Document:

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                                                                    Exhibit 10.5

                           IDERA PHARMACEUTICALS, INC.
                                345 Vassar Street
                         Cambridge, Massachusetts 02139

                                    March 24, 2006

Youssef El-Zein
Starco Center
Omar Daouk Street
Bloc B, 1st Floor
Beirut Central District
Beirut 2020-3313
Lebanon

Dear Youssef:

         This letter sets forth the terms and conditions of the engagement of
Youssef El-Zein (the "Advisor") as a non-exclusive financial advisor to Idera
Pharmaceuticals, Inc. (the "Company") in connection with the arrangement and
negotiation of an equity vehicle under which the Company may issue up to
$9,750,000 of its common stock (the "Transaction"). The Advisor, in his capacity
as financial advisor to the Company, has identified and will identify potential
non-U.S. investors and, subject to the Company's prior written approval, has
contacted or will contact such potential investors on behalf of the Company and
has provided and will provide such other services in connection with the
Transaction as the Company may from time to time reasonably request.

         The Advisor has not contacted or initiated and shall not contact or
initiate any discussions with any party or prospective investor without first
identifying such party or prospective investor to the Company and obtaining the
Company's prior written approval to make such contact or initiate such
discussions (such parties and prospective investors that are approved by the
Company are referred to herein as the "Approved Investors"). The Advisor shall
not have authority under this letter to bind the Company in any way to any
party, and nothing contained in this letter shall require the Company to accept
the terms of any proposal or undertake any other action that would result in the
receipt by the Advisor of a fee hereunder.

         The Advisor represents, warrants and covenants to the Company that:

                  (a)      He has not offered, offered to sell or sold and shall
         not offer, offer to sell or sell any securities of the Company on the
         basis of any written communications or documents relating to the
         Company or its business other than written materials furnished by the
         Company or previously approved by the Company in writing, including
         without limitation the Company's filings under the Securities Exchange
         Act of 1934, as amended (the "Offering Materials"). No communications
         (whether oral or written) or documents

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         relating to the Company or its business made or delivered by the
         Advisor have been or shall be inconsistent with the Offering Materials.

                  (b)      He has not offered, offered to sell or sold and shall
         not offer, offer to sell or sell any securities of the Company to any
         investor in the United States or to any United States person outside
         the United States.

                  (c)      He has not engaged and shall not engage in any form
         of general solicitation or general advertising which is prohibited by
         Regulation D ("Regulation D") promulgated under the Securities Act of
         1933, as amended (the "Securities Act"), in connection with the
         Transaction or any directed selling efforts in the United States (as
         such term is defined in Regulation S ("Regulation S") promulgated under
         the Securities Act). In addition, such Advisor has not taken and shall
         not take any action that might reasonably be expected to jeopardize the
         availability for the Transaction of the exemption from registration
         provided by Regulation S or the qualification of securities of the
         Company for offer and sale under any applicable foreign securities
         laws.

                  (d)      He shall make reasonable inquiry to determine that
         each investor is acquiring the securities of the Company for his or its
         own account for investment.

                  (e)      In the performance of his services hereunder, he has
         complied and shall comply with the U.S. securities laws and the
         securities laws in effect in any jurisdiction in which securities of
         the Company are offered by it and the rules, regulations and orders of
         any securities administrator existing or adopted thereunder.

                  (f)      He shall not receive, directly or indirectly, any
         remuneration in respect of any issuance and sale by the Company of its
         securities in the United States or to any U.S. person.

         In the event a Transaction with Approved Investors is completed during
the term of this letter, the Company will (i) pay the Advisor a fee in an amount
of $262,500 and (ii) issue to the Advisor three-year warrants (the "Warrant")
(in a form containing antidilution protection for stock splits and other similar
events and other customary provisions as agreed by the Company and the Advisor)
to purchase 1,155,076 shares of common stock of the Company (the "Warrant
Shares") at an exercise price per share equal to $0.96. The Warrants shall be
exercisable for cash only and following the second anniversary of the date of
issuance of the Warrants shall be redeemable by the Company for $.01 per share
following notice to the Advisor if the closing sales prices of the common stock
on each day of a 15 day consecutive trading day period ending within 30 days
prior to the notice is greater than or equals 250% of the exercise price of the
Warrants.

         The Advisor recognizes that the Company is subject to the rules of the
American Stock Exchange, including Section 711 of the American Stock Exchange
Company Guide. Accordingly, the Advisor agrees that notwithstanding the
foregoing the Company shall have no obligation hereunder to pay any fees or
issue any Warrants to the Advisor that would not comply

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with the rules of the American Stock Exchange or that would require the Company
to obtain stockholder approval. In the event of such a conflict, the Company and
the Advisor agree to negotiate in good faith new compensation terms for the
Advisor.

         In addition to any fees payable to the Advisor under the terms of this
letter, the Company agrees to reimburse the Advisor for his reasonable
out-of-pocket expenses and the reasonable out-of-pocket expenses of the investor
in the Transaction, documented in reasonable detail, and incurred in connection
with the Advisor's activities under this letter or the Transaction; provided
that the Company shall not be required to reimburse more than $50,000 in
expenses hereunder, in the aggregate.

         The Company agrees to indemnify the Advisor and his affiliates and
agents (each such person being an "Indemnified Party") from and against any and
all losses, claims, damages and liabilities, joint or several, to which such
Indemnified Party may become subject under any applicable federal or state law,
or otherwise, related to or arising out of the engagement of the Advisor
pursuant to, and the performance by the Advisor of the services contemplated by,
this letter and will, subject to the limitation set forth below, reimburse any
Indemnified Party for all expenses (including reasonable counsel fees and
expenses, whether incurred in connection with third party claims or direct
claims against the Company) as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party. The Company will not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage, liability
or expense is found in a final judgment by a court of competent jurisdiction to
have resulted from an Indemnified Party's breach of this letter, bad faith,
willful misfeasance, gross negligence or reckless disregard of its obligations
or duties. No Indemnified Party shall settle any claim for which indemnification
may be sought by him or it hereunder without the prior written consent of the
Company. The Company's obligations to indemnify pursuant hereto shall be limited
to the Indemnified Party's actual liabilities, losses, damages or expenses
incurred and shall not include any consequential damages or damages for loss of
business or reputation.

         The Company will have the right, at its option, to assume the defense
of any litigation or proceeding in respect of which indemnity may be sought
hereunder, including the employment of counsel reasonably satisfactory to the
Advisor (the Advisor hereby agrees that Wilmer Cutler Pickering Hale and Dorr
LLP is satisfactory to the Advisor) and the payment of the fees and expenses of
such counsel, in which event, except as provided below, the Company shall not be
liable for the fees and expenses of any other counsel retained by any
Indemnified Person in connection with such litigation or proceeding. In any such
litigation or proceeding the defense of which the Company shall have so assumed,
any Indemnified Person shall have the right to participate in such litigation or
proceeding and to retain its own counsel.

         Upon receipt by an Indemnified Person of actual notice of a claim,
action or proceeding against such Indemnified Person in respect of which
indemnity may be sought hereunder, such Indemnified Person shall promptly notify
the Company with respect thereto. In addition, an Indemnified Person shall
promptly notify the Company after any action is commenced (by the

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way of service with a summons or other legal process giving information as to
the nature and basis of the claim) against such Indemnified Person in respect of
which indemnity may be sought hereunder. In any event, failure to notify the
Company shall not relieve the Company from any liability which the Company may
have on account of this indemnity or otherwise, except to the extent the Company
shall have been prejudiced by such failure.

         In the course of his services, the Advisor has had and will have access
to Confidential Information (as defined below) concerning the Company. The
Advisor agrees that all Confidential Information has been and will be treated by
the Advisor as confidential in all respects. The term "Confidential Information"
shall mean all information, whether written or oral, which is disclosed by the
Company or its affiliates, agents or representatives to the Advisor or is
otherwise learned of by the Advisor in connection with his role as financial
advisor to the Company which information is not in the public domain, but shall
not include: (i) information which, prior to disclosure to the Advisor, was
already in the Advisor's possession and was not otherwise subject to an
obligation of confidentiality; (ii) information which is publicly disclosed
other than by the Advisor in violation of this letter; (iii) information which
is obtained by the Advisor from a third party that (x) the Advisor does not know
to have violated, or to have obtained such information in violation of, any
obligation to the Company or its affiliates with respect to such information,
and (y) does not require the Advisor to refrain from disclosing such
information; and (iv) information which is required to be disclosed by the
Advisor or his outside counsel under compulsion of law (whether by oral
question, interrogatory, subpoena, civil investigative demand or otherwise) or
by order of any court or governmental or regulatory body to whose supervisory
authority the Advisor is subject; provided that, in such circumstance, the
Advisor will give the Company prior written notice of such disclosure and
cooperate with the Company to minimize the scope of any such disclosure. The
Advisor's obligation under this paragraph shall survive the expiration,
termination or completion of this letter or the Advisor's engagement hereunder.

         The Advisor's engagement hereunder and this letter shall terminate on
the earlier of (i) March 24, 2006 or (ii) written notice of termination by the
Company to the Advisor or by the Advisor to the Company, it being understood
that the provisions relating to confidentiality and indemnification will survive
any such termination.

         This letter shall be construed and interpreted in accordance with the
laws of the Commonwealth of Massachusetts. This letter constitutes the entire
agreement of the parties with respect to the subject matter hereof.

         If the foregoing is in accordance with your understanding, please
confirm acceptance by signing and returning to us the duplicate of this letter
attached herewith.

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                                             Sincerely,

                                             IDERA PHARMACEUTICALS, INC.

                                             By: /s/ Sudhir Agrawal
                                                 ------------------------------
                                                 Name: Sudhir Agrawal
                                                 Title: Chief Executive Officer

AGREED AND ACCEPTED AS OF
THE DATE SET FORTH ABOVE BY:

By: /s/ Youssef El-Zein
    -------------------------------
    Youssef El-Zein

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                                                                    Exhibit 10.6

                           IDERA PHARMACEUTICALS, INC.

                          REGISTRATION RIGHTS AGREEMENT

                           dated as of March 24, 2006

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                           IDERA PHARMACEUTICALS, INC.

                          REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this "AGREEMENT") is entered into as of
March 24, 2006 by and among Idera Pharmaceuticals, Inc., a Delaware corporation
(the "COMPANY"), Biotech Shares Ltd. (the "INVESTOR") and Youssef El-Zein (the
"AGENT").

     WHEREAS, the Company is conducting an offering (the "OFFERING") of up to
$9,750,000 of shares of the Company's common stock, $0.001 par value per share
(the "COMMON STOCK"), pursuant to the Common Stock Purchase Agreement dated as
of March 24, 2006, by and between the Investor and the Company (the "PURCHASE
AGREEMENT");

     WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to
issue to the Investor warrants to purchase Common Stock of the Company (the
"INVESTOR WARRANTS");

     WHEREAS, pursuant to the Purchase Agreement, the Company may, in its sole
discretion, issue up to three Purchase Notices (as defined in the Purchase
Agreement) pursuant to which the Company will issue and sell shares of Common
Stock to the Investor;

     WHEREAS, in connection with the Offering, the Company has engaged the Agent
and may issue to the Agent warrants to purchase shares of Common Stock (the
"AGENT WARRANTS"); and

     WHEREAS, to induce the Investor to enter into the Purchase Agreement and
the Agent to assist the Company in the Offering, the Company has agreed to
provide registration rights under the Securities Act (as defined below) and
applicable state securities laws, as described below;

     NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, the Agent and the
Investor hereby agree as follows:

     1. Certain Definitions. As used in this Agreement, the following terms
shall have the following meanings:

          (a) "Business Day" means any day other than Saturday, Sunday or any
other day on which commercial banks in The City of New York or in Boston,
Massachusetts are required by law to remain closed.

          (b) "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.

          (c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.

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          (d) "Indemnified Party" means a party entitled to indemnification
pursuant to Section 7.

          (e) "Indemnifying Party" means a party obligated to provide
indemnification pursuant to Section 7.

          (f) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization or association and governmental entity or any department or agency
thereof.

          (g) "Registrable Securities" means (i) the shares of Common Stock
issued or issuable upon exercise of the Investor Warrants and the Agent
Warrants, (ii) the shares of Common Stock issued or issuable to the Investor
pursuant to Section 3 of the Purchase Agreement, and (iii) any other shares of
Common Stock issued in respect of such shares (as a result of a stock split,
stock dividend, reclassification, recapitalization or other similar transaction
affecting the Common Stock); provided, however, that shares of Common Stock that
are Registrable Securities shall cease to be Registrable Securities upon the
earliest of (A) the date that such shares are eligible to be sold under Rule 144
of the Securities Act, without restriction by the volume limitations of Rule
144(e) of the Securities Act, (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 which by virtue of Section 9 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 exercise of the
Agent Warrants and the Investor Warrants, in each case to the extent any such
warrants are outstanding, even if such exercise has not been effected.

          (h) "Registration Statement" means a registration statement of the
Company filed under the Securities Act and covering Registrable Securities.

          (i) "Rightsholders" means the Investor, the Agent and any persons or
entities to whom the rights granted under this Agreement are transferred by the
Investor, the Agent or his or its successors or assigns pursuant to Section 9 of
this Agreement.

          (j) "Securities Act" means the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.

     2. Registration

          (a) The Company shall use its best efforts to prepare and file with
the Commission within 60 days of the date hereof a Registration Statement (the
"INITIAL REGISTRATION STATEMENT") covering the resale of the Registrable
Securities issued or issuable upon exercise of the Investor Warrants and the
Agent Warrants and such other shares of Common Stock as the Company may desire
to include pursuant to registration rights agreements

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with other Persons. The Company shall use its best efforts to have the Initial
Registration Statement declared effective by the Commission within 90 days after
the date the Initial Registration Statement is filed or as soon as possible
thereafter.

          (b) The Company shall use its best efforts to prepare and file with
the Commission within 90 days of the date hereof a Registration Statement (the
"PRE-ISSUANCE REGISTRATION STATEMENT") covering the resale of the maximum number
of shares of Common Stock that may be issued to the Investor pursuant to Section
3 of the Purchase Agreement as of the filing of such Pre-Issuance Registration
Statement. The Company shall use its best efforts to have the Pre-Issuance
Registration Statement declared effective by the Commission within 90 days after
the date the Pre-Issuance Registration Statement is filed or as soon as possible
thereafter.

          (c) In the event that any shares of Common Stock are issued to the
Investor pursuant to Section 3 of the Purchase Agreement prior to the date the
Pre-Issuance Registration Statement is declared effective by the Commission (the
"UNREGISTERED SHARES"), the Company shall use its best efforts to prepare and
file with the Commission within 60 days of the date such Unregistered Shares are
issued by the Company a Registration Statement (an "ADDITIONAL REGISTRATION
STATEMENT") covering the resale of such Unregistered Shares. The Company shall
use its best efforts to have an Additional Registration Statement declared
effective by the Commission within 90 days after the date such Additional
Registration Statement is filed or as soon as possible thereafter.

          (d) In the event that the Company receives any comments from the
Commission with respect to a Registration Statement, the Company shall notify
the Rightsholders that it has received such comments and shall respond to the
Commission as to such comments as promptly as practicable.

          (e) The Company shall use its best efforts to cause each Registration
Statement to remain effective until the date on which the Rightsholders do not
hold any Registrable Securities covered by such Registration Statement.

     3. Registration Procedures.

          (a) In connection with the effectiveness of each Registration
Statement, the Company shall furnish to each Rightsholder such reasonable
numbers of copies of the relevant prospectus and such documents incident
thereto, including any amendment of or supplement to such prospectus, as a
Rightsholder from time to time may reasonably request in order to facilitate the
disposition of such Rightsholder's Registrable Securities under such
Registration Statement in conformity with the requirements of the Securities
Act.

          (b) The Company shall use its best efforts to register or qualify the
Registrable Securities covered by a Registration Statement under the securities
laws of such states of the United States as the Rightsholders may reasonably
request; provided, however, that the Company shall not be required in connection
with this paragraph (b) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction.

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          (c) If the Company has delivered preliminary or final prospectuses to
the Rightsholders and if after having done so the Company determines that such
prospectus and/or the Registration Statement of which such prospectus
constitutes a part needs to be amended or supplemented to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Rightsholders and, if requested by the Company, the Rightsholders shall
immediately cease making offers or sales of shares under such Registration
Statement and shall return all such prospectuses to the Company. The Company
shall as promptly as reasonably practicable prepare and file with the Commission
any required amendment or supplement and following such filing, and, if
applicable, the effectiveness of such filing, shall provide the Rightsholders
with revised or supplemented prospectuses. Following receipt of the revised or
supplemented prospectuses, the Rightsholders shall be free to resume making
offers and sales under such Registration Statement.

          (d) If requested in writing by a Rightsholder in connection with the
transfer by such Rightsholder of Registrable Securities held by such
Rightsholder and the corresponding rights of the Rightsholder under this
Agreement as permitted by Section 9, then the Company shall, subject to
compliance by the transferee with Section 5 as a Rightsholder thereunder,
prepare and file with the Commission an amendment or supplement to the
applicable Registration Statement for the purpose of listing such transferee as
an additional selling stockholder under such Registration Statement.

          (e) The Company shall use its best efforts to cause all Registrable
Securities registered pursuant to this Agreement to be listed on each securities
exchange on which similar securities issued by the Company are then listed.

     4. Limitations on Registration Rights.

          (a) The Company may, by written notice to the Rightsholders, (i) delay
the filing of, or effectiveness of, a Registration Statement (notwithstanding
the provisions of Section 2) or (ii) suspend a Registration Statement after
effectiveness and require that the Rightsholders immediately cease sales of
shares pursuant to such Registration Statement, in the event that the Company is
engaged in any activity or transaction or preparations or negotiations for any
activity or transaction that the Company desires to keep confidential for
business reasons, if the Company determines in good faith that the public
disclosure requirements imposed on the Company under the Securities Act in
connection with such Registration Statement would require disclosure of such
activity, transaction, preparations or negotiations.

          (b) If the Company requires the Rightsholders to cease sales of shares
pursuant to paragraph (a) above, 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 such
Registration Statement and/or give written notice to all Rightsholders
authorizing them to resume sales pursuant to such Registration Statement. If as
a result thereof the prospectus included in such 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 Rightsholders given pursuant
to this paragraph (b), and the Rightsholders shall make no offers or sales of
shares pursuant to such Registration Statement other than by means of such
revised prospectus.

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          (c) Notwithstanding the foregoing, the Company may not (i) delay the
filing of, or the effectiveness of, a Registration Statement or (ii) suspend
such Registration Statement, pursuant to paragraph (a) above on more than two
occasions during any 12-month period or for more than 60 days per such occasion.

     5. Obligations of the Rightsholders.

          (a) The Company shall not be required to include any Registrable
Securities in a Registration Statement unless such Rightsholder shall have
furnished 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 by the Company to effect
the effectiveness of such Registration Statement and unless such Rightsholder
shall have executed such documents in connection with such Registration
Statement as the Company may reasonably request. Each Rightsholder shall
promptly notify the Company of any material change with respect to such
information previously provided to the Company by such Rightsholder, including
without limitation notice of the sale by the Rightsholder of any Registrable
Securities.

          (b) Each Rightsholder agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation and
filing of each Registration Statement hereunder.

     6. Expenses of Registration. The Company shall pay the expenses incurred by
it in complying with its obligations under this Agreement, including all
registration and filing fees, exchange listing fees, fees and expenses of
counsel for the Company, and fees and expenses of accountants for the Company,
but excluding (a) any brokerage fees, selling commissions or underwriting
discounts incurred by the Rightsholders in connection with sales under the
Registration Statement and (b) the fees and expenses of any counsel retained by
Rightsholders.

     7. Indemnification and Contribution.

          (a) In the event of any registration of any of the Registrable
Securities under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless each Rightsholder, each of its officers, directors
and partners, and each underwriter of such Registrable Securities, if any, and
each other person, if any, who controls such Rightsholder or underwriter within
the meaning of the Securities Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which such
Rightsholder, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement registering such Registrable Securities, any preliminary prospectus or
final prospectus contained in such Registration Statement, or any amendment or
supplement to such Registration Statement or (ii) the omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Company will reimburse such
Rightsholder, underwriter and each such controlling person for any legal or any
other expenses reasonably incurred by such Rightsholder, underwriter or
controlling person in connection with

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investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon any untrue statement or omission made in such Registration
Statement, preliminary prospectus or final prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to the
Company by or on behalf of such Rightsholder, underwriter or controlling person
and stated to be specifically for use in connection with such Registration
Statement; and provided further that the foregoing indemnity agreement is
subject to the condition that, insofar as it relates to any untrue statement,
alleged untrue statement, omission or alleged omission made in any Registration
Statement, prospectus or amendment or supplement that was eliminated, remedied
or cured by the Company, such indemnity agreement shall not inure to the benefit
of any Rightsholder from whom the Person asserting any loss, claim, damage or
liability purchased the Registrable Securities if a copy of such Registration
Statement, prospectus, amendment or supplement was provided by the Company to
the Rightsholder but was not given or sent to such Person by the Rightsholder
prior to written confirmation of such sale.

          (b) Each Rightsholder, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors and officers and each
underwriter (if any) and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state securities or Blue
Sky laws or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement, any preliminary prospectus or final prospectus contained
in such Registration Statement, or any amendment or supplement to such
Registration Statement, or (ii) any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if and to the extent (and only to the extent) that the
statement or omission was made in reliance upon and in conformity with written
information relating to such Rightsholder furnished to the Company by such
Rightsholder and stated to be specifically for use in connection with such
Registration Statement, prospectus, amendment or supplement; provided, however,
that the obligations of a Rightsholder hereunder shall be limited to an amount
equal to the net proceeds to such Rightsholder of Registrable Securities sold in
connection with such registration.

          (c) Each Indemnified Party shall give notice to the Indemnifying Party
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld, conditioned or delayed); and, provided,
further, that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 7 except to the extent that the Indemnifying Party is adversely affected
by such failure. The Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party shall pay such
expense if the Indemnified Party reasonably concludes based upon written advice
of its counsel that representation of such Indemnified Party by the counsel
retained by the

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Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding; provided further that in no event shall the
Indemnifying Party be required to pay the expenses of more than one law firm per
jurisdiction as counsel for the Indemnified Party. The Indemnifying Party also
shall be responsible for the expenses of such defense if the Indemnifying Party
does not elect to assume such defense. No Indemnifying Party, in the defense of
any such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation, and no Indemnified Party shall consent to entry of
any judgment or settle such claim or litigation without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, conditioned or delayed.

          (d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is due
in accordance with its terms but for any reason is held to be unavailable to an
Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Rightsholders on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Rightsholders 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 Rightsholders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Rightsholders agree that it would not be just and equitable
if contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7(d), (i) in no case shall any one Rightsholder be liable or
responsible for any amount in excess of the gross proceeds received by such
Rightsholder from the offering of Registrable Securities and (ii) the Company
shall be liable and responsible for any amount in excess of such proceeds;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 7(d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve such party from any other
obligation it or they may have thereunder or otherwise under this Section 7(d)
except to the extent that the party or parties from whom contribution may be
sought are adversely affected. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its prior
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed.

                                       7

<PAGE>

     8. Reporting. With a view to making available to the Rightsholders the
benefits of Rule 144 promulgated under the Securities Act or any other similar
rule or regulation of the Commission that may at any time permit the
Rightsholders to sell securities of the Company to the public without
registration ("RULE 144"), for so long as Rightsholders continue to own
Registrable Securities, the Company shall use its reasonable efforts to:

          (a) make and keep public information available, as those terms are
understood and defined in Rule 144, and file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

          (b) furnish to each Rightsholder, for so long as such Rightsholder
owns Registrable Securities, promptly upon request, (i) a written statement by
the Company, if true, that it has complied with the applicable 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 (iii) such
other information as may be reasonably requested to permit the Rightsholders to
sell such securities pursuant to Rule 144 without registration.

     9. Assignment of Registration Rights. The rights under this Agreement shall
not be assigned by any Rightsholder except in connection with the transfer of
Registrable Securities by such Rightsholder to an affiliate or shareholder of
such Rightsholder, provided that (i) the Rightsholder agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company; (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 rights are being transferred or assigned; (iii) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence, the transferee or assignee agrees in writing with the
Company to be bound by all of the obligations of an Rightsholder under this
Agreement; and (iv) such transfer shall have been conducted in accordance with
all applicable federal and state securities laws.

     10. Amendment of Registration Rights. Any provision of this Agreement may
be amended and the observance of any provision of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Rightsholders
who then hold at least a majority of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon each
Rightsholder and the Company. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.

     11. Miscellaneous.

          (a) A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the record owner of such Registrable Securities.

                                       8

<PAGE>

          (b) Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile; or (iii) two (2) Business
Days after deposit with a reputable overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:

     If to the Company:

                         Idera Pharmaceuticals, Inc.
                         345 Vassar Street
                         Cambridge, MA 02139-4818
                         Telephone: 617-679-5500
                         Facsimile: 617-679-5592
                         Attention: Chief Financial Officer

     with a copy to:

                         Wilmer Cutler Pickering Hale and Dorr LLP
                         60 State Street
                         Boston, MA 02109
                         Telephone: 617-526-6000
                         Facsimile: 617-526-5000
                         Attention: David E. Redlick, Esq.

     If to the Investor:

                         Biotech Shares Ltd.
                         St. James's Chambers
                         64A Athol Street
                         Isle of Man IM1 1JE

     If to the Agent:

                         Youssef El-Zein
                         Starco Center
                         Omar Daouk Street
                         Bloc B, 1st Floor
                         Beirut Central District
                         Beirut 2020-3313
                         Lebanon

     If to a Rightsholder, to its address and facsimile number as set forth
above, or to such other address and/or facsimile number and/or to the attention
of such other Person as the

                                       9

<PAGE>

recipient party has specified by written notice given to each other party five
(5) days prior to the effectiveness of such change.

     Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission, or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a reputable overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

          (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) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of Delaware, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Delaware or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Delaware.

          (e) This Agreement and the documents referenced herein 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 and the documents referenced herein supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.

          (f) Subject to the requirements of Section 9 of this Agreement, this
Agreement shall inure to the benefit of and be binding upon the permitted
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.

          (h) This Agreement may be executed in identical 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 parties 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.

                                       10

<PAGE>

          (j) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.

          (k) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

                                       11

<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the day and year first above written.

                                        COMPANY:

                                        IDERA PHARMACEUTICALS, INC.

                                        By: /s/ Sudhir Agrawal
                                            ------------------------------------
                                        Name: Sudhir Agrawal
                                        Title: Chief Executive Officer

                                        INVESTOR:

                                        BIOTECH SHARES LTD.

                                        By: /s/ Oussama Salam
                                            ------------------------------------
                                        Name: Oussama Salam
                                        Title: Director

                                        AGENT:

                                        YOUSSEF EL-ZEIN

                                        /s/ Youssef El-Zein
                                        ----------------------------------------

                                       12

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