Document:

Exhibit 4.2

Exhibit 4.2

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE
PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

WARRANT TO PURCHASE STOCK

Company: Alimera Sciences, Inc., a Delaware corporation

Number of Shares: As set forth below

Class of Stock: Common Stock, $0.01 par value per share

Warrant Price: $11.00 per share, subject to adjustment

Issue Date: May 16, 2011

Expiration Date: May 16, 2021

			
	Credit Facility:	 	This Warrant is issued in connection with that certain
First Loan Modification Agreement of even date herewith
among Midcap Funding III, LLC, Silicon Valley Bank, and
the Company, which amends certain provisions of that
certain Loan and Security Agreement, dated as of October
14, 2010, among Midcap Funding III, LLC, Silicon Valley
Bank, and the Company (as amended and in effect from time
to time, the “Loan Agreement”).

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK
(Silicon Valley Bank, together with any successor or permitted assignee or transferee of this
Warrant or of any shares issued upon exercise hereof, is referred to hereinafter as “Holder”) is
entitled to purchase the number of fully paid and non-assessable shares (the “Shares”) of the
above-stated Class of Stock (the “Class”) of the above-named company (the “Company”) at the
above-stated Warrant Price per Share, all as set forth above and as adjusted pursuant to Article 2
of this Warrant, subject to the provisions and upon the terms and conditions set forth in this
Warrant.

A. Number of Shares. If, but only if, the balance of the Term B Loan (as defined in the
Loan Agreement) is advanced pursuant to the Loan Agreement by Holder (or its affiliate) to the
Company, then, upon such advance, this Warrant automatically shall become exercisable for such
number of Shares as shall equal (a) 133,000, divided by (b) the Warrant Price in effect on and as
of the date of such advance, and subject to adjustment thereafter from time to time in accordance
with the provisions of this Warrant.

ARTICLE 1. EXERCISE.

1.1 Method of Exercise. Holder may exercise this Warrant by delivering the original
of this Warrant together with a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company.

 

 

 

Unless
Holder is exercising the conversion right set forth in Article 1.2, Holder shall also deliver to
the Company a check, wire transfer (to an account designated by the Company), or other form of
payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

1.2 Conversion Right. In lieu of exercising this Warrant as specified in Article 1.1,
Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares
determined by dividing (a) the aggregate fair market value of the Shares or other securities
otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares shall be determined
pursuant to Article 1.3.

1.3 Fair Market Value. If shares of the Class are then publicly listed or quoted on
one or more securities exchanges, inter-dealer quotation systems or over-the-counter markets, the
fair market value of a Share shall be the closing price of a share of the Class reported on the
principal such exchange, system or market for the business day immediately before Holder delivers
this Warrant together with its Notice of Exercise to the Company. If shares of the Class are not
then publicly listed or quoted on one or more securities exchanges, inter-dealer quotation systems
or over-the-counter markets, then the Board of Directors of the Company shall determine the fair
market value of a Share in its reasonable good faith judgment.

1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or
converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant
Price, the Company shall deliver to Holder certificates for the Shares acquired and, if this
Warrant has not been fully exercised or converted and has not expired, a new warrant of like tenor
representing the Shares not so acquired.

1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,
theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

1.6 Treatment of Warrant Upon Acquisition of Company.

1.6.1 “Acquisition”. For the purpose of this Warrant, “Acquisition” means any sale,
exclusive license, or other disposition of all or substantially all of the assets of the Company,
or any reorganization, consolidation, merger or sale of outstanding equity securities of the
Company where the holders of the Company’s outstanding voting equity securities as of immediately
before the transaction beneficially own less than a majority of the outstanding voting equity
securities of the surviving or successor entity as of immediately after the transaction.

 

2

 

1.6.2 Treatment of Warrant at
Acquisition.

A) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition in
which the sole consideration is cash, either (a) Holder shall exercise its conversion or purchase
right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to
exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The
Company shall provide the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less
than ten (10) days prior to the closing of the proposed Acquisition.

B) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that
is an “arms length” sale of all or substantially all of the Company’s assets (and only its assets)
to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset Sale”),
either (a) Holder shall exercise its conversion or purchase right under this Warrant and such
exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b)
if Holder elects not to exercise the Warrant, this Warrant will continue until the Expiration Date
if the Company continues as a going concern following the closing of any such True Asset Sale. The
Company shall provide the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less
than ten (10) days prior to the closing of the proposed Acquisition.

C) Upon the closing of any Acquisition other than those particularly described in subsections (A)
and (B) above, the successor entity shall assume the obligations of this Warrant, and this Warrant
shall be exercisable for the same securities, cash, and property as would be payable for the Shares
issuable upon exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price and/or
number of Shares shall be adjusted accordingly.

As used in this Article 1.6, “Affiliate” shall mean any person or entity that owns or
controls directly or indirectly ten percent (10%) or more of the stock of Company, any person or
entity that controls or is controlled by or is under common control with such persons or entities,
and each of such person’s or entity’s officers, directors, joint venturers or partners, as
applicable.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the
outstanding shares of the Class payable in common stock or other securities, then upon exercise of
this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total
number and kind of securities to which Holder would have been entitled had Holder owned the Shares
of record as of the date the dividend occurred. If the Company subdivides the outstanding shares
of the Class by reclassification or otherwise into a greater number of shares, the number of Shares
purchasable hereunder shall be proportionately increased and the Warrant Price shall be
proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be
proportionately increased and the number of Shares shall be proportionately decreased.

 

3

 

2.2 Reclassification, Exchange, Combinations or Substitution. Upon any
reclassification, exchange, substitution, recapitalization, reorganization or other event affecting
the outstanding shares of the Class, Holder shall be entitled to receive, upon exercise or
conversion of this Warrant, the number and kind of securities and property that Holder would have
received for the Shares if this Warrant had been exercised in full immediately before such
reclassification, exchange, substitution, recapitalization, reorganization or other event, at an
aggregate Warrant Price not exceeding the aggregate Warrant Price in effect as of immediately prior
thereto. The Company or its successor shall promptly issue to Holder a certificate pursuant to
Article 2.6 hereof setting forth the number, class and series or other designation of such new
securities or other property issuable upon exercise or conversion of this Warrant as a result of
such reclassification, exchange, substitution, recapitalization, reorganization or other event.
The provisions of this Article 2.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, recapitalizations, reorganizations and other events.

2.3 [Intentionally Omitted].

2.4 No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution,
issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed under this Warrant by the Company,
but shall at all times in good faith assist in carrying out of all the provisions of this Article 2
and in taking all such action as may be necessary or appropriate to protect Holder’s rights under
this Article against impairment. For the avoidance of doubt, an amendment of the Company’s
Certificate of Incorporation that does not impact the rights of the Holder to be granted upon
exercise of this Warrant in a manner differently than the rights of all other holders of the Class
in their capacity as such shall not be deemed an impairment for the purposes of this Warrant.

2.5 Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant and the number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by paying Holder the amount
computed by multiplying the fractional interest by the fair market value of a full Share.

2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, Class
and/or number of Shares, the Company shall promptly notify Holder in writing, and, at the Company’s
expense, promptly compute such adjustment, and furnish Holder with a certificate of its Chief
Financial Officer setting forth such adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant
Price, Class and number of Shares in effect upon the date thereof and the series of adjustments
leading to such Warrant Price, Class and number of Shares.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

3.1 Representations and Warranties. The Company represents and warrants to, and
agrees with, the Holder as follows:

 

4

 

(a) All Shares which may be issued upon the exercise of the purchase right represented by this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable,
and free of any liens and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.

3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any
dividend or distribution upon the outstanding shares of the Class, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend; (b) to offer for
subscription or sale pro rata to the holders of the outstanding shares of the Class any additional
shares of any class or series of the Company’s stock; (c) to effect any reclassification,
reorganization or recapitalization of the shares of the Class; (d) to effect an Acquisition or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to
participate in an underwritten public offering of the Company’s securities for cash, then, in
connection with each such event, the Company shall give Holder: (1) at least 10 days prior written
notice of the date on which a record will be taken for such dividend, distribution, or subscription
rights (and specifying the date on which the holders of shares of the Class will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters referred to in (c)
and (d) above; (2) in the case of the matters referred to in (c) and (d) above at least 10 days
prior written notice of the date when the same will take place (and specifying the date on which
the holders of shares of the Class will be entitled to exchange their shares for the securities or
other property deliverable upon the occurrence of such event); and (3) in the case of the matter
referred to in (e) above, the same notice as is given to the holders of such registration rights.

3.3 Registration Under Securities Act of 1933, as amended. The Company agrees that
the Shares shall have the same incidental, or “Piggyback,” and S-3 registration rights that the
holders of registrable securities have under the Company’s Investor Rights Agreement. The
provisions set forth in the Company’s Investor Rights Agreement relating to the above in effect as
of the Issue Date may not be amended, modified or waived without the prior written consent of
Holder unless such amendment, modification or waiver affects the rights associated with the Shares
in the same manner as such amendment, modification, or waiver affects the rights associated with
all other registrable securities under such Agreement.

3.4 No Shareholder Rights. Except as provided in this Warrant, Holder will not have
any rights as a shareholder of the Company until the exercise of this Warrant.

3.5 Certain Information. Subject to the provisions of Section 12.9 of the Loan
Agreement, the Company agrees to provide Holder at any time and from time to time with such
information as Holder may reasonably request for purposes of Holder’s compliance with regulatory,
accounting and reporting requirements applicable to Holder.

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and warrants
to the Company as follows:

4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon
exercise of this Warrant by Holder will be acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public
resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for
the specific purpose of acquiring this Warrant or the Shares.

 

5

 

4.2 Disclosure of Information. Holder has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment decision with
respect to the acquisition of this Warrant and its underlying securities. Holder further has had
an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to obtain additional
information (to the extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to Holder or to which
Holder has access.

4.3 Investment Experience. Holder understands that the purchase of this Warrant and
its underlying securities involves substantial risk. Holder has experience as an investor in
securities of companies in the development stage and acknowledges that Holder can bear the economic
risk of such Holder’s investment in this Warrant and its underlying securities and has such
knowledge and experience in financial or business matters that Holder is capable of evaluating the
merits and risks of its investment in this Warrant and its underlying securities and/or has a
preexisting personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables Holder to be aware of the
character, business acumen and financial circumstances of such persons.

4.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning
of Regulation D promulgated under the Act.

4.5 The Act. Holder understands that this Warrant and the Shares issuable upon
exercise or conversion hereof have not been registered under the Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the
Holder’s investment intent as expressed herein. Holder understands that this Warrant and the
Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently
registered under the Act and qualified under applicable state securities laws, or unless exemption
from such registration and qualification are otherwise available.

ARTICLE 5. MISCELLANEOUS.

5.1 Term: This Warrant is exercisable in whole or in part at any time and from time
to time on or before the Expiration Date. 

5.2 Legends. This Warrant and the Shares shall be imprinted with a legend in
substantially the following form:

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE
SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF
ARTICLE 5 OF THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE COMPANY
TO SILICON VALLEY BANK DATED AS OF MAY ___ 2011 MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE
OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

 

6

 

5.3 Compliance with Securities Laws on Transfer. This Warrant and/or the Shares
issued upon exercise or conversion of this Warrant may not be transferred or assigned in whole or
in part without compliance with applicable federal and state securities laws by the transferor and
the transferee (including, without limitation, the delivery of investment representation letters
and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).
The Company shall not require Holder to provide an opinion of counsel if the transfer is to an
affiliate of Holder, provided that such affiliate is an “accredited investor” as defined in
Regulation D promulgated under the Act.

5.4 Transfer Procedure. After receipt by Silicon Valley Bank (“Bank”) of the executed
Warrant, Bank will transfer all of this Warrant to SVB Financial Group, Holder’s parent company.
Subject to the provisions of Article 5.3 and upon providing the Company with written notice, SVB
Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares
issuable upon exercise of this Warrant (or the securities issuable directly or indirectly, upon
conversion of the Shares, if any) to any transferee, provided, however, in connection with any such
transfer, SVB Financial Group or such subsequent Holder will give the Company notice of the portion
of the Warrant being transferred with the name, address and taxpayer identification number of the
transferee and Holder will surrender this Warrant to the Company for reissuance to the
transferee(s) (and Holder if applicable). The foregoing provisions of this Article 5.4 shall not
apply to a public sale of any Shares issued on exercise or conversion of this Warrant pursuant to
the provisions of Rule 144 promulgated under the Act.

5.5 Notices. All notices and other communications from the Company to the Holder, or
vice versa, shall be deemed delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid (or on the first business day after transmission by
facsimile), at such address as may have been furnished to the Company or Holder, as the case may
be, in writing by the Company or such holder from time to time. All notices to Holder shall be
addressed as follows until the Company receives notice of a change of address in connection with a
transfer or otherwise:

SVB Financial Group

Attn: Treasury Department

3003 Tasman Drive, HA 200

Santa Clara, CA 95054

Telephone: 408-654-7400

Facsimile: 408-496-2405

 

7

 

Notice to the Company shall be addressed as follows until Holder receives notice of a change
in address:

Alimera Sciences, Inc.

Attn: Richard S. Eiswirth, Jr.

6120 Windward Parkway, Suite 290

Alpharetta, Georgia 30005

Telephone: 678-527-1750

Facsimile: 678-990-5744

5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.

5.7 Attorney’s Fees. In the event of any dispute between the parties concerning the
terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to
collect from the other party all costs incurred in such dispute, including reasonable attorneys’
fees.

5.8 Automatic Conversion upon Expiration. In the event that, upon the Expiration
Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as
determined in accordance with Article 1.3 above is greater than the Warrant Price in effect on such
date, then this Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Article 1.2 above as to all Shares (or such other securities) for which it shall not
previously have been exercised or converted, and the Company shall promptly deliver a certificate
representing the Shares (or such other securities) issued upon such conversion to Holder.

5.9 Counterparts. This Warrant may be executed in counterparts, all of which together
shall constitute one and the same agreement.

 

8

 

5.10 Governing Law. This Warrant shall be governed by and construed in accordance
with State of Delaware without giving effect to its principles regarding conflicts of law.

	 	 	 	 	 
	“COMPANY”	 	 
	 
	 	 	 	 
	ALIMERA SCIENCES, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Richard S. Eiswirth, Jr.
 

	 	 
	Name:

	 	Richard S. Eiswirth, Jr.	 	 
	 

	 	(Print)	 	 
	Title:

	 	Chief Operating Officer and
Chief Financial Officer	 	 
	 
	 	 	 	 
	“HOLDER”	 	 
	 
	 	 	 	 
	SILICON VALLEY BANK	 	 
	 
	 	 	 	 
	By:
	 	/s/ M. Scott McCarty	 	 
	 

	 	 	 	 
	Name:
	 	Scott McCarty	 	 
	 

	 	 	 	 
	 

	 	(Print)	 	 
	Title:
	 	Vice President	 	 

 

9

 

APPENDIX 1

NOTICE OF EXERCISE

1. Holder elects to purchase
 _____ 
shares of the Common Stock of Alimera Sciences, Inc.
pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the
shares in full.

[or]

1. Holder elects to convert the attached Warrant into Shares/cash [strike one] in the manner
specified in the Warrant. This conversion is exercised for
 _____ 
of the Shares
covered by the Warrant.

[Strike paragraph that does not apply.]

2. Please issue a certificate or certificates representing the Shares in the name specified
below:

	 	 	 	 	 
	 

	 	 

     Holders Name
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	     (Address)	 	 

3. By its execution below and for the benefit of the Company, Holder hereby restates each of
the representations and warranties in Article 4 of the Warrant as of the date hereof.

	 	 	 	 	 	 	 
	 	 	HOLDER:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	(Date):	 	 	 	 
	 

	 	 	 	 	 	 

 

10Exhibit 10.2

Exhibit 10.1

FIRST LOAN MODIFICATION AGREEMENT

(TERM LOAN)

This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as
of May 16, 2011, by and among MIDCAP FUNDING III, LLC, a Delaware limited liability company, with an
office located at 7735 Old Georgetown Road, Suite 400, Bethesda, Maryland 20814 (“MidCap”), and
the other Lenders party hereto from time to time including without limitation, SILICON VALLEY BANK,
a California corporation and with a loan production office located at 3353 Peachtree Road, NE,
Suite M-10, Atlanta, GA 30326 (“SVB”), SVB in its capacity as agent for the Lenders (the “Agent”),
SVB and MidCap in their capacity as joint lead arrangers (in such capacity, the “Arrangers”), and
ALIMERA SCIENCES, INC., a Delaware corporation with its chief executive office located at 6120
Windward Parkway, Suite 290, Alpharetta, Georgia 30005 (“Borrower”).

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and
obligations which may be owing by Borrower to Lenders, Borrower is indebted to Lenders pursuant to
a loan arrangement dated as of October 14, 2010, evidenced by, among other documents, a certain
Loan and Security Agreement dated as of October 14, 2010, between Borrower and Lenders (as amended,
the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same
meaning as in the Loan Agreement.

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by (a) the
Collateral as described in the Loan Agreement, and (b) the Intellectual Property Collateral as
described in that certain Intellectual Property Security Agreement dated as of October 14, 2010,
among, Borrower, Agent, and Lenders (the “IP Agreement”, and together with the Loan Agreement and
any other collateral security granted to Agent, for the ratable benefit of the Lenders, the
“Security Documents”).

Hereinafter, the Security Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”.

3. DESCRIPTION OF CHANGE IN TERMS.

	 	A.	 	Modifications to Loan Agreement.

	 	1	 	The Loan Agreement shall be amended by deleting the following,
appearing as Sections 2.1.1 (a) and 2.1.1 (b) thereof, in its entirety:

“(a) Availability. Subject to the terms and conditions of this
Agreement, the Lenders agree, severally and not jointly, to make term loans
to Borrower in an aggregate amount up to Twelve Million Five Hundred
Thousand Dollars ($12,500,000.00) according to each Lender’s Term Loan
Commitment as set forth on Schedule 1.1 hereto. The Term Loans shall be
available in two (2) tranches. The first tranche (“Term A Loan”) shall be
in an amount equal to Six Million Two Hundred Fifty Thousand Dollars
($6,250,000.00) and shall be advanced on the Effective Date. The second
tranche (“Term B Loan”; Term A Loan and Term B Loan are each referred to
herein individually as a “Term Loan” and collectively as the “Term Loans”)
shall be made available by the Lenders during the Term B Loan Draw Period in
an amount equal to Six Million Two Hundred Fifty Thousand Dollars
($6,250,000.00) in a single advance. In the event Borrower does not request
the Term B Loan during the Term B Loan Draw Period, the Lenders may, in
their discretion, advance the Term B Loan to Borrower on July 31, 2011,
without such request by Borrower, after which advance Borrower will be
deemed to have received said Term Loan B for all purposes hereafter.
Notwithstanding anything to the contrary contained in the foregoing or
anywhere else in this Agreement or any other

 

 

 

Loan
Document, (x) the Lenders shall not have any obligation to make any advances
under the Term B Loan Commitments until the commencement of the Term B Loan
Draw Period, and from the Effective Date until the commencement of the Term
B Loan Draw Period, for all purposes under this Agreement, the Term B Loan
Commitments and the Term B Loan Commitment of each Lender shall be deemed to
be zero ($0), and (y) from the Effective Date until the commencement of the
Term B Loan Draw Period, for all purposes under this Agreement, the Term
Loan Commitments shall be deemed to be Term A Loan Commitments and the Term
Loan Commitment of each Lender shall be deemed to be such Lender’s Term A
Loan Commitment. Any portion of the Term B Loan Commitments not funded as of
the close of business on the date which is five (5) Business Days after the
end of the Term B Loan Draw Period shall thereupon automatically be
terminated and the Term B Loan Commitment of each Lender as of such date
shall be reduced by such Lender’s Pro Rata Share of such total reduction in
the Term B Loan Commitments. Each Lender’s obligation to fund the applicable
Term Loan shall be limited to such Lender’s Term A Loan Commitment or Term B
Loan Commitment, as applicable, and no Lender shall have any obligation to
fund any portion of any Term Loan required to be funded by any other Lender,
but not so funded. Borrower shall not have any right to reborrow any portion
of any Term Loan that is repaid or prepaid from time to time.

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

and inserting in lieu thereof the following:

“(a) Availability. Subject to the terms and conditions of this
Agreement, the Lenders agree, severally and not jointly, to make term loans
to Borrower in an aggregate amount up to Seventeen Million Two Hundred Fifty
Thousand Dollars ($17,250,000.00) according to each Lender’s Term Loan
Commitment as set forth on Schedule 1.1 hereto. The Term Loans shall be
available in two (2) tranches. The first tranche (“Term A Loan”) shall be
in an amount equal to Six Million Two Hundred Fifty Thousand Dollars
($6,250,000.00) and shall be advanced on the Effective Date. The second
tranche (“Term B Loan”; Term A Loan and Term B Loan are each referred to
herein individually as a “Term Loan” and collectively as the “Term Loans”)
shall be made available by the Lenders during the Term B Loan Draw Period in
an amount equal to Eleven Million Dollars ($11,000,000.00) in a single
advance. In the event Borrower does not request the Term B Loan during the
Term B Loan Draw Period, the Lenders may, in their discretion, advance the
Term B Loan to Borrower on December 31, 2011, without such request by
Borrower, after

 

 

 

 which advance Borrower will be deemed to have received said
Term Loan B for all purposes hereafter. Notwithstanding anything to the
contrary contained in the foregoing or anywhere else in this Agreement or
any other Loan
 Document, (x) the Lenders shall not have any obligation to make any advances
under the Term B Loan Commitments until the commencement of the Term B Loan
Draw Period, and from the Effective Date until the commencement of the Term
B Loan Draw Period, for all purposes under this Agreement, the Term B Loan
Commitments and the Term B Loan Commitment of each Lender shall be deemed to
be zero ($0), and (y) from the Effective Date until the commencement of the
Term B Loan Draw Period, for all purposes under this Agreement, the Term
Loan Commitments shall be deemed to be Term A Loan Commitments and the Term
Loan Commitment of each Lender shall be deemed to be such Lender’s Term A
Loan Commitment. Any portion of the Term B Loan Commitments not funded as of
the close of business on the date which is five (5) Business Days after the
end of the Term B Loan Draw Period shall thereupon automatically be
terminated and the Term B Loan Commitment of each Lender as of such date
shall be reduced by such Lender’s Pro Rata Share of such total reduction in
the Term B Loan Commitments. Each Lender’s obligation to fund the applicable
Term Loan shall be limited to such Lender’s Term A Loan Commitment or Term B
Loan Commitment, as applicable, and no Lender shall have any obligation to
fund any portion of any Term Loan required to be funded by any other Lender,
but not so funded. Borrower shall not have any right to reborrow any portion
of any Term Loan that is repaid or prepaid from time to time.

(b) Repayment. Commencing on August 31, 2011, and continuing on the
Payment Date of each successive month thereafter through and including the
Term Loan Maturity Date, Borrower shall make consecutive monthly payments of
principal in respect of the Term A Loans to each Lender, as calculated by
Agent in accordance with: (1) the amount of such Lender’s Term A Loan, (2)
the effective rate of interest, as determined in Section 2.2, and (3) a
straight-line amortization schedule ending on the Term Loan Maturity Date.
Commencing on May 31, 2012, and continuing on the Payment Date of each
successive month thereafter through and including the Term Loan Maturity
Date, Borrower shall make consecutive monthly payments of principal in
respect of the Term B Loans to each Lender, as calculated by Agent in
accordance with: (1) the amount of such Lender’s Term B Loan, (2) the
effective rate of interest, as determined in Section 2.2, and (3) a
straight-line amortization schedule ending on the Term Loan Maturity Date.
All unpaid principal and accrued interest with respect to the Term Loans is
due and payable in full on the Term Loan Maturity Date. The Term Loans may
be prepaid only in accordance with Sections 2.1.1(c) and 2.1.1(d).”

	 	2	 	The Loan Agreement shall be amended by deleting the following,
appearing as Section 2.2 (a) thereof, in its entirety:

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

 

 

 

and inserting in lieu thereof the following:

“(a) Interest Rate. Subject to Section 2.2(b), the principal
amount outstanding under the Term A Loans shall accrue interest at a
fixed per annum rate equal to eleven and one-half percent (11.50%),
which interest shall be
payable monthly. Subject to Section 2.2(b), the principal amount
outstanding under the Term B Loans shall accrue interest at a fixed
per annum rate equal to twelve and one half percent (12.50%), which
interest shall be payable monthly.”

	 	3	 	The Loan Agreement shall be amended by deleting the following
appearing as Section 4.1 thereof:
	 
	 	 	 	“4.1 Grant of Security Interest. Borrower hereby grants Agent, for the
ratable benefit of Lenders, to secure the payment and performance in full of
all of the Obligations, a continuing security interest in, and pledges to
Agent, for the ratable benefit of the Lenders, the Collateral, wherever
located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof; provided, that solely with respect to
Borrower’s IP Collateral, such security interest shall not be effective
unless or until an IP Lien Event has occurred. Borrower represents,
warrants, and covenants that the security interest granted herein is and
shall at all times continue to be a first priority perfected security
interest in the Collateral, subject only to Permitted Liens that may have
priority to Agent’s Lien to the extent permitted under this Agreement. If
Borrower shall acquire a commercial tort claim (as defined in the Code),
Borrower shall promptly notify Agent in a writing signed by Borrower of the
general details thereof (and further details as may be required by Agent)
and grant to Agent, for the ratable benefit of the Lenders, in such writing
a security interest therein and in the proceeds thereof, all upon the terms
of this Agreement, with such writing to be in form and substance reasonably
satisfactory to Agent.”
	 
	 	 	 	and inserting in lieu thereof the following:
	 
	 	 	 	“4.1 Grant of Security Interest. Borrower hereby grants Agent, for the
ratable benefit of Lenders, to secure the payment and performance in full of
all of the Obligations, a continuing security interest in, and pledges to
Agent, for the ratable benefit of the Lenders, the Collateral, wherever
located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Borrower represents, warrants, and
covenants that the security interest granted herein is and shall at all
times continue to be a first priority perfected security interest in the
Collateral, subject only to Permitted Liens that may have priority to
Agent’s Lien to the extent permitted under this Agreement. If Borrower
shall acquire a commercial tort claim (as defined in the Code), Borrower
shall promptly notify Agent in a writing signed by Borrower of the general
details thereof (and further details as may be required by Agent) and grant
to Agent, for the ratable benefit of the Lenders, in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably
satisfactory to Agent.”

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

“(c) Prompt written notice of (i) any material change in the
composition of the Intellectual Property, (ii) the registration of
any Copyright, including any subsequent ownership right of Borrower
in or to any Copyright, Patent or Trademark not shown in the IP
Agreement, and (iii) Borrower’s knowledge of an event that could
reasonably be expected to materially and adversely affect the value
of the Intellectual Property. Upon the

 

 

 

 occurrence of an IP Lien
Event,
Borrower shall deliver to Agent and the Lenders an updated
intellectual property security agreement (in form and substance
reasonably acceptable to Agent in its discretion) in favor of Agent,
covering all of the then-existing IP Collateral.”

and inserting in lieu thereof the following:

“(c) Prompt written notice of (i) any material change in the
composition of the Intellectual Property, (ii) the registration of
any Copyright, including any subsequent ownership right of Borrower
in or to any Copyright, Patent or Trademark not shown in the IP
Agreement, and (iii) Borrower’s knowledge of an event that could
reasonably be expected to materially and adversely affect the value
of the Intellectual Property.”

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

“(a) Borrower shall own, or be licensed to use or otherwise have the
right to use, all Material Intellectual Property. All Intellectual
Property of Borrower is and shall be fully protected and/or duly and
properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filings or issuances, except
where the failure to do so would not reasonably be expected to have a
material adverse effect on Borrower’s business. After the Effective
Date, Borrower shall not become a party to, nor become bound by, any
material license or other agreement with respect to which Borrower is
the licensee that prohibits or otherwise restricts Borrower from
granting a security interest in Borrower’s interest in such license
or agreement or other property. Borrower shall at all times conduct
its business without infringement and shall use commercially
reasonable efforts to conduct its business without claim of
infringement of any Intellectual Property rights of others. Borrower
shall, to the extent it determines, in the exercise of its reasonable
business judgment, that it is prudent to do the following: (a) except
as may be reasonably determined to be appropriate by Borrower in the
ordinary course of business, protect, defend and maintain the
validity and enforceability of its Intellectual Property; (b)
promptly advise Agent in writing of material infringements of its
Intellectual Property; and (c) not allow any Material Intellectual
Property to be abandoned, forfeited or dedicated to the public
without Agent’s prior written consent. If Borrower (i) obtains any
Patent, registered Trademark or servicemark, registered Copyright,
registered mask work, or any pending application for any of the
foregoing, whether as owner, licensee or otherwise, or (ii) applies
for any Patent or the registration of any Trademark or servicemark,
in the case of (i) or (ii) that is not included in the IP Agreement,
then Borrower shall concurrently provide written notice thereof to
Agent and shall promptly execute such intellectual property security
agreements (or updates to the Exhibits to the IP Agreement if not
filed at such time by Agent) and other documents and take such other
actions as Agent shall request in its good faith business judgment to
perfect and maintain a first priority perfected security interest
(which will be effective as provided herein) in favor of Agent, for
the ratable benefit of Lenders, in such property. If Borrower
decides to register any Copyrights or mask works in the United States
Copyright Office, that are not included in the IP Agreement, then
Borrower shall (a) after an IP Lien Event, concurrently provide
written notice thereof to Agent and update all Exhibits to the IP
Agreement, and (b) following the occurrence of an IP Lien Event: (x)
provide Agent with at least fifteen (15) days prior written notice of
Borrower’s intent to register such Copyrights or mask works
together with a copy of the

 

 

 

 application it intends to file with the United
States Copyright Office (excluding exhibits thereto); (y) execute an
intellectual property security agreement and such other documents and
take such other actions as Agent may request in its good faith
business judgment to perfect and maintain a first priority perfected
security interest in favor of Agent, for the ratable benefit of the
Lenders, in the Copyrights or mask works intended to be registered
with the
United States Copyright Office; and (z) record such intellectual
property security agreement with the United States Copyright Office
promptly after with filing the Copyright or mask work application(s)
with the United States Copyright Office. Borrower shall promptly
provide to Agent copies of all applications that it files for Patents
or for the registration of Trademarks, servicemarks, Copyrights or
mask works, together with evidence of the recording of the
intellectual property security agreement necessary for Agent, for the
ratable benefit of the Lenders, to perfect and maintain a first
priority perfected security interest in such property.”

and inserting in lieu thereof the following:

“(a) Borrower shall own, or be licensed to use or otherwise have the
right to use, all Material Intellectual Property. All Intellectual
Property of Borrower is and shall be fully protected and/or duly and
properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filings or issuances, except
where the failure to do so would not reasonably be expected to have a
material adverse effect on Borrower’s business. After the Effective
Date, Borrower shall not become a party to, nor become bound by, any
material license or other agreement with respect to which Borrower is
the licensee that prohibits or otherwise restricts Borrower from
granting a security interest in Borrower’s interest in such license
or agreement or other property. Borrower shall at all times conduct
its business without infringement and shall use commercially
reasonable efforts to conduct its business without claim of
infringement of any Intellectual Property rights of others. Borrower
shall, to the extent it determines, in the exercise of its reasonable
business judgment, that it is prudent to do the following: (a) except
as may be reasonably determined to be appropriate by Borrower in the
ordinary course of business, protect, defend and maintain the
validity and enforceability of its Intellectual Property; (b)
promptly advise Agent in writing of material infringements of its
Intellectual Property; and (c) not allow any Material Intellectual
Property to be abandoned, forfeited or dedicated to the public
without Agent’s prior written consent. If Borrower (i) obtains any
Patent, registered Trademark or servicemark, registered Copyright,
registered mask work, or any pending application for any of the
foregoing, whether as owner, licensee or otherwise, or (ii) applies
for any Patent or the registration of any Trademark or servicemark,
in the case of (i) or (ii) that is not included in the IP Agreement,
then Borrower shall concurrently provide written notice thereof to
Agent and shall promptly execute such intellectual property security
agreements (or updates to the Exhibits to the IP Agreement if not
filed at such time by Agent) and other documents and take such other
actions as Agent shall request in its good faith business judgment to
perfect and maintain a first priority perfected security interest
(which will be effective as provided herein) in favor of Agent, for
the ratable benefit of Lenders, in such property. Prior to the
occurrence of the IP Release Event, if Borrower decides to register
any Copyrights or mask works in the United States Copyright Office,
that are not included in the IP Agreement, then Borrower shall (x)
provide Agent with at least fifteen (15) days prior written notice of
Borrower’s intent to

 

 

 

 register such
Copyrights or mask works together
with a copy of the application it intends to file with the United
States Copyright Office (excluding exhibits thereto); (y) execute an
intellectual property security agreement and such other documents and
take such other actions as Agent may request in its good faith
business judgment to perfect and maintain a first priority perfected
security interest in favor of Agent, for the ratable benefit of the
Lenders, in the Copyrights or mask works intended to be registered
with the United States Copyright Office; and (z) record such
intellectual property security agreement with the United States
Copyright Office promptly after with filing the Copyright or mask
work application(s) with the United States Copyright Office. Prior
to the occurrence o the IP Release Event, Borrower shall promptly
provide to Agent copies of all applications that it files for Patents
or for the registration of Trademarks, servicemarks, Copyrights or
mask works, together with evidence of the recording of the
intellectual property security agreement necessary for Agent, for the
ratable benefit of the Lenders, to perfect and maintain a first
priority perfected security interest in such property.”

	 	6	 	The Loan Agreement shall be amended by inserting the following
new Section 12.14, appearing immediately after Section 12.13 thereof:

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

	 	7	 	The Loan Agreement shall be amended by deleting the following
definitions appearing in Section 14.1 thereof:

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

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

““IP Collateral” is defined on Exhibit A.”

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

 

 

 

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

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

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

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

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

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

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

and inserting in lieu thereof the following:

““Final Payment Percentage” is four percent (4.00%).”

““IP Agreement” is that certain Intellectual Property Security
Agreement executed by Borrower to Agent dated as of the Effective
Date, provided that such Intellectual Property Security Agreement
shall be deemed inoperative and of no force or effect following the
occurrence of an IP Release Event.”

““IP Collateral” is defined on Exhibit E.”

 

 

 

““IP Release Event” means written confirmation by Agent that Borrower
has achieved positive EBITDA for two (2) consecutive calendar
quarters.”

““Prepayment Fee” means:

(A) Prior to the Funding Date of the Term B Loan, with respect to any
Term Loan subject to prepayment prior to the Term Loan Maturity Date,
whether by mandatory or voluntary prepayment, acceleration or
otherwise, an additional fee payable to the Lenders in amount equal
to:

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

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

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

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

(B) On and after the Funding Date of the Term B Loan, with respect
to any Term Loan subject to prepayment prior to the Term Loan
Maturity Date, whether by mandatory or voluntary prepayment,
acceleration or otherwise, an additional fee payable to the Lenders
in amount equal to:

(i) for a prepayment made prior to the first anniversary of the
Funding Date of the Term B Loan, five percent (5.00%) of the
outstanding principal amount of the Term Loans on the date of such
prepayment;

(ii) for a prepayment made after the date which is after the first
anniversary of the Funding Date of the Term B Loan through and
including the date which is the second anniversary of the Funding
Date of the Term B Loan, three percent (3.00%) of the outstanding
principal amount of the Term Loans on the date of such prepayment;
and

 

 

 

(ii) for a prepayment made after the date which is after the date
that is after the second anniversary of the Funding Date of the Term
B Loan and prior to the Term Loan Maturity Date, one percent (1.00%)
of the outstanding principal amount of the Term Loans on the date of
such prepayment.

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

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

““Term Loan Maturity Date” is April 30, 2014.”

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

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

	 	9	 	The Schedule appearing as Schedule 1.1 to the Loan
Agreement is hereby replaced with the Schedule attached as Schedule 1
hereto.
	 
	 	10	 	The Loan Agreement shall be amended by substituting the
Collateral description appearing on Exhibit A thereto for the
Collateral description on Schedule 2 hereto. Borrower hereby grants
Agent, for the ratable benefit of Lenders, to secure the payment and
performance in full of all of the Obligations and the performance of each of
Borrower’s duties under the Existing Loan Documents, a continuing security
interest in, and pledges to Agent, for the ratable benefit of the Lenders, the
Collateral, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof.
	 
	 	11	 	The Loan Agreement shall be amended by adding a new Exhibit
E to the Loan Agreement, attached as Schedule 3 hereto.

 

 

 

4. FEES. Borrower shall pay to Agent a modification fee equal to Fifty Thousand Dollars
($50,000) to be shared ratably among the Lenders pursuant to their respective Commitment
Percentages, which fee shall be due on the date hereof and shall be deemed fully earned as of the
date hereof. Borrower shall also reimburse Lenders for all legal fees and expenses incurred in
connection with this amendment to the Existing Loan Documents.

5. RATIFICATION OF IP AGREEMENT. Borrower hereby ratifies, confirms and reaffirms, all and
singular, the terms and conditions of a certain IP Agreement, and acknowledges, confirms and agrees
that said IP Agreement contains an accurate and complete listing of all Intellectual Property
Collateral as defined in said IP Agreement, except as set forth on Exhibit C attached to
the Secretary’s Corporate Borrowing Certificate delivered to the Lenders in connection herewith,
and shall remain in full force and effect.

6. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and disclosures contained in a certain Perfection
Certificate dated as of October 14, 2010 between Borrower and Lenders, and acknowledges, confirms
and agrees the disclosures and information Borrower provided to Lenders in the Perfection
Certificate, except as set forth on Exhibit D attached to the Secretary’s
Corporate Borrowing Certificate delivered to the Lenders in connection herewith, has not changed,
as of the date hereof.

7. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary
to reflect the changes described above.

8. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all
terms and conditions of all security or other collateral granted to the Lenders, and confirms that
the indebtedness secured thereby includes, without limitation, the Obligations.

9. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no
offsets, defenses, claims, or counterclaims against Lenders with respect to the Obligations, or
otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or
counterclaims against Lenders, whether known or unknown, at law or in equity, all of them are
hereby expressly WAIVED and Borrower hereby RELEASES Lenders from any liability thereunder.

10. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing
Obligations, Lenders are relying upon Borrower’s representations, warranties, and agreements, as
set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan
Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force
and effect. Lenders’ agreement to modifications to the existing Obligations pursuant to this Loan
Modification Agreement in no way shall obligate Lenders to make any future modifications to the
Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the
Obligations. It is the intention of Lenders and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by each Lender in writing. No
maker will be released by virtue of this Loan Modification Agreement.

11. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it
shall have been executed by Borrower and Agent.

[The remainder of this page is intentionally left blank]

 

 

 

This Loan Modification Agreement is executed as of the date first written above.

	 	 	 	 	 	 	 	 	 
	BORROWER:	 	 	 	AGENT:
	 
	 	 	 	 	 	 	 	 
	ALIMERA SCIENCES, INC.	 	 	 	SILICON VALLEY BANK
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Richard S. Eiswirth, Jr.
	 	 	 	By:	 	/s/ M. Scott McCarty
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Richard S. Eiswirth, Jr.
	 	 	 	Name:	 	Scott McCarty
	 

	 	 	 	 	 	 	 	 
	Title:

	 	Chief Operating Officer and
Chief Financial Officer
	 	 	 	Title:	 	Vice President
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LENDERS:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	MIDCAP FUNDING III, LLC, as a Lender	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ Luis Viera	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	Name:
	 	Luis Viera	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	Title:
	 	Managing Director	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SILICON VALLEY BANK, as a Lender	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ M. Scott McCarty	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	Name:
	 	Scott McCarty	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	Title:
	 	Vice President	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

 

 

 

SCHEDULE 1

SCHEDULE 1.1

LENDERS AND COMMITMENTS

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

	 	 	 	 	 	 	 	 	 
	Lender	 	Term B Loan Commitment	 	 	Commitment Percentage	 
	MidCap Funding III, LLC
	 	$	6,600,000	 	 	 	60.0	%
	Silicon Valley Bank
	 	$	4,400,000	 	 	 	40.0	%
	TOTAL TERM B LOANS
	 	$	11,000,000	 	 	 	100	%
	TOTAL TERM LOANS
	 	$	17,250,000	 	 	 	100	%

 

 

 

Schedule 2

EXHIBIT A

The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property:

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or
rights to payment of money, leases, license agreements, franchise agreements, General Intangibles,
commercial tort claims, documents, instruments (including any promissory notes), chattel paper
(whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights
(whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and

all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any
of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.

 

 

 

Schedule 3

EXHIBIT E — COLLATERAL DESCRIPTION

The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property:

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as provided below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts,
certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is
evidenced by a writing), securities, and all other investment property, supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and

all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.

Notwithstanding the foregoing, the Collateral does not include any of the following, whether
now owned or hereafter acquired except to the extent that a judicial authority (including a U.S.
Bankruptcy Court) would hold that it is necessary under applicable law to have a security interest
in any of the following in order to have a perfected lien and security interest in and to the “IP
Proceeds” defined below: any copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work, whether published or unpublished;
any patents, patent applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the same; trademarks,
trade names, service marks, mask works, rights of use of any name or domain names and, to the
extent permitted under applicable law, any applications therefor, whether registered or not; and
operating manuals, trade secret rights, clinical and non-clinical data, rights to unpatented
inventions (the “IP Collateral”); provided, however, the Collateral at all times shall include all
Accounts, license and royalty fees and other revenues, proceeds, or income arising out of or
relating to any of the foregoing and any claims for damage by way of any past, present, or
future infringement of any of the foregoing (collectively, the “IP Proceeds”).

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]