Exhibit 10.36

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (as may be amended or restated, this
“Agreement”) is dated as of July 17, 2012, between Alimera Sciences, Inc., a
Delaware corporation (the “Company”), and each purchaser identified on the
signature pages hereto (each, including its successors and assigns, a
“Purchaser”, and collectively, the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an effective registration statement under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”), the Company desires to issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this Agreement; and

WHEREAS, certain of the Company’s stockholders have entered into separate
support letters (the “Support Letters”) whereby such stockholders have agreed to
vote their shares in favor of the transactions contemplated by this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:

ARTICLE I.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings set
forth in this Section 1.1:

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.

“Agreement” shall have the meaning ascribed to such term in the preamble to this
Agreement.

“Beneficial Ownership” shall have the meaning ascribed to such term in
Section 4.10(d).

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

“CDA” shall have the meaning ascribed to such term in Section 3.2(d).

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

“Closing 8-K” shall have the meaning ascribed to such term in Section 4.2.

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“Closing Date” means the Trading Day mutually agreed upon by the Company and the
Purchasers purchasing at least 70% of the Units at such Closing not later than
three (3) Business Days following the date of the Stockholder Approval,
provided, that, the conditions set forth in Sections 2.3(a) and 2.3(b) have been
satisfied or waived but, pursuant to Section 5.1, in no event later than
November 30, 2012.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.01 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed.

“Company” shall have the meaning ascribed to such term in the preamble to this
Agreement.

“Company Counsel” means Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP with offices located at 850 Winter Street, Waltham, MA 02451.

“Company Stockholders Meeting” shall have the meaning ascribed to such term in
Section 4.10(a).

“Conversion Shares” means the shares of Common Stock issuable upon conversion of
each of the Shares.

“Enforceability Exceptions” shall have the meaning ascribed to such term in
Section 3.1(b).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“FDA” means the U.S. Food and Drug Administration.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(f).

“Intellectual Property Licenses” shall have the meaning ascribed to such term in
Section 3.1(i).

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(i).

“Knowledge of the Company” or “Knowledge” means the actual knowledge, after
reasonable due inquiry, of each of C. Daniel Myers and Richard S. Eiswirth, Jr.,
and, solely with respect to Section 3.1(o), the actual knowledge, after due
inquiry, of Susan Caballa.

“Lead Purchaser” means Palo Alto Investors, LLC a California limited liability
company.

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction that has the practical effect of
creating any of the foregoing.

 

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“Management Rights Letter” means a management rights letter substantially in the
form of Exhibit B attached hereto.

“Material Adverse Effect” means: (i) a material adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the Company’s authority or ability to perform on a timely basis in any
material respect its obligations under any Transaction Document or (iii) a
material adverse change in the results of operations, assets, business or
condition (financial or otherwise) of the Company.

“Money Laundering Laws” shall have the meaning ascribed to such term in
Section 3.1(q).

“Per Share Purchase Price” means $40.00 per share.

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Preferred Stock” means the Series A Preferred Stock of the Company, par value
$0.01 per share, and any other class of securities into which such securities
may hereafter be reclassified or changed.

“Press Release” shall have the meaning ascribed to such term in Section 4.2.

“Press Release 8-K” shall have the meaning ascribed to such term in Section 4.2.

“Prospectus” means the final prospectus filed for the Registration Statement,
including the documents incorporated by reference in the Registration Statement,
and the documents incorporated by reference in such final prospectus.

“Prospectus Supplement” means the supplement to the Prospectus complying with
Rule 424(b) of the Securities Act that shall be filed with the Commission and
delivered by the Company to each Purchaser at the Closing, including the
documents incorporated by reference therein.

“Proxy Statement” shall have the meaning ascribed to such term in
Section 4.10(a)

“Purchaser” and “Purchasers” shall have the meaning ascribed to such terms in
the preamble to this Agreement.

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.4.

“Registration Statement” means the effective registration statement filed with
the Commission on May 27, 2011 (File No. 333-174586), which registers the sale
of the Shares, the Common Stock issuable upon conversion of the Shares, the
Warrants, the Warrant Shares and the shares of Common Stock issuable upon
conversion of the Warrant Shares to the Purchasers.

 

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“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(e).

“Second Lead Purchaser” means Sofinnova Venture Partners VIII, L.P., a Delaware
limited partnership.

“Securities” means the Shares, the Conversion Shares, the Warrants, and the
Warrant Shares.

“Securities Act” shall have the meaning ascribed to such term in the recitals to
this Agreement.

“Shares” means the shares of Preferred Stock issued or issuable to each
Purchaser pursuant to this Agreement.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Preferred Stock or Common Stock).

“Stockholder Approval” shall the meaning ascribed to such term in
Section 2.3(c).

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for the Units purchased hereunder, in United States dollars and in
immediately available funds, the amount as specified below such Purchaser’s name
on the signature page of this Agreement and next to the heading “Subscription
Amount;”

“Trading Day” means a day on which the principal Trading Market is open for
trading.

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any
successor exchanges of any of the foregoing).

“Transaction Documents” means this Agreement, the Warrants, the Support Letters,
the Management Rights Letter and the Registration Rights Agreement.

“Transfer Agent” means American Stock Transfer & Trust Company, with a mailing
address of 59 Maiden Lane, New York, NY 10038-4667, and a telephone number of
(212) 936-5100, and any successor transfer agent of the Company.

“Unit” means one share of Preferred Stock and a Warrant to purchase 0.30 shares
of Preferred Stock.

 

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“Warrant” means a warrant to purchase shares of Preferred Stock delivered to the
Purchasers at the Closing in accordance with Section 2.2(a)(iii), in the form of
Exhibit A attached hereto.

“Warrant Shares” means the shares of Preferred Stock or Common Stock, as the
case may be, issuable upon exercise of the Warrants.

ARTICLE II.

PURCHASE AND SALE

2.1 Closing. On the Closing Date, upon the terms and subject to the conditions
set forth herein, the Company shall issue and sell to each Purchaser, and each
Purchaser shall, severally and not jointly, purchase from the Company, such
number of Units equal to the quotient resulting from dividing (a) the applicable
Subscription Amount for such Purchaser by (b) the Per Share Purchase Price,
provided that any Purchaser may cause one or more investment funds that are
Affiliates of such Purchaser to purchase the number of Units allocated to such
Purchaser. On the Closing Date, each Purchaser purchasing Units at a Closing (or
such investment fund) shall deliver to the Company, via wire transfer,
immediately available funds equal to such Purchaser’s Subscription Amount, and
the Company shall deliver to such Purchaser its respective Shares and Warrants
as determined pursuant to Section 2.2(a), and the Company and such Purchaser
shall deliver the other items set forth in Section 2.2. The Closing shall occur
at the offices of Company Counsel or such other location as the Company and the
Purchasers purchasing at least 70% of the Units being purchased by all
Purchasers at the Closing shall mutually agree. The Company shall not be
obligated to issue Units for an aggregate Subscription Amount in excess of
$40,000,000.00 hereunder.

2.2 Deliveries.

(a) Company Deliverables. On or prior to the Closing Date, the Company shall
deliver or cause to be delivered to each Purchaser purchasing Units at the
Closing the following:

(i) solely in the case of the Second Lead Purchaser, the Management Rights
Letter, duly executed by the Company;

(ii) a copy of the irrevocable instructions to the Transfer Agent, duly executed
by the Company, instructing the Transfer Agent to deliver on an expedited basis
via The Depository Trust Company’s Deposit or Withdrawal at Custodian system
Shares equal to such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser, to the account(s)
identified by such Purchaser;

(iii) a Warrant registered in the name of such Purchaser to purchase up to a
number of shares of Preferred Stock equal to 30% of such Purchaser’s Shares,
with an initial exercise price per share equal to 110% of the Per Share Purchase
Price, (such Warrant may be delivered within three (3) Trading Days of the
Closing Date), duly executed by the Company;

 

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(iv) the Prospectus Supplement (which may be delivered in accordance with Rule
172 under the Securities Act);

(v) a legal opinion of Company Counsel, addressed to the Purchasers and dated
the Closing Date, substantially in the form of Exhibit C attached hereto;

(vi) a certificate of the Secretary of the Company, dated as of the Closing
Date, (A) certifying the resolutions adopted by the Board of Directors or a duly
authorized committee thereof approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the Units,
(B) certifying that the shareholders of the Company have adopted resolutions
approving the transactions contemplated by this Agreement and the other
Transaction Documents and the issuance of the Units, (C) certifying the current
versions of the certificate of incorporation, as amended, and bylaws of the
Company, and (D) certifying as to the signatures and authority of persons
signing the Transaction Documents and related documents on behalf of the
Company;

(vii) an officer’s certificate certifying that the conditions to close found in
Section 2.3(b)(i) and (ii) have been satisfied;

(viii) a copy of the Registration Rights Agreement executed by the Company; and

(ix) an executed copy of an indemnification agreement with the director of the
Company designated by the Second Lead Purchaser.

(b) Purchasers’ Deliverables. On or prior to the Closing Date, each Purchaser
purchasing Units at the Closing shall deliver or cause to be delivered to the
Company the following:

(i) such Purchaser’s Subscription Amount by wire transfer to the account
specified by the Company;

(ii) solely in the case of the Second Lead Purchaser, a copy of the Second Lead
Purchaser’s Management Rights Letter executed by the Second Lead Purchaser;

(iii) a copy of the Registration Rights Agreement executed by such Purchaser;
and

(iv) solely in the case of the Second Lead Purchaser, an executed copy of the
indemnification agreement referred to in Section 2.2(a)(ix) above.

2.3 Closing Conditions.

(a) Company Conditions to Close. The obligations of the Company hereunder in
connection with the Closing are subject to the following conditions being met or
waived by the Company:

 

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(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);

(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and

(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b).

(b) Purchasers’ Conditions to Close. The respective obligations of the
Purchasers hereunder in connection with the Closing are subject to the following
conditions being met or waived by Purchasers purchasing at least 70% of the
Units at Closing:

(i) (A) the accuracy in all material respects when made of the representations
and warranties of the Company contained herein, (B) the accuracy in all material
respects of the representations and warranties of the Company contained in
Sections 3.1(a)—(f) and (s) on the Closing Date and (C) the accuracy of the
representations and warranties of the Company contained in Sections 3.1(g)—(r)
on the Closing Date, except where any inaccuracies in the representations and
warranties in Sections 3.1(g)—(r) do not constitute a Material Adverse Effect;

(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;

(iii) the delivery by the Company of the items set forth in Section 2.2(a);

(iv) since the date of execution of this Agreement, no event or series of events
shall have occurred that has had or would reasonably be expected to have a
Material Adverse Effect with respect to the Company; provided, however, that no
event, change or effect to the extent arising out of, resulting from or
attributable to any of the following shall be deemed to constitute, nor be taken
into account in determining whether any event or series of events shall have
occurred that has had or would reasonably be expected to have a Material Adverse
Effect with respect to the Company: (A) changes in the Company’s industry or the
overall economy, the securities markets, financial markets or capital markets of
the United States or worldwide generally; (B) general worldwide economic,
business or political conditions; (C) any act of war (whether or not declared),
sabotage, terrorism, military action or the escalation thereof; (D) any change
in accounting requirements or principles or any change in applicable laws, rules
or regulations, provided such change is not applicable solely to the Company;
(E) any event, change or effect resulting from the announcement of this
Agreement in compliance with the terms of this Agreement, and/or pendency of the
transactions contemplated by this Agreement; (F) earthquakes, hurricanes, floods
or other natural disasters; (G) any failure, in and of itself, by the Company to
meet any internal or published financial projections, predictions, estimates or
expectations for any period ending on or after the date of this Agreement;
(H) actions taken or the failure to take action as a result of the covenants or
restrictions set forth in this Agreement (I) continued losses from operations or
decreases in cash balances of the Company, in either case incurred in or
resulting from the ordinary course of the Company’s business; (J) any decline in
the trading price of the Common Stock; or (K) any event, change or effect
relating to the review of the Commission or the Trading Market of the
transactions contemplated by this Agreement, including, without limitation, the
Proxy Statement and the additional listing application relating to the
Securities, except, in case of clause (A), (B), (C) or (D), to the extent that
such change, effect, event, matter, occurrence or state of facts has a
materially disproportionate effect on the Company relative to similarly-situated
companies in the industry in which the Company operates;

 

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(v) no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
initiated or threatened by the Commission;

(vi) the Common Stock shall be registered under the Exchange Act and, as of the
Closing Date, the Common Stock shall be listed and admitted and authorized for
trading on the Trading Market, and, upon request, reasonably satisfactory
evidence of such actions shall have been provided to counsel to the Purchasers;

(vii) the Company shall have taken no action designed to, or reasonably likely
to have the effect of terminating the registration of the Common Stock under the
Exchange Act or delisting or suspending from trading the Common Stock from the
Trading Market, nor shall the Company have received any written information from
the Commission or the Trading Market, as applicable, suggesting that the
Commission or the Trading Market, as applicable, is contemplating terminating
such registration or listing;

(viii) from the date hereof to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission or the Trading Market (except
for (A) any suspension of trading of limited duration agreed to by the Company,
which suspension shall be terminated prior to the Closing and (B) any suspension
of trading in securities generally as reported by Bloomberg L.P.);

(ix) no action shall have been taken and no statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents; and

(x) approval of ILUVIEN shall not have been revoked in any jurisdiction in which
such drug was, as of the date hereof, approved and authorized by the proper
governmental authority for sale and distribution.

(c) Company Stockholder Approval. The approval by the Company’s stockholders of
the transactions contemplated by this Agreement (the “Stockholder Approval”)
shall have been obtained by the Company.

(d) Board of Directors. The Board of Directors shall have appointed, effective
as of the Closing, Garheng Kong (or such other individual designated by the
Second Lead Purchaser, which other individual is acceptable to the Company) to
the Board of Directors of the Company, to serve as a Class II Director.

 

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ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. The Company hereby makes the
following representations and warranties to each Purchaser:

(a) Organization and Qualification. The Company is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power and authority to own or lease and use its properties and assets
and to carry on its business as currently conducted. The Company is not in
violation or default of any of the provisions of its Restated Certificate of
Incorporation. The Company is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified or in good standing would not have
or reasonably be expected to result in a Material Adverse Effect. The Company
does not have any direct or indirect subsidiaries.

(b) Authorization; Enforcement. Subject to obtaining Stockholder Approval, the
Company has all requisite corporate power and corporate authority to enter into
and to perform its obligations under the Transaction Documents, to consummate
the transactions contemplated by this Agreement and each of the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder, and to issue (or reserve for issuance) the Securities in accordance
with the terms thereof. Subject to obtaining Stockholder Approval, the
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby in accordance with the terms hereof and thereof
(including the issuance of the Securities) have been duly authorized by all
necessary corporate action on the part of the Company, and no further action is
required by the Company or the Board of Directors. This Agreement and each of
the other Transaction Documents has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms hereof
and thereof, will constitute the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity and except as rights to indemnity and
contribution may be limited by applicable laws or public policy underlying such
laws (collectively, the “Enforceability Exceptions”).

(c) No Conflicts. The execution, delivery and performance of this Agreement and
the other Transaction Documents by the Company, and after obtaining Stockholder
Approval, the issuance of the Securities and the consummation by the Company of
the transactions contemplated thereby do not and will not: (i) conflict with or
violate any provision of the Company’s Restated Certificate of Incorporation or
bylaws, (ii) conflict with, violate, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, result in
the creation of any Lien upon any of the properties or assets of the Company, or
give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or
otherwise) or other understanding to which the Company is a party or by which
any property or asset of the Company is bound or affected or (iii) conflict with
or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including federal and state securities laws and
regulations) or by which any property or asset of the Company is bound or
affected; except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.

 

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(d) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including
the issuance of the Securities), other than: (i) the filings required pursuant
to Sections 4.2 and 4.10, (ii) the filing with the Commission of the Prospectus
Supplement, (iii) a Notification Form: Listing of Additional Shares and
Notification Form: Change in the Number of Shares Outstanding to the Trading
Market for the listing of the Conversion Shares for trading thereon (iv) such
filings as are required to be made under applicable state securities laws, and
(v) the Stockholder Approval.

(e) Issuance of the Securities; Registration. The Shares are duly authorized
and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company. The Warrants are duly authorized,
and when duly executed and delivered by the Company in accordance with the
applicable Transaction Documents, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
their terms, except as limited by the Enforceability Exceptions. The Warrant
Shares, when issued in accordance with the terms of the Warrants, will be
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company. The Conversion Shares, when issued in accordance with
the Company’s Certificate of Incorporation, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the Company. The
Company has reserved from its duly authorized capital stock the maximum number
of shares of Preferred Stock issuable pursuant to this Agreement and the
Warrants as of the date hereof and the maximum number of Conversion Shares
issuable upon conversion of the Shares and the Warrant Shares as of the date
hereof. The Units, Shares, Warrants and Common Stock conform as to legal matters
in all material respects to the respective descriptions thereof contained in the
Registration Statement, Prospectus and Prospectus Supplement and such
descriptions conform to the rights set forth in the instruments defining the
same. The Company has prepared and filed the Registration Statement in
conformity with the requirements of the Securities Act, which became effective
on June 17, 2011, including the Prospectus, and such amendments and supplements
thereto as may have been required to the date of this Agreement. The
Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus has been issued by the
Commission and no proceedings for that purpose have been instituted or, to the
Knowledge of the Company, are threatened by the Commission. At the time the
Registration Statement and any amendments thereto became effective, at the date
of this Agreement and at the Closing Date, the Registration Statement and any
amendments thereto

 

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conformed and will conform in all material respects to the requirements of the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and as of the date
of the Prospectus Supplement and at the Closing Date, the Prospectus Supplement,
when taken together with the Prospectus, and any amendments or supplements
thereto, when taken together with the Prospectus and Prospectus Supplement and
any amendments and supplements thereto prior to such date, conformed and will
conform in all material respects to the requirements of the Securities Act and
did not and will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, when they became effective or at the
time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission thereunder.

(f) SEC Reports; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the twelve (12) months preceding the date
hereof (all of the foregoing and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the “SEC Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the Commission promulgated thereunder applicable to the SEC
Reports. To the Knowledge of the Company, none of the SEC Reports, at the time
they were filed with the Commission, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Company has never
been an issuer subject to, or identified in, Rule 144(i) under the Securities
Act. The financial statements of the Company included in the SEC Reports, the
Prospectus and the Prospectus Supplement complied in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly presented
in all material respects the financial position of the Company as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

 

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(g) Material Changes; Undisclosed Events, Liabilities or Developments. Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed prior to the
date hereof, (i) there has been no event, occurrence or development that has had
or that would reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice, (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or
disclosed in filings made with the Commission and (C) additional fees paid or
payable in connection with the pursuit of approval of ILUVIEN with the FDA to
the consultant referenced in filings made with the Commission, (iii) the Company
has not altered its method of accounting (other than in accordance with
pronouncements under GAAP), (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information other than with respect to
Exhibit 10.35 to the Company’s Quarterly Report on Form 10-Q filed with the
Commission on May 11, 2012.

(h) Litigation. There is no action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the Knowledge of the Company,
threatened against the Company or any of its properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which (i) challenges the legality,
validity or enforceability of any of the Transaction Documents or the Securities
or (ii) would, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect.

(i) Intellectual Property. The Company owns, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights sufficient for the operation of its business
as described in the SEC Reports and which the failure to so have would
reasonably be expected to have a Material Adverse Effect (collectively, the
“Intellectual Property Rights”). The Company has not received a notice (written
or otherwise) within the two (2) year period prior to the date of this Agreement
that any of the Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned within two
(2) years after the date of this Agreement. Except as otherwise described in the
SEC Reports, the licenses relating to Intellectual Property Rights described in
the SEC Reports, the Prospectus and the Prospectus Supplement (the “Intellectual
Property Licenses”) are valid, binding upon and enforceable against the Company,
and to the Knowledge of the Company, against the parties thereto, in accordance
with their terms. The Company has complied in all material respects with, and is
not in breach nor has received any written claim of breach of, any Intellectual
Property License, and the Company has no Knowledge of any breach or anticipated
breach by any other Person to any Intellectual Property License. The Company is
not in breach of that certain Amended and Restated Collaboration Agreement by
and between pSivida, Inc. (f/k/a/Control Delivery Systems, Inc.) and the
Company, dated as of March 14, 2008. The Company has not received, since the
date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise does not have any Knowledge that the
Intellectual Property Rights violate or infringe upon the rights of any Person,
except as would not have or reasonably be expected to result in a Material
Adverse Effect. To the Knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights. The Company has taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
its intellectual properties, except where failure to do so would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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(j) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material
compliance with any and all applicable requirements of the Sarbanes-Oxley Act of
2002 that are effective as of the date hereof, and any and all applicable rules
and regulations promulgated by the Commission thereunder that are effective as
of the date hereof and as of the Closing Date. Since the end of the period
covered by the most recently filed periodic report under the Exchange Act, there
have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) of the Company that have materially
affected, or is reasonably likely to materially affect, the internal control
over financial reporting of the Company.

(k) Certain Fees. Except as set forth in the Prospectus Supplement, no brokerage
or finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents. The Purchasers shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section 3.1(k) that may be due in
connection with the transactions contemplated by the Transaction Documents.

(l) Investment Company. The Company is not and immediately after receipt of
payment for the Securities will not be an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

(m) Disclosure. All of the disclosure furnished by or on behalf of the Company
to the Purchasers regarding the Company, its business and the transactions
contemplated hereby is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The Company acknowledges and agrees
that no Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2.

(n) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that
no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.

 

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(o) Regulatory Permits; FDA. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities (including, without limitation, those from the
FDA and any other federal, state, local or foreign regulatory authorities
performing functions similar to those performed by the FDA) necessary to conduct
its business as described in the SEC Reports, except where the failure to
possess such permits would not reasonably be expected to result in a Material
Adverse Effect. There is no pending, completed or, to the Knowledge of the
Company, threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or investigation)
against the Company, and the Company has not received any notice, warning letter
or other communication from the FDA or any other governmental entity, which
(i) imposes a clinical hold on any clinical investigation by the Company,
(ii) enjoins production at any facility of the Company, (iii) enters or proposes
to enter into a consent decree of permanent injunction with the Company, or
(iv) otherwise alleges any violation of any laws, rules or regulations by the
Company, and which, either individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect. The properties, business and
operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the
FDA.

(p) Clinical Trials. All studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company were and, if still pending, are being,
conducted in accordance with experimental protocols, procedures and controls
pursuant to accepted professional scientific standards and applicable local,
state and federal laws, rules, regulations and guidances, including, but not
limited to the applicable requirements of Good Laboratory Practices or Good
Clinical Practices, as applicable, except as, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
The descriptions of the results of such studies, tests and trials (including
adverse events) contained in the SEC Reports, if any, are not inconsistent with
the description made to governmental authorities of such results in any material
respects. Except as described in the SEC Reports, no results of any other
studies or tests have come to the attention of the Company that have caused the
Company to believe that such results call into question the results described in
the SEC Reports of the clinical trials. The Company has not received any notices
or correspondence from the FDA or any other governmental authority requiring the
termination, suspension or modification of any clinical trials currently
conducted by, or on behalf of, the Company or in which the Company has
participated that are described in the SEC Reports, if any, or the results of
which are referred to in the SEC Reports.

 

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(q) Foreign Corrupt Practices; Anti-Bribery; Office of Foreign Assets Control;
Money Laundering. Neither the Company, nor to the Knowledge of the Company, any
agent or other person acting on behalf of the Company, (i) has directly or
indirectly, used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity,
(ii) has made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) has failed to disclose fully any contribution made by the
Company which is in violation of law, (iv) has violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as amended, (v) has
taken or proposed to take any action in furtherance of an offer, payment,
promise to pay, or authorization or approval of the payment or giving of money,
property, gifts or anything else of value, directly or indirectly, to any
government official (including any officer or employee of a government or
government-owned or controlled entity or of a public international organization,
or any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office) to improperly influence official action or secure an improper advantage
or (vi) is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department. To the Knowledge of the
Company, the operations of the Company are and have been conducted at all times
in compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and anti-corruption laws and
applicable rules and regulations thereunder (collectively, the “Money Laundering
Laws”), and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company with respect
to the Money Laundering Laws is pending or, to the Knowledge of the Company,
threatened. The Company has instituted policies and procedures designed to
promote and achieve material compliance with such laws and with the
representation and warranty contained herein.

(r) Waiver of Section 203. The Company’s Board of Directors has waived the
provisions of Section 203 of the Delaware General Corporation Law with respect
to the issuance of the Shares and Warrants to the Purchasers.

(s) Capitalization. (i) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock,
$0.01 par value per share, of the Company. As of the date hereof, there were
(i) 31,432,355 shares of Common Stock outstanding; (ii) no shares of Preferred
Stock outstanding; (iii) an aggregate of 3,698,019 shares of Common Stock
subject to outstanding stock options of the company; (iv) an aggregate of 85,437
shares of Common Stock subject to outstanding restricted stock units and (v) an
aggregate of 152,714 shares of Company Stock subject to outstanding warrants of
the Company. All outstanding shares of capital stock of the Company have been,
and all shares that may be issued pursuant to any stock option plan of the
Company will be, when issued in accordance with the respective terms thereof,
duly authorized, validly issued and fully paid.

(ii) Except as set forth in Section 3.1(s)(i) and for issuance of equity awards
to officers, directors, employees, consultants, advisors or contractors of the
Company pursuant to stock option, stock purchase plans or other equity incentive
plans on terms approved by the Company’s Board of Directors, there are no
issued, reserved for issuance or outstanding (A) shares of capital stock or
other voting securities of or ownership interests in the Company, (B) securities
of the Company convertible into or exchangeable for shares of capital stock or
other voting securities of or ownership interests in the Company, (C) warrants,
calls, options or other rights to acquire from the Company, or other obligation
of the Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company or (D) restricted shares, stock appreciation rights, performance units,
contingent value rights, “phantom” stock or similar securities or rights that
are derivative of, or provide economic benefits based, directly or indirectly,
on the value or price of, any capital stock of or voting securities of the
Company.

 

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3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself
and for no other Purchaser, hereby represents and warrants as of the execution
of this Agreement on the date hereof to the Company as follows (unless as of a
specific date therein):

(a) Organization; Authority. Such Purchaser is duly incorporated or formed,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate
the transactions contemplated by this Agreement and the Warrant and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as
applicable, on the part of such Purchaser. Each Transaction Document to which it
is a party has been duly executed by such Purchaser, and when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except as limited by the Enforceability Exceptions.

(b) No Conflicts. The execution, delivery and performance of the Transaction
Documents to which it is a party by such Purchaser and the consummation by such
Purchaser of the transactions contemplated thereby do not and will not:
(i) conflict with or violate any provision of the Purchaser’s certificate or
articles of incorporation, bylaws or other organizational or charter documents,
(ii) violate, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument to which such Purchaser is a party or (iii) result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which such Purchaser is
subject (including federal and state securities laws and regulations) or by
which any property or asset of such Purchaser is bound or affected; except in
the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights
or violations which would not individually or in the aggregate, reasonably be
expected to have a material adverse effect on the transactions contemplated
hereby or in the other Transaction Documents or the authority or ability of such
Purchaser to perform it obligations under the Transaction Documents.

(c) Understandings or Arrangements. Such Purchaser is acquiring the Securities
as principal for its own account and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws). Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business.

 

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(d) Certain Transactions and Confidentiality. Other than consummating the
transactions contemplated hereunder, such Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser,
directly or indirectly executed any purchases or sales, including Short
Sales, of the securities of the Company during the period commencing as of the
time that such Purchaser first entered into a confidentiality or non-disclosure
agreement with the Company regarding this transaction (each such agreement a
“CDA”) and ending immediately prior to the execution hereof. Notwithstanding the
foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this Agreement. Other
than to other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with
respect to the identification of the availability of, or securing of, available
shares to borrow in order to effect Short Sales or similar transactions in the
future. Each Purchaser acknowledges that it has had the opportunity to read the
SEC Reports.

(e) Disclosure. Such Purchaser acknowledges and agrees that the Company is not
making any representation or warranty and has not made any representation or
warranty other than those set forth in the Transaction Documents. In addition,
such Purchaser and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and relating to
the offer and sale of the Securities that have been requested by such Purchaser.
The Company acknowledges and agrees that the representations contained in
Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transactions contemplated by this
Agreement.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1 Furnishing of Information. Until the earliest of the time that (a) no
Purchaser (or any investment fund that is an Affiliate of a Purchaser) owns
Securities or (b) the Warrants have expired, the Company shall use commercially
reasonable efforts to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act.

4.2 Securities Laws Disclosure; Publicity. The Company (a) may, on or after the
date hereof, issue a press release reasonably acceptable to the Lead Purchaser
and Second Lead Purchaser disclosing the material terms of the transactions
contemplated by this Agreement (the “Press Release”) and may, on or after the
date hereof file a Current Report on Form 8-K describing the terms of the
Transaction Documents and including the Press Release and the forms of the
Transaction Documents, as exhibits thereto, with the Commission (the “Press
Release 8-K”), and (b) shall file a Current Report on Form 8-K describing the
terms of the Transaction Documents and including the Transaction Documents as
exhibits thereto, with the Commission, no later than 9:00 A.M. Eastern time on
the first (1st) Trading Day immediately following the Closing (the “Closing
8-K”). From and after the Closing, no Purchaser shall

 

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be in possession of any material, non-public information received from the
Company or any of its officers, directors, employees or agents with respect to
the material terms and conditions of the transactions contemplated by the
Transaction Documents, except for any material, non-public information provided
to the Lead Purchaser and Second Lead Purchaser pursuant to the Management
Rights Letter, as a result of a representative of the Lead Purchaser or the
Second Lead Purchaser serving on the Board of Directors, or pursuant to a
written confidentiality agreement entered into with such Purchaser after the
date hereof. The Company and each Purchaser shall consult with each other in
issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press
release nor otherwise make any such public statement without the prior consent
of the Company, with respect to any press release of any Purchaser, or without
the prior written consent of such Purchaser, with respect to any press release
of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public
statement or communication. Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (a) the
filing of the Press Release and form of Transaction Documents, (b) as required
by federal securities law in connection with the filing of the Closing 8-K and
final Transaction Documents (including signature pages thereto) with the
Commission after the Closing Date and (c) to the extent such disclosure is
required by law or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure permitted under this
clause (c).

4.3 Use of Proceeds. The Company shall use the net proceeds to fund development
and commercialization of the Company’s existing and pipeline drugs, maintenance
of the Company’s credit facility with Silicon Valley Bank and MidCap Financial,
as the same may be amended, refinanced or resyndicated from time to time, up to
$35,000,000 in the aggregate and corporate purposes substantially related to the
commercialization of the Company’s existing and pipeline drugs (including
without limitation, general and administrative and research and development
expenses, in each case, primarily related to such business and the maintenance
of the Company’s infrastructure to continue such business).

4.4 Indemnification of Purchasers. Subject to the provisions of this
Section 4.4, the Company will indemnify and hold each Purchaser and its
directors, officers, stockholders, members, partners and employees (and any
other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, stockholders,
members, partners or employees (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against a Purchaser in any
capacity, or any of them

 

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or their respective Affiliates, by any stockholder of the Company who is not an
Affiliate of such Purchaser, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon
(i) a breach of such Purchaser’s representations, warranties or covenants under
the Transaction Documents or any agreements or understandings such Purchaser may
have with any such stockholder, (ii) any violations by such Purchaser of state
or federal securities laws or (iii) any conduct by such Purchaser which
constitutes fraud, gross negligence, willful misconduct or malfeasance). If any
action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (A) the employment thereof has
been specifically authorized by the Company in writing, (B) the Company has
failed after a reasonable period of time to assume such defense and to employ
counsel or (C) in such action there is, in the reasonable opinion of counsel, a
material conflict on any material issue between the position of the Company and
the position of such Purchaser Party, in which case the Company shall be
responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Purchaser Party under
this Agreement (y) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed; or (z) to the extent, but only to the extent that a
loss, claim, damage or liability is attributable to any Purchaser Party’s breach
of any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents. The
indemnification required by this Section 4.4 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and
when bills are received or are incurred. The indemnity agreements contained
herein shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others, and any liabilities the Company
may be subject to pursuant to law.

4.5 Equal Treatment of Purchasers. No consideration (including any modification
of any Transaction Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to
the Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

4.6 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material, non-public information unless
such material non-public information is provided by the Company to the Lead
Purchaser or the Second Lead Purchaser pursuant to the Management Rights Letter,
as a result of a representative of the Lead Purchaser or Second Lead Purchaser
serving on the Board of Directors, or pursuant to a written confidentiality
agreement entered into with such Purchaser after the date hereof. The Company
understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.

 

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4.7 Reservation of Preferred Stock and Common Stock. As of the date hereof, the
Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares
of Preferred Stock and Conversion Shares for the purpose of enabling the Company
to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any
exercise of the Warrants.

4.8 Listing of Common Stock. The Company hereby agrees to use its commercially
reasonable efforts to maintain the listing or quotation of the Common Stock on
the Trading Market on which it is currently listed, and concurrently with or
prior to the Closing, the Company shall file a Notification Form: Listing of
Additional Shares to apply to list or quote all of the Conversion Shares on such
Trading Market, file a Notification Form: Change in the Number of Shares
Outstanding with such Trading Market and promptly secure the listing of all of
the Conversion Shares on such Trading Market. The Company further agrees, if the
Company applies to have the Common Stock traded on any other Trading Market, it
will then include in such application all of the Conversion Shares, and will
take such other action as is necessary to cause all of the Conversion Shares to
be listed or quoted on such other Trading Market as promptly as possible. The
Company will then take all action reasonably necessary to continue the listing
and trading of its Common Stock on a Trading Market and will comply in all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Trading Market.

4.9 Compliance with Securities Laws.

(a) At all times prior to Closing, the Company shall comply with the
requirements of Rule 430B, and will promptly notify the Lead Purchaser and the
Second Lead Purchaser (i) when any amendment or supplement to the Registration
Statement, Prospectus or Prospectus Supplement shall have been filed, (ii) of
the receipt of any written comments from the Commission, (iii) of any written
request by the Commission for any amendment or supplement to the Registration
Statement, Prospectus or any document incorporated by reference therein or
otherwise deemed to be a part thereof or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant to
Section 8(e) of the Securities Act concerning the Registration Statement and
(v) if the Company becomes the subject of a proceeding under Section 8A of the
Securities Act in connection with the offering of the Units. The Company will
effect the filings required under Rule 424(b), in the manner and within the time
period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will
take such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by
the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will use commercially reasonable efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.

 

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(b) The Company shall comply with the Securities Act, Exchange Act and the rules
and regulations thereunder so as to permit the completion of the distribution of
the Shares, Warrants, Warrant Shares and Conversion Shares as contemplated by
the Transaction Documents and the Prospectus Supplement. If at any time prior to
the issuance of the Shares, Warrants, Warrant Shares and Conversion Shares, any
event shall occur or condition shall exist as a result of which it is necessary
to amend the Registration Statement or amend or supplement the Prospectus
Supplement in order that the Prospectus Supplement will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at such time, or if it shall be necessary to amend the
Registration Statement or amend or supplement the Prospectus Supplement in order
to comply with the requirements of the Securities Act, the Company will promptly
prepare and file with the Commission such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus Supplement comply with such requirements.

4.10 Preparation of the Proxy Statement and Company’s Stockholders Meeting.

(a) The Company shall use its reasonable best efforts to call, hold and convene
a special meeting of its stockholders to vote on the approval of transactions
contemplated by this Agreement, as required under the rules of the Trading
Market, as soon as reasonable practicable after the date hereof but in any event
not later than September 28, 2012 (the “Company Stockholders Meeting”). The
board of directors of the Company shall recommend to the Company stockholders
that the Company stockholders vote to approve the transactions contemplated by
this Agreement, as required under the rules of the Trading Market (the
“Recommendation”) and shall include such Recommendation in the proxy statement
to be issued in connection with this Agreement (the “Proxy Statement”). In
connection with the Company’s Stockholders Meeting, the Company shall prepare
and file with the SEC as soon as reasonably practicable, but in any event, not
later than ten (10) days after the date hereof the Proxy Statement in
preliminary form, and the Company shall use its reasonable best efforts to
respond as promptly as practicable to any comments of the SEC with respect
thereto. The Company shall use its reasonable best efforts to prepare and file
with the SEC the definitive Proxy Statement and to cause the definitive Proxy
Statement to be mailed to the Company’s stockholders as promptly as practicable
after the filing of the definitive Proxy Statement with the SEC. The Company
shall take any action required to be taken under any applicable state securities
laws in connection with this Agreement. The Company shall notify the Lead
Investor and the Second Lead Investor promptly of the receipt of any written
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or for additional
information and shall supply the Lead Investor and the Second Lead Investor with
copies of all correspondence between the Company or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand, with respect to
the Proxy Statement. Prior to filing or mailing the preliminary or definitive
Proxy Statement (or any amendment or supplement thereto) or responding to the
comments of the SEC with respect thereto, the Company (i) shall provide the Lead
Investor and the Second Lead Investor a reasonable opportunity to review such
document or response and (ii) shall consider in good faith comments proposed by
the Lead Investor and the Second Lead Investor on such document or response.

 

21

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(b) Until the Closing, the Company shall not, and shall instruct its directors,
officers, managers, partners, financial advisors and other Representatives not
to, directly or indirectly, knowingly encourage, solicit, initiate or continue
any inquiries or proposals from, discuss or negotiate with, or provide any
non-public information to, any person or entity concerning any merger, sale of
any material portion of the assets, sale of more than 2% of the outstanding
shares of capital stock or similar transaction involving the Company or enter
into any agreement with respect thereto, and each of them shall terminate and
cease any existing activities, discussions or negotiations with respect to the
foregoing.

4.11 Confidentiality. Each Purchaser, severally and not jointly with the other
Purchasers, covenants that such Purchaser will maintain the confidentiality of
any confidential or material non-public information of the Company provided to
it by or on behalf of the Company prior to or after the date of this Agreement,
whether pursuant to a written confidentiality agreement, a Management Rights
Letter or as a result of such Purchaser having a representative on the Board of
Directors; provided, however, each Purchaser may disclose such confidential and
material non-public information of the Company to such Purchaser’s employees,
agents, and representatives who need to know such information for the purposes
of this Agreement and such Purchaser advises such employees, agents and
representatives of the confidentiality restrictions contained herein, and in
accordance with its reporting obligations to its limited partners. Each
Purchaser’s obligations under this Section 4.11 shall not apply to confidential
information that (a) without any breach by such Purchaser of this Section 4.11
was in the public domain at or subsequent to the time communicated to such
Purchaser by the Company; (b) was rightfully in such Purchaser’s possession free
of any obligation of confidentiality to the Company at the time communicated to
such Purchaser by the Company; (c) was received from a third party who
rightfully disclosed it to such Party without an obligation of confidentiality
to the Company on its subsequent disclosure; or (d) was developed by employees
or agents of such Purchaser independently of and without reference to any
confidential information. In addition, any disclosure of any portion of
confidential or material non-public information of the Company either (i) in
response to a valid order by a court or other governmental body, or
(ii) otherwise required by law, shall not be considered to be a breach of this
Section 4.11 or a waiver of confidentiality for other purposes; provided,
however, that such Purchaser shall provide prompt prior written notice thereof
to the Company to enable the Company to seek a protective order or otherwise
prevent such disclosure.

4.12 Board of Director Seat for Second Lead Purchaser. The Board of Directors
shall appoint, effective as of the Closing, a designee of the Second Lead
Purchaser, which designee shall initially be Garheng Kong, to the Board of
Directors as a Class II Director (as such term is defined in the Company’s
Restated Certificate of Incorporation as filed with the Secretary of State of
Delaware) with such designee’s initial term expiring at the Company’s 2015
annual meeting of stockholders; provided that if the Company shall amend the
Company’s Restated Certificate of Incorporation to de-classify the Board of
Directors and provide that the members of the Board of Directors shall be
subject to annual election, the Board of Directors shall nominate a designee of
the Second Lead Purchaser for inclusion as a nominee for election to the Board
of Directors in each of the Company’s proxy statements for its annual meetings
of stockholders; provided the Second Lead Purchaser holds at least 50% of the
Conversion Shares it originally purchased. Immediately following the appointment
of the Second Lead Purchaser’s designee to the Board of Directors, the Company
shall (a) add such designee as a covered party under the Company’s current
director and officer insurance policy, and (b) deliver to such designee an
indemnification agreement, duly executed by the Company and in the same form
entered into by the Company with each of the Company’s other directors.

 

22

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4.13 Absence of Certain Changes or Events. From the date of this Agreement to
the Closing Date, except with respect to actions taken by the Company with
respect to the commercialization of ILUVIEN in Europe, the Company shall conduct
its business in the ordinary course of business consistent with past practices,
and during such period the Company shall not cause or permit:

(a) any redemption or repurchase, directly or indirectly, of any shares of any
capital stock of the Company or other equity security or declaration, setting
aside or payment of any dividends or making of any other distributions (whether
in cash or kind) with respect to any shares of the Company’s capital stock or
other equity security of any subsidiary of the Company, provided, however, that
this Section 4.13(a) shall not apply to the repurchases of stock from former
employees, officers, directors or consultants who performed services for the
Company in connection with the cessation of such employment or service pursuant
to the terms of existing agreements with such individuals;

(b) any split, combination or reclassification of any capital stock of the
Company or any capital stock or other equity securities of any subsidiary of the
Company or any issuance, sale or transfer of any equity securities, any
securities convertible, exchangeable or exercisable into shares of the capital
stock of the Company or other equity securities, or warrants, options or other
rights to acquire shares of the Company’s capital stock or other equity security
of any subsidiary of the Company or any issuance or incurrence of indebtedness
(other than trade payables incurred in the ordinary course of business and
operating, capital and equipment leases entered into in the ordinary course of
business), provided, however, the foregoing shall not apply to (i) issuances of
Common Stock or rights to purchase Common Stock issued to employees, directors,
consultants or other service providers pursuant to an equity incentive plan of
the Company maintained in the ordinary course of business and approved by its
Board of Directors or (ii) incurrence of secured indebtedness up to an aggregate
of $35,000,000 pursuant to the Corporation’s credit facility with Silicon Valley
Bank and/or MidCap Financial, as the same may be amended, refinanced or
resyndicated from time to time;

(c) any material change in accounting methods or principles, except insofar as
may have been required by a change in GAAP or applicable Law;

(d) any disposal of any of the properties or assets of the Company or any
subsidiary of the Company, other than in the ordinary course of business,
including, but not limited to, any sale, assignment or transfer of any material
tangible assets or any material Intellectual Property or any merger,
consolidation or liquidation of the Company; and

(e) any contract, whether or not in writing, to take any action described in
this Section 4.13.

 

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4.14 Conversion to Common Stock. In order to facilitate a timely conversion of
the Preferred Stock into Common Stock, at the election of a Purchaser, the
Company and the Purchasers shall execute an election of conversion notice in
substantially the same form as Exhibit D-1 attached hereto and the Company shall
provide the transfer agent of the Company with an opinion in substantially the
same form as Exhibit D-2 attached hereto. The Company represents and warrants
that the foregoing documents are the only documents that the Company’s transfer
agent requires in order to convert the Preferred Stock into Common Stock within
2 business days of a request to so convert.

ARTICLE V.

MISCELLANEOUS

5.1 Termination. This Agreement shall automatically terminate if the Closing has
not been consummated on or before November 30, 2012; provided, however, that no
such termination will affect the right of any party to sue for any breach by any
other party (or parties). Notwithstanding the foregoing, the Company and each
Purchaser, with respect to such Purchaser only and without any effect whatsoever
on the obligations between the Company and any other Purchaser, may, by mutual
written agreement, extend the term of this Agreement beyond November 30, 2012.

5.2 Fees and Expenses. Except as expressly set forth in this Section 5.2 to the
contrary, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of the Transaction Documents. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and any exercise
notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.
Notwithstanding the foregoing, the Company shall reimburse (a) the Lead
Purchaser for its reasonable and documented fees and disbursements of
O’Melveny & Myers LLP, in an amount not to exceed $150,000 in the aggregate and
(b) the Second Lead Purchaser for its reasonable and documented consultant fees,
in an amount not to exceed $15,000 in the aggregate; provided that in the event
either such Purchaser fails to consummate the transaction contemplated hereby
when the Company has satisfied each of the conditions to Closing set forth in
Section 2.3(b) and complied with Sections 2.3(c) and 2.3(d), the Company shall
have no obligation to reimburse the fees of such Purchaser.

5.3 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties solely with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, solely with respect to such
matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules. For the avoidance of doubt, the parties acknowledge and
agree that each of the confidentiality agreements entered into prior to the date
hereof between any Purchaser and the Company is superseded by entry into this
Agreement and the parties hereby agree that each such agreement shall be deemed
terminated in its entirety and of no further force or effect, in each case
effective as of the execution of this Agreement by the Company and the
applicable Purchaser who is a counterparty to such agreement (or an Affiliate of
such Purchaser).

 

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5.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of: (a) the date of transmission, if such
notice or communication is delivered via facsimile or e-mail at the facsimile
number or e-mail address set forth on the signature pages attached hereto prior
to 5:30 p.m. (Eastern time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
or e-mail at the facsimile number or e-mail address set forth on the signature
pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m.
(Eastern time) on any Trading Day, (c) the second (2nd) Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier
service or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as set
forth on the signature pages attached hereto.

5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed by the Company and
the Purchasers purchasing at least 70% of the Units at Closing; provided,
however, that (a) if any amendment or waiver of this Agreement adversely and
directly affects the rights of any Purchaser in a materially adverse and
different manner than the other Purchasers, such amendment or waiver shall also
require the written consent of such adversely affected Purchaser, and (b) with
respect to any amendment or waiver of Section 5.1, or that changes the Per Share
Purchase Price or Subscription Amount of any Purchaser, such amendment or waiver
shall require the written consent of a Purchaser in order to bind such
Purchaser. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right. Any amendment or waiver effected in accordance with this paragraph shall
be binding upon each Purchaser and the Company. Notwithstanding the foregoing,
additional Persons purchasing Units under this Agreement may become parties as
Purchasers under this Agreement, by executing a counterpart of this Agreement,
without any amendment of this Agreement pursuant to this Section 5.5 or any
consent or approval of any other Purchaser other than the Lead Purchaser.

5.6 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

5.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger).
Prior to the Closing Date, no Purchaser may assign any or all of its rights
under this Agreement to any Person without the prior written consent of the
Company. If, after the Closing Date, any Purchaser is permitted to assign any or
all of its rights under this Agreement to any Person to whom such Purchaser
assigns or transfers any Securities, such transferee shall agree in writing to
be bound, with respect to the transferred Securities, by the provisions of the
Transaction Documents that apply to the “Purchasers.”

 

25

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5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.4.

5.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective Affiliates) shall be commenced exclusively in the state and federal
courts sitting in the State of Delaware. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the State of Delaware for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.

5.10 Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities, provided, however, that the
representations and warranties of the Company contained herein shall terminate
with respect to a Purchaser when such Purchaser no longer holds any Securities.

5.11 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to each other party, it being understood that the parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

5.12 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

 

26

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5.13 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The applicant
for a new certificate or instrument under such circumstances shall also execute
a customary affidavit and pay any reasonable third-party costs (including
customary indemnity) associated with the issuance of such replacement
Securities.

5.14 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.

5.15 Independent Nature of Purchasers’ Obligations and Rights. The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto
or thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in its review and negotiation of the Transaction
Documents. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company
and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.

5.16 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

27

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5.17 Construction. The parties agree that each of them and/or their respective
counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments thereto. In
addition, each and every reference to share prices and shares of Preferred Stock
or Common Stock in any Transaction Document shall be subject to adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Preferred Stock or Common Stock that occur after the
date of this Agreement.

5.18 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

5.19 Exercise Procedures. The form of Notice of Exercise included in the
Warrants sets forth the totality of the procedures required of each of the
Purchasers in order to exercise their respective Warrants. No legal opinion or
additional other information or instructions shall be required of any of the
Purchasers to exercise their respective Warrants. The Company shall honor
exercises of the Warrants and shall deliver Warrant Shares in accordance with
the terms, conditions and time periods set forth in the Warrants.

(Signature Pages Follow)

 

28

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

ALIMERA SCIENCES, INC.    Address for Notice: By:  

/s/ C. Daniel Myers

   6120 Windward Parkway, Suite 290      Name: C. Daniel Myers    Alpharetta, GA
30005      Title: Chief Executive Officer    Facsimile: With a copy to (which
shall not constitute notice):    Email:

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

29

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[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser:

   PALO ALTO INVESTORS, LLC Signature of Authorized Signatory of Purchaser:   

/s/ Scott R. Smith

Name of Authorized Signatory:   

Scott R. Smith

Title of Authorized Signatory:   

VP, Chief Compliance Officer

Email Address of Authorized Signatory:   

ssmith@pa-investors.com

Facsimile Number of Authorized Signatory:   

(650) 325-5028

Address for Notice to Purchaser:   

Palo Alto Investors, LLC

Attn: Scott Smith

470 University Avenue

Palo Alto, California 94301

   With a copy to:   

O’Melveny & Myers LLP

Two Embarcadero Center, 28th Floor

San Francisco, CA 94111

Attention: Paul Scrivano, Esq.

Fax: (415) 984-8701

 

Address for Delivery of Warrants to Purchaser (if not same as address for
notice):

 

  

 

  

 

   Subscription Amount:  $  

24,000,000

  

 

Shares*:   

600,000

   (DWAC Information Below)

 

Name and Contact for Broker:  

 

    

 

  

 

Broker No.:   

 

   Account No.:   

 

  

--------------------------------------------------------------------------------

Account Holder:   

 

   Warrant Shares*:   

180,000

  

 

EIN Number:   

 

  

 

* To be completed at Closing

--------------------------------------------------------------------------------

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser:

   SOFINNOVA VENTURE PARTNERS VIII, L.P.    By: Sofinnova Management VIII,
L.L.C., its General Partner Signature of Authorized Signatory of Purchaser:   

/s/ Garheng Kong

Name of Authorized Signatory:   

Garheng Kong

Title of Authorized Signatory:   

Managing Member

Email Address of Authorized Signatory:   

garheng@sofinnova.com

Facsimile Number of Authorized Signatory:   

(650) 322-2037

Address for Notice to Purchaser:   

Sofinnova Venture Partners VIII, L.P.

2800 Sand Hill Road, Suite 150

Menlo Park, CA 94025

Attention: Hooman Shahlavi

Fax: (650) 322-2037

   With a copy to:   

O’Melveny & Myers LLP

Two Embarcadero Center, 28th Floor

San Francisco, CA 94111

Attention: Paul Scrivano, Esq.

Fax: (415) 984-8701

 

Address for Delivery of Warrants to Purchaser (if not same as address for
notice):

 

  

 

  

 

   Subscription Amount:  $  

10,000,000

  

 

Shares*:   

250,000

   (DWAC Information Below)

 

Name and Contact for Broker:  

 

 

--------------------------------------------------------------------------------

 

 

Broker No.:                                                                     
                        Account No.:                           
                                                               
Account Holder:                          
                                                          
Warrant Shares*:75,000                         
                                               
EIN Number:                                                                     
                      

 

* To be completed at Closing

 

--------------------------------------------------------------------------------

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser:   

GROWTH EQUITY OPPORTUNITIES FUND III, LLC

 

By: New Enterprise Associates 14, L.P., its

sole member

By: NEA Partners 14, L.P., its general partner

By: NEA 14 GP, LTD, its general partner

Signature of Authorized Signatory of Purchaser:   

/s/ Jake R. Nunn

Name of Authorized Signatory:   

Jake R. Nunn

Title of Authorized Signatory:   

Assistant Vice President

Email Address of Authorized Signatory:   

jnunn@nea.com

Facsimile Number of Authorized Signatory:   

 

Address for Notice to Purchaser:   

New Enterprise Associates 14, L.P.

New Enterprise Associates

2855 Sand Hill Road

Menlo Park, CA 94025

Ph: 650-854-9499

Attention: Frank M. Torti, MD

Email: ftorti@nea.com

 

With a copy to:

 

New Enterprise Associates

1954 Greenspring Drive, Suite 600

Timonium, MD 21093

Attention: Louis S. Citron, Chief Legal Officer

Email: lcitron@nea.com

Fax: 410-842-4100

 

34

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and

Proskauer Rose LLP

 

One International Place

Boston, MA 02110

Attention: Ori Solomon

email: osolomon@proskauer.com

Fax: 617-526-9899

 

Address for Delivery of Warrants to Purchaser (if not same as address for
notice):

 

 

 

 

 

  Subscription Amount: $6,000,000                                       
                                  Shares*:
150,000                                              (DWAC Information Below)  

 

Name and Contact for Broker:             

 

Broker No.:                                                                    
                        Account No.:                         
                                                                 Account
Holder:                                        
                                            Warrant
Shares*:45,000                                      
                                 EIN
Number:                                        
                                                 

 

* To be completed at Closing

 

35

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EXHIBIT A

PREFERRED STOCK PURCHASE WARRANT

--------------------------------------------------------------------------------

EXHIBIT B

MANAGEMENT RIGHTS LETTER

--------------------------------------------------------------------------------

EXHIBIT C

COMPANY COUNSEL OPINION

--------------------------------------------------------------------------------

EXHIBIT D-1

ELECTION OF CONVERSION NOTICE

--------------------------------------------------------------------------------

EXHIBIT D-2

OPINION