exv10w1






Exhibit 10.1





LOAN AND SECURITY AGREEMENT




     THIS LOAN AND SECURITY AGREEMENT (this “Agreement”)
dated as of October 14, 2010 (the “Effective Date”)
among MIDCAP FUNDING III, LLC, a Delaware limited
liability company, with an office located at 7735
Old Georgetown Road, Suite 400, Bethesda, Maryland
20814 (“MidCap”), and the other Lenders party
hereto from time to time including without
limitation, MidCap, and SILICON VALLEY BANK, a
California corporation and with a loan production
office located at 3353 Peachtree Road, NE, Suite
M-10, Atlanta, GA 30326 (“SVB”), SVB in its
capacity as agent for the Lenders (the “Agent”),
SVB and MidCap in their capacity as joint lead
arrangers (in such capacity, the “Arrangers”), and
ALIMERA SCIENCES, INC. , a Delaware corporation
(“Borrower”) provides the terms on which the
Lenders shall lend to Borrower and Borrower shall
repay the Lenders. The parties agree as follows:



     1 ACCOUNTING AND OTHER TERMS



     Accounting terms not defined in this Agreement
shall be construed following GAAP. Calculations
and determinations must be made following GAAP.
Notwithstanding the foregoing, all financial
calculations (whether for pricing, covenants, or
otherwise) shall be made with regard to Borrower
only and not on a consolidated basis. The term
“financial statements” includes the notes and
schedules. The terms “including” and “includes”
always mean “including (or includes) without
limitation,” in this or any Loan Document.
Capitalized terms not otherwise defined in this
Agreement shall have the meanings set forth in
Section 14. All other terms contained in this
Agreement, unless otherwise indicated, shall have
the meaning provided by the Code to the extent
such terms are defined therein.



     2 LOAN AND TERMS OF PAYMENT




     2.1 Promise to Pay. Borrower hereby unconditionally promises to pay to Agent, for payment to
each Lender in accordance with its respective Pro Rata Share, the outstanding principal amount of
all Credit Extensions made by the Lenders and accrued and unpaid interest thereon and any other
amounts due hereunder as and when due in accordance with this Agreement.




     2.1.1 Term Loans.




          (a) Availability. Subject to the terms and conditions of this Agreement, the Lenders
agree, severally and not jointly, to make term loans to Borrower in an aggregate amount up to
Twelve Million Five Hundred Thousand Dollars ($12,500,000.00) according to each Lender’s Term Loan
Commitment as set forth on Schedule 1.1 hereto. The Term Loans shall be available in two (2)
tranches. The first tranche (“Term A Loan”) shall be in an amount equal to Six Million Two Hundred
Fifty Thousand Dollars ($6,250,000.00) and shall be advanced on the Effective Date. The second
tranche (“Term B Loan”; Term A Loan and Term B Loan are each referred to herein individually as a
“Term Loan” and collectively as the “Term Loans”) shall be made available by the Lenders during the
Term B Loan Draw Period in an amount equal to Six Million Two Hundred Fifty Thousand Dollars
($6,250,000.00) in a single advance. In the event Borrower does not request the Term B Loan during
the Term B Loan Draw Period, the Lenders may, in their discretion, advance the Term B Loan to
Borrower on July 31, 2011, without such request by Borrower, after which advance Borrower will be
deemed to have received said Term Loan B for all purposes hereafter. Notwithstanding anything to
the contrary contained in the foregoing or anywhere else in this Agreement or any other Loan
Document, (x) the Lenders shall not have any obligation to make any advances under the Term B Loan
Commitments until the commencement of the Term B Loan Draw Period, and from the Effective Date
until the commencement of the Term B Loan Draw Period, for all purposes under this Agreement, the
Term B Loan Commitments and the Term B Loan Commitment of each Lender shall be deemed to be zero
($0), and (y) from the Effective Date until the commencement of the Term B Loan Draw Period, for
all purposes under this Agreement, the Term Loan Commitments shall be deemed to be Term A Loan
Commitments and the Term Loan Commitment of each Lender shall be deemed to be such Lender’s Term A
Loan Commitment. Any portion of the Term B Loan Commitments not funded as of the close of business
on the date which is five (5) Business Days after the end of the Term B Loan Draw Period shall
thereupon automatically be terminated and the Term B Loan Commitment of each Lender as of such date
shall be reduced by such Lender’s Pro Rata Share of such total reduction in the Term B Loan
Commitments. Each Lender’s obligation to fund the applicable Term Loan shall



 









 







be limited to such Lender’s Term A Loan Commitment or Term B Loan Commitment, as applicable,
and no Lender shall have any obligation to fund any portion of any Term Loan required to be funded
by any other Lender, but not so funded. Borrower shall not have any right to reborrow any portion
of any Term Loan that is repaid or prepaid from time to time.




          (b) Repayment. Commencing on August 31, 2011, and continuing on the Payment Date of
each successive month thereafter through and including the Term Loan Maturity Date, Borrower shall
make consecutive monthly payments of principal in respect of the Term A Loans to each Lender, as
calculated by Agent in accordance with: (1) the amount of such Lender’s Term A Loan, (2) the
effective rate of interest, as determined in Section 2.2, and (3) a straight-line amortization
schedule ending on the Term Loan Maturity Date. Commencing on the later of (i) August 31, 2011
and (ii) the first (1st) Payment Date following the Funding Date of the Term B Loans,
and continuing on the Payment Date of each successive month thereafter through and including the
Term Loan Maturity Date, Borrower shall make consecutive monthly payments of principal in respect
of the Term B Loans to each Lender, as calculated by Agent in accordance with: (1) the amount of
such Lender’s Term B Loan, (2) the effective rate of interest, as determined in Section 2.2, and
(3) a straight-line amortization schedule ending on the Term Loan Maturity Date. All unpaid
principal and accrued interest with respect to the Term Loans is due and payable in full on the
Term Loan Maturity Date. The Term Loans may be prepaid only in accordance with Sections 2.1.1(c)
and 2.1.1(d).




          (c) Mandatory Prepayments. If the Term Loans are accelerated following the
occurrence of an Event of Default, Borrower shall immediately pay to Agent, for payment to each
Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all
outstanding principal of the Term Loans, plus accrued and unpaid interest thereon, (ii) the Final
Payment, (iii) the Prepayment Fee, plus (iv) all other sums that shall have become due and payable,
including Lenders’ Expenses.




          (d) Permitted Prepayment of Loans. Borrower shall have the option to prepay all, but
not less than all, of the Term Loans advanced by the Lenders under this Agreement, provided
Borrower (i) provides written notice to Agent of its election to prepay the Term Loans at least
thirty (30) days prior to such prepayment, and (ii) pays to Agent, for payment to each Lender in
accordance with its respective Pro Rata Share, on the date of such prepayment, an amount equal to
the sum of (A) all outstanding principal of the Term Loans, plus accrued interest thereon, (B) the
Final Payment, (C) the Prepayment Fee, and (D) all other sums that shall have become due and
payable, including Lenders’ Expenses.




     2.2 Payment of Interest on the Credit Extensions.




          (a) Interest Rate. Subject to Section 2.2(b), the principal amount outstanding under
the Term A Loans shall accrue interest at a fixed per annum rate equal to eleven and one-half
percent (11.50%), which interest shall be payable monthly. Subject to Section 2.2(b), the principal
amount outstanding under the Term B Loans shall accrue interest at a fixed per annum rate equal to
(a) in the event the Term B Loans are funded on or before February 28, 2011, eleven and one-half
percent (11.50%) or (b) in the event the Term B Loans are funded after February 28, 2011, twelve
percent (12.00%), which interest shall be payable monthly.




          (b) Default Rate. Immediately upon the occurrence and during the continuance of an
Event of Default, Obligations shall bear interest at a rate per annum which is four percentage
points per annum (4.00%) above the rate that is otherwise applicable thereto (the “Default Rate”)
unless the Required Lenders otherwise elect from time to time in their sole discretion to impose a
smaller increase. Payment or acceptance of the increased interest rate provided in this Section
2.2(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of the Lenders.




          (c) Computation; 360-Day Year. In computing interest, the date of the making of any
Credit Extension shall be included and the date of payment shall be excluded; provided, however,
that if any Credit Extension is repaid on the same day on which it is made, such day shall be
included in computing interest on such Credit Extension. Interest shall be computed on the basis
of a 360-day year for the actual number of days elapsed.




          (d) Debit of Accounts. The Lenders may debit any of Borrower’s deposit accounts,
including the Designated Deposit Account, for (i) principal and interest payments when due or (ii)
any other



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amounts Borrower owes the Lenders when due. Agent shall promptly notify Borrower when it
debits Borrower’s accounts. These debits shall not constitute a set-off.




          (e) Interest Payment Date. Commencing on the first (1st) Payment Date
following the Funding Date of the Term Loans, and continuing on the Payment Date of each successive
month thereafter through and including the Term Loan Maturity Date, Borrower shall make monthly
payments of interest in respect of the Term Loans, in arrears, to Agent, for payment to each Lender
in accordance with its respective Pro Rata Share and calculated as set forth above.




          (f) Maximum Lawful Rate. In no event shall the interest charged hereunder, with
respect to the notes (if any) or any other obligations of Borrower under any Loan Documents exceed
the maximum amount permitted under the Laws of the State of New York. Notwithstanding anything to
the contrary herein or elsewhere, if at any time the rate of interest payable hereunder or under
any note or other Loan Document (the “Stated Rate”) would exceed the highest rate of interest
permitted under any applicable Law to be charged (the “Maximum Lawful Rate”), then for so long as
the Maximum Lawful Rate would be so exceeded, the rate of interest payable shall be equal to the
Maximum Lawful Rate; provided, however, that if at any time thereafter the Stated Rate is less than
the Maximum Lawful Rate, Borrower shall, to the extent permitted by Law, continue to pay interest
at the Maximum Lawful Rate until such time as the total interest received is equal to the total
interest which would have been received had the Stated Rate been (but for the operation of this
provision) the interest rate payable. Thereafter, the interest rate payable shall be the Stated
Rate unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in which event
this provision shall again apply. In no event shall the total interest received by any Lender
exceed the amount which it could lawfully have received, had the interest been calculated for the
full term hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence, any Lender
has received interest hereunder in excess of the Maximum Lawful Rate, such excess amount shall be
applied to the reduction of the principal balance of such Lender’s applicable Credit Extension or
to other amounts (other than interest) payable hereunder, and if no such principal or other amounts
are then outstanding, such excess or part thereof remaining shall be paid to Borrower. In
computing interest payable with reference to the Maximum Lawful Rate applicable to any Lender, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number
of days in the year in which such calculation is made.




     2.3 Fees. Borrower shall pay to Agent for the account of Lenders:




          (a) Origination Fee. A non-refundable origination fee (the “Origination Fee”) to be
shared among the Lenders pursuant to their respective Commitment Percentages in an amount equal to
one-half of one percent (0.50%) of the Term Loan Commitments;




          (b) Final Payment. The Final Payment, when due hereunder, to be shared among the
Lenders in accordance with their respective Pro Rata Shares;




          (c) Prepayment Fee. The Prepayment Fee, when due hereunder, to be shared among the
Lenders in accordance with their respective Pro Rata Shares;




          (d) Lenders’ Expenses. All Lenders’ Expenses (including reasonable attorneys’ fees
and expenses for documentation and negotiation of this Agreement) incurred through and after the
Effective Date, when due (and in the absence of any other due date specified herein, such Lenders’
Expenses shall be due upon demand); and




          (e) Good Faith Deposit. Borrower has paid to Agent a deposit of Fifty Thousand
Dollars ($50,000.00) (the “Good Faith Deposit”) to initiate Lenders’ due diligence review process.
Any portion of the Good Faith Deposit not utilized to pay Lenders’ Expenses will be applied to the
Origination Fee.




     2.4 Secured Promissory Notes. Each Term Loan shall be evidenced by a Secured Promissory Note
in the form attached as Exhibit D hereto (each a “Secured Promissory Note”), and shall be repayable
as set forth herein. Borrower irrevocably authorizes each Lender to make or cause to be made, on
or about the Funding Date of any Term Loan or at the time of receipt of any payment of principal on
such Lender’s Secured Promissory Note, an



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appropriate notation on such Lender’s Secured Promissory Note Record reflecting the making of
such Term Loan or (as the case may be) the receipt of such payment. The outstanding amount of each
Term Loan set forth on such Lender’s Secured Promissory Note Record shall be prima facie evidence
of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any
error in so recording, any such amount on such Lender’s Secured Promissory Note Record shall not
limit or otherwise affect the obligations of Borrower hereunder or under any Secured Promissory
Note to make payments of principal of or interest on any Secured Promissory Note when due. Upon
receipt of an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation
of its Secured Promissory Note, Borrower shall issue, in lieu thereof, a replacement Secured
Promissory Note in the same principal amount thereof and of like tenor.




     2.5 Payments. All payments (including prepayments) to be made by Borrower under any Loan
Document shall be made in immediately available funds in U.S. Dollars, without setoff, recoupment
or counterclaim, before 12:00 p.m. Eastern time on the date when due. Payments of principal and/or
interest received after 12:00 p.m. Eastern time are considered received at the opening of business
on the next Business Day. When a payment is due on a day that is not a Business Day, the payment
shall be due the next Business Day, and additional fees or interest, as applicable, shall continue
to accrue until paid.



     3 CONDITIONS OF LOANS




     3.1 Conditions Precedent to Initial Credit Extension. Each Lender’s obligation to make the
initial Credit Extension is subject to the condition precedent that Agent shall consent to or shall
have received, in form and substance satisfactory to Agent and Lenders, such documents, and
completion of such other matters, as Agent may reasonably deem necessary or appropriate, including,
without limitation:




          (a) delivery of the SVB Loan Agreement and completion of all conditions precedent thereto;




          (b) duly executed original signatures to the Loan Documents to which Borrower is a party;




          (c) duly executed original signatures to the Warrants;




          (d) duly executed original signatures to the Control Agreement[s];




          (e) duly executed original Secured Promissory Notes in favor of each Lender with a face amount
equal to such Lender’s Term Loan Commitment;




          (f) the Operating Documents of Borrower and good standing certificates of Borrower certified
by the Secretary of State of the State of Delaware as of a date no earlier than thirty (30) days
prior to the Effective Date;




          (g) good standing certificates dated as of a date no earlier than thirty (30) days prior to
the Effective Date to the effect that Borrower is qualified to transact business in all states in
which the nature of Borrower’s business so requires;




          (h) Secretary’s Certificate with completed Borrowing Resolutions for Borrower;




          (i) certified copies, dated as of a recent date, of financing statement searches, as Agent
shall request, accompanied by written evidence (including any UCC termination statements) that the
Liens indicated in any such financing statements either constitute Permitted Liens or have been or,
in connection with the initial Credit Extension, will be terminated or released;




          (j) the Perfection Certificate executed by Borrower;




          (k) a legal opinion of Borrower’s counsel dated as of the Effective Date together with the
duly executed original signatures thereto;



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          (l) copies of any existing registration rights agreement/investors’ rights agreement or
similar agreements and any amendments thereto;




          (m) evidence satisfactory to Agent that the insurance policies required by Section 6.5 hereof
are in full force and effect, together with appropriate evidence showing loss payable and/or
additional insured clauses or endorsements in favor of Agent, for the ratable benefit of Lenders;
and




          (n) payment of the fees and Lenders’ Expenses then accrued as specified in Section 2.3 hereof.




     3.2 Conditions Precedent to all Credit Extensions. The obligation of each Lender to make each
Credit Extension, including the initial Credit Extension, is subject to the following conditions
precedent:




          (a) timely receipt by Agent of an executed Payment/Advance Form in the form of Exhibit B
attached hereto;




          (b) the representations and warranties in Section 5 shall be true, correct and complete in all
material respects on the date of the Payment/Advance Form and on the Funding Date of each Credit
Extension; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date, and no
Default or Event of Default shall have occurred and be continuing or result from the Credit
Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the
representations and warranties in Section 5 remain true, accurate and complete in all material
respects; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date; and




          (c) in such Lender’s sole discretion, there has not been any material adverse change in the
business, results of operation, financial condition or the prospect of repayment of the
Obligations, or any material adverse deviation by Borrower from the most recent SEC Reports or
financial projections delivered to Agent pursuant to Section 6.2(a)(i) herein.




     3.3 Covenant to Deliver. Borrower agrees to deliver to Agent each item required to be
delivered to Agent under this Agreement as a condition precedent to any Credit Extension. Borrower
expressly agrees that a Credit Extension made prior to the receipt by Agent of any such item shall
not constitute a waiver by the Lenders of Borrower’s obligation to deliver such item, and the
making of any such Credit Extension in the absence of a required item shall be made in each
Lender’s sole discretion.




     3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable
conditions to the making of a Term Loan set forth in this Agreement, to obtain a Term Loan,
Borrower shall notify Agent (which notice shall be irrevocable) by electronic mail, facsimile, or
telephone by 4:00 P.M. Eastern time three (3) Business Days prior to the Funding Date the Term Loan
is to be made. Together with any such electronic or facsimile notification, Borrower shall deliver
to Agent by electronic mail or facsimile a completed Payment/Advance Form executed by a Responsible
Officer or his or her designee. Upon receipt of a Payment/Advance Form, Agent shall promptly
provide a copy of the same to each Lender. Agent may rely on any telephone notice given by a
person whom Agent reasonably believes is a Responsible Officer or designee. Agent shall credit Term
Loans to the Designated Deposit Account.



     4 CREATION OF SECURITY INTEREST




     4.1 Grant of Security Interest. Borrower hereby grants Agent, for the ratable benefit of
Lenders, to secure the payment and performance in full of all of the Obligations, a continuing
security interest in, and pledges to Agent, for the ratable benefit of the Lenders, 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 IP



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Collateral, 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
is and shall at all times continue to be a first priority perfected security interest in the
Collateral, subject only to Permitted Liens that may have priority to Agent’s Lien to the extent
permitted under this Agreement. If Borrower shall acquire a commercial tort claim (as defined in
the Code), Borrower shall promptly notify Agent in a writing signed by Borrower of the general
details thereof (and further details as may be required by Agent) and grant to Agent, for the
ratable benefit of the Lenders, 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
reasonably satisfactory to Agent.




     4.2 Authorization to File Financing Statements; Termination of Financing Statements. Borrower
hereby authorizes Agent to file financing statements, without notice to Borrower, with all
appropriate jurisdictions to perfect or protect Agent’s and each Lender’s interest or rights
hereunder, including a notice that any disposition of the Collateral, by either Borrower or any
other Person, shall be deemed to violate the rights of Agent and the Lenders under the Code. Upon
payment in full of (i) all outstanding principal of all Credit Extensions and all other
Obligations, plus accrued and unpaid interest thereon, (ii) the Final Payment, (iii) the Prepayment
Fee, plus (iv) any and all other sums that shall have become due and payable, including Lenders’
Expenses, and provided that Lenders have no further obligation or commitment to lend hereunder,
Agent and Lenders, at Borrower’s sole cost, shall promptly file termination statements relating to
the Collateral.



     5 REPRESENTATIONS AND WARRANTIES



     Borrower represents and warrants as follows:




     5.1 Due Organization, Authorization; Power and Authority.




          (a) Borrower and each of its Subsidiaries, if any, are duly existing and in good standing, as
Registered Organizations in their respective jurisdictions of formation and are qualified and
licensed to do business and are in good standing in any jurisdiction in which the conduct of their
business or their ownership of property requires that they be qualified except where the failure to
do so would not reasonably be expected to have a material adverse effect on Borrower’s business.
In connection with this Agreement, Borrower has delivered to Agent a completed perfection
certificate signed by Borrower (the “Perfection Certificate”). Borrower represents and warrants to
Agent and the Lenders that (a) Borrower’s exact legal name is that indicated on the Perfection
Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is
organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection
Certificate accurately sets forth Borrower’s organizational identification number or accurately
states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s
place of business, or, if more than one, its chief executive office as well as Borrower’s mailing
address (if different than its chief executive office); (e) Borrower (and each of its predecessors)
has not, in the past five (5) years, changed its jurisdiction of formation, organizational
structure or type, or any organizational number assigned by its jurisdiction; and (f) all other
information set forth on the Perfection Certificate pertaining to Borrower and each of its
Subsidiaries is accurate and complete in all material respects (it being understood and agreed that
Borrower may from time to time update certain information in the Perfection Certificate after the
Effective Date to the extent permitted by one or more specific provisions in this Agreement). If
Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify
Agent of such occurrence and provide Agent with Borrower’s organizational identification number.




          (b) The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational
documents, (ii) contravene, conflict with, constitute a default under or violate any material
Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by which Borrower or any
of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any
action by, filing, registration, or qualification with, or Governmental Approval from, any
Governmental Authority (except such Governmental Approvals which have already been obtained and are
in full force and effect), or (v) constitute an event of default under any material agreement by
which Borrower or any of its Subsidiaries or their respective properties is bound. Borrower is not
in default under any agreement to which it is a party or by which it is bound in which the default
would reasonably be expected to have a material adverse effect on Borrower’s business.



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     5.2 Collateral.




          (a) Borrower has good title to, has rights in, and has the power to transfer each item of the
Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens
except Permitted Liens. Borrower has no Deposit Accounts, Securities Accounts, Commodity Accounts
or other investment accounts other than the Collateral Accounts with SVB or the other investment
accounts, if any, described in the Perfection Certificate delivered to Agent in connection herewith
with respect of which Borrower has given Agent notice and taken such actions as are necessary to
give Agent for the ratable benefit of all Lenders a perfected security interest therein.




          (b) On the Effective Date, the Collateral is not in the possession of any third party bailee
(such as a warehouse) except as disclosed in the Perfection Certificate or Schedule 5.2(b). None
of the components of the Collateral shall be maintained at locations other than as disclosed in the
Perfection Certificate on the Effective Date or as permitted pursuant to Section 7.2. In the event
that Borrower, after the Effective Date, intends to store or otherwise deliver any portion of the
Collateral to a bailee in excess of One Hundred Thousand Dollars ($100,000), then Borrower will
have such bailee execute and deliver a bailee agreement in form and substance satisfactory to Agent
in its sole discretion.




          (c) All Inventory is in all material respects of good and marketable quality, free from
material defects.




          (d) Borrower is the sole owner of the Intellectual Property which it owns or purports to own
except for (a) non-exclusive licenses granted to its customers in the ordinary course of business,
(b) over-the-counter software that is commercially available to the public, and (c) Intellectual
Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns
or purports to own and which is material to Borrower’s business is valid and enforceable, and no
part of the Intellectual Property which Borrower owns or purports to own and which is material to
Borrower’s business has been judged invalid or unenforceable, in whole or in part. To Borrower’s
knowledge, no claim has been made that any part of the Intellectual Property violates the rights of
any third party except to the extent such claim would not reasonably be expected to have a material
adverse effect on Borrower’s business.




          (e) Except as noted on the Perfection Certificate, and other than over-the-counter software
that is commercially available to the public, Borrower is not a party to, nor is bound by, any
Restricted License.




          (f) All of Borrower’s Material Intellectual Property, including all licenses under which
Borrower is the licensee of any such Material Intellectual Property owned by another Person, are
set forth on Schedule 5.2(f). Such Schedule 5.2(f) indicates in each case the expiration date of
such Material Intellectual Property and whether such Material Intellectual Property (or application
therefor) is owned or licensed by Borrower, and in the case of any such licensed Material
Intellectual Property, lists the name and address of the licensor and the name and date of the
agreement pursuant to which such item of Material Intellectual Property is licensed, the expiration
date of such license and the expiration date of the underlying Material Intellectual Property,
whether or not such license is an exclusive license and whether there are any purported
restrictions in such license on the ability to Borrower to grant a security interest in and/or to
transfer any of its rights as a licensee under such license.




     5.3 Litigation. There are no actions or proceedings pending or, to the knowledge of
Borrower’s Responsible Officers, threatened in writing by or against Borrower or any of its
Subsidiaries involving more than, individually or in the aggregate, One Hundred Fifty Thousand
Dollars ($150,000.00).




     5.4 No Material Deterioration in Financial Condition; Financial Statements. All consolidated
financial statements for Borrower and any of its Subsidiaries delivered to Agent fairly present, in
conformity with GAAP, in all material respects Borrower’s consolidated financial condition and
Borrower’s consolidated results of operations. There has not been any material deterioration in
Borrower’s consolidated financial condition since the date of the most recent SEC Reports.



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     5.5 Solvency. The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; and Borrower is able to pay its debts
(including trade debts) as they mature.




     5.6 Regulatory Compliance.




          (a) Borrower is not an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of
its important activities in extending credit for margin stock (under Regulations X, T and U of the
Federal Reserve Board of Governors). Neither Borrower nor any of its Subsidiaries is a “holding
company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company”
as each term is defined and used in the Public Utility Holding Company Act of 2005. Borrower has
complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not
violated any Laws, ordinances or rules, the violation of which would reasonably be expected to have
a material adverse effect on Borrower’s business. None of Borrower’s or any Subsidiary’s
properties or assets has been used by Borrower or any Subsidiary or, to Borrower’s knowledge, by
previous Persons, in disposing, producing, storing, treating, or transporting any hazardous
substance other than in material compliance with applicable Laws with respect to Borrower’s
business as currently conducted. Borrower has obtained all Required Permits, or has contracted
with third parties holding Required Permits, necessary for compliance with all Laws and all such
Required Permits are current. Borrower and each of its Subsidiaries have obtained all consents,
approvals and authorizations of, made all declarations or filings with, and given all notices to,
all Governmental Authorities that are necessary to continue their respective businesses as
currently conducted.




          (b) None of Borrower or its Subsidiaries is (i) in violation of any Anti-Terrorism Law, (ii)
engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law, or (iii) is a Blocked Person. Neither Borrower nor, to the knowledge of Borrower, any of its
Subsidiaries, (x) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise
engages in any transaction relating to, any property or interest in property blocked pursuant to
Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law.




     5.7 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.




     5.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required
tax returns and reports, and Borrower and its Subsidiaries have timely paid when due and payable or
duly filed valid extensions in connection therewith all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower. Borrower may defer payment of any
contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes
by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Agent in
writing of the commencement of, and any material development in, the proceedings, and (c) posts
bonds or takes any other steps required to prevent the governmental authority levying such
contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted
Lien”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax
years which could result in additional taxes becoming due and payable by Borrower. Borrower has
paid all amounts necessary to fund all present pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has
not permitted partial or complete termination of, or permitted the occurrence of any other event
with respect to, any such plan which could reasonably be expected to result in any liability of
Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or
any other governmental agency.




     5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions to fund its
general business requirements and not for personal, family, household or agricultural purposes.




     5.10 Full Disclosure. No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Agent or any Lender, as of the date such
representation, warranty, or other statement was made, taken together with all such written
certificates and written statements given to Agent or any Lender, contains any untrue statement of
a material fact or omits to state a material fact necessary to make the



8









 







statements contained in the certificates or statements not misleading (it being recognized
that the projections and forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or periods covered by
such projections and forecasts may differ from the projected or forecasted results).



     6 AFFIRMATIVE COVENANTS



          Borrower shall do all of the following:





     6.1 Government Compliance.




          (a) Maintain its and all its Subsidiaries’ legal existence and good standing in their
respective jurisdictions of formation and maintain qualification in each jurisdiction in which the
failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s
business or operations. Borrower shall comply, and have each Subsidiary comply, with all Laws,
ordinances and regulations to which it is subject, noncompliance with which would reasonably be
expected to have a material adverse effect on Borrower’s business.




          (b) Obtain all of the Governmental Approvals necessary for the performance by Borrower of its
obligations under the Loan Documents to which it is a party and the grant of a security interest to
Agent for the ratable benefit of the Lenders, in all of its property. Borrower shall promptly
provide copies of any such obtained Governmental Approvals to Agent.




          (c) In connection with the development, testing, manufacture, marketing or sale of each and
any Iluvien Product by Borrower, Borrower shall comply fully and completely in all respects with
all Required Permits at all times issued by any Governmental Authority the noncompliance with which
would reasonably be expected to have a material adverse effect on Borrower’s business, specifically
including the FDA, with respect to such development, testing, manufacture, marketing or sales of
such Iluvien Product by Borrower as such activities are at any such time being conducted by
Borrower.




     6.2 Financial Statements, Reports, Certificates.




          (a) Deliver to Agent: (i) no later than thirty (30) days after approval thereof by Borrower’s
Board of Directors, but no later than March 31st of each calendar year, Borrower’s
financial projections for the current fiscal year; (ii) within five (5) days of delivery, copies of
all statements, reports and notices delivered to all of Borrower’s security holders or to any
holders of Subordinated Debt; (iii) within five (5) days of filing, all reports on Form 10-K, 10-Q
and 8-K filed with the Securities and Exchange Commission (“SEC Reports”) or a link thereto on
Borrower’s or another website on the Internet; (iv) a prompt report of any legal actions pending or
threatened against Borrower or any of its Subsidiaries that could result in damages or costs to
Borrower or any of its Subsidiaries of One Hundred Fifty Thousand Dollars ($150,000) or more or
would reasonably be expected to have a material adverse effect on Borrower’s business; (v) within
thirty (30) days after the last day of each month, copies of all monthly bank statements together
with a Compliance Certificate signed by a Responsible Officer; and (vi) budgets, sales projections,
operating plans and other financial information as reasonably requested in writing by Agent.




          (b) Deliver to Agent, within thirty (30) days after the last day of each month, an updated
Schedule 5.2(f) promptly upon Borrower’s acquisition or development of any Material Intellectual
Property not already listed on Schedule 5.2(f) and upon any other material change in Borrower’s
Material Intellectual Property from that listed on Schedule 5.2(f).




          (c) 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 could 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 Agent and the Lenders an updated intellectual property



9









 







security agreement (in form and substance reasonably acceptable to Agent in its discretion) in
favor of Agent, covering all of the then-existing IP Collateral.




          (d) If after the Effective Date, Borrower determines to manufacture, sell, develop, test or
market any new Iluvien Product, Borrower shall give written notice to Agent of such new Iluvien
Product following such Iluvien Product’s introduction to the general marketplace (which shall
include a brief description of such Iluvien Product, plus a list of all Required Permits relating
to such new Iluvien Product (and a copy of such Required Permits if requested by Agent) and/or
Borrower’s manufacture, sale, development, testing or marketing thereof issued or outstanding as of
the date of such notice); and further, provided, that, if Borrower shall at any time obtain any new
or additional Required Permits from the FDA or parallel state or local authorities, or foreign
counterparts of the FDA or parallel state or local authorities, with respect to any Iluvien Product
which has previously been disclosed to Agent, Borrower shall promptly give written notice to Agent
of such new or additional Required Permits (along with a copy thereof if requested by Agent).




     6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from
material defects. Returns and allowances between Borrower and its Account Debtors shall follow
Borrower’s customary practices as they exist at the Effective Date. Borrower must promptly notify
Agent of all returns, recoveries, disputes and written claims that involve more than One Hundred
Thousand Dollars ($100,000).




     6.4 Taxes; Pensions. Timely file and require each of its Subsidiaries to timely file, all
required tax returns and reports and timely pay, and require each of its Subsidiaries to timely
file, all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by
Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant
to the terms of Section 5.8 hereof, and shall deliver to Agent, on demand, appropriate certificates
attesting to such payments, and pay all amounts necessary to fund all present pension, profit
sharing and deferred compensation plans in accordance with their terms.




     6.5 Insurance. Keep its business and the Collateral insured for risks and in amounts standard
for companies in Borrower’s industry, stage of development and location and as Agent may reasonably
request. Insurance policies shall be in a form, with companies, and in customary amounts that are
reasonably satisfactory to Agent. All property policies shall have a lender’s loss payable
endorsement showing Agent as lender loss payee and waive subrogation against Agent and shall
provide that the insurer must give Agent at least twenty (20) days notice before canceling,
amending, or declining to renew its policy. All liability policies shall show, or have endorsements
showing, Agent, as an additional insured. All policies (or the loss payable and additional insured
endorsements) shall provide that the insurer shall endeavor to give Agent at least twenty (20) days
notice before canceling, amending, or declining to renew its policy. At Agent’s request, Borrower
shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable
under any policy shall, at Agent’s option, be payable to Agent on behalf of the Lenders on account
of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.5 or to
pay any amount or furnish any required proof of payment to third persons and Agent, Agent may make
all or part of such payment or obtain such insurance policies required in this Section 6.5, and
take any action under the policies Agent deems prudent.




     6.6 Operating Accounts.




          (a) Maintain its primary and its Subsidiaries’ primary operating and other deposit accounts
and securities accounts with SVB and SVB’s Affiliates, which accounts shall represent at least 50%
of the dollar value of Borrower’s and such Subsidiaries accounts at all financial institutions.




          (b) Provide Agent five (5) days prior written notice before establishing any Collateral
Account at or with any bank or financial institution other than SVB. In addition, for each
Collateral Account that Borrower at any time maintains (including, without limitation, Borrower’s
existing deposit account no. 220-07833 maintained with J.P. Morgan Clearing Corp.), Borrower shall
cause the applicable bank or financial institution at or with which any Collateral Account is
maintained to execute and deliver a Control Agreement or other appropriate instrument with respect
to such Collateral Account to perfect Agent’s Lien in such Collateral Account in accordance with
the terms hereunder, which Control Agreement may not be terminated without prior written consent of
Agent. The provisions of the previous sentence shall not apply to deposit accounts exclusively
used for payroll, payroll



10









 







taxes and other employee wage and benefit payments to or for the benefit of Borrower’s
employees and identified to Agent by Borrower as such.




     6.7 Protection of Intellectual Property Rights.




          (a) Borrower shall own, or be licensed to use or otherwise have the right to use, all Material
Intellectual Property. All Intellectual Property of Borrower is and shall be fully protected
and/or duly and properly registered, filed or issued in the appropriate office and jurisdictions
for such registrations, filings or issuances, except where the failure to do so would not
reasonably be expected to have a material adverse effect on Borrower’s business. After the
Effective Date, Borrower shall not become a party to, nor become bound by, any material license or
other agreement with respect to which Borrower is the licensee that prohibits or otherwise
restricts Borrower from granting a security interest in Borrower’s interest in such license or
agreement or other property. Borrower shall at all times conduct its business without infringement
and shall use commercially reasonable efforts to conduct its business without claim of infringement
of any Intellectual Property rights of others. Borrower shall, to the extent it determines, in the
exercise of its reasonable business judgment, that it is prudent to do the following: (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 Agent in writing of material infringements of its Intellectual Property; and (c)
not allow any Material Intellectual Property to be abandoned, forfeited or dedicated to the public
without Agent’s prior 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 concurrently provide written notice thereof to Agent 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 Agent) and other documents and take such other
actions as Agent 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
Agent, for the ratable benefit of Lenders, 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 Agent and update all Exhibits to the IP Agreement, and (b) following the occurrence of
an IP Lien Event: (x) provide Agent 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 Agent may request in its good faith business judgment to perfect and maintain a first
priority perfected security interest in favor of Agent, for the ratable benefit of the Lenders, 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 Agent 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 Agent, for the ratable benefit of the Lenders, to perfect and maintain a first priority
perfected security interest in such property.




          (b) Provide written notice to Agent within ten (10) days of entering or becoming bound by any
Restricted License (other than over-the-counter software that is commercially available to the
public). Borrower shall take such steps as Agent reasonably requests to obtain the consent of, or
waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be
deemed “Collateral” as provided under this Agreement and for Agent and the Lenders to have a
security interest in it as provided under the Agreement that might otherwise be restricted or
prohibited by law or by the terms of any such Restricted License, whether now existing or entered
into in the future, and (ii) Agent and the Lenders to have the ability in the event of a
liquidation of any Collateral to dispose of such Collateral in accordance with the rights and
remedies of Agent and the Lenders under this Agreement and the other Loan Documents.




     6.8 Litigation Cooperation. From the date hereof and continuing through the termination of
this Agreement, make available to Agent, without expense to Agent, Borrower and its officers,
employees and agents and Borrower’s Books, to the extent that Agent may deem them reasonably
necessary to prosecute or defend any third-party suit or proceeding instituted by or against Agent
with respect to any Collateral or relating to Borrower.



11









 






     6.9 Intentionally Omitted.




     6.10 Formation or Acquisition of Subsidiaries. At the time that Borrower forms any direct or
indirect Subsidiary or acquires any direct or indirect Subsidiary after the Effective Date,
Borrower shall (a) cause such new Subsidiary to provide to Agent a joinder to the Loan Agreement to
cause such Subsidiary to become a co-borrower hereunder, together with such appropriate financing
statements and/or Control Agreements, all in form and substance satisfactory to Agent (including
being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the
assets of such newly formed or acquired Subsidiary), (b) provide to Agent appropriate certificates
and powers and financing statements, pledging all of the direct or beneficial ownership interest in
such new Subsidiary, in form and substance satisfactory to Agent, and (c) provide to Agent all
other documentation in form and substance satisfactory to Agent, including one or more opinions of
counsel satisfactory to Agent, which in its opinion is appropriate with respect to the execution
and delivery of the applicable documentation referred to above. Any document, agreement, or
instrument executed or issued pursuant to this Section 6.10 shall be a Loan Document.




     6.11 Iluvien Sales. In the event that Borrower does not commence sales of Iluvien Products
in the United States within six (6) months following Borrower’s receipt of Iluvien FDA Approval,
Borrower shall at all times thereafter maintain on deposit at SVB unrestricted cash equal to or
greater than seventy-five percent (75.0%) of the outstanding principal balance of the Term Loans.




     6.12 Consents/Waivers. Deliver to Agent within thirty (30) days after the Effective Date: (a)
a fully-executed original landlord’s consent in form and substance acceptable to Agent with respect
to each location at which Borrower leases or occupies real property or at which Collateral is
located and (b) a fully-executed original bailee’s waiver or warehousemen’s waiver (as applicable)
in form and substance acceptable to Agent with respect to each location at which Borrower maintains
any Collateral in the possession of a third party.




     6.13 Further Assurances.




          (a) Execute any further instruments and take further action as Agent reasonably requests to
perfect or continue Agent’s Lien in the Collateral or to effect the purposes of this Agreement; and




          (b) Subject to Section 12.9 herein, deliver to Agent, within ten (10) days after the same are
sent or received, copies of all material correspondence, reports, documents and other filings with
any Governmental Authority regarding compliance with or maintenance of Governmental Approvals or
Requirements of Law; or that would reasonably be expected to have a material effect on any of the
Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries.




     6.14 License and Disposition Proceeds. Borrower shall, immediately upon receipt of any IP
Disposition Proceeds, pay such IP Disposition Proceeds to Lenders (unless and to the extent SVB, in
connection with the SVB Loan Agreement, has made an outstanding advance with respect to such IP
Disposition Proceeds that are in the form of royalty or other form of Accounts, as opposed to
advances made in respect of cash already received by Borrower). Lenders may agree in writing to
waive the requirements of this section in any specific instance. The waiver by the Lenders in one
instance shall not constitute a waiver for any future breaches of this Section. “IP Disposition
Proceeds” means (a) proceeds from licensees or any other party in connection with licenses entered
into by Borrower in violation of Section 7.1(d)(2), and (b) proceeds realized upon the sale,
license or other disposition of any Intellectual Property as part of any enforcement action by
Agent or Lenders.



     7 NEGATIVE COVENANTS



     Borrower shall not do any of the following without the prior written consent of Agent and the
Required Lenders:




     7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b)
of worn-out or obsolete Equipment; or (c) in connection with Permitted Liens and Permitted
Investments; or (d) of (1) non-exclusive licenses for the use of the



12









 







property of Borrower or its Subsidiaries in the ordinary course of business and (2) licenses
that do not result in a legal transfer of title of the licensed property but that may be exclusive
in respects other than territory and that may be exclusive as to territory only as to discreet
geographical areas in the European Union and Japan.




     7.2 Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or
permit any of its Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b)
liquidate or dissolve; or (c) (i) have a change in senior management such that any Key Person
ceases to hold such office with Borrower and a replacement satisfactory to Borrower’s Board of
Directors is not made within ninety (90) days after their departure from Borrower; or (ii) enter
into any transaction or series of related transactions whereby the stockholders of Borrower who
were not stockholders immediately prior to the first such transaction own more than 49% of the
voting stock of Borrower immediately after giving effect to such transaction or related series of
such transactions (other than by the sale of Borrower’s equity securities in a public offering or
to venture capital investors so long as Borrower identifies to Agent the venture capital investors
prior to the closing of the transaction and provides to Agent a description of the material terms
of the transaction).




          Borrower shall not, without at least ten (10) days prior written notice to Agent: (1) add any
new offices or business locations, including warehouses (unless such new offices or business
locations contain less than Twenty-five Thousand Dollars ($25,000) in Borrower’s assets or
property) or deliver any portion of the Collateral valued, individually or in the aggregate, in
excess of Twenty-Five Thousand Dollars ($25,000) to a bailee at a location other than to a bailee
and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of
organization, (3) change its organizational structure or type, (4) change its legal name, or (5)
change any organizational number (if any) assigned by its jurisdiction of organization. If
Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate,
in excess of Twenty-five Thousand Dollars ($25,000) to a bailee, and Agent and such bailee are not
already parties to a bailee agreement governing both the Collateral and the location to which
Borrower intends to deliver the Collateral, then Borrower will first receive the written consent of
Agent, and such bailee shall execute and deliver a bailee agreement in form and substance
satisfactory to Agent in its sole discretion.




     7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge
or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock or property of another Person. A Subsidiary may
merge or consolidate into another Subsidiary or into Borrower.




     7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.




     7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign
or convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to
the first priority security interest granted herein, or enter into any agreement, document,
instrument or other arrangement (except with or in favor of Agent) with any Person which directly
or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning,
mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or
any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and
the definition of “Permitted Liens” herein.




     7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to
the terms of Section 6.6(b) hereof.




     7.7 Distributions; Investments. (a) Pay any dividends (other than dividends payable solely in
common stock) or make any distribution or payment on or redeem, retire or purchase any capital
stock provided that (i) Borrower may convert any of its convertible securities into other
securities pursuant to the terms of such convertible securities or otherwise in exchange thereof,
and (ii) Borrower may repurchase the stock of current or former employees, officers, directors or
consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist
at the time of such repurchase and would not exist after giving effect to such repurchase,



13









 







provided such repurchase does not exceed in the aggregate of Two Hundred Fifty Thousand
Dollars ($250,000) per fiscal year;, or (b) directly or indirectly make any Investment other than
Permitted Investments, or permit any of its Subsidiaries to do so.




     7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower, except for transactions that are in the
ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable
to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.




     7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under
the terms of the subordination, intercreditor, or other similar agreement to which such
Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt which would increase the amount thereof or adversely affect the subordination
thereof to Obligations owed to the Lenders.




     7.10 Compliance. Become an “investment company” or a company controlled by an “investment
company”, under the Investment Company Act of 1940, as amended or undertake as one of its important
activities extending credit to purchase or carry margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for
that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor
Standards Act or violate any other Law or regulation, if the violation could reasonably be expected
to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do
so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any present pension,
profit sharing and deferred compensation plan which would reasonably be expected to result in any
liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other governmental agency.




     7.11 Compliance with Anti-Terrorism Laws. Agent hereby notifies Borrower that pursuant to the
requirements of Anti-Terrorism Laws, and Agent’s policies and practices, Agent is required to
obtain, verify and record certain information and documentation that identifies Borrower and its
principals, which information includes the name and address of Borrower and its principals and such
other information that will allow Agent to identify such party in accordance with Anti-Terrorism
Laws. Borrower will not, nor will Borrower permit any Subsidiary or Affiliate to, directly or
indirectly, knowingly enter into any documents, instruments, agreements or contracts with any
Person listed on the OFAC Lists. Borrower shall immediately notify Agent if Borrower has knowledge
that Borrower or any Subsidiary or Affiliate is listed on the OFAC Lists or (a) is convicted on,
(b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges
involving money laundering or predicate crimes to money laundering. Borrower will not, nor will
Borrower permit any Subsidiary or Affiliate to, directly or indirectly, (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including, without limitation, the
making or receiving of any contribution of funds, goods or services to or for the benefit of any
Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224, any similar executive order or
other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.



     8 EVENTS OF DEFAULT



     Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:




     8.1 Payment Default. Borrower fails to pay any of the Obligations when due;




     8.2 Covenant Default. Borrower fails or neglects to perform any obligation in Section 6 or
violates any covenant in Section 7 or fails or neglects to perform, keep, or observe any other
term, provision, condition, covenant or agreement contained in this Agreement or any Loan
Documents, and as to any default under such other term, provision, condition, covenant or agreement
that can be cured, has failed to cure the default within ten (10) days after the occurrence
thereof; provided, however, grace and cure periods provided under this Section 8.2 shall



14









 







not apply, among other things, to financial covenants that are required to be satisfied,
completed or tested by a date certain ;




     8.3 Impairment of Collateral. There is a material impairment in the perfection or priority of
Agent’s Lien in the Collateral or in the value of such Collateral.




     8.4 Attachment; Levy; Restraint on Business.




          (a) (i) The service of process seeking to attach, by trustee or similar process, any funds of
Borrower or of any entity under control of Borrower (including a Subsidiary) on deposit or
otherwise maintained with the Lenders or any Lender Affiliate, or (ii) a notice of lien, levy, or
assessment is filed against any of Borrower’s assets by any government agency, and the same under
subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof,
discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no
Credit Extensions shall be made during any ten (10) day cure period; and




          (b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents
Borrower from conducting any part of its business;




     8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they
become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45)
days (but no Credit Extensions shall be made while any of the conditions described in clause (a)
exist and/or until any Insolvency Proceeding is dismissed);




     8.6 Other Agreements. If there is a default in any agreement to which Borrower is a party
with a third party or parties resulting in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred
Thousand Dollars ($100,000) or that would reasonably be expected to have a material adverse effect
on Borrower’s business;




     8.7 Judgments. One or more judgments, orders, or decrees for the payment of money in an
amount, individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) (not
covered by independent third-party insurance as to which liability has been accepted by such
insurance carrier) shall be rendered against Borrower and shall remain unsatisfied, unvacated, or
unstayed for a period of ten (10) days after the entry thereof (provided that no Credit Extensions
will be made prior to the satisfaction, vacation or stay of such judgment, order, or decree);




     8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document or in any writing
delivered to Agent and/or the Lenders or to induce Agent and/or the Lenders to enter this Agreement
or any Loan Document, and such representation, warranty, or other statement is incorrect in any
material respect when made;




     8.9 Subordinated Debt. A default or breach occurs under any agreement between Borrower and
any creditor of Borrower that signed a subordination agreement, intercreditor agreement, or other
similar agreement with Agent and Lenders, or any creditor that has signed such an agreement with
Agent and Lenders breaches any terms of the agreement;




     8.10 Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason to be
in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any
guaranty of the Obligations; (c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.7, or 8.8.
occurs with respect to any Guarantor; (d) the liquidation, winding up, or termination of existence
of any Guarantor; or (e) (i) a material impairment in the perfection or priority of Agent’s and
Lenders’ Lien in the collateral provided by Guarantor or in the value of such collateral or (ii) a
material adverse change in the general affairs, management, results of operation, condition
(financial or otherwise) or the prospect of repayment of the Obligations occurs with respect to any
Guarantor;



15









 






     8.11 Governmental Approvals. Any Governmental Approval shall have been (a) revoked,
rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a
full term or (b) subject to any decision by a Governmental Authority that designates a hearing with
respect to any applications for renewal of any such Governmental Approval or that would reasonably
be expected to result in the Governmental Authority taking any of the actions described in clause
(a) above, and such decision or such revocation, rescission, suspension, modification or
non-renewal has, or would reasonably be expected to have, a material adverse effect on Borrower’s
business;




     8.12 Criminal Proceeding. The institution by any Governmental Authority of criminal
proceedings against Borrower;




     8.13 Lien Priority. Except as permitted by Agent, any Lien created hereunder or by any other
Loan Document shall at any time fail to constitute a valid and perfected Lien on all of the
Collateral purported to be secured thereby, subject to no prior or equal Lien; or




     8.14 Withdrawals/ Recalls. (a) The institution of any proceeding by FDA or similar
Governmental Authority to order the complete withdrawal of all Iluvien Product from the U.S. market
or to enjoin Borrower or any representative of Borrower from manufacturing, marketing, selling or
distributing any Iluvien Product in the U.S., (b) the institution of any action or proceeding by
the FDA, or any other Governmental Authority to revoke, suspend, reject, withdraw, limit, or
restrict any Required Permit relating to any Iluvien Product held by Borrower or any representative
of Borrower, (c) the commencement of any enforcement action against Borrower by FDA, or any other
Governmental Authority, or (d) the recall of all Iluvien Product from the market, the voluntary
withdrawal of all Iluvien Product from the U.S. market, or actions to discontinue the sale of all
Iluvien Product in the U.S.




     8.15 SVB Loan Agreement. The occurrence of an Event of Default (as defined under the SVB Loan
Agreement) under the SVB Loan Agreement.



     9 RIGHTS AND REMEDIES




     9.1 Rights and Remedies.




          (a) Upon the occurrence and during the continuance of an Event of Default, Agent may, and at
the written direction of any Lender shall, without notice or demand, do any or all of the
following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to Borrower
declare all Obligations immediately due and payable (but if an Event of Default described in
Section 8.5 occurs all Obligations shall be immediately due and payable without any action by Agent
or the Lenders), and (iii) by notice to Borrower suspend or terminate the obligations, if any, of
the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under
any other agreement between Borrower and Agent and/or the Lenders (but if an Event of Default
described in Section 8.5 occurs all obligations, if any, of the Lenders to advance money or extend
credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower
and Agent and/or the Lenders shall be immediately terminated without any action by Agent or the
Lenders);




          (b) Without limiting the rights of Agent and the Lenders set forth in Section 9.1(a) above,
upon the occurrence and during the continuance of an Event of Default Agent shall have the right,
at the written direction of the Required Lenders, without notice or demand, to do any or all of the
following:




     (i) foreclose upon and/or sell or otherwise liquidate, the Collateral;




     (ii) apply to the Obligations any (a) balances and deposits of Borrower that
Agent or any Lender holds or controls, or (b) any amount held or controlled by Agent
or any Lender owing to or for the credit or the account of Borrower;




     (iii) and/or commence and prosecute an Insolvency Proceeding or consent to
Borrower commencing any Insolvency Proceeding.



16









 






          (c) Without limiting the rights of Agent and the Lenders set forth in Sections 9.1(a) and (b)
above, upon the occurrence and during the continuance of an Event of Default Agent shall have the
right, without notice or demand, to do any or all of the following:




     (i) settle or adjust disputes and claims directly with Account Debtors for
amounts on terms and in any order that Agent considers advisable, notify any Person
owing Borrower money of Agent’s security interest in such funds, and verify the
amount of such account;




     (ii) make any payments and do any acts it considers necessary or reasonable to
protect the Collateral and/or its security interest in the Collateral. Borrower
shall assemble the Collateral if Agent requests and make it available as Agent
designates. Agent may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase, contest, or
compromise any Lien which appears to be prior or superior to its security interest
and pay all expenses incurred. Borrower grants Agent a license to enter and occupy
any of its premises, without charge, to exercise any of Agent’s rights or remedies;




     (iii) ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, and/or advertise for sale, the Collateral (to the extent not prohibited by
Law). Agent is hereby granted a non-exclusive, royalty-free license or other right
to use, without charge, to the extent not prohibited by Law, Borrower’s labels,
Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade
names, Trademarks, service marks, and advertising matter, or any similar property as
it pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and, in connection with Agent’s exercise of its rights
under this Section 9.1, Borrower’s rights under all licenses and all franchise
agreements inure to Agent for the benefit of the Lenders;




     (iv) place a “hold” on any account maintained with Agent or the Lenders and/or
deliver a notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any Control Agreement or similar agreements providing
control of any Collateral; demand and receive possession of Borrower’s Books; and




     (v) Subject to clauses 9.1(a) and (b), exercise all rights and remedies
available to Agent under the Loan Documents or at law or equity, including all
remedies provided under the Code (including disposal of the Collateral pursuant to
the terms thereof).



Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event
of Default, Agent shall have the right to exercise any and all remedies referenced in this Section
9.1 without the written consent of Required Lenders following the occurrence of an Exigent
Circumstance. As used in the immediately preceding sentence, “Exigent Circumstance” means any
event or circumstance that, in the reasonable judgment of Agent, imminently threatens the ability
of Agent to realize upon all or any material portion of the Collateral, such as, without
limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste
thereof, or failure of Borrower after reasonable demand to maintain or reinstate adequate casualty
insurance coverage, or which, in the judgment of Agent, could result in a material diminution in
value of the Collateral.




     9.2 Power of Attorney. Borrower hereby irrevocably appoints Agent as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b)
sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Agent determines reasonable; (d) make, settle, and adjust all
claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Agent or a third party as the Code permits. Borrower hereby appoints
Agent as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect
or continue the perfection of Agent’s security interest in the Collateral regardless of whether an
Event of Default has occurred until all Obligations have been satisfied in full and Agent and the
Lenders are under no further obligation to make Credit Extensions hereunder. Agent’s foregoing
appointment as Borrower’s attorney



17









 







in fact, and all of Agent’s rights and powers, coupled with an interest, are irrevocable until
all Obligations have been fully repaid and performed and Agent’s and the Lenders’ obligation to
provide Credit Extensions terminates.




     9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5
or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, Agent may obtain such insurance or make such
payment, and all amounts so paid by Agent are Lenders’ Expenses and immediately due and payable,
bearing interest at the then highest applicable rate, and secured by the Collateral. Agent will
make reasonable efforts to provide Borrower with notice of Agent obtaining such insurance at the
time it is obtained or within a reasonable time thereafter. No such payments by Agent are deemed
an agreement to make similar payments in the future or Agent’s waiver of any Event of Default.




     9.4 Application of Payments and Proceeds. Notwithstanding anything to the contrary contained
in this Agreement, upon the occurrence and during the continuance of an Event of Default, (a)
Borrower irrevocably waives the right to direct the application of any and all payments at any time
or times thereafter received by Agent from or on behalf of Borrower of all or any part of the
Obligations, and, as between Borrower on the one hand and Agent and the Lenders on the other, Agent
shall have the continuing and exclusive right to apply and to reapply any and all payments received
against the Obligations in such manner as Agent may deem advisable notwithstanding any previous
application by Agent, and (b) the proceeds of any sale of, or other realization upon all or any
part of the Collateral shall be applied: first, to Lenders Expenses; second, to accrued and unpaid
interest on the Obligations (including any interest which, but for the provisions of the United
States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount of the
Obligations outstanding; and fourth, to any other indebtedness or obligations of Borrower owing to
Agent or any Lender under the Loan Documents. Any balance remaining shall be delivered to Borrower
or to whoever may be lawfully entitled to receive such balance or as a court of competent
jurisdiction may direct. In carrying out the foregoing, (x) amounts received shall be applied in
the numerical order provided until exhausted prior to the application to the next succeeding
category, and (y) each of the Persons entitled to receive a payment in any particular category
shall receive an amount equal to its pro rata share of amounts available to be applied pursuant
thereto for such category. Any reference in this Agreement to an allocation between or sharing by
the Lenders of any right, interest or obligation “ratably,” “proportionally” or in similar terms
shall refer to Pro Rata Share unless expressly provided otherwise. Agent, or if applicable, each
Lender, shall promptly remit to the other Lenders such sums as may be necessary to ensure the
ratable repayment of each Lender’s portion of any Credit Extension and the ratable distribution of
interest, fees and reimbursements paid or made by Borrower. Notwithstanding the foregoing, a
Lender receiving a scheduled payment shall not be responsible for determining whether the other
Lenders also received their scheduled payment on such date; provided, however, if it is later
determined that a Lender received more than its ratable share of scheduled payments made on any
date or dates, then such Lender shall remit to Agent or other Lenders such sums as may be necessary
to ensure the ratable payment of such scheduled payments, as instructed by Agent. Any payment or
distribution of any kind or character, whether in cash, properties or securities, shall be received
by a Lender in excess of its ratable share, then the portion of such payment or distribution in
excess of such Lender’s ratable share shall be received by such Lender in trust for and shall be
promptly paid over to the other Lender for application to the payments of amounts due on the other
Lender’s claims. To the extent any payment for the account of Borrower is required to be returned
as a voidable transfer or otherwise, the Lenders shall contribute to one another as is necessary to
ensure that such return of payment is on a pro rata basis. If any Lender shall obtain possession
of any Collateral, it shall hold such Collateral for itself and as agent and bailee for Agent and
other Lenders for purposes of perfecting Agent’s security interest therein.
Notwithstanding anything to the contrary herein, any warrants issued to the Lenders by
Borrower, the stock issuable thereunder, any equity securities purchased by Lenders, any amounts
paid thereunder, any dividends, and any other rights in connection therewith shall not be subject
to the terms and conditions of this Agreement. Nothing herein shall affect any Lender’s rights
under any such warrants, stock, or other equity securities to administer, manage, transfer, assign,
or exercise such warrants, stock, or other equity securities for its own account.




     9.5 Liability for Collateral. So long as Agent and the Lenders comply with applicable Law and
reasonable banking practices regarding the safekeeping of the Collateral in the possession or under
the control of Agent and the Lenders, Agent and the Lenders shall not be liable or responsible for:
(a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution
in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.



18









 






     9.6 No Waiver; Remedies Cumulative. Agent’s failure, at any time or times, to require strict
performance by Borrower of any provision of this Agreement or any other Loan Document shall not
waive, affect, or diminish any right of Agent thereafter to demand strict performance and
compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the
party(ies) granting the waiver and then is only effective for the specific instance and purpose for
which it is given. Agent’s rights and remedies under this Agreement and the other Loan Documents
are cumulative. Agent has all rights and remedies provided under the Code, by Law, or in equity.
Agent’s exercise of one right or remedy is not an election, and shall not preclude Agent from
exercising any other remedy under this Agreement or other remedy available at law or in equity, and
Agent’s waiver of any Event of Default is not a continuing waiver. Agent’s delay in exercising any
remedy is not a waiver, election, or acquiescence.




     9.7 Demand Waiver. Borrower waives, to the fullest extent permitted by law, demand, notice of
default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Agent on which Borrower is liable.



     10 NOTICES




     All notices, consents, requests, approvals, demands, or other communication (collectively,
“Communication”) by any party to this Agreement or any other Loan Document must be in writing and
shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual
receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or
certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when
sent by electronic mail (if an email address is specified herein) or facsimile transmission; (c)
one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or
(d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to
be notified and sent to the address, facsimile number, or email address indicated below. Any of
Agent, Lender or Borrower may change its mailing or electronic mail address or facsimile number by
giving the other party written notice thereof in accordance with the terms of this Section 10.



	 	 	 

	          If to Borrower:

	 	c/o Alimera Sciences, Inc.

6120 Windward Parkway

Suite 290

Alpharetta, GA 30005

Attention: Chief Financial Officer

Fax: (678) 990-5744

Email: eiswirth@alimerasciences.com
	 
	 	 
	          If to Agent:

	 	Silicon Valley Bank

3353 Peachtree Road, NE

Suite M-10

Atlanta, GA 30326

Attention: Mr. Scott McCarty

Fax: (404) 783.5822

Email: SMccarty@svb.com
	 
	 	 
	          If to the Lenders:

	 	MidCap Funding III, LLC

7735 Old Georgetown Road, Suite 400

Bethesda, Maryland 20814

Attention: Portfolio Management- Life Sciences

Fax: (301) 941-1450

Email: lviera@midcapfinancial.com
	 
	 	 
	 

	 	Silicon Valley Bank

3353 Peachtree Road, NE

Suite M-10

Atlanta, GA 30326






19









 






	 	 	 

	 

	 	Attention: Mr. Scott McCarty

Fax: (404) 783.5822

Email: SMccarty@svb.com
	 
	 	 
	          with a copy to:

	 	Riemer & Braunstein LLP

Three Center Plaza

Boston, Massachusetts 02108

Attention: David A. Ephraim, Esquire

Fax: (617) 880-3456

Email: DEphraim@riemerlaw.com






     11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER




     New York Law governs the Loan Documents without regard to principles of conflicts of law.
Borrower, Lenders and Agent each submit to the exclusive jurisdiction of the State and Federal
courts in New York, New York. NOTWITHSTANDING THE FOREGOING, AGENT AND LENDERS SHALL HAVE THE
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH AGENT AND LENDERS (IN ACCORDANCE WITH THE PROVISIONS OF SECTION 9.1) DEEM
NECESSARY OR APPROPRIATE TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE AGENT’S AND LENDERS’
RIGHTS AGAINST BORROWER OR ITS PROPERTY. Borrower expressly submits and consents in advance to such
jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any
objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non
conveniens and hereby consents to the granting of such legal or equitable relief as is deemed
appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and
other process issued in such action or suit and agrees that service of such summons, complaints,
and other process may be made by registered or certified mail addressed to Borrower at the address
set forth in Section 10 of this Agreement and that service so made shall be deemed completed upon
the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the
U.S. mails, proper postage prepaid.




TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, AGENT AND LENDERS EACH WAIVE THEIR
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT,
THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND
ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.




     Borrower, Agent and each Lender agree that each Credit Extension (including those made on the
Effective Date) shall be deemed to be made in, and the transactions contemplated hereunder and in
any other Loan Document (other than the Warrants) shall be deemed to have been performed in, the
State of New York.



     12 GENERAL PROVISIONS




     12.1 Successors and Assigns. This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any rights or
obligations under it without Agent’s prior written consent (which may be granted or withheld in
Agent’s discretion, subject to Section 12.11). The Lenders have the right, without the consent of
or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any
part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement
and the other Loan Documents provided, however, that any such sale, assignment, negotiation or
grant of a participation by any Lender (other than a sale or assignment to an Eligible Assignee) of
its obligations, rights, and benefits under this Agreement and the other Loan Documents shall
require the prior written consent of the Required Lenders (such approved assignee, an “Approved
Lender”). Borrower and Agent shall be entitled to continue to deal solely and directly with such
Lender in connection with the interests so assigned until Agent shall have received and accepted an
effective Assignment Agreement executed, delivered and fully completed by the applicable parties
thereto, and shall have received such other information regarding such Eligible Assignee or
Approved Lender as Agent reasonably shall require.



20









 






     12.2 Indemnification.




          (a) Borrower agrees to indemnify, defend and hold Agent and the Lenders and their respective
directors, officers, employees, agents, attorneys, or any other Person affiliated with or
representing Agent or the Lenders (each, an “Indemnified Person”) harmless against: (a) all
obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party
in connection with the transactions contemplated by the Loan Documents; and (b) all losses or
Lenders’ Expenses incurred, or paid by Indemnified Person from, following, or arising from
transactions between Agent, and/or the Lenders and Borrower (including reasonable attorneys’ fees
and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross
negligence or willful misconduct (collectively, the “Indemnified Liabilities”).




          (b) Borrower hereby further indemnifies, defends and holds each Indemnified Person harmless
from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the fees and disbursements of counsel for such Indemnitee), except to the extent
directly caused by such Indemnified Person’s gross negligence or willful misconduct, in connection
with any investigative, response, remedial, administrative or judicial matter or proceeding,
whether or not such Indemnified Person shall be designated a party thereto and including any such
proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by
engineers, environmental consultants and similar technical personnel and any commission, fee or
compensation claimed by any broker (other than any broker retained by Agent or Lenders) asserting
any right to payment for the transactions contemplated hereby which may be imposed on, incurred by
or asserted against such Indemnified Person as a result of or in connection with the transactions
contemplated hereby and the use or intended use of the proceeds of the loan proceeds.




          (c) To the extent that the undertaking set forth in this Section 12.2 may be unenforceable,
Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all such indemnified liabilities incurred by the
Indemnitees or any of them.




     12.3 Time of Essence. Time is of the essence for the performance of all Obligations in this
Agreement.




     12.4 Severability of Provisions. Each provision of this Agreement is severable from every
other provision in determining the enforceability of any provision.




     12.5 Intentionally Omitted.




     12.6 Integration. This Agreement and the Loan Documents represent the entire agreement about
this subject matter and supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the parties about the subject
matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.




     12.7 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, is an
original, and all taken together, constitute one Agreement.




     12.8 Survival. All covenants, representations and warranties made in this Agreement continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.2
to indemnify each Lender and Agent shall survive until the statute of limitations with respect to
such claim or cause of action shall have run.




     12.9 Confidentiality. In handling any confidential information of Borrower, each of the
Lenders and Agent shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (a) to the Lenders’ and Agent’s
Subsidiaries or Affiliates (provided that they agree to the terms hereof); (b) to prospective
transferees or purchasers of any interest in the Credit Extensions (provided,



21









 







however, the Lenders and Agent shall use commercially reasonable efforts to obtain such
prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required
by Law, regulation, subpoena, or other order; (d) to regulators or as otherwise required in
connection with an examination or audit; (e) as Agent considers appropriate in exercising remedies
under the Loan Documents; and (f) to third party service providers of the Lenders and/or Agent so
long as such service providers have executed a confidentiality agreement with the Lenders and Agent
with terms no less restrictive than those contained herein. Confidential information does not
include information that either: (i) is in the public domain or in the Lenders’ and/or Agent’s
possession when disclosed to the Lenders and/or Agent, or becomes part of the public domain after
disclosure to the Lenders and/or Agent (through no fault of the Lenders or Agent); or (ii) is
disclosed to the Lenders and/or Agent by a third party, if the Lenders and/or Agent does not know
that the third party is prohibited from disclosing the information. Lenders and/or Agent may use
confidential information for any purpose, including, without limitation, for the development of
client databases, reporting purposes, and market analysis, so long as Lenders and/or Agent do not
disclose Borrower’s identity or the identity of any person associated with Borrower or otherwise
render such identities determinable unless otherwise expressly permitted by this Agreement. The
provisions of the immediately preceding sentence shall survive the termination of this
Agreement. The agreements provided under this Section 12.9 supersede all prior
agreements, understanding, representations, warranties, and negotiations between the parties about
the subject matter of this Section 12.9. In respect of confidential information provided by
Borrower to Agent and Lenders hereunder and Borrower’s securities Agent and Lenders agree to comply
with applicable securities laws which prohibit trading in securities based upon material non-public
information.




     12.10 Right of Set Off. Borrower hereby grants to Agent and to each Lender, a lien, security
interest and right of set off as security for all Obligations to Agent and each Lender hereunder,
whether now existing or hereafter arising upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of Agent or the
Lenders or any entity under the control of Agent or the Lenders (including a Agent affiliate) or in
transit to any of them. At any time after the occurrence and during the continuance of an Event of
Default, without demand or notice, Agent or the Lenders may set off the same or any part thereof
and apply the same to any liability or obligation of Borrower even though unmatured and regardless
of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE
AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR
OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.




     12.11 Amendments.




          (a) No amendment, modification, termination or waiver of any provision of this Agreement or
any other Loan Document, no approval or consent thereunder, or any consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed
by Borrower, Agent and the Required Lenders provided that




     (i) no such amendment, waiver or other modification that would have the effect
of increasing or reducing a Lender’s Term Loan Commitment or Commitment Percentage
shall be effective as to such Lender without such Lender’s written consent;




     (ii) no such amendment, waiver or modification that would affect the rights and
duties of Agent shall be effective without Agent’s written consent or signature;




     (iii) no such amendment, waiver or other modification shall, unless signed by
all the Lenders directly affected thereby, (A) reduce the principal of, rate of
interest on or any fees with respect to any Credit Extension or forgive any
principal, interest (other than default interest) or fees (other than late charges)
with respect to any Credit Extension (B) postpone the date fixed for, or waive, any
payment of principal of any Credit Extension or of interest on any Credit Extension
(other than default interest) or any fees provided for hereunder (other than late
charges or for any termination of any commitment); (C) change the definition of the
term “Required Lenders” or the percentage of Lenders which shall be required for
Lenders to take any action hereunder; (D) release all or substantially all or any
material portion of the Collateral, authorize Borrower to sell



22









 







or otherwise dispose of all or substantially all or any material portion of the
Collateral or release any Guarantor of all or any portion of the Obligations or its
guaranty obligations with respect thereto, except, in each case with respect to this
clause (D), as otherwise may be expressly permitted under this Agreement or the
other Loan Documents (including in connection with any disposition permitted
hereunder); (E) amend, waive or otherwise modify this Section 12.11 or the
definitions of the terms used in this Section 12.11 insofar as the definitions
affect the substance of this Section 12.11; (F) consent to the assignment,
delegation or other transfer by any Borrower or any Guarantor of any of its rights
and obligations under any Loan Document or release Borrower or any Guarantor of its
payment obligations under any Loan Document, except, in each case with respect to
this clause (F), pursuant to a merger or consolidation permitted pursuant to this
Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the
definitions Pro Rata Share, Term Loan Commitment, Commitment Percentage or that
provide for the Lenders to receive their Pro Rata Shares of any fees, payments,
setoffs or proceeds of Collateral hereunder; (H) subordinate the Liens granted in
favor of Agent securing the Obligations; or (I) amend any of the provisions of
Section 12.10. It is hereby understood and agreed that all Lenders shall be deemed
directly affected by an amendment, waiver or other modification of the type
described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the preceding
sentence;




     (iv) the provisions of the foregoing clauses (i), (ii) and (iii) are subject to
the provisions of any interlender or agency agreement among the Lenders and Agent
pursuant to which any Lender may agree to give its consent in connection with any
amendment, waiver or modification of the Loan Documents only in the event of the
unanimous agreement of all Lenders.




          (b) Other than as expressly provided for in Section 12.11(a)(i)-(iii), Agent may, if requested
by the Required Lenders, from time to time designate covenants in this Agreement less restrictive
by notification to a representative of the Borrower.




     12.12 Publicity. Borrower will not directly or indirectly publish, disclose or otherwise use
in any public disclosure, advertising material, promotional material, press release (unless
Borrower has provided Agent with an opportunity to review and approve the same in Agent’s
reasonable discretion) or interview, any reference to the name, logo or any trademark of Agent or
any Lender or any of their Affiliates or any reference to this Agreement or the financing evidenced
hereby, in any case except as required by applicable Law, subpoena or judicial or similar order, in
which case Borrower shall endeavor to give Agent prior written notice of such publication or other
disclosure. Each Lender and Borrower hereby authorizes each Lender to publish the name of such
Lender and Borrower, the existence of the financing arrangements referenced under this Agreement,
the primary purpose and/or structure of those arrangements, the amount of credit extended under
each facility, the title and role of each party to this Agreement, and the total amount of the
financing evidenced hereby in any “tombstone”, comparable advertisement or press release which such
Lender elects to submit for publication. In addition, each Lender and Borrower agrees that each
Lender may provide lending industry trade organizations with information necessary and customary
for inclusion in league table measurements after the Effective Date. With respect to any of the
foregoing, such authorization shall be subject to such Lender providing Borrower and the other
Lenders with an opportunity to review and confer with such Lender regarding, and approve, the
contents of any such tombstone, advertisement or information, as applicable, prior to its initial
submission for publication, but subsequent publications of the same tombstone, advertisement or
information shall not require Borrower’s approval.




     12.13 No Strict Construction. The parties hereto have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.



     13 AGENT




     13.1 Appointment and Authorization of Agent. Each Lender hereby irrevocably appoints,
designates and authorizes Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto.



23









 







Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan
Document, Agent shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender or
participant, and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against
Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent”
herein and in the other Loan Documents with reference to Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable
Law. Instead, such term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting parties.




     13.2 Delegation of Duties. Agent may execute any of its duties under this Agreement or any
other Loan Document by or through its, or its Affiliates’, agents, employees or attorneys-in-fact
and shall be entitled to obtain and rely upon the advice of counsel and other consultants or
experts concerning all matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.




     13.3 Liability of Agent. Except as otherwise provided herein, no Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under or in connection
with this Agreement or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its duties expressly set forth
herein), or (b) be responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by Borrower or any officer thereof, contained herein or
in any other Loan Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of Borrower or any Affiliate thereof.




     13.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel to Borrower), independent accountants and other experts
selected by Agent. Agent shall be fully justified in failing or refusing to take any action under
any Loan Document unless it shall first receive such advice or concurrence of all Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in accordance with a
request or consent of all Lenders and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.




     13.5 Notice of Default. Agent shall not be deemed to have knowledge or notice of the
occurrence of any default and/or Event of Default, unless Agent shall have received written notice
from a Lender or Borrower, describing such default or Event of Default. Agent will notify the
Lenders of its receipt of any such notice. Agent shall take such action with respect to an Event of
Default as may be directed in writing by the Required Lenders in accordance with Article 9(a);
provided, however, that while an Event of Default has occurred and is continuing, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action, with respect to
such Event of Default as Agent shall deem advisable or in the best interest of the Lenders,
including without limitation, satisfaction of other security interests, liens or encumbrances on
the Collateral not permitted under the Loan Documents, payment of taxes on behalf of Borrower,
payments to landlords, warehouseman, bailees and other persons in possession of the Collateral and
other actions to protect and safeguard the Collateral, and actions with respect to insurance claims
for casualty events affecting Borrower and/or the Collateral.



24









 






     13.6 Credit Decision; Disclosure of Information by Agent. Each Lender acknowledges that no
Agent-Related Person has made any representation or warranty to it, and that no act by Agent
hereafter taken, including any consent to and acceptance of any assignment or review of the affairs
of Borrower or any Affiliate thereof, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons
have disclosed material information in their possession. Each Lender represents to Agent that it
has, independently and without reliance upon any Agent-Related Person and based on such documents
and information as it has deemed appropriate, made its own appraisal of, and investigation into,
the business, prospects, operations, property, financial and other condition and creditworthiness
of Borrower and its respective Subsidiaries, and all applicable bank or other regulatory Laws
relating to the transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and creditworthiness of
Borrower. Except for notices, reports and other documents expressly required to be furnished to the
Lenders by Agent herein, Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrower or any of its Affiliates which may come into
the possession of any Agent-Related Person.




     13.7 Indemnification of Agent. Whether or not the transactions contemplated hereby are
consummated, each Lender shall, severally and pro rata based on its respective Pro Rata Share,
indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of
Borrower and without limiting the obligation of Borrower to do so), and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities (which shall not include
legal expenses of Agent incurred in connection with the closing of the transactions contemplated by
this Agreement) incurred by it; provided, however, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined
in a judgment by a court of competent jurisdiction to have resulted from such Agent-Related
Person’s own gross negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 13.7. Without limitation of the
foregoing, each Lender shall, severally and pro rata based on its respective Pro Rata Share,
reimburse Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including
Lenders’ Expenses incurred after the closing of the transactions contemplated by this Agreement)
incurred by Agent (in its capacity as Agent, and not as a Lender) in connection with the
preparation, execution, delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this Section 13.7 shall survive the payment in full of the
Obligations, the termination of this Agreement and the resignation of Agent.




     13.8 Agent in its Individual Capacity. With respect to its Credit Extensions, SVB shall have
the same rights and powers under this Agreement as any other Lender and may exercise such rights
and powers as though it were not Agent, and the terms “Lender” and “Lenders” include SVB in its
individual capacity.




     13.9 Successor Agent. Agent may resign as Agent upon ten (10) days’ notice to the Lenders. If
Agent resigns under this Agreement, all Lenders shall appoint from among the Lenders (or the
affiliates thereof) a successor Agent for the Lenders, which successor Agent shall (unless an Event
of Default has occurred and is continuing) be subject to the approval of Borrower (which approval
shall not be unreasonably withheld or delayed). If no successor Agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders, a
successor Agent from among the Lenders (or the affiliates thereof). Upon the acceptance of its
appointment as successor Agent hereunder, the Person acting as such successor Agent shall succeed
to all the rights, powers and duties of the retiring Agent and the respective term “Agent” means
such successor Agent and the retiring Agent’s appointment, powers and duties in such capacities
shall be terminated without any other further act or deed on its behalf. After any retiring Agent’s
resignation hereunder as Agent, the provisions of this Article 13 and Section 12.2 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor Agent has accepted appointment as Agent by the date



25









 







ten (10) days following a retiring Agent’s notice of resignation, the retiring Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Lenders appoint a successor agent as
provided for above.




     13.10 Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to Borrower, Agent (irrespective of whether the principal of any Loan, shall
then be due and payable as herein expressed or by declaration or otherwise and irrespective of
whether Agent shall have made any demand on Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:




          (a) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Credit Extensions and all other Obligations that are owing and unpaid and
to file such other documents as may be necessary or advisable in order to have the claims of the
Lenders and Agent (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Lenders and Agent and their respective agents and counsel and all other amounts due
the Lenders and Agent allowed in such judicial proceeding); and




          (b) to collect and receive any monies or other property payable or deliverable on any such
claims and to distribute the same;




and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such payments to Agent
and, in the event that Agent shall consent to the making of such payments directly to the Lenders,
to pay to Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of Agent and its agents and counsel, and any other amounts due Agent. To the extent that
Agent fails timely to do so, each Lender may file a claim relating to such Lender’s claim.




     13.11 Collateral and Guaranty Matters. The Lenders irrevocably authorize Agent, at its option
and in its discretion, to release any Guarantor and any Lien on any Collateral granted to or held
by Agent under any Loan Document (i) upon the date that all Obligations due hereunder have been
fully and indefeasibly paid in full and no Term Loan Commitments or other obligations of any Lender
to provide funds to Borrower under this Agreement remain outstanding, (ii) that is transferred or
to be transferred as part of or in connection with any Transfer permitted hereunder or under any
other Loan Document, or (iii) as approved in accordance with Section 12.11. Upon request by Agent
at any time, all Lenders will confirm in writing Agent’s authority to release its interest in
particular types or items of Property, pursuant to this Section 13.11.




     13.12 Cooperation of Borrower. If necessary, Borrower agrees to (i) execute any documents
(including new Secured Promissory Notes) reasonably required to effectuate and acknowledge each
assignment of a Term Loan Commitment or Credit Extension to an assignee in accordance with Section
12.1, (ii) make Borrower’s management available to meet with Agent and prospective participants and
assignees of Term Loan Commitments or Credit Extensions and (iii) assist Agent or the Lenders in
the preparation of information relating to the financial affairs of Borrower as any prospective
participant or assignee of a Term Loan Commitment or Credit Extension reasonably may request.
Subject to the provisions of Section 12.9 Borrower authorizes each Lender to disclose to any
prospective participant or assignee of a Term Loan Commitment, any and all information in such
Lender’s possession concerning Borrower and its financial affairs which has been delivered to such
Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered to such
Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower
prior to entering into this Agreement.



     14 DEFINITIONS




     14.1 Definitions. As used in this Agreement, the following terms have the following meanings:




     “Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.



26









 






     “Account Debtor” is any “account debtor” as defined in the Code with such additions to such
term as may hereafter be made.




     “Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person,
any Person that controls or is controlled by or is under common control with the Person, and each
of that Person’s senior executive officers, directors, partners and, for any Person that is a
limited liability company, that Person’s managers and members.




     “Agent” means, SVB, not in its individual capacity, but solely in its capacity as agent on
behalf of and for the benefit of the Lenders.




     “Agent-Related Person” means Agent, together with its Affiliates, and the officers, directors,
employees, agents, advisors, auditors and attorneys-in-fact of such Persons; provided, however,
that no Agent-Related Person shall be an Affiliate of Borrower.




     “Agreement” is defined in the preamble hereof.




     “Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering, including
Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws comprising
or implementing the Bank Secrecy Act, and the Laws administered by OFAC.




     “Approved Fund” means any (i) investment company, fund, trust, securitization vehicle or
conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its business or (ii)
any Person (other than a natural person) which temporarily warehouses loans for any Lender or any
entity described in the preceding clause (i) and that, with respect to each of the preceding
clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or
(c) a Person (other than a natural person) or an Affiliate of a Person (other than a natural
person) that administers or manages a Lender.




     “Approved Lender” has the meaning given it in Section 12.1.




     “Arrangers” is defined in the preamble hereof.




     “Assignment Agreement” means an agreement substantially in the form of Exhibit E
hereto.




     “Blocked Person” means any Person: (a) listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on
behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits,
threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224,
or (e) a Person that is named a “specially designated national” or “blocked person” on the most
current list published by OFAC or other similar list.



     “Borrower” is defined in the preamble hereof.



     “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state
tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any equipment containing
such information.



     “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such
Person’s Board of Directors and delivered by such Person to Agent approving the Loan Documents to
which such Person is a party and the transactions contemplated thereby, together with a certificate
executed by its Secretary on behalf of such Person certifying that (a) such Person has the
authority to execute, deliver, and perform its obligations under each of the Loan Documents to
which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and
complete copy of the resolutions then in full force and effect authorizing and ratifying the
execution, delivery, and performance by such Person of the Loan



27









 




Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the
Loan Documents on behalf of such Person, together with a sample of the true signature(s) of such
Person(s), and (d) that Agent and the Lenders may conclusively rely on such certificate unless and
until such Person shall have delivered to Agent a further certificate canceling or amending such
prior certificate.




     “Business Day” is any day that is not a Saturday, Sunday or a day on which Agent is closed.



     “Cash Burn” means EBITDA less the sum of (a) cash taxes, (b) unfunded capital expenditures,
(c) cash interest payments, (d) principal payments on all Indebtedness (excluding payments under
the SVB Loan Agreement), (e) dividends or distributions, and (f) to the extent such payments are
not deducted in the calculation of EBITDA, license payments (excluding the Twenty-Five Million
Dollar ($25,000,000) dSivida payment and the Two Hundred Fifty Thousand Dollar ($250,000) Dow
Sumitomo payment).



     “Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed
by the United States or any agency or any State thereof having maturities of not more than one (1)
year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after
its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc., (c) certificates of deposit issued maturing no more than one (1) year
after issue, and (d) money market funds at least ninety-five percent (95%) of the assets
of which constitute Cash Equivalents of the kinds described in clauses (a) through (b) of this
definition.. For the avoidance of doubt, the direct purchase by Borrower, co-borrower, or any
subsidiary of Borrower of any Auction Rate Securities, or purchasing participations in, or entering
into any type of swap or other derivative transaction, or otherwise holding or engaging in any
ownership interest in any type of Auction Rate Security by Borrower, co-borrower, or any subsidiary
of Borrower shall be conclusively determined by the Lenders as an ineligible Cash Equivalent, and
any such transaction shall expressly violate each other provision of this agreement governing
Permitted Investments. Notwithstanding the foregoing, Cash Equivalents does not include and each
Borrower and Subsidiary is prohibited from purchasing, purchasing participations in, entering into
any type of swap or other equivalent derivative transaction, or otherwise holding or engaging in
any ownership interest in any type of debt instrument, including, without limitation, any corporate
or municipal bonds with a long-term nominal maturity for which the interest rate is reset through a
dutch auction and more commonly referred to as an auction rate security.



     “Claims” are defined in Section 12.2.



     “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the State of New York; provided, that, to the extent that the Code is used to define any
term herein or in any Loan Document and such term is defined differently in different Articles or
Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of Law, any or all of
the attachment, perfection, or priority of, or remedies with respect to, Agent’s Lien on any
Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the
State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority, or remedies and for purposes of definitions relating to such
provisions.



     “Collateral” is any and all properties, rights and assets of Borrower described on Exhibit
A.



     “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.



     “Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.



     “Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made.



     “Communication” is defined in Section 10.



     “Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit C.



     “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation
of another such as an obligation, in each case, directly or



28









 




indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or
for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of
credit for the account of that Person; and (c) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency exchange rates or
commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course
of business. The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum
reasonably anticipated liability for it determined by the Person in good faith; but the amount may
not exceed the maximum of the obligations under any guarantee or other support arrangement.




     “Control Agreement” is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary
at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Agent
pursuant to which Agent obtains control (within the meaning of the Code) for the benefit of the
Lenders over such Deposit Account, Securities Account, or Commodity Account.



     “Copyrights” are any and all copyright rights, copyright applications, copyright registrations
and like protections in each work or authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret.



     “Credit Extension” is any Term Loan or any other extension of credit by any Lender for
Borrower’s benefit.



     “Default” is any event which with notice or passage of time or both, would constitute an Event
of Default.



     “Default Rate” is defined in Section 2.2(b).



     “Deposit Account” is any “deposit account” as defined in the Code with such additions to such
term as may hereafter be made.



     “Designated Deposit Account” is the deposit account maintained by Borrower with SVB and
designated as the “Designated Deposit Account” and over which Agent shall be granted control for
the ratable benefit of all Lenders.



     “Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and
not any other currency, regardless of whether that currency uses the “$” sign to denote its
currency or may be readily converted into lawful money of the United States.



     “EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted
in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income
tax expense.



     “Effective Date” is defined in the preamble of this Agreement.



     “Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund
and (iv) any commercial bank, savings and loan association or savings bank or any other entity
which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as
amended) and which extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance companies, in each case,
which either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating of
Baa2 or higher from Moody’s Investors Service, Inc. at the date that it becomes a Lender or (B) has
total assets in excess of $5,000,000,000, and in each case of clauses (i) through (iv), which,
through its applicable lending office, is capable of lending to Borrower without the imposition of
any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee”
shall not include Borrower, any Guarantor or any of Borrower’s or any Guarantor’s Affiliates or
Subsidiaries. Notwithstanding the foregoing, in connection with assignments by a Lender due to a
forced divestiture at the request of any regulatory agency, the restrictions set forth herein shall
not apply and Eligible Assignee shall mean any Person or party.



     “Equipment” is all “equipment” as defined in the Code with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles
(including motor vehicles and trailers), and any interest in any of the foregoing.



29









 





     “ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.



     “Event of Default” is defined in Section 8.



     “Excess Availability” is defined as the lesser of (i) the current sum of all Eligible Accounts
(as defined in the SVB Loan Agreement), multiplied by the Advance Rate (as defined in the SVB Loan
Agreement), minus the aggregate amount of outstanding Advances (as defined in the SVB Loan
Agreement) under the SVB Loan Agreement, and (ii) Twenty Million Dollars ($20,000,000) minus the
aggregate amount of outstanding Advances (as defined in the SVB Loan Agreement) under the SVB Loan
Agreement.



     “FDA” means the Food and Drug Administration of the United States of America or any successor
entity thereto.



     “Final Payment” is a payment (in addition to and not a substitution for the regular monthly
payments of principal plus accrued interest) in respect of the Term Loans due on the earlier to
occur of (a) the Term Loan Maturity Date, or (b) the acceleration of the Term Loans, or (c) the
prepayment of the Term Loans pursuant to Section 2.1.1(c) or (d), equal to the original principal
amount of the Term Loans advanced to Borrower or for the account of Borrower multiplied by the
Final Payment Percentage.



     “Final Payment Percentage” is three percent (3.00%).



     “Funding Date” is any date on which a Credit Extension is made to or for the account of
Borrower which shall be a Business Day.



     “GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other Person as may be approved by a significant segment of the
accounting profession in the United States, which are applicable to the circumstances as of the
date of determination.



     “General Intangibles” is all “general intangibles” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all Intellectual Property, claims, income and other tax refunds, security and other
deposits, options to purchase or sell real or personal property, rights in all litigation presently
or hereafter pending (whether in contract, tort or otherwise), insurance policies (including
without limitation key man, property damage, and business interruption insurance), payments of
insurance and rights to payment of any kind.



     “Good Faith Deposit” is defined in Section 2.3(e).



     “Governmental Approval” is any consent, authorization, approval, order, license, franchise,
permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or
other act by or in respect of, any Governmental Authority.



     “Governmental Authority” is any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory organization.



     “Guarantor” is any present or future guarantor of the Obligations.



     “Iluvien FDA Approval” means the issuance to Borrower of all necessary licenses, certificates,
accreditations, product clearances or approvals, provider numbers or provider authorizations,
marketing authorizations, other authorizations, registrations, permits, consents and/or other
Governmental Approvals by the Food and Drug Administration of the United States or any successor
entity thereto or any other Governmental Authority under applicable United States Law required for
the manufacture, marketing and sale of Iluvien Product(s) by Borrower.



30









 





     “Iluvien Product” means an intravitreal insert for human use that delivers fluocinolone
acetonide for the treatment of diabetic macular edema (DME).



     “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.



     “Indemnified Liabilities” is defined in Section 12.2.



     “Indemnified Person” is defined in Section 12.2.



     “Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency Law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.



     “Intellectual Property” means all of Borrower’s right, title, and interest in and to the
following:




     (a) its Copyrights, Trademarks and Patents;




     (b) any and all trade secrets and trade secret rights, including, without limitation, any
rights to unpatented inventions, know-how, operating manuals;




     (c) any and all source code;




     (d) any and all design rights which may be available to a Borrower;




     (e) any and all claims for damages by way of past, present and future infringement of any of
the foregoing, with the right, but not the obligation, to sue for and collect such damages for said
use or infringement of the Intellectual Property rights identified above; and




     (f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.



     “Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date, including, in any
event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower,
including, without limitation or duplication, all commissions, discounts, or related amortization
and other fees and charges with respect to letters of credit and bankers’ acceptance financing and
the net costs associated with interest rate swap, cap, and similar arrangements, and the interest
portion of any deferred payment obligation (including leases of all types).



     “Inventory” is all of Borrower’s right, title, and interest in and to “inventory” as defined
in the Code in effect on the date hereof with such additions to such term as may hereafter be made,
and includes without limitation all of Borrower’s right, title, and interest in ant to
merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products, including without limitation such inventory as is temporarily out of Borrower’s
custody or possession or in transit and including any returned goods and any documents of title
representing any of the above.



     “Investment” is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.



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



     “IP Collateral” is defined on Exhibit A.



31









 





     “IP Disposition Proceeds” is defined in Section 6.14.



     “IP Lien Event” has occurred when on any date (a) Borrower’s unrestricted balance sheet cash
and Cash Equivalents in one or more Collateral Accounts over which Agent has obtained a Control
Agreement with respect to such Collateral Account, plus (b) Excess Availability under the SVB Loan
Agreement is less than the product of (i) six (6) times (ii) 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.



     “IP Release Event” has occurred when with respect to an IP Lien Event on any date (a)
Borrower’s unrestricted balance sheet cash and Cash Equivalents in one or more Collateral Accounts
over which Agent has obtained a Control Agreement with respect to such Collateral Account, plus (b)
Excess Availability under the SVB Loan Agreement is equal to or greater than the product of
(i) twelve (12) times (ii) the Monthly Cash Burn Amount.



     “Key Person” is Borrower’s President and Chief Executive Officer (who is Dan Myers, as of the
Effective Date) and Chief Operating Officer (who is Rick Eisworth, as of the Effective Date).



     “Law” means any and all federal, state, provincial, territorial, local and foreign statute,
law, judicial decision, regulation, guidance, guideline, ordinance, rule, judgment, order, decree,
code, plan, injunction, permit, concession, grant, franchise, governmental agreement and
governmental restriction, whether now or hereafter in effect, which are applicable to Borrower in
any particular circumstance.



     “Lender” is any one of the Lenders.



     “Lenders” shall mean the Persons identified on Schedule 1.1 hereto and each assignee that
becomes a party to this Agreement pursuant to Section 12.1.



     “Lenders’ Expenses” are all audit fees and expenses, costs, and expenses (including reasonable
attorneys’ fees and expenses) of Lenders and Agent for preparing, amending, negotiating,
administering, defending and enforcing the Loan Documents (including, without limitation, those
incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Agent or
the Lenders in connection with the Loan Documents.



     “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other
encumbrance of any kind, whether voluntarily incurred or arising by operation of Law or otherwise
against any property.



     “Loan Documents” are, collectively, this Agreement, the Warrant, the Perfection Certificate,
the IP Agreement and any other intellectual property security agreement delivered by Borrower
hereunder, any note, or notes or guaranties executed by Borrower in connection with the
indebtedness governed by this Agreement, and any other present or future agreement between Borrower
and/or for the benefit of the Lenders and Agent in connection with this Agreement, all as amended,
restated, or otherwise modified.



     “Material Intellectual Property” is all of Borrower’s Intellectual Property that is material
to the condition (financial or other), business or operations of Borrower.



     “Monthly Cash Burn Amount” means, as of any date of determination and based on the financial
statements contained in the Borrower’s most recently filed SEC Reports and most recent Board
approved plan, the greater of (i) the average Cash Burn for the preceding three (3) months, or (ii)
the average projected Cash Burn for the succeeding three (3) months.



     “Net Income” means, for any period as of the date of determination, the net profit (or loss),
after provision for taxes, of Borrower for such period taken as a single accounting period.



     “Obligations” are all of Borrower’s obligations to pay when due any debts, principal,
interest, Lenders’ Expenses, the Prepayment Fee, the Final Payment, the Termination Fee, and other
amounts Borrower owes the Lenders now or later, under this Agreement , the SVB Loan Agreement, or
the other Loan Documents, and including interest accruing after



32









 




Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to
the Lenders and/or Agent, and the performance of Borrower’s duties under the Loan Documents.




     “OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.



     “OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001)
and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the
rules and regulations of OFAC or pursuant to any other applicable Executive Orders.



     “Operating Documents” are, for any Person, such Person’s formation documents, as certified
with the Secretary of State of such Person’s state of formation on a date that is no earlier than
30 days prior to the Effective Date, and (a) if such Person is a corporation, its bylaws in current
form, (b) if such Person is a limited liability company, its limited liability company agreement
(or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or
similar agreement), each of the foregoing with all current amendments or modifications thereto.



     “Origination Fee” is defined in Section 2.3(a).



     “Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.



     “Payment/Advance Form” is that certain form attached hereto as Exhibit B.



     “Payment Date” is the last calendar day of each calendar month.



     “Perfection Certificate” is defined in Section 5.1.



     “Permits” means licenses, certificates, accreditations, product clearances or approvals,
provider numbers or provider authorizations, marketing authorizations, other authorizations,
registrations, permits, consents and approvals required in connection with the conduct of
Borrower’s or any Subsidiary’s business or to comply with any applicable Laws, including, without
limitation, drug listings and drug establishment registrations if applicable to any Iluvien
Product, and those issued by State governments for the conduct of Borrower’s or any Subsidiary’s
business.



     “Permitted Indebtedness” is:



     (a) Borrower’s Indebtedness to the Lenders and Agent under this Agreement, the SVB Loan
Agreement, and the other Loan Documents;



     (b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;



     (c) Subordinated Debt;



     (d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;



     (e) Indebtedness secured by Permitted Liens; and



     (h) extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness (a) through (e) above, provided that the principal amount thereof is not
increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or
its Subsidiary, as the case may be.



     “Permitted Investments” are:



     (a) Investments shown on the Perfection Certificate and substantially similar to those
existing on the Effective Date;



33









 





     (b) (i) Investments consisting of Cash Equivalents and (ii) any Investments permitted by
Borrower’s investment policy, as amended from time to time, provided that such investment policy
(and any such amendment thereto) has been approved in writing by Agent;



     (c) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business;
provided that this paragraph (c) shall not apply to Investments of Borrower in any Subsidiary;



     (d) joint ventures or strategic alliances in the ordinary course of Borrower’s business
consisting of the non-exclusive licensing of technology, the development of technology or the
providing of technical support, provided that any cash investments by Borrower do not exceed One
Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year.



     “Permitted Liens” are:



     (a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising
under this Agreement, the SVB Loan Agreement, and the other Loan Documents;



     (b) Liens for taxes, fees, assessments or other government charges or levies, either not due
and payable or being contested in good faith and for which Borrower maintains adequate reserves on
its Books, provided that no notice of any such Lien has been filed or recorded under the Internal
Revenue Code of 1986, as amended , and the Treasury Regulations adopted thereunder;



     (c) purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing
the acquisition of the Equipment securing no more than One Hundred Thousand Dollars ($100,000) in
the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien
is confined to the property and improvements and the proceeds of the Equipment;



     (d) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature
arising in the ordinary course of business so long as such Liens attach only to Inventory, securing
liabilities in the aggregate amount not to exceed Fifty Thousand Dollars ($50,000) and which are
not delinquent or remain payable without penalty or which are being contested in good faith and by
appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of
the property subject thereto;



     (e) leases or subleases of real property granted in the ordinary course of Borrower’s business
(or, if referring to another Person, in the ordinary course of such Person’s business), and leases,
subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual
Property) granted in the ordinary course of Borrower’s business (or, if referring to another
Person, in the ordinary course of such Person’s business), if the leases, subleases,
licenses and sublicenses do not prohibit granting Agent and Lenders a security interest therein;



     (f) non-exclusive licenses of Intellectual Property granted to third parties in the ordinary
course of business; and



     (g) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) and (f) above, but any extension, renewal or replacement Lien must
be limited to the property encumbered by the existing Lien and the principal amount of the
Indebtedness may not increase.



     “Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.



     “Prepayment Fee” means with respect to any Term Loan subject to prepayment prior to the Term
Loan Maturity Date, whether by mandatory or voluntary prepayment, acceleration or otherwise, an
additional fee payable to the Lenders in amount equal to:



34









 





     (i) for a prepayment made on or after the Effective Date through and including the date which
is twelve (12) months after the Effective Date, five percent (5.00%) of the outstanding principal
amount of the Term Loans on the date of such prepayment;



     (ii) for a prepayment made after the date which is after the date that is twelve (12) months
after the Effective Date through and including the date which is twenty-four (24) months after the
Effective Date, three percent (3.00%) of the outstanding principal amount of the Term Loans on the
date of such prepayment; and



     (ii) for a prepayment made after the date which is after the date that is twenty-four (24)
months after the Effective Date and prior to the Term Loan Maturity Date, one percent (1.00%) of
the outstanding principal amount of the Term Loans on the date of such prepayment.



     Provided, that (i) any applicable Prepayment Fee shall be reduced by 50% in the event that the
prepayment of the Terms Loans is made as a condition precedent to, in connection with or
immediately upon the acquisition by Borrower (whether by merger or the acquisition of all or
substantially all of Borrower’s assets) by a non-affiliated third party, provided that no Event of
Default has occurred and is continuing, and (ii) no Prepayment Fee shall be payable to SVB to the
extent the prepayment of the Terms Loans held by SVB is financed with the proceeds of an advance
under the SVB Loan Agreement, provided that for the ninety (90) day period following such
prepayment, no payments are made under the SVB Loan Agreement except for mandatory payments under
the SVB Loan Agreement.



     “Pro Rata Share” means with respect each Lender, a percentage (expressed as a decimal, rounded
to the ninth decimal place) determined by dividing the amount of Term Loans held by such Lender by
the aggregate amount of all outstanding Term Loans.



     “Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made



     “Required Lenders” means (i) for so long as all of the Persons that are Lenders on the
Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests
in their respective Credit Extensions, Lenders holding one hundred percent (100%) of the aggregate
outstanding principal balance of the Credit Extensions, or (ii) at any time from and after any
Original Lender has assigned or transferred any interest in its Credit Extensions, Lenders holding
sixty-six percent (66%) or more of the aggregate outstanding principal balance of the Credit
Extensions, plus, in respect of this clause (ii), (A) each Original Lender that has not assigned or
transferred any portion of its respective Credit Extensions and (B) each assignee of an Original
Lender provided such assignee was assigned or transferred and continues to hold 100% of the
assigning Original Lender’s interest in the Credit Extensions (in each case in respect of clauses
(A) and (B) of this clause (ii), whether or not such Lender is included within the Lenders holding
sixty-six percent (66%) of the Terms Loans); provided, however, that notwithstanding the foregoing,
for purposes of Section 9.1(b) hereof, “Required Lenders” means (i) for so long as all Original
Lenders retain 100% of their interests in their respective Credit Extensions, Lenders holding one
hundred percent (100%) of the aggregate outstanding principal balance of the Credit Extensions, or
(ii) at any time from and after any Original Lender has assigned or transferred any interest in its
Credit Extensions, Lenders holding sixty-six percent (66%) or more of the aggregate outstanding
principal balance of the Credit Extensions, plus, in respect of this clause (ii), each Original
Lender that has not assigned or transferred any portion of its respective Credit Extension (in each
case in respect of this clause (ii), whether or not such Original Lender is included within the
Lenders holding sixty-six percent (66%) of the Credit Extensions). For purposes of this definition
only, a Lender shall be deemed to include itself, and any Lender that is an Affiliate or Approved
Fund of such Lender.



     “Required Permit” means a Permit (a) issued or required under Laws applicable to the business
of Borrower or any of its Subsidiaries or necessary in the manufacturing, importing, exporting,
possession, ownership, warehousing, marketing, promoting, sale, labeling, furnishing, distribution
or delivery of goods or services under Laws applicable to the business of Borrower or any of its
Subsidiaries or any Drug Application (including without limitation, at any point in time, all
licenses, approvals and permits issued by the FDA or any other applicable Governmental Authority
necessary for the testing, manufacture, marketing or sale of any Iluvien Product by Borrower as
such activities are being conducted by Borrower with respect to such Iluvien Product at such time),
and (b) issued by any Person from which Borrower or any of its Subsidiaries have received an
accreditation.



35









 





     “Requirement of Law” is as to any Person, the organizational or governing documents of such
Person, and any Law (statutory or common), treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its property is subject.



     “Responsible Officer” is any of the President and Chief Executive Officer or Chief Financial
Officer of Borrower.



     “Restricted License” is any material license or other agreement with respect to which Borrower
is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security
interest in Borrower’s interest in such license or agreement or any other property, or (b) for
which a default under or termination of could interfere with the Agent’s or any Lender’s right to
sell any Collateral.



     “SEC Reports” is defined in Section 6.2(a).



     “Secured Promissory Note” is defined in Section 2.4.



     “Secured Promissory Note Record” is a record maintained by each Lender with respect to the
outstanding Obligations and credits made thereto.



     “Securities Account” is any “securities account” as defined in the Code with such additions to
such term as may hereafter be made.



     “Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now
or hereafter indebtedness to the Lenders (pursuant to a subordination, intercreditor, or other
similar agreement in form and substance satisfactory to Agent and the Lenders entered into between
Agent, Borrower and the other creditor), on terms acceptable to Agent and the Lenders.



     “Subsidiary” means, with respect to any Person, any Person of which more than 50.0% of the
voting stock or other equity interests (in the case of Persons other than corporations) is owned or
controlled, directly or indirectly, by such Person or one or more of Affiliates of such Person.



     “SVB Loan Agreement” is that certain Loan and Security Agreement by and between Borrower and
Bank dated as of October 14, 2010, as amended.



     “Term Loan” or “Term Loans” is defined in Section 2.1.1(a) hereof.



     “Term A Loan” is defined in Section 2.1.1(a) hereof.



     “Term B Loan” is defined in Section 2.1.1(a) hereof.



     “Term B Loan Draw Period” is the period commencing upon the occurrence of the Iluvien FDA
Approval (provided no Event of Default has occurred and is continuing on such date) and continuing
through the earlier to occur of (i) July 31, 2011, and (ii) the occurrence of an Event of Default.



     “Term Loan Commitment” means, for any Lender, the obligation of such Lender to make a Term
Loan, up to the principal amount shown on Schedule 1.1. “Term Loan Commitments” means the
aggregate amount of such commitments of all Lenders.



     “Term Loan Maturity Date” is October 31, 2013.



     “Trademarks” means any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and the entire
goodwill of the business of Borrower connected with and symbolized by such trademarks.



     “Transfer” is defined in Section 7.1.



36









 





     “U.S.” is the United States of America.



     “Warrants” are those certain Warrants to Purchase Stock dated as of the Effective Date
executed by Borrower in favor of each Lender or such Lender’s Affiliates.



37









 




IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.




	 	 	 	 	 
	BORROWER:



ALIMERA SCIENCES, INC.

 	 	 
	By  	/s/ Richard S. Eiswirth, Jr.
 	 	 
	 	Name:  	Richard S. Eiswirth, Jr. 	 	 
	 	Title:  	Chief Operating Officer and Chief Financial Officer 	 	 
	 
	AGENT:



SILICON VALLEY BANK

 	 	 
	By  	/s/ Scott McCarty
 	 	 
	 	Name:  	Scott McCarty 	 	 
	 	Title:  	Vice President 	 	 
	 
	LENDERS:



MIDCAP FUNDING III, LLC, as a Lender

 	 	 
	By  	/s/ Josh Groman
 	 	 
	 	Name:  	Josh Groman 	 	 
	 	Title:  	Managing Director 	 	 
	 
	SILICON VALLEY BANK, as a Lender

 	 	 
	By  	/s/ Scott McCarty
 	 	 
	 	Name:  	Scott McCarty 	 	 
	 	Title:  	Vice President 	 	 
	 



[Signature Page to the Loan and Security Agreement]

















 





SCHEDULE 1.1




LENDERS AND COMMITMENTS



	 	 	 	 	 	 	 	 	 
	Lender	 	Term A Loan Commitment	 	Commitment Percentage
	MidCap Funding III, LLC
	 	$	3,750,000	 	 	 	60.0	%
	Silicon Valley Bank
	 	$	2,500,000	 	 	 	40.0	%
	TOTAL TERM A LOANS
	 	$	6,250,000	 	 	 	100	%






	 	 	 	 	 	 	 	 	 
	Lender	 	Term B Loan Commitment	 	Commitment Percentage
	MidCap Funding III, LLC
	 	$	3,750,000	 	 	 	60.0	%
	Silicon Valley Bank
	 	$	2,500,000	 	 	 	40.0	%
	TOTAL TERM B LOANS
	 	$	6,250,000	 	 	 	100	%
	TOTAL TERM LOANS
	 	$	12,500,000	 	 	 	100	%






 









 





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 insurance 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, 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 (whether or not
the security interest in IP Collateral is effective as provided below) shall include all Accounts,
license and royalty fees and other revenues, proceeds, or income arising out of or relating to any
of the foregoingand any claims for damage by way of any past, present, or future
infringement of any of the foregoing (collectively, the “IP Proceeds”); provided, that, upon the
occurrence of a IP Lien Event (whether occurring prior to or after an IP Release Event), the
Collateral shall include all IP Collateral automatically and without any further action of the
parties, and this Agreement shall constitute a security agreement for all purposes of the Code with
respect to such IP Collateral; and provided, further, upon the occurrence of a IP Release Event, at
Borrower’s sole cost and expense, Agent shall execute and deliver to Borrower all releases,
terminations and other instruments as may be necessary to release Agent’s Lien in and to the IP
Collateral, 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.



     Pursuant to the terms of a certain negative pledge arrangement with Lenders, Borrower has
agreed not to encumber any of its Intellectual Property without Lenders’ prior written consent.



 









 





EXHIBIT
B — LOAN PAYMENT/ADVANCE REQUEST FORM




Deadline is Noon E.S.T.



			
	 	 	 
	Fax To:
	 	Date:                                         











	 	 	 

	LOAN PAYMENT:
	 	 
	Alimera Sciences, Inc.

	 
	 	 
	From Account #                                         

	 	To Account #                                                             
	(Deposit Account #)

	 	                    (Loan Account #)
	Principal $                                          and/or Interest $                                                             
	 
	 	 
	Authorized Signature:                                         

	 	Phone Number:                                         
	Print Name/Title:                                         
	 	 
















	 	 	 

	Loan Advance:
	 	 
	 
	 	 
	Complete Outgoing Wire Request section below if all or a portion of the funds from this loan
advance are for an outgoing wire.
	 
	 	 
	From Account #                                         

	 	To Account #                                                             
	(Loan Account #)

	 	                    (Deposit Account #)
	 
	 	 
	Amount of Advance $                                         
	 	 
	 
	 	 
	     All Borrower’s representations and warranties in the Loan and Security Agreement are
true, correct and complete in all material respects on the date of the request for an
advance; provided, however, that such materiality qualifier shall not be applicable
to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those representations and
warranties expressly referring to a specific date shall be true, accurate and
complete in all material respects as of such date:
	 
	 	 
	Authorized Signature:                                         

	 	Phone Number:                                                             
	Print Name/Title:                                         
	 	 













	 	 	 

	Outgoing Wire Request:
	 	 
	Complete only if all or a portion of funds from the
    loan advance above is to be wired.

	Deadline for same day processing is noon, E.S.T.
	 	 
	 
	 	 
	Beneficiary Name:                                         

	 	Amount of Wire: $                                                            
	Beneficiary Lender:                                         

	 	Account Number:                                                             
	City and State:                                         
	 	 
	 
	 	 
	Beneficiary Lender Transit (ABA) #:                     

	 	Beneficiary Lender Code (Swift, Sort, Chip, etc.):                                         
	(For International Wire Only)
	 	 
	 
	 	 
	Intermediary Lender:                                         

	 	Transit (ABA) #:                                                             
	For Further Credit to:                                                                                                                                                                 
	 
	 	 
	Special Instruction:                                                                                                                                                                 
	 
	 	 
	     By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be
processed in accordance with and subject to the terms and conditions set forth in the agreements(s)
covering funds transfer service(s), which agreements(s) were previously received and executed by me
(us).
	 
	 	 
	Authorized Signature:                                         

	 	2nd Signature (if required):                                         
	Print Name/Title:                                          	 	Print Name/Title:                                                                                  
	 
	 	 
	Telephone #:                                         

	 	Telephone #:                                         







 









 






EXHIBIT C — COMPLIANCE CERTIFICATE




			
	 	 	 
	     TO: Silicon Valley Bank, as Agent
	 	Date:                     






     FROM: Alimera Sciences, Inc.



     The undersigned authorized officer of Alimera Sciences, Inc. (“Borrower”) certifies that under
the terms and conditions of the Loan and Security Agreement between Borrower, Agent and the Lenders
(the “Agreement”), (1) Borrower is in complete compliance for the period ending
                    
with all required covenants except as noted below, (2) there are no Events of Default, (3) all
representations and warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in all material
respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to
the terms of Section 5.8 of the Agreement, and (5) no Liens have been levied or claims made against
Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which
Borrower has not previously provided written notification to Agent. Attached are the required
documents supporting the certification. The undersigned certifies, in the capacity as an officer
of Borrower, that these are prepared in accordance with GAAP consistently applied from one period
to the next except as explained in an accompanying letter or footnotes. The undersigned
acknowledges, in the capacity as an officer of Borrower, that no borrowings may be requested at any
time or date of determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this certificate is delivered.
Capitalized terms used but not otherwise defined herein shall have the meanings given them in the
Agreement.



     Please indicate compliance status by circling Yes/No under “Complies” column.



	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	10-K, 10-Q and 8-K

	 	Within 5 days of filing with the SEC
	 	Yes   No
	Audited Financial Statements

	 	Annually within 120 days after FYE
	 	Yes   No
	Board Approved Projections

	 	Annually within 30 days after
approval, but no later
March than March
31st of each calendar
year.
	 	Yes   No
	Compliance Certificate

	 	Monthly within 30 days
	 	Yes   No
	Bank Statements

	 	Monthly within 30 days
	 	Yes   No






	 	 	 	 	 	 	 	 	 

	Monthly Cash Burn Amount

	 	 	$	 	 	X (6)=$
	 	 
	Cash

	 	 	$	 	 	 	 	 






     Section 6.2(c) and (d)





The following Intellectual Property was registered (or a registration application submitted) after
the Effective Date. Set forth below is a list of material changes to the composition of the
Intellectual Property (if no registrations or material changes, state “None”).




 





 





The following is a list of all Required Permits obtained relating to such new Iluvien Product (if
no Required Permits obtained, state “None”).




 





 




 









 





     The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)


 




 




                    




	 	 	 	 	 	 	 	 	 	 	 

	Alimera Sciences,
Inc.

 	 	 	 	AGENT USE ONLY	 	 
	By:

	 	 	 	 	 	 	 	Received by:                                         	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	authorized signer	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 	 	Date:                                                             	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Verified:                                         	 	 
	 

	 	 	 	 	 	 	 	authorized signer	 	 
	 

	 	 	 	 	 	 	 	Date:                                                             	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Compliance Status:          Yes     No	 	 






 









 






EXHIBIT D — SECURED PROMISSORY NOTE




SECURED PROMISSORY NOTE



			
	 	 	 
	$                     
	 	Dated:                     , 20___






     FOR
VALUE RECEIVED, the undersigned, ALIMERA SCIENCES, INC., a                      corporation (“Borrower”)
HEREBY PROMISES TO PAY to the order of SILICON VALLEY BANK (“Lender”) the principal amount
of
                     DOLLARS ($                    ) or such lesser amount as shall equal the
outstanding principal balance of the Term
           Loan made to Borrower by Lender, plus interest on
the aggregate unpaid principal amount of the Term
           Loan, at the rates and in accordance with
the terms of the Loan and Security Agreement by and between Borrower and Silicon Valley Bank, as
Agent, and the Lenders as defined therein (as amended, restated, supplemented or otherwise modified
from time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount and all
accrued interest hereunder and under the Loan Agreement shall be due and payable on Term Loan
Maturity Date as set forth in the Loan Agreement.


Borrower agrees to pay any initial partial month interest payment from the date of this Secured
Promissory Note (this “Note”) to the first Payment Date (“Interim Interest”) on the first Payment
Date.



Principal,
interest and all other amounts due with respect to the Term            Loan, are payable in
lawful money of the United States of America to Lender as set forth in the Loan Agreement and this
Note. The principal amount of this Note and the interest rate applicable thereto, and all payments
made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed
on the grid attached hereto which is part of this Note.



The Loan
Agreement, among other things, (a) provides for the making of a secured Term            Loan to
Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of
certain stated events.



This Note may not be prepaid except as set forth in Section 2.1.1(c) and Section 2.1.1(d) of the
Loan Agreement.



This Note
and the obligation of Borrower to repay the unpaid principal amount of the Term            Loan,
interest on the Term
           Loan and all other amounts due Lender under the Loan Agreement is secured
under the Loan Agreement.



Presentment for payment, demand, notice of protest and all other demands and notices of any kind in
connection with the execution, delivery, performance and enforcement of this Note are hereby
waived.



Borrower shall pay all reasonable fees and expenses, including, without limitation, reasonable
attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of
Borrower’s obligations hereunder not performed when due. This Note shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.



Note Register; Ownership of Note. The ownership of an interest in this Note shall be
registered on a record of ownership maintained by Lender or its agent. Notwithstanding anything
else in this Note to the contrary, the right to the principal of, and stated interest on, this Note
may be transferred only if the transfer is registered on such record of ownership and the
transferee is identified as the owner of an interest in the obligation. Borrower shall be entitled
to treat the registered holder of this Note (as recorded on such record of ownership) as the owner
in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim
to or interest in this Note on the part of any other person or entity.







 









 








     IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers
thereunto duly authorized on the date hereof.



	 	 	 	 	 
	 	BORROWER:



ALIMERA SCIENCES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



1243337.12