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)
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Delaware
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001-34703
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20-0028718
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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6120 Windward Parkway
Suite 290
Alpharetta, Georgia
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30005
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(Address of principal executive offices)
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(Zip Code)
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Registrants 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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 Companys 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 Companys intellectual property). Under the
Term Loan Modification Agreement, the Lenders security interest has been expanded to include a
continuing security interest in the Companys intellectual property (provided that in the event the
Company meets certain financial conditions as described therein, the Lenders lien on the Companys
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 Companys common stock and to
Silicon Valley Bank, a warrant to purchase up to 12,090 shares of the Companys 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 Companys intellectual
property). Under the Line of Credit Modification Agreement, Silicon Valley Banks security
interest has been expanded to include a continuing security interest in the Companys intellectual
property (provided that in the event the Company meets certain financial conditions as described
therein, Silicon Valley Banks lien on the Companys 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.
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Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
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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
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Exhibit No.
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Description
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4.1
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Warrant to Purchase Stock dated May 16, 2011 issued to Midcap Funding III, LLC.
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4.2
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Warrant to Purchase Stock dated May 16, 2011 issued to Silicon Valley Bank.
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10.1
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First Loan Modification Agreement (Term Loan) dated May 16, 2011 between
Alimera Sciences, Inc., Midcap Funding III, LLC and Silicon Valley Bank.
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10.2
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First Loan Modification Agreement (Working Capital Line of Credit) dated May
16, 2011 between Alimera Sciences, Inc. and Silicon Valley Bank.
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99.1
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Press Release of Alimera Sciences, Inc. dated May 16, 2011.
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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.
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ALIMERA SCIENCES, INC.
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By:
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/s/
RICHARD S. EISWIRTH, JR.
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Name:
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Richard S. Eiswirth, Jr.
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Title:
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Chief Operating Officer and
Chief Financial Officer
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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
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Credit Facility:
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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).
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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
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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
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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 Companys 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.
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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 Companys 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 persons or entitys 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.
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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]
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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 Holders rights under
this Article against impairment. For the avoidance of doubt, an amendment of the Companys
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 Companys
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.
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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 Companys 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 Companys 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 Companys Investor Rights Agreement. The
provisions set forth in the Companys 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 Holders compliance with regulatory,
accounting and reporting requirements applicable to Holder.
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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 Holders 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 Holders 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
Holders 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.
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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
7
Notice to the Company shall be addressed as follows until Holder receives notice of a change
in address:
Alimera Sciences, Inc.
Attn: Richard S. Eiswirth, Jr.
6120 Windward Parkway, Suite 290
Alpharetta, Georgia 30005
Telephone: 678-527-1750
Facsimile: 678-990-5744
5.6
Waiver
. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.
5.7
Attorneys Fees
. In the event of any dispute between the parties concerning the
terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to
collect from the other party all costs incurred in such dispute, including reasonable attorneys
fees.
5.8
Automatic Conversion upon Expiration
. In the event that, upon the Expiration
Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as
determined in accordance with Article 1.3 above is greater than the Warrant Price in effect on such
date, then this Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Article 1.2 above as to all Shares (or such other securities) for which it shall not
previously have been exercised or converted, and the Company shall promptly deliver a certificate
representing the Shares (or such other securities) issued upon such conversion to Holder.
5.9
Counterparts.
This Warrant may be executed in counterparts, all of which together
shall constitute one and the same agreement.
8
5.10
Governing Law
. This Warrant shall be governed by and construed in accordance
with State of Delaware without giving effect to its principles regarding conflicts of law.
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COMPANY
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By:
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/s/ Richard S. Eiswirth, Jr.
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Name:
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Richard S. Eiswirth, Jr.
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(Print)
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Title:
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Chief Operating Officer and
Chief Financial Officer
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HOLDER
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MIDCAP FUNDING III, LLC
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By:
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/s/ Luis Viera
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Name:
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Luis Viera
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(Print)
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Title:
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Managing Director
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9
APPENDIX 1
NOTICE OF EXERCISE
1. Holder elects to purchase
_____
shares of the Common Stock of Alimera Sciences, Inc.
pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the
shares in full.
[or]
1. Holder elects to convert the attached Warrant into Shares/cash [strike one] in the manner
specified in the Warrant. This conversion is exercised for
_____
of the Shares
covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing the Shares in the name specified
below:
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.
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HOLDER:
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By:
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Name:
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Title:
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(Date):
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10
Exhibit 4.2
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE ACT), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE
PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN
THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.
WARRANT TO PURCHASE STOCK
Company: Alimera Sciences, Inc., a Delaware corporation
Number of Shares: As set forth below
Class of Stock: Common Stock, $0.01 par value per share
Warrant Price: $11.00 per share, subject to adjustment
Issue Date: May 16, 2011
Expiration Date: May 16, 2021
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Credit Facility:
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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).
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THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK
(Silicon Valley Bank, together with any successor or permitted assignee or transferee of this
Warrant or of any shares issued upon exercise hereof, is referred to hereinafter as Holder) is
entitled to purchase the number of fully paid and non-assessable shares (the Shares) of the
above-stated Class of Stock (the Class) of the above-named company (the Company) at the
above-stated Warrant Price per Share, all as set forth above and as adjusted pursuant to Article 2
of this Warrant, subject to the provisions and upon the terms and conditions set forth in this
Warrant.
A.
Number of Shares
. If, but only if, the balance of the Term B Loan (as defined in the
Loan Agreement) is advanced pursuant to the Loan Agreement by Holder (or its affiliate) to the
Company, then, upon such advance, this Warrant automatically shall become exercisable for such
number of Shares as shall equal (a) 133,000, divided by (b) the Warrant Price in effect on and as
of the date of such advance, and subject to adjustment thereafter from time to time in accordance
with the provisions of this Warrant.
ARTICLE 1.
EXERCISE
.
1.1
Method of Exercise
. Holder may exercise this Warrant by delivering the original
of this Warrant together with a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company.
Unless
Holder is exercising the conversion right set forth in Article 1.2, Holder shall also deliver to
the Company a check, wire transfer (to an account designated by the Company), or other form of
payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.
1.2
Conversion Right
. In lieu of exercising this Warrant as specified in Article 1.1,
Holder may from time to time convert this Warrant, in whole or in part, into a number of Shares
determined by dividing (a) the aggregate fair market value of the Shares or other securities
otherwise issuable upon exercise of this Warrant minus the aggregate Warrant Price of such Shares
by (b) the fair market value of one Share. The fair market value of the Shares shall be determined
pursuant to Article 1.3.
1.3
Fair Market Value
. If shares of the Class are then publicly listed or quoted on
one or more securities exchanges, inter-dealer quotation systems or over-the-counter markets, the
fair market value of a Share shall be the closing price of a share of the Class reported on the
principal such exchange, system or market for the business day immediately before Holder delivers
this Warrant together with its Notice of Exercise to the Company. If shares of the Class are not
then publicly listed or quoted on one or more securities exchanges, inter-dealer quotation systems
or over-the-counter markets, then the Board of Directors of the Company shall determine the fair
market value of a Share in its reasonable good faith judgment.
1.4
Delivery of Certificate and New Warrant
. Promptly after Holder exercises or
converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant
Price, the Company shall deliver to Holder certificates for the Shares acquired and, if this
Warrant has not been fully exercised or converted and has not expired, a new warrant of like tenor
representing the Shares not so acquired.
1.5
Replacement of Warrants
. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss,
theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.
1.6
Treatment of Warrant Upon Acquisition of Company
.
1.6.1
Acquisition
. For the purpose of this Warrant, Acquisition means any sale,
exclusive license, or other disposition of all or substantially all of the assets of the Company,
or any reorganization, consolidation, merger or sale of outstanding equity securities of the
Company where the holders of the Companys outstanding voting equity securities as of immediately
before the transaction beneficially own less than a majority of the outstanding voting equity
securities of the surviving or successor entity as of immediately after the transaction.
2
1.6.2
Treatment of Warrant at
Acquisition
.
A) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition in
which the sole consideration is cash, either (a) Holder shall exercise its conversion or purchase
right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (b) if Holder elects not to
exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The
Company shall provide the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in connection with such
contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less
than ten (10) days prior to the closing of the proposed Acquisition.
B) Upon the written request of the Company, Holder agrees that, in the event of an Acquisition that
is an arms length sale of all or substantially all of the Companys 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 persons or entitys officers, directors, joint venturers or partners, as
applicable.
ARTICLE 2.
ADJUSTMENTS TO THE SHARES
.
2.1
Stock Dividends, Splits, Etc
. If the Company declares or pays a dividend on the
outstanding shares of the Class payable in common stock or other securities, then upon exercise of
this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total
number and kind of securities to which Holder would have been entitled had Holder owned the Shares
of record as of the date the dividend occurred. If the Company subdivides the outstanding shares
of the Class by reclassification or otherwise into a greater number of shares, the number of Shares
purchasable hereunder shall be proportionately increased and the Warrant Price shall be
proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be
proportionately increased and the number of Shares shall be proportionately decreased.
3
2.2
Reclassification, Exchange, Combinations or Substitution
. Upon any
reclassification, exchange, substitution, recapitalization, reorganization or other event affecting
the outstanding shares of the Class, Holder shall be entitled to receive, upon exercise or
conversion of this Warrant, the number and kind of securities and property that Holder would have
received for the Shares if this Warrant had been exercised in full immediately before such
reclassification, exchange, substitution, recapitalization, reorganization or other event, at an
aggregate Warrant Price not exceeding the aggregate Warrant Price in effect as of immediately prior
thereto. The Company or its successor shall promptly issue to Holder a certificate pursuant to
Article 2.6 hereof setting forth the number, class and series or other designation of such new
securities or other property issuable upon exercise or conversion of this Warrant as a result of
such reclassification, exchange, substitution, recapitalization, reorganization or other event.
The provisions of this Article 2.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, recapitalizations, reorganizations and other events.
2.3
[Intentionally Omitted]
.
2.4
No Impairment
. The Company shall not, by amendment of its Certificate of
Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution,
issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed under this Warrant by the Company,
but shall at all times in good faith assist in carrying out of all the provisions of this Article 2
and in taking all such action as may be necessary or appropriate to protect Holders rights under
this Article against impairment. For the avoidance of doubt, an amendment of the Companys
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 Companys
expense, promptly compute such adjustment, and furnish Holder with a certificate of its Chief
Financial Officer setting forth such adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant
Price, Class and number of Shares in effect upon the date thereof and the series of adjustments
leading to such Warrant Price, Class and number of Shares.
ARTICLE 3.
REPRESENTATIONS AND COVENANTS OF THE COMPANY
.
3.1
Representations and Warranties
. The Company represents and warrants to, and
agrees with, the Holder as follows:
4
(a) All Shares which may be issued upon the exercise of the purchase right represented by this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable,
and free of any liens and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.
3.2
Notice of Certain Events
. If the Company proposes at any time (a) to declare any
dividend or distribution upon the outstanding shares of the Class, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend; (b) to offer for
subscription or sale pro rata to the holders of the outstanding shares of the Class any additional
shares of any class or series of the Companys 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 Companys 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 Companys Investor Rights Agreement. The
provisions set forth in the Companys 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 Holders 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 Holders account, not as a nominee or agent, and not with a view to the public
resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for
the specific purpose of acquiring this Warrant or the Shares.
5
4.2
Disclosure of Information.
Holder has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment decision with
respect to the acquisition of this Warrant and its underlying securities. Holder further has had
an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to obtain additional
information (to the extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to Holder or to which
Holder has access.
4.3
Investment Experience.
Holder understands that the purchase of this Warrant and
its underlying securities involves substantial risk. Holder has experience as an investor in
securities of companies in the development stage and acknowledges that Holder can bear the economic
risk of such Holders 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
Holders investment intent as expressed herein. Holder understands that this Warrant and the
Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently
registered under the Act and qualified under applicable state securities laws, or unless exemption
from such registration and qualification are otherwise available.
ARTICLE 5.
MISCELLANEOUS
.
5.1
Term
: This Warrant is exercisable in whole or in part at any time and from time
to time on or before the Expiration Date.
5.2
Legends
. This Warrant and the Shares shall be imprinted with a legend in
substantially the following form:
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR THE
SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF
ARTICLE 5 OF THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE COMPANY
TO SILICON VALLEY BANK DATED AS OF MAY ___ 2011 MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE
OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.
6
5.3
Compliance with Securities Laws on Transfer
. This Warrant and/or the Shares
issued upon exercise or conversion of this Warrant may not be transferred or assigned in whole or
in part without compliance with applicable federal and state securities laws by the transferor and
the transferee (including, without limitation, the delivery of investment representation letters
and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company).
The Company shall not require Holder to provide an opinion of counsel if the transfer is to an
affiliate of Holder, provided that such affiliate is an accredited investor as defined in
Regulation D promulgated under the Act.
5.4
Transfer Procedure.
After receipt by Silicon Valley Bank (Bank) of the executed
Warrant, Bank will transfer all of this Warrant to SVB Financial Group, Holders parent company.
Subject to the provisions of Article 5.3 and upon providing the Company with written notice, SVB
Financial Group and any subsequent Holder may transfer all or part of this Warrant or the Shares
issuable upon exercise of this Warrant (or the securities issuable directly or indirectly, upon
conversion of the Shares, if any) to any transferee, provided, however, in connection with any such
transfer, SVB Financial Group or such subsequent Holder will give the Company notice of the portion
of the Warrant being transferred with the name, address and taxpayer identification number of the
transferee and Holder will surrender this Warrant to the Company for reissuance to the
transferee(s) (and Holder if applicable). The foregoing provisions of this Article 5.4 shall not
apply to a public sale of any Shares issued on exercise or conversion of this Warrant pursuant to
the provisions of Rule 144 promulgated under the Act.
5.5
Notices
. All notices and other communications from the Company to the Holder, or
vice versa, shall be deemed delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid (or on the first business day after transmission by
facsimile), at such address as may have been furnished to the Company or Holder, as the case may
be, in writing by the Company or such holder from time to time. All notices to Holder shall be
addressed as follows until the Company receives notice of a change of address in connection with a
transfer or otherwise:
SVB Financial Group
Attn: Treasury Department
3003 Tasman Drive, HA 200
Santa Clara, CA 95054
Telephone: 408-654-7400
Facsimile: 408-496-2405
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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
Attorneys Fees
. In the event of any dispute between the parties concerning the
terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to
collect from the other party all costs incurred in such dispute, including reasonable attorneys
fees.
5.8
Automatic Conversion upon Expiration
. In the event that, upon the Expiration
Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as
determined in accordance with Article 1.3 above is greater than the Warrant Price in effect on such
date, then this Warrant shall automatically be deemed on and as of such date to be converted
pursuant to Article 1.2 above as to all Shares (or such other securities) for which it shall not
previously have been exercised or converted, and the Company shall promptly deliver a certificate
representing the Shares (or such other securities) issued upon such conversion to Holder.
5.9
Counterparts.
This Warrant may be executed in counterparts, all of which together
shall constitute one and the same agreement.
8
5.10
Governing Law
. This Warrant shall be governed by and construed in accordance
with State of Delaware without giving effect to its principles regarding conflicts of law.
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COMPANY
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ALIMERA SCIENCES, INC.
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By:
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/s/ Richard S. Eiswirth, Jr.
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Name:
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Richard S. Eiswirth, Jr.
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(Print)
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Title:
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Chief Operating Officer and
Chief Financial Officer
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HOLDER
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SILICON VALLEY BANK
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Name:
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Title:
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Vice President
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9
APPENDIX 1
NOTICE OF EXERCISE
1. Holder elects to purchase
_____
shares of the Common Stock of Alimera Sciences, Inc.
pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the
shares in full.
[or]
1. Holder elects to convert the attached Warrant into Shares/cash [strike one] in the manner
specified in the Warrant. This conversion is exercised for
_____
of the Shares
covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing the Shares in the name specified
below:
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.
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HOLDER:
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By:
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Name:
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Title:
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(Date):
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10
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
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A.
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Modifications to Loan Agreement.
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1
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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:
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(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 Lenders 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 Lenders 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 Lenders Pro Rata Share of such total reduction in
the Term B Loan Commitments. Each Lenders obligation to fund the applicable
Term Loan shall be limited to such Lenders 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 Lenders 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 Lenders 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 Lenders 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 Lenders 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 Lenders Pro Rata Share of such total reduction in
the Term B Loan Commitments. Each Lenders obligation to fund the applicable
Term Loan shall be limited to such Lenders 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 Lenders 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 Lenders 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).
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The Loan Agreement shall be amended by deleting the following,
appearing as Section 2.2 (a) thereof, in its entirety:
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(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.
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3
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The Loan Agreement shall be amended by deleting the following
appearing as Section 4.1 thereof:
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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
Borrowers 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 Agents 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.
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and inserting in lieu thereof the following:
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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
Agents 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.
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4
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The Loan Agreement shall be amended by deleting the following
provision appearing in Section 6.2(c) thereof, in its entirety:
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(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) Borrowers knowledge of an event that could
reasonably be expected to materially and adversely affect the value
of the Intellectual Property. Upon the
occurrence of an IP Lien
Event,
Borrower shall deliver to Agent and the Lenders an updated
intellectual property security agreement (in form and substance
reasonably acceptable to Agent in its discretion) in favor of Agent,
covering all of the then-existing IP Collateral.
and inserting in lieu thereof the following:
(c) Prompt written notice of (i) any material change in the
composition of the Intellectual Property, (ii) the registration of
any Copyright, including any subsequent ownership right of Borrower
in or to any Copyright, Patent or Trademark not shown in the IP
Agreement, and (iii) Borrowers knowledge of an event that could
reasonably be expected to materially and adversely affect the value
of the Intellectual Property.
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The Loan Agreement shall be amended by deleting the following,
appearing as Section 6.7 (a) thereof, in its entirety:
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(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 Borrowers 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 Borrowers 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 Agents 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
Borrowers 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 Borrowers 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 Borrowers 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 Agents 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
Borrowers 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.
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The Loan Agreement shall be amended by inserting the following
new Section 12.14, appearing immediately after Section 12.13 thereof:
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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 Borrowers 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.
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The Loan Agreement shall be amended by deleting the following
definitions appearing in Section 14.1 thereof:
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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) Borrowers 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 Borrowers assets) by a non-affiliated third
party, provided that no Event of Default has occurred and is
continuing, and (ii) no Prepayment Fee shall be payable to SVB to the
extent the prepayment of the Terms Loans held by SVB is financed with
the proceeds of an advance under the SVB Loan Agreement, provided
that for the ninety (90) day period following such prepayment, no
payments are made under the SVB Loan Agreement except for mandatory
payments under the SVB Loan Agreement.
Term B Loan Draw Period
is the period commencing upon
the occurrence of the Iluvien FDA Approval (provided no
Event of Default has occurred and is continuing on such
date) and continuing through the earlier to occur of (i)
July 31, 2011, and (ii) the occurrence of an Event of
Default.
Term Loan Maturity Date
is October 31, 2013.
and inserting in lieu thereof the following:
Final Payment Percentage
is four percent (4.00%).
IP Agreement
is that certain Intellectual Property Security
Agreement executed by Borrower to Agent dated as of the Effective
Date, provided that such Intellectual Property Security Agreement
shall be deemed inoperative and of no force or effect following the
occurrence of an IP Release Event.
IP Collateral
is defined on
Exhibit E.
IP Release Event
means written confirmation by Agent that Borrower
has achieved positive EBITDA for two (2) consecutive calendar
quarters.
Prepayment Fee
means:
(A) Prior to the Funding Date of the Term B Loan, with respect to any
Term Loan subject to prepayment prior to the Term Loan Maturity Date,
whether by mandatory or voluntary prepayment, acceleration or
otherwise, an additional fee payable to the Lenders in amount equal
to:
(i) for a prepayment made on or after the Effective Date through and
including the date which is twelve (12) months after the Effective
Date, five
percent (5.00%) of the outstanding principal amount of the Term Loans
on the date of such prepayment;
(ii) for a prepayment made after the date which is after the date
that is twelve (12) months after the Effective Date through and
including the date which is twenty-four (24) months after the
Effective Date, three percent (3.00%) of the outstanding principal
amount of the Term Loans on the date of such prepayment; and
(ii) for a prepayment made after the date which is after the date
that is twenty-four (24) months after the Effective Date and prior to
the Term Loan Maturity Date, one percent (1.00%) of the outstanding
principal amount of the Term Loans on the date of such prepayment.
Provided, that (i) any applicable Prepayment Fee shall be reduced by
50% in the event that the prepayment of the Terms Loans is made as a
condition precedent to, in connection with or immediately upon the
acquisition by Borrower (whether by merger or the acquisition of all
or substantially all of Borrowers assets) by a non-affiliated third
party, provided that no Event of Default has occurred and is
continuing, and (ii) no Prepayment Fee shall be payable to SVB to the
extent the prepayment of the Terms Loans held by SVB is financed with
the proceeds of an advance under the SVB Loan Agreement, provided
that for the ninety (90) day period following such prepayment, no
payments are made under the SVB Loan Agreement except for mandatory
payments under the SVB Loan Agreement; and
(B) On and after the Funding Date of the Term B Loan, with respect
to any Term Loan subject to prepayment prior to the Term Loan
Maturity Date, whether by mandatory or voluntary prepayment,
acceleration or otherwise, an additional fee payable to the Lenders
in amount equal to:
(i) for a prepayment made prior to the first anniversary of the
Funding Date of the Term B Loan, five percent (5.00%) of the
outstanding principal amount of the Term Loans on the date of such
prepayment;
(ii) for a prepayment made after the date which is after the first
anniversary of the Funding Date of the Term B Loan through and
including the date which is the second anniversary of the Funding
Date of the Term B Loan, three percent (3.00%) of the outstanding
principal amount of the Term Loans on the date of such prepayment;
and
(ii) for a prepayment made after the date which is after the date
that is after the second anniversary of the Funding Date of the Term
B Loan and prior to the Term Loan Maturity Date, one percent (1.00%)
of the outstanding principal amount of the Term Loans on the date of
such prepayment.
Provided, that (i) any applicable Prepayment Fee shall be reduced by
fifty percent (50%) in the event that the prepayment of the Terms
Loans is made as a condition precedent to, in connection with or
immediately upon the acquisition by Borrower (whether by merger or
the acquisition of all or substantially all of Borrowers 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.
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8
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The Loan Agreement shall be amended by deleting the following
definition appearing in Section 13.1 thereof:
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IP Lien Event
has occurred when on any date (a) Borrowers
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.
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9
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The Schedule appearing as
Schedule 1.1
to the Loan
Agreement is hereby replaced with the Schedule attached as
Schedule 1
hereto.
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10
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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
Borrowers 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.
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11
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The Loan Agreement shall be amended by adding a new
Exhibit
E
to the Loan Agreement, attached as
Schedule 3
hereto.
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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 Secretarys 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 Secretarys
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 Borrowers representations, warranties, and agreements, as
set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan
Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force
and effect. Lenders agreement to modifications to the existing Obligations pursuant to this Loan
Modification Agreement in no way shall obligate Lenders to make any future modifications to the
Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the
Obligations. It is the intention of Lenders and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by each Lender in writing. No
maker will be released by virtue of this Loan Modification Agreement.
11.
COUNTERSIGNATURE
. This Loan Modification Agreement shall become effective only when it
shall have been executed by Borrower and Agent.
[The remainder of this page is intentionally left blank]
This Loan Modification Agreement is executed as of the date first written above.
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BORROWER:
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AGENT:
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ALIMERA SCIENCES, INC.
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SILICON VALLEY BANK
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By:
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/s/ Richard S. Eiswirth, Jr.
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By:
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/s/ M. Scott McCarty
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Name:
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Richard S. Eiswirth, Jr.
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Name:
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Scott McCarty
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Title:
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Chief Operating Officer and
Chief Financial Officer
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Title:
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Vice President
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LENDERS:
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MIDCAP FUNDING III, LLC, as a Lender
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By:
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/s/ Luis Viera
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Name:
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Luis Viera
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Title:
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Managing Director
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SILICON VALLEY BANK, as a Lender
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By:
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/s/ M. Scott McCarty
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Name:
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Scott McCarty
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Title:
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Vice President
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SCHEDULE 1
SCHEDULE 1.1
LENDERS AND COMMITMENTS
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Lender
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Term A Loan Commitment
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Commitment Percentage
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MidCap Funding III, LLC
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$
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3,750,000
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60.0
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%
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Silicon Valley Bank
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$
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2,500,000
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40.0
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%
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TOTAL TERM A LOANS
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$
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6,250,000
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100
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%
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Lender
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Term B Loan Commitment
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Commitment Percentage
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MidCap Funding III, LLC
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$
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6,600,000
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60.0
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%
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Silicon Valley Bank
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$
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4,400,000
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40.0
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%
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TOTAL TERM B LOANS
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$
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11,000,000
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100
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%
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TOTAL TERM LOANS
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$
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17,250,000
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100
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%
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Schedule 2
EXHIBIT A
The Collateral consists of all of Borrowers 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 Borrowers 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 Borrowers right, title and interest in and to the following
personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as provided below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts,
certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is
evidenced by a writing), securities, and all other investment property, supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and
all Borrowers Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.
Notwithstanding the foregoing, the Collateral does not include any of the following, whether
now owned or hereafter acquired except to the extent that a judicial authority (including a U.S.
Bankruptcy Court) would hold that it is necessary under applicable law to have a security interest
in any of the following in order to have a perfected lien and security interest in and to the IP
Proceeds defined below: any copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work, whether published or unpublished;
any patents, patent applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the same; trademarks,
trade names, service marks, mask works, rights of use of any name or domain names and, to the
extent permitted under applicable law, any applications therefor, whether registered or not; and
operating manuals, trade secret rights, clinical and non-clinical data, rights to unpatented
inventions (the
IP Collateral
); provided, however, the Collateral at all times shall include all
Accounts, license and royalty fees and other revenues, proceeds, or income arising out of or
relating to any of the foregoing
and any claims for damage by way of any past, present, or
future infringement of any of the foregoing (collectively, the
IP Proceeds
).
Pursuant to the terms of a certain negative pledge arrangement with Lenders, Borrower has
agreed not to encumber any of its Intellectual Property without Lenders prior written consent.
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.
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1
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The Loan Agreement shall be amended by deleting the following,
appearing as Section 2.2.6 (a) thereof, in its entirety:
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(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.
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and inserting in lieu thereof the following:
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(a) Upon the earlier of: (i) the initial Advance, or (ii) September
30, 2011, Borrower shall direct each Account Debtor (and each
depository institution where proceeds of Accounts are on deposit) to
remit payments with respect to the Accounts to a lockbox account
established with Bank or to wire transfer payments to a cash
Collateral Account that Bank controls (collectively, the
Lockbox
).
It will be considered an immediate Event of Default if the Lockbox is
not set-up and operational upon the earlier of (i) the initial
Advance, or (ii) September 30, 2011.
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2
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The Loan Agreement shall be amended by deleting the following,
appearing as Section 2.2.6 (e) thereof, in its entirety:
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(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.
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and inserting in lieu thereof the following:
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(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.
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The Loan Agreement shall be amended by deleting the following,
appearing as Section 2.2.8 thereof, in its entirety:
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2.2.8
Unused Line Facility Fee
. As compensation for Banks
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
Banks obligation to make Advances hereunder.
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and inserting in lieu thereof the following:
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2.2.8
Unused Line Facility Fee
. As compensation for Banks
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
Banks obligation to make Advances hereunder.
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The Loan Agreement shall be amended by deleting the following
text appearing in Section 4.1 thereof:
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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 Borrowers 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
Borrowers 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 Banks 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 Borrowers 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 Banks 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.
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5
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The Loan Agreement shall be amended by deleting the following
provision appearing in Section 6.2(h) thereof, in its entirety:
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(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) Borrowers knowledge of
an event that would reasonably be expected to materially and adversely
affect the value of the Intellectual Property. Upon the occurrence of an IP
Lien Event, Borrower shall deliver to Bank an updated intellectual property
security agreement (in form and substance reasonably acceptable to Bank in
its discretion) in favor of Bank, covering all of the then-existing IP
Collateral.
and inserting in lieu thereof the following:
(h) Prompt written notice of (i) any material change in the composition of
the Intellectual Property, (ii) the registration of any Copyright, including
any subsequent ownership right of Borrower in or to any Copyright, Patent or
Trademark not shown in the IP Agreement, and (iii) Borrowers knowledge of
an event that would reasonably be expected to materially and adversely
affect the value of the Intellectual Property.
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The Loan Agreement shall be amended by deleting the following,
appearing as Section 6.7 (a) thereof, in its entirety:
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(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 Borrowers business to be
abandoned, forfeited or dedicated to the public without Banks
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
Borrowers 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.
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and inserting in lieu thereof the following:
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(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 Borrowers business to be
abandoned, forfeited or dedicated to the public without Banks
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.
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 Borrowers 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.
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The Loan Agreement shall be amended by inserting the following
new Section 12.11, appearing immediately after Section 12.10 thereof:
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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 Borrowers 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.
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The Loan Agreement shall be amended by deleting the following
definitions appearing in Section 13.1 thereof:
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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 Borrowers
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.
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and inserting in lieu thereof the following:
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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.
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The Loan Agreement shall be amended by deleting the following
definition appearing in Section 13.1 thereof:
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IP Lien Event
has occurred when on any date, (a) the sum of
Borrowers 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.
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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 Borrowers 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.
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11
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The Loan Agreement shall be amended by adding a new
Exhibit
C
to the Loan Agreement, attached as
Schedule 2
hereto.
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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 Secretarys 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 Secretarys 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 Borrowers 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. Banks 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.
[The remainder of this page is intentionally left blank]
This Loan Modification Agreement is executed as of the date first written above.
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BORROWER:
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BANK:
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ALIMERA SCIENCES, INC.
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SILICON VALLEY BANK
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By:
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/s/ Richard S. Eiswirth, Jr.
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By:
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/s/ M. Scott McCarty
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Name:
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Richard S. Eiswirth, Jr.
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Name:
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Scott McCarty
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Title:
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Chief Operating Officer and Chief Financial Officer
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Title:
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Vice President
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Schedule 1
EXHIBIT A
The Collateral consists of all of Borrowers 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 Borrowers 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 2
EXHIBIT C COLLATERAL DESCRIPTION
The Collateral consists of all of Borrowers right, title and interest in and to the following
personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as provided below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts,
certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is
evidenced by a writing), securities, and all other investment property, supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and
all Borrowers Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.
Notwithstanding the foregoing, the Collateral does not include any of the following, whether
now owned or hereafter acquired except to the extent that a judicial authority (including a U.S.
Bankruptcy Court) would hold that it is necessary under applicable law to have a security interest
in any of the following in order to have a perfected lien and security interest in and to the IP
Proceeds defined below: any copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work, whether published or unpublished;
any patents, patent applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the same; trademarks,
trade names, service marks, mask works, rights of use of any name or domain names and, to the
extent permitted under applicable law, any applications therefor, whether registered or not; and
operating manuals, trade secret rights, clinical and non-clinical data, rights to unpatented
inventions (the
IP Collateral
); provided, however, the Collateral at all times shall include all
Accounts, license and royalty fees and other revenues, proceeds, or income arising out of or
relating to any of the foregoing
and any claims for damage by way of any past, present, or
future infringement of any of the foregoing (collectively, the
IP Proceeds
).
Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed
not to encumber any of its Intellectual Property without Banks 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 Alimeras 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 ILUVIENs 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, Alimeras future results
of operations and financial position, business strategy and plans and objectives of management for
Alimeras 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 Alimeras
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
Alimeras product candidates, uncertainty as to Alimeras ability to commercialize, and market
acceptance of, its product candidates, the extent of government regulations, uncertainty as to
relationship between the benefits of Alimeras product candidates and the risks of their
side-effect profiles, dependence on third-party manufacturers to manufacture Alimeras product
candidates in sufficient quantities and quality, uncertainty of clinical trial results, limited
sales and marketing infrastructure, inability of Alimeras outside sales force to successfully sell
and market ILUVIEN in the U.S. following regulatory approval and Alimeras 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 Managements Discussion and
Analysis of Financial Condition and Results of Operations sections of Alimeras 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 SECs website at www.sec.gov. In addition to the risks described above and in
Alimeras 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 Alimeras
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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