingently or otherwise, as obligor, guarantor or otherwise or with respect to which obligations Debtor assures a creditor against loss, (vii) any indebtedness or
liabilities secured by an Encumbrance on Debtor’s assets, (viii) any amounts owed by Debtor to any Person under any non-competition, consulting or deferred compensation arrangements, and (ix) with respect to Debtor, any excess of the
funds payable to customers of MercadoPago, over funds receivable from customers of MercadoPago. 
 (f) “Interest Payment
Date” for this Note means (i) the Maturity Date of this Note, and (ii) the date of any prepayment or repayment of principal of this Note. 
 (g) “Interest Rate Determination Date” means the Banking Day that is two (2) Banking Days before the Closing Date. 
 (h) “Margin” shall mean, with respect to this Note, (1) 1.5% for the period commencing on September 5, 2008 and ending on January 4, 2009, (2) 2.0% bps for the period commencing on
January 5 2009 and ending on May 4, 2009, and (3) 2.5% bps for the period commencing on for the period commencing on May 5, 2009 and ending on September 5, 2009. 
 (i) “Maturity Date” means September 5, 2009. 
 (j) “Person” means any corporation, natural person, firm, joint venture, partnership, trust, unincorporated organization or government, or any political subdivision, department or agency of any
government. 
 (k) “Prepayment Date” means the date that the Debtor prepays this Note (in whole or in part). 
 (l) “Reference Bank” means the principal London office of any major bank in the London interbank market, as reasonably and mutually
selected by the Creditor and the Debtor in their reasonable discretion. 
 2. Payments; Prepayments; Fees. 
 (a) Place and Time of Payment. All payments of principal of and interest on this Note and all other amounts payable hereunder shall be made by
deposit to account no. 24.74.40.647 of the Creditor at Fortis Bank NV, Blaak 555, 3000 BA, Rotterdam, The Netherlands, BIC/SWIFT: FTSBNL2R, IBAN: NL17 FTSB 0247 4406 47, not later than 12:00 p.m. (New York time) on the dates due, or to such other
account as the Creditor may designate in writing to the Debtor. 
  

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 (b) Payments to be on Banking Days. Whenever any payment hereunder shall be stated to be due on a
day other than a Banking Day, such payment shall be made on the next succeeding Banking Day (unless such next succeeding Banking Day would fall in the succeeding calendar month, in which case such payment shall be made on the next preceding Banking
Day), and any such extension or reduction of time shall in such case be reflected in the computation of payment of interest. 
 (c)
Voluntary Prepayments. The Debtor may, upon three (3) Banking Days’ notice to the Creditor, prepay this Note (in whole or in part) on any Banking Day. 
 3. Interest. All computations of interest hereon shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for
which interest is payable. 
 4. Pari Passu Status. The payment obligations of the Debtor under this Note shall rank at least
pari passu with all of its other Indebtedness, whether now existing or hereafter outstanding, except for obligations accorded preference by mandatory provisions of law. 
 5. Covenants. From the Closing Date, the Debtor covenants not to incur Indebtedness, on a consolidated basis, in excess of $55,000,000 (including
the Indebtedness incurred hereunder and any other Indebtedness of the Debtor to the Creditor), except as follows (collectively, “Permitted Indebtedness”): 
 (i) Indebtedness of the Debtor to any Subsidiary and of any Subsidiary to the Debtor or any other Subsidiary; 
 (ii) Guarantees by the Debtor of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Debtor or any other Subsidiary; and 
 (iii) any Guarantees granted by Debtor or its Affiliates under any discount of funds receivable from customers of MercadoPago. 
 6. Notices. All notices, requests, demands or communications hereunder shall be in writing and shall be given to or made upon the respective parties hereto at the following addresses: 
  

			
	If to the Debtor:	  	If to the Creditor:
		
	MercadoLibre, Inc.	  	S.A. La Nación
	Tronador 4890, 8th Floor	  	Bouchard 557 6th floor
	Buenos Aires C140DNN, Argentina	  	C1106ABG Buenos Aires, Argentina
	Attn.: Jacobo Cohen Imach	  	Attn.: Eduardo Lomanto
	Tel: +54 11 5352 8030	  	Tel: +54 11 4319-1865
	Fax: +1 305 393 8250	  	Fax: + 54 11 4319-4527
		
	With a copy to:	  	
		
	Hunton & Williams LLP	  	
	1111 Brickell Avenue, Suite 2500	  	
	Miami, FL 33131	  	
	Attn.: John F. Haley	  	
	Tel: (305) 810 2595	  	

  

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 7. Prepayment. The Debtor may, upon notice to the Creditor, at any time or from time to time
voluntarily prepay this Note (in whole or in part) without premium or penalty. 
 8. Miscellaneous. 
 (a) This Note sets forth the entire agreement between the parties hereto, supersedes all prior communications and understandings of any nature and may not
be amended, supplemented or altered except in a writing signed by both parties hereto. 
 (b) Any suit, action or proceeding against the
Debtor with respect to this Note or on any judgment entered by any court in respect thereof may be brought in the courts of the State of New York, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern
District of New York, and the Debtor submits to the nonexclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding or judgment. 
 (c) This Note shall be governed by and interpreted and construed in accordance with the law of the State of New York, without regard to principles of conflicts of laws (other than Section 5-1401 of the General
Obligations Law of the State of New York). 
  

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 IN WITNESS WHEREOF, the Debtor has caused this Note to be duly executed by its duly authorized officer as
of the day and year first above written. 
  

			
	DEBTOR:
	
	MERCADOLIBRE, INC.
		
	By:	 	 /s/ Nicolás Szekasy

	Name:	 	Nicolás Szekasy
	Title:	 	Executive Vice President and Chief Financial Officer

  

			
	AGREED AND ACCEPTED:
	
	HAMMER.COM, LLC
		
	By:	 	 /s/ Nicolás Szekasy

	Name:	 	Nicolás Szekasy
	Title:	 	Chief Financial Officer
	
	S.A. LA NACIÓN
		
	By:	 	 /s/ Eduardo Lomanto

	Name:	 	Eduardo Lomanto
	Title:	 	Attorney-in-Fact

  

			
		
	By:	 	/s/ Marcelo Sajaroff
	Name:	 	Marcelo Sajaroff
	Title:	 	Attorney-in-Fact

			
	
	HISPANOAMERICAN EDUCATIONAL INVESTMENTS BV
		
	By:	 	 /s/ Eduardo Lomanto

	Name:	 	Eduardo Lomanto
	Title:	 	Attorney-in-Fact

  

			
		
	By:	 	/s/ Marcelo Sajaroff
	Name:	 	Marcelo Sajaroff
	Title:	 	Attorney-in-Fact

  

 6Form of Common Stock Warrant

 Exhibit 10.2 
 Warrant No. 08-__ 
 ARROWHEAD RESEARCH CORPORATION 
 COMMON STOCK WARRANT 
 This certifies
that                  (the “Holder”), or assigns, for value received, is entitled to purchase from Arrowhead Research Corporation (the
“Company”), subject to the terms set forth below, a maximum of                  fully-paid and non-assessable shares (subject to
adjustment as provided herein) of the Company’s Common Stock, $0.001 par value, (the “Warrant Shares”) for cash at a price of $2.00 per share (the “Exercise Price”) (subject to adjustment as
provided herein) at any time or from time to time on or after                     , 6 months and one day after issuance date (the
“Initial Exercise Date”), and up to and including 5:00 p.m. (New York City Time) on                     , 5 years from
issuance date (the “Expiration Date”) upon surrender to the Company at its principal office (or at such other location as the Company may advise the Holder in writing) of this Warrant properly endorsed with the Notice of
Subscription attached hereto duly completed and signed and upon payment in cash or by check of the aggregate Exercise Price for the number of shares for which this Warrant is being exercised determined in accordance with the provisions hereof. The
Exercise Price is subject to adjustment as provided in Section 4 of this Warrant. This Warrant is issued subject to the following terms and conditions: 
 1. Exercise, Issuance of Certificates. The Holder may exercise this Warrant at any time or from time to time on or after the Initial Exercise Date and on or prior to the Expiration Date, for all or any part of
the Warrant Shares (but not for a fraction of a share) which may be purchased hereunder, as that number may be adjusted pursuant to Section 4 of this Warrant. The Company agrees that the Warrant Shares purchased under this Warrant shall be and
are deemed to be issued to the Holder hereof as the record owner of such Warrant Shares as of the close of business on the date on which this Warrant shall have been surrendered, properly endorsed, the completed and executed Notice of Subscription
delivered, and payment in cash made for such Warrant Shares (such date, a “Date of Exercise”). Certificates for the Warrant Shares so purchased, together with any other securities or property to which the Holder hereof is
entitled upon such exercise, shall be delivered to the Holder hereof by the Company at the Company’s expense as soon as practicable after the rights represented by this Warrant have been so exercised, but in any event not later than the third
trading day following the Date of Exercise. In case of a purchase of less than all the Warrant Shares which may be purchased under this Warrant, the Company shall cancel this Warrant and execute and deliver to the Holder hereof within a reasonable
time a new Warrant or Warrants of like tenor for the balance of the Warrant Shares purchasable under the Warrant surrendered upon such purchase. Each stock certificate so delivered shall be registered in the name of such Holder and issued with or
without legends in accordance with the Subscription Agreement pursuant to which this Warrant was originally issued (the “Subscription Agreement”). 
 2. Cashless Exercise during Restrictive Event. 
 2.1. Cashless Exercise. If a
“Restrictive Event” (as defined below) exists at a time when this Warrant is exercised, then the Warrant shall be exercised at such time only by means of a “cashless exercise” in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where: 
  

					
	 (A)
	 	=	 	the closing price of the Company’s Common Stock (the “Common Stock”) on the business day immediately prior to the Exercise Date (the “Fair Market
Value”);

					
	 (B)
	 	=	 	the Exercise Price of the Warrants, as adjusted; and
			
	 (X)
	 	=	 	the number of Warrant Shares issuable upon exercise of the Warrants in accordance with the terms of this Warrant.

 2.2. Company-Elected Conversion. The Company shall provide to the Holder
prompt written notice of any time that the Company is unable to issue Warrant Shares because (a) the Securities and Exchange Commission (the “Commission”) has issued a stop order with respect to the Registration
Statement (as defined in the Subscription Agreement), (b) the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, (c) the Company has suspended or withdrawn
the effectiveness of the Registration Statement, either temporarily or permanently or (d) for any other reason (each, a “Restrictive Event”). To the extent that a Restrictive Event occurs after the Holder has exercised
this Warrant in accordance with Section 1 but prior to the delivery of the Warrant Shares, the Company shall (i) if the Fair Market Value of the Warrant Shares is greater than the Exercise Price, provide written notice to the Holder that
the Company will deliver that number of Warrant Shares to the Holder as should be delivered in a “cashless exercise” in accordance with Section 2.1, and return to the Holder all consideration paid to the Company in connection with the
Holder’s attempted exercise of this Warrant pursuant to Section 1 (a “Company-Elected Conversion”), or (ii) at the election of the Holder to be given within five (5) days of receipt of notice of a
Company-Elected Conversion, the Holder shall be entitled to rescind the previously submitted Notice of Exercise and the Company shall return all consideration paid by Holder for such shares upon such rescission. 
 3. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all Warrant Shares, will, upon issuance and, if
applicable, payment of the applicable Exercise Price, be duly authorized, validly issued, fully paid and non-assessable, and free of all preemptive rights, liens and encumbrances, except for restrictions on transfer provided for herein. The Company
shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of providing for the exercise of the rights to purchase all Warrant Shares granted pursuant to this Warrant, such number of shares
of Common Stock as shall, from time to time, be sufficient therefor. 
 4. Adjustment of Exercise Price and Number of Shares. The
Exercise Price and the total number of Warrant Shares shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 4. Upon each adjustment of the Exercise Price, the Holder of this Warrant
shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment. 
 4.1. Subdivision or Combination of Stock. In the event the outstanding shares of the Company’s Common Stock shall be increased by a stock dividend payable in Common Stock, stock split, subdivision, or
other similar transaction occurring after the date hereof into a greater number of shares of Common Stock, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares issuable
hereunder proportionately increased. Conversely, in the event the outstanding shares of the Company’s Common Stock shall be decreased by reverse stock split, combination, consolidation, or other similar transaction occurring after the date
hereof into a lesser number of shares of Common Stock, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares issuable hereunder proportionately decreased. 

 

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 4.2. Reclassification. If any reclassification of the capital stock of the Company
or any reorganization, consolidation, merger, or any sale, lease, license, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all, of the business and/or assets of the Company (each, a
“Reclassification Event”) shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, or other assets or property, then, as a condition of such Reclassification Event lawful
and adequate provisions shall be made whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby) such shares of stock, securities, or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby. In any Reclassification Event, appropriate provision shall be made with respect to the rights and interests of the Holder of this Warrant to the
end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of Warrant Shares), shall thereafter be applicable, as nearly as may be, in relation to any shares of stock,
securities, or assets thereafter deliverable upon the exercise hereof. 
 4.3. Notice of Adjustment. Upon any
adjustment of the Exercise Price or any increase or decrease in the number of Warrant Shares, the Company shall give written notice thereof at the address of such Holder as shown on the books of the Company. The notice shall be prepared and signed
by the Company’s Chief Executive Officer or Chief Financial Officer and shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of
this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 
 5.
Redemption. 
 5.1. Subject to the provisions of this Section 5, at any time after the Initial Exercise Date, if
(i) the last reported sale price of the Common Stock on the principal stock exchange or quotation service on which the Common Stock trades is greater than $4.00 (subject to adjustment pursuant to Section 4 hereof) for at least twenty
(20) trading days during any consecutive sixty (60)-day period and (ii) the Company has fully honored, in accordance with the terms of this Warrant, all Notices of Subscription delivered prior to 5:00 p.m. (New York City time) on the Call
Date (as defined below), then the Company may redeem this Warrant at a price of $1.00 (the “Redemption Price”). To exercise this right, the Company shall, not less than thirty (30) days prior to the Call Date, deliver to
the Holder an irrevocable written notice (the “Call Notice”) informing the Holder that the Common Stock has traded at the required levels for the specified time periods and specifying the date on which the Company shall
redeem this Warrant in accordance with this Section 5 (the “Call Date”). If the Warrant is not exercised on or before the Call Date, then this Warrant shall be cancelled at 5:00 p.m. (New York City time) on the Call
Date, and the Company shall thereafter deliver the Redemption Price to such Holder at its address of record. The Company covenants and agrees that it will honor all Notices of Subscription with respect to Warrant Shares that are tendered from the
time of delivery of the Call Notice through 5:00 p.m. (New York City time) on the Call Date. For the avoidance of doubt, the Company’s delivery to Holder of the Redemption Price of $1.00 shall be effective to redeem this Warrant in its entirety
pursuant to this Section 5, without regard to the number of Warrant Shares then potentially issuable upon exercise of the Warrant. 
 5.2. If (A) the Holder timely delivers to the Company a notice of exercise and tenders the applicable purchase price on or before the Call Date, and (B) the Company is unable to issue the full number of
Warrant Shares potentially issuable as of the Call Date solely due to the limitations in Section 6.1 regarding the Holder’s acquisition of more than 19.99% of the Company’s issued and outstanding Common Stock (without regard to any
potential lowering of the Maximum Percentage as permitted in Section 6.3), then in such instance, the Company shall honor the exercise only to the extent allowed under Section 6.1 based on the total shares outstanding at the close of
business on the Call Date and shall 

  

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promptly return that portion of the exercise price not applied to the purchase of Warrant Shares. The Warrant Shares that cannot be acquired as of the Call
Date shall remain issuable hereunder and the Warrant shall not be redeemed with respect to those Warrant Shares. 
 6. Limitation on
Exercise. 
 6.1. Holder’s 20% Restrictions. The Company shall not effect any exercise of this Warrant, and
the Holder shall not have the right to exercise any portion of this Warrant, to the extent that as a result of giving effect to such exercise, such Holder (together with such Holder’s affiliates, and any other person or entity acting as a group
together with such Holder or any of such Holder’s affiliates) would beneficially own in excess of 19.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such
exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned (directly or indirectly through Warrant Shares or otherwise) by such Holder and its affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by such Holder or any of its affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any
other preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by such Holder or any of its affiliates. The limitations contained in this Section 6.1 shall
apply only to the extent required under NASDAQ Marketplace Rule 4350(i)(1)(B). The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 6.1 to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in
this Section 6.1 shall apply to a successor Holder of this Warrant. 
 6.2. Calculation of Ownership. Except as
set forth in the preceding Section, for purposes of this Section 6, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged
by the Holder that the Company is not representing to such Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in this Section 6 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Subscription shall be deemed to be such Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two
trading days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by such Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. 
  

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 6.3. Reductions to Maximum Percentage. The Holder may, at any time and upon
providing the Company with written notice, lower the Maximum Percentage to any percentage below 19.99% (such amount being the “Adjusted Maximum Percentage”). Upon providing the Company with at least 61 days prior written
notice, the Holder may increase the Adjusted Maximum Percentage, up to 19.99% of the shares of Common Stock outstanding immediately after giving effect to such exercise. 
 6.4. Liquidation Event. Notwithstanding the limitations set forth in this Section 6, but subject to NASDAQ Marketplace Rule
4350(i)(1)(B), this Warrant shall be fully exercisable upon a Liquidation Event (defined below). For purposes of this Section 6.4, “Liquidation Event” shall mean the consummation of any of the following transactions:
(a) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in
which there is no substantial change in the shareholders of the Company), (b) the sale of all or substantially all of the assets of the Company, or (c) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction. 
 7. No Voting or Dividend Rights. Nothing contained in this Warrant shall be
construed as conferring upon the holder hereof the right to vote or to consent to receive notice as a shareholder of the Company on any other matters or any rights whatsoever as a shareholder of the Company. No dividends or interest shall be payable
or accrued in respect of this Warrant or the interest represented hereby or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised. 
 8. Compliance with Securities Act. The Holder of this Warrant, by acceptance hereof, agrees that this Warrant is being acquired for Holder’s
own account and not for any other person or persons, for investment purposes and that it will not offer, sell, or otherwise dispose of this Warrant except under circumstances which will not result in a violation of the Securities Act of 1933 or any
applicable state securities laws. 
 9. Modification and Waiver. This Warrant and any provision hereof may be changed, waived,
discharged, or terminated only by an instrument in writing signed by the party against whom enforcement of the same is sought. 
 10.
Notices. Any notice, request, or other document required or permitted to be given or delivered to the Holder hereof or the Company shall be delivered by hand or messenger or shall be sent by certified mail, postage prepaid, or by overnight
courier to each such Holder at its address as shown on the books of the Company or to the Company at its principal place of business or such other address as either may from time to time provide to the other. Each such notice or other communication
shall be treated as effective or having been given: (i) when delivered if delivered personally, (ii) if sent by registered or certified mail, at the earlier of its receipt or three business days after the same has been registered or
certified as aforesaid, (iii) if sent by overnight courier, on the next business day after the same has been deposited with a nationally recognized courier service, or (iv) the date of transmission, if such notice or communication is
delivered via facsimile prior to 5:00 p.m. (New York City time) on a trading day at a facsimile number as either may from time to time provide to the other and a confirming copy of such notice is sent the same day by first class mail. 
 11. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant 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 law thereof. Each 

  

 -5- 

 
party agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated
(“Proceedings”) (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York (the
“Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any Court, or that such Proceeding has been commenced in an improper or inconvenient
forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Warrant or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Warrant, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable
attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
 12.
Lost or Stolen Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Company, at its expense, will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Warrant. 
 13. Fractional Shares. No fractional shares shall be issued upon exercise of this Warrant. The Company shall,
in lieu of issuing any fractional share, pay the Holder entitled to such fraction a sum in cash equal to such fraction (calculated to the nearest 1/100th of a share) multiplied by the then effective Exercise Price on the date the Notice of
Subscription is received by the Company. 
 14. Acknowledgement. Upon the request of the Holder, the Company will at any time during
the period this Warrant is outstanding acknowledge in writing, in form satisfactory to Holder, the continued validity of this Warrant and the Company’s obligations hereunder. 
 15. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the
Company and the successors and assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant, and shall be enforceable by any such Holder. 
 16. Severability of Provisions. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 
  

 -6- 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its officer, thereunto
duly authorized on this          day of August 2008. 
  

			
	 ARROWHEAD RESEARCH CORPORATION,
 a Delaware corporation

		
	By:	 	 
		 	 Chris Anzalone
 President and Chief Executive Officer

 NOTICE OF SUBSCRIPTION 
 (To be signed only upon exercise of Warrant) 
  

	To:	Arrowhead Research Corporation 

 The undersigned, the holder of the attached Common Stock Warrant, hereby elects to exercise the purchase right represented by such Warrant for, and to purchase
thereunder,                            1 shares of Common Stock of Arrowhead Research Corporation and either (check one): 
              makes payment of $             therefor; or 
              makes a “cashless exercise” as required by Section 2 of
the Warrant. 
 By its delivery of this Notice of Subscription, the undersigned represents and warrants to the Company that in giving effect
to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Warrant to
which this notice relates. 
 The undersigned requests that certificates for such shares be issued in the name of, and delivered to:
             whose address is:
                                         
                                         
                                         
                         . 
 DATED:                                     

  

			
	 
	(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)
		
	Name:	 	 
		
	Title:	 	 

  
  

	 1
	 Insert here the number of shares called for on the face of the Warrant (or, in the case of a partial exercise, the
portion thereof as to which the Warrant is being exercised), in either case without making any adjustment for any stock or other securities or property or cash which, pursuant to the adjustment provisions of the Warrant, may be deliverable upon
exercise.

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