Exhibit 10.2
FIRST LOAN MODIFICATION AGREEMENT
(WORKING CAPITAL LINE OF CREDIT)
This First Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of May 16, 2011, by and between SILICON VALLEY BANK, a
California corporation and with a loan production office located at 3353
Peachtree Road, NE, Suite M-10, Atlanta, GA 30326 (“Bank”) and ALIMERA SCIENCES,
INC., a Delaware corporation with its chief executive office located at 6120
Windward Parkway, Suite 290, Alpharetta, Georgia 30005 (“Borrower”).
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a loan arrangement dated as of October 14, 2010,
evidenced by, among other documents, a certain Loan and Security Agreement
(Working Capital Line of Credit) dated as of October 14, 2010, between Borrower
and Bank (as amended, the “Loan Agreement”). Capitalized terms used but not
otherwise defined herein shall have the same meaning as in the Loan Agreement.
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the (a)
Collateral as described in the Loan Agreement, and (b) the Intellectual Property
Collateral as described in that certain Intellectual Security Agreement dated as
of October 14, 2010, between Bank and Borrower (the “IP Agreement”, and together
with the Loan Agreement and any other collateral security granted to Bank, the
“Security Documents”).
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the “Existing
Loan Documents”.
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modifications to Loan Agreement.

  1   The Loan Agreement shall be amended by deleting the following, appearing
as Section 2.2.6 (a) thereof, in its entirety:

“(a) Borrower shall direct each Account Debtor (and each depository institution
where proceeds of Accounts are on deposit) to remit payments with respect to the
Accounts to a lockbox account established with Bank or to wire transfer payments
to a cash Collateral Account that Bank controls (collectively, the “Lockbox”).
It will be considered an immediate Event of Default if the Lockbox is not set-up
and operational on or before January 15, 2011.”

      and inserting in lieu thereof the following:

“(a) Upon the earlier of: (i) the initial Advance, or (ii) September 30, 2011,
Borrower shall direct each Account Debtor (and each depository institution where
proceeds of Accounts are on deposit) to remit payments with respect to the
Accounts to a lockbox account established with Bank or to wire transfer payments
to a cash Collateral Account that Bank controls (collectively, the “Lockbox”).
It will be considered an immediate Event of Default if the Lockbox is not set-up
and operational upon the earlier of (i) the initial Advance, or
(ii) September 30, 2011.”

 

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  2   The Loan Agreement shall be amended by deleting the following, appearing
as Section 2.2.6 (e) thereof, in its entirety:

“(e) Notwithstanding anything herein to the contrary, Bank shall waive any and
all fees and/or expenses related to the LockBox incurred or arising prior to the
earlier of: (i) the initial Advance, or (ii) January 31, 2011.”

      and inserting in lieu thereof the following:

“(e) Notwithstanding anything herein to the contrary, Bank shall waive any and
all fees and/or expenses related to the Lockbox incurred or arising prior to the
earlier of: (i) the initial Advance, or (ii) September 30, 2011.”

  3   The Loan Agreement shall be amended by deleting the following, appearing
as Section 2.2.8 thereof, in its entirety:

“2.2.8 Unused Line Facility Fee. As compensation for Bank’s maintenance of
sufficient funds available for such purpose, Bank shall have earned a fee (the
“Unused Line Facility Fee”), which fee shall be paid monthly, in arrears, on a
calendar year basis on the first day of each month, in an amount equal to
(a) commencing on the earlier to occur of (i) the Funding Date (as defined in
the Term Loan Agreement) of Term Loan B (as defined in the Term Loan Agreement)
or (ii) August 1, 2011 (the earlier to occur of (i) or (ii) being referred to
herein as the “Unused Line Facility Fee Commencement Date”), and thereafter
until the date that is one (1) year after the Unused Line Facility Fee
Commencement Date, 0.0313% of the unused portion of the Availability, as
determined by Bank, and (b) on and after the date that is one (1) year from the
Unused Line Facility Fee Commencement Date, 0.0208 of the unused portion of the
Availability, as determined by Bank. Borrower shall not be entitled to any
credit, rebate or repayment of any Unused Line Facility Fee previously earned by
Bank pursuant to this Section 2.2.8 notwithstanding any termination of the
within Agreement, or suspension or termination of Bank’s obligation to make
Advances hereunder.”

      and inserting in lieu thereof the following:

“2.2.8 Unused Line Facility Fee. As compensation for Bank’s maintenance of
sufficient funds available for such purpose, Bank shall have earned a fee (the
“Unused Line Facility Fee”), which fee shall be paid monthly, in arrears, on a
calendar year basis on the first day of each month, in an amount equal to
(a) commencing on the earlier to occur of (i) the Funding Date (as defined in
the Term Loan Agreement) of Term Loan B (as defined in the Term Loan Agreement)
or (ii) December 31, 2011 (the earlier to occur of (i) or (ii) being referred to
herein as the “Unused Line Facility Fee Commencement Date”), and thereafter
until the date that is one (1) year after the Unused Line Facility Fee
Commencement Date, 0.0313% of the unused portion of the Availability, as
determined by Bank, and (b) on and after the date that is one (1) year from the
Unused Line Facility Fee Commencement Date, 0.0208 of the unused portion of the
Availability, as determined by Bank. Borrower shall not be entitled to any
credit, rebate or repayment of any Unused Line Facility Fee previously earned by
Bank pursuant to this Section 2.2.8 notwithstanding any termination of the
within Agreement, or suspension or termination of Bank’s obligation to make
Advances hereunder.”

 

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  4   The Loan Agreement shall be amended by deleting the following text
appearing in Section 4.1 thereof:

“4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the
payment and performance in full of all of the Obligations and the performance of
each of Borrower’s duties under the Loan Documents, a continuing security
interest in, and pledges to Bank, the Collateral, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof,
provided, that solely with respect to Borrower’s Intellectual Property, such
security interest shall not be effective unless or until an IP Lien Event has
occurred. Borrower represents, warrants, and covenants that the security
interest granted herein shall be a first priority security interest in the
Collateral, subject only to Permitted Liens that may have priority to Bank’s
Lien to the extent permitted under this Agreement. If Borrower shall at any
time, acquire a commercial tort claim, Borrower shall promptly notify Bank in a
writing signed by Borrower of the general details thereof and grant to Bank in
such writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
satisfactory to Bank.”
and inserting in lieu thereof the following:
“4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the
payment and performance in full of all of the Obligations and the performance of
each of Borrower’s duties under the Loan Documents, a continuing security
interest in, and pledges to Bank, the Collateral, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof.
Borrower represents, warrants, and covenants that the security interest granted
herein shall be a first priority security interest in the Collateral, subject
only to Permitted Liens that may have priority to Bank’s Lien to the extent
permitted under this Agreement. If Borrower shall at any time, acquire a
commercial tort claim, Borrower shall promptly notify Bank in a writing signed
by Borrower of the general details thereof and grant to Bank in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
Bank.”

  5   The Loan Agreement shall be amended by deleting the following provision
appearing in Section 6.2(h) thereof, in its entirety:

“ (h) Prompt written notice of (i) any material change in the composition of the
Intellectual Property, (ii) the registration of any Copyright, including any
subsequent ownership right of Borrower in or to any Copyright, Patent or
Trademark not shown in the IP Agreement, and (iii) Borrower’s knowledge of an
event that would reasonably be expected to materially and adversely affect the
value of the Intellectual Property. Upon the occurrence of an IP Lien Event,
Borrower shall deliver to Bank an updated intellectual property security
agreement (in form and substance reasonably acceptable to Bank in its
discretion) in favor of Bank, covering all of the then-existing IP Collateral.”
and inserting in lieu thereof the following:
“ (h) Prompt written notice of (i) any material change in the composition of the
Intellectual Property, (ii) the registration of any Copyright, including any
subsequent ownership right of Borrower in or to any Copyright, Patent or
Trademark not shown in the IP Agreement, and (iii) Borrower’s knowledge of an
event that would reasonably be expected to materially and adversely affect the
value of the Intellectual Property.”

 

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  6   The Loan Agreement shall be amended by deleting the following, appearing
as Section 6.7 (a) thereof, in its entirety:

“(a) Borrower shall: (a) except as may be reasonably determined to be
appropriate by Borrower in the ordinary course of business, protect, defend and
maintain the validity and enforceability of its Intellectual Property;
(b) promptly advise Bank in writing of material infringements of its
Intellectual Property; and (c) not allow any Intellectual Property material to
Borrower’s business to be abandoned, forfeited or dedicated to the public
without Bank’s written consent. If Borrower (i) obtains any Patent, registered
Trademark or servicemark, registered Copyright, registered mask work, or any
pending application for any of the foregoing, whether as owner, licensee or
otherwise, or (ii) applies for any Patent or the registration of any Trademark
or servicemark, in the case of (i) or (ii) that is not included in the IP
Agreement, then Borrower shall promptly provide written notice thereof to Bank
and shall promptly execute such intellectual property security agreements (or
updates to the Exhibits to the IP Agreement if not filed at such time by Bank)
and other documents and take such other actions as Bank shall request in its
good faith business judgment to perfect and maintain a first priority perfected
security interest (which will be effective as provided herein) in favor of Bank
in such property. If Borrower decides to register any Copyrights or mask works
in the United States Copyright Office, that are not included in the IP
Agreement, then Borrower shall (a) prior to an IP Lien Event, concurrently
provide written notice thereof to Bank and update all Exhibits to the IP
Agreement, and (b) following the occurrence of an IP Lien Event: (x) provide
Bank with at least fifteen (15) days prior written notice of Borrower’s intent
to register such Copyrights or mask works together with a copy of the
application it intends to file with the United States Copyright Office
(excluding exhibits thereto); (y) execute an intellectual property security
agreement and such other documents and take such other actions as Bank may
request in its good faith business judgment to perfect and maintain a first
priority perfected security interest in favor of Bank in the Copyrights or mask
works intended to be registered with the United States Copyright Office; and
(z) record such intellectual property security agreement with the United States
Copyright Office promptly after with filing the Copyright or mask work
application(s) with the United States Copyright Office. Borrower shall promptly
provide to Bank copies of all applications that it files for Patents or for the
registration of Trademarks, servicemarks, Copyrights or mask works, together
with evidence of the recording of the intellectual property security agreement
necessary for Bank to perfect and maintain a first priority perfected security
interest in such property.”

      and inserting in lieu thereof the following:

“(a) Borrower shall: (a) except as may be reasonably determined to be
appropriate by Borrower in the ordinary course of business, protect, defend and
maintain the validity and enforceability of its Intellectual Property;
(b) promptly advise Bank in writing of material infringements of its
Intellectual Property; and (c) not allow any Intellectual Property material to
Borrower’s business to be abandoned, forfeited or dedicated to the public
without Bank’s written consent. If Borrower (i) obtains any Patent, registered
Trademark or servicemark, registered Copyright, registered mask work, or any
pending application for any of the foregoing, whether as owner, licensee or
otherwise, or (ii) applies for any Patent or the registration of any Trademark
or servicemark, in the case of (i) or (ii) that is not included in the IP
Agreement, then Borrower shall promptly provide written notice thereof to Bank
and

 

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shall promptly execute such intellectual property security agreements (or
updates to the Exhibits to the IP Agreement if not filed at such time by Bank)
and other documents and take such other actions as Bank shall request in its
good faith business judgment to perfect and maintain a first priority perfected
security interest (which will be effective as provided herein) in favor of Bank
in such property. Prior to the occurrence of the IP Release Event, if Borrower
decides to register any Copyrights or mask works in the United States Copyright
Office, that are not included in the IP Agreement, then Borrower shall
(x) provide Bank with at least fifteen (15) days prior written notice of
Borrower’s intent to register such Copyrights or mask works together with a copy
of the application it intends to file with the United States Copyright Office
(excluding exhibits thereto); (y) execute an intellectual property security
agreement and such other documents and take such other actions as Bank may
request in its good faith business judgment to perfect and maintain a first
priority perfected security interest in favor of Bank in the Copyrights or mask
works intended to be registered with the United States Copyright Office; and
(z) record such intellectual property security agreement with the United States
Copyright Office promptly after with filing the Copyright or mask work
application(s) with the United States Copyright Office. Prior to the occurrence
of the IP Release Event, Borrower shall promptly provide to Bank copies of all
applications that it files for Patents or for the registration of Trademarks,
servicemarks, Copyrights or mask works, together with evidence of the recording
of the intellectual property security agreement necessary for Bank to perfect
and maintain a first priority perfected security interest in such property.”

  7   The Loan Agreement shall be amended by inserting the following new
Section 12.11, appearing immediately after Section 12.10 thereof:

“ 12.11 Release of Intellectual Property. Upon the occurrence of the IP Release
Event, provided that no Event of Default exists, the Collateral set forth in
Exhibit A hereto, shall be deemed amended to simultaneously replace Exhibit A
hereto in its entirety and inserting in lieu thereof Exhibit C attached hereto.
Borrower has granted to the Bank a continuing security interest in the assets
described in Exhibit C at all times hereunder. At Borrower’s sole cost and
expense, upon the occurrence of the IP Release Event, provided that no Event of
Default exists, Bank shall execute and deliver to Borrower all releases,
terminations, and other instruments as may be necessary or proper to release its
Liens in the Intellectual Property of Borrower, granted herein, including,
without limitation, UCC financing statement amendments and appropriate filings
with the U.S. Copyright Office and the U.S. Patent and Trademark Office.”

  8   The Loan Agreement shall be amended by deleting the following definitions
appearing in Section 13.1 thereof:

““IP Agreement” is that certain Intellectual Property Security Agreement
executed by Borrower to Bank dated as of the Effective Date, provided that such
Intellectual Property Security Agreement shall not be deemed delivered to Bank
or effective until the occurrence of an IP Lien Event.”

 

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““IP Collateral” is defined on Exhibit A.”
““IP Release Event” has occurred when with respect to an IP Lien Event, on any
date, (a) the sum of Borrower’s unrestricted balance sheet cash and Cash
Equivalents in one or more Collateral Accounts over which Bank has obtained a
Control Agreement with respect to such Collateral Account, plus (b) Excess
Availability is equal to or greater than the product of (y) twelve (12) times
(z) the Monthly Cash Burn Amount.”
““Maturity Date” is October 31, 2013.”

      and inserting in lieu thereof the following:

““IP Agreement” is that certain Intellectual Property Security Agreement
executed by Borrower to Bank dated as of the Effective Date, provided that such
Intellectual Property Security Agreement shall be deemed inoperative and of no
force or effect following the occurrence of an IP Release Event.”
““IP Collateral” is defined on Exhibit C.”
““IP Release Event” means written confirmation by Bank that Borrower has
achieved positive EBITDA for two (2) consecutive calendar quarters.”
““Maturity Date” is April 30, 2014.”

  9   The Loan Agreement shall be amended by deleting the following definition
appearing in Section 13.1 thereof:

““IP Lien Event” has occurred when on any date, (a) the sum of Borrower’s
unrestricted balance sheet cash and Cash Equivalents in one or more Collateral
Accounts over which Bank has obtained a Control Agreement with respect to such
Collateral Account, (b) plus Excess Availability is less than the product of
(y) six (6) times (z) the Monthly Cash Burn Amount. Upon the occurrence of an IP
Lien Event, such IP Lien Event shall stay in effect until the occurrence of an
IP Release Event.”

  10   The Loan Agreement shall be amended by substituting the Collateral
description appearing on Exhibit A thereto for the Collateral description on
Schedule 1 hereto. Borrower hereby grants Bank, to secure the payment and
performance in full of all of the Obligations and the performance of each of
Borrower’s duties under the Existing Loan Documents, a continuing security
interest in, and pledges to Bank, the Collateral, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof.

  11   The Loan Agreement shall be amended by adding a new Exhibit C to the Loan
Agreement, attached as Schedule 2 hereto.

4. FEES. Borrower shall reimburse Bank for all legal fees and expenses incurred
in connection with this amendment to the Existing Loan Documents.

 

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5. RATIFICATION OF IP AGREEMENT. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and conditions of the IP Agreement, and
acknowledges, confirms and agrees that said IP Agreement contains an accurate
and complete listing of all Intellectual Property Collateral as defined in said
IP Agreement, except as set forth on Exhibit C attached to the Secretary’s
Corporate Borrowing Certificate delivered to the Bank in connection herewith,
and shall remain in full force and effect.
6. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in a
certain Perfection Certificate dated as of October 14, 2010 between Borrower and
Bank, and acknowledges, confirms and agrees the disclosures and information
Borrower provided to Bank in the Perfection Certificate, except as set forth on
Exhibit D attached to the Secretary’s Corporate Borrowing Certificate delivered
to the Bank in connection herewith, has not changed, as of the date hereof.
7. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
8. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.
9. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.
10. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank’s agreement to modifications to the existing Obligations pursuant to this
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank
and Borrower to retain as liable parties all makers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker will be
released by virtue of this Loan Modification Agreement.
11. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank.
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This Loan Modification Agreement is executed as of the date first written above.

                      BORROWER:       BANK:    
 
                    ALIMERA SCIENCES, INC.       SILICON VALLEY BANK    
 
                   
By:
  /s/ Richard S. Eiswirth, Jr.       By:   /s/ M. Scott McCarty    
Name:
 
 
Richard S. Eiswirth, Jr.       Name:  
 
Scott McCarty    
Title:
  Chief Operating Officer and Chief Financial Officer       Title:  
 
Vice President  

 

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Schedule 1
EXHIBIT A
The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles, commercial tort claims, documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), securities, and all
other investment property, supporting obligations, and financial assets, whether
now owned or hereafter acquired, wherever located; and
all Borrower’s Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

 

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Schedule 2
EXHIBIT C — COLLATERAL DESCRIPTION
The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles (except as provided below), commercial
tort claims, documents, instruments (including any promissory notes), chattel
paper (whether tangible or electronic), cash, deposit accounts, certificates of
deposit, fixtures, letters of credit rights (whether or not the letter of credit
is evidenced by a writing), securities, and all other investment property,
supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and
all Borrower’s Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.
Notwithstanding the foregoing, the Collateral does not include any of the
following, whether now owned or hereafter acquired except to the extent that a
judicial authority (including a U.S. Bankruptcy Court) would hold that it is
necessary under applicable law to have a security interest in any of the
following in order to have a perfected lien and security interest in and to the
“IP Proceeds” defined below: any copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished; any patents, patent
applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same; trademarks, trade names, service marks, mask works, rights of use of any
name or domain names and, to the extent permitted under applicable law, any
applications therefor, whether registered or not; and operating manuals, trade
secret rights, clinical and non-clinical data, rights to unpatented inventions
(the “IP Collateral”); provided, however, the Collateral at all times shall
include all Accounts, license and royalty fees and other revenues, proceeds, or
income arising out of or relating to any of the foregoing and any claims for
damage by way of any past, present, or future infringement of any of the
foregoing (collectively, the “IP Proceeds”).
Pursuant to the terms of a certain negative pledge arrangement with Bank,
Borrower has agreed not to encumber any of its Intellectual Property without
Bank’s prior written consent.