Document:

EX-10.1

EXHIBIT 10.1

June 30, 2008

Martin J. Sullivan,

American International Group, Inc.,

70 Pine Street,

New York, New York 10270.

Martin:

          The Board appreciates your efforts and contributions as President and Chief Executive Officer
over the past three years. On behalf of American International Group, Inc. (“AIG”), we are
proposing the following retirement and transition arrangements in recognition of over thirty-five
years of service.

     1. Acceptance of Resignation

          This letter will serve as acceptance of your resignation as an officer and director of AIG and
as an officer and/or director of any of its affiliated companies. The effective date of your
resignation will be July 1, 2008.

     2. Benefits

          AIG agrees that your resignation is for “Good Reason” for purposes of your Employment
Agreement with AIG, dated June 27, 2005, and amended by the letter dated March 12, 2008 (together,
your “Employment Agreement”), and waives any related notice or cure provisions in your Employment
Agreement.

          Schedule A sets forth the payments and benefits that you are entitled to receive under
Section 9(c) of your Employment Agreement. Schedule B sets forth the long-term incentive
and equity-based awards that are subject to Section 5 of the March 12, 2008, amendment to your
Employment Agreement, specifies the dates on which you may exercise or will receive cash or shares
in settlement of those awards and identifies the dates on which any previously vested option awards
will expire. In addition, AIG agrees to pay or provide you with (a) a cash payment in respect of
your accrued and unused vacation within 30 days of July 1, 2008, and (b) an office and an assistant
through December 31, 2008.

 

 

          In consideration of your service to AIG, you will be treated as continuing employment for
purposes of the long-term incentive and equity-based awards set forth on Schedule C, which
also sets forth the dates on which you will receive cash or shares in settlement of those awards.
For purposes of the Performance RSUs for the 2007-2008 and 2008-2009 performance periods under
AIG’s Partners Plan and the 2006-2008 performance period under AIG’s Senior Partners Plan, your
awards will
be prorated in accordance with the treatment provided for participants who retire with the
consent of AIG (which proration is reflected on Schedule C), and the awards will be
delivered or paid on the same schedule and basis as if you had remained employed.

          AIG agrees to satisfy all obligations to you under the Assurance Agreement, by AIG in favor of
eligible employees dated as of June 27, 2005, relating to certain obligations of Starr
International Company, Inc. under its Deferred Compensation Profit Participation Plans (the “SICO
Plans”), as if you had remained employed with AIG through normal retirement age. As a condition to
this benefit, you agree to take all actions that the Compensation Committee may reasonably request
upon reasonable advance written notice to effect the reinstatement of your outstanding awards under
the SICO Plans (other than a requirement to enter into restrictive covenants other than, or for
periods that extend beyond, those provided for in this letter). Schedule D sets forth the
contingent AIG shares allocated to you under the SICO Plans.

          AIG confirms that you have been approved for early retirement under AIG’s Excess Retirement
Income Plan and Supplemental Executive Retirement Plan, and, to the extent you so request, AIG will
use best efforts to cause the trustees of AIG’s United Kingdom Pension Plan to approve you for
early retirement treatment under that plan. Schedule E sets forth the AIG defined benefit
pension plans in which you participate. Your actual benefits under each of these plans will
commence and be determined in accordance with the terms of the plans and the elections that have
been or may be made by you. In lieu of the provision of life insurance benefits under Section
9(c)(iv) of your Employment Agreement, you shall continue to participate (generally on the same
basis as you currently do) in, and be provided coverage under, the life insurance arrangements in
which you currently participate or are provided coverage under for the period specified therein,
and in lieu of the provision of benefits under Section 9(c)(vi) of your Employment Agreement, you
shall participate in AIG’s retiree medical and life insurance programs (generally on the same basis
as other participants in AIG’s Executive Severance Plan as currently in effect) following the
provision of benefits under Section 9(c)(iv) of your Employment Agreement.

     3. No Other Benefits; Release Required

          (a) No Other Benefits. Except as described in this letter and the attached Schedules,
you will have no rights to any further compensation under your Employment Agreement or under any
long-term or equity-based compensation plan of AIG. All other benefits, if any, due to you
following the effective date of your resignation shall be determined in accordance with the plans,
policies and practices of AIG. You will not participate in any severance plan, policy or program
of AIG. You acknowledge and agree that any of your long-term incentive or equity-based awards
granted under any AIG plan that are not reflected on Schedule B or Schedule C will
be forfeited due to your resignation before the relevant vesting date, and you expressly waive any
right or claim to those awards. You acknowledge that you will

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not be entitled to any long-term
incentive or equity-based compensation under any AIG plan or the SICO Plans other than the
compensation and benefits set forth on Schedule B through Schedule D, and that you
are not eligible to receive retirement benefits under any defined benefit pension plans of AIG
other than those plans listed on Schedule E.

     (b) Release Required. Notwithstanding any other provision of your Employment
Agreement or this letter to the contrary, you acknowledge and agree that any and all payments and
benefits to which you are entitled under Section 9(c) of your Employment Agreement or due to this
letter are conditional upon and subject to your execution of a general release and waiver, in the
form set forth on Schedule F, of all claims you may have against AIG and its directors,
officers and affiliates, except as to matters covered by provisions of your Employment Agreement
that expressly survive the termination of your Employment Agreement or by this letter or as
otherwise expressly excluded in the general release. If the general release and waiver does not
become effective and irrevocable within 45 days of the date of this letter, you will waive all
rights to benefits under this letter.

     4. Continuing Covenants; Forfeiture

          (a) Covenants. You and AIG acknowledge and agree as follows:

               (1) Without limitation on any other remedies specified in Section 12 of your Employment
Agreement, your payments and benefits under Section 9(c) of your Employment Agreement will be
subject to your compliance with the Restrictive Covenants set forth in

Sections 11(a), (b), (d),
(e) and (f) of your Employment Agreement (taking into account the exceptions set forth therein) for
a “Restricted Period” of 12 months following July 1, 2008.

               (2) Notwithstanding anything to the contrary in Section 5 of the March 12, 2008, amendment to
your Employment Agreement or in AIG’s Executive Severance Plan or this letter, you will not be
subject to any restrictions on “solicitation” or other restrictive covenants set forth in the award
agreements or plans applicable to the awards set forth on Schedule B through
Schedule D. However, your entitlement to receive or exercise those awards instead will be
subject to the following conditions only:

          (A) You will comply with the Restrictive Covenants set forth in Sections 11(a)(i)
through 11(a)(iii) (taking into account the exceptions set forth in Sections 11(a)(iii)
and 11(a)(iv)) of your Employment Agreement for a “Restricted Period” of 12 months
following July 1, 2008.

          (B) You will comply with the Restrictive Covenants set forth in Section 11(a)(v) of
your Employment Agreement for a “Restricted Period” of 24 months following July 1, 2008.

          (C) You will not, in any manner, directly or indirectly, (1) Solicit any Client to
transact business with a “Competitive Business” (as defined in Section 11(a)(ii) of your
Employment Agreement) or to reduce or refrain from doing any business with AIG or its
subsidiaries or (2) interfere with or damage (or attempt to interfere with or damage) any
relationship between AIG or its subsidiaries and any such Client, in each case for a
period of 36 months following July 1, 2008. For this purpose, “Solicit” means any direct
or indirect communication of any kind whatsoever, regardless of by whom initiated,
inviting, advising, encouraging or requesting any person or entity, in any manner, to take
or refrain from taking any action, and “Client” means any client or prospective client of
AIG and its subsidiaries to whom you

-3-

 

provided services, or for whom you transacted business, or whose identity became
known to you in connection with your relationship with or employment by AIG. AIG agrees
that, notwithstanding anything contained in this clause (C), it shall not be a violation
of any portion of this clause (C) for you to Solicit any Client to transact business with
a private equity firm or hedge fund to the extent permitted by Section 11(a)(iv)(B) of
your Employment Agreement.

          (D) If you fail to satisfy any of the conditions set forth in clauses (A) through (C)
above, or if you fail to fulfill the duties described in Sections 11(b), (d), (e) and (f)
of your Employment Agreement, you will forfeit the right to receive any of the long-term
incentive and equity-based awards set forth on Schedule B through
Schedule D that have not vested (or, if applicable, been exercised) prior to the
date any such breach is determined to have occurred, and, as a remedy for such breach, AIG
will be entitled to immediately terminate those awards and cease paying any amounts
remaining due with respect to any such awards.

               (3) AIG agrees that your retention of a copy of your electronic rolodex will not violate any
of the restrictive covenants in your Employment Agreement, this letter or any other plan or
agreement.

          (b) Forfeiture. Notwithstanding anything to the contrary in this letter, no further
payments or benefits shall be due under your Employment Agreement or this letter if, at any time
prior to the time when any payment is made or benefit provided pursuant to your Employment
Agreement or this letter, the Board determines, in accordance with the procedures set forth in
Section 9(a) of your Employment Agreement, that grounds existed, on or prior to July 1, 2008, for
the Company to terminate your employment for “Cause” (as defined in Section 9(a) of your Employment
Agreement); provided, however, that you shall in all events be entitled to receive the Accrued
Obligations and the cash payment in respect of your accrued and unused vacation described in
Section 2 of this letter.

     5. Section 409A

          You and AIG agree that your Employment Agreement will be interpreted and administered in a
manner that complies with Section 409A. Notwithstanding anything in your Employment Agreement or
Section 1 of this letter to the contrary, you and AIG agree that your Employment Agreement will be
interpreted and administered so that distributions that are conditioned upon termination of your
employment with AIG will be conditioned upon your “separation from service” with AIG within the
meaning of Section 409A. For purposes of determining the First Payment Date under your Employment
Agreement and the commencement date of any other payments or benefits that are subject to the
six-month delay due to Section 409A, your “separation from service” with AIG within the meaning of
Section 409A will be June 15, 2008. Each payment under your Employment Agreement and any other AIG
plan in which you participate (including the SICO Plans) will be

-4-

 

treated as a separate payment for
purposes of Section 409A. Any reimbursements to which you may be entitled will not offset any
amounts payable to you under your Employment Agreement or this letter, and any reimbursements will
be made to you no later than the end of the calendar year in which such expenses were incurred and
otherwise in accordance with the reimbursement rules of Section 409A.

     6. General Provisions

          (a) Interpretation. Capitalized terms used in this letter that are not defined in
this letter have the meanings as used or defined in your Employment Agreement. References to
Schedules are to the Schedules attached hereto. The words “include,” “includes” and “including”
will be deemed to be followed by the words “without limitation.” For the avoidance of doubt,
notwithstanding that any Schedule may provide for a payment or delivery date with respect to an
award or plan in which you participate, if the award or plan would provide for any earlier payment
on your death, the award or plan will control in that circumstance. In addition, in the event of
your death prior to the payment or provision of benefits described in this letter and the Schedules
attached hereto, such payments or benefits will be provided to your estate (in the case of
insurance benefits, in accordance with terms of the relevant plan).

          (b) Entire Agreement; Amendments; Survival; Miscellaneous. This letter constitutes
the entire understanding and agreement between you and AIG with regard to all matters addressed
herein. Other than your Employment Agreement and this letter, there are no other agreements,
conditions, or representations, oral or written, express or implied, with regard to the matters
addressed herein. This letter represents your and AIG’s mutual agreement with respect to your
compensation and benefits under your Employment Agreement, and in the event of any express
inconsistency between this letter and your Employment Agreement, this letter will control. Except
to the extent that this letter supersedes your Employment Agreement, your Employment Agreement
(including Section 13) will survive in accordance with its terms. The provisions of Section 15 of
your Employment Agreement will apply to this letter as if set forth herein (substituting references
to “this Agreement” with “this letter”). This letter may be amended only in writing, signed by the
parties hereto.

*               *               *

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          If you agree that this letter appropriately represents our understanding, please sign and
return this letter, which will become a binding agreement on our receipt.

	 	 	 	 	 
	 	Very truly yours,

American International Group, Inc.

 	 
	 	By:  	/s/ Andrew J. Kaslow
 	 
	 	 	Andrew J. Kaslow 	 
	 	 	Senior Vice President and

Chief Human Resources Officer 	 
	 

Accepted and agreed:

	 	 	 
	/s/ Martin J. Sullivan
 

	 	  
	Martin J. Sullivan
	 	 

 

 

Schedule A

	 	 	 	 	 	 	 
	§ 9(c)	 	Payment or Benefit	 	Amount/Time Period	 	Payment Date
	(i)

	 	Accrued Obligations
	 	To be determined in
accordance with the
Employment
Agreement
	 	To be paid in
accordance with

§ 9(c)(i) of the
Employment
Agreement
	 
	 	 	 	 	 	 
	(ii)

	 	Pro-Rata Bonus
	 	 $4,000,000
	 	To be paid on First
Payment Date
	 
	 	 	 	 	 	 
	(iii)

	 	Severance
	 	 $15,000,000
	 	To be paid in
installments,
beginning on First
Payment Date, in
accordance with
§ 9(c)(iii) of the
Employment
Agreement, with the
first installment
to be in the amount
of $7.5 million
	 
	 	 	 	 	 	 
	(iv)

	 	Continued active
employee health
benefits
	 	 36 months
	 	To be provided
beginning July 1,
2008, with any
related payment
obligation subject
to Section 409A to
be provided
beginning on First
Payment Date
	 
	 	 	 	 	 	 
	(iv)

	 	Continued active
employee life benefits
	 	 36 months
	 	To be provided
beginning July 1,
2008, in accordance
with the letter,
with any
reimbursement
payment and related
payment obligation
subject to Section
409A to be provided
beginning on First
Payment Date*
	 
	 	 	 	 	 	 
	(v)

	 	Additional age and
service credit under
AIG’s nonqualified
pension plans
	 	 36 months
	 	N/A
	 
	 	 	 	 	 	 
	(vi)

	 	Retiree medical benefits
	 	N/A
	 	To be provided
beginning July 1,
2011, in accordance
with the letter

 

 

	 	 	 	 	 	 	 
	§ 9(c)	 	Payment or Benefit	 	Amount/Time Period	 	Payment Date
	(vi)

	 	Retiree life benefits
	 	N/A
	 	To be provided
beginning July 1,
2011, in accordance
with the letter
(unless otherwise
waived by the
participant in
writing)

 

			
	*	 	Between July 1, 2008, and the First Payment Date, the participant will make any life insurance
premium payments that become due, and AIG will reimburse the participant on the First Payment Date.
For the avoidance of doubt, the participant will not be entitled to any related payment in respect
of imputed income (if any) associated with life insurance policies.

A-2

 

Schedule B

	 	 	 	 	 
	Award	 	Amount	 	Dates
	06-07 Performance RSUs

	 	11,510 AIG shares
	 	Vest and deliver January 1,
2010
	 
	 	 	 	 
	AIG DCPPP RSUs

	 	32,000 AIG shares
	 	Vest and deliver May 1, 2009
	 
	 	 	 	 
	AIG DCPPP RSUs

	 	32,000 AIG shares
	 	Vest and deliver May 1, 2010
	 
	 	 	 	 
	04-06 Senior Partner Units

	 	$2,891,875
plus dividend-related
payments
	 	To be paid January 1, 2010,
with dividend-related
payments to be made in
accordance with plan terms
for active participants
	 
	 	 	 	 
	05-07 Senior Partner Units

	 	$2,717,000
plus dividend-related
payments
	 	To be paid January 1, 2011,
with dividend-related
payments to be made in
accordance with plan terms
for active participants
	 
	 	 	 	 
	AIG 2005 Senior Partners
Plan

	 	$2,750,000
plus dividend-related
payments
	 	To be paid January 1, 2011,
with dividend-related
payments to be made in
accordance with plan terms
for active participants
	 
	 	 	 	 
	Options to purchase
AIG shares at
$59.35/share

	 	25,000 options
	 	Become exercisable in equal
installments on September 1
of 2008 and 2009; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$71.00/share

	 	131,250 options
	 	Become exercisable in equal
installments on December 11
of 2008, 2009 and 2010;
terminate April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$57.05/share

	 	107,553 options
	 	Become exercisable in equal
installments on December 13
of 2008, 2009 and 2010;
terminate April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$65.99/share

	 	43,288 options
	 	Become exercisable in equal
installments on December 14
of 2008 and 2009; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$64.47/share

	 	12,500 options
	 	Become exercisable
December 16, 2008;
terminate April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$46.53/share

	 	9,375 options
	 	Exercisable now; terminate 

December 14, 2008
	 
	 	 	 	 
	Options to purchase
AIG shares at
$60.13/share

	 	7,500 options
	 	Exercisable now; terminate 

September 15, 2009

 

 

	 	 	 	 	 
	Award	 	Amount	 	Dates
	Options to purchase
AIG shares at
$96.56/share

	 	7,000 options
	 	Exercisable now; terminate
December 14, 2010
	 
	 	 	 	 
	Options to purchase
AIG shares at
$79.61/share

	 	15,000 options
	 	Exercisable now; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$61.30/share

	 	40,000 options
	 	Exercisable now; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$47.00/share

	 	40,000 options
	 	Exercisable now; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$63.95/share

	 	40,000 options
	 	Exercisable now; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$64.47/share

	 	37,500 options
	 	Exercisable now; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$59.35/share

	 	25,000 options
	 	Exercisable now; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$65.99/share

	 	43,287 options
	 	Exercisable now; terminate
April 1, 2011
	 
	 	 	 	 
	Options to purchase
AIG shares at
$71.00/share

	 	43,750 options
	 	Exercisable now; terminate
April 1, 2011

B-2

 

Schedule C

	 	 	 	 	 
	Award	 	Amount	 	Dates
	06-07 Performance RSUs

	 	11,510 AIG shares
	 	Vest and deliver
January 1, 2012
	 
	 	 	 	 
	07-08 Performance RSUs

	 	28,800 AIG shares
multiplied by percentage of
Performance RSUs earned
under Partners Plan
	 	Vest and deliver in
equal installments
on January 1 of
2011 and 2013
	 
	 	 	 	 
	08-09 Performance RSUs

	 	9,600 AIG shares
multiplied by percentage of
Performance RSUs earned
under Partners Plan
	 	Vest and deliver in
equal installments
on January 1 of
2011 and 2012
	 
	 	 	 	 
	AIG DCPPP RSUs

	 	12,800 AIG shares
	 	Vest and deliver
March 1, 2012
	 
	 	 	 	 
	04-06 Senior Partner Units

	 	$2,891,875
plus dividend-related
payments
	 	To be paid
January 1, 2012,
with
dividend-related
payments to be made
in accordance with
plan terms for
active participants
	 
	 	 	 	 
	05-07 Senior Partner Units

	 	$2,717,000
plus dividend-related
payments
	 	To be paid
January 1, 2013,
with
dividend-related
payments to be made
in accordance with
plan terms for
active participants
	 
	 	 	 	 
	06-08 Senior Partner Units

	 	1,667 Units,
multiplied by value per Unit
under Senior
Partners Plan,
plus dividend-related
payments
	 	To be paid in equal
installments on
January 1 of 2011
and 2012, with
dividend-related
payments to be made
in accordance with
plan terms for
active participants

 

 

Schedule D

	 	 	 	 	 
	Award	 	Amount	 	Dates
	SICO Plans

	 	218,433 AIG shares
	 	To be delivered in accordance with
the terms of the SICO Plans
(consistent with the participant’s
elections)

 

 

Schedule E

Plan*

AIG Retirement Plan

AIG United Kingdom Pension

Plan**

Excess Retirement Income

Plan

Supplemental Executive

Retirement Plan

* Before September 1, 2008, AIG will provide the participant with: (a) a memorandum setting forth
benefit calculations and alternative forms of benefits (including (i) any available elections as to
timing of payments and (ii) the available elections as to form of payments, including elections
under Section 6.2 of each of the AIG Excess Retirement Income Plan and Supplemental Executive
Retirement Plan (each as amended and restated effective January 1, 2008)) under each pension plan
(with such calculations to give effect to Section 9(c)(v) of the Employment Agreement); and (b) the
forms or other documents or instruments necessary for making the aforementioned elections under
each pension plan.

** For the avoidance of doubt, the AIG United Kingdom Pension Plan is a foreign deferred
compensation plan for purposes of Section 4 of the AIG Supplemental Executive Retirement Plan.

 

 

Schedule F

RELEASE OF CLAIMS

1. Release of Claims

     In partial consideration of the payments and benefits described in Section 9 of the employment
agreement (the “Employment Agreement”), effective March 14, 2005, by and between Martin J.
Sullivan (“Executive”) and American International Group, Inc. (the “Company”) as
amended by the letter between Executive and the Company dated March 12, 2008 (the
“Letter”), to which Executive agrees Executive is not entitled until and unless he executes
this Release, Executive, for and on behalf of himself and his heirs and assigns, subject to the
following two sentences hereof, hereby waives and releases any employment, compensation or
benefit-related common law, statutory or other complaints, claims, charges or causes of action of
any kind whatsoever, both known and unknown, in law or in equity, which Executive ever had, now has
or may have against the Company and its shareholders (other than C.V. Starr & Co., Inc. and Starr
International Company, Inc.), subsidiaries, successors, assigns, directors, officers, partners,
members, employees or agents (collectively, the “Releasees”) by reason of facts or
omissions which have occurred on or prior to the date that Executive signs this Release, including,
without limitation, any complaint, charge or cause of action arising under federal, state or local
laws pertaining to employment, including the Age Discrimination in Employment Act of 1967
(“ADEA,” a law which prohibits discrimination on the basis of age), the National Labor
Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities Act of 1990, Title VII
of the Civil Rights Act of 1964, all as amended; and all other federal, state and local laws and
regulations. By signing this Release, Executive acknowledges that he intends to waive and release
any rights known or unknown that he may have against the Releasees under these and any other laws;
provided, that Executive does not waive or release claims with respect to the right to enforce (i)
the Employment Agreement as amended by the Letter and (ii) the letter from the Company to Executive
dated June 30, 2008 (the “Unreleased Claims”). Notwithstanding the foregoing, Executive
does not release, discharge or waive any rights to indemnification that he may have under the
certificate of incorporation, the by-laws or equivalent governing documents of the Company or its
subsidiaries or affiliates, the laws of the State of Delaware or any other state of which such
subsidiary or affiliate is a domiciliary, or any indemnification agreement between Executive and
the Company, or any rights to insurance coverage under any directors’ and officers’ personal
liability insurance or fiduciary insurance policy.

2. Proceedings

     Executive acknowledges that he has not filed any complaint, charge, claim or proceeding,
except with respect to an Unreleased Claim, if any, against any of the Releasees before any local,
state or federal agency, court or other body (each individually a “Proceeding”). Executive
represents that he is not aware of any basis on which such a Proceeding could reasonably be
instituted. Executive (i) acknowledges that he will not initiate or cause to be initiated on his
behalf any Proceeding and will not participate in any Proceeding, in each case, except as required
by law; and (ii) waives any right he may have to benefit in any manner from any relief (whether
monetary or otherwise) arising out of any Proceeding, including any Proceeding conducted by the
Equal Employment Opportunity Commission

 

 

(“EEOC”). Further, Executive understands that, by executing this Release, he will be
limiting the availability of certain remedies that he may have against the Company and limiting
also his ability to pursue certain claims against the Releasees. Notwithstanding the above, nothing
in Section 1 of this Release shall prevent Executive from (i) initiating or causing to be initiated
on his behalf any complaint, charge, claim or proceeding against the Company before any local,
state or federal agency, court or other body challenging the validity of the waiver of his claims
under the ADEA contained in Section 1 of this Release (but no other portion of such waiver); or
(ii) initiating or participating in an investigation or proceeding conducted by the EEOC.

3. Time to Consider

     Executive acknowledges that he has been advised that he has twenty-one (21) days from the date
of receipt of this Release to consider all the provisions of this Release and he does hereby
knowingly and voluntarily waive said given twenty-one (21) day period. EXECUTIVE FURTHER
ACKNOWLEDGES THAT HE HAS READ THIS RELEASE CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO, AND HAS
IN FACT, CONSULTED AN ATTORNEY, AND FULLY UNDERSTANDS THAT BY SIGNING BELOW HE IS GIVING UP CERTAIN
RIGHTS WHICH HE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE RELEASEES, AS DESCRIBED IN
SECTION 1 OF THIS RELEASE AND THE OTHER PROVISIONS HEREOF. EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT
BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS RELEASE, AND EXECUTIVE AGREES TO ALL
OF ITS TERMS VOLUNTARILY.

4. Revocation

     Executive hereby acknowledges and understands that Executive shall have seven (7) days from
the date of his execution of this Release to revoke this Release (including, without limitation,
any and all claims arising under the ADEA) and that neither the Company nor any other person is
obligated to provide any benefits to Executive pursuant to Section 9 of the Employment Agreement
until eight (8) days have passed since Executive’s signing of this Release without Executive having
revoked this Release, in which event the Company immediately shall arrange and/or pay for any such
benefits otherwise attributable to said eight- (8) day period, consistent with the terms of the
Employment Agreement. If Executive revokes this Release, Executive will be deemed not to have
accepted the terms of this Release, and no action will be required of the Company under any section
of this Release.

5. No Admission

     This Release does not constitute an admission of liability or wrongdoing of any kind by
Executive or the Company.

6. General Provisions

     A failure of any of the Releasees to insist on strict compliance with any provision of this
Release shall not be deemed a waiver of such provision or any other provision hereof. If any
provision of this Release is determined to be so broad as to be unenforceable, such provision shall
be interpreted to be only so broad as is enforceable, and in the event that any provision is
determined to be entirely

F-2

 

unenforceable, such provision shall be deemed severable, such that all other provisions of this
Release shall remain valid and binding upon Executive and the Releasees.

7. Governing Law

     The validity, interpretations, construction and performance of this Release shall be governed
by the laws of the State of New York without giving effect to conflict of laws principles.

     IN WITNESS WHEREOF, Executive has hereunto set Executive’s hand as of the day and year set
forth opposite his signature below.

	 	 	 	 	 	 	 
	 

	 	 

DATE
	 	 

Martin J. Sullivan
	 	 

F-3EX-4.3

Exhibit 4.3

ALIMERA SCIENCES, INC.

SECOND AMENDED AND RESTATED

INVESTOR RIGHTS AGREEMENT

March 17, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. Restrictions on Transfer
	 	 	2	 
	1.1 Restrictive Legends
	 	 	2	 
	1.2 Notice of Proposed Transfers
	 	 	3	 
	 
	 	 	 	 
	2. Registration Rights
	 	 	3	 
	2.1 Certain Definitions
	 	 	3	 
	2.2 Demand Registration
	 	 	4	 
	2.3 Piggyback Registration
	 	 	6	 
	2.4 Expenses of Registration
	 	 	7	 
	2.5 Obligations of the Company
	 	 	8	 
	2.6 Indemnification
	 	 	9	 
	2.7 Information by Holder
	 	 	12	 
	2.8 Transfer and Assignment of Rights
	 	 	12	 
	2.9 Form S-3
	 	 	12	 
	2.10 Delay of Registration
	 	 	13	 
	2.11 Limitations on Subsequent Registration Rights
	 	 	13	 
	2.12 Rule 144 Reporting
	 	 	13	 
	2.13 “Market Stand-Off” Agreement
	 	 	13	 
	2.14 Termination of Rights
	 	 	14	 
	 
	 	 	 	 
	3. Rights of First Refusal
	 	 	14	 
	3.1 Certain Definitions
	 	 	14	 
	3.2 Right of First Refusal
	 	 	15	 
	3.3 Required Notices
	 	 	15	 
	3.4 Company’s Right to Sell
	 	 	16	 
	3.5 Assignment of Rights of First Refusal
	 	 	16	 
	3.6 Expiration of Right
	 	 	16	 
	 
	 	 	 	 
	4. Company Covenants
	 	 	16	 
	4.1 Affirmative Covenants
	 	 	16	 
	4.2 Negative Covenants
	 	 	23	 
	4.3 Expiration of Covenants
	 	 	25	 
	 
	 	 	 	 
	5. Voting Agreement
	 	 	25	 
	5.1 Election of Directors
	 	 	25	 
	5.2 Binding Effect of Voting Agreement
	 	 	25	 
	5.3 Legends
	 	 	25	 
	5.4 Termination of Voting Agreement
	 	 	26	 
	 
	 	 	 	 
	6. Prior Agreement
	 	 	26	 
	6.1 Amendment and Restatement of Prior Agreement
	 	 	26	 
	 
	 	 	 	 
	7. Miscellaneous
	 	 	26	 

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	 	 	Page	 
	7.1 Governing Law
	 	 	26	 
	7.2 Successors and Assigns
	 	 	26	 
	7.3 Entire Agreement
	 	 	26	 
	7.4 Severability
	 	 	26	 
	7.5 Amendment and Waiver
	 	 	27	 
	7.6 Delays or Omissions
	 	 	28	 
	7.7 Notices, etc.
	 	 	28	 
	7.8 Attorneys’ Fees
	 	 	29	 
	7.9 Aggregation of Stock
	 	 	29	 
	7.10 Titles and Subtitles
	 	 	29	 
	7.11 Counterparts
	 	 	29	 

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ALIMERA SCIENCES, INC.

SECOND AMENDED AND RESTATED INVESTOR

RIGHTS AGREEMENT

     THIS SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “Agreement”) is
entered into as of this 17th day of March, 2008, by and among Alimera Sciences, Inc., a
Delaware corporation (the “Company”), the holders of the Company’s Series A Preferred Stock
(the “Series A Stock”) listed on Exhibit A attached hereto (the “Series A
Investors”), the holders of the Company’s Series B Preferred Stock (the “Series B
Stock”) listed on Exhibit B attached hereto (the “Series B Investors”), the holders of
the Company’s Series C Preferred Stock (the “Series C Stock”) listed on Exhibit C attached
hereto (the “Series C Investors”), those holders of the Company’s Common Stock listed on
Exhibit D attached hereto (the “Common Holders”), and those holders of stock purchase
warrants (the “Warrants”) to purchase shares of the Company’s Common Stock listed on
Exhibit E attached hereto (the “Warrant Holders”). The Series A Stock, the Series B Stock
and the Series C Stock, together shall be referred to herein as “Investor Stock” and, the
Series A Investors, the Series B Investors and the Series C Investors, together shall be referred
to herein as the “Investors”.

RECITAL

     WHEREAS, in connection with the issuance and sale of shares of the Series B Stock to the
Series B Investors pursuant to that certain Series B Preferred Stock Purchase Agreement, dated as
of November 22, 2005, by and among the Company and the Series B Investors, the Company, the Series
A Investors, the Series B Investors, the Common Holders and the Warrant Holders entered into an
Amended and Restated Investor Rights Agreement, dated November 22, 2005 (the “Prior
Agreement”) to provide the Series B Investors with certain rights;

     WHEREAS, in connection with the issuance and sale of shares of the Series C Stock to the
Series C Investors pursuant to that certain Series C Purchase Agreement (the “Series C Purchase
Agreement”), dated as of the date hereof, by and among the Company and the Series C Investors,
the Company desires to provide the Series C Investors certain rights with respect to registration
of the shares of stock held by them and certain other rights with respect to such shares; and

     WHEREAS, the parties to the Prior Agreement desire to amend and restate the Prior Agreement
and to accept the rights and covenants hereof in lieu of their rights and covenants under the Prior
Agreement;

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual agreements, covenants and conditions contained
herein, the Company, the Investors, the Common Holders and the Warrant Holders hereby agree as
follows.

 

 

     1. Restrictions on Transfer.

          1.1 Restrictive Legends. Each certificate representing (a) the Investor Stock, (b)
the Common Stock of the Company (the “Common Stock”) issued upon conversion of the Investor
Stock, (c) the Common Stock issued upon exercise of the Warrants, and (d) any other securities
issued in respect of the Investor Stock or Common Stock issued upon conversion of the Investor
Stock upon any stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of Section 1.2 below) be stamped or
otherwise imprinted with a legend in substantially the following form (in addition to any legend
required under applicable state securities laws).

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION
PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SECOND AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE
CORPORATION), AND BY ACCEPTING ANY INTEREST IN SUCH SECURITIES THE PERSON ACCEPTING SUCH
INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID
SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT, AS IN EFFECT FROM TIME TO TIME.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD OF UP TO 180
DAYS, SUBJECT TO EXTENSION IN CERTAIN CIRCUMSTANCES, AFTER THE EFFECTIVE DATE OF THE
CORPORATION’S REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH
MAY BE OBTAINED AT THE CORPORATION’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON
TRANSFEREES OF THESE SECURITIES.

     Each Holder (as defined below) consents to the Company’s making a notation on its records and
giving instructions to any transfer agent of the Investor Stock or the Common Stock in order to
implement the restrictions on transfer established in this Section 1.

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          1.2 Notice of Proposed Transfers. The holder of each certificate representing
Registrable Securities (as defined below) by acceptance thereof agrees to comply in all respects
with the provisions of this Section 1.2. Prior to any proposed sale, assignment, transfer or
pledge of any Registrable Securities, unless there is in effect a registration statement under the
Securities Act of 1933, as amended (the “1933 Act”) covering the proposed transfer, the holder
thereof shall give written notice to the Company of such holder’s intention to effect such
transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances
of the proposed transfer, sale, assignment or pledge in sufficient detail and, if reasonably
requested by the Company, shall be accompanied at such holder’s expense by a written opinion of
legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company
addressed to the Company, to the effect that the proposed transfer of the Registrable Securities
may be effected without registration under the 1933 Act. Each certificate evidencing the
Registrable Securities transferred as above provided shall bear, except if such transfer is made
pursuant to Rule 144, the appropriate restrictive legend set forth in Section 1.1 above, except
that such certificate shall not bear such restrictive legend if in the opinion of counsel for such
holder and the Company such legend is not required in order to establish compliance with any
provisions of the 1933 Act. Notwithstanding the foregoing, no such opinion of counsel shall be
necessary for a transfer by a Holder which is (a) a partnership transferring to its partners or
former partners in accordance with the partnership interests, (b) a limited liability company
transferring to its members or former members in accordance with their interest in the limited
liability company, or (c) a corporation transferring to its stockholders in accordance with their
interest in the corporation; provided that in each case the transferee will be subject to
the terms of this Agreement to the same extent as if he or she were an original Holder hereunder.

     2. Registration Rights. The Company hereby grants to each of the Holders (as defined
below) the registration rights set forth in this Section 2 with respect to the Registrable
Securities (as defined below) owned by such Holders. The Company and the Holders agree that the
registration rights provided herein set forth the sole and entire agreement, and supersede any
prior agreement, between the Company and the Holders with respect to registration rights for the
Company’s securities.

          2.1 Certain Definitions. As used in this Section 2, the following terms shall have
the following meanings.

               (a) The terms “register,” “registered” and “registration” refer to a
registration effected by filing with the Securities and Exchange Commission (the “SEC’) a
registration statement (the “Registration Statement”) in compliance with the 1933 Act, and
the declaration or ordering by the SEC of the effectiveness of such Registration Statement.

               (b) The term “Registrable Securities” means (i) Common Stock issued or issuable upon
conversion of the shares of Investor Stock held by Investors or any transferee as permitted by
Section 2.8 hereof, (ii) Common Stock issued or issuable upon exercise of the Warrants, and (iii)
any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or
other security that is issued as) a dividend or other distribution with respect to, or in exchange
or in replacement of, such above-described securities; provided, however, that
shares of Common Stock or other securities shall only be treated as Registrable Securities if and

3

 

so long as (A) they have not been sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction, (B) they have not been sold in a
transaction exempt from the registration and prospectus delivery requirements of the 1933 Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends with respect thereto
are removed upon the consummation of such sale, and (C) the registration rights associated with
such securities have not been terminated pursuant to Section 2.15 hereof.

               (c) The term “Holder” (collectively, “Holders”) means each Investor and any
transferee, as permitted by Section 2.8 hereof, holding Registrable Securities, securities
exercisable or convertible into Registrable Securities or securities exercisable for securities
convertible into Registrable Securities.

               (d) The term “Initiating Holders” means any Holder or Holders of at least 50% of the
Registrable Securities then outstanding and not registered at the time of any request for
registration made pursuant to Section 2.2 of this Agreement.

          2.2 Demand Registration.

               (a) Demand for Registration. If the Company shall receive from Initiating Holders a
written demand that the Company effect any registration (a “Demand Registration”) of all or
a portion of such Initiating Holders’ Registrable Securities then outstanding (other than a
registration on Form S-3 or any related form of registration statement, such a request being
provided for under Section 2.9 hereof), the Company will:

                    (i) promptly (but in any event within ten (10) days) give written notice of the proposed
registration to all other Holders; and

                    (ii) use its best efforts to effect such registration as soon as practicable and as will
permit or facilitate the sale and distribution of all or such portion of such Initiating Holders’
Registrable Securities as are specified in such demand, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such demand as are specified in a
written demand received by the Company within fifteen (15) days after such written notice is given,
provided that the Company shall not be obligated to take any action to effect any such
registration pursuant to this Section 2.2:

                         (A) in any particular jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such registration, qualification or compliance unless
the Company is already subject to service in such jurisdiction and except as may be required by the
1933 Act;

                         (B) after the Company has effected two (2) such registrations pursuant to this Section 2.2,
and the sales of the shares of Common Stock under such registration have closed;

                         (C) if the Company shall furnish to such Holders a certificate signed by the President of the
Company, stating that in the good faith judgment of the Board of Directors of the Company (the
“Board of Directors”) it would be seriously detrimental to the Company and its stockholders for
such Registration Statement to be filed at the date filing

4

 

would be required, in which case the Company shall have an additional period or periods of not
more than ninety (90) days within which to file such Registration Statement; provided,
however, that the Company shall not use this right to delay the filing for more than 180
days in the aggregate in any 12-month period;

                         (D) if the Holders, together with the holders of any other securities of the Company entitled
to inclusion in such registration, propose to sell Registrable, Securities and such other
securities (if any) at an aggregate price to the public of less than $7,500,000; or

                         (E) prior to the earlier of: (1) the 4th anniversary of the date of this Agreement, or (2)
the date 6 months after the effective date of the initial public offering of the Company’s
securities.

               (b) Underwriting. If reasonably required to maintain an orderly market in the Common
Stock, the Holders shall distribute the Registrable Securities covered by their demand by means of
an underwriting. If the Initiating Holders intend to distribute the Registrable Securities covered
by their demand by means of an underwriting, they shall so advise the Company as part of their
demand made pursuant to this Section 2.2, including the identity of the managing underwriter, and
the Company shall include such information in the written notice referred to in Section 2.2(a)(i).
In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be
conditioned upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting to the extent provided herein.

     The Company shall, together with all holders of capital stock of the Company proposing to
distribute their securities through such underwriting, enter into an underwriting agreement in
customary form with the underwriter or underwriters selected by a majority-in-interest of the
Initiating Holders and reasonably satisfactory to the Company. Notwithstanding any other provision
of this Section 2.2, if the underwriter shall advise the Company that marketing factors (including,
without limitation, an adverse effect on the per share offering price) require a limitation of the
number of shares to be underwritten, then the Company shall so advise all Holders of Registrable
Securities that have requested to participate in such offering, and the number of shares of
Registrable Securities that may be included in the registration and underwriting shall be allocated
pro rata among such Holders thereof in proportion, as nearly as practicable, to the amounts of
Registrable Securities held by such Holders at the time of filing the Registration Statement. No
Registrable Securities excluded from the underwriting by reason of the underwriter’s marketing
limitation shall be included in such registration.

     If any Holder disapproves of the terms of the underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company, the underwriter and the Initiating Holders. The
Registrable Securities so withdrawn shall also be withdrawn from registration.

     If the underwriter has not limited the number of Registrable Securities to be underwritten,
the Company may include securities for its own account (or for the account of other stockholders)
in such registration if the underwriter so agrees and if the number of Registrable Securities would
not thereby be limited.

5

 

          2.3 Piggyback Registration.

               (a) Company Registration. If at any time or from time to time the Company shall
determine to register any of its securities, either for its own account or for the account of
security holders, other than a registration relating solely to employee benefit plans, a
registration on Form S-4 relating solely to an SEC Rule 145 transaction or a registration pursuant
to Section 2.2 or 2.9 hereof, the Company will:

                    (i) promptly (but in any event within ten (10) days) give to each Holder written notice
thereof; and

                    (ii) include in such registration (and any related qualification under state securities laws
or other compliance), and in any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within fifteen (15) days after receipt of such
written notice from the Company, by any Holder or Holders, except as set forth in Section 2.3(b)
below. If a Holder decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings of its securities,
all upon the terms and conditions set forth herein.

               (b) Underwriting. If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so advise the Holders as a
part of the written notice given pursuant to Section 2.3(a)(i). In such event the right of any
Holder to registration pursuant to this Section 2.3 shall be
conditioned upon such Holder’s .participation in such underwriting and the inclusion of such Holder’s Registrable Securities in
the underwriting to the extent provided herein.

     All Holders proposing to distribute their Registrable Securities through such underwriting
shall, together with the Company and the other parties distributing their securities through such
underwriting, enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding any other provision of
this Section 2.3, if the underwriter determines that marketing factors require a limitation of the
number of shares to be underwritten, the underwriter may limit the number of Registrable Securities
to be included in the registration and underwriting. The Company shall so advise all holders of
the Company’s securities that would otherwise be registered and underwritten pursuant hereto, and
the number of shares of such securities, including Registrable Securities, that may be included in
the registration and underwriting shall be allocated in the following manner: shares, other than
Registrable Securities and other securities that have contractual rights with respect to
registration similar to those provided for in this Section 2.3, requested to be included in such
registration by stockholders shall be excluded, and if a limitation on the number of shares still
is required, the number of Registrable Securities and other securities that have contractual rights
with respect to registration that may be included shall be allocated among the Holders thereof in
proportion, as nearly as practicable, to the amounts of Registrable Securities and such other
securities held by each such Holder at the time of filing the Registration Statement;
provided, however, that the aggregate value of securities (including Registrable
Securities) to be included in such registration by the Holders may not be so reduced

6

 

to less than twenty-five percent (25%) of the total value of all securities included in such
registration. For purposes of any such underwriter cutback, all Registrable Securities and other
securities held by any holder that is a partnership, limited liability company or corporation shall
also include any Registrable Securities held by the partners, retired partners, members,
stockholders or affiliated entities of such holder, or the estates and family members of any such
partners, retired partners, members and any trusts for the benefit of any of the foregoing persons,
and such holder and other persons shall be deemed to be a single “selling holder,” and any pro rata
reduction with respect to such “selling holder” shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in such “selling
holder,” as defined in this sentence. No securities excluded from the underwriting by reason of
the underwriter’s marketing limitation shall be included in such registration. Nothing in this
Section 2.3(b) is intended to diminish the number of securities to be included by the Company in
the underwriting.

     If any Holder disapproves of the terms of the underwriting, it may elect to withdraw therefrom
by written notice to the Company and the underwriter. The Registrable Securities so withdrawn
shall also be withdrawn from registration.

               (c) Right to Terminate Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness of such
registration whether or not any Holder has elected to include securities in such registration and
shall promptly notify any Holder that has elected to include shares in such registration of such
termination or withdrawal.

          2.4 Expenses of Registration. All expenses incurred in connection with all
registrations effected pursuant to Sections 2.2, 2.3 and 2.9, including without limitation all
registration, filing and qualification fees (including state securities law fees and expenses),
printing expenses, escrow fees, fees and disbursements of counsel for the Company (and, if it is
reasonably determined that a separate special counsel for the participating Holders is necessary,
the reasonable fees and disbursements of one such counsel), and expenses of any special audits
incidental to or required by such registration shall be borne by the Company; provided,
however, that the Company shall not be required to pay stock transfer taxes or
underwriters’ discounts or selling commissions relating to Registrable Securities; and
provided, further, that the Company shall not be required to pay for any expenses
of any registration pursuant to Section 2.9 after the Company has effected 2 registrations pursuant
to Section 2.9, in which event the Holders of Registrable Securities to be registered shall bear
all such expenses pro rata on the basis of Registrable Securities to be registered.
Notwithstanding anything to the contrary above, the Company shall not be required to pay for any
expenses of any registration proceeding under Section 2.2 if the registration request is
subsequently withdrawn at the request of the Holders of the Registrable Securities to have been
registered, in which event the Holders of Registrable Securities to have been registered shall bear
all such expenses pro rata on the basis of the Registrable Securities to have been registered.
Notwithstanding the preceding sentence, however, if at the time of the withdrawal, the Holders have
learned of a materially adverse change in the condition, business or prospects of the Company from
that known to the Holders at the time of their request and have withdrawn the request with
reasonable promptness after learning of such information, then the Holders shall not be required to
pay any of said expenses and shall retain their rights pursuant to Section 2.2.

7

 

          2.5 Obligations of the Company. Whenever required to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably possible:

               (a) prepare and file with the SEC a Registration Statement with respect to such Registrable
Securities and use its diligent efforts to cause such Registration Statement to become effective,
and keep such Registration Statement effective for the lesser of one hundred eighty (180) days or
until the Holder or Holders have completed the distribution relating thereto;

               (b) prepare and file with the SEC such amendments and supplements to such Registration
Statement and the prospectus used in connection with such Registration Statement as may be
necessary to keep such Registration Statement effective and to comply with the provisions of the
1933 Act with respect to the disposition of all securities covered by such Registration Statement
for the period set forth in paragraph (a) above;

               (c) furnish to the Holders such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the 1933 Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable Securities owned by
them;

               (d) use its reasonable efforts to register or otherwise qualify the securities covered by such
Registration Statement under such other securities laws of such states and other jurisdictions as
shall be reasonably requested by the Holders or the managing underwriter, provided that the
Company shall not be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states or jurisdictions;

               (e) in the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter of such
offering. Each Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement;

               (f) notify each Holder of Registrable Securities covered by such Registration Statement, at
any time when a prospectus relating thereto is required to be delivered under the 1933 Act, of the
happening of any event as a result of which the prospectus included in such Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing and amend or supplement such prospectus in order to
cause such prospectus not to include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;

               (g) use its reasonable efforts to list the Registrable Securities covered by such Registration
Statement with any securities exchange on which the Common Stock is then listed;

               (h) make available for inspection by each Holder including Registrable Securities in such
registration, any underwriter participating in any distribution pursuant to such

8

 

registration, and any attorney, accountant or other agent retained by such Holder or
underwriter, all financial and other records, pertinent corporate documents and properties of the
Company, as such parties may reasonably request, and cause the Company’s officers, directors and
employees to supply all information reasonably requested by any such Holder, underwriter, attorney,
accountant or agent in connection with such Registration Statement;

               (i) use its reasonable efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold through underwriters, (i)
an opinion, dated as of such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date,
from the independent certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters;

               (j) cooperate with Holders including Registrable Securities in such registration and the
managing underwriters, if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold, such certificates to be in such denominations and
registered in such names as such Holders or the managing underwriters may request at least two (2)
business days prior to any sale of Registrable Securities; and

               (k) permit any Holder which Holder, in the sole and exclusive judgment, exercised in good
faith, of such Holder, might be deemed to be a controlling person of the Company, to participate in
good faith in the preparation of such Registration Statement and to require the insertion therein
of material, furnished to the Company in writing, that in the reasonable judgment of such Holder
and its counsel should be included.

          2.6 Indemnification.

               (a) To the fullest extent permitted by law, the Company will, and does hereby undertake to,
indemnify and hold harmless each Holder of Registrable Securities, each of such Holder’s officers,
directors, managers, partners, members and agents, and each person controlling such Holder, legal
counsel and accountants for each Holder, and each underwriter of the Company’s securities covered
by such a Registration Statement, if any, and each person who controls any such underwriter, with
respect to any registration, qualification or compliance effected pursuant to this Section 2 of the
Registrable Securities held by or issuable to such Holder, against all claims, losses, damages and
liabilities (or actions in respect thereto) to which they may become subject under the 1933 Act,
the Securities Exchange Act of 1934, as amended (the “1934 Act”), or other federal or state
law arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular or other similar document (including any
related Registration Statement, notification, or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances in which they were made, (ii) any violation or alleged
violation by the Company of any federal, state or common law rule or regulation applicable to the
Company in connection with any such registration, qualification or compliance, or (iii) any failure
to register or qualify Registrable Securities in any

9

 

state where the Company or its agents have affirmatively undertaken or agreed in writing that
the Company (the undertaking of any underwriter chosen by the Company being attributed to the
Company) will undertake such registration or qualification on behalf of the Holders of such
Registrable Securities (provided that in such instance the Company shall not be so liable
if it has undertaken its best efforts to so register or qualify such Registrable Securities) (a
“Violation”) and will reimburse, as incurred, each such Holder, each such underwriter and
each such director, manager, officer, partner, member agent and controlling person, for any legal
and any other expenses reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action; provided that the indemnity agreement contained
in this Section 2.6(a) shall not apply to amounts paid in settlement of any such claim, loss;
damage, liability, or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be liable in any such
case to the extent that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission made in conformity with written information furnished to
the Company expressly for use in connection with such registration, qualification or compliance by
such Holder or underwriter.

               (b) To the fullest extent permitted by law, each Holder will, and if Registrable Securities
held by or issuable to such Holder are included in such registration, qualification or compliance
pursuant to this Section 2, does hereby undertake to indemnify and hold harmless the Company, each
of its directors and officers, and each person controlling the Company within the meaning of the
Securities Act, legal counsel and accountants for the Company, each underwriter of the Company’s
securities covered by such a Registration Statement, if any, and each person who controls any such
underwriter, and each other Holder, each of such other Holder’s officers, directors, managers,
partners, members and agents and each person controlling such other Holder, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of or based on (i) any
failure of such Holder or its agents or representatives to comply with the prospectus delivery
requirements of the 1933 Act or any other applicable securities or blue sky law, or (ii) any untrue
statement (or alleged untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular or other document, or any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which they were made (a “Holder
Violation”), and will reimburse, as incurred, the Company, each such underwriter, each such
other Holder, and each such director, officer, manager, partner, member and controlling person of
the foregoing, for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) was made in such Registration Statement, prospectus, offering
circular or other document, in reliance upon and in conformity with written information furnished
to the Company expressly for use in such registration, qualification or compliance;
provided, however, that the indemnity agreement contained in this Section 2.6(b)
shall not apply to amounts paid in settlement of any such claim, loss, damage, liability, or action
if such settlement is effected without the consent of the Holder (which consent shall not be
unreasonably withheld) nor shall a Holder be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any untrue statement or
omission made in conformity with written information furnished to the Holder expressly for use in
connection with such registration, qualification or compliance by or

10

 

on behalf of the Company; provided, further, that the liability of each Holder
hereunder shall be limited to the proportion of any such claim, loss, damage or liability that is
equal to the proportion that the public offering price of the shares sold by such Holder under such
Registration Statement bears to the total public offering price of all securities sold thereunder,
but in any event not to exceed the net proceeds received by such Holder from the sale of securities
under such Registration Statement. It is understood and agreed that the indemnification
obligations of each Holder pursuant to any underwriting agreement entered into in connection with
any Registration Statement shall be limited to the obligations contained in this subsection 2.6(b).

               (c) Each party entitled to indemnification under this Section 2.6 (the “Indemnified
Party”) shall give notice to the party required to provide such indemnification (the
“Indemnifying Party”) of any claim as to which indemnification may be sought promptly after
such Indemnified Party has actual knowledge thereof, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom; provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be subject to approval by the Indemnified Party (whose approval shall not be unreasonably
withheld) and that the Indemnified Party (together with all other Indemnified Parties which may be
represented without conflict by one counsel) shall have the right to retain its own counsel, with
the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified
Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or
potential differing interests between such Indemnified Party and any other party represented by
such counsel in such proceeding; and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2, except to the extent that such failure to give notice shall
materially adversely affect the Indemnifying Party in the defense of any such claim or any such
litigation. An Indemnifying Party, in the defense of any such claim or litigation, may, without
the consent of each Indemnified Party, consent to entry of any judgment or enter into any
settlement that provides for solely monetary damages to be paid by the Indemnifying Party and
includes as an unconditional term thereof the giving by the claimant or plaintiff therein, to such
Indemnified Party, of a release from all liability with respect to such claim or litigation.

               (d) In order to provide for just and equitable contribution to joint liability under the 1933
Act in any case in which either (i) any Holder exercising rights under this Agreement, or any
controlling person of any such Holder, makes a claim for indemnification pursuant to this Section
2.6 but it is judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the last right of
appeal) that such indemnification may not be enforced in such case notwithstanding the fact that
this Section 2.6 provides for indemnification in such case, or (ii) contribution under the 1933 Act
may be required on the part of any such Holder or any such controlling person in circumstances for
which indemnification is provided under this Section 2.6; then, and in each such case, the Company
and such Holder will contribute to the aggregate claims, losses, damages or liabilities to which
they may be subject (after contribution from others) in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the indemnified party
on the other in connection with the Violation(s) or Holder Violation(s) that resulted in such loss,
claim, damage or liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the

11

 

indemnified party shall be determined by a court of law by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by the indemnified party
and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Notwithstanding the foregoing, in any case, (A) no such Holder
will be required to contribute any amount in excess of the public offering price of all securities
offered by it pursuant to such Registration Statement, after deduction of underwriting discounts
and commissions; and (B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(1) of the 1933 Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.

               (e) The indemnities provided in this Section 2.6 shall survive the transfer of any Registrable
Securities by such Holder.

          2.7 Information by Holder. The Holder or Holders of Registrable Securities included
in any registration shall furnish to the Company such information regarding such Holder, or
Holders, the Registrable Securities held by such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in this Section 2.

          2.8 Transfer and Assignment of Rights. The rights contained in Sections 2 and 3
hereof may be assigned or otherwise conveyed to transferees or assignees of Registrable Securities,
who shall be considered a “Holder” for purposes hereof; provided that (i) such
transfer is effected in compliance with Section 1.2 hereof, (ii) such transferee (A) is a current
or former principal, manager, member, limited partner, general partner, stockholder, subsidiary or
officer of such transferor of the Registrable Securities, or (B) acquires at least 200,000 shares
of the transferor’s Registrable Securities (as adjusted for stock splits, stock dividends,
recapitalizations and other combinations), (iii) such transferee agrees to be subject to all
restrictions set forth in this Agreement and the other Ancillary Agreements (as defined in the
Series C Purchase Agreement), and (iv) such transferee is not engaged in the development, sales and
marketing of ophthalmic pharmaceuticals.

          2.9 Form S-3. The Company shall use its best efforts to qualify for registration on
Form S-3 (or any future form that is substantially equivalent to the current Form S-3). After the
Company has qualified for the use of Form S-3, the Holders of at least twenty percent (20%) of the
Registrable Securities then outstanding and not registered shall have the right to request in
writing registrations on Form S-3 under this Section 2.9. The Company shall give notice to all
Holders of Registrable Securities of the receipt of a request for registration pursuant to this
Section 2.9 and shall provide a reasonable opportunity for other Holders to participate in the
registration. Subject to the foregoing, the Company will use its diligent efforts to effect as
soon as practicable the registration of all shares of Registrable Securities on Form S-3 to the
extent requested by the Holder or Holders thereof for purposes of disposition; provided,
however, that the Company shall not be obligated to effect any such registration if the
Holders, together with the holders of any other securities of the Company entitled to inclusion in
such registration, propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $2,000,000. Notwithstanding the foregoing, nothing

12

 

herein shall restrict, prohibit or limit in any way a Holder’s ability to exercise its
registration rights under Sections 2.2 or 2.3 hereof. The Company shall have no obligation to take
any action to effect any registration pursuant to this Section 2.9 for any of the reasons set forth
in Section 2.2(a)(ii)(A) or (C) (which shall be deemed to apply to the obligations under this
Section 2.9 with equal force). In addition, any registration pursuant to this Section 2.9 shall be
subject to the provisions of Section 2.2(b), which shall be deemed to apply to the obligations
under this Section 2.9 with equal force, except that any reference therein to Section 2.2 or a
subsection thereof shall, for these purposes only, be deemed to be a reference to this Section 2.9.

          2.10 Delay of Registration. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this Section 2.

          2.11 Limitations on Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not, without the prior written consent of the Holders of at least a
majority of the Registrable Securities then outstanding and not registered, enter into any
agreement with any holder or prospective holder of any securities of the Company that would allow
such holder or prospective holder to require the Company to effect a registration, or include any
securities in any registration filed under Section 2.2, 2.3 or 2.9 hereof.

          2.12 Rule 144 Reporting. With a view to making available to the Holders the benefits
of certain rules and regulations of the SEC that may permit the sale of the Registrable Securities
to the public without registration, the Company agrees to use its diligent efforts to:

               (a) make and keep current public information available, within the meaning of SEC Rule 144 or
any similar or analogous rule promulgated under the 1933 Act, at all times after it has become
subject to the reporting requirements of the 1934 Act;

               (b) file with the SEC, in a timely manner, all reports and other documents required of the
Company under the 1933 Act and 1934 Act (after it has become subject to such reporting
requirements); and

               (c) so long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon
request a written statement by the Company as to its compliance with the reporting requirements of
said Rule 144 (at any time commencing ninety (90) days after the effective date of the first
registration filed by the Company for an offering of its securities to the general public), the
1933 Act and the 1934 Act (at any time after it has become subject to such reporting requirements);
a copy of the most recent annual or quarterly report of the Company; and such other reports and
documents as a Holder may reasonably request in availing itself of any rule or regulation of the
SEC allowing it to sell any such securities without registration.

          2.13 “Market Stand-Off” Agreement. Each Holder and each Common Holder hereby agrees
that during a period not to exceed one hundred eighty (180) days following the effective date of
the initial, effective registration statement of the Company filed under the 1933 Act (or such
longer period after the expiration of the 180-day period, as the underwriters or the Company shall
request in order to facilitate compliance with NASD Rule 2711 or any

13

 

comparable or successor rule), it shall not, to the extent requested by the Company and any
underwriter, sell, pledge, transfer, make any short sale of, loan, grant any option for the
purchase of, or otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any Common Stock held by it at any time during such period except Common Stock included in
such registration or Common Stock purchased in a market transaction after the effective date of
such registration statement; provided, however, that all One Percent Stockholders
(as defined below), if any, and all officers and directors of the Company enter into similar
agreements. In the event the Company or any underwriter releases any One Percent Stockholder,
officer or director of the Company from its obligations under such similar agreements, it shall
similarly release each of the Holders from its obligations hereunder on a pro rata basis, as
applicable. For purposes of this Section 2.13, the term “One Percent Stockholder” shall
mean a stockholder of the Company who holds at least 1% of the outstanding Common Stock of the
Company (assuming conversion ‘of all outstanding Investor Stock of the Company). The underwriters
in connection with the initial, effective registration statement of the Company are intended
third-party beneficiaries of this Section 2.13 and shall have the right, power and authority to
enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to
execute such agreements as may be reasonably requested by the underwriters that are consistent with
this Section 2.13 or that are necessary to give further effect thereto.

     In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions
with respect to the Common Stock of the Common Holders and Registrable Securities of each Holder
(and the shares or securities of every other person subject to the foregoing restriction) until the
end of such period.

          2.14 Termination of Rights. The rights of any particular Holder under Sections 2 and
3 hereof shall terminate as to any Holder at the earlier of (i) the date five (5) years following
the closing of a Qualified Public Offering (as defined below), or (ii) the date such Holder is able
to dispose of all of its Registrable Securities in any 90-day period pursuant to SEC Rule 144 (or
any similar or analogous rule promulgated under the 1933 Act), so long as the Company has completed
its initial public offering and such Holder holds less than one percent (1%) of the Company’s
equity securities.

     3. Rights of First Refusal.

          3.1 Certain Definitions. As used in this Section 3:

               (a) The term “Eligible Holder” shall mean a Holder, as defined in Section 2.1(c), that
holds shares of the Company’s Common Stock issued or issuable upon the conversion of shares of
Investor Stock.

               (b) The term “New Securities” shall mean any capital stock of the Company, whether now
authorized or not, and rights, options or warrants to purchase such capital stock, and securities
of any type whatsoever that are, or may become, convertible into such capital stock;
provided that the term “New Securities” does not include the following issuances:
(i) the issuance of shares of Common Stock upon exercise of stock options issued or issuable
pursuant to that certain Alimera Sciences, Inc. 2004 Incentive Stock Plan adopted on July 7, 2004
(the “2004 Option Plan”) or that certain Alimera Sciences, Inc. 2005 Incentive

14

 

Stock Plan adopted on November 21, 2005 (the “2005 Option Plan” and together the
“Option Plans”), each as in effect from time to time, (ii) the issuance of securities in a
Qualified Public Offering; (iii) the issuance of shares of Common Stock issued upon conversion of
Investor Stock or upon exercise of warrants to purchase up to 1,193,171 shares of Common Stock
outstanding on the date hereof; (iv) the issuance of shares of Common Stock or Investor Stock
issued by way of dividend or other comparable distribution on the Investor Stock; (v) the issuance
of shares of Common Stock, or securities exercisable for or convertible into Common Stock, in the
aggregate not to exceed 1,000,000 shares, as adjusted for any stock dividend, split, combination or
other similar recapitalization affecting such shares, of Common Stock, issued to banks or equipment
lessors (and not principally for the purposes of raising capital) pursuant to equipment or other
financing arrangements approved by a majority of the directors selected by the holders of Investor
Stock pursuant to Article V, Subsection D.3 of the Company’s Restated Certificate of Incorporation
(as in effect on the date hereof, the “Restated Certificate”) (and if no such directors are
in office, each such issuance that is approved by holders of at least a majority of the outstanding
Investor Stock, voting together as a single class on an as-converted basis); or (vi) the issuance
of shares of Common Stock, or securities exercisable for or convertible into Common Stock, in the
aggregate not to exceed 1,000,000 shares, as adjusted for any stock dividend, split, combination or
other similar recapitalization affecting such shares, of Common Stock, issued pursuant to a
strategic or collaborative relationship with, or the acquisition of, another company by the
Corporation pursuant to a plan, agreement or other arrangement (and not principally for the
purposes of raising capital) approved by a majority of the directors selected by the holders of
Investor Stock pursuant to Article V, Subsection D.3 of the Restated Certificate (and if no such
directors are in office, each such issuance that is approved by holders of at least a majority of
the outstanding Investor Stock, voting together as a single class on an as-converted basis).

               (c) The term “Pro Rata Share” shall mean the ratio, (i) the numerator of which is the
number of shares of Common Stock held by such Eligible Holder or issuable to such Eligible Holder
upon the conversion of shares of Investor Stock held by such Eligible Holder, on the date of the
Company’s written notice pursuant to Section 3.3 hereof, and (ii) the denominator of which is the
number of shares of Common Stock outstanding, assuming for this purpose conversion or exercise of
all securities convertible into or exercisable for Common Stock of the Company on the date of the
Company’s written notice pursuant to Section 3.3 hereof.

          3.2 Right of First Refusal. The Company hereby grants to each Eligible Holder,
subject to the terms and conditions specified in this Section 3, the right of first refusal to
purchase, on the terms and conditions set forth in the Company’s notice pursuant to Section 3.3
hereof, up to its Pro Rata Share of all New Securities that the Company may, from time to time,
propose to sell and issue.

          3.3 Required Notices. In the event the Company proposes to undertake an issuance of
New Securities, it shall give each Eligible Holder written notice of its intention, describing the
type of New Securities, the price and the general terms upon which the Company proposes to issue
the same. Each Eligible Holder shall have thirty (30) days from the date of any such notice to
exercise its right of first refusal under Section 3.2 hereof to purchase such New Securities for
the price and upon the general terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased.

15

 

          3.4 Company’s Right to Sell. If not all of the Eligible Holders elect to purchase
their Pro Rata Share of the Equity Securities, then the Company shall promptly notify in writing
the Eligible Holders who do so elect and shall offer such Eligible Holders the right to acquire
such unsubscribed shares on a pro rata basis. The Eligible Holders shall have five (5) days after
receipt of such notice to notify the Company of its election to purchase all or a portion of such
unsubscribed shares. The Company shall have ninety (90) days after the thirty (30) day period
described in Section 3.3 hereof to sell all such New Securities respecting which the Eligible
Holders’ rights of first refusal hereunder were not exercised, at a price and upon terms no more
favorable in any material respect to the purchasers thereof than specified in the Company’s notice.
In the event the Company has not sold all such New Securities within such ninety (90) day period,
the Company shall not thereafter issue or sell any New Securities without first notifying the
Eligible Holders in the manner provided herein.

          3.5 Assignment of Rights of First Refusal. The rights of first refusal of each
Eligible Holder under this Section 3 may be assigned to the same parties, subject to the same
restrictions as any transfer of registration rights pursuant to Section 2.8.

          3.6 Expiration of Right. The rights of first refusal granted under this Section 3
shall not apply to, and shall expire upon, the effectiveness of a registration statement for the
sale of the Company’s shares of Common Stock in a firm commitment underwritten public offering
registered under the 1933 Act that results in the automatic conversion of the Investor Stock into
shares of the Company’s Common Stock pursuant to the terms of the Restated Certificate (a
“Qualified Public Offering”).

     4. Company Covenants. The Company hereby covenants and agrees on behalf of itself and
its subsidiaries to the following.

          4.1 Affirmative Covenants. The Company hereby covenants and agrees as follows.

               (a) Financial Statements and Information. The Company will keep books of account and
prepare financial statements and will cause to be furnished to each Major Investor (as defined
below) the following reports (all of the foregoing and following to be kept and prepared in
accordance with United States generally accepted accounting principles applied on a consistent
basis), provided, however, that the Company shall not be obligated pursuant to this
Section 4.1(a) to provide financial information to any person whom the Company reasonably believes
is a competitor of the Company. As used herein, the term “Major Investor” means any
Investor owning (either individually or collectively with its affiliates) not less than 1,500,000
shares of Registrable Securities (as adjusted for stock splits, stock dividends, combinations and
other reclassifications) and each transferee who holds no less than that number of shares of
Registrable Securities.

                    (i) As soon as practicable, but in any event within sixty (60) days after the end of each
fiscal year of the Company, the Company will furnish to each Major Investor (A) preliminary,
unaudited consolidated balance sheets of the Company and its subsidiaries, if any, as at the end of
such fiscal year, and preliminary, unaudited consolidated statements of income and losses,
stockholders’ equity and cash flows of the Company and its

16

 

subsidiaries, if any, for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, if any, all in reasonable detail.

                    (ii) As soon as practicable, but in any event within five (5) months after the end of each
fiscal year of the Company, the Company will furnish to each Major Investor (A) audited
consolidated balance sheets of the Company and its subsidiaries, if any, as at the end of such
fiscal year, and audited consolidated statements of income and losses, stockholders’ equity and
cash flows of the Company and its subsidiaries, if any, for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, if any, all in reasonable detail
and accompanied by a report and opinion thereon by independent auditors selected by the Board of
Directors, and (B) a copy of such auditors’ management letter prepared in connection therewith, if
any (such management letter is to be made available promptly after receipt by the Company, which
may be greater than the aforesaid five (5) month period).

                    (iii) As soon as practicable after the end of each of the first three quarters of the fiscal
year, but in any event within thirty (30) days after the end of each such quarter, the Company will
furnish to each Major Investor the unaudited consolidated balance sheets of the Company and its
subsidiaries, if any, as of the end of such quarter, and its unaudited consolidated statements of
income and losses, stockholders’ equity and cash flows for such quarter, setting forth in each case
in comparative form the figures for the corresponding period of the preceding fiscal year, all in
reasonable detail, and except that such financial statements may not contain notes and will be
subject to year-end adjustment.

                    (iv) As soon as practicable after the end of each month, but in any event within thirty (30)
business days thereafter, the Company will furnish to each Major Investor (A) the unaudited
consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of such month
and its unaudited statement of income and losses, stockholders’ equity and cash flows for such
month, indicating actual results versus the Company’s plan for such month, setting forth in each
case in comparative form the figures for the corresponding period of the preceding fiscal year,
except that such financial statements may not contain notes and will be subject to year-end
adjustment, and (B) a progress report from the Company’s Chief Executive Officer (the
“CEO”) (provided such monthly financial information and progress report may be
delivered via e-mail), outlining the status of the Company’s research, development, sales,
marketing and other operating activities (personnel, financing, etc.).

                    (v) As soon as practicable, but in any event within 30 days before the beginning of each
fiscal year, the Company will furnish to each Major Investor an annual operating plan and budget
for the following fiscal year (which budget and plan shall include capital and operating expense
budgets, cash flow projections, profit and loss projections and projected balance sheets for such
year), accompanied by a report from the CEO detailing the assumptions underlying the budget and any
other information necessary to make such budget and plan accurate and not misleading, and, as soon
as practicable after the adoption thereof, copies of any revisions to such annual operating plan.

                    (vi) The Company will furnish to each Major Investor prompt notice of any material default of
the Company under any bond, note, indenture or other debt

17

 

instrument representing indebtedness for borrowed money and of any acceleration of
indebtedness which may result therefrom.

                    (vii) The Company will furnish to each Major Investor with reasonable promptness, such other
information respecting the business, properties or the condition or operations, financial or other,
of the Company or any subsidiary as any Major Investor may from time to time reasonably request.

               (b) Inspection. The Company shall permit each Major Investor and its transferee(s)
(provided such transfer is effected in compliance with Section 1.2 hereof), its attorney or
its other representative, after executing a confidentiality agreement reasonably acceptable to the
Board of Directors, to visit and inspect the Company’s properties, to examine the Company’s books
of account and other records, to make copies or extracts therefrom and to discuss the Company’s
affairs, finances and accounts with its officers, management, employees and independent auditors
all at such reasonable times during the Company’s normal business hours and as often as such Major
Investor or transferee may reasonably request; provided, however, that the Company
shall not be obligated pursuant to this Section 4.1(b) to provide trade secrets or confidential
information or to provide information to any person whom the Company reasonably believes is a
competitor of the Company; provided, further, that such Investor shall bear any
out-of-pocket costs or expenses of such investigations or inquiries.

               (c) Payment of Taxes. The Company shall pay, and cause each subsidiary to pay, and
discharge all taxes, assessments and governmental charges or levies imposed upon it or upon its
income, profits or business, or upon any properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims that, if unpaid, might become a lien or charge upon
any properties of the Company or any subsidiary, provided that neither the Company nor any
subsidiary shall be required to pay any such tax, assessment, charge, levy or claim that is being
contested in good faith and by appropriate proceedings if the Company or any subsidiary shall have
set aside on its books sufficient reserves, if any, with respect thereto.

               (d) Payment of Trade Debt. The Company shall pay, and cause each subsidiary to pay,
when due, or in conformity with customary trade terms but not later than ninety (90) days from the
due date, all lease obligations, all trade debt, and all other indebtedness incident to the
operations of the Company or its subsidiaries, except such as are being contested in good faith and
by proper proceedings if the Company or subsidiary concerned shall have set aside on its books
sufficient reserves, if any, with respect thereto.

               (e) Maintenance of Insurance. The Company shall maintain, and cause each subsidiary
to maintain, insurance with responsible and reputable insurance companies or associations in such
amounts and covering such risks as is customarily carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the Company or such
subsidiary operates.

               (f) Intellectual Property. The Company shall secure, preserve and maintain, patents,
processes, licenses, permits, trademarks, trade names, inventions, intellectual property and cause
each subsidiary to secure, preserve and maintain, all licenses and other rights

18

 

to use rights or copyrights owned or used by it to the extent necessary to the conduct of its
business or the business of any subsidiary.

               (g) Compliance with Laws. The Company shall comply, and cause each subsidiary to
comply, with the requirements of all applicable laws, rules, regulations and orders of any
governmental authority, noncompliance with which could materially adversely affect its business or
condition, financial or otherwise.

               (h) Records and Books of Account. The Company shall keep, and cause each subsidiary
to keep, adequate records and books of account in which complete entries will be made in accordance
with generally accepted accounting principles consistently applied, reflecting all financial
transactions of the Company and any subsidiary, and in which, for each fiscal year, all proper
reserves for depreciation, depletion, returns of merchandise, obsolescence, amortization, taxes,
bad debts and other purposes in connection with its business shall be made.

               (i) Maintenance of Properties. The Company shall maintain and preserve, and cause
each subsidiary to maintain and preserve, all of its properties and assets necessary for the proper
conduct of its business, in good repair, working order and condition, ordinary wear and tear
excepted.

               (j) Regulatory Compliance. The Company shall comply, and cause each subsidiary to
comply, with all minimum funding requirements applicable to any pension, employee benefit plans, or
employee contribution plans that are subject to the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), or to the Internal Revenue Code of 1986, as amended (the
“Code”), and comply, and cause each subsidiary to comply, in all other material respects
with the provisions of ERISA and the Code, and the rules and regulations thereunder, which are
applicable to any such plan; provided further that neither the Company nor any
subsidiary will permit any event or condition to exist that would permit any such plan to be
terminated under circumstances that would cause any material lien provided for in section 4068 of
ERISA to attach to the assets of the Company or any subsidiary.

               (k) Compliance with Environmental Laws. The Company shall comply, and cause each
subsidiary to comply, with the provisions of all federal, state and local environmental, health and
safety laws, codes and ordinances and all rules and regulations promulgated thereunder, and the
Company shall maintain, and cause each subsidiary to maintain, all federal, state and local
permits, licenses, certificates and approvals known to the Company or any subsidiary to be required
relating to (i) air emissions, (ii) discharges to surface water or ground water, (iii) noise
emissions, (iv) solid or liquid waste disposal, (v) the use, generation, storage, transportation or
disposal of toxic or hazardous substances or wastes (intended hereby and hereafter to include any
and all such materials listed in any federal, state or local law, code or ordinance and all rules
and regulations promulgated thereunder, as hazardous or potentially hazardous), or (vi) other
environmental, health and safety matters.

               (l) Financings. The Company shall promptly, fully and in detail, inform the Board of
Directors of any discussions, offers or contracts relating to possible financings of any nature for
the Company, whether initiated by the Company or any other person, except for arrangements with
trade creditors.

19

 

               (m) Directors and Officers Insurance; Indemnification. The Company shall at all times
maintain in full force and effect, directors and officers insurance providing for coverage of not
less than $2,000,000 per director per occurrence. The Restated Certificate and the Company’s
Bylaws, each as may be amended from time to time, shall at all times provide (i) for elimination of
the liability of directors and officers to the maximum extent permitted by law, and (ii) for
indemnification of directors and officers for acts on behalf of the Company to the maximum extent
permitted by law.

               (n) Nondisclosure and Inventions Agreements. The Company shall require each officer,
employee and consultant of the Company to enter into the Company’s standard Nondisclosure and
Assignment of Inventions Agreement, in form and substance reasonably satisfactory to the Investors,
prior to the commencement of such officer’s, employee’s or consultant’s employment or consulting
relationship with the Company, as applicable.

               (o) Use of Proceeds. The Company shall expend the proceeds from the sale of the
Series C Stock substantially in accordance with the Company’s business plan approved by the Board
of Directors (including a majority of the directors selected by the holders of Preferred Stock
pursuant to Article V, Subsection D.3 of the Company’s Restated Certificate) from time to time.

               (p) Key-Person Life Insurance. The Company shall at all times maintain in full force
and effect, a policy of “key-person” life insurance on the life of Dan Myers with minimum coverage
of $1,000,000, the proceeds of which shall be payable to the Company.

               (q) FDA Compliance. The Company shall maintain, and cause each subsidiary to
maintain, such permits, licenses, franchises, authorizations and clearances (“Permits”) of
governmental or regulatory authorities, including, without limitation, the Food and Drug
Administration (the “FDA”) of the U.S. Department of Health and Human Services and/or any committee
thereof, as are necessary to own, lease and operate its properties and to conduct its business as
now conducted and as currently proposed to be conducted; the Company shall fulfill and perform, and
cause each subsidiary to fulfill and perform, all such material obligations with respect to the
Permits, and the Company shall conduct or sponsor, and cause each subsidiary to conduct or sponsor,
feasibility, pre-clinical, clinical and other studies and tests in accordance with standard medical
and scientific research procedures.

               (r) Committees of the Board of Directors. A four-member Compensation Committee of the
Board of Directors (the “Compensation Committee”), for which the Chairman shall initially
be Dr. Calvin Roberts, and a four-member Audit Committee (the “Audit Committee”) of the
Board of Directors shall be established and maintained at all times after the date hereof, the
membership of such committees to be agreed to by the Board of Directors; provided that no
member of the Compensation Committee or Audit Committee shall be an employee of the Company and
provided that the Intersouth Director (as defined below) shall be a member of the
Compensation Committee and the Venrock Director (as defined below) shall be a member of the
Compensation Committee and shall initially be the Chairman of the Audit Committee. The Chief
Executive Officer or interim Chief Executive Officer of the Company shall be entitled to attend
meetings of the Compensation Committee in a nonvoting

20

 

capacity; provided, however, that such officer may be excluded from any
meeting, or portion thereof, at the discretion of the Compensation Committee. The Compensation
Committee will, among other things, be responsible for and have discretion concerning all
compensation decisions and decisions concerning the issuance of stock options or other equity
awards, including without limitation the vesting of stock options or other equity awards. The
senior financial officer of the Company shall be entitled to attend meetings of the Audit Committee
in a nonvoting capacity; provided, however, that such officer may be excluded from
any meeting, or portion thereof, at the discretion of the Audit Committee. At least one of the
directors selected by the Investors pursuant to Section 5(b) below shall be included as a member of
each other committee of the Board of Directors currently existing or hereafter established by the
Board of Directors, whether or not described in this section.

               (s) Stock Vesting. Unless otherwise approved by the Board of Directors, all stock and
stock equivalents issued to officers, employees, directors, consultants and other service providers
will be subject to vesting as determined by the Compensation Committee, with all such stock options
and other equity awards approved by the Compensation Committee for officers and employees expected
to vest over a period of no less than four years, with no less than twenty-five percent (25%) of
each stock option or other equity award vesting only after a period of one year from the date of
grant or the date the recipient was hired. If options are exercised prior to vesting, terms of any
repurchase option upon termination of employment or service of the shareholder will also be
determined by the Compensation Committee.

               (t) Market Standoff Agreements. The Company will require all future purchasers of
stock prior to the initial public offering of the Company’s securities to execute a market standoff
agreement in which the holders agree, if so requested by the Company or any underwriter’s
representative in connection with an initial public offering, not to sell or otherwise transfer any
securities of the Company during a period of up to 180 days following the effective date of the
registration statement (or such longer period after the expiration of the 180-day period, as the
underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711 or
any similar or successor rule).

               (u) Preservation of Corporation Existence. The Company will preserve and maintain,
and, unless the Company reasonably deems it not to be in its best interests, cause each subsidiary
to preserve and maintain, its corporate existence, rights, franchises and privileges in the
jurisdictions of its incorporation, and qualify and remain qualified, and cause each subsidiary to
qualify and remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is necessary or desirable in view of its business and operations or the ownership or
lease, of its properties, except when the failure to, be so qualified would not have a material
adverse effect on the Company or its subsidiaries.,

               (v) Material Change; Litigation. The officers of the Company will promptly .advise
the Major Investors and the Board of Directors of any material adverse change in the business or
condition, financial or otherwise, of the Company and of each suit or proceeding commenced or
threatened against the Company which, if adversely determined, in the reasonable judgment or the
officers of the Company after consultation with counsel, would result in a material adverse change.
The Company will also promptly advise the Major Investors

21

 

of the occurrence of any event that constitutes a material breach of any covenant contained
herein.

               (w) Reservation of Common Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the conversion of the Investor Stock, all shares
of Common Stock issuable upon such conversion.

               (x) Board of Directors. The Company shall call and hold meetings of the Board of
Directors as determined by a majority of the Board of Directors (including a majority of the
directors selected by the Investors pursuant to Section 5.1(b) below) and in accordance with the
Restated Certificate and the Company’s Bylaws, each as may be amended from time to time, but in any
event not less than once in every two-month period (unless 75% of the directors then in office vote
to schedule meetings less frequently). Members of the Board of Directors shall be elected in
accordance with the Restated Certificate, as the same may be amended from time to time, and Section
5 of this Agreement. The Company’s Bylaws shall at all times provide that (i) the CEO shall not
also serve as the Chairman of the Board of Directors, and (ii) any one director, or holders of at
least 10% of the Company’s outstanding Common Stock (assuming conversion of the Investor Stock) can
call a meeting of the Board of Directors. The reasonable out-of-pocket expenses of members of the
Board of Directors associated with attending meetings or business related to the Company will be
borne by the Company, and all directors will be treated identically with regard to compensation and
expense reimbursement related to their service as members of the Board of Directors.

               (y) Observation Rights. Each Investor owning (either individually or collectively
with its affiliates) not less than 2,000,000 shares of Registrable Securities (as adjusted for
stock splits, stock dividends, combinations and other reclassifications) and each transferee who
holds (either individually or collectively with its affiliates) no less than that number of shares
of Registrable Securities, shall have the right to receive notice of all meetings of the Board of
Directors, to attend any such meeting (or designate its representative to attend such meeting on
its behalf) as a nonvoting observer and to comment for the record at any such meeting (for purposes
of this Section 4.1(y), the term “meeting” shall be deemed to include all “executive sessions” and
any other similar meeting of all or part of the Board of Directors). Each observer so appointed as
provided above shall sign a confidentiality agreement reasonably acceptable to the Board of
Directors prior to his or her first attendance to his or her first meeting of the Board of
Directors. Notwithstanding anything contained herein to the contrary, no observer shall be
permitted to attend any meeting of any committee of the Board of Directors without the consent of a
majority of the members of such committee (including a majority of the directors selected by the
Investors pursuant to Section 5 below). The Board of Directors, or the members of any committee
thereof, as applicable, shall have the right to prevent access by any or all observers to any
meeting of the Board of Directors, or committee thereof, respectively, or any portion thereof, if a
majority of the directors present at such meeting (including a majority of the directors selected
by the Investors pursuant to Section 5 below) deem, in their sole discretion, such action necessary
to protect the confidential information of the Company.

               (z) Quarterly Expense Reports. The Company shall provide to the Board of Directors,
on no less than a quarterly basis, a detailed expense report from the CEO.

22

 

               (aa) Additional Common Holders and Investors. The Company shall cause each person or
entity hereafter becoming a holder of shares of the Company’s Common Stock to become a party to
this Agreement as a “Common Holder,” subject to all applicable terms and provisions hereof,
by having such holder execute a signature page hereto and amending Exhibit D pursuant to Section
7.5 below. The Company shall cause each person or entity hereafter becoming a holder of shares of
the Series C Stock at the Second Tranche Closing (as defined in the Series C Purchase Agreement) to
become a party to this Agreement as an “Investor,” subject to all applicable terms and
provisions hereof, by having such holder execute a signature page hereto and amending Exhibit C
pursuant to Section 7.5 below.

               (bb) Qualified Small Business Stock. The Company shall use its best efforts to comply
with the reporting and record keeping requirements of Section 1202 of the Code, any regulations
promulgated thereunder and any similar state laws and regulations, and agrees not to repurchase any
stock of the Company if such repurchase would constitute a “significant redemption” within the
meaning of Section 1202(c)(3)(B) of the Code with respect to the Preferred Stock. In addition,
within ten days after an Investor’s written request therefore, the Company shall deliver to such
Investor a written statement indicating whether such Investor’s interest in the Company constitutes
“qualified small business stock” as defined in Section 1202(c) of the Code.

               (cc) Amendment to Certain Warrants. The Company shall use its best efforts to obtain
within 120 days of the date hereof an amendment to that certain Warrant to Purchase Shares of
Common Stock, identified as Warrant No. 16 in the Company’s capitalization records to provide for
an adjustment effective upon a merger or other recapitalization similar to those set forth in the
Company’s other warrants and reasonably acceptable to Venrock Associates IV, L.P. (the “Warrant
Amendment”). Effective upon the effectiveness of the Warrant Amendment, the Investors party
hereto hereby waive any and all rights that they may have as a result of the Company’s failure to
effect an amendment to certain of its warrants to purchase Common Stock in accordance with Section
4.1(cc) of the Prior Agreement.

          4.2 Negative Covenants. Without limiting any other covenant or provision hereof, the
Company covenants and agrees that, so long as shares of Investor Stock remain outstanding, it will,
and will cause each subsidiary (to the extent applicable thereto) of the Company, if and when such
subsidiary exists, to do the following.

               (a) Limitation on Guaranties: Investments: Advances or Loans. The Company and its
subsidiaries shall not guarantee, create any subsidiaries, or purchase or otherwise acquire, or
invest in the securities of, or make or suffer to exist any loan or advance to, or enter into any
arrangement for the purpose of providing funds or credit to, or make any other investment in, any
person or entity, other than as approved by the Board of Directors (including a majority of the
directors selected by the Investors pursuant to Section 5 below).

               (b) Dividends and Redemptions. Except as otherwise permitted in the Restated
Certificate or this Agreement, the Company shall not (i) declare or make any dividends or
distributions of its cash, stock property, or assets or redeem, retire, purchase, or otherwise
acquire, directly or indirectly, any of its capital stock or the capital stock or securities of any

23

 

affiliate or any subsidiary of the Company, or any securities convertible or exchangeable into
its capital stock or the capital stock or securities of any affiliate or any subsidiary of the
Company or otherwise make any distribution on account of the purchase, repurchase, redemption, put,
call or other retirement of any shares of capital stock of the Company or any subsidiary thereof or
of any warrant, option or other right to acquire such shares, or (ii) pay any professional
consulting or management fees or any other payments to any stockholders of the Company or any
subsidiary, in each case other than as approved by the Board of Directors (including a majority of
the directors selected by the Investors pursuant to Section 5 below).

               (c) Sale of Assets. The Company shall not effect any sale, lease, assignment,
transfer, or other conveyance of any material portion of the assets or operations or the revenue or
income generating capacity of the Company (other than inventory in the ordinary course of business
and other assets reasonably and in good faith determined by the Company to be obsolete or no longer
necessary to the business of the Company), or to take any such action that has the effect of any of
the foregoing, other than as approved by a majority of the Board of Directors (including a majority
of the directors selected by the Investors pursuant to Section 5(b) below).

               (d) Executive Compensation. The Company shall not increase the compensation paid to
its executive officers or directors, whether by means of salary, bonus, profit sharing, options,
dividends or any other means whatsoever, other than as approved by a majority of the Board of
Directors (including a majority of the directors selected by the Investors pursuant to Section
5.1(b) below).

               (e) Related Party Transactions. The Company shall not enter into any transaction or
transactions with any director, officer or stockholder of the Company, or any affiliate or relative
of the foregoing, other than normal payments of wages, benefits and travel expenses or advances,
except upon terms that, in the opinion of the holders of a majority of the Investor Stock, are fair
and reasonable and that are, in any event, at least as favorable as would result in a comparable
arm’s length transaction with a person or entity not a director, officer, stockholder or affiliate
of the Company or any affiliate or related party of the foregoing, or advance any monies to any
such persons or entities, except for travel advances in the ordinary course of business.

               (f) Capital Expenditures. The Company shall not, without the prior approval of a
majority of the Board of Directors (including a majority of the directors selected by the Investors
pursuant to Section 5.1(b) below), purchase any item of equipment or make any capital expenditure
(including, without limitation, expenditures under capitalized leases) in an amount in excess of
110% of the amount budgeted for such item or equipment or capital expenditure set forth in the
operating plan and budget approved by the Board of Directors and delivered to the Major Investors
pursuant to Section 4.1(a)(v).

               (g) Conflicts. Neither the Company nor any of its subsidiaries will enter into any
contract, agreement, transaction or dealing with any one or more of its directors or stockholders,
or any entity with which any director or stockholder is affiliated, either as director, officer,
general partner, trustee, manager or similar management level position, as stockholder, limited
partner, beneficiary, member or other equity owner, or as joint venturer, promoter, finder,

24

 

agent, broker, dealer or otherwise, or any member of the immediate family of any such person
unless the terms thereof are fully disclosed to the Board of Directors and such contract,
agreement, transaction or dealing is approved in advance by (i) a majority of the disinterested
members of the Board of Directors, and (ii) a majority of the disinterested directors selected by
the Investors, if any.

          4.3 Expiration of Covenants. The covenants set forth in this Section 4 (other than
the provisions of Section 4.1(m)) shall expire and be of no further force or effect upon the
effectiveness of a Qualified Public Offering (as defined in Section 3.5 hereof). After such time,
the Investors shall be entitled to receive such annual and quarterly reports as the Company shall
distribute to its stockholders generally.

     5. Voting Agreement.

          5.1 Election of Directors. From and after the execution of the Series C Purchase
Agreement, the Board of Directors will consist of seven (7) persons. Each time the stockholders of
the Company meet, or act by written consent in lieu of a meeting, for the purpose of electing the
directors to serve on the Board of Directors, each Common Holder and each Investor shall vote all
of the shares of the Company’s capital stock owned by it (whether now owned are acquired hereafter)
in order to cause the election of (a) the individual then serving as the CEO; (b) five (5)
designees of the holders of Investor Stock, one of whom shall be designated by each of (i)
Intersouth Partners VI, L.P. (the “Intersouth Director”), (ii) Domain Partners VI, L.P.,
(iii) Polaris Venture Partners IV, L.P., (iv) BAVP, L.P., and (v) Venrock Associates IV, L.P. (the
“Venrock Director”), who shall be the designees of the holders of the Investor Stock
pursuant to Article V, Subsection D.3 of the Restated Certificate; and (c) one (1) independent
outsider who is not an employee or officer of the Company and who is mutually agreed to by the CEO
and Investors holding at least two-thirds (2/3) of the Investor Stock (the “Independent
Director”), and who initially shall be Dr. Calvin Roberts. Each Common Holder and each
Investor agrees that no director may be removed from office without the approval or request of the
stockholder or stockholders that designated such director in accordance with this Section 5.1 and
upon any such request, each Common Holder and each Investor agrees to take all such actions
reasonably necessary to effectuate such removal. In addition, in the event the CEO resigns or is
removed for any reason, each Common Holder and each Investor agrees to take all such actions
reasonably necessary to remove him or her from the Board of Directors as soon as practicable
thereafter.

          5.2 Binding Effect of Voting Agreement. The voting agreement set forth in this
Section 5 shall be binding upon any transferee of shares of the Company’s stock held by the
Investors and Common Holders. Each such transferee shall execute documents assuming the
obligations of the transferor under this Section 5 prior to the completion of such transfer.

          5.3 Legends. Each certificate held by or issued to the Investors or the Common
Holders, whether now outstanding or subsequently issued, shall be surrendered to the Company for
endorsement or be endorsed by the Company prior to its issuance with substantially the following
legend.

25

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING AGREEMENT
AMONG THE HOLDER OF THESE SECURITIES AND CERTAIN OTHER HOLDERS OF THE ISSUER’S
SECURITIES WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING OF THE SECURITIES
REPRESENTED HEREBY. BY ACCEPTING ANY INTEREST IN SUCH SECURITIES, THE PERSON
ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL OF
THE PROVISIONS OF SUCH AGREEMENT. COPIES OF SUCH VOTING AGREEMENT MAY BE OBTAINED
UPON WRITTEN REQUEST BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.

          5.4 Termination of Voting Agreement. The covenants set forth in this Section 5 shall
terminate upon the earliest of (a) the closing of a Qualified Public Offering (as defined in
Section 3.5 hereof); (b) such time as the Company shall be subject to the reporting requirements
arising under the 1934 Act, or any successor statute and any applicable rules promulgated
thereunder by the SEC; or (c) the date 10 years from the date hereof.

     6. Prior Agreement.

          6.1 Amendment and Restatement of Prior Agreement. The Prior Agreement is hereby
amended in its entirety and restated herein. Such amendment and restatement is effective upon the
execution of this Agreement by the Company and the holders of two-thirds (2/3) of the Investor
Stock and a majority of the Common Stock outstanding as of the date of this Agreement. Upon such
execution, all provisions of, rights granted and covenants made in the Prior Agreement are hereby
waived, released and superseded in their entirety and shall have no further force or effect,
including, without limitation, all rights of first refusal and any notice period associated
therewith otherwise applicable to the transactions contemplated by the Series B Purchase Agreement.

     7. Miscellaneous.

          7.1 Governing Law. This Agreement shall be governed by the laws of the State of
Delaware without regard to choice of law provisions.

          7.2 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto.

          7.3 Entire Agreement. This Agreement constitutes the full and entire understanding
and agreement among the parties with regard to the subjects hereof. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties hereto and their
successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.

          7.4 Severability. Any invalidity, illegality or limitation of the enforceability with
respect to any Holder of any one or more of the provisions of this Agreement, or any part

26

 

thereof, whether arising by reason of the law of any such person’s domicile or otherwise,
shall in no way affect or impair the validity, legality or enforceability of this Agreement with
respect to any other Holder. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and
enforceable and to retain as nearly as practicable the intent of the parties, and the validity,
legality, and enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

          7.5 Amendment and Waiver. Except as otherwise expressly provided herein, any term of
this Agreement may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance, either retroactively or prospectively and either for
a specified period of time or indefinitely) with the written consent of the Company and the
Investors, or their transferees, holding at least two thirds (2/3) of the shares of Investor Stock
and voting together as a single group (treated as if converted at the conversion rate then in
effect and including, for such purposes, shares of Common Stock into which any shares of Investor
Stock shall have been converted that are held by a Holder); provided, however, that
no such amendment or waiver shall reduce the aforesaid percentage of Investor Stock and Common
Stock issued upon conversion thereof, the holders of which are required to consent to any waiver or
supplemental agreement, without the consent of the holders of all of such Investor Stock and Common
Stock; provided, further, that any amendment to Sections 5.1(a), 5.1(c), 5.3, 5.4
or 5.5 shall also require the consent of the holders of at least a majority of the shares of Common
Stock issued to, or issuable upon exercise of options or warrants held by, the Common Holders. Any
amendment or waiver effected in accordance with this Section 7.5 shall be binding upon the Company,
each Common Holder, each Investor and each transferee of the Registrable Securities; and
provided, further, that notwithstanding the foregoing, (i) Section 5.1(b)(i) shall
not be amended or waived without the written consent of Intersouth Partners VI, L.P., (ii) Section
5.1(b)(ii) shall not be amended or waived without the written consent of Domain Partners VI, L.P.,
Section 5.1(b)(iii) shall not be amended or waived without the written consent of Polaris Venture
Partners IV, L.P., (iv) Section 5.1(b)(iv) shall not be amended or waived without the written
consent of BAVP, L.P., and Section 5.1(b)(v) shall not be amended or waived without the written
consent of Venrock Associates IV, L.P., at any time during which such party has the right to
designate a director to the Board of Directors pursuant to the applicable clause of Section 5.1(b);
and provided, further, that any waiver or amendment of the provisions of Section 3
hereof in connection with a transaction shall be binding upon the Company and each Eligible Holder
only if, in the event that any other Eligible Holder (a “Purchasing Holder”) is purchasing
shares of the Company’s capital stock notwithstanding such waiver or amendment, each other Eligible
Holder is offered the right to purchase in such transaction the same portion of such Eligible
Holder’s Pro Rata Share as the Purchasing Holder is purchasing of such Purchasing Holder’s Pro Rata
Share. Upon the effectuation of each such amendment or waiver, the Company shall promptly give
written notice thereof to the Investors and Common Holders who have not previously consented
thereto in writing: Notwithstanding anything to the contrary in this Section 7.5, the Company shall
be entitled to, (A) in accordance with Section 4.1(aa), include additional holders of its Series C
Stock and Common Stock as parties to this Agreement, and to treat such holders as
“Investors” or “Common Holders,” as the case may be, hereunder by having each such
holder execute a signature page hereto, amend Exhibit C and/or Exhibit D, as applicable, attached
hereto and provide such amended Exhibit C and/or Exhibit D to the other parties to this Agreement
and (B) amend Exhibit
 C (and provide of such amended Exhibit C to the other parties

27

 

to this Agreement) as soon as reasonably practicable following the Second Tranche Closing to
reflect the actual number of shares of Series C Preferred Stock acquired in the Second Tranche
Closing by each Investor that participated in the First Tranche Closing.

          7.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to the Company, the Investors, or any transferees upon any breach, default or
noncompliance of the Investors or any transferee or the Company under this Agreement, shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of any similar breach, default or
noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character on the part of the Company or the Investors of any breach,
default or noncompliance under this Agreement or any waiver on the Company’s or the Investors’ part
of any provisions or conditions of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing and that all remedies, either under this
Agreement, by law, or otherwise afforded to the Company and the Investors, shall be cumulative and
not alternative.

          7.7 Notices, etc. Any notice required or permitted under this Agreement shall be
given in writing and shall be deemed effectively given and received: (a) upon personal delivery to
the party to be notified; (b) upon delivery by confirmed facsimile transmission if received by the
recipient before 5:00 p.m. local time on a business day, and if not, then the next business day;
(c) if to a U.S. resident, five (5) days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid; or (d) if to a U.S. resident, one (1) business day
after deposit with a nationally recognized overnight courier service (or if to a non-U.S. resident,
two (2) business days after deposit with an internationally recognized overnight courier service,
specifying international priority delivery), and addressed:

(a)   if to the Company, at:

Alimera Sciences, Inc.

6120 Windward Parkway, Suite 290

Alpharetta, GA 30005

Attn: Chief Executive Officer

Telephone: 678-990-5740

Fax: 678-990-5744

With a copy to:

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP

610 Lincoln Street

Waltham, MA 02451

Attn: Jay Hachigian, Esq.

Telephone: 781-795-3550

Fax: 781-622-1622

or at such other address as the Company shall have furnished to the Investors in writing;

28

 

               (b) if to the Investors, at the addresses of such Investors specified on Exhibit A, Exhibit B
or Exhibit C hereto, or at such other addresses as the Investors shall have furnished to the
Company in writing;

               (c) if to a Holder other than the Investors, at such Holder’s address as shall have been
furnished to the Company in writing; and

               (d) if to the Common Holders, at the addresses of such Common Holders specified on Exhibit D
hereto, or at such other addresses as the Common Holders shall have furnished to the Company in
writing.

          7.8 Attorneys’ Fees. In the event that any suit or action is instituted under or in
relation to this Agreement, including without limitation to enforce any provision in this
Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party
all fees, costs and expenses of enforcing any right of such prevailing party under or with respect
to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

          7.9 Aggregation of Stock. All shares of Registrable Securities held or acquired by
affiliated entities or persons or persons or entities under common management or control shall be
aggregated together for the purpose of determining the availability of any rights under this
Agreement.

          7.10 Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in construing this
Agreement.

          7.11 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute one instrument.

[Remainder of page intentionally left blank]

29

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 

	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	ALIMERA SCIENCES, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	Name: 
	 

	 	 
	 

	 	Title:
	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS:
	 
	 	 	 	 	 	 
	 	 	VENROCK PARTNERS, L.P.
	 	 	by its General Partner, Venrock Partners
	 	 	Management, LLC
	 
	 	 	 	 	 	 
	 	 	VENROCK ASSOCIATES IV, L.P.
	 	 	by its General Partner, Venrock Management IV,
	 	 	LLC
	 
	 	 	 	 	 	 
	 	 	VENROCK ENTREPRENEURS FUND IV, L.P.
	 	 	by its General Partner, VEF Management IV, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

Member
	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	INTERSOUTH PARTNERS V, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Intersouth Associates V, L.P.,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	INTERSOUTH AFFILIATES V, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Intersouth Associates V, LLC,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	INTERSOUTH PARTNERS VI, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Intersouth Associates VI, LLC,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	INTERSOUTH PARTNERS VII, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Intersouth Associates VII, L.P.,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	BAVP, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	BA Venture Partners VI, LLC,	 	 
	 

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 

Managing Director
	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	G&H PARTNERS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	POLARIS VENTURE PARTNERS IV, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Polaris Venture Management Co. IV, L.L.C.,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	POLARIS VENTURE PARTNERS	 	 
	 	 	ENTREPRENEURS’ FUND IV, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Polaris Venture Management Co. IV, L.L.C.,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement hat been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	DOMAIN PARTNERS VI, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	One Palmer Square Associates VI, L.L.C.,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	DP VI ASSOCIATES, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	One Palmer Square Associates VI, L.L.C.,	 	 
	 

	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Amended and Restated Investor Rights Agreement has been duly executed
and delivered by the parties as of the date first above written.

	 	 	 	 	 
	 

	 	INVESTOR/COMMON HOLDER:	 	 
	 
	 	 	 	 
	 

	 	 

Dr. Calvin Roberts
	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

 

 

     IN WITNESS WHEREOF, this Second Amended and Restated Investor Rights Agreement has been duly
executed and delivered by the parties as of the date first above written.

	 	 	 	 	 
	 

	 	COMMON STOCKHOLDERS:	 	 
	 
	 	 	 	 
	 

	 	 

C. Daniel Myers
	 	 
	 
	 	 	 	 
	 

	 	 

David Holland
	 	 
	 
	 	 	 	 
	 

	 	 

Alisa Hudzina
	 	 
	 
	 	 	 	 
	 

	 	 

Susan Caballa
	 	 
	 
	 	 	 	 
	 

	 	 

David Eitel
	 	 

Signature Page to

Second Amended and Restated Investor Rights Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]