Exhibit 10.35

FLEXTRONICS CONFIDENTIAL

Manufacturing Services Agreement

This Manufacturing Services Agreement (“Agreement”) is entered into this 2nd day
of March 2012 (the “Effective Date”) by and between Alimera Sciences, Inc.
having its place of business at 6120 Windward Parkway, Suite 290, Alpharetta,
Georgia 30005 (“Customer” or “Alimera”) and Flextronics Medical Sales and
Marketing, Ltd, having its place of business at Level 3, Alexander House, 35
Cybercity, Ebene, Mauritius (“Flextronics”).

Customer desires to engage Flextronics to perform manufacturing services as
further set forth in this Agreement. The parties agree as follows:

1. DEFINITIONS

Flextronics and Customer agree that capitalized terms shall have the meanings
set forth in this Agreement and Exhibit 1 attached hereto and incorporated
herein by reference.

2. MANUFACTURING SERVICES

2.1. Work. Customer hereby engages Flextronics to perform, and Flextronics
agrees to perform, the work (hereinafter “Work”). “Work” shall mean to procure
Materials and to manufacture, assemble, test, and store Product (as defined in
Exhibit 2.1(a)) in accordance with detailed written Specifications. The
“Specifications” for the Product or revision thereof shall include but are not
limited to bill of materials, designs, schematics, assembly drawings, process
documentation, test specifications, current revision number, and Approved Vendor
List. The Specifications (and any modifications thereto) as provided by Customer
and included in Flextronics’ production document management system are
incorporated herein by reference as Exhibit 2.1(b). This Agreement does not
include any new product introduction (NPI) or product prototype services related
to the Product. In the event that Customer requires any such services, the
parties will enter into a separate agreement. In case of any conflict between
the Specifications and this Agreement, this Agreement shall prevail.

2.2. Engineering Changes. Customer may request that Flextronics incorporate
engineering changes into the Product by providing Flextronics with a description
of the proposed engineering change sufficient to permit Flextronics to evaluate
its feasibility and cost. Flextronics will consider such proposed engineering
change and determine, in good faith, whether any delivery schedule and/or
pricing changes are necessary. Flextronics will proceed with engineering changes
when the parties have agreed in writing upon the changes to the Specifications,
delivery schedule and Product pricing and Customer has issued a purchase order
for the related implementation costs, if any.

2.3. Tooling; Non-Recurring Expenses; Software. Customer shall pay for or obtain
and allow Flextronics to use for Customer’s benefit in accordance with this
Agreement any Product-specific tooling, equipment, molds or software and other
materials that are reasonably necessary for the performance of Work
(hereinafter, collectively, “Customer Property”), provided that Flextronics
shall not obtain any such Customer Property without first obtaining the prior
written consent of Customer. Customer agrees that Customer shall pay for all
reasonably necessary non-recurring expenses associated with the installation or
tear down of the Customer Property. [****]

Flextronics agrees that the transfer of Customer Property to Flextronics shall
be a bailment and shall not constitute a sale thereof, and all right, title and
interest in Customer Property, including software that Customer provides to
Flextronics or any test software that Customer engages Flextronics to develop,
is and shall remain the property of Customer. Flextronics shall handle, store
and maintain all Customer Property under proper conditions to preserve quality
and prevent damage or other loss. Flextronics shall maintain and service all
equipment that

 

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Customer has authorized Flextronics to purchase, such equipment to be returned
to Customer in good working order, reasonable wear and tear excepted, following
the termination or expiration of this Agreement. The costs of repairing any
equipment or tooling outside of reasonable wear and tear will be the
responsibility of Customer, and any estimated costs for the repair will be
submitted to Customer in writing for approval before repair work will be
initiated. Notwithstanding the foregoing, if such need for repair arises or
results from the negligence, gross negligence or willful misconduct of
Flextronics, then the costs of such repair will be the responsibility of
Flextronics. Flextronics shall not use all or any part of Customer Property for
any purpose other than supplying Product to Customer under this Agreement.
Flextronics shall mark all Customer Property, including without limitation
equipment, as “Property of Alimera Sciences.” During the term of this Agreement,
Flextronics shall maintain commercially reasonable insurance to protect against
any loss to the Customer Property while in the possession of Flextronics.

2.4. Cost Reduction Projects. Flextronics agrees to seek ways to reduce the cost
of manufacturing Product by methods such as elimination of Materials,
redefinition of Specifications, and re-design of assembly or test methods.
Flextronics shall submit a written proposal to Customer for each proposed method
for reducing the cost of manufacturing Product. Such proposal shall include
sufficient detail regarding such proposed method to allow Customer to determine
whether the proposed method will require prior approval from any governmental or
regulatory authority. Flextronics may not implement any such proposed method
until it receives the written approval of Customer. Upon approval by Customer
and implementation of such ways that have been proposed by Flextronics,
Flextronics will receive [****] of the demonstrated cost reduction and Customer
shall receive the remaining [****] of the demonstrated cost reduction. Customer
will receive [****] of the demonstrated cost reduction upon implementation of
such ways initiated by Customer.

2.5. Manufacturing Facility. The Work shall be performed at Flextronics’
manufacturing facility located in Tijuana, Mexico (hereinafter the
“Manufacturing Site”). A change in the Manufacturing Site is a major change and
may require approval from the applicable governmental or regulatory authority,
and therefore, Flextronics will provide [****] prior to changing the
Manufacturing Site and will develop a transition plan with Customer in good
faith. Flextronics will not implement the change in the Manufacturing Site until
it receives written notification from Customer that such change can be
implemented. Flextronics will be responsible for all costs and expenses
associated with changing the Manufacturing Site.

3. FORECASTS; ORDERS; FEES; PAYMENT

3.1. Forecast. Customer shall provide Flextronics, [****] forecast indicating
Customer’s monthly Product requirements. The [****] of the forecast will be
binding and will constitute a Firm Order for all Work to be completed during
such [****]. A purchase order for Work to be completed within the [****] of a
forecast will be issued in accordance with Section 3.2 below.

3.2. Purchase Orders; Precedence. Customer may use its standard purchase order
form for any firm written orders for Work in respect of the Products to be
produced and delivered to Customer (hereinafter “Firm Orders”) provided for
hereunder; provided that all Firm Orders must reference this Agreement and the
applicable Specifications. All Firm Orders will be deemed to incorporate all of
the terms and conditions in this Agreement. The parties agree that the terms and
conditions contained in this Agreement shall prevail over any terms and
conditions of any such purchase order, acknowledgment form or other instrument.

3.3. Purchase Order Acceptance. Purchase orders shall be deemed accepted by
Flextronics so long as they are consistent with this Agreement. Flextronics may
reject any purchase order if: (a) the purchase order is an amended order in
accordance with Section 5.2 below and the purchase order is outside of the
Flexibility Table; (b) the fees reflected in the purchase order are inconsistent
with the parties’ agreement with respect to the fees; (c) the purchase order
represents a significant deviation from the forecast for the same period, unless
such deviation is within the parameters of the Flexibility Table; or (d) if a
purchase order would extend Flextronics’ liability beyond Customer’s approved
credit line. Flextronics shall notify Customer of rejection of any purchase
order within five (5) business days of receipt of such purchase order. If
Flextronics does not notify Customer of rejection of any purchase order during
such period, then the purchase order shall be deemed accepted by Flextronics.

3.4. Fees; Changes; Taxes.

(a) The initial fees shall be as set forth on the Fee List attached hereto and
incorporated herein as Exhibit 3.1 (the “Fee List”). If a Fee List is not
attached or completed, then the initial fees shall be as set forth in purchase
orders issued by Customer and accepted by Flextronics in accordance with the
terms of this Agreement. Changes to the fees will be agreed by the parties in
accordance with Section 3.4(c).

 

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(b) Customer is responsible for additional fees and costs due to: (a) changes to
the Specifications; (b) failure of Customer or its subcontractor to timely
provide sufficient quantities or a reasonable quality level of Customer
Controlled Materials where applicable to sustain the production schedule; and
(c) any expediting charges reasonably necessary because of a change in
Customer’s requirements, provided that Customer shall not be responsible for
such fees and costs due to reasons specified in (a) or (c) unless Flextronics
received prior written approval from Customer to incur such fees and costs.

(c) Flextronics will notify Customer of changes to the cost of Materials as such
changes are identified. On a [****] basis, Flextronics and Customer will
mutually agree on the Product fees based on changes, if any, to Materials costs
and other costs. Concurrent with updating the Product fees on a quarterly basis,
Flextronics and Customer will true up any differences to standard cost already
incurred in the prior quarter. Any other changes in Product fees (increases or
decreases) and the timing of such changes shall be agreed in writing by the
parties, such agreement not to be unreasonably withheld or delayed. By way of
example only, the fees may be increased or decreased if the market price of
fuels, Materials, equipment, labor and other production costs, increase or
decrease beyond normal variations in pricing, as reasonably demonstrated by
Flextronics or Alimera.

(d) All fees are exclusive of federal, state and local excise, sales, use, VAT,
and similar transfer taxes, and any duties, and Customer shall be responsible
for all such items. This subsection (d) does not apply to taxes on Flextronics’
net income.

(e) The Fees List will be based on the exchange rate(s) for converting the
purchase price for Inventory denominated in the Parts Purchase Currency(ies)
into the Functional Currency. The fees will be adjusted, on a monthly basis
based on changes in the Exchange Rate(s) as reported on the last business day of
each month, for the following month to the extent that such Exchange Rates
change [****] from the prior month. “Exchange Rate(s)” is defined as the closing
currency exchange rate(s) as reported on Reuters’ page FIX on the last business
day of the current month prior to the following month. “Functional Currency”
means the currency in which all payments are to be made pursuant to Section 3.5
below. “Parts Purchase Currency(ies)” means U.S. Dollars, Japanese Yen and/or
Euros to the extent such currencies are different from the Functional Currency
and are used to purchase inventory needed for the performance of the Work
forecasted to be completed during the applicable month.

3.5. Payment. Customer agrees to pay all correct invoices in U.S. Dollars,
[****] from the date of the invoice. The date of the invoice shall be the date
on which the invoice is sent to Customer electronically or in accordance with
Section 12.10. Flextronics shall not invoice Customer for Product until
Flextronics has shipped Product to Customer. If Customer has any reasonable
grounds for disputing in good faith any invoiced amounts under this Agreement,
Customer shall pay the undisputed amount in accordance with this Section 3.5 and
shall, within [****] after its receipt of the applicable invoice, provide
Flextronics with written notice specifying the amount of the invoice that is
disputed, and describing in reasonable detail the basis of the dispute. The
parties agree to work to resolve the dispute pursuant to Section 12.11 below. In
the event that, upon resolution of such a dispute, any amounts are due to
Flextronics, Customer shall pay such amounts within that period equal to the
longer of (a) the remaining time for payment pursuant to this Agreement or
(b) five (5) business days from the date such dispute is resolved.

3.6. Late Payment. Customer agrees to pay [****] monthly interest on all late
payments (other than amounts disputed in good faith). Furthermore, if Customer
is late with payments (other than amounts disputed in good faith) more than
[****], Flextronics may (a) stop all Work under this Agreement upon written
notice to Customer (in accordance with Section 12.10) until assurances of
payment reasonably satisfactory to Flextronics are received or payment is
received; (b) demand prepayment for purchase orders; (c) delay shipments upon
written notice to Customer (in accordance with Section 12.10) until assurances
of payment reasonably satisfactory to Flextronics are received or payment is
received; and (d) to the extent that Flextronics’s personnel cannot be
reassigned to other billable work during such stoppage and/or in the event
restart cost are incurred, invoice Customer for additional fees before the Work
can resume. In the event that Customer is no longer publicly traded on the
NASDAQ Global Market and Flextronics does not have access to Customer’s current
filings with the Securities and Exchange Commission, Customer agrees to provide
all necessary financial information required by Flextronics from time to time in
order to make a proper assessment of the creditworthiness of Customer.

 

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3.7. Letter of Credit In the event that Customer’s working capital falls below
ten million dollars ($10,000,000) at any time during the term of this Agreement,
Flextronics may request, and Customer agrees to obtain and maintain, a stand-by
letter of credit on behalf of Flextronics to minimize the financial risk to
Flextronics for its performance of the Work under this Agreement. The stand-by
letter of credit shall be for a minimum period of time of six (6) months and
shall be for a total amount that is equal to the total value of the risks
associated with Inventory, Special Inventory, and the accounts receivable from
Customer. The calculation shall be based upon the forecast provided by Customer
pursuant to Section 3.1. The draw down procedures under the stand-by letter of
credit shall be determined solely by Flextronics. Flextronics will, in good
faith, review Customer’s creditworthiness periodically and may provide more
favorable terms once it feels it is prudent to do so.

4. MATERIALS PROCUREMENT; CUSTOMER RESPONSIBILITY FOR MATERIALS

4.1. Authorization to Procure Materials, Inventory and Special Inventory.
Customer’s accepted purchase orders and forecast will constitute authorization
for Flextronics to procure, without Customer’s prior approval, (a) Inventory to
manufacture the Product covered by such purchase orders based on the Lead Time
and (b) certain Special Inventory based on Customer’s purchase orders and
forecast as follows: Long Lead-Time Materials as required based on the Lead Time
when such purchase orders are placed and Minimum Order Inventory as required by
the supplier. Flextronics will only purchase Economic Order Inventory with the
prior written approval of Customer.

4.2. Customer Controlled Materials. Customer may direct Flextronics to purchase
Customer Controlled Materials in accordance with Customer Controlled Materials
Terms. Customer acknowledges that Customer Controlled Materials Terms will
directly impact Flextronics’s ability to perform under this Agreement and to
provide Customer with the flexibility Customer is requiring pursuant to the
terms of this Agreement. In the event that Flextronics reasonably believes that
Customer Controlled Materials Terms will create an additional cost that is not
covered by this Agreement, then Flextronics will notify Customer and the parties
will agree to either (a) compensate Flextronics for such additional costs,
(b) amend this Agreement to conform to Customer Controlled Materials Terms or
(c) amend Customer Controlled Materials Terms to conform to this Agreement. If
Customer directs Flextronics to purchase Customer Controlled Materials in
accordance with Customer Controlled Materials Terms, Customer agrees to provide
a copy to Flextronics of all relevant Customer Controlled Materials Terms upon
the execution of this Agreement and promptly upon execution of any relevant new
agreements with suppliers. Customer agrees not to make any modifications or
additions to the relevant Customer Controlled Materials Terms or enter into new
relevant Customer Controlled Materials Terms with suppliers that will negatively
impact Flextronics’s procurement activities.

4.3. Preferred Supplier. Customer shall provide to Flextronics and maintain an
Approved Vendor List. Flextronics shall purchase only from vendors on a current
AVL that has been approved in writing by Customer the Materials required to
manufacture the Product. Customer shall give Flextronics reasonable opportunity
to be included on the AVL for Materials that Flextronics can supply. If
Flextronics is on an AVL and its prices and quality are competitive with other
vendors, Flextronics may source Materials from itself unless otherwise requested
by Customer. For purposes of this Section 4.3 only, the term “Flextronics”
includes Flextronics’ Affiliates.

4.4. Customer Responsibility for Inventory and Special Inventory. Customer is
responsible under the conditions provided in this Agreement for all Materials,
Inventory and Special Inventory purchased by Flextronics in accordance with this
Section 4.

4.5. Materials Warranties. Flextronics shall use reasonable efforts to obtain
and shall endeavor to pass through to Customer the following warranties with
regard to the Materials (other than the Production Materials): (i) conformance
of the Materials with the vendor’s specifications and/or with the
Specifications; (ii) that the Materials will be free from defects in
workmanship; (iii) that the Materials will comply with Environmental
Regulations; and (iv) that the Materials will not infringe the intellectual
property rights of third parties.

5. SHIPMENTS, SCHEDULE CHANGE, CANCELLATION, STORAGE

5.1. Shipments. Flextronics shall use commercially reasonable efforts to deliver
Products in accordance with the delivery times specified in each accepted
purchase order. All Products delivered pursuant to the terms of this Agreement
shall be suitably packed for shipment in accordance with the Specifications and
marked for shipment to Customer’s destination specified in the applicable
purchase order. Each time Flextronics ships Product, it shall provide Customer
with, in English, a certificate of compliance that confirms that the lot has
been manufactured and tested in accordance with the Specifications. Customer
will have sole responsibility for the

 

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release of Products to the market. [****] If Customer chooses a different
location for Flextronics to ship the Products, Flextronics reserves the right to
change the shipping terms. All freight, insurance and other shipping expenses,
as well as any special packing expenses not included in the original quotation
for the Products, will be included in the fee list. In the event the shipping
terms change and the Customer designates a freight carrier to be utilized by
Flextronics, Customer agrees to designate only freight carriers that are
currently in compliance with all applicable laws relating to anti-terrorism
security measures and who agree to adhere to the applicable C-TPAT
(Customs-Trade Partnership Against Terrorism) security recommendations and
guidelines as outlined by the United States Bureau of Customs and Border
Protection and to prohibit the freight carriage to be sub-contracted to any
carrier that is not in compliance with the applicable C-TPAT guidelines.
Flextronics shall convey good title to the Product to Customer, free of all
liens of any kind whatsoever.

5.2. Quantity Increases and Shipment Schedule Changes.

(a) For any accepted purchase order, Customer may (a) increase the quantity of
Products or (b) reschedule the quantity of Products and their shipment date as
provided in the flexibility table below (the “Flexibility Table”):

[****]

Any decrease in quantity is considered a cancellation, unless the decreased
quantity is rescheduled for delivery at a later date in accordance with the
Flexibility Table. Quantity cancellations are governed by the terms of
Section 5.3 below. Any purchase order quantities increased or rescheduled
pursuant to this Section 5.2 (a) may not be subsequently increased or
rescheduled without the approval of Flextronics, provided that Flextronics will
use good faith, commercially reasonable efforts in trying to accommodate any
subsequent increase and/or rescheduling.

(b) All reschedules to push out delivery dates outside of the table in
subsection (a) require Flextronics’ prior written approval, which, in its sole
discretion may or may not be granted. If Customer does not request prior
approval from Flextronics for such reschedules, or if Customer and Flextronics
do not agree in writing to specific terms with respect to any approved
reschedule, then Customer will pay Flextronics the Monthly Charges for any such
reschedule, calculated as of the first day after such reschedule for any
Inventory and/or Special Inventory that was procured by Flextronics to support
the original delivery schedule that is not used to manufacture Product pursuant
to an accepted purchase order within [****] after such reschedule. In addition,
if Flextronics notifies Customer that such Inventory and/or Special Inventory
has remained in Flextronics’ possession for more than [****] since such
reschedule, then Customer agrees, subject to Section 5.4, to purchase any
affected Inventory and/or Special Inventory upon receipt of the notice by paying
the Affected Inventory Costs. In addition, any finished Products that have
already been manufactured to support the original delivery schedule will be
treated as cancelled as provided in Sections 5.3 and 5.4 below.

(c) Flextronics will use commercially reasonable efforts meet any quantity
increases within the Flexibility Table, and will use reasonable commercial
efforts to meet any quantity increases outside the Flexibility Table, which are
subject to Materials and capacity availability. All reschedules or quantity
increases outside of the table in subsection (a) require Flextronics’ approval,
which, in its sole discretion, may or may not be granted, provided that
Flextronics will use good faith, commercially reasonable efforts in trying to
accommodate any subsequent increase and/or rescheduling. If Flextronics agrees
to accept a reschedule to pull in a delivery date or an increase in quantities
in excess of the Flexibility Table in subsection (a) and if there are extra
costs to meet such reschedule or increase, Flextronics will inform Customer for
its written acceptance and approval in advance.

 

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(d) Any delays in the normal production or interruption in the workflow process
caused by Customer’s changes to the Specifications or failure to provide
sufficient quantities or a reasonable quality level of Customer Controlled
Materials where applicable to sustain the production schedule, will be
considered a reschedule of any affected purchase orders for purposes of this
Section 5.2 for the period of such delay.

(e) For purposes of calculating the amount of Inventory and Special Inventory
subject to subsection (b), the “Lead Time” shall be calculated as the Lead Time
at the time of procurement of the Inventory and Special Inventory.

5.3. Cancellation of Orders and Customer Responsibility for Inventory.

(a) Customer may not cancel all or any portion of Product quantity of an
accepted purchase order without Flextronics’s prior written approval, which, in
its sole discretion, may or may not be granted. If Customer does not request
prior approval, or if Customer and Flextronics do not agree in writing to
specific terms with respect to any approved cancellation, then Customer will pay
Flextronics Monthly Charges for any such cancellation, [****] for any Product or
Inventory or Special Inventory procured by Flextronics to support the original
delivery schedule. In addition, if Flextronics notifies Customer that such
Product, Inventory and/or Special Inventory has remained in Flextronics’
possession for more than thirty (30) days since such cancellation, then Customer
agrees, subject to Section 5.4, to purchase from Flextronics such Product,
Inventory and/or Special Inventory by paying the Affected Inventory Costs. In
addition, Flextronics shall calculate the cost or gain of unwinding any currency
hedging contracts entered into by Flextronics to support the cancelled purchase
order(s). Should the unwinding result in a loss to Flextronics, Customer agrees
to cover such loss amount for Flextronics immediately upon receipt of an invoice
for such amount. Should the unwinding result in a gain to Flextronics, a credit
note will be immediately issued to Customer.

(b) If the forecast for any period is less than the previous forecast supplied
over the same period, that amount will be considered canceled and Customer will
be responsible for any Special Inventory purchased or ordered by Flextronics to
support the forecast.

(c) Products that have been ordered by Customer and that have not been picked up
in accordance with the agreed upon shipment dates shall be considered cancelled
and Customer will be responsible for such Products in the same manner as set
forth above in Section 5.3(a).

(d) For purposes of calculating the amount of Inventory and Special Inventory
subject to subsection (a), the “Lead Time” shall be calculated as the Lead Time
at the time of procurement of the Inventory and Special Inventory or
cancellation of the purchase order, whichever is longer.

5.4. Mitigation of Inventory and Special Inventory. Prior to invoicing Customer
for the amounts due pursuant to Sections 5.2 or 5.3, Flextronics will use
reasonable commercial efforts for a period of [****], to return unused Inventory
and Special Inventory and to cancel pending orders for such inventory, and to
otherwise mitigate the amounts payable by Customer. Customer shall pay amounts
due under Sections 5.2 and 5.3 within [****] after receipt of an invoice.
Flextronics will ship the Inventory and Special Inventory and Product paid for
by Customer under Sections 5.2 and 5.3 to Customer promptly upon said payment by
Customer. Notwithstanding the foregoing, if Customer provides written notice to
Flextronics to hold and use the Inventory and Special Inventory purchased by
Flextronics on Customer’s behalf (that Customer has not yet paid for) under this
Section 5 for future orders (“Excess Inventory”), Flextronics will store such
Excess Inventory at its facilities for up to [****] from the date of reschedule
or cancellation pursuant to sections 5.2 or 5.3 respectively (the “Storage
Period”); provided, that until Customer pays for such Excess Inventory, Customer
shall pay Flextronics a storage charge equal to [****] of the Cost of the Excess
Inventory for each month that such Excess Inventory is held by Flextronics. In
the event that Customer purchases such Excess Inventory during the Storage
Period, Customer shall pay Flextronics a storage charge equal to [****] of the
Cost of the Excess Inventory for each month that such Excess Inventory is held
by Flextronics; and provided, further, that if Excess Inventory that is
purchased by Customer is used in the fulfillment of any Firm Orders during the
Storage Period, the price of the Product incorporating such Purchased Inventory
will be reduced by the amount paid by Customer for the Excess Inventory used.
For any Excess Inventory not used in the fulfillment of any Firm Orders during
the Storage Period, Customer shall immediately pay all amounts due for such
Excess Inventory hereunder and Flextronics will ship such Excess Inventory
promptly upon receipt of said payment by Customer. In the event Customer does
not pay amounts due under Sections 5.2 and 5.3 within [****] after receipt of an
invoice, Flextronics will be entitled to dispose of such Inventory, Special
Inventory or Excess Inventory in a commercially reasonable manner and credit to
Customer any monies received from third parties.

Flextronics shall then submit an invoice for the balance amount due and Customer
agrees to pay said amount within [****] of its receipt of the invoice.

 

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5.5. No Waiver. For the avoidance of doubt, Flextronics’ failure to invoice
Customer for any of the charges set forth in this Section 5 does not constitute
a waiver of Flextronics’ right to charge Customer for the same event or other
similar events in the future.

6. PRODUCT ACCEPTANCE AND EXPRESS LIMITED WARRANTIES

6.1. Product Acceptance. The Products delivered by Flextronics will be inspected
as required by Customer within [****] of receipt at the “ship to” location on
the applicable purchase order. If Products do not comply with the express
limited warranty set forth in Section 6.3(a) below, Customer has the right to
reject such Products during said period. Products not rejected during said
period will be deemed accepted. Customer may return defective Products, freight
collect, after obtaining a return material authorization number from Flextronics
to be displayed on the shipping container and completing a failure report.
Rejected Products will be promptly repaired or replaced, at Flextronics’ option
and at Flextronics’ sole cost, and returned freight pre-paid. Following any such
resubmission of rejected Product, Customer shall accept or reject such Product
in accordance with the acceptance procedures and within the timeframe noted
above. Customer shall bear all of the risk, and all costs and expenses,
associated with Products that have been returned to Flextronics for which there
is no defect found. If Customer and Flextronics dispute whether any Products
comply with the express limited warranty set forth in Section 6.3(a) below,
then, if the parties cannot resolve such dispute after good faith negotiations,
such dispute will be resolved in accordance with Section 12.11.

6.2. Mutual Warranties. Each party represents and warrants that, as of the
Effective Date, (a) it has the full right and authority to enter into this
Agreement, and that it is not aware of any impediment that would inhibit its
ability to perform its obligations hereunder and (b) it is a corporation duly
organized, validly existing and in good standing under the laws of its
incorporating jurisdiction and has all requisite power and authority to enter
into this Agreement.

6.3. Express Limited Warranty. This Section 6.3 sets forth Flextronics’ sole and
exclusive warranty with respect to the Product and Customer’s sole and exclusive
remedies with respect to a breach by Flextronics of such warranty

(a) Flextronics warrants that the Products (i) will be manufactured in
compliance with the applicable laws of the country in which the Product is
manufactured, (ii) will be manufactured in compliance with Current Good
Manufacturing Practices, (iii) will be manufactured in accordance with the
applicable Specifications and the Quality Agreement, (iv) will be free from
defects in workmanship, and (v) shall incorporate Materials tested in accordance
with the Specifications, in each case for a period of three hundred and
sixty-five (365) days from the date of shipment. In addition, Flextronics
warrants that Production Materials are in compliance with Environmental
Regulations.

(b) Notwithstanding anything else in this Agreement, this express limited
warranty does not apply to, and Flextronics makes no representations or
warranties whatsoever with respect to: (i) Materials (except as set forth in
Section 6.3(a)(v)), and/or Customer Controlled Materials; (ii) defects resulting
from the Specifications or Product design; (iii) Product that has been abused,
damaged, altered or misused by any person or entity after title passes to
Customer; (iv) first articles, prototypes, pre-production units, test units or
other similar Products; (v) defects resulting from tooling, designs or
instructions produced or supplied by Customer, or (vi) the compliance of
Materials or Products with any Environmental Regulations. Customer shall bear
all of the risk, and all costs and expenses, associated with Products that have
been returned to Flextronics for which there is no defect found.

(c) Upon any failure of a Product to comply with the express limited warranty
set forth in this Section 6.3, Flextronics’ sole obligation, and Customer’s sole
remedy is for Flextronics, at its option, to promptly repair or replace such
unit and return it to Customer freight prepaid, all in accordance with the terms
and conditions of Section 6.1. Customer shall return Products covered by this
warranty, at Flextronics’ expense, after completing a failure report and
obtaining a return material authorization number from Flextronics to be
displayed on the shipping container. Customer shall bear all of the risk, and
all costs and expenses, associated with Products that have been returned to
Flextronics for which there is no defect found. For the avoidance of doubt, this
Section 6.3 shall not affect (i) Flextronics’ indemnification obligations set
forth in Section 11.1, (ii) Customer’s right to terminate this Agreement as set
forth in Section 10.2, (iii) Flextronics’ obligations with respect to Recalls as
set forth in Section 7, or (iv) Customer’s right to seek refund of amounts paid
for any defective Product in the event that Flextronics does not repair or
replace such defective Product in accordance with this subsection 6.3(c).

 

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(d) Customer will provide its own warranties directly to any of its end users or
other third parties. Customer will not pass through to end users or other third
parties the warranties made by Flextronics under this Agreement. Customer will
not make any representations to end users or other third parties on behalf of
Flextronics, and Customer will expressly indicate that the end users and third
parties must look solely to Customer in connection with any problems, warranty
claim or other matters concerning the Product.

6.4. No Representations or Other Warranties. EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OR
CONDITIONS ON THE PERFORMANCE OF THE WORK, OR THE PRODUCTS, OR ANY OTHER SUBJECT
MATTER OF THIS AGREEMENT, WHETHER EXPRESS, IMPLIED, STATUTORY, AND FLEXTRONICS
SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

7. PRODUCT RECALLS AND RETURNS

In the event that any Product defect or any governmental action attributable to
a Product defect requires a Recall in Customer’s reasonable judgment, Customer
shall promptly provide verbal notification to Flextronics (followed by a written
notification) and the Parties shall cooperate fully in the investigation of the
problem. To the extent that the Recall results from a breach by Flextronics of
its express limited warranty set forth in Section 6.3(a) above, then, in
addition to Flextronics’ obligation to repair or replace any such Products as
set forth in Section 6.3(c), Flextronics’ sole obligation and Customer’s sole
remedy shall be to reimburse Customer for documented out-of-pocket
administrative costs and expenses incurred in conducting such Recall in an
amount [****].

8. GOVERNMENTAL REQUIREMENTS

8.1. Governmental Communications. Flextronics may communicate with any
governmental agency, including but not limited to governmental agencies
responsible for granting regulatory approval for the Products, regarding the
Manufacturing Site generally and non-Product-specific manufacturing operations.

8.2. Records and Accounting by Flextronics. Flextronics shall keep records of
the manufacture, testing and shipping of the Products in accordance with the
Quality Agreement.

8.3. Inspection. During the term of this Agreement and for [****] thereafter,
Customer may inspect Flextronics reports and records relating to this Agreement,
including without limitation relating to the invoices issued hereunder, during
normal business hours and with reasonable advance notice, provided a Flextronics
representative is present during any such inspection.

8.4. Access. Flextronics shall provide Customer with reasonable access at
mutually agreeable times (as discussed in good faith) to the areas of the
Manufacturing Site in which the Products are manufactured, stored, handled or
shipped in order to permit Customer’s verification of the performance of the
Work in accordance with the Specifications and the Quality Agreement. At all
times while on Flextronics’s premises, Customer’s representatives shall comply
with all Flextronics policies and procedures related to safety, security and
confidentiality.

8.5. Notification of Regulatory Inspections. Flextronics’ interactions and
correspondences with relevant regulatory authorities, including the U.S. Food
and Drug Administration (hereinafter the “FDA”), in connection with this
Agreement shall be handled in accordance with the Quality Agreement.

8.6. Reports. Flextronics will promptly supply, as requested by Customer, all
Product data in its control, including complaint test results, and all
investigations (in manufacturing, testing and storage), that Customer reasonably
requires in order to complete any filing under any applicable regulatory regime.
Flextronics will estimate the hours of effort and estimated cost to Customer for
any reports requiring more than [****] to complete, and Customer will provide a
purchase order to cover the estimated costs if Customer approves such cost.

 

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8.7. Regulatory Filings. Customer shall have the sole responsibility for filing
all documents with all regulatory authorities and taking any other actions that
may be required for the receipt and/or maintenance of regulatory authority
approval for the commercial manufacture of the Products.

9. INTELLECTUAL PROPERTY RIGHTS; LICENSES

9.1. Licenses from Customer. Customer hereby grants Flextronics a non-exclusive,
non-sublicensable, non-transferrable (except to its Affiliates or in accordance
with Section 12.9) license during the term of this Agreement to use Customer’s
patents, trade secrets and other intellectual property (collectively, “Customer
Intellectual Property”), in each case only to the extent necessary to perform
Flextronics’ obligations under this Agreement and solely to perform such
obligations.

9.2. No Other Licenses. Except as otherwise specifically provided in this
Agreement, each party acknowledges and agrees that no licenses or rights under
any of the intellectual property rights of the other party are given or intended
to be given to such other party. Customer (and its licensors) shall retain all
right, title and interest in and to Customer Intellectual Property, and
Flextronics shall not take any action inconsistent with such rights.

9.3. Acknowledgement of Ownership. Prior to the Effective Date of this
Agreement, Flextronics performed certain design services for Customer with
respect to the Product. Flextronics hereby confirms that the designs and other
information and items made or conceived by Flextronics during the course of
performing such design services and incorporated into the deliverables (the
“Developments”) and the intellectual property rights in the Developments were
assigned to Customer as its sole and exclusive property, subject to any third
party intellectual property rights incorporated into such deliverables.
Flextronics makes and hereby agrees to make all assignments necessary to
accomplish the foregoing ownership, and will execute all documents and otherwise
assist Customer (at Customer’s expense) to further evidence, record and perfect
such assignments, and to perfect, obtain, maintain, enforce, and defend any
rights assigned. Customer acknowledges and agrees that the deliverables
(including any prototype or trial units of the Product) were provided on an
“as-is” basis and that Flextronics made no representations and no warranties on
such design services or the deliverables or products based on or incorporating
any deliverables, express, implied, statutory or otherwise.

10. TERM AND TERMINATION

10.1. Term. The term of this Agreement shall commence on the date hereof above
and shall continue for three (3) years thereafter unless earlier terminated as
provided in Section 10.2 (Termination) or 12.8 (Force Majeure). After the
expiration of the initial term hereunder (unless this Agreement has been
terminated), this Agreement shall be automatically renewed for separate but
successive one-year terms unless either party provides written notice to the
other party that it does not intend to renew this Agreement eighteen (18) months
or more prior to the end of any term.

10.2. Termination. This Agreement may be terminated by either party (a) for
convenience upon eighteen (18) months prior written notice to the other party or
(b) if the other party defaults in any payment to the terminating party and such
default continues without a cure for a period of [****] after the delivery of
written notice thereof by the terminating party to the other party, (c) if the
other party defaults in the performance of any other material term or condition
of this Agreement and such default continues unremedied for a period of [****]
after the delivery of written notice thereof by the terminating party to the
other party, or (d) pursuant to Section 12.8 (Force Majeure). In addition,
Customer may terminate this Agreement upon written notice to Flextronics in the
event that (i) the Product or Iluvien (Customer’s product that is an
intravitreal insert containing fluocinolone acetonide) is withdrawn by Customer
or by a regulatory authority or (ii) a regulatory authority takes any action or
raises any objection that prevents the Customer from marketing, distributing,
importing, exporting or selling Product or Iluvien.

10.3. Effect of Expiration or Termination. Expiration or termination of this
Agreement under any of the foregoing provisions shall not affect the amounts due
under this Agreement by either party or any obligations of either party under
this Agreement, in each case, that exist as of the date of expiration or
termination, and as of the date of expiration or termination of this Agreement,
the provisions of Sections 5.2, 5.3, and 5.4 shall apply with respect to payment
and shipment to Customer of finished Products, Inventory, and Special Inventory
in existence as of such date. Expiration or termination of this Agreement shall
not affect Flextronics’ express limited warranty in Section 6.3 above. In
addition, upon expiration or termination of this Agreement, Flextronics shall
promptly deliver

 

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to Customer at Customer’s designated facility all Customer Property, Customer
Intellectual Property and Customer Confidential Information, and Flextronics
shall provide to the Customer (or its designee) any and all documentation
related to the Work that is the property of Customer, as reasonably requested by
the Customer. Upon reasonable request by Customer, Flextronics will provide
transition services to Customer at Flextronics’ published labor rates. Sections
1, 3.5, 3.6, 3.7, 4, 5.3, 5.4, 6, 7, 8, 9, 11 and 12 of this Agreement, this
Section 10.3, and Sections 8, 21, 22, 24 and 25 of the Quality Agreement shall
be the only terms that shall survive any termination or expiration of this
Agreement.

11. INDEMNIFICATION; LIABILITY LIMITATION

11.1. Indemnification by Flextronics. Flextronics agrees to defend, indemnify
and hold harmless, Customer and its Affiliates and all of their respective
directors, officers, employees, and agents (each, a “Customer Indemnitee”) from
and against all claims, actions, losses, expenses, damages or other liabilities,
including reasonable attorneys’ fees (collectively, “Damages”) incurred by or
assessed against any of the foregoing, but solely to the extent the same arise
out of, are in connection with, or are caused by or related to third-party
claims relating to:

(a) any actual or threatened injury or damage to any person or property caused,
or alleged to be caused, by a Product sold by Flextronics to Customer hereunder,
but solely to the extent such injury or damage has been caused by the breach by
Flextronics of its express limited warranties set forth in Section 6.3(a); or

(b) any infringement of the intellectual property rights of any third party but
solely to the extent that such infringement is caused by a process that
Flextronics uses to manufacture, assemble and/or test the Products; provided
that Flextronics shall not have any obligation to indemnify Customer if such
claim would not have arisen but for Flextronics’ manufacture, assembly or test
of the Product in accordance with the Specifications.

11.2. Indemnification by Customer. Customer agrees to defend, indemnify and hold
harmless, Flextronics and its Affiliates, and all of their respective directors,
officers, employees and agents (each, a “Flextronics Indemnitee”) from and
against all Damages incurred by or assessed against any of the foregoing, but
solely to the extent the same arise out of, are in connection with, are caused
by or are related to third-party claims relating to:

(a) any failure of any Product (and Materials contained therein) sold by
Flextronics hereunder to comply with any safety standards and/or Environmental
Regulations to the extent that such failure has not been caused by Flextronics’
breach of its express limited warranties set forth in Section 6.3 hereof;

(b) any actual or threatened injury or damage to any person or property caused,
or alleged to be caused, by a Product, but only to the extent such injury or
damage has not been caused by Flextronics’ breach of its express limited
warranties set forth in Section 6.3 hereof; or

(c) any infringement of the intellectual property rights of any third party by
any Product except to the extent such infringement is the responsibility of
Flextronics pursuant to Section 11.1(b) above.

11.3. Procedures for Indemnification. With respect to any third-party claims,
either party shall give the other party prompt notice of any third-party claim
and cooperate with the indemnifying party at its expense. The indemnifying party
shall have the right to assume the defense (at its own expense) of any such
claim through counsel of its own choosing by so notifying the party seeking
indemnification within [****] after the first receipt of such notice. The party
seeking indemnification shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the indemnifying party, provided that the indemnifying party is not
prejudiced thereby. The indemnifying party shall not, without the prior written
consent of the indemnified party (which shall not be unreasonably withheld or
delayed), agree to the settlement, compromise or discharge of such third-party
claim. The indemnifying party shall not be responsible for any settlement it
does not approve in writing.

11.4. Sale of Products Enjoined. Should the use of any Products be enjoined for
a cause stated in Section 11.1(b) or 11.2(c) above, or in the event the
indemnifying party desires to minimize its liabilities under this Section 11, in
addition to its indemnification obligations set forth in this Section 11, the
indemnifying party’s sole responsibility is, subject to Section 2.2, to either
substitute a fully equivalent Product or process (as applicable) not subject to
such injunction, modify such Product or process (as applicable) without
affecting the fit, form, function or safety of the Product so that the Product
or process (as applicable) is no longer subject to such injunction, or obtain
the right to continue using the enjoined process or Product (as applicable). For
the sake of clarity, in the event that any of the foregoing remedies cannot be
effected on commercially reasonable terms then, all accepted purchase orders and
the current forecast will be considered cancelled and Customer shall purchase
all Products, Inventory and

 

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Special Inventory as provided in Sections 5.3 and 5.4 hereof. Any changes to any
Products or process must be made in accordance with Section 2.2 above.
Notwithstanding the foregoing, in the event that a third party makes an
infringement claim, but does not obtain an injunction, the indemnifying party
shall not be required to substitute a fully equivalent Product or process (as
applicable) or modify the Product or process (as applicable) if the indemnifying
party obtains an opinion from competent patent counsel reasonably acceptable to
the other party that such Product or process is not infringing or that the
patents alleged to have been infringed are invalid.

11.5. No Other Liability; Limitations on Liability. EXCEPT WITH REGARD TO A
BREACH OF THE PARTIES’ INDEMNIFICATION OBLIGATIONS SET FORTH IN SECTIONS 11.1
AND 11.2 ABOVE OR A BREACH OF SECTION 12.1 BELOW, IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER FOR ANY “COVER” DAMAGES (INCLUDING INTERNAL COVER DAMAGES
WHICH THE PARTIES AGREE MAY NOT BE CONSIDERED “DIRECT” DAMAGES), OR ANY
INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR RELIANCE DAMAGES OF ANY KIND OR
NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF PRODUCTS, WHETHER SUCH
LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY
OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN
WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF THE
LIMITED REMEDIES IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.

EXCEPT WITH RESPECT TO FLEXTRONICS’S OBLIGATIONS OF INDEMNIFICATION AS SET FORTH
IN SECTION 11.1 ABOVE OR A BREACH OF FLEXTRONICS’S OBLIGATIONS OF
CONFIDENTIALITY IN SECTION 12.1 BELOW, NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THIS AGREEMENT, FLEXTRONICS’S TOTAL LIABILITY TO CUSTOMER HEREUNDER SHALL BE
SUBJECT TO THE FOLLOWING AGGREGATE CAP: FLEXTRONICS’S MAXIMUM AGGREGATE
LIABILITY TO CUSTOMER SHALL IN NO EVENT EXCEED FIVE HUNDRED THOUSAND DOLLARS
($500,000).

THIS SECTION 11 STATES THE ENTIRE LIABILITY OF THE PARTIES TO EACH OTHER
CONCERNING INFRINGEMENT OF THIRD PARTY PATENT, COPYRIGHT, TRADE SECRET OR OTHER
INTELLECTUAL PROPERTY RIGHTS.

12. MISCELLANEOUS

12.1. Confidentiality. Each party shall use commercially reasonable efforts to
protect the confidentiality of the other party’s Confidential Information. Each
party shall refrain from using any or all Confidential Information of the
disclosing party for any purposes or activities other than those specifically
authorized in this Agreement. Except as otherwise specifically permitted herein
or pursuant to written permission of the party to this Agreement owning the
Confidential Information, no party shall disclose or facilitate disclosure of
Confidential Information of the disclosing party to anyone without the prior
written consent of the disclosing party, except to its employees, consultants,
parent company, and subsidiaries of its parent company who need to know such
information for carrying out the activities contemplated by this Agreement and
who have agreed in writing to confidentiality terms that are no less restrictive
than the requirements of this Section. The receiving party shall be responsible
and liable for any breaches of confidentiality by its employees, consultants,
parent company or subsidiaries of its parent company. Notwithstanding the
foregoing, the receiving party may disclose Confidential Information of the
disclosing party pursuant to a subpoena or other court process only (a) after
having given the disclosing party prompt notice of the receiving party’s receipt
of such subpoena or other process and (b) after the receiving party has given
the disclosing party a reasonable opportunity (to the extent allowed by
applicable law or regulation) to oppose such subpoena or other process or to
obtain a protective order. In addition, Customer may disclose the existence and
any terms and conditions of this Agreement to a prospective sublicense,
development and/or commercialization partner or acquirer, provided that prior to
such disclosure, Customer enters into a confidentiality agreement with such
party that includes confidentiality obligations similar to those provided in
this Section 12.1. Furthermore, Customer may disclose the existence and any
terms and conditions of this Agreement (i) as required by any legally
enforceable order or other applicable law or regulation and/or (ii) as needed in
any filings required by the United States Securities and Exchange Commission
(the “SEC”) or other governmental authority or securities exchange. To the
extent that Customer reasonably determines that it is required to make such a
disclosure (the “Disclosure Obligation”), Customer shall promptly inform
Flextronics thereof and shall use reasonable efforts to maintain the
confidentiality of Flextronics Confidential Information in any such disclosure.
To the extent that Customer reasonably determines that it is required to file a
copy of this Agreement to comply with the Disclosure Obligation, prior to making
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Agreement, the parties shall mutually agree on the provisions of this Agreement
for which the parties shall seek confidential treatment, it being understood
that if one party determines to seek confidential treatment for a provision for
which the other party does not, then the parties will use reasonable efforts in
connection with such filing to seek the confidential treatment of any such
provision. The parties shall cooperate, each at its own expense, in such filing,
including, without limitation, such confidential treatment request, and shall
execute all documents reasonably required in connection therewith. In
furtherance of the foregoing, the parties will agree as promptly as practicable
after the Effective Date on the confidential treatment request to be filed with
the SEC and the redacted form of this Agreement related thereto. In furtherance
thereof, any redaction reasonably requested by either party shall be included in
such filing. The parties will reasonably cooperate in responding promptly to any
comments received from the SEC with respect to such filing in an effort to
achieve confidential treatment of such redacted form; provided, however, that a
party shall be relieved of such obligation to seek confidential treatment for a
provision requested by the other party if such treatment is not achieved after
the first round of responses to comments from the SEC. Confidential Information
of the disclosing party in the custody or control of the receiving party shall
be promptly returned or destroyed upon the earlier of (i) the disclosing party’s
written request or (ii) termination of this Agreement. Confidential Information
disclosed pursuant to this Agreement shall be maintained confidential for a
period of [****] after the termination or expiration of this Agreement. Subject
to the disclosure rights above, the existence and terms of this Agreement shall
be confidential in perpetuity, provided that such information does not fall into
one of the exceptions set forth in the definition of Confidential Information in
Exhibit 1. Confidential Information of the disclosing party shall remain the
exclusive property of the disclosing party.

12.2. Use of Flextronics Name Prohibited. The existence and terms of this
Agreement are Confidential Information and protected pursuant to Section 12.1
above. Accordingly, neither party may use the other party’s name or identity or
any other Confidential Information in any advertising, promotion or other public
announcement without the prior express written consent of the other party,
except as expressly provided in Section 12.1.

12.3. Entire Agreement; Severability. This Agreement constitutes the entire
agreement between the Parties with respect to the transactions contemplated
hereby and supersedes all prior agreements and understandings between the
parties relating to such transactions. If the scope of any of the provisions of
this Agreement is too broad in any respect whatsoever to permit enforcement to
its full extent, then such provisions shall be enforced to the maximum extent
permitted by law, and the parties hereto consent and agree that such scope may
be judicially modified accordingly and that the whole of such provisions of this
Agreement shall not thereby fail, but that the scope of such provisions shall be
curtailed only to the extent necessary to conform to law.

12.4. Amendments; Waiver. This Agreement may be amended only by written consent
of both parties. The failure by either party to enforce any provision of this
Agreement will not constitute a waiver of future enforcement of that or any
other provision. Neither party will be deemed to have waived any rights or
remedies hereunder unless such waiver is in writing and signed by a duly
authorized representative of the party against which such waiver is asserted.

12.5. Independent Contractor. Neither party shall, for any purpose, be deemed to
be an agent of the other party and the relationship between the parties shall
only be that of independent contractors. Neither party shall have any right or
authority to assume or create any obligations or to make any representations or
warranties on behalf of any other party, whether express or implied, or to bind
the other party in any respect whatsoever.

12.6. Expenses. Each party shall pay their own expenses in connection with the
negotiation of this Agreement. All fees and expenses incurred in connection with
the resolution of Disputes shall be allocated as further provided in
Section 12.11 below.

12.7. Insurance. Flextronics and Customer agree to maintain appropriate
insurance to cover their respective risks under this Agreement with coverage
amounts commensurate with levels in their respective markets. Customer
specifically agrees to maintain insurance coverage for any finished Products or
Materials the title and risk of loss of which passes to Customer pursuant to
this Agreement and which is stored on the premises of Flextronics.

12.8. Force Majeure. In the event that either party is prevented from performing
or is unable to perform any of its obligations under this Agreement (other than
a payment obligation) due to any act of God, acts or decrees of governmental or
military bodies, fire, casualty, flood, earthquake, war, strike, lockout,
epidemic, destruction of production facilities, riot, insurrection, Materials
unavailability, or any other cause beyond the

 

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reasonable control of the party invoking this section (collectively, a “Force
Majeure”), and if such party shall have used its commercially reasonable efforts
to mitigate its effects, and such party shall have given prompt written notice
to the other party, then its performance shall be excused, and the time for the
performance shall be extended for the period of delay or inability to perform
due to such occurrences. Regardless of the excuse of Force Majeure, if such
party is not able to perform within [****] after such event, the other party may
terminate the Agreement upon written notice to the other party.

12.9. Successors, Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns and
legal representatives. Neither party shall have the right to assign or otherwise
transfer its rights or obligations under this Agreement except with the prior
written consent of the other party, not to be unreasonably withheld; provided,
that without consent but with written notice to Flextronics, Customer may assign
its rights and obligations hereunder to any successor to all or substantially
all of its business that concerns this Agreement (whether by sale of stock or
assets, merger, consolidation or otherwise). Notwithstanding the foregoing,
Flextronics may assign or delegate some or all of its rights and obligations
under this Agreement to a Flextronics Affiliate; provided that Flextronics shall
provide Customer with written notice in the event the foregoing effects an
assignment of this Agreement in its entirety.

12.10. Notices. All notices required or permitted under this Agreement will be
in writing and will be deemed received (a) when delivered personally; (b) when
sent by confirmed facsimile; (c) [****] after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) [****] after
deposit with a commercial overnight carrier. All communications will be sent to
the addresses set forth above or to such other address as may be designated by a
party by giving written notice to the other party pursuant to this Section.

12.11. Disputes Resolution; Waiver of Jury Trial.

(a) Except as otherwise provided in this Agreement, the following binding
dispute resolution procedures shall be the exclusive means used by the parties
to resolve all disputes, differences, controversies and claims arising out of or
relating to the Agreement or any other aspect of the relationship between
Flextronics and Customer or their respective Affiliates (collectively,
“Disputes”). Either party may, by written notice to the other party, refer any
Disputes for resolution in the manner set forth below.

(b) Any and all Disputes shall be referred to arbitration under the Commercial
Arbitration Rules of American Arbitration Association (“AAA”), including the AAA
Supplementary Procedures for Large Complex Commercial Disputes, if applicable,
who shall act as the arbitration administrator (the “Arbitration
Administrator”).

(c) The parties shall agree on a single arbitrator (the “Arbitrator”). The
Arbitrator shall be a retired judge selected by the parties from a roster of
arbitrators provided by the Arbitration Administrator. If the parties cannot
agree on an Arbitrator within [****] after delivery of the demand for
arbitration (“Demand”) (or such other time period as the parties may agree), the
Arbitration Administrator will select an independent Arbitrator.

(d) Unless otherwise mutually agreed to by the parties, the place of arbitration
shall be [****] although the arbitrators may be selected from rosters outside
[****].

(e) The Federal Arbitration Act shall govern the arbitrability of all Disputes.
The Federal Rules of Civil Procedure and the Federal Rules of Evidence (the
“Federal Rules”), to the extent not inconsistent with this Agreement, govern the
conduct of the arbitration. To the extent that the Federal Arbitration Act and
Federal Rules do not provide an applicable procedure, [****] law shall govern
the procedures for arbitration and enforcement of an award, and then only to the
extent not inconsistent with the terms of this Section. Disputes between the
parties shall be subject to arbitration notwithstanding that a party to this
Agreement is also a party to a pending court action or special proceeding with a
third party, arising out of the same transaction or series of related
transactions and there is a possibility of conflicting rulings on a common issue
of law or fact.

(f) Unless otherwise mutually agreed to by the parties, each party shall allow
and participate in discovery as follows:

(i) Non-Expert Discovery. Each party may (1) conduct [****] non-expert
depositions of no more than [****] of testimony each, with any deponents
employed by any party to appear for deposition in [****]; (2) propound a single
set of requests for production of documents containing no more than [****]
individual requests; (3) propound up to [****] written interrogatories; and
(4) propound up to [****] requests for admission.

 

 

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(ii) Expert Discovery. Each party may select a witness who is retained or
specially employed to provide expert testimony and an additional expert witness
to testify with respect to damages issues, if any. The parties shall exchange
expert reports and documents under the same requirements as Federal Rules of
Civil Procedure 26(a)(2) &(4).

(iii) Additional Discovery. The Arbitrator may, on application by either party,
authorize additional discovery only if deemed essential to avoid injustice. In
the event that remote witnesses might otherwise be unable to attend the
arbitration, arrangements shall be made to allow their live testimony by video
conference during the arbitration hearing.

(g) The Arbitrator shall render an award within [****] after the date of
appointment, unless the parties agree to extend such time. The award shall be
accompanied by a written opinion setting forth the findings of fact and
conclusions of law. The Arbitrator shall have authority to award compensatory
damages only, and shall not award any punitive, exemplary, or multiple damages.
The award (subject to clarification or correction by the Arbitrator as allowed
by statute and/or the Federal Rules) shall be final and binding upon the
parties, subject solely to the review procedures provided in this Section.

(h) Either party may seek arbitral review of the award. Arbitral review may be
had as to any element of the award.

(i) This Agreement’s arbitration provisions are to be performed in [****].

(j) Each party shall pay their own expenses in connection with the resolution of
Disputes pursuant to this Section, including attorneys’ fees.

(k) Notwithstanding anything contained in this Section to the contrary, in the
event of any Dispute, prior to referring such Dispute to arbitration pursuant to
Subsection (b) of this Section, Customer and Flextronics shall attempt in good
faith to resolve any and all controversies or claims relating to such Disputes
promptly by negotiation commencing within [****] after the written notice of
such Disputes by either party, including referring such matter [****]. The
representatives of the parties shall meet at a mutually acceptable time and
place and thereafter as often as they reasonably deem necessary to exchange
relevant information and to attempt to resolve the Dispute for a period of
[****]. In the event that the parties are unable to resolve such Dispute
pursuant to this Subsection (k), the provisions of Subsections (a) through
(j) of this Section, inclusive, as well as Subsections (l), (m), (n) and (o) of
this Section shall apply.

(l) The parties agree that the existence, conduct and content of any arbitration
pursuant to this Section shall be kept confidential and no party shall disclose
to any person any information about such arbitration, except as may be required
by law or by any governmental authority or for financial reporting purposes in
each party’s financial statements, provided that such party promptly provides
the other party with written notice of such requirement.

(m) IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES, WHETHER IT RESULTS IN
PROCEEDINGS IN ANY COURT IN ANY JURISDICTION OR IN ARBITRATION, THE PARTIES
HEREBY KNOWINGLY AND VOLUNTARILY, AND HAVING HAD AN OPPORTUNITY TO CONSULT WITH
COUNSEL, WAIVE ALL RIGHTS TO TRIAL BY JURY, AND AGREE THAT ANY AND ALL MATTERS
SHALL BE DECIDED BY A JUDGE OR ARBITRATOR WITHOUT A JURY TO THE FULLEST EXTENT
PERMISSIBLE UNDER APPLICABLE LAW.

(n) In the event of any lawsuit between the parties arising out of or related to
this Agreement, the parties agree to prepare and to timely file in the
applicable court a mutual consent to waive any statutory or other requirements
for a trial by jury.

(o) Notwithstanding anything to the contrary herein, neither party shall be
prohibited from seeking injunctive or other equitable relief in any [****] court
(including without limitation, in any case where issues involving the protection
or unauthorized use or disclosure of a party’s confidential information, trade
secrets or intellectual property are involved). Unless expressly provided
otherwise, each right and remedy in this Agreement is in addition to any other
right or remedy, at law or in equity, and the exercise of one right or remedy
will not be deemed a waiver of any other right or remedy.

 

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12.12. Even-Handed Construction. The terms and conditions as set forth in this
Agreement have been arrived at after mutual negotiation, and it is the intention
of the parties that its terms and conditions not be construed against any party
merely because it was prepared by one of the parties.

12.13. Controlling Language. This Agreement is in English only, which language
shall be controlling in all respects. All documents exchanged under this
Agreement shall be in English.

12.14. Controlling Law. This Agreement shall be governed and construed in all
respects in accordance with the domestic laws and regulations of [****], without
regard to its conflicts of laws provisions; except to the extent there may be
any conflict between the law of [****] and the Incoterms of the International
Chamber of Commerce, 2010 edition, in which case the Incoterms shall be
controlling. The parties specifically agree that the 1980 United Nations
Convention on Contracts for the International Sale of Goods, as may be amended
from time to time, shall not apply to this Agreement. The parties acknowledge
and confirm that they have selected the laws of [****] as the governing law for
this Agreement in part because jury trial waivers are enforceable under [****]
law. The parties further acknowledge and confirm that the selection of the
governing law is a material term of this Agreement.

12.15. Counterparts. This Agreement may be executed in counterparts.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their duly authorized representatives as of the Effective Date.

 

ALIMERA SCIENCES, INC.:     FLEXTRONICS MEDICAL SALES AND MARKETING, LTD.: By:  

/s/ Richard S. Eiswirth, Jr.

    By:  

/s/ Manny Mrimuthu

Name:  

Richard S. Eiswirth, Jr.

    Name:  

Manny Mrimuthu

Title:  

Chief Financial Officer

    Title:  

Director

Date:  

March 2, 2012

     

 

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Exhibit 1

Definitions

 

“Affected Inventory Costs”    Shall mean: (a) [****] of the Cost of all affected
Inventory and Special Inventory in Flextronics’ possession and not returnable to
the vendor or reasonably usable for other customers, whether in raw form or work
in process, less the salvage value thereof, (b) [****] of the Cost of all
affected Inventory and Special Inventory on order and not cancelable, (c) any
vendor cancellation charges incurred with respect to the affected Inventory and
Special Inventory accepted for cancellation or return by the vendor, or (d) the
then current fees for any affected Product. “Affiliate”    Shall mean means any
corporation, company, partnership, joint venture or other entity directly or
indirectly controlling, controlled by, or under direct or indirect common
control with the specified entity, for so long as such control exists. For
purposes of this definition only, “control” of a corporation, company,
partnership, joint venture or other entity means the possession, directly or
indirectly, of the power to direct or cause the direction of the activities,
management or policies of such corporation, company, partnership, joint venture
or other entity, whether through the ownership of voting securities, by contract
or otherwise. “Approved Vendor List” or “AVL”    Shall mean the list of
suppliers currently approved in writing by Customer to provide the Materials
specified in the bill of materials for a Product. “Arbitration Administrator”   
Shall have the meaning set forth in Section 12.11(b). “Arbitrator”    Shall have
the meaning set forth in Section 12.11(c). “Confidential Information”    Shall
mean (a) the existence and terms of this Agreement and all information
concerning the unit number and fees for Products and Inventory/Special Inventory
and (b) any other information that is (i) marked “Confidential” or the like or,
if delivered verbally, confirmed in writing to be “Confidential” within [****]
of the initial disclosure or that (ii) is of such a nature that should be
understood by a reasonable person to be confidential or proprietary.
Confidential Information does not include information (i) that the receiving
party can prove it already rightfully knew without restriction at the time of
receipt from the disclosing party; (ii) that has come into the public domain
without breach of confidence by the receiving party; (iii) that was received
from a third party without restrictions on its use or disclosure; (iv) that the
receiving party can prove it independently developed without use of or reference
to the disclosing party’s data or information; or (v) to the extent the
disclosing party agrees in writing that such information is free of the
confidentiality restrictions and obligations in this Agreement. “Cost”    Shall
mean the cost represented on the bill of materials supporting the most current
fees for Products at the time of cancellation, expiration or termination, as
applicable. “Current Good Manufacturing Practice”    Shall mean current good
manufacturing practices, regulations and guidelines as described in (a) Part 820
(Quality Systems Regulations for Medical Devices) of Title 21 of the United
States Code of Federal Regulations, (b) Annex 1 Essential Requirements of the
Medical Device Directives 93/94/EEC, (c) ISO 13485:2003 (Quality Management
Standard for Medical Devices) and (d) ISO 14971 (Risk Management System), in
each case, as may be amended from time to time.

 

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“Customer Controlled Materials”    Shall mean those Materials provided by
Customer or by suppliers with whom Customer has a commercial contractual or non-
contractual relationship. “Customer Controlled Materials Terms”    Shall mean
the terms and conditions that Customer has negotiated with its suppliers for the
purchase of Customer Controlled Materials. “Customer Indemnitee”    Shall have
the meaning set forth in Section 11.1. “Customer Intellectual Property”    Shall
have the meaning set forth in Section 9.1. Customer Intellectual Property shall
include any intellectual property rights in the Developments. “Customer
Property”    Shall have the meaning set forth in Section 2.3. “Damages”    Shall
have the meaning set forth in Section 11.1. “Demand”    Shall have the meaning
set forth in Section 12.11(c). “Developments”    Shall have the meaning set
forth in Section 9.4. “Disclosure Obligation”    Shall have the meaning set
forth in Section 12.1. “Disputes”    Shall have the meaning set forth in Section
12.11(a) “Economic Order Inventory”    Shall mean Materials purchased in
quantities, above the required amount for purchase orders, in order to achieve
price targets for such Materials. “Effective Date”    Shall have the meaning set
forth in the opening paragraph of this Agreement. “Environmental Regulations”   
Shall mean any applicable hazardous substance content laws and regulations
including, without limitation, those related to the EU Directive 2002/95/EC
about the Restriction of Use of Hazardous Substances (RoHS). “FDA”    Shall have
the meaning set forth in Section 8.5. “Federal Rules”    Shall have the meaning
set forth in Section 12.11(e). “Fee List”    Shall have the meaning set forth in
Section 3.4. “Firm Orders”    Shall have the meaning set forth in Section 3.2.
“Flexibility Table”    Shall have the meaning set forth in Section 5.2.
“Flextronics Indemnitee”    Shall have the meaning set forth in Section 11.2.
“Force Majeure”    Shall have the meaning set forth in Section 12.8. “Inventory”
   Shall mean any Materials that are used to manufacture Products that are
ordered pursuant to a Firm Order from Customer. “Lead Time(s)”    Shall mean the
Materials Procurement Lead Time plus the manufacturing cycle time required from
the delivery of the Materials at Flextronics facility to the completion of the
manufacture, assembly and test processes with respect to the Products. “Long
Lead Time Materials”    Shall mean Materials with Materials Procurement Lead
Times exceeding the period covered by the accepted purchase orders for the
Products. Flextronics will provide a list of Long Lead Time Materials to
Customer from time to time at Customer’s request.

 

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“Manufacturing Site”    Shall have the meaning set forth in Section 2.5.
“Materials”    Shall mean components, parts and subassemblies that comprise the
Product and that appear on the bill of materials for the Product. “Materials
Procurement Lead Time”    Shall mean with respect to any particular item of
Materials, the longer of (a) lead time to obtain such Materials as recorded on
Flextronics’ MRP system or (b) the actual lead time, if a supplier has increased
the lead time but Flextronics has not yet updated its MRP system. “Minimum Order
Inventory”    Shall mean Materials that are required to be purchased in excess
of requirements for purchase orders because of minimum lot sizes available from
the supplier. Flextronics will provide a list of Minimum Order Inventory to
Customer from time to time at Customer’s request. “Monthly Charges”    Shall
mean a finance carrying charge of [****] and a storage and handling charge of
[****], in each case of the Cost of the Inventory and/or Special Inventory
and/or of the fees for the Product affected by the reschedule or cancellation
(as applicable) per month until such Inventory and/or Special Inventory and/or
Product is returned to the vendor, used to manufacture Product or is otherwise
purchased by Customer. “Product”    Shall have the meaning set forth in Exhibit
2.1. “Production Materials”    Shall mean materials that are consumed in the
production processes to manufacture Products including without limitation,
solder, epoxy, cleaner solvent, labels, flux, and glue. Production Materials do
not include any such production materials that have been specified by the
Customer in the bill of materials in the Specifications or any Customer
Controlled Materials. “Purchased Inventory”    Shall have the meaning set forth
in Section 5.4. “Quality Agreement”    Shall mean the agreement attached as
Attachment A setting out the quality assurance standards to be applicable to the
Work performed by Flextronics. “Recall”    Shall mean any action (a) by Customer
to recover title to or possession of quantities of defective Products sold or
shipped to third parties (including, without limitation, the voluntary
withdrawal of defective Products from the market); or (b) by any regulatory
authorities to detain or destroy any defective Products. “SEC”    Shall have the
meaning set forth in Section 12.1. “Special Inventory”    Shall mean any Long
Lead Time Materials and/or Minimum Order Inventory and/or Economic Order
Inventory. “Specifications”    Shall have the meaning set forth in Section 2.1.
“Work”    Shall have the meaning set forth in Section 2.1.

 

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ATTACHMENT A

QUALITY AGREEMENT

by and between

Alimera Sciences, Inc.

and

Flextronics Medical Sales and Marketing, Ltd

 

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QUALITY AGREEMENT TABLE OF CONTENTS

 

1.        PURPOSE

     21   

2.        RELATIONSHIP TO SUPPLY AGREEMENT

     21   

3.        SCOPE

     21   

4.        RESPONSIBILITY

     21   

5.        PREMISES

     21   

6.        AUDITS

     22   

7.        REGULATORY AGENCY INSPECTIONS

     22   

8.        DOCUMENTATION/CHANGE MANAGEMENT

     23   

9.        ALIMERA APPROVAL AND NOTIFICATION

     24   

10.      FLEXTRONICS’S NOTIFICATION TO ALIMERA

     24   

11.      RAW MATERIAL/ PACKAGING COMPONENTS

     24   

12.      PRODUCTION PROCESS CHANGES

     24   

13.      PRODUCTION CONTROLS

     25   

14.      TRACEABILITY

     25   

15.      COMPUTER SYSTEMS

     25   

16.      CALIBRATION/PREVENTIVE MAINTENANCE

     25   

17.      SUBCONTRACTING; TRAINING; QUALIFICATION.

     25   

18.      INVESTIGATIONS

     26   

19.      DOCUMENTATION REVIEW

     26   

20.      STORAGE & SHIPMENT

     26   

21.      DOCUMENTATION RETENTION

     26   

22.      REGULATORY & LABELING

     26   

23.      COMPLAINTS

     27   

24.      PRODUCT RECALLS

     27   

25.      DISPUTE RESOLUTION

     28    APPENDIX I: OUTLINE OF RESPONSIBILITIES      29   

 

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1. PURPOSE

This Quality Agreement defines the roles and responsibilities between
Flextronics Medical Sales and Marketing, Ltd. (“Flextronics”) and Alimera
Sciences, Inc. (“Alimera”) for providing Product to Alimera. The Product
consists of subassemblies for a drug delivery insertion system. This Quality
Agreement also defines how the quality departments of Flextronics and Alimera
will interact with each other.

 

2. RELATIONSHIP TO SUPPLY AGREEMENT

This Quality Agreement shall be incorporated within and constitute a part of the
Manufacturing Services Agreement by and between Flextronics and Alimera (the
“Supply Agreement”). In the event of inconsistencies between this Quality
Agreement and the Supply Agreement, the Supply Agreement shall control. All
capitalized terms used herein without definition will have the same meanings as
specified in the Supply Agreement.

 

3. SCOPE

This Quality Agreement clarifies the quality-related responsibilities of
Flextronics for Products supplied to Alimera pursuant to the Supply Agreement.
All information disclosed by or on behalf of a party under this Quality
Agreement shall be deemed Confidential Information of such party in accordance
with the Supply Agreement, and all confidentiality obligations specified under
the Supply Agreement shall apply.

 

4. RESPONSIBILITY

 

  4.1 Communication and Implementation. Responsibility for communication and
implementation of this Quality Agreement for Alimera and for Flextronics rests
with the management of each party’s respective Quality departments. This Quality
Agreement is effective upon signature approval of the Supply Agreement between
the parties. The Product to be provided by Flextronics is defined in an exhibit
to the Supply Agreement; and quality-related responsibilities are outlined in
Appendix I of this Quality Agreement. No changes to the terms of this Quality
Agreement, or waivers of any of the provisions thereof, may be made without the
express written consent of both parties.

 

  4.2 Amendments. This Quality Agreement may be amended as responsibilities are
added, or as responsibilities are deleted, all as mutually agreed upon in a
writing signed by both parties. Flextronics and Alimera contact information may
be updated as required by written notification to the other party.

 

5. PREMISES

 

  5.1 Operations. Flextronics shall perform the manufacturing activities for the
Product at its Tijuana, Mexico manufacturing campus. The premises and equipment
used to manufacture the Product shall be maintained according to the standards
outlined in ISO 13485:2003 (Quality Management Standard for Medical Devices),
ISO 14971 (Risk Management System), Annex I Essential Requirements of the
Medical Device Directives 93/42/EEC and Sub-Chapter H, Part 820 of Title 21 of
the United States Code of Federal Regulations (Quality Systems Regulations for
Medical Devices), in each case, as may be amended from time to time. The
manufacture of the Product will be conducted in a suitably controlled ISO Class
7 (Class 10,000) or ISO Class 8 (Class 100,000) clean room environment, and such
facilities will be regularly monitored to demonstrate and maintain compliance
with Current Good Manufacturing Practices.

 

  5.2 Controlled Access. Flextronics shall maintain controlled access to its
facilities where the Product is manufactured. All visitors shall comply with
Flextronics’ applicable access policies and security requirements.

 

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6. AUDITS

 

  6.1 Access. With no less than [****] written notice, Flextronics shall grant
access for inspection or audit of its manufacturing facilities, its quality
system and/or its production, inspection, testing, packaging, storage, and/or
shipping processes and documentation related to such production, inspection,
testing, packaging, storage, and/or shipping processes as it pertains to the
Product, and Flextronics shall reasonably cooperate with Alimera (or its
designee) during any such inspection or audit. In the event of any Product which
fails to comply with the express limited warranty set forth in the Supply
Agreement, then Alimera may visit Flextronics at mutually agreeable times (as
discussed in good faith) as necessary. Without limiting Section 7.2, such access
shall be granted to Alimera, to the FDA, and/or other health regulatory
authorities and in order to meet European requirements, to the European
qualified person specified by Alimera (“QP”). Access will be granted during the
normal working hours of Flextronics and at the time mutually agreed upon by
Alimera and Flextronics in good faith. All information gathered, including any
reports created based on such information (e.g., those reports mandated under
Section 6.2 herein), shall be considered as “Confidential Information” of
Flextronics and protected in accordance with the confidentiality obligations of
the Supply Agreement. At all times during audits of the Flextronics facility,
Alimera personnel shall comply with all Flextronics policies and procedures
related to safety, security and confidentiality.

 

  6.2 Report of Findings. Alimera will report audit findings verbally at the
close of the audit and will provide Flextronics with a written report within
[****] after the completion of the audit. Flextronics shall formally respond to
observations made by Alimera’s representatives on areas where Alimera has
determined that Flextronics should take corrective action. Flextronics’ response
shall include root cause evaluation, corrective actions, preventative actions,
and remedial actions, where appropriate, and shall include a timeline for
completion of each action, and such response shall be subject to Alimera’s
review and written approval, such approval not to be unreasonably withheld. The
response will be sent to the Alimera auditor within [****] of Flextronics’
receipt of the audit report. Flextronics shall perform such approved corrective,
preventative and/or remedial actions in accordance with the approved timeline
for completion of such actions.

 

7. REGULATORY AGENCY INSPECTIONS

 

  7.1 Regulatory Actions. Flextronics will promptly (within [****]) inform
Alimera of receipt of any communication related to any regulatory agency action
that affects the Product to be supplied by Flextronics pursuant to the Supply
Agreement. Alimera will promptly (within [****]) inform Flextronics of receipt
of any communication related to any regulatory agency action that specifically
affects the Work to be performed by Flextronics pursuant to the Supply
Agreement.

 

  7.2 Regulatory Inspections. Flextronics shall notify Alimera of any regulatory
agency inspection impacting the Product covered by this Quality Agreement within
[****] of the initiation of the inspection by the regulatory agency. Alimera
reserves the right to have [****] on site during a regulatory agency inspection
when the inspection pertains to the Product; provided, however, that Alimera’s
on site representatives attend to serve the role of a subject matter expert and
will not be part of the face-to-face team during the inspection. Additionally,
Alimera shall have no right to have any representatives present during general
Current Good Manufacturing Practice agency inspections or audits that do not
directly relate to the Product. Flextronics will forward all regulatory agency
documentation (e.g., EIR, FDA-483) and responses that pertain to the Product to
Alimera’s quality department within [****] of receipt or completion of
submission, as applicable. Flextronics shall respond to the regulatory agency on
any Product-specific citations only after consultation with and considering in
good faith any and all input from Alimera, provided Alimera shall provide such
input to Flextronics in a timely manner so as to reasonably allow Flextronics to
respond to the regulatory agency before the applicable deadline. Alimera shall
notify Flextronics in writing of any regulatory agency inspection at Alimera’s
facility specifically impacting the manufacture of the Product covered by the
Supply Agreement within [****] of the initiation of the audit by the regulatory
agency. Alimera reserves the right to present Manufacturing Site data and/or
procedures upon specific requests regarding Alimera responsibilities.

 

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8. DOCUMENTATION/CHANGE MANAGEMENT

 

  8.1. Alimera shall own, but Flextronics shall establish and maintain, unless
otherwise specified, Product Design History Files (“DHF”) for the Product.

 

  8.2. Alimera shall own, but Flextronics shall establish and maintain, unless
otherwise specified, all Device Master Records (“DMR”) for the Product. Such
documentation shall include, but is not limited to, Specifications, raw material
and component specifications, labeling, tooling drawings and specifications, and
approved suppliers.

 

  8.3. [****], all Process Device Master Batch Records (“Process DMR”) for the
Product. Process DMR documentation shall include, but is not limited to,
production, inspection, test and packaging procedures, process work
instructions, receiving inspection procedures, work order and manufacturing
traveler templates. Flextronics shall maintain original documentation for the
Product for a period covering [****].

 

  8.4. Alimera shall own, but Flextronics shall establish and maintain, unless
otherwise specified, all Device History Records (“DHR”) for the insertion
device. DHR documentation includes, but is not limited to, production batch
records, work orders or production travelers, appropriate assembler/inspector
and date records, pick/kitting lists, inspection test results, non-conforming
material reports, rework records, and traceability documentation. Flextronics
shall provide copies DHR documentation to Alimera upon request. Flextronics
shall retain original DHR documentation for the Product for a period covering
[****] after Product expiration, at which time, the records can be dispositioned
per Flextronics’ Record Retention policy.

 

  8.5. Flextronics shall provide a Certificate of Compliance (CoC) with each
manufacturing lot of Product per Alimera specifications. A copy of the CoC will
be supplied to Alimera at the time of Product shipment.

 

  8.6. For all Product manufactured by Flextronics, Flextronics shall maintain
all Quality System Records (general procedures and documentation of activities
not specific to the Product, such as environmental records) for a period of time
consistent with Flextronics’ documented procedure and regulatory requirements,
including without limitation, US 21CFR 211, subpart J, Records and Reports, and
all referenced sub-sections, 820.40 Document Controls and 820.180 Records of 21
CFR 820, the applicable requirements from ISO 13485 (4.5 Documentation
requirements, and 4.16, “Control of Quality Records”), Annex I Essential
Requirements of Medical Device Directives 93/42/EEC and other comparable
regulatory requirements.

 

  8.7. Before implementing any change or changes to Flextronics-controlled
Current Good Manufacturing Practice documentation that affects the Product,
Flextronics shall notify Alimera in writing in order to ensure that all Current
Good Manufacturing Practice documentation, which is maintained at Flextronics
and subject to regulatory review, will match and be consistent with information
filed by Alimera with regulatory authorities following implementation of such
change or changes. Alimera will review any such changes and provide any comments
to Flextronics within [****] after Alimera’s receipt of such changes.
Flextronics shall consider any such comments from Alimera in good faith,
provided that if any changes proposed by Flextronics could impact the quality of
the Product and/or information filed by Alimera with regulatory authorities,
then such changes shall be subject to a written action plan developed in
conjunction with and agreed upon by Alimera.

 

  8.8. Changes to Current Good Manufacturing Practice documents which (a) may
affect the regulatory submissions or the support system or (b) have a direct
impact on the quality systems affecting the Product, will also be reviewed by
Alimera’s quality management and regulatory personnel for regulatory advice and
implementation requirements prior to implementation of such changes. Alimera
will review any such changes and provide any comments to Flextronics within
[****] after Alimera’s receipt of such changes. Flextronics shall consider any
such comments from Alimera in good faith, provided that if any changes proposed
by Flextronics could impact the quality of the Product and/or information filed
by Alimera with regulatory authorities, then such changes shall be subject to a
written action plan developed in conjunction with and agreed upon by Alimera. If
required, Alimera will inform regulatory agencies of such changes to the Product
documentation and obtain input concerning any required filing or official
communication requirements to regulatory agencies.

 

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9. ALIMERA APPROVAL AND NOTIFICATION

 

  9.1 In each instance where prior approval is required, the approval must be
given in writing.

 

  9.2 For the purpose of clarity, Flextronics shall obtain Alimera’s prior
approval, in the following situations when Alimera Product is involved, unless
this right is waived in writing by Alimera:

 

  (a) Any changes or planned deviations to the Device Master Record including,
but not limited to, the insertion device, process, test, inspection, or labeling
documentation that may affect form, fit or function of the Product.

 

  (b) Any changes, deviations, or substitutions to the Alimera approved
suppliers (“AVL”).

 

  (c) Any changes to the physical location of the manufacturing facility where
the Product is produced.

 

  (d) Material Review Board activity resulting in “use as is” or “rework”
disposition, unless otherwise specified in writing.

 

10. FLEXTRONICS’S NOTIFICATION TO ALIMERA

 

  10.1 Flextronics shall notify Alimera in writing within [****] of any of the
following:

 

  (a) Initiation of production/distribution holds for quality or other issues.

 

  (b) Any event which could reasonably lead to interruption of deliveries.

 

  (c) Any changes or planned deviations to the Device Master Record items
including, but not limited to, the insertion device, process, test, inspection,
or labeling documentation that may affect form, fit or function of the Product.

 

11. RAW MATERIAL/ PACKAGING COMPONENTS

 

  11.1 Flextronics shall be responsible for purchasing all Materials from
manufacturers or suppliers [****]. Prior to use, all Materials must be tested in
accordance with the Specifications. Changes to test methods or deviations from
the AVL must be documented and discussed between Flextronics and Alimera prior
to implementation of such changes to assess impact on the Product and existing
regulatory filings. Flextronics may not implement such changes or deviations
without the prior written approval of Alimera.

 

12. PRODUCTION PROCESS CHANGES

 

  12.1 Regardless of effect on form, fit or function, Flextronics will notify
Alimera of any intended change to manufacturing/assembly process, inspection and
test procedures and/or packaging and storage procedures with respect to the
Product, prior to implementing the change. Alimera will evaluate the intended
change to determine the significance of the change and the appropriate
regulatory action, if any. Notwithstanding any other terms herein, this notice
shall only be through Flextronics’ Change Control System.

 

  12.2 Flextronics shall develop written procedures describing the receipt,
identification, quarantine, storage, handling, sampling, testing and
approval/rejection of materials and sub-components used in the Product.

 

  12.3 Flextronics shall implement appropriate production process controls
including quality data/metrics, as agreed upon in writing with Alimera, prior to
initiation of production. Flextronics shall analyze and report to Alimera on
quality data/metrics during Quarterly Business Review (QBR) sessions held
between Flextronics and Alimera each quarter.

 

  12.4 Equipment, Facility, and Utilities Qualification. Flextronics is
responsible for all equipment, facility, and utility qualification activities
associated with the Product. Clean room critical services such as HEPA filters
will be routinely re-certified and pressure differentials will be maintained and
monitored to ensure satisfactory clean room environmental conditions are
maintained. Storage areas for raw materials, in-process, and finished inserter
subassemblies will be monitored to ensure that satisfactory storage conditions
are maintained.

 

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13. PRODUCTION CONTROLS

 

  13.1. Flextronics shall have in place and maintain a quality system that meets
the applicable requirements of ISO 13485:2003, FDA Quality System Regulations
(21 CFR 820)for the production of the Product.

 

  13.2. Flextronics shall have in place and maintain environmental controls
meeting the applicable process control requirements of ISO 13485:2003 and FDA
Quality System Regulation (21CFR820.70(c)), and applicable sections of 21 CFR
211, and subpart C, Buildings and Facilities, for the production of the Product.

 

  13.3. Flextronics shall inform Alimera a minimum of [****] in advance unless
otherwise agreed, of any change that impacts Product specifications. This
includes changes to approved suppliers for Materials that are part of any
Product Specifications. Flextronics shall obtain written approval from Alimera
for any changes prior to implementation of changes.

 

14. TRACEABILITY

 

  14.1. All Materials making up the Product are required to be traced to the end
item serialized or lot coded device. Flextronics shall implement appropriate
controls and processes to ensure that this traceability requirement is met, and
associated records retained as part of the Device History Record (DHR) for the
finished Product.

 

  (a) Materials with a serial number shall have the serial number traced.

 

  (b) Materials with a lot/date code shall have the lot or date code traced.

 

  (c) Materials with both lot/date codes and serial numbers shall have the
serial number traced.

 

15. COMPUTER SYSTEMS

 

  15.1. Flextronics’ computer systems used in the manufacturing, packaging,
testing and/or storage of the Product shall be validated. Where compliance with
21 CFR Part 11, “Electronic Records and Electronic Signatures”, is required,
Flextronics will comply with those regulations or have a master plan to achieve
compliance.

 

  15.2. To the extent that Flextronics provides such access to its other
customers, Flextronics will provide access for up to [****] to Flextronics
computer system (i.e., Agile) in order to monitor, maintain and approve
specifications, drawings, protocols, and reports as necessary.

 

16. CALIBRATION/PREVENTIVE MAINTENANCE

Flextronics will maintain a calibration and preventative maintenance program to
support the manufacturing, testing, packaging and storage of the Product.
Flextronics shall also follow a procedure that documents the actions to be taken
in the event of a calibration failure.

 

17. SUBCONTRACTING; TRAINING; QUALIFICATION.

 

  17.1 Any subcontracted manufacturing facility must be audited or evaluated and
approved by Flextronics prior to being used by Flextronics. Flextronics will be
responsible and liable for any breaches of this Quality Agreement by any such
subcontracted manufacturing facility.

 

  17.2 Flextronics shall provide a process or program designed with the goal of
assuring that all Flextronics personnel (and its independent contractors)
engaged in the manufacturing, packaging, testing, storage, release and shipping
of the Product have the education, training and experience to properly perform
their assigned functions. The training provided by Flextronics shall be in the
particular operations that the employee or independent contractor performs.
Flextronics shall qualify and routinely assess the employee or independent
contractor in the assigned functions to ensure compliance.

 

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18. INVESTIGATIONS

 

  18.1 Manufacturing Deviations. Any deviation from the process during
manufacture, packaging, testing, storage, or release of the Product shall be
documented by Flextronics and approved by Flextronics quality assurance and
appropriate area management. Flextronics will notify Alimera in writing on a
timely basis if any problems are discovered that may impact Product previously
shipped in order to reasonably allow Alimera to meet regulatory reporting
guidelines. A list of all deviations from the process during manufacture,
packaging, testing, storage, or release of the Product will be provided to
Alimera with any release documentation package provided to Alimera. A copy of
any final investigation report will be reviewed with Alimera and included in the
Product release documentation package provided to Alimera.

 

19. DOCUMENTATION REVIEW

Flextronics will provide a standard Certificate of Compliance signed by an
authorized representative of Flextronics confirming that the Products have been
manufactured in accordance with the Specifications. PRODUCT DISPOSITION

Release of the Product is the responsibility of Flextronics. Flextronics will
release the Product in accordance with the Specifications.

 

20. STORAGE & SHIPMENT

 

  20.1 Storage. Flextronics shall store the Product in accordance with the
Specifications. Flextronics shall ensure that during storage and before shipping
of the Product, appropriate controls are in place designed with the goal of
ensuring that there is no interference, theft, Product contamination, or mixture
with any other products or materials.

 

  20.2 Shipment. Flextronics will ship Product to the designated location as
specified in the Supply Agreement. Flextronics will not ship any product that is
under quarantine.

 

21. DOCUMENTATION RETENTION

 

  21.1. Flextronics shall maintain true, complete and accurate records with
respect to the Product in accordance with Flextronics’ standard operating
procedures. Validation records will be retained indefinitely until superseded by
new validation studies or until termination of the Supply Agreement, at which
time such records will be transferred to Alimera. Flextronics will retain
production records of the Product for a total of [****] past the expiry date of
Product or until termination of the Supply Agreement (whichever comes first)
unless notified of a shorter retention period by Alimera. Flextronics shall
provide a schedule of destruction for each lots’ production records annually.
Alimera reserves the right to request records to be shipped prior to
destruction. If the termination of the Supply Agreement occurs before the
expiration of the retention period then Flextronics will turn over all of the
remaining records to Alimera.

 

22. REGULATORY & LABELING

 

  22.1. Regulatory Filings. AIimera shall prepare and maintain all regulatory
submissions for the Product. Flextronics shall provide to AIimera, upon request,
all necessary documentation (e.g., DMR, DHR) and other information as needed, to
prepare the regulatory submissions for the Product. AIimera will provide a copy
of the applicable product registration documentation to Flextronics as
applicable to support regulatory inspection activities. Flextronics shall
provide AIimera with all reasonably necessary cooperation, information,
documents, data and assistance in connection therewith at Alimera’s cost.

 

  22.2. Flextronics is responsible for obtaining and maintaining the required
device establishment registrations as the manufacturer of the Product.

 

  22.3. In the case of a Flextronics proprietary production process, Flextronics
shall grant read-only access to requested information concerning the Product to
the FDA or other regulatory agencies, as necessary, to comply with regulatory
requirements.

 

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  22.4. AIimera shall be responsible for ensuring that all labeling complies
with US FDA and other foreign regulatory requirements. All product labeling
shall be provided by Alimera. In the case where Alimera utilizes Flextronics
resources to create or update product labeling, this work will be reviewed and
approved by AIimera in writing and ownership of artwork transferred to Alimera
prior to use.

 

23. COMPLAINTS

 

  23.1 General Complaints. Alimera shall have sole responsibility for responding
to questions and complaints regarding the Product. Questions or complaints
received by Flextronics shall be promptly referred to Alimera. Flextronics shall
cooperate as reasonably required to allow Alimera to determine the cause of and
resolve any questions or complaints. Such assistance shall include follow-up
investigations, including testing when applicable. In addition, Flextronics
shall promptly provide Alimera with information that will enable Alimera to
respond properly to questions or complaints relating to the Product. Unless it
is determined that the cause of any complaint resulted from a failure by
Flextronics to manufacture the Product in accordance with the Specifications,
all costs incurred in respect of this Section shall be borne by Alimera.

 

  23.2 Technical Complaints. Alimera shall receive and process all technical
complaints concerning the Product. Flextronics shall inform Alimera of any
complaints concerning the Product that it may receive. As appropriate,
Flextronics shall inform Alimera of complaint information relevant to
Flextronics’ production/inspection processes. Flextronics shall investigate and
determine appropriate Flextronics corrective actions, and inform Alimera of such
actions in writing, and Flextronics shall promptly implement any and all such
corrective actions. Flextronics shall supply a complaint investigation summary
to Alimera no more than [****] after Flextronics becomes aware that a complaint
has been initiated.

 

  23.3 Medical Complaints. Alimera is responsible for investigating any medical
Product complaints and reporting serious adverse events to the appropriate
regulatory authorities. Any medical complaint received by Flextronics will be
immediately (within [****]) forwarded to Alimera. Flextronics shall assist as
needed and requested by Alimera for any investigation that may be required for
the medical complaint. Flextronics shall respond in a timely manner so Alimera
may comply with reporting requirements.

 

24. PRODUCT RECALLS

 

  24.1. Records and Notice. Flextronics shall maintain records as may be
reasonably necessary to provide documentation to Alimera to permit a Recall (as
defined below) of any Products manufactured and delivered to Alimera by
Flextronics. Each party shall promptly notify the other by telephone (to be
confirmed in writing via fax) of any information of a Product defect serious
enough to make the Products unsafe for use which would result in a Recall or
seizure of the Products. Upon receiving such notice or upon any such discovery,
each party shall cease and desist from further shipments of such Products in its
possession or control. The decision to initiate a Recall or to take some other
corrective action, if any, shall be made and implemented solely by Alimera.
AIimera shall notify the FDA, and any applicable foreign regulatory agencies of
any Recall, and shall be responsible for coordinating all necessary activities
regarding the action taken. AIimera acknowledges and understands that
Flextronics, as manufacturer of the Product, has significant regulatory
obligations if there are any indications that a Recall would be necessary.
Accordingly, Flextronics and AIimera agree to cooperate fully regarding any
proposed Recall; and the parties agree to keep each other advised, and to
exchange copies of such documentation as may be required, to assure regulatory
compliance.

 

  24.2. Recalls by Government Authority. In the event (a) any government or
regulatory authority issues a directive, order or, following the issuance of a
safety warning or alert with respect to a Product, a written request that any
Product be recalled, (b) a court of competent jurisdiction orders such a Recall,
or (c) Alimera determines that any Product should be recalled or that a “Dear
Doctor” letter is required relating to the restrictions on the use of any
Product, Flextronics will cooperate as reasonably required by Alimera, at
Alimera’s expense.

 

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25. DISPUTE RESOLUTION

 

  25.1. In the event that a dispute arises between Flextronics and Alimera
regarding any matters covered under this Quality Agreement, the parties shall
use the dispute resolution procedures detailed in Section 12.11 of the Supply
Agreement.

 

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APPENDIX I: OUTLINE OF RESPONSIBILITIES

In the event of any conflict between the assignment of responsibilities under
the following chart and the assignment of responsibilities under the Supply
Agreement, the assignment of responsibilities under the Supply Agreement shall
control.

 

FUNCTION

   Flextronics    Alimera

PRODUCT MANUFACTURING

   X   

PRODUCT LABELING

      X

PRODUCT TESTING – Physical

   X   

INVESTIGATIONS INTO DEVIATIONS AND NON-CONFORMANCES

   X    X

COMPLAINT RECEIPTS

      X

COMPLAINT INVESTIGATIONS

   X    X

ADVERSE EVENT REPORTS

      X

RECALLS

      X

PRODUCT RETURNS

   X   

RAW MATERIAL ORDERS

   X   

RAW MATERIAL TESTS

   X   

RAW MATERIAL RELEASE

   X   

SUPPLIER AUDITS

   X   

MAINTENANCE OF VENDOR LISTS

   X   

NOTICE OF PROPOSED CHANGES

   X    X

DOCUMENT/PROCESS CHANGE CONTROL

   X    X

 

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EXHIBIT 2.1(a)

PRODUCT

“Product” shall mean Customer’s proprietary inserter system that may be used
with Customer’s ILUVIEN™ product. The inserter system consists of two parts: the
hand piece and the guideshaft.

 

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EXHIBIT 2.1(b)

The Following Specifications have been provided by Alimera

 

File Name    Revision

Alimera 01-05-2012 Approved Vendors

   N/A

PS-021092 Alimera Inserter Product Spec bb

   E

034-FBA-DWG-30229

   A

034-FBA-COC-52100

   A

034-FBA-DWG-3649

   A

034-FBA-DWG-1000417

   A

034-FBA-DWG-1000842

   A

034-FBA-DWG-1001781

   A-1

034-FBA-DWG-1001782

   A-1

034-FBA-FPS-52100 Rev C

   C

034-FBA-FPS-1001781

   A

034-FBA-IPS-52100 Rev D

   D

034-FBA-IPS-1001781

   A-1

034-FBA-MP-52100_Rev_F

   F

034-FBA-MP-1001781

   B

034-FBA-MP-1003865

   B

034-FBA-MP-1008203

   A

034-FBA-RMS-3649

   A

034-FBA-RMS-10200

   B

034-FBA-RMS-10202

   B

034-FBA-RMS-30229

   A

034-FBA-RMS-30231

   B

034-FBA-RMS-1000417

   B

034-FBA-RMS-1000620

   A

034-FBA-RMS-1000633

   A

034-FBA-RMS-1000842

   A

034-FBA-RMS-1001960

   A

034-FBA-RMS-1001961

   A

034-FBA-RMS-1001963

   A

034-FBA-RMS-1001964

   A

034-FBA-RMS-1001976

   A

DWG-06-114-01-004 Button

   A

DWG-06-114-01-010 Inserter Plunger Plug

   A

DWG-06-114-01-011 Handpiece RH

   A

DWG-06-114-01-012 Handpiece LH

   A

DWG-06-114-01-013 Window

   B

DWG-06-114-05-001 Co-Mold RH

   A

 

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DWG-06-114-05-002 Co-Mold LH

   A

DWG-06-114-09-004

   B

DWG-06-114-09-005

   B

FBA-AW-1001976

   A

PTJ00-393

   1/26/2010

RMS-30201

   B

RMS-30202

   B

RMS-30203

   A

RMS-30214

   A

RMS-30225

   B

034-FBA-COC-52102

   A

034-FBA-DWG-30223

   A

034-FBA-DWG-1000407

   B

034-FBA-DWG-1000409

   A

034-FBA-DWG-1000410

   A

034-FBA-DWG-1000914

   A

034-FBA-DWG-1000915

   A

034-FBA-FPS-52102 Rev C

   C

034-FBA-IPS-52102 Rev D

   D

034-FBA-MP-52102 Rev E

   E

034-FBA-MP-1003865

   B

034-FBA-RMS-30223

   A

034-FBA-RMS-30227

   B

034-FBA-RMS-30228

   A

034-FBA-RMS-1000407

   C

034-FBA-RMS-1000409

   B

034-FBA-RMS-1000410

   B

034-FBA-RMS-1000914

   B

034-FBA-RMS-1000915

   B

DWG-06-114-01-001 Cap

   A

PTJ00-394

   1/26/2010

RMS-30215

   A

034-FBA-DWG-1003584

   A

034-FBA-RMS-30230

   A

034-FBA-RMS-11035

   F

034-FBA-DWG-1003662

   A

034-FBA-MLF-1002537

   A

034-FBA-ART-1002538

   A

034-FBA-MLF-1002539

   A

 

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EXHIBIT 3.1

FEES LIST –

 

         52100   52102  

Landed price includes transportation to the broker at
the border and broker fees. Alimera to arrange
delivery from the broker to the compounder.

[****]

Total Landed Price

   [****]   [****]   [****]  

Total Landed Price

   [****]   [****]   [****]  

Ex works Price

     [****]   [****]  

Operations Definitions and Standard Billing Rates

Sustaining engineering:

 

  1) Direct floor support in production lines

 

  2) Compliance to quality standards i.e. NCMR, and CAPA processing etc.

 

  3) Preventative and corrective maintenance

 

  4) Processing of ECO’s, BOM’s etc. for existing production

 

  5) Updates to the DMR (Device Master Record) per sustaining activities

 

  6) Support of small group activities for Flex Lean

What is not covered in sustaining overhead:

 

  1) Material changes

 

  2) Product changes

 

  3) Label changes other than minor, routine changes

 

  4) Risk Assessment updates to dFMEA from Material/Product/Label changes.

 

  5) Engineering Verification activities associated with above 4 items.

 

  6) Updates to the Engineering DHR (Design History File)

 

  7) NPI projects up to PQ step

 

  8) Vertical integration programs unless otherwise agreed by management

Standard Billing Rates for Tijuana Engineering (NRE)

 

Program Managers

   [****]

Design Engineering

   [****]

San Diego Engineering

   [****]

Process & Quality Engineering

   [****]

Engineering Technician

   [****]

Production Assembly

   [****]

 

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OMITTED PORTIONS.