Exhibit 10.1
Execution Version

                                                    

CREDIT AND SECURITY AGREEMENT
dated as of September 25, 2020
    by and among    
EXICURE, INC. AND EXICURE OPERATING COMPANY, each as a Borrower
and any additional borrower that hereafter becomes party hereto,
and
MIDCAP FINANCIAL TRUST,
as Agent,
and
THE LENDERS
FROM TIME TO TIME PARTY HERETO
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CREDIT AND SECURITY AGREEMENT
This CREDIT AND SECURITY AGREEMENT (this “Agreement”), dated as of September 25,
2020 (the “Closing Date”) by and among MIDCAP FINANCIAL TRUST, a Delaware
statutory trust (“MidCap”), as administrative agent, the Lenders listed on the
Credit Facility Schedule attached hereto and otherwise party hereto from time to
time (each a “Lender”, and collectively the “Lenders”), and EXICURE, INC., a
Delaware corporation (“Parent”), EXICURE OPERATING COMPANY, a Delaware
corporation (“Exicure Operating Company”) and the other entities from time to
time party to this Agreement as borrowers (each individually and, collectively
in the singular, “Borrower”), provides the terms on which Lenders agree to lend
to Borrower and Borrower shall repay the Lenders. The parties agree as follows:
1.ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed in accordance
with GAAP. Calculations and determinations must be made in accordance with GAAP.
Capitalized terms not otherwise defined in this Agreement shall have the
meanings set forth in Article 15. All other capitalized terms contained in
Article 4 and Exhibit A, unless otherwise indicated, shall have the meaning
provided by the Code to the extent such terms are defined therein. All headings
numbered without a decimal point are herein referred to as “Articles,” and all
paragraphs numbered with a decimal point (and all subparagraphs or subsections
thereof) are herein referred to as “Sections.” All references herein to a
merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or
analogous term, will be construed to mean also a division of or by a limited
liability company, as if it were a merger, transfer, consolidation,
amalgamation, assignment, sale or transfer, or similar term, as applicable. Any
series of limited liability company shall be considered a separate Person.
Notwithstanding any other provision contained herein, all terms of an accounting
or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to herein, and the determination of Indebtedness
hereunder, shall be made without giving effect to Financial Accounting Standards
Board (FASB) Standard ASC 842 (Leases) (or any other applicable financial
accounting standard having a similar result or effect) and related
interpretations, in each case, to the extent any lease (or similar arrangement
conveying the right to use) would be required to be treated as a capital lease
thereunder where such lease (or similar arrangement) would have been treated as
an operating lease under GAAP as in effect immediately prior to the
effectiveness of ASC 842.

2.CREDIT FACILITIES AND TERMS
2.1    Promise to Pay. Borrower hereby unconditionally promises to pay to each
Lender in accordance with each Lender’s respective Pro Rata Share of each Credit
Facility, the outstanding principal amount of all Credit Extensions made by the
Lenders under such Credit Facility and accrued and unpaid interest thereon and
any other amounts due hereunder as and when due in accordance with this
Agreement.
2.2    Credit Facilities. Subject to the terms and conditions hereof, each
Lender, severally, but not jointly, agrees to make available to Borrower Credit
Extensions in respect of each Credit Facility set forth opposite such Lender’s
name on the Credit Facility Schedule, in each case not to exceed such Lender’s
commitment as identified on the Credit Facility Schedule (such commitment of
each Lender, as it may be amended to reflect assignments made in accordance with
this Agreement or terminated or
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reduced in accordance with this Agreement, its “Applicable Commitment”, and the
aggregate of all such commitments of all Lenders, the “Applicable Commitments”).
2.3    Credit Facilities.
(a)    Nature of Credit Facility; Credit Extension Requests. Credit Extensions
in respect of a Credit Facility may be requested by Borrower to be made by the
applicable Lenders on any Business Day during the Draw Period for such Credit
Facility, but no Credit Extensions in respect of a Credit Facility shall be made
before the applicable Commitment Commencement Date or after the applicable
Commitment Termination Date. For any Credit Extension requested under a Credit
Facility (other than a Credit Extension on the Closing Date), Agent must receive
the completed Credit Extension Form by 12:00 noon (New York time) fifteen (15)
Business Days prior to the date the Credit Extension is to be funded (other than
the Credit Extension made on the Closing Date). To the extent any Credit
Facility proceeds are repaid for any reason, whether voluntarily or
involuntarily (including repayments from insurance or condemnation proceeds),
Agent and the Lenders shall have no obligation to re-advance such sums to
Borrower.
(b)    Principal Payments. Principal payable on account of a Credit Facility
shall be payable by Borrower to Agent, for the account of the applicable Lenders
in accordance with their respective Pro Rata Shares, immediately upon the
earliest of (i) the date(s) set forth in the Amortization Schedule for such
Credit Facility, or (ii) the Maturity Date. Except as this Agreement may
specifically provide otherwise, all prepayments of Credit Extensions under the
Credit Facilities shall be applied by Agent to the applicable Credit Facility in
inverse order of maturity. The monthly payments required under the Amortization
Schedule shall continue in the same amount (for so long as the applicable Credit
Facility shall remain outstanding) notwithstanding any partial prepayment,
whether mandatory or optional, of the applicable Credit Facility.
(c)    Mandatory Prepayment. If a Credit Facility is accelerated following the
occurrence of an Event of Default, Borrower shall immediately pay to Agent, for
payment to each Lender in accordance with its respective Pro Rata Share, an
amount equal to the sum of: (i) all outstanding principal of the Credit Facility
and all other Obligations, plus accrued and unpaid interest thereon, (ii) any
fees payable under the Fee Letters by reason of such prepayment, (iii) the
Applicable Prepayment Fee as specified in the Credit Facility Schedule for the
Credit Facility being prepaid, and (iv) all other sums that shall have become
due and payable, including Protective Advances. Additionally, at the election of
Agent, Borrower shall prepay the Credit Facilities (to be allocated pro rata
among the outstanding Credit Extensions under all Credit Facilities) in the
following amounts: (A) within five (5) Business Days the date on which any
Credit Party (or Agent as loss payee or assignee) receives any casualty proceeds
in excess of One Million Dollars ($1,000,000)for property, in respect of assets
upon which Agent has been granted a Lien, an amount equal to one hundred percent
(100%) of such proceeds (net of out-of-pocket expenses and, in the case of
personal property, repayment of any permitted purchase money debt encumbering
the personal property that suffered such casualty), or such lesser portion of
such proceeds as Agent shall elect to apply to the Obligations; and (B) within
five (5) Business Days after receipt by any Credit Party of the proceeds in
excess of One Million Dollars ($1,000,000) of any asset disposition of personal
property not made in the Ordinary Course of Business (other than transfers
permitted by Section 7.1) an amount equal to one hundred percent (100%) of the
net cash proceeds of such asset disposition (net of out-of-pocket expenses and
repayment of any permitted purchase money debt encumbering such asset), or such
lesser portion as Agent shall elect to apply to the Obligations. Notwithstanding
the foregoing, (a) so long as no Default or Event of Default has occurred and is
continuing, Borrower shall have the option of applying the proceeds of any
casualty policy up to One Million Dollars ($1,000,000) in
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the aggregate with respect to any property loss in any one (1) year, toward the
replacement or repair of destroyed or damaged property; provided that any such
replaced or repaired property (x) shall be of greater, equal, or like value as
the replaced or repaired Collateral and (y) shall be deemed Collateral in which
Agent and the Lenders have been granted a first priority security interest and
(b) after the occurrence and during the continuance of a Default or Event of
Default, all proceeds payable under such casualty policy shall, at the option of
Agent, be payable to Agent, for the ratable benefit of the Lenders, on account
of the Obligations.
(d)    Permitted Prepayment. Except as provided below, Borrower shall have no
right to prepay the Credit Extensions made in respect of a Credit Facility. For
the applicable Credit Facility as specified in the Credit Facility Schedule
therefor, Borrower shall have the option to prepay the Prepayable Amount (as
defined below) of such Credit Facility advanced by the Lenders under this
Agreement, provided Borrower (i) provides irrevocable written notice to Agent
and each Lender of its election to prepay the Prepayable Amount at least five
(5) Business Days prior to such prepayment, and (ii) pays to Agent, for payment
to each applicable Lender in accordance with its respective Pro Rata Share, on
the date of such prepayment, an amount equal to the sum of (A) the Prepayable
Amount, plus accrued interest thereon, (B) any fees payable under the Fee
Letters by reason of such prepayment, (C) the Applicable Prepayment Fee as
specified in the Credit Facility Schedule for the Credit Facility being prepaid,
and (D) all Protective Advances. The term “Prepayable Amount” means all, but not
less than all, of the Credit Extensions and all other Obligations under all
Credit Facilities.
2.4    Reserved.
2.5    Reserved.
2.6    Interest and Payments; Administration.
(a)    Interest; Computation of Interest. Each Credit Extension shall bear
interest on the outstanding principal amount thereof from the date when made
until paid in full at a rate per annum equal to the Applicable Interest Rate.
Each Lender may, upon the failure of Borrower to pay any fees or interest as
required herein, capitalize such interest and fees and begin to accrue interest
thereon until paid in full, which such interest shall be at a rate per annum
equal to the Applicable Interest Rate unless and until the Default Rate shall
otherwise apply. All other Obligations shall bear interest on the outstanding
amount thereof from the date they first become payable by Borrower under the
Financing Documents until paid in full at a rate per annum equal to the
Applicable Interest Rate unless and until the Default Rate shall otherwise
apply. Interest on the Credit Extensions and all fees payable under the
Financing Documents shall be computed on the basis of a three hundred sixty
(360) day year and the actual number of days elapsed in the period during which
such interest accrues. In computing interest on any Credit Extension or other
advance, the date of the making of such Credit Extension or advance shall be
included and the date of payment shall be excluded; provided, however, that if
any Credit Extension or advance is repaid on the same day on which it is made,
such day shall be included in computing interest on such Credit Extension or
advance. As of each Applicable Interest Rate Determination Date, Agent shall
determine (which determination shall, absent manifest error in calculation, be
final, conclusive and binding upon all parties) the interest rate that shall
apply to the Credit Extensions.
(b)    Default Rate. Upon the election of Agent following the occurrence and
during the continuance of an Event of Default, Obligations shall bear interest
at a compounded rate per annum which is two percent (2.00%) above the rate that
is otherwise applicable thereto (the “Default Rate”). Payment or acceptance of
the increased interest rate provided in this subsection is not a permitted
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alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Agent or the
Lenders.
(c)    Payments Generally. Except as otherwise provided in this Agreement,
including pursuant to Section 2.6(c), or as otherwise directed by Agent, all
payments in respect of the Obligations shall be made to Agent for the account of
the applicable Lenders in accordance with their Pro Rata Share. Payments of
principal and interest in respect of each Credit Facility shall be made to each
applicable Lender identified on the applicable Credit Facility Schedule. All
Obligations are payable upon demand of Agent in the absence of any other due
date specified herein. All fees payable under the Financing Documents shall be
deemed non-refundable as of the date paid. Any payment required to be made to
Agent or a Lender (and any servicer or trustee on behalf of a securitization
vehicle designated by either) under this Agreement may be made by debit or
automated clearing house payment initiated by Agent or such Lender (or any
servicer designated or trustee on behalf of a securitization vehicle on behalf
of either) from any of Borrower’s Deposit Accounts, including the Designated
Funding Account, and Borrower hereby authorizes Agent and each Lender (or any
servicer or trustee on behalf of a securitization vehicle designated on behalf
of either) to debit any such accounts for any amounts Borrower owes hereunder
when due. Without limiting the foregoing, Borrower shall tender to Agent and the
Lenders any authorization forms as Agent or any Lender may require to implement
such debit or automated clearing house payment. These debits or automated
clearing house payments shall not constitute a set-off. Payments of principal
and/or interest received after 12:00 noon New York time are considered received
at the opening of business on the next Business Day. When a payment is due on a
day that is not a Business Day, the payment is due the next Business Day and
additional fees or interest, as applicable, shall continue to accrue until paid.
All payments to be made by Borrower under any Financing Document shall be made
without set-off, recoupment or counterclaim, in lawful money of the United
States and in immediately available funds. The balance of the Obligations, as
recorded in Agent’s books and records at any time, shall be conclusive and
binding evidence of the amounts due and owing to Agent and the Lenders by each
Borrower absent manifest error; provided, however, that any failure to so record
or any error in so recording shall not limit or otherwise affect any Borrower’s
duty to pay all amounts owing hereunder or under any Financing Document. Agent
shall endeavor to provide Borrower with a monthly statement regarding the Credit
Extensions (but neither Agent nor any Lender shall have any liability if Agent
shall fail to provide any such statement). Unless Borrower notifies Agent of any
objection to any such statement (specifically describing the basis for such
objection) within ninety (90) days after the date of receipt thereof, it shall
be deemed final, binding and conclusive upon Borrower in all respects as to all
matters reflected therein.
(d)    Interest Payments; Maturity Date. Commencing on the first (1st) Payment
Date following the funding of a Credit Extension, and continuing on the Payment
Date of each successive month thereafter through and including the Maturity
Date, Borrower shall make monthly payments of interest, in arrears, calculated
as set forth in this Section 2.6. All unpaid principal and accrued interest is
due and payable in full on the Maturity Date or any earlier date specified
herein. If the Obligations are not paid in full on or before the Maturity Date,
all interest thereafter accruing shall be payable immediately upon accrual.
(e)    Fees. Borrower shall pay, as and when due and payable under the terms of
the Fee Letters, to Agent and each Lender, as applicable, for their own accounts
and not for the benefit of any other Lenders, the fees set forth in the Fee
Letters.
(f)    Protective Advances. Borrower shall pay to Agent for the account of the
Lenders all Protective Advances (including reasonable attorneys’ fees and
expenses for documentation
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and negotiation of this Agreement and the other Financing Documents) when due
under any Financing Document (and in the absence of any other due date specified
herein, such Protective Advances shall be due upon demand).
(g)    Maximum Lawful Rate. In no event shall the interest charged hereunder
with respect to the Obligations exceed the maximum amount permitted under the
Laws of the State of New York. Notwithstanding anything to the contrary in any
Financing Document, if at any time the rate of interest payable hereunder (the
“Stated Rate”) would exceed the highest rate of interest permitted under any
applicable Law to be charged (the “Maximum Lawful Rate”), then for so long as
the Maximum Lawful Rate would be so exceeded, the rate of interest payable shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the Stated Rate is less than the Maximum Lawful Rate, Borrower shall,
to the extent permitted by Law, continue to pay interest at the Maximum Lawful
Rate until such time as the total interest received is equal to the total
interest which would have been received had the Stated Rate been (but for the
operation of this provision) the interest rate payable. Thereafter, the interest
rate payable shall be the Stated Rate unless and until the Stated Rate again
would exceed the Maximum Lawful Rate, in which event this provision shall again
apply. In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received, had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder in excess of the
Maximum Lawful Rate, such excess amount shall be applied to the reduction of the
principal balance of such Lender’s Credit Extensions or to other amounts (other
than interest) payable hereunder, and if no such Credit Extensions or other
amounts are then outstanding, such excess or part thereof remaining shall be
paid to Borrower. In computing interest payable with reference to the Maximum
Lawful Rate applicable to any Lender, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in the
year in which such calculation is made.
(h)    Taxes; Additional Costs.
(i)    Any and all payments by or on account of any obligation of Borrower
hereunder shall be made without deduction or withholding for any Taxes, except
as required by applicable law. For purposes of this Section 2.6(h), the term
“applicable law” shall include FATCA. If any applicable law (as determined in
the good faith discretion of an applicable Withholding Agent) requires the
deduction or withholding of any Tax from any such payment by a Withholding
Agent, then the applicable Withholding Agent shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax, then the sum payable by Borrower
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section 2.6(h)) the applicable Recipient receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.
(ii)    Borrower shall timely pay to the relevant Governmental Authority in
accordance with applicable law, or at the option of Agent timely reimburse it
for the payment of, any Other Taxes.
(iii)    Borrower shall indemnify each Recipient, within ten (10) Business Days
after demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section 2.6(h)) payable or paid by such Recipient or required to be
withheld or deducted from a payment to such Recipient and any
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reasonable and documented out-of-pocket expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to Borrower by a Lender (with
a copy to Agent), or by Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.
(iv)    Each Lender shall severally indemnify Agent, within ten (10) days after
demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but
only to the extent that Borrower has not already indemnified Agent for such
Indemnified Taxes and without limiting the obligation of Borrower to do so),
(ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 13.1(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by Agent in connection with this Agreement or any
Obligation, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by Agent shall be conclusive absent
manifest error. Each Lender hereby authorizes Agent to set off and apply any and
all amounts at any time owing to such Lender pursuant to this Agreement or
otherwise payable by Agent to the Lender from any other source against any
amount due to Agent under this paragraph (iv).
(v)    As soon as practicable after any payment of Taxes by Borrower to a
Governmental Authority pursuant to this Section 2.6(h), Borrower shall deliver
to Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to Agent.
(vi)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Financing Document shall
deliver to Borrower and Agent, at the time or times prescribed by applicable law
or reasonably requested by Borrower or Agent, such properly completed and
executed documentation reasonably requested by Borrower or Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by Borrower or
Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by Borrower or Agent as will enable Borrower or Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two (2) sentences, the completion, execution and submission of
such documentation (other than such documentation set forth in Section
2.6(h)(vii)(A), (vii)(B) and (vii)(D) below) shall not be required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.
(vii)    Without limiting the generality of the foregoing,
(A)    any Lender that is a U.S. Person shall deliver to Borrower and Agent on
or prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of Borrower or
Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt
from U.S. federal backup withholding tax;
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrower and Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from
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time to time thereafter upon the reasonable request of Borrower or Agent),
whichever of the following is applicable:
(1)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under this Agreement or any Financing Document, executed copies of IRS
Form W-8BEN-E or W-8BEN, as applicable, establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “interest” article of
such tax treaty and (y) with respect to any other applicable payments under this
Agreement or any other Financing Document, IRS Form W-8BEN-E or W-8BEN, as
applicable, establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article of
such tax treaty;
(2)    executed copies of IRS Form W-8ECI;
(3)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the IRC, (x) executed copies of
IRS Form W-8BEN-E or W-8BEN, as applicable and (y) a certification reasonably
satisfactory to Borrower and Agent to the effect that such Foreign Lender is not
a “bank” within the meaning of Section 881(c)(3)(A) of the IRC, a “10 percent
shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the IRC,
or a “controlled foreign corporation” related to Borrower as described in
Section 881(c)(3)(C) of the IRC, together with such Other Tax Certification as
Borrower or Agent may reasonably request from time to time; or
(4)    to the extent a Foreign Lender is not the beneficial owner, executed
copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E or
W-8BEN, as applicable, IRS Form W-9, and/or such Other Tax Certification from
each beneficial owner as Borrower or Agent may reasonably request, as
applicable; provided that if the Foreign Lender is a partnership and one (1) or
more direct or indirect partners of such Foreign Lender are claiming the
portfolio interest exemption, such Foreign Lender may provide such Other Tax
Certification as may be reasonably required by Borrower or Agent on behalf of
each such direct and indirect partner;
(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrower and Agent (in such number of copies as shall be requested by
the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Borrower or Agent), executed copies of any other form
prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. federal withholding Tax, duly completed, together with such
Other Tax Certification as may be prescribed by applicable law to permit
Borrower or Agent to determine the withholding or deduction required to be made;
and
(D)    if a payment made to Agent or a Lender under any this Agreement would be
subject to U.S. federal withholding Tax imposed by FATCA if Agent or such Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the IRC, as
applicable), Agent or such Lender shall deliver to Borrower and Agent on or
prior to the date on which Agent or such Lender becomes a Lender under this
Agreement at the time or times prescribed by law and at such time or times
reasonably requested by Borrower or Agent such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC)
and such Other Tax Certification reasonably requested by Borrower or Agent as
may be necessary for Borrower and Agent to comply with their obligations under
FATCA and
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to determine that Agent or such Lender has complied with Agent or such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold, if
any, from such payment. Solely for purposes of this clause (D), “FATCA” shall
include any amendments made to FATCA after the date of this Agreement.
Agent and each Lender agrees that if any form or certification it previously
delivered pursuant to this Section 2.6(h)(vi), (vii) or (viii) expires or
becomes obsolete or inaccurate in any respect, it shall promptly update such
form or certification or promptly notify Borrower and Agent, if applicable, in
writing of its legal inability to do so.
(viii)    On or prior to the date Agent becomes a party to this Agreement, Agent
shall, in the event that Agent is a U.S. Person, deliver an IRS Form W-9 to
Borrower, and in the event Agent is not a U.S. Person, deliver to Borrower the
appropriate IRS Form W-8 certifying Agent’s exemption, if any, from U.S.
withholding Taxes with respect to amounts payable under this Agreement.
(ix)    If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section 2.6(h) (including by the payment of additional amounts
pursuant to this Section 2.6(h)), it shall pay to the indemnifying party an
amount equal to such refund (but only to the extent of indemnity payments made
under this Section with respect to the Taxes giving rise to such refund), net of
all reasonable and documented out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (h) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (h) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.
(x)    If any Lender shall determine in its commercially reasonable judgment
that the adoption or taking effect of, or any change in, any applicable Law
regarding capital adequacy, in each instance, after the Closing Date, or any
change after the Closing Date in the interpretation, administration or
application thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation, administration or application thereof,
or the compliance by any Lender or any Person controlling such Lender with any
request, guideline or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency adopted or otherwise taking effect after the Closing Date, has
or would have the effect of reducing the rate of return on such Lender’s or such
controlling Person’s capital as a consequence of such Lender’s obligations
hereunder to a level below that which such Lender or such controlling Person
could have achieved but for such adoption, taking effect, change,
interpretation, administration, application or compliance (taking into
consideration such Lender’s or such controlling Person’s policies with respect
to capital adequacy) then from time to time, upon written demand by such Lender
(which demand shall be accompanied by a statement setting forth the basis for
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such demand and a calculation of the amount thereof in reasonable detail, a copy
of which shall be furnished to Agent), Borrower shall promptly pay to such
Lender such additional amount as will compensate such Lender or such controlling
Person for such reduction; provided, however, that notwithstanding anything in
this Agreement to the contrary, (A) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (B) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “change in
applicable Law”, regardless of the date enacted, adopted or issued.
(xi)    If any Lender requires compensation under this subsection (h), or
requires any Borrower to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to this subsection
(h), then, upon the written request of Borrower, such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Credit Extensions hereunder or to assign its rights and obligations
hereunder (subject to the terms of this Agreement) to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (A) would eliminate or materially reduce amounts payable pursuant to
any such subsection, as the case may be, in the future, and (B) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender (as determined in its sole discretion).
Borrower hereby agrees to pay all reasonable and documented costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(xii)    Each party’s obligations under this Section 2.6(h) shall survive the
resignation or replacement of Agent or any assignment of rights by, or the
replacement of, a Lender, and the repayment, satisfaction or discharge of all
Obligations hereunder.
(i)    Administrative Fees and Charges.
(i)    Subject to Section 6.2(c), Borrower shall pay to Agent, for its own
account and not for the benefit of any other Lenders, all reasonable and
documented out-of-pocket fees and expenses in connection with audits and
inspections of the books and records of the Credit Parties, audits, valuations
or appraisals of the Collateral, audits of Borrower’s compliance with applicable
Laws and such other matters as Agent shall deem appropriate, which shall be due
and payable on the first (1st) Business Day of the month following the date of
issuance by Agent of a written request for payment thereof to any Borrower.
(ii)    If payments of principal or interest due on the Obligations, or any
other amounts due hereunder or under the other Financing Documents, are not
timely made and remain overdue for a period of five (5) Business Days, Borrower,
without notice or demand by Agent, promptly shall pay to Agent, for its own
account and not for the benefit of any other Lenders, as additional compensation
to Agent in administering the Obligations, an amount equal to five percent
(5.0%) of each delinquent payment.
2.7    Secured Promissory Notes. At the election of any Lender made as to each
Credit Facility for which it has made Credit Extensions, each Credit Facility
shall be evidenced by one (1) or more secured promissory notes in form and
substance reasonably satisfactory to Agent and the Lenders (each a “Secured
Promissory Note”). Upon receipt of an affidavit of an officer of a Lender as to
the loss, theft,
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destruction, or mutilation of its Secured Promissory Note, Borrower shall issue,
in lieu thereof, a replacement Secured Promissory Note in the same principal
amount thereof and of like tenor.
2.8    Original Issue Discount. The parties acknowledge and agree that the
Credit Extensions are being issued with original issue discount within the
meaning of Section 1273 of the IRC and will take all tax reporting positions
consistent with the foregoing unless otherwise required by a Governmental
Authority.
3.CONDITIONS OF CREDIT EXTENSIONS
3.1    Conditions Precedent to Initial Credit Extension. Each Lender’s
obligation to make the initial advance in respect of a Credit Facility is
subject to the condition precedent that Agent shall consent to or shall have
received, in form and substance satisfactory to Agent, such documents, and
completion of such other matters, as Agent may reasonably deem necessary or
appropriate, including, without limitation, all items listed on the Closing
Deliveries Schedule attached hereto.
3.2    Conditions Precedent to all Credit Extensions. The obligation of each
Lender to make each Credit Extension, including the initial Credit Extension, is
subject to the following conditions precedent:
(a)    [reserved];
(b)    timely receipt by Agent and each Lender of an executed Credit Extension
Form in the form attached hereto;
(c)    (i)    for Credit Extensions made on the Closing Date, the
representations and warranties in Article 5 and elsewhere in the Financing
Documents shall be true, correct and complete in all respects on the Closing
Date; provided, however, that those representations and warranties expressly
referring to a specific date shall be true, correct and complete in all respects
as of such date; and
(ii)    for Credit Extensions made after the Closing Date, if any, the
representations and warranties in Article 5 and elsewhere in the Financing
Documents shall be true, correct and complete in all material respects on the
date of the Credit Extension Form and on the Funding Date of each Credit
Extension; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date. Each
Credit Extension is Borrower’s representation and warranty on that date that the
representations and warranties in Article 5 and elsewhere in the Financing
Documents remain true, accurate and complete in all material respects; provided,
however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date;
(d)    no Default or Event of Default shall have occurred and be continuing or
result from the Credit Extension;
(e)    payment in full of the fees owed to Agent and the Lenders in connection
with the making of the applicable Credit Extensions, including pursuant to the
Fee Letters;
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(f)    Agent shall be satisfied with the results of any searches conducted under
Section 3.5;
(g)    receipt by Agent of such evidence as Agent shall reasonably request to
confirm that the deliveries made in Section 3.1 remain current, accurate and in
full force and effect, or if not, updates thereto, each in form and substance
satisfactory to Agent;
(h)    as determined in such Lender’s sole but reasonable discretion, no fact,
event or circumstance has occurred which could reasonably be expected to result
in a Material Adverse Change; and
(i)    as determined in such Lender’s sole but reasonable discretion, there has
not been any material adverse deviation by Borrowers from the final financial
projections delivered by Borrower to Agent and Lenders prior to the Closing
Date.
3.3    Method of Borrowing. Each Credit Extension in respect of each Credit
Facility shall be in an amount at least equal to the applicable Minimum Credit
Extension Amount for such Credit Facility as set forth in the Credit Facility
Schedule or such lesser amount as shall remain undisbursed under the Applicable
Commitments for such Credit Facility. The date of funding for any requested
Credit Extension shall be a Business Day. To obtain a Credit Extension, Borrower
shall deliver to Agent a completed Credit Extension Form executed by a
Responsible Officer. Agent may rely on any notice given by a person whom Agent
reasonably believes is a Responsible Officer or designee thereof. Agent and the
Lenders shall have no duty to verify the authenticity of any such notice.
3.4    Funding of Credit Facilities. In Agent’s discretion, Credit Extensions
may be funded by Agent on behalf of the Lenders or by the Lenders directly. Upon
the terms and subject to the conditions set forth in this Agreement, each
Lender, severally and not jointly, shall make available to Agent its Pro Rata
Share of the requested Credit Extension, in lawful money of the United States of
America in immediately available funds, prior to 11:00 a.m. (New York time) on
the specified date for the Credit Extension. Agent (or if Agent elects to have
each Lender fund its Credit Extensions to Borrower directly, each Lender) shall,
unless it shall have determined that one of the conditions set forth in Section
3.1 or 3.2, as applicable, has not been satisfied, by 2:00 p.m. (New York time)
on the specified date for the Credit Extension, credit the amounts received by
it in like funds to Borrower by wire transfer to the Designated Funding Account
(or to the account of Borrower in respect of the Obligations, if the Credit
Extension is being made to pay an Obligation of Borrower). A Credit Extension
made prior to the satisfaction of any conditions set forth in Section 3.1 or 3.2
shall not constitute a waiver by Agent or the Lenders of Borrower’s obligation
to satisfy such conditions, and any such Credit Extension made in the absence of
such satisfaction shall be made in each Lender’s discretion.
3.5    Searches. Before the Closing Date, and thereafter (as and when determined
by Agent in its reasonable discretion), Agent shall have the right to perform,
all at Borrower’s expense, the searches described in clauses (a), (b), and (c)
below against Borrower and any other Credit Party, the results of which are to
be consistent with Borrower’s representations and warranties under this
Agreement and the reasonably satisfactory results of which shall be a condition
precedent to all Credit Extensions requested by Borrower: (a) title
investigations, UCC searches and fixture filings searches and the equivalent
thereof in any foreign jurisdiction; (b) judgment, pending litigation, federal
tax lien, personal property tax lien, and corporate and partnership tax lien
searches, in each jurisdiction searched under clause (a) above; and (c) searches
of applicable corporate, limited liability company, partnership and related
records to confirm
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the continued existence, organization and good standing of the applicable Person
and the exact legal name under which such Person is organized.
4.CREATION OF SECURITY INTEREST
4.1    Grant of Security Interest. Each Borrower hereby grants Agent, for the
ratable benefit of the Lenders, to secure the payment and performance in full of
all of the Obligations, a continuing security interest in, and pledges to Agent,
for the ratable benefit of the Lenders, the Collateral, wherever located,
whether now owned or hereafter acquired or arising, and all proceeds and
products thereof. Each Borrower represents, warrants, and covenants that the
security interest granted herein is and shall at all times continue to be a
first priority perfected security interest in the Collateral, subject only to
Permitted Liens that may have priority by operation of applicable Law or by the
terms of a written intercreditor or subordination agreement entered into by
Agent. Each Borrower represents, warrants, and covenants that the security
interest granted herein is and shall at all times continue to be a first
priority perfected security interest in the Collateral, subject only to
Permitted Liens that may have priority by operation of applicable Law or by the
terms of a written intercreditor or subordination agreement entered into by
Agent.
4.2    Representations and Covenants.
(a)        As of the Closing Date, Borrower has no ownership interest in any
Chattel Paper, letter of credit rights, commercial tort claims, Instruments,
documents or investment property (other than as disclosed on the Disclosure
Schedule attached hereto).
(b)        Borrower shall promptly (and in any event within ten (10) Business
Days of acquiring any of the following) deliver to Agent all tangible Chattel
Paper and all Instruments and documents with an aggregate value in excess of One
Million Dollars ($1,000,000) owned at any time by any Borrower and constituting
part of the Collateral duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Agent. Borrower shall provide Agent with “control” (as defined in the Code) of
all electronic Chattel Paper owned by any Borrower and constituting part of the
Collateral by having Agent identified as the assignee on the records pertaining
to the single authoritative copy thereof and otherwise complying with the
applicable elements of control set forth in the Code. Borrower also shall
deliver to Agent all security agreements securing any such Chattel Paper and
securing any such Instruments. Borrower will mark conspicuously all such Chattel
Paper and all such Instruments and Documents with a legend, in form and
substance satisfactory to Agent, indicating that such Chattel Paper and such
Instruments and Documents are subject to the security interests and Liens in
favor of Agent created pursuant to this Agreement and the Financing Documents.
(c)        Borrower shall promptly (and in any event within ten (10) Business
Days of acquiring any of the following) deliver to Agent all letters of credit
with an aggregate value in excess of One Million Dollars ($1,000,000) on which
any Borrower is the beneficiary and which give rise to letter of credit rights
owned by such Borrower which constitute part of the Collateral in each case duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to Agent. Borrower shall take any and all
actions as may be necessary or desirable, or that Agent may request, from time
to time, to cause Agent to obtain exclusive “control” (as defined in the Code)
of any such letter of credit rights in a manner acceptable to Agent.
(d)        Borrower shall promptly (and in any event within 10 Business Days)
advise Agent upon any Borrower becoming aware that it has any interests in any
commercial tort claim that
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constitutes part of the Collateral, which may reasonably exceed One Million
Dollars ($1,000,000), which such notice shall include descriptions of the events
and circumstances giving rise to such commercial tort claim and the dates such
events and circumstances occurred, the potential defendants with respect such
commercial tort claim and any court proceedings that have been instituted with
respect to such commercial tort claims, and Borrower shall, with respect to any
such commercial tort claim, execute and deliver to Agent such documents as Agent
shall request to perfect, preserve or protect the Liens, rights and remedies of
Agent with respect to any such commercial tort claim.
(e)        No Inventory or other Collateral shall at any time be in the
possession or control of any warehouse, consignee, bailee or any of Borrower’s
agents or processors without prior written notice to Agent and the receipt by
Agent, if Agent has so requested, of warehouse receipts, consignment agreements
or bailee lien waivers (as applicable) satisfactory to Agent prior to the
commencement of such possession or control except for (w) locations where
Borrower maintains less than One Million Dollars ($1,000,000) in the aggregate
of Inventory or other Collateral, (x) locations outside of the United States,
(y) clinical trial sites, and (z) contract manufacturers. Borrower shall, upon
the request of Agent, notify any such warehouse, consignee, bailee, agent or
processor of the security interests and Liens in favor of Agent created pursuant
to this Agreement and the Financing Documents, instruct such Person to hold all
such Collateral for Agent’s account subject to Agent’s instructions and shall,
in Agent’s discretion, obtain an Access Agreement or other acknowledgement from
such Person that such Person holds the Collateral for Agent’s benefit.
(f)        Upon the reasonable request of Agent, Borrower shall promptly deliver
to Agent any and all certificates of title, applications for title or similar
evidence of ownership of all such tangible personal property and shall cause
Agent to be named as lienholder on any such certificate of title or other
evidence of ownership. Borrower shall not permit any such tangible personal
property with an aggregate value in excess of One Million Dollars ($1,000,000)
to become fixtures to real estate unless such real estate is subject to a Lien
in favor of Agent.
(g)        As of the Closing Date and each date on which a Compliance
Certificate is required to be delivered under this Agreement, all Deposit
Accounts, Securities Accounts, Commodity Accounts or other bank accounts or
investment accounts owned by Borrower, together with the purpose of such
accounts and the financial institutions at which such accounts reside, are
listed on the Disclosure Schedule.
(h)        Each Borrower hereby authorizes Agent to file without the signature
of such Borrower one or more UCC financing statements relating to its Liens on
all or any part of the Collateral, which financing statements may list Agent as
the “secured party” and such Borrower as the “debtor” and which describe and
indicate the collateral covered thereby as all or any part of the Collateral
under the Financing Documents, in such jurisdictions as Agent from time to time
determines are appropriate, and to file without the signature of such Borrower
any continuations of or corrective amendments to any such financing statements,
in any such case in order for Agent to perfect, preserve or protect the Liens,
rights and remedies of Agent with respect to the Collateral. Each Borrower also
ratifies its authorization for Agent to have filed in any jurisdiction any
initial financing statements or amendments thereto if filed prior to the date
hereof. Any financing statement may include a notice that any disposition of the
Collateral in contravention of this Agreement, by either Borrower or any other
Person, shall be deemed to violate the rights of Agent and the Lenders under the
Code.
(i)        As of the Closing Date, no Borrower holds, and after the Closing
Date, Borrower shall promptly notify Agent in writing upon creation or
acquisition by any Borrower of, any Collateral
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which constitutes a claim against any Governmental Authority, including, without
limitation, the federal government of the United States or any instrumentality
or agency thereof, the assignment of which claim is restricted by any applicable
Law, including, without limitation, the federal Assignment of Claims Act and any
other comparable Law. Upon the request of Agent, Borrower shall take such steps
as may be necessary or desirable, or that Agent may request, to comply with any
such applicable Law.
(j)        The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens to the extent all necessary action has been timely and properly taken by
Agent as contemplated by such Security Documents are or will be perfected
security interests and Liens, prior to all other Liens other than Permitted
Liens. Except for filings completed on or prior to the Closing Date and as
contemplated hereby and by the Security Documents, no filing or other action
will be necessary to perfect or protect such Liens other than the actions
described in Section 6.15.
(k)        Borrower shall furnish to Agent from time to time any statements and
schedules further identifying or describing the Collateral and any other
information, reports or evidence concerning the Collateral as Agent may
reasonably request from time to time.
5.REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows on the Closing Date, on the date of
each Credit Extension, and on such other dates when such representations and
warranties under this Agreement are made or deemed to be made:
5.1    Due Organization, Authorization: Power and Authority.
(a)        Each Credit Party and each Subsidiary is duly organized, validly
existing and in good standing (if applicable in such entity’s jurisdiction of
formation) as a Registered Organization in its respective jurisdiction of
formation. Each Credit Party and each Subsidiary has the power to own its assets
and is qualified and licensed to do business and is in good standing (if
applicable in such jurisdiction) in any jurisdiction in which the conduct of its
business or its ownership of property requires that it be qualified except where
the failure to do so could not reasonably be expected to have a Material Adverse
Change. The Financing Documents have been duly authorized, executed and
delivered by each Credit Party and constitute legal, valid and binding
agreements enforceable in accordance with their terms. The execution, delivery
and performance by each Credit Party of each Financing Document executed or to
be executed by it is in each case within such Credit Party’s powers.
(b)        The execution, delivery and performance by each Credit Party of the
Financing Documents to which it is a party do not (i) conflict with any of such
Credit Party’s organizational documents; (ii) contravene, conflict with,
constitute a default under or violate any Law in any material respect; (iii)
contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by
which such Credit Party or any of its property or assets may be bound or
affected; (iv) require any action by, filing, registration, or qualification
with, or Required Permit from, any Governmental Authority (except such Required
Permits which have already been obtained and are in full force and effect); or
(v) constitute a default under or conflict with any Material Agreement. No
Credit Party is in default under any agreement to which it is a party or by
which it is bound in which the default would reasonably be expected to have a
Material Adverse Change.
5.2    Litigation. Except as disclosed on the Disclosure Schedule or, after the
Closing Date, pursuant to Section 6.7, there are no actions, suits, proceedings
or investigations pending or, to the
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knowledge of the Responsible Officers, threatened in writing by or against any
Credit Party which involves the possibility of any judgment or liability of more
than One Million Dollars ($1,000,000.00). There are no actions, suits,
proceedings or investigations pending or, to the knowledge of the Responsible
Officers, threatened in writing by or against any Credit Party that could result
in a Material Adverse Change, or which questions the validity of the Financing
Documents or actions to be taken pursuant to the Financing Documents.
5.3    No Material Deterioration in Financial Condition; Financial Statements.
All financial statements for the Credit Parties delivered to Agent or any Lender
fairly present, in conformity with GAAP, in all material respects the
consolidated financial condition and consolidated results of operations of such
Credit Party. There has been no material deterioration in the consolidated
financial condition of any Credit Party from the most recent financial
statements and projections submitted to Agent or any Lender. There has been no
material adverse deviation from the most recent annual operating plan of
Borrower delivered to Agent and the Lenders. Since December 31, 2019, nothing
has occurred that has caused, or could reasonably be expected to result in, a
Material Adverse Change.
5.4    Solvency. The fair salable value of (a) Exicure Operating Company’s, and
(b) the Credit Parties’ (taken as a whole), assets (including goodwill minus
disposition costs) exceeds, in each case, the fair value of its liabilities.
After giving effect to the transactions described in this Agreement, (i) neither
Exicure Operating Company nor the Credit Parties, taken as a whole, are left
with unreasonably small capital in relation to its business as presently
conducted, and (ii) each Credit Party is able to pay its debts (including trade
debts) as they mature.
5.5    Subsidiaries; Investments; Margin Stock. Borrower and its Subsidiaries do
not own any stock, partnership interest or other equity securities, except for
Permitted Investments. Without limiting the foregoing, Borrower and its
Subsidiaries do not own or hold any Margin Stock.
5.6    Tax Returns and Payments; Pension Contributions. Each Credit Party and
its Subsidiaries has (a) timely filed all required (x) federal and income tax
returns and (y) all other tax returns and reports, and (b) has timely paid all
Taxes, assessments, deposits and contributions owed by such Credit Party or
Subsidiary, as applicable, in each case, except (i) those Taxes, assessments,
deposits and contributions that are subject to a Permitted Contest or (ii)
solely in the case of clauses (a)(y) and (b) above, if the failure to file such
a tax return or pay such a Tax, assessment, deposit or contribution could not
reasonably be expected to result in a Material Adverse Change. Other than as
disclosed to Agent in accordance with Section 6.2 or which could not be
reasonably be expected to result in a Material Adverse Change, Borrower is
unaware of any claims or adjustments proposed for any prior tax years of any
Credit Party or any of its Subsidiaries which could result in additional Taxes
becoming due and payable by such Credit Party. No Credit Party nor any trade or
business (whether or not incorporated) that is under common control with any
Credit Party within the meaning of Section 414(b) or (c) of the IRC (and
Sections 414(m) and (o) of the IRC for purposes of the provisions relating to
Section 412 of the IRC) or Section 4001 of ERISA (an “ERISA Affiliate”) (i) has
failed to satisfy the “minimum funding standards” (as defined in Section 412 of
or Section 302 of ERISA), whether or not waived, with respect to any Pension
Plan, (ii) has incurred liability with respect to the withdrawal or partial
withdrawal of any Credit Party or ERISA Affiliate from any Pension Plan or
incurred a cessation of operations that is treated as a withdrawal, (iii) has
incurred any liability under Title IV of ERISA (other than for PBGC premiums due
but not delinquent under Section 4007 of ERISA), (iv) has had any “reportable
event” as defined in Section 4043(c) of ERISA (or the regulations issued
thereunder) (other than an event for which the thirty (30) day notice
requirement is waived) occur with respect to any Pension Plan or (v) failed to
maintain (1) each “plan” (as defined by Section 3(3) of ERISA) in all material
respects with the applicable provisions
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of ERISA, the IRC and other federal or state laws, and (2) the tax qualified
status of each plan (as defined above) intended to be so qualified.
5.7    Intellectual Property and License Agreements. A list of all Registered
Intellectual Property of each Credit Party and all in-bound license or
sublicense agreements, exclusive out-bound license or sublicense agreements, or
other material rights of any Credit Party to use Intellectual Property (but
excluding in-bound licenses of over-the-counter software that is commercially
available to the public), as of the Closing Date and, as updated pursuant to
Section 6.14, is set forth on the Intangible Assets Schedule. Such Intangible
Assets Schedule shall be prepared by Borrower in the form provided by Agent and
contain all information required in such form. Except for Permitted Licenses,
each Credit Party is the sole owner of, or has valid license rights to, its
Intellectual Property free and clear of any Liens other than Permitted Liens.
Each Patent is valid and enforceable and no part of the Material Intangible
Assets has been judged invalid or unenforceable, in whole or in part, and to the
best of Borrower’s knowledge, no claim has been made that any part of the
Intellectual Property materially violates the rights of any third party.
5.8    Regulatory Status.
(a)    All of Borrower’s Products and material Regulatory Required Permits are
listed on the Products Schedule and Required Permits Schedule, respectively (as
updated from time to time pursuant to Section 6.14), and Borrower has delivered
to Agent a copy of all Regulatory Required Permits reasonably requested by Agent
as of the date hereof or to the extent requested by Agent pursuant to Section
6.16.
(b)    None of the Borrowers or any Subsidiary thereof are in violation of any
Healthcare Law, except where any such violation could not reasonably be expected
to result in a Material Adverse Change.
(c)    None of the Borrower’s or its Subsidiaries’ officers, directors,
employees, their agents or, to the Borrower’s knowledge, any of its affiliates
has made an untrue statement of material fact or fraudulent statement to the FDA
or failed to disclose a material fact required to be disclosed to the FDA,
committed an act, made a statement, or failed to make a statement that could
reasonably be expected to provide a basis for the FDA to invoke its policy
respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities,” set forth in 56 Fed. Regulation 46191 (September 10, 1991).
(d)    With respect to each Product, (i) Borrower and its Subsidiaries have
received, and such Product is the subject of, all Regulatory Required Permits
needed in connection with the testing, manufacture, marketing or sale of such
Product as currently being conducted by or on behalf of Borrower, and have
provided Agent and each Lender with all material notices and other material
information required by Section 6.16, (ii) such Product is being tested,
manufactured, marketed or sold, as the case may be, in material compliance with
all applicable Laws and Regulatory Required Permits.
(e)    As of the Closing Date, there have been no Regulatory Reporting Events.
5.9    No Default. No Event of Default, or to such Borrower’s knowledge,
Default, has occurred and is continuing. No Credit Party is in breach or default
under or with respect to any contract, agreement, lease or other instrument to
which it is a party or by which its property is bound or affected, which breach
or default could reasonably be expected to have a Material Adverse Change.
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5.10    Accuracy of Schedules and Perfection Certificate. All information set
forth in the Disclosure Schedule, Intangible Assets Schedule, the Required
Permits Schedule and the Products Schedule is true, accurate and complete in all
material respects as of the Closing Date, the date of delivery of the last
Compliance Certificate and any other subsequent date on which Borrower is
requested to update such certificate. All information set forth in the
Perfection Certificate is true, accurate and complete in all material respects
as of the Closing Date, the date of each Credit Extension and each other
subsequent date on which Borrower delivers an updated Perfection Certificate
pursuant to Agent’s request. Notwithstanding the foregoing, Borrower shall not
be required to update information on any of the Disclosure Schedule, Intangible
Assets Schedule, the Required Permits Schedule and the Products Schedule, except
as expressly required by the Financing Documents.
5.11    Senior Indebtedness Status. The Obligations of each Credit Party under
this Agreement and each of the other Financing Documents ranks and shall
continue to rank at least senior in priority of payment to all Subordinated Debt
that is contractually subordinated to the Obligations of each such Person under
this Agreement and is designated as “Senior Indebtedness” (or an equivalent
term) under the applicable Subordinated Debt Documents.
6.AFFIRMATIVE COVENANTS
Borrower covenants and agrees as follows:
6.1    Organization and Existence; Government Compliance.
(a)        Each Credit Party and its Subsidiaries shall maintain its legal
existence and good standing in its respective jurisdiction of formation and
shall maintain qualification in each jurisdiction in which the failure to so
qualify could reasonably be expected to have a Material Adverse Change. If a
Credit Party is not now a Registered Organization but later becomes one,
Borrower shall promptly notify Agent of such occurrence and provide Agent with
such Credit Party’s organizational identification number.
(b)        Each Credit Party and its Subsidiaries shall comply with all Laws,
ordinances and regulations to which it or its business locations are subject,
the noncompliance with which could reasonably be expected to result in a
Material Adverse Change. Each Credit Party shall, and shall cause each
Subsidiary to, obtain and keep in full force and effect and comply with all of
the Required Permits, except where failure to have or maintain compliance with
or effectiveness of such Required Permit could not reasonably be expected to
result in a Material Adverse Change. Upon request of Agent or any Lender, each
Credit Party shall promptly (and in any event within three (3) Business Days of
such request) provide copies of any such obtained Required Permits to Agent.
Borrower shall notify Agent within three (3) Business Days (but in any event
prior to Borrower submitting any requests for Credit Extensions or release of
any reserves) of the occurrence of any facts, events or circumstances known to a
Borrower, whether threatened in writing, existing or pending, that could cause
any Required Permit to become materially limited, suspended or revoked.
Notwithstanding the foregoing, each Credit Party shall comply with Section 6.16
as it relates to Regulatory Required Permits and to the extent that there is a
conflict between this Section and Section 6.16 as it relates to Regulatory
Required Permits, Section 6.16 shall govern.
6.2    Financial Statements, Reports, Certificates.
(a)        Each Credit Party shall deliver to Agent and each Lender: (i) as soon
as available, but no later than thirty (30) days after the last day of each
month, a company prepared consolidated
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balance sheet, income statement and cash flow statement covering such Credit
Party’s consolidated operations for such month certified by a Responsible
Officer and in a form acceptable to Agent and each Lender; (ii) as soon as
available, but no later than ninety (90) days after the last day of a Credit
Party’s fiscal year, audited consolidated financial statements prepared under
GAAP, consistently applied, together with an unqualified opinion on the
financial statements from KPMG or another independent certified public
accounting firm acceptable to Agent and each Lender in its reasonable
discretion; (iii) as soon as available after approval thereof by such Credit
Party’s governing board, but no later than thirty (30) days after the last day
of such Credit Party’s fiscal year, and as amended and/or updated, such Credit
Party’s financial projections for the current fiscal year; (iv) within five (5)
days of delivery, copies of all statements, reports and notices made available
to all of such Credit Party’s security holders or to any holders of Subordinated
Debt; (v) in the event that such Credit Party is or becomes subject to the
reporting requirements under the Securities Exchange Act of 1934, as amended,
within five (5) days of filing, all reports on Form 10-K, 10-Q and 8K filed
with the Securities and Exchange Commission (“SEC”) or a link thereto on such
Credit Party’s or another website on the Internet; (vi) as soon as available,
but no later than thirty (30) days after the last day of each month, copies of
the month-end account statements for each Collateral Account maintained by a
Credit Party, which statements may be provided to Agent and each Lender by
Borrower or directly from the applicable institution(s); (vii) promptly (and in
any event within ten (10) days of any request therefor) such readily available
budgets, sales projections, operating plans, financial information and other
information, reports or statements regarding the Credit Parties or their
respective businesses, contractors and subcontractors reasonably requested by
Agent or any Lender; and (viii) within ten (10) days after any Credit Party
becomes aware of any Tax claim or adjustment proposed for any prior tax years of
any Credit Party or any of their Subsidiaries which could result in a Material
Adverse Change, notice of such claim or adjustment. Notwithstanding anything to
the contrary herein, documents required to be delivered pursuant to Section
6.2(a)(i), (ii) or (v) (to the extent any such documents are included in
materials filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date on which Borrower
posts such documents, or provides a link thereto, on Borrower’s website on the
Internet at Borrower’s website address.
(b)        Within thirty (30) days after the last day of each month, Borrower
shall deliver to Agent and each Lender with the monthly financial statements
described above, a duly completed Compliance Certificate signed by a Responsible
Officer.
(c)        Borrower shall cause each Credit Party to keep proper books of record
and account in accordance with GAAP (subject to normal year-end audit
adjustments and the absence of footnotes with respect to unaudited financials)
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities. Upon prior written
notice and during business hours (which such limitations shall not apply if a
Default or Event of Default has occurred and is continuing), Borrower shall
allow, and cause each Credit Party to allow, Agent and the Lenders to visit and
inspect any properties of a Credit Party, to examine and make abstracts or
copies from any Credit Party’s books, to conduct a collateral audit and analysis
of its operations and the Collateral to verify the amount and age of the
accounts, the identity and credit of the respective account debtors, to review
the billing practices of the Credit Party and to discuss its respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants once per twelve (12) month period unless an Event of Default
has occurred and is continuing. Borrower shall reimburse Agent and each Lender
for all reasonable and documented costs and expenses associated with such visits
and inspections; provided, however, that Borrower shall be required to reimburse
Agent and each Lender for such costs and expenses for no more than one (1) such
visit and inspection per twelve (12) month period unless an Event of Default has
occurred and is continuing at the time such an inspection or visit occurs.
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(d)        Borrower shall, and shall cause each Credit Party to, deliver to
Agent and each Lender, within five (5) days after the same are sent or received,
copies of all material correspondence, reports, documents and other filings with
any Governmental Authority that could reasonably be expected to have a material
adverse effect on any of the Required Permits material to Borrower’s business or
otherwise on the operations of Borrower or any of its Subsidiaries.
(e)        Borrower shall, and shall cause each Credit Party to, promptly, but
in any event within five (5) Business Days, after any Responsible Officer of any
Borrower obtains knowledge of the occurrence of any event or change (including,
without limitation, any notice of any violation of Healthcare Laws) that has
resulted or could reasonably be expected to result in, either in any case or in
the aggregate, a Material Adverse Change, a certificate of a Responsible Officer
specifying the nature and period of existence of any such event or change, or
specifying the notice given or action taken by such holder or Person and the
nature of such event or change, and what action the applicable Credit Party or
Subsidiary has taken, is taking or proposes to take with respect thereto.
(f)        Borrower shall, and shall cause each Credit Party to, promptly (and
in any event within five (5) Business Days of the occurrence thereof) provide
Agent and each Lender with written notice of the occurrence of a Springing IP
Lien Event, which notice shall be accompanied by a certificate from an
authorized executive officer from each Credit Party (A) acknowledging that a
Springing IP Lien Event has occurred, (B) specifying the date on which the
Springing IP Lien Event occurred, and (C) acknowledging that Agent may exercise
any rights it may have under this Agreement or any other Financing Document with
respect to the Springing IP Lien Event, subject to the terms and conditions of
this Agreement and the other Financing Documents. Without limiting the
foregoing, Borrower shall, and shall cause each Credit Party to, promptly (and
in any event within fifteen (15) days of the occurrence of a Springing IP Lien
Event) provide Agent a supplement to the IP Security Agreement certifying to and
attaching true, correct and complete copies of updated schedules to the IP
Security Agreement and certifying that all Intellectual Property owned by each
Credit Party and registered in the United States as of the date of such
certification is reflected on such schedules.
(g)        Borrower shall, and shall cause each Credit Party to, promptly after
the request by any Lender, provide all documentation and other information that
such Lender reasonably requests in order to comply with its ongoing obligations
under applicable “know your customer” and anti-money laundering rules and
regulations, including, without limitation, the USA PATRIOT Act.
6.3    Maintenance of Property. Borrower shall, and shall cause each Credit
Party to, cause all equipment and other tangible personal property other than
Inventory to be maintained and preserved in the same condition, repair and in
working order as of the date hereof, ordinary wear and tear excepted, and shall
promptly make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end. Borrower shall cause each Credit Party to keep all Inventory in good and
marketable condition, free from material defects. Returns and allowances between
a Credit Party and its Account Debtors shall follow the Credit Party’s customary
practices as they exist at the Closing Date. Borrower shall promptly notify
Agent of all returns, recoveries, disputes and claims that involve more than One
Hundred Thousand Dollars ($100,000) of Inventory collectively among all Credit
Parties.
6.4    Taxes; Pensions. Borrower shall timely file and cause each Credit Party
to timely file, all required federal and income tax returns and other material
tax returns and reports and timely pay, and cause each Credit Party to timely
pay, all federal Taxes and all other material foreign, state, and local Taxes,
assessments, deposits and contributions owed, and shall deliver to Agent
promptly on demand,
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appropriate certificates attesting to such payments; provided, however, that a
Credit Party may defer payment of any contested Taxes, so long as such Credit
Party (a) in good faith contests its obligation to pay the Taxes by appropriate
proceedings promptly and diligently instituted and conducted, (b) notifies Agent
in writing of the commencement of, and any material development in, the
proceedings, and (c) posts bonds or takes any other steps required to prevent
the Governmental Authority levying such contested Taxes from obtaining a Lien
upon any of the Collateral other than a Permitted Lien (such contest, a
“Permitted Contest”). For purposes of this Section 6.4, any foreign, state or
local Taxes, assessment, deposit or contribution, and any return with respect
thereto, shall be considered “material” only if the failure to file such a tax
return or pay such a tax could reasonably be expected to result in a Material
Adverse Change. Borrower shall pay, and cause each Credit Party to pay, all
amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with their terms. Each Credit Party and their
ERISA Affiliates shall timely make all required contributions to each Pension
Plan and shall maintain each “plan” (as defined by Section 3(3) of ERISA) in
material compliance with the applicable provisions of ERISA, the Internal
Revenue Code and other federal and state laws. Borrower shall give written
notice to Agent and each Lender promptly (and in any event within five (5)
Business Days) upon Borrower becoming aware of any (i) Credit Party’s or any
ERISA Affiliate’s failure to make any contribution required to be made with
respect to any Pension Plan not having been timely made, (ii) notice of the
PBGC’s, any Credit Party’s or any ERISA Affiliate’s intention to terminate or to
have a trustee appointed to administer any such Pension Plan, or (iii) complete
or partial withdrawal by any Credit Party or any ERISA Affiliate from any
Pension Plan.
6.5    Insurance. Borrower shall, and shall cause each Credit Party to, keep its
business and the Collateral insured for risks and in amounts standard for
companies in Borrower’s industry and location and as Agent may reasonably
request. Insurance policies shall be in a form, with companies, and in amounts
that are satisfactory to Agent. All property policies shall have a lender’s loss
payable endorsement showing Agent as sole lender’s loss payee and waive
subrogation against Agent, and all liability policies shall show, or have
endorsements showing, Agent as an additional insured. No other loss payees may
be shown on the policies unless Agent shall otherwise consent in writing. If
required by Agent, all policies (or the loss payable and additional insured
endorsements) shall provide that the insurer shall endeavor to give Agent at
least thirty (30) days’ (ten (10) days’ for non-payment of premium) notice
before canceling or declining to renew its policy. At Agent’s request, Borrower
shall deliver certified copies of all such Credit Party insurance policies and
evidence of all premium payments. If any Credit Party fails to obtain insurance
as required under this Section 6.5 or to pay any amount or furnish any required
proof of payment to third persons and Agent, Agent may make all or part of such
payment or obtain such insurance policies required in this Section 6.5, and take
any action under the policies Agent deems prudent.
6.6    Collateral Accounts.
(a)    Borrower shall, and shall cause each Credit Party to, provide Agent five
(5) Business Days prior written notice before establishing any Collateral
Account at or with any bank or financial institution. In addition, for each
Collateral Account that any Credit Party at any time maintains (and in
connection with any such Collateral Account established after the Closing Date,
prior to opening such Collateral Account), Borrower shall, and shall cause each
Credit Party to, cause the applicable bank or financial institution at or with
which any Collateral Account is maintained to execute and deliver a Control
Agreement or other appropriate instrument with respect to such Collateral
Account to perfect Agent’s Lien in such Collateral Account in accordance with
the terms hereunder, which Control Agreement, inter alia, (i) provides that,
upon written notice from Agent, such bank or financial institution shall comply
with instructions originated by Agent directing disposition of the funds in such
Collateral
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Account without further consent by Borrower and (ii) may not be terminated
without prior written consent of Agent. The provisions of the previous sentence
shall not apply to (x) Deposit Accounts exclusively used for payroll, payroll
taxes and, in Agent’s discretion, other employee wage and benefit payments to or
for the benefit of a Credit Party’s employees and identified to Agent by
Borrower as such; provided, however, that, the aggregate balance in such
accounts does not exceed the amount necessary to make the next two (2)
immediately succeeding payroll, payroll tax or benefit payment (or such minimum
amount as may be required by any requirement of Law with respect to such
accounts), and (y) the Bank Services Collateral Accounts (subject, in each case,
to the limitations set forth in the definition thereof) ((x) and (y),
collectively, “Excluded Accounts”). At all times Borrower shall maintain one (1)
or more separate Deposit Accounts to hold any and all amounts to be used for
payroll, payroll taxes and other employee wage and benefit payments, and shall
not commingle any monies allocated for such purposes with funds in any other
Deposit Account.
(b)    Borrower shall maintain at all times in Deposit Accounts or Securities
Accounts with Silicon Valley Bank (“SVB”) or SVB’s Affiliates an aggregate
balance of the greater of (i) $20,000,000 and (ii) twenty percent (20%) of the
aggregate cash and Cash Equivalents of Borrower and its consolidated
Subsidiaries (taken as a whole) (“Borrower Consolidated Cash”); provided that if
Borrower Consolidated Cash is less than $20,000,000 at any time, Borrower shall,
and shall cause its Subsidiaries to, maintain all of their Borrower Consolidated
Cash in Deposit Accounts or Securities Accounts with SVB or SVB’s Affiliates
until Borrower provides Agent and Lenders with evidence reasonably satisfactory
to Agent and Lenders that Borrower Consolidated Cash is greater than
$20,000,000; provided, however, that during the 30-day period following the
initial date on which Borrower Consolidated Cash is less than $20,000,000,
Borrower may maintain the Deposit Accounts maintained at JPMorgan Chase set
forth in the Disclosure Schedule so long as the balance in such accounts does
not exceed $1,000,000 at any time.
(c)    In addition, beginning on the date that is one hundred eighty (180) days
after the Closing Date, Borrower, shall, and shall cause its Subsidiaries to,
maintain any business credit cards exclusively with Bank.
6.7    Notices of Material Agreements, Litigation and Defaults; Cooperation in
Litigation.
(a)        Borrower shall promptly (and in any event within the time periods
specified below) provide written notice to Agent and each Lender that the
following has occurred:
(i)    Within three (3) Business Days of Borrower becoming aware of the
existence of any Default or Event of Default;
(ii)    Within three (3) Business Days of Borrower becoming aware of (or having
reason to believe any of the following are pending or threatened in writing) any
action, suit, proceeding or investigation by or against Borrower or any Credit
Party which involves the possibility of any judgment or liability of more than
One Million Dollars ($1,000,000) or that could result in a Material Adverse
Change, or which questions the validity of any of the Financing Documents, or
the other documents required thereby or any action to be taken pursuant to any
of the foregoing; and
(iii)    (A) Within five (5) Business Days of Borrower receiving or delivering
any notice of termination (due to a breach or default and not from termination
in accordance with its terms) or similar notice in connection with any Material
Agreement, and (B) together with delivery of the next Compliance Certificate,
the execution of any new Material Agreement and/or any new material
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amendment, consent, waiver or other modification to any Material Agreement not
previously disclosed. Documents required to be delivered pursuant to this
Section 6.7(a)(iii) (to the extent any such documents are included in materials
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date on which Borrower posts such
documents or provides a link thereto, on Borrower’s website on the Internet at
Borrower’s website address.
(b)        Borrower shall, and shall cause each Credit Party, to provide such
further information (including copies of such documentation) as Agent or any
Lender shall reasonably request with respect to any of the events or notices
described in clause (a). From the date hereof and continuing through the
termination of this Agreement, Borrower shall, and shall cause each Credit Party
to, make available to Agent and each Lender, without expense to Agent or any
Lender, each Credit Party’s officers, employees and agents and books, to the
extent that Agent or any Lender may deem them reasonably necessary to prosecute
or defend any third-party suit or proceeding instituted by or against Agent or
any Lender with respect to any Collateral or relating to a Credit Party.
6.8    Creation/Acquisition of Subsidiaries. 
(a)    Borrower shall provide Agent with at least ten (10) days (or such shorter
period as Agent may accept in its sole discretion) prior written notice of its
intention to create or, to the extent permitted pursuant to this Agreement,
acquire a new Subsidiary.
(b)    Promptly (but in any event within ten (10) Business Days of such creation
or acquisition) upon the creation or acquisition of any Subsidiary, Credit
Parties shall, and shall cause each such Subsidiary (as applicable) to, (i)
pledge, have pledged or cause or have caused to be pledged to Agent pursuant to
a pledge agreement in form and substance satisfactory to Agent, all of the
outstanding shares of equity interests or other equity interests of such
Subsidiary owned directly or indirectly by any Credit Party, along with undated
stock or equivalent powers for such certificates, executed in blank, (ii) cause
such Subsidiary to take such other actions (including entering into or joining
any Security Documents) as are necessary or advisable in the reasonable opinion
of Agent in order to grant Agent, acting on behalf of the Lenders, a first
priority Lien (subject to Permitted Liens) on all real and personal property of
such Subsidiary (other than Excluded Property) in existence as of such date and
in all after acquired property, (iii) to either, in the discretion of Agent,
become a co-Borrower hereunder or to guarantee the Obligations of Borrower under
the Financing Documents pursuant to joinder documents in form and substance
satisfactory to Agent, and (iv) cause such Subsidiary to deliver certified
copies of such Subsidiary’s certificate, articles of incorporation or other
organizational documents, together with good standing certificates, by-laws (or
other operating agreement or governing documents), resolutions of the board of
directors or other governing body, approving and authorizing the execution and
delivery of the Security Documents, incumbency certificates and to execute
and/or deliver such other documents and legal opinions or to take such other
reasonable actions as may be requested by Agent, in each case, in form and
substance reasonably satisfactory to Agent (the requirements set forth in
clauses (i)-(iv) above, collectively, the “Joinder Requirements”); provided that
the Credit Parties shall not be permitted to make any Investment in such
Subsidiary until such time as the Credit Parties and such Subsidiary have
satisfied the Joinder Requirements with respect to such Subsidiary.
6.9    Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions
solely for (a) transaction fees incurred in connection with the Financing
Documents, and (b) for working capital needs of Borrower and its Subsidiaries.
No portion of the proceeds of the Credit Extensions will be used for family,
personal, agricultural or household use or to purchase Margin Stock.
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6.10    Hazardous Materials; Remediation.
(a)        If any release or disposal of Hazardous Materials shall occur or
shall have occurred on any real property or any other assets of any Borrower or
any other Credit Party, such Borrower will cause, or direct the applicable
Credit Party to cause, the prompt containment and removal of such Hazardous
Materials and the remediation of such real property or other assets as is
necessary to comply in all material respects with all applicable Laws and to
preserve the material value of such real property or other assets. Without
limiting the generality of the foregoing, each Borrower shall, and shall cause
each other Credit Party to, comply in all material respects with each applicable
Law requiring the performance at any real property by any Borrower or any other
Credit Party of activities in response to the release or threatened release of a
Hazardous Material.
(b)        Borrower will provide Agent within thirty (30) days after written
demand therefor with a bond, letter of credit or similar financial assurance
evidencing to the reasonable satisfaction of Agent that sufficient funds are
available to pay the cost of removing, treating and disposing of any Hazardous
Materials or Hazardous Materials Contamination and discharging any assessment
which may be established on any property as a result thereof, such demand to be
made, if at all, upon Agent’s determination that the failure to remove, treat or
dispose of any Hazardous Materials or Hazardous Materials Contamination, or the
failure to discharge any such assessment could reasonably be expected to have a
Material Adverse Change.
(c)        If there is any conflict between this Section 6.10 and any
environmental indemnity agreement which is a Financing Document, the
environmental indemnity agreement shall govern and control.
6.11    Power of Attorney. Each of the officers of Agent is hereby irrevocably
made, constituted and appointed the true and lawful attorney for each Borrower
(without requiring any of them to act as such) with full power of substitution
to do the following: (a) after the occurrence and during the continuance of an
Event of Default, pay, contest or settle any Lien, charge, encumbrance, security
interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; (b) so
long as Agent has provided not less than three (3) Business Days’ prior written
notice to Borrower to perform the same and Borrower has failed to take such
action, (i) execute in the name of any Person comprising Borrower any schedules,
assignments, instruments, documents, and statements that Borrower is obligated
to give Agent under this Agreement or that Agent or any Lender deems necessary
to perfect or better perfect Agent’s security interest or Lien in any
Collateral, (ii) after the occurrence and during the continuance of an Event of
Default, do such other and further acts and deeds in the name of Borrower that
Agent may deem necessary or desirable to enforce, protect or preserve any
Collateral or its rights therein, including, but not limited to, to sign
Borrower’s name on any invoice or bill of lading for any Account or drafts
against Account Debtors; and (iii) after the occurrence and during the
continuance of an Event of Default, (A) endorse the name of any Borrower upon
any and all checks, drafts, money orders, and other instruments for the payment
of money that are payable to Borrower; (B) make, settle, and adjust all claims
under Borrower’s insurance policies; (C) take any action any Credit Party is
required to take under this Agreement or any other Financing Document; (D)
transfer the Collateral into the name of Agent or a third party as the Code
permits; (E) exercise any rights and remedies described in this Agreement or the
other Financing Documents; and (F) do such other and further acts and deeds in
the name of Borrower that Agent may deem necessary or desirable to enforce its
rights with regard to any Collateral.
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6.12    Further Assurances. Borrower shall, and shall cause each Credit Party
and their Subsidiaries to, at its own cost and expense, promptly and duly take,
execute, acknowledge and deliver all such further acts, documents and assurances
as may from time to time be necessary or as Agent or Required Lenders may from
time to time reasonably request in order to carry out the intent and purposes of
the Financing Documents and the transactions contemplated thereby, including all
such actions to establish, create, preserve, protect and perfect a first
priority Lien (subject only to Permitted Liens) in favor of Agent for itself and
for the benefit Lenders on the Collateral (including Collateral acquired after
the date hereof), including on any and all assets of each Credit Party, whether
now owned or hereafter acquired (subject to the limitations set forth in the
Financing Documents).
6.13    Post-Closing Obligations. Borrower shall, and shall cause each Credit
Party to, complete each of the post-closing obligations and/or deliver to Agent
each of the documents, instruments, agreements and information listed on the
Post-Closing Obligations Schedule attached hereto, on or before the date set
forth for each such item thereon (as the same may be extended by Agent in
writing in its sole discretion), each of which shall be completed or provided in
form and substance reasonably satisfactory to Agent and the Lenders.
6.14    Disclosure Schedule Updates. Borrower shall deliver to Agent, together
with the each Compliance Certificate delivered with respect to the last month of
a calendar quarter under this Agreement, an update to the Disclosure Schedule
correcting all outdated, inaccurate, incomplete or misleading information
therein. With respect to any proposed updates to the Disclosure Schedule
involving Permitted Liens, Permitted Indebtedness or Permitted Investments,
Agent will replace the Disclosure Schedule attached hereto with such proposed
updates only if such updated information reflects transactions that are
otherwise expressly permitted by the definitions of, and limitations herein
pertaining to, Permitted Liens, Permitted Indebtedness or Permitted Investments
(it being understood that such updates will not be deemed to amend the
Disclosure Schedule as in effect on the Closing Date). With respect to any
updates to the Disclosure Schedule involving matters other than those set forth
in the preceding sentence, Agent will replace the applicable portion of the
Disclosure Schedule attached hereto with such update upon Agent’s receipt and
approval thereof.
6.15    Intellectual Property and Licensing.
(a)        Together with each Compliance Certificate required to be delivered
pursuant to Section 6.2(b) delivered with respect to the last month of a
calendar quarter, to the extent (i) Borrower acquires and/or develops any new
Registered Intellectual Property, (ii) Borrower enters into or becomes bound by
any additional in-bound license or sublicense agreement, any additional
exclusive out-bound license or sublicense agreement or other material agreement
with respect to rights in Intellectual Property (other than over-the-counter
software that is commercially available to the public), or (iii) there occurs
any other material change in Borrower’s Registered Intellectual Property,
in-bound licenses or sublicenses or exclusive out-bound licenses or sublicenses
from that listed on the Intangible Assets Schedule, together with such
Compliance Certificate, deliver to Agent an updated Intangible Assets Schedule
reflecting such updated information.
(b)        If Borrower or any Credit Party obtains any Registered Intellectual
Property, the Borrower shall, and shall cause the other Credit Parties to,
promptly execute such documents and provide such other information (including,
without limitation, copies of applications) and take such other actions as Agent
shall request in its good faith business judgment to perfect and maintain a
first priority perfected security interest (subject to Permitted Liens) in favor
of Agent, for the ratable benefit of Lenders, in (x) prior to the occurrence of
a Springing IP Lien Event, the IP Proceeds pertaining thereto or
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(y) upon the occurrence of a Springing IP Lien Event, the Registered
Intellectual Property. Upon the occurrence of a Springing IP Lien Event, Credit
Parties shall take such actions as Agent shall request in its good faith
business judgment to perfect and maintain a first priority perfected security
interest (subject to Permitted Liens) in favor of Agent, for the ratable benefit
of Lenders, in the Registered Intellectual Property.
(c)        Borrower shall take such steps as Agent requests to obtain the
consent of, or waiver by, any person whose consent or waiver is necessary for
(x) all licenses or agreements to be deemed “Collateral” and for Agent to have a
security interest in it that might otherwise be restricted or prohibited by Law
or by the terms of any such license or agreement, whether now existing or
entered into in the future, and (y) Agent to have the ability in the event of a
liquidation of any Collateral to dispose of such Collateral in accordance with
Agent’s rights and remedies under this Agreement and the other Financing
Documents.
(d)        Borrower shall own, or be licensed to use or otherwise have the right
to use, all Material Intangible Assets subject to Permitted Licenses. Borrower
shall cause all Registered Intellectual Property to be duly and properly
registered, filed or issued in the appropriate office and jurisdictions for such
registrations, filings or issuances, except where the failure to do so would not
reasonably be expected to result in a Material Adverse Change. Borrower shall at
all times conduct its business without material infringement or claim of
infringement of any Intellectual Property rights of others. Borrower shall (i)
protect, defend and maintain the validity and enforceability of its Material
Intangible Assets (ii) promptly advise Agent in writing of material
infringements of its Material Intangible Assets, or of a material claim of
infringement by Borrower on the Intellectual Property rights of others, in each
case to the extent Borrower has received written notice from a third party
thereof; and (iii) not allow any of Borrower’s Material Intangible Assets to be
abandoned, invalidated, forfeited or dedicated to the public or to become
unenforceable. Borrower shall not become a party to, nor become bound by, any
material license or other agreement with respect to which Borrower is the
licensee that prohibits or otherwise restricts Borrower from granting a security
interest in Borrower’s interest in such license or agreement or other property.
(e)        On the Closing Date, Borrower shall, and shall cause the other Credit
Parties to, execute and deliver to Agent the IP Security Agreement. The IP
Security Agreement shall be held in escrow by Agent, and shall not be in force
and effect, unless and until the occurrence of the Springing IP Lien Event, at
which time (i) the IP Security Agreement shall immediately and automatically
become effective without any further action or consent by any Credit Party and
(ii) Agent shall be automatically authorized to date and file the IP Security
Agreement (including any updated schedules thereto delivered pursuant to this
Section 6.15) with the United States Patent and Trademark Office and/or United
States Copyright Office, as applicable.
(f)        Upon the occurrence of a Springing IP Lien Event and continuing at
all times thereafter (whether or not the Springing IP Lien Event continues),
then automatically and without notice or any further action by Agent, any Lender
or any Credit Party (i) Agent shall be authorized to file UCC financing
statements, financing statement amendments and security agreements (including
any IP Security Agreement) necessary or desirable to perfect such security
interest in the Intellectual Property (other than Excluded Property), and (ii)
each Credit Party shall execute such other agreements and take such other
actions as Agent may reasonably request to establish, perfect or protect Agent’s
security interest in the Intellectual Property of Credit Parties.
6.16    Regulatory Reporting and Covenants.
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(a)        Borrower shall notify Agent and each Lender promptly, and in any
event within five (5) Business Days of receiving, becoming aware of or
determining that, (each, a “Regulatory Reporting Event” and collectively, the
“Regulatory Reporting Events”):
(i)    any Governmental Authority, specifically including the FDA is conducting
or has conducted (A) if applicable, any investigation of Borrower’s or its
Subsidiaries’ manufacturing facilities and processes for any Product (or any
investigation of the facility of a contract manufacturer engaged by Borrower or
is Subsidiaries in respect of a Product of which Borrower and/or its
Subsidiaries are aware), which has disclosed any material deficiencies or
violations of Laws and/or the Regulatory Required Permits related thereto or (B)
an investigation or review of any Regulatory Required Permit (other than routine
reviews in the Ordinary Course of Business associated with the renewal of a
Regulatory Required Permit),
(ii)    any development, testing, and/or manufacturing of any Product should
cease,
(iii)    if a Product has been approved for marketing and sale, any marketing or
sales of such Product should cease or such Product should be withdrawn from the
marketplace,
(iv)    any Regulatory Required Permit has been suspended, revoked, withdrawn or
adversely limited, modified or restricted,
(v)    adverse clinical test results have occurred with respect to any Product
to the extent that such results have or would reasonably be expected to result
in a Material Adverse Change,
(vi)    receipt by Borrower or any Subsidiary thereof from the FDA a warning
letter, Form FDA-483, “Untitled Letter,” other correspondence or notice setting
forth allegedly objectionable observations or alleged (in writing) material
violations of laws and regulations enforced by the FDA, or any comparable
correspondence from any state or local authority responsible for regulating drug
products and establishments, or any comparable correspondence from any foreign
counterpart of the FDA, or any comparable correspondence from any foreign
counterpart of any state or local authority with regard to any Product or the
manufacture, processing, packing, or holding thereof;
(vii)    any Product recalls or voluntary Product withdrawals from any market
(other than with respect to discrete batches or lots that are not material in
quantity or amount and are not made in conjunction with a larger recall) have
occurred, or
(i)    any significant failures in the manufacturing of any Product have
occurred such that the amount of such Product successfully manufactured in
accordance with all specifications thereof and the required payments to be made
to Borrower therefor in any month shall decrease significantly with respect to
the quantities of such Product and payments produced in the prior month.
Borrower shall provide to Agent or any Lender such further information
(including copies of such documentation) as Agent or any Lender shall reasonably
request with respect to any such Regulatory Reporting Event promptly, but in any
event within five (5) Business Days of, upon such request.
(b)    Borrower shall have, and shall ensure that it and each of its
Subsidiaries has, each material Required Permit and other rights from, and have
made all declarations and filings with, all applicable Governmental Authorities,
all self-regulatory authorities and all courts and other tribunals
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necessary to engage in all material respects in the ownership, management and
operation of the business or the assets of any Borrower and Borrowers shall take
reasonable actions to ensure that no Governmental Authority has taken action to
limit, suspend or revoke any such Required Permit. Borrower shall ensure that
all such Required Permits are valid and in full force and effect and Borrowers
are in material compliance with the terms and conditions of all such Required
Permits in all material respects.
(c)    Borrower will maintain in full force and effect, and free from
restrictions, probations, conditions or known conflicts which would materially
impair the use or operation of Borrowers’ business and assets, all material
Required Permits necessary under Healthcare Laws to carry on the business of
Borrowers as it is conducted on the Closing Date in all material respects.
(d)    Borrower shall, and shall cause each Credit Party to, obtain and comply
in all material respects with and, to the extent applicable, use commercially
reasonable efforts to cause all third parties to obtain and comply in all
material respects with, all Regulatory Required Permits at all times issued or
required to be issued by any Governmental Authority, specifically including the
FDA, with respect to such development, testing, manufacture, marketing or sales
of any Product by such Borrower as such activities are at any such time being
conducted by such Borrower.
(e)    Borrowers will timely file or caused to be timely filed (after giving
effect to any extension duly obtained), all material notifications, reports,
submissions, material Required Permit renewals and reports required by
applicable Healthcare Laws (which reports will be materially accurate and
complete in all respects and not materially misleading in any respect and shall
not remain open or unsettled).
(f)    In the event Borrower or any Credit Party obtains any new material
Regulatory Required Permit or any information on the Required Permits Schedule
becomes outdated, inaccurate, incomplete or misleading, Borrower shall, together
with the next quarterly Compliance Certificate required to be delivered under
this Agreement after such event, provide Agent with an updated Required Permits
Schedule including such updated information.
(g)    If, after the Closing Date, (i) Borrower determines to manufacture, sell,
develop, test or market any new Product (by itself or through a third party),
Borrower shall deliver prior written notice to Agent of such determination
(which shall include a brief description of such Product) and, together with
delivery of the next quarterly Compliance Certificate shall provide an updated
Intangible Assets Schedule, Products Schedule and Required Permits Schedule (and
copies of such Required Permits as Agent may request) reflecting updates related
to such determination.
7.NEGATIVE COVENANTS
Borrower shall not do, nor shall it permit any Credit Party or any of its
Subsidiaries to do, any of the following:
7.1    Dispositions. Convey, sell, abandon, lease, license, transfer, assign or
otherwise dispose of (collectively, “Transfer”) (including by merger, allocation
of assets (including allocation of assets to any series of a limited liability
company), division, consolidation or amalgamation) all or any part of its
business or property, except for (a) sales, transfers or dispositions of
Inventory in the Ordinary Course of Business; (b) sales or abandonment of (i)
worn-out, surplus or obsolete Equipment or (ii) other Equipment that is no
longer used or useful in the business of Borrower with a fair salable value not
to exceed One Million Dollars ($1,000,000) in the aggregate for all such sales
in any calendar year; (c) to the extent constituting a Transfer, Permitted
Liens; (d) to the extent they may constitute a Transfer, the use of cash
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and Cash Equivalents to make Permitted Investments; (e) the granting of
Permitted Licenses, (f) Transfers of assets from any Subsidiary or Credit Party
to any Borrower; provided that no Subsidiary shall transfer any assets to Parent
except for cash and Cash Equivalents to the extent permitted by this Agreement,
and, (g) the expiration, forfeiture, invalidation, cancellation, or abandonment
of Intellectual Property (other than Material Intangible Assets) to the extent
such Intellectual Property is no longer used or useful in the business of
Borrower, and (h) so long as no Event of Default has occurred and is continuing
or would result therefrom, other Transfers of tangible personal property in the
Ordinary Course of Business with a fair market value not to exceed Five Hundred
Thousand Dollars ($500,000) in the aggregate for all such property per fiscal
year.
7.2    Changes in Business, Management, Ownership or Business Locations. (a)
Engage in, or permit any of its Subsidiaries to engage in, any business other
than the businesses currently engaged in by Borrower, such Credit Party or such
Subsidiary, as applicable, or reasonably related thereto or a reasonable
extension thereof; (b) liquidate or dissolve; provided that a Subsidiary that is
not a Credit Party may liquidate or dissolve so long as such Subsidiary
distributes its assets to a Credit Party upon such liquidation or dissolution;
(c) (i) have a change in the Chief Executive Officer where a suitable interim or
permanent replacement, as approved by Borrower’s or such Credit Party’s board of
directors, has not been named and hired by not later than ninety (90) days after
such change, or (ii) enter into any transaction or series of related
transactions which would result in a Change in Control unless the agreements
with respect to such transactions provide for, as a condition precedent to the
consummation thereof, either (x) the indefeasible payment in full of the
Obligations or (y) the consent of Agent and the Lenders; (d) fail to deliver
within thirty (30) days (or such longer time as approved by Agent) notice of the
addition of any new offices or business locations, or of any new leases with
respect to existing offices or business locations, and a fully-executed Access
Agreement to Agent (except as otherwise provided below); (e) without at least
ten (10) Business Days’ prior written notice to Agent of its intention to take
such action and executing any and all documents, instruments and agreements and
taking any other actions which Agent may request after receiving such written
notice in order to protect and preserve the Liens, rights and remedies of Agent
with respect to the Collateral, (i) change its jurisdiction of organization
(provided that no Credit Party shall change its jurisdiction of organization to
a new country without Agent’s consent); (ii) change its organizational structure
or type; (iii) change its legal name; or (iv) change any organizational number
(if any) assigned by its jurisdiction of organization. Notwithstanding the
foregoing in the case of subpart (d) above, provided that the applicable lease
or license agreement, or applicable law, does not grant to the landlord or
licensor any Lien upon intangible assets of the tenant or licensee, subpart (d)
shall not restrict leases or licenses for (i) such new or existing offices or
business locations (w) containing less than One Million Dollars ($1,000,000) in
Borrower’s assets or property and not containing Borrower’s Books, (x) located
outside of the United States, (y) consisting of clinical trial sites or (z)
contract manufacturers, and (ii) any new or existing business location
constituting a warehouse, consignee or bailee location that does not contain any
of Borrower’s Books and would not otherwise require an Access Agreement pursuant
to the criteria set forth in Section 4.2(e).
7.3    Mergers or Consolidations. Merge or consolidate with any other Person,
provided, however, that (a) a Borrower may merge or consolidate into another
Borrower, (b) a Guarantor may merge or consolidate into another Credit Party,
and (c) a Subsidiary that is not a Credit Party may merge or consolidate into a
Credit Party, so long as, in each case of the foregoing (a)-(c), (i) Borrower
has provided Agent and the Lenders with prior written notice of such
transaction, (ii) if a Credit Party is a party thereto, a Person already
comprising a Credit Party shall be the surviving legal entity, (iii) if Parent a
party thereto, Parent shall be the surviving legal entity, (iv) if a Borrower is
a party thereto, the Borrower shall be the surviving legal entity, (v) if a
Credit Party is a party thereto, the surviving Credit
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Party’s tangible net worth is not thereby materially reduced, (vi) no Event of
Default has occurred and is continuing prior thereto or arises as a result
therefrom and (vii) Borrower shall be in compliance with the covenants set forth
in this Agreement both before and after giving effect to such transaction.
7.4    Indebtedness. (a) Create, incur, assume, or be liable for any
Indebtedness other than Permitted Indebtedness or (b) purchase, redeem, defease
or prepay any principal of, premium, if any, interest or other amount payable in
respect of any Indebtedness (other than with respect to the Obligations as
described in Section 2.3) prior to its scheduled maturity.
7.5    Encumbrance. (a)(i) Create, incur, allow, or suffer any Lien on any of
its property, except for Permitted Liens or (ii) without limiting clause (i),
grant or permit to exist any license in respect of its Intellectual Property
other than Permitted Licenses, (b) permit any Collateral to fail to be subject
to the first priority security interest granted herein except for Permitted
Liens that may have priority by operation of applicable Law or by the terms of a
written intercreditor or subordination agreement entered into by Agent, or (c)
enter into any agreement, document, instrument or other arrangement (except with
or in favor of Agent) with any Person which directly or indirectly prohibits or
has the effect of prohibiting Borrower or any Subsidiary from assigning,
mortgaging, pledging, granting a security interest in or upon, or encumbering
any of Borrower’s or any Subsidiary’s property.
7.6    Maintenance of Collateral Accounts. Maintain any Collateral Account,
except pursuant to the terms of Section 6.6 hereof.
7.7    Distributions; Investments; Margin Stock.
(a)    Directly or indirectly pay any dividends or make any distribution or
payment (or set aside any funds for payment) with respect to its equity
interests or redeem, retire or purchase or repurchase any of its equity
interests other than Permitted Distributions;
(b)    directly or indirectly acquire, make, own, hold or otherwise consummate
any Investment (including, for the avoidance of doubt, any Acquisition) other
than Permitted Investments;
(c)    without limiting clause (b) above, acquire any other material assets
other than Permitted Investments or otherwise (i) in the Ordinary Course of
Business, (ii) constituting capital expenditures, (iii) constituting replacement
assets purchased with proceeds of property insurance policies, awards or other
compensation with respect to any eminent domain, condemnation or similar
proceeding and for which the requirements set forth in Section 2.3(c) have been
satisfied and (iv) any acquisition by a Credit Party of assets of any other
Credit Party not otherwise prohibited by Article 7 of this Agreement; or
(d)    Without limiting the foregoing, Borrower shall not, and shall not permit
any of its Subsidiaries or any Credit Party to, purchase or carry Margin Stock.
7.8    Transactions with Affiliates. Directly or indirectly enter into or permit
to exist any material transaction with any Affiliate of any Credit Party, except
for (a) transactions that are in the Ordinary Course of Business, upon fair and
reasonable terms that are no less favorable to Borrower than would be obtained
in an arm’s length transaction with a non-affiliated Person, (b) transactions
with Subsidiaries that are designated as a Borrower hereunder and that are not
otherwise prohibited by Article 7 of this Agreement, (c) transactions permitted
by Section 7.7(a) of this Agreement, (d) transactions constituting bona fide
equity financings for capital raising purposes not otherwise in contravention of
this
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Agreement, and (e) reasonable and customary director, officer and employee
compensation (including bonuses) and other benefits (including retirement,
health, stock option and other benefit plans and indemnification arrangements
approved by the relevant board of directors, board managers or equivalent
corporate body in the Ordinary Course of Business).
7.9    Subordinated Debt. (a) Make or permit any payment (or set aside any funds
for payment) on, or any distribution in respect of, any Subordinated Debt,
except to the extent expressly permitted to be made pursuant to the terms of the
Subordination Agreement to which such Subordinated Debt is subject, or (b) amend
any provision in any document relating to the Subordinated Debt other than as
may be expressly permitted pursuant to the terms of any applicable Subordination
Agreement to which such Subordinated Debt is subject.
7.10    Compliance. Become an “investment company” or a company controlled by an
“investment company”, under the Investment Company Act of 1940, as amended or
undertake as one of its important activities extending credit to purchase or
carry Margin Stock, or use the proceeds of any Credit Extension for that
purpose; (i) fail, or permit any ERISA Affiliate to fail, to meet “minimum
funding standards” (as defined in Section 412 of the Internal Revenue Code or
Section 302 of ERISA), whether or not waived, (ii) permit (with respect to any
Credit Party, any Subsidiary of any Credit Party or any ERISA Affiliate thereof)
a “reportable event” as defined in Section 4043(c) of ERISA (or the regulations
issued thereunder) (other than an event for which the 30-day notice requirement
is waived) to occur, (iii) engage in any “prohibited transaction” within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code
that could reasonably be expected to result in liability in excess of One
Million Dollars ($1,000,000) in the aggregate or that could reasonably be
expected to result in a Material Adverse Change; (iv) fail to comply with the
Federal Fair Labor Standards Act that could result in liability in excess of One
Million Dollars ($1,000,000) in the aggregate or that could reasonably be
expected to result in a Material Adverse Change; (v) permit (with respect to any
Credit Party, any Subsidiary of any Credit Party or any ERISA Affiliate thereof)
the withdrawal from participation in any Pension Plan, or (vi) incur, or permit
any Credit Party, any Subsidiary of any Credit Party or any ERISA Affiliate
thereof to incur, any liability under Title IV of ERISA (other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA).
7.11    Amendments to Organization Documents and Material Agreements. Amend,
modify or waive any provision of (a) any Material Agreement in a manner that is
materially adverse to Borrower or any of its Subsidiaries, that is adverse to
Agent or any Lender, that pertains to rights to assign or grant a security
interest in such Material Agreement or that could or could reasonably be
expected to result in a Material Adverse Change, or (b) any of its
organizational documents (other than a change in registered agents, or a change
that could not adversely affect the rights of Agent or the Lenders hereunder,
but, for the avoidance of doubt, under no circumstances a change of its name,
type of organization or jurisdiction of organization), in each case, without the
prior written consent of Agent. Borrower shall provide to Agent copies of all
amendments, waivers and modifications of any Material Agreement or
organizational documents in accordance with Section 6.7(a)(iii).
7.12    Compliance with Anti-Terrorism Laws. Directly or indirectly, knowingly
enter into any documents, instruments, agreements or contracts with any Person
listed on the OFAC Lists. Borrower shall immediately notify Agent if Borrower
has knowledge that Borrower or any Subsidiary or Affiliate is listed on the OFAC
Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on,
or (d) is arraigned and held over on charges involving money laundering or
predicate crimes to money laundering. Borrower will not, nor will Borrower
permit any Subsidiary or Affiliate to, directly or indirectly, (i) conduct any
business or engage in any transaction or dealing with any Blocked Person,
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including, without limitation, the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Blocked Person, (ii) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Anti-Terrorism Law, or (iii) engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in
Executive Order No. 13224 or other Anti-Terrorism Law. Agent hereby notifies
Borrower that pursuant to the requirements of Anti-Terrorism Laws, and Agent’s
policies and practices, Agent is required to obtain, verify and record certain
information and documentation that identifies Borrower and its principals, which
information includes the name and address of Borrower and its principals and
such other information that will allow Agent to identify such party in
accordance with Anti-Terrorism Laws.
7.13    Passive Holding Company Status of Parent. Parent shall not engage in any
operating or business activities, provided that the following and activities or
operations incidental thereto shall be permitted in any event: (i) its ownership
of the equity interests of its subsidiaries and activities incidental thereto,
(ii) the maintenance of its legal existence (including the ability to incur
fees, costs and expenses relating to such maintenance), (iii) the performance of
its obligations with respect to the Financing Documents and any other Permitted
Indebtedness, (iv) any public offering of its common stock or any other issuance
or sale of its equity interests, (v) payment of dividends, making contributions
to the capital of Borrower and guaranteeing the obligations of Borrower to the
extent such guarantee would otherwise be permitted under Sections 7.4 and 7.7,
(vi) participating in tax, accounting and other administrative matters as a
member of the consolidated group that includes Parent and Borrower, (vii)
holding any cash incidental to any activities permitted under this Section 7.13,
(viii) providing indemnification to employees, officers, managers and directors,
(ix) activities incidental to the consummation of the Operating Documents, (x)
as otherwise required to comply with applicable laws and any court orders, (xi)
participating in group tax, accounting, legal and other administrative matters,
(xii) performing its obligations and exercising its rights under license
agreements and other contracts entered into by Parent prior to the Closing Date
(including any amendments thereto to the extent otherwise permitted under this
Agreement), (xiii) ownership of Deposit Accounts and Securities Accounts (and
the cash and Cash Equivalents on deposit therein) to the extent such Deposit
Accounts and Securities Accounts are subject to Control Agreements (other than
any Excluded Accounts) in accordance with the terms of this Agreement, (xiv)
ownership of Intellectual Property and (xv) any activities incidental to the
foregoing. Parent shall not (a) incur any material Liens other than those for
the benefit of the Obligations or the Obligations under any Permitted
Indebtedness or, non-consensual Liens permitted by Section 7.5, (b) own any
equity interests other than those of Borrower and (c) incur any Indebtedness
except pursuant to the Financing Documents and other Permitted Indebtedness
arising by operation of Law, or any guarantee by Parent of Indebtedness of the
Borrowers that would otherwise be permitted under Sections 7.4.
8.RESERVED
9.RESERVED
10.    EVENTS OF DEFAULT
10.1    Events of Default. The occurrence of any of the following conditions
and/or events, whether voluntary or involuntary, by operation of law or
otherwise, shall constitute an “Event of Default” and Credit Parties shall
thereupon be in default under this Agreement and each of the other Financing
Documents:
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(a)    Borrower fails to (i) make any payment of principal or interest on any
Credit Extension on its due date, or (ii) pay any other Obligations within three
(3) Business Days after such Obligations are due and payable (which three (3)
Business Day grace period shall not apply to payments due on the Maturity Date
or the date of acceleration pursuant to Section 10.2 hereof).
(b)    any Credit Party defaults in the performance of or compliance with any
term contained in this Agreement or in any other Financing Document (other than
occurrences described in other provisions of this Section 10.1 for which a
different grace or cure period is specified or for which no grace or cure period
is specified and thereby constitute immediate Events of Default) and such
default is not remedied by the Credit Party or waived by Agent within thirty
(30) days after the earlier of (i) the date of receipt by any Borrower of notice
from Agent or the Required Lenders of such default, or (ii) the date an officer
of such Credit Party becomes aware, or through the exercise of reasonable
diligence should have become aware, of such default;
(c)    any Credit Party defaults in the performance of or compliance with any
term contained in Section 6.2, 6.4, 6.5, 6.6, 6.7(a), 6.8, 6.9, 6.10, 6.13,
6.15, 6.16, or Article 7;
(d)    any representation, warranty, certification or statement made by any
Credit Party or any other Person acting for or on behalf of a Credit Party (i)
in any Financing Document or in any certificate, financial statement or other
document delivered pursuant to any Financing Document, or (ii) to induce Agent
and/or Lenders to enter into this Agreement or any Financing Document is
incorrect in any respect (or in any material respect if such representation,
warranty, certification or statement is not by its terms already qualified as to
materiality) when made (or deemed made);
(e)    (i) (x) any Credit Party materially defaults under or materially breaches
any Material Agreement (after any applicable grace period contained therein) and
such default is not effectively and permanently cured or waived by the
applicable counterparties to such Material Agreement within ten (10) Business
Days of the occurrence of such default or breach, or (y) a Material Agreement
shall be terminated by a third party or parties party thereto prior to the
expiration thereof, or there is a loss of a material right of a Credit Party
under any Material Agreement to which it is a party, (ii) (A) any Credit Party
or any Subsidiary of a Credit Party fails to make (after any applicable grace
period) any payment when due (whether due because of scheduled maturity,
required prepayment provisions, acceleration, demand or otherwise) on any
Indebtedness (other than the Obligations) of such Credit Party or such
Subsidiary having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than One Million Dollars
($1,000,000) (“Material Indebtedness”), (B) any other event shall occur or
condition shall exist under any contractual obligation relating to any such
Material Indebtedness, if the effect of such event or condition is to
accelerate, or to permit the acceleration of (without regard to any
subordination terms with respect thereto), the maturity of such Material
Indebtedness or (C) any such Material Indebtedness shall become or be declared
to be due and payable, or be required to be prepaid, redeemed, defeased or
repurchased (other than by a regularly scheduled required payment), prior to the
stated maturity thereof, (iii) the occurrence of any breach or default under any
terms or provisions of any Subordinated Debt Document or under any agreement
subordinating the Subordinated Debt to all or any portion of the Obligations, or
the occurrence of any event requiring the prepayment of any Subordinated Debt,
or the delivery of any notice with respect to any Subordinated Debt or pursuant
to any Subordination Agreement that triggers the start of any standstill or
similar period under any Subordination Agreement, or (iv) any Borrower makes any
payment on account of any Indebtedness that has been subordinated to any of the
Obligations, other than payments specifically permitted by the terms of such
subordination;
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(f)    (i) any Credit Party or any Subsidiary of a Credit Party shall generally
not pay its debts as such debts become due, shall admit in writing its inability
to pay its debts generally, shall make a general assignment for the benefit of
creditors, or shall cease doing business as a going concern, (ii) any proceeding
shall be instituted by or against any Credit Party or any Subsidiary of a Credit
Party in any jurisdiction seeking to adjudicate it a bankrupt or insolvent or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, composition of it or its debts or any similar order, in each
case under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or seeking the entry of an order for relief or the appointment
of a custodian, receiver, trustee, conservator, liquidating agent, liquidator,
other similar official or other official with similar powers, in each case for
it or for any substantial part of its property and, in the case of any such
proceedings instituted against (but not by or with the consent of) such Credit
Party or such Subsidiary, either such proceedings shall remain undismissed or
unstayed for a period of sixty (60) days or more or any action sought in such
proceedings shall occur or (iii) any Credit Party or any Subsidiary of a Credit
Party shall take any corporate or similar action or any other action to
authorize any action described in clause (i) or (ii) above;
(g)    (i) the service of process seeking to attach, execute or levy upon, seize
or confiscate any Collateral Account with a value in excess of One Million
Dollars ($1,000,000), any Intellectual Property, or any funds of any Credit
Party on deposit with Agent, any Lender or any Affiliate of Agent or any Lender,
or (ii) a notice of lien, levy, or assessment (other than a Permitted Lien) is
filed against any assets of a Credit Party with an individual or aggregate value
in excess of One Million Dollars ($1,000,000) by any government agency, and the
same under subclauses (i) and (ii) hereof are not discharged or stayed (whether
through the posting of a bond or otherwise) prior to the earlier to occur of
thirty (30) days after the occurrence thereof or such action becoming effective;
(h)    (i) any court order enjoins, restrains, or prevents a Credit Party from
conducting any material part of its business, (ii) the institution by any
Governmental Authority of criminal proceedings against any Credit Party or any
Subsidiary of a Credit Party, or (iii) one or more judgments or orders for the
payment of money (not paid or fully covered by insurance and as to which the
relevant insurance company has acknowledged coverage in writing) aggregating in
excess of One Million Dollars ($1,000,000) shall be rendered against any or all
Credit Parties or their Subsidiaries and either (A) enforcement proceedings
shall have been commenced and not effectively stayed by any creditor upon any
such judgments or orders, or (B) there shall be any period of thirty (30)
consecutive days during which a stay of enforcement of any such judgments or
orders, by reason of a pending appeal, bond or otherwise, shall not be in
effect;
(i)    any Lien created by any of the Financing Documents shall at any time fail
to constitute a valid and perfected Lien on all of the Collateral purported to
be encumbered thereby, subject to no prior or equal Lien except Permitted Liens
and other than solely as a result of any action or inaction of Agent or Lenders
provided that such action or inaction is not caused by a Credit Party’s failure
to comply with the terms of the Financing Documents, or any Credit Party shall
so assert; any provision of any Financing Document shall fail to be valid and
binding on, or enforceable against, a Credit Party, or any Credit Party shall so
assert;
(j)        a Change in Control occurs;
(k)    any Required Permit shall have been (i) revoked, rescinded, suspended,
modified in a materially adverse manner or not renewed in the Ordinary Course of
Business for a full term, or (ii) subject to any decision by a Governmental
Authority that designates a hearing with respect to any applications for renewal
of any of such Required Permit or that could reasonably be expected to result in
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the Governmental Authority taking any of the actions described in clause (i)
above, and such decision or such revocation, rescission, suspension,
modification or non-renewal has, or could reasonably be expected to have, a
Material Adverse Change;
(l)    (i) the voluntary withdrawal or institution of any action or proceeding
by the FDA or similar Governmental Authority to order the withdrawal of any
Product or Product category from the market or to enjoin Borrower, its
Subsidiaries from manufacturing, marketing, selling or distributing any Product
or Product category, in each case, which results in or could reasonably be
expected to result in a Material Adverse Change, (ii) the institution of any
action or proceeding by any DEA, FDA, or any other Governmental Authority to
revoke, suspend, reject, withdraw, limit, or restrict any Regulatory Required
Permit held by Borrower, its Subsidiaries or any representative of Borrower or
its Subsidiaries, which, in each case, has or could reasonably be expected to
result in Material Adverse Change, (iii) the commencement of any enforcement
action against Borrower, its Subsidiaries or any representative of Borrower or
its Subsidiaries (with respect to the business of Borrower or its Subsidiaries)
by DEA, FDA, or any other Governmental Authority that has or could reasonably be
expected to result in a Material Adverse Change, or (iv) the occurrence of
adverse test results in connection with a Product that has or could reasonably
be expected to result in a Material Adverse Change;
(m)    Parent’s equity securities fail to remain registered with the SEC in good
standing and/or listed for trading on the NASDAQ Stock Market; or
(n)    the occurrence of any fact, event or circumstance that could reasonably
be expected to result in a Material Adverse Change.
All cure periods provided for in this Section 10.1 shall run concurrently with
any cure period provided for in any applicable Financing Documents under which
the default occurred.
10.2    Rights and Remedies.
(a)    Upon the occurrence and during the continuance of an Event of Default,
Agent may, and at the written direction of the Required Lenders shall, without
notice or demand, do any or all of the following: (i) deliver notice of the
Event of Default to Borrower, (ii) by notice to any Borrower declare all
Obligations immediately due and payable (but if an Event of Default described in
Section 10.1(f) occurs all Obligations shall be immediately due and payable
without any action by Agent or the Lenders), or (iii) by notice to any Borrower
suspend or terminate the obligations (including, for the avoidance of doubt, the
Applicable Commitments), if any, of the Lenders to advance money or extend
credit for Borrower’s benefit under this Agreement or under any other agreement
between any Credit Party and Agent and/or the Lenders (but if an Event of
Default described in Section 10.1(f) occurs all obligations, if any, of the
Lenders to advance money or extend credit for Borrower’s benefit under this
Agreement or under any other agreement between Borrower and Agent and/or the
Lenders shall be immediately terminated without any action by Agent or the
Lenders).
(b)    Without limiting the rights of Agent and the Lenders set forth in Section
10.2(a) above, upon the occurrence and during the continuance of an Event of
Default, Agent shall have the right, without notice or demand, to do any or all
of the following:
(i)    with or without legal process, enter any premises where the Collateral
may be and take possession of and remove the Collateral from the premises or
store it on the premises, and foreclose upon and/or sell, lease or liquidate,
the Collateral, in whole or in part;
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(ii)    apply to the Obligations (A) any balances and deposits of any Credit
Party that Agent or any Lender or any Affiliate of Agent or a Lender holds or
controls, or (B) any amount held or controlled by Agent or any Lender or any
Affiliate of Agent or a Lender owing to or for the credit or the account of any
Credit Party;
(iii)    settle, compromise or adjust and grant releases with respect to
disputes and claims directly with Account Debtors for amounts on terms and in
any order that Agent considers advisable, notify any Person owing any Credit
Party money of Agent’s security interest in such funds, and verify the amount of
such Account;
(iv)    make any payments and do any acts it considers necessary or reasonable
to protect the Collateral and/or its security interest in the Collateral.
Borrower shall assemble the Collateral if Agent requests and make it available
as Agent designates. Agent may also render any or all of the Collateral unusable
at a Credit Party’s premises and may dispose of such Collateral on such premises
without liability for rent or costs. Borrower grants Agent a license to enter
and occupy any of its premises, without charge, to exercise any of Agent’s
rights or remedies;
(v)    pay, purchase, contest, or compromise any Lien which appears to be prior
or superior to its security interest and pay all expenses incurred;
(vi)    ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, and/or advertise for sale, the Collateral. Agent is hereby granted a
non-exclusive, royalty-free license or other right to use, upon the occurrence
and during the continuance of an Event of Default, without charge, Borrower’s
labels, patents, copyrights, mask works, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
similar property as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral (and including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof) and, in connection with Agent’s exercise of its rights under this
Article 10, Borrower’s rights under all licenses and all franchise agreements
shall be deemed to inure to Agent for the benefit of the Lenders, subject to any
rights of third party licensors and licensees, as applicable;
(vii)    place a “hold” on any account maintained with Agent or the Lenders or
any Affiliate of Agent or a Lender and/or deliver a notice of exclusive control,
any entitlement order, or other directions or instructions pursuant to any
Control Agreement or similar agreements providing control of any Collateral;
(viii)    demand and receive possession of the Books of Borrower and the other
Credit Parties; and
(ix)    exercise all other rights and remedies available to Agent under the
Financing Documents or at law or equity, including all remedies provided under
the Code (including disposal of the Collateral pursuant to the terms thereof).
10.3    Notices. Any notice that Agent is required to give to a Credit Party
under the UCC of the time and place of any public sale or the time after which
any private sale or other intended disposition of the Collateral is to be made
shall be deemed to constitute reasonable notice if such notice is given in
accordance with this Agreement at least ten (10) days prior to such action.
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10.4    Protective Payments. If any Credit Party fails to pay or perform any
covenant or obligation under this Agreement or any other Financing Document,
Agent may pay or perform such covenant or obligation, and all amounts so paid by
Agent are Protective Advances and immediately due and payable, constituting
principal and bearing interest at the then highest applicable rate for the
Credit Facilities hereunder, and secured by the Collateral. No such payments or
performance by Agent shall be construed as an agreement to make similar payments
or performance in the future or constitute Agent’s waiver of any Event of
Default.
10.5    Liability for Collateral No Waiver; Remedies Cumulative. So long as
Agent and the Lenders comply with reasonable banking practices regarding the
safekeeping of the Collateral in the possession or under the control of Agent
and the Lenders, Agent and the Lenders shall not be liable or responsible for:
(a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral;
(c) any diminution in the value of the Collateral; or (d) any act or default of
any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of
loss, damage or destruction of the Collateral. Agent’s failure, at any time or
times, to require strict performance by Borrower of any provision of this
Agreement or any other Financing Document shall not waive, affect, or diminish
any right of Agent thereafter to demand strict performance and compliance
herewith or therewith. No waiver hereunder shall be effective unless signed by
Agent and then is only effective for the specific instance and purpose for which
it is given. Agent’s rights and remedies under this Agreement and the other
Financing Documents are cumulative. Agent has all rights and remedies provided
under the Code, by Law, or in equity. Agent’s exercise of one (1) right or
remedy is not an election, and Agent’s waiver of any Event of Default is not a
continuing waiver. Agent’s delay in exercising any remedy is not a waiver,
election, or acquiescence.
10.6    Application of Payments and Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, upon the occurrence and during the
continuance of an Event of Default, (i) Borrower, for itself and the other
Credit Parties, irrevocably waives the right to direct the application of any
and all payments at any time or times thereafter received by Agent from or on
behalf of Borrower of all or any part of the Obligations, and, as between
Borrower and the Credit Parties on the one hand and Agent and the Lenders on the
other, Agent shall have the continuing and exclusive right to apply and to
reapply any and all payments received against the Obligations in such manner as
Agent may deem advisable notwithstanding any previous application by Agent, and
(ii) unless Agent and the Lenders shall agree otherwise, the proceeds of any
sale of, or other realization upon all or any part of the Collateral shall be
applied: first, to the Protective Advances; second, to accrued and unpaid
interest on the Obligations (including any interest which, but for the
provisions of the United States Bankruptcy Code, would have accrued on such
amounts); third, to the principal amount of the Obligations outstanding; and
fourth, to any other indebtedness or obligations of the Credit Parties owing to
Agent or any Lender under the Financing Documents. Borrower shall remain fully
liable for any deficiency. Any balance remaining shall be delivered to Borrower
or to whomever may be lawfully entitled to receive such balance or as a court of
competent jurisdiction may direct. Unless Agent and the Lenders shall agree
otherwise, in carrying out the foregoing, (x) amounts received shall be applied
in the numerical order provided until exhausted prior to the application to the
next succeeding category, and (y) each of the Persons entitled to receive a
payment in any particular category shall receive an amount equal to its pro rata
share of amounts available to be applied pursuant thereto for such category.
10.7    Waivers.
(a)    Except as otherwise provided for in this Agreement and to the fullest
extent permitted by applicable law, each Borrower waives: (i) presentment,
demand and protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release,
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compromise, settlement, extension or renewal of any or all Financing Documents
and hereby ratifies and confirms whatever Agent or the Lenders may do in this
regard; (ii) all rights to notice and a hearing prior to Agent’s or any Lender’s
entry upon the premises of a Borrower, the taking possession or control of, or
to Agent’s or any Lender’s replevy, attachment or levy upon, any Collateral or
any bond or security which might be required by any court prior to allowing
Agent or any Lender to exercise any of its remedies; and (iii) the benefit of
all valuation, appraisal and exemption Laws. Each Borrower acknowledges that it
has been advised by counsel of its choices and decisions with respect to this
Agreement, the other Financing Documents and the transactions evidenced hereby
and thereby.
(b)    Each Borrower for itself and all its successors and assigns, (i) agrees
that its liability shall not be in any manner affected by any indulgence,
extension of time, renewal, waiver, or modification granted or consented to by
any Lender; (ii) consents to any indulgences and all extensions of time,
renewals, waivers, or modifications that may be granted by Agent or any Lender
with respect to the payment or other provisions of the Financing Documents, and
to any substitution, exchange or release of the Collateral, or any part thereof,
with or without substitution, and agrees to the addition or release of any
Borrower, endorsers, guarantors, or sureties, or whether primarily or
secondarily liable, without notice to any other Borrower and without affecting
its liability hereunder; (iii) agrees that its liability shall be unconditional
and without regard to the liability of any other Borrower, Agent or any Lender
for any tax on the indebtedness; and (iv) to the fullest extent permitted by
law, expressly waives the benefit of any statute or rule of law or equity now
provided, or which may hereafter be provided, which would produce a result
contrary to or in conflict with the foregoing.
(c)    To the extent that Agent or any Lender may have acquiesced in any
noncompliance with any requirements or conditions precedent to the closing of
the Credit Facilities or to any subsequent disbursement of Credit Extensions,
such acquiescence shall not be deemed to constitute a waiver by Agent or any
Lender of such requirements with respect to any future Credit Extensions and
Agent may at any time after such acquiescence require Borrower to comply with
all such requirements. Any forbearance by Agent or a Lender in exercising any
right or remedy under any of the Financing Documents, or otherwise afforded by
applicable law, including any failure to accelerate the maturity date of the
Credit Facilities, shall not be a waiver of or preclude the exercise of any
right or remedy nor shall it serve as a novation of the Financing Documents or
as a reinstatement of the Obligations or a waiver of such right of acceleration
or the right to insist upon strict compliance of the terms of the Financing
Documents. Agent’s or any Lender’s acceptance of payment of any sum secured by
any of the Financing Documents after the due date of such payment shall not be a
waiver of Agent’s and such Lender’s right to either require prompt payment when
due of all other sums so secured or to declare a default for failure to make
prompt payment. The procurement of insurance or the payment of taxes or other
Liens or charges by Agent as the result of an Event of Default shall not be a
waiver of Agent’s right to accelerate the maturity of the Obligations, nor shall
Agent’s receipt of any condemnation awards, insurance proceeds, or damages under
this Agreement operate to cure or waive any Credit Party’s default in payment of
sums secured by any of the Financing Documents.
(d)    Without limiting the generality of anything contained in this Agreement
or the other Financing Documents, each Borrower agrees that if an Event of
Default is continuing (i) Agent and the Lenders shall not be subject to any “one
action” or “election of remedies” law or rule, and (ii) all Liens and other
rights, remedies or privileges provided to Agent or the Lenders shall remain in
full force and effect until Agent or the Lenders have exhausted all remedies
against the Collateral and any other properties owned by Borrower and the
Financing Documents and other security instruments or agreements securing the
Obligations have been foreclosed, sold and/or otherwise realized upon in
satisfaction of Borrower’s obligations under the Financing Documents.
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(e)    Neither Agent nor any Lender shall be under any obligation to marshal any
assets in payment of any or all of the Obligations. Nothing contained herein or
in any other Financing Document shall be construed as requiring Agent or any
Lender to resort to any part of the Collateral for the satisfaction of any of
Borrower’s obligations under the Financing Documents in preference or priority
to any other Collateral, and Agent may seek satisfaction out of all of the
Collateral or any part thereof, in its absolute discretion in respect of
Borrower’s obligations under the Financing Documents. To the fullest extent
permitted by law, each Borrower, for itself and its successors and assigns,
waives in the event of foreclosure of any or all of the Collateral any equitable
right otherwise available to any Credit Party which would require the separate
sale of any of the Collateral or require Agent or the Lenders to exhaust their
remedies against any part of the Collateral before proceeding against any other
part of the Collateral; and further in the event of such foreclosure each
Borrower does hereby expressly consent to and authorize, at the option of Agent,
the foreclosure and sale either separately or together of each part of the
Collateral.
10.8    Injunctive Relief. The parties acknowledge and agree that, in the event
of a breach or threatened (in writing) breach of any Credit Party’s obligations
under any Financing Documents, Agent and the Lenders may have no adequate remedy
in money damages and, accordingly, shall be entitled to an injunction
(including, without limitation, a temporary restraining order, preliminary
injunction, writ of attachment, or order compelling an audit) against such
breach or threatened breach, including, without limitation, maintaining any cash
management and collection procedure described herein. However, no specification
in this Agreement of a specific legal or equitable remedy shall be construed as
a waiver or prohibition against any other legal or equitable remedies in the
event of a breach or threatened breach of any provision of this Agreement. Each
Credit Party waives, to the fullest extent permitted by law, the requirement of
the posting of any bond in connection with such injunctive relief. By joining in
the Financing Documents as a Credit Party, each Credit Party specifically joins
in this Section 10.8 as if this Section 10.8 were a part of each Financing
Document executed by such Credit Party.
11.    NOTICES
All notices, consents, requests, approvals, demands, or other communication by
any party to this Agreement or any other Financing Document must be in writing
and shall be deemed to have been validly served, given, or delivered: (a) upon
the earlier of actual receipt and three (3) Business Days after deposit in the
U.S. mail, first class, registered or certified mail return receipt requested,
with proper postage prepaid; (b) upon transmission, when sent by electronic mail
(if an email address is specified herein) or facsimile transmission; (c) one (1)
Business Day after deposit with a reputable overnight courier with all charges
prepaid; or (d) when delivered, if hand-delivered by messenger, all of which
shall be addressed to the party to be notified and sent to the address,
facsimile number, or email address indicated below. Any of Agent, a Lender or
Borrower may change its mailing or electronic mail address or facsimile number
by giving the other party written notice thereof in accordance with the terms of
this Article 11.
If to Borrower:
Exicure, Inc.
2430 N. Halsted St.
Chicago, IL 60614
Attn: David Giljohann
Email: davidg@exicuretx.com
If to Agent or to MidCap (or any of its Affiliates or Approved Funds) as a
Lender:
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MidCap Financial Trust
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Ave, Suite 300
Bethesda, MD 20814
Attn: Account Manager for Exicure transaction
Fax: 301-941-1450
Email: notices@midcapfinancial.com
With a copy to:
MidCap Financial Trust
c/o MidCap Financial Services, LLC, as servicer
7255 Woodmont Ave, Suite 300
Bethesda, MD 20814
Attn: Legal
Fax: 301-941-1450
Email: legalnotices@midcapfinancial.com
If to any Lender other than MidCap: at the address set forth on the signature
pages to this Agreement or provided as a notice address for such in connection
with any assignment hereunder.
12.    CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
12.1    THIS AGREEMENT, EACH SECURED PROMISSORY NOTE AND EACH OTHER FINANCING
DOCUMENT (EXCLUDING THOSE FINANCING DOCUMENTS THAT BY THEIR OWN TERMS ARE
EXPRESSLY GOVERNED BY THE LAWS OF ANOTHER JURISDICTION), AND THE RIGHTS,
REMEDIES AND OBLIGATIONS OF THE PARTIES HERETO AND THERETO, AND ANY CLAIM,
CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT OR SUCH
FINANCING DOCUMENT (EXCLUDING THOSE FINANCING DOCUMENTS THAT BY THEIR OWN TERMS
ARE EXPRESSLY GOVERNED BY THE LAWS OF ANOTHER JURISDICTION), THE RELATIONSHIP OF
THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES
OF THE PARTIES AND ALL OTHER MATTERS RELATING HERETO, THERETO OR ARISING
THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW). NOTWITHSTANDING THE
FOREGOING, AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH AGENT AND THE LENDERS (IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 12.1) DEEM NECESSARY OR APPROPRIATE TO REALIZE ON THE COLLATERAL OR TO
OTHERWISE ENFORCE AGENT’S AND LENDERS’ RIGHTS AGAINST BORROWER OR ITS PROPERTY.
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO THE JURISDICTION OF THE
FEDERAL AND STATE COURTS LOCATED IN THE STATE OF NEW YORK AND ANY SUCH OTHER
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE, OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
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DEEMED APPROPRIATE BY SUCH COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINTS, AND OTHER PROCESS ISSUED IN SUCH ACTION OR SUIT AND AGREES
THAT SERVICE OF SUCH SUMMONS, COMPLAINTS, AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
ARTICLE 11 OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER TO OCCUR OF BORROWER’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAIL, PROPER POSTAGE PREPAID.
12.2    TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, AGENT AND
THE LENDERS EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE FINANCING DOCUMENTS OR
ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER
INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
13.    GENERAL PROVISIONS
13.1    Successors and Assigns.
(a)    This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any
rights or obligations under it without Agent’s prior written consent (which may
be granted or withheld in Agent’s discretion). Any Lender may at any time assign
to one (1) or more Eligible Assignees all or any portion of such Lender’s
Applicable Commitment and/or Credit Extensions, together with all related
obligations of such Lender hereunder. Borrower and Agent shall be entitled to
continue to deal solely and directly with such Lender in connection with the
interests so assigned until Agent shall have received and accepted an effective
assignment agreement in form and substance acceptable to Agent, executed,
delivered and fully completed by the applicable parties thereto, and shall have
received such other information regarding such Eligible Assignee as Agent
reasonably shall require. Notwithstanding anything set forth in this Agreement
to the contrary, any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided, however, that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto. If requested by Agent,
Borrower agrees to (i) execute any documents reasonably required to effectuate
and acknowledge each assignment of an Applicable Commitment or Credit Extension
to an assignee hereunder, (ii) make Borrower’s management available to meet with
Agent and prospective participants and assignees of Applicable Commitments or
Credit Extensions and (iii) assist Agent or the Lenders in the preparation of
information relating to the financial affairs of Borrower as any prospective
participant or assignee of an Applicable Commitment or Credit Extension
reasonably may request.
(b)    From and after the date on which the conditions described above have been
met, (i) such Eligible Assignee shall be deemed automatically to have become a
party hereto and, to the extent of the interests assigned to such Eligible
Assignee pursuant to such assignment agreement, shall have the rights and
obligations of a Lender hereunder, and (ii) the assigning Lender, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
assignment agreement, shall be released from its rights and obligations
hereunder (other than those that survive termination). Upon the request of
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the Eligible Assignee (and, as applicable, the assigning Lender) pursuant to an
effective assignment agreement, each Borrower shall execute and deliver to Agent
for delivery to the Eligible Assignee (and, as applicable, the assigning Lender)
secured notes in the aggregate principal amount of the Eligible Assignee’s
Credit Extensions or Applicable Commitments (and, as applicable, secured
promissory notes in the principal amount of that portion of the principal amount
of the Credit Extensions or Applicable Commitments retained by the assigning
Lender).
(c)    Agent, acting solely for this purpose as an agent of Borrower, shall
maintain at its offices located in Bethesda, Maryland a copy of each assignment
agreement delivered to it and a Register for the recordation of the names and
addresses of each Lender, and the commitments of, and principal amount (and
stated interest) of the Credit Extensions owing to, such Lender pursuant to the
terms hereof (the “Register”). The entries in such Register shall be conclusive,
absent manifest error, and Borrower, Agent and the Lenders may treat each Person
whose name is recorded therein pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. Such Register shall be available for inspection by Borrower and any
Lender, at any reasonable time upon reasonable prior notice to Agent. Each
Lender that sells a participation shall, acting solely for this purpose as an
agent of Borrower maintain a register on which it enters the name and address of
each participant and the principal amounts (and stated interest) of each
participant’s interest in the Obligations (each, a “Participant Register”). The
entries in the Participant Registers shall be conclusive, absent manifest error.
Each Participant Register shall be available for inspection by Borrower and
Agent at any reasonable time upon reasonable prior notice to the applicable
Lender; provided that no Lender shall have any obligation to disclose all or any
portion of the Participant Register (including the identity of any participant
or any information relating to a participant’s interest in any commitments,
loans, letters of credit or its other obligations under any Financing Document)
to any Person (including Borrower) except to the extent that such disclosure is
necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. For the avoidance of doubt, Agent (in its capacity as
Agent) shall have no responsibility for maintaining a participant register.
Borrower agrees that each participant shall be entitled to the benefits of
Section 2.6(h) (subject to the requirements and limitations therein, including
the requirements under Section 2.6(h)(vi) and Section 2.6(h)(vii) (it being
understood that the documentation required under Section 2.6(h)(vi) and Section
2.6(h)(vii) shall be delivered to the participating Lender)) to the same extent
as if it were a Lender and had acquired its interest by assignment; provided
that such participant (A) agrees to be subject to the provisions of Section
2.6(h)(xi) as if it were an assignee; and (B) shall not be entitled to receive
any greater payment under Section 2.6(h) with respect to any participation, than
its participating Lender would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from the adoption
or taking effect of, or any change in, any applicable Law or any change in the
interpretation, administration or application thereof that occurs after the
participant acquired the applicable participation.
(d)    Notwithstanding anything to the contrary contained in this Agreement, the
Credit Extensions (including any Secured Promissory Notes evidencing such Credit
Extensions) are intended to be registered obligations, the right, title and
interest of the Lenders and their assignees in and to such Credit Extensions
shall be transferable only upon notation of such transfer in the Register (or an
applicable Participant Register) and no assignment thereof shall be effective
until recorded therein. It is intended that this Agreement be construed so that
the Credit Extensions are at all times maintained in “registered form” within
the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the IRC and Section
5f.103-1(c) of the United States Treasury Regulations.
13.2    Indemnification.
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(a)    Borrower hereby agrees to promptly pay (i) (A) all reasonable and
documented costs and expenses of Agent and Lenders (including, without
limitation, the costs, expenses and reasonable fees of counsel to, and
independent appraisers and consultants retained by, Agent) in connection with
the examination, review, due diligence investigation, documentation,
negotiation, closing and syndication of the transactions contemplated by the
Financing Documents, and in connection with the continued administration of the
Financing Documents including (1) any amendments, modifications, consents and
waivers to and/or under any and all Financing Documents, and (2) any periodic
public record searches conducted by or at the request of Agent (including,
without limitation, title investigations, UCC searches, fixture filing searches,
judgment, pending litigation and tax lien searches and searches of applicable
corporate, limited liability, partnership and related records concerning the
continued existence, organization and good standing of certain Persons), and (B)
reasonable and documented costs and expenses of Agent in connection with the
performance by Agent of its rights and remedies under the Financing Documents;
(ii) without limitation of the preceding clause (i), all reasonable and
documented costs and expenses of Agent in connection with the creation,
perfection and maintenance of Liens pursuant to the Financing Documents; (iii)
without limitation of the preceding clause (i), all costs and expenses of Agent
in connection with (A) protecting, storing, insuring, handling, maintaining or
selling any Collateral, (B) any litigation, dispute, suit or proceeding relating
to any Financing Document, and (C) any workout, collection, bankruptcy,
insolvency and other enforcement proceedings under any and all of the Financing
Documents; (iv) without limitation of the preceding clause (i), all reasonable
and documented costs and expenses of Agent in connection with Agent’s
reservation of funds in anticipation of the funding of the Credit Extensions to
be made hereunder; and (v) all costs and expenses incurred by Agent or the
Lenders in connection with any litigation, dispute, suit or proceeding relating
to any Financing Document and in connection with any workout, collection,
bankruptcy, insolvency and other enforcement proceedings under any and all
Financing Documents, whether or not Agent or the Lenders are a party thereto. If
Agent or any Lender uses in-house counsel for any of these purposes, Borrower
further agrees that the Obligations include reasonable charges for such work
commensurate with the fees that would otherwise be charged by outside legal
counsel selected by Agent or such Lender for the work performed.
(b)    Borrower hereby agrees to indemnify, pay and hold harmless Agent and the
Lenders and the officers, directors, employees, trustees, agents, investment
advisors, collateral managers, servicers, and counsel of Agent and the Lenders
(collectively called the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the disbursements and reasonable fees of counsel for such Indemnitee)
in connection with any investigative, response, remedial, administrative or
judicial matter or proceeding, whether or not such Indemnitee shall be
designated a party thereto and including any such proceeding initiated by or on
behalf of a Credit Party, and the reasonable expenses of investigation by
engineers, environmental consultants and similar technical personnel and any
commission, fee or compensation claimed by any broker (other than any broker
retained by Agent or the Lenders) asserting any right to payment for the
transactions contemplated hereby, which may be imposed on, incurred by or
asserted against such Indemnitee as a result of or in connection with the
transactions contemplated hereby and the use or intended use of the proceeds of
the Credit Facilities, except that Borrower shall have no obligation hereunder
to an Indemnitee with respect to any liability resulting from the gross
negligence or willful misconduct of such Indemnitee, as determined by a final
non-appealable judgment of a court of competent jurisdiction. To the extent that
the undertaking set forth in the immediately preceding sentence may be
unenforceable, Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable Law to the payment and
satisfaction of all such Indemnified Liabilities incurred by the Indemnitees or
any of them. No Indemnitee shall be liable for any damages arising from the use
by unintended recipients of any
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information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby. This Section 13.2 shall not apply with respect to Taxes other
than any Taxes that represent losses, claims, damages, etc. arising from any
non-Tax claim.
(c)    Notwithstanding any contrary provision in this Agreement, the obligations
of Borrower under this Section 13.2 shall survive the payment in full of the
Obligations and the termination of this Agreement. NO INDEMNITEE SHALL BE
RESPONSIBLE OR LIABLE TO ANY CREDIT PARTY OR TO ANY OTHER PARTY TO ANY FINANCING
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.
13.3    Time of Essence. Time is of the essence for the payment and performance
of the Obligations in this Agreement.
13.4    Severability of Provisions. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
13.5    Correction of Financing Documents. Agent and the Lenders may correct
patent errors and fill in any blanks in this Agreement and the other Financing
Documents consistent with the agreement of the parties.
13.6    Integration. This Agreement and the other Financing Documents represent
the entire agreement about this subject matter and supersede prior negotiations
or agreements. All prior agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of
this Agreement and the Financing Documents merge into this Agreement and the
Financing Documents.
13.7    Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, is an original, and all taken together, constitute
one Agreement. Delivery of an executed signature page of this Agreement by
facsimile transmission or electronic transmission shall be as effective as
delivery of a manually executed counterpart hereof.
13.8    Survival. All covenants, representations and warranties made in this
Agreement continue in full force until this Agreement has terminated pursuant to
its terms and all Obligations (other than inchoate indemnity obligations for
which no claim has yet been made and any other obligations which, by their
terms, are to survive the termination of this Agreement) have been satisfied.
The obligation of Borrower in Section 13.2 to indemnify each Lender and Agent
shall survive until the statute of limitations with respect to such claim or
cause of action shall have run. All powers of attorney and appointments of Agent
or any Lender as Borrower’s attorney in fact hereunder, and all of Agent’s and
Lenders’ rights and powers in respect thereof, are coupled with an interest, are
irrevocable until all Obligations (other than inchoate indemnity obligations for
which no claim has yet been made and any other obligations which, by their
terms, are to survive the termination of this Agreement) have been fully repaid
and performed and Agent’s and the Lenders’ obligation to provide Credit
Extensions terminates.
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13.9    Confidentiality. In handling any confidential information of Borrower,
each of the Lenders and Agent shall use all reasonable efforts to maintain, in
accordance with its customary practices, the confidentiality of information
obtained by it pursuant to any Financing Document and designated in writing by
any Credit Party as confidential, but disclosure of information may be made: (a)
to the Lenders’ and Agent’s Subsidiaries or Affiliates; (b) to prospective
transferees or purchasers of any interest in the Credit Extensions, provided,
however, that any such Persons are bound by obligations of confidentiality
substantially the same or more stringent than those set forth in this Section
13.9; (c) as required by Law, regulation, subpoena, order or other legal,
administrative, governmental or regulatory request; (d) to regulators or as
otherwise required in connection with an examination, audit or similar
investigation by any Governmental Authority, or to any nationally recognized
rating agency; (e) as Agent or any Lender considers appropriate in exercising
remedies under the Financing Documents; (f) to financing sources that are
advised of the confidential nature of such information and are instructed to
keep such information confidential; (g) to third party service providers of the
Lenders and/or Agent so long as such service providers are bound to such Lender
or Agent by obligations of confidentiality; (h) to the extent necessary or
customary for inclusion in league table measurements; and (i) in connection with
any litigation or other proceeding to which such Lender or Agent or any of their
Affiliates is a party or bound, or to the extent necessary to respond to public
statements or disclosures by Credit Parties or their Affiliates referring to a
Lender or Agent or any of their Affiliates. Confidential information does not
include information that either: (i) is in the public domain or in the Lenders’
and/or Agent’s possession when disclosed to the Lenders and/or Agent, or becomes
part of the public domain after disclosure to the Lenders and/or Agent; or (ii)
is disclosed to the Lenders and/or Agent by a third party, if the Lenders and/or
Agent does not know that the third party is prohibited from disclosing the
information. Agent and/or the Lenders may use confidential information for the
development of client databases, reporting purposes, and market analysis, so
long as Agent and/or the Lenders, as applicable, do not disclose Borrower’s
identity or the identity of any Person associated with Borrower unless otherwise
permitted by this Agreement. The provisions of the immediately preceding
sentence shall survive the termination of this Agreement. The agreements
provided under this Section 13.9 supersede all prior agreements, understanding,
representations, warranties, and negotiations between the parties about the
subject matter of this Section 13.9.
13.10    Right of Set-off. Borrower hereby grants to Agent and to each Lender, a
lien, security interest and right of set-off as security for all Obligations
(other than contingent indemnification obligations for which no claim has been
made) to Agent and each Lender hereunder, whether now existing or hereafter
arising upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Agent or the
Lenders or any entity under the control of Agent or the Lenders (including an
Agent or Lender Affiliate) or in transit to any of them. At any time after the
occurrence and during the continuance of an Event of Default, without demand or
notice, Agent or the Lenders may set-off the same or any part thereof and apply
the same to any liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the Obligations. ANY
AND ALL RIGHTS TO REQUIRE AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS
RIGHT OF SET-OFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
13.11    Publicity. Borrower will not directly or indirectly publish, disclose
or otherwise use in any public disclosure, advertising material, promotional
material, press release or interview, any reference to the name, logo or any
trademark of Agent or any Lender or any of their Affiliates or any reference to
this Agreement or the financing evidenced hereby, in any case except as required
by applicable Law,
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subpoena or judicial or similar order, in which case Borrower shall endeavor to
give Agent prior written notice of such publication or other disclosure. Each
Lender and Borrower hereby authorize each Lender to publish the name of such
Lender and Borrower, the existence of the financing arrangements referenced
under this Agreement, the primary purpose and/or structure of those
arrangements, the amount of credit extended under each facility, the title and
role of each party to this Agreement, and the total amount of the financing
evidenced hereby in any “tombstone”, comparable advertisement or press release
which such Lender elects to submit for publication. In addition, each Lender and
Borrower agree that each Lender may provide lending industry trade organizations
with information necessary and customary for inclusion in league table
measurements after the Closing Date. With respect to any of the foregoing, such
authorization shall be subject to such Lender providing Borrower and the other
Lenders with an opportunity to review and confer with such Lender regarding, and
approve, the contents of any such tombstone, advertisement or information, as
applicable, prior to its initial submission for publication, but subsequent
publications of the same tombstone, advertisement or information shall not
require Borrower’s approval.
13.12    No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
13.13    Approvals. Unless expressly provided herein to the contrary, any
approval, consent, waiver or satisfaction of Agent or the Lenders with respect
to any matter that is the subject of this Agreement or the other Financing
Documents may be granted or withheld by Agent and the Lenders in their sole and
absolute discretion and credit judgment.
13.14    Amendments; Required Lenders; Inter-Lender Matters.
(a)    No amendment, modification, termination or waiver of any provision of
this Agreement or any other Financing Document, no approval or consent
thereunder, or any consent to any departure by Borrower therefrom (in each case,
other than amendments, waivers, approvals or consents deemed ministerial by
Agent), shall in any event be effective unless the same shall be in writing and
signed by Borrower, Agent and the Required Lenders. Except as set forth in
clause (b) below, all such amendments, modifications, terminations or waivers
requiring the consent of the “Lenders” shall require the written consent of
Required Lenders.
(b)    No amendment, modification, termination or waiver of any provision of
this Agreement or any other Financing Document shall, unless in writing and
signed by Agent and by each Lender directly affected thereby: (i) increase or
decrease the Applicable Commitment of any Lender (which shall be deemed to
affect all Lenders), (ii) reduce the principal of or rate of interest on any
Obligation or the amount of any fees payable hereunder, (iii) postpone the date
fixed for or waive any payment of principal of or interest on any Credit
Extension, or any fees or reimbursement obligation hereunder, (iv) release all
or substantially all of the Collateral, or consent to a transfer of any of the
Intellectual Property, in each case, except as otherwise expressly permitted in
the Financing Documents (which shall be deemed to affect all Lenders), (v)
subordinate the lien granted in favor of Agent securing the Obligations (which
shall be deemed to affect all Lenders, except as otherwise provided below), (vi)
release a Credit Party from, or consent to a Credit Party’s assignment or
delegation of, such Credit Party’s obligations hereunder and under the other
Financing Documents or any Guarantor from its guaranty of the Obligations (which
shall be deemed to affect all Lenders) or (vii) amend, modify, terminate or
waive this
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Section 13.14(b) or the definition of “Required Lenders” or “Pro Rata Share” or
any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the consent of each
Lender. For purposes of the foregoing, no Lender shall be deemed affected by (i)
waiver of the imposition of the Default Rate or imposition of the Default Rate
to only a portion of the Obligations, (ii) waiver of the accrual of late
charges, (iii) waiver of any fee solely payable to Agent under the Financing
Documents, (iv) subordination of a lien granted in favor of Agent; provided that
such subordination is limited to equipment being financed by a third party
providing Permitted Indebtedness. Notwithstanding any provision in this Section
13.14 to the contrary, no amendment, modification, termination or waiver
affecting or modifying the rights or obligations of Agent hereunder shall be
effective unless signed by Agent and the Required Lenders.
(c)    Agent shall not grant its written consent to any deviation or departure
by Borrower or any other Credit Party from the provisions of Article 7 without
the prior written consent of the Required Lenders. Required Lenders shall have
the right to direct Agent to take any action described in Section 10.2(b). Upon
the occurrence of any Event of Default, Agent shall have the right to exercise
any and all remedies referenced in Section 10.2 without the written consent of
Required Lenders following the occurrence of an “Exigent Circumstance” (as
defined below). All matters requiring the satisfaction or acceptance of Agent in
the definition of Subordinated Debt shall further require the satisfaction and
acceptance of each Required Lender. Any reference in this Agreement to an
allocation between or sharing by the Lenders of any right, interest or
obligation “ratably,” “proportionally” or in similar terms shall refer to Pro
Rata Share unless expressly provided otherwise. As used in this Section,
“Exigent Circumstance” means any event or circumstance that, in the reasonable
judgment of Agent, imminently threatens the ability of Agent to realize upon all
or any material portion of the Collateral, such as, without limitation,
fraudulent removal, concealment, or abscondment thereof, destruction or material
waste thereof, or failure of Borrower after reasonable demand to maintain or
reinstate adequate casualty insurance coverage, or which, in the judgment of
Agent, could result in a material diminution in value of the Collateral.
13.15    Borrower Liability. If there is more than one (1) entity comprising
Borrower, then (a) any Borrower may, acting singly, request Credit Extensions
hereunder, (b) each Borrower hereby appoints the other as agent for the other
for all purposes hereunder, including with respect to requesting Credit
Extensions hereunder, (c) each Borrower shall be jointly and severally obligated
to pay and perform all obligations under the Financing Documents, including, but
not limited to, the obligation to repay all Credit Extensions made hereunder and
all other Obligations, regardless of which Borrower actually receives said
Credit Extensions, as if each Borrower directly received all Credit Extensions,
and (d) each Borrower waives (1) any suretyship defenses available to it under
the Code or any other applicable law, and (2) any right to require the Lenders
or Agent to: (A) proceed against any Borrower or any other person; (B) proceed
against or exhaust any security; or (C) pursue any other remedy. The Lenders or
Agent may exercise or not exercise any right or remedy they have against any
Credit Party or any security (including the right to foreclose by judicial or
non-judicial sale) in accordance with the terms of the Financing Documents
without affecting any other Credit Party’s liability or any Lien against any
other Credit Party’s assets. Notwithstanding any other provision of this
Agreement or other related document, until the indefeasible payment in cash in
full of the Obligations (other than inchoate indemnity obligations for which no
claim has yet been made) and termination of the Applicable Commitments, each
Borrower irrevocably waives all rights that it may have at law or in equity
(including, without limitation, any law subrogating Borrower to the rights of
the Lenders and Agent under this Agreement) to seek contribution,
indemnification or any other form of reimbursement from any other Credit Party,
or any other Person now or hereafter primarily or secondarily liable for any of
the Obligations, for any payment
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made by any Credit Party with respect to the Obligations in connection with this
Agreement or otherwise and all rights that it might have to benefit from, or to
participate in, any security for the Obligations as a result of any payment made
by a Credit Party with respect to the Obligations in connection with this
Agreement or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section shall be
null and void. If any payment is made to a Credit Party in contravention of this
Section, such Credit Party shall hold such payment in trust for the Lenders and
Agent and such payment shall be promptly delivered to Agent for application to
the Obligations, whether matured or unmatured.
13.16    Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition or other proceeding be filed by or
against any Credit Party for liquidation or reorganization, should any Credit
Party become insolvent or make an assignment for the benefit of any creditor or
creditors or should an interim receiver, receiver, receiver and manager or
trustee be appointed for all or any significant part of any Credit Party’s
assets, and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a fraudulent preference reviewable transaction or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Obligations shall
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
13.17    USA PATRIOT Act Notification. Agent (for itself and not on behalf of
any Lender) and each Lender hereby notifies each Borrower that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
certain information and documentation that identifies Borrower, which
information includes the name and address of Borrower and such other information
that will allow Agent or such Lender, as applicable, to identify Borrower in
accordance with the USA PATRIOT Act.
14.    AGENT
14.1    Appointment and Authorization of Agent. Each Lender hereby irrevocably
appoints, designates and authorizes Agent to take such action on its behalf
under the provisions of this Agreement and each other Financing Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Financing Document, together with such
powers as are reasonably incidental thereto. The provisions of this Article are
solely for the benefit of Agent and the Lenders and none of Credit Parties nor
any other Person shall have any rights as a third party beneficiary of any of
the provisions hereof. The duties of Agent shall be mechanical and
administrative in nature. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Financing Document, Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Agent have or be deemed to have any fiduciary relationship with any
Lender or participant, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Financing Document or otherwise exist against Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Financing Documents with reference to Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. Without limiting the
generality of the foregoing, Agent shall have the sole and exclusive right and
authority (to the exclusion of the Lenders), and is hereby authorized, to (a)
act as collateral agent for Agent and each Lender for purposes of the perfection
of all liens created by the Financing Documents and all other purposes stated
therein, (b) manage,
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supervise and otherwise deal with the Collateral, (c) take such other action as
is necessary or desirable to maintain the perfection and priority of the liens
created or purported to be created by the Financing Documents, (d) except as may
be otherwise specified in any Financing Document, exercise all remedies given to
Agent and the other Lenders with respect to the Collateral, whether under the
Financing Documents, applicable law or otherwise and (e) execute any amendment,
consent or waiver under the Financing Documents on behalf of any Lender that has
consented in writing to such amendment, consent or waiver; provided, however,
that Agent hereby appoints, authorizes and directs each Lender to act as
collateral sub-agent for Agent and the Lenders for purposes of the perfection of
all liens with respect to the Collateral, including any deposit account
maintained by a Credit Party with, and cash and Cash Equivalents held by, such
Lender, and may further authorize and direct the Lenders to take further actions
as collateral sub-agents for purposes of enforcing such liens or otherwise to
transfer the Collateral subject thereto to Agent, and each Lender hereby agrees
to take such further actions to the extent, and only to the extent, so
authorized and directed.
14.2    Successor Agent.
(a)    Agent may at any time assign its rights, powers, privileges and duties
hereunder to (i) another Lender or an Affiliate of Agent or any Lender or any
Approved Fund, or (ii) any Person to whom Agent, in its capacity as a Lender,
has assigned (or will assign, in conjunction with such assignment of agency
rights hereunder) fifty percent (50%) or more of the Credit Extensions or
Applicable Commitments then held by Agent (in its capacity as a Lender), in each
case without the consent of the Lenders or Borrower. Following any such
assignment, Agent shall give notice to the Lenders and Borrower. An assignment
by Agent pursuant to this subsection (a) shall not be deemed a resignation by
Agent for purposes of subsection (b) below.
(b)    Without limiting the rights of Agent to designate an assignee pursuant to
subsection (a) above, Agent may at any time give notice of its resignation to
the Lenders and Borrower. Upon receipt of any such notice of resignation,
Required Lenders shall have the right to appoint a successor Agent. If no such
successor shall have been so appointed by Required Lenders and shall have
accepted such appointment within ten (10) Business Days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent; provided, however, that if Agent shall
notify Borrower and the Lenders that no Person has accepted such appointment,
then such resignation shall nonetheless become effective in accordance with such
notice from Agent that no Person has accepted such appointment and, from and
following delivery of such notice, (i) the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Financing
Documents, and (ii) all payments, communications and determinations provided to
be made by, to or through Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor Agent as
provided for above in this subsection (b).
(c)    Upon (i) an assignment permitted by subsection (a) above, or (ii) the
acceptance of a successor’s appointment as Agent pursuant to subsection (b)
above, such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and obligations
hereunder and under the other Financing Documents (if not already discharged
therefrom as provided above in this subsection (c)). The fees payable by
Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such successor. After
the retiring Agent’s resignation hereunder and under the other Financing
Documents, the provisions of this Article shall continue in effect for the
benefit of such retiring Agent and its sub-agents in respect of any actions
taken or omitted to be taken by any of them while the retiring Agent was acting
or was continuing to act as Agent.
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14.3    Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other Financing Document by or through its, or its Affiliates’,
agents, employees or attorneys-in-fact and shall be entitled to obtain and rely
upon the advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct. Any such Person to whom Agent
delegates a duty shall benefit from this Article 14 to the extent provided by
Agent.
14.4    Liability of Agent. Except as otherwise provided herein, no
“Agent-Related Person” (as defined below) shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Financing Document or the transactions contemplated
hereby (except for its own gross negligence or willful misconduct in connection
with its duties expressly set forth herein), or (b) be responsible in any manner
to any Lender or participant for any recital, statement, representation or
warranty made by any Credit Party or any officer thereof, contained herein or in
any other Financing Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Financing Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Financing Document, or for any failure of any Credit
Party or any other party to any Financing Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Financing Document, or to inspect the Collateral, other
properties or books or records of any Credit Party or any Affiliate thereof. The
term “Agent-Related Person” means Agent, together with its Affiliates, and the
officers, directors, employees, agents, advisors, auditors and attorneys-in-fact
of such Persons; provided, however, that no Agent-Related Person shall be an
Affiliate of Borrower.
14.5    Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to Borrower), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under any Financing Document (a) if
such action would, in the opinion of Agent, be contrary to law or any Financing
Document, (b) if such action would, in the opinion of Agent, expose Agent to any
potential liability under any law, statute or regulation or (c) if Agent shall
not first have received such advice or concurrence of all Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Financing Document in accordance with
a request or consent of all Lenders (or Required Lenders where authorized
herein) and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders.
14.6    Notice of Default. Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default and/or Event of Default, unless Agent shall
have received written notice from a Lender or Borrower, describing such default
or Event of Default. Agent will notify the Lenders of its receipt of any such
notice. While an Event of Default has occurred and is continuing, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Event of Default as Agent shall deem advisable or in the
best interests of the Lenders, including without
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limitation, satisfaction of other security interests, liens or encumbrances on
the Collateral not permitted under the Financing Documents, payment of taxes on
behalf of Borrower or any other Credit Party, payments to landlords,
warehouseman, bailees and other Persons in possession of the Collateral and
other actions to protect and safeguard the Collateral, and actions with respect
to insurance claims for casualty events affecting a Credit Party and/or the
Collateral.
14.7    Credit Decision; Disclosure of Information by Agent. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by Agent hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of Borrower or any
Affiliate thereof, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession.
Each Lender represents to Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of, and investigation into, the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Financing Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by Agent herein, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any Credit Party which may
come into the possession of any Agent-Related Person.
14.8    Indemnification of Agent. Whether or not the transactions contemplated
hereby are consummated, each Lender shall, severally and pro rata based on its
respective Pro Rata Share, indemnify upon demand each Agent-Related Person (to
the extent not reimbursed by or on behalf of Borrower and without limiting the
obligation of Borrower to do so), and hold harmless each Agent-Related Person
from and against any and all Indemnified Liabilities (which shall not include
legal expenses of Agent incurred in connection with the closing of the
transactions contemplated by this Agreement) incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person’s own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender
shall, severally and pro rata based on its respective Pro Rata Share, reimburse
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Protective Advances incurred after the closing of the transactions
contemplated by this Agreement) incurred by Agent (in its capacity as Agent, and
not as a Lender) in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Financing Document,
or any document contemplated by or referred to herein, to the extent that Agent
is not reimbursed for such expenses by or on behalf of Borrower. The undertaking
in this Section shall survive the payment in full of the Obligations, the
termination of this Agreement and the resignation of Agent. The term
“Indemnified Liabilities” means those liabilities described in Section 13.2(a)
and Section 13.2(b).
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14.9    Agent in its Individual Capacity. With respect to its Credit Extensions,
MidCap shall have the same rights and powers under this Agreement as any other
Lender and may exercise such rights and powers as though it were not Agent, and
the terms “Lender” and “Lenders” include MidCap in its individual capacity.
MidCap and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party and any of their Affiliates and any
person who may do business with or own securities of any Credit Party or any of
their Affiliates, all as if MidCap were not Agent and without any duty to
account therefor to Lenders. MidCap and its Affiliates may accept fees and other
consideration from a Credit Party for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders. Each Lender
acknowledges the potential conflict of interest between MidCap as a Lender
holding disproportionate interests in the Credit Extensions and MidCap as Agent,
and expressly consents to, and waives, any claim based upon, such conflict of
interest.
14.10    Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Credit
Party, Agent (irrespective of whether the principal of any Credit Extension,
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether Agent shall have made any demand on such Credit
Party) shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Credit Extensions and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Lenders and Agent and their respective agents and counsel
and all other amounts due the Lenders and Agent allowed in such judicial
proceeding); and
(b)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to the Lenders, to pay to Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of Agent and its agents and counsel, including Protective Advances. To
the extent that Agent fails timely to do so, each Lender may file a claim
relating to such Lender’s claim.
14.11    Collateral and Guaranty Matters. The Lenders irrevocably authorize
Agent, at its option and in its discretion, to release (a) any Credit Party and
any Lien on any Collateral granted to or held by Agent under any Financing
Document upon the date that all Obligations (other than inchoate indemnity
obligations for which no claim has yet been made and any other obligations
which, by their terms, are to survive the termination of this Agreement) due
hereunder have been fully and indefeasibly paid in full and no Applicable
Commitments or other obligations of any Lender to provide funds to Borrower
under this Agreement remain outstanding, and (b) any Lien on any Collateral that
is transferred or to be transferred as part of or in connection with any
transfer permitted hereunder or under any other Financing Document. Upon request
by Agent at any time, all Lenders will confirm in writing Agent’s authority to
release its interest in particular types or items of Collateral pursuant to this
Section 14.11.
14.12    Advances; Payments; Non-Funding Lenders.
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(a)    Advances; Payments. If Agent receives any payment for the account of the
Lenders on or prior to 11:00 a.m. (New York time) on any Business Day, Agent
shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment
on such Business Day. If Agent receives any payment for the account of the
Lenders after 11:00 a.m. (New York time) on any Business Day, Agent shall pay to
each applicable Lender such Lender’s Pro Rata Share of such payment on the next
Business Day. To the extent that any Lender has failed to fund any Credit
Extension (a “Non-Funding Lender”), Agent shall be entitled to set-off the
funding short-fall against that Non-Funding Lender’s Pro Rata Share of all
payments received from Borrower.
(b)    Return of Payments.
(i)    If Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from a
Credit Party and such related payment is not received by Agent, then Agent will
be entitled to recover such amount (including interest accruing on such amount
at the Federal Funds Rate for the first Business Day and thereafter, at the rate
otherwise applicable to such Obligation) from such Lender on demand without
set-off, counterclaim or deduction of any kind.
(ii)    If Agent determines at any time that any amount received by Agent under
this Agreement must be returned to a Credit Party or paid to any other person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Financing Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to a Credit Party or such other person, without
set-off, counterclaim or deduction of any kind.
14.13    Miscellaneous.
(a)    Neither Agent nor any Lender shall be responsible for the failure of any
Non-Funding Lender to make a Credit Extension or make any other advance required
hereunder. The failure of any NonFunding Lender to make any Credit Extension or
any payment required by it hereunder shall not relieve any other Lender (each
such other Lender, an “Other Lender”) of its obligations to make the Credit
Extension or payment required by it, but neither any Other Lender nor Agent
shall be responsible for the failure of any Non-Funding Lender to make a Credit
Extension or make any other payment required hereunder. Notwithstanding anything
set forth herein to the contrary, a Non-Funding Lender shall not have any voting
or consent rights under or with respect to any Financing Document or constitute
a “Lender” (or be included in the calculation of “Required Lender” hereunder)
for any voting or consent rights under or with respect to any Financing
Document. At Borrower’s request, Agent or a person reasonably acceptable to
Agent shall have the right with Agent’s consent and in Agent’s sole discretion
(but shall have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent’s request, sell and assign to
Agent or such person, all of the Applicable Commitments and all of the
outstanding Credit Extensions of that Non-Funding Lender for an amount equal to
the principal balance of the Credit Extensions held by such Non-Funding Lender
and all accrued interest and fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed assignment
agreement reasonably acceptable to Agent.
(b)    Each Lender shall promptly remit to the other Lenders such sums as may be
necessary to ensure the ratable repayment of each Lender’s portion of any Credit
Extension and the ratable distribution of interest, fees and reimbursements paid
or made by any Credit Party.
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Notwithstanding the foregoing, if this Agreement requires payments of principal
and interest to be made directly to the Lenders, a Lender receiving a scheduled
payment shall not be responsible for determining whether the other Lenders also
received their scheduled payment on such date; provided, however, if it is
determined that a Lender received more than its ratable share of scheduled
payments made on any date or dates, then such Lender shall remit to Agent (for
Agent to redistribute to itself and the Lenders in a manner to ensure the
payment to Agent of any sums due Agent hereunder and the ratable repayment of
each Lender’s portion of any Credit Extension and the ratable distribution of
interest, fees and reimbursements) such sums as may be necessary to ensure the
ratable payment of such scheduled payments, as instructed by Agent. If any
payment or distribution of any kind or character, whether in cash, properties or
securities and whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise, shall be received by a Lender in excess of its ratable
share, then (i) the portion of such payment or distribution in excess of such
Lender’s ratable share shall be received by such Lender in trust for application
to the payments of amounts due on the other Lender’s claims, or, in the case of
Collateral, shall hold such Collateral for itself and as agent and bailee for
Agent and other Lenders and (ii) such Lender shall promptly advise Agent of the
receipt of such payment, and, within five (5) Business Days of such receipt and,
in the case of payments and distributions, such Lender shall purchase (for cash
at face value) from the other Lenders (through Agent), without recourse, such
participations in the Credit Extension made by the other Lenders as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them in accordance with the respective Pro Rata Shares of the
Lenders; provided, however, that if all or any portion of such excess payment is
thereafter recovered by or on behalf of a Credit Party from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest; provided, further, that the
provisions of this Section shall not be construed to apply to (x) any payment
made by a Credit Party pursuant to and in accordance with the express terms of
this Agreement or the other Financing Documents, or (y) any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Applicable Commitment pursuant to Section 13.1. Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this
Section may exercise all of its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of Borrower in the amount of such participation. No
documentation other than notices and the like shall be required to implement the
terms of this Section. Agent shall keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased pursuant
to this Section and shall in each case notify the Lenders following any such
purchases.
15.    DEFINITIONS
In addition to any terms defined elsewhere in this Agreement, or in any schedule
or exhibit attached hereto, as used in this Agreement, the following terms have
the following meanings:
“Access Agreement” means a landlord consent, bailee letter or warehouseman’s
letter, in form and substance reasonably satisfactory to Agent, in favor of
Agent executed by such landlord, bailee or warehouseman, as applicable, for any
third party location.
“Account” means any “account”, as defined in the Code, with such additions to
such term as may hereafter be made, and includes, without limitation, all
accounts receivable and other sums owing to Borrower.
“Account Debtor” means any “account debtor”, as defined in the Code, with such
additions to such term as may hereafter be made.
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“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business, line of
business or division or other unit of operation of a Person, (b) the acquisition
of fifty percent (50%) or more of the equity interests of any Person, whether or
not involving a merger or consolidation with such other Person, or otherwise
causing any Person to become a Subsidiary of a Credit Party, (c) any merger or
consolidation or any other combination with another Person or (d) the
acquisition (including through licensing) of any product, product line or
Intellectual Property of or from any other Person.
“Affiliate” means, with respect to any Person, a Person that owns or controls
directly or indirectly the Person, any Person that controls or is controlled by
or is under common control with the Person (whether through the ownership of
voting securities, by contract or otherwise), and each of that Person’s senior
executive officers, directors, partners and, for any Person that is a limited
liability company, that Person’s managers and members.
“Agent” means, MidCap, not in its individual capacity, but solely in its
capacity as agent on behalf of and for the benefit of the Lenders, together with
its successors and assigns.
“Agreement” has the meaning given it in the preamble of this Agreement.
“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the
Laws administered by OFAC.
“Applicable Commitment” has the meaning given it in Section 2.2
“Applicable Floor” means for each Credit Facility the per annum rate of interest
specified on the Credit Facility Schedule.
“Applicable Index Rate” means, for any Applicable Interest Period, the rate per
annum determined by Agent equal to the Applicable Libor Rate; provided, however,
that in the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation of
application thereof, shall at any time after the date hereof, in the reasonable
opinion of Agent or any Lender, make it unlawful or impractical for Agent or
such Lender to fund or maintain Obligations bearing interest based upon the
Applicable Libor Rate, Agent or such Lender shall give notice of such changed
circumstances to Agent and Borrower and the Applicable Index Rate for
Obligations outstanding or thereafter extended or made by Agent or such Lender
shall thereafter be the Applicable Prime Rate until Agent or such Lender
determines (as to the portion of the Credit Extensions or Obligations owed to
it) that it would no longer be unlawful or impractical to fund or maintain such
Obligations or Credit Extensions at the Applicable Libor Rate. In the event that
Agent shall have determined (which determination shall be final and conclusive
and binding upon all parties hereto), as of any Applicable Interest Rate
Determination Date, that adequate and fair means do not exist for ascertaining
the interest rate applicable to any Credit Facility on the basis provided for
herein, then Agent may select a comparable replacement index and corresponding
margin.
“Applicable Interest Period” for each Credit Facility has the meaning specified
for that Credit Facility in the Credit Facility Schedule; provided, however,
that, at any time that the Applicable Prime Rate is the Applicable Index Rate,
Applicable Interest Period shall mean the period commencing as of the most
recent Applicable Interest Rate Determination Date and continuing until the next
Applicable Interest Rate Determination Date or such earlier date as the
Applicable Prime Rate shall no longer be the
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Applicable Index Rate; and provided, further, that, at any time the Libor Rate
Index is adjusted as set forth in the definition thereof, or re-implemented
following invocation of the Applicable Prime Rate as permitted herein, the
Applicable Interest Period shall mean the period commencing as of such
adjustment or re-implementation and continuing until the next Applicable
Interest Rate Determination Date, if any.
“Applicable Interest Rate” means a per annum rate of interest equal to the
Applicable Index Rate plus the Applicable Margin.
“Applicable Interest Rate Determination Date” means the second (2nd) Business
Day prior to the first (1st) day of the related Applicable Interest Period;
provided, however, that, at any time that the Applicable Prime Rate is the
Applicable Index Rate, Applicable Interest Rate Determination Date means the
date of any change in the Base Rate Index; and provided, further, that, at any
time the Libor Rate Index is adjusted as set forth in the definition thereof,
the Applicable Interest Rate Determination Date shall mean the date of such
adjustment or the second (2nd) Business Day prior to the first (1st) day of the
related Applicable Interest Period, as elected by Agent.
“Applicable Libor Rate” means, for any Applicable Interest Period, the rate per
annum, determined by Agent (rounded upwards, if necessary, to the next
1/100th%), equal to the greater of (a) the Applicable Floor and (b) the Libor
Rate Index.
“Applicable Margin” for each Credit Facility has the meaning specified for that
Credit Facility in the Credit Facility Schedule
“Applicable Prepayment Fee”, for each Credit Facility, has the meaning given it
in the Credit Facility Schedule for such Credit Facility.
“Applicable Prime Rate” means, for any Applicable Interest Period, the rate per
annum, determined by Agent (rounded upwards, if necessary, to the next
1/100th%), equal to the greater of (a) the Applicable Floor and (b) the Base
Rate Index
“Approved Fund” means any (a) investment company, fund, trust, securitization
vehicle or conduit that is (or will be) engaged in making, purchasing, holding
or otherwise investing in commercial loans and similar extensions of credit in
the Ordinary Course of Business, or (b) any Person (other than a natural person)
which temporarily warehouses loans for any Lender or any entity described in the
preceding clause (a) and that, with respect to each of the preceding clauses (a)
and (b), is administered or managed by (i) a Lender, (ii) an Affiliate of a
Lender or (iii) a Person (other than a natural person) or an Affiliate of a
Person (other than a natural person) that administers or manages a Lender.
“Bank Services Collateral Accounts” means, collectively, each segregated Deposit
Account from time to time identified to Agent in writing established by Borrower
for the sole purpose of securing Borrower’s obligations under clause (g) or (h)
of the definition Permitted Contingent Obligations and containing only such cash
or Cash Equivalents that have been required to be pledged to secure such
obligations of Borrower; provided, that the aggregate amount of cash or Cash
Equivalents deposited in such Bank Services Collateral Accounts does not, at any
time, exceed One Million Dollars ($1,000,000) in the aggregate.
“Base Rate Index” means, for any Applicable Interest Period, the rate per annum,
determined by Agent (rounded upwards, if necessary, to the next 1/100th%) as
being the rate of interest announced, from time to time, within Wells Fargo
Bank, N.A. (“Wells Fargo”) at its principal office in San Francisco as its
“prime rate,” with the understanding that the “prime rate” is one of Wells
Fargo’s base rates (not
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necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Wells Fargo may designate; provided, however, that
Agent may, upon prior written notice to any Borrower, choose a reasonably
comparable index or source to use as the basis for the Base Rate Index.
“Blocked Person” means: (a) any Person listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order No.
13224, (c) a Person with whom any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law, (d) a Person that
commits, threatens or conspires to commit or supports “terrorism” as defined in
Executive Order No. 13224, or (e) a Person that is named a “specially designated
national” or “blocked person” on the most current list published by OFAC or
other similar list.
“Books” means all books and records of a Person, including ledgers, federal and
state tax returns, records regarding the Person’s assets or liabilities, the
Collateral, business operations or financial condition, and all computer
programs or storage or any equipment containing such information.
“Borrower” mean the entity(ies) described in the first paragraph of this
Agreement and each of their successors and permitted assigns. The term “each
Borrower” shall refer to each Person comprising the Borrower if there is more
than one (1) such Person, or the sole Borrower if there is only one (1) such
Person. The term “any Borrower” shall refer to any Person comprising the
Borrower if there is more than one (1) such Person, or the sole Borrower if
there is only one (1) such Person.
“Borrower Unrestricted Cash” means unrestricted cash and Cash Equivalents of
Borrowers that (a) are subject to Agent’s first priority perfected lien and held
in the name of a Borrower in a Deposit Account or Securities Account that is
subject to a Control Agreement in favor of Agent at a bank or financial
institution located in the United States, (b) are not subject to any Lien (other
than Permitted Liens), and (c) are not funds for the payment of a drawn or
committed but unpaid draft, ACH or EFT transaction.
“Borrowing Resolutions” means, with respect to any Person, those resolutions, in
form and substance satisfactory to Agent, adopted by such Person’s Board of
Directors or other appropriate governing body and delivered by such Person to
Agent approving the Financing Documents to which such Person is a party and the
transactions contemplated thereby, as well as any other approvals as may be
necessary or desired to approve the entering into the Financing Documents or the
consummation of the transactions contemplated thereby or in connection
therewith.
“Business Day” means any day except a Saturday, Sunday or other day on which
either the New York Stock Exchange is closed, or on which commercial banks in
Washington, DC and New York City are authorized by law to close, and, in the
case of a Business Day which relates to a determination of the Libor Rate Index,
a day on which dealings are carried on in the London interbank eurodollar
market.
“Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or
directly, unconditionally and fully guaranteed or insured by the United States
federal government or (ii) issued by any agency of the United States federal
government the obligations of which are fully backed by the full faith and
credit of the United States federal government, (b) any readily-marketable
direct obligations issued by any other agency of the United States federal
government, any state of the United States or any political subdivision of any
such state or any public instrumentality thereof, in each case having a rating
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of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial
paper rated at least “A-1” by S&P or “P-1”by Moody’s and issued by any Person
organized under the laws of any state of the United States, and any corporate
notes and corporate bonds with long-term ratings of at least “A” by S&P or “A2”
by Moody’s and issued by any Person organized under the laws of any state of the
United States (d) any United States dollar-denominated time deposit, insured
certificate of deposit, overnight bank deposit or bankers’ acceptance issued or
accepted by (i) any Lender or (ii) any commercial bank that is (A) organized
under the laws of the United States, any state thereof or the District of
Columbia, (B) “adequately capitalized” (as defined in the regulations of its
primary federal banking regulators) and (C) has Tier 1 capital (as defined in
such regulations) in excess of $25,000,000 and (e) shares of any United States
money market fund that (i) has substantially all of its assets invested
continuously in the types of investments referred to in clause (a), (b), (c) or
(d) above with maturities as set forth in the proviso below, (ii) has net assets
in excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s the
highest rating obtainable for money market funds in the United States; provided,
however, that the remaining maturities of all obligations specified in any
clauses (a), (b), (c) or (d) above shall not exceed one year.
“Change in Control” means an event or series of events by which: (a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an
“option right”)), directly or indirectly, of thirty-five percent (35%) or more
of the combined voting power of all voting stock of Parent or any other Borrower
(as applicable) on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any
option right); (b) during any period of twelve (12) consecutive months, a
majority of the members of the board of directors or other equivalent governing
body of Borrower cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period,
(ii) whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (i)
and (ii) above constituting at the time of such election or nomination at least
a majority of that board or equivalent governing body; (c) any Borrower ceases
to own and control, directly or indirectly, all of the economic and voting
rights associated with the outstanding securities of each of its Subsidiaries,
or (d) the occurrence of any “change in control”, “fundamental change” or any
term or provision of similar effect under any Subordinated Debt Document or
Parent’s Operating Documents.
“Closing Date” has the meaning given it in the preamble of this Agreement.
“Code” means the Uniform Commercial Code in effect on the date hereof, as the
same may, from time to time, be enacted and in effect in the State of New York;
provided, however, that to the extent that the Code is used to define any term
herein or in any Financing Document and such term is defined differently in
different Articles or Divisions of the Code, the definition of such term
contained in Article or Division 9 shall govern; and provided, further, that in
the event that, by reason of mandatory provisions of Law, any or all of the
attachment, perfection, or priority of, or remedies with respect to, Agent’s
Lien on any Collateral is governed by the Uniform Commercial Code in effect in a
jurisdiction other than the State of New York, the term “Code” shall mean the
Uniform Commercial Code as enacted and in effect
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in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority, or remedies and for purposes
of definitions relating to such provisions.
“Collateral” means all property, now existing or hereafter acquired, mortgaged
or pledged to, or purported to be subjected to a Lien in favor of, Agent, for
the benefit of Agent and the Lenders, pursuant to this Agreement and the other
Financing Documents (but excluding Excluded Property), including, without
limitation, all of the property described in Exhibit A hereto.
“Collateral Account” means any Deposit Account, Securities Account or Commodity
Account.
“Commitment Commencement Date” has the meaning given it in the Credit Facility
Schedule.
“Commitment Termination Date” has the meaning given it in the Credit Facility
Schedule.
“Commodity Account” means any “commodity account”, as defined in the Code, with
such additions to such term as may hereafter be made.
“Competitor” means, at any time of determination, any Person engaged in the same
or substantially the same line of business as the Borrower and the other Credit
Parties and such business accounts for all or substantially all of the revenue
or net income of such Person at the time of determination.
“Compliance Certificate” means a certificate, duly executed by an authorized
officer of Borrower, appropriately completed and substantially in the form of
Exhibit B.
“Contingent Obligation” means, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation directly
or indirectly guaranteed, endorsed, comade, discounted or sold with recourse by
that Person, or for which that Person is directly or indirectly liable; (b) any
obligations for undrawn letters of credit for the account of that Person; and
(c) all obligations from any interest rate, currency or commodity swap
agreement, interest rate cap or collar agreement, or other agreement or
arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices; but “Contingent Obligation”
does not include endorsements in the Ordinary Course of Business. The amount of
a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith; but the amount may not exceed the maximum of the obligations under
any guarantee or other support arrangement.
“Control Agreement” means any control agreement, each of which shall be in form
and substance satisfactory to Agent, entered into among the depository
institution at which Borrower maintains a Deposit Account or the securities
intermediary or commodity intermediary at which Borrower maintains a Securities
Account or a Commodity Account, Borrower, and Agent pursuant to which Agent
obtains control (within the meaning of the Code) for the benefit of the Lenders
over such Deposit Account, Securities Account or Commodity Account.
“Credit Extension” means an advance or disbursement of proceeds to or for the
account of Borrower in respect of a Credit Facility.
“Credit Extension Form” means that certain form attached hereto as Exhibit C, as
the same may be from time to time revised by Agent.
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“Credit Facility” means a term loan credit facility specified on the Credit
Facility Schedule.
“Credit Facility Schedule” means each “Credit Facility Schedule” attached to
this Agreement.
“Credit Party” means any Borrower, any Guarantor under a guarantee of the
Obligations or any part thereof, and any other Person (other than Agent, a
Lender or a participant of a Lender), whether now existing or hereafter acquired
or formed, that becomes obligated as a borrower, guarantor, surety, indemnitor,
pledgor, assignor or other obligor under any Financing Document; and “Credit
Parties” means all such Persons, collectively.
“DEA” means the Drug Enforcement Administration of the United States of America,
any comparable state or local Governmental Authority, any comparable
Governmental Authority in any non-United States jurisdiction, and any successor
agency of any of the foregoing.
“Default” means any fact, event or circumstance which with notice or passage of
time or both, could constitute an Event of Default.
“Default Rate” has the meaning given it in Section 2.6(b).
“Deposit Account” means any “deposit account” as defined in the Code with such
additions to such term as may hereafter be made.
“Designated Funding Account” is Borrower’s Deposit Account, account number
ending 2756, maintained with Silicon Valley Bank and over which Agent has been
granted a Control Agreement.
“Disqualified Stock” means, with respect to any Person, any equity interest in
such Person that, prior to the date that is 91 days after the Maturity Date,
either by its terms (or by the terms of any security or other equity interests
into which it is convertible or for which it is exchangeable) or upon the
happening of any event or condition, (a) matures or is mandatorily redeemable
(other than solely for Permitted Indebtedness or other equity interests in such
Person or of Parent that do not constitute Disqualified Stock and cash in lieu
of fractional shares of such equity interests), pursuant to a sinking fund
obligation or otherwise, (b) is redeemable at the option of the holder thereof,
in whole or in part (other than solely for Permitted Indebtedness or other
equity interests in such Person or of Parent that do not constitute Disqualified
Stock and cash in lieu of fractional shares of such equity interests),
(c) provides for the scheduled payments of dividends or distributions in cash,
or (d) is or becomes convertible into or exchangeable for Indebtedness (other
than Permitted Indebtedness) or any other equity interests that would constitute
Disqualified Stock.
“Dollars,” “dollars” and “$” each means lawful money of the United States.
“Draw Period” means, for each Credit Facility, the period commencing on the
Commitment Commencement Date and ending on the Commitment Termination Date.
“Drug Application” means a new drug application, an abbreviated drug
application, or a product license application for any Product, as appropriate,
as those terms are defined in the FDCA.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by Agent; provided, however, that notwithstanding the foregoing, “Eligible
Assignee” shall not include (x) any Credit Party or any Subsidiary of a Credit
Party or (y) so long as no Event of Default has occurred and is continuing, (i)
any
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vulture hedge fund (other than any Affiliate of a Lender or an Approved Fund) or
(ii) a Person known by Agent to be a Competitor, in each case of (i) and (ii) as
reasonably determined by Agent. Notwithstanding the foregoing, in connection
with assignments by a Lender due to a forced divestiture at the request of any
regulatory agency, the restrictions set forth herein shall not apply and
Eligible Assignee shall mean any Person or party becoming an assignee incident
to such forced divestiture.
“Environmental Law” means each present and future law (statutory or common),
ordinance, treaty, rule, regulation, order, policy, other legal requirement or
determination of an arbitrator or of a Governmental Authority and/or Required
Permits imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the workplace, the
environment and natural resources, and including public notification
requirements and environmental transfer of ownership, notification or approval
statutes.
“Equipment” means all “equipment”, as defined in the Code, with such additions
to such term as may hereafter be made, and includes without limitation all
machinery, fixtures, goods, vehicles (including motor vehicles and trailers),
and any interest in any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, and all
regulations promulgated thereunder.
“ERISA Affiliate” has the meaning given it in Section 5.6.
“Event of Default” has the meaning given it in Section 10.1.
“Excluded Property” means:
(a)    prior to the occurrence of a Springing IP Lien Event, all Intellectual
Property except to the extent that it is necessary under applicable law to have
a Lien and security interest in any such Intellectual Property in order to have
a perfected Lien and security interest in and to IP Proceeds, in which case the
Collateral shall automatically, and effective as of the Closing Date, include
the Intellectual Property to the extent necessary to permit perfection of
Agent’s, for the ratable benefit of the Lenders, security interest in such IP
Proceeds and, for the avoidance of doubt, Agent shall have a Lien and security
interest in, (A) all IP Proceeds, and (B) all payments with respect to IP
Proceeds that are received after the commencement of a bankruptcy or insolvency
proceeding and in no event shall IP Proceeds or any payments in respect thereof
constitute Excluded Property; provided, however, that, upon the occurrence of a
Springing IP Lien Event and continuing at all times thereafter (whether or not
the Springing IP Lien Event continues), Intellectual Property shall no longer
constitute “Excluded Property” pursuant to this clause (a) and “Collateral”
shall immediately include all Intellectual Property of each Credit Party
(including, for the avoidance of doubt, all IP Proceeds) automatically and
without notice or any further action by Agent, any Lender or any Credit Party;
(b)    any lease, license, contract, permit, letter of credit, purchase money
arrangement, instrument or agreement to which any Credit Party is a party or any
of its rights or interests thereunder if and to the extent that the grant of
such security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of any Credit
Party therein or (ii) result in a breach or termination pursuant to the terms
of, or default under, any such lease, license, contract, permit, letter of
credit, purchase money arrangement, instrument or agreement; and
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(c)    any governmental licenses or state or local franchises, charters and
authorizations, to the extent that Agent may not validly possess a security
interest in any such license, franchise, charter or authorization under
applicable Law;
provided that (x) any such limitation described in the foregoing clauses (b) and
(c) on the security interests granted hereunder shall apply only to the extent
that any such prohibition could not be rendered ineffective pursuant to the Code
or any other applicable Law (including Sections 9-406, 9-407 and 9-408 of the
Code) or principles of equity, (y) in the event of the termination or
elimination of any such prohibition or the requirement for any consent contained
in such contract, agreement, permit, lease or license or in any applicable Law,
to the extent sufficient to permit any such item to become Collateral hereunder,
or upon the granting of any such consent, or waiving or terminating any
requirement for such consent, a security interest in such contract, agreement,
permit, lease, license, franchise, authorization or asset shall be automatically
and simultaneously granted hereunder and shall be included as Collateral
hereunder, and (z) all rights to payment of money due or to become due pursuant
to, and all rights to the proceeds from the sale of, all Excluded Property shall
be and at all times remain subject to the security interests created by this
Agreement (unless such proceeds would independently constitute Excluded
Property).

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Credit Extension or
Applicable Commitment pursuant to a law in effect on the date on which (i) such
Lender acquires such interest in the Credit Extension or Applicable Commitment
or (ii) such Lender changes its lending office, except in each case to the
extent that, pursuant to Section 2.6(h)(i) or 2.6(h)(iii), amounts with respect
to such Taxes were payable either to such Lender’s assignor immediately before
such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Sections 2.6(h)(vi), (vii) and (viii) and (d) any withholding
Taxes imposed under FATCA.
“Exigent Circumstance” has the meaning given it in Section 13.14.
“FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the IRC and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Governmental Authorities and implementing
such Sections of the IRC.
“FDA” means the Food and Drug Administration of the United States of America,
any comparable state or local Governmental Authority, any comparable
Governmental Authority in any non-United States jurisdiction, and any successor
agency of any of the foregoing.
“FDCA” means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C.
Section 301 et seq., and all regulations promulgated thereunder.
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“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to Agent on such day on such transactions as determined by
Agent in a commercially reasonable manner.
“Fee Letters” means, collectively, the fee letter agreements among Borrower and
Agent and Borrower and each Lender.
“Financing Documents” means, collectively, this Agreement, the Perfection
Certificate, the Security Documents, each Subordination Agreement and any
subordination or intercreditor agreement pursuant to which any Indebtedness
and/or any Liens securing such Indebtedness is subordinated to all or any
portion of the Obligations, the Fee Letter(s), each note and guarantee executed
by one (1) or more Credit Parties in connection with the indebtedness governed
by this Agreement, and each other present or future agreement executed by one
(1) or more Credit Parties and, or for the benefit of, the Lenders and/or Agent
in connection with this Agreement, all as amended, restated, or otherwise
modified from time to time.
“Foreign Lender” means a Lender that is not a U.S. Person.
“Funding Date” means any date on which a Credit Extension is made to or on
account of Borrower which shall be a Business Day.
“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
Person as may be approved by a significant segment of the accounting profession
in the United States, which are applicable to the circumstances as of the date
of determination.
“General Intangibles” means all “general intangibles”, as defined in the Code,
with such additions to such term as may hereafter be made, and includes without
limitation, all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, trademarks, service marks
and, to the extent permitted under applicable Law, any applications therefor,
whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights,
goodwill, franchise agreements, purchase orders, customer lists, route lists,
telephone numbers, domain names, claims, income and other tax refunds, security
and other deposits, options to purchase or sell real or personal property,
rights in all litigation presently or hereafter pending (whether in contract,
tort or otherwise), insurance policies (including, without limitation, key man,
property damage, and business interruption insurance), payments of insurance and
rights to payment of any kind.
“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
“Guarantor” means any present or future guarantor of the Obligations.
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“Hazardous Materials” means petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; explosives, flammable
materials; radioactive materials; polychlorinated biphenyls and compounds
containing them; lead and lead-based paint; asbestos or asbestos-containing
materials; underground or above-ground storage tanks, whether empty or
containing any substance; any substance the presence of which is prohibited by
any Laws; toxic mold, any substance that requires special handling; and any
other material or substance now or in the future defined as a “hazardous
substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic
pollutant,” “contaminant,” “pollutant” or other words of similar import within
the meaning of any Environmental Law, including: (a) any “hazardous substance”
defined as such in (or for purposes of) CERCLA, or any so-called “superfund” or
“superlien” Law, including the judicial interpretation thereof; (b) any
“pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (c) any
material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (d)
any petroleum or petroleum by-products, including crude oil or any fraction
thereof; (e) natural gas, natural gas liquids, liquefied natural gas, or
synthetic gas usable for fuel; (f) any “hazardous chemical” as defined pursuant
to 29 C.F.R. Part 1910; (g) any toxic or harmful substances, wastes, materials,
pollutants or contaminants (including, without limitation, asbestos,
polychlorinated biphenyls, flammable explosives, radioactive materials,
infectious substances, materials containing lead-based paint or raw materials
which include hazardous constituents); and (h) any other toxic substance or
contaminant that is subject to any Environmental Laws or other past or present
requirement of any Governmental Authority.
“Hazardous Materials Contamination” means contamination (whether now existing or
hereafter occurring) of the improvements, buildings, facilities, personalty,
soil, groundwater, air or other elements on or of the relevant property by
Hazardous Materials, or any derivatives thereof, or on or of any other property
as a result of Hazardous Materials, or any derivatives thereof, generated on,
emanating from or disposed of in connection with the relevant property.
“Healthcare Laws” means all applicable Laws relating to the procurement,
development, provision, clinical and non-clinical evaluation or investigation,
product approval or clearance, manufacture, production, distribution,
importation, exportation, use, handling, quality, reimbursement, sale, labeling,
advertising, promotion, or postmarket requirements of any product produced by a
Credit Party or any Subsidiary thereof (including, without limitation, any
component of, or accessory to, the foregoing products) subject to regulation
under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. et seq.) or FDCA, and
similar state or foreign laws, controlled substances laws, and all laws,
policies, procedures, requirements and regulations pursuant to which Required
Permits are issued, in each case, as the same may be amended from time to time.
“Indebtedness” means (a) indebtedness for borrowed money (including the
Obligations) or the deferred price of, or payment for, property or services,
such as reimbursement and other obligations for surety bonds and letters of
credit, (b) obligations evidenced by notes, bonds, debentures or similar
instruments, (c) capital lease obligations, (d) non-contingent obligations of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit, banker’s acceptance or similar instrument, (e) equity
securities of such Person subject to repurchase or redemption other than at the
sole option of such Person and any other Disqualified Stock, (f) obligations
secured by a Lien on any asset of such Person, whether or not such obligation is
otherwise an obligation of such Person, (g) “earnouts”, purchase price
adjustments, profit sharing arrangements, deferred purchase money amounts and
similar payment obligations or continuing obligations of any nature of such
Person arising out of purchase and sale contracts, (h) all Indebtedness of
others guaranteed by such Person, (i) off-balance sheet liabilities and/or
pension plan or multiemployer plan liabilities of such Person, (j) obligations
in respect of litigation settlement agreements or similar agreements, (k)
obligations arising under bonus, deferred compensation,
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incentive compensation or similar arrangements, other than those arising in the
Ordinary Course of Business, and (l) Contingent Obligations.
“Indemnified Liabilities” has the meaning given it in Section 14.8.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of Borrower
under this Agreement and (b) to the extent not otherwise described in (a), Other
Taxes.
“Indemnitees” has the meaning given it in Section 13.2(b).
“Insolvency Proceeding” means any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency Law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
“Intellectual Property” means all copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, any patents, patent
applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same, trademarks, trade names, service marks, mask works, rights of use of any
name, domain names, or any other similar rights, any applications therefor,
whether registered or not, know-how, operating manuals, trade secret rights,
clinical and non-clinical data, rights to unpatented inventions, and any claims
for damage by way of any past, present, or future infringement of any of the
foregoing.
“Inventory” means all “inventory”, as defined in the Code, with such additions
to such term as may hereafter be made, and includes without limitation all
merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products, including without limitation such
inventory as is temporarily out of Borrower’s custody or possession or in
transit and including any returned goods and any documents of title representing
any of the above.
“Investment” means, with respect to any Person, directly or indirectly, (a) to
purchase or acquire any stock or stock equivalents, or any obligations or other
securities of, or any interest in, any Person, including the establishment or
creation of a Subsidiary, (b) to make or commit to make any Acquisition or (c)
to make or purchase any advance, loan, extension of credit or capital
contribution to, or any other investment in, any Person.
“IP Proceeds” means, collectively, all cash, Accounts, license and royalty fees,
claims, products, awards, judgments, insurance claims, and other revenues,
proceeds or income, arising out of, derived from or relating to any Intellectual
Property of any Credit Party, and any claims for damage by way of any past,
present or future infringement of any Intellectual Property of any Credit Party
(including, without limitation, all cash, royalty fees, other proceeds, Accounts
and General Intangibles that consist of rights of payment to or on behalf of a
Credit Party and the proceeds from the sale, licensing or other disposition of
all or any part of, or rights in, any Intellectual Property by or on behalf of a
Credit Party).
“IP Security Agreement” means any security agreement executed by Borrower that
grants (or is prepared as a notice filing or recording with respect to) a Lien
or security interest in favor of Agent and/or Lenders on Intellectual Property,
each as amended, restated, or otherwise modified from time to time, which
agreements shall become effective in accordance with the terms of Section 6.15.
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“IRC” means the Internal Revenue Code of 1986, as amended, and any successor
provisions.
“IRS” means the United States Internal Revenue Service.
“Joinder Requirements” has the meaning given it in Section 6.8.
“Laws” means any and all federal, state, provincial, territorial, local and
foreign statutes, laws, judicial decisions, regulations, guidance, guidelines,
ordinances, rules, judgments, orders, decrees, codes, plans, injunctions,
permits, concessions, grants, franchises, governmental agreements and
governmental restrictions, whether now or hereafter in effect, which are
applicable to any Credit Party in any particular circumstance.
“Lenders” means each of the Persons identified on the Credit Facility Schedule
as amended from time to time to reflect assignments made in accordance with this
Agreement.
“Libor Rate Index” means, for any Applicable Interest Period, the rate per
annum, determined by Agent (rounded upwards, if necessary, to the next 1/100th%)
by dividing (a) the rate per annum, determined by Agent in accordance with its
customary procedures, and utilizing such electronic or other quotation sources
as it considers appropriate (rounded upwards, if necessary, to the next 1/100%),
to be the rate at which Dollar deposits (for delivery on the first (1st) day of
such Applicable Interest Period) in the amount of One Million Dollars
($1,000,000) are offered to major banks in the London interbank market on or
about 11:00 a.m. (London time) on the Applicable Interest Rate Determination
Date, for a period of thirty (30) days, which determination shall be conclusive
in the absence of manifest error, by (b) one hundred percent (100%) minus the
Reserve Percentage; provided, however, that Agent may, upon prior written notice
to any Borrower and in consultation with Borrower, choose a reasonably
comparable index or source to use as the basis for the Libor Rate Index;
provided, further, that if (a) the administrator responsible for determining and
publishing such rate per annum, determined by Agent in accordance with its
customary procedures, has made a public announcement identifying a date certain
on or after which such rate shall no longer be provided or published, as the
case may be; or (b) timely, adequate and reasonable means do not exist for
ascertaining such rate and the circumstances giving rise to the Agent’s
inability to ascertain LIBOR are unlikely to be temporary as determined in
Agent’s reasonable discretion, then Agent may, upon prior written notice to
Borrower, choose a reasonably comparable index or source together with
corresponding adjustments to “Applicable Margin” or scale factor or floor to
such index that Agent, in its reasonable discretion, has determined is necessary
to preserve the current all-in yield (including interest rate margins, any
interest rate floors, original issue discount and upfront fees, but without
regard to future fluctuations of such alternative index, it being acknowledged
and agreed that neither Agent nor any Lender shall have any liability whatsoever
from such future fluctuations) to use as the basis for the Libor Rate Index. The
Libor Rate Index may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs,
in each case, due to changes in applicable Law occurring subsequent to the
commencement of the then Applicable Interest Period, including changes in tax
laws (except changes of general applicability in corporate income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), which additional or increased costs
would increase the cost of funding loans bearing interest based upon the Libor
Rate Index; provided, however, that notwithstanding anything in this Agreement
to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection
Act and all requests, rules, guidelines or directives thereunder or issued in
connection therewith and (ii) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign
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regulatory authorities, in each case pursuant to Basel III, shall in each case
be deemed to be a “change in applicable Law”, regardless of the date enacted,
adopted or issued. In any such event, the affected Lender shall give Borrower
and Agent notice of such a determination and adjustment and Agent promptly shall
transmit the notice to each other Lender and, upon its receipt of the notice
from the affected Lender, Borrower may, by notice to such affected Lender
require such Lender to furnish to Borrower a statement setting forth the basis
for adjusting such Libor Rate Index and the method for determining the amount of
such adjustment.
“Lien” means a claim, mortgage, deed of trust, lien, levy, charge, pledge,
security interest or other encumbrance of any kind, whether voluntarily incurred
or arising by operation of Law or otherwise against any property.
“Margin Stock” means “margin stock” as such term is defined in Regulation T, U,
or X of the Board of Governors of the Federal Reserve System.
“Material Adverse Change” means (a) a material impairment in the perfection or
priority of Agent’s Lien (or any Lender’s Lien therein to the extent provided
for in the Financing Documents) in the Collateral (other than solely as a result
of any action or inaction of Agent or Lenders provided that such action or
inaction is not caused by a Credit Party’s failure to comply with the terms of
the Financing Documents); (b) a material impairment in the value of the
Collateral; (c) a material adverse change in the business, operations, or
financial condition or prospects of any Credit Party; or (d) a material
impairment of the prospect of repayment of any portion of the Obligations.
“Material Agreement” means (a) each agreement or contract that is filed by a
Credit Party with the SEC as a material agreement (other than employee or
director compensation agreements, arrangements or plans or any amendments
thereto) and (b) each agreement or contract to which such Credit Party or its
Subsidiaries is a party the termination of which could reasonably be expected to
result in a Material Adverse Change.
“Material Indebtedness” has the meaning given it in Section 10.1(e).
“Material Intangible Assets” means (a) all of Borrower’s and its Subsidiaries’
Intellectual Property and (b) each license or sublicense agreements or other
agreements with respect to rights in Intellectual Property, that, in the case of
each of clauses (a) and (b), is material to the condition (financial or other),
business or operations of Borrower and its Subsidiaries, as determined by Agent.
“Maturity Date” means October 1, 2025.
“Maximum Lawful Rate” has the meaning given it in Section 2.6(g).
“MidCap” has the meaning given it in the preamble of this Agreement.
“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) or ERISA, to which any Credit Party or any ERISA Affiliate
has at any time (whether presently or in the past) sponsored, maintained,
contributed to, or had an obligation to make contributions to or to which any
Credit Party or any ERISA Affiliate has any liability, contingent or otherwise.
“Obligations” means all of Borrower’s obligations to pay when due any debts,
principal, interest, Protective Advances, fees, indemnities and other amounts
Borrower owes Agent or the Lenders now or later, under this Agreement or the
other Financing Documents, including, without limitation, interest
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accruing after Insolvency Proceedings begin (whether or not allowed) and debts,
liabilities, or obligations of Borrower assigned to the Lenders and/or Agent,
and the payment and performance of each other Credit Party’s covenants and
obligations under the Financing Documents. “Obligations” does not include
obligations under any warrants issued to Agent or a Lender.
“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.
“Operating Documents” means, for any Person, such Person’s formation documents,
as certified with the Secretary of State of such Person’s state of formation on
a date that is no earlier than thirty (30) days prior to the Closing Date, and
(a) if such Person is a corporation, its bylaws in current form, (b) if such
Person is a limited liability company, its limited liability company agreement
(or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current
amendments or modifications thereto.
“Ordinary Course of Business” means, in respect of any transaction involving any
Credit Party, the ordinary course of business of such Credit Party, as conducted
by such Credit Party in accordance with past practices or then current business
practices set forth in the most recent operating plan of Borrower to the extent
approved by Agent, or reasonably related thereto, which shall in any event be at
arms-length.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising solely from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced this
Agreement, or sold or assigned an interest in any Obligation hereunder).
“Other Tax Certification” means such certification or evidence, in each case in
form and substance reasonably satisfactory to Agent and Borrower, that any
Lender or prospective Lender is exempt from, or eligible for a reduction in,
U.S. federal withholding tax or backup withholding tax, including evidence
supporting the basis for such exemption or reduction.
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, this Agreement, except any such Taxes that are Other Connection
Taxes imposed with respect to an assignment (other than an assignment made
pursuant to Section 2.6(h)(xi)).
“Parent” has the meaning set forth in the preamble.
“Participant Register” has the meaning given it in Section 13.1(c).
“Payment Date” means the first (1st) calendar day of each calendar month.
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor entity
thereto.
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“Pension Plan” means any employee benefit pension plan that is subject to the
minimum funding standards under Section 412 of the IRC or is covered by Title IV
of ERISA (including a Multiemployer Plan) that any Credit Party or any ERISA
Affiliate has, at any time (whether presently or in the past) sponsored,
maintained, contributed to, or had an obligation to make contributions to or to
which any Credit Party or any ERISA Affiliate has any liability (contingent or
otherwise).
“Perfection Certificate” means the Perfection Certificate delivered to Agent as
of the Closing Date, together with any amendments thereto required under this
Agreement.
“Permitted Contest” has the meaning given it in Section 6.4.
“Permitted Contingent Obligations” means:
(a)    Contingent Obligations resulting from endorsements for collection or
deposit in the Ordinary Course of Business;
(b)    Contingent Obligations incurred in the Ordinary Course of Business with
respect to surety and appeal bonds, performance bonds and other similar
obligations not to exceed Two Hundred and Fifty Thousand Dollars ($250,000) in
the aggregate at any time outstanding;
(c)    Contingent Obligations arising under indemnity agreements with title
insurers;
(d)    Contingent Obligations arising with respect to customary indemnification
obligations in favor of purchasers in connection with dispositions of personal
property assets permitted under Section 7.1;
(e)    Contingent Obligations arising under the Financing Documents;
(f)    so long as there exists no Event of Default both immediately before and
immediately after giving effect to any such transaction, Contingent Obligations
existing or arising under any swap contract, provided, however, that such
obligations are (or were) entered into by Borrower or an Affiliate in the
Ordinary Course of Business for the purpose of directly mitigating risks
associated with liabilities, commitments, investments, assets, or property held
or reasonably anticipated by such Person and not for purposes of speculation;
(g)    Contingent Obligations existing or arising in connection with any
security deposit or letter of credit obtained for the sole purpose of securing a
lease of real property in an aggregate amount that does not at any time exceed
One Million Dollars ($1,000,000);
(h)    Contingent Obligations existing or arising or in connection with
ancillary bank services such as a corporate credit card facility, provided that
the aggregate outstanding amount of all such ancillary bank services obligations
does not at any time exceed One Million Dollars ($1,000,000);
(i)    Guaranties by a Credit Party of Permitted Indebtedness of another Credit
Party incurred in the Ordinary Course of Business; provided, any such guaranty
shall be subordinated to the Obligations to the same extent and on the same
terms and conditions as the Indebtedness guaranteed has been subordinated to the
Obligations; and
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(j)    other Contingent Obligations not permitted by clauses (a) through (i)
above, not to exceed One Million Dollars ($1,000,000) in the aggregate at any
time outstanding.
“Permitted Distributions” means:
(a)    dividends payable solely in common stock and made in the Ordinary Course
of Business;
(b)    repurchases of stock of former or current employees, directors, officers
or consultants pursuant to stock purchase agreements, employee stock purchase
plans, employee restricted stock agreements or similar plans in an aggregate
amount not to exceed One Hundred Thousand Dollars ($100,000) each calendar year;
(c)    repurchases of stock of former or current employees, directors, officers
or consultants pursuant to stock repurchase agreements by the cancellation of
indebtedness owed by such former employees, directors, officers or consultants
(and not, for the avoidance of doubt, by the payment of cash or Cash Equivalents
by any Credit Party or Subsidiary thereof);
(d)    payment of dividends or the making of distributions by any Subsidiary to
a Borrower;
(e)    conversions of convertible securities (including warrants and options)
into other equity securities (other than Disqualified Stock) pursuant to the
terms of such convertible securities or otherwise in exchange thereof;
(f)    issuance of other non-cash equity compensation (and acceleration of
vesting thereof), including retention bonuses, to its officers, directors and
other employees to the extent not constituting Disqualified Stock and issued in
the Ordinary Course of Business;
(g)    de minimis cash payable in lieu of issuing fractional shares; and
(h)    repurchases of stock deemed to occur upon exercise of stock options or
warrants if such stock represents a portion of the exercise price of such
options or warrants and repurchases of stock deemed to occur upon the
withholding of a portion of the stock granted or awarded; provided that no cash
or Cash Equivalents shall be paid by any Credit Party or any Subsidiary thereof
in connection with such repurchase expect to the extent otherwise constituting a
Permitted Distribution.
“Permitted Indebtedness” means:
(a)    Borrower’s Indebtedness to the Lenders and Agent under this Agreement and
the other Financing Documents;
(b)    Indebtedness existing on the Closing Date and described on the Disclosure
Schedule on the Closing Date;
(c)    Indebtedness secured by Liens permitted pursuant to clause (b) of the
definition of “Permitted Liens” so long as before and immediately after giving
effect to the incurrence of such Indebtedness, no Event of Default has occurred
and is continuing;
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(d)    Subordinated Debt;
(e)    unsecured Indebtedness to trade creditors incurred in the Ordinary Course
of Business;
(f)    Permitted Contingent Obligations;
(g)    extensions, refinancings, modifications, amendments and restatements of
any items of Permitted Indebtedness set forth in (b) and (c) above, provided,
however, that the principal amount thereof is not increased and the terms
thereof are not modified to impose more burdensome terms upon the obligors
thereunder;
(h)    Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits (other than ERISA) pursuant to
reimbursement or indemnification obligations to such Person, in each case in the
Ordinary Course of Business;
(i)    Indebtedness in respect of netting services, overdraft protections,
payment processing, automatic clearinghouse arrangements, arrangements in
respect of pooled deposit or sweep accounts, check endorsement guarantees, and
other similar obligations in respect of Deposit Accounts or Securities Accounts,
in each case so long as such Indebtedness is incurred in the Ordinary Course of
Business and is unsecured;
(j)    Indebtedness owed to any Person providing property, casualty, liability,
or other insurance to the Credit Parties, including to finance insurance
premiums, so long as the amount of such Indebtedness is not in excess of the
amount of the unpaid cost of, and shall be incurred only to defer the cost of,
such insurance for the policy year in which such Indebtedness is incurred and
such Indebtedness is outstanding only during such policy year;
(k)    Indebtedness consisting of unsecured intercompany loans and advances
incurred by any Credit Party owing to any other Credit Party;
(l)    Indebtedness incurred as a result of endorsing negotiable instruments
received in the Ordinary Course of Business;
(m)    Indebtedness in respect custom duties relating to the importation or
exportation of goods incurred in the Ordinary Course of Business; and
(n)    Other unsecured Indebtedness not exceeding One Million Dollars
($1,000,000) at any time outstanding.
“Permitted Investments” means
(a)    Investments existing on the Closing Date and described on the Disclosure
Schedule on the Closing Date;
(b)    (i) the holding of Cash Equivalents to the extent constituting an
Investment and (ii) Investments in liquid assets permitted by Borrower’s
investment policy, as amended from time to time, provided that such investment
policy (and any such amendment thereto) has been approved in writing by Agent
(provided that, under no circumstances shall Borrower be permitted to invest in
or hold Margin Stock);
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(c)    Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of any
Credit Party;
(d)    Investments consisting of Deposit Accounts or Securities Accounts in
which Agent has a first priority perfected security interest except as otherwise
provided by Section 6.6;
(e)    Investments consisting of (i) travel advances and employee relocation
loans and other employee loans and advances in the Ordinary Course of Business,
and (ii) loans to employees, officers or directors relating to the purchase of
equity securities of Borrower or its Subsidiaries pursuant to employee stock
purchase plans or agreements approved by Borrower’s board of directors in the
Ordinary Course of Business and in an aggregate amount not to exceed Two Hundred
Fifty Thousand Dollars ($250,000) in any calendar year;
(f)    Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the Ordinary Course of Business;
(g)    so long as no Event of Default exists or results therefrom, the granting
of Permitted Licenses;
(h)    Investments consisting of accounts receivable created, acquired or made
and trade credit extended to customers and suppliers who are not Affiliates of a
Credit Party in the Ordinary Course of Business and payable in accordance with
customary trade terms; and
(i)    so long as no Event of Default exists or results therefrom, other
Investments of cash and Cash Equivalents in an amount not exceeding One Million
Dollars ($1,000,000) in the aggregate during the term of this Agreement.
“Permitted License” means:
(a)    Licenses existing on the Closing Date and described on the Disclosure
Schedule, as such License exists on the Closing Date and without giving effect
to any further licenses granted thereunder except to the extent otherwise
constituting a Permitted License under clauses (b)-(d) below;
(b)    any non-exclusive license of Intellectual Property rights of Borrower or
its Subsidiaries so long as all such Permitted Licenses (i) are granted to third
parties in the Ordinary Course of Business, (ii) do not result in a legal
transfer of title to the licensed property, and (iii) have been granted in
exchange for fair consideration and on commercially reasonable arms’ length
terms;
(c)    any exclusive license of Intellectual Property rights of Borrower or its
Subsidiaries so long as all such Permitted Licenses (i) are granted to third
parties in the Ordinary Course of Business, (ii) do not result in a legal
transfer of title to the licensed property, (iii) have been granted in exchange
for fair consideration and on commercially reasonable arms’ length terms, (iv)
no Event of Default is existing at the time such license is granted or would
result from the granting thereof and (v) is exclusive solely as to (A) discrete
geographical areas outside of North America and/or (B) with respect to any drug
candidate which is (x) not a Product at the time such license is granted and (y)
for a specific target or for a specific indication (and not exclusive in any
other respect); and
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(d)    any exclusive license of Intellectual Property with respect to discrete
Products or fields to the extent Agent and Required Lenders have consented in
advance in writing to such license (such consent to be given or withheld in the
Agent’s and Required Lenders’ reasonable discretion).
“Permitted Liens” means:
(a)    Liens existing on the Closing Date and shown on the Disclosure Schedule
on the Closing Date;
(b)    Liens arising under this Agreement and the other Financing Documents;
(c)    purchase money Liens or capital leases securing no more than one hundred
thousand dollars ($100,000.00) in the aggregate amount outstanding (i) on
Equipment acquired or held by a Credit Party incurred for financing the
acquisition of the Equipment, or (ii) existing on Equipment when acquired, if
the Lien is confined to the property and improvements and the proceeds of the
Equipment, so long as, in each case, before and immediately after giving effect
to the incurrence of such Liens, no Event of Default has occurred and is
continuing;
(d)    Liens for Taxes, fees, assessments or other government charges or levies,
either not delinquent or being contested in good faith and for which adequate
reserves are maintained on the Books of the Credit Party against whose asset
such Lien exists;
(e)    statutory Liens securing claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other Persons imposed without action of
such parties, which are not due, or which are being contested in good faith and
for which adequate reserves are maintained on the Books of the Credit Party
against whose asset such Lien exists;
(f)    leases or subleases of real property granted in the Ordinary Course of
Business, and leases, subleases, non-exclusive licenses or sublicenses of
property (other than real property or Intellectual Property) granted in the
Ordinary Course of Business, if the leases, subleases, licenses and sublicenses
do not prohibit granting Agent a security interest;
(g)    Liens to secure payment of workers’ compensation, employment insurance,
old-age pensions, social security and other like obligations incurred in the
Ordinary Course of Business (other than Liens imposed by ERISA);
(h)    Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default;
(i)    easements, reservations, rights-of-way, restrictions, minor defects or
irregularities in title and similar charges or encumbrances affecting real
property not constituting a Material Adverse Change;
(j)    purported Liens evidenced by the filing of precautionary UCC financing
statements relating solely to operating leases or consignments of personal
property entered into the Ordinary Course of Business;
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(k)    Liens that are rights of set-off, bankers’ liens or similar
non-consensual Liens relating to deposit or securities accounts in favor of
banks, other depositary institutions and securities intermediaries arising in
the Ordinary Course of Business;
(l)    Liens in favor of customs and revenue authorities arising as a matter of
Law to secure payment of customs duties in connection with the importation of
goods in the Ordinary Course of Business;
(m)    to the extent constituting a Lien and so long as no Event of Default has
occurred and is continuing, the granting of a Permitted License;
(n)    Liens granted in the Ordinary Course of Business on the unearned portion
of insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted in clause (k) of the definition of Permitted
Indebtedness;
(o)    certificates of deposit and/or segregated cash collateral accounts
serving solely as collateral in connection with corporate credit cards or other
bank services permitted under clause (h) of the definition of “Permitted
Contingent Obligations”, provided that the aggregate amount of such certificates
of deposit or segregated cash collateral accounts does not exceed the aggregate
amount of such Permitted Contingent Obligations;
(p)    customary indemnification obligations relating to any asset disposition
expressly permitted pursuant to the terms of this Agreement; and
(q)    Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) and (b) above, but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the Indebtedness may not increase.
“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.
“Pledge Agreement” means that certain Pledge Agreement, dated as of the date
hereof, executed by Borrower in favor of Agent, for the benefit of Lenders,
covering all the equity interests respectively owned by the Credit Parties, as
amended, restated, or otherwise modified from time to time.
“Pro Rata Share” means, as determined by Agent, with respect to each Credit
Facility and Lender holding an Applicable Commitment or Credit Extensions in
respect of such Credit Facility, a percentage (expressed as a decimal, rounded
to the ninth decimal place) determined by dividing (a) in the case of
fully-funded Credit Facilities, the amount of Credit Extensions held by such
Lender in such Credit Facility by the aggregate amount of all outstanding Credit
Extensions for such Credit Facility, and (b) in the case of Credit Facilities
that are not fully-funded, the amount of Credit Extensions and unfunded
Applicable Commitments held by such Lender in such Credit Facility by the
aggregate amount of all outstanding Credit Extensions and unfunded Applicable
Commitments for such Credit Facility.
“Products” means any products manufactured, sold, developed, tested or marketed
by any Borrower or any of its Subsidiaries, in each case with respect to which
such Borrower or Subsidiary (or any Person who owned or had the rights to such
product prior such Borrower or Subsidiary) (a) has received approval for an
investigational new drug application from FDA, or (b) has commenced any trial
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in which humans are being dosed, including without limitation, those products
set forth on the Products Schedule (as updated from time to time in accordance
with Section 6.16); provided that, for the avoidance of doubt, any new Product
not disclosed on the Products Schedule shall still constitute a “Product” as
herein defined.
“Protective Advances” means all audit fees and expenses, costs, and expenses
(including reasonable attorneys’ fees and expenses) of Agent and the Lenders for
preparing, amending, negotiating, administering, defending and enforcing the
Financing Documents (including, without limitation, those incurred in connection
with appeals or Insolvency Proceedings) or otherwise incurred by Agent or the
Lenders in connection with the Financing Documents.
“Recipient” means Agent and any Lender, as applicable.
“Register” has the meaning given it in Section 13.1(c).
“Registered Intellectual Property” means any registered patent, registered
trademark or servicemark, registered copyright, registered mask work, or any
pending application for any of the foregoing.
“Registered Organization” means any “registered organization” as defined in the
Code, with such additions to such term as may hereafter be made.
“Regulatory Reporting Event” has the meaning given it in Section 6.16(a).
“Regulatory Required Permit” means any and all licenses, approvals and permits
issued by the FDA, DEA or any other applicable Governmental Authority, including
without limitation Drug Applications, necessary for the testing, manufacture,
marketing or sale of any Product or any other product by any applicable
Borrower(s) and its Subsidiaries as such activities are being conducted by such
Borrower and its Subsidiaries with respect to such Product or product at such
time and any drug listings and drug establishment registrations under 21 U.S.C.
Section 510, registrations issued by DEA under 21 U.S.C. Section 823 (if
applicable to any Product or product), and those issued by State governments for
the conduct of Borrower’s or any Subsidiary’s business.
“Required Lenders” means, unless all of the Lenders and Agent agree otherwise in
writing, Lenders having more than sixty percent (60%) of the Applicable
Commitments of the Lenders or (to the extent such Applicable Commitments have
expired or been terminated (including by way of funding)) more than sixty
percent (60%) of the aggregate outstanding principal amount of the Credit
Extensions held by the Lenders; provided, however, that so long as Silicon
Valley Bank and MidCap Financial Trust do not assign any portion of their
Applicable Commitment or all or any part of their Credit Extensions (other than,
in each case, an assignment to any Affiliate or Approved Fund of such Lender),
the “Required Lenders” shall include such Lender (or such Affiliate or Approved
Fund of such Lender).
“Required Permit” means all licenses, certificates, accreditations, product
clearances or approvals, provider numbers or provider authorizations, supplier
numbers, provider numbers, marketing authorizations, other authorizations,
registrations, permits, consents and approvals of a Credit Party issued or
required under Laws applicable to the business of Borrower or any of its
Subsidiaries or necessary in the manufacturing, importing, exporting,
possession, ownership, warehousing, marketing, promoting, sale, labeling,
furnishing, distribution or delivery of goods or services under Laws applicable
to the business of Borrower or any of its Subsidiaries. Without limiting the
generality of the foregoing, “Required Permits” includes any Regulatory Required
Permit.
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“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor Governmental Authority) for determining the reserve requirements
(including any basic, supplemental, marginal, or emergency reserves) that are in
effect on such date with respect to eurocurrency funding (currently referred to
as “eurocurrency liabilities”) of that Lender, but so long as such Lender is not
required or directed under applicable regulations to maintain such reserves, the
Reserve Percentage shall be zero.
“Responsible Officer” means any of the President and Chief Executive Officer or
Chief Financial Officer of Borrower.
“Secretary’s Certificate” means, with respect to any Person, a certificate, in
form and substance satisfactory to Agent, executed by such Person’s secretary
(or other appropriate officer acceptable to Agent in its sole but reasonable
discretion) on behalf of such Person certifying (a) that such Person has the
authority to execute, deliver, and perform its obligations under each of the
Financing Documents to which it is a party, (b) that attached to such
certificate is a true, correct, and complete copy of the Borrowing Resolutions
then in full force and effect authorizing and ratifying the execution, delivery,
and performance by such Person of the Financing Documents to which it is a
party, (c) the name(s) of the Person(s) authorized to execute the Financing
Documents on behalf of such Person, together with a sample of the true
signature(s) of such Person(s), and (d) that attached to such certificate are
true, correct, and complete copies of the Operating Documents of Borrower and
good standing certificates of Borrower certified by the Secretary of State of
the state(s) of organization of Borrower as of a date no earlier than thirty
(30) days prior to the Closing Date has been delivered to Agent.
“Secured Promissory Note” has the meaning given it in Section 2.7.
“Securities Account” means any “securities account”, as defined in the Code,
with such additions to such term as may hereafter be made.
“Security Documents” means, collectively, the Pledge Agreement, each IP Security
Agreement (at all times after such agreement becomes effective in accordance
with the terms of this Agreement), each Control Agreement, and each other
agreement, document or instrument executed concurrently herewith or at any time
hereafter pursuant to which one (1) or more Credit Parties or any other Person
provides, as security for all or any portion of the Obligations, a Lien on any
of its assets in favor of Agent for its own benefit and the benefit of the
Lenders, as any or all of the same may be amended, supplemented, restated or
otherwise modified from time to time.
“Springing IP Lien Event” means that, on any date, the Borrowers have allowed,
as of the close of business on such date, the aggregate Borrower Unrestricted
Cash to be less than $30,000,000.
“Stated Rate” has the meaning given it in Section 2.6(g).
“Subordinated Debt” means indebtedness incurred by Borrower which shall be (a)
in an amount satisfactory to Agent and the Required Lenders, (b) made pursuant
to documents in form and substance satisfactory to Agent and the Required
Lenders (the “Subordinated Debt Documents”), and (c) subordinated to all of
Borrower’s now or hereafter indebtedness to Agent and the Lenders pursuant to a
Subordination Agreement.
“Subordination Agreement” means a subordination, intercreditor, or other similar
agreement in form and substance, and on terms, approved by Agent and the
Required Lenders in writing.
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“Subsidiary” means, with respect to any Person, any Person of which more than
fifty percent (50.0%) of the voting stock or other equity interests (in the case
of Persons other than corporations) is owned or controlled, directly or
indirectly, by such Person. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
“Transfer” has the meaning given it in Section 7.1.
“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the IRC.
“Withholding Agent” means Borrower and/or Agent.
[SIGNATURES APPEAR ON FOLLOWING PAGES]

76    
MidCap / Exicure / Credit and Security Agreement

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Closing Date.

BORROWER:
EXICURE, INC.

By:/s/ David GiljohannName:David GiljohannTitle:CEO

BORROWER:
Exicure Operating Company

By:/s/ David GiljohannName:David GiljohannTitle:CEO

CREDIT AGREEMENT
SIGNATURE PAGE

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AGENT:
MIDCAP FINANCIAL TRUST
By:     Apollo Capital Management, L.P.,
its investment manager
By:    Apollo Capital Management GP, LLC,
its general partner

By:
/s/ Maurice Amsellem
Name:Maurice AmsellemTitle:Authorized Signatory

CREDIT AGREEMENT
SIGNATURE PAGE

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LENDERS:
MIDCAP FINANCIAL TRUST
By:     Apollo Capital Management, L.P.,
its investment manager
By:    Apollo Capital Management GP, LLC,
its general partner

By:
/s/ Maurice Amsellem
Name:Maurice AmsellemTitle:Authorized Signatory

CREDIT AGREEMENT
SIGNATURE PAGE

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LENDERS:
SILICON VALLEY BANK

By:
/s/ Tom Hertberg
Name:Tom HertzbergTitle:Managing Director

CREDIT AGREEMENT
SIGNATURE PAGE

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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A    Collateral
Exhibit B    Form of Compliance Certificate
Exhibit C    Credit Extension Form
SCHEDULES
Credit Facility Schedule
Amortization Schedule (for each Credit Facility)
Post-Closing Obligations Schedule
Closing Deliveries Schedule
Disclosure Schedule
Intangible Assets Schedule
Products Schedule
Required Permits Schedule

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EXHIBIT A
COLLATERAL
The Collateral consists of all assets of each Borrower (other than Excluded
Property), including, without limitation, all of such Borrower’s right, title
and interest in and to the following, whether now owned or hereafter created,
acquired or arising:
(a)    all Goods, Accounts (including health-care insurance receivables),
Equipment, Inventory, Contracts together with all Contract Rights or rights to
payment of money, leases, license agreements, franchise agreements, General
Intangibles, IP Proceeds, Commercial Tort Claims (including each such claim
listed on the Disclosure Schedule), Documents, Instruments (including any
promissory notes), Chattel Paper (whether tangible or electronic), Vehicles and
title documents with respect to Vehicles, cash, Deposit Accounts, Securities
Accounts, Commodity Accounts and other Collateral Accounts, all certificates of
deposit, Fixtures, Letters of Credit Rights (whether or not the letter of credit
is evidenced by a writing), Securities, and all other Investment Property,
Supporting Obligations, and Financial Assets, whether now owned or hereafter
acquired, wherever located;
(b)    all of such Borrower’s Books relating to the foregoing and all rights of
access to Borrower’s Books; and
(c)    and any and all claims, rights and interests in any of the above and all
substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of
any or all of the foregoing.
Pursuant to the terms of a certain negative pledge agreement with Agent and the
Lenders, each Borrower has agreed not to encumber any of its Intellectual
Property without Agent’s and the Lenders’ prior written consent.

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EXHIBIT B
COMPLIANCE CERTIFICATE
TO:            MidCap Financial Trust, as Agent
FROM:     __________________________________
DATE:         ________________, 20__
The undersigned authorized officer of Exicure, Inc., a Delaware corporation
(“Borrower”) certifies that under the terms and conditions of the Credit and
Security Agreement between Borrower, Agent and the Lenders (as amended,
restated, supplemented, replaced or otherwise modified from time to time, the
“Agreement”):
(1)     Borrower is in complete compliance with all required covenants for the
month ending _______________, 202__, except as noted below;
(2)     there are no Events of Default; except as set forth in Schedule 1
hereto, which includes a description of the nature and period of existence of
such Event of Default and what action Borrowers have taken, are undertaking and
propose to take with respect thereto;
(3)     all representations and warranties in the Agreement are true and correct
in all material respects on this date except as noted below; provided, however,
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further, that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date;
(4)     Each of Borrower and the other Credit Parties has timely filed all
required tax returns and reports, and has timely paid all foreign, federal,
state and local taxes, assessments, deposits and contributions owed except as
otherwise permitted pursuant to the terms of the Agreement;
(5)     no Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Agent; and
(6)    attached hereto is an updated [Disclosure Schedule][Required Permits
Schedule][Products Schedule][Intangible Assets Schedule][INSERT AS APPROPRIATE]
as required to be updated pursuant to the terms of the Credit and Security
Agreement.
(7)    attached hereto are copies of each new Material Agreement and/or any new
material amendment, consent, waiver or other modification to any Material
Agreement not previously disclosed to Agent.
(8)    the aggregate amount of Borrower Unrestricted Cash as of the date hereof
is $__________.
Attached are the required documents supporting the certifications set forth in
this Compliance Certificate. The undersigned certifies, in his/her capacity as
an officer of Borrower, that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes, and subject to normal year-end audit
adjustments and the absence of footnotes with respect to unaudited financials.
The undersigned acknowledges, in his/her capacity as

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an officer of Borrower, that no borrowings may be requested at any time or date
of determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered. Capitalized terms used but not otherwise defined
herein shall have the meanings given them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.
Reporting Covenant

RequiredCompliesMonthly Financial StatementsMonthly within 30 daysYes NoAudited
Financial StatementsAnnually within 90 days after FYE
Yes No

Board Approved ProjectionsAnnually within 30 days after FYE
Yes No

Compliance CertificateMonthly within 30 days
Yes No

Minimum Borrower Unrestricted Cash

Monthly within 30 days
Yes No

The following are the exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions to note.”)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[PARENT BORROWER]

By:    
Name:    
Title:    

AGENT USE ONLY

Received by: _____________________
authorized signer
Date:     _________________________

Verified: ________________________
authorized signer
Date:     _________________________

Compliance Status:    Yes No

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EXHIBIT C
CREDIT EXTENSION Form
Deadline is Noon New York Time
Date: __________________, 201__

Loan Advance:
Complete Outgoing Wire Request section below if all or a portion of the funds
from this loan advance are for an outgoing wire.
From Account #________________________________    To Account
#_________________________________(Loan Account
#)                        (Deposit Account #)Amount of Advance
$___________________________Requested Date of Advance (subject to requirements
of Credit and Security Agreement): ______________
All of Borrower’s representations and warranties in the Credit and Security
Agreement are true, correct and complete in all material respects on the date of
the request for an advance; provided, however, that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof; and provided, further,
that those representations and warranties expressly referring to a specific date
shall be true, accurate and complete in all material respects as of such date:
Authorized Signature:        Phone Number:     _______
Print Name/Title:    

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Outgoing Wire Request:Complete only if all or a portion of funds from the loan
advance above is to be wired.
Beneficiary Name: _____________________________        Amount of Wire: $    
Beneficiary Lender: ____________________________        Account Number:    
City and State:    
Beneficiary Lender Transit (ABA) #:         Beneficiary Lender Code (Swift,
Sort, Chip, etc.):    
(For International Wire Only)
Intermediary Lender:         Transit (ABA) #:    
For Further Credit to:    
Special Instruction:    
By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me.
Authorized Signature: ___________________________    2nd Signature (if
required): ________________________
Print Name/Title: ______________________________    Print Name/Title:
_______________________________
Telephone #:                  Telephone #:

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CREDIT FACILITY SCHEDULE
The following Credit Facilities are specified on this Credit Facility Schedule:
Credit Facility #1:
Credit Facility and Type:    Term, Tranche 1
Lenders for and their respective Applicable Commitments to this Credit Facility:

LenderApplicable Commitment
MidCap Financial Trust
Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000)Silicon Valley
BankEight Million Seven Hundred Fifty Thousand Dollars
($8,750,000)Total:Seventeen Million Five Hundred Thousand Dollars
($17,500,000.00)

    
The following defined terms apply to this Credit Facility:
Applicable Interest Period: means the one-month period starting on the first
(1st) day of each month and ending on the last day of such month; provided,
however, that the first (1st) Applicable Interest Period for each Credit
Extension under this Credit Facility shall commence on the date that the
applicable Credit Extension is made and end on the last day of such month.
Applicable Floor: means one and one-half percent (1.50%) per annum for the
Applicable Libor Rate.
Applicable Margin: a rate of interest equal to six and one-quarter percent
(6.25%) per annum.
Applicable Prepayment Fee: means the following amount, calculated as of the date
(the “Accrual Date”) that the Applicable Prepayment Fee becomes payable in the
case of prepayments required under the Financing Documents or the date any
voluntary prepayment is made: (a) for an Accrual Date on or after the Closing
Date through and including the date which is twelve (12) months after the
Closing Date, three percent (3.0%) multiplied by the amount of the outstanding
principal of the Credit Extension prepaid or required to be prepaid (whichever
is greater); and (b) for an Accrual Date on or after the date which is twelve
(12) months after the Closing Date through and including the date immediately
preceding the Maturity Date, one percent (1.0%) multiplied by the amount of the
outstanding principal of the Credit Extension prepaid or required to be prepaid
(whichever is greater).
Commitment Commencement Date: Closing Date.
Commitment Termination Date:    the close of the Business Day following the
Closing Date.
Minimum Credit Extension Amount: $17,500,000.00

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Credit Facility #2:
Credit Facility and Type:    Term, Tranche 2
Lenders for and their respective Applicable Commitments to this Credit Facility:

LenderApplicable CommitmentMidCap Financial TrustThree Million Seven Hundred
Fifty Thousand Dollars ($3,750,000)Silicon Valley BankThree Million Seven
Hundred Fifty Thousand Dollars ($3,750,000)Total:Seven Million Five Hundred
Thousand Dollars ($7,500,000.00)

The following defined terms apply to this Credit Facility:
Applicable Interest Period: means the one-month period starting on the first
(1st) day of each month and ending on the last day of such month; provided,
however, that the first (1st) Applicable Interest Period for each Credit
Extension under this Credit Facility shall commence on the date that the
applicable Credit Extension is made and end on the last day of such month.
Applicable Floor: means one and one-half percent (1.50%) per annum for the
Applicable Libor Rate.
Applicable Margin: a rate of interest equal to six and one-quarter percent
(6.25%) per annum.
Applicable Prepayment Fee: means the following amount, calculated as of the date
(the “Accrual Date”) that the Applicable Prepayment Fee becomes payable in the
case of prepayments required under the Financing Documents or the date any
voluntary prepayment is made: (a) for an Accrual Date on or after the Closing
Date through and including the date which is twelve (12) months after the
Closing Date, three percent (3.0%) multiplied by the amount of the outstanding
principal of the Credit Extension prepaid or required to be prepaid (whichever
is greater); and (b) for an Accrual Date on or after the date which is twelve
(12) months after the Closing Date through and including the date immediately
preceding the Maturity Date, one percent (1.0%) multiplied by the amount of the
outstanding principal of the Credit Extension prepaid or required to be prepaid
(whichever is greater).
Commitment Commencement Date: April 1, 2021.
Commitment Termination Date: the earlier to occur of (a) September 30, 2021, and
(b) the date on which the Applicable Commitments are terminated in accordance
with Section 10.2(a).

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AMORTIZATION SCHEDULE (FOR EACH CREDIT FACILITY)
Credit Facility #1
Commencing on October 1, 2022 (the “Amortization Start Date”) and continuing on
the first day of each calendar month thereafter, Borrower shall pay to Agent as
a principal payment on the Credit Extensions in respect of Credit Facility #1 an
amount equal to the aggregate amount of all Credit Extensions in respect of
Credit Facility #1 made to Borrower hereunder divided by thirty-six (36), for a
thirty-six (36) month straight-line amortization of equal monthly principal.
Credit Facility #2
Commencing on the Amortization Start Date and continuing on the first day of
each calendar month thereafter, Borrower shall pay to Agent as a principal
payment on the Credit Extensions in respect of Credit Facility #2 an amount
equal to the aggregate amount of all Credit Extensions in respect of Credit
Facility #2 made to Borrower hereunder divided by thirty-six (36), for a
thirty-six (36) month straight-line amortization of equal monthly principal.
Notwithstanding anything to the contrary contained in the foregoing, the entire
remaining outstanding principal balance under all Credit Extensions shall mature
and be due and payable upon the Maturity Date.

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POST CLOSING OBLIGATIONS SCHEDULE
Borrower shall satisfy and complete each of the following obligations, or
provide Agent with each of the items listed below, as applicable, on or before
the date indicated below, all to the satisfaction of Agent in its sole and
absolute discretion:
1.By the date that is two (2) Business Days after the Closing Date (or such
later date as Agent and Required Lenders may agree in writing), Borrower shall
provide Agent with duly executed copies of Control Agreement with respect to
each Deposit Account and Securities Account (other than, in eac case, any
Excluded Accounts) at SVB, UBS and CIBC.
2.By the date that is thirty (30) days after the Closing Date (or such later
date as Agent may agree in writing), Borrower shall provide Agent with duly
executed copies of Control Agreements with respect to each Deposit Account and
Securities Account (other than, in each case, Excluded Accounts) in existence as
of the Closing Date and for which a Control Agreement was not provided on the
Closing Date or pursuant to paragraph 1 above (collectively, the “Post-Closing
Control Agreements”); provided that the Credit Parties shall not maintain, at
any point during the period commencing on the date that is three (3) Business
Days after the Closing Date and ending on the date on which the post-closing
condition set forth in this paragraph has been satisfied, funds on deposit in
the Deposit Accounts and Securities Accounts for which Post-Closing Control
Agreements are required in the aggregate amount greater than $5,000,000 for all
such Deposit Accounts and Securities Accounts.
3.By the date that is thirty (30) days after the Closing Date (or such later
date as Agent may agree in writing), with respect to the insurance policies
required by Article 6, Borrower shall provide Agent with appropriate evidence
showing loss payable and/or additional insured clauses or endorsements in favor
of Agent, for the ratable benefit of the Lenders.
4.By the date that is thirty (30) days after the Closing Date (or such later
date as Agent may agree in Writing), Borrower shall provide to Agent a fully
executed Access Agreement with respect to Borrower’s facilities located at 2430
N. Halsted St., Chicago, IL 60614.
5.By the date that is thirty (30) days after the Closing Date (or such later
date as Agent may agree in writing), Borrower shall provide Agent with the
original stock certificates and accompanying duly-executed and undated stock
powers (or similar instrument of transfer) with respect to Exicure Operating
Company.

6.By the date that is five (5) Business Days after the Closing Date (or such
later date as Agent may agree in writing), Borrower shall deliver to Agent a
good standing certificate to the effect that Exicure Operating Company is
qualified to transact business in all states in which the nature of Borrower’s
business so requires.

Borrower’s failure to complete and satisfy, or comply with, any of the above
obligations on or before the date indicated above, or Borrower’s failure to
deliver any of the above listed items on or before the date indicated above,
shall constitute an immediate and automatic Event of Default.

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CLOSING DELIVERIES SCHEDULE
1.duly executed signatures to the Financing Documents to which Borrower is a
party.
2.the Operating Documents of each Borrower and good standing certificates of
each Borrower certified by the Secretary of State of the state(s) of
organization of Borrower as of a date no earlier than thirty (30) days prior to
the Closing Date;
3.except as otherwise provided on the Post-Closing Schedules for Exicure
Operating Company, good standing certificates dated as of a date no earlier than
thirty (30) days prior to the Closing Date to the effect that each Borrower is
qualified to transact business in all states in which the nature of Borrower’s
business so requires;
4.duly executed and completed Borrowing Resolutions for Borrower;
5.certified copies, dated as of a recent date, of financing statement searches,
as Agent shall request, accompanied by written evidence (including any UCC
termination statements) that the Liens indicated in any such financing
statements either constitute Permitted Liens or have been or, in connection with
the initial Credit Extension, will be terminated or released;
6.the Perfection Certificate executed by each Borrower;
7.a duly executed legal opinion of Borrower’s counsel dated as of the Closing
Date;
8.evidence reasonably satisfactory to Agent that the insurance policies required
by Article 6 are in full force and effect, together with appropriate evidence
showing loss payable and/or additional insured clauses or endorsements in favor
of Agent, for the ratable benefit of the Lenders;
9.payment of the fees and expenses of Agent and the Lenders then accrued,
including pursuant to the Fee Letters;
10.a duly executed original Secretary’s Certificate dated as of the Closing Date
which includes copies of the completed Borrowing Resolutions for each Borrower;
11.timely receipt by Agent of an executed disbursement letter, including a
certification by a Responsible Officer of Borrower, in form and substance
satisfactory to Agent, which shall certify as to certain conditions to the
funding of the Credit Extensions on the Closing Date;
12.except as otherwise provided on the Post-Closing Schedule, all possessory
collateral required to be delivered to Agent with corresponding endorsements
pursuant to Section 4.2(b).

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DISCLOSURE SCHEDULE
[To be completed by Borrower]
Scheduled Collateral Accounts
Bank Name

Account TypeAccount Number

Scheduled Permitted Liens

DebtorSecured PartyCollateralState and JurisdictionFiling Date and Number
(include original file date and continuations, amendments, etc.)

Scheduled Permitted Indebtedness

DebtorCreditorAmount of Indebtedness outstanding as of _____ __, ____Maturity
Date

Schedule Permitted Investments

DebtorType of InvestmentDateAmount Outstanding as of _______

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Scheduled Litigation
1.
2.
3.
Scheduled ownership interest in any Chattel Paper, letter of credit rights,
commercial tort claims, Instruments, documents or investment property
1.
2.
3

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INTANGIBLE ASSETS SCHEDULE

Intellectual Property (registrations and applications)

Borrower that is Owner of IPName / Identifier of IPType of IP (e.g., patent, TM,
©, mask work)
Registration/Publication or Application Number

Filing Date/Expiration Date

INTANGIBLE ASSETS SCHEDULE (CONTINUED)
LICENSE AND SIMILAR AGREEMENTS

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INBOUND LICENSE # 1 [COMPLETE FOR EACH AGREEMENT]Name and Date of License
Agreement:Borrower that is Licensee:Name and address of Licensor:Expiration Date
of LicenseExclusive License [Y/N]?Describe Licensed Intellectual Property For
This LicenseName / Identifier of IPType of IP (e.g., patent, TM, ©, mask work)
Registration/
Publication or Application Number
Filing Date/Expiration Date

INBOUND LICENSE # 2 [COMPLETE FOR EACH AGREEMENT]Name and Date of License
Agreement:Borrower that is Licensee:Name and address of Licensor:Expiration Date
of LicenseExclusive License [Y/N]?Describe Licensed Intellectual Property For
This LicenseName / Identifier of IPType of IP (e.g., patent, TM, ©, mask work)
Registration/
Publication or Application Number
Filing Date/Expiration Date

[REPEAT ABOVE FOR EACH INBOUND LICENSE AGREEMENT]

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OUTBOUND LICENSE # 1 [COMPLETE FOR EACH AGREEMENT]Name and Date of License
Agreement:Borrower that is Licensor:Name and address of Licensee:Expiration Date
of LicenseExclusive License [Y/N]?Describe Licensed Intellectual Property For
This LicenseName / Identifier of IPType of IP (e.g., patent, TM, ©, mask work)
Registration/
Publication or Application Number
Filing Date/Expiration Date

[REPEAT ABOVE FOR EACH OUTBOUND LICENSE AGREEMENT]

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PRODUCTS SCHEDULE

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REQUIRED PERMITS SCHEDULE