Exhibit 10.1
IDERA PHARMACEUTICALS, INC.
CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
November 4, 2011
     This Convertible Preferred Stock and Warrant Purchase Agreement (this
“AGREEMENT”) is entered into as of the date set forth above by and among Idera
Pharmaceuticals, Inc., a Delaware corporation (the “COMPANY”), and the
undersigned purchasers (each a “PURCHASER” and collectively, the “PURCHASERS”)
set forth on the Schedule of Purchasers attached hereto as Exhibit A (the
“SCHEDULE OF PURCHASERS”). The parties hereby agree as follows:
ARTICLE 1
AUTHORIZATION AND SALE OF SECURITIES
     1.1 Authorization. The Company has duly authorized the sale and issuance to
the Purchasers pursuant to the terms and conditions hereof of (i) up to
1,124,260 shares (the “SHARES”) of its Series D Convertible Preferred Stock, par
value $0.01 per share (the “SERIES D PREFERRED STOCK”), and (ii) warrants to
purchase up to 2,810,650 shares of common stock, par value $0.001 per share (the
“COMMON STOCK”) in the form attached hereto as Exhibit B (the “WARRANTS”). The
Series D Preferred Stock shall have the rights, privileges, preferences and
restrictions set forth in the Certificate of Designations, Preferences and
Rights of Series D Preferred Stock attached hereto as Exhibit C (the
“CERTIFICATE OF DESIGNATIONS”). The Company has, or before the Closing will have
adopted and filed the Certificate of Designations with the Secretary of State of
the State of Delaware.
     1.2 Sale of Securities. Subject to the terms and conditions hereof, at the
Closing (as defined in Section 2.1 below) the Company will issue and sell to
each Purchaser, and each Purchaser agrees, severally and not jointly, to
purchase from the Company, the number of Shares set forth opposite such
Purchaser’s name on the Schedule of Purchasers, at a purchase price of $8.1375
per share, and Warrants to purchase the number of shares of Common Stock set
forth opposite such Purchaser’s name on the Schedule of Purchasers, at a
purchase of $0.125 per Warrant Share, and for the aggregate purchase price set
forth thereon. Payment of the purchase price for the Shares and the Warrants
will be made by the Purchasers by wire transfer in same day funds.
ARTICLE 2
CLOSING
     2.1 Closing. Subject to the terms and conditions of this Agreement, the
closing (the “CLOSING”) of the sale and purchase of the Shares and the Warrants
under this Agreement shall take place at the offices of WilmerHale, 60 State
Street, Boston, MA 02109 (or remotely via the exchange of documents and
signatures) on the date of this Agreement (the “CLOSING DATE”). At the Closing:

 

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          (A) the Company and the Purchasers shall execute and deliver the
Registration Rights Agreement in the form attached hereto as Exhibit D (the
“REGISTRATION RIGHTS AGREEMENT” and together with this Agreement and the
Warrants, the “TRANSACTION DOCUMENTS”);
          (B) the Company shall deliver to the Purchasers certificates, as of
the most recent practicable dates, (i) as to the corporate good standing of the
Company issued by the Secretary of State of the State of Delaware and (ii) as to
the due qualification of the Company as a foreign corporation issued by the
Secretary of State of the Commonwealth of Massachusetts;
          (C) the Company shall deliver to the Purchasers the Certificate of
Incorporation of the Company, as amended and in effect as of the Closing Date
(including the Certificate of Designations), certified by the Secretary of the
State of the State of Delaware;
          (D) the Company shall deliver to the Purchasers a Certificate of the
Secretary of the Company attesting as to (i) the By-laws of the Company;
(ii) the signatures and titles of the officers of the Company executing this
Agreement or any of the other agreements to be executed and delivered by the
Company at the Closing; and (iii) resolutions of the Board of Directors of the
Company authorizing and approving all matters in connection with this Agreement
and the transactions contemplated hereby;
          (E) WilmerHale, counsel for the Company, shall deliver to the
Purchasers an opinion, dated the Closing Date, in substantially the form
attached hereto as Exhibit E;
          (F) the Company shall deliver to each of the Purchasers a certificate
for the number of Shares set forth opposite such Purchaser’s name on Exhibit A
and Warrants to purchase the number of shares of Common Stock set forth opposite
such Purchaser’s name on Exhibit A, in each case registered in the name of such
Purchaser; and
          (G) each Purchaser shall pay to the Company, by wire transfer of
immediately available funds the aggregate purchase price for the Shares and
Warrants being purchased by such Purchaser. The Closing shall not be deemed to
occur, and all such payments by any Purchaser shall be deemed to be held in
escrow, until all Purchasers listed on Exhibit A have tendered to the Company
the payment indicated thereon.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
     The Company hereby represents and warrants to each Purchaser that except as
set forth in the Exchange Act Reports (as defined in Section 3.13):
     3.1 Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. The Company is qualified to do business as a foreign corporation in
each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect. For purposes of this Agreement, the term “MATERIAL ADVERSE
EFFECT” shall mean a material adverse effect upon the business, financial
condition, properties or results of operations of the Company.

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     3.2 Authorized Capital Stock. Immediately prior to Closing, the Company
will have (i) authorized 70,000,000 shares of Common Stock, of which 27,634,389
shares of Common Stock were outstanding as of October 15, 2011, and
(ii) authorized 5,000,000 shares of Preferred Stock, $0.01 par value per share
(“PREFERRED STOCK”), of which 1,500,000 shares have been designated Series A
Convertible Preferred Stock, 655 shares of which are outstanding, 200,000 shares
have been designated Series C Junior Participating Preferred Stock, none of
which are outstanding, and 1,124,260 shares have been designated Series D
Preferred Stock. The issued and outstanding shares of the Common Stock and
Preferred Stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance in material respects with all
federal and state securities laws, were not issued in violation of any
preemptive rights or other rights to subscribe for or purchase securities
granted by the Company, and conform (except with respect to the number of
authorized, issued and outstanding shares) in all material respects to the
description thereof contained in the Exchange Act Reports or in any Registration
Statement on Form 8-A filed with the Securities and Exchange Commission (the
“COMMISSION” or the “SEC”) by the Company. Except as disclosed in the Exchange
Act Reports (including options granted under plans described in the Exchange Act
Reports), the Company does not have outstanding any options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments
requiring the Company to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations.
     3.3 Issuance, Sale and Delivery of the Shares. The Shares, when issued,
delivered and paid for in the manner set forth in this Agreement, will be
validly issued, fully paid and nonassessable and free and clear of all pledges,
liens, and encumbrances imposed by the Company (other than restrictions on
transfer under state and/or federal securities laws). The Common Stock issuable
upon conversion of the Shares (the “CONVERSION SHARES”) or upon exercise of the
Warrants (the “WARRANT SHARES,” and collectively with the Shares, the Warrants
and the Conversion Shares, the “SECURITIES”), have been duly reserved for
issuance, and when issued, delivered and, in the case of the Warrant Shares,
paid for, will be validly issued, fully paid and nonassessable and free and
clear of all pledges, liens, and encumbrances imposed by the Company (other than
restrictions on transfer under state and/or federal securities laws). No
preemptive rights or other rights to subscribe for or purchase from the Company
exist with respect to the issuance and sale of the Securities by the Company
pursuant to this Agreement. Except as disclosed in the Exchange Act Reports, no
stockholder of the Company has any right (which has not been waived or has not
expired by reason of lapse of time following notification of the Company’s
intent to file the registration statement to be filed by it pursuant to the
Registration Rights Agreement (the “REGISTRATION STATEMENT”) to require the
Company to register the sale of any shares owned by such stockholder under the
Securities Act of 1933, as amended (the “SECURITIES ACT”) in the Registration
Statement.
     3.4 Due Execution, Delivery and Performance of this Agreement. The Company
has full legal right, corporate power and authority to enter into the
Transaction Documents and consummate the transactions contemplated hereby and
thereby. The Transaction Documents have been duly authorized, executed and
delivered by the Company. The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated herein and therein: (i) will not violate any provision of the
certificate of incorporation or bylaws of the Company, (ii) will not result in
the creation of any lien, charge,

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security interest or encumbrance upon any assets of the Company pursuant to the
terms or provisions of, and will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the passage of
time or both, a default under any agreement, lease, franchise, license, permit
or other instrument to which the Company is a party or by which the Company or
any of its properties are bound, except, in each case, for any lien, charge,
security interest, encumbrance, conflict, breach, violation or default which
would not have a Material Adverse Effect, or (iii) conflict with or result in
the violation of any statute or any judgment, decree, order, rule or regulation
of any court or any regulatory body, administrative agency or other governmental
body applicable to the Company or any of its properties except for any such
conflict or violation which would not have a Material Adverse Effect. Assuming
the accuracy of the representations made by the Purchasers in Section 4, no
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery by the Company of the Transaction Documents or the consummation by
the Company of the transactions contemplated by the Transaction Documents,
except for the filing of the Certificate of Designations, compliance with the
blue sky laws and federal securities laws, the listing of the Conversion Shares
and the Warrant Shares on the Nasdaq Global Market and the filing of the
Registration Statement. Upon the execution and delivery of the Transaction
Documents, and assuming the valid execution thereof by the Purchasers, each
Transaction Document will constitute a valid and binding obligation of the
Company, enforceable against it in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except to the extent enforcement of the indemnification obligations of the
Company set forth in the Registration Rights Agreement may be limited by federal
or state securities laws or the public policy underlying such laws.
     3.5 Accountants. The firm of Ernst & Young LLP, which has expressed its
opinion with respect to the financial statements to be included or incorporated
by reference in the Registration Statement and the prospectus which forms a part
thereof (the “PROSPECTUS”), is an independent accountant as required by the
Securities Act.
     3.6 No Defaults. The Company is not in violation or default of any
provision of its certificate of incorporation or bylaws, or in breach of or
default with respect to any provision of any agreement, judgment, decree, order,
lease, franchise, license, permit or other instrument to which it is a party or
by which it or any of its properties are bound except for any violation or
default that would not have a Material Adverse Effect.
     3.7 Contracts. There is no material contract or agreement required by the
Securities Exchange Act of 1934, as amended (the “EXCHANGE ACT”) to be described
in or filed as an exhibit to the Exchange Act Reports which is not described or
filed therein as required. Any contracts filed as exhibits to the Exchange Act
Reports that are material to the Company are in full force and effect on the
date hereof (except to the extent they have expired by their terms subsequent to
the date of the Exchange Act Reports).

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     3.8 No Actions. Except as disclosed in the Exchange Act Reports, (1) there
are no legal or governmental actions, suits or proceedings pending and (2) to
the Company’s knowledge, there are no inquiries or investigations pending, or
any legal or governmental actions, suits, or proceedings threatened in writing,
against the Company or of which property owned or leased by the Company is or
may be the subject (it being understood that the interaction between the Company
and the United States Food and Drug Administration and such comparable
governmental bodies relating solely to the clinical development and product
approval process shall not be deemed proceedings for purposes of this
representation), or related to environmental or discrimination matters, which
actions, suits or proceedings, individually or in the aggregate, would have a
Material Adverse Effect. No labor disturbance by the employees of the Company
exists or, to the Company’s knowledge, is imminent which would have a Material
Adverse Effect. The Company is not party to or named as subject to the
provisions of any injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body specifically naming the
Company that would have a Material Adverse Effect.
     3.9 No Material Change. Since June 30, 2011, and except as described in the
Exchange Act Reports or as disclosed to the Purchasers:
          (A) the Company has not incurred any material liabilities or
obligations, indirect, or contingent, or entered into any material oral or
written agreement or other transaction, which was not incurred or entered into
in the ordinary course of business;
          (B) the Company has not sustained any material loss or interference
with its business or properties from fire, flood, windstorm, accident or other
calamity not covered by insurance;
          (C) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock and the Company is not in
default in the payment of principal or interest on any outstanding debt
obligations;
          (D) there has not been any material change or amendment to a contract
filed as an exhibit to an Exchange Act Report that is material to the Company;
          (E) there has not been any sale, assignment or transfer of all or
substantially all of the Company’s rights in any patents, trademarks,
copyrights, trade secrets or other intangible assets or other material assets,
except a sale, assignment or transfer made in the ordinary course of business
that is not material to the assets, properties, financial condition, operating
results or business of the Company;
          (F) there has not been any waiver by the Company of a material debt
owed to it;
          (G) there has not been any material change in any compensation
arrangement or agreement with any officer or director;
          (H) there has not been any agreement or commitment by the Company to
do any of the acts described in subsections (A) through (G) above; and

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          (I) there has not been any event which has caused a Material Adverse
Effect other than continued incurrence of operating losses incurred in the
ordinary course of the Company’s business.
     3.10 Intellectual Property. Except as disclosed in the Exchange Act
Reports, (i) to the Company’s knowledge, the Company owns or has the right to
use the inventions, patent applications, patents, trademarks (both registered
and unregistered), trade names, copyrights and trade secrets used by it in or
necessary for the conduct of the Company’s business (collectively, the “COMPANY
INTELLECTUAL PROPERTY”), except where such failure to own or have the right to
use such intellectual property would not have a Material Adverse Effect; and
(ii) (a) to the Company’s knowledge, there are no third parties who have any
ownership rights to any Company Intellectual Property that would preclude the
Company from conducting its business as currently conducted and have a Material
Adverse Effect, except for the ownership rights of the owners of the Company
Intellectual Property licensed by the Company; (b) to the Company’s knowledge,
there are currently no sales of any products or any other uses that would
constitute an infringement by third parties of any Company Intellectual
Property, which infringement would have a Material Adverse Effect; (c) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the rights of the Company in or to any Company
Intellectual Property, which action, suit, proceeding or claim would have a
Material Adverse Effect; (d) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the validity
or scope of any Company Intellectual Property, which action, suit, proceeding or
claim would have a Material Adverse Effect; and (e) there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary right (an “INTELLECTUAL PROPERTY
RIGHT”) of others, which action, suit, proceeding or claim would have a Material
Adverse Effect. To the knowledge of the Company, the Company does not infringe
any Intellectual Property Rights of any other person. The Company has not
entered into any consent agreements, forbearance to sue or settlement agreements
with respect to the validity of the Company’s ownership or right to use Company
Intellectual Property. The Company has complied, in all material respects, with
its contractual obligations relating to the protection of the Company
Intellectual Property used pursuant to licenses. All former or current
employees, officers and consultants of the Company have entered into agreements
with the Company providing for the assignment of inventions to the Company,
except where the failure to have entered into an agreement with an employee,
officer or consultant would not have a Material Adverse Effect.
     3.11 Compliance. The Company is conducting its business in compliance with
all applicable laws, rules and regulations of the jurisdictions in which it is
conducting its business, including, without limitation, all applicable local,
state and federal environmental laws and regulations, except where failure to be
so in compliance would not have a Material Adverse Effect.
     3.12 Investment Company. The Company is not an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.

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     3.13 Disclosure. The information contained in the following documents did
not, as of the date of the applicable document, include any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading, as of their respective dates:
          (A) the Company’s Annual Report on Form 10-K for the year ended
December 31, 2010;
          (B) the Company’s Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2011 and June 30; 2011;
          (C) all other documents, if any, filed by the Company with the
Commission since December 31, 2010 pursuant to the reporting requirements of the
Exchange Act (together with Sections 3.13(A) and (B), the “EXCHANGE ACT
REPORTS”).
     3.14 Reporting Company; Form S-3. The Company is subject to the reporting
requirements of the Exchange Act and since June 30, 2010 has timely filed all
reports required thereby. As of their respective filing dates, all Exchange Act
Reports complied in all material respects with the requirements of the Exchange
Act. The Company is eligible to register the Conversion Shares and the Warrant
Shares for resale by the Purchaser on a registration statement on Form S-3 under
the Securities Act.
     3.15 Use of Proceeds. The Company intends to use the proceeds from the sale
of the Securities for research and clinical development activities,
manufacturing and commercialization of its product candidates, working capital
and general corporate purposes.
     3.16 Related Party Transactions. No transaction has occurred between or
among the Company and its affiliates, officers or directors or any affiliate or
affiliates of any such officer or director that is required to have been
described in the Exchange Act Reports under Item 404 of Regulation S-K as
required by the Exchange Act or otherwise and is not so described in the
Exchange Act Reports.
     3.17 Governmental Permits, Etc. The Company has all franchises, licenses,
certificates and other authorizations from such federal, state or local
government or governmental agency, department or body that are currently
required for the operation of the business of the Company as currently
conducted, except where the failure to posses currently such franchises,
licenses, certificates and other authorizations would not have a Material
Adverse Effect. The Company has not received any written notice of proceedings
relating to the revocation or modification of any such permit.
     3.18 Financial Statements. The financial statements of the Company and the
related notes contained in the Exchange Act Reports (collectively, the
“FINANCIAL STATEMENTS”) present fairly in all material respects the financial
position of the Company as of the dates indicated, and the results of operations
and cash flows for the periods therein specified, subject, in the case of
unaudited financial statements for interim periods, to normal year-end audit
adjustments. The Financial Statements (including the related notes) have been
prepared in accordance with United States generally accepted accounting
principles (“GAAP”), applied on a

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consistent basis throughout the periods therein specified, except that unaudited
financial statements are subject to normal year-end audit adjustments and may
not contain all footnotes required by GAAP. Since September 30, 2011, the
Company has not incurred liabilities, contingent or otherwise outside the
ordinary course of business which individually or in the aggregate, are material
to the financial condition or operating results of the Company.
     3.19 Listing. The Common Stock is presently listed on the Nasdaq Global
Market. The Company has not, in the two years preceding the date hereof,
received any written notice from the Nasdaq Global Market to the effect that the
Company is not in compliance with the maintenance requirements of such exchange.
     3.20 Sarbanes-Oxley Act; Accounting Controls. The Company is in compliance
in all material respects with all provisions of the Sarbanes-Oxley Act of 2002
which are applicable to it. The Company maintains a system of internal
accounting controls that the Company reasonably believes is sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
     3.21 Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Purchasers contained in Section 4 hereof,
the offer, sale and issuance of the Securities are exempt from the registration
requirements of the Securities Act, and the registration, permit or
qualification requirements of any applicable state securities laws. Neither the
Company nor any person acting on its behalf has taken any action to sell, offer
for sale or solicit offers to buy any securities of the Company that would
reasonably be expected to subject the offer, issuance or sale of the Securities,
as contemplated by this Agreement, to the registration requirements of Section 5
of the Securities Act.
     3.22 No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause this offering of
Securities to be integrated with any prior or contemporaneous offering of
securities of the Company for purposes of the Securities Act or any applicable
state securities law or any applicable stockholder approval provisions.
     3.23 No Brokers. The Company has taken no action which would give rise to
any claim by any person for brokerage commissions, finder’s fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby, other than fees that may be owed to Rodman and Renshaw as
disclosed to the Purchasers.
     3.24 Tax Matters. The Company has timely prepared and filed all material
tax returns required to have been filed by the Company with all appropriate
governmental agencies and timely paid all taxes shown thereon. The charges,
accruals and reserves on the books of the Company in respect of taxes for all
fiscal periods are adequate in all material respects, and there

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are no material unpaid assessments against the Company nor, to the Company’s
knowledge, any basis for the assessment of any additional taxes, penalties or
interest for any fiscal period or audits by any federal, state or local taxing
authority except for any assessment which would not have a Material Adverse
Effect. All material taxes and other assessments and levies that the Company is
required to withhold or to collect for payment have been duly withheld and
collected and paid to the proper governmental entity or third party when due.
There are no tax liens or claims pending or, to the Company’s knowledge,
threatened against the Company or any of its assets or properties.
     3.25 Application of Takeover Protections. The Company has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.
     3.26 Insurance Coverage. The Company maintains in full force and effect
insurance coverage and the Company reasonably believes such insurance coverage
is adequate.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     Each Purchaser hereby represents and warrants as follows:
     4.1 This Agreement and the Registration Rights Agreement have been duly and
validly authorized, executed and delivered on behalf of such Purchaser and are
valid and binding agreements of such Purchaser enforceable against such
Purchaser in accordance with their terms except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and except to the extent enforcement of the Purchaser’s
indemnification obligations set forth in the Registration Rights Agreement may
be limited by federal or state securities laws or the public policy underlying
such laws.
     4.2 The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
securities representing an investment decision like that involved in the
purchase of the Securities, including investments in securities issued by the
Company and comparable entities, and has had the opportunity to request,
receive, review and consider all information it deems relevant in making an
informed decision to purchase the Securities; (ii) the Purchaser is acquiring
the Securities set forth in Section 1 above in the

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ordinary course of its business and for its own account for investment only and
with no present intention of distributing any of such Securities or any
arrangement or understanding with any other persons regarding the distribution
of such Securities (this representation and warranty not limiting the
Purchaser’s right to sell pursuant to the Registration Statement or in
compliance with the Securities Act and the Rules and Regulations, or the
Purchaser’s right to indemnification under the Registration Rights Agreement);
(iii) the Purchaser has not been organized, reorganized or recapitalized
specifically for the purpose of investing in the Securities; (iv) the Purchaser
has completed or caused to be completed, or will complete and deliver to the
Company within five (5) business days after the Closing, the Registration
Statement Questionnaire attached hereto as part of Exhibit F, for use in
preparation of the Registration Statement, and the answers thereto are true and
correct as of the date such Registration Statement Questionnaire is delivered to
the Company and will be true and correct as of the effective date of the
Registration Statement and the Purchaser will notify the Company promptly of any
material change in any such information provided in the Registration Statement
Questionnaire until such time as the Purchaser has sold all of its Securities or
until the Company is no longer required to keep the Registration Statement
effective; (v) the Purchaser has had an opportunity to discuss this investment
with representatives of the Company and ask questions of them; (vi) the
Purchaser is an “accredited investor” within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act; (vii) the Purchaser agrees to
notify the Company promptly of any change in any of the foregoing information
until such time as the Purchaser has sold all of its Securities or the Company
is no longer required to keep the Registration Statement effective; and
(viii) the Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire to take a pledge of) any of the Shares except in compliance
with the Securities Act, the Rules and Regulations, and applicable state
securities laws.
     4.3 The Purchaser understands that the Securities are being offered and
sold to it in reliance upon specific exemptions from the registration
requirements of the Securities Act, the Rules and Regulations and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Purchaser’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Securities.
     4.4 The Purchaser understands that its investment in the Securities
involves a significant degree of risk, including a risk of total loss of the
Purchaser’s investment, and the Purchaser has full cognizance of and understands
all of the risk factors related to the Purchaser’s purchase of the Securities.
The Purchaser understands that the market price of the Common Stock has been
volatile and that no representation is being made as to the future value of the
Common Stock. The Purchaser has the knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities and has the ability to bear the economic risks of
an investment in the Securities.
     4.5 The Purchaser understands that no United States federal or state agency
or any other government or governmental agency has passed upon or made any
recommendation or endorsement of the Securities.

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     4.6 The Purchaser’s principal executive offices are at the address set
forth below the Purchaser’s name on the Schedule of Purchasers.
     4.7 The Purchaser further represents and warrants to, and covenants with,
the Company that (i) the Purchaser is in compliance with Executive Order 13224
and the regulations administered by the U.S. Department of the Treasury
(“TREASURY”) Office of Foreign Assets Control, (ii) the Purchaser, its parents,
subsidiaries, affiliated companies, officers, directors and partners, and to the
Purchaser’s knowledge, its shareholders, owners, employees, and agents, are not
on the List of Specially Designated Nationals and Blocked Persons maintained by
Treasury and have not been designated by Treasury as a financial institution of
primary money laundering concern, (iii) to the Purchaser’s knowledge after
reasonable investigation, all of the funds to be used to acquire the Securities
are derived from legitimate sources and are not the product of illegal
activities, and (iv) the Purchaser is in compliance with all other applicable
U.S. anti-money laundering laws and regulations and has implemented, if
applicable, an anti-money laundering compliance program in accordance with the
requirements of the Bank Secrecy Act, as amended by the USA PATRIOT Act, Pub. L.
107-56.
ARTICLE 5
COVENANTS
     5.1 Form D; Form 8-K. The Company shall file with the SEC a Form D with
respect to the Securities as required under Regulation D. Within four
(4) trading days after the Closing Date, the Company shall file a Form 8-K (or
include in a Form 10-Q information) concerning this Agreement and the
transactions contemplated hereby, which Form 8-K (or Form 10-Q) shall attach
this Agreement, the Registration Rights Agreement, the Certificate of
Designations and the form of Warrant as exhibits to such Form 8-K (or Form
10-Q).
     5.2 Preemptive Rights.
          (A) In the event that, on or prior to the earlier of (i) the third
anniversary of the Closing Date and (ii) with respect to any Purchaser the day
that such Purchaser holds a number of Shares (including shares of Common Stock
issued upon conversion of the Shares) which is less than 50% of the number of
Shares purchased by such Purchaser pursuant to this Agreement and set forth
opposite such Purchaser’s name on the Schedule of Purchasers (such number of
Shares being subject to adjustment for stock splits, dividends, combinations,
recapitalizations, reclassifications and other similar events), the Company
proposes to privately sell and issue securities of the Company (an “ADDITIONAL
FINANCING”) each Purchaser shall have the option to purchase, on the same terms
and conditions offered by the Company to the other purchasers of such securities
in such Additional Financing, up to that percentage of the securities sold in
such Additional Financing equal to (x) the number of shares of Common Stock then
held by such Purchaser (including such Purchaser’s Conversion Shares) as
compared to (y) the total number of shares of Common Stock then outstanding
(including all Conversion Shares) (such percentage being such Purchaser’s
“ADDITIONAL FINANCING PRO RATA AMOUNT”); provided, however, that if a
Purchaser’s Pro Rata Amount exceeds 19.99%, such Purchaser’s Additional
Financing Pro Rata Amount shall be 19.99%.

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          (B) In the event that on or prior to the earlier of (i) the third
anniversary of the Closing Date and (ii) with respect to any Purchaser the day
before the date that such Purchaser holds a number of Shares which is less than
50% of the number of Shares purchased by such Purchaser pursuant to this
Agreement and set forth opposite such Purchaser’s name on the Schedule of
Purchasers (such numbers of Shares being subject to adjustment for stock splits,
dividends, combinations, recapitalizations, reclassifications and other similar
events), the Company proposes to (x) enter into a loan financing for the purpose
of raising capital and not for the purpose of purchasing equipment (a “LOAN
FINANCING”), or (y) privately sell and issue convertible debt securities or
preferred stock of the Company that ranks senior to the Series D Preferred Stock
(together with a Loan Financing, a “SENIOR FINANCING”, and, together with an
Additional Financing, an “ADDITIONAL TRANSACTION”), each such Purchaser shall
have the option to participate in a Loan Financing or purchase securities in
other Senior Financings, on the same terms and conditions offered by the Company
to the other participants or purchasers of securities in such Senior Financings,
up to that percentage (such percentage being such Purchaser’s “ADDITIONAL
TRANSACTION PRO RATA AMOUNT”) of the amount of the Loan Financing or of the
securities sold in such Senior Financing equal to the product of:
               (I) A fraction, the numerator of which equals the number of
Shares then held by the Purchaser and the denominator of which equals the total
number of Shares issued to Purchasers by the Company; and
               (II) if the closing date of the Senior Financing is on or prior
to (i) the first anniversary of the Closing Date, 50%, (ii) the second
anniversary of the Closing Date, 40%, or (iii) the third anniversary of the
Closing Date, 30%.
          (C) The terms of any Senior Financing may provide that the
participants in such Senior Financing, other than any Purchasers participating
in such Senior Financing, shall have the right to exercise control over any
matter requiring action by or on behalf of all participants in such Senior
Financing without the consent of any Purchaser.
          (D) If the Board of Directors of the Company determines in good faith
that the participation in the Senior Financing of the Purchasers pursuant to the
preemptive rights set forth in Section 5.2(B) would jeopardize the consummation
of such Senior Financing on terms acceptable to the Board of Directors of the
Company, then the Company will have no obligation to offer the Purchasers the
opportunity to participate in such Senior Financing pursuant to Section 5.2(B).
          (E) To the extent that a Purchaser is entitled to preemptive rights
pursuant to both of Section 5.2(A) and Section 5.2(B) with respect to a Senior
Financing, the preemptive right to which such Purchaser is entitled pursuant to
Section 5.2(B) shall supersede any right to which such Purchaser would have
otherwise been entitled pursuant to Section 5.2(A).
          (F) Promptly after the Company determines to engage in an Additional
Transaction, the Company shall deliver a written notice (the “OFFER NOTICE”) to
the Purchasers stating (i) its bona fide intention to offer securities in an
Additional Transaction, (ii) the number of such securities to be offered or
amount to be borrowed in the Loan Financing, (iii)

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the price and terms, to the extent known, upon which it proposes to offer such
securities or borrow such funds, and (iv) the anticipated closing date of the
Additional Transaction. The Company shall promptly notify each Purchaser of
(i) the determination of the price and terms upon which it proposes to offer
such securities, to the extent not set forth in the Offer Notice, and (ii) any
material change in any of the information set forth in the Offer Notice or in
the price or other terms previously communicated to such Purchaser.
          (G) No Purchaser may participate in an Additional Transaction, in
whole or in part, unless it (i) delivers to the Company, on or prior to the date
10 days after the date of delivery of the Offer Notice a written notice of
acceptance (an “ACCEPTANCE NOTICE”) providing a representation letter certifying
that such Purchaser is an accredited investor within the meaning of Rule 501
under the Securities Act and indicating the portion of the Purchaser’s
Additional Financing Pro Rata Amount or Additional Transaction Pro Rata Amount,
as applicable, that such Purchaser elects to purchase and (ii) deposits in a
U.S. escrow account on terms satisfactory to the Company the amount that the
Purchaser proposes to invest pursuant to the preemptive rights set forth in this
Section 5.2 (the “ESCROW DEPOSIT”) concurrently with delivering an Acceptance
Notice indicating the amount or number of securities to be purchased by the
Purchaser; provided that, if the Company does not intend to sign the definitive
documentation for such Additional Transaction within ten days of the date such
Acceptance Notice is due pursuant to clause (i) of this Section 5.2(G), the
Purchaser must make the Escrow Deposit no later than five days after a request
from the Company for the Purchaser to make such Escrow Deposit.
          (H) Any issuance of Exempted Securities (as defined in the Certificate
of Designations) shall not be Additional Transactions for purposes of this
Section 5.2 and the Purchasers shall have no rights hereunder with respect to
the issuance of Exempted Securities; provided, however, that any issuance
described in clause (vi) of the definition of Exempted Securities that
constitutes a Senior Financing shall not be exempted from Section 5.2(B).
          (I) No Purchaser shall have any right to purchase securities of the
Company hereunder, and the Company shall have no obligation to a Purchaser
hereunder, if (1) the Company has used its reasonable best efforts to ensure
that the sale of such securities to such Purchaser will not violate the
Securities Act or the Exchange Act and, despite such efforts, the Company
reasonably determines in good faith that the sale of such securities to such
Purchaser cannot be made without the violation of any Rule or Regulation or
(2) the Company reasonably determines in good faith that the sale of such
securities to such Purchaser cannot be made without requiring the approval of
the Company’s stockholders for a reason that is related to such Purchaser (or to
the Purchasers as a group) and is not related to the participation of other
participants in the Additional Transaction, including, without limitation, the
application of Nasdaq Marketplace Rule 5635(b).
     5.3 Expenses. The Company shall pay to Pillar Pharmaceuticals I, L.P.
(“PILLAR”) at the Closing upon delivery to the Company of an invoice,
reimbursement for the out-of-pocket expenses reasonably incurred by Pillar or
its advisors in connection with the negotiation, preparation, execution and
delivery of the Transaction Documents and the other agreements to be executed in
connection herewith, and therewith, including, without limitation, reasonable
due diligence and attorneys’ fees and expenses related to the transactions
contemplated by the

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Transaction Documents (the “EXPENSES”); provided, however, the maximum amount of
Expenses for which the Company shall be responsible pursuant to this Section
shall be $100,000 and the balance of the expenses of Pillar and the other
Purchasers shall be borne by Pillar and the other Purchasers.
     5.4 Listing. The Company will use its reasonable best efforts to continue
the listing and trading of its Common Stock, including the Conversion Shares and
Warrant Shares, on the American Stock Exchange, the New York Stock Exchange, the
Nasdaq Global Market, the Nasdaq Capital Market or other equivalent U.S.
national exchange or automated trading market (a “PERMITTED EXCHANGE”) and to
comply with the reporting, filing and other obligations under the bylaws or
rules thereof.
     5.5 Securities Laws; No Integrated Offerings. The Company shall not make
any offers or sales of any security under circumstances that would cause the
offer and sale of the Securities hereunder to violate the Securities Act or the
Rules or Regulations or cause the offer and sale of the Securities to be subject
to any stockholder approval provision applicable to the Company or its
securities.
     5.6 No Short Sales. Each Purchaser agrees that beginning on the date hereof
until the earlier of (i) first anniversary of the date hereof or (ii) the date
at which the Shares held by such Purchaser have been converted into Common
Stock, it will not enter into any Short Sales. For purposes of this Section 5.6,
a “Short Sale” by a Purchaser means a sale of Common Stock that is marked as a
short sale and that is executed at a time when such Purchaser has no equivalent
offsetting long position in the Common Stock. For purposes of determining
whether a Purchaser has an equivalent offsetting long position in the Common
Stock, all Common Stock that would be issuable upon exercise in full of all
options then held by such Purchaser (assuming that such options were then fully
exercisable, notwithstanding any provisions to the contrary, and giving effect
to any exercise price adjustments scheduled to take effect in the future) shall
be deemed to be held long by such Purchaser.
     5.7 Standstill Provision. Each Purchaser hereby agrees that, to the extent
that and for so long as the total number of shares of Common Stock beneficially
owned by the Purchaser and its affiliates and any other persons whose beneficial
ownership of Common Stock would be aggregated with the Purchaser for purposes of
Section 13(d) of the Exchange Act exceeds 15%, unless specifically invited in
writing by the Company to do so, neither the purchaser nor its affiliates will,
or will cause or knowingly permit any of its or their directors, officers,
partners, managers, employees, investment bankers, attorneys, accountants or
other advisors or representatives to, in any manner, directly or indirectly:
          (A) effect or seek, initiate, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way advise or, assist
any other person to effect or seek, initiate, offer or propose (whether publicly
or otherwise) to effect or cause or participate in, any acquisition of any
securities (or beneficial ownership thereof) or assets of the Company; any
tender or exchange offer, merger, consolidation or other business combination
involving the Company; any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company; or
any “solicitation” of “proxies” (as such terms are used in the proxy rules of
the Commission) or consents to vote any voting securities of the

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Company. Notwithstanding the foregoing, nothing in this clause (A) shall prevent
or limit the ability of any director of the Company that is affiliated with a
Purchaser or to (i) acquire, exercise or dispose of any stock options or other
equity securities of the Company received as compensation for serving as a
director or (ii) perform his or her duties as a director of the Company;
          (B) form, join or in any way participate in a “group” (as defined
under the Exchange Act) with respect to any securities of the Company;
          (C) otherwise act, alone or in concert with others, to seek to control
or influence the management, Board of Directors or policies of the Company;
          (D) take any action which could reasonably be expected to force the
Company to make a public announcement regarding any of the types of matters set
forth in this Section 5.7; or
          (E) enter into any agreements, discussions or arrangements with any
third party with respect to any of the foregoing.
Notwithstanding the foregoing, the Company hereby agrees that the purchase by a
Purchaser after the date hereof and pursuant to Section 5.2 of this Agreement
shall not be a violation of this Section 5.7.
     5.8 Voting Rights.
          (A) Each Purchaser hereby agrees that, to the extent that and for so
long as the total number of shares of Common Stock beneficially owned by the
Purchaser and its affiliates and any other persons whose beneficial ownership of
Common Stock would be aggregated with the Purchaser for purposes of Section
13(d) of the Exchange Act exceeds 15%, in any election of directors and in any
other vote to be taken by the stockholders of the Company (whether taken at an
annual or special meeting of stockholders or by written action), it and its
affiliates will vote any Excess Shares (as defined below) held in the same
manner as and in the same proportion to the votes cast by the other holders of
the Company’s Common Stock or other voting securities.
          (B) Each Purchaser hereby constitutes and appoints as the proxies of
the party and hereby grants a power of attorney to the officers of the Company,
and each of them, with full power of substitution, with respect to clause
(A) above, and hereby authorizes each of them to represent and to vote, if and
only if the Purchaser (i) fails to vote or (ii) attempts to vote (whether by
proxy, in person or by written consent), in a manner which is inconsistent with
the terms of clause (A), all of such Purchaser’s Excess Shares in accordance
with the terms of clause (A). Each of the proxy and power of attorney granted
pursuant to the immediately preceding sentence is given in consideration of the
agreements and covenants of the Company and the parties in connection with the
transactions contemplated by this Agreement and, as such, each is coupled with
an interest and shall be irrevocable unless and until this Agreement terminates
or expires. Each Purchaser hereby revokes any and all previous proxies or powers
of attorney with respect to the Excess Shares and shall not hereafter, unless
and until this Agreement terminates or expires, purport to grant any other proxy
or power of attorney with respect to any of such Excess Shares, deposit any of
such Excess Shares into a voting trust or enter into any agreement

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(other than this Agreement), arrangement or understanding with any person,
directly or indirectly, to vote, grant any proxy or give instructions with
respect to the voting of any of such Excess Shares, in each case, with respect
to clause (A) above.
          (C) For purposes of this Section 5.8, “Excess Shares” means for any
Purchaser the number of shares of Common Stock held by the Purchaser and its
affiliates (including the Purchaser’s or such affiliates’ Conversion Shares)
equal to (i) the total number of shares of Common Stock held by the Purchaser
and its affiliates (including the Purchaser’s or such affiliates’ Conversion
Shares), less (ii) 15% of the total number of shares of Common Stock then
outstanding (including all Conversion Shares).
     5.9 Reservation of Common Stock. The Company shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of providing for the conversion of the Series D Preferred Stock
and the exercise of the Warrants, such number of shares of Common Stock as shall
from time to time equal 100% of the number of shares sufficient to permit the
conversion of the Series D Preferred Stock and the exercise of the Warrants
issued pursuant to this Agreement in accordance with their respective terms,
without regard to any exercise limitations contained therein.
     5.10 Delivery of Certificates. In connection with any conversion of the
Shares by a Purchaser, the Company shall use its best efforts to issue to such
Purchaser the applicable certificate or certificates for the Conversion Shares
within three (3) business days of receipt of all documents and information
needed to effect such conversion and issue such certificates.
ARTICLE 6
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES
     6.1 Restrictions on Transferability. The Securities shall not be sold,
transferred, assigned or hypothecated unless (i) there is an effective
registration statement under the Securities Act covering such Securities,
(ii) the sale is made in accordance with Rule 144 under the Securities Act, or
(iii) the Company receives an opinion of counsel for the holder of the
Securities reasonably satisfactory to the Company stating that such sale,
transfer, assignment or hypothecation is exempt from the registration
requirements of the Securities Act, and each such case upon all other conditions
specified in this Section 6.1. Notwithstanding the provisions of the preceding
sentence, no such registration statement or opinion of counsel shall be required
for any transfer of any Securities by a Purchaser that is a partnership, a
limited liability company or a corporation to (A) a partner of such partnership,
a member of such limited liability company or a stockholder of such corporation,
(B) an entity that controls, or is controlled by, or is under common control
with such partnership, limited liability company or corporation, or (C) the
estate of any such partner, member or stockholder; provided that in each of the
foregoing cases the proposed transferee of the Securities held by the Purchaser
agrees in writing to take and hold such Securities subject to the provisions and
upon the conditions specified in this Section 6.
     6.2 Restrictive Legends. Each certificate representing the Securities, and
any other securities issued in respect of the Securities upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event (except
as otherwise permitted by the provisions of this

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Section 6), shall be stamped or otherwise imprinted with a legend in
substantially the following form:

      “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES
LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THOSE LAWS.”

     6.3 Removal of Legend and Transfer Restrictions. The foregoing legend shall
be removed from the certificates representing any Securities, at the request of
the holder thereof, at such time as (a) a period of at least one year, as
determined in accordance with paragraph (d) of Rule 144 under the Securities
Act, as elapsed since the later of the date the Securities were acquired from
the Company or an affiliate of the Company, and (b) the Securities become
eligible for resale pursuant to Rule 144(b)(1)(i) under the Securities Act.
ARTICLE 7
MISCELLANEOUS
     7.1 [Intentionally omitted.]
     7.2 Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the
Purchasers herein shall survive the execution of this Agreement, the delivery to
the Purchasers of the Shares and Warrants being purchased and the payment
therefor.
     7.3 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon delivery to the party to
be notified, (ii) when received by email or confirmed facsimile, or (iii) one
(1) business day after deposit with a nationally recognized overnight carrier,
specifying next business day delivery, with written verification of receipt. All
communications shall be sent to the Company and the Purchasers as follows or at
such other addresses as the Company or the Purchasers may designate upon ten
(10) days’ advance written notice to the other party:
          (A) if to the Company, to:
Idera Pharmaceuticals, Inc.
167 Sidney Street
Cambridge, MA 02139
Attention: Chief Executive Officer
Facsimile: (617) 679-5592
Email: sagrawal@iderapharma.com

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with a copy to:
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Stuart Falber
Facsimile: (617) 526-5000
Email: stuart.falber@wilmerhale.com
          (B) if to a Purchaser, at its address as set forth on the Schedule of
Purchasers to this Agreement.
     7.4 Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Purchasers holding a
majority of the Shares then outstanding. No provision hereunder may be waived
other than in a written instrument executed by the waiving party.
     7.5 Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
     7.6 Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
     7.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
     7.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered (including by facsimile) to the other parties.
     7.9 Entire Agreement. This Agreement, the Registration Rights Agreement and
the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Purchasers
make any representation, warranty, covenant or undertaking with respect to such
matters.
     7.10 Assignment. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
parties hereto and their respective permitted successors, assigns, heirs,
executors and administrators. This Agreement and the rights of a Purchaser
hereunder may not be assigned by the Purchaser without the prior written consent
of the Company, except such consent shall not be required in cases of
assignments by a

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Purchaser as permitted under Section 6.1, provided that such assignee agrees in
writing to be bound by the terms of this Agreement. Notwithstanding the
foregoing, the rights set forth in Section 5.2 may not be assigned or
transferred.
     7.11 Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurance as may be reasonably requested by any
other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
     7.12 Confidentiality. Each Purchaser agrees that it will keep confidential
and will not disclose or divulge any confidential, proprietary or secret
information which such Purchaser may obtain from the Company pursuant to
reports, notices and other materials submitted by the Company to such Purchaser
pursuant to this Agreement, otherwise pursuant to the Registration Rights
Agreement, unless (a) such information is known, or until such information
becomes known, to the public or (b) such information is required to be disclosed
in legal proceedings (such as by deposition, interrogatory, request for
documents, subpoena, civil investigation demand, filing with any governmental
authority or similar process), provided, however, that before making any use or
disclosure in reliance on this clause (b) the Purchaser shall give the Company
at least fifteen (15) days prior written notice (or such shorter period as
required by law) specifying the circumstances giving rise thereto and will
furnish only that portion of the non-public information which is legally
required and will exercise its best efforts to obtain reliable assurance that
confidential treatment will be accorded any non-public information so furnished.
     7.13 Use of Purchaser Name. Except as may be required by applicable law or
regulation and as may be required in the Registration Statement, the Company
shall not use any Purchaser’s name or the name of any of its affiliates in any
advertisement, announcement, press release or other similar public communication
in connection with the offering of the Securities contemplated hereby unless it
has received the prior written consent of such Purchaser for the specific use
contemplated or as otherwise required by applicable law or regulation.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.

            IDERA PHARMACEUTICALS, INC.
      By:   /s/ Sudhir Agrawal         Sudhir Agrawal        Chief Executive
Officer        PURCHASER:

PILLAR PHARMACEUTICALS I, L.P.
      By:   /s/ Youssef El Zein         Name:   Youssef El Zein        Title:  
Director     

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EXHIBIT A
Schedule of Purchasers

                              Shares   Warrants   Purchase Price
Pillar Pharmaceuticals I, L.P. Address:
    1,124,260       2,810,650     $ 9,499,997.00  
Pillar Invest Offshore SAL
Starco Center, Bloc B, Third Floor
Omar Daouk Street
Beirut 2020-3313
Lebanon
                       
 
                       
Tel: +961 1 363 362
Fax: +961 1 379 378
Email: pillar@pillarinvest.com
                       

 

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EXHIBIT B
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 5 OF THIS WARRANT

Warrant No. ___   Number of Shares:______________
(subject to adjustment)

Original Issue Date: November __ 2011
Common Stock Purchase Warrant
(Void after November __, 2016)
     Idera Pharmaceuticals, Inc., a Delaware corporation (the “Company”), for
value received, hereby certifies that ______________________, or its registered
assigns (the “Registered Holder”), is entitled, subject to the terms and
conditions set forth below, to purchase from the Company, at any time or from
time to time on or after the date of issuance and on or before 5:00 p.m. (Boston
time) on November __, 2016, _________ shares of Common Stock, $0.001 par value
per share, of the Company (“Common Stock”), at a purchase price of $_______ per
share. The shares purchasable upon exercise of this Warrant, and the purchase
price per share, each as adjusted from time to time pursuant to the provisions
of this Warrant, are hereinafter referred to as the “Warrant Shares” and the
“Purchase Price,” respectively.
     1. Exercise.
          (a) Exercise for Cash. The Registered Holder may, at its option, elect
to exercise this Warrant, in whole or in part and at any time or from time to
time, by surrendering this Warrant, with the purchase form appended hereto as
Exhibit I duly executed by or on behalf of the Registered Holder, at the
principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full, in lawful money of the
United States, of the Purchase Price payable in respect of the number of Warrant
Shares purchased upon such exercise.
          (b) Cashless Exercise.
               (i) During such periods as there is not an effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”),
registering, and no current prospectus available for, the resale by the
Registered Holder of any Warrant Shares (except to the extent due to any actions
or inactions of the Registered Holders under the Registration Rights Agreement
dated as of November 4, 2011 by and among the Company and the Purchasers (as
defined therein)), the Registered Holder may, at its option, elect to exercise
this Warrant, in whole or in part, on a cashless basis, by surrendering this
Warrant, with the purchase form appended hereto as Exhibit I duly executed by or
on behalf of the Registered Holder, at the principal office of the Company, or
at such other office or agency as the Company may designate, by canceling a
portion of this Warrant in payment of the Purchase Price payable in respect of
the number of Warrant Shares purchased upon such exercise. In the event of an

 

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exercise pursuant to this subsection 1(b), the number of Warrant Shares issued
to the Registered Holder shall be determined according to the following formula:
X = Y(A-B)
             A

     
Where: X =
  the number of Warrant Shares that shall be issued to the Registered Holder;
 
   
Y=
  the number of Warrant Shares for which this Warrant is being exercised (which
shall include both the number of Warrant Shares issued to the Registered Holder
and the number of Warrant Shares subject to the portion of the Warrant being
cancelled in payment of the Purchase Price);
 
   
A=
  the Fair Market Value (as defined below) of one share of Common Stock; and
 
   
B=
  the Purchase Price then in effect.

               (ii) The Fair Market Value per share of Common Stock shall be
determined as follows:
                    (A) If the Common Stock is listed on a national securities
exchange, or another nationally recognized trading system as of the Exercise
Date, the Fair Market Value per share of Common Stock shall be deemed to be the
average of the high and low reported sale prices per share of Common Stock
thereon on the trading day immediately preceding the Exercise Date (provided
that if no such price is reported on such day, the Fair Market Value per share
of Common Stock shall be determined pursuant to clause (B)).
                    (B) If the Common Stock is not listed on a national
securities exchange or another nationally recognized trading system as of the
Exercise Date, the Fair Market Value per share of Common Stock shall be deemed
to be the amount most recently determined by the Board of Directors of the
Company (the “Board”) to represent the fair market value per share of the Common
Stock (including without limitation a determination for purposes of granting
Common Stock options or issuing Common Stock under any plan, agreement or
arrangement with employees of the Company); and, upon request of the Registered
Holder, the Board (or a representative thereof) shall, as promptly as reasonably
practicable but in any event not later than 10 days after such request, notify
the Registered Holder of the Fair Market Value per share of Common Stock and
furnish the Registered Holder with reasonable documentation of the Board’s
determination of such Fair Market Value. Notwithstanding the foregoing, if the
Board has not made such a determination within the three-month period prior to
the Exercise Date, then (A) the Board shall make, and shall provide or cause to
be provided to the Registered Holder notice of, a determination of the Fair
Market Value per share of the Common Stock within 15 days of a request by the
Registered Holder that it do so, and (B) the exercise of this Warrant pursuant
to this subsection 1(b) shall be delayed until such determination is made and
notice thereof is provided to the Registered Holder.

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          (c) Exercise Date. Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company as provided in
subsection 1(a) or 1(b) above (the “Exercise Date”). At such time, the person or
persons in whose name or names any certificates for Warrant Shares shall be
issuable upon such exercise as provided in subsection 1(d) below shall be deemed
to have become the holder or holders of record of the Warrant Shares represented
by such certificates.
          (d) Issuance of Certificates. The Company, at its expense, shall use
its best efforts, as soon as practicable after the exercise of this Warrant in
whole or in part, and in any event within three (3) business days thereafter, to
cause to be issued in the name of, and delivered to, the Registered Holder, or
as the Registered Holder (upon payment by the Registered Holder of any
applicable transfer taxes) may direct:
                    (i) a certificate or certificates for the number of full
Warrant Shares to which the Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which the Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
                    (ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the number of Warrant Shares for which this Warrant
was so exercised (which, in the case of an exercise pursuant to subsection 1(b),
shall include both the number of Warrant Shares issued to the Registered Holder
pursuant to such partial exercise and the number of Warrant Shares subject to
the portion of the Warrant being cancelled in payment of the Purchase Price).
          (e) Exercise Limitation. Notwithstanding anything to the contrary
contained herein, the Company shall not effect any exercise of this Warrant and
the Registered Holder shall not be entitled to exercise this Warrant for a
number of Warrant Shares in excess of that number of Warrant Shares which, upon
giving effect to such exercise, would cause (i) the aggregate number of shares
of Common Stock beneficially owned by a holder of Series D Preferred Stock and
its affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the holder’s for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), to exceed
19.99% of the total number of issued and outstanding shares of Common Stock of
the Company following such exercise, or (b) the combined voting power of the
securities of the Company beneficially owned by a holder of Series D Preferred
Stock and its affiliates and any other persons whose beneficial ownership of
Common Stock would be aggregated with the holder’s for purposes of Section 13(d)
of the Exchange Act to exceed 19.99% of the combined voting power of all of the
securities of the Company then outstanding following such exercise, unless, in
either case, the Company obtains the requisite stockholder approval under NASDAQ
Marketplace Rule 5635(b), in which case, the Issuance Limitation under this
Section 1(e) shall no longer apply to the Registered Holder. For purposes of
this Section 1(e), the aggregate number of shares of Common Stock or voting
securities beneficially owned by the Registered Holder and its affiliates and
any other persons whose beneficial ownership of Common Stock would be aggregated
with the Registered

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Holder’s for purposes of Section 13(d) of the Exchange Act shall include the
shares of Common Stock issuable upon the exercise of this Warrant with respect
to which such determination is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (i) exercise of the
remaining unexercised and non-cancelled portion of this Warrant by the
Registered Holder and (ii) exercise or conversion of the unexercised,
non-converted or non-cancelled portion of any other securities of the Company
that do not have voting power (including without limitation any securities of
the Company which would entitle the holder thereof to acquire at any time Common
Stock, including without limitation any debt, preferred stock, right, option,
warrant or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock), subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Registered Holder or any
of its affiliates and other persons whose beneficial ownership of Common Stock
would be aggregated with the Registered Holder’s for purposes of Section 13(d)
of the Exchange Act.
     2. Adjustments.
          (a) Adjustments to Purchase Price for Diluting Issues. In the event
that the Series D Conversion Price (as defined in the Certificate of
Designations, Preferences and Rights of the Series D Convertible Preferred Stock
of the Company (the “Certificate of Designations”)) shall be adjusted pursuant
to Section 4.4.4 of the Certificate of Designations, the Purchase Price
hereunder shall, automatically and concurrently with the adjustment to the
Series D Conversion Price, be adjusted in the same manner and same proportion as
the Series D Conversion Price is so adjusted.
          (b) Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the Original Issue Date effect a
subdivision of the outstanding Common Stock, the Purchase Price then in effect
immediately before that subdivision shall be proportionately decreased. If the
Company shall at any time or from time to time after the Original Issue Date
combine the outstanding shares of Common Stock, the Purchase Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.
          (c) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time, or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect immediately before such event shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Purchase
Price then in effect by a fraction:
                    (A) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and

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                    (B) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Purchase Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Purchase Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
          (d) Adjustment in Number of Warrant Shares. When any adjustment is
required to be made in the Purchase Price pursuant to subsections 2(b) or 2(c),
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
          (e) Adjustments for Other Dividends and Distributions. In the event
the Company at any time or from time to time after the Original Issue Date shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Company (other than shares of Common Stock) or in cash or
other property (other than regular cash dividends paid out of earnings or earned
surplus, determined in accordance with generally accepted accounting
principles), then and in each such event provision shall be made so that the
Registered Holder shall receive upon exercise hereof, in addition to the number
of shares of Common Stock issuable hereunder, the kind and amount of securities
of the Company, cash or other property which the Registered Holder would have
been entitled to receive had this Warrant been exercised on the date of such
event and had the Registered Holder thereafter, during the period from the date
of such event to and including the Exercise Date, retained any such securities
receivable during such period, giving application to all adjustments called for
during such period under this Section 2 with respect to the rights of the
Registered Holder.
          (f) Adjustment for Reorganization. If there shall occur any
reorganization, recapitalization, reclassification, consolidation or merger
involving the Company in which the Common Stock is converted into or exchanged
for securities, cash or other property (other than a transaction covered by
subsections 2(b), 2(c) or 2(e)) (collectively, a “Reorganization”), then,
following such Reorganization, the Registered Holder shall receive upon exercise
hereof the kind and amount of securities, cash or other property which the
Registered Holder would have been entitled to receive pursuant to such
Reorganization if such exercise had taken place immediately prior to such
Reorganization. In any such case, appropriate adjustment (as determined in good
faith by the Board) shall be made in the application of the provisions set forth
herein with respect to the rights and interests thereafter of the Registered
Holder, to the end that the provisions set forth in this Section 2 (including
provisions with respect to changes in and other adjustments of the Purchase
Price) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any securities, cash or other property thereafter deliverable upon
the exercise of this Warrant.

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          (g) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Purchase Price pursuant to this Section 2, the
Company at its expense shall, as promptly as reasonably practicable but in any
event not later than 10 days thereafter, compute such adjustment or readjustment
in accordance with the terms hereof and furnish to the Registered Holder a
certificate setting forth such adjustment or readjustment (including the kind
and amount of securities, cash or other property for which this Warrant shall be
exercisable and the Purchase Price) and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, as promptly as
reasonably practicable after the written request at any time of the Registered
Holder (but in any event not later than 10 days thereafter), furnish or cause to
be furnished to the Registered Holder a certificate setting forth (i) the
Purchase Price then in effect and (ii) the number of shares of Common Stock and
the amount, if any, of other securities, cash or property which then would be
received upon the exercise of this Warrant.
     3. Fractional Shares. The Company shall not be required upon the exercise
of this Warrant to issue any fractional shares, but shall pay the value thereof
to the Registered Holder in cash on the basis of the Fair Market Value per share
of Common Stock, as determined pursuant to subsection 1(b)(ii) above.
     4. Redemption of Warrants.
          (a) At any time after November 4, 2013, subject to the terms of this
Section 4, the Company shall have the right to redeem all or a portion of this
Warrant for a redemption price (the “Redemption Price”) equal to the result
obtained by multiplying (i) $0.01 by (ii) the number of Warrant Shares that the
Registered Holder is entitled to purchase upon exercise of all or the portion of
this Warrant that is being redeemed (such Redemption Price being subject to
adjustment for stock splits, stock dividends, combinations, recapitalizations,
reclassifications, and similar transactions affecting the Common Stock).
          (b) The Company shall exercise this redemption right by providing at
least 30 days’ prior written notice to the Registered Holder of such redemption
(the “Redemption Notice”). Such Redemption Notice shall be provided to the
Registered Holder in accordance with Section 19 of this Warrant. The Redemption
Notice shall specify the time, manner and place of redemption, including without
limitation the date on which this Warrant shall be redeemed (the “Redemption
Date”) and the Redemption Price payable to the Registered Holder (assuming that
this Warrant is not exercised on or prior to the Redemption Date).
          (c) Notwithstanding the foregoing, the Company may not redeem this
Warrant or provide the Redemption Notice to the Registered Holder (i) unless the
closing sales price of the Common Stock for twenty (20) or more trading days in
a period of thirty (30) consecutive trading days ending within thirty (30) days
prior to the date the Company provides the Redemption Notice to the Registered
Holder is greater than or equal to $6.51 (subject to adjustment for stock
splits, stock dividends, combinations, recapitalizations, reclassifications, and
similar transactions affecting the Common Stock) and (ii) with respect to any
portion of this Warrant which may not be exercised by the Registered Holder as
of the time of the Redemption Notice under Section 1(e).

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          (d) This Warrant shall cease to be exercisable and shall be terminated
and of no further force or effect effective at 5:00 p.m. (Boston Time) on the
Redemption Date. If the Registered Holder does not exercise this Warrant on or
prior to the Redemption Date, the Registered Holder shall surrender this Warrant
to the Company on the Redemption Date for cancellation. From and after the
Redemption Date, the Registered Holder’s sole right hereunder shall be to
receive the Redemption Price, without interest, upon presentation and surrender
of this Warrant for cancellation.
     5. Transfers, etc.
          (a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act, or (ii) the Company first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration requirements of the
Securities Act. Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is an
entity to a wholly owned subsidiary of such entity, a transfer by a Registered
Holder which is a partnership to a partner of such partnership or a retired
partner of such partnership or to the estate of any such partner or retired
partner, or a transfer by a Registered Holder which is a limited liability
company to a member of such limited liability company or a retired member or to
the estate of any such member or retired member, provided that the transferee in
each case agrees in writing to be subject to the terms of this Section 5, or
(ii) a transfer made in accordance with Rule 144 under the Securities Act.
          (b) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
“The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and may not be offered, sold or
otherwise transferred, pledged or hypothecated unless and until such securities
are registered under such Act or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is not required.”
     The foregoing legend shall be removed from the certificates representing
any Warrant Shares, at the request of the holder thereof, at such time as (i) a
period of at least one year, as determined in accordance with paragraph (d) of
Rule 144 under the Act, has elapsed since the later of the date the Warrant
Shares were acquired from the Company or an affiliate of the Company, and
(ii) the Warrant Shares become eligible for resale pursuant to Rule 144(b)(1)(i)
under the Securities Act.
          (c) The Company will maintain a register containing the name and
address of the Registered Holder of this Warrant. The Registered Holder may
change its address as shown on the warrant register by written notice to the
Company requesting such change.
          (d) Subject to the provisions of Section 5 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant with a properly

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executed assignment (in the form of Exhibit II hereto) at the principal office
of the Company (or, if another office or agency has been designated by the
Company for such purpose, then at such other office or agency).
     6. Notices of Record Date, etc. In the event:
          (a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
          (b) of any capital reorganization of the Company, any reclassification
of the Common Stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity and its Common Stock is not converted into
or exchanged for any other securities or property), or any transfer of all or
substantially all of the assets of the Company; or
          (c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will send or cause to be sent to the
Registered Holder a notice specifying, as the case may be, (i) the record date
for such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice shall be sent at least 10 days prior to
the record date or effective date for the event specified in such notice.
     7. Reservation of Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property, as
from time to time shall be issuable upon the exercise of this Warrant.
     8. Exchange or Replacement of Warrants.
          (a) Upon the surrender by the Registered Holder, properly endorsed, to
the Company at the principal office of the Company, the Company will, subject to
the provisions of Section 5 hereof, issue and deliver to or upon the order of
the Registered Holder, at the Company’s expense, a new Warrant or Warrants of
like tenor, in the name of the Registered Holder or as the Registered Holder
(upon payment by the Registered Holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face or faces thereof for the number of

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shares of Common Stock (or other securities, cash and/or property) then issuable
upon exercise of this Warrant.
          (b) Upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and (in the case of
loss, theft or destruction) upon delivery of an indemnity agreement (with surety
if reasonably required) in an amount reasonably satisfactory to the Company, or
(in the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
     9. Notices. All notices and other communications from the Company to the
Registered Holder in connection herewith shall be mailed by certified or
registered mail, postage prepaid, sent by email or confirmed facsimile or sent
via a reputable nationwide overnight courier service guaranteeing next business
day delivery, to the address last furnished to the Company in writing by the
Registered Holder. All notices and other communications from the Registered
Holder to the Company in connection herewith shall be mailed by certified or
registered mail, postage prepaid, sent by email or confirmed facsimile or sent
via a reputable nationwide overnight courier service guaranteeing next business
day delivery, to the Company at its principal office set forth below. If the
Company should at any time change the location of its principal office to a
place other than as set forth below, it shall give prompt written notice to the
Registered Holder and thereafter all references in this Warrant to the location
of its principal office at the particular time shall be as so specified in such
notice. All such notices and communications shall be deemed delivered (i) two
business days after being sent by certified or registered mail, return receipt
requested, postage prepaid, (ii) upon receipt of email or confirmed facsimile or
(iii) one business day after being sent via a reputable nationwide overnight
courier service guaranteeing next business day delivery.
     Notices and other communications from the Registered Holder to the Company
shall be sent to:
Idera Pharmaceuticals, Inc.
167 Sidney Street
Cambridge, MA 02139
Attention: Chief Executive Officer
Facsimile: (617) 679-5592
Email: sagrawal@iderapharma.com

with a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Stuart Falber
Facsimile: (617) 526-5000
Email: stuart.falber@wilmerhale.com

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     10. No Rights as Stockholder. Until the exercise of this Warrant, the
Registered Holder shall not have or exercise any rights by virtue hereof as a
stockholder of the Company. Notwithstanding the foregoing, in the event (i) the
Company effects a split of the Common Stock by means of a stock dividend and the
Purchase Price of and the number of Warrant Shares are adjusted as of the date
of the distribution of the dividend (rather than as of the record date for such
dividend), and (ii) the Registered Holder exercises this Warrant between the
record date and the distribution date for such stock dividend, the Registered
Holder shall be entitled to receive, on the distribution date, the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.
     11. Amendment or Waiver. Any term of this Warrant may be amended or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought. No waivers of any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.
     12. Section Headings. The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
     13. Governing Law. This Warrant will be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts (without
reference to the conflicts of law provisions thereof).
     14. Facsimile Signatures. This Warrant may be executed by facsimile
signature.
EXECUTED as of the Date of Issuance indicated above.

            Idera Pharmaceuticals, Inc.
      By:           Title:       

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EXHIBIT I
PURCHASE FORM
 

To:_________________   Dated:____________

     The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby elects to purchase (check applicable box):
     Ğ ____ shares of the Common Stock of Idera Pharmaceuticals, Inc. covered by
such Warrant; or
     Ğ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in subsection 1(b).
     The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant. Such payment takes
the form of (check applicable box or boxes):

  Ğ   $______ in lawful money of the United States; and/or     Ğ   the
cancellation of such portion of the attached Warrant as is exercisable for a
total of _____ Warrant Shares (using a Fair Market Value of $_____ per share for
purposes of this calculation) ; and/or     Ğ   the cancellation of such number
of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 1(b), to exercise this Warrant with respect to the maximum number of
Warrant Shares purchasable pursuant to the cashless exercise procedure set forth
in subsection 1(b).

                  Signature:                 Address:                 

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EXHIBIT II
ASSIGNMENT FORM
     FOR VALUE RECEIVED, ____________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant (No.
____) with respect to the number of shares of Common Stock of Idera
Pharmaceuticals, Inc. covered thereby set forth below, unto:

         
Name of Assignee
  Address   No. of Shares

 
 

                 
Dated:
          Signature:    
 
               

Signature Guaranteed:

                  By:      

The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.

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EXHIBIT C
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES D PREFERRED STOCK
OF
IDERA PHARMACEUTICALS, INC.
(Pursuant to Section 151 of
the Delaware General Corporation Law)
     Idera Pharmaceuticals, Inc. (the “Corporation”), a corporation organized
and existing under the laws of the State of Delaware, hereby certifies that,
pursuant to authority conferred on its Board of Directors (the “Board”) by the
Restated Certificate of Incorporation of the Corporation, as amended, the
following resolution was adopted by the Board at a meeting duly called and held
on November 4, 2011, which resolution remains in full force and effect on the
date hereof:
RESOLVED, that there is hereby created and established a series of the
Corporation’s authorized Preferred Stock (the “Preferred Stock”) having a par
value of $0.01 per share, which series shall be designated as “Series D
Convertible Preferred Stock” (the “Series D Preferred Stock”) and shall consist
of 1,124,260 shares. The shares of Series D Preferred Stock shall have the
voting powers, designations, preferences and other special rights, and
qualifications, limitations and restrictions thereof set forth below:
     1. Dividends.
          1.1 Each holder of Series D Preferred Stock shall be entitled to
receive, with respect to each share of Series D Preferred Stock then outstanding
and held by such holder of Series D Preferred Stock, dividends, commencing from
the date of issuance of such share of Series D Preferred Stock, at the rate of
seven percent (7%) per annum (on the basis of a 360 day year) of the Series D
Original Issue Price (as defined below) (the “Series D Preferred Dividends”).
The Series D Preferred Dividends shall be cumulative, whether or not earned or
declared, shall be paid quarterly in arrears on the last day of December, March,
June and September (a “Quarterly Dividend Payment Date”) in each year that
Series D Preferred Stock is outstanding, with the first Quarterly Dividend
Payment Date being December 31, 2011, and shall be prorated for periods shorter
than one quarter. The rights of a holder of Series D Preferred Stock as Series D
Preferred Dividends shall rank senior to the rights of the Corporation’s
Series A Convertible Preferred Stock as to dividends. The Series D Preferred
Dividends shall be paid to each holder of Series D Preferred Stock in cash out
of legally available funds or, at the Corporation’s election, through the
issuance of such number of shares of the Corporation’s Common Stock, par value
$0.001 per share (the “Common Stock”) (rounded down to the nearest whole share
with any fractional shares being issued in cash in an amount equal to the Market
Price (as defined in Section 4.2 below) of such fractional share of Common
Stock) determined by dividing the amount of the total accrued but unpaid
dividends

 

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then outstanding on such holder’s shares of Series D Preferred Stock by the
Market Price then in effect (which for this purpose may not be less than $1.46
per share, subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization with respect to the
Common Stock); provided, however, that (i) the Corporation may not pay such
dividends in shares of Common Stock on or prior to December 31, 2014, (ii) the
Corporation may not issue shares of Common Stock in excess of that number of
shares of Common Stock which, upon giving effect to such issuance, would cause
(a) the aggregate number of shares of Common Stock beneficially owned by a
holder of Series D Preferred Stock and its affiliates and any other persons
whose beneficial ownership of Common Stock would be aggregated with the holder’s
for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), to exceed 19.99% of the total number of issued and
outstanding shares of Common Stock of the Corporation following such issuance,
or (b) the combined voting power of the securities of the Corporation
beneficially owned by a holder of Series D Preferred Stock and its affiliates
and any other persons whose beneficial ownership of Common Stock would be
aggregated with the holder’s for purposes of Section 13(d) of the Exchange Act
to exceed 19.99% of the combined voting power of all of the securities of the
Corporation then outstanding following such issuance, unless, in either case,
the Corporation obtains the requisite stockholder approval under NASDAQ
Marketplace Rule 5635(b) (the “Issuance Limitation”), in which case, the
Issuance Limitation under this clause (ii) shall no longer apply to the payment
of dividends hereunder and (iii) if clause (ii) shall in fact limit the issuance
of any shares of Common Stock in payment of a given dividend, then the
Corporation’s election to pay such dividend in shares of Common Stock shall be
ineffective to the extent of such limitation and such dividend shall instead
thereupon be paid in cash by the Corporation out of legally available funds. Any
election by the Corporation to pay Series D Preferred Dividends in cash or
shares of Common Stock shall be made uniformly with respect to all outstanding
shares of Series D Preferred Stock for a given dividend period. For purposes of
this Section 1.1 the aggregate number of shares of Common Stock or voting
securities beneficially owned by a holder of Series D Preferred Stock and its
affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the holder’s for purposes of Section 13(d) of the
Exchange Act, shall include the shares of Common Stock to be issued as part of
such dividend payment, but shall exclude the number of shares of Common Stock
which would be issuable upon exercise or conversion of the unexercised,
non-converted or non-cancelled portion of any other securities of the
Corporation that do not have voting power (including without limitation any
securities of the Corporation which would entitle the holder thereof to acquire
at any time Common Stock, including without limitation any debt, preferred
stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock), subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by
the holder or any of its affiliates and other persons whose beneficial ownership
of Common Stock would be aggregated with the holder’s for purposes of Section
13(d) of the Exchange Act.
          1.2 Notwithstanding the foregoing, if any Series D Preferred Dividend
is not paid by the Corporation within five trading days following a Quarterly
Dividend Payment Date, such Series D Preferred Dividend shall continue to accrue
and the Corporation shall be obligated to pay the holders a late fee with
respect to such Series D Preferred Dividend, which shall be

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paid by the Corporation in cash, at the rate of sixteen percent (16%) per annum
(or such lesser rate permitted by applicable law) (the “Dividend Late Fee”), and
shall accrue daily from the applicable Quarterly Dividend Payment Date through
and including the date the Corporation pays such Series D Preferred Dividend
plus the Dividend Late Fee in full (which amount shall be paid as liquidated
damages and not as a penalty); provided however, that no Dividend Late Fee shall
accrue or be owed with respect to any Series D Preferred Dividend (i) that the
Corporation is not permitted to pay under Delaware law or (ii) to be paid in
cash that is not paid at a time when the Corporation has less than $10 million
of cash and cash equivalents as of the applicable Quarterly Dividend Payment
Date as certified in writing by the Corporation to the holders.
          1.3 The Corporation shall not declare, pay or set aside any dividends
on shares of any other class or series of capital stock of the Corporation
(other than dividends on shares of Common Stock payable in shares of Common
Stock and dividends on the Series A Convertible Preferred Stock in accordance
with Section 2(a) of the Certificate of Designations for the Series A
Convertible Preferred Stock) unless the holders of the Series D Preferred Stock
then outstanding shall first receive, or simultaneously receive, a dividend on
each outstanding share of Series D Preferred Stock in an amount at least equal
to the sum of (i) the amount of the aggregate dividends then accrued on such
share of Series D Preferred Stock and not previously paid and (ii) (A) in the
case of a dividend on Common Stock or any class or series that is convertible
into Common Stock, that dividend per share of Series D Preferred Stock as would
equal the product of (1) the dividend payable on each share of such class or
series determined, if applicable, as if all shares of such class or series had
been converted into Common Stock and (2) the number of shares of Common Stock
issuable upon conversion of a share of Series D Preferred Stock, in each case
calculated on the record date for determination of holders entitled to receive
such dividend or (B) in the case of a dividend on any class or series that is
not convertible into Common Stock, at a rate per share of Series D Preferred
Stock determined by (1) dividing the amount of the dividend payable on each
share of such class or series of capital stock by the original issuance price of
such class or series of capital stock (subject to appropriate adjustment in the
event of any stock dividend, stock split, combination or other similar
recapitalization with respect to such class or series) and (2) multiplying such
fraction by an amount equal to the Series D Original Issue Price; provided that,
if the Corporation declares, pays or sets aside, on the same date, a dividend on
shares of more than one class or series of capital stock of the Corporation, the
dividend payable to the holders of Series D Preferred Stock pursuant to this
Section 1.3 shall be calculated based upon the dividend on the class or series
of capital stock that would result in the highest Series D Preferred Stock
dividend.
          1.4 The “Series D Original Issue Price” shall mean $8.1375 per share,
subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the
Series D Preferred Stock.
     2. Liquidation, Dissolution or Winding Up.
          2.1 Payments to Holders of Series D Preferred Stock. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series D Preferred Stock then outstanding
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders before any payment shall be made

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to the holders of Common Stock, Series A Convertible Preferred Stock or any
other class of capital stock of the Corporation ranking junior to the Series D
Preferred Stock as to liquidation, by reason of their ownership thereof, an
amount per share equal to the greater of (i) the Series D Original Issue Price,
plus any dividends accrued or declared but unpaid thereon, or (ii) such amount
per share as would have been payable with respect to such share had all shares
of Series D Preferred Stock been converted into Common Stock pursuant to
Section 4 immediately prior to such liquidation, dissolution or winding up. If
upon any such liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation available for distribution to its stockholders shall
be insufficient to pay the holders of shares of Series D Preferred Stock the
full amount to which they shall be entitled under this Subsection 2.1, the
holders of shares of Series D Preferred Stock shall share ratably in any
distribution of the assets available for distribution in proportion to the
respective amounts which would otherwise be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with respect to
such shares were paid in full.
          2.2 Payments to Holders of Common Stock. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, after
the payment of all preferential amounts required to be paid to the holders of
shares of Series D Preferred Stock and subject to any other distribution that
may be required with respect to any other series of Preferred Stock, the
remaining assets of the Corporation available for distribution to its
stockholders shall be distributed among the holders of shares of Common Stock
and any class or series of capital stock that participates with the Common Stock
in such distributions.
     3. Voting. On any matter presented to the stockholders of the Corporation
for their action or consideration at any meeting of stockholders of the
Corporation, each holder of outstanding shares of Series D Preferred Stock shall
be entitled to cast a number of votes equal to the number of whole shares of
Common Stock into which the shares of Series D Preferred Stock held by such
holder are convertible as of the record date for determining stockholders
entitled to vote on such matter. Except as provided by law or by the other
provisions of the Certificate of Incorporation, holders of Series D Preferred
Stock shall vote together with the holders of Common Stock as a single class.
     4. Optional Conversion.
     The holders of the Series D Preferred Stock shall have conversion rights as
follows (the “Conversion Rights”):
          4.1 Right to Convert.
               4.1.1 Conversion Ratio. Each share of Series D Preferred Stock
shall be convertible, at the option of the holder thereof, at any time and from
time to time, and without the payment of additional consideration by the holder
thereof, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing the Series D Original Issue Price by the Series D
Conversion Price (as defined below) in effect at the time of conversion. The
“Series D Conversion Price” shall initially be equal to $1.6275. Such initial
Series D Conversion Price, and the rate at which shares of Series D Preferred
Stock may be converted into

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shares of Common Stock, shall be subject to adjustment as provided below.
Notwithstanding the foregoing, the Corporation shall not effect any conversion
of such holder’s Series D Preferred Stock and such holder shall not be entitled
to convert its shares of Series D Preferred Stock for a number of shares of
Common Stock in excess of that number of shares of Common Stock which, upon
giving effect to such conversion, would cause (a) the aggregate number of shares
of Common Stock beneficially owned by a holder of Series D Preferred Stock and
its affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the holder’s for purposes of Section 13(d) of the
Exchange Act to exceed 19.99% of the total number of issued and outstanding
shares of Common Stock of the Corporation (including for such purpose the shares
of Common Stock issuable upon conversion of the Series D Preferred Stock)
following such conversion, or (b) the combined voting power of the securities of
the Corporation beneficially owned by a holder of Series D Preferred Stock and
its affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the holder’s for purposes of Section 13(d) of the
Exchange Act to exceed 19.99% of the combined voting power of all of the
securities of the Corporation then outstanding following such conversion,
unless, in either case, the Corporation obtains the requisite stockholder
approval under NASDAQ Marketplace Rule 5635(b) unless the Corporation obtains
the requisite stockholder approval under NASDAQ Marketplace Rule 5635(b), in
which case, this limitation under this Section 4.1.1 shall no longer apply to
the holder. For purposes of this Section 4.1.1, the aggregate number of shares
of Common Stock or voting securities beneficially owned by the holder and its
affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the holder’s for purposes of Section 13(d) of the
Exchange Act shall include the shares of Common Stock issuable upon the
conversion of the Series D Preferred Stock with respect to which such
determination is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon exercise or conversion of the unexercised,
non-converted or non-cancelled portion of any other securities of the
Corporation that do not have voting power (including without limitation any
securities of the Corporation which would entitle the holder thereof to acquire
at any time Common Stock, including without limitation any debt, preferred
stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Stock), subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by
the holder or any of its affiliates and other persons whose beneficial ownership
of Common Stock would be aggregated with the holder’s for purposes of Section
13(d) of the Exchange Act.
               4.1.2 Termination of Conversion Rights. In the event of a notice
of redemption of any shares of Series D Preferred Stock pursuant to Section 5 or
6, the Conversion Rights of the shares designated for redemption shall terminate
at the close of business on the last full day preceding the date fixed for
redemption, unless the redemption price is not fully paid on such redemption
date, in which case the Conversion Rights for such shares shall continue until
such price is paid in full. In the event of a liquidation, dissolution or
winding up of the Corporation, the Conversion Rights shall terminate at the
close of business on the last full day preceding the date fixed for the payment
of any such amounts distributable on such event to the holders of Series D
Preferred Stock.

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          4.2 Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series D Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the Market Price
of a share of Common Stock. Whether or not fractional shares would be issuable
upon such conversion shall be determined on the basis of the total number of
shares of Series D Preferred Stock the holder is at the time converting into
Common Stock and the aggregate number of shares of Common Stock issuable upon
such conversion. The “Market Price” of the Common Stock shall be determined as
follows: if the Common Stock is listed on a national securities exchange or
another nationally recognized trading system, the Market Price per share of
Common Stock shall be deemed to be the greater of (a) the 20 consecutive trading
day average closing price per share of the Corporation’s common stock ending on
the trading day immediately prior to the date of determination and (b) the
closing price of the Corporation’s common stock on the trading day immediately
prior to the date of determination; and if the Common Stock is not listed on a
national securities exchange or another nationally recognized trading system,
the Market Price per share of Common Stock shall be deemed to be the amount most
recently determined by the Board of Directors of the Corporation to represent
the fair market value per share of the Common Stock (including without
limitation a determination for purposes of granting Common Stock options or
issuing Common Stock under any plan, agreement or arrangement with employees of
the Company). Upon request of a holder of Series D Preferred Stock, the Board of
Directors (or a representative thereof) shall, as promptly as reasonably
practicable but in any event not later than 10 days after such request, notify
the holder of the Market Price and furnish the holder with reasonable
documentation of the Board’s determination of such Market Price. Notwithstanding
the foregoing, if the Board has not made such a determination within the
three-month period prior to the date of determination, then the Board shall
make, and shall provide or cause to be provided to the holder notice of, a
determination of the Market Price within 15 days of a request by the holder that
it do so.
          4.3 Mechanics of Conversion.
               4.3.1 Notice of Conversion. In order for a holder of Series D
Preferred Stock to voluntarily convert shares of Series D Preferred Stock into
shares of Common Stock, such holder shall surrender the certificate or
certificates for such shares of Series D Preferred Stock (or, if such registered
holder alleges that such certificate has been lost, stolen or destroyed, a lost
certificate affidavit and agreement reasonably acceptable to the Corporation to
indemnify the Corporation against any claim that may be made against the
Corporation on account of the alleged loss, theft or destruction of such
certificate), at the office of the transfer agent for the Series D Preferred
Stock (or at the principal office of the Corporation if the Corporation serves
as its own transfer agent), together with written notice that such holder elects
to convert all or any number of the shares of the Series D Preferred Stock
represented by such certificate or certificates and, if applicable, any event on
which such conversion is contingent. Such notice shall state such holder’s name
or the names of the nominees in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. If required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or his,
her or its attorney duly authorized in writing. The close of business on the
date of receipt by the transfer agent (or by the Corporation if the Corporation

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serves as its own transfer agent) of such certificates (or lost certificate
affidavit and agreement) and notice shall be the time of conversion (the
“Conversion Time”), and the shares of Common Stock issuable upon conversion of
the shares represented by such certificate shall be deemed to be outstanding of
record as of such date. The Corporation shall, as soon as practicable after the
Conversion Time, (i) issue and deliver to such holder of Series D Preferred
Stock, or to his, her or its nominees, a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion in
accordance with the provisions hereof and a certificate for the number (if any)
of the shares of Series D Preferred Stock represented by the surrendered
certificate that were not converted into Common Stock, (ii) pay in cash such
amount as provided in Subsection 4.2 in lieu of any fraction of a share of
Common Stock otherwise issuable upon such conversion and (iii) pay all accrued
or declared but unpaid dividends on the shares of Series D Preferred Stock
converted.
               4.3.2 Reservation of Shares. The Corporation shall at all times
when the Series D Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued capital stock, for the purpose of
effecting the conversion of the Series D Preferred Stock, such number of its
duly authorized shares of Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding Series D Preferred Stock; and if at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion of all then outstanding shares of the
Series D Preferred Stock, the Corporation shall take such corporate action as
may be necessary to increase its authorized but unissued shares of Common Stock
to such number of shares as shall be sufficient for such purposes, including,
without limitation, engaging in best efforts to obtain the requisite stockholder
approval of any necessary amendment to the Certificate of Incorporation. Before
taking any action which would cause an adjustment reducing the Series D
Conversion Price below the then par value of the shares of Common Stock issuable
upon conversion of the Series D Preferred Stock, the Corporation will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Corporation may validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Series D Conversion Price.
               4.3.3 Effect of Conversion. All shares of Series D Preferred
Stock which shall have been surrendered for conversion as herein provided shall
no longer be deemed to be outstanding and all rights with respect to such shares
shall immediately cease and terminate at the Conversion Time, except only the
right of the holders thereof to receive shares of Common Stock in exchange
therefor, to receive payment in lieu of any fraction of a share otherwise
issuable upon such conversion as provided in Subsection 4.2 and to receive
payment of any dividends accrued or declared but unpaid thereon. Any shares of
Series D Preferred Stock so converted shall be retired and cancelled and may not
be reissued as shares of such series, and the Corporation may thereafter take
such appropriate action (without the need for stockholder action) as may be
necessary to reduce the authorized number of shares of Series D Preferred Stock
accordingly.
               4.3.4 No Further Adjustment. Upon any such conversion, no
adjustment to the Series D Conversion Price shall be made for any declared but
unpaid dividends on the Series D Preferred Stock surrendered for conversion or
on the Common Stock delivered upon conversion.

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               4.3.5 Taxes. The Corporation shall pay any and all issue and
other similar taxes that may be payable in respect of any issuance or delivery
of shares of Common Stock upon conversion of shares of Series D Preferred Stock
pursuant to this Section 4. The Corporation shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of shares of Common Stock in a name other than that in
which the shares of Series D Preferred Stock so converted were registered, and
no such issuance or delivery shall be made unless and until the person or entity
requesting such issuance has paid to the Corporation the amount of any such tax
or has established, to the satisfaction of the Corporation, that such tax has
been paid.
          4.4 Adjustments to Series D Conversion Price for Diluting Issues.
               4.4.1 Special Definitions. For purposes of this Article Fourth,
the following definitions shall apply:
                    (a) “Option” shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities.
                    (b) “Series D Original Issue Date” shall mean the date on
which the first share of Series D Preferred Stock was issued.
                    (c) “Convertible Securities” shall mean any evidences of
indebtedness, shares or other securities directly or indirectly convertible into
or exchangeable for Common Stock, but excluding Options.
                    (d) “Additional Shares of Common Stock” shall mean all
shares of Common Stock issued (or, pursuant to Subsection 4.4.3 below, deemed to
be issued) by the Corporation after the Series D Original Issue Date, other than
(1) the following shares of Common Stock and (2) shares of Common Stock deemed
issued pursuant to the following Options and Convertible Securities (clauses
(1) and (2), collectively, “Exempted Securities”):

  (i)   shares of Common Stock, Options or Convertible Securities issued as a
dividend or distribution on Series D Preferred Stock;     (ii)   shares of
Common Stock, Options or Convertible Securities issued by reason of a dividend,
stock split, split-up or other distribution on shares of Common Stock that is
covered by Subsection 4.5, 4.6, 4.7 or 4.8;     (iii)   shares of Common Stock
or Options issued to employees or directors of, or consultants or advisors to,
the Corporation or any of its subsidiaries pursuant to a plan, agreement or
arrangement approved by the Board of Directors of the Corporation;

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  (iv)   shares of Common Stock or Convertible Securities actually issued upon
the exercise of Options or shares of Common Stock actually issued upon the
conversion or exchange of Convertible Securities, in each case provided such
issuance is pursuant to the terms of such Option or Convertible Security;    
(v)   shares of Common Stock, Options or Convertible Securities issued as
payments of interest on notes or other indebtedness of the Company;     (vi)  
shares of Common Stock, Options or Convertible Securities issued to banks,
equipment lessors or other financial institutions, or to real property lessors,
pursuant to a debt financing, equipment leasing or real property leasing
transaction approved by the Board of Directors of the Corporation;     (vii)  
shares of Common Stock, Options or Convertible Securities issued to suppliers or
third party service providers in connection with the provision of goods or
services, including placement agents, pursuant to transactions approved by the
Board of Directors of the Corporation;     (viii)   shares of Common Stock,
Options or Convertible Securities issued pursuant to the acquisition of another
corporation by the Corporation by merger, purchase of substantially all of the
assets or other reorganization or to a joint venture agreement, provided, that
such issuances are approved by the Board of Directors of the Corporation; or    
(ix)   shares of Common Stock, Options or Convertible Securities issued in
connection with sponsored research, collaboration, technology license,
development, marketing or other similar agreements or strategic partnerships
approved by the Board of Directors of the Corporation.

               4.4.2 No Adjustment of Series D Conversion Price. No adjustment
in the Series D Conversion Price shall be made as the result of the issuance or
deemed issuance of Additional Shares of Common Stock if the Corporation receives
written notice from the Requisite Holders agreeing that no such adjustment shall
be made as the result of the issuance or deemed issuance of such Additional
Shares of Common Stock. The term “Requisite Holders”

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shall mean the holders of at least a majority of the then outstanding shares of
Series D Preferred Stock.
               4.4.3 Deemed Issue of Additional Shares of Common Stock.
                    (a) If the Corporation at any time or from time to time
after the Series D Original Issue Date shall issue any Options or Convertible
Securities (excluding Options or Convertible Securities which are themselves
Exempted Securities) or shall fix a record date for the determination of holders
of any class of securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares of Common Stock (as set forth in
the instrument relating thereto, assuming the satisfaction of any conditions to
exercisability, convertibility or exchangeability but without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible Securities and
Options therefor, the conversion or exchange of such Convertible Securities,
shall be deemed to be Additional Shares of Common Stock issued as of the time of
such issue or, in case such a record date shall have been fixed, as of the close
of business on such record date.
                    (b) If the terms of any Option or Convertible Security, the
issuance of which resulted in an adjustment to the Series D Conversion Price
pursuant to the terms of Subsection 4.4.4, are revised as a result of an
amendment to such terms or any other adjustment pursuant to the provisions of
such Option or Convertible Security (but excluding automatic adjustments to such
terms pursuant to anti-dilution or similar provisions of such Option or
Convertible Security) to provide for either (1) any increase or decrease in the
number of shares of Common Stock issuable upon the exercise, conversion and/or
exchange of any such Option or Convertible Security or (2) any increase or
decrease in the consideration payable to the Corporation upon such exercise,
conversion and/or exchange, then, effective upon such increase or decrease
becoming effective, the Series D Conversion Price computed upon the original
issue of such Option or Convertible Security (or upon the occurrence of a record
date with respect thereto) shall be readjusted to such Series D Conversion Price
as would have obtained had such revised terms been in effect upon the original
date of issuance of such Option or Convertible Security. Notwithstanding the
foregoing, no readjustment pursuant to this clause (b) shall have the effect of
increasing the Series D Conversion Price to an amount which exceeds the lower of
(i) the Series D Conversion Price in effect immediately prior to the original
adjustment made as a result of the issuance of such Option or Convertible
Security, or (ii) the Series D Conversion Price that would have resulted from
any issuances of Additional Shares of Common Stock (other than deemed issuances
of Additional Shares of Common Stock as a result of the issuance of such Option
or Convertible Security) between the original adjustment date and such
readjustment date.
                    (c) If the terms of any Option or Convertible Security
(excluding Options or Convertible Securities which are themselves Exempted
Securities), the issuance of which did not result in an adjustment to the
Series D Conversion Price pursuant to the terms of Subsection 4.4.4 (either
because the consideration per share (determined pursuant to Subsection 4.4.5) of
the Additional Shares of Common Stock subject thereto was equal to or greater
than the Series D Conversion Price then in effect, or because such Option or
Convertible

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Security was issued before the Series D Original Issue Date), are revised after
the Series D Original Issue Date as a result of an amendment to such terms or
any other adjustment pursuant to the provisions of such Option or Convertible
Security (but excluding automatic adjustments to such terms pursuant to
anti-dilution or similar provisions of such Option or Convertible Security) to
provide for either (1) any increase in the number of shares of Common Stock
issuable upon the exercise, conversion or exchange of any such Option or
Convertible Security or (2) any decrease in the consideration payable to the
Corporation upon such exercise, conversion or exchange, then such Option or
Convertible Security, as so amended or adjusted, and the Additional Shares of
Common Stock subject thereto (determined in the manner provided in Subsection
4.4.3(a)) shall be deemed to have been issued effective upon such increase or
decrease becoming effective.
                    (d) Upon the expiration or termination of any unexercised
Option or unconverted or unexchanged Convertible Security (or portion thereof)
which resulted (either upon its original issuance or upon a revision of its
terms) in an adjustment to the Series D Conversion Price pursuant to the terms
of Subsection 4.4.4, the Series D Conversion Price shall be readjusted to such
Series D Conversion Price as would have obtained had such Option or Convertible
Security (or portion thereof) never been issued.
                    (e) If the number of shares of Common Stock issuable upon
the exercise, conversion and/or exchange of any Option or Convertible Security,
or the consideration payable to the Corporation upon such exercise, conversion
and/or exchange, is calculable at the time such Option or Convertible Security
is issued or amended but is subject to adjustment based upon subsequent events,
any adjustment to the Series D Conversion Price provided for in this Subsection
4.4.3 shall be effected at the time of such issuance or amendment based on such
number of shares or amount of consideration without regard to any provisions for
subsequent adjustments (and any subsequent adjustments shall be treated as
provided in clauses (b) and (c) of this Subsection 4.4.3). If the number of
shares of Common Stock issuable upon the exercise, conversion and/or exchange of
any Option or Convertible Security, or the consideration payable to the
Corporation upon such exercise, conversion and/or exchange, cannot be calculated
at all at the time such Option or Convertible Security is issued or amended, any
adjustment to the Series D Conversion Price that would result under the terms of
this Subsection 4.4.3 at the time of such issuance or amendment shall instead be
effected at the time such number of shares and/or amount of consideration is
first calculable (even if subject to subsequent adjustments), assuming for
purposes of calculating such adjustment to the Series D Conversion Price that
such issuance or amendment took place at the time such calculation can first be
made.
               4.4.4 Adjustment of Series D Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event the Corporation shall at any
time after the Series D Original Issue Date issue Additional Shares of Common
Stock (including Additional Shares of Common Stock deemed to be issued pursuant
to Subsection 4.4.3), without consideration or for a consideration per share
less than $1.46 (subject to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization with
respect to the Common Stock), then the Series D Conversion Price shall be
reduced, concurrently with such issue, to a price (calculated to the nearest
one-hundredth of a cent) determined in

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accordance with the formula below; provided, however that in no event shall the
Series D Conversion Price hereunder be reduced under this Section 4.4.4 to a
price that is less than $1.46 (subject to appropriate adjustment in the event of
any stock dividend, stock split, combination or other similar recapitalization
with respect to the Common Stock):
CP2 = CP1* (A + B) ÷ (A + C).
For purposes of the foregoing formula, the following definitions shall apply:
                    (a) “CP2” shall mean the Series D Conversion Price in effect
immediately after such issue of Additional Shares of Common Stock
                    (b) “CP1” shall mean the Series D Conversion Price in effect
immediately prior to such issue of Additional Shares of Common Stock;
                    (c) “A” shall mean the number of shares of Common Stock
outstanding immediately prior to such issue of Additional Shares of Common Stock
(treating for this purpose as outstanding all shares of Common Stock issuable
upon exercise of Options outstanding immediately prior to such issue or upon
conversion or exchange of Convertible Securities (including the Series D
Preferred Stock) outstanding (assuming exercise of any outstanding Options
therefor) immediately prior to such issue);
                    (d) “B” shall mean the number of shares of Common Stock that
would have been issued if such Additional Shares of Common Stock had been issued
at a price per share equal to CP1 (determined by dividing the aggregate
consideration received by the Corporation in respect of such issue by CP1); and
                    (e) “C” shall mean the number of such Additional Shares of
Common Stock issued in such transaction.
               4.4.5 Determination of Consideration. For purposes of this
Subsection 4.4, the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:
                    (a) Cash and Property: Such consideration shall:

  (i)   insofar as it consists of cash, be computed at the aggregate amount of
cash received by the Corporation, excluding amounts paid or payable for accrued
interest;     (ii)   insofar as it consists of property other than cash, be
computed at the fair market value thereof at the time of such issue, as
determined in good faith by the Board of Directors of the Corporation; and

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  (iii)    in the event Additional Shares of Common Stock are issued together
with other shares or securities or other assets of the Corporation for
consideration which covers both, be the proportion of such consideration so
received, computed as provided in clauses (i) and (ii) above, as determined in
good faith by the Board of Directors of the Corporation.

                    (b) Options and Convertible Securities. The consideration
per share received by the Corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to Subsection 4.4.3, relating to Options and
Convertible Securities, shall be determined by dividing

  (i)   the total amount, if any, received or receivable by the Corporation as
consideration for the issue of such Options or Convertible Securities, plus the
minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable to the Corporation
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities, or in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, by     (ii)   the maximum number of
shares of Common Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, or in the case of Options for
Convertible Securities, the exercise of such Options for Convertible Securities
and the conversion or exchange of such Convertible Securities.

               4.4.6 Multiple Closing Dates. In the event the Corporation shall
issue on more than one date Additional Shares of Common Stock that are a part of
one transaction or a series of related transactions and that would result in an
adjustment to the Series D Conversion Price pursuant to the terms of Subsection
4.4.4, and such issuance dates occur within a period of no more than 90 days
from the first such issuance to the final such issuance, then, upon the final
such issuance, the Series D Conversion Price shall be readjusted to give effect
to all such

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issuances as if they occurred on the date of the first such issuance (and
without giving effect to any additional adjustments as a result of any such
subsequent issuances within such period).
          4.5 Adjustment for Stock Splits and Combinations. If the Corporation
shall at any time or from time to time after the Series D Original Issue Date
effect a subdivision of the outstanding Common Stock, the Series D Conversion
Price in effect immediately before that subdivision shall be proportionately
decreased so that the number of shares of Common Stock issuable on conversion of
each share of such series shall be increased in proportion to such increase in
the aggregate number of shares of Common Stock outstanding. If the Corporation
shall at any time or from time to time after the Series D Original Issue Date
combine the outstanding shares of Common Stock, the Series D Conversion Price in
effect immediately before the combination shall be proportionately increased so
that the number of shares of Common Stock issuable on conversion of each share
of such series shall be decreased in proportion to such decrease in the
aggregate number of shares of Common Stock outstanding. Any adjustment under
this subsection shall become effective at the close of business on the date the
subdivision or combination becomes effective.
          4.6 Adjustment for Certain Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Series D Original
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable on the Common Stock in additional shares of Common Stock, then and in
each such event the Series D Conversion Price in effect immediately before such
event shall be decreased as of the time of such issuance or, in the event such a
record date shall have been fixed, as of the close of business on such record
date, by multiplying the Series D Conversion Price then in effect by a fraction:

  (1)   the numerator of which shall be the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such issuance or
the close of business on such record date, and     (2)   the denominator of
which shall be the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date plus the number of shares of Common Stock issuable in payment of
such dividend or distribution.

Notwithstanding the foregoing, (a) if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Series D Conversion Price shall be recomputed
accordingly as of the close of business on such record date and thereafter the
Series D Conversion Price shall be adjusted pursuant to this subsection as of
the time of actual payment of such dividends or distributions; and (b) no such
adjustment shall be made if the holders of Series D Preferred Stock
simultaneously receive a dividend or other distribution of shares of Common
Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of Series D Preferred Stock had been
converted into Common Stock on the date of such event.

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          4.7 Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Series D Original
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation (other than a distribution of shares of
Common Stock in respect of outstanding shares of Common Stock) or in other
property and the provisions of Section 1 do not apply to such dividend or
distribution, then and in each such event the holders of Series D Preferred
Stock shall receive, simultaneously with the distribution to the holders of
Common Stock, a dividend or other distribution of such securities or other
property in an amount equal to the amount of such securities or other property
as they would have received if all outstanding shares of Series D Preferred
Stock had been converted into Common Stock on the date of such event.
          4.8 Adjustment for Merger or Reorganization, etc. If there shall occur
any reorganization, recapitalization, reclassification, consolidation or merger
involving the Corporation in which the Common Stock (but not the Series D
Preferred Stock) is converted into or exchanged for securities, cash or other
property (other than a transaction covered by Subsections 4.4, 4.6 or 4.7),
then, following any such reorganization, recapitalization, reclassification,
consolidation or merger, each share of Series D Preferred Stock shall thereafter
be convertible in lieu of the Common Stock into which it was convertible prior
to such event into the kind and amount of securities, cash or other property
which a holder of the number of shares of Common Stock of the Corporation
issuable upon conversion of one share of Series D Preferred Stock immediately
prior to such reorganization, recapitalization, reclassification, consolidation
or merger would have been entitled to receive pursuant to such transaction; and,
in such case, appropriate adjustment (as determined in good faith by the Board
of Directors of the Corporation) shall be made in the application of the
provisions in this Section 4 with respect to the rights and interests thereafter
of the holders of the Series D Preferred Stock, to the end that the provisions
set forth in this Section 4 (including provisions with respect to changes in and
other adjustments of the Series D Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any securities or
other property thereafter deliverable upon the conversion of the Series D
Preferred Stock.
          4.9 Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series D Conversion Price pursuant to this
Section 4, the Corporation at its expense shall, as promptly as reasonably
practicable but in any event not later than 10 days thereafter, compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of Series D Preferred Stock a certificate setting forth such
adjustment or readjustment (including the kind and amount of securities, cash or
other property into which the Series D Preferred Stock is convertible) and
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, as promptly as reasonably practicable after the written
request at any time of any holder of Series D Preferred Stock (but in any event
not later than 10 days thereafter), furnish or cause to be furnished to such
holder a certificate setting forth (i) the Series D Conversion Price then in
effect, and (ii) the number of shares of Common Stock and the amount, if any, of
other securities, cash or property which then would be received upon the
conversion of Series D Preferred Stock.

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          4.10 Notice of Record Date. In the event:
               (a) the Corporation shall take a record of the holders of its
Common Stock (or other capital stock or securities at the time issuable upon
conversion of the Series D Preferred Stock) for the purpose of entitling or
enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of capital stock of any class or
any other securities, or to receive any other security; or
               (b) of any capital reorganization of the Corporation, any
reclassification of the Common Stock of the Corporation, or any consolidation or
merger of the Corporation; or
               (c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation,
then, and in each such case, the Corporation will send or cause to be sent to
the holders of the Series D Preferred Stock a notice specifying, as the case may
be, (i) the record date for such dividend, distribution or right, and the amount
and character of such dividend, distribution or right, or (ii) the effective
date on which such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up is proposed to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such other capital stock or securities at the time issuable upon the
conversion of the Series D Preferred Stock) shall be entitled to exchange their
shares of Common Stock (or such other capital stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up, and the amount per share and character of such exchange applicable
to the Series D Preferred Stock and the Common Stock. Such notice shall be sent
at least 10 days prior to the record date or effective date for the event
specified in such notice.
     5. Redemption by Corporation.
          5.1 Redemption. Shares of Series D Preferred Stock may be redeemed by
the Corporation out of funds lawfully available therefor at a price equal to the
Series D Original Issue Price per share, plus all accrued or declared but unpaid
dividends thereon (the “Redemption Price”), at any time after November 4, 2013,
if the closing sales price of the Common Stock for 20 or more trading days in a
period of 30 consecutive trading days is equal to or greater than 200% of the
Series D Conversion Price, provided that the Corporation provides written notice
of such redemption to each holder of Series D Preferred Stock within 30 days of
the end of such 30 consecutive trading day period (the “Redemption Notice”). The
Corporation shall send the Redemption Notice to each holder of record of
Series D Preferred Stock not less than 30 days prior to the date fixed by the
Corporation for such redemption (the “Redemption Date”). The Redemption Notice
shall state:
               (a) the Redemption Date and the Redemption Price;
               (b) the date upon which the holder’s right to convert such shares
terminates (as determined in accordance with Subsection 4.1); and

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               (c) that the holder is to surrender to the Corporation, in the
manner and at the place designated, his, her or its certificate or certificates
representing the shares of Series D Preferred Stock to be redeemed.
          5.2 Surrender of Certificates; Payment. On or before the Redemption
Date, each holder of shares of Series D Preferred Stock, unless such holder has
exercised his, her or its right to convert such shares as provided in Section 4,
shall surrender the certificate or certificates representing such shares (or, if
such registered holder alleges that such certificate has been lost, stolen or
destroyed, a lost certificate affidavit and agreement reasonably acceptable to
the Corporation to indemnify the Corporation against any claim that may be made
against the Corporation on account of the alleged loss, theft or destruction of
such certificate) to the Corporation, in the manner and at the place designated
in the Redemption Notice, and thereupon the Redemption Price for such shares
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof.
          5.3 Rights Subsequent to Redemption. If the Redemption Notice shall
have been duly given, and if on the Redemption Date the Redemption Price payable
upon redemption of the shares of Series D Preferred Stock is paid or tendered
for payment or deposited with an independent payment agent so as to be available
therefor in a timely manner, then notwithstanding that the certificates
evidencing any of the shares of Series D Preferred Stock so called for
redemption shall not have been surrendered, dividends with respect to such
shares of Series D Preferred Stock shall cease to accrue after such Redemption
Date and all rights with respect to such shares shall forthwith after the
Redemption Date terminate, except only the right of the holders to receive the
Redemption Price without interest upon surrender of their certificate or
certificates therefor.
     6. Fundamental Change Redemption.
          6.1 Fundamental Change. Upon the occurrence of a Fundamental Change,
each holder of shares of Series D Preferred Stock may, at its sole option,
require the Corporation to purchase all or a portion of its shares of Series D
Preferred Stock (the “Fundamental Change Redemption”) at a price equal to
Redemption Price. A “Fundamental Change” shall mean any of the following events:
               (a) any “person” or “group” (each term as defined in the Exchange
Act) that is not an affiliate of any holder of shares of Series D Preferred
Stock becoming the “beneficial owner” (as defined in the Exchange Act) of voting
securities of the Corporation, representing 66 2/3% or more of the outstanding
voting securities of the Corporation (treating all securities convertible or
exchangeable into or exercisable for shares of Common Stock as having been fully
converted, exchanged and exercised, without regard to any exercise, conversion
or exchange limitations therein) other than in connection with a transaction
described in clause (d) below;
               (b) the recapitalization or reclassification of the Common Stock
of the Corporation;

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               (c) a sale of all or substantially all of the assets of the
Corporation’s assets to a person that is not an affiliate of any holder of
shares of Series D Preferred Stock; or
               (d) a merger, consolidation, business combination or similar
transaction the result of which a “person” or “group” (each as defined in the
Exchange Act) that is not an affiliate of any holder of shares of Series D
Preferred Stock owns voting securities representing 66 2/3% or more of the
outstanding voting securities of the surviving entity upon completion of such
transaction.
          6.2 Exercise of Fundamental Change Redemption Option. The Company
shall send a written notice (the “Fundamental Change Notice”) to each holder of
shares of Series D Preferred Stock of (i) the occurrence of a Fundamental Change
described in Subsection 6.1(a) above, within 10 days of the Corporation’s
becoming aware of the occurrence of such Fundamental Change, and (ii) a
Fundamental Change described in Subsection 6.1(b)-(d) above, in accordance with
Section 4.10. The Fundamental Change Notice shall describe the Fundamental
Change and state that each holder of shares of Series D Preferred Stock has the
right to require a Fundamental Change Redemption. In order to require a
Fundamental Change Redemption, a holder of Series D Preferred Stock must deliver
written notice to the Corporation requesting the Fundamental Change Redemption
within five days after the date of the Fundamental Change Notice and stating the
number of shares of Series D Preferred Stock to be redeemed. Unless prohibited
by Delaware law governing distributions to stockholders, the Corporation shall
redeem the shares of Series D Preferred Stock requested to be redeemed at a
price equal to the Redemption Price and on a date to be fixed by the Corporation
which shall not be more than 30 days from the date of the last timely delivered
Fundamental Change Redemption request. If, on the date of the Fundamental Change
Redemption, Delaware law governing distributions to stockholders prevents the
Corporation from redeeming all shares of Series D Preferred Stock to be
redeemed, the Corporation shall ratably redeem the maximum number of shares that
it may redeem consistent with such law, and shall redeem the remaining shares as
soon as it may lawfully do so under such law.
          6.3 Redemption Notice. Following receipt of a timely request for a
Fundamental Change Redemption by a holder of Series D Preferred Stock, the
Corporation shall send written notice of the mandatory redemption to the holder
stating:
                    (a) the date fixed for the Fundamental Redemption (the
“Fundamental Redemption Date”) and the Redemption Price;
                    (b) the date upon which the holder’s right to convert such
shares terminates (as determined in accordance with Subsection 4.1); and
                    (c) that the holder is to surrender to the Corporation, in
the manner and at the place designated, his, her or its certificate or
certificates representing the shares of Series D Preferred Stock to be redeemed.
          6.4 Surrender of Certificates; Payment. On or before the Fundamental
Redemption Date, each holder of shares of Series D Preferred Stock to be
redeemed on such

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Redemption Date, unless such holder has exercised his, her or its right to
convert such shares as provided in Section 4, shall surrender the certificate or
certificates representing such shares (or, if such registered holder alleges
that such certificate has been lost, stolen or destroyed, a lost certificate
affidavit and agreement reasonably acceptable to the Corporation to indemnify
the Corporation against any claim that may be made against the Corporation on
account of the alleged loss, theft or destruction of such certificate) to the
Corporation, in the manner and at the place designated in the notice from the
Corporation, and thereupon the Redemption Price for such shares shall be payable
to the order of the person whose name appears on such certificate or
certificates as the owner thereof. In the event less than all of the shares of
Series D Preferred Stock represented by a certificate are redeemed, a new
certificate representing the unredeemed shares of Series D Preferred Stock shall
promptly be issued to such holder.
          6.5 Rights Subsequent to Redemption. If on the Fundamental Redemption
Date the Redemption Price payable upon redemption of the shares of the Series D
Preferred Stock to be redeemed on such Redemption Date is paid or tendered for
payment or deposited with an independent payment agent so as to be available
therefor in a timely manner, then notwithstanding that the certificates
evidencing any of the shares of Series D Preferred Stock so called for
redemption shall not have been surrendered, dividends with respect to such
shares of Series D Preferred Stock shall cease to accrue after such Redemption
Date and all rights with respect to such shares shall forthwith after the
Fundamental Redemption Date terminate, except only the right to the holders to
receive the Redemption Price without interest upon surrender of their
certificate or certificates therefor.
          6.6 Fundamental Change and Dividends. Upon the occurrence of a
Fundamental Change as described in Subsection 6.1(c)-(d), the Company’s
obligation to pay Series D Preferred Dividends shall terminate.
     7. Redeemed or Otherwise Acquired Shares. Any shares of Series D Preferred
Stock that are redeemed or otherwise acquired by the Corporation or any of its
subsidiaries shall be automatically and immediately cancelled and retired and
shall not be reissued, sold or transferred. Neither the Corporation nor any of
its subsidiaries may exercise any voting or other rights granted to the holders
of Series D Preferred Stock following redemption.
     8. Waiver. Any of the rights, powers, preferences and other terms of the
Series D Preferred Stock set forth herein may be waived on behalf of all holders
of Series D Preferred Stock by the affirmative written consent or vote of the
Requisite Holders.
     9. Notices. Any notice required or permitted to be given to a holder of
shares of Series D Preferred Stock shall be mailed, postage prepaid, to the post
office address last shown on the records of the Corporation, or given by
electronic communication in compliance with the provisions of the General
Corporation Law, and shall be deemed sent upon such mailing or electronic
transmission.

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     IN WITNESS WHEREOF, this Certificate of Designations has been executed by a
duly authorized officer of this corporation on this ___ day of November, 2011.

                  By:           Chief Executive Officer   

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EXHIBIT D
IDERA PHARMACEUTICALS, INC.
REGISTRATION RIGHTS AGREEMENT
     REGISTRATION RIGHTS AGREEMENT (this “AGREEMENT”), dated as of November __,
2011, by and among IDERA PHARMACEUTICALS, INC., a corporation organized under
the laws of the State of Delaware (the “COMPANY”), and each of the persons or
entities listed on Exhibit A hereto (the “PURCHASERS”).
WHEREAS:
     In connection with the Convertible Preferred Stock and Warrant Purchase
Agreement, dated as of even date herewith, by and among the Company and the
Purchasers (the “STOCK PURCHASE AGREEMENT”), the Company has agreed, upon the
terms and subject to the conditions contained therein, to issue and sell to the
Purchasers (i) shares (the “SHARES”) of the Company’s Series D convertible
preferred stock, par value $0.01 per share (the “PREFERRED STOCK”), and
(ii) warrants (the “WARRANTS”) to acquire shares of the Company’s common stock,
par value $0.001 per share (the “COMMON STOCK”). The shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants are referred to
herein as the “WARRANT SHARES.”
     To induce the Purchasers to execute and deliver the Stock Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “SECURITIES
ACT”), and applicable state securities laws.
     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchasers
hereby agree as follows:
1. DEFINITIONS.
     A. As used in this Agreement, the following terms shall have the following
meanings:
          i. “PURCHASERS” means the Purchasers and any transferees or assignees
who agree to become bound by the provisions of this Agreement in accordance with
Section 10 hereof.
          ii. “REGISTER,” “REGISTERED,” and “REGISTRATION” refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis (“RULE 415”), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the “SEC”).
          iii. “REGISTRABLE SECURITIES” means (a) the shares of Common Stock
issued or issuable upon the conversion of the Shares (the “CONVERSION SHARES”),
(b) the

 

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Warrant Shares and (c) any shares of capital stock issued or issuable, from time
to time (with any adjustments), in respect of the Conversion Shares or the
Warrant Shares by virtue of any stock split, stock dividend, recapitalization or
similar event; provided, however, that shares of Common Stock that are
Registrable Securities shall cease to be Registrable Securities upon the
earliest of (A) the date such shares become eligible for sale pursuant to Rule
144(b)(1)(i) under the Securities Act; provided that a period of at least one
year, as determined in accordance with paragraph (d) of Rule 144 under the
Securities Act, has elapsed since the later of the date such shares were
acquired from the Company or an affiliate of the Company, (B) the date that such
shares are sold (I) pursuant to a registration statement, (II) to or through a
broker, dealer or underwriter in a public securities transaction and/or (III) in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act such that all transfer restrictions and restrictive
legends with respect thereto, if any, are removed upon the consummation of such
sale, or (C) any sale or transfer to any person or entity which by virtue of
Section 10 of this Agreement is not entitled to the rights provided by this
Agreement. Wherever reference is made in this Agreement to a request or consent
of holders of a certain percentage of Registrable Securities, the determination
of such percentage shall include shares of Common Stock issuable upon conversion
of the Shares or exercise of the Warrants, even if such conversion or exercise
has not been effected.
          iv. “REGISTRATION STATEMENT” means a registration statement of the
Company under the Securities Act.
     B. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Stock Purchase Agreement.
2. REGISTRATION.
     A. MANDATORY REGISTRATION. The Company shall file with the SEC and use its
reasonable best efforts to cause to become effective a Registration Statement on
Form S-3 (or, if Form S-3 is not then available, on such form of Registration
Statement as is then available to effect a registration of all of the
Registrable Securities) covering the resale of the Registrable Securities on or
prior to February 2, 2012. The Registration Statement filed hereunder, to the
extent allowable under the Securities Act, shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of the Preferred Stock or exercise
of the Warrants to prevent dilution resulting from stock splits, stock dividends
or similar transactions.
     B. PAYMENTS BY THE COMPANY. If the Registration Statement is not declared
effective by the SEC on or before March 4, 2012 (the “REGISTRATION DEADLINE”)
or, (ii) if, after the Registration Statement has been declared effective by the
SEC, sales of any of the Registrable Securities cannot be made pursuant to such
Registration Statement because such Registration Statement has been suspended
(by reason of a stop order or the Company’s failure to update the Registration
Statement or otherwise) except as a result of a permitted Suspension under
Section 9, then the Company will make payments to the Purchasers in such amounts
and at such times as shall be determined pursuant to this Section 2(B), as
liquidated damages and not as a penalty for such delay in or reduction of their
ability to sell the Registrable Securities (which remedy shall constitute the
Purchasers exclusive monetary remedy). The Company shall pay to

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each Purchaser an amount equal to the product of (i) the aggregate purchase
price of the Shares then held by such Purchaser (the “AGGREGATE SHARE PRICE”),
multiplied by (ii) one hundredths (.01), for each thirty (30) day period,
(A) after the Registration Deadline and prior to the date the Registration
Statement filed pursuant to Section 2(A) is declared effective by the SEC, and
(B) during which sales of any Registrable Securities cannot be made pursuant to
any such Registration Statement after the Registration Statement has been
declared effective; provided, however, that there shall be excluded from each
such period any delays which are attributable to changes (other than corrections
of Company mistakes with respect to information previously provided by the
Purchasers) required by the Purchasers in the Registration Statement with
respect to information relating to the Purchasers, including, without
limitation, changes to the plan of distribution. Such amounts shall be paid in
cash within five (5) trading days after the end of each thirty (30) day period
that gives rise to such obligation. Notwithstanding the foregoing, in no event
shall the Company be obligated to make payments hereunder (a) to more than one
Purchaser in respect of the same Registrable Securities for the same period of
time or (b) to any one Purchaser in an aggregate amount that exceeds 10% of the
Aggregate Purchase Price paid by such Purchaser for such Shares. All liquidated
damages hereunder shall apply on a daily pro-rata basis for any portion of a
30-day period prior to the cure of any of the events specified in (A) or (B) of
this Section 2(B).
3. OBLIGATIONS OF THE COMPANY.
     In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
     A. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to keep the Registration Statement effective pursuant to
Rule 415 at all times until no Registrable Securities remain outstanding (the
“REGISTRATION PERIOD”), and, during such period, comply with the provisions of
the Securities Act in order to enable the disposition of all Registrable
Securities of the Company covered by the Registration Statement until such time
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof as set
forth in the Registration Statement.
     B. In connection with the effectiveness of the Registration Statement, the
Company shall furnish to each Purchaser whose Registrable Securities are
included in the Registration Statement within three trading days of the date of
effectiveness of the Registration Statement or any amendment thereto, a notice
stating that the Registration Statement or amendment has been declared
effective; and such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such other documents
as such Purchaser may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such Purchaser.
     C. The Company shall use its reasonable best efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement under
such other securities or “blue sky” laws of such jurisdictions in the United
States as each Purchaser who holds Registrable Securities being offered
reasonably requests, (ii) prepare and file in those jurisdictions such

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amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (a) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(C), (b) subject itself to general taxation in any such
jurisdiction, (c) file a general consent to service of process in any such
jurisdiction, (d) provide any undertakings that cause the Company undue expense
or burden, or (e) make any change in its charter or by-laws, which in each case
the Board of Directors of the Company determines to be contrary to the best
interests of the Company and its stockholders.
     D. The Company shall notify each Purchaser who holds Registrable Securities
of the time when a supplement to any prospectus forming a part of such
Registration Statement has been filed and of any request by the Commission for
the amending or supplementing of such Registration Statement or prospectus. If
the Company has delivered a Prospectus and after having done so the prospectus
is amended to comply with the requirements of the Securities Act, the Company
shall promptly notify each Purchaser who holds Registrable Securities and, if
requested, such Purchasers shall immediately cease making offers of Registrable
Securities and return all prospectuses to the Company. The Company shall
promptly provide the Purchasers with revised prospectuses and, following receipt
of the revised prospectuses, the Purchasers shall be free to resume making
offers of the Registrable Securities.
     E. The Company shall provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities not later than the effective date
of the Registration Statement.
     F. The Company shall cooperate with the Purchasers who hold Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be offered pursuant to the Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as Purchasers may reasonably request and registered in such
names as the Purchasers may request.
     G. At the reasonable request of the Purchasers holding a majority in
interest of the Registrable Securities, the Company shall prepare and file with
the SEC such amendments (including post effective amendments) and supplements to
a Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.
     H. The Company shall use its reasonable best efforts to cause all
Registrable Securities registered pursuant to this Agreement to be listed on
each securities exchange or trading system on which similar securities issued by
the Company are then listed.
4. OBLIGATIONS OF THE PURCHASERS. In connection with the registration of the
Registrable Securities, the Purchasers shall have the following obligations:

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     A. It shall be a condition precedent to the obligations of the Company
under Sections 2 and 3 with respect to the Registrable Securities of a
particular Purchaser that such Purchaser shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request. At least five (5) trading days prior to the
first anticipated filing date of the Registration Statement, the Company shall
notify each Purchaser of the information the Company requires from each such
Purchaser.
     B. Each Purchaser, by such Purchaser’s acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Purchaser has notified the Company in writing
of such Purchaser’s election to exclude all of such Purchaser’s Registrable
Securities from such Registration Statement.
     C. Each Purchaser agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Sections 3(D) or 9, such
Purchaser will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Purchaser’s receipt of the copies of the supplemented or amended
prospectus contemplated by Sections 3(D) or 9.
5. EXPENSES OF REGISTRATION. All reasonable expenses incurred by the Company or
the Purchasers in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3 above, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, the
fees and disbursements of counsel for the Company and the fees and disbursements
of one counsel selected by the Purchasers, shall be borne by the Company,
excluding underwriting discounts, selling commissions and similar costs which
shall be borne by the Purchasers.
6. INDEMNIFICATION. In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
     A. To the extent permitted by law, the Company will indemnify, hold
harmless and defend (i) each Purchaser who holds such Registrable Securities,
and (ii) the directors, officers, partners, members, employees and agents of
such Purchaser and each person who controls any Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the “EXCHANGE ACT”), if any, (each, an “INDEMNIFIED PERSON”),
against any joint or several losses, claims, damages, liabilities or expenses
(collectively, together with actions, proceedings or inquiries by any regulatory
or self-regulatory organization, whether commenced or threatened, in respect
thereof, “CLAIMS”) to which any of them may become subject insofar as such
Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or

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supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any other law, including, without limitation, any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities (the matters in the foregoing clauses
(i) through (iii), collectively, “VIOLATIONS”). Subject to the restrictions set
forth in Section 6(C) with respect to the number of legal counsel, the Company
shall reimburse the Purchasers and each other Indemnified Person, promptly as
such expenses are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the obligations of the Company contained in this
Section 6(A): (i) shall not apply to a Claim arising out of or based upon (A) a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person expressly for use
in the Registration Statement or any such amendment thereof or supplement
thereto, (B) the failure of a Purchaser to comply with Section 4(C) or (C) the
use by a Purchaser in connection with any sale or sales of Registrable
Securities of a prospectus containing any untrue statement or omission of a
material fact following notification by the Company that such prospectus
contains an untrue statement or omission of a material fact and receipt by the
Purchaser of a corrected prospectus; and (ii) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Purchasers pursuant to Section 10 hereof.
     B. Each Purchaser who holds such Registrable Securities agrees severally
and not jointly to indemnify, hold harmless and defend, to the same extent and
in the same manner set forth in Section 6(A), the Company, each of its
directors, each of its officers who signs the Registration Statement, its
employees, agents and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and any other stockholder selling securities pursuant to the Registration
Statement or any of its directors or officers or any person who controls such
stockholder within the meaning of the Securities Act or the Exchange Act
(collectively and together with an Indemnified Person, an “INDEMNIFIED PARTY”),
against any Claim to which any of them may become subject, under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Purchaser expressly for use in
connection with such Registration Statement; and subject to Section 6(C) such
Purchaser will reimburse any legal or other expenses (promptly as such expenses
are incurred and are due and payable) reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that (I) the
obligations of a Purchaser contained in this Section 6(B) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Purchaser, which consent shall not be
unreasonably withheld, and (II) the Purchaser shall be liable under this
Agreement (including this Section 6(B) and Section 7) for only that amount as
does not exceed the gross proceeds actually received by such Purchaser as a
result of the sale of Registrable

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Securities pursuant to such Registration Statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the Registrable
Securities by the Purchasers pursuant to Section 10 hereof.
     C. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the threat or commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that such indemnifying party shall not be entitled to assume such
defense and an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential conflicts of interest between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding or the actual or potential defendants in, or targets of, any such
action include both the Indemnified Person or the Indemnified Party and the
indemnifying party and any such Indemnified Person or Indemnified Party
reasonably determines, based upon the reasonable opinion of counsel, that there
may be legal defenses available to such Indemnified Person or Indemnified Party
which are in conflict with those available to such indemnifying party. The
indemnifying party shall pay for only one separate legal counsel for the
Indemnified Persons or the Indemnified Parties, as applicable, and such legal
counsel shall be selected by Purchasers holding a majority-in-interest of the
Registrable Securities included in the Registration Statement to which the Claim
relates (with the approval of the Purchasers if it holds Registrable Securities
included in such Registration Statement), if the Purchasers are entitled to
indemnification hereunder, or by the Company, if the Company is entitled to
indemnification hereunder, as applicable. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is actually prejudiced in its ability to
defend such action.
     D. The Indemnified Party shall cooperate fully with the indemnifying party
in connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party which relates to such action or
claim.
     E. No indemnifying party shall, except with the consent of each Indemnified
Party (which consent shall not be unreasonably withheld), consent to entry of
any judgment or enter into any settlement which does not include the giving by
the claimant to such Indemnified Party a release from all liability in respect
to such claim or litigation.

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7. CONTRIBUTION. To the extent any indemnification by an indemnifying party
required by the terms of this Agreement is prohibited or limited by law, the
indemnifying party, in lieu of indemnifying the Indemnified Party, agrees to
contribute with respect to any amounts for which it would otherwise be liable
under Section 6 up to the amount paid or payable by the indemnifying party as a
result of the Claims in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and the Indemnified
Person or Indemnified Party, as the case may be, on the other hand, with respect
to the Violation giving rise to the applicable Claim; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation, and (iii) contribution (together with any
indemnification or other obligations under this Agreement) by any seller of
Registrable Securities shall be limited in amount to the amount of gross
proceeds received by such seller from the sale of such Registrable Securities.
The relative fault of the Company and the Purchasers shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of material fact related to information supplied by the Company or the
Purchasers and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
8. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to the
Purchasers the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit each
Purchaser to sell securities of the Company to the public, so long as the
Registration Statement is effective and such Purchaser holds Registrable
Securities, without registration (“RULE 144”), the Company agrees to:
          i. file with the SEC in a timely manner and make and keep available
all reports and other documents required of the Company under the Securities Act
and the Exchange Act so long as the Company remains subject to such requirements
and the filing and availability of such reports and other documents is required
for the applicable provisions of Rule 144; and
          ii. furnish to each Purchaser so long as such Purchaser owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to
permit the Purchasers to sell such securities under Rule 144 without
registration.
9. SUSPENSION OF USE OF PROSPECTUS. Subject to Section 2(B), the Company may, by
written notice to the Purchasers, (i) delay the filing of, or effectiveness of,
the Registration Statement; or (ii) suspend the Registration Statement after
effectiveness and require that the Purchasers immediately cease sales of
Registrable Securities pursuant to the Registration Statement, if (a) the
Company reasonably believes that there is or may be in existence material
nonpublic information or events involving the Company, the failure of which to
be disclosed in the prospectus included in the registration statement would
result in a Violation (as defined below) and (b) the Company shall furnish to
the Purchasers a certificate signed by the Chairman of the Board of Directors of
the Company stating that in the good faith judgment of the Board of

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Directors of the Company, it would have a material adverse effect on the Company
(which for this purpose shall include a material adverse effect on a pending
transaction) to disclose such material nonpublic information or events in the
prospectus included in the registration statement (a “SUSPENSION”). The Company
shall not disclose such information or events to any Purchaser. If the Company
requires the Purchasers to cease sales of Registrable Securities pursuant to a
Suspension, the Company shall, as promptly as practicable following the
termination of the circumstance which entitled the Company to do so, take such
actions as may be necessary to reinstate the effectiveness of the Registration
Statement and/or give written notice to the Purchasers authorizing them to
resume sales pursuant to the Registration Statement. If, as a result thereof,
the prospectus included in the Registration Statement has been amended to comply
with the requirements of the Securities Act, the Company shall enclose such
revised prospectus with the notice to the Purchasers given pursuant hereto, and
the Purchasers shall make no offers or sales of Registrable Securities pursuant
to the Registration Statement other than by means of such revised prospectus.
The Company shall not cause a Suspension on more than two occasions during any
twelve (12) month period or for more than thirty (30) days per such occasion.
10. ASSIGNMENT OF REGISTRATION RIGHTS. The rights of the Purchasers hereunder,
including the right to have the Company register Registrable Securities pursuant
to this Agreement, shall be automatically assignable by each Purchaser to any
affiliate of the Purchaser to which all or any portion of the Registrable
Securities are transferred if: (i) the Purchaser agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company after such assignment, (ii) the Company is furnished
with written notice of (a) the name and address of such transferee or assignee,
and (b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) the transferee or assignee agrees in writing for
the benefit of the Company to be bound by all of the provisions contained
herein, and (iv) such transfer shall have been made in accordance with the
applicable requirements of the Stock Purchase Agreement and the Warrants, as
applicable.
11. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
written consent of the Company and Purchasers who hold a majority in interest of
the Registrable Securities; provided, however, that no consideration shall be
paid to a Purchaser by the Company in connection with an amendment hereto unless
each Purchaser similarly affected by such amendment receives a pro-rata amount
of consideration from the Company. Unless a Purchaser otherwise agrees, each
amendment hereto must similarly affect each Purchaser. Any amendment or waiver
effected in accordance with this Section 11 shall be binding upon each Purchaser
and the Company.
12. MISCELLANEOUS.
     A. A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

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     B. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon delivery to the party to be
notified, (ii) when received by email or confirmed facsimile, or (iii) one
(1) business day after deposit with a nationally recognized overnight carrier,
specifying next business day delivery, with written verification of receipt. All
communications shall be sent to the Company and the Purchasers as follows or at
such other addresses as the Company or the Purchasers may designate upon ten
(10) days’ advance written notice to the other party:
If to the Company:
Idera Pharmaceuticals, Inc.
167 Sidney Street
Cambridge, MA 02139
Attn: Chief Executive Officer
Fax: (617)-679-5592
Email: sagrawal@iderapharma.com
with a copy simultaneously transmitted by like means to:
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Stuart Falber
Fax: (617) 526-5000
Email: stuart.falber@wilmerhale.com
     If to a Purchaser, at its address as set forth on the Schedule of
Purchasers attached to the Stock Purchase Agreement.
     C. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
     D. This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts without regard to principles of
conflicts of law.
     E. This Agreement, the Stock Purchase Agreement (including all schedules
and exhibits thereto) and the Warrants constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and thereof. There are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the Stock Purchase
Agreement and the Warrants supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.
     F. Subject to the requirements of Section 10 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.
     G. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

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     H. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
     I. Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
     J. All consents, approvals and other determinations to be made by the
Purchasers pursuant to this Agreement shall be made by the Purchasers holding a
majority in interest of the Registrable Securities (determined as if all Shares
and Warrant Shares then outstanding had been converted into or exercised for
Registrable Securities) held by all Purchasers.
     K. Each party to this Agreement has participated in the negotiation and
drafting of this Agreement. As such, the language used herein shall be deemed to
be the language chosen by the parties hereto to express their mutual intent, and
no rule of strict construction will be applied against any party to this
Agreement.
     L. For purposes of this Agreement, the term “Business Day” means any day
other than a Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law, regulation or executive
order to close, and the term “Trading Day” means any day on which the Nasdaq
Global Market, or if the Common Stock is not then traded on the Nasdaq Global
Market the principal securities exchange or trading market where the Common
Stock is then listed or traded, is open for trading.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.

            IDERA PHARMACEUTICALS, INC.
      By:           Name:  Sudhir Agrawal        Its:  Chief Executive Officer
and President     

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PURCHASER:

            PILLAR PHARMACEUTICALS I, L.P.
      By:           Name:           Title:        

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EXHIBIT A
Purchasers
Pillar Pharmaceuticals I, L.P.

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EXHIBIT E
WILMERHALE [b88877b8887700.gif]
+ 1 617 526 6000 (t)
+ 1 617 526 6000 (t)
wilmerhale.com
wilmerhale.com
November __, 2011
To the Purchasers Named on
     Schedule A attached hereto

  Re:    Convertible Preferred Stock and Warrant Financing of
Idera Pharmaceuticals, Inc.

Ladies and Gentlemen:
This opinion is being furnished pursuant to Section 2.1(E) of the Convertible
Preferred Stock and Warrant Purchase Agreement, dated as of November __, 2011
(the “Agreement”), by and among Idera Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and each of the persons identified in the Agreement
as a “Purchaser” (each of whom is named on Schedule A attached hereto
(collectively, the “Purchasers” and individually, a “Purchaser”)). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
ascribed to them in the Agreement.
We have acted as counsel to the Company in connection with the preparation,
execution and delivery of the Agreement. As such counsel, we have examined and
are familiar with and have relied upon the following documents:

  (a)   the Restated Certificate of Incorporation, as amended to date (the
“Certificate of Incorporation”), and Amended and Restated By-laws, as amended to
date (the “By-laws”), of the Company;     (b)   the Certificate of Designations,
Preferences and Rights of Series D Preferred Stock of the Company, as filed with
the Secretary of State of the State of Delaware on November __, 2011 (the
“Certificate of Designations”);     (c)   a Certificate of the Secretary of
State of the State of Delaware, dated November 3, 2011, attesting to the
continued legal existence and corporate good standing of the Company in Delaware
(the “Domestic Certificate”);     (d)   a Certificate of the Secretary of State
of the Commonwealth of Massachusetts, dated November 2, 2011, attesting to the
good standing and due qualification of the Company to transact business in
Massachusetts (the “Foreign Qualification Certificate”);     (e)   the Agreement
and the Registration Rights Agreement dated of even date herewith among the
Company and the Purchasers (the “Registration Rights Agreement” and together
with the Agreement the “Transaction Documents”); and

Wilmer Cutler Pickering Hale and Dorr llp, 60 State Street, Boston,
Massachusetts 02109
Beijing Berlin Boston Brussels Frankfurt London Los Angeles New York Oxford Palo
Alto Waltham Washington

 

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To the Purchasers Named on
     Schedule A attached hereto

November __, 2011

  (f)   an Officer’s Certificate from the Company, dated as of the date hereof
(the “Officer’s Certificate”), attesting to the Company’s Certificate of
Incorporation and By-laws, certain resolutions adopted by the Board of Directors
of the Company, the incumbency of certain officers of the Company and as to
certain other matters.

In our examination of the documents described above, we have assumed the
genuineness of all signatures, the legal capacity of all individual signatories,
the completeness of all corporate and stock records provided to us, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies, and the
authenticity of the originals of such latter documents.
In rendering this opinion, we have relied, as to all questions of fact material
to this opinion, upon certificates of public officials and officers of the
Company and upon the representations and warranties made by the Purchasers and
the Company in the Agreement. We have not attempted to verify independently such
facts. We have not conducted a search of any electronic databases or the dockets
of any court, administrative or regulatory body, agency or other filing office
in any jurisdiction.
For purposes of this opinion, we have assumed that the Transaction Documents
have been duly authorized, executed and delivered by all parties thereto other
than the Company, and that all such other parties have all requisite power and
authority to effect the transactions contemplated by the Transaction Documents.
We have also assumed that each Transaction Document is the valid and binding
obligation of each party thereto other than the Company and is enforceable
against such other parties in accordance with its terms. We do not render any
opinion as to the application of any federal or state law or regulation to the
power, authority or competence of any party to the Transaction Documents other
than the Company.
For purposes of this opinion we have assumed that the Board of Directors of the
Company has complied with its fiduciary duties in connection with the
transactions contemplated by the Transaction Documents and the Warrants. We have
also assumed for purposes of Section 144 of the DGCL Statute (as defined below),
that the Transaction Documents and the Warrants are fair as to the Company as of
the time they were authorized, approved or ratified by the Board of Directors of
the Company.
Our opinions set forth below are qualified to the extent that they may be
subject to or affected by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws relating to or affecting the
rights of creditors generally, (ii) statutory or decisional law concerning
recourse by creditors to security in the absence of notice or hearing,
(iii) duties and standards imposed on creditors and parties to contracts,
including, without limitation, requirements of good faith, reasonableness and
fair dealing, and (iv) general equitable principles. We express no opinion as to
the availability of any equitable or specific remedy upon any breach

 

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To the Purchasers Named on
   Schedule A attached hereto

November ___, 2011
of any of the agreements as to which we are opining herein, or any of the
agreements, documents or obligations referred to therein, or to the successful
assertion of any equitable defenses, inasmuch as the availability of such
remedies or the success of any equitable defense may be subject to the
discretion of a court. We are expressing no opinion herein as to the
enforceability of Section 6 of the Registration Rights Agreement. We are
expressing no opinion herein with respect to compliance by the Company with
state securities or “blue sky” laws, or with any state or federal securities
antifraud laws.
We also express no opinion herein as to any provision of any agreement (a) which
may be deemed to or construed to waive any right of the Company, (b) to the
effect that rights and remedies are not exclusive, that every right or remedy is
cumulative and may be exercised in addition to or with any other right or remedy
and does not preclude recourse to one or more other rights or remedies, (c)
relating to the effect of invalidity or unenforceability of any provision of the
Transaction Documents or the Warrants on the validity or enforceability of any
other provision thereof, (d) requiring the payment of penalties, consequential
damages or liquidated damages, (e) which is in violation of public policy,
including, without limitation, any provision relating to indemnification and
contribution with respect to securities law matters, (f) purporting to indemnify
any person against his, her or its own negligence or intentional misconduct,
(g) which provides that the terms of the Transaction Documents or the Warrants
may not be waived or modified except in writing or (h) relating to choice of law
or consent to jurisdiction.
Our opinions expressed in paragraph 1 below, insofar as they relate to the valid
existence, due qualification and good standing of the Company, are based solely
on the Domestic Certificate and the Foreign Qualification Certificate and are
limited accordingly, and, as to such matters, our opinions are rendered as of
the respective dates of such certificates. We express no opinion as to the tax
good standing of the Company in any jurisdiction.
For purposes of our opinions in paragraphs 5 and 6 below, we have relied upon
representations made by the Purchasers in Article 4 of the Agreement, and have
assumed (without any independent investigation) the accuracy of such
representations. For purposes of our opinions in paragraphs 5 and 6 below, we
have also assumed that in connection with the offer and sale of securities to
the Purchasers, neither the Company nor any person acting on its behalf has
engaged in any form of “general solicitation or general advertising” within the
meaning contemplated by Rule 502 (c) of Regulation D.
We are opining herein solely as to the state laws of the Commonwealth of
Massachusetts, the statutes codified as 8 Del. C. §§101-398 and known as the
General Corporation Law of the State of Delaware (the “DGCL Statute”) and the
federal laws of the United States of America. To the extent that any other laws
govern any of the matters as to which we are opining below, we have assumed,
with your permission and without independent investigation, that such laws are
identical to the state laws of the Commonwealth of Massachusetts, and we express
no opinion as to whether such assumption is reasonable or correct.

 

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To the Purchasers Named on
   Schedule A attached hereto
November ___, 2011
For purposes of our opinions rendered below, we have assumed that the facts and
law governing the future performance by the Company of its obligations under the
Transaction Documents and the Warrants will be identical to the facts and law
governing its performance on the date of this opinion.
Based upon and subject to the foregoing, we are of the opinion that:

  1.   The Company is a corporation validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to conduct its business as it is, to our knowledge, currently
conducted, to enter into and perform its obligations under the Transaction
Documents and the Warrants, and to carry out the transactions contemplated by
the Transaction Documents and the Warrants. The Company is duly qualified to do
business and is in good standing in the Commonwealth of Massachusetts.     2.  
The authorized capital stock of the Company on the date hereof consists of (i)
70,000,000 shares of Common Stock, $.001 par value per share (the “Common
Stock”), and (ii) 5,000,000 shares of Preferred Stock, $0.01 par value per
share, of which 1,500,000 shares have been designated Series A Convertible
Preferred Stock, 200,000 shares have been designated Series C Junior
Participating Preferred Stock and _________ shares have been designated as
Series D Convertible Preferred Stock.     3.   The Shares, and the shares of
Common Stock issuable upon conversion of the Shares and exercise of the
Warrants, have been duly authorized or reserved for issuance by all necessary
corporate actions on the part of the Company; and the Shares, when issued, sold
and delivered against payment therefor in accordance with the provisions of the
Agreement, and the shares of Common Stock issuable upon conversion of the Shares
and exercise of the Warrants, when issued upon such conversion or exercise, will
be duly and validly issued, fully paid and non-assessable.     4.   The
execution and delivery by the Company of the Transaction Documents and the
Warrants, and the consummation by the Company of the transactions contemplated
thereby, have been duly authorized by all necessary corporate actions on the
part of the Company, and the Transaction Documents and the Warrants have been
duly executed and delivered by the Company. Each of the Transaction Documents
and each of the Warrants constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.

 

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To the Purchasers Named on
   Schedule A attached hereto
November ___, 2011

  5.   The execution and delivery by the Company of the Transaction Documents
and the Warrants, and the consummation by the Company of the transactions
contemplated thereby, do not (a) violate the provisions of any U.S. federal or
Massachusetts state law, rule or regulation applicable to the Company or the
DGCL Statute; (b) violate the provisions of the Company’s Certificate of
Incorporation or By-laws, each as amended to date; and (c) violate any judgment,
decree, order or award of any court, governmental body or arbitrator
specifically naming the Company of which we are aware.     6.   Based in part on
the representations of each of the Purchasers in Article 4 of the Agreement, the
offer, issuance and sale of the Shares and the Warrants pursuant to the
Agreement are exempt from registration under the Securities Act of 1933, as
amended.     7.   Except for such post-closing filings as may be required under
federal or state securities laws and the filing of the Certificate of
Designations with the Secretary of State of the State of Delaware, no consent,
approval or authorization of, or designation, declaration or filing with, any
Delaware state governmental authority under the DGCL Statute or any United
States federal or Massachusetts state governmental authority is required on the
part of the Company in connection with the execution and delivery by the Company
of the Transaction Documents and the Warrants or the consummation by the Company
of the transactions contemplated thereby.

This opinion is provided to the Purchasers as a legal opinion only and not as a
guaranty or warranty of the matters discussed herein. This opinion is based upon
currently existing statutes, rules, regulations and judicial decisions and is
rendered as of the date hereof, and we disclaim any obligation to advise you of
any change in any of the foregoing sources of law or subsequent developments in
law or changes in facts or circumstances which might affect any matters or
opinions set forth herein.
This opinion is rendered only to the Purchasers and is solely for the benefit of
the Purchasers in connection with the transactions contemplated by the
Transaction Documents. This opinion may not be relied upon by the Purchasers for
any other purpose, nor may this opinion be provided to, quoted to or relied upon
by any other person or entity for any purpose without our prior written consent.

 

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To the Purchasers Named on
   Schedule A attached hereto
November ___, 2011

          Very truly yours,

WILMER CUTLER PICKERING
HALE AND DORR LLP
    By:         Stuart M. Falber, Partner         

 

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To the Purchasers Named on
   Schedule A attached hereto
November ___, 2011
Schedule A
Purchasers
Pillar Pharmaceuticals I, L.P.

 

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EXHIBIT F
IDERA PHARMACEUTICALS, INC.
167 Sidney Street
Cambridge, Massachusetts 02139
[Date]
SELLING STOCKHOLDER QUESTIONNAIRE

To:   Idera Pharmaceuticals, Inc.
c/o Rebecca Nauta, Esq.
WilmerHale
60 State Street
Boston, Massachusetts 02109
Facsimile: (617) 526-5000

Reference is made to (i) that certain Convertible Preferred Stock and Warrant
Purchase Agreement, dated November __, 2011 (the “Purchase Agreement”), between
Idera Pharmaceuticals, Inc. (the “Company”) and the Purchasers (as defined
therein) and (ii) that certain Registration Rights Agreement, dated November __,
2011 (the “Registration Rights Agreement”), by and among the Company and the
Purchasers (as defined therein).
     Pursuant to Section 4.2 of the Purchase Agreement, the undersigned selling
stockholder (the “Selling Stockholder”) hereby furnishes to the Company the
following information for use by the Company in connection with the preparation
of the Registration Statement contemplated by Section 2 of the Registration
Rights Agreement. For purposes of this questionnaire, “Registrable Securities”
means shares of the Company’s common stock issuable upon exercise of the
Warrants (the “Warrants”) and conversion of shares of the Series D Convertible
Preferred Stock (the “Shares”) purchased by the Selling Stockholder pursuant to
the Purchase Agreement.
     (1) Name and Contact Information:

         
Full legal name of record holder:
     
 
     
 
     
Address of record holder:
     
 
     
 
     
Social Security Number or Taxpayer identification number of record holder:
     
 
     
 
     
Identity of beneficial owner (if different than record holder):
     
 
     
 
     
Name of contact person:
     
 
     
 
     
Telephone number of contact person:
     
 
       
Fax number of contact person:
     
 
     
 
     
E-mail address of contact person:
     
 
   

 

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     (2) Beneficial Ownership of Registrable Securities:
(a) Number of Registrable Securities owned by Selling Stockholder:
 
(b) Number of Registrable Securities requested to be registered:
 
     (3) Beneficial Ownership of Other Securities of the Company Owned by the
Selling Stockholder:
Except as set forth below in this Item (3), the undersigned is not the
beneficial or registered owner of any securities of the Company other than the
Registrable Securities listed above in Item (2)(a).
Type and amount of other securities beneficially owned by the Selling
Stockholder:
 
 
     (4) Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (5% or more) has held any
position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.
State any exceptions here:
 
 
     (5) Plan of Distribution:
Except as set forth below, the undersigned intends to distribute pursuant to the
Registration Statement the Registrable Securities listed above in Item (2) in
accordance with the “Plan of Distribution” section set forth therein:
State any exceptions here:
 

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Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior agreement
of the Company.
     (6) Selling Stockholder Affiliations:
(a) Is the Selling Stockholder a registered broker-dealer?
 
(b) Is the Selling Stockholder an affiliate of a registered broker-dealer(s)?
(For purposes of this response, an “affiliate” of, or person “affiliated” with,
a specified person, is a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the person specified.)
 
(c) If the answer to Item (6)(b) is yes, identify the registered
broker-dealer(s) and describe the nature of the affiliation(s):
 
(d) If the answer to Item (6)(b) is yes, did the Selling Stockholder acquire the
Registrable Securities in the ordinary course of business (if not, please
explain)?
 
(e) If the answer to Item (6)(b) is yes, did the Selling Stockholder, at the
time of purchase of the Registrable Securities, have any agreements, plans or
understandings, directly or indirectly, with any person to distribute the
Registrable Securities (if yes, please explain)?
 
Note: If the Selling Stockholder is an affiliate of a broker-dealer and did not
purchase its Registrable Securities in the ordinary course of business or at the
time of the purchase had any agreements, plans or understandings, directly or
indirectly, with any person to distribute the Registrable Securities, the
Company may be required to identify the Selling Stockholder as an underwriter in
the Registration Statement, any amendments thereto and the related prospectus.
     (7) Voting or Investment Control over the Registrable Securities:
If the Selling Stockholder is not a natural person, please identify the natural
person or persons who have voting or investment control over the Registrable
Securities listed in Item (2) above:

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Pursuant to Section 9 of the Registration Rights Agreement, the undersigned
acknowledges that the Company may, by written notice to the undersigned, suspend
the Registration Statement and require that the undersigned immediately cease
sales of Registrable Securities pursuant to the Registration Statement under
certain circumstances described in the Registration Rights Agreement. At any
time that such notice has been given, the undersigned may not sell Registrable
Securities pursuant to the Registration Statement.
The undersigned hereby acknowledges receipt of a draft of the Registration
Statement dated _____________ ___, _______ and confirms that the undersigned has
reviewed such draft including, without limitation, the sections captioned
“Selling Stockholders” and “Plan of Distribution,” and confirms that, to the
best of the undersigned’s knowledge, the same is true, complete and accurate in
every respect except as indicated in this Questionnaire. The undersigned hereby
further acknowledges that pursuant to Section 6 of the Registration Rights
Agreement, the undersigned shall indemnify the Company and each of its directors
and officers against, and hold the Company and each of its directors and
officers harmless from, any losses, claims, damages, expenses or liabilities
(including reasonable attorneys fees) to which the Company or its directors and
officers may become subject by reason of any statement or omission in the
Registration Statement made in reliance upon, or in conformity with, a written
statement by the undersigned, including the information furnished in this
Questionnaire by the undersigned.
     By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items (1) through (7) above and
the inclusion of such information in the Registration Statement, any amendments
thereto and the related prospectus. The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.
[Signature page follows]

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     The undersigned has reviewed the answers to the above questions and affirms
that the same are true, complete and accurate. THE UNDERSIGNED AGREES TO NOTIFY
THE COMPANY IMMEDIATELY OF ANY CHANGES IN THE FOREGOING INFORMATION.

          Dated: November ___, 2011  If you are an INDIVIDUAL (if purchased as
JOINT
TENANTS, as TENANTS IN COMMON, or as
COMMUNITY PROPERTY, each owner must sign below):
      Print Name         Signature         Signature         If you are signing
on behalf of a PARTNERSHIP,
CORPORATION, LIMITED LIABILITY COMPANY or TRUST:
             Print Name of Partnership, Corporation, Limited
Liability Company or Trust       By:           Name:           Title:      

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