Exhibit 10.3
MASTER SECURITY AGREEMENT
dated as of April 23, 2007 (“Agreement”)
     THIS AGREEMENT is between General Electric Capital Corporation (together
with its successors and assigns, if any, “Secured Party”) and Idera
Pharmaceuticals, Inc. (“Debtor”). Secured Party has an office at 83 Wooster
Heights Road, Danbury, CT 06810. Debtor is a corporation organized and existing
under the laws of the state of Delaware (“the State”). Debtor’s mailing address
and chief place of business is 345 Vassar St, Cambridge, MA 02139.

1.   CREATION OF SECURITY INTEREST.

     Debtor grants to Secured Party, its successors and assigns, a security
interest in and against all property listed on any collateral schedule now or in
the future annexed to or made a part of this Agreement (“Collateral Schedule”),
and in and against all additions, attachments, accessories and accessions to
such property, all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof (all such property is individually and
collectively called the “Collateral”). This security interest is given to secure
the payment and performance of all debts, obligations and liabilities of any
kind whatsoever of Debtor to Secured Party, now existing or arising in the
future, including but not limited to the payment and performance of certain
Promissory Notes from time to time identified on any Collateral Schedule
(collectively “Notes” and each a “Note”), and any renewals, extensions and
modifications of such debts, obligations and liabilities (such Notes, debts,
obligations and liabilities are called the “Indebtedness”).

2.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

     Debtor represents, warrants and covenants as of the date of this Agreement
and as of the date of each Collateral Schedule that:
     (a) Debtor’s exact legal name is as set forth in the preamble of this
Agreement and Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the preamble of this
Agreement, has its chief executive offices at the location specified in the
preamble, and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations;
     (b) Debtor has adequate power and capacity to enter into, and to perform
its obligations under this Agreement, each Note and any other documents
evidencing, or given in connection with, any of the Indebtedness (all of the
foregoing are called the “Debt Documents”);
     (c) This Agreement and the other Debt Documents have been duly authorized,
executed and delivered by Debtor and constitute legal, valid and binding
agreements enforceable in accordance with their terms, except to the extent that
the enforcement of remedies may be limited under applicable bankruptcy and
insolvency laws;
     (d) No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into, or
performance by Debtor of any of the Debt Documents, except any already obtained;
     (e) The entry into, and performance by, Debtor of the Debt Documents will
not (i) violate any of the organizational documents of Debtor or any judgment,
order, law or regulation applicable to Debtor, or (ii) result in any breach of
or constitute a default under any contract to which Debtor is a party, or result
in the creation of any lien, claim or encumbrance on any of Debtor’s property
(except for liens in favor of Secured Party) pursuant to any indenture,
mortgage, deed of trust, bank loan, credit agreement, or other agreement or
instrument to which Debtor is a party;
     (f) There are no suits or proceedings pending in court or before any
commission, board or other administrative agency against or affecting Debtor
which could, in the aggregate, have a material adverse effect on Debtor, its
business or operations, or its ability to perform its obligations under the Debt
Documents, nor does Debtor have reason to believe that any such suits or
proceedings are threatened;
     (g) All financial statements delivered to Secured Party in connection with
the Indebtedness have been prepared in accordance with generally accepted
accounting principles, and since the date of the most recent financial
statement, there has been no material adverse change in Debtors financial
condition;
     (h) The Collateral is not, and will not be, used by Debtor for personal,
family or household purposes;
     (i) The Collateral is, and will remain, in good condition and repair
(normal wear and tear excepted) and Debtor will not be negligent in its care and
use;
     (j) Debtor is, and will remain, the sole and lawful owner, and in
possession of, the Collateral, and has the sole right and lawful authority to
grant the security interest described in this Agreement;

 

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     (k) The Collateral is, and will remain, free and clear of all liens, claims
and encumbrances of any kind whatsoever, except for (i) liens in favor of
Secured Party, (ii) liens for taxes not yet due or for taxes being contested in
good faith and which do not involve, in the judgment of Secured Party, any risk
of the sale, forfeiture or loss of any of the Collateral and with respect to
which adequate reserves have been set aside for the payment thereof in
accordance with GAAP, and (iii) inchoate materialmen’s, mechanic’s, repairmen’s
and similar liens arising by operation of law in the normal course of business
for amounts which are not delinquent (all of such liens are called “Permitted
Liens”); and
     (l) Debtor is and will remain in full compliance with all laws and
regulations applicable to it including, without limitation, (i) ensuring that no
person who owns a controlling interest in or otherwise controls Debtor is or
shall be (Y) listed on the Specially Designated Nationals and Blocked Person
List maintained by the Office of Foreign Assets Control (“OFAC”), Department of
the Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation or (Z) a person designated
under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders,
and (ii) compliance with all applicable Bank Secrecy Act (“BSA”) laws,
regulations and government guidance on BSA compliance and on the prevention and
detection of money laundering violations.

3.   COLLATERAL.

     (a) Until the declaration of any default, Debtor shall remain in possession
of the Collateral; except that Secured Party shall have the right to possess
(i) any chattel paper or instrument that constitutes a part of the Collateral,
and (ii) any other Collateral in which Secured Party’s security interest may be
perfected only by possession. Secured Party may inspect any of the Collateral
during normal business hours after giving Debtor reasonable prior notice. If
Secured Party asks, Debtor will promptly notify Secured Party in writing of the
location of any Collateral.
     (b) Debtor shall (i) use the Collateral only in its trade or business,
(ii) maintain all of the Collateral in good operating order and repair, normal
wear and tear excepted, (iii) use and maintain the Collateral only in compliance
with manufacturers recommendations and all applicable laws, and (iv) keep all of
the Collateral free and clear of all liens, claims and encumbrances (except for
Permitted Liens).
     (c) Secured Party does not authorize and Debtor agrees it shall not
(i) part with possession of any of the Collateral (except to Secured Party or
for maintenance and repair), (ii) remove any of the Collateral from the
continental United States, or (iii) sell, rent, lease, mortgage, license, grant
a security interest in or otherwise transfer or encumber (except for Permitted
Liens) any of the Collateral.
     (d) Debtor shall pay promptly when due all taxes, license fees, assessments
and public and private charges levied or assessed on any of the Collateral, on
its use, or on this Agreement or any of the other Debt Documents. At its option,
Secured Party may discharge taxes, liens, security interests or other
encumbrances that remain outstanding for more than sixty (60) days on the
Collateral and may pay for the maintenance, insurance and preservation of the
Collateral and effect compliance with the terms of this Agreement or any of the
other Debt Documents. Debtor agrees to reimburse Secured Party, on demand, all
costs and expenses incurred by Secured Party in connection with such payment or
performance and agrees that such reimbursement obligation shall constitute
Indebtedness.
     (e) Debtor shall, at all times, keep accurate and complete records of the
Collateral, and Secured Party shall have the right to inspect and make copies of
all of Debtor’s books and records relating to the Collateral during normal
business hours, after giving Debtor reasonable prior notice.
     (f) Debtor agrees and acknowledges that any third person who may at any
time possess all or any portion of the Collateral shall be deemed to hold, and
shall hold, the Collateral as the agent of, and as pledge holder for, Secured
Party. Secured Party may at any time give notice to any third person, described
in the preceding sentence, notifying Debtor, that such third person is holding
the Collateral as the agent of, and as pledge holder for, the Secured Party.

4.   INSURANCE.

     (a) Debtor shall at all times bear the entire risk of any loss, theft,
damage to, or destruction of, any of the Collateral from any cause whatsoever.
     (b) Debtor shall maintain and keep in full force and effect, with
financially sound and reputable insurance companies reasonably acceptable to the
Secured Party, insurance in such amounts and covering such risks (including,
without limitation, risk of fire, public liability, property damage, business
interruption and workmen’s compensation) as is usually carried by entities
engaged in similar businesses and owning similar properties in the same general
areas in which the debtor operates, all policies of insurance to be in form and
substance reasonably satisfactory to the Secured Party. Such insurance shall
include insurance covering the Collateral against risk of loss or damage by
fire, theft, and such other casualties as the Lender may require. The insurance
coverage shall be in an amount no less than the full replacement value of the
Collateral, and deductible amounts, insurers and policies shall be acceptable to
Secured Party, which acceptance shall not be unreasonable withheld. Debtor shall
deliver to Secured Party policies or certificates of insurance evidencing such
coverage. Each policy shall name Secured Party as additional insured and
lender’s loss payee, shall not be subject to co-insurance, and shall provide
that coverage may not be canceled or altered by the insurer

 

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except upon thirty (30) days prior written notice to Secured Party. Debtor
appoints Secured Party as its attorney-in-fact to make proof of loss, claim for
insurance and adjustments with insurers, and to receive payment of and execute
or endorse all documents, checks or drafts in connection with insurance payments
for loss or damage to Collateral. Secured Party shall not have authority to act
as Debtor’s attorney-in-fact unless Debtor is in default. Proceeds of insurance
shall be applied, at the option of Secured Party, to repair or replace the
Collateral or to reduce any of the Indebtedness.

5.   REPORTS.

     (a) Debtor shall promptly notify Secured Party of (i) any change in the
name of Debtor, (ii) any change in the state of its incorporation, organization
or registration, (iii) any relocation of its chief executive offices, (iv) any
relocation of any of the Collateral, (v) any of the Collateral being lost,
stolen, missing, destroyed, materially damaged or worn out, or (vi) any lien,
claim or encumbrance other than Permitted Liens attaching to or being made
against any of the Collateral.
     (b) Debtor will deliver to Secured Party financial statements as follows.
If Debtor is a privately held company, then Debtor agrees to provide monthly
financial statements, certified by Debtor’s president or chief financial officer
including a balance sheet, statement of operations and cash flow statement
within 30 days of each month end and its complete audited annual financial
statements, certified by a recognized firm of certified public accountants,
within 120 days of fiscal year end or at such time as Debtor’s Board of
Directors receives the audit. If Debtor is a publicly held company, then Debtor
agrees to provide quarterly unaudited statements and annual audited statements,
certified by a recognized firm of certified public accountants, within 10 days
after the statements are provided to the Securities and Exchange Commission
(“SEC”); provided that such financial statements shall be deemed delivered upon
the posting by Debtor of such statements to EDGAR or similar platform provided
by the Securities Exchange Commission; provided further that if Secured Party
shall not have access to such posting or for any other reason cannot access the
statements, Debtor shall furnish the relevant financial statements to Secured
Party immediately upon its request. All such statements are to be prepared using
generally accepted accounting principles (“GAAP”) and, if Debtor is a publicly
held company, are to be in compliance with SEC requirements.

6.   FURTHER ASSURANCES.

     (a) Debtor shall, upon request of Secured Party, furnish to Secured Party
such further information, execute and deliver to Secured Party such documents
and instruments (including, without limitation, Uniform Commercial Code
financing statements) and shall do such other acts and things as Secured Party
may at any time reasonably request relating to the perfection or protection of
the security interest created by this Agreement or for the purpose of carrying
out the intent of this Agreement. Without limiting the foregoing, Debtor shall
cooperate and do all acts deemed necessary for Secured Party to continue in
Secured Party a perfected first security interest in the Collateral, and shall
obtain and furnish to Secured Party any subordinations, releases, landlord
waivers, lessor waivers, mortgagee waivers, or control agreements, and similar
documents as may be from time to time requested by, and in form and substance
reasonably satisfactory to, Secured Party.
     (b) Debtor authorizes Secured Party to file a financing statement and
amendments thereto describing the Collateral and containing any other
information required by the applicable Uniform Commercial Code. During the term
of this Agreement, Debtor irrevocably grants to Secured Party the power to sign
Debtor’s name and generally to act on behalf of Debtor to execute and file
applications for title, transfers of title, financing statements, notices of
lien and other documents pertaining to any or all of the Collateral; this power
is coupled with Secured Party’s interest in the Collateral. Debtor shall, if any
certificate of title be required or permitted by law for any of the Collateral,
obtain and promptly deliver to Secured Party such certificate showing the lien
of this Agreement with respect to the Collateral. Debtor ratifies its prior
authorization for Secured Party to file financing statements and amendments
thereto describing the Collateral and containing any other information required
by the Uniform Commercial Code if filed prior to the date hereof.
     (c) Debtor shall indemnify and defend the Secured Party, its successors and
assigns, and their respective directors, officers and employees, from and
against all third party claims, actions and suits (including, without
limitation, related attorneys’ fees) of any kind whatsoever arising, directly or
indirectly, in connection with any of the Collateral, this agreement, any other
Debt Document, and the transactions contemplated hereby or thereby, except for
claims, actions or suits arising from the gross negligence or willful misconduct
of Secured Party or its successors or assigns and their respective directors,
officers and employees as determined by final judgment of a court of competent
jurisdiction.

7.   DEFAULT AND REMEDIES.

     (a) Debtor shall be in default under this Agreement and each of the other
Debt Documents if:
          (i) Debtor breaches its obligation to pay when due any installment or
other amount due or coming due under any of the Debt Documents and fails to cure
the breach within fifteen (15) business days;

 

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          (ii) Debtor, without the prior written consent of Secured Party,
attempts to or does sell, rent, lease, license, mortgage, grant a security
interest in, or otherwise transfer or encumber (except for Permitted Liens) any
of the Collateral;
          (iii) Debtor breaches any of its insurance obligations under
Section 4;
          (iv) Debtor breaches any of its other obligations under any of the
Debt Documents and fails to cure that breach within thirty (30) days after
written notice from Secured Party;
          (v) Any warranty, representation or statement made by Debtor in any of
the Debt Documents or otherwise in connection with any of the Indebtedness shall
be false or intentionally misleading in any material respect;
          (vi) Any of the Collateral is subjected to attachment, execution,
levy, seizure or confiscation in any legal proceeding or otherwise, or if any
legal or administrative proceeding is commenced against Debtor or any of the
Collateral, which in the good faith judgment of Secured Party subjects any of
the Collateral to a material risk of attachment, execution, levy, seizure or
confiscation and no bond is posted or protective order obtained to negate such
risk;
          (vii) Debtor breaches or is in default under any other agreement
between Debtor and Secured Party;
          (viii) Debtor or any guarantor or other obligor for any of the
Indebtedness (collectively “Guarantor”) dissolves, terminates its existence,
becomes insolvent or ceases to do business as a going concern;
          (ix) If Debtor or any Guarantor is a natural person, Debtor or any
such Guarantor dies or becomes incompetent;
          (x) A receiver is appointed for all or of any part of the property of
Debtor or any Guarantor, or Debtor or any Guarantor makes any assignment for the
benefit of creditors;
          (xi) Debtor or any Guarantor files a petition under any bankruptcy,
insolvency or similar law, or any such petition is filed against Debtor or any
Guarantor and is not dismissed within forty-five (45) days;
          (xii) Debtor’s improper filing of an amendment or termination
statement relating to a filed financing statement describing the Collateral,
which could result in a material impairment of Lender’s security interest in
such Collateral;
          (xiii) There is a material adverse change in the Debtor’s business,
operations, financial condition and prospects, taken as a whole, as determined
in the reasonable judgment of Secured Party;
          (xiv) Any Guarantor revokes or attempts to revoke its guaranty of any
of the Indebtedness or fails to observe or perform any covenant, condition or
agreement to be performed under any guaranty or other related document to which
it is a party;
          (xv) A default or breach occurs under any other agreement, document or
instrument to which Debtor is a party that is not cured within any applicable
grace period therefor, and such default or breach (i) involves the failure to
make any payment when due in respect of any indebtedness or guaranteed
indebtedness (other than the obligations owed under the Debt Documents) of
Debtor in excess of $10,000 in the aggregate;
          (xvi) At any time during the term of this Agreement Debtor experiences
a change of control such that any person or entity acquires either more than 50%
of the voting stock of Debtor or all or substantially all of Debtor’s assets, in
either case, without Secured Party’s prior written consent, which shall not be
unreasonably or untimely withheld.
     (b) If Debtor is in default, the Secured Party, at its option, may declare
any or all of the Indebtedness to be immediately due and payable, without demand
or notice to Debtor or any Guarantor. The accelerated obligations and
liabilities shall bear interest (both before and after any judgment) until paid
in full at the lower of eighteen percent (18%) per annum or the maximum rate not
prohibited by applicable law.
     (c) After default, Secured Party shall have all of the rights and remedies
of a Secured Party under the Uniform Commercial Code, and under any other
applicable law. Without limiting the foregoing, Secured Party shall have the
right to (i) notify any account debtor of Debtor or any obligor on any
instrument which constitutes part of the Collateral to make payment to the
Secured Party, (ii) with or without legal process, enter any premises where the
Collateral may be and take possession of and remove the Collateral from the
premises or store it on the premises, (iii) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and purchase at
said sale, each in accordance with the relevant terms set forth in the Uniform
Commercial Code or (iv) lease or otherwise dispose of all or part of the
Collateral, applying proceeds from such disposition to the obligations then in
default. If requested by Secured Party, Debtor shall promptly assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party, which is reasonably convenient to both parties. Any notice that
Secured Party is required to give to Debtor under the Uniform Commercial Code of
the time and place of any public sale or the time after

 

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which any private sale or other intended disposition of the Collateral is to be
made shall be deemed to constitute reasonable notice if such notice is delivered
by certified mail to the last known address of Debtor at least ten (10) days
prior to such action.
     (d) Proceeds from any sale or lease or other disposition shall be applied:
first, to all documented costs of repossession, storage, and disposition
including without limitation attorneys’, appraisers’, and auctioneers’ fees;
second, to discharge the obligations then in default; third, to discharge any
other Indebtedness of Debtor to Secured Party, whether as obligor, endorser,
guarantor, surety or indemnitor; fourth, to expenses incurred in paying or
settling liens and claims against the Collateral; and lastly, to Debtor, if
there exists any surplus. Debtor shall remain fully liable for any deficiency of
Indebtedness.
     (e) Debtor agrees to pay all reasonable attorneys’ fees and other fees,
costs and expenses incurred by Secured Party (including, without limitation, the
allocated cost of in-house legal counsel) in connection with the enforcement,
assertion, defense or preservation of Secured Party’s rights and remedies under
this Agreement, or if prohibited by law, such lesser sum as may be permitted.
Debtor further agrees that such fees and costs shall constitute Indebtedness.
     (f) Secured Party’s rights and remedies under this Agreement or otherwise
arising are cumulative and may be exercised singularly or concurrently. Neither
the failure nor any delay on the part of the Secured Party to exercise any
right, power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise of that or any other right, power or privilege.
SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS RIGHTS UNDER THIS
AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER SIGNED BY DEBTOR
UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY SECURED PARTY. A waiver
on any one occasion shall not be construed as a bar to or waiver of any right or
remedy on any future occasion.
     (g) DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED
HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP
THAT IS BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER
DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

8.   MISCELLANEOUS.

     (a) This Agreement, any Note and/or any of the other Debt Documents may be
assigned, in whole or in part, by Secured Party without notice to Debtor, and
Debtor agrees not to assert against any such assignee, or assignee’s assigns,
any defense, set-off, recoupment claim or counterclaim which Debtor has or may
at any time have against Secured Party for any reason whatsoever; provided that
this provision shall not affect any defense, set-off, recoupment claim or
counterclaim which Debtor has or may at any time have directly against Secured
Party. Debtor agrees that if Debtor receives written notice of an assignment
from Secured Party, Debtor will pay all amounts payable under any assigned Debt
Documents to such assignee or as instructed by Secured Party. Debtor also agrees
to confirm in writing receipt of the notice of assignment as may be reasonably
requested by Secured Party or assignee.
     (b) All notices to be given in connection with this Agreement shall be in
writing, shall be addressed to the parties at their respective addresses set
forth in this Agreement (unless and until a different address may be specified
in a written notice to the other party), and shall be deemed given (i) on the
date of receipt if delivered in hand or by facsimile transmission, (ii) on the
next business day after being sent by express mail, and (iii) on the fourth
business day after being sent by regular, registered or certified mail. As used
herein, the term “business day” shall mean and include any day other than
Saturdays, Sundays, or other days on which commercial banks in New York, New
York are required or authorized to be closed.
     (c) Debtor agrees to pay all reasonable attorneys’ fees and all other fees,
costs and expenses incurred by Secured Party (including, without limitation, the
allocated cost of in-house legal counsel) in connection with the preparation,
negotiation and closing of the transactions contemplated in this Agreement and
all related documents and schedules and in connection with the continued
administration thereof, including, without limitation, any amendments,
modifications, consents or waivers thereof and in connection with the
protection, monitoring or preservation of the Collateral. Debtor further agrees
that such fees and costs shall constitute Indebtedness.
     (d) Secured Party may correct patent errors and fill in all blanks in this
Agreement or in any Collateral Schedule consistent with the agreement of the
parties.
     (e) Time is of the essence of this Agreement. This Agreement shall be
binding, jointly and severally, upon all parties described as the “Debtor” or
“Secured Party” and their respective heirs, executors, representatives,
successors and assigns, and shall inure to the benefit of their respective
successors and assigns.

 

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     (f) This Agreement and its Collateral Schedules constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior understandings (whether written, verbal or
implied) with respect to such subject matter. THIS AGREEMENT AND ITS COLLATERAL
SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT
ONLY BY A WRITING SIGNED BY BOTH PARTIES. Section headings contained in this
Agreement have been included for convenience only, and shall not affect the
construction or interpretation of this Agreement.
     (g) This Agreement shall continue in full force and effect until all of the
Indebtedness has been indefeasibly paid in full to Secured Party or its
assignee. The surrender, upon payment or otherwise, of any Note or any of the
other documents evidencing any of the Indebtedness shall not affect the right of
Secured Party to retain the Collateral for such other Indebtedness as may then
exist. This Agreement shall automatically be reinstated if Secured Party is ever
required to return or restore the payment of all or any portion of the
Indebtedness (all as though such payment had never been made).
     (h) [Intentionally omitted].
     (i) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.
     (j) In the event either party hereunder shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reasons of
strike, lockouts, labor troubles, inability to procure materials, failure of
power or restrictive government or judicial orders, or decrees, riots,
insurrection, war, acts of God, inclement weather or other similar reason or
cause beyond that party’s control, then performance of such act shall be excused
for the period of such delay; provided, however, that such excused performance
shall not exceed fifteen (15) business days.
IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally bound
hereby, have duly executed this Agreement in one or more counterparts, each of
which shall be deemed to be an original, as of the day and year first aforesaid.

                          SECURED PARTY:       DEBTOR:        
 
                        General Electric Capital Corporation       Idera
Pharmaceuticals, Inc.        
 
                       
By:
  /S/ DANIJELA GJENERO       By:   /S/ ROBERT ANDERSON        
 
                       
 
  Name: Danijela Gjenero           Name: Robert G. Anderson        
 
  Title: Duly Authorized Signatory           Title: CFO, VP Operations        
 
                       
 
          By:   /S/ SUDHIR AGRAWAL        
 
                       
 
              Name : Sudhir Agrawal        
 
              Title: CEO, CSO