ALIMERA SCIENCES INC (Form: 8-K, Received: 05/17/2011 16:06:20)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 16, 2011

ALIMERA SCIENCES, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-34703	20-0028718

(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


6120 Windward Parkway Suite 290 Alpharetta, Georgia		30005

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (678) 990-5740

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Definitive Material Agreement.

As previously disclosed, on October 14, 2010, Alimera Sciences, Inc. (the “Company”) entered into a Loan and Security Agreement (Term Loan) with Midcap Funding III, LLC and Silicon Valley Bank (the “Lenders”), pursuant to which the Company obtained a $12.5 million term loan (the “Term Loan Agreement”), as well as a Loan and Security Agreement (Working Capital Line of Credit) with Silicon Valley Bank, pursuant to which the Company obtained a $25.0 million working capital line of credit (the “Line of Credit Agreement”). On May 16, 2011, the Company entered into a First Loan Modification Agreement (Term Loan) with the Lenders, which amends certain terms of the Term Loan Agreement (the “Term Loan Modification Agreement”), as well as a First Loan Modification Agreement (Working Capital Line of Credit) with Silicon Valley Bank, which amends certain terms of the Line of Credit Agreement (the “Line of Credit Modification Agreement”). The material provisions of the Term Loan Modification Agreement and the Line of Credit Modification Agreement are described below.

Term Loan Modification Agreement

Pursuant to the original terms of the Term Loan Agreement, the Company was entitled to borrow up to $12.5 million, of which $6.25 million (“Term Loan A”) was advanced to the Company on October 14, 2010. The Company was entitled to draw down the remaining $6.25 million under the Term Loan (“Term Loan B” and together with Term Loan A, the “Term Loan”) if the United States Food and Drug Administration (the “FDA”) approved the Company’s New Drug Application (“NDA”) for ILUVIEN prior to or on July 31, 2011. Under the Term Loan Modification Agreement, the amount of Term Loan B has been increased by $4.75 million to $11.0 million and the date by which the FDA must approve the NDA in order for the Company to draw down Term Loan B has been extended until December 31, 2011. In addition, the maturity date of the Term Loan has been extended from October 31, 2013 to April 30, 2014 (the “Term Loan Maturity Date”).

To secure the repayment of any amounts borrowed under the Term Loan Agreement, the Company previously granted to the Lenders a continuing security interest in all of its assets, other than its intellectual property (provided that in the event the Company failed to meet certain financial conditions, a curable lien would be imposed on the Company’s intellectual property). Under the Term Loan Modification Agreement, the Lenders’ security interest has been expanded to include a continuing security interest in the Company’s intellectual property (provided that in the event the Company meets certain financial conditions as described therein, the Lenders’ lien on the Company’s intellectual property will be released).

The interest rate on the amount borrowed under Term Loan A remains unchanged at 11.5%, however, the Company has an additional six months to repay the principal, beginning August 31, 2011, as a result of the extension of the Term Loan Maturity Date. The interest rate on amounts borrowed, if any, under Term Loan B has increased from 12.0% to 12.5%. The Company is required to pay interest only at the rate of 12.5% on the amount borrowed, if any, under Term Loan B through April 30, 2012, and thereafter will be required to repay the principal in equal monthly installments through the Term Loan Maturity Date, plus interest.

Pursuant to the original terms of the Term Loan Agreement, if the Company were to repay the Term Loan prior to maturity, the Company would pay to the Lenders a prepayment fee equal to 5.0% of the total amount of principal then outstanding on both Term Loan A and Term Loan B if the prepayment occurred within one year after the funding date of Term Loan A (the “Term Loan A Funding Date”), 3.0% of such amount if the prepayment occurred between one year and two years after the Term Loan A Funding Date and 1.0% of such amount if the prepayment occurred thereafter (subject to a 50% reduction in the event that the prepayment occurred in connection with an acquisition of the Company). Under the Term Loan Modification Agreement, if Term Loan B is advanced to the Company, then the amount of the prepayment fee on both Term Loan A and Term Loan B will be reset to 5.0% and the time-based reduction of the prepayment fee will be measured from the funding date of Term Loan B (subject to the same 50% reduction in the event of an acquisition of the Company), rather than from the Term Loan A Funding Date.

Upon execution of the Term Loan Modification Agreement, the Company paid to the Lenders a $50,000 loan modification fee. Except as set forth above, all other fees and payments remain unchanged from the original terms of the Term Loan Agreement, with the exception that the final payment fee has been increased from 3.0% to 4.0% of the total amount borrowed under the Term Loan.

In connection with the increase in the amount of Term Loan B, the Company issued to Midcap Funding III, LLC, a warrant to purchase up to 18,136 shares of the Company’s common stock and to Silicon Valley Bank, a warrant to purchase up to 12,090 shares of the Company’s common stock (together, the “Lender Warrants”). Each of the Lender Warrants is exercisable only after Term Loan B has been advanced, has a per-share exercise price of $11.00 and has a term of 10 years. In addition, the Lenders will have certain registration rights with respect to the shares of common stock issuable upon exercise of the Lender Warrants.

The Term Loan Modification Agreement and the Lender Warrants, which are filed as Exhibits 10.1, 4.1 and 4.2, respectively, to this report on Form 8-K, are incorporated herein by reference. The foregoing description of the Term Loan Modification Agreement and the Lender Warrants is qualified in its entirety by reference to such exhibits.

Line of Credit Modification Agreement

Pursuant to the Line of Credit Modification Agreement, the maturity date was extended from October 31, 2013 to April 30, 2014, consistent with the new Term Loan Maturity Date.

To secure the repayment of any amounts borrowed under the Line of Credit Agreement, the Company previously granted to Silicon Valley Bank a continuing security interest in all of its assets, other than its intellectual property (provided that in the event the Company failed to meet certain financial conditions, a curable lien would be imposed on the Company’s intellectual property). Under the Line of Credit Modification Agreement, Silicon Valley Bank’s security interest has been expanded to include a continuing security interest in the Company’s intellectual property (provided that in the event the Company meets certain financial conditions as described therein, Silicon Valley Bank’s lien on the Company’s intellectual property will be released).

The Line of Credit Modification Agreement, which is filed as Exhibit 10.2 to this report on Form 8-K, is incorporated herein by reference. The foregoing description of the Line of Credit Modification Agreement is qualified in its entirety by reference to such exhibit.


Item 2.03.		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information disclosed in Item 1.01 above is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities

The Company relied on the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D, in connection with the issuance of the Lender Warrants in connection with the Term Loan Modification Agreement. The Lender Warrants and the shares of common stock issuable under the Lender Warrants, have not been registered under the Securities Act, or state securities laws, and may not be offered or sold in the United States without being registered with the SEC or through an applicable exemption from SEC registration requirements.

The other information called for by this item is contained in Item 1.01, which is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On May 17, 2011, the Company issued a press release announcing that it had entered into the Term Loan Modification Agreement and the Line of Credit Modification Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in Item 7.01 of this Current Report on Form 8-K and the press release furnished as Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.		Description
4.1		Warrant to Purchase Stock dated May 16, 2011 issued to Midcap Funding III, LLC.

4.2		Warrant to Purchase Stock dated May 16, 2011 issued to Silicon Valley Bank.

10.1		First Loan Modification Agreement (Term Loan) dated May 16, 2011 between Alimera Sciences, Inc., Midcap Funding III, LLC and Silicon Valley Bank.

10.2		First Loan Modification Agreement (Working Capital Line of Credit) dated May 16, 2011 between Alimera Sciences, Inc. and Silicon Valley Bank.

99.1		Press Release of Alimera Sciences, Inc. dated May 16, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


ALIMERA SCIENCES, INC.
By:	/s/ RICHARD S. EISWIRTH, JR.
	Name:	Richard S. Eiswirth, Jr.
	Title:	Chief Operating Officer and Chief Financial Officer

Dated: May 17, 2011

Exhibit 4.1

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, MIDCAP FUNDING III, LLC (Midcap Funding III, LLC, 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) 199,500, 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.

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.

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:

(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.

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 MIDCAP FUNDING III, LLC 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.

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. Subject to the provisions of Article 5.3 and upon providing the Company with written notice, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant to any transferee, provided, however, in connection with any such transfer, 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:

Midcap Funding III, LLC
7735 Old Georgetown Road, Suite 400
Bethesda, Maryland 20814
Attention: Portfolio Management- Life Sciences
Telephone: 301-760-7600
Facsimile: 301-941-1450

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.

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”

By:		/s/ Richard S. Eiswirth, Jr.

Name:		Richard S. Eiswirth, Jr.
		(Print)
Title:		Chief Operating Officer and Chief Financial Officer

“HOLDER”

MIDCAP FUNDING III, LLC

By:		/s/ Luis Viera

Name:		Luis Viera

		(Print)
Title:		Managing Director

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):

Exhibit 4.2

WARRANT TO PURCHASE STOCK


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 .

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.

1.6 Treatment of Warrant Upon Acquisition of Company .

1.6.2 Treatment of Warrant at Acquisition .

ARTICLE 2. ADJUSTMENTS TO THE SHARES .

2.3 [Intentionally Omitted] .

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:

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.

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

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

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.

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.

SVB Financial Group
Attn: Treasury Department
3003 Tasman Drive, HA 200
Santa Clara, CA 95054
Telephone: 408-654-7400
Facsimile: 408-496-2405

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

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

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

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):

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 .

Modifications to Loan Agreement.

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 (1 ^st ) 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).”

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.”

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:

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.”

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.”

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:

(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.”

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.

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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

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.

Exhibit 10.2

FIRST LOAN MODIFICATION AGREEMENT

(WORKING CAPITAL LINE OF CREDIT)

This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of May 16, 2011, by and between SILICON VALLEY BANK , a California corporation and with a loan production office located at 3353 Peachtree Road, NE, Suite M-10, Atlanta, GA 30326 (“Bank”) and ALIMERA SCIENCES, INC. , a Delaware corporation with its chief executive office located at 6120 Windward Parkway, Suite 290, Alpharetta, Georgia 30005 (“Borrower”).

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

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

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

3. DESCRIPTION OF CHANGE IN TERMS .

A. Modifications to Loan Agreement.

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

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

and inserting in lieu thereof the following:

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

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

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

and inserting in lieu thereof the following:

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

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

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

and inserting in lieu thereof the following:

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

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

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

and inserting in lieu thereof the following:

“ 4.1 Grant of Security Interest . Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations and the performance of each of Borrower’s duties under the Loan Documents, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and covenants that the security interest granted herein shall be a first priority security interest in the Collateral, subject only to Permitted Liens that may have priority to Bank’s Lien to the extent permitted under this Agreement. If Borrower shall at any time, acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to Bank.”

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

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

and inserting in lieu thereof the following:

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

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

and inserting in lieu thereof the following:

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

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

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

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

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

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

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

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

and inserting in lieu thereof the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


BORROWER:		BANK:

ALIMERA SCIENCES, INC.		SILICON VALLEY BANK

By:	/s/ Richard S. Eiswirth, Jr.	By:	/s/ M. Scott McCarty
Name:	Richard S. Eiswirth, Jr.	Name:	Scott McCarty
Title:	Chief Operating Officer and Chief Financial Officer	Title:	Vice President

Schedule 1

EXHIBIT A

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

Schedule 2

EXHIBIT C — COLLATERAL DESCRIPTION

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

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

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

Exhibit 99.1

FOR IMMEDIATE RELEASE

INVESTOR CONTACT:
ICR, LLC
John Mills
310-954-1105
John.Mills@icrinc.com

ALIMERA SCIENCES EXTENDS AND EXPANDS CREDIT FACILITY

ATLANTA, GA. (May 17, 2011) — Alimera Sciences, Inc. (NASDAQ: ALIM) (Alimera), a biopharmaceutical company that specializes in the research, development and commercialization of prescription ophthalmic pharmaceuticals, today announced modifications to its credit facility with lenders Midcap Financial, LLC and Silicon Valley Bank. The credit facility includes both a term loan and a working capital line of credit.

Term Loan

Under the original term loan agreement, Alimera was entitled to borrow up to $12.5 million, of which $6.25 million was advanced on October 14, 2010. Alimera was entitled to a second advance of $6.25 million if the U.S. Food and Drug Administration (FDA) approved Alimera’s New Drug Application (NDA) for ILUVIEN prior to or on July 31, 2011. The term loan agreement has been modified to increase the amount available under the second advance by $4.75 million to $11.0 million, and to extend the NDA approval deadline for the second advance to December 31, 2011.

The interest rate on the amount borrowed under the first advance remains unchanged at 11.5%, however, Alimera now has an additional six months to repay the principal, beginning August 31, 2011 in equal monthly installments, as a result of the extension of the maturity date from October 31, 2013 to April 30, 2014. The interest rate on amounts borrowed, if any, under the second advance increased from 12.0% to 12.5%. Alimera is required to pay interest only on the amount borrowed, if any, under the second advance through April 30, 2012, and thereafter will be required to repay the principal in equal monthly installments through April 30, 2014, plus interest.

Working Capital Line Of Credit

The working capital line of credit provides Alimera with up to $20.0 million that may be drawn against eligible domestic accounts receivable. The maturity date for this line of credit has been extended from October 31, 2013 to April 30, 2014, consistent with the modified term loan.

“We are very pleased that our short- and long-term outlook enables us to modify our term loan and working capital line of credit to meet our future needs,” said Rick Eiswirth, Chief Operating Officer and Chief Financial Officer of Alimera. “Our strong relationships with Silicon Valley Bank and Midcap Financial position us to obtain this additional financing as we prepare for the next step of ILUVIEN’s potential commercialization.”

About Alimera Sciences, Inc.

Alimera Sciences, Inc., based in Alpharetta, Georgia, is a biopharmaceutical company that specializes in the research, development and commercialization of prescription ophthalmic pharmaceuticals. Presently, Alimera is focused on diseases affecting the back of the eye, or retina. Its advanced product candidate, ILUVIEN, is an investigational intravitreal insert containing fluocinolone acetonide (FAc), a non-proprietary corticosteroid with demonstrated efficacy in the treatment of ocular disease. ILUVIEN is in development for the treatment of diabetic macular edema (DME), a disease of the retina that affects individuals with diabetes and can lead to severe vision loss and blindness.

About Silicon Valley Bank

Silicon Valley Bank is the premier commercial bank for companies in the technology, life science, venture capital, private equity and premium wine industries. SVB provides a comprehensive suite of financing solutions, treasury management, corporate investment and international banking services to its clients worldwide. Through its focus on specialized markets and extensive knowledge of the people and business issues driving them, Silicon Valley Bank provides a level of service and partnership that measurably impacts its clients’ success. Founded in 1983 and headquartered in Santa Clara, Calif., the company serves clients around the world through 26 U.S. offices and international operations in China, India, Israel and the United Kingdom. Silicon Valley Bank is a member of global financial services firm SVB Financial Group (Nasdaq:SIVB), with SVB Analytics, SVB Capital, SVB Global and SVB Private Client Services. More information on the company can be found at www.svb.com.

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

About MidCap Financial, LLC

MidCap Financial is a commercial finance company focused on middle market lending in healthcare and other specialty vertical markets. MidCap specializes in middle market loans in the $10 million to $200 million range. Its principal officers are all veterans of the health care finance industry, having worked together at three healthcare finance companies previously. The company is headquartered in Bethesda, MD, with offices in Chicago and Los Angeles.

Forward Looking Statements

This press release contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, regarding, among other things, Alimera’s future results of operations and financial position, business strategy and plans and objectives of management for Alimera’s future operations. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “contemplate,” “predict,” “project,” “target,” “likely,” “potential,” “continue,” “will,” “would,” “should,” “could,” or the negative of these terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The events and circumstances reflected in Alimera’s forward-looking statements may not occur and actual results could differ materially from those projected in its forward-looking statements. Meaningful factors which could cause actual results to differ include, but are not limited to, delay in or failure to obtain regulatory approval of Alimera’s product candidates, uncertainty as to Alimera’s ability to commercialize, and market acceptance of, its product candidates, the extent of government regulations, uncertainty as to relationship between the benefits of Alimera’s product candidates and the risks of their side-effect profiles, dependence on third-party manufacturers to manufacture Alimera’s product candidates in sufficient quantities and quality, uncertainty of clinical trial results, limited sales and marketing infrastructure, inability of Alimera’s outside sales force to successfully sell and market ILUVIEN in the U.S. following regulatory approval and Alimera’s ability to operate its business in compliance with the covenants and restrictions that it is subject to under its credit facility, as well as other factors discussed in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Alimera’s Annual Report on Form 10-K for the year ended December 31, 2010 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, which are on file with the Securities and Exchange Commission (SEC) and available on the SEC’s website at www.sec.gov. In addition to the risks described above and in Alimera’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the SEC, other unknown or unpredictable factors also could affect Alimera’s results. There can be no assurance that the actual results or developments anticipated by Alimera will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Alimera. Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

All forward-looking statements contained in this press release are expressly qualified by the cautionary statements contained or referred to herein. Alimera cautions investors not to rely too heavily on the forward-looking statements Alimera makes or that are made on its behalf. These forward-looking statements speak only as of the date of this press release (unless another date is indicated). Alimera undertakes no obligation, and specifically declines any obligation, to publicly update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.

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