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As filed with the Securities and Exchange Commission on January 8, 2016
Registration No. 333-            

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Clearside Biomedical, Inc.
(Exact name of registrant as specified in its charter)

 
 	 	 	 	 	
Delaware	 	2834	 	45-2437375	
(State or other jurisdiction of
incorporation or organization)	 	(Primary Standard Industrial
Classification Code Number)	 	(I.R.S. Employer
Identification Number)	

1220 Old Alpharetta Road, Suite 300
Alpharetta, GA 30005
(678) 270-3631
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Daniel H. White
Chief Executive Officer
Clearside Biomedical, Inc.
1220 Old Alpharetta Road, Suite 300
Alpharetta, GA 30005
(678) 270-3631
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Brent B. Siler
Darren K. DeStefano
Brian F. Leaf
Cooley LLP
11951 Freedom Drive
Reston, VA 20190-5656
(703) 456-8000	 	Peter N. Handrinos
Latham & Watkins LLP
John Hancock Tower
200 Clarendon Street
Boston, MA 02116
(617) 948-6000	
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

 	
Title of Securities being Registered	 	Proposed Maximum Aggregate
Offering Price(1)(2)	 	Amount of
Registration Fee	
Common Stock, $0.001 par value per share	 	$57,500,000	 	$5,790.25	

(1)	In accordance with Rule 457(o) under the Securities Act of 1933, as amended, the number of shares being registered and the proposed maximum offering price per share are not included in this table.	
(2)	Estimated solely for purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act. Includes offering price of additional shares that underwriters have the option to purchase.	

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 under the Securities Exchange Act of 1934. (Check one):

Large Accelerated Filer ¨	 	Accelerated Filer ¨	 	 	 	Non-accelerated Filer x	 	 	 	Smaller Reporting Company ¨	

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
 
Subject to Completion, dated January 8, 2016
             Shares

COMMON STOCK

We are offering              shares of our common stock. This is our initial public offering and no public market currently exists for our common stock. We expect the initial public offering price to be between $         and $         per share.

We have applied to list our common stock on The NASDAQ Global Market under the symbol “CLSD.”

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, and will be subject to reduced public company reporting requirements.
Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 15.

 
 	 	 	 	 	 	 	 	 	
 	  	PER SHARE	 	  	TOTAL	 	
Initial public offering price	  	$	            	  	  	$	            	  	
Underwriting discount and commissions(1)	  	$	 	  	  	$	 	  	
Proceeds, before expenses, to us	  	$	 	  	  	$	 	  	
 
 	(1)	See “Underwriting” in this prospectus for a description of compensation payable to the underwriters.	
We have granted the underwriters an option to purchase up to              additional shares of common stock, exercisable at any time until 30 days after the date of this prospectus. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by us will be $         and the total proceeds to us, before expenses, will be $        .
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares on or about                     , 2016.

 	 	
RBC CAPITAL MARKETS	 	STIFEL	
 	 	
NEEDHAM & COMPANY	 	WEDBUSH PACGROW	
Prospectus dated                     , 2016

Table of Contents
TABLE OF CONTENTS

 	  	Page	 	
Prospectus Summary	  	 	1	  	
Risk Factors	  	 	15	  	
Special Note Regarding Forward-Looking Statements and Industry Data	  	 	56	  	
Use of Proceeds	  	 	58	  	
Dividend Policy	  	 	59	  	
Capitalization	  	 	60	  	
Dilution	  	 	63	  	
Selected Financial Data	  	 	65	  	
Management’s Discussion and Analysis of Financial Condition and Results of Operations	  	 	67	  	
Business	  	 	85	  	
Management	  	 	134	  	

 	  	Page	 	
Executive Compensation	  	 	142	  	
Certain Relationships and Related Party Transactions	  	 	156	  	
Principal Stockholders	  	 	162	  	
Description of Capital Stock	  	 	166	  	
Shares Eligible for Future Sale	  	 	172	  	
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders	  	 	175	  	
Underwriting	  	 	179	  	
Legal Matters	  	 	187	  	
Experts	  	 	187	  	
Where You Can Find Additional Information	  	 	187	  	
Index to Financial Statements	  	 	F-1	  	

 
You should rely only on the information contained in this prospectus and any free writing prospectus prepared by or on behalf of us or to which we have referred you. We have not authorized anyone to provide you with information that is different from that contained in such prospectuses. We are offering to sell shares of our common stock, and seeking offers to buy shares of our common stock, only in jurisdictions where such offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common stock.
Until and including                     , 2016, 25 days after the date of this prospectus, all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.
For investors outside of the United States: neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our financial statements and the related notes thereto and the information set forth under the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case included in this prospectus. Unless the context otherwise requires, we use the terms “Clearside,” “company,” “we,” “us” and “our” in this prospectus to refer to Clearside Biomedical, Inc.
Overview of Clearside Biomedical
We are a late-stage clinical biopharmaceutical company developing first-in-class drug therapies to treat blinding diseases of the eye. Our current product candidates focus on diseases affecting the retina and choroid, especially diseases associated with macular edema, and are injected into the suprachoroidal space, or SCS, adjacent to the choroid, using our proprietary SCS Microinjector. With the SCS injection, our product candidates are more directly administered to the retina and choroid as compared to other ocular drug delivery techniques, such as intravitreal injections. We believe SCS injection may provide a number of benefits, including lower frequency of necessary injection and faster onset of therapeutic effect. We hold the exclusive rights to develop and commercialize drugs for injection into the SCS. Our most advanced product candidates, CLS-1001 and CLS-1003, are based on commonly used ophthalmic drugs, which we believe will allow us to more efficiently and predictably pursue the regulatory approval of these product candidates under Section 505(b)(2) of the U.S. Federal Food, Drug, and Cosmetic Act. Under Section 505(b)(2), if we can establish that reliance on the Food and Drug Administration’s, or FDA’s, previous findings of safety and effectiveness for an approved product is scientifically appropriate, or there is scientific literature to support the product’s safety or effectiveness, it may eliminate the need for us to conduct some of the preclinical studies or clinical trials for the new product candidate that might otherwise have been required. We estimate that there are nearly five million people in the United States diagnosed with our target indications and that worldwide annual sales of drugs to treat these indications were approximately $7 billion in 2014.
Our CLS-1001 program is being developed for the treatment of macular edema associated with non-infectious uveitis, a condition that we estimate affects 350,000 patients in the United States. CLS-1001 consists of an SCS injection of CLS-TA, our proprietary, preservative-free formulation of the corticosteroid triamcinolone acetonide, or TA, specifically designed to be administered through our SCS Microinjector. We enrolled the first patient in our Phase 3 clinical trial in November 2015. We expect to enroll approximately 150 patients in this trial and report the data in the second half of 2017. We believe, based on our end-of-Phase 2 review with the FDA in May 2015, that this Phase 3 clinical trial will be the only pivotal clinical trial necessary to support the filing of a New Drug Application, or NDA, with the FDA. In January 2016, we announced top line data from a Phase 2 clinical trial in 22 patients with macular edema associated with non-infectious uveitis. In this trial, we observed statistically significant improvement in both retinal thickness, the primary endpoint of the trial, and best corrected visual acuity, or BCVA, a secondary endpoint. In our completed Phase 1/2 clinical trial, we observed a range of improvements in BCVA of between one and five lines on a standard eye chart. At the end of week 12, the average improvement in BCVA exceeded two lines, which is considered clinically meaningful. At the end of week 26, four of the eight patients in the trial had still not required additional treatment. For those four patients, the average improvement in BCVA was nearly three lines at week 26.

 
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We are developing CLS-1003 for the treatment of macular edema associated with retinal vein occlusion, or RVO, a condition that we estimate affects 2.2 million patients in the United States. We have completed enrollment of a 46-patient Phase 2 clinical trial and expect to report data from this trial in the second quarter of 2016. In our CLS-1003 program, we are exploring the concomitant SCS injection of CLS-TA and an intravitreal injection of Eylea, a corticosteroid and an anti-VEGF agent, respectively, to provide the potential benefits of improved visual acuity, reduced macular edema and reduced injection frequency. Corticosteroids and anti-VEGF agents have known advantages in treating RVO.
We are developing CLS-1002 for the treatment of wet age-related macular degeneration, or wet AMD, a condition that we estimate affects 1.2 million patients in the United States. We have selected a lead compound, axitinib, that has activity against both vascular endothelial growth factor, or VEGF, and platelet derived growth factor, or PDGF, to be administered by SCS injection, which we believe could be more effective than current treatments for wet AMD. We plan to develop a proprietary suspension formulation of axitinib and, in the second half of 2016, submit an investigational new drug application, or IND, with the FDA and subsequently commence a Phase 1/2 clinical trial. We are also considering a development program for drug compounds to treat diabetic macular edema, or DME.
We are also working with third parties through collaborations and licenses to develop eye disease treatments using our proprietary SCS Microinjector and method of drug administration to the choroid and retina through the SCS. We are collaborating with Santen Pharmaceuticals, Ltd., or Santen, to develop compounds for SCS injection that are designed to treat DME, wet AMD and RVO. Additionally, we are collaborating with Santen to explore the potential benefits of SCS injection of compounds known to reduce intraocular pressure, or IOP, associated with glaucoma for a sustained period of time. We have also entered into an agreement with Spark Therapeutics, Inc., or Spark, pursuant to which we are collaborating with Spark to investigate the use of our SCS Microinjector to administer gene therapy to the back of the eye for the potential treatment of orphan diseases of the eye.
Our current and planned development programs aim to restore or improve visual function primarily by reducing the macular edema associated with a number of diseases affecting the retina, the tissue that lines the inside of the eye and is the part of the eye primarily responsible for vision, and the choroid, the layer adjacent to the retina that supplies the retina with blood, oxygen and nourishment. These diseases include uveitis, RVO, wet AMD and DME. Macular edema is the build-up of fluid that can cause abnormal swelling of the macula, the portion of the retina responsible for central vision and color perception. This swelling can rapidly result in deterioration of vision and can eventually lead to blindness.
The most common treatments for eye diseases with associated macular edema affecting the retina and choroid are corticosteroids and drugs that inhibit VEGF signaling, known as anti-VEGF drugs. These corticosteroids and anti-VEGF drugs are often injected into the vitreous, a jelly-like substance that occupies the central portion of the eye. Intravitreal injections rely on drug to diffuse outward from the vitreous to the retina and choroid. This diffusion can result in lower concentrations of drug in these targeted areas. At the same time, this diffusion can also result in drug spreading to unintended parts of the eye, where, for some drugs, it can cause significant side effects. By contrast, with our SCS Microinjector, drug is injected into and spreads within the SCS, which is the space located between the choroid and the outer protective layer of the eye known as the sclera, to reach the back of the eye.
We believe administration of drug using our SCS Microinjector may provide improved bioavailability to the targeted retina and choroid, with drug remaining more localized and away from other parts of the eye,

 
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where the drug could cause side effects. Corticosteroids are effective both at treating the inflammation aspects of ocular disease and at reducing macular edema, but when delivered intravitreally, they have been associated with significant side effects, such as cataract formation or exacerbation and elevated IOP, which can lead to glaucoma. Anti-VEGF drugs, while highly effective in reducing macular edema, require frequent administration, in some cases as often as monthly. We believe that our differentiated approach of injecting ocular drugs into the SCS may result in fewer side effects and improved bioavailability of drug at the diseased retina and choroid, as compared to intravitreal administration, a faster onset of therapeutic effect, a similar efficacy profile with lower drug amounts required, and longer duration of therapeutic effect with less frequent required injections. The procedure for SCS injection with our SCS Microinjector is conducted in an in-office setting and is similar to the procedure for intravitreal injection, and we therefore expect our products, if they achieve regulatory approval, to be incorporated into retinal specialists’ standard medical practice.
Our drug candidates, SCS Microinjector and method of drug administration into the SCS are protected by five issued U.S. patents and over 50 patent applications filed in the United States and major international markets, including the European Union, Canada, India, Japan, China and Australia. Our issued patents are broadly directed to methods of administering drugs of any type, including anti-inflammatory drugs, anti-VEGF drugs, and gene therapy, into the SCS by injection and are not scheduled to expire until 2027, 2029 and 2034. Our patent applications relate to SCS injection technology and methods, our current therapeutic drug candidates and formulations, various therapeutic uses, including treatment of specific indications such as macular edema associated with non-infectious uveitis and RVO, as well as wet AMD and DME, and administration of specific classes of drugs to the SCS, including anti-inflammatory drugs and anti-VEGF drugs. Our pending patent applications are not projected to expire until between 2027 and 2035.
If our product candidates are approved, we plan to build a specialized team of 30 to 40 sales and medical marketing support professionals to target the approximately 1,700 retinal specialists in the United States, and we may also pursue collaborations with third parties to commercialize any of our drugs approved for marketing outside the United States.
The members of our management team have held senior leadership positions at a number of pharmaceutical and biotechnology companies with approved ophthalmic drugs, including Alcon, Alimera Sciences, CIBA Vision and ISTA Pharmaceuticals. Members of our team have contributed to the development, regulatory approval and commercialization of several retinal products, such as Triesence, Iluvien, Nevanac, Visudyne and Xibrom.
The Clearside Approach
We are developing drug candidates for back of the eye diseases to be administered to the retina and choroid through the SCS using our proprietary SCS Microinjector. We believe that our novel, patented approach of SCS drug administration may provide a number of potential benefits, including:
 
 	•	 	Improved bioavailability at the site of disease and faster onset of therapeutic effect. In preclinical studies, we observed higher amounts of drug present in the retina and choroid following SCS injection, both at early time points and over the course of the experimental timeframe, as compared to the amounts of the same drug present over time in the retina and choroid following intravitreal administration. We believe this suggests that treatment using SCS injection of a drug may have a faster onset of therapeutic effect as compared to intravitreal administration, along with similar or better efficacy, in diseases such as uveitis, RVO, wet AMD and DME.	

 
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 	•	 	Similar efficacy profile with lower drug amounts required. In a preclinical study in an animal model of uveitis, SCS injection of TA achieved similar efficacy results with only 10% of the drug amount commonly administered through intravitreal injection. We believe this suggests our approach may allow us to develop ocular therapies with similar efficacy, but with lower amounts of active drug, compared to current therapies.	
 
 	•	 	Less frequent injections. Current treatments for RVO require monthly intravitreal injections of anti-VEGF drugs, while current treatments for wet AMD require such injections as often as seven times per year. For RVO patients, we believe that a combination of a standard intravitreal injection of an anti-VEGF drug that addresses the vascular aspect of the disease, together with an SCS injection of CLS-TA, which addresses the inflammatory aspect of RVO, may have efficacy similar to that of monthly intravitreal anti-VEGF injections but with a reduction in the frequency of treatment to once every 90 days. In wet AMD, we believe that more direct administration of drugs with anti-VEGF or dual anti-VEGF and anti-PDGF activity to the neovascularization in the choroid through SCS injection may substantially block the process of additional new vascular growth within the choroid before the vessels break into the retina and create further damage through leakage. If treatment through the SCS can block retinal damage before it occurs, we believe it could delay vision loss for a longer duration of time than the current standard intravitreal administration of anti-VEGF drugs and, accordingly, could require less frequent administration while providing at least the same levels of efficacy.	
 
 	•	 	Enhanced safety profile. Intravitreal injections result in drugs diffusing throughout the eye, including to the lens, iris and ciliary body at the front of the eye, which for some drugs, such as corticosteroids, has been associated with safety issues, such as cataracts and elevated IOP levels. Intravitreal administration of TA has been associated with cataracts and increases in IOP levels in 20% to 60% of patients. Because SCS injection of drugs in preclinical studies appeared to result in drug remaining mostly localized in the retina and choroid without substantial diffusion to the vitreous or the front portion of the eye, we believe SCS injection has the potential to reduce the incidence of these side effects. In our Phase 2 clinical trial, all 22 patients, who were all treated with an SCS injection of CLS-TA, completed the full observation period and were evaluated for safety. There were no corticosteroid-related increases in IOP or treatment-related serious adverse events observed in this trial. None of the eight patients dosed in our Phase 1/2 clinical trial in non-infectious uveitis experienced cataracts, increased levels of IOP or other treatment-related serious adverse events over the course of 26 weeks following a single SCS injection of TA.	
 
 	•	 	Incorporated into standard medical practice. If approved for marketing, our drugs will be packaged together with our SCS Microinjector for use by retinal specialists in their offices. Our product candidates are designed to be administered using a procedure similar to that used for intravitreal injections. Accordingly, we expect our products, if approved, will be incorporated into retinal specialists’ standard medical practice.	
Strategy
Our goal is to be a leading biopharmaceutical company focused on the development and commercialization of therapeutics to treat blinding diseases of the eye, with a particular emphasis on diseases affecting the retina and the choroid. The key elements of our strategy are:
 
 	•	 	Advancing CLS-1001 and CLS-1003 to FDA approval under the Section 505(b)(2) NDA regulatory pathway.  Our most advanced product candidates, CLS-1001 and CLS-1003, utilize CLS-TA, our	

 
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 	proprietary formulation of TA, a corticosteroid that has been used for decades to treat ocular inflammatory conditions. We believe this approach will allow us to more efficiently and predictably pursue the regulatory approval of these product candidates under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. In the CLS-1001 uveitis program, we recently commenced a pivotal Phase 3 clinical trial of CLS-TA for the treatment of macular edema associated with non-infectious uveitis and expect to report data from this trial in the second half of 2017. Based on our end-of-Phase 2 review with the FDA in May 2015, we expect this trial to be the only pivotal clinical trial necessary to support a 505(b)(2) NDA filing for CLS-TA. Separately, in the CLS-1003 program, we have completed enrollment of a 46-patient Phase 2 clinical trial with CLS-TA injected into the SCS concomitantly with intravitreally injected Eylea for the treatment of macular edema associated with RVO. We expect to report data from this trial in the second quarter of 2016.	
 
 	•	 	Maximizing the commercial potential of our product candidates. If either CLS-1001 or CLS-1003 is approved, we plan to build a specialized team of 30 to 40 sales and medical marketing support professionals to target the approximately 1,700 retinal specialists in the United States. We expect that this sales force would be able to effectively sell more than one of our products, in the event that multiple product candidates are approved for marketing. We have retained the worldwide commercialization rights to all of our product candidates, except we have granted a third party the exclusive right to commercialize our product candidates in Russia and specified adjacent territories pursuant to a license agreement, as described later in this prospectus. We may pursue additional collaborations with third parties to commercialize any of our drugs approved for marketing outside the United States, either through territorial licenses or distributor relationships.	
 
 	•	 	Advancing our CLS-1002 wet AMD development program. We plan to develop a proprietary suspension formulation of axitinib, a compound with dual anti-VEGF and anti-PDGF activity, for the treatment of wet AMD by injection into the SCS. We believe a single injection of a drug with dual anti-VEGF and anti-PDGF activity to the choroid and retina through the SCS may provide superior visual outcomes compared to intravitreal anti-VEGF treatment and could reduce the number of injections required to treat wet AMD. We plan to file an IND for our proprietary formulation of axitinib in the second half of 2016 and subsequently commence a Phase 1/2 clinical trial.	
 
 	•	 	Developing a product candidate to treat DME. DME, like uveitis and RVO, is characterized by an inflammatory aspect. After the data from the CLS-1003 Phase 2 clinical trial have been analyzed, we intend to initiate clinical trials to develop a product candidate to treat DME modeled after our approach for addressing the treatment of RVO.	
 
 	•	 	Developing additional therapies through collaborations with third parties. We plan to explore collaborations with third parties to develop SCS-injected treatments for eye diseases. These collaborations may take the form of in-licenses of the third parties’ drugs or drug candidates for our own development for SCS-injected treatments, or out-licenses for third parties to use our intellectual property covering SCS-injected treatments as part of the development of their own drugs. For example, we are collaborating with Santen to develop compounds designed to treat macular edema and neovascularization associated with wet AMD, RVO and DME, as well as elevated IOP associated with glaucoma. We have also entered into an agreement with Spark pursuant to which we are collaborating with Spark to investigate the use of our SCS Microinjector to administer gene therapy to the back of the eye.	

 
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 	•	 	Maintaining and strengthening our intellectual property portfolio. Our intellectual property strategy aims to control the commercialization of SCS access, with patents and patent applications covering SCS injection, novel formulations of drugs and microinjectors used to access the SCS, and methods of treatment of diseases through the SCS. Our current patents and patent applications provide us with exclusivity in the United States and major international markets, and are not projected to expire until between 2027 and 2035. We will seek to broaden the scope of and increase the geographic reach of our patent protection throughout the world.	
Overview of our Product Candidates
The current development status of our product candidates is summarized in the chart below:

Development
Program	 	  Indication  	 	Route of Administration and
Active Ingredient	 	Status and Upcoming Milestones	
 	 	 	 	
CLS-1001	 	Macular

edema
associated
with non-
infectious
uveitis	 	SCS injection of CLS-TA	 	•  Initiated ~150-patient single pivotal Phase 3 clinical trial in November 2015 with CLS-TA, with data expected in the second half of 2017
•  Completed a 22-patient Phase 2 clinical trial
•  Completed an 8-patient Phase 1/2 clinical trial

CLS-1003	 	Macular

edema
associated
with RVO	 	SCS injection of CLS-TA
together with intravitreal
injection of the anti-
VEGF agent, Eylea
 	 	•  Completed enrollment of a 46-patient Phase 2 clinical trial, with data expected in the second quarter of 2016	
 	 	 	 	
CLS-1002	 	Wet AMD	 	SCS injection of the anti-
VEGF and anti-PDGF
agent, axitinib
 	 	•  IND submission expected in the second half of 2016 and subsequently commence a Phase 1/2 clinical trial	
We have discussed our proposed development program with the FDA for the CLS-1001 program using CLS-TA for the treatment of macular edema associated with non-infections uveitis, but we have not yet done so for our CLS-1003 and CLS-1002 development programs.
CLS-1001 Program Targeting Macular Edema Associated with Non-infectious Uveitis
The most common treatment for non-infectious uveitis, a condition characterized by inflammation of the choroid and surrounding tissues, involves the use of corticosteroids, such as TA. CLS-1001 consists of an SCS injection of CLS-TA with our SCS Microinjector. Because CLS-1001 is based on our formulation of TA, and TA is known to be effective in treating uveitis, we believe that our product candidate will be at least as effective as commonly used formulations of TA in treating all aspects of the disease, including the associated macular edema. If approved, CLS-1001 would be the first drug specifically indicated for macular edema associated with non-infectious uveitis. In November 2015, we enrolled the first patient in a pivotal Phase 3 clinical trial in which our CLS-TA is injected into the SCS with our SCS Microinjector. We intend to enroll approximately 150 patients with macular edema associated with non-infectious uveitis and expect to report the results of this trial in the second half of 2017. Based on our end-of-Phase 2 review with the FDA in May 2015, we believe this will be the only pivotal clinical trial necessary to support a 505(b)(2)

 
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NDA filing for CLS-TA for macular edema associated with non-infectious uveitis. We have completed a Phase 2 clinical trial in patients with macular edema associated with non-infectious uveitis to evaluate the safety and efficacy of our CLS-TA injected into the SCS with our SCS Microinjector. In this trial, we observed statistically significant improvement in both retinal thickness, the primary endpoint of the trial, and BCVA, a secondary endpoint. The 22 enrolled patients were randomized to receive a single SCS injection of one of two doses of CLS-TA, with 17 patients receiving a 4.0 mg dose and five patients receiving a 0.8 mg dose. Patients returned for follow-up examinations between seven days and 11 days, at four weeks and at eight weeks following dosing. The patients who received the 4.0 mg dose of CLS-TA were evaluated for change in retinal thickness of at least 75 microns from baseline at eight weeks, the primary endpoint in this trial, and improvement in BCVA, a key secondary endpoint in this trial. At four and eight weeks, the average reduction in retinal thickness was 135 and 164 microns, respectively, and the average improvement in BCVA was 7.7 and 9.2 letters, respectively. These results all achieved statistical significance. All 22 patients completed the full observation period and CLS-TA was generally well tolerated. There were no corticosteroid-related increases in IOP or treatment-related serious adverse events observed in this trial. In our completed Phase 1/2 clinical trial, we evaluated the safety of SCS injection of Triesence, a TA formulation that is similar to CLS-TA and that has been approved by the FDA to treat non-infectious uveitis. While the trial was primarily a safety and tolerability study, we also assessed efficacy measures. Data from the eight patients enrolled in this trial indicated that SCS injection of the drug was generally well tolerated, with none of the eight patients having developed cataracts or experienced elevated IOP. At the end of week 12, the average improvement in BCVA exceeded two lines, which is considered clinically meaningful. At the end of week 26, four of the eight patients in the trial had still not required additional treatment. For those four patients, the average improvement in BCVA was nearly three lines at week 26. Our preclinical studies suggest that SCS injection of TA may provide improved bioavailability of drug at the diseased retina and choroid, which may result in faster onset of therapeutic effect and a similar efficacy profile with lower drug amounts required. Our preclinical studies suggest the potential for CLS-1001 to effectively treat uveitis for at least 90 days following a single SCS injection and our Phase 1/2 clinical trial observations potentially support a duration of action longer than 90 days since four of the eight patients in that trial did not require additional treatment over the 180-day observation period. Currently used ocular injections of TA are typically effective for approximately 90 days.
CLS-1003 Program Targeting Macular Edema Associated with Retinal Vein Occlusion
Under our CLS-1003 program, we have completed enrollment of a Phase 2 clinical trial for the treatment of macular edema associated with RVO, a sight-threatening disorder resulting from the blockage of a retinal vein. The current standard of care for RVO involves monthly intravitreal injections of an anti-VEGF drug, such as Lucentis (ranibizumab), Eylea (aflibercept) or Avastin (bevacizumab). Corticosteroids are also indicated for the treatment of macular edema associated with RVO. In our Phase 2 clinical trial, in which we enrolled 46 patients, we are evaluating the safety and efficacy of the injection of our CLS-TA into the SCS together with Eylea injected into the vitreous, as compared to an intravitreal injection of Eylea alone. We believe that SCS injection of CLS-TA, by addressing the inflammatory aspect of RVO, in combination with intravitreal anti-VEGF treatment, addressing the vascular aspect of RVO, may result in faster onset of therapeutic effect and may be able to improve visual acuity and reduce macular edema, compared to currently used intravitreal anti-VEGF treatment alone, while also potentially reducing the frequency of necessary anti-VEGF treatments from once every 30 days to once every 90 days. In addition, we believe that the side effect profile of CLS-1003 will be similar to that of current intravitreal anti-VEGF

 
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treatments alone, as SCS injections of CLS-TA should allow the corticosteroid to remain substantially localized in the retina and choroid without introducing the side effects that are commonly observed with other routes of administration of corticosteroids.
CLS-1002 Program Targeting Wet Age-Related Macular Degeneration
Under our CLS-1002 program for the treatment of wet AMD, we plan to develop a proprietary suspension formulation of axitinib, a single molecule with dual anti-VEGF and anti-PDGF activity, for injection into the SCS with our SCS Microinjector. Axitinib, also known by its brand name Inlyta, is currently marketed by Pfizer and is approved by the FDA for the treatment of advanced renal cell carcinoma, but not for any ophthalmology indications. Wet AMD is a condition involving the abnormal formation and growth of new blood vessels in the choroid, their intrusion into the outer layers of the retina and the leakage of blood and fluid into the retina. The current standard of care for the treatment of wet AMD is intravitreal injection of anti-VEGF drugs as a standalone therapy, as often as seven times per year. Additionally, anti-PDGF molecules, when injected into the vitreous immediately following an anti-VEGF intravitreal injection, have shown clinical promise from Phase 1 and Phase 2 trials conducted by others in improving upon the visual acuity outcomes of the anti-VEGF agent alone. Because wet AMD manifests in the retina and choroid, we believe that SCS injection of drug more directly to the retina and choroid may result in faster onset of therapeutic effect as compared to intravitreal injection. We believe that SCS injection also has the potential to access the new blood vessels in the choroid before they intrude into the retina, which could reduce the necessary frequency of treatment, and reduce or prevent damage to the retina. We plan to file an IND for CLS-1002 in the second half of 2016 and subsequently commence a Phase 1/2 clinical trial.
Future Potential Product Candidates
We believe that our SCS-focused approach has the potential for application in treating other back of the eye diseases, and we intend to develop additional product candidates for SCS injection based on the results of our current and planned clinical trials. In addition to uveitis, RVO and wet AMD, there are a number of ophthalmic conditions affecting the retina and choroid with unmet medical need for which SCS injection of therapy may be beneficial. These indications include DME, a common ocular complication of diabetes that results in swelling in the macula and is the primary cause of vision loss associated with diabetes, polypoidal choroidal vasculopathy, or PCV, a disorder resulting from the abnormal growth of new blood vessels in the choroid adjacent to the macula, and geographic atrophy, another advanced form of AMD.
Risks Associated with Our Business
Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common stock. These risks are discussed more fully in the “Risk Factors” section of this prospectus. These risks include the following:
 
 	•	 	We have incurred significant losses since our inception, expect to incur losses over the next several years and may never achieve or maintain profitability.	
 
 	•	 	Except for our most advanced programs, CLS-1001 and CLS-1003, all of our product candidates are in preclinical development.	

 
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 	•	 	Clinical drug development involves a lengthy and expensive process, with an uncertain outcome, and we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.	
 
 	•	 	We rely, and expect to continue to rely, on third parties to conduct our clinical trials for our product candidates, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.	
 
 	•	 	If the FDA does not conclude that our product candidates satisfy the requirements for the Section 505(b)(2) NDA regulatory approval pathway, or if the requirements under Section 505(b)(2) are not as we expect, the approval pathway for our product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.	
 
 	•	 	Our research and development efforts are focused on the development of product candidates for SCS injection, which is a novel approach and may fail to achieve and sustain market acceptance.	
 
 	•	 	If we are unable to establish sales, marketing and distribution capabilities for our product candidates, we may not be successful in commercializing those product candidates, if and when they are approved.	
 
 	•	 	If we are unable to obtain and maintain patent protection for our technology and product candidates, or if our licensors are unable to obtain and maintain patent protection for the technology or product candidates that we license from them, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired.	
 
 	•	 	An active trading market for our common stock may not develop and you may not be able to resell your shares of our common stock at or above the initial offering price, if at all.	
 
 	•	 	We are an “emerging growth company” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.	
Corporate Information
We were incorporated under the laws of the State of Delaware in May 2011. Our principal executive offices are located at 1220 Old Alpharetta Road, Suite 300, Alpharetta, Georgia 30005 and our telephone number is (678) 270-3631. Our website address is  www.clearsidebio.com . The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
We have proprietary rights to a number of trademarks used in this prospectus which are important to our business, including Clearside ® , SCS and the Clearside logo. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the  ®  and TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. All other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.

 
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Implications of Being an Emerging Growth Company
As a company with less than $1 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from some of the reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:
 
 	•	 	being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;	
 
 	•	 	not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;	
 
 	•	 	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;	
 
 	•	 	reduced disclosure obligations regarding executive compensation; and	
 
 	•	 	not being required to hold a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved.	
We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th and (2) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some, but not all, of the available exemptions. We have taken advantage of some reduced reporting burdens in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.
In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

 
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THE OFFERING
 
Common stock offered by us	             shares	
 
Common stock to be outstanding immediately after this offering	             shares	
 
Option to purchase additional shares	We have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to              additional shares of our common stock.	
 
Use of proceeds	We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $         million, assuming the shares are offered at $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus.	
 
 	We anticipate that the majority of the net proceeds from this offering will be used to fund our pivotal Phase 3 clinical trial of CLS-1001, our Phase 2 clinical trial of CLS-1003 and our preparation of an IND for, and subsequent Phase 1/2 clinical trial of, CLS-1002. The remaining proceeds will be used for the continued research and development of our earlier-stage programs, and for working capital and general corporate purposes. See “Use of Proceeds” for additional information.	
 
Risk factors	You should read the “Risk Factors” section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.	
 
Proposed NASDAQ Global Market symbol	CLSD	
The number of shares of our common stock that will be outstanding after this offering is based on 26,952,509 shares of common stock outstanding as of December 31, 2015, after giving effect to the automatic conversion of 20,839,633 shares of our convertible preferred stock outstanding as of December 31, 2015 and the exercise of warrants to purchase an aggregate of 248,175 shares of common stock that would otherwise expire upon the closing of this offering, and excludes:
 
 	•	 	2,775,680 shares of our common stock issuable upon the exercise of stock options outstanding under our 2011 stock incentive plan as of December 31, 2015, at a weighted average exercise price of $1.09 per share;	
 
 	•	 	73,693 shares of our common stock issuable upon the exercise of warrants at a weighted average exercise price of $3.12 per share, which will remain outstanding following the closing of this offering; and	
 
 	•	 	             shares of our common stock reserved for future issuance under our equity incentive plans following this offering.	

 
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Except as otherwise indicated herein, all information in this prospectus, including the number of shares that will be outstanding after this offering, assumes or gives effect to:
 
 	•	 	        -for-         reverse stock split of our common stock expected to be completed prior to the completion of this offering;	
 
 	•	 	the conversion of all outstanding shares of our convertible preferred stock into an aggregate of 20,839,633 shares of our common stock, which will occur automatically upon the closing of this offering;	
 
 	•	 	the exercise of all outstanding warrants to purchase shares of common stock that will otherwise expire upon the closing of this offering for an aggregate of 248,175 shares of common stock;	
 
 	•	 	the conversion of outstanding warrants to purchase shares of convertible preferred stock into warrants to purchase an aggregate of 73,693 shares of common stock upon the closing of this offering; and	
 
 	•	 	no exercise of the underwriters’ option to purchase additional shares of common stock.	

 
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Summary Financial Data
In the tables below, we provide you with our summary financial data for the periods indicated. We have derived the following summary of our statement of operations data for the years ended December 31, 2013 and 2014 from our audited financial statements appearing elsewhere in this prospectus. We have derived the following summary of our statement of operations data for the nine months ended September 30, 2014 and 2015 and our balance sheet data as of September 30, 2015 from our unaudited interim financial statements appearing elsewhere in this prospectus.
The financial data for the nine months ended September 30, 2014 and 2015 and as of September 30, 2015 includes, in the opinion of our management, all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial position and results of operations for these periods. Our historical results are not necessarily indicative of the results to be expected in the future, and our operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2015 or any other future period.
You should read this summary financial data together with the historical financial statements and related notes to those statements, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this prospectus.

 	  	Year Ended
December 31,	 	 	Nine Months
Ended September 30,	 	
 	  	2013	 	 	2014	 	 	2014	 	 	2015	 	
 	  	(in thousands, except share and per share data)	 	
Statement of Operations Data:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	  	$	5,045	  	 	$	6,692	  	 	$	4,776	  	 	$	6,964	  	
General and administrative	  	 	2,193	  	 	 	3,131	  	 	 	2,398	  	 	 	5,337	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	7,238	  	 	 	9,823	  	 	 	7,174	  	 	 	12,301	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from operations	  	 	(7,238	) 	 	 	(9,823	) 	 	 	(7,174	) 	 	 	(12,301	) 	
Other income (expense):	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	  	 	(23	) 	 	 	(371	) 	 	 	(353	) 	 	 	(174	) 	
Interest income	  	 	7	  	 	 	5	  	 	 	1	  	 	 	6	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other expense	  	 	(16	) 	 	 	(366	) 	 	 	(352	) 	 	 	(168	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	  	$	(7,254	) 	 	$	(10,189	) 	 	$	(7,526	) 	 	$	(12,469	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share of common stock — basic and diluted	  	$	(2.45	) 	 	$	(2.66	) 	 	$	(2.00	) 	 	$	(2.54	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding — basic and diluted	  	 	2,956,285	  	 	 	3,825,052	  	 	 	3,769,091	  	 	 	4,910,055	  	
Pro forma net loss per share — basic and diluted	  	 	 	 	 	$	(0.53	) 	 	 	 	 	 	$	(0.61	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pro forma weighted average shares outstanding — basic and diluted	  	 	 	 	 	 	19,390,011	  	 	 	 	 	 	 	20,475,014	  	
The following table presents our summary balance sheet data as of September 30, 2015:
 
 	•	 	on an actual basis;	
 
 	•	 	on a pro forma basis to give effect to:	
 
 	•	 	the conversion of all outstanding shares of our convertible preferred stock, including the 5,274,674 shares of Series C preferred stock issued in November and December 2015, into an aggregate of	

 
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 	20,839,633 shares of our common stock, which will occur automatically upon the closing of this offering; and	
 
 	•	 	the exercise of all outstanding warrants to purchase shares of common stock that will otherwise expire upon the closing of this offering for an aggregate of 248,175 shares of common stock; and	
 
 	•	 	on a pro forma as adjusted basis to give further effect to our sale of             shares of common stock in this offering at an assumed initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.	

 	  	As of September 30, 2015	 	
 	  	Actual	 	 	Pro forma	 	  	Pro forma
as adjusted	 	
 	  	(in thousands)	 	
Balance Sheet Data:	  	 	 	 	 	 	 	 	  	 	 	 	
Cash and cash equivalents	  	$	4,186	  	 	$	            	  	  	$	            	  	
Total assets	  	 	4,516	  	 	 	 	 	  	 	 	 	
Total liabilities	  	 	8,848	  	 	 	 	 	  	 	 	 	
Total convertible preferred stock	  	 	27,228	  	 	 	 	 	  	 	 	 	
Total stockholders’ equity (deficit)	  	 	(31,560	) 	 	 	 	 	  	 	 	 	
The pro forma as adjusted information presented in the summary balance sheet data is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease each of cash and cash equivalents, total assets and total stockholders’ equity on a pro forma as adjusted basis by $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Similarly, each increase or decrease of 1.0 million shares offered by us at the assumed initial public offering price would increase or decrease each of cash and cash equivalents, total assets and total stockholders’ equity on a pro forma as adjusted basis by $         million.

 
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RISK FACTORS
Investing in our common stock involves a high degree of risk. Before you invest in our common stock, you should carefully consider the following risks, as well as general economic and business risks, and all of the other information contained in this prospectus. Any of the following risks could have a material adverse effect on our business, operating results and financial condition and cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment. When determining whether to invest, you should also refer to the other information contained in this prospectus, including our financial statements and the related notes thereto.
Risks Related to Our Financial Position and Capital Needs
We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability.
Since our inception through September 30, 2015, we have incurred net losses of $34.2 million. We incurred net losses of $7.3 million, $10.2 million and $12.5 million for the years ended December 31, 2013 and 2014 and the nine months ended September 30, 2015, respectively. We financed our operations through September 30, 2015 with approximately $33.9 million of net cash proceeds raised in private placements of convertible preferred stock and convertible promissory notes, as well as a long-term loan agreement. In November and December 2015, we raised an additional $20.0 million from the sale of Series C convertible preferred stock.
We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and clinical trials. We are still in the early stages of development of our product candidates, and we have not completed development of any drugs. We expect to continue to incur significant expenses and operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially as we:
 
 	•	 	complete our ongoing pivotal Phase 3 clinical trial in our CLS-1001 program and our ongoing Phase 2 clinical trial in our CLS-1003 program, initiate clinical trials in our CLS-1002 program and conduct additional clinical trials in these programs;	
 
 	•	 	continue the research and development of our other product candidates;	
 
 	•	 	seek to discover and develop additional product candidates;	
 
 	•	 	seek regulatory approvals for any product candidates that successfully complete clinical trials;	
 
 	•	 	ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drugs for which we may obtain regulatory approval;	
 
 	•	 	maintain, expand and protect our intellectual property portfolio;	
 
 	•	 	hire additional clinical, manufacturing and scientific personnel;	
 
 	•	 	add operational, financial and management information systems and personnel, including personnel to support our drug development and planned future commercialization efforts; and	
 
 	•	 	incur additional legal, accounting and other expenses in operating as a public company.	
 
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To become and remain profitable, we must succeed in developing and eventually commercializing drugs that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical testing and clinical trials of our product candidates, obtaining regulatory approval and manufacturing, marketing and selling any products for which we may obtain regulatory approval, as well as discovering and developing additional product candidates. We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.
Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of expenses or when, or if, we will be able to achieve profitability. If we are required by regulatory authorities to perform studies in addition to those currently expected, or if there are any delays in the initiation and completion of our clinical trials or the development of any of our product candidates, our expenses could increase.
Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress our value and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product offerings or continue our operations. A decline in our value could also cause you to lose all or part of your investment.
We will need substantial additional funding to meet our financial obligations and to pursue our business objectives. If we are unable to raise capital when needed, we could be forced to delay, reduce or altogether cease our drug development programs or commercialization efforts.
We believe that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. However, we will need to obtain substantial additional funding in connection with our continuing operations. Our future capital requirements will depend on many factors, including:
 
 	•	 	the progress and results of our ongoing Phase 3 clinical trial for CLS-1001, our ongoing Phase 2 clinical trial for CLS-1003, our planned Phase 1/2 clinical trial for CLS-1002 and our future clinical trials for these programs;	
 
 	•	 	the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates;	
 
 	•	 	the number and development requirements of other product candidates that we may pursue;	
 
 	•	 	the costs, timing and outcome of regulatory review of our product candidates;	
 
 	•	 	the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;	
 
 	•	 	the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;	
 
 	•	 	the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and	
 
 	•	 	the extent to which we acquire or in-license other product candidates and technologies.	
 
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Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of drugs that we do not expect to be commercially available for several years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs or future commercialization efforts.
Raising additional capital may cause dilution to our stockholders, including purchasers of common stock in this offering, restrict our operations or require us to relinquish rights to our technologies or product candidates.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings and potential collaboration, license and development agreements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Our operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
We commenced active operations in 2012, and our operations to date have been largely focused on raising capital, identifying potential product candidates, broadening our expertise in the development of our product candidates, including our SCS Microinjector, and undertaking preclinical studies and conducting early clinical trials. We have not yet demonstrated an ability to successfully complete later-stage clinical trials, obtain regulatory approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.
We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives. We will need to transition at some point from a
 
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company with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.
We expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.
We may not be able to generate sufficient cash to service our indebtedness, which currently consists of our loan from Silicon Valley Bank.
We have entered into a loan and security agreement with Silicon Valley Bank, or SVB, pursuant to which we have borrowed an aggregate of $6.0 million. Our obligations under the loan agreement are secured by substantially all of our assets except for our intellectual property, and we may not encumber our intellectual property without SVB’s prior written consent. The loan agreement with SVB contains negative covenants restricting our activities, including limitations on dispositions, mergers or acquisitions, incurring indebtedness or liens, paying dividends or making investments and other specified business transactions. Our obligations under the loan agreement are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in our business, operations or financial or other condition. We were in compliance with these covenants as of September 30, 2015. We may also enter into other debt agreements in the future which may contain similar or more restrictive terms.
Our ability to make scheduled monthly payments or to refinance our debt obligations depends on numerous factors, including the amount of our cash reserves and our actual and projected financial and operating performance. These amounts and our performance are subject to certain financial and business factors, as well as prevailing economic and competitive conditions, some of which may be beyond our control. We cannot assure you that we will maintain a level of cash reserves or cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our existing or future indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, or that these actions would permit us to meet our scheduled debt service obligations. Failure to comply with the conditions of the loan agreement could result in an event of default, which could result in an acceleration of amounts due under the loan agreement. We may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and SVB could seek to enforce security interests in the collateral securing such indebtedness, which would harm our business.
Risks Related to the Development of Our Product Candidates
Our research and development efforts are focused on the development of product candidates for SCS injection, which is a novel approach and may fail to achieve and sustain market acceptance.
Injecting drugs into the SCS is a novel approach for ophthalmic therapies, and there is no guarantee this approach will be accepted by physicians, patients or third-party payors. We believe we are the first and only company developing drugs specifically for SCS injection. The scientific evidence to support the feasibility of developing drugs based on this approach is both preliminary and limited. Although our clinical
trial results suggest that SCS injection of drugs, such as CLS-1001, may be effective at treating back of the eye diseases, to date no company has developed a drug for administration through the SCS that has received marketing approval.
 
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Additionally, we have limited clinical experience in SCS drug injection. Therefore, we cannot guarantee that SCS injection of drugs will prove in our ongoing and future clinical trials to be a safe or effective approach for treating back of the eye diseases in humans.
Even if we are able to achieve marketing approval for one of our product candidates, the novelty of SCS injection may make it difficult to demonstrate to physicians and third-party payors that SCS injection of our drugs is an appropriate approach for treating diseases such as non-infectious uveitis, RVO and wet AMD and provides advantages compared to the current standard of care. Further, if we are not successful in conveying to physicians, patients and third-party payors that the administration of our drug candidates with our proprietary SCS Microinjector improves patient outcomes, we may experience reluctance, or refusal, on the part of physicians to order and use, and third-party payors to cover and provide adequate payment for, our product candidates. Additionally, in some cases, our product candidates will complement the current standard of care, rather than serve as a replacement for the current standard of care. Therefore, we may encounter significant difficulty in gaining broad market acceptance by physicians, third-party payors and potential patients using CLS-1001, CLS-1003 and our other product candidates.
Except for our most advanced programs, CLS-1001 and CLS-1003, all of our product candidates are in preclinical development. If we are unable to commercialize our product candidates or if we experience significant delays in doing so, our business may be harmed.
For our most advanced clinical development program, CLS-1001 for the treatment of macular edema associated with non-infectious uveitis, we have completed a Phase 1/2 clinical trial, in which we dosed eight patients with a commercially available formulation of the active ingredient in CLS-TA, and a Phase 2 trial, in which we administered CLS-TA to 22 patients with our SCS Microinjector. For our second clinical development program, CLS-1003 for the treatment of macular edema associated with RVO, we have completed enrollment in our first clinical trial, a Phase 2 trial, in which we administered CLS-TA to 46 patients. Given our limited human experience with our clinical programs, the successful development of any of our product candidates is extremely uncertain, and we cannot guarantee that we will be successful in developing any of our product candidates.
Further, the FDA may conclude that our clinical trials are not sufficient to support approval of our product candidates. For example, we have initiated our clinical development program for CLS-1003 with a Phase 2 clinical trial without having conducted a separate Phase 1 clinical trial for this program. We believe that we will be able to rely on our completed toxicology study of CLS-TA administered in combination with Eylea in rabbits, the preclinical studies and safety data generated by our completed clinical trials for CLS-1001 and other supportive literature for a potential NDA submission for CLS-1003, which has the same active pharmaceutical ingredient, CLS-TA, as CLS-1001. However, we have not yet confirmed this approach with the FDA, and the FDA may require that we conduct additional safety studies or trials. For our CLS-1002 program, the only clinical trial we have conducted to date is the Phase 1 exploratory trial of Avastin in Mexico. Although the exploratory trial was conducted in accordance with good clinical practices and had approval and oversight of the local institutional review board, the FDA could conclude that we may not rely on the results of the trial conducted in Mexico as part of our regulatory application seeking marketing approval for axitinib.
We have not completed the development of any product candidates, we currently generate no revenues from sales of any products and we may never be able to develop a marketable product. We have invested substantially all of our efforts and financial resources in the development of our proprietary SCS
 
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Microinjector for SCS injection of drugs and the identification of potential drug candidates using that technology. Our ability to generate revenue from our product candidates, which we do not expect will occur for several years, if ever, will depend heavily on their successful development and eventual commercialization. The success of those product candidates will depend on several factors, including the following:
 
 	•	 	successful completion of preclinical studies and requisite clinical trials;	
 
 	•	 	receipt of marketing approvals from applicable regulatory authorities;	
 
 	•	 	obtaining marketing approvals with labeling for sufficiently broad patient populations and indications, without unduly restrictive distribution limitations or safety warnings;	
 
 	•	 	obtaining and maintaining patent, trademark and trade secret protection and regulatory exclusivity for our product candidates;	
 
 	•	 	making arrangements with third-party manufacturers for, or establishing, commercial manufacturing capabilities;	
 
 	•	 	launching commercial sales of products, if and when approved, whether alone or in collaboration with others;	
 
 	•	 	successful training of physicians in the proper use of our SCS Microinjector;	
 
 	•	 	acceptance of the therapies and of the concept of SCS injection of drugs, if and when approved, by physicians, patients and third-party payors;	
 
 	•	 	competing effectively with other therapies;	
 
 	•	 	obtaining and maintaining healthcare coverage and adequate reimbursement;	
 
 	•	 	protecting our rights in our intellectual property portfolio; and	
 
 	•	 	maintaining a continued acceptable safety profile of the drugs and our SCS Microinjector following approval.	
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business.
The administration of CLS-1003 as a therapy together with an anti-VEGF drug for the treatment of macular edema associated with RVO is a novel approach and may fail to be successful.
We are developing our second drug program, CLS-1003, as a therapy to complement the current standard of care in the treatment of patients experiencing macular edema associated with RVO, with the goal of reducing current required monthly anti-vascular endothelial growth factor, or anti-VEGF, injections to quarterly injections. The scientific evidence to support the potential efficacy of this treatment approach is limited and based on third party clinical trials studying intravitreal injections of steroids in patients with RVO, which, although effective in reducing edema, has been associated with side effects. While our clinical trial experience involving the SCS injection of steroids suggests that these adverse side effects may be avoided using SCS injection, to date no other company has explored this specific concomitant treatment approach in clinical trials or preclinical studies.
 
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Even if we are able to successfully develop, and achieve marketing approval of, CLS-1003, it may be difficult to demonstrate to physicians and third-party payors that the administration of CLS-1003 concomitantly with anti-VEGF drugs, and the reduction in frequency of anti-VEGF treatments, is the appropriate approach for treating RVO and provides advantages over the current standard of care. Further, if we are not successful in conveying to physicians, patients and third-party payors that the administration of CLS-1003 concomitantly with anti-VEGF drugs improves patient outcomes, we may experience reluctance, or refusal, on the part of physicians to order and use, and third-party payors to pay for, CLS-1003. Therefore, we may encounter significant difficulty in gaining broad market acceptance by physicians, third-party payors and potential patients using CLS-1003.
We have recently revised the design of our SCS Microinjector. We do not yet have significant experience with our SCS Microinjector in humans.
In our preclinical studies and Phase 1/2 clinical trials, we used several prototype iterations of the SCS Microinjector. We have since finalized the commercial design, which we have been using in our CLS-1001 and CLS-1003 Phase 2 clinical trials and plan to use in our Phase 3 clinical trial of CLS-1001. Accordingly, in addition to the risks associated with drug development, we are also subject to the risks associated with developing the microinjector. For example, in our Phase 1/2 clinical trial, the needle of our earlier microinjector was not long enough to penetrate the scleras of two patients screened for the trial. If we encounter similar limitations with this design, or if it does not function properly in any way, we could be required to expend significant additional time and resources to redesign our microinjector, which would delay or compromise our drug development efforts. Additionally, our ability to successfully commercialize our product candidates will depend on retinal specialists being comfortable with the design and functionality of our microinjector. If, for any reason, retinal specialists were unsatisfied with the form or function of our microinjector, it would harm the market acceptance and potential commercial success of our product candidates, if any, that receive marketing approval.
We may not be successful in our efforts to build a pipeline of product candidates.
A key element of our strategy is to build a pipeline of product candidates for SCS injection and to progress these product candidates through clinical development for the treatment of a variety of diseases of the back of the eye. We may not be able to develop product candidates that are safe and effective. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for clinical development, including as a result of being shown to have significant side effects or other characteristics that indicate that they are unlikely to be drugs that will receive marketing approval or achieve market acceptance. If we do not successfully develop and commercialize product candidates based upon our approach, we will not be able to obtain product revenue in future periods, which could significantly harm our financial position and adversely affect our stock price.
Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
The risk of failure for our product candidates is high. It is impossible to predict when or if any of our product candidates will prove effective or safe in humans and will receive regulatory approval. Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and
 
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efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:
 
 	•	 	regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;	
 
 	•	 	we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;	
 
 	•	 	clinical trials of our product candidates may produce negative or inconclusive results, including failure to demonstrate statistical significance, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;	
 
 	•	 	the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;	
 
 	•	 	our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;	
 
 	•	 	regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;	
 
 	•	 	the cost of clinical trials of our product candidates may be greater than we anticipate;	
 
 	•	 	the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and	
 
 	•	 	our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials.	
If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:
 
 	•	 	be delayed in obtaining marketing approval for our product candidates;	
 
 	•	 	not obtain marketing approval at all;	
 
 	•	 	obtain approval for indications or patient populations that are not as broad as intended or desired;	
 
 	•	 	obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;	
 
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 	•	 	be subject to additional post-marketing testing requirements; or	
 
 	•	 	have the product removed from the market after obtaining marketing approval.	
Our drug development costs may also increase if we experience delays in testing or marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.
If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.
We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States. For example, we began enrolling patients in our Phase 1/2 uveitis trial in July 2013 and intended to enroll approximately 10 patients in the trial, but we completed enrollment after dosing the eighth patient in July 2014. We have limited experience enrolling patients in our clinical trials, and cannot predict how successful we will be at enrolling patients in future clinical trials. If we are not successful at enrolling patients in one clinical trial, it may affect when we are able to initiate our next clinical trial, which could result in significant delays in our efforts to pursue regulatory approval of and commercialize our product candidates. In addition, some of our competitors have ongoing clinical trials to treat the same indications as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors. Patient enrollment is affected by other factors including:
 
 	•	 	the severity of the disease under investigation;	
 
 	•	 	the eligibility criteria for the study in question;	
 
 	•	 	the perceived risks and benefits of the product candidate under study;	
 
 	•	 	the availability of drugs approved to treat the diseases under study;	
 
 	•	 	the efforts to facilitate timely enrollment in clinical trials;	
 
 	•	 	the patient referral practices of physicians;	
 
 	•	 	the ability to monitor patients adequately during and after treatment; and	
 
 	•	 	the proximity and availability of clinical trial sites for prospective patients.	
Our inability to enroll a sufficient number of patients for clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether. Enrollment delays in these clinical trials may result in increased development costs for our product candidates, which could cause our value to decline and limit our ability to obtain additional financing.
If serious adverse or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit our development of some of our product candidates.
If our product candidates are associated with side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their development or limit development to more narrow uses or
 
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subpopulations in which the side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many product candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development of the product candidate.
We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and management resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
Risks Related to Our Dependence on Third Parties
We expect to rely on third parties to conduct our clinical trials for our product candidates, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.
We have engaged contract research organizations, or CROs, for our ongoing and planned clinical trials. We also expect to engage CROs for any of our other product candidates that may progress to clinical development. We expect to rely on CROs, as well as other third parties, such as clinical data management organizations, medical institutions and clinical investigators, to conduct those clinical trials. Agreements with such third parties might terminate for a variety of reasons, including a failure to perform by the third parties. If we need to enter into alternative arrangements, that would delay our drug development activities.
Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with regulatory standards, commonly referred to as good clinical practices, or GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so can result in FDA refusal to approve applications based on the clinical data, fines, adverse publicity and civil and criminal sanctions.
Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
 
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In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection by the FDA of any NDA we submit. Any such delay or rejection could prevent us from commercializing CLS-1001, CLS-1003 or our other future product candidates.
We also expect to rely on other third parties to store and distribute product supplies for our clinical trials. Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, producing additional losses and depriving us of potential product revenue.
We contract with third parties for the manufacture of CLS-TA and our SCS Microinjector for preclinical and clinical testing and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of CLS-TA and our SCS Microinjector or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
We do not have any manufacturing facilities or personnel. We currently procure the active pharmaceutical ingredient in CLS-TA on a purchase order basis from a third-party manufacturer, and we anticipate entering into commercial supply agreements with this or another manufacturer at a later date. In addition, we obtain each of the components of our SCS Microinjector on a purchase order basis from third-party suppliers. Some of our current suppliers are based outside of the United States. We expect to continue to rely on third parties as we proceed with preclinical and clinical testing using CLS-TA with our SCS Microinjector, as well as for commercial manufacture, if any of our product candidates receives marketing approval. This reliance on third parties increases the risk that we will not have sufficient quantities of CLS-TA and our SCS Microinjector or such quantities at an acceptable cost or quality, which could delay, prevent or impair our ability to timely conduct our clinical trials or our other development or commercialization efforts.
We also expect to rely on third-party manufacturers or collaborators for the manufacture of commercial supply of any other product candidates for which we obtain marketing approval. We may be unable to establish any agreements with third-party manufacturers or collaborators or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers or collaborators, reliance on third-party manufacturers or collaborators entails additional risks, including:
 
 	•	 	reliance on the third party for regulatory compliance and quality assurance;	
 
 	•	 	the possible breach of the manufacturing agreement by the third party;	
 
 	•	 	the possible misappropriation of our proprietary information, including our trade secrets and know-how; and	
 
 	•	 	the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.	
Our product candidates, including our proprietary drug formulations packaged together with our SCS Microinjector, are drug/device combination products that will be regulated under the drug regulations of the
 
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Federal Food, Drug, and Cosmetic Act, or FDCA, based on their primary mode of action as drugs. Third-party manufacturers may not be able to comply with current good manufacturing practices, or cGMP, regulations, regulations applicable to drug/device combination products, including applicable provisions of the FDA’s drug cGMP regulations, device cGMP requirements embodied in the Quality System Regulation, or QSR, or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates, operating restrictions and criminal prosecutions, any of which could significantly affect supplies of our product candidates.
Our product candidates that we may develop may compete with other drugs and devices for access to manufacturing facilities. There are a limited number of manufacturers that operate under the drug and device cGMP regulations applicable to our product candidates and that might be capable of manufacturing for us. Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. We do not currently have arrangements in place for redundant supply or a second source for bulk drug substance or our SCS Microinjector. If our current contract manufacturers cannot perform as agreed, we may be required to replace such manufacturers. Although we believe that there are several potential alternative manufacturers who could manufacture our drugs and the components of our SCS Microinjector, we may incur added costs and delays in identifying and qualifying any such replacement. For example, the FDA could require supplemental data if a new supplier is relied upon for the active pharmaceutical ingredient used in our products. Any interruption or delay in the supply of components and materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to cancel orders.
Our current and anticipated future dependence upon others for the manufacture of our product candidates may compromise our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.
We may seek collaborations with third parties for the development and commercialization of our product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates.
We may seek third-party collaborators for the development and commercialization of our product candidates, particularly for the commercialization of any of our product candidates that are approved for marketing outside the United States or for product candidates targeted at larger indications in the United States such as wet AMD and DME. Our likely collaborators for any collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. We have entered into a collaboration with Santen to develop compounds that are designed to treat macular edema and neovascularization associated with wet AMD, RVO and DME, as well as elevated IOP associated with glaucoma. We have also entered into an agreement with Spark to investigate the use of our SCS Microinjector to administer gene therapy to the back of the eye. Under our collaborations with Santen and Spark, and if we enter into any future collaboration arrangements with any third parties, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our product candidates. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.
 
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Collaborations involving our product candidates would pose the following risks to us:
 
 	•	 	collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;	
 
 	•	 	collaborators may not perform their obligations as expected;	
 
 	•	 	collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;	
 
 	•	 	collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;	
 
 	•	 	collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized on terms that are more economically attractive than ours;	
 
 	•	 	product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;	
 
 	•	 	a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such products;	
 
 	•	 	disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;	
 
 	•	 	collaborators may not properly maintain or defend our or their intellectual property rights or may use our or their proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us to potential litigation;	
 
 	•	 	collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and	
 
 	•	 	collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.	
Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our drug development or commercialization program could be delayed, diminished or terminated.
 
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If we are not able to establish collaborations, we may have to alter some of our future development and commercialization plans.
Our drug development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses. For some of our product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies, such as our current collaborations with Santen and Spark, for the future development and potential commercialization of those product candidates.
We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate. We may also be restricted under existing license agreements from entering into agreements on certain terms with potential collaborators. Collaborations are complex and time-consuming to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.
We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of such product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.
Risks Related to the Commercialization of Our Product Candidates
If we are unable to establish sales, marketing and distribution capabilities for our product candidates, we may not be successful in commercializing those product candidates, if and when they are approved.
We do not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of pharmaceutical drugs or medical devices. To achieve commercial success for any product candidate for which we may obtain marketing approval in the United States, we will need to establish a sales and marketing organization. In the future, we expect to build a focused sales and marketing infrastructure to target the approximately 1,700 retinal specialists in the United States for any of our product candidates that receive marketing approval. There are risks involved with establishing our own sales, marketing and distribution capabilities. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have
 
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prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
Factors that may inhibit our efforts to commercialize our drugs on our own include:
 
 	•	 	our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;	
 
 	•	 	the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future drugs;	
 
 	•	 	the lack of complementary drugs to be offered by sales personnel, which may put us at a competitive disadvantage compared to companies with more extensive product lines; and	
 
 	•	 	unforeseen costs and expenses associated with creating an independent sales and marketing organization.	
If we are unable to establish our own sales, marketing and distribution capabilities and, instead, enter into arrangements with third parties to perform these services, our product revenues and our profitability, if any, are likely to be lower than if we were to sell, market and distribute any product candidates that we develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.
Even if any of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
If any of our product candidates receives marketing approval, it may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community. SCS injection of drugs is a novel approach and physicians, patients or third-party payors may be hesitant to deviate from or change the current standard of care. If our product candidates do not achieve an adequate level of market acceptance, we may not generate significant product revenue and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:
 
 	•	 	the efficacy and potential advantages compared to alternative treatments;	
 
 	•	 	our ability to offer our drugs for sale at competitive prices;	
 
 	•	 	the convenience and ease of administration compared to alternative treatments;	
 
 	•	 	the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;	
 
 	•	 	the willingness of the healthcare community and patients to adopt new technologies and our novel approach of SCS injection of drugs;	
 
 	•	 	the willingness of retinal specialists to expend the time necessary to receive proper training on injecting drugs into the SCS using our SCS Microinjector;	
 
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 	•	 	the ability to manufacture our product in sufficient quantities and yields;	
 
 	•	 	the strength of marketing and distribution support;	
 
 	•	 	the availability of third-party coverage and adequate reimbursement;	
 
 	•	 	the prevalence and severity of any side effects; and	
 
 	•	 	any restrictions on the use of our drugs together with other medications.	
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
The development and commercialization of new products is highly competitive. We face competition with respect to our current product candidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide.
With respect to CLS-TA, we face competition from other commercially available forms of TA and other injectable and implantable corticosteroids. Bristol-Myers Squibb markets TA under the brand name Kenalog. Kenalog is indicated only for intramuscular or intraarticular injection, although it is commonly used off-label for intraocular inflammation. There are also a number of generic equivalents of Kenalog. In addition, Alcon’s injectable TA, Triesence, is approved in the United States for the treatment of uveitis and other inflammatory conditions unresponsive to topical corticosteroids, although it is not indicated for the treatment of macular edema associated with uveitis or RVO or for the treatment of DME. Ozurdex, marketed by Allergan, is a bioerodable extended release implant that delivers the corticosteroid dexamethasone and is approved for the treatment of non-infectious uveitis affecting the back of the eye and RVO in both the United States and in the European Union, and recently received approval from the FDA to treat DME in adult patients who have an artificial lens implant or who are scheduled for cataract surgery. Bausch + Lomb markets Retisert, an intravitreal implant of the corticosteroid fluocinolone acetonide, for the treatment of non-infectious uveitis. Iluvien, marketed by Alimera Sciences, is a fluocinolone acetonide implant and is approved for the treatment of DME in both the United States and the European Union.
Our product candidates will also compete with anti-VEGF drugs, which are the current standard of care for RVO and wet AMD and have also been approved for DME. Genentech’s products Lucentis and Avastin are both anti-VEGF antibodies. Lucentis is currently approved in the United States and European Union for the treatment of wet AMD, macular edema associated with RVO and DME. Avastin is an anti-VEGF drug used by retinal specialists off-label in both the United States and in certain countries of the European Union in the treatment of numerous retinal diseases, but it is not indicated for ophthalmic use. Regeneron’s anti-VEGF product, Eylea, is approved for the treatment of wet AMD, macular edema associated with RVO and DME in the United States. In the European Union, Eylea is approved for the treatment of wet AMD, DME and macular edema secondary to RVO.
Ophthotech’s drug candidate, Fovista, an anti-PDGF agent, is in Phase 3 clinical trials as a potential treatment for wet AMD to be administered together with an anti-VEGF drug. We are also aware of several other drug candidates in earlier stages of development as potential treatments for the diseases that we intend to target.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any product candidates that we may develop. Our competitors also
 
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may obtain FDA or other regulatory approval for their product candidates more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic drugs. For some of the indications that we are pursuing, drugs used off-label, such as Kenalog and Avastin, serve as a cheaper alternatives to our product candidates. Their lower prices could result in significant pricing pressure, even if our product candidates are otherwise viewed as a preferable therapy. Additional drugs may become available on a generic basis over the coming years. If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic drugs.
Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
Even if we are able to commercialize any product candidates, our product candidates may be subject to unfavorable pricing regulations, third-party coverage and reimbursement policies or healthcare reform initiatives.
Our ability to commercialize any product candidates successfully will depend, in part, on the extent to which coverage and adequate reimbursement for our product candidates will be available from government payor programs at the federal and state levels, including Medicare and Medicaid, private health insurers, managed care plans and other third-party payors. Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which medical products they will pay for and establish reimbursement levels. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drugs and products. Coverage and reimbursement may not be available for any product that we commercialize and, even if these are available, the level of reimbursement may not be satisfactory. Inadequate reimbursement levels may adversely affect the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining and maintaining adequate reimbursement for our drugs may be difficult. We may be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement compared to other therapies. If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidates for which marketing approval is obtained.
A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products. By way of example, the Medicare Prescription Drug Improvement and Modernization Act of 2003, or MMA, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for outpatient drug purchases by those covered by Medicare under a new Part D and introduced a new reimbursement methodology based on average sales prices for Medicare Part B physician-administered drugs, including drugs currently on the
 
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market used by physicians to treat the clinical indications for which we are currently seeking FDA approval and likely our product candidates, if approved. As a result of this legislation and the expansion of federal coverage of drug products, there is additional pressure to contain and reduce costs. While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates, and any reduction in reimbursement that results from the MMA may result in a similar reduction in payments from private payors. These cost reduction initiatives and other provisions of the MMA could decrease the coverage and reimbursement that we receive for any approved products, and could seriously harm our business.
Further, from time to time, typically on an annual basis, payment amounts are updated and revised by third-party payors. Because we expect that customers who use our product candidates, if approved, will be separately reimbursed for the procedure administering our products, these updates could directly impact the demand for our products. An example of payment updates is the Medicare program updates to physician payments, which is done on an annual basis using a prescribed statutory formula. In the past, when the application of the formula resulted in lower payment, Congress has passed interim legislation to prevent the reductions. However, the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, ended the use of the statutory formula, and provided for a 0.5% annual increase in payment rates under the Medicare Physician Fee Schedule through 2019, but no annual update from 2020 through 2025. MACRA also introduced a merit based incentive bonus program for Medicare physicians beginning in 2019. At this time it is unclear how the introduction of the merit based incentive program will impact overall physician reimbursement under the Medicare program. In addition, the Medicare physician fee schedule has been adapted by some private payors into their plan-specific physician payment schedule. We cannot predict how pending and future healthcare legislation will impact our business, and any changes in coverage and reimbursement that further restricts coverage of our products or lowers reimbursement for procedures using our products could materially affect our business.
There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the indications for which the product is approved by the FDA or similar regulatory authorities outside the United States. Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution expenses. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. However, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payors in the United States. Therefore, coverage and reimbursement can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained at all. Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved drugs that we develop could significantly harm our operating results, our ability to raise capital needed to commercialize drugs and our overall financial condition.
 
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The regulations that govern marketing approvals, pricing, coverage and reimbursement for new drugs vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues able to be generated from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.
There can be no assurance that our product candidates, if they are approved for sale in the United States or in other countries, will be considered medically reasonable and necessary for a specific indication, that they will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably if they are approved for sale.
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.
We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an even greater risk if we commercially sell any drugs that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:
 
 	•	 	decreased demand for any product candidates or products that we may develop;	
 
 	•	 	injury to our reputation and significant negative media attention;	
 
 	•	 	withdrawal of clinical trial participants;	
 
 	•	 	significant costs to defend the related litigation;	
 
 	•	 	substantial monetary awards paid to trial participants or patients;	
 
 	•	 	loss of revenue;	
 
 	•	 	reduced resources of our management to pursue our business strategy; and	
 
 	•	 	the inability to commercialize any drugs that we may develop.	
We currently hold $5.0 million in product liability insurance coverage in the aggregate, with a per incident limit of $5.0 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
 
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Risks Related to Employee Matters and Managing Our Growth
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
We are highly dependent on the management, research and development, clinical, financial and business development expertise of Daniel White, our Chief Executive Officer, Charlie Deignan, our Chief Financial Officer, and Glenn Noronha, our Executive Vice President of Research and Development, as well as the other members of our scientific and clinical teams. Although we intend to enter into new employment agreements with our executive officers that will be effective upon the closing of this offering, each of them may currently terminate their employment with us at any time and will continue to be able to do so after the closing of this offering. We do not maintain “key person” insurance for any of our executives or employees.
Recruiting and retaining qualified scientific and clinical personnel and, if we progress the development of our product pipeline toward scaling up for commercialization, manufacturing and sales and marketing personnel, will also be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize our product candidates. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.
We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
As of December 31, 2015, we had 21 employees. As our development progresses, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of research, drug development, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.
 
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Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent protection for our technology and product candidates, or if our licensors are unable to obtain and maintain patent protection for the technology or product candidates that we license from them, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired.
Our success depends in large part on our and our licensors’ ability to obtain and maintain patent protection in the United States and other countries with respect to our product candidates. We and our licensors seek to protect our proprietary position by filing patent applications in the United States and abroad related to our technology and product candidates.
The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. We may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to patents licensed to third parties. For example, we do not control the prosecution of the patent applications licensed to us under the Emory/GT License described below. Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business. If such licensors fail to maintain such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States or visa-versa. For example, European patent law restricts the patentability of methods of treatment of the human body more than United States law does. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued that protect our technology or product candidates, in whole or in part, or which effectively prevent others from commercializing competitive technologies and drugs. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.
Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art and may also affect patent litigation. The United States Patent and Trademark Office recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16,
 
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2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could significantly harm our business and financial condition. In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of our owned and licensed patents and patent applications.
Moreover, we may be subject to a third-party preissuance submission of prior art to the U.S. Patent and Trademark Office, or become involved in opposition, derivation, reexamination,  inter partes  review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or drugs and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize drugs without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
Even if our owned and licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, and may not be of sufficient scope or strength to provide us with any commercial advantage. Our competitors may be able to design around our owned or licensed patents by developing similar or alternative technologies or drugs without infringing on our intellectual property rights.
In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and drugs, or limit the duration of the patent protection of our technology and drugs. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours, and our business will suffer.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.
Competitors may infringe our issued patents or other intellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly, which would undermine our competitive position.
 
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Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could significantly harm business.
Our commercial success depends upon our ability, and the ability of any collaborators, to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. There is considerable intellectual property litigation in the biotechnology and pharmaceutical industries. In particular, we are focused on developing product candidates based on widely used therapeutic agents, many of which are protected by proprietary rights of third parties, and we are developing proprietary formulations of these therapeutic agents specifically for SCS injection using our proprietary SCS Microinjector. For example, in our CLS-1002 program for wet AMD, we plan to develop a propriety formulation of axitinib to be administered by SCS injection, which we believe could be more effective than current treatments for wet AMD. We plan to file an IND with the FDA for CLS-1002 delivered using SCS injection for this indication in the second half of 2016. Axitinib is currently marketed by Pfizer and was approved for the treatment of advanced renal cell carcinoma. Pfizer has Orange Book-listed as well as unlisted patents for axitinib that expire in 2020, without extension. Pfizer has also applied for Patent Term Extension under 35 U.S.C. § 156 that could extend the term of one listed patent to 2025 for the approved indication. Although we seek to develop our proprietary drug formulations that don’t infringe the intellectual property rights of others, we may become party to, or threatened with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our drugs or other aspects of our technology, including interference or derivation proceedings before the U.S. Patent and Trademark Office. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future.
If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our technology and drugs. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations.
Competing products may also be sold in other countries in which our patent coverage might not exist or be as strong. If we lose a foreign patent lawsuit alleging our infringement of a competitor’s patent, we could be prevented from marketing our products in one or more foreign countries. As a result, our ability to grow our business and compete in the market may be harmed.
Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could hurt the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors
 
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may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.
If we fail to comply with our obligations under our existing intellectual property licenses with third parties, we could lose license rights that are important to our business.
We are a party to a license agreement with Emory University and Georgia Tech Research Corporation, or the Emory/GT License, and may enter into additional license agreements in the future. Our existing license agreement imposes, and we expect that future license agreements would impose, various diligence, milestone payment, royalty, insurance and other obligations on us. For example, under the Emory/GT License, we are required to use commercially reasonable efforts to develop and commercialize licensed products under the agreement and to satisfy other specified obligations, including the payment of license fees and minimum royalty payments. If we fail to comply with our obligations under our license agreements, our licensors may have the right to terminate these license agreements, in which event we might not be able to market any product that is covered by these agreements, or to convert the license to a non-exclusive license, which could impair the value of the product candidate being developed under the license agreement. Termination of these license agreements or reduction or elimination of our licensed rights may result in our having to negotiate new or reinstated licenses with less favorable terms. If our licensors under the Emory/GT License were to terminate their license agreement with us for any reason, we would lose access to critical technology related to our SCS Microinjector.
We may need to license additional intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.
A third party may hold intellectual property rights, including patent rights, that are important or necessary to the development of our product candidates. It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our product candidates, in which case we would be required to obtain a license from these third parties. Such a license may not be available on commercially reasonable terms, or at all, and we could be forced to accept unfavorable contractual terms. If we are unable to obtain such licenses on commercially reasonable terms, our business could be harmed.
We may be subject to claims by third parties asserting that we or our employees have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these employees or we have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer. We may also in the future be subject to claims that we have caused an employee to breach the terms of his or her non-competition or non-solicitation agreement. Litigation may be necessary to defend against these potential claims.
In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.
 
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If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A court could prohibit us from using technologies or features that are essential to our products, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and could be a distraction to management. In addition, any litigation or threat thereof may adversely affect our ability to hire employees or contract with independent service providers. Moreover, a loss of key personnel or their work product could hamper or prevent our ability to commercialize our products.
Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.
We expect to rely on trademarks as one means to distinguish any of our product candidates that are approved for marketing from the products of our competitors. We have not yet selected trademarks for our product candidates and have not yet begun the process of applying to register trademarks for our product candidates. Once we select trademarks and apply to register them, our trademark applications may not be approved. Third parties may oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition to seeking patent and trademark protection for our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. In addition, we may not be able to obtain adequate remedies for any such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.
Moreover, our competitors may independently develop knowledge, methods and know-how equivalent to our trade secrets. Competitors could purchase our products and replicate some or all of the competitive advantages we derive from our development efforts for technologies on which we do not have patent protection. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.
 
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Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired.
Our product candidates and the activities associated with their development and commercialization, including their design, research, testing, manufacture, safety, efficacy, quality control, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale, distribution, import, export, and reporting of safety and other post-market information, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by the European Medicines Agency, or EMA, and similar regulatory authorities outside the United States. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market any of our product candidates from regulatory authorities in any jurisdiction. We have only limited experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs to assist us in this process. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. If any of our product candidates receives marketing approval, the accompanying label may limit its approved use, which could limit sales of the product.
The process of obtaining marketing approvals, both in the United States and abroad, is expensive and may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.
If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be materially impaired.
If the FDA does not conclude that our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements under Section 505(b)(2) are not as we expect, the approval pathway for our product candidates will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.
We intend to seek FDA approval through the Section 505(b)(2) regulatory pathway for our product candidates, such as CLS-1001. Our product candidates, including our proprietary drug formulations
 
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packaged together with our SCS Microinjector, are drug/device combination products that will be regulated under the drug provisions of the FDCA, enabling us to submit NDAs for approval of our product candidates. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Amendments, added Section 505(b)(2) to the FDCA. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference.
If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as anticipated, we may need to conduct additional clinical trials, provide additional data and information and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for our product candidates, and complications and risks associated with our product candidates, would likely substantially increase. We may need to obtain additional funding, which could result in significant dilution to the ownership interests of our then existing stockholders to the extent we issue equity securities or convertible debt. We cannot assure you that we would be able to obtain such additional financing on terms acceptable to us, if at all. Moreover, inability to pursue the Section 505(b)(2) regulatory pathway could result in competitive products reaching the market before our product candidates, which could impact our competitive position and prospects. Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure you that our product candidates will receive the requisite approvals for commercialization.
In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2) over the last few years, some pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may be required to change its Section 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2).
Additional time may be required to obtain regulatory approval for our product candidates because they are combination products.
Our product candidates are drug/device combination products that require coordination within the FDA and similar foreign regulatory agencies for review of their device and drug components. Although the FDA and similar foreign regulatory agencies have systems in place for the review and approval of combination products such as ours, we may experience delays in the development and commercialization of our product candidates due to regulatory timing constraints and uncertainties in the product development and approval process.
Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.
In order to market and sell our products in the European Union and any other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one
 
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regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, failure to obtain approval in one jurisdiction may impact our ability to obtain approval elsewhere. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.
A variety of risks associated with marketing our product candidates internationally could affect our business.
We may seek regulatory approval for our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:
 
 	•	 	differing regulatory requirements in foreign countries;	
 
 	•	 	the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market with low or lower prices rather than buying them locally;	
 
 	•	 	unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;	
 
 	•	 	economic weakness, including inflation, or political instability in particular foreign economies and markets;	
 
 	•	 	compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;	
 
 	•	 	foreign taxes, including withholding of payroll taxes;	
 
 	•	 	foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;	
 
 	•	 	difficulties staffing and managing foreign operations;	
 
 	•	 	workforce uncertainty in countries where labor unrest is more common than in the United States;	
 
 	•	 	potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations;	
 
 	•	 	challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;	
 
 	•	 	production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and	
 
 	•	 	business interruptions resulting from geo-political actions, including war and terrorism.	
These and other risks associated with our international operations may compromise our ability to achieve or maintain profitability.
 
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Any product candidate for which we obtain marketing approval could be subject to post-marketing restrictions or recall or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.
Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, advertising and promotional activities for such product, will be subject to continual requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, including the requirement to implement a risk evaluation and mitigation strategy, which could involve requirements for, among other things, a medication guide, special training for prescribers and dispensers, and patient registries. If any of our product candidates receives marketing approval, the accompanying label may limit its approved uses, which could limit sales of the product.
The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product. The FDA closely regulates the post-approval marketing and promotion of products to ensure products are marketed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we do not market our drugs for their approved indications, we may be subject to enforcement action for off-label marketing. Violations of the FDCA relating to the promotion of prescription drugs may lead to investigations alleging violations of federal and state healthcare fraud and abuse laws, as well as state consumer protection laws.
In addition, later discovery of previously unknown adverse events or other problems with our drugs, including device malfunctions, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may have negative consequences, including:
 
 	•	 	restrictions on such drugs, manufacturers or manufacturing processes;	
 
 	•	 	restrictions on the labeling or marketing of a drug;	
 
 	•	 	restrictions on drug distribution or use;	
 
 	•	 	requirements to conduct post-marketing studies or clinical trials;	
 
 	•	 	warning letters;	
 
 	•	 	recall or withdrawal of the drugs from the market;	
 
 	•	 	refusal to approve pending applications or supplements to approved applications that we submit;	
 
 	•	 	clinical holds;	
 
 	•	 	fines, restitution or disgorgement of profits or revenues;	
 
 	•	 	suspension or withdrawal of marketing approvals;	
 
 	•	 	refusal to permit the import or export of our drugs;	
 
 	•	 	product seizure; or	
 
 	•	 	injunctions or the imposition of civil or criminal penalties.	
 
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Non-compliance with European Union requirements regarding safety monitoring, or pharmacovigilance, and with requirements related to the development of drugs for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with the European Union’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.
Even though we have received orphan drug designation in the European Union for our most advanced product candidate, CLS-1001, we may not be able to obtain orphan drug marketing exclusivity for this product candidate or any of our future product candidates.
Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate drugs for relatively small patient populations as orphan drugs. We have received orphan drug designation from the EMA for CLS-1001 for the treatment of non-infectious uveitis, and we may seek orphan drug designation from the FDA or EMA for our future drug candidates. However, we do not plan to pursue orphan drug designation and exclusivity from the FDA for CLS-1001.
Regulation (EC) No 141/2000 and Regulation (EC) No 847/2000 provide that a product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Union when the application is made, or (2) a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives the medicinal product is unlikely to be developed. For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the European Union or, if such method exists, the medicinal product will be of significant benefit to those affected by that condition. Once authorized, orphan medicinal products are entitled to ten years of market exclusivity in all EU Member States and in addition a range of other benefits during the development and regulatory review process including scientific assistance for study protocols, authorization through the centralized marketing authorization procedure covering all member countries and a reduction or elimination of registration and marketing authorization fees. However, marketing authorization may be granted to a similar medicinal product with the same orphan indication during the ten-year period with the consent of the marketing authorization holder for the original orphan medicinal product or if the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities. Marketing authorization may also be granted to a similar medicinal product with the same orphan indication if this product is safer, more effective or otherwise clinically superior to the original orphan medicinal product. In addition, the period of market exclusivity may be reduced to six years if it can be demonstrated based on available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity. There is no guarantee that we will be able to obtain or maintain orphan exclusivity for CLS-1001 even if we receive marketing authorization for CLS-1001 in Europe.
Our employees, independent contractors, principal investigators, CROs, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees and independent contractors, such as principal investigators, CROs, consultants, commercial partners and vendors, could include failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state healthcare fraud and abuse laws, to report financial information or data accurately or to disclose unauthorized activities to us. In particular, sales, marketing and other business arrangements in the healthcare industry are subject to extensive
 
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laws intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws may restrict or prohibit a wide range of business activities, including, but not limited to, research, manufacturing, distribution, pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee and independent contractor misconduct could also involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. In addition, federal procurement laws impose substantial penalties for misconduct in connection with government contracts and require certain contractors to maintain a code of business ethics and conduct. It is not always possible to identify and deter employee and independent contractor misconduct, and any precautions we take to detect and prevent improper activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate.
Our current and future relationships with healthcare professionals, principal investigators, consultants, customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to penalties.
Healthcare providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, that may constrain the business or financial arrangements and relationships through which we sell, market and distribute any product candidates for which we obtain marketing approval. In addition, we may be subject to physician payment transparency laws and patient privacy and security regulation by the federal government and by the states and foreign jurisdictions in which we conduct our business. The applicable federal, state and foreign healthcare laws that may affect our ability to operate include the following:
 
 	•	 	the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid;	
 
 	•	 	federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including through civil whistleblower or  qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;	
 
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 	•	 	the civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent;	
 
 	•	 	the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;	
 
 	•	 	HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on “covered entities,” including healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;	
 
 	•	 	the federal Open Payments program, created under Section 6002 of Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA, and its implementing regulations, imposed new annual reporting requirements for manufacturers of drugs, devices, biologicals and medical supplies for certain payments and “transfers of value” provided to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Failure to submit timely, accurately and completely the required information for all payments, transfers of value and ownership or investment interests may result in civil monetary penalties of up to an aggregate of $150,000 per year and up to an aggregate of $1.0 million per year for “knowing failures,” for an aggregate potential annual liability of $1,150,000; and	
 
 	•	 	analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.	
Further, the ACA, among other things, amended the intent requirement of the federal Anti-Kickback Statute and certain criminal statutes governing healthcare fraud. A person or entity no longer needs to have
 
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actual knowledge of the statute or specific intent to violate it. In addition, the ACA provided that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.
Efforts to ensure that our future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, which could significantly harm our business. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including future collaborators, are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from participation in government healthcare programs, which could also affect our business.
Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. In March 2010, President Obama signed into law the ACA, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
Among the provisions of the ACA of importance to our potential product candidates are the following:
 
 	•	 	an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;	
 
 	•	 	a 2.3% medical device excise tax on certain transactions, including many U.S. sales of medical devices and drug and device combination products, which, under the Consolidated Appropriations Act, 2016, is suspended from January 1, 2016 to December 31, 2017, and, absent further legislative action, will be reinstated starting January 1, 2018;	
 
 	•	 	an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;	
 
 	•	 	expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers and enhanced penalties for non-compliance;	
 
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 	•	 	addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;	
 
 	•	 	a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;	
 
 	•	 	extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;	
 
 	•	 	expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the Federal Poverty Level beginning in 2014, thereby potentially increasing manufacturers’ Medicaid rebate liability;	
 
 	•	 	expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;	
 
 	•	 	the new requirements under the federal Open Payments program and its implementing regulations;	
 
 	•	 	a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and	
 
 	•	 	a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.	
There have been judicial and congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and, due to the Bipartisan Budget Act of 2015, will stay in effect through 2025 unless additional Congressional action is taken. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding, which could negatively impact customers for our product candidates, if approved, and, accordingly, our financial operations.
We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs.
Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for drugs. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased
 
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scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.
Governments outside the United States tend to impose strict price controls, which may affect our revenue, if any.
In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
Risks Related to this Offering, Ownership of Our Common Stock and Our Status as a Public Company
An active trading market for our common stock may not develop and you may not be able to resell your shares of our common stock at or above the initial offering price, if at all.
Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations with the underwriters and may not be indicative of the price at which our common stock will trade upon completion of this offering. Although we have applied to list our common stock on The NASDAQ Global Market, an active trading market for our
 
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shares may never develop or be sustained following this offering. If an active market for our common stock does not develop or is not sustained, it may be difficult for you to sell shares you purchased in this offering at an attractive price or at all.
The trading price of the shares of our common stock may be volatile, and purchasers of our common stock could incur substantial losses.
Our stock price may be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common stock at or above the price paid for the shares. The market price for our common stock may be influenced by many factors, including:
 
 	•	 	actual or anticipated variations in our operating results;	
 
 	•	 	changes in financial estimates by us or by any securities analysts who might cover our stock;	
 
 	•	 	conditions or trends in our industry;	
 
 	•	 	stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the biopharmaceutical industry;	
 
 	•	 	announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;	
 
 	•	 	announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;	
 
 	•	 	capital commitments;	
 
 	•	 	investors’ general perception of us and our business;	
 
 	•	 	recruitment or departure of key personnel; and	
 
 	•	 	sales of our common stock, including sales by our directors and officers or specific stockholders.	
In addition, in the past, stockholders have initiated class action lawsuits against pharmaceutical and biotechnology companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources from our business.
If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. We do not currently have and may never obtain research coverage by equity research analysts. Equity research analysts may elect not to provide research coverage of our common stock after the completion of this offering, and such lack of research coverage may adversely affect the market price of our common stock. In the event we do have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which in turn could cause our stock price or trading volume to decline.
 
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If you purchase shares of our common stock in this offering, you will suffer immediate dilution of your investment.
We expect the initial public offering price of our common stock to be substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our pro forma as adjusted net tangible book value per share after this offering. Based on an assumed initial public offering price of $        per share, which is the midpoint of the price range set forth on the cover page of this prospectus, you will experience immediate dilution of $        per share, representing the difference between our pro forma as adjusted net tangible book value per share after this offering and the assumed initial public offering price. After this offering, we will also have outstanding options and warrants to purchase common stock with exercise prices lower than the initial public offering price. To the extent these outstanding options and warrants are exercised, there will be further dilution to investors in this offering.
A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market following this offering, the market price of our common stock could decline significantly.
Upon completion of this offering, we will have outstanding             shares of common stock, assuming no exercise of outstanding options or warrants. Of these shares, the             shares sold in this offering and             additional shares will be freely tradable,             additional shares of common stock will be eligible for sale in the public market beginning 90 days after the date of this prospectus under Rule 144 and Rule 701, and             additional shares of common stock will be available for sale in the public market beginning 180 days after the date of this prospectus following the expiration of lock-up agreements between some of our stockholders and the underwriters. The representatives of the underwriters may release these stockholders from their lock-up agreements with the underwriters at any time and without notice, which would allow for earlier sales of shares in the public market.
In addition, promptly following the completion of this offering, we intend to file one or more registration statements on Form S-8 registering the issuance of approximately             shares of common stock subject to options or other equity awards issued or reserved for future issuance under our equity incentive plans. Shares registered under these registration statements on Form S-8 will be available for sale in the public market subject to vesting arrangements and exercise of options, the lock-up agreements described above and, in the case of our affiliates, the restrictions of Rule 144.
Additionally, after this offering, the holders of an aggregate of approximately             shares of our common stock and             shares of our common stock issuable upon the exercise of outstanding warrants, or their transferees, will have rights, subject to some conditions, to require us to file one or more registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. If we were to register the resale of these shares, they could be freely sold in the public market. If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.
 
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Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management and hinder efforts to acquire a controlling interest in us, and the market price of our common stock may be lower as a result.
There are provisions in our certificate of incorporation and bylaws as they will be in effect following this offering that may make it difficult for a third party to acquire, or attempt to acquire, control of our company, even if a change in control was considered favorable by you and other stockholders. For example, our board of directors will have the authority to issue up to 5,000,000 shares of preferred stock. The board of directors can fix the price, rights, preferences, privileges, and restrictions of the preferred stock without any further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in control transaction. As a result, the market price of our common stock and the voting and other rights of our stockholders may be adversely affected. An issuance of shares of preferred stock may result in the loss of voting control to other stockholders.
Our charter documents will also contain other provisions that could have an anti-takeover effect, including:
 
 	•	 	only one of our three classes of directors will be elected each year;	
 
 	•	 	stockholders will not be entitled to remove directors other than by a 66 2⁄3% vote and only for cause;	
 
 	•	 	stockholders will not be permitted to take actions by written consent;	
 
 	•	 	stockholders cannot call a special meeting of stockholders; and	
 
 	•	 	stockholders must give advance notice to nominate directors or submit proposals for consideration at stockholder meetings.	
In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which regulates corporate acquisitions by prohibiting Delaware corporations from engaging in specified business combinations with particular stockholders of those companies. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock, including transactions that may be in your best interests. These provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.
Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.
Upon completion of this offering, our executive officers, directors and current beneficial owners of 5% or more of our common stock and their respective affiliates will, in the aggregate, beneficially own approximately     % of our outstanding common stock. As a result, these persons, acting together, would be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors, any merger, consolidation, sale of all or substantially all of our assets, or other significant corporate transactions.
Some of these persons or entities may have interests different than yours. For example, because many of these stockholders purchased their shares at prices substantially below the price at which shares are being sold in this offering and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders.
 
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We are an “emerging growth company” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:
 
 	•	 	being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;	
 
 	•	 	not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;	
 
 	•	 	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;	
 
 	•	 	reduced disclosure obligations regarding executive compensation; and	
 
 	•	 	not being required to hold a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.	
We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Under Section 107(b) of the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
After the completion of this offering, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act and the rules and regulations of The NASDAQ Stock Market. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Commencing with our fiscal year ending December 31, 2016, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 10-K filing for that year, as required by Section 404 of the Sarbanes-
 
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Oxley Act. This will require that we incur substantial additional professional fees and internal costs to expand our accounting and finance functions and that we expend significant management efforts. Prior to this offering, we have never been required to test our internal controls within a specified period, and, as a result, we may experience difficulty in meeting these reporting requirements in a timely manner.
We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.
If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements. If that were to happen, the market price of our stock could decline and we could be subject to sanctions or investigations by The NASDAQ Stock Market, the Securities and Exchange Commission or other regulatory authorities.
We will have broad discretion in the use of proceeds from this offering and may invest or spend the proceeds in ways with which you do not agree and in ways that may not increase the value of your investment.
We will have broad discretion over the use of proceeds from this offering. You may not agree with our decisions, and our use of the proceeds may not yield any return on your investment. We expect to use the net proceeds to us from this offering to complete our Phase 3 clinical trial of CLS-1001 in uveitis patients, to complete our Phase 2 clinical trial of CLS-1003 in RVO patients, to prepare an IND and complete our planned Phase 1/2 clinical trial of CLS-1002 in wet AMD patients, to fund the research and development of any future programs, including drug discovery, and for working capital and general corporate purposes. Our failure to apply the net proceeds of this offering effectively could compromise our ability to pursue our growth strategy and we might not be able to yield a significant return, if any, on our investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering.
Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gains and you may never receive a return on your investment.
You should not rely on an investment in our common stock to provide dividend income. We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, our loan and security agreement with SVB currently prohibits us from paying dividends without SVB’s consent, and the terms of any future debt agreements may likewise preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future. Investors seeking cash dividends should not purchase our common stock.
 
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We plan to use potential future operating losses and our federal and state NOL carryforwards to offset future taxable income, if any. However, our ability to use existing NOL carryforwards could be limited as a result of issuances of equity securities.
As of December 31, 2014, we had approximately $20.4 million of federal and $24.6 million of state net operating loss, or NOL, carryforwards. If not utilized, these federal NOL carryforwards will begin to expire at various dates beginning in 2031, and these state NOL carryforwards will begin to expire at various dates beginning in 2027. To the extent we generate taxable income in the future, we plan to use our existing NOL carryforwards and future losses to offset income that would otherwise be taxable. However, under Section 382 of the U.S. Internal Revenue Code of 1986, as amended, as interpreted by the U.S. Internal Revenue Service, the amount of benefits from our NOL carryforwards may be impaired or limited if we incur a cumulative ownership change of more than 50% over a three-year period. The completion of this offering, private placements and other transactions that have occurred, and future offerings of our securities may trigger, or may have already triggered, such an ownership change. In addition, since we will need to raise substantial additional funding to finance our operations, we may undergo further ownership changes in the future. We have not conducted an analysis as to whether such a change of ownership has occurred, but if such a change has occurred or occurs in the future, we will be limited regarding the amount of NOL carryforwards that can be utilized annually in the future to offset taxable income. Any such annual limitation may significantly reduce the value of our NOL carryforwards before they expire, which could result in greater tax liabilities than we would incur in the absence of such a limitation.
We will incur increased costs and demands upon management as a result of being a public company.
As a public company listed in the United States, we will incur significant additional legal, accounting and other costs. We estimate the additional costs we will incur as a result of being a public company to be approximately $1.5 million to $2.5 million annually. These additional costs could negatively affect our financial results. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC and The NASDAQ Stock Market, may increase legal and financial compliance costs and make some activities more time consuming. These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If, notwithstanding our efforts to comply with new laws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
Failure to comply with these rules might also make it more difficult for us to obtain some types of insurance, including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors or as members of senior management.
 
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This prospectus contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” but are also contained elsewhere in this prospectus. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. Forward-looking statements include statements about:
 
 	•	 	our plans to develop and commercialize our product candidates;	
 
 	•	 	our planned clinical trials for our CLS-1001, CLS-1003 and CLS-1002 programs;	
 
 	•	 	the timing of the availability of data from our clinical trials;	
 
 	•	 	the timing of our planned regulatory filings;	
 
 	•	 	the timing of and our ability to obtain and maintain regulatory approvals for our product candidates;	
 
 	•	 	our expectation that CLS-1001, if approved, would be the first drug specifically indicated for macular edema associated with non-infectious uveitis;	
 
 	•	 	the clinical utility of our product candidates;	
 
 	•	 	our commercialization, marketing and manufacturing capabilities and strategy;	
 
 	•	 	our intellectual property position;	
 
 	•	 	our ability to identify additional drug candidates with significant commercial potential that are compatible with SCS injection and which are consistent with our commercial objectives; and	
 
 	•	 	our estimates regarding future revenues, expenses and needs for additional financing.	
You should refer to the “Risk Factors” section of this prospectus for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
 
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This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.
 
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USE OF PROCEEDS
We estimate that the net proceeds from our issuance and sale of              shares of our common stock in this offering will be approximately $         million, or approximately $         million if the underwriters exercise their option to purchase additional shares in full, based upon an assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase or decrease the net proceeds to us from this offering by $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. Each increase or decrease of 1.0 million in the number of shares we are offering at the assumed initial public offering price would increase or decrease the net proceeds to us from this offering by $         million.
We currently estimate that we will use the net proceeds from this offering, together with our existing cash and cash equivalents, as follows:
 
 	•	 	approximately $         million to complete our ongoing Phase 3 clinical trial of CLS-1001 in uveitis patients;	
 
 	•	 	approximately $         million to complete our ongoing Phase 2 clinical trial of CLS-1003 in RVO patients;	
 
 	•	 	approximately $         million to prepare our IND for, and complete our planned Phase 1/2 clinical trial of, CLS-1002 in wet AMD patients; and	
 
 	•	 	the remainder to fund continued research and development of our earlier-stage programs, including drug discovery for potential new applications for our SCS microinjection technology, and for working capital and other general corporate purposes.	
In the ordinary course of our business, we expect to from time to time evaluate the acquisition of, investment in or in-license of complementary products, technologies or businesses, and we could use a portion of the net proceeds from this offering for such activities. We currently do not have any agreements, arrangements or commitments with respect to any potential acquisition, investment or license.
This expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress of our development, the status of and results from clinical trials, as well as any collaborations that we may enter into with third parties for our product candidates, and any unforeseen cash needs.
Our management will have broad discretion in the application of the net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Pending these uses, we plan to invest these net proceeds in short-term, interest bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the United States. The goal with respect to the investment of these net proceeds is capital preservation and liquidity so that such funds are readily available to fund our operations.
 
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DIVIDEND POLICY
We have never declared or paid any dividends on our common stock. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future.
 
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CAPITALIZATION
The following table sets forth our cash and cash equivalents and our capitalization as of September 30, 2015:
 
 	•	 	on an actual basis;	
 
 	•	 	on a pro forma basis to give effect to:	
 
 	•	 	our issuance of 5,274,674 shares of Series C convertible preferred stock in November and December 2015 at a purchase price of $3.7917 per share and our receipt of $20.0 million in net cash proceeds therefrom;	
 
 	•	 	the conversion of all outstanding shares of our convertible preferred stock, including the 5,274,674 shares of Series C preferred stock issued in November and December 2015, into an aggregate of 20,839,633 shares of our common stock, which will occur automatically upon the closing of this offering;	
 
 	•	 	the filing of our amended and restated certificate of incorporation upon the closing of this offering; and	
 
 	•	 	the exercise of all outstanding warrants to purchase shares of common stock that will otherwise expire upon the closing of this offering for an aggregate of 248,175 shares of common stock; and	
 
 	•	 	on a pro forma as adjusted basis to give further effect to our sale of              shares of common stock in this offering at an assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.	
 
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The following information is illustrative only of our cash and cash equivalents and capitalization following the completion of this offering and will change based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes appearing elsewhere in this prospectus.

 	  	As of September 30, 2015	 	
 	  	Actual	 	 	Pro forma	 	  	Pro forma
as adjusted	 	
 	  	(in thousands)	 	
Cash and cash equivalents	  	$	4,186	  	 	$	            	  	  	$	            	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	
Long-term debt, including current portion	  	$	5,915	  	 	 	 	 	  	 	 	 	
Convertible preferred stock:	  	 	 	 	 	 	 	 	  	 	 	 	
Series A convertible preferred stock, $0.001 par value; 5,198,826 shares authorized, issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted	  	 	4,086	  	 	 	 	 	  	 	 	 	
Series A-1 convertible preferred stock, $0.001 par value; 4,373,481 shares authorized, 4,356,931 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted	  	 	7,890	  	 	 	 	 	  	 	 	 	
Series B convertible preferred stock, $0.001 par value; 7,413,365 shares authorized, 6,009,202 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted	  	 	15,252	  	 	 	 	 	  	 	 	 	
Series C convertible preferred stock, $0.001 par value; no shares authorized, issued or outstanding, actual, pro forma or pro forma as adjusted	  	 	—	  	 	 	 	 	  	 	 	 	
Stockholders’ equity (deficit):	  	 	 	 	 	 	 	 	  	 	 	 	
Common stock, $0.001 par value; 30,000,000 shares authorized, 5,839,334 shares issued and outstanding, actual;              shares authorized,              shares issued and outstanding, pro forma;              shares authorized,              shares issued and outstanding, pro forma as adjusted	  	 	5	  	 	 	 	 	  	 	 	 	
Preferred stock, $0.001 par value; no shares authorized, issued or outstanding, actual;              shares authorized, no shares issued or outstanding, pro forma or pro forma as adjusted	  	 	—	  	 	 	 	 	  	 	 	 	
Additional paid-in-capital	  	 	2,628	  	 	 	 	 	  	 	 	 	
Accumulated deficit	  	 	(34,193	) 	 	 	 	 	  	 	 	 	
 	  	 	 	 	 	 	 	 	  	 	 	 	
Total stockholders’ equity (deficit)	  	 	(31,560	) 	 	 	 	 	  	 	 	 	
 	  	 	 	 	 	 	 	 	  	 	 	 	
Total capitalization	  	$	1,583	  	 	$	 	  	  	$	 	  	
 	  	 	 	 	 	 	 	 	  	 	 	 	
Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase or decrease the pro forma as adjusted amount of each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Each increase or decrease of 1.0 million in the number
 
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of shares we are offering at the assumed initial public offering price would increase or decrease the pro forma as adjusted amount of each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by $         million.
The number of shares of common stock outstanding in the table above does not include:
 
 	•	 	2,266,776 shares of our common stock issuable upon the exercise of stock options outstanding under our 2011 stock incentive plan as of September 30, 2015, at a weighted average exercise price of $0.77 per share, or the 512,184 shares of common stock issuable upon the exercise of stock options granted in December 2015;	
 
 	•	 	73,693 shares of our common stock issuable upon exercise of warrants outstanding as of September 30, 2015, at a weighted average exercise price of $3.12 per share; and	
 
 	•	 	             shares of our common stock reserved for future issuance under our equity incentive plans following this offering.	
 
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DILUTION
If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering. Net tangible book value per share is determined by dividing our total tangible assets less total liabilities and convertible preferred stock by the number of outstanding shares of our common stock.
As of September 30, 2015, we had a net tangible book deficit of $(4.3) million, or $(5.00) per share of common stock. On a pro forma basis, after giving effect to the issuance of 5,274,674 shares of our Series C convertible preferred stock issued in November and December 2015 and the conversion of the outstanding shares of our convertible preferred stock, including the Series C convertible preferred stock, into 20,839,633 shares of our common stock upon the completion of this offering, and the exercise of all outstanding warrants to purchase shares of common stock that will otherwise expire upon the closing of this offering for 248,175 shares of common stock, our pro forma net tangible book value would have been $         million, or $        per share of common stock.
After giving effect to the issuance and sale of              shares of our common stock in this offering at an assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2015 would have been $         million, or $         per share of common stock. This represents an immediate increase in the pro forma net tangible book value of $         per share to existing stockholders, and an immediate dilution in the pro forma net tangible book value of $         per share to investors purchasing shares of our common stock in this offering. The following table illustrates this per share dilution:

Assumed initial public offering price per share	  	 	 	 	 	$	            	  	
Actual net tangible book deficit per share as of September 30, 2015	  	$	(5.00	) 	 	 	 	 	
Increase per share attributable to conversion of convertible preferred stock and exercise of warrants	  	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	 	
Pro forma net tangible book value per share before this offering	  	 	 	 	 	 	 	 	
Increase in pro forma net tangible book value per share attributable to this offering	  	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	 	
Pro forma as adjusted net tangible book value per share after this offering	  	 	 	 	 	 	 	 	
 	  	 	 	 	 	 	 	 	
Dilution per share to investors participating in this offering	  	 	 	 	 	$	            	  	
 	  	 	 	 	 	 	 	 	
The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase or decrease our pro forma as adjusted net tangible book value by $         million, or $         per share, and the dilution per share to investors participating in this offering by $         per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Each increase or decrease of 1.0 million shares in the number of shares offered by us at the assumed initial public offering price would increase or decrease our pro forma as adjusted net tangible book value per share after this offering by $         per share and decrease or increase the dilution to investors participating in this offering by $         per share.
 
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If the underwriters exercise their option in full to purchase              additional shares of common stock in this offering, the pro forma as adjusted net tangible book value per share after the offering would be $         per share, the increase in the pro forma net tangible book value per share to existing stockholders would be $         per share and the dilution to new investors purchasing common stock in this offering would be $         per share.
The following table sets forth as of September 30, 2015, on the pro forma basis described above, the differences between the number of shares of common stock purchased from us, the total consideration paid and the weighted average price per share paid by existing stockholders and by investors purchasing shares of our common stock in this offering at an assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page on this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

 	  	Shares purchased	 	 	Total consideration	 	 	Weighted average
price per share	 	
 	  	Number	  	Percent	 	 	Amount	 	  	Percent	 	 	 	 	
Existing stockholders	  	 	  	 	    	% 	 	$	            	  	  	 	    	% 	 	$	            	  	
New investors	  	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
 	  	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Total	  	 	  	 	100	% 	 	$	            	  	  	 	100	% 	 	 	 	 	
 	  	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase or decrease the total consideration paid by new investors by $         million, and increase or decrease the percent of total consideration paid by new investors by              percentage points, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same.
The table above also excludes:
 
 	•	 	2,266,776 shares of our common stock issuable upon the exercise of stock options outstanding under our 2011 stock incentive plan as of September 30, 2015, at a weighted average exercise price of $0.77 per share, and the 512,184 shares of common stock issuable upon the exercise of stock options granted in December 2015;	
 
 	•	 	73,693 shares of our common stock issuable upon exercise of warrants outstanding as of September 30, 2015, at a weighted average exercise price of $3.12 per share; and	
 
 	•	 	             shares of our common stock reserved for future issuance under our equity incentive plans following this offering.	
The shares of our common stock reserved for future issuance under our equity benefit plans may be subject to automatic annual increases in accordance with the terms of the plans. To the extent that options or warrants are exercised, new options or other equity awards are issued under our equity incentive plans, or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
 
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SELECTED FINANCIAL DATA
The following tables set forth our selected financial data for the periods indicated. The following selected statement of operations data for the years ended December 31, 2013 and 2014 and the selected balance sheet data as of December 31, 2013 and 2014 are derived from our audited financial statements appearing elsewhere in this prospectus. The selected statement of operations data for the nine months ended September 30, 2014 and 2015 and the selected balance sheet data as of September 30, 2015 are derived from unaudited condensed financial statements appearing elsewhere in this prospectus. The data should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in conjunction with the financial statements, related notes, and other financial information included elsewhere in this prospectus.
The unaudited condensed financial statements include all adjustments, consisting of normal recurring accruals, which management considers necessary for a fair presentation of the financial position and the results of operations for these periods. Our historical results are not necessarily indicative of the results to be expected in the future, and our operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2015 or any other future period.

 	 	Year Ended
December 31,	 	 	Nine Months
Ended September 30,	 	
 	 	2013	 	 	2014	 	 	2014	 	 	2015	 	
 	 	(in thousands, except share and per share data)	 	
Statement of Operations Data:	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	$	5,045	  	 	$	6,692	  	 	$	4,776	  	 	$	6,964	  	
General and administrative	 	 	2,193	  	 	 	3,131	  	 	 	2,398	  	 	 	5,337	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	7,238	  	 	 	9,823	  	 	 	7,174	  	 	 	12,301	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from operations	 	 	(7,238	) 	 	 	(9,823	) 	 	 	(7,174	) 	 	 	(12,301	) 	
Other income (expense):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(23	) 	 	 	(371	) 	 	 	(353	) 	 	 	(174	) 	
Interest income	 	 	7	  	 	 	5	  	 	 	1	  	 	 	6	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other expense	 	 	(16	) 	 	 	(366	) 	 	 	(352	) 	 	 	(168	) 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(7,254	) 	 	$	(10,189	) 	 	$	(7,526	) 	 	$	(12,469	) 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share of common stock — basic and diluted	 	$	(2.45	) 	 	$	(2.66	) 	 	$	(2.00	) 	 	$	(2.54	) 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding, basic and diluted	 	 	2,956,285	  	 	 	3,825,052	  	 	 	3,769,091	  	 	 	4,910,055	  	
Pro forma net loss per share — basic and diluted	 	 	 	 	 	$	(0.53	) 	 	 	 	 	 	$	(0.61	) 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pro forma weighted average shares outstanding — basic and diluted	 	 	 	 	 	 	19,390,011	  	 	 	 	 	 	 	20,475,014	  	
 
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 	 	As of December 31,	 	 	As of
September 30,
2015	 	
 	 	2013	 	 	2014	 	 	 	 	
 	 	(in thousands)	 	
Balance Sheet Data:	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	1,909	  	 	$	8,269	  	 	$	4,186	  	
Total assets	 	 	2,137	  	 	 	10,299	  	 	 	4,516	  	
Long-term debt	 	 	268	  	 	 	—	  	 	 	5,915	  	
Total liabilities	 	 	1,004	  	 	 	2,677	  	 	 	8,848	  	
Total convertible preferred stock	 	 	11,871	  	 	 	26,835	  	 	 	27,228	  	
Total stockholders’ deficit	 	 	(10,738	) 	 	 	(19,213	) 	 	 	(31,560	) 	
 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a late-stage clinical biopharmaceutical company developing first-in-class drug therapies to treat blinding diseases of the eye. Our current product candidates focus on diseases affecting the retina and choroid, especially diseases associated with macular edema, and are injected into the suprachoroidal space, or SCS, using our proprietary SCS Microinjector. With the SCS injection procedure, our product candidates are more directly administered to the retina and choroid as compared to other ocular drug delivery techniques such as intravitreal injections. We believe SCS injection may provide a number of benefits, including lower frequency of necessary administration and faster onset of therapeutic effect. We hold the exclusive rights to develop and commercialize drugs for injection into the SCS. Our most advanced product candidates, CLS-1001 and CLS-1003, are based on commonly used ophthalmic drugs, which we believe will allow us to more efficiently and predictably pursue the regulatory approval of these product candidates under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act.
For CLS-1001, we enrolled the first patient in a pivotal Phase 3 clinical trial of CLS-1001 in November 2015. We expect to enroll approximately 150 patients with macular edema associated with non-infectious uveitis in this trial and expect to report data in the second half of 2017, We believe, based on our end-of-Phase 2 review with the FDA in May 2015, that this Phase 3 clinical trial will be the only pivotal clinical trial necessary to support the filing of an NDA to the FDA. In January 2016, we announced top line data from a Phase 2 clinical trial in 22 patients with macular edema associated with non-infectious uveitis. In this trial, we observed statistically significant improvement in both retinal thickness, the primary endpoint of the trial, and best corrected visual acuity, or BCVA, a secondary endpoint. In our completed Phase 1/2 clinical trial, we observed a range of improvements in BCVA of between one and five lines on a standard eye chart. At the end of week 12, the average improvement in BCVA exceeded two lines, which is considered clinically meaningful. At the end of week 26, four of the eight patients in the trial had still not required additional treatment. For those four patients, the average improvement in BCVA was nearly three lines at week 26.
Under our CLS-1003 program for macular edema associated with RVO, a sight-threatening disorder resulting from the blockage of a retinal vein, we have completed enrollment of a 46-patient Phase 2 clinical trial. We expect to report data from this trial in the second quarter of 2016. In our CLS-1002 program for the treatment of wet age-related macular degeneration, or wet AMD, we have selected a lead compound, axitinib, that has activity against both vascular endothelial growth factor, or VEGF, and platelet derived growth factor, or PDGF, to be administered by SCS injection, which we believe could be more effective than current treatments for wet AMD. We plan to develop a proprietary suspension formulation of axitinib and, in the second half of 2016, submit an IND and subsequently commence a Phase 1/2 clinical trial.
 
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If our product candidates are approved, we plan to commercialize them with a specialty team of 30 to 40 sales and medical marketing professionals to target the approximately 1,700 retinal specialists in the United States, and we may also pursue collaborations with third parties to commercialize any of our drugs approved for marketing outside the United States.
We have incurred net losses since our inception in May 2011. Our operations to date have been limited to organizing and staffing our company, raising capital, undertaking preclinical studies and other research and development initiatives and, beginning in 2013, conducting clinical trials of our most advanced product candidates. To date, we have not generated any revenue and have primarily financed our operations through the private placement of our equity securities, issuance of convertible promissory notes and loan agreements. We have raised net cash proceeds of $24.5 million from the sale of convertible preferred stock, $3.4 million from the sale of convertible promissory notes and $6.0 million from a long-term loan agreement through September 30, 2015. In November and December 2015, we raised an additional $20.0 million from the sale of convertible preferred stock. As of September 30, 2015, we had an accumulated deficit of $34.2 million. We recorded net losses of $7.3 million and $10.2 million for the years ended December 31, 2013 and 2014, respectively, and $7.5 million and $12.5 million for the nine months ended September 30, 2014 and 2015, respectively. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development and obtaining regulatory approval and preparing for potential commercialization of our product candidates.
We expect to continue to incur significant and increasing operating losses at least for the next several years. We do not expect to generate product revenue unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will increase substantially as we:
 
 	•	 	complete our ongoing Phase 3 clinical trial of CLS-1001;	
 
 	•	 	complete our ongoing Phase 2 clinical trial of CLS-1003 and our planned Phase 1/2 clinical trial of CLS-1002, as well as future clinical trials for these programs;	
 
 	•	 	continue the research and development of our other product candidates;	
 
 	•	 	seek to evaluate and develop additional product candidates;	
 
 	•	 	seek regulatory approvals for any product candidates that successfully complete clinical trials;	
 
 	•	 	ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any product candidates for which we may obtain regulatory approval;	
 
 	•	 	maintain, expand and protect our intellectual property portfolio;	
 
 	•	 	hire additional clinical, manufacturing and scientific personnel;	
 
 	•	 	add operational, financial and management information systems and personnel, including personnel to support our drug development and potential future commercialization efforts; and	
 
 	•	 	begin to operate as a public company.	
We anticipate that we will use approximately $         million of the net proceeds from this offering for clinical and non-clinical costs associated with the completion of our ongoing Phase 3 clinical trial for
 
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CLS-1001, approximately $         million for clinical and non-clinical costs associated with completing our Phase 2 clinical trial for CLS-1003 and approximately $         million for the preparation of an IND and to complete our planned Phase 1/2 clinical trial of CLS-1002. We intend to use the remainder of the proceeds of this offering to fund the research and development of our earlier-stage programs, including drug discovery and for working capital and general corporate purposes. We expect that these funds will not be sufficient to enable us to complete all necessary development and commercially launch both of these product candidates. Accordingly, we will be required to obtain further funding through other public or private offerings of our capital stock, debt financing, collaboration and licensing arrangements or other sources. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or altogether cease our research and development programs or future commercialization efforts. Although it is difficult to predict future liquidity requirements, we believe that the net proceeds of this offering, together with our existing cash and cash equivalents, will be sufficient to fund our operations for at least the next 12 months. However, our ability to successfully transition to profitability will be dependent upon achieving a level of revenues adequate to support our cost structure. We cannot assure you that we will ever be profitable or generate positive cash flow from our operating activities.
Components of Operating Results
Revenue
We have not generated any revenue from the sale of any drugs, and we do not expect to generate any revenue unless or until we obtain regulatory approval of and commercialize our product candidates. Over time, we may also seek to earn revenue by out-licensing our proprietary microinjection technology for SCS drug administration to third-party strategic collaborators.
Research and Development
Since our inception, we have focused on our development programs. Research and development expenses consist primarily of costs incurred for the research and development of our preclinical and clinical product candidates, which include:
 
 	•	 	employee-related expenses, including salaries, benefits, travel and share-based compensation expense for research and development personnel;	
 
 	•	 	expenses incurred under agreements with contract research organizations, or CROs, as well as contract manufacturing organizations and consultants that conduct clinical trials and preclinical studies;	
 
 	•	 	costs associated with preclinical activities and development activities;	
 
 	•	 	costs associated with technology and intellectual property licenses;	
 
 	•	 	costs for our research and development facility; and	
 
 	•	 	depreciation expense for assets used in research and development activities.	
We expense research and development costs to operations as incurred. The costs for some of our development activities, such as clinical trials, are recognized based on the terms of underlying agreements, as well as an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations and additional information provided to us by our vendors about their actual costs occurred.
 
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Expenses related to activities, such as manufacturing and stability and toxicology studies, that are supportive of a product candidate itself, are classified as direct non-clinical costs. Expenses related to clinical trials and similar activities, including costs associated with CROs, are classified as direct clinical costs. Expenses related to activities that support more than one development program or activity, such as salaries, share-based compensation and depreciation, are not classified as direct clinical costs or non-clinical costs and are separately classified as unallocated.
For the years ended December 31, 2013 and 2014 and the nine months ended September 30, 2014 and 2015, substantially all of our research and development expenses have been related to the non-clinical and clinical development of CLS-1001, CLS-1003 and CLS-1002. From inception through September 30, 2015, we have incurred $21.3 million in research and development expenses, of which only $0.2 million was expended prior to January 1, 2012. Prior to January 1, 2012, we did not allocate any research and development expenses to any specific product candidate.
The following table shows our research and development expenses by type of activity for the years ended December 31, 2013 and 2014, the nine months ended September 30, 2014 and 2015, and the period from May 26, 2011 (date of inception) to September 30, 2015.

 	  	Year Ended
December 31,	 	  	Nine Months Ended
September 30,	 	  	Period from
May 26, 2011
(Date of Inception)
to September 30,
2015	 	
 	  	2013	 	  	2014	 	  	    2014    	 	  	    2015    	 	  	 	 	
 	  	(in thousands)	 	
CLS-1001:	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Direct non-clinical	  	$	1,326	  	  	$	1,617	  	  	$	1,492	  	  	$	516	  	  	$	4,385	  	
Direct clinical	  	 	173	  	  	 	828	  	  	 	403	  	  	 	1,135	  	  	 	2,136	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,499	  	  	 	2,445	  	  	 	1,895	  	  	 	1,651	  	  	 	6,521	  	
CLS-1002:	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Direct non-clinical	  	 	153	  	  	 	251	  	  	 	204	  	  	 	968	  	  	 	1,372	  	
Direct clinical	  	 	44	  	  	 	6	  	  	 	6	  	  	 	3	  	  	 	176	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	197	  	  	 	257	  	  	 	210	  	  	 	971	  	  	 	1,548	  	
CLS-1003:	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Direct non-clinical	  	 	45	  	  	 	102	  	  	 	100	  	  	 	2	  	  	 	149	  	
Direct clinical	  	 	—  	  	  	 	633	  	  	 	251	  	  	 	1,051	  	  	 	1,684	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	45	  	  	 	735	  	  	 	351	  	  	 	1,053	  	  	 	1,833	  	
Unallocated	  	 	3,304	  	  	 	3,255	  	  	 	2,320	  	  	 	3,289	  	  	 	11,360	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total research and development expense	  	$	5,045	  	  	$	6,692	  	  	$	4,776	  	  	$	6,964	  	  	$	21,262	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Our expenses related to clinical trials are based on estimates of patient enrollment and related expenses at clinical investigator sites as well as estimates for the services received and efforts expended under contracts with research institutions, consultants and CROs that conduct and manage clinical trials on our behalf. We generally accrue expenses related to clinical trials based on contracted amounts applied to the level of patient enrollment and activity according to the protocol. If future timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we would modify our estimates of accrued expenses accordingly on a prospective basis. Historically, any such modifications have not been material.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical
 
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development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase over the next several years as we progress CLS-1001, CLS-1003, CLS-1002 and any future product candidates through clinical development. However, it is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates, or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates.
The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors that include, but are not limited to, the following:
 
 	•	 	number of trials required for approval and any requirement for extension trials;	
 
 	•	 	per patient trial costs;	
 
 	•	 	the number of patients that participate in the trials;	
 
 	•	 	the number of sites included in the trials;	
 
 	•	 	the countries in which the trial is conducted;	
 
 	•	 	the length of time required to enroll eligible patients;	
 
 	•	 	the number of doses that patients receive;	
 
 	•	 	the drop-out or discontinuation rates of patients;	
 
 	•	 	potential additional safety monitoring or other studies requested by regulatory agencies;	
 
 	•	 	the duration of patient follow-up; and	
 
 	•	 	the efficacy and safety profile of the product candidate.	
In addition, the probability of success for each product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability. We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each product candidate, as well as an assessment of each candidate’s commercial potential.
General and Administrative
General and administrative expenses consist primarily of salaries and other related costs, including share-based compensation, for personnel in executive, finance, accounting, business development, and human resources functions. Other significant costs include facility costs not otherwise included in research and development expenses, legal fees relating to intellectual property and corporate matters and fees for accounting and consulting services.
We anticipate that our general and administrative expenses will increase in the future to support our continued research and development activities, potential commercialization of our product candidates and increased costs of operating as a public company. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses. Additionally, we anticipate increased costs associated with being a public company including expenses related to services associated with maintaining compliance with NASDAQ listing rules and SEC requirements, insurance, and investor relations costs. In addition, if CLS-1001 or any of our other product candidates obtains regulatory approval for marketing, we expect to incur expenses associated with building
 
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a sales and marketing team. However, we do not expect to receive any such regulatory approval until at least 2018.
Other Income (Expense)
Other income consists of interest income earned on our cash and cash equivalents. Interest income is not considered significant to our financial statements, but we expect our interest income to increase following this offering as we invest the net proceeds from this offering pending their use in operations.
Other expense consists of interest accrued under promissory notes, amortization of debt discounts arising from the preferred stock purchase warrant and the loan agreements described in the footnotes to our financial statements appearing elsewhere in this prospectus.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of expenses during the reporting periods. In accordance with GAAP, we evaluate our estimates and judgments on an ongoing basis. Significant estimates include assumptions used in the determination of share-based compensation and some of our research and development expenses. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We define our critical accounting policies as those accounting principles generally accepted in the United States of America that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. While our significant accounting policies are more fully described in Note 2 to our financial statements appearing elsewhere in this prospectus, we believe the following are the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments.
Accrued Expenses
As part of the process of preparing our financial statements, we are required to estimate accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with applicable vendor personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. Examples of estimated accrued expenses include fees paid to CROs and investigative sites in connection with clinical trials.
We accrue our expenses related to clinical trials based on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct research
 
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activities or manage clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the level of effort varies from our estimate, we will adjust the accrual accordingly. If we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates. Although we do not currently anticipate the future settlement of existing accruals to differ materially from our estimates, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low for any period. There have been no material changes in estimates for the periods presented in our financial statements.
Fair Value Measurements
We record some of our financial assets and liabilities at fair value in accordance with the provisions of Accounting Standards Codification, or ASC, Topic 820 on fair value measurements. As defined in the guidance, fair value, defined as an exit price, represents the amount that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, the guidance defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value.
 
 	•	 	Level 1 — Unadjusted quoted prices in active, accessible markets for identical assets or liabilities.	
 
 	•	 	Level 2 — Other inputs that are directly or indirectly observable in the marketplace.	
 
 	•	 	Level 3 — Unobservable inputs that are supported by little or no market activity.	
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Our material financial instruments at December 31, 2013, December 31, 2014 and September 30, 2015 consisted primarily of cash and cash equivalents, long-term debt and stock purchase warrant liabilities. The fair value of cash and cash equivalents approximate their respective carrying values due to the short-term nature of these instruments. The fair value of long-term debt approximates the carrying value due to variable interest rates that correspond to market rates. We have determined the preferred stock purchase warrant, the value of which is recorded within other non-current liabilities, to be valued under Level 3.
Share-Based Compensation
We recognize compensation costs related to stock options and restricted stock granted to employees, directors and consultants ratably over the requisite service period, which in most cases is the vesting period of the award for employees, based on the estimated fair value of the awards on the date of grant. Compensation expense for options granted to non-employees is determined as the fair value of consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. The fair value of the awards granted to non-employees is re-measured each period until the related service is complete.
Share-based compensation expense was $0.3 million and $0.4 million for the years ended December 31, 2013 and 2014, respectively, and $0.3 million and $0.5 million for the nine months ended September 30, 2014 and 2015, respectively.
 
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Significant Factors, Assumptions and Methodologies Used in Determining Fair Value
Determining the appropriate fair value measurement of share-based awards requires the use of subjective assumptions. In the absence of a public trading market for our common stock, and in preparation for this offering, we have conducted retrospective assessments and contemporaneous valuations of our common stock, as described below in “— Common Stock Valuations.” The determination of the fair value measurement of options using the Black-Scholes option pricing model is affected by our estimated common stock fair values as well as assumptions regarding a number of other subjective variables. These other variables include the expected term of the options, our expected stock price volatility over the expected term of the options, stock option exercise and cancellation behaviors, risk-free interest rates and expected dividends.
We estimated the fair value of stock options at the grant date using the following assumptions:
 
 	•	 	Fair Value of our Common Stock.    Since no public market exists for our stock, we must estimate its fair value, as discussed in “— Common Stock Valuations” below.	
 
 	•	 	Volatility.    As we do not have a trading history for our common stock, we utilize data from a representative group of publicly traded companies to estimate expected stock price volatility. We selected representative companies from the pharmaceutical industry with similar characteristics to us, including stage of product development and therapeutic focus.	
 
 	•	 	Expected Term.    We used the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107,  Share-Based Payment , as we do not have sufficient historical exercise and post-vesting termination data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees.	
 
 	•	 	Risk-Free Rate.    The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to liquidity.	
 
 	•	 	Forfeitures.    Forfeitures are estimated such that we only recognize expense for the shares expected to vest, and adjustments are made if actual forfeitures differ from those estimates. We estimated our annual forfeiture rates to be zero for 2013 and 2014.	
 
 	•	 	Dividend Yield.    We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future.	
The table below lists the weighted average assumptions utilized in the Black-Scholes option pricing model for the years ended December 31, 2013 and 2014 and for the nine month periods ended September 30, 2014 and 2015.

 	  	Year Ended
December 31,	 	 	Nine Months Ended
September 30,	 	
 	  	2013	 	 	2014	 	 	2014	 	 	2015	 	
Expected term (years)	  	 	7.00	  	 	 	7.00	  	 	 	7.00	  	 	 	7.00	  	
Expected stock price volatility	  	 	97.02	% 	 	 	85.64	% 	 	 	87.85	% 	 	 	89.00	% 	
Risk-free interest rate	  	 	1.69	% 	 	 	1.99	% 	 	 	2.10	% 	 	 	2.04	% 	
Dividend yield	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	
The estimation of the number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period in which estimates are revised.
 
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Common Stock Valuations
We are a private company with no active public market for our common stock. Our common stock valuations are determined by our board of directors in its sole discretion based on recommendations from management and, beginning in 2014, taking into account advice and assistance provided by a third-party valuation consultant engaged to assist us in connection with such valuations. The valuations of our common stock were determined utilizing guidelines outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.
Our common stock valuations were performed using a hybrid method, which used market approaches to estimate our enterprise value. We selected the hybrid method based on the availability and the quality of information to develop the assumptions for the methodology. The hybrid method is a probability-weighted expected return method, or PWERM, where the equity value in one or more of the scenarios is calculated using an option-pricing method, or OPM. The PWERM is a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for the company, assuming various outcomes. Under this method, the common stock value is based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available, as well as the rights of each class of stock. The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceed the value of the preferred stock liquidation preference at the time of a liquidity event, such as a strategic sale or merger.
In the hybrid method used in each of our third-party valuations, we considered several future event scenarios, including various OPM scenarios and IPO scenarios. The relative probability of each type of future event scenario was based on our analysis of market conditions at the time, including then-current IPO valuations of similarly situated companies and expectations as to the timing and likely prospects of the future event scenarios. To determine our enterprise values under the OPM scenarios, we used the OPM backsolve approach. To determine our enterprise values under the IPO scenarios, we used the guideline public company method under the market approach, which analyzed enterprise values at the IPO date of publicly traded biopharmaceutical companies. To derive the fair value of the common stock for each future event scenario under the hybrid method, the proceeds to the common stockholders were calculated based on the conversion rights and preferences of the preferred stock. We then applied a discount for lack of marketability to the common stock to account for the lack of access to an active public market.
The assumptions used in the valuation models that ultimately determine the fair value of our common stock as of the valuation date are based on numerous objective and subjective factors combined with management judgment, including the following:
 
 	•	 	our results of operations, financial position and the status of our research and development efforts;	
 
 	•	 	the composition of, and changes to, our management team and board of directors;	
 
 	•	 	the lack of liquidity of our common stock as a private company;	
 
 	•	 	our stage of development and business strategy and the material risks related to our business and industry;	
 
 	•	 	our discounted future cash flows, based on our projected operating results;	
 
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 	•	 	the potential impact on our common stock of liquidation preference rights of our convertible preferred stock;	
 
 	•	 	the valuation of publicly traded companies in the life sciences and pharmaceutical industry sectors, as well as recently completed mergers and acquisitions of peer companies;	
 
 	•	 	any external market conditions affecting the life sciences and pharmaceutical industry sectors;	
 
 	•	 	the likelihood of achieving a liquidity event for the holders of our common stock and stock options, such as an initial public offering, or IPO, or a sale of our company, given prevailing market conditions;	
 
 	•	 	the state of the IPO market for similarly situated privately held biotechnology companies; and	
 
 	•	 	any recent contemporaneous valuations prepared in accordance with methodologies outlined in the Practice Aid.	
The following table presents the grant dates and related exercise prices of stock options that we granted from January 1, 2014 through the date of this prospectus, along with the corresponding exercise price for each option grant and the fair values per share utilized to calculate share-based compensation expense.

Date of Grant	  	Number of Shares
Underlying
Options	 	  	Exercise Price
Per Option	 	  	Common Stock
Fair Value Per
Share on
Grant Date	 	
8/12/2014	  	 	70,000	  	  	$	1.40	  	  	$	1.40	  	
11/26/2014	  	 	100,000	  	  	 	1.55	  	  	 	1.55	  	
12/9/2014	  	 	132,500	  	  	 	1.55	  	  	 	1.55	  	
12/19/2014	  	 	525,000	  	  	 	1.55	  	  	 	1.55	  	
6/18/2015	  	 	90,000	  	  	 	2.80	  	  	 	2.80	  	
8/14/2015	  	 	35,000	  	  	 	2.80	  	  	 	2.80	  	
12/3/2015	  	 	512,184	  	  	 	2.53	  	  	 	2.87	(1) 	
 
(1)	We assessed the fair value of our common stock subsequent to the grant date of these awards, as described below.	
In the course of preparing for this offering, in December 2015, we performed a retrospective fair value assessment and concluded that the fair value of our common stock underlying stock options we granted in December 2015 was $2.87 per share. This reassessed value, which we applied to calculate share-based compensation expense associated with the December 2015 option grants for accounting purposes, was based in part upon a revised valuation of our common stock as of September 30, 2015, performed on a retrospective basis with the assistance of a third-party specialist, taking into account an increased probability of executing a successful initial public offering in 2016. This revised common stock valuation was performed using the hybrid method.
Determination of Estimated Offering Price
The midpoint of the preliminary range for the initial public offering as determined by us and the underwriters was $         per share. In comparison, our estimate of the fair value of our common stock was $2.87 per share as of the December 3, 2015 option grants. We note that, as is typical in IPOs, the preliminary range was not derived using a formal determination of fair value, but was determined based upon discussions between us and the underwriters. Among the factors that were considered in setting this range were our
 
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prospects and the history of and prospects for our industry, the general condition of the securities markets and the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies. We believe that the difference between the fair value of our common stock as of December 3, 2015 and the midpoint of the price range for this offering is the result of these factors as well as the fact that the estimated IPO price range necessarily assumes that the initial public offering has occurred, a public market for our common stock has been created and that our preferred stock converted into common stock in connection with the IPO, and therefore excludes any discount for lack of marketability of our common stock, which was factored into the valuation used as a basis for our December 3, 2015 option grants.
Based on an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, the intrinsic value of all stock options outstanding as of September 30, 2015 was $         million, of which $         million and $         million related to stock options that were vested and unvested, respectively, at that date.
Results of Valuation Models May Vary
Valuation models require the input of highly subjective assumptions and estimates. These judgments and estimates include assumptions regarding our future operating performance, the time to completing an IPO or other liquidity event and the determinations of the appropriate valuation methods. Because our common stock has characteristics significantly different from that of publicly traded common stock and because changes in the subjective input assumptions can materially affect our fair value estimates, the existing models do not necessarily provide a reliable, single measure of the fair value of our common stock. If we had made different assumptions, our share-based compensation expense, our net loss and net loss per share could have been significantly different. The foregoing valuation methodologies are not the only valuation methodologies available and will not be used to value our common stock once this offering is complete. We cannot make assurances as to any particular valuation for our stock. Accordingly, investors are cautioned not to place undue reliance on the foregoing valuation methodologies as an indicator of future stock prices.
Tax Valuation Allowance
We recorded deferred tax assets of $7.9 million, related to our net operating losses, as of December 31, 2014, which have been fully offset by a valuation allowance due to uncertainties surrounding our ability to realize these tax benefits. We record a valuation allowance if it is more likely than not that a deferred tax asset will not be realized. We provided a full valuation allowance on our deferred tax assets that primarily consist of cumulative net operating losses, or NOLs, of $20.4 million for the period from our inception on May 26, 2011 to December 31, 2014. We incurred a net loss of $12.5 million for the nine months ended September 30, 2015. Due to our three-year cumulative loss position, history of operating losses and losses expected to be incurred in the foreseeable future, we considered it necessary to provide for a full valuation allowance against our net deferred tax assets.
Our deferred tax assets are primarily composed of federal and state tax NOL carryforwards. As of December 31, 2014, we had federal NOL carryforwards of $20.4 million and state NOL carryforwards of $24.6 million available to reduce future taxable income, if any. These federal NOL carryforwards will begin to expire at various dates starting in 2031. The state NOL carryforwards will begin to expire at various dates starting in 2027. In general, if we experience a greater than 50 percentage point aggregate change in ownership of specified significant stockholders over a three-year period, utilization of our pre-change NOL carryforwards will be subject to an annual limitation under Section 382 of the U.S. Internal Revenue Code of 1986, as amended, or the Code, and similar state laws. Such limitations may result in expiration of a
 
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portion of the NOL carryforwards before utilization and may be substantial. If we experience a Section 382 ownership change in connection with this offering or as a result of future changes in our stock ownership, some of which changes are outside our control, the tax benefits related to the NOL carryforwards may be further limited or lost.
Results of Operations for the Nine Months Ended September 30, 2014 and 2015
The following table sets forth our results of operations for the nine months ended September 30, 2014 and 2015.

 	  	Nine Months Ended
September 30,	 	 	Period-to-Period
Change	 	
 	  	2014	 	 	2015	 	 	 	 	
 	  	(in thousands)	 	
Operating expenses:	  	 	 	 	 	 	 	 	 	 	 	 	
Research and development	  	$	4,776	  	 	$	6,964	  	 	$	2,188	  	
General and administrative	  	 	2,398	  	 	 	5,337	  	 	 	2,939	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	7,174	  	 	 	12,301	  	 	 	5,127	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Loss from operations	  	 	(7,174	) 	 	 	(12,301	) 	 	 	(5,127	) 	
Other income (expense):	  	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	  	 	(353	) 	 	 	(174	) 	 	 	179	  	
Interest income	  	 	1	  	 	 	6	  	 	 	5	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total other expense	  	 	(352	) 	 	 	(168	) 	 	 	184	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net loss	  	$	(7,526	) 	 	$	(12,469	) 	 	$	(4,943	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Research and development.    Research and development expense increased from $4.8 million for the nine months ended September 30, 2014 to $7.0 million for the nine months ended September 30, 2015, an increase of 46%. This was primarily attributable to a $0.7 million increase in costs related to the ongoing Phase 2 clinical trial and the initiation of the Phase 3 clinical trial for CLS-1001, a $0.8 million increase in costs for the ongoing Phase 2 clinical trial of CLS-1003 in RVO patients and a $0.8 million increase in costs for preclinical studies of CLS-1002 for wet AMD. This was partially offset by a $1.0 million decrease in pre-clinical costs for CLS-1001. We also incurred increased personnel and related costs of $0.5 million during the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014.
General and administrative.    General and administrative expense increased by $2.9 million, from $2.4 million for the nine months ended September 30, 2014 to $5.3 million for the nine months ended September 30, 2015. The increase was primarily attributable to recognizing $1.9 million of expenses related to previously deferred offering costs, a $0.4 million increase in personnel costs, including share-based compensation, and $0.4 million in professional fees including fees related to the audit of our financial statements in preparation for this offering.
Interest expense.    Interest expense decreased from $0.4 million in the nine months ended September 30, 2014 to $0.2 million in the nine months ended September 30, 2015. The decrease was primarily related to the accelerated amortization of debt discount related to the convertible promissory notes upon their conversion to Series B convertible preferred stock that occurred in the prior period. This was partially offset by the accretion of the financing costs, and the accretion of the warrants and the final payment related to the loan agreements.
 
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Results of Operations for the Years Ended December 31, 2013 and 2014
The following table sets forth our results of operations for the years ended December 31, 2013 and 2014.

 	  	Year Ended
December 31,	 	 	Period-to-Period
Change	 	
 	  	2013	 	 	2014	 	 	 	 	
 	  	(in thousands)	 	
Operating expenses:	  	 	 	 	 	 	 	 	 	 	 	 	
Research and development	  	$	5,045	  	 	$	6,692	  	 	$	1,647	  	
General and administrative	  	 	2,193	  	 	 	3,131	  	 	 	938	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	7,238	  	 	 	9,823	  	 	 	2,585	  	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Loss from operations	  	 	(7,238	) 	 	 	(9,823	) 	 	 	(2,585	) 	
Other income (expense):	  	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	  	 	(23	) 	 	 	(371	) 	 	 	(348	) 	
Interest income	  	 	7	  	 	 	5	  	 	 	(2	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total other expense	  	 	(16	) 	 	 	(366	) 	 	 	(350	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net loss	  	$	(7,254	) 	 	$	(10,189	) 	 	$	(2,935	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Research and development.    Research and development expense increased from $5.0 million for the year ended December 31, 2013 to $6.7 million for the year ended December 31, 2014, an increase of 33%. The increase was primarily attributable to a $0.6 million increase in costs related to the design, testing and manufacture of our SCS Microinjector, a $0.7 million increase in costs related to the Phase 2 program for CLS-1001 and a $0.6 million increase in costs for the startup of the Phase 2 clinical trial of CLS-1003 in RVO patients. We also incurred increased personnel costs during the year ended December 31, 2014 as compared to the prior year, offset by lower costs of preclinical studies for CLS-1001.
General and administrative.    General and administrative expense increased by $0.9 million, from $2.2 million for the year ended December 31, 2013 to $3.1 million for the year ended December 31, 2014, an increase of 43%. The increase was primarily attributable to increases in personnel costs, including share-based compensation and fees related to the audit of our financial statements.
Interest expense.    Interest expense increased by $0.3 million for the year ended December 31, 2014. This increase was primarily due to the acceleration of the amortization of the debt discount related to the convertible promissory notes upon their conversion to Series B convertible preferred stock.
Liquidity and Capital Resources
Sources of Liquidity
We have incurred losses and experienced negative operating cash flows since our inception and anticipate that we will continue to incur losses for at least the next several years. We expect that our research and development and general and administrative expenses will increase over historical levels and, as a result, we will need additional capital to fund our operations, which we may obtain from additional public offerings, debt financing, collaboration and licensing arrangements or other sources.
For the period from our inception on May 26, 2011 to September 30, 2015, we have cumulative net cash used by operating activities of $29.3 million and cumulative net losses of $34.2 million. Since our inception, we have funded operations primarily through the sale of convertible preferred stock, a long-term loan agreement and the issuance of convertible promissory notes. We have raised net cash proceeds of
 
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$24.5 million from the sale of convertible preferred stock, $6.0 million from a long-term loan agreement and $3.4 million from the sale of convertible promissory notes through September 30, 2015. As of December 31, 2014 and September 30, 2015, we had cash and cash equivalents of $8.3 million and $4.2 million, respectively. We invest any cash in excess of our immediate requirements primarily with a view to liquidity and capital preservation. As of December 31, 2014 and September 30, 2015, our funds were held in cash and money market funds. In November and December 2015, we raised an additional $20.0 million from the sale of convertible preferred stock.
On April 15, 2015, we entered into a loan and security agreement with Silicon Valley Bank, or SVB, for borrowings of up to $6.0 million. Under the terms of the loan agreement, an initial tranche of $4.0 million was advanced on April 15, 2015 and an additional tranche of $2.0 million was advanced on May 15, 2015. Amounts outstanding under the loan agreement accrue interest at SVB’s prime rate less 0.50%, or 2.75% as of September 30, 2015. We are obligated only to make payments of accrued interest until May 2016, after which outstanding principal and accrued interest will be payable in 30 monthly installments through October 2018. We will also be obligated to make a final payment of $330,000 to SVB upon the maturity date of the loan in October 2018. We may voluntarily prepay amounts outstanding under the loan agreement, subject to the payment of a termination fee equal to $120,000, which termination fee decreases over time to $30,000 after the second anniversary of the initial advance.
Our obligations under the SVB loan are secured by substantially all of our assets except for our intellectual property, and we may not encumber our intellectual property without SVB’s prior written consent. The loan agreement with SVB contains negative covenants restricting our activities, including limitations on dispositions, mergers or acquisitions, incurring indebtedness or liens, paying dividends or making investments and other specified business transactions. There are no financial covenants associated with the loan agreement. Our obligations under the loan agreement are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in our business, operations or financial or other condition.
In connection with the loan agreement, we issued a warrant to SVB to purchase 57,143 shares of our convertible preferred stock at an exercise price of $3.50 per share. As of the date of this prospectus, the warrant remains outstanding and upon the closing of the offering will be exercisable for 57,143 shares of common stock at an exercise price of $3.50 per share. Unless earlier exercised, the warrant will expire in April 2025.
In April 2014, we issued $3.0 million in aggregate principal amount of convertible promissory notes, or the bridge notes, to our existing stockholders, including two of our executive officers and one of our directors in their individual capacities. The bridge notes accrued interest at an annual rate of 7%, with principal plus interest due upon maturity in April 2015 unless earlier converted. The bridge notes were convertible upon the occurrence of a qualified financing. Our August 2014 Series B convertible preferred stock financing was a qualified financing as contemplated by the bridge notes, and the principal and interest under all of the bridge notes was converted automatically into an aggregate of 1,137,652 shares of Series B convertible preferred stock in connection with this financing. These shares of Series B convertible preferred stock are convertible into shares of our common stock upon the completion of this offering. In connection with the issuance of the bridge notes, we also issued warrants to the lenders to purchase an aggregate of 248,175 shares of our common stock at an exercise price of $0.01 per share. These warrants expire upon the closing of this offering, and therefore we expect that these warrants will be exercised in connection with the completion of this offering and that we will issue 248,175 shares of our common stock upon their exercise.
 
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In April 2013, we entered into a loan agreement with an entity affiliated with the State of North Carolina under which we borrowed an aggregate of $125,000. The outstanding balance bore interest at an annual rate of 4.25%. All unpaid principal, together with unpaid and accrued interest, were due and payable in February 2016 or, if earlier, upon the occurrence of specified events. We repaid this note in full in May 2014. In connection with the initial loan, we also issued this lender a warrant to purchase 16,550 shares of our Series A-1 convertible preferred stock, which will become a warrant to purchase 16,550 shares of our common stock following the completion of this offering.
Funding Requirements
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, laboratory and related supplies, clinical costs, legal and other regulatory expenses and general overhead costs.
The successful development of our product candidates is highly uncertain. As such, at this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the remainder of the development of CLS-1001, CLS-1002, CLS-1003 or any of our other product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from product sales. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:
 
 	•	 	successful enrollment in, and completion of clinical trials;	
 
 	•	 	receipt of marketing approvals from applicable regulatory authorities;	
 
 	•	 	establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;	
 
 	•	 	obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates; and	
 
 	•	 	launching commercial sales of the products, if and when approved, whether alone or in collaboration with others.	
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that candidate.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings and potential collaboration, license and development agreements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future
 
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commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
We will also incur costs as a public company that we have not previously incurred or have previously incurred at lower rates, including but not limited to, increased costs and expenses for fees to members of our board of directors, increased personnel costs, increased directors and officers insurance premiums, audit and legal fees, investor relations fees and expenses for compliance with reporting requirements under the Exchange Act and rules implemented by the SEC and NASDAQ. We estimate that we will annually incur approximately $1.5 million to $2.5 million in expenses to comply with these requirements.
Outlook
Based on our research and development plans and our timing expectations related to the progress of our programs, we expect that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress in these trials is uncertain.
Cash Flows
During the nine months ended September 30, 2014 and 2015, our operating activities used net cash of $6.4 million and $10.1 million, respectively. The use of net cash in each period primarily resulted from our net losses. The increase in net loss for the nine months ended September 30, 2015 as compared to the nine months ended September 30, 2014 was primarily attributable to higher research and development expenses and increased personnel-related costs. The other changes from operating activities were caused primarily by changes in our accounts payable and other accrued liabilities, share-based compensation and deferred offering costs. The net cash used in investing activities during the nine months ended September 30, 2014 and 2015 related to the purchase of fixed assets. The net cash provided by financing activities during the nine months ended September 30, 2014 consisted primarily of $3.0 million received from the issuance of the bridge notes and $12.8 million from the sale of our Series B convertible preferred stock. The net cash provided by financing during the nine months ended September 30, 2015 was primarily due to the $6.0 million long-term debt agreement with SVB.
During the years ended December 31, 2013 and 2014, our operating activities used net cash of $6.8 million and $9.1 million, respectively. The use of net cash in each period primarily resulted from our net losses. The increase in net loss for the year ended December 31, 2014 as compared to the year ended December 31, 2013 was primarily attributable to higher research and development expenses. The other changes from operating activities were caused primarily by changes in our accounts payable, share-based compensation, deferred offering costs and other accrued liabilities. During the years ended December 31, 2013 and 2014, we did not engage in any material investing activities other than the purchase of property and equipment. The net cash provided by financing activities during the year ended December 31, 2013 consisted primarily of $7.8 million from the sale of our Series A-1 convertible preferred stock, net of issuance costs, while the net cash provided by financing activities during the year ended December 31, 2014 consisted primarily of $3.0 million received from the issuance of the bridge notes and $12.7 million from the sale of our Series B convertible preferred stock.
 
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Contractual Obligations
The following table summarizes our significant contractual obligations as of December 31, 2014, all of which consisted of obligations under leases for our corporate headquarters in Alpharetta, Georgia and our research facility in Durham, North Carolina.

 	  	Payment due by period (in thousands)	 	
 	  	Total	 	  	Less than 1
year	 	  	1-3 years	 	  	3-5 years	 	  	More than
5 years	 	
Operating lease obligations	  	$	293	  	  	$	180	  	  	$	113	  	  	$	—	  	  	$	—	  	
On April 15, 2015, we entered into a loan agreement with a bank for borrowings up to $6.0 million, with a floating interest rate equal to the Wall Street Journal’s prime rate minus 0.5%. Under the terms of the loan agreement, an initial tranche of $4.0 million was advanced on April 15, 2015 and an additional tranche of $2.0 million was advanced on May 15, 2015. We are required to pay accrued interest only for a period of 12 months from the date of each advance, followed by 30 equal monthly payments of principal and accrued interest. A final payment of $0.3 million, or 5.5% of the aggregate borrowed amount, is due at maturity of the loan in 2018.
We have no material non-cancelable purchase commitments with contract manufacturers or service providers, as we have generally contracted on a cancelable purchase order basis.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.
Recent Accounting Pronouncements
We have considered all recently issued accounting pronouncements and do not believe the adoption of such pronouncements will have a material impact on our financial statements.
JOBS Act
In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period, and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
Quantitative and Qualitative Disclosures about Market Risk
The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates. As of December 31, 2013 and 2014 and September 30, 2015, we had cash and cash equivalents of $1.9 million, $8.3 million and $4.2 million, respectively. We generally hold our cash in interest-bearing money market accounts. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Due to the short-term maturities of our cash equivalents and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash equivalents.
 
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We do not engage in any hedging activities against changes in interest rates. Our outstanding debt instruments carry a fixed interest rate and, as such, are not subject to interest rate risk.
We do not have any foreign currency or other derivative financial instruments.
 
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BUSINESS
Overview
We are a late-stage clinical biopharmaceutical company developing first-in-class drug therapies to treat blinding diseases of the eye. Our current product candidates focus on diseases affecting the retina and choroid, especially diseases associated with macular edema, and are injected into the suprachoroidal space, or SCS, adjacent to the choroid, using our proprietary SCS Microinjector. With the SCS injection, our product candidates are more directly administered to the retina and choroid as compared to other ocular drug delivery techniques, such as intravitreal injections. We believe SCS injection may provide a number of benefits, including lower frequency of necessary administration and faster onset of therapeutic effect. We hold the exclusive rights to develop and commercialize drugs for injection into the SCS. Our most advanced product candidates, CLS-1001 and CLS-1003, are based on commonly used ophthalmic drugs, which we believe will allow us to more efficiently and predictably pursue the regulatory approval of these product candidates under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. Under Section 505(b)(2), if we can establish that reliance on the U.S. Food and Drug Administration’s, or FDA’s, previous findings of safety or effectiveness or both for an approved product is scientifically appropriate, or there is scientific literature to support the product’s safety or effectiveness, it may eliminate the need for us to conduct some of the preclinical studies or clinical trials for the new product candidate that might otherwise have been required. We estimate that there are nearly five million people in the United States diagnosed with our target indications and that worldwide annual sales of drugs to treat these indications were approximately $7 billion in 2014.
Our CLS-1001 program is being developed for the treatment of macular edema associated with non-infectious uveitis, a condition that we estimate affects 350,000 patients in the United States. CLS-1001 consists of an SCS injection of CLS-TA, our proprietary, preservative-free formulation of the corticosteroid triamcinolone acetonide, or TA, specifically designed to be administered through our SCS Microinjector. We enrolled the first patient in our Phase 3 clinical trial in November 2015. We expect to enroll approximately 150 patients in this trial and report the data in the second half of 2017. We believe, based on our end-of-Phase 2 review with the FDA in May 2015, that this Phase 3 clinical trial will be the only pivotal clinical trial necessary to support the filing of a New Drug Application, or NDA, with the FDA. In January 2016, we announced top line data from a Phase 2 clinical trial in 22 patients with macular edema associated with non-infectious uveitis. In this trial, we observed statistically significant improvement in both retinal thickness, the primary endpoint of the trial, and best corrected visual acuity, or BCVA, a secondary endpoint. In our completed Phase 1/2 clinical trial, we observed a range of improvement in best corrected visual acuity, or BCVA, of between one and five lines on a standard eye chart. At the end of week 12, the average improvement in BCVA exceeded two lines, which is considered clinically meaningful. At the end of week 26, four of the eight patients in the trial had still not required additional treatment. For those four patients, the average improvement in BCVA was nearly three lines at week 26.
We are developing CLS-1003 for the treatment of macular edema associated with retinal vein occlusion, or RVO, a condition that we estimate affects 2.2 million patients in the United States. We have completed enrollment of a 46-patient Phase 2 clinical trial and expect to report data from this trial in the second quarter of 2016. In our CLS-1003 program, we are exploring the concomitant SCS injection of CLS-TA and an intravitreal injection of Eylea, a corticosteroid and an anti-VEGF agent, respectively, to provide the potential benefits of improved visual acuity, reduced macular edema and reduced injection frequency. Corticosteroids and anti-VEGF agents have known advantages in treating RVO.
 
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We are developing CLS-1002 for the treatment of wet age-related macular degeneration, or wet AMD, a condition that we estimate affects 1.2 million patients in the United States. We have selected a lead compound, axitinib, that has activity against both vascular endothelial growth factor, or VEGF, and platelet derived growth factor, or PDGF, to be administered by SCS injection, which we believe could be more effective than current treatments for wet AMD. Axitinib, also known by its brand name Inlyta, is currently marketed by Pfizer and is approved by the FDA for the treatment of advanced renal cell carcinoma, but not for any ophthalmology indications. We plan to develop a proprietary suspension formulation of axitinib and, in the second half of 2016, file an investigational new drug application, or IND, with the FDA and subsequently commence a Phase 1/2 clinical trial. We are also considering a development program for drug compounds that may be able to treat diabetic macular edema, or DME.
We are also working with third parties through collaborations and licenses to develop eye disease treatments using our proprietary SCS Microinjector and method of drug administration to the choroid and retina through the SCS. We are collaborating with Santen Pharmaceuticals, Ltd., or Santen, to develop compounds for SCS injection that are designed to treat DME, wet AMD and RVO. Additionally, we are collaborating with Santen to explore the potential benefits of SCS injection of compounds known to reduce elevated intraocular pressure, or IOP, associated with glaucoma, and formulated for IOP reduction over a sustained period of time. We have also entered into an agreement with Spark Therapeutics, Inc., or Spark, pursuant to which we are collaborating with Spark to investigate the use of our SCS Microinjector to administer gene therapy to the back of the eye for the potential treatment of orphan diseases of the eye.
Our current and planned development programs aim to restore or improve visual function primarily by reducing the macular edema associated with a number of diseases affecting the retina, the tissue that lines the inside of the eye and is the part of the eye primarily responsible for vision, and the choroid, the layer adjacent to the retina that supplies the retina with blood, oxygen and nourishment. These diseases include uveitis, RVO, wet AMD and DME. Macular edema is the build-up of fluid that can cause abnormal swelling of the macula, the portion of the retina responsible for central vision and color perception. This swelling can rapidly result in deterioration of vision and can eventually lead to blindness.
The most common treatments for eye diseases with associated macular edema affecting the retina and choroid are corticosteroids and drugs that inhibit VEGF signaling, known as anti-VEGF drugs. These corticosteroids and anti-VEGF drugs are often injected into the vitreous, a jelly-like substance that occupies the central portion of the eye. Intravitreal injections rely on drug to diffuse outward from the vitreous to the retina and choroid. This diffusion can result in lower concentrations of drug in these targeted areas. At the same time, this diffusion can also result in drug spreading to unintended parts of the eye, where, for some drugs, it can cause significant side effects. By contrast, with our SCS Microinjector, drug is injected into and spreads within the SCS, which is the space located between the choroid and the outer protective layer of the eye known as the sclera, to reach the back of the eye.
We believe administration of drug using our SCS Microinjector may provide improved bioavailability to the targeted retina and choroid, with drug remaining more localized and away from other parts of the eye, where the drug could cause side effects. Corticosteroids are effective both at treating the inflammatory aspect of ocular disease and at reducing macular edema, but when delivered intravitreally, they have been associated with significant side effects, such as cataract formation or exacerbation and elevated IOP, which can lead to glaucoma. Anti-VEGF drugs, while highly effective in reducing macular edema, require frequent administration, in some cases as often as monthly. We believe that our differentiated approach of injecting ocular drugs into the SCS may result in fewer side effects and improved bioavailability of drug at the diseased
 
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retina and choroid, as compared to intravitreal administration, a faster onset of therapeutic effect, a similar efficacy profile with lower drug amounts required, and longer duration of therapeutic effect with less frequent required injections. The procedure for SCS injection with our SCS Microinjector is conducted in an in-office setting and is similar to the procedure for intravitreal injection, and we therefore expect our products, if they achieve regulatory approval, to be incorporated into retinal specialists’ standard medical practice.
Under our CLS-1001 program, we have completed a Phase 2 clinical trial in patients with non-infectious uveitis, a condition characterized by inflammation of the choroid and surrounding tissues not caused by an infectious agent. The most common treatment for non-infectious uveitis involves the use of corticosteroids or other immunosuppressive agents that are used systemically or locally. A commonly used corticosteroid is triamcinolone acetonide, or TA. CLS-1001 consists of an SCS injection of CLS-TA, our proprietary, preservative-free formulation of TA, specifically designed to be administered through our proprietary SCS Microinjector.
In our Phase 2 clinical trial, we observed statistically significant improvement in both retinal thickness, the primary endpoint of the trial, and BCVA, a secondary endpoint. The 22 enrolled patients were randomized to receive a single SCS injection of one of two doses of CLS-TA, with 17 patients receiving a 4.0 mg dose and five patients receiving a 0.8 mg dose. Patients returned for follow-up examinations between seven days and 11 days, at four weeks and at eight weeks following dosing. The patients who received the 4.0 mg dose of CLS-TA were evaluated for an average change in retinal thickness from baseline at eight weeks and improvement in BCVA. At four and eight weeks, the average reduction in retinal thickness was 135 and 164 microns, respectively, and the average improvement in BCVA was 7.7 and 9.2 letters, respectively. These results all achieved statistical significance. All 22 patients, who were all treated with an SCS injection of CLS-TA, completed the full observation period and were evaluated for safety. There were no corticosteroid-related increases in IOP or treatment-related serious adverse events observed in this trial.
In our Phase 1/2 clinical trial, we evaluated the efficacy and safety of an SCS injection of Triesence, a TA formulation that is pharmaceutically equivalent to CLS-TA and that has been approved by the FDA to treat non-infectious uveitis. While the trial was primarily a safety and tolerability study, we also assessed efficacy measures, including BCVA improvement and reduction in retinal thickness, which is a common measure of macular edema. During the course of the trial, we observed a range of improvements in BCVA of between one and five lines on a standard eye chart with each line of improvement corresponding to five letters. At the end of week 12, the average improvement in BCVA exceeded two lines, which is considered clinically meaningful. At the end of week 26, four of the eight patients in the trial had still not required additional treatment. For those four patients, the average improvement in BCVA was nearly three lines at week 26. At the end of weeks 12 and 26 of the trial, the average reduction in retinal thickness for patients was greater than 100 microns from their respective baselines, with a reduction of 50 microns being considered clinically meaningful. In the trial, SCS injection of Triesence was generally well tolerated, with none of the eight dosed patients developing cataracts or experiencing elevated IOP through week 26.
Because our CLS-1001 program uses our formulation of TA for the treatment of uveitis, and TA is known to be effective in treating uveitis, we believe that our product candidate will be at least as effective as commonly used formulations of TA for locally treating the disease, including the associated macular edema, with a reduced incidence of side effects, such as uncontrolled elevated IOP and cataracts. Our preclinical studies suggest that SCS injection of TA may provide improved bioavailability of drug at the diseased retina and choroid compared to other local intraocular or periocular administration methods, which may result in
 
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faster onset of therapeutic effect and a better efficacy profile with lower drug amounts required. Our preclinical ocular drug distribution studies suggest the potential for CLS-1001 to effectively treat uveitis for at least 90 days following a single SCS injection and the Phase 1/2 clinical trial observations potentially support a duration of action longer than 90 days since four of the eight patients did not require additional treatment over the 180-day observation period in that trial. Currently used ocular injections of TA are typically effective for approximately 90 days.
In November 2015, we enrolled the first patient in a pivotal Phase 3 clinical trial with our CLS-TA injected into the SCS. We intend to enroll approximately 150 patients with macular edema associated with non-infectious uveitis in this trial and expect to report data from this trial in the second half of 2017. Based on our end-of-Phase 2 review with the FDA in May 2015, we believe this will be the only pivotal clinical trial necessary to support a 505(b)(2) NDA filing in the CLS-1001 program. If approved, CLS-TA would be the first drug specifically indicated for macular edema associated with non-infectious uveitis.
Under our CLS-1003 program, we have completed enrollment of Phase 2 clinical trial for the treatment of macular edema associated with RVO, a sight-threatening disorder resulting from the blockage of a retinal vein. We enrolled 46 patients in this trial. The current standard of care for RVO involves monthly intravitreal injections of an anti-VEGF drug, such as Lucentis (ranibizumab), Eylea (aflibercept) or Avastin (bevacizumab). Corticosteroids are also indicated for the treatment of macular edema associated with RVO.
In our Phase 2 clinical trial, we are evaluating the safety and efficacy of the injection of our CLS-TA into the SCS, together with the anti-VEGF agent Eylea injected into the vitreous, as compared to an intravitreal injection of Eylea alone. We believe that SCS injection of our CLS-TA, in combination with intravitreal anti-VEGF treatment, may provide the potential benefits of improved visual acuity, reduced macular edema and reduced injection frequency. In addition, we believe that the side effect profile of CLS-1003 will be similar to that of current intravitreal anti-VEGF treatments alone, as SCS injections of CLS-TA should allow the corticosteroid to remain substantially localized in the retina and choroid without introducing the side effects that are commonly observed with other routes of administration of corticosteroids.
Under our CLS-1002 program, for the treatment of wet AMD, we plan to develop a proprietary suspension formulation of axitinib, a single molecule with dual anti-VEGF and anti-PDGF activity, for injection into the SCS with our SCS Microinjector. Wet AMD is a condition involving the abnormal formation and growth of new blood vessels in the choroid, their intrusion into the outer layers of the retina and the leakage of blood and fluid into the retina. The current standard of care for the treatment of wet AMD is intravitreal injection of anti-VEGF drugs as a standalone therapy, as often as seven times per year. Additionally, anti-PDGF molecules, when injected into the vitreous immediately following an anti-VEGF intravitreal injection, have shown clinical promise from Phase 1 and Phase 2 trials conducted by others in improving upon the visual acuity outcomes of the anti-VEGF agent alone. Because wet AMD manifests in the retina and choroid, we believe that SCS injection of drug more directly to the retina and choroid may result in faster onset of therapeutic effect as compared to intravitreal injection. We believe that SCS injection also has the potential to access the new blood vessels in the choroid, which could reduce the necessary frequency of treatment, since damage to the retina may be preventable or reduced before these new blood vessels can intrude into the retina and cause damage. We plan to further study these effects in any future clinical trials that we conduct as part of our CLS-1002 program.
Our drug candidates, SCS Microinjector, and method of drug administration into the SCS are protected by five issued U.S. patents and over 50 patent applications filed in the United States and major international
 
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markets, including the European Union, Canada, India, Japan, China and Australia. Our issued patents are broadly directed to methods of administering drugs of any type, including anti-inflammatory drugs, anti-VEGF drugs, anti-PDGF drugs and gene therapy, into the SCS by injection and are not scheduled to expire until 2027, 2029 and 2034. Our patent applications relate to SCS injection technology and methods, our current therapeutic drug candidates and formulations, various therapeutic uses, including treatment of specific indications such as macular edema associated with non-infectious uveitis and RVO, as well as wet AMD and DME, and administration of specific classes of drugs to the SCS, including anti-inflammatory drugs and anti-VEGF drugs. Our pending patent applications are not projected to expire until between 2027 and 2035.
If our product candidates are approved, we plan to commercialize them with a specialty team of 30 to 40 sales and medical marketing support professionals to target the approximately 1,700 retinal specialists in the United States, and we may also pursue collaborations with third parties to commercialize any of our drugs approved for marketing outside the United States.
The members of our management team have held senior leadership positions at a number of pharmaceutical and biotechnology companies with approved ophthalmic drugs, including Alcon, Alimera Sciences, CIBA Vision and ISTA Pharmaceuticals. Members of our team have contributed to the development, regulatory approval and commercialization of several retinal products, such as Triesence, Iluvien, Nevanac, Visudyne and Xibrom.
Strategy
Our goal is to be a leading biopharmaceutical company focused on the development and commercialization of therapeutics to treat blinding diseases of the eye, with a particular emphasis on diseases affecting the retina and the choroid. The key elements of our strategy are:
 
 	•	 	Advancing CLS-1001 and CLS-1003 to FDA approval under the Section 505(b)(2) NDA regulatory pathway.     Our most advanced product candidates, CLS-1001 and CLS-1003, utilize CLS-TA, our proprietary formulation of TA, a corticosteroid that has been used for decades to treat ocular inflammatory conditions. We believe this approach will allow us to more efficiently and predictably pursue the regulatory approval of these product candidates under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act. In the CLS-1001 uveitis program, we recently commenced a pivotal Phase 3 clinical trial of CLS-TA injected into the SCS for the treatment of macular edema associated with non-infectious uveitis and expect to report data from this trial in the second half of 2017. Based on our end-of-Phase 2 review with the FDA in May 2015, we expect this trial to be the only pivotal clinical trial necessary to support a 505(b)(2) NDA filing for CLS-TA. Separately, in our CLS-1003 program, we have completed enrollment of a 46-patient Phase 2 clinical trial of CLS-TA injected into the SCS concomitantly with intravitreally injected Eylea for the treatment of macular edema associated with RVO, with data expected in the second quarter of 2016.	
 
 	•	 	Maximizing the commercial potential of our product candidates.    If either CLS-1001 or CLS-1003 is approved, we plan to build a specialized team of 30 to 40 sales and medical marketing support professionals to target the approximately 1,700 retinal specialists in the United States. We expect that this sales force would be able to effectively sell more than one of our products, in the event that multiple product candidates are approved for marketing. We have retained the worldwide commercialization rights to all of our product candidates, except we have granted a third party the exclusive right to commercialize our product candidates in Russia and specified adjacent territories	
 
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 	pursuant to a license agreement, as described later in this prospectus. We may pursue additional collaborations with third parties to commercialize any of our drugs approved for marketing outside the United States, either through territorial licenses or distributor relationships.	
 
 	•	 	Advancing our CLS-1002 wet AMD development program.     We plan to develop a proprietary suspension formulation of axitinib, a compound with dual anti-VEGF and anti-PDGF activity, for the treatment of wet AMD by injection into the SCS. We believe a single injection of a drug with dual anti-VEGF and anti-PDGF activity to the choroid and retina through the SCS may provide superior visual outcomes compared to an intravitreal anti-VEGF treatment alone and could reduce the number of injections required to treat wet AMD. We plan to file an IND for our proprietary formulation of axitinib in the second half of 2016 and subsequently commence a Phase 1/2 clinical trial.	
 
 	•	 	Developing a product candidate to treat DME.    DME, like uveitis and RVO, is characterized by an inflammatory aspect. After the data from the CLS-1003 Phase 2 clinical trial have been analyzed, we intend to initiate clinical trials to develop a product candidate to treat DME modeled after our approach for addressing the treatment of RVO.	
 
 	•	 	Developing additional therapies through collaborations with third parties.    We plan to explore collaborations with third parties to develop SCS-injected treatments for eye diseases. These collaborations may take the form of in-licenses of the third parties’ drugs or drug candidates for our own development for SCS-injected treatments, or out-licenses for third parties to use our intellectual property covering SCS-injected treatments as part of the development of their own drugs. For example, we are collaborating with Santen to develop compounds designed to treat macular edema and neovascularization associated with wet AMD, RVO and DME. Additionally, we are collaborating with Santen to explore the potential benefits of SCS injection of compounds known to reduce elevated IOP associated with glaucoma for a sustained period of time. We have also entered into an agreement with Spark pursuant to which we are collaborating with Spark to investigate the use of our SCS Microinjector to administer gene therapy to the back of the eye.	
 
 	•	 	Maintaining and strengthening our intellectual property portfolio.    Our intellectual property strategy aims to control the commercialization of SCS access, with patents and patent applications covering SCS injection methods, novel formulations of drugs and microinjectors used to access the SCS, and methods of treatment of diseases through the SCS. Our current patents and patent applications provide us with exclusivity in the United States and major international markets, and are not projected to expire until between 2027 and 2034. We will seek to broaden the scope of and increase the geographic reach of our patent protection throughout the world.	
The Clearside Approach
We are developing drug candidates for the treatment of back of the eye diseases to be administered to the retina and choroid through the SCS using our proprietary SCS Microinjector. We believe that our novel, patented approach of SCS drug injection may provide a number of potential benefits, including:
 
 	•	 	Improved bioavailability at the site of disease and faster onset of therapeutic effect.    In preclinical studies, we observed higher amounts of drug present in the retina and choroid following SCS injection, both at early time points and over the course of the experimental timeframe, as compared to the amounts of the same drug present over time in the retina and choriod following intravitreal injection. We believe this suggests that treatment using SCS injection of a drug may have a faster	
 
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 	onset of therapeutic effect than intravitreal drug injection, along with similar or better efficacy, in diseases such as uveitis, RVO, wet AMD and DME.	
 
 	•	 	Similar efficacy profile with lower drug amounts required.    In a preclinical study in an animal model of uveitis, SCS injection of TA achieved similar efficacy results with only 10% of the drug amount commonly administered through intravitreal injection. We believe this suggests our approach may allow us to develop ocular therapies with similar efficacy, but with lower amounts of active drug, compared to current therapies.	
 
 	•	 	Less frequent injections.    Current treatments for RVO require monthly intravitreal injections of anti-VEGF drugs, while current treatments for wet AMD require such injections as often as seven times per year. For RVO patients, we believe that a combination of a standard intravitreal injection of an anti-VEGF drug that addresses the vascular aspect of the disease, together with an SCS injection of CLS-TA, which addresses the inflammatory aspect of RVO, may have efficacy similar to that of monthly intravitreal anti-VEGF injections but with a reduction in the frequency of treatment to once every 90 days. In wet AMD, we believe that more direct administration of drugs with anti-VEGF or dual anti-VEGF and anti-PDGF activity to the neovascularization in the choroid through SCS injection may substantially block the process of additional new vascular growth within the choroid before the vessels break into the retina and create further damage through leakage. If treatment through the SCS can block retinal damage before it occurs, we believe it could delay vision loss for a longer duration of time than the current standard intravitreal administration of anti-VEGF drugs and, accordingly, could require less frequent administration while providing at least the same levels of efficacy.	
 
 	•	 	Enhanced safety profile.    Intravitreal injections result in drugs diffusing throughout the eye, including to the lens, iris and ciliary body at the front of the eye, which for some drugs, such as corticosteroids, has been associated with safety issues, such as cataracts and elevated IOP levels. Intravitreal administration of TA has been associated with cataracts and increases in IOP levels in 20% to 60% of patients. Because SCS injection of drugs in preclinical studies appeared to result in drug remaining localized in the retina and choroid without substantial diffusion to the vitreous or the front portion of the eye, we believe SCS injection has the potential to reduce the incidence of these side effects. In our Phase 2 clinical trial, all 22 patients, who were all treated with an SCS injection of CLS-TA, completed the full observation period and were evaluated for safety. None of the patients experienced cataracts and there were no corticosteroid-related increases in IOP or treatment-related serious adverse events observed in this trial. None of the eight patients dosed in our Phase 1/2 clinical trial in non-infectious uveitis experienced cataracts, increased levels of IOP or other treatment-related serious adverse events over the course of 26 weeks following a single SCS injection of TA.	
 
 	•	 	Incorporated into standard medical practice.    If approved for marketing, our drugs will be packaged together with our SCS Microinjector for use by retinal specialists in their offices. Our product candidates are designed to be administered using a similar procedure as is used for intravitreal injections. Accordingly, we expect our products, if approved, will be incorporated into retinal specialists’ standard medical practice.	
 
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The current development status of our product candidates is summarized in the chart below:

Development
Program	 	  Indication  	 	Route of Administration and
Active Ingredient	  	Status and Upcoming Milestones	
 	 	 	 	
CLS-1001	 	Macular

edema
associated
with non-
infectious
uveitis	 	SCS injection of CLS-TA	  	• Initiated ~150-patient single pivotal Phase 3 clinical trial in November 2015 with CLS-TA, with data expected in the second half of 2017
 
• Completed a 22-patient Phase 2 clinical trial
 
• Completed an 8-patient Phase 1/2 clinical trial

CLS-1003	 	Macular

edema
associated
with RVO	 	SCS injection of CLS-TA
together with intravitreal
injection of the
anti-VEGF agent, Eylea
 	  	• Completed enrollment of a 46-patient Phase 2 clinical trial, with data expected in the second quarter of 2016	
 	 	 	 	
CLS-1002	 	Wet AMD	 	SCS injection of the anti-
VEGF and anti-PDGF
agent, axitinib
 	  	• IND submission expected in the second half of 2016 and subsequently commence a Phase 1/2 clinical trial	
We have discussed our proposed development program with the FDA for the CLS-1001 program using CLS-TA for the treatment of macular edema associated with non-infectious uveitis, but have not yet done so for our CLS-1003 and CLS-1002 development programs.
CLS-1001 Program Targeting Macular Edema Associated with Non-infectious Uveitis
In the CLS-1001 program, we are developing CLS-TA for treatment of macular edema associated with non-infectious uveitis, a condition characterized by macular edema in addition to other complications due to a variety of inflammatory conditions in the eye other than infection. CLS-1001 consists of an SCS injection of CLS-TA, our proprietary formulation of TA. In November 2015, we enrolled the first patient in a pivotal Phase 3 clinical trial in which we intend to enroll approximately 150 patients. We currently expect to report data from this trial in the second half of 2017 and then submit a Section 505(b)(2) NDA to the FDA. We have completed a Phase 2 clinical trial for this indication that we conducted with CLS-TA. We enrolled 22 patients in the Phase 2 clinical trial and we received top line data in December 2015, as described below. We have also completed a Phase 1/2 clinical trial in eight uveitis patients. We believe that CLS-TA will be at least as effective in treating uveitis, including the associated macular edema, as commonly used treatments with corticosteroids. However, we believe that it may provide improved bioavailability of drug at the diseased retina and choroid, which may result in faster onset of therapeutic effect, a similar efficacy profile with lower drug amounts required, and longer duration of therapeutic effect, potentially resulting in a reduced frequency of necessary injections. We also believe that CLS-TA may result in fewer side effects compared to commonly used corticosteroid treatments.
Market Opportunity for Treatment of Macular Edema Associated with Non-infectious Uveitis
Uveitis is one of the most frequent causes of blindness in the developed world. Based on prevalence data published in the journal  Ophthalmology  in 2004 and United States census data for 2010, we estimate approximately 350,000 individuals in the United States suffer from some form of uveitis. Typically diagnosed in individuals between the ages of 20 and 50, uveitis can occur in both eyes approximately two-thirds of the time and accounts for approximately 10% of cases of blindness in the United States. Uveitis
 
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can be either infectious or non-infectious, with non-infectious uveitis accounting for approximately 80% of all uveitis cases. Macular edema was reported in 33% of uveitis patients according to a study published in 2006 in the journal Ophthalmology .
Limitations of Currently Available Therapies for Macular Edema Associated with Non-Infectious Uveitis
Although there are drugs approved for the treatment of non-infectious uveitis, there are currently no approved drugs that specifically target macular edema associated with non-infectious uveitis. Corticosteroids are the most commonly used treatments for non-infectious uveitis. Corticosteroids administered through eye drops, although used to treat some uveitis patients, are generally ineffective in treating patients with macular edema associated with non-infectious uveitis. Corticosteroids administered orally or systemically can be effective in treating patients with macular edema associated with non-infectious uveitis, but their use is associated with significant side effects. As a result of the shortcomings associated with these methods of administering corticosteroids, the most common method for treating macular edema associated with non-infectious uveitis is intravitreal injection or implant of a corticosteroid, such as TA, dexamethasone or fluocinolone acetonide. Examples of intravitreal corticosteroid treatments include Ozurdex ® , Retisert ® , Kenalog ®  and Triesence. Ozurdex is a single-use biodegradable dexamethasone implant that has been approved by the FDA as a treatment for non-infectious uveitis affecting the back of the eye, but has been associated with increased IOP in 25% of patients and cataracts in 5% of patients following administration. Retisert, a non-biodegradable fluocinolone acetonide implant that requires surgical administration, has also been approved by the FDA as a treatment for non-infectious uveitis, but more than 75% of patients receiving Retisert require additional medications within three years of receiving Retisert therapy to effectively treat their uveitis, more than 35% of patients require surgical intervention in order to control increase in IOP levels, and nearly all patients develop cataracts and require cataract surgery following treatment.
Triesence and Kenalog are the main injectable formulations of TA that are used for the treatment of intraocular inflammatory conditions. Prescription of Kenalog is off-label because it has not been approved by the FDA to treat intraocular conditions. TA has been associated with increases in IOP or cataract formation or progression in 20% to 60% of patients when injected intravitreally.
Immunosuppressive agents are also sometimes used to control the inflammation associated with non-infectious uveitis, but due to their ability to systemically impair the body’s immune system and their association with additional side effects, physicians are cautious in using these agents. Anti-VEGF therapies are also used to treat macular edema in a variety of diseases, but are generally not used in uveitis patients because they do not treat the inflammation inherent to uveitis or many of the other complications associated with uveitis.
Potential Benefits of CLS-1001
If approved by the FDA, CLS-TA would be the first treatment specifically indicated for macular edema associated with non-infectious uveitis. Because the CLS-1001 program is based on CLS-TA, our formulation of TA, a corticosteroid known to be effective in treating uveitis, we believe that our product candidate will be effective in treating the disease, including the associated macular edema, with a reduced incidence of side effects, such as uncontrolled, elevated IOP and cataracts. Our preclinical studies suggest that SCS injection of TA may provide improved bioavailability of drug at the retina and choroid, both at early time points and over the course of 12 weeks following treatment. We believe improved bioavailability could result in faster onset of therapeutic effect and a similar efficacy profile with lower drug amounts required. Our clinical observations from the Phase 1/2 trial suggest the potential for CLS-1001 to be effective at treating uveitis for at least 12 weeks following a single SCS injection, as four of the eight treated patients did not receive any additional
 
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therapy for at least 26 weeks following a single SCS injection of TA. Currently used intraocular injections of TA are typically effective for approximately 12 weeks. In contrast to intravitreal injections, based on our preclinical studies, we believe that SCS injection will allow the drug to remain more localized in the diseased retina and choroid. As a result of this localization, we believe that CLS-1001 may be effective in treating non-infectious uveitis, including the associated macular edema, without significant drug exposure to other eye tissues, thereby potentially reducing the incidence of side effects associated with commonly used corticosteroid treatments. We will evaluate this result in our future clinical trials in the CLS-1001 program.
Our Clinical and Preclinical Development of CLS-1001
Based on our consultation with the FDA, we have conducted or are conducting the following clinical trial and preclinical studies, in each case using TA injected using a prototype of our SCS Microinjector, as part of our CLS-1001 development program:
 
 	•	 	an ongoing Phase 3 clinical trial in patients with macular edema associated with non-infectious uveitis evaluating SCS injection of CLS-TA with our SCS Microinjector, from which we expect to report data in the second half of 2017;	
 
 	•	 	a completed 22-patient Phase 2 clinical trial in patients with macular edema associated with non-infectious uveitis evaluating SCS injection of CLS-TA with our SCS Microinjector;	
 
 	•	 	a completed Phase 1/2 clinical trial in non-infectious uveitis patients evaluating SCS injections of Triesence, a commercially available TA formulation, with our SCS Microinjector;	
 
 	•	 	a completed preclinical study comparing the pharmacokinetic effects of SCS and intravitreal injection of Triesence in rabbits;	
 
 	•	 	a completed preclinical study comparing the pharmacokinetic effects of SCS injection of CLS-TA and Triesence in rabbits;	
 
 	•	 	a completed preclinical study evaluating the pharmacodynamic effects of SCS and intravitreal injection of Triesence in a pig model of uveitis; and	
 
 	•	 	completed preclinical studies evaluating the toxicology of single and repeated SCS injection of CLS-TA and Triesence in rabbits.	
Details of these clinical trials and preclinical studies are summarized below.
Pivotal Phase 3 Clinical Trial
Clinical Trial Design.    In November 2015, we initiated a pivotal Phase 3 randomized, controlled, multi-center clinical trial in patients with macular edema associated with non-infectious uveitis and we expect to report data from this trial in the second half of 2017. Based on our end-of-Phase 2 review with the FDA in May 2015, we believe that this trial will be the only pivotal clinical trial necessary to support a filing of a Section 505(b)(2) NDA for this indication.
We intend to conduct the trial at approximately 50 investigational sites and to enroll approximately 150 patients with macular edema associated with non-infectious uveitis, randomized either to a treatment arm consisting of approximately 90 patients or to a sham injection procedure arm consisting of approximately 60 patients. We expect to use a sham injection procedure as a comparator for CLS-TA suprachoroidal treatment, as opposed to an active drug, because there are no approved therapies for macular edema associated with non-infectious uveitis against which to compare CLS-TA. All of the patients in the treatment arm will receive a 4.0 mg dose of CLS-TA injected into the SCS using our SCS Microinjector. In order to simulate an injection to
 
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maintain masking, the sham injection procedure will include all steps involved in the SCS injection procedure, except that a microinjector with a needleless hub will be used to apply pressure to the eye. Patients in each arm will receive their designated procedure at the beginning of the trial and a second procedure of the same type at week 12. All patients will be followed and evaluated for a period of six months following the initial procedure.
Endpoints.    The primary efficacy outcome of the trial will be a visual acuity outcome, as we evaluate patients’ changes in BCVA from baseline at week 24. Secondary efficacy outcomes will include additional measures of changes in BCVA and reductions in retinal thickness from baseline. Safety measures will be monitored over the 24-week observation period and will include the incidence of adverse events and serious adverse events, including cataracts and increases in IOP.
Phase 2 Clinical Trial
We have completed a Phase 2 multi-center, masked, randomized, internally controlled clinical trial designed to evaluate the safety and efficacy of a single 4.0 mg or a single 0.8 mg dose of CLS-TA administered through the SCS. We are using and expect to use CLS-TA in all ongoing and future clinical trials intended to support a 505(b)(2) NDA submission for the CLS-1001 program.
Clinical Trial Design.    We enrolled 22 patients at 14 sites in this trial. Eligibility criteria included males and non-pregnant females over the age of 18 with macular edema associated with non-infectious uveitis, with fluid in the retina and with retinal thickness above 310 microns and reading better than 20/400 in the study eye, which corresponds to 20 or more letters of BCVA. Patients were excluded if they had other ocular conditions in the study eye. Patients were randomized to receive a single SCS injection of one of two doses of CLS-TA, with 17 patients receiving a 4.0 mg dose and five patients receiving a 0.8 mg dose. Patients returned for follow-up examinations between seven days and 11 days, at four weeks and at eight weeks following dosing.
Endpoints.    The primary endpoint in this trial was mean change in retinal thickness from baseline at eight weeks following the SCS injection of the 4.0 mg dose of CLS-TA. Secondary endpoints included evaluation of changes in BCVA. Only the 17 patients who received the 4.0 mg dose of CLS-TA were evaluated for achievement of these endpoints. The efficacy data from the patients on the 0.8 mg dose is considered exploratory, and therefore was not considered in determining achievement of endpoints. We also evaluated safety endpoints in all 22 patients, including changes in IOP, in this trial. We received top line data from this trial at the end of December 2015.
 
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Top Line Efficacy Results – Retinal Thickness.    Of the 17 patients who received the 4.0 mg dose of CLS-TA, 16 were evaluated for changes in retinal thickness. At four and eight weeks, the average reduction in retinal thickness was 135 and 164 microns, respectively, with p-values of 0.0056 and 0.0018, respectively. A 50 micron change in retinal thickness is considered clinically meaningful. P-value is a conventional statistical method for measuring the statistical significance of clinical results. A p-value of 0.05 or less represents statistical significance, meaning that there is a less than 1-in-20 likelihood that the observed results occurred by chance. These results are summarized in the chart below.
Mean Reduction in Retinal Thickness

 
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Top Line Efficacy Results – Visual Acuity.    All 17 patients who received the 4.0 mg dose of CLS-TA were evaluated for changes in BCVA, measured using the Early Treatment of Diabetic Retinopathy Study chart, or the ETDRS chart, a standard visual acuity measurement. At four and eight weeks, the average improvement in BCVA was 7.7 and 9.2 letters on the ETDRS chart, respectively, with p-values of 0.0001 and 0.0004, respectively. These results are summarized in the chart below.
Improvement in Best Corrected Visual Acuity

Top Line Safety Results.    All 22 patients completed the full observation period of the trial, and CLS-TA was generally well tolerated. One patient experienced atrial fibrillation, a condition that resolved in one day. The principal investigator considered this serious adverse event to be unrelated to the treatment, an assessment that was reviewed and approved by an independent medical monitor. There were no serious adverse events related to study treatment and no corticosteroid-related increases in IOP observed in this trial and none of the patients experienced cataracts.
Phase 1/2 Clinical Trial
In February 2015, we completed a Phase 1/2 multi-center, open-label clinical trial designed to evaluate the safety and tolerability of a single injection of Triesence into the SCS in patients diagnosed with non-infectious uveitis. The trial was conducted under an IND we submitted to the FDA in December 2012 for the potential treatment of sympathetic ophthalmia, temporal arteritis, uveitis and ocular inflammatory conditions unresponsive to topical corticosteroids. The IND was amended in March 2014 to update the specific treatment indication to be macular edema following non-infectious uveitis. The primary purpose of this trial was to demonstrate the overall safety of treating uveitis patients by injecting a commercially available formulation of TA into the SCS, rather than intravitreally.
Clinical Trial Design.    We enrolled eight patients at three centers in this trial. Eligibility criteria included adult patients with non-infectious uveitis experiencing either macular edema or vitreous haze, another common complication of uveitis. We enrolled patients with either of these complications of uveitis in order to assess the safety and tolerability of SCS injection of TA and to determine whether SCS injection of TA could improve patient vision by reducing the effects of either of these conditions. Eligible patients had IOP levels of no greater than 22 millimeters of mercury, or mmHg, a common measure of pressure.
 
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Normal IOP levels are generally between 10 and 12 mmHg at the low end and 20 and 22 mmHg at the high end. IOP levels above 22 mmHg are considered to be elevated, increasing the patient’s risk of developing glaucoma.
Each patient enrolled received a single SCS injection of 4.0 mg of Triesence, a common intravitreal dose of TA, at a location at the front of the eye similar to the location typically used for intravitreal injection. Patients returned for a follow-up examination on the day after the injection and then for eight additional evaluations at weeks 1, 2, 4, 8, 12, 16, 20 and 26 following the treatment. Patients could receive other treatment for non-infectious uveitis at any time during the trial with any accepted therapy, if the patient’s condition deteriorated or if the treating physician otherwise determined it to be advisable. In the event a patient received other treatment, we continued to follow the patient for the duration of the trial for safety purposes, but, in accordance with the trial protocol, we no longer considered efficacy measures after the administration of other treatment as part of the evaluation of the SCS injection’s effect on that patient.
This Phase 1/2 clinical trial was not powered to show efficacy results with statistical significance. Statistical significance means that an effect is unlikely to have occurred by chance. Clinical trial results are considered statistically significant when the probability of the results occurring by chance, rather than from the efficacy of the product candidate, is sufficiently low. Since the trial was not powered to show results with statistical significance, the results from the trial may be attributable to chance and not to the clinical efficacy of TA. This trial design is typical of Phase 1 and some Phase 2 clinical trials, the principal purpose of which is to provide the basis for the design of larger, definitive trials with the inclusion of more patients to show statistical significance.
Endpoints.    Our Phase 1/2 clinical trial was primarily a safety and tolerability study, although we also assessed efficacy measures. The main safety endpoint related to changes from baseline in IOP. We also assessed efficacy endpoints relating to changes in best-corrected visual acuity, or BCVA, and changes in retinal thickness, which is a common measurement of macular edema. BCVA is a common measurement of a patient’s ability to see at distances. In this trial, BCVA was measured using a standard eye chart known as a Logarithm of the Minimum Angle of Resolution, or LogMAR, chart. A LogMAR chart has five letters per line, and improvement in BCVA of one line on the LogMAR chart corresponds to an improvement of 0.1 LogMAR units. A LogMAR score of zero corresponds to 20/20 vision, while a LogMAR score of 0.3 corresponds to 20/40 vision and a score of 0.6 corresponds to 20/80 vision.
Safety Results.    The chart below shows the mean change in IOP for the eight patients treated in the trial, as measured at different time points post-treatment. All eight patients completed the full 26-week observation period. No patient experienced a clinically meaningful increase in IOP, defined as a 10 mmHg increase in IOP from baseline, or an absolute increase in IOP to a level above 30 mmHg, which symptoms are typically seen starting between six and 12 weeks after topical or intravitreal administration of steroid to the eye. For example, the prescribing information for the intravitreally administered corticosteroid, Ozurdex, notes that in clinical trials of over 300 patients, 28% of patients receiving Ozurdex experienced at least a 10 mmHg increase in IOP from baseline at a follow-up visit, and 33% of patients treated with Ozurdex experienced an increase in IOP to a level above 25 mmHg. Additionally, in our Phase 1/2 clinical trial, no patient required medication to lower increased IOP during the course of the trial.
The number of patients included in the results for each time point in the chart below, indicated with the notation “n=”, varies because, at some time points up to week 4, one or two patients either missed a follow-up visit or a measurement was inadvertently skipped, resulting in only six or seven of the eight patients being measured. In addition, the number of patients included in the results for the time points in the chart
 
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below also varies because observations for the four patients who received other treatment for their non-infectious uveitis during the follow-up observation period of the trial are only included up to the point that these patients received such other treatment. One patient received additional treatment following the week 8 observation, two patients received additional treatment following the week 16 observation and a fourth patient received additional treatment following the week 20 observation.
Mean Change in IOP

In addition to these IOP observations, the drug was generally well tolerated in this clinical trial. One patient with a history of pulmonary embolisms was hospitalized following a pulmonary embolism 10 weeks after treatment. The principal investigator considered this serious adverse event to be unrelated to the treatment, an assessment that was reviewed and approved by an independent medical monitor. The condition resolved after three days.
Efficacy Results — Visual Acuity.    In this trial, BCVA was measured at weeks 1, 2, 4, 8, 12, 16, 20 and 26 following treatment. Efficacy results were recorded until the patient required another treatment, after which the patient’s BCVA was no longer measured in accordance with the trial protocol. Of the eight patients who received drug in this trial, one patient was given additional treatment following the week 8 observation, two patients were given additional treatment following the week 16 observation, and one patient was given additional treatment following the week 20 observation. The remaining four patients needed no additional treatment during the 26-week post-treatment observation period.
The chart below summarizes the mean improvement in BCVA observed at each evaluation time point in the trial, measured using a LogMAR chart. A LogMAR chart has five letters per line, and improvement in BCVA of one line on the LogMAR chart corresponds to an improvement of 0.1 LogMAR units. During the course of the trial, we observed a range of improvement in BCVA of between one and five lines on the LogMAR chart. At the end of week 12, the average improvement in BCVA exceeded two lines, which is considered clinically meaningful. At the end of week 26, four of the eight patients in the trial had still not required additional treatment. For those four patients, the average improvement in BCVA was nearly three lines at week 26.
 
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As described above, the number of patients included in the results for the time points in the chart below varies because of missed follow-up visits and because observations for the four patients who received other treatment for their non-infectious uveitis during the follow-up observation period of the trial are only included up to the point that these patients received such other treatment.
Improvement in Best Corrected Visual Acuity

The table below summarizes, for the patients at each time point who had not received other treatment, the number of patients who achieved improvements of at least two and three lines from their baseline measurements:

  	 	Week 1
(n=7)	 	Week 2
(n=7)	 	Week 4
(n=7)	 	Week 8
(n=8)	 	Week 12
(n=7)	 	Week 16
(n=7)	 	Week 20
(n=5)	 	Week 26
(n=4)	
 	 	 	 	 	 	 	 	 	
³2 logMAR lines	 	3	 	3	 	5	 	6	 	5	 	4	 	4	 	4	
 	 	 	 	 	 	 	 	 	
³3 logMAR lines	 	2	 	2	 	2	 	5	 	3	 	3	 	2	 	2	
Efficacy Results — Retinal Thickness.    Of the eight patients treated in the trial, seven were experiencing macular edema associated with their uveitis at the time of treatment and were therefore also evaluated for change in retinal thickness after the injection. A reduction in retinal thickness in patients with macular edema occurs with the removal of excess fluid from the retina, reflecting a reduction of the swelling of the macula and other parts of the retina, affected by the edema. The eighth patient was only experiencing vitreous haze associated with uveitis, an inflammatory symptom of uveitis where inflammatory cells cloud the vitreous, but in this case, the patient did not have macular edema, and change in retinal thickness is therefore not a relevant measurement for this patient.
The chart below summarizes the mean change in retinal thickness observed in the four patients that completed the 26-week post-observation period without other treatment. At weeks 12 and 26 of the trial, the average reduction in retinal thickness for patients was greater than 100 microns from their respective
 
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baselines, which is considered clinically meaningful. One micron is equal to one-thousandth of one millimeter.
In addition to the number of patients varying at each time point as a result of missing follow-up visits or skipped measurements, as described above under “—Safety Results,” of the seven patients that were experiencing macular edema, the number of patients included in the results for the time points in the chart below also varies because efficacy observations for the two patients who received other treatment for their non-infectious uveitis during the follow-up observation period of the trial are only included up to the point that these patients received such other treatment.
Mean Reduction in Retinal Thickness

We believe these results are encouraging because we observed consistent response after the SCS injection. It is important to note that the improvements in BCVA and reductions in retinal thickness were achieved only in a small patient population, with data from only eight patients, in an open-label setting, were not statistically significant and might not be replicated in larger-scale trials that we intend to conduct.
Preclinical Study Comparing the Pharmacokinetic Effects of SCS and Intravitreal Injection of Triesence in Rabbits
We conducted a preclinical study in rabbits to compare the pharmacokinetic results of SCS injections and intravitreal injections of Triesence, a commercially available TA formulation. Pharmacokinetics refers to the process by which a drug is distributed and metabolized in the body, which provides information on drug levels in specific tissues and how these levels change over time. To compare these results, we observed the relative distributions of Triesence in the different tissues and areas of the eye for each method of administration.
In this study, 50 rabbits received a single dose of 4.0 mg of Triesence on day 1 of the study injected either intravitreally or into the SCS. The rabbits were then observed for periods of up to 90 days and the concentration of TA in various parts of the eye was measured at days 14, 28, 56 and 91.
The tables below illustrate the results of this study. For each tissue type or area of the eye, the values shown represent the average concentration of drug observed in the rabbits at the particular measurement
 
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points during the study, when comparing the two routes of injection. For clarity of presentation, the tables below include varying concentration scales.
Concentration of TA Following Either SCS or Intravitreal (IVT) Injection

 	 	 	

 	 	

 	 	 	
In the inner sclera, choroid and outer retina, significantly higher concentrations of TA injected into the SCS were present throughout the 91-day period as compared to TA injected intravitreally. The opposite was the case in the iris, ciliary body, lens and aqueous humor, all of which are located at the front of the eye, as well as in the vitreous, with each of these tissues showing higher levels of TA throughout the 91-day period when injected intravitreally as compared to its injection into the SCS. Only minimal levels of TA were present in the iris, ciliary body, lens and aqueous humor when injected into the SCS. Although there was
 
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variability in the relative concentrations in the inner retina, which is the part of the retina adjacent to the vitreous, at different time points, the concentrations were generally comparable across both administration methods. In this study, we also compared the drug levels in the blood plasma for each method of administration. Minimal levels of drug in the blood plasma were detected following each method of administration.
We believe these preclinical study results suggest that drugs administered through the SCS can remain substantially localized within the targeted retina and choroid, and away from other parts of the eye, where they could result in a higher incidence of side effects. We also believe these results suggest that SCS injection provides substantially better bioavailability for at least 90 days in the targeted retina and choroid than intravitreal injection. We intend to further evaluate this bioavailability data in future clinical trials before any potential submission of our marketing application to the FDA.
Preclinical Study Comparing the Pharmacokinetic Effects of SCS Injection of CLS-TA and Triesence in Rabbits
In order to establish that our CLS-TA behaves in the same manner as Triesence despite the differences in formulation, we conducted a preclinical pharmacokinetic study in rabbits, comparing the pharmacokinetic profile of our CLS-TA with the profile of Triesence, each injected into the SCS. In the study, 25 rabbits received a single dose of 4.0 mg of either our CLS-TA or Triesence injected into the SCS on day 1. The rabbits were then observed for periods of up to 90 days and the resulting concentrations of each of the two TA formulations in various parts of the eye was measured at days 15, 29, 58, 63 and 91.
In this study, our CLS-TA and Triesence had comparable distributions throughout the eye over the 90-day period. As shown in the graphs below, both our CLS-TA and Triesence, administered through the SCS, remained present in the retina and choroid throughout the 90-day period following injection.
Concentration of Either CLS-TA or Triesence Following SCS Injection

 	 	
 	  	 	
Preclinical Study Evaluating the Pharmacodynamic Effects of SCS and Intravitreal Injection of Triesence in a Pig Model of Uveitis
In this preclinical study, the results of which were published in the journal Investigative Ophthalmology and Vision Science , we studied the pharmacodynamics of Triesence injected into the SCS
 
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and injected intravitreally in a pig model of uveitis. Pharmacodynamics refers to the biochemical and physiological effects of a drug on the body. In this study, 20 pigs were assigned to one of three drug treatment arms: two intravitreal and one SCS. The intravitreal injections were with doses of either 0.2 mg or 2.0 mg of Triesence and the SCS injection was with a dose of 0.2 mg of Triesence. The pigs were observed for three days after injection to measure their average change in inflammatory score, as measured by an established scale for measuring inflammation in the eye, the modified McDonald-Shadduck grading system. After three days, both the 2.0 mg intravitreal and the 0.2 mg SCS doses were observed to be more effective at reducing uveitic inflammation than the 0.2 mg intravitreal injection. Additionally, the 0.2 mg SCS dose and 2.0 mg intravitreal dose achieved similar reductions in inflammatory scores each day. Therefore, SCS injection of Triesence had a similar pharmacodynamic response to intravitreal injection at only 10% of the dose. The graph below illustrates these results.
Reduction in Inflammation Following Either SCS or Intravitreal Injection
of Triesence in a Pig Model of Uveitis

Preclinical Studies Evaluating the Toxicology of SCS Injection of CLS-TA and Triesence in Rabbits
We have conducted toxicology studies in rabbits in which both our CLS-TA and Triesence were well tolerated when injected into the SCS. In one study, 110 rabbits received a single SCS injection of either 3.2 mg or 5.2 mg of Triesence or of a vehicle control without active drug. The rabbits were then evaluated for the following 17 weeks. In the other study, 48 rabbits received an initial SCS injection of either 4.0 mg of our CLS-TA or of vehicle control and were then evaluated for the following 13 weeks. A subgroup of the 48 rabbits received a second SCS injection of our CLS-TA after the first 13 weeks and this subgroup was evaluated for an additional 13 weeks, resulting in a total observation period of 26 weeks. In both studies, the rabbits were observed for tolerability assessments as well as mortality and clinical observations, body weight and food and water consumption.
In these studies, all doses of our CLS-TA and Triesence were well-tolerated. In the study in which rabbits received our CLS-TA, a slight increase in IOP was observed. There were no other treatment-related or administration-related side effects, and in each case localization of TA in the back of the eye was observed, with minimal exposure in the front of the eye.
Additional Studies
We will also be following patients from the Phase 3 trial in an extension trial to obtain additional information on the duration of action of CLS-TA. In this extension trial, patients from the Phase 3 trial who
 
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have not received any other therapy will have the opportunity to be enrolled, and will receive no further treatments for their uveitis. Since the last treatment in the Phase 3 trial would have occurred at week 12 following the initial procedure, we expect to enroll patients starting at their week 24 exit visit and to follow eligible patients for an additional 24 weeks or until they receive additional treatment at the election of the physician.
We intend to enroll an additional 35 patients in a separate clinical trial in order to collect additional safety information to add to our overall safety database to reach the number required for our planned NDA submission. These additional patients will be evaluated over six months following dosing with CLS-TA.
Regulatory Approval Pathway of CLS-1001
If the results of our single pivotal Phase 3 clinical trial are favorable, we intend to seek regulatory approval of CLS-TA by utilizing Section 505(b)(2) of the FDCA. As part of our NDA submission under Section 505(b)(2), we intend to rely on the results from all of our clinical trials, as well as the FDA’s previous findings of safety and efficacy for TA and an analysis of available data from clinical literature.
We also intend to base any foreign marketing applications, in part, on data obtained through these trials.
CLS-1003 Program Targeting Macular Edema Associated with Retinal Vein Occlusion
We are developing CLS-1003 for treatment of macular edema associated with RVO, a sight-threatening disorder resulting from the blockage of a retinal vein. In the CLS-1003 program, we are using an SCS injection of CLS-TA together with an intravitreal injection of the anti-VEGF drug, Eylea. We believe that we may provide a differentiated therapeutic benefit for RVO patients with our combination treatment that potentially couples the advantages of visual acuity gain and macular edema reduction along with a quarterly, rather than monthly, dosing schedule, compared to currently used intravitreal anti-VEGF injections alone.
We initiated a 46-patient Phase 2 clinical trial in February 2015 in which we are comparing a combination treatment arm of patients who receive both a suprachoroidal injection of CLS-TA and an intravitreal injection of Eylea to a control arm in which patients receive only intravitreal injections of Eylea. We have completed enrollment of this Phase 2 clinical trial and expect to report data from this trial in the second quarter of 2016.
Market Opportunity for Treatment of RVO
RVO is a sight-threatening disorder resulting from a blockage of one of the veins carrying blood out of the retina. RVO is estimated to affect more than 16 million adults worldwide, according to a 2010 study published in the journal Ophthalmology , and we estimate RVO affects 2.2 million individuals in the United States. In RVO, the blockage of a retinal vein can lead to poor blood circulation, low oxygen, and sometimes inflammation. A blocked vein will leak its contents of blood and fluid. Bleeding within the retina and swelling from fluid can create macular edema.
Limitations of Currently Available Therapies for Macular Edema Associated with RVO
There are three primary treatments currently used for the treatment of RVO: intravitreal injections of anti-VEGF medications, intravitreal corticosteroid injections and laser surgery. The current standard treatment for macular edema associated with RVO involves intravitreal injections of anti-VEGF drugs, such as Lucentis, Eylea or Avastin. Lucentis and Eylea are indicated for monthly administration and Avastin is
 
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used in a similar fashion, but off-label. These monthly treatments are required throughout the course of the disease, which could last for years. Anti-VEGF drugs are effective in significantly improving vision in approximately 30% to 40% of patients with macular edema associated with RVO, and have limited side effects.
Corticosteroid treatment, specifically TA injected intravitreally, was previously evaluated in a series of randomized, multi-center clinical trials, called the SCORE studies, conducted by the National Eye Institute. For example, in the SCORE-CRVO study, approximately 26% of patients with macular edema associated with RVO had meaningful gains in visual acuity after one year with a dosing frequency of one intravitreal injection of TA every four months. However, several side effects were observed, including cataracts and elevated IOP. Because of these side effects, intravitreal administration of corticosteroids, such as TA, is not the preferred therapy, even though it has been observed to be effective in reducing macular edema associated with RVO. Another corticosteroid therapy, Ozurdex, an extended release dexamethasone implanted in the vitreous, has been approved by the FDA for the treatment of RVO, but has also been associated with increased IOP in 25% of patients and cataracts in 5% of patients.
Before the introduction of anti-VEGF drugs, laser surgery was the leading therapy for treating macular edema associated with RVO. Laser surgery can be used to help control bleeding and swelling, which can reduce the loss of sight, but cannot improve vision. Laser surgery, however, cannot be used long term because it permanently damages the retina.
Potential Benefits of CLS-1003
In our CLS-1003 program, we are exploring the concomitant SCS injection of CLS-TA and intravitreal injection of Eylea, a corticosteroid and an anti-VEGF agent, respectively, to provide the potential benefits of improved visual acuity, reduced macular edema and reduced injection frequency. Corticosteroids and anti-VEGF agents have known advantages in treating RVO. Based on the SCORE studies described above and our findings in preclinical studies, we believe that each SCS injection of CLS-TA may provide a duration of effect longer than anti-VEGF therapy alone, while also potentially reducing the frequency of necessary anti-VEGF treatments from once every 30 days to once every 90 days, due to the benefits of both corticosteroid and anti-VEGF treatment. In addition, we believe that the side effect profile of CLS-1003 will be similar to that of current intravitreal anti-VEGF treatments alone, as SCS injections of CLS-TA should allow the corticosteroid to remain substantially localized in the retina and choroid without introducing the side effects that are commonly observed with other routes of administration of corticosteroids. Combination therapy with a corticosteroid and an anti-VEGF agent has been shown to reduce treatment frequency to once every four months along with improved visual acuity outcomes based on a clinical trial conducted by a third party.
Clinical Trials
We have completed the enrollment of a 46-patient Phase 2 clinical trial in which the goal will be to demonstrate that patients treated with CLS-TA injected into the SCS together with Eylea injected intravitreally may require less frequent treatments than monotherapy of Eylea injected intravitreally. We enrolled 46 patients at 14 sites in the United States in this trial. All patients in the trial are randomized to receive one intravitreal injection of 2.0 mg of Eylea, in a total volume of 50 microliters, and an SCS injection of 4.0 mg of our CLS-TA, in a total volume of 100 microliters, or one intravitreal injection of Eylea and a sham SCS procedure in the same visit. After randomization, patients will be seen in the clinic once per month for three months. Patients in each of the two treatment arms will be evaluated for the need
 
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to receive additional intravitreal injections of Eylea at the subsequent visits one and two months after the initial injection if they continue to experience increases in macular edema or reductions in visual acuity in accordance with strictly defined guidelines for receiving additional intravitreal Eylea injections, as determined by a masked, centralized reading center. If they do not experience increases in macular edema or reductions in visual acuity at these subsequent visits, they will not receive additional intravitreal Eylea treatment.
The primary objective of the trial is to evaluate the safety and efficacy of a single SCS injection of CLS-TA together with the initial intravitreal injection of Eylea, compared to the control group initially receiving only an intravitreal Eylea injection. The primary efficacy endpoints in the trial include determining the number of required Eylea treatments in each arm, which we believe will provide an indication of whether concomitant therapy provides any advantage to the patient in reducing the number of required Eylea treatments. Secondary efficacy endpoints include measures of change in visual acuity and reductions in retinal thickness from baseline. The safety endpoints are the incidence of adverse events and serious adverse events, including increases in IOP. We believe that the combination of an SCS injection of CLS-TA and an intravitreal injection of Eylea will provide the potential benefits of improved visual acuity, reduced macular edema and reduced injection frequency.
We have also completed a GLP toxicology study in rabbits with an SCS injection of CLS-TA together with an intravitreal injection of the anti-VEGF drug Eylea.
Regulatory Approval Pathway
We expect to correspond with the FDA following the completion of our Phase 2 clinical trial to discuss the details of the regulatory approval pathway for CLS-1003. If the results of our Phase 2 clinical trial are positive, we expect to be able to follow a 505(b)(2) NDA regulatory approval pathway and to conduct one or two pivotal Phase 3 clinical trials in order to support an NDA submission for CLS-1003 in macular edema associated with RVO. We expect that we would be able to commence any such Phase 3 clinical trial in the first half of 2017. In pursuing the 505(b)(2) regulatory pathway, we intend to rely on the results from our CLS-1003 development program, the FDA’s previous findings of safety and efficacy for TA, the FDA’s previous findings of safety and efficacy for Eylea and peer-reviewed literature.
CLS-1002 Program Targeting Wet Age-Related Macular Degeneration
Under our CLS-1002 program, we intend to develop a treatment for wet AMD that, through SCS injection with our SCS Microinjector, could provide visual acuity benefits, macular edema reduction and potentially reduce the frequency of necessary treatments compared to the current standard of care. Wet AMD is a condition involving the abnormal formation and growth of new blood vessels in the choroid, their intrusion into the outer layers of the retina and leakage of blood and fluid into the retina. We have selected a lead compound, axitinib, a single molecule with both anti-VEGF and anti-PDGF activity, and plan to develop a proprietary suspension formulation of axitinib to be administered by SCS injection, which we believe could be more effective than current treatments for wet AMD. We believe that SCS injection of our proprietary formulation of axitinib could result in improvements in visual acuity compared to intravitreal injection of anti-VEGF drugs, while potentially reducing the frequency of necessary treatment. We plan to file an IND in the second half of 2016 and subsequently commence a Phase 1/2 clinical trial for our proprietary formulation of axitinib.
 
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Market Opportunity for Treatment of Wet AMD
Wet AMD is a leading cause of severe vision loss and blindness in people over the age of 50 in the developed world. If untreated, the blood vessel growth and leakage associated with wet AMD can eventually lead to blindness. The majority of patients with wet AMD experience severe vision loss in the affected eye within approximately two years after diagnosis of the disease. According to a study published in 2004 in the journal  Ophthalmology , approximately 1.2 million people in the United States suffer from wet AMD. Based on estimates from AMD Alliance International, a non-profit organization focused on AMD awareness, and census growth data, we estimate there are approximately 230,000 new cases of wet AMD each year in the United States. Because the risk of developing wet AMD increases with age, we expect that the overall aging of the population will result in a significant increase in the number of wet AMD cases, both in the United States and worldwide.
Limitations of Currently Available Therapies for Wet AMD
The current standard of care for the treatment of wet AMD is administration by intravitreal injection of anti-VEGF drugs as a standalone therapy. The anti-VEGF drugs most commonly used include Lucentis and Eylea, both of which have been approved by the FDA for the treatment of wet AMD, and Avastin, which is used off-label for the disease.
Because anti-VEGF therapies inhibit abnormal blood vessel growth and leakage, they are effective in reducing the macular edema associated with wet AMD. Anti-VEGF therapies have demonstrated the ability to prevent further visual loss in approximately 90% of treated patients. A retrospective study published in 2012 in the journal  Archives of Ophthalmology concluded that the prevalence of both legal blindness and moderate visual impairment in patients two years after being diagnosed with wet AMD had decreased substantially following the introduction of anti-VEGF therapy. However, because anti-VEGF drugs do not appear to cause any regression of the underlying neovascularization associated with wet AMD, the current standard of care requires regular injections, typically as often as seven times per year, and therapy may be required indefinitely. Further, while anti-VEGF treatment is effective at preventing vision loss, only 30% of patients improve their visual acuity by 15 letters or more. Anti-VEGF treatments have been associated with subretinal fibrosis, or the formation of excess connective tissue under the retina, as well as retinal scarring in some patients, with 45% of patients experiencing scarring after two years of anti-VEGF therapy according to a 2014 study published by the American Academy of Ophthalmology. Additionally, monthly treatment with anti-VEGF agents have been associated with increased risk of geographic atrophy, according to a 2013 study published by the American Academy of Ophthalmology.
In addition to anti-VEGF therapies, anti-PDGF drugs are being developed as potential treatments for wet AMD. Because PDGF is a major factor in the formation and stabilization of blood vessel growth in the choroid, therapies inhibiting PDGF may also be effective in addressing the abnormal growth of new blood vessels associated with wet AMD. In clinical trials conducted by others, an intravitreal injection of a PDGF inhibitor together with an intravitreal injection of Lucentis improved visual acuity in approximately 60% of patients with wet AMD compared to approximately 30% of patients receiving intravitreal injections of Lucentis alone. However, no anti-PDGF therapy has been approved by the FDA for the treatment of wet AMD, either alone or in combination with an anti-VEGF agent. Even if approved, we expect that anti-PDGF therapy would also require indefinite monthly injections.
Even though anti-VEGF and anti-PDGF therapies may be effective in treating wet AMD, intravitreal injection of these drugs relies on the process of diffusion of the drug from the vitreous outward to the retina and, eventually, the choroid, which results in lower bioavailability and the need for frequent retreatment.
 
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Potential Benefits of CLS-1002
Axitinib, the lead compound selected for further clinical development as part of our CLS-1002 program, has dual anti-VEGF and anti-PDGF activity. Based on prior clinical data from trials conducted by a third party, we believe that anti-PDGF properties together with anti-VEGF properties may provide superior visual outcomes to standalone anti-VEGF drugs. We believe that the SCS injection of drugs with anti-VEGF, or dual anti-VEGF and anti-PDGF, activity more directly to the neovascularization in the choroid through SCS injection could block the process of additional new vascular growth within the choroid before the vessels break into and create further damage through leakage into the retina. We believe that such SCS injection of treatment may, therefore, provide faster onset of therapeutic effect and delay vision loss for a longer duration of time than the current standard intravitreal administration and will require less frequent injections. We will test this hypothesis in any future clinical trials that we may conduct as part of our clinical development program for CLS-1002.
Clinical and Preclinical Development of CLS-1002
We have completed the following clinical trial and preclinical studies as part of our CLS-1002 development program:
 
 	•	 	a completed Phase 1 clinical trial in wet AMD patients evaluating the safety and tolerability of SCS injection of Avastin, an anti-VEGF drug, with our SCS Microinjector;	
 
 	•	 	a completed preclinical efficacy study of SCS injection of a compound with dual anti-VEGF and anti-PDGF activity in a rabbit model of wet AMD;	
 
 	•	 	a completed preclinical efficacy study of SCS injection of Eylea in a rat model of wet AMD;	
 
 	•	 	a completed preclinical safety study of SCS injection of compounds with dual anti-VEGF and anti-PDGF activity; and	
 
 	•	 	a completed preclinical pharmacokinetic study to evaluate ocular distribution and duration of axitinib in a rabbit model.	
Details of the trial and studies are summarized below.
Completed Phase 1 Clinical Trial with Avastin
In order to evaluate the safety and tolerability of SCS injection of Avastin, an anti-VEGF drug, in humans with our SCS Microinjector, we conducted a Phase 1, single-center, open-label clinical trial in 2012 at the Hospital of the Association to Prevent Blindness in Mexico. Because of its established safety profile and its prevalence as an off-label treatment for wet AMD, we selected Avastin as the therapy to be evaluated in this exploratory trial. Four patients with wet AMD were enrolled in the trial, each of whom was between the ages of 63 and 73. Each patient received a 2.5 mg dose of Avastin in a 100 microliter injection in one eye using a prototype of our SCS Microinjector. The trial was conducted in accordance with current U.S. good clinical practices.
Trial Design.    Eligibility criteria included adult patients with choroidal neovascularization associated with wet AMD that had previously responded to Avastin treatment, had retinal thickness in the study eye of between 275 and 600 microns in the central subfield, and had specified levels of visual acuity. In addition, patients could not have received any anti-VEGF treatment within 60 days of screening or have had any expectation of receiving such treatment during their participation in the study other than the single Avastin injection.
 
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Once eligibility was established, each patient received a single SCS injection of Avastin and then returned for a follow-up examination on the day after the injection. Thereafter, patients returned for five additional evaluations at approximately weeks 1, 2, 3, 4 and 8 following the injection. No additional treatments were administered during the course of the trial.
Endpoints.    The trial was primarily a safety and tolerability study. The safety endpoints included incidence, intensity and type of adverse events, as well as changes from baseline in IOP. We also measured efficacy endpoints, including change from baseline in BCVA letter score.
Safety results.    SCS injection of Avastin in the trial was observed to be generally well tolerated. No increases in IOP or serious or unexpected adverse events were reported in any of the patients. Two patients experienced hyperemia, or redness in the study eye, which was mild in severity, was determined to be unrelated to treatment in the trial and resolved within a day without other treatment.
Efficacy results.    Two of the four patients achieved an improvement in BCVA letter score of at least 13 letters at the end of the eight-week trial following the SCS injection of Avastin. One of these patients improved by 16 letters within one day of treatment and maintained that level of improvement for the remainder of the trial. The second patient achieved an improvement of four letters by one week after treatment, which improved to 10 letters by week 3 after treatment and 13 letters by week 8. The other two patients in the trial maintained their BCVA letter score within four letters of their baseline at each measurement point in the trial. Overall, there was an average gain of nine letters in the four patients at the end of the eight-week observation period following the SCS injection of Avastin.
By comparison, in a trial conducted by the National Eye Institute, the Comparison of AMD Treatment Trial, or CATT, which was a Phase 3 randomized, masked, controlled, multi-center study, the efficacy of Avastin was compared to that of Lucentis, which has been approved by the FDA for the treatment of wet AMD. In the CATT trial, patients in the respective treatment arms received either monthly intravitreal injections of Lucentis or monthly intravitreal injections of Avastin over two years. After one year, patients receiving monthly Lucentis treatment experienced an average improvement in BCVA of 8.5 letters, while those receiving Avastin experienced an average improvement of 8.0 letters. After two years, the average improvement for the patients receiving Lucentis and Avastin was 8.8 letters and 7.8 letters, respectively.
Our Phase 1 trial was not designed to show any efficacy results with statistical significance and was conducted in an open-label, uncontrolled setting. While the data from this exploratory trial suggested potential improvement in visual acuity over eight weeks following SCS injection of Avastin, it is important to note that the results from this trial were observed in only four patients and might not be achieved by any other patient treated with a product candidate to be developed as part of our CLS-1002 program. Any later-stage trials intended to support an application for regulatory approval of a product candidate for this indication will need to show statistical significance in larger, well-controlled clinical trials.
Preclinical Efficacy Study of a Compound with Dual Anti-VEGF and Anti-PDGF Activity in a Rabbit Model of Wet AMD
We conducted a preclinical study assessing the effect on retinal leakage in a wet AMD rabbit model of a drug candidate with dual anti-VEGF and anti-PDGF activity administered by SCS injection. In this study, the treatment arm of three rabbits received an SCS injection of the drug and the control arm of three rabbits received an SCS injection of a vehicle without the active drug. After 28 days, retinal leakage was induced on the surface vessels of the inner retina in both arms and leakage was measured approximately two hours after this induction. The treatment arm showed 48% less retinal leakage than the vehicle arm. We believe
 
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this suggests that this dual anti-VEGF and anti-PDGF drug administered through the SCS may be effective in treating wet AMD by reducing leakage in the retina, and even in vessels in the inner retina, which is closest to the vitreous. We are continuing to evaluate this compound.
Preclinical Efficacy Study of SCS Injection of Eylea in a Rat Model of Wet AMD
We conducted a preclinical study to assess the effectiveness of SCS injection of Eylea, as compared to intravitreal injection, in reducing the lesion area in rats with choroidal neovascularization, in a well-established model of wet AMD in which laser burns are used to induce choroidal neovascularization. Rats were divided in groups and given either one 0.2 mg dose of Eylea by SCS injection, two separate 0.2 mg doses of Eylea by SCS injection, or SCS injections of saline. We measured the reduction in macular lesion area after 21 days and found that the lesion area reductions in the two groups receiving Eylea by SCS injection were comparable to historical data of lesion area reductions from intravitreal injections of Eylea at the 0.2 mg dosage level. We believe this suggests that administration of Eylea through SCS injection may be as effective as intravitreal administration in reducing leakage due to choroidal neovascularization in this rat model of wet AMD.
Preclinical Safety Study of SCS Injection of Compounds with Dual Anti-VEGF and Anti-PDGF Activity
We conducted a preclinical study assessing the safety of compounds with dual anti-VEGF and anti-PDGF activity administered by SCS injection. In this study, a total of 18 rabbits received an SCS injection of a number of compounds and were evaluated on days 1, 4 and 7. Overall, the compounds were well tolerated with only mild or transient ocular effects observed.
Preclinical Pharmacokinetic Study of Ocular Distribution and Duration of Axitinib in Rabbit Model
We conducted a preclinical pharmacokinetic study to assess the rate at which axitinib distributes through the ocular tissues, in addition to the time-frame of such ocular distribution. In this study, we administered 4.0 mg of axitinib by SCS injection in both eyes of two rabbits. We measured the distribution and duration of the drug on days 1, 2, 4, 8, 15, 29, 61 and 91 following the injection. Key portions of the eye that were evaluated for levels of drug remaining were the sclera-choroid-retinal pigmented epithelium, or SCR, the neural retina and the vitreous. We also observed that, at 91 days, there was more than 60% of the original axitinib remaining in the SCR. There was also a significant amount of drug remaining in the neural retina. Based on calculations from the remaining amounts of drug, we believe the data suggest a possible half-life of axitinib of at least three months. We believe this duration of effect supports our belief that SCS administration of axitinib may require less frequent injections than the current standard intravitreal injections of anti-VEGF drugs.
Planned Clinical Development
Based on the results of our Phase 1 clinical trial in four wet AMD patients and our preclinical rabbit study, we believe that wet AMD may be effectively treated through SCS injection, and we will evaluate this hypothesis as part of any clinical development program. We expect to perform pharmacokinetic and toxicology studies, as well as additional preclinical testing, to support an IND filing for our proprietary formulation of axitinib in the second half of 2016.
Future Potential Product Candidates
We believe that our SCS-focused approach has the potential to become more broadly used for the treatment of other back of the eye diseases, and we intend to develop additional product candidates for SCS
 
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injection based on the results of our current and planned clinical trials. We will then seek to secure appropriate regulatory authorizations to begin additional clinical testing for any such product candidates. In addition to uveitis, RVO and wet AMD, there are a number of ophthalmic conditions affecting the retina and choroid with unmet medical need for which SCS injection of therapy may be beneficial, including:
 
 	•	 	Diabetic macular edema, or DME, a common ocular complication of diabetes that results in swelling in the macula and is the primary cause of vision loss associated with diabetes;	
 
 	•	 	Polypoidal choroidal vasculopathy, or PCV, a disorder resulting from the abnormal growth of new blood vessels in the choroid adjacent to the macula. PCV is characterized by dilated and branching blood vessels in “polyp like” groups in the choroid that could lead to leakage;	
 
 	•	 	Geographic atrophy, an advanced form of AMD, is characterized by a loss of the layers of cells in the retina next to the choroid, eventually including the photoreceptor cells in the macula, leading to gradual irreversible loss of central vision and eventually blindness; and	
 
 	•	 	Pseudophakic cystoid macular edema, also known as Irvine-Gass syndrome, a common cause of visual impairment after cataract surgery.	
According to the U.S. Centers for Disease Control and Prevention, or CDC, the number of Americans diagnosed with diabetes has increased from approximately 7.7 million in 1994 to approximately 21.0 million in 2010. All patients with diabetes are at risk of developing some form of diabetic eye disease. DME accounts for a majority of vision loss in patients with diabetic eye disease. According to a study published in the journal  Diabetes Care  in 2003, patients with diabetes have a 10% risk of developing clinically significant DME over a 10-year period. A study published in the journal Ophthalmology  in 2009 found that over a 25-year period, approximately 17% of diabetics studied were diagnosed with DME. We estimate approximately 1.1 million individuals in the United States suffer from DME.
Currently, the only FDA-approved drugs for the treatment of DME are the anti-VEGF drugs Lucentis and Eylea and the intravitreal corticosteroid implants Ozurdex and Iluvien. Some retinal specialists also prescribe other anti-VEGF drugs for off-label use, such as Avastin, as well as corticosteroid therapies, primarily Kenalog and Triesence, and laser photocoagulation to treat DME. Laser photocoagulation is a procedure in which a laser is used to apply a burn or a pattern of burns to cauterize leaky blood vessels to reduce edema in the retina. Studies have shown that both anti-VEGF drugs and corticosteroids are effective in some DME patients. However, both anti-VEGF drugs and corticosteroids are limited by a need for multiple injections to maintain a therapeutic effect. This raises concerns, not only for patients, but also for caregivers who are affected by frequent doctor visits, as well as for healthcare providers who must monitor patients monthly. In addition, these therapies have safety concerns. Corticosteroids administered intravitreally have historically been associated with acceleration of cataract formation and significant increases in IOP, which may increase the risk of glaucoma, and monthly anti-VEGF treatments have been associated with increased risk of geographic atrophy. Laser photocoagulation can also have undesirable side effects, including partial loss of peripheral and night vision.
Our development program for DME will be modeled after our approach for the treatment of RVO. We expect that any clinical trials we may conduct for this indication will be designed based on the results observed in our Phase 2 clinical trial of CLS-1003 in RVO patients, in which we have taken a combination approach using both CLS-TA injected suprachoroidally and Eylea injected intravitreally.
As part of our ongoing collaboration with Santen, we are evaluating the use of our SCS Microinjector to administer sustained-release formulations of known glaucoma drugs. Glaucoma is a progressive eye
 
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disease in which elevated levels of IOP are associated with damage to the optic nerve, which results in irreversible vision loss and potentially blindness. The National Eye Institute estimates that 2.7 million Americans suffered from glaucoma in 2010. Glaucoma is treated by the reduction of IOP, which has been shown to slow the progression of vision loss. Once glaucoma develops, it is a chronic condition that requires life-long treatment. The treatment of glaucoma, if successful, would be through the suprachoroidal administration of latanoprost or other drugs known to lower elevated IOP associated with glaucoma.
We are also evaluating the potential use of our SCS Microinjector to inject sustained-release formulations of other ocular therapies. We believe these formulations could include hydrogels, emulsions and liposomes, as well as treatments containing agents such as hyaluronic acid or micro- or nanoparticles.
The SCS Microinjector
Our drug candidates have been and will be specifically formulated to be injected with our SCS Microinjector into the SCS in order to spread around to the back of the eye. The single-use microinjector is intended to consistently inject drug into the SCS, in volumes similar to the amount of drug commonly used in an intravitreal injection. If approved for marketing by applicable regulatory authorities, the SCS Microinjector will be packaged with two 30-gauge hollow microneedles of varying lengths, each less than 1.2 millimeters, within a custom-designed hub that optimizes insertion and administration of drug into the eye. Based on our discussions with the FDA to date, we do not anticipate that the FDA will require a separate medical device authorization for the SCS Microinjector, but this could change during the course of its review of any marketing application that we may submit.
Our proprietary SCS Microinjector, shown below, can be used to inject a wide variety of drugs into the SCS.

The SCS injection is designed to be carried out perpendicular to the sclera, at a site similar to an intravitreal injection, under local anesthesia. Once the microneedle penetrates the sclera and reaches the SCS, the boundary between the sclera and the choroid, the open bevel of the needle releases the drug between these two layers. Once drug is injected into the SCS, it spreads within the SCS to the back of the eye, where diseases manifest. The preparation and injection will require minimal training for the administering retinal specialist and can be accomplished in an in-office setting.
 
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Current intravitreal injections are performed in a procedure similar to that of SCS injections, except that the hypodermic needles and syringes used in intravitreal injection procedures are designed so that the needle penetrates through all of the layers of the eye and drug is injected into the vitreous cavity, where the precise spatial location of the needle is not as important as when injecting into the SCS. Intravitreal injections are typically performed using a needle that is approximately five millimeters in length, or four times the length of our microneedle. Using a needle of this length, the physician penetrates past the sclera, choroid and retina until reaching the vitreous and does not receive any tactile feedback as to when the needle had reached one of the layers between the sclera and the vitreous. By contrast, our SCS Microinjector is designed to enable the release of the drug into the SCS.
Background on Eye Disease
The human eye possesses focusing elements in the front, the cornea and lens, and a light-sensing element in the back, the retina. Light falls on the photoreceptors that are part of the retina, called rods and cones, and is converted into electrical energy, which travels via the optic nerve to the brain. The central portion of the retina is the macula, which is the region responsible for seeing color and the acute central vision necessary for activities such as reading, face recognition, watching television and driving. The brain processes the complex signals sent from the retina into vision. The following diagram illustrates the principal elements of the anatomy of a healthy eye, including a detailed cross-section of the back of the eye, which refers to the portion of the eye behind the lens.

Role of the Choroid in Retinal Disease
Eye disease can be caused by many factors and can affect both the front and back of the eye. In its most extreme cases, eye disease can result in either partial or total blindness. In the developed world, the major diseases that result in blindness are those affecting the retina. Millions of people live with varying degrees of irreversible vision loss because they have a degenerative eye disorder that affects the retina. In these conditions, the retina is damaged, affecting the retina’s ability to send light signals to the brain. The choroid provides blood, oxygen and nourishment to the outer layers of the retina, but it is also thought to regulate retinal heat, to assist in the control of IOP and to absorb excess light so as to avoid reflection that can damage the retina.
The choroid can be subject to disorders that can lead to retinal damage and vision loss, including inflammatory disorders, vascular disorders and tumors. Our focus is on the first two categories of disorders. When the choroid and surrounding tissue become inflamed from an immune response, it can result in
 
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macular edema, or swelling in the macular region of the retina, which often results in distorted vision or even blindness. In addition, in the case of choroidal neovascularization, abnormal blood vessels forming from choroidal blood vessels may rupture and leak into the retina, also leading to macular edema.
Back of the Eye Diseases
Some of the more common diseases that originate or manifest in the retinal and choroidal areas of the eye include:
Uveitis
Uveitis is inflammation inside the eye and is classified anatomically as anterior, intermediate, posterior or pan-uveitis, according to the primary site of inflammation. Each of these categories, however, encompasses a number of conditions that can be characterized further along other dimensions including: onset, duration, course and etiology. Prolonged or severe inflammation in the back of the eye associated with uveitis can result in the breakdown of cells at the interface of the retina and choroid, leading to the leakage and accumulation of fluid in the macular region of the retina. This fluid build-up can cause macular edema, which can rapidly result in distortion of vision, and eventually blindness, given the macula’s critical role in vision. Approximately 30% of people with uveitis develop macular edema, which is the most frequent cause of visual impairment among patients with uveitis.
Uveitis is one of the most frequent causes of blindness in the developed world. Based on prevalence data published in the journal  Ophthalmology  in 2004 and United States census data for 2010, we estimate approximately 350,000 individuals in the United States suffer from some form of uveitis. Uveitis can be either infectious, caused by an immune response to fight an infection inside the eye, or non-infectious. Non-infectious uveitis accounts for approximately 80% of all uveitis cases.
Uveitis is commonly treated with corticosteroids. Corticosteroids administered through eye drops, although used to treat some uveitis patients, are generally ineffective in treating patients with macular edema associated with non-infectious uveitis. Corticosteroids administered orally or systemically can be effective in treating patients with macular edema associated with non-infectious uveitis, but their long-term use is associated with significant side effects. As a result of the shortcomings associated with these methods of administering corticosteroids, the most common method for treating macular edema associated with non-infectious uveitis is intravitreal injection or implant of a corticosteroid, such as TA, dexamethasone or fluocinolone acetonide.
Retinal Vein Occlusion
RVO is a sight-threatening visual disorder resulting from a blockage of one of the veins carrying blood out of the retina. In RVO, the blockage of a retinal vein can lead to poor blood circulation, low oxygen, and sometimes inflammation in the area that is normally drained by the affected vein. A blocked vein will leak its contents of blood and fluid. This leakage within the retina and the consequential swelling from fluid can cause macular edema. Persistent inadequately treated macular edema associated with RVO can blur vision, cause significant loss in visual acuity and eventually lead to blindness. Macular edema is the most common cause of vision loss in people who suffer from RVO.
RVO is estimated to affect more than 16 million adults worldwide, according to a 2010 study published in the journal Ophthalmology . We estimate RVO affects 2.2 million individuals in the United States.
 
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RVO can be treated and vision can be restored in most cases when treatment is administered relatively soon after initial diagnosis and aggressive treatment is obtained. One common method of reducing the macular edema associated with RVO is to use an anti-VEGF drug. Anti-VEGF drugs are effective in drying the leaking fluid and, therefore, they are useful in eye conditions where edema is a complication of the disease. An added challenge of RVO is inflammation that arises in response to the vascular damage and further contributes to the swelling by causing even more fluid to accumulate in the retina. Since inflammation also plays a role in vein occlusion, corticosteroids may provide an added advantage in the reduction of macular edema associated with RVO because they block the inflammatory pathways and also act to stabilize membranes.
Age-related Macular Degeneration
AMD is a chronic, progressive disease of the macula that results in the loss of central vision. The most common symptoms are a central blurred or blank spot, distortion of objects or simply blurred vision. Peripheral vision usually remains intact. The disease typically affects patients initially in one eye, with a high likelihood of it occurring in the second eye over time. Because AMD is strongly correlated with aging, the disease may recur, notwithstanding treatment, as the aging process continues.
There are two forms of AMD, “dry” AMD and “wet” AMD. Dry AMD is the most common form, representing approximately 85% to 90% of all AMD cases. However, dry AMD cases can develop into wet AMD, and wet AMD accounts for 90% of the severe vision loss associated with advanced AMD.
Wet AMD occurs when new blood vessels in the choroid intrude into the retinal layers and leak fluid. The formation of these new blood vessels is referred to as choroidal neovascularization, since they arise from the capillaries in the choroid. Abnormal new blood vessels tend to be fragile and often bleed and leak fluid into the macula. Untreated, blood vessel growth and associated leakage typically lead to retinal distortion and eventual retinal damage and scarring, resulting in irreversible destruction of the macula and permanent loss of vision. This visual loss occurs rapidly with a progressive course.
According to a study published in 2004 in the journal Ophthalmology, approximately 1.2 million people in the United States suffer from wet AMD. Based on estimates from AMD Alliance International and census growth data, we estimate there are approximately 230,000 new cases of wet AMD each year in the United States. Because the risk of developing wet AMD increases with age, we expect that the overall aging of the population will result in a significant increase in the number of wet AMD cases, both in the United States and worldwide.
The current standard of care for the treatment of wet AMD is administration by intravitreal injection of anti-VEGF drugs as a standalone therapy. Because anti-VEGF therapies inhibit abnormal blood vessel growth and leakage, they are effective in reducing the macular edema associated with wet AMD. Anti-VEGF therapies are effective in reducing macular edema associated with wet AMD and have been shown to prevent visual loss in over 90% of treated patients. They are also associated with improvements of 15 or more letters of visual acuity in approximately 30% of treated patients. However, anti-VEGF treatments have been associated with subretinal fibrosis, or the formation of excess connective tissue under the retina, as well as retinal scarring in some patients. In addition to anti-VEGF therapies, anti-PDGF drugs are being developed as potential treatments for wet AMD. Even though anti-VEGF and anti-PDGF therapies may be effective in treating wet AMD, intravitreal administration of these drugs requires frequent retreatment. Patients typically receive injections as often as seven times per year to manage this chronic disease.
 
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Diabetic Macular Edema
DME is a complication of diabetic retinopathy, a disease affecting the blood vessels of the retina. Diabetic retinopathy results in multiple abnormalities in the retina, including retinal thickening, hemorrhages, impeded blood flow, excessive leakage of fluid from blood vessels and, in the final stages, abnormal blood vessel growth. When the blood vessel leakage causes swelling in the macula, it is referred to as DME. Poorly controlled blood glucose levels, high blood pressure, abnormal kidney function causing fluid retention, high cholesterol levels and other general systemic factors are risk factors associated with DME. The principal symptom of DME is a severe loss of central vision.
According to the CDC, the number of Americans diagnosed with diabetes has increased from approximately 7.7 million in 1994 to approximately 21.0 million in 2010. According to a study published in the journal  Diabetes Care  in 2003, patients with diabetes have a 10% risk of developing clinically significant DME over a 10-year period. A study published in the journal  Ophthalmology  in 2009 found that over a 25-year period, approximately 17% of diabetics studied were diagnosed with DME. We estimate approximately 1.1 million individuals in the United States suffer from DME.
Currently, the only FDA-approved drugs for the treatment of DME are Iluvien, an injectible form of fluocinolone acetonide, the anti-VEGF drugs Lucentis and Eylea and the intravitreal corticosteroid implant Ozurdex. Some retinal specialists also prescribe other anti-VEGF drugs for off-label use, such as Avastin, as well as corticosteroid therapies, primarily Kenalog and Triesence, and laser photocoagulation to treat DME. Studies have shown that both anti-VEGF drugs and corticosteroids are effective in some DME patients. However, the early use of anti-VEGF drugs administered intravitreally is limited by a need for frequent injections to maintain a therapeutic effect and corticosteroids administered intravitreally have historically been associated with acceleration of cataract formation and significant increases in IOP, which may increase the risk of glaucoma. Laser photocoagulation can also have undesirable side effects, including partial loss of peripheral and night vision.
Challenges of Ophthalmic Drug Administration
Administration of drugs to treat back of the eye diseases is a significant issue in ophthalmology. Due to the effectiveness of the blood/eye barrier, it is difficult for oral or other systemically administered drugs to reach the eye in sufficient quantities to have a beneficial effect without adverse side effects to other parts of the body. It is also difficult to provide localized delivery of drug to the individual tissues of the eye through common eye drop or intravitreal injection techniques.
There is a need for more localized drug delivery to the back of the eye in a manner that is safe, effective and practical for long-term use. While there have been many attempts to administer drugs to the back of the eye, most do not achieve sufficient and consistent concentrations for the appropriate period of time. Currently, intravitreal injection remains as the standard for delivering drugs to the retina and choroid. We believe that our novel approach using SCS injection can address several of the shortcomings of current therapies.
Manufacturing
We do not have any manufacturing facilities. We utilize contract manufacturers to formulate and produce our drug candidates and to produce our SCS Microinjector used for our clinical trials. We procure the active pharmaceutical ingredient for our drugs from a third-party supplier. We expect to utilize third-party manufacturers to produce commercial quantities of our drugs and SCS Microinjector, if approved. We anticipate entering into commercial supply agreements with these or other manufacturers at a later date.
 
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Commercialization
We intend to develop and, if approved by the FDA, to commercialize our product candidates in the United States, and we may enter into distribution or licensing arrangements for commercialization rights for other regions. Our management team, who will lead the commercialization of our lead product candidates, has substantial experience in sales and marketing based on their participation in the commercialization of ophthalmic drugs at large pharmaceutical companies including Alcon, Allergan, CIBA Vision, ISTA and Novartis.
For marketing in the United States, we intend to build a specialty team of 30 to 40 sales and medical marketing professionals to target the approximately 1,700 retinal specialists in the United States.
Competition
The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary drugs. While we believe that our technologies, knowledge, experience and scientific resources provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions. Any product candidate that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
With respect to CLS-TA, we face competition from other commercially available forms of TA and other injectable and implantable corticosteroids. Bristol-Myers Squibb markets TA under the brand name Kenalog. Kenalog is indicated only for intramuscular or intraarticular injection, although it is used off-label for intraocular inflammation. There are also a number of generic equivalents of Kenalog. In addition, Alcon’s injectable TA, Triesence, is approved in the United States for the treatment of uveitis and other inflammatory conditions unresponsive to topical corticosteroids, although it is not indicated for the treatment of macular edema associated with uveitis or RVO or DME. Ozurdex, marketed by Allergan, is a bioerodable extended release implant that delivers the corticosteroid dexamethasone and is approved for the treatment of non-infectious uveitis affecting the back of the eye and RVO in both the United States and in the European Union, and recently received approval from the FDA to treat DME. Bausch + Lomb markets Retisert, an intravitreal implant of the corticosteroid fluocinolone acetonide for the treatment of non-infectious uveitis. Iluvien, an injectable form of fluocinolone acetonide marketed by Alimera Sciences, has been approved in both the United States and the European Union for the treatment of DME.
Our product candidates will also compete with anti-VEGF drugs, which are the current standard of care for RVO, wet AMD and DME. Genentech’s products Lucentis and Avastin are both anti-VEGF antibodies. Lucentis is currently approved in the United States and European Union for the treatment of wet AMD, macular edema following RVO and DME. Avastin is an anti-VEGF drug used off-label by retinal specialists in both the United States and in certain countries of the European Union in the treatment of numerous retinal diseases, but it is not indicated for ophthalmic use. In the United States, Regeneron’s anti-VEGF product, Eylea, is approved for the treatment of wet AMD, macular edema following RVO and DME. In the European Union, Eylea is approved for the treatment of wet AMD, DME and macular edema secondary to RVO.
Ophthotech’s drug candidate, Fovista, an anti-PDGF agent, is in Phase 3 clinical trials as a potential treatment for wet AMD to be administered together with an anti-VEGF drug. We are also aware of several
 
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other drug candidates in earlier stages of development as potential treatments for the diseases that we intend to target.
Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient recruitment for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any drugs that we may develop. Our competitors may also obtain FDA or other regulatory approval for their drugs more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market or obtaining FDA market exclusivity, thereby delaying our product approvals. Competitors’ patent protection could also potentially delay FDA approval of our product candidates for up to 30 months, and we will still be subject to potential patent litigation that might arise beyond the 30 months. The key competitive factors affecting the success of our product candidates, if approved for marketing, are likely to be their efficacy, safety, method of administration, convenience, price and the availability of coverage and reimbursement from government and other third-party payors.
Intellectual Property
Our success depends in part on our ability to obtain and maintain patent and other intellectual property and proprietary protection for our technologies and methods of accessing the SCS, drug candidates and formulations as well as patent and other intellectual property and proprietary protection for novel applications, uses, and technological innovations related to our drug candidates, proprietary delivery devices and core technologies. We also rely on trade secrets, know-how, and continuing technological innovation to develop and maintain our proprietary position.
Patents and Patent Applications
Our patent estate, on a worldwide basis, includes five granted U.S. patents broadly directed to methods of administering drugs into the SCS by injection. In addition, our patent estate includes ten patent applications pending in the United States, seven issued foreign patents, four pending international PCT applications and over 50 patent applications pending in major international markets, including the European Union, Canada, India, Japan, China and Australia, relating to our SCS delivery technology, as well as the formulations of our current therapeutic drug candidates and delivery device. Of these patents and patent applications, we license four of the five issued U.S. patents, two pending U.S. applications, five of the issued foreign patents, one of the pending international PCT applications and 15 foreign patent applications, each relating to methods of delivering drugs to the eye by microneedle administration, pursuant to a license agreement with Georgia Tech Research Corporation and Emory University that is described below. With respect to the in-licensed international PCT application, according to the terms of the license agreement, we advise Georgia Tech and Emory regarding the countries in which patent applications should be pursued. Subject to payment of required maintenance fees, annuities and other charges, our issued in-licensed U.S. patents are expected to expire between 2027 and 2029, without taking into account possible patent
 
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term adjustments or extensions. Applications relating to SCS delivery technology and methods, our current therapeutic drug candidates and formulations, various therapeutic uses, including treatment of specific indications such as macular edema associated with non-infectious uveitis and RVO, wet AMD as well as DME and improvement of specified clinical parameters, are expected to expire between 2027 and 2035, without taking into account possible patent term adjustments or extensions.
The term of individual patents depends on the legal term for patents in the countries in which they are granted. In most countries, including the United States, the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country. In the United States, a patent’s term may, in certain cases, be extended by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration date of a U.S. patent as partial compensation for the length of time the drug is under regulatory review.
Our product candidates are protected against genericization through several levels of patents, including the patented approach of administration into the SCS. In the case of CLS-TA injected into the SCS, an applicant who files a paragraph 4 ANDA or 505(b)(2) NDA certifying they may circumvent our patents must also demonstrate comparability of the proposed drug, which we believe may require a clinical trial in macular edema associated with uveitis, against our product, unless a biowaiver is obtained.
Third-Party Patent Filings
Numerous U.S. and foreign issued patents and patent applications owned by third parties exist in the fields in which we are developing products, including patents and applications related to surgical methods of accessing the SCS and certain formulations of TA. Because patent applications can take many years to issue, there may be applications unknown to us, which may later result in issued patents that our product candidates or proprietary technologies may infringe.
Under U.S. law, a person may be able to patent a discovery of a new way to use a previously known compound, even if such compound itself is patented, provided the newly discovered use is novel and nonobvious. Such a method-of-use patent, however, if valid, only protects the use of a claimed compound for the specified methods claimed in the patent. This type of patent does not prevent persons from using the compound for any previously known use of the compound. Further, this type of patent does not prevent persons from making and marketing the compound for an indication that is outside the scope of the patented method.
License Agreement with Emory and Georgia Tech
In July 2012, we entered into a license agreement with Emory University, or Emory, and the Georgia Tech Research Corporation, or GTRC, under which we received a worldwide exclusive license to specified patents relating to methods and devices for drug delivery using a microinjector. The field of the license covers all ophthalmic uses of the microinjector for mammals and birds. Under this license agreement, we have agreed to direct all prosecution of intellectual property to the licensors’ patent counsel and have agreed to pay for all intellectual property expenses associated with the licensed patents.
 
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Under this license agreement, we made an initial $30,000 upfront payment and a $35,000 milestone payment upon dosing of the first human patient in a clinical trial. This license agreement requires us to make a $75,000 milestone payment upon the occurrence of a specified event relating to the commercialization of a drug developed using the licensed patents. Beginning on the third anniversary of this license agreement, we will be obligated to pay an annual license maintenance fee of $25,000, which will continue until the first commercial sale of a product covered by the licensed patents. Additionally, we will owe a low single-digit royalty on any worldwide net product sales related to the licensed patents, with minimum annual royalties starting at $15,000 per year after commercialization. The minimum annual royalty increases each year after the first commercial sale, up to a maximum amount of $100,000 per year in the sixth calendar year and in subsequent years.
We are solely responsible for the development and commercialization of products related to the licensed patients. We are obligated to provide Emory and GTRC a written report detailing our activities related to the development and commercialization of products twice a year.
Royalties are calculated based on net sales of products covered by a patent licensed under the agreement, and are due on each such product sold as long as the patent covering that particular product is valid and unexpired. Unless otherwise terminated pursuant to its termination provisions, this license agreement will expire upon the expiration of the last to expire of the licensed patents. We have the right to terminate this license agreement at any time upon 60 days’ written notice to Emory and GTRC. Emory and GTRC may also terminate this license agreement in the event of a material breach by us. This license agreement will immediately terminate if we challenge the validity or enforceability of any of the licensed patents in a court or other governmental agency of competent jurisdiction.
Research, Option and License Agreement with Spark
In April 2015, we entered into a research, option and license agreement with Spark under which we granted Spark the option to license exclusive rights to our SCS Microinjector technology and related intellectual property for use in delivering gene therapies to the back of the eye. Under this agreement, we and Spark intend to explore the feasibility of using our SCS Microinjector to deliver gene therapies to the choroid and the retina through the SCS for the treatment of several orphan diseases of the back of the eye. We believe that SCS injection of gene therapies could be a useful method of accessing the retina and choroid compared to current methods of subretinal infusion that are not easy to administer. Gene therapies incorporate a DNA molecule used to deliver foreign genetic material to a cell and a nucleic acid that confers a therapeutic benefit.
Under the agreement, Spark made a $500,000 upfront payment to us. If Spark elects to initiate an additional option period, Spark will be obligated to pay us an additional $1.0 million. Spark can exercise its option for a payment to us of $2.0 million or $3.0 million, depending upon the time of exercise. We are eligible to receive aggregate payments of up to $13.5 million from Spark upon the achievement of specified development and commercialization milestones as described in the agreement, as well as aggregate payments of up to $12.0 million upon the achievement of specified annual net sales milestones. In addition, we are eligible to receive low and mid single-digit percentage royalties on net sales of licensed products.
Subject to specified exceptions, if Spark exercises its option, the license will expire on a licensed product-by-licensed product basis and on a country-by-country basis upon the expiration of the specified licensed intellectual property. If Spark does not exercise its option, the agreement will terminate at the end of the last option exercise period. Spark has the right to terminate the agreement at any time upon written
 
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notice to us. We and Spark may also terminate this agreement upon 90 days’ written notice in the event of an uncured material breach by the other party.
Trademarks, Trade Secrets and Know-How
Our trademark portfolio currently consists of one trademark registered in the European Union, one trademark registered in the European Union and New Zealand, and three pending U.S. trademark applications, as well as pending trademark applications in the European Union, Canada, Mexico, Brazil, Australia, China, India, Israel, Japan, New Zealand, Russia, Singapore, South Africa and South Korea. In addition to patent and trademark protection, we rely upon unpatented trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our commercial partners, collaborators, employees, and consultants, and employees. These and other agreements, such as invention assignment agreements, grant us ownership of technologies that are developed through a relationship with a third party.
Government Regulation
In the United States, the FDA regulates drug and device products under the FDCA and its implementing regulations. Our product candidates are subject to regulation as combination products, which means that they are composed of both a drug product and device product. If marketed individually, each component would be subject to different regulatory pathways and reviewed by different Centers within the FDA. A combination product, however, is assigned to a Center that will have primary jurisdiction over its regulation based on a determination of the combination product’s primary mode of action, which is the single mode of action that provides the most important therapeutic action. In the case of our product candidates, the primary mode of action is attributable to the drug component of the product, which means that the FDA’s Center for Drug Evaluation and Research has primary jurisdiction over the premarket development, review and approval of our product candidates. Accordingly, we plan to investigate our products through the IND framework and seek approval through the NDA pathway. Based on our discussions with the FDA to date, we do not anticipate that the FDA will require a separate medical device authorization for our SCS Microinjector, but this could change during the course of its review of any marketing application that we may submit.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by FDA to approve applications, withdrawal of an approval, imposition of a clinical hold, import/export delays, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by FDA and the Department of Justice or other governmental entities.
Drugs
The clinical testing, manufacturing, labeling, storage, distribution, record keeping, advertising, promotion, import, export and marketing, among other things, of our product candidates are governed by
 
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extensive regulation by governmental authorities in the United States and other countries. The FDA, under the Federal Food, Drug, and Cosmetic Act, or FDCA, regulates pharmaceutical products in the United States. The steps required before a drug may be approved for marketing in the United States generally include:
 
 	•	 	preclinical laboratory tests and animal tests conducted under Good Laboratory Practices, or GLP;	
 
 	•	 	the submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials commence;	
 
 	•	 	adequate and well-controlled human clinical trials to establish the safety and efficacy of the product and conducted in accordance with Good Clinical Practices, or GCP;	
 
 	•	 	the submission to the FDA of an NDA;	
 
 	•	 	FDA acceptance, review and approval of the NDA, which might include an Advisory Committee review; and	
 
 	•	 	satisfactory completion of an FDA inspection of the manufacturing facilities at which the product is made to assess compliance with current Good Manufacturing Practices, or cGMPs.	
The testing and approval process requires substantial time, effort and financial resources, and the receipt and timing of any approval is uncertain. The FDA may suspend clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.
Preclinical studies include laboratory evaluations of the product candidate, as well as animal studies to assess the potential safety and efficacy of the product candidate. The results of the preclinical studies, together with manufacturing information and analytical data, are submitted to the FDA as part of the IND, which must become effective before clinical trials may be commenced. The IND will become effective automatically 30 days after receipt by the FDA, unless the FDA raises concerns or questions about the conduct of the trials as outlined in the IND prior to that time. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can proceed. The FDA may nevertheless initiate a clinical hold after the 30 days if, for example, significant public health risks arise.
Each clinical trial must be reviewed and approved by an independent institutional review board, or IRB, at each of the sites at which the trial will be conducted. The IRB will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution.
Clinical trials are typically conducted in three sequential phases prior to approval, but the phases may overlap. These phases generally include the following:
Phase 1.    Phase 1 clinical trials represent the initial introduction of a product candidate into human subjects, frequently healthy volunteers. In Phase 1, the product candidate is usually tested for safety, including adverse effects, dosage tolerance, absorption, distribution, metabolism, excretion and pharmacodynamics.
Phase 2.    Phase 2 clinical trials usually involve studies in a limited patient population to (1) evaluate the efficacy of the product candidate for specific indications, (2) determine dosage tolerance and optimal dosage and (3) identify possible adverse effects and safety risks.
Phase 3.    If a product candidate is found to be potentially effective and to have an acceptable safety profile in Phase 2 clinical trials, the clinical trial program will be expanded to Phase 3 clinical
 
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trials to further demonstrate clinical efficacy, optimal dosage and safety within an expanded patient population at geographically dispersed clinical trial sites.
Phase 4 clinical trials are conducted after approval to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations, or when otherwise requested by the FDA in the form of post-market requirements or commitments. Failure to promptly conduct any required Phase 4 clinical trials could result in withdrawal of approval.
The results of preclinical studies and clinical trials, together with detailed information on the manufacture, composition and quality of the product, are submitted to the FDA in the form of an NDA, requesting approval to market the product. The application must be accompanied by a significant user fee payment, although waivers may be granted in limited cases. The FDA has substantial discretion in the approval process and may refuse to accept any application or decide that the data is insufficient for approval and require additional preclinical, clinical or other studies.
Review of Application
Once an NDA has been accepted for filing, which occurs, if at all, 60 days after submission, the FDA sets a user fee goal date that informs the applicant of the specific date by which the FDA intends to complete its review. This is typically 10 months from the date of submission for drugs that are not new molecular entities, such as our product candidates. The review process can be extended by FDA requests for additional information or clarification. The FDA reviews NDAs to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMPs to assure and preserve the product’s identity, strength, quality and purity. Before approving an NDA, the FDA may inspect the facilities at which the product is manufactured and will not approve the product unless the manufacturing facility complies with cGMPs and may also inspect clinical trial sites for integrity of the data supporting safety and efficacy. The device component of our products will also be subject to review as part of the NDA review process and its manufacturers subject to inspection for compliance with device cGMPs embodied in the Quality System Regulation, or QSR. During the approval process, the FDA also will determine whether a risk evaluation and mitigation strategy, or REMS, is necessary to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed REMS, and the FDA will not approve the application without an approved REMS, if required. A REMS can substantially increase the costs of obtaining approval. The FDA could also require a special warning, known as a black box warning, to be included in the product label in order to highlight a particular safety risk. The FDA may also convene an advisory committee of external experts to provide input on certain review issues relating to risk, benefit and interpretation of clinical trial data. The FDA may delay approval of an NDA if applicable regulatory criteria are not satisfied and/or the FDA requires additional testing or information. The FDA may require post-marketing testing and surveillance to monitor safety or efficacy of a product. FDA will issue either an approval of the NDA or a Complete Response Letter, detailing the deficiencies and information required for reconsideration of the application.
Post-Approval Requirements
Approved drugs that are manufactured or distributed in the United States are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product distribution, advertising and promotion and reporting of adverse experiences
 
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with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims and some manufacturing and supplier changes are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for products and the establishments at which such products are manufactured, as well as new application fees for certain supplemental applications.
The FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. The FDA may also require a REMS, which could involve requirements for, among other things, a medication guide, special training for prescribers and dispensers, and patient registries.
In addition, entities involved in the manufacture and distribution of approved devices or drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. The FDA has promulgated specific requirements for drug cGMPs, device cGMPs embodied in the QSR and combination product cGMPs that, for drug/device combination products, specify the requirements within the drug cGMPs and the QSR with which manufacturers must comply. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:
 
 	•	 	restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;	
 
 	•	 	fines, warning letters or holds on post-approval clinical trials;	
 
 	•	 	refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of product approvals;	
 
 	•	 	product seizure or detention, or refusal to permit the import or export of products; or	
 
 	•	 	injunctions or the imposition of civil or criminal penalties.	
The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including investigation by federal and state authorities.
 
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The Hatch-Waxman Amendments
Our regulatory strategy is to pursue development of our drugs for suprachoroidal delivery as Section 505(b)(2) NDAs under the FDCA. As an alternative path to FDA approval for modifications to formulations or uses of drugs previously approved by the FDA, an applicant may submit an NDA under Section 505(b)(2) of the FDCA Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendments. A Section 505(b)(2) NDA is an application that contains full reports of investigations of safety and effectiveness, but where at least some of the information required for approval comes from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted. This type of application permits reliance for such approvals on literature or on an FDA finding of safety, effectiveness or both for an approved drug product. As such, under Section 505(b)(2), the FDA may rely, for approval of an NDA, on data not developed by the applicant. Therefore, if we can satisfy the conditions required for a Section 505(b)(2) NDA submission, it may eliminate the need for us to conduct some of the preclinical studies or clinical trials for the new product candidate that might otherwise have been required. The FDA may also require companies to perform additional studies or measurements, including clinical trials, to support the change from the approved branded reference drug. The FDA may then approve the new product candidate for all, or some, of the label indications for which the branded reference drug has been approved, as well as for any new indication sought by the 505(b)(2) applicant.
Orange Book Listing
In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product. Upon approval of an NDA, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, known as the Orange Book. Any applicant who files an Abbreviated New Drug Application, or ANDA, seeking approval of a generic equivalent version of a drug listed in the Orange Book or a 505(b)(2) NDA referencing a drug listed in the Orange Book must certify, for each patent listed in the Orange Book for the referenced drug, to the FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA, (2) such patent has expired, (3) the date on which such patent expires or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. There might also be no relevant patent certification. The fourth certification described above is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers. The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. This section viii statement does not require notice to the patent holder or NDA owner.
If the reference NDA holder and patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the paragraph IV certification expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the applicant. Even if the 45 days expire, a patent infringement lawsuit can be brought and could delay market entry, but it would not extend the FDA-related 30-month stay of approval.
 
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The ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the branded reference drug has expired as described in further detail below.
Non-Patent Exclusivity
In addition to patent exclusivity, the holder of the NDA for the listed drug may be entitled to a period of non-patent exclusivity, during which the FDA cannot approve an ANDA or 505(b)(2) application that relies on the listed drug.
A drug, including one approved under a 505(b)(2) application, may obtain a three-year period of non-patent market exclusivity for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted/sponsored by the applicant. Should this occur, the FDA would be precluded from approving any ANDA or 505(b)(2) application for the protected modification until after that three-year exclusivity period has run. However, the FDA can accept an application and begin the review process during the three-year exclusivity period. A 505(b)(2) NDA may also be subject to a five-year exclusivity period for a new chemical entity, whereby the FDA will not accept for filing, with limited exception, a product seeking to rely upon the FDA’s findings of safety or effectiveness for such new chemical entity.
Orphan Drugs
Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition affecting fewer than 200,000 individuals in the United States, or in other limited cases. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process, though companies developing orphan drugs are eligible for certain incentives, including tax credits for qualified clinical testing. In addition, an NDA for a product that has received orphan drug designation is not subject to a prescription drug user fee unless the application includes an indication other than the rare disease or condition for which the drug was designated.
If a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active moiety for the same indication for seven years, except in limited circumstances, such as another drug’s showing of clinical superiority over the drug with orphan exclusivity. Competitors, however, may receive approval of different active moieties for the same indication or obtain approval for the same active moiety for a different indication. In addition, doctors may prescribe products for off-label uses and undermine our exclusivity. Orphan drug exclusivity could block the approval of one of our products for seven years if a competitor obtains approval for the same active moiety for the same indication before we do, unless we are able to demonstrate that our product is clinically superior.
We do not plan to pursue orphan drug designation and exclusivity for CLS-1001 for the treatment of non-infectious uveitis in the United States. However, we may seek designation for other products in the future. We cannot guarantee that we will obtain orphan drug designation for any products in any jurisdiction. Even if we are able to obtain orphan drug designation for a product, we cannot be sure that such product will be approved, that we will be able to obtain orphan drug exclusivity upon approval, if ever, or that we will be able to maintain any exclusivity that is granted.
 
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Foreign Regulation
In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by the comparable foreign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions. Although many of the issues discussed above with respect to the United States apply similarly in the context of the European Union and other geographies, the approval process varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.
Federal and State Fraud and Abuse, Data Privacy and Security and Transparency Laws
In addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices. These laws include, without limitation, anti-kickback and false claims laws, data privacy and security laws, as well as transparency laws regarding payments or other items of value provided to healthcare providers.
The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any good, facility, item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the Anti-Kickback Statute has been violated.
Additionally, the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, collectively the Affordable Care Act, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the Affordable Care Act codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.
 
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The federal civil False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. The civil False Claims Act also applies to false submissions that cause the government to be paid less than the amount to which it is entitled, such as a rebate. Intent to deceive is not required to establish liability under the civil False Claims Act. Several pharmaceutical, device and other healthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus non-covered, uses.
The government may further prosecute conduct constituting a false claim under the criminal False Claims Act. The criminal False Claims Act prohibits the making or presenting of a claim to the government knowing such claim to be false, fictitious, or fraudulent and, unlike the civil False Claims Act, requires proof of intent to submit a false claim.
The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Like the Anti-Kickback Statute, the Affordable Care Act amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
Also, many states have similar fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs.
Under HIPAA, the U.S. Department of Health and Human Services, or HHS, has issued regulations to protect the privacy and security of protected health information used or disclosed by covered entities including health care providers. HIPAA also regulates standardization of data content, codes and formats used in health care transactions and standardization of identifiers for health plans and providers. HIPAA, as amended by HITECH and its implementing regulations, including the omnibus final rule published on January 25, 2015, also imposes certain obligations on the business associates of covered entities that obtain protected health information in providing services to or on behalf of covered entities. Penalties for violations of HIPAA regulations include civil and criminal penalties. In addition to federal privacy regulations, there are a number of state laws governing confidentiality and security of health information that are applicable to our business. New laws governing privacy may be adopted in the future as well.
 
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Failure to comply with privacy requirements could result in civil or criminal penalties, which could have a materially adverse effect on our business.
Additionally, there has been a recent trend of increased federal and state regulation of payments and transfers of value provided to healthcare professionals and/or entities. On February 8, 2013, the Centers for Medicare & Medicaid Services, or CMS, released its final rule implementing section 6002 of the Affordable Care Act known as the Physician Payments Sunshine Act that imposes new annual reporting requirements on manufacturers of drugs, devices, biologicals and medical supplies for payments and other transfers of value provided by them, directly or indirectly, to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their family members. A manufacturer’s failure to submit timely, accurately and completely the required information for all payments, transfers of value or ownership or investment interests may result in civil monetary penalties of up to an aggregate of $150,000 per year, and up to an aggregate of $1 million per year for “knowing failures.” Any failure to comply could result in significant fines and penalties. Certain states also mandate implementation of commercial compliance programs, impose restrictions on device manufacturer marketing practices or require tracking and reporting of gifts, compensation and other remuneration to particular types of healthcare professionals and entities.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that some of our current or future business activities, including certain sales and marketing practices and the provision of certain items and services to our customers, could be subject to challenge under one or more of such laws. The heightening compliance environment and the need to build and maintain robust and expandable systems to comply with different compliance and/or reporting requirements in multiple jurisdictions could increase the possibility that a healthcare company may fail to comply fully with one or more of these requirements. If our operations are found to be in violation of any of the health care laws or regulations described above that are applicable to us, or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal and civil and/or administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any of our product candidates, once approved, are sold in a foreign country, we may be subject to similar foreign laws, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.
Coverage and Reimbursement
We believe that physicians who use our product candidates, if approved, will be reimbursed by third-party payors for both the SCS injection using our SCS Microinjector and for the drug itself. We intend to seek a specific Current Procedural Terminology, or CPT, code as established and maintained by the American Medical Association, or AMA, for the SCS injection of pharmacologic agents using our SCS Microinjector, and a separate Healthcare Common Procedure Coding System, or HCPCS, code as maintained by the Centers for Medicare and Medicaid Services, or CMS, for the drug itself. We believe that separate CPT and HCPCS codes will help payors differentiate our drug candidates from other drugs currently on the market administered through intravitreal injections, although we can provide no assurance that the AMA or CMS will approve the creation of such new codes applicable to our products.
 
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Our strategy will include efforts to engage physician societies and encourage third-party payors to establish coverage, coding and payment that will facilitate access to our product candidates and SCS Microinjector as we expand our commercialization efforts in the United States. Our success in these efforts depends in part on the extent to which governmental authorities, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for the procedures during which our product candidates are administered and for the drugs themselves. Failure by physicians, hospitals, ambulatory surgery centers, and other users of our products to obtain sufficient coverage and reimbursement from healthcare payors for the procedures administering our product candidates or for the product candidates themselves, or adverse changes in government and private third-party payors’ policies would have a material adverse effect on our business, financial condition, results of operations and future growth prospects.
In the U.S., third-party payors continue to implement initiatives that restrict the use of certain technologies to those that meet certain clinical evidentiary requirements. Failure to obtain favorable coverage policies could have a material adverse effect on our business and operations.
In addition to uncertainties surrounding coverage policies, third-party payors from time to time update reimbursement amounts and also revise the methodologies used to determine reimbursement amounts. This includes annual updates to payments to ambulatory surgery centers, hospitals and physicians for the procedure performed administering our products, which could directly impact the demand for any of our product candidates that may be approved. An example of payment updates is the Medicare program updates to physician payments, which is done on an annual basis using a prescribed statutory formula. In the past, when the application of the formula resulted in lower payment, Congress has passed interim legislation to prevent the reductions. However, the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, ended the use of the statutory formula, and provided for a 0.5% annual increase in payment rates under the Medicare Physician Fee Schedule through 2019, but no annual update from 2020 through 2025. MACRA also introduced a merit based incentive bonus program for Medicare physicians beginning in 2019. At this time it is unclear how the introduction of the merit based incentive program will impact overall physician reimbursement under the Medicare program. Any changes in coverage and reimbursement that further restricts coverage of our products or lowers reimbursement for procedures using our products could materially affect our business.
Healthcare Reform
Current and future legislative proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products, or for the procedures associated with the use of our products, or limit coverage of our products. The cost containment measures that payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could significantly reduce our revenues from the sale of our products. However, we believe that the shift away from fee-for-service agreements to capitated payment models supports the value of our products, as we believe that our products reduce longitudinal resource utilization, which can be cost saving-for both payors and providers.
For example, implementation of the Affordable Care Act has the potential to substantially change healthcare financing and delivery by both governmental and private insurers, and significantly impact the pharmaceutical and medical device industries.
The Affordable Care Act imposed, among other things, a new federal excise tax on the sale of certain medical devices, established an annual, nondeductible fee on any entity that manufactures or imports certain
 
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specified branded prescription drugs and biologic agents, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program, extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations, and provided incentives to programs that increase the federal government’s comparative effectiveness research. In addition, the Affordable Care Act implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models. There have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.
In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. On August 2, 2011, the President signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government programs. This includes reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to the Bipartisan Budget Act of 2015, will remain in effect through 2025 unless additional Congressional action is taken. On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressure.
The Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act, or the FCPA, prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from government contracts.
Employees
As of December 31, 2015, we had 21 employees, all of whom are located in the United States. None of our employees is represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.
 
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Facilities
Our principal offices occupy approximately 8,800 square feet of leased office space in Alpharetta, Georgia, pursuant to a lease agreement that expires in March 2017. We believe that our current facilities are suitable and adequate to meet our current needs. We intend to add new facilities or expand existing facilities as we add employees, and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations.
Legal Proceedings
We are not currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results or financial condition.
 
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MANAGEMENT
Directors and Executive Officers
The following table sets forth information concerning our directors, executive officers and other key employees, including their ages as of December 31, 2015:

Name	  	Age	 	  	Position	
Executive Officers:	  	 	 	 	  	 	
Daniel H. White	  	 	48	  	  	President, Chief Executive Officer and Director	
Charles A. Deignan	  	 	51	  	  	Chief Financial Officer	
Glenn Noronha, Ph.D.	  	 	50	  	  	Executive Vice President, Research and Development	
Other Key Employees:	  	 	 	 	  	 	
Rafael V. Andino	  	 	50	  	  	Vice President, Product Development	
Stephen H. Lang	  	 	58	  	  	Vice President, Commercial Operations	
Non-Management Directors:	  	 	 	 	  	 	
Christy L. Shaffer, Ph.D	  	 	57	  	  	Chairman of the Board of Directors	
Clay B. Thorp	  	 	47	  	  	Director	
Evgeny Zaytsev, M.D.	  	 	47	  	  	Director	
Gerald D. Cagle, Ph.D.	  	 	71	  	  	Director	
William D. Humphries	  	 	49	  	  	Director	
Derek Yoon	  	 	41	  	  	Director	
Executive Officers
Daniel H. White
Mr. White is the founder of our company and has served as our President and Chief Executive Officer and as a member of our board of directors since our inception in May 2011. From 2008 to 2011, Mr. White served as Executive Director, Global Corporate Development, for Stiefel Laboratories, Inc., a dermatology pharmaceutical company acquired by GlaxoSmithKline in 2009. From 2007 to 2008, he co-founded and served as President and Chief Executive Officer of Percept BioScience, Inc., a biotechnology company. In 2003, Mr. White co-founded, and until 2007 served as Vice President of Finance and Corporate Development of Alimera Sciences, Inc., a biopharmaceutical company focused on ophthalmology. Previously, he was Head of Business Development and Licensing for CIBA Vision, a Novartis company, and Director of Licensing and Business Development for AAIPharma. Mr. White holds an M.B.A. degree from Wake Forest University and a B.S. degree in Molecular Biology from Auburn University. Our board of directors believes that Mr. White’s leadership of our company since its inception, extensive entrepreneurial experience, knowledge of our company as founder and experience with biotechnology companies prior to founding our company provides him with the qualifications and skills to serve as a director of our company.
Charles A. Deignan
Mr. Deignan has served as our Chief Financial Officer since January 2012. From 2009 to December 2011, Mr. Deignan was Vice President of Finance and Administration for Salutria Pharmaceuticals. Previously, from 1999 to 2009, Mr. Deignan served in a number of roles with AtheroGenics, Inc., a publicly held biopharmaceutical company, including as its Vice President of Finance and Administration. Prior to that, he held management positions at AAIPharma, Inc. and Schering-Plough. Mr. Deignan received his B.S. degree in Business Administration from Boston University.
 
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Glenn Noronha, Ph.D.
Dr. Noronha has served as our Executive Vice President, Research and Development since August 2013. From August 2012 to May 2013, he served as Vice President, Research and Development at Sucampo Pharma Americas, LLC, a pharmaceutical company. From July 2011 to July 2012, Dr. Noronha was Chief Scientific Officer for JW Theriac, Inc., a pharmaceutical company focused on new drug research and development. From 2008 to July 2011, Dr. Noronha was Global Project Head for Retinal Development at Alcon Laboratories, Inc., a Novartis company. From 2002 to 2008, Dr. Noronha held several positions at TargeGen, Inc., a pharmaceutical company, including as co-lead for its ophthalmology programs. Previously, from 2000 to 2002, he was a research scientist and project leader for Medtronic MiniMed, Inc. Dr. Noronha received his Ph.D. degree from Loyola University of Chicago and was a post-doctoral fellow at the University of California at Irvine.
Other Key Employees
Rafael V. Andino
Mr. Andino has served as our Vice President, Product Development since February 2013. Since June 2013, Mr. Andino has also served as an adjunct professor of biomedical engineering at the Georgia Institute of Technology. From January 2009 to February 2013, he served as Director of Research and Development for Bard Medical, a division of C.R. Bard, Inc., a publicly traded company. In 1999, Mr. Andino founded, and until 2008 served as President and Chief Executive Officer of Biofisica, Inc., a biotechnology company that developed technology to expedite wound healing and regeneration of connective tissue in humans. Prior to founding Biofisica, from 1995 to 2005 Mr. Andino was a mechanical engineer, research and development director and senior project manager for CIBA Vision, a Novartis company. He has also worked for the global technology companies E.I. Dupont de Nemours, General Electric and IBM. Mr. Andino received his Bachelor’s degree in Mechanical Engineering from the Georgia Institute of Technology, a Master of Science in Biomedical Engineering from the University of Alabama at Birmingham and an M.B.A. degree from Mercer University.
Stephen H. Lang
Mr. Lang has served as our Vice President, Commercial Operations since March 2013. From 2006 to June 2012, Mr. Lang served as Vice President of Sales for ISTA Pharmaceuticals, Inc., an ophthalmic product company acquired by Bausch + Lomb in 2012. Previously, Mr. Lang held leadership roles in sales and marketing, serving with Novartis Ophthalmics, Inc. from 1995 to 2003, including as its Senior Vice President of U.S. Sales from 2002 to 2003. Mr. Lang began his career with Allergan, Inc. where he served for more than 16 years in various positions, including sales, marketing, national accounts and global business development. He earned his B.B.A. degree in Management from Georgia Southern University.
Non-Management Directors
Christy L. Shaffer, Ph.D.
Dr. Shaffer has served as a director of our company and as the chairman of our board of directors since January 2012. Since 2011, Dr. Shaffer has served as a Venture Partner with Hatteras Venture Partners, an investment firm, and as Managing Director of Hatteras Discovery, which invests in early-stage companies in the life sciences industry sector. From 1995 to March 2010, Dr. Shaffer served in increasing leadership positions at Inspire Pharmaceuticals, a publicly held biopharmaceutical company, beginning as the
 
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company’s first full-time employee and Director of Clinical Operations and eventually being appointed as Chief Executive Officer and a director of the company in 1999, as its President in 2005 and a member of its Development Committee in 2009. Prior to Inspire, she was a clinical research scientist, international project leader and Associate Director of Pulmonary and Critical Care Medicine at Burroughs Wellcome Co. Dr. Shaffer currently serves in leadership roles on several non-profit boards, including as chair of the Morehead Planetarium and Science Center’s advisory board, on the Board of Trustees for the Cystic Fibrosis Foundation, and as chair of the board of CFF Therapeutic, Inc. Dr. Shaffer is a receptor pharmacologist by training, earning her Ph.D. in Pharmacology from the University of Tennessee’s Health Science Center in Memphis, Tennessee. She completed post-doctoral training at The Chicago Medical School as well as the University of North Carolina at Chapel Hill. In September 2008, the Securities and Exchange Commission approved a non-monetary settlement of its investigation relating to Inspire Pharmaceuticals’ disclosures in its periodic reports relating to a clinical trial. The Commission also approved a settlement with Dr. Shaffer, as Inspire’s President and Chief Executive Officer and a member of its board of directors, under which she consented to a cease and desist order against future violations of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder. The cease and desist order followed a finding by the Commission that three Quarterly Reports on Form 10-Q filed by Inspire included misleading disclosure about a clinical trial, specifically that the trial was described as “confirmatory” and “replicating” the efficacy found in an earlier trial. Dr. Shaffer did not admit or deny any findings in the order, and the order did not include any finding of any violation of any statute or regulation that involved any intentional wrongdoing or fraud, any monetary payments or other sanctions or otherwise affect Dr. Shaffer’s future employment status, nor did it prohibit Dr. Shaffer from serving in any capacity on public company boards of directors. Our board of directors believes that Dr. Shaffer’s clinical background as a scientist and her leadership experience as chief executive of a public company in the biopharmaceutical industry provides her with the qualifications and skills to serve as a director of our company.
Clay B. Thorp
Mr. Thorp has served as a director of our company since January 2012. In 2001, Mr. Thorp co-founded and has since served as General Partner of Hatteras Venture Partners, an investment firm, where he leads investments in a range of life science companies in the biopharmaceutical, medical device, diagnostics and research informatics sectors. Previously, he was instrumental in the founding of several life sciences companies, including serving as co-founder, Chief Executive Officer and Chairman of Synthematix, Inc., a chemistry informatics company that was acquired by Symyx Technologies in 2005, co-founder and former Chairman of PhaseBio Pharmaceuticals, Inc., co-founder and head of corporate development for Novalon Pharmaceutical Corporation, which was sold to Karo Bio in 2000, and co-founder and president of Xanthon, Inc., a bioinformatics company with electro-chemical detection technology for direct analysis of DNA, RNA and proteins. Mr. Thorp holds a Masters of Public Policy degree from Harvard University and a B.A. degree in Mathematics and History from the University of North Carolina at Chapel Hill. Our board of directors believes that Mr. Thorp’s experience as an entrepreneur and an investor in life sciences companies provides him with the qualifications and skills to serve as a director of our company.
Evgeny Zaytsev, M.D.
Dr. Zaytsev has served as a director of our company since August 2014. Dr. Zaytsev has served as President, Chief Executive Officer and a managing partner of RMI Partners LLC since May 2013 and as the President and Chief Executive Officer of RMI Partners Inc. since November 2013. Dr. Zaytsev has also served as a general partner at Helix Ventures, which he co-founded to exclusively invest in novel
 
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therapeutic opportunities, since July 2009. Previously Dr. Zaytsev was a partner at Asset Management Company, one of the oldest venture firms in Silicon Valley, from 2002 to 2009. Dr. Zaytsev received his M.D. degree and Ph.D. degree from the Altai State Medical University and his M.B.A. degree from the Stanford Graduate School of Business. Our board of directors believes that Dr. Zaytsev’s scientific background and experience as an investor in life sciences companies provides him with the qualifications and skills to serve as a director of our company.
Gerald D. Cagle, Ph.D.
Dr. Cagle has served on our board of directors since July 2013. Dr. Cagle has served as Chief Operating Officer at Cognoptix, lnc., a biotechnology company focused on the diagnosis of Alzheimer’s disease, since December 2008. He also is Senior Advisor and Head of Business Development for GrayBug, LLC, a platform drug delivery company. Previously, Dr. Cagle served as Senior Vice President of Research & Development at Alcon Laboratories lnc. from 1997 to 2008, assuming the responsibility of Chief Scientific Officer in 2006. He currently serves on the board of directors of Aerie Pharmaceuticals, Inc., a publicly held biopharmaceutical company. Dr. Cagle has also served on the Wilmer Eye Institute Advisory Council and is a member of the ARVO Foundation Board of Governors. Dr. Cagle received his B.S. degree from Wayland College and earned M.S. and Ph.D. degrees from the University of North Texas. Our board of directors believes that Dr. Cagle’s scientific background and experience provides him with the qualifications and skills to serve as a director of our company.
William D. Humphries
Mr. Humphries has served as a director of our company since January 2012. Mr. Humphries has served as President and Chief Executive Officer of the North American business of Merz, Inc., an affiliate of Merz Pharma Group, a specialty healthcare company, since March 2012. From 2006 to March 2012, he served in a number of leadership positions with Stiefel Laboratories, Inc., a dermatology pharmaceutical company, including as its Chief Commercial Officer and then as its President beginning in 2008. Stiefel was acquired by GlaxoSmithKline in 2009. After the acquisition, Mr. Humphries served as the President of Dermatology for Stiefel from 2009 until March 2012. Before Stiefel, Mr. Humphries served in executive roles in sales and marketing, business development, and international marketing for Allergan, Inc., concluding as vice president of its U.S. skincare business. Mr. Humphries has served on the board of ZARS Pharma, the GlaxoSmithKline Portfolio Investment Board and the GlaxoSmithKline Ophthalmology Board. Mr. Humphries received his M.B.A. degree from Pepperdine University and a B.A. degree from Bucknell University. Our board of directors believes that Mr. Humphries’ experience as pharmaceutical company executive provides him with the qualifications and skills to serve as a director of our company.
Derek Yoon
Mr. Yoon has served as a director of our company since December 2015. Mr. Yoon has served as a Partner in the Boston, Massachusetts office of AJU IB Investment, a venture investment firm headquartered in Seoul, Korea, since January 2014. Prior to that, from April 2011 to December 2013, Mr. Yoon served as a Portfolio Manager, Healthcare Banking at RBS Citizens Bank. From July 2009 to May 2011, he served as a Research Associate at Berwind Private Equity. Before this, Mr. Yoon held a variety of positions in the investment banking industry. Mr. Yoon received his B.S. degree in Chemical Engineering from Yonsei University (Seoul, Korea), his M.B.A. degree from Babson College and his M.S.F. degree from Boston College. Our board of directors believes that Mr. Yoon’s scientific and finance background and experience provide him with the qualifications and skills to serve as a director of our company.
 
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Board Composition
Our board of directors currently consists of seven members. Each director is currently elected to the board for a one-year term, to serve until the election and qualification of successor directors at the annual meeting of stockholders, or until the director’s earlier removal, resignation or death.
Our directors were elected to and currently serve on the board pursuant to a voting agreement among us and several of our largest stockholders. This agreement will terminate upon the completion of this offering, after which there will be no further contractual obligations regarding the election of our directors.
In accordance with our amended and restated certificate of incorporation, which will be in effect upon the closing of this offering, our board of directors will be divided into three classes, each of which will consist, as nearly as possible, of one-third of the total number of directors constituting our entire board and which will serve staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:
 
 	•	 	Class I, which will consist of                     and                     , and their term will expire at our first annual meeting of stockholders to be held after the completion of this offering;	
 
 	•	 	Class II, which will consist of                     and                     , and their term will expire at our second annual meeting of stockholders to be held after the completion of this offering; and	
 
 	•	 	Class III, which will consist of                     and                     , and their term will expire at our third annual meeting of stockholders to be held after the completion of this offering.	
Our amended and restated bylaws, which will become effective upon completion of this offering, will provide that the authorized number of directors may be changed only by resolution approved by a majority of our board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.
The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.
Director Independence
Our board of directors has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our board of directors has determined that Drs. Shaffer, Cagle and Zaytsev and Messrs. Humphries, Yoon and Thorp, representing six of our seven directors, are “independent directors” as defined under NASDAQ rules.
Committees of the Board of Directors
Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which has the composition and responsibilities described below. From time to time, the board may establish other committees to facilitate the management of our business.
 
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Audit Committee
Our audit committee reviews our internal accounting procedures and consults with and reviews the services provided by our independent registered public accountants. Our audit committee consists of three directors,                 ,                     and                     , and our board of directors has determined that each of them is independent within the meaning of the applicable stock exchange listing requirements and the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.                     is the chairman of the audit committee and our board of directors has determined that                     is an “audit committee financial expert” as defined by SEC rules and regulations. Our board of directors has determined that the composition of our audit committee meets the criteria for independence under, and the functioning of our audit committee complies with, the applicable requirements of the Sarbanes-Oxley Act, applicable stock exchange listing requirements and SEC rules and regulations. We intend to continue to evaluate the requirements applicable to us and we intend to comply with the future requirements to the extent that they become applicable to our audit committee. The principal duties and responsibilities of our audit committee include:
 
 	•	 	appointing and retaining an independent registered public accounting firm to serve as independent auditor to audit our financial statements, overseeing the independent auditor’s work and determining the independent auditor’s compensation;	
 
 	•	 	approving in advance all audit services and non-audit services to be provided to us by our independent auditor;	
 
 	•	 	establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls, auditing or compliance matters, as well as for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;	
 
 	•	 	reviewing and discussing with management and our independent auditor the results of the annual audit and the independent auditor’s review of our quarterly financial statements; and	
 
 	•	 	conferring with management and our independent auditor about the scope, adequacy and effectiveness of our internal accounting controls, the objectivity of our financial reporting and our accounting policies and practices.	
Compensation Committee
Our compensation committee reviews and determines the compensation of all our executive officers. Our compensation committee consists of                     directors,                     , each of whom is a non-employee member of our board of directors as defined in Rule 16b-3 under the Exchange Act.                     is the chairman of the compensation committee. Our board of directors has determined that the composition of our compensation committee satisfies the applicable independence requirements under, and the functioning of our compensation committee complies with the applicable requirements of, stock exchange listing rules and SEC rules and regulations. We intend to continue to evaluate and intend to comply with all future requirements applicable to our compensation committee. The principal duties and responsibilities of our compensation committee include:
 
 	•	 	establishing and approving, and making recommendations to the board of directors regarding, performance goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives and	
 
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 	setting, or recommending to the full board of directors for approval, the chief executive officer’s compensation, including incentive-based and equity-based compensation, based on that evaluation;	
 
 	•	 	setting the compensation of our other executive officers, based in part on recommendations of the chief executive officer;	
 
 	•	 	exercising administrative authority under our stock plans and employee benefit plans;	
 
 	•	 	establishing policies and making recommendations to our board of directors regarding director compensation;	
 
 	•	 	reviewing and discussing with management the compensation discussion and analysis that we may be required from time to time to include in SEC filings; and	
 
 	•	 	preparing a compensation committee report on executive compensation as may be required from time to time to be included in our annual proxy statements or annual reports on Form 10-K filed with the SEC.	
Nominating and Corporate Governance Committee
The nominating and corporate governance committee consists of                 directors,                     .                     is the chairman of the nominating and corporate governance committee. Our board of directors has determined that the composition of our nominating and corporate governance committee satisfies the applicable independence requirements under, and the functioning of our nominating and corporate governance committee complies with the applicable requirements of, stock exchange listing standards and SEC rules and regulations. We will continue to evaluate and will comply with all future requirements applicable to our nominating and corporate governance committee. The nominating and corporate governance committee’s responsibilities include:
 
 	•	 	assessing the need for new directors and identifying individuals qualified to become directors;	
 
 	•	 	recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;	
 
 	•	 	assessing individual director performance, participation and qualifications;	
 
 	•	 	developing and recommending to the board corporate governance principles;	
 
 	•	 	monitoring the effectiveness of the board and the quality of the relationship between management and the board; and	
 
 	•	 	overseeing an annual evaluation of the board’s performance.	
Code of Business Conduct and Ethics for Employees, Executive Officers and Directors
Effective upon completion of this offering, we will adopt a Code of Business Conduct and Ethics, or the Code of Conduct, applicable to all of our employees, executive officers and directors. Following the completion of this offering, the Code of Conduct will be available on our website at  www.clearsidebio.com . The nominating and corporate governance committee of our board of directors will be responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website.
 
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Compensation Committee Interlocks and Insider Participation
None of our directors who currently serve as members of our compensation committee is, or has at any time during the past year been, one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving on our board of directors or compensation committee.
Non-Employee Director Compensation
We have not historically paid cash retainers or other compensation with respect to service on our board of directors, except for reimbursement of direct expenses incurred in connection with attending meetings of the board or committees. In January 2012, we awarded an option to purchase 50,000 shares of our common stock to Mr. Humphries at an exercise price of $0.07 per share, which option was outstanding at December 31, 2015. In October 2013, we awarded an option to purchase 50,000 shares of our common stock to Mr. Humphries at an exercise price of $0.18 per share, which option was outstanding at December 31, 2015. As of December 31, 2015, these options were fully vested.
In June 2013, in connection with his appointment to our board of directors, we awarded an option to purchase 100,000 shares of our common stock to Dr. Cagle at an exercise price of $0.18 per share, which option was outstanding as of December 31, 2015. As of December 31, 2015, the option was vested as to 56,250 shares and the remaining 43,750 shares vest in equal quarterly installments through June 30, 2017 and are subject to full acceleration of vesting upon a change of control of our company. Other than Mr. Humphries and Dr. Cagle, none of our non-employee directors serving as of December 31, 2015 held any options to purchase our common stock.
None of our non-employee directors received compensation for service on our board of directors during the year ended December 31, 2015 and, accordingly, we have not included a 2015 director compensation table. Mr. White, our President and Chief Executive Officer, is also a director but does not receive any additional compensation for his service as a director. Mr. White’s compensation as an executive officer is set forth below under “Executive Compensation—Summary Compensation Table.”
We expect that our board of directors will adopt a director compensation policy for non-employee directors to be effective following the completion of this offering.
 
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EXECUTIVE COMPENSATION
Our named executive officers for the year ended December 31, 2015 include our principal executive officer and our two other executive officers:
 
 	•	 	Daniel H. White, our President and Chief Executive Officer;	
 
 	•	 	Charles A. Deignan, our Chief Financial Officer; and	
 
 	•	 	Glenn Noronha, Ph.D., our Executive Vice President of Research and Development.	
No other individuals served as executive officers of our company at any point during 2015.
Summary Compensation Table
The following table presents the compensation awarded to, earned by or paid to each of our named executive officers for the years ended December 31, 2014 and 2015.

Name and Principal Position	  	Year	 	  	Salary
($)(1)	 	  	Bonus

($)(2)	 	 	Option
Awards
($)(3)	 	  	Non-Equity
Incentive Plan
Compensation
($)	 	 	Total
($)	 	
Daniel H. White	  	 	2015	  	  	 	325,000	  	  	 	(4	) 	 	 	230,063	  	  	 	(4	) 	 	 	555,063	  	
President and Chief Executive Officer	  	 	2014	  	  	 	263,294	  	  	 	12,424	  	 	 	387,500	  	  	 	37,576	  	 	 	700,794	  	
Charles A. Deignan	  	 	2015	  	  	 	250,000	  	  	 	(4	) 	 	 	177,100	  	  	 	(4	) 	 	 	427,100	  	
Chief Financial Officer	  	 	2014	  	  	 	203,090	  	  	 	6,040	  	 	 	155,000	  	  	 	24,161	  	 	 	388,291	  	
Glenn Noronha, Ph.D	  	 	2015	  	  	 	274,495	  	  	 	(4	) 	 	 	177,100	  	  	 	(4	) 	 	 	451,595	  	
Executive Vice President, Research and Development	  	 	2014	  	  	 	262,708	  	  	 	—	  	 	 	155,000	  	  	 	29,848	  	 	 	447,556	  	
 
(1)	Salary amounts represent actual amounts paid during the indicated year. See “—Narrative to Summary Compensation Table—Annual Base Salary” for a description of adjustments to base salaries made during the year.	
 
(2)	Represents the amount above the specified level of achievement under the annual bonus incentive plan. In 2014, the compensation committee exercised its discretion to award Mr. White and Mr. Deignan additional compensation in light of their roles in the achievement of corporate objectives outside of the scope of the stated objectives described below under “Narrative to Summary Compensation Table—Annual Bonus.”	
 
(3)	The amounts reflect the full grant date fair value for awards granted during the indicated year. The grant date fair value was computed in accordance with ASC Topic 718,  Compensation — Stock Compensation . Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the executive will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in note 11 to our financial statements included in this prospectus.	
 
(4)	Our board of directors has not yet determined the bonus amounts payable to our executive officers for performance during the year ended December 31, 2015. Our board of directors expects to make this determination in the first quarter of 2016.	
 
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Narrative to Summary Compensation Table
We review compensation annually for all employees, including our executives. In setting executive base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders, and a long-term commitment to our company. We do not target a specific competitive position or a specific mix of compensation among base salary, bonus or long-term incentives.
The compensation committee of our board of directors has historically determined our executives’ compensation. Our compensation committee typically reviews and discusses management’s proposed compensation with the chief executive officer for all executives other than the chief executive officer. Based on those discussions and its discretion, the compensation committee then recommends the compensation for each executive officer. Our compensation committee, without members of management present, discusses and ultimately approves the compensation of our executive officers. To date, our compensation committee has not engaged a compensation consultant or adopted a peer group of companies for purposes of determining executive compensation.
Annual Base Salary
Our named executive officers’ base salaries are reviewed periodically by our board of directors, and adjustments may be made upon the recommendations of the compensation committee. In 2012, we entered into an employment agreement with Mr. White under which his annual base salary was established at $250,000. In February 2013, our compensation committee recommended, and our board of directors approved, an increase in Mr. White’s annual base salary to $258,125. At the same time, our compensation committee recommended, and our board of directors approved, an increase in Mr. Deignan’s base salary from $175,000 to $180,688. Dr. Noronha’s annual base salary of $260,000 was approved by our board of directors in connection with the commencement of his employment with us in August 2013. In July 2014, our compensation committee recommended, and the board of directors approved, further increases in our named executive officers’ salaries as follows: $268,450 for Mr. White, $215,722 for Mr. Deignan and $266,500 for Dr. Noronha. In November 2014, our compensation committee recommended, and in December 2014, our board of directors approved, further increases in our named executive officers’ salaries effective January 1, 2015 as follows: $325,000 for Mr. White, $250,000 for Mr. Deignan and $274,495 for Dr. Noronha.
Annual Bonus
We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations for each fiscal year. Each named executive officer has a target bonus opportunity, defined as a percentage of his annual salary. For 2014 and 2015, the target bonus was as follows:

 	 	Target Bonus
(% of Salary)	 	
Name	 	2014	 	  	2015	 	
Daniel H. White	 	 	25	  	  	 	50	  	
Charles A. Deignan	 	 	20	  	  	 	35	  	
Glenn Noronha, Ph.D.	 	 	20	  	  	 	35	  	
 
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To reinforce the importance of integrated and collaborative leadership, our executives’ bonuses have historically been solely based on company performance, and we did not include an individual performance component. In December 2014, our board of directors determined that the 2014 performance goals had been achieved at a 56% level in the aggregate. The bonuses paid to the named executive officers for 2014 performance at the 56% level are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above. Our board of directors has not yet determined whether and to what extent the 2015 performance goals have been achieved, and therefore the bonuses, if any, payable to our executive officers for 2015 performance are not reflected in the Summary Compensation Table above.
Long-Term Incentives
Our 2011 Stock Incentive Plan authorizes us to make grants to eligible recipients of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units and other stock-based awards. All of our awards under this plan have been in the form of stock options.
We typically grant stock options at the start of employment to each executive and our other employees. Through 2015, we have not maintained a practice of granting additional equity on an annual basis, but we have retained discretion to provide additional targeted grants in appropriate circumstances.
We award stock options on the date the compensation committee approves the grant. We set the option exercise price and grant date fair value based on our per-share valuation on the date of grant.
In December 2014, our compensation committee awarded options to Mr. White, Mr. Deignan and Dr. Noronha to purchase 250,000 shares, 100,000 shares and 100,000 shares of our common stock, respectively. Each of these options has an exercise price of $1.55 per share.
In December 2015, our compensation committee awarded options to Mr. White, Mr. Deignan and Dr. Noronha to purchase 90,934 shares, 70,000 shares and 70,000 shares of our common stock, respectively. Each of these options has an exercise price of $2.53 per share.
Employment Arrangements and Potential Payments upon Termination of Employment
In September 2012, we entered into an employment agreement with Mr. White, under which he serves as our President and Chief Executive Officer. On January 1, 2015, we entered into an amended and restated employment agreement with Mr. White, under which he continues to serve as our President and Chief Executive Officer. On January 1, 2015, we also entered into employment agreements with Mr. Deignan and Dr. Noronha, pursuant to which they serve as our Chief Financial Officer and Executive Vice President of Research and Development, respectively.
These employment agreements have one-year terms and are renewable for successive one-year terms unless either we or the executive officer gives notice of non-renewal at least 60 days prior to the end of the term. Pursuant to these employment agreements, Mr. White, Mr. Deignan and Dr. Noronha are eligible to receive severance benefits in specified circumstances.
In the event we terminate Mr. White without cause, he resigns for good reason or we elect not to renew his employment agreement, then, upon execution and effectiveness of a settlement agreement and release of claims in a form acceptable to us, Mr. White will be entitled to receive (a) an amount equal to 18 months of his annual base salary, less applicable deductions, payable in accordance with our normal payroll schedule, (b) reimbursement of the cost of health insurance premiums for 18 months or, if shorter, until he obtains reasonably comparable health insurance coverage and (c) each equity award held by him shall immediately
 
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vest and become exercisable to the extent the award would have vested had he remained employed by us for 18 months following the termination of the agreement.
If we or our successor terminates Mr. White without cause, he resigns for good reason or we elect not to renew his employment agreement within 12 months after a “change in control event” within the meaning of the regulations promulgated under Section 409A of the Internal Revenue Code, as amended, or the Code, in addition to the payments and benefits specified above, the equity awards held by Mr. White at the time of termination shall immediately vest and become exercisable until the earlier to occur of either the final exercise date in the equity award or the end of the severance period. He shall also be entitled to receive 100% of the performance bonus earned by him in the most recent calendar year.
For the period of two years following January 1, 2015, to the extent that any payment, benefit or distribution by us or any of our affiliates to Mr. White pursuant to his employment agreement or any other agreement, plan or arrangement would constitute an “excess parachute payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed under Section 4999 of the Code, Mr. White will be entitled to receive a “gross-up” payment equal to 36 months of his annual base salary. After such period, Mr. White will not be entitled to any such “gross up” and if all or a portion of the total payments to him would constitute an “excess parachute payment” within the meaning of 280G of the Code, he shall receive (a) an amount limited so that no portion shall fail to be deductible under Section 280G of the Code or (b) if the amount otherwise payable, under the employment agreement or otherwise, would be greater than the limited amount after paying the excise tax and any other taxes required, he shall receive the amount otherwise payable.
In the event we terminate Mr. Deignan without cause, he resigns for good reason or we elect not to renew his employment agreement, then, upon execution and effectiveness of a settlement agreement and release of claims in a form acceptable to us, Mr. Deignan will be entitled to receive (a) an amount equal to 12 months of his annual base salary, less applicable deductions, payable in accordance with our normal payroll schedule, (b) reimbursement of the cost of health insurance premiums for 12 months or, if shorter, until he obtains reasonably comparable health insurance coverage and (c) each equity award held by him shall immediately vest and become exercisable to the extent the award would have vested had he remained employed by us for 12 months following the termination of the agreement.
If we or our successor terminates Mr. Deignan without cause, he resigns for good reason or we elect not to renew his employment agreement within 12 months after a “change in control event” within the meaning of the regulations promulgated under Section 409A of the Code, in addition to the payments and benefits specified above, the equity awards held by Mr. Deignan at the time of termination shall immediately vest and become exercisable until the earlier to occur of either the final exercise date in the equity award or the end of the severance period. He shall also be entitled to receive 67% of the performance bonus earned by him in the most recent calendar year.
For the period of two years following January 1, 2015, to the extent that any payment, benefit or distribution by us or any of our affiliates to Mr. Deignan pursuant to his employment agreement or any other agreement, plan or arrangement would constitute an “excess parachute payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed under Section 4999 of the Code, Mr. Deignan will be entitled to receive a “gross-up” payment equal to 18 months of his annual base salary. After such period, Mr. Deignan will not be entitled to any such “gross up” and if all or a portion of the total payments to him would constitute an “excess parachute payment” within the meaning of 280G of
 
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the Code, he shall receive (a) an amount limited so that no portion shall fail to be deductible under Section 280G of the Code or (b) if the amount otherwise payable, under the employment agreement or otherwise, would be greater than the limited amount after paying the excise tax and any other taxes required, he shall receive the amount otherwise payable.
In the event we terminate Dr. Noronha without cause, he resigns for good reason or we elect not to renew his employment agreement, then, upon execution and effectiveness of a settlement agreement and release of claims in a form acceptable to us, Dr. Noronha will be entitled to receive (a) an amount equal to 12 months of his annual base salary, less applicable deductions, payable in accordance with our normal payroll schedule, (b) reimbursement of the cost of health insurance premiums for 12 months or, if shorter, until he obtains reasonably comparable health insurance coverage and (c) each equity award held by him shall immediately vest and become exercisable to the extent the award would have vested had he remained employed by us for 12 months following the termination of the agreement.
If we or our successor terminates Dr. Noronha without cause, he resigns for good reason or we elect not to renew his employment agreement, in each case within 12 months after a “change in control event” within the meaning of the regulations promulgated under Section 409A of the Code, in addition to the payments and benefits specified above, the equity awards held by Dr. Noronha at the time of termination shall immediately vest and become exercisable until the earlier to occur of either the final exercise date in the equity award or the end of the severance period. He shall also be entitled to receive 67% of the performance bonus earned by him in the most recent calendar year.
For the period of two years following January 1, 2015, to the extent that any payment, benefit or distribution by us or any of our affiliates to Dr. Noronha pursuant to his employment agreement or any other agreement, plan or arrangement would constitute an “excess parachute payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed under Section 4999 of the Code, Dr. Noronha will be entitled to receive a “gross-up” payment equal to 18 months of his annual base salary. After such period, Dr. Noronha will not be entitled to any such “gross up” and if all or a portion of the total payments to him would constitute an “excess parachute payment” within the meaning of 280G of the Code, he shall receive (a) an amount limited so that no portion shall fail to be deductible under Section 280G of the Code or (b) if the amount otherwise payable, under the employment agreement or otherwise, would be greater than the limited amount after paying the excise tax and any other taxes required, he shall receive the amount otherwise payable.
The following definitions have been adopted in Mr. White’s, Mr. Deignan’s and Dr. Noronha’s employment agreements:
 
 	•	 	“cause” means that our board of directors has determined that any of the following has occurred: (a) the material breach of the employment agreement, failure to diligently and properly perform his duties or failure to achieve the objectives specified by the board of directors, and such breach or failure has not been cured within 30 days after written notice thereof; (b) the misappropriation or unauthorized use of our property or breach of his agreements with us relating to confidentiality, intellectual property rights, non-competition or non-solicitation; (c) a material failure to comply with our policies or directives of our board of directors, and any such failure has not been cured within 30 days after written notice thereof, provided that the failure to comply with our policies related to harassment, unlawful discrimination, retaliation or workplace violence do not require notice or permit a cure period; (d) the use of illegal drugs or any illegal substance, or the use of alcohol in any manner that materially interferes with the performance of the executive officer’s duties to the	
 
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 	company; (e) a dishonest or illegal action by the executive officer, or any action determined to be detrimental to our interest and well-being, including harm to our reputation; (f) a failure to fully disclose any material conflict of interest that he may have in a transaction between us and a third party, which is materially detrimental to our interest and well-being; (g) any adverse action or omission by the executive officer which would be required to be disclosed under securities laws or which would limit our ability to sell securities or would disqualify us from an exemption otherwise available to us; and	
 
 	•	 	“good reason” means the existence of any of the following without the executive officer’s prior consent: (a) any substantial reduction or diminution of his duties and responsibilities or salary; (b) any material breach of the employment agreement by us; or (c) a relocation of his place of employment by more than 50 miles from the location of our principal office, in each case after notice to us within 90 days following the initial existence of the event and after we have had the opportunity to but have not cured the event for 30 days following such notice, and the executive officer terminates his employment with us no later than two years after the initial existence of the event.	
Outstanding Equity Awards at End of 2015
The following table provides information about outstanding stock options held by each of our executive officers at December 31, 2015. All of these options were granted under our 2011 Stock Incentive Plan.

 	  	Option Awards	 	  	Stock Awards	 	
Name	  	Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable	 	Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable	 	 	Option
Exercise
Price
($)	 	  	Option
Expiration
Date	 	  	Number of
Shares or
Units of
Stock That
Have Not
Vested (#)	 	 	Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(9)	 	
Daniel H. White	  	87,991(1)	 	 	40,009	(1) 	 	 	0.18	  	  	 	02/28/2023	  	  	 	 	 	 	 	 	 	
 	  	37,497(3)	 	 	37,503	(3) 	 	 	0.18	  	  	 	11/24/2023	  	  	 	 	 	 	 	 	 	
 	  	62,500(4)	 	 	187,500	(4) 	 	 	1.55	  	  	 	12/18/2024	  	  	 	 	 	 	 	 	 	
 	  	—	 	 	90,934	(5) 	 	 	2.53	  	  	 	12/02/2025	  	  	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Charles A. Deignan	  	35,746(1)	 	 	16,254	(1) 	 	 	0.18	  	  	 	02/28/2023	  	  	 	833	(6) 	 	 	2,391	  	
 	  	37,497(3)	 	 	37,503	(3) 	 	 	0.18	  	  	 	11/24/2023	  	  	 	8,750	(7) 	 	 	25,113	  	
 	  	25,000(4)	 	 	75,000	(4) 	 	 	1.55	  	  	 	12/18/2024	  	  	 	4,687	(8) 	 	 	13,452	  	
 	  	—	 	 	70,000	(5) 	 	 	2.53	  	  	 	12/02/2025	  	  	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Glenn Noronha, Ph.D	  	72,910(2)	 	 	52,090	(2) 	 	 	0.18	  	  	 	08/06/2023	  	  	 	 	 	 	 	 	 	
 	  	24,998(3)	 	 	25,002	(3) 	 	 	0.18	  	  	 	11/24/2023	  	  	 	 	 	 	 	 	 	
 	  	25,000(4)	 	 	75,000	(4) 	 	 	1.55	  	  	 	12/18/2024	  	  	 	 	 	 	 	 	 	
 	  	—	 	 	70,000	(5) 	 	 	2.53	  	  	 	12/02/2025	  	  	 	 	 	 	 	 	 	
 
(1)	The shares underlying this option vested as to 25% of the shares on March 1, 2014, with the remainder vesting in 36 equal monthly installments thereafter, subject to the officer’s continued service through each applicable vesting date. The option is subject to full acceleration of vesting following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause within 12 months following the change of control.	
 
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(2)	The shares underlying this option vested as to 25% of the shares on August 1, 2014, with the remainder vesting in 36 equal monthly installments thereafter, subject to the officer’s continued service through each applicable vesting date. The option is subject to full acceleration of vesting (a) upon a change of control if the option is not assumed or a substantially equivalent award is not substituted by the acquiring or succeeding entity or (b) following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause within 12 months following the change of control.	
 
(3)	The shares underlying this option vested as to 25% of the shares on December 13, 2014, with the remainder vesting in 36 equal monthly installments thereafter, subject to the officer’s continued service through each applicable vesting date. The option is subject to full acceleration of vesting (a) upon a change of control if the option is not assumed or a substantially equivalent award is not substituted by the acquiring or succeeding entity or (b) following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause or for good reason within 12 months following the change of control.	
 
(4)	The shares underlying this option vested as to 25% of the shares on December 19, 2015, with the remainder vesting in 36 equal monthly installments thereafter, subject to the officer’s continued service through each applicable vesting date. The option is subject to full acceleration of vesting (a) upon a change of control if the option is not assumed or a substantially equivalent award is not substituted by the acquiring or succeeding entity or (b) following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause or for good reason within 12 months following the change of control.	
 
(5)	The shares underlying this option vest as to 25% of the shares on December 2, 2016, with the remainder vesting in 36 equal monthly installments thereafter, subject to the officer’s continued service through each applicable vesting date. The option is subject to full acceleration of vesting (a) upon a change of control if the option is not assumed or a substantially equivalent award is not substituted by the acquiring or succeeding entity or (b) following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause or for good reason within 12 months following the change of control.	
 
(6)	These restricted shares will vest in equal monthly installments through January 31, 2016. These restricted shares are subject to full acceleration of vesting (a) upon a change of control if the option is not assumed or a substantially equivalent award is not substituted by the acquiring or succeeding entity or (b) following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause or for good reason within 12 months following the change of control.	
 
(7)	These restricted shares will vest in equal monthly installments through July 1, 2016. These restricted shares are subject to full acceleration of vesting (a) upon a change of control if the option is not assumed or a substantially equivalent award is not substituted by the acquiring or succeeding entity or (b) following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause or for good reason within 12 months following the change of control.	
 
(8)	These restricted shares will vest in equal monthly installments through September 30, 2016. These restricted shares are subject to full acceleration of vesting (a) upon a change of control if the option is not assumed or a substantially equivalent award is not substituted by the acquiring or succeeding entity	
 
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 	or (b) following a change of control if the option is assumed or a substantially equivalent award is substituted, but the officer’s employment is terminated without cause or for good reason within 12 months following the change of control.	
 
(9)	Based on a retrospective fair value assessment we performed in December 2015 in which we concluded that the fair value of our common stock on December 2, 2015 was $2.87 per share.	
Stock Option Exercises and Stock Vested During 2015
The following table shows information regarding stock awards vested during the year ended December 31, 2015 with respect to our named executive officers.

 	  	Stock Awards	 	
Name	  	Number of
Shares
Acquired on
Vesting (#)	 	 	Value
Realized on
Vesting ($)	 	
Charles A. Deignan	  	 	31,248	(1) 	 	 	75,724	(2) 	
 
(1)	Mr. Deignan acquired shares of stock pursuant to the early exercise of stock options, which stock was subject to a right of repurchase in favor of us. The number of shares acquired on vesting represents the number of such shares for which our rights of repurchase lapsed during the year.	
(2)	Represents the difference between the estimated value of the shares for which our repurchase right lapsed and the exercise price of $0.07 per share paid by Mr. Deignan in respect of such shares upon the early exercise of the options. For shares vested from January through March of 2015, the assumed value of such shares was $1.55 per share, the valuation of our common stock as of September 30, 2014. For shares vested from April through November of 2015, the assumed value of such shares was $2.80 per share, the valuation of our common stock as of March 31, 2015. For shares vested in December 2015, the assumed value of such shares was $2.87 per share, the valuation of our common stock as of December 2, 2015 as determined by a retrospective fair value assessment we performed in December 2015.	
Health and Welfare Benefits
We maintain a defined contribution employee retirement plan for our employees. Our 401(k) plan is intended to qualify as a tax-qualified plan under Section 401 of the Internal Revenue Code so that contributions to our 401(k) plan, and income earned on such contributions, are not taxable to participants until withdrawn or distributed from the 401(k) plan. Our 401(k) plan provides that each participant may contribute a portion of his or her pre-tax compensation, up to a statutory limit, which was $17,500 for 2014 and $18,000 for 2015. Participants who are at least 50 years old can also make “catch-up” contributions, which in 2014 and 2015 was up to an additional $5,500 above the statutory limit. Under our 401(k) plan, each employee is fully vested in his or her deferred salary contributions. Employee contributions are held and invested by the plan’s trustee, subject to participants’ ability to give investment directions by following specified procedures. We do not currently make discretionary contributions or matching contributions to our 401(k) plan.
Except for the benefits described above under “Narrative to Summary Compensation Table — Other Compensation,” we do not provide perquisites or personal benefits to our named executive officers. We do, however, pay the premiums for medical, dental and term life insurance for all of our employees, including our named executive officers.
 
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Equity Incentive Plans
2016 Equity Incentive Plan
We expect that our board of directors will adopt, and our stockholders will approve, prior to the completion of this offering our 2016 Equity Incentive Plan, or our 2016 plan. We do not expect to issue equity awards under our 2016 plan until after the completion of this offering. No awards have been granted and no shares of our common stock have been issued under our 2016 plan. Our 2016 plan will provide for the grant of incentive stock options within the meaning of Section 422 of the Code to our employees and our parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. Our 2016 plan will also provide for the grant of performance cash awards to our employees, consultants and directors.
Authorized Shares
The maximum number of shares of our common stock that may be issued under our 2016 plan is             shares. The number of shares of our common stock reserved for issuance under our 2016 plan will automatically increase on January 1 of each year, for a period of 10 years, from January 1, 2017 continuing through January 1, 2026, by     % of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by our board of directors. The maximum number of shares that may be issued pursuant to the exercise of incentive stock options under the 2016 plan is                     .
Shares issued under our 2016 plan may be authorized but unissued or reacquired shares of our common stock. Shares subject to stock awards granted under our 2016 plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under our 2016 plan. Additionally, shares issued pursuant to stock awards under our 2016 plan that we repurchase or that are forfeited, as well as shares reacquired by us as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under our 2016 plan.
Administration
Our board of directors, or a duly authorized committee thereof, has the authority to administer our 2016 plan. Our board of directors has delegated its authority to administer our 2016 plan to our compensation committee under the terms of the compensation committee’s charter. Our board of directors may also delegate to one or more of our officers the authority to (i) designate employees other than officers to receive specified stock awards and (ii) determine the number of shares of our common stock to be subject to such stock awards. Subject to the terms of our 2016 plan, the administrator has the authority to determine the terms of awards, including recipients, the exercise price or strike price of stock awards, if any, the number of shares subject to each stock award, the fair market value of a share of our common stock, the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration, if any, payable upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under our 2016 plan.
The administrator has the power to modify outstanding awards under our 2016 plan. Subject to the terms of our 2016 plan, the administrator has the authority to reprice any outstanding option or stock
 
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appreciation right, cancel and re-grant any outstanding option or stock appreciation right in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected participant.
Section 162(m) Limits
No participant may be granted stock awards covering more than             shares of our common stock under our 2016 plan during any calendar year pursuant to stock options, stock appreciation rights and other stock awards whose value is determined by reference to an increase over an exercise price or strike price of at least 100% of the fair market value of our common stock on the date of grant. Additionally, no participant may be granted in a calendar year a performance stock award covering more than             shares of our common stock or a performance cash award having a maximum value in excess of $         under our 2016 plan. These limitations enable us to grant awards that will be exempt from the $1,000,000 limitation on the income tax deductibility of compensation paid per covered executive officer imposed by Section 162(m) of the Code.
Performance Awards
Our 2016 plan permits the grant of performance-based stock and cash awards that may qualify as performance-based compensation that is not subject to the $1,000,000 limitation on the income tax deductibility of compensation paid per covered executive officer imposed by Section 162(m) of the Code. To enable us to grant performance-based awards that will qualify, our compensation committee can structure such awards so that the stock or cash will be issued or paid pursuant to such award only following the achievement of specified pre-established performance goals during a designated performance period.
Corporate Transactions
Our 2016 plan provides that in the event of a specified corporate transaction, including without limitation a consolidation, merger, or similar transaction involving our company, the sale, lease or other disposition of all or substantially all of the assets of our company or the consolidated assets of our company and our subsidiaries, or a sale or disposition of at least 50% of the outstanding capital stock of our company, the administrator will determine how to treat each outstanding stock award. The administrator may:
 
 	•	 	arrange for the assumption, continuation or substitution of a stock award by a successor corporation;	
 
 	•	 	arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation;	
 
 	•	 	accelerate the vesting of the stock award and provide for its termination prior to the effective time of the corporate transaction;	
 
 	•	 	arrange for the lapse, in whole or in part, of any reacquisition or repurchase right held by us; or	
 
 	•	 	cancel the stock award prior to the transaction in exchange for a cash payment, which may be reduced by the exercise price payable in connection with the stock award.	
The administrator is not obligated to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner. The administrator may take different actions with respect to the vested and unvested portions of a stock award.
 
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Change in Control
The administrator may provide, in an individual award agreement or in any other written agreement between us and the participant, that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a change in control. In the absence of such a provision, no such acceleration of the stock award will occur.
Plan Amendment or Termination
Our board has the authority to amend, suspend, or terminate our 2016 plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. No incentive stock options may be granted after the tenth anniversary of the date our board of directors adopts our 2016 plan.
2011 Stock Incentive Plan
Our board of directors adopted, and our stockholders approved, the 2011 Stock Incentive Plan, or the 2011 plan, in November 2011. Our 2011 plan was amended by our board of directors and our stockholders in December 2011. Our 2011 plan provides for the grant of incentive stock options within the meaning of Section 422 of the Code to our employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock units and other stock-based awards to our officers, directors, employees, consultants and advisers.
Authorized Shares
There are 3,338,776 shares of our common stock reserved for issuance under our 2011 plan. As of December 31, 2015, 563,096 shares of our common stock have been issued upon the exercise of options granted under our 2011 plan and options to purchase 2,775,680 shares of our common stock were outstanding at a weighted average exercise price of $1.09 per share. Effective upon the completion of this offering, no further options or stock awards may be granted under our 2011 plan, but all outstanding stock awards will continue to be governed by their existing terms.
Administration
Our board of directors, or a committee thereof appointed by our board of directors, administers our 2011 plan and the option and stock awards granted under it. Our board of directors delegated its authority to administer our 2011 plan to our compensation committee.
Corporate Transactions
Our 2011 plan provides that, in the event of a specified change of control transaction, including without limitation a dissolution, merger, consolidation or reorganization of our company with one or more other entities in which our company is not the surviving entity, a sale of substantially all of the assets of our company, or any transaction which results in the disposition of at least a majority of the voting power or value of the securities of our company, the board may take any one or more of the following actions with respect to awards other than restricted stock awards:
 
 	•	 	the assumption or substitution of the options by a successor corporation;	
 
 	•	 	the termination of the options immediately prior to the change of control transaction;	
 
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 	•	 	provide that the options become exercisable, realizable or derivable, or that restrictions applicable to options shall lapse;	
 
 	•	 	the purchase of outstanding options for an amount of cash that could have been received upon the exercise of the options or the conversion of the options into a right to receive liquidation proceeds; or	
 
 	•	 	any combination of the foregoing.	
With respect to restricted stock awards, upon the occurrence of a change of control transaction involving the liquidation or dissolution of our company, all restrictions and conditions on all restricted stock awards then outstanding shall automatically be deemed terminated or satisfied. With respect to a change of control transaction not involving the liquidation or dissolution of our company, all of our repurchase or other rights under each outstanding restricted stock award shall inure to the benefit of our successor.
2016 Employee Stock Purchase Plan
We expect that our board of directors will adopt, and our stockholders will approve, prior to the completion of this offering, our 2016 Employee Stock Purchase Plan, or our 2016 ESPP. We expect that the 2016 ESPP will become effective upon the completion of this offering, but we have no current plans to grant purchase rights under our 2016 ESPP.
The maximum number of shares of our common stock that may be issued under our 2016 ESPP is                  shares. Additionally, the number of shares of our common stock reserved for issuance under our 2016 ESPP will automatically increase on January 1 of each year, beginning on January 1 of the year after the completion of this offering and ending on and including January 1, 2026, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year or (ii) 1,000,000 shares of common stock; provided, however, our board of directors may act prior to the first day of any calendar year to provide that there will be no January 1 increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of common stock. Shares subject to purchase rights granted under our 2016 ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under our 2016 ESPP.
Our board of directors, or a duly authorized committee thereof, will administer our 2016 ESPP. Our board of directors has delegated its authority to administer our 2016 ESPP to our compensation committee under the terms of the compensation committee’s charter.
Employees, including executive officers, of ours or any of our designated affiliates may have to satisfy one or more of the following service requirements before participating in our 2016 ESPP, as determined by the administrator: (i) customary employment with us or one of our affiliates for more than 20 hours per week and more than five months per calendar year; or (ii) continuous employment with us or one of our affiliates for a minimum period of time, not to exceed two years, prior to the first date of an offering. An employee may not be granted rights to purchase stock under our 2016 ESPP if such employee (i) immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of all classes of our common stock, or (ii) holds rights to purchase stock under our 2016 ESPP that would accrue at a rate that exceeds $25,000 worth of our stock for each calendar year that the rights remain outstanding.
A component of our 2016 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Code and the provisions of this component will be construed in a manner that is
 
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consistent with the requirements of Section 423 of the Code. In addition, the 2016 ESPP authorizes the grant of options to purchase shares of our common stock that do not meet the requirements of Section 423 of the Code because of deviations necessary to permit participation in the 2016 ESPP by employees who are foreign nationals or employed outside of the United States while complying with applicable foreign laws. Any such options must be granted pursuant to rules, procedures or subplans adopted by our board designed to achieve these objectives for eligible employees and our company. The administrator may specify offerings with a duration of not more than 27 months, and may specify one or more shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of our common stock will be purchased for the employees who are participating in the offering. The administrator, in its discretion, will determine the terms of offerings under our 2016 ESPP.
Our 2016 ESPP permits participants to purchase shares of our common stock through payroll deductions up to 15% of their earnings. Unless otherwise determined by the administrator, the purchase price of the shares will be 85% of the lower of the fair market value of our common stock on the first day of an offering or on the date of purchase. Participants may end their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with us.
A participant may not transfer purchase rights under our 2016 ESPP other than by will, the laws of descent and distribution or as otherwise provided under our 2016 ESPP.
In the event of a specified corporate transaction, such as a merger or change in control of our company, a successor corporation may assume, continue or substitute each outstanding purchase right. If the successor corporation does not assume, continue or substitute for the outstanding purchase rights, the offering in progress will be shortened and a new exercise date will be set. The participants’ purchase rights will be exercised on the new exercise date and such purchase rights will terminate immediately thereafter.
Our board of directors has the authority to amend, suspend or terminate our 2016 ESPP, at any time and for any reason. Our 2016 ESPP will remain in effect until terminated by our board of directors in accordance with the terms of the 2016 ESPP.
Limitations on Liability and Indemnification Matters
Our amended and restated certificate of incorporation, which will become effective upon the completion of this offering, contains provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:
 
 	•	 	any breach of the director’s duty of loyalty to the corporation or its stockholders;	
 
 	•	 	any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;	
 
 	•	 	unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or	
 
 	•	 	any transaction from which the director derived an improper personal benefit.	
 
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This limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.
Our amended and restated certificate of incorporation and our amended and restated bylaws will provide that we are required to indemnify our directors to the fullest extent permitted by Delaware law. Our amended and restated bylaws will also provide that, upon satisfaction of certain conditions, we are required to advance expenses incurred by a director in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. Our amended and restated bylaws will also provide our board of directors with discretion to indemnify our officers and employees when determined appropriate by the board. We have entered into and expect to continue to enter into agreements to indemnify our directors, and we also expect to enter into agreements to indemnify our officers, as determined by the board of directors. With certain exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors. We also maintain customary directors’ and officers’ liability insurance.
The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought and we are not aware of any threatened litigation that may result in claims for indemnification.
Rule 10b5-1 Sales Plans
Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from them. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy. Prior to 180 days after the date of this offering, subject to early termination, the sale of any shares under such plan would be prohibited by the lock-up agreement that the director or officer has entered into with the underwriters.
 
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The following is a description of transactions since January 1, 2013 to which we have been a participant in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described under “Executive Compensation.”
Sales of Series A-1 Convertible Preferred Stock
In January 2013, we sold an aggregate of 4,356,931 shares of our Series A-1 convertible preferred stock at a price of $1.8132 per share for an aggregate price of $7.9 million, 3,860,573 shares of which were sold to entities affiliated with members of our board of directors and holders of more than 5% of our voting securities. The table below summarizes these sales.

Purchaser	 	Shares of Series A-1
Convertible Preferred
Stock Purchased	 	 	Aggregate
Purchase Price	 	
Entities affiliated with Hatteras Venture Partners(1)	 	 	1,654,531	  	 	$	2,999,996	 	
Entities affiliated with GRA Venture Fund(2)	 	 	275,754	  	 	 	499,997	 	
Santen Pharmaceutical Co., Ltd.	 	 	1,930,288	  	 	 	3,499,998	 	
 	 	 	 	 	 	 	 	 	
Total	 	 	3,860,573	  	 	$	6,999,991	 	
 
 	(1)	Consists of 631,997 shares purchased by Hatteras Venture Partners III, LP, 57,391 shares purchased by Hatteras Venture Affiliates III, LP, 689,388 shares purchased by Hatteras Venture Partners IV SBIC, LP and 275,755 shares purchased by Hatteras NC Fund, LP.	
 
 	(2)	Consists of 174,226 shares purchased by GRA Venture Fund, LLC and 101,528 shares purchased by GRA Venture Fund (T.E.), LLC.	
Unsecured 7% Convertible Promissory Notes
In April and May 2014, we issued an aggregate principal amount of $3.0 million of unsecured 7% convertible promissory notes, or the bridge notes, and warrants to purchase an aggregate of 248,175 shares of our common stock at an exercise price of $0.01 per share. We issued an aggregate principal amount of $2,196,993 of our bridge notes and warrants to purchase up to 181,750 shares of our common stock to holders of more than 5% of our voting securities, members of our board of directors and our officers. The table below summarizes these issuances.

Name	 	Principal Amount of
Unsecured Convertible
Notes	 	 	Common Stock
Warrants	 	
Entities affiliated with Hatteras Venture Partners(1)	 	$	1,154,496	  	 	 	95,508	  	
Entities affiliated with GRA Venture Fund(2)	 	 	499,997	  	 	 	41,363	  	
Santen Pharmaceutical Co., Ltd.	 	 	500,000	  	 	 	41,363	  	
Daniel H. White	 	 	17,500	  	 	 	1,448	  	
Charles A. Deignan	 	 	12,500	  	 	 	1,034	  	
Gerald D. Cagle, Ph.D.	 	 	12,500	  	 	 	1,034	  	
 	 	 	 	 	 	 	 	 	
Total	 	$	2,196,993	  	 	 	181,750	  	
 
 	(1)	Consists of bridge notes and warrants issued to Hatteras Venture Partners III, LP.	
 
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 	(2)	Consists of a principal amount of $315,911 of our bridge notes and warrants to purchase 31,023 shares of our common stock issued to GRA Venture Fund, LLC, and a principal amount of $184,086 of our bridge notes and warrants to purchase 10,341 shares of our common stock issued to GRA Venture Fund (T.E.), LLC.	
All principal and interest under the bridge notes was converted into shares of our Series B convertible preferred stock in connection with our August 2014 financing described below.
Sales of Series B Convertible Preferred Stock
In August 2014, we issued an aggregate of 6,009,202 shares of our Series B convertible preferred stock at a price of $2.69783 per share for an aggregate price of $16.2 million, 4,302,359 shares of which were sold to entities affiliated with members of our board of directors, our officers and holders of more than 5% of our voting securities. In some cases, some or all of the purchase price for these shares took the form of conversion of principal and interest under outstanding bridge notes held by the respective investors. In connection with this financing, we also issued warrants to purchase an aggregate of 1,716,914 shares of common stock at an exercise price of $0.01 per share, which became exercisable in February 2015. Of these warrants issued, warrants to purchase an aggregate of 1,229,248 shares of common stock were issued to entities affiliated with members of our board of directors, our officers and holders of more than 5% of our voting securities. All of the warrants issued in connection with this financing were exercised in May 2015. The table below summarizes the issuances of shares of Series B convertible preferred stock and warrants to purchase common stock to entities affiliated with members of our board of directors, our officers and holders of more than 5% of our voting securities.

Purchaser	  	Shares of Series B
Convertible
Preferred
Stock Purchased	 	  	Warrants to
Purchase Common
Stock Issued	 	  	Aggregate Purchase
Price	 	 	
 	  	 	 	  	 	 	  	Cash	 	  	Note
Conversion	 	 	 	 	 	 	 	 	
Entities affiliated with Hatteras Venture Partners(1)	  	 	865,881	  	  	 	247,395	  	  	$	1,154,492	  	  	$	1,181,508	  	 	 	 	 	 	 	 	
Entities affiliated with GRA Venture Fund(2)	  	 	434,937	  	  	 	124,268	  	  	 	499,994	  	  	 	673,394	  	 	 	 	 	 	 	 	
Santen Pharmaceutical Co., Ltd.	  	 	375,004	  	  	 	107,144	  	  	 	499,998	  	  	 	511,699	  	 	 	 	 	 	 	 	
RMI Investments(3)	  	 	2,594,677	  	  	 	741,340	  	  	 	6,999,997	  	  	 	—	  	 	 	 	 	 	 	 	
Daniel H. White	  	 	13,110	  	  	 	3,745	  	  	 	17,499	  	  	 	17,871	  	 	 	 	 	 	 	 	
Charles A. Deignan	  	 	9,375	  	  	 	2,678	  	  	 	12,500	  	  	 	12,792	  	 	 	 	 	 	 	 	
Gerald D. Cagle	  	 	9,375	  	  	 	2,678	  	  	 	12,500	  	  	 	12,792	  	 	 	 	 	 	 	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	
Total	  	 	4,302,359	  	  	 	1,229,248	  	  	$	9,196,980	  	  	$	2,410,056	  	 	 	 	 	 	 	 	
 
(1)	Consists of (i) 396,920 shares of Series B convertible preferred stock and a warrant to purchase 113,406 shares of common stock issued to Hatteras Venture Partners III, LP, (ii) 36,020 shares of Series B convertible preferred stock and a warrant to purchase 10,291 shares of common stock issued to Hatteras Venture Affiliates III, LP and (iii) 432,941 shares of Series B convertible preferred stock and a warrant to purchase 123,698 shares of common stock issued to Hatteras Venture Partners IV SBIC, LP.	
 
(2)	Consists of (i) 236,711 shares of Series B convertible preferred stock and a warrant to purchase 67,632 shares of common stock issued to GRA Venture Fund, LLC, (ii) 137,935 shares of Series B	
 
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 	convertible preferred stock and a warrant to purchase 39,410 shares of common stock issued to GRA Venture Fund (T.E.), LLC and (iii) 60,291 shares of Series B convertible preferred stock and a warrant to purchase 17,226 shares of common stock issued to Georgia Research Alliance, Inc.	
 
(3)	Entities affiliated with RMI Investments, or RMI, are holders of more than 5% of our voting securities and Evgeny Zaytsev, M.D. is affiliated with RMI Investments and is a member of our board of directors.	
Sales of Series C Convertible Preferred Stock
In November and December 2015, we issued an aggregate of 5,274,674 shares of our Series C convertible preferred stock at a price of $3.7917 per share for an aggregate price of $20.0 million, 1,902,158 shares of which were sold to entities affiliated with members of our board of directors and holders of more than 5% of our voting securities. The table below summarizes the issuances of shares of Series C convertible preferred stock to entities affiliated with members of our board of directors and holders of more than 5% of our voting securities.

Purchaser	  	Shares of Series C
Convertible Preferred
Stock Purchased	 	  	Aggregate
Purchase Price	 	
Entities Affiliated with Hatteras Venture Partners(1)	  	 	675,795	  	  	$	2,562,412	  	
Entities Affiliated with GRA Venture Fund(2)	  	 	171,427	  	  	 	650,000	  	
AJU Life Science Overseas Expansion Platform Fund(3)	  	 	1,054,936	  	  	 	4,000,000	  	
 	  	 	 	 	  	 	 	 	
Total	  	 	1,902,158	  	  	$	7,212,412	  	
 
(1)	Consists of (i) 309,768 shares of Series C convertible preferred stock issued to Hatteras Venture Partners III, LP, (ii) 28,130 shares of Series C convertible preferred stock issued to Hatteras Venture Affiliates III, LP and (iii) 337,897 shares of Series C convertible preferred stock issued to Hatteras Venture Partners IV SBIC, LP.	
 
(2)	Consists of (i) 143,120 shares of Series C convertible preferred stock issued to GRA Venture Fund, LLC and (ii) 28,307 shares of Series C convertible preferred stock issued to GRA Venture Fund (T.E.), LLC.	
 
(3)	Derek Yoon, a member of our board of directors, is a Partner of AJU IB Investment, which is affiliated with AJU Life Science Overseas Expansion Platform Fund.	
NovaMedica License Agreement
In connection with our Series B financing, in August 2014, we entered into a license agreement with NovaMedica LLC, or NovaMedica. Under this agreement, we granted to NovaMedica the exclusive right in Russia and specified adjacent territories to use our intellectual property to develop and commercialize products involving the use of TA as the sole active pharmaceutical ingredient for administration in the SCS. In connection with this license, NovaMedica made an upfront payment to us of $200,000. In addition, NovaMedica has agreed to make royalty payments equal to the amount of any royalties we owe to Emory or GTRC pursuant to the Emory/GTRC License Agreement as a result of NovaMedica’s sales of products and services covered by the license granted to NovaMedica, up to a maximum of a low single-digit percentage of net sales of such products or services by NovaMedica. NovaMedica has also agreed to make milestone payments, totaling $12.7 million in the aggregate, upon the achievement of specified development and commercial milestones. NovaMedica is jointly owned by Rusnano MedInvest LLC, or Rusnano MedInvest,
 
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and Domain Russia Investments Limited. RMI, which beneficially owns more than 5% of our voting securities, is a wholly owned subsidiary of Rusnano MedInvest.
The term of the NovaMedica license agreement will expire upon the expiration of the last-to-expire valid claim within the patents licensed to NovaMedica pursuant to the agreement. Either we or NovaMedica may terminate the agreement upon written notice in the event of the other party’s material breach that is not cured within 20 business days of receiving written notice requesting a cure of a payment breach, and within 60 business days of receiving written notice requesting a cure in the case of all other breaches. Each party also has the right to terminate in the event of the other party’s bankruptcy or insolvency. We may terminate the agreement immediately upon written notice in the event that NovaMedica commences or participates in any action challenging the validity or enforceability of the patents licensed to NovaMedica under the agreement.
Santen Research Collaboration
In January 2013, we entered into a collaboration agreement with Santen, which beneficially owns more than 5% of our common stock. Under this agreement, we and Santen agreed to conduct feasibility studies to identify compounds for further development. Each party to the agreement bears its own costs, except that some of the costs we may incur are limited to a maximum amount. We and Santen amended our collaboration agreement in April 2014 and in April 2015 to expand the scope of our collaboration and to extend the duration of Santen’s option rights with respect to products we develop together under the agreement. We incurred research and development costs under this agreement of $162,000 during the year ended December 31, 2013 and $98,000 during the year ended December 31, 2014.
Investor Rights Agreement
We have entered into an investor rights agreement, as amended, with our preferred stockholders, including entities affiliated with Hatteras, Santen, GRA and RMI, each of which beneficially own more than 5% of our common stock, as well as certain of our directors and executive officers. The investor rights agreement, among other things:
 
 	•	 	grants our preferred stockholders specified registration rights with respect to shares of our common stock, including shares of common stock issued or issuable upon conversion of shares of our convertible preferred stock held by them;	
 
 	•	 	obligates us to deliver periodic financial statements to some of the stockholders who are parties to the investor rights agreement; and	
 
 	•	 	grants a right of first refusal with respect to sales of our shares by us, subject to specified exclusions, which exclusions include the sale of the shares pursuant to this prospectus, to some of the stockholders who are parties to the investor rights agreement.	
For more information regarding the registration rights provided in this agreement, please refer to the section titled “Description of Capital Stock — Registration Rights.” The provisions of this agreement other than those relating to registration rights will terminate upon the completion of this offering.
Voting Agreement
We have entered into a voting agreement, as amended, with some of our stockholders, including entities affiliated with Hatteras, Santen, GRA and RMI, as well as certain of our directors and executive officers. The
 
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voting agreement, among other things, provides for the voting of shares with respect to the constituency of our board of directors. The voting agreement will terminate upon the completion of this offering.
Stock Sale Agreement
We have entered into a stock sale agreement, as amended, with some of our stockholders, including entities affiliated with Hatteras, Santen, GRA and RMI, as well as certain of our directors and executive officers. The stock sale agreement, among other things:
 
 	•	 	grants our investors and our founders rights of first refusal and co-sale with respect to proposed transfers of our securities by specified stockholders;	
 
 	•	 	grants us rights of first refusal with respect to proposed transfers of our securities by specified stockholders; and	
 
 	•	 	provides for the voting of shares with respect to specified transactions approved by a majority of holders of our outstanding convertible preferred stock.	
The stock sale agreement will terminate upon the completion of this offering.
Indemnification Agreements
Our amended and restated certificate of incorporation will contain provisions limiting the liability of directors, and our amended and restated bylaws will provide that we will indemnify each of our directors to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and amended and restated bylaws will also provide our board of directors with discretion to indemnify our officers and employees when determined appropriate by the board.
In addition, we have entered into an indemnification agreement with each of our directors. For more information regarding these agreements, see “Executive Compensation — Limitations on Liability and Indemnification Matters.”
Related Person Transaction Policy
Prior to this offering, we have not had a formal policy regarding approval of transactions with related parties. Prior to the completion of this offering, we expect to adopt a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. The policy will become effective immediately upon the execution of the underwriting agreement for this offering. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involved exceeds $120,000. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate, to another independent body of our board of directors, for review,
 
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consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our Code of Business Conduct and Ethics that we expect to adopt prior to the completion of this offering, our employees and directors will have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions, our audit committee, or other independent body of our board of directors, will take into account the relevant available facts and circumstances including, but not limited to:
 
 	•	 	the risks, costs and benefits to us;	
 
 	•	 	the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated;	
 
 	•	 	the availability of other sources for comparable services or products; and	
 
 	•	 	the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.	
The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other independent body of our board of directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our audit committee, or other independent body of our board of directors, determines in the good faith exercise of its discretion.
 
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PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of our common stock as of December 31, 2015 for:
 
 	•	 	each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock;	
 
 	•	 	each of our named executive officers;	
 
 	•	 	each of our directors; and	
 
 	•	 	all of our current executive officers and directors as a group.	
The percentage ownership information shown in the table is based upon 26,704,334 shares of common stock outstanding as of December 31, 2015, after giving effect to the conversion of all of our convertible preferred stock into 20,839,633 shares of common stock, which will occur automatically upon the closing of this offering.
We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options or warrants that are exercisable on or before February 29, 2016, which is 60 days after December 31, 2015. These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.
 
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Except as otherwise noted below, the address for persons listed in the table is c/o Clearside Biomedical, Inc., 1220 Old Alpharetta Road, Suite 300, Alpharetta, Georgia 30005.

Name of Beneficial Owner	 	Number of
Shares
Beneficially
Owned	 	 	Percentage of Shares
Beneficially
Owned	 	
 	 	 	 	 	Before
Offering	 	 	After
Offering	 	 	 	 	
Principal Stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Entities affiliated with Hatteras Venture Partners(1)	 	 	7,610,038	  	 	 	28.4	% 	 	 	 	 	 	 	
Santen Pharmaceutical Co., Ltd.(2)	 	 	2,453,416	  	 	 	9.2	  	 	 	 	 	 	 	
Entities affiliated with GRA Venture Fund(3)	 	 	1,913,836	  	 	 	7.2	  	 	 	 	 	 	 	
RMI Investments(4)	 	 	3,333,370	  	 	 	12.5	  	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Executive Officers and Directors:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Daniel H. White(5)	 	 	1,469,807	  	 	 	5.5	  	 	 	 	 	 	 	
Charles A. Deignan(6)	 	 	245,776	  	 	 	*	  	 	 	 	 	 	 	
Glenn Noronha, Ph.D.(7)	 	 	134,364	  	 	 	*	  	 	 	 	 	 	 	
Christy L. Shaffer, Ph.D.(1)	 	 	—	  	 	 	—	  	 	 	 	 	 	 	
Clay B. Thorp(1)	 	 	7,610,038	  	 	 	28.4	  	 	 	 	 	 	 	
William D. Humphries(8)	 	 	100,000	  	 	 	*	  	 	 	 	 	 	 	
Gerald D. Cagle, Ph.D.(9)	 	 	75,577	  	 	 	*	  	 	 	 	 	 	 	
Evgeny Zaytsev, M.D.(4)	 	 	3,333,370	  	 	 	12.5	  	 	 	 	 	 	 	
Derek Yoon	 	 	—	  	 	 	—	  	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
All current directors and executive officers as a group (9 persons)(10)	 	 	12,968,932	  	 	 	47.3	  	 	 	 	 	 	 	
 
*	Represents beneficial ownership of less than 1%.	
 
(1)	Consists of (a) 113,000 shares of common stock, 3,205,103 shares of common stock issuable upon conversion of shares of preferred stock and 43,780 shares of common stock issuable upon exercise of immediately exercisable warrants held by Hatteras Venture Partners III, LP (“HVP III”), (b) 10,254 shares of common stock, 291,030 shares of common stock issuable upon conversion of shares of preferred stock and 3,973 shares of common stock issuable upon exercise of immediately exercisable warrants held by Hatteras Venture Affiliates III, LP (“HVA III”), (c) 123,256 shares of common stock, 3,496,134 shares of common stock issuable upon conversion of shares of preferred stock and 47,753 shares of common stock issuable upon exercise of immediately exercisable warrants held by Hatteras Venture Partners IV SBIC, LP (“HVP IV SBIC”) and (d) 275,755 shares of common stock issuable upon conversion of shares of preferred stock held by Hatteras NC Fund (“Hatteras NC” and together with HVP III, HVA III, and HVP IV SBIC, the “Hatteras Entities”). The shares directly held by HVA III and HVP III are indirectly held by Hatteras Venture Advisors III, LLC (“HVA III LLC”), their general partner. The individual general partners of HVA III LLC are Clay B. Thorp, Robert A. Ingram, Kenneth B. Lee, Douglas Reed, MD and John Crumpler (the “HVA III LLC Directors”). HVA III LLC and the HVA III LLC Directors may be deemed to have shared voting and dispositive power over, and be deemed indirect beneficial owners of, the shares directly held by Hatteras Venture Affiliates III and Hatteras Venture Partners III. The shares directly held by HVP IV SBIC are indirectly held by Hatteras Venture Advisors IV SBIC, LLC (“HVA IV SBIC LLC”), its general partner. The individual general partners of HVA IV SBIC LLC are Clay B. Thorp, Robert A Ingram, Kenneth B. Lee, Douglas Reed, MD and John Crumpler	
 
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 	(the “HVA IV SBIC LLC Directors”). HVA IV SBIC LLC and the HVA IV SBIC LLC Directors may be deemed to have shared voting and dispositive power over, and be deemed indirect beneficial owners of, the shares directly held by HVA IV SBIC. The shares directly held by Hatteras NC are indirectly held by Hatteras Venture Advisors IV, LLC (“HVA IV”), its general partner. The individual general partners of HVA IV are Clay B. Thorp, Robert A. Ingram, Kenneth B. Lee, Douglas Reed, MD and John Crumpler (the “HVA IV Directors”). HVA IV and the HVA IV Directors may be deemed to have shared voting and dispositive power over, and be deemed indirect beneficial owners of, the shares directly held by Hatteras NC. Christy Shaffer, one of our directors, is a Venture Partner with Hatteras Venture Partners, but she does not have beneficial ownership over the shares held by HVP III, HVA III, HVP IV SBIC and Hatteras NC. The principal business address of the Hatteras Entities is 280 S. Mangum St., Suite 350, Durham, NC 27701.	
 
(2)	Consists of (a) 106,761 shares of common stock, (b) 2,305,292 shares of common stock issuable upon conversion of shares of preferred stock and (c) 41,363 shares of common stock issuable upon exercise of immediately exercisable warrants, in each case held by Santen Pharmaceutical Co., Ltd. (“Santen”). The principal business address of Santen is 9-19 Shimoshinjo 3-chome, Higashiyodogawa-ku, Osaka 533-8651, Japan.	
 
(3)	Consists of (a) 67,390 shares of common stock, 1,101,549 shares of common stock issuable upon conversion of shares of preferred stock and 26,134 shares of common stock issuable upon exercise of immediately exercisable warrants held by GRA Venture Fund, LLC (“GRAVF”), (b) 39,269 shares of common stock, 586,811 shares of common stock issuable upon conversion of shares of preferred stock and 15,228 shares of common stock issuable upon exercise of immediately exercisable warrants held by GRA Venture Fund (T.E.), LLC (“GRAVF TE”) and (c) 17,164 shares of common stock and 60,291 shares of common stock issuable upon conversion of shares of preferred stock held in the name of Georgia Research Alliance, Inc. (“GRA, Inc.” and, together with GRAVF and GRAVF TE, the “GRA Entities”) in an account administered by GRA, Inc. pursuant to a contract with the State of Georgia’s Department of Economic Development. The shares directly held by GRAVF are indirectly held by the members of its board of managers, Duane Ackerman, Jim Balloun, Chris Carr, Russ Chandler, Frederick E. Cooper, Brad Currey, Bill Fickling, Rusty French, William Linginfelter, Diana M. Murphy, Sig Mosley, Tom Parker, David Ratcliffe and Fran Rogers (the “GRAVF Directors”). The GRAVF Directors may be deemed to have shared voting and dispositive power over, and be deemed indirect beneficial owners of, the shares directly held by GRAVF. The shares directly held by GRAVF TE are indirectly held by the members of its board of managers, who are the same individuals as the GRAVF Directors (the “GRAVF TE Directors”). The GRAVF TE Directors may be deemed to have shared voting and dispositive power over, and be deemed indirect beneficial owners of, the shares directly held by GRAVF TE. The shares directly held by GRA, Inc. are indirectly held by the members of its board of trustees, Clyde Tuggle, Douglas Hertz, Kathelen Amos, Paul Amos, Dr. Ricardo Azziz, Dr. Mark Becker, Paul Bowers, Carlton Brown, Chris Carr, Dr. Max Cooper, Kenneth Cornelius, Thomas Cousins, Larry Gellerstedt III, George Deese, James Hannan, Robert Hatcher, Edward Heys, William Linginfelter, Kelly Loeffler, Charles McTier, Jere Morehead, Allen Mosley, Thomas Noonan, Charles Ogburn, Kenneth Ostrowski, G.P. Peterson, Parker Petit, David Ratcliffe, Joseph Rogers, William Rogers, John Somerhalder II, Lizanne Thomas, T. Rogers Wade, James Wagner and Felker Ward (the “GRA, Inc. Trustees”). The GRA, Inc. Trustees may be deemed to have shared voting and dispositive power over, and be deemed indirect beneficial owners of, the shares directly held in the name of GRA, Inc. pursuant to a contact with the State of Georgia’s Department of Economic Development. The principal business address of the GRA Entities is 191 Peachtree Street, NE, Suite 846, Atlanta, Georgia 30303.	
 
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(4)	Consists of 738,693 shares of common stock and 2,594,677 shares of common stock issuable upon conversion of shares of preferred stock held by RMI. The shares directly held by RMI are indirectly held by RusnanoMedInvest, the parent company of RMI. RMI Partners LLC is the management company for RusnanoMedInvest. The CEO of RMI Partners LLC is Vladimir Gurdus and the Managing Partner of RMI Partners LLC is Evgeny Zaytsev, M.D., a member of our board of directors (the “RMI Partners LLC Directors”). RusnanoMedInvest, RMI Partners LLC and the RMI Partners LLC Directors may be deemed to have shared voting and dispositive power over, and be deemed indirect beneficial owners of, the shares directly held by RMI. The principal business address of RMI is Business-Center 29/22, Capital Tower 1st Brestskaya Street, Moscow, 12 125047.	
 
(5)	Consists of (a) 1,016,830 shares of common stock held by Mr. White directly, (b) 90,000 shares of common stock held by the White Family Trust, for which Mr. White’s wife serves as trustee, (c) 5,136 shares of common stock held for the benefit of Mr. White’s children under the Georgia Uniform Transfers to Minors Act, for which Mr. White serves as custodian, (d) 135,131 shares of common stock issuable upon conversion of shares of preferred stock held by Mr. White directly, (e) 3,191 shares of common stock, 11,213 shares of common stock issuable upon conversion of shares of preferred stock and 1,034 shares of common stock issuable upon exercise of immediately exercisable warrants held by the Daniel H. White (IRA), for which Mr. White serves as trustee, (f) 206,859 shares of common stock underlying options that are exercisable and vested within 60 days of December 31, 2015 and (g) 413 shares of common stock issuable upon exercise of immediately exercisable warrants.	
 
(6)	Consists of (a) 127,668 shares of common stock, (b) 9,375 shares of common stock issuable upon conversion of shares of preferred stock, (c) 107,699 shares of common stock underlying options that are exercisable and vested within 60 days of December 31, 2015 and (d) 1,034 shares of common stock issuable upon exercise of immediately exercisable warrants. Shares of restricted stock that are not vested are subject to a repurchase right in favor of the company if Mr. Deignan does not satisfy the applicable vesting requirements. In any event, unvested restricted shares may not be disposed of until the vesting period has been satisfied.	
 
(7)	Consists of 134,364 shares of common stock underlying options that are exercisable and vested within 60 days of December 31, 2015.	
 
(8)	Consists of 100,000 shares of common stock underlying options that are exercisable and vested within 60 days of December 31, 2015.	
 
(9)	Consists of (a) 2,668 shares of common stock, (b) 9,375 shares of common stock issuable upon conversion of shares of preferred stock (c) 62,500 shares of common stock underlying options that are exercisable and vested within 60 days of December 31, 2015 and (d) 1,034 shares of common stock issuable upon exercise of immediately exercisable warrants.	
 
(10)	Consists of (a) 2,227,505 shares of common stock, (b) 10,016,580 shares of common stock issuable upon conversion of shares of preferred stock, (c) 611,422 shares of common stock underlying options that are exercisable and vested within 60 days of December 31, 2015 and (d) 99,021 shares of common stock issuable upon exercise of immediately exercisable warrants. Shares of restricted stock that are not vested are subject to a repurchase right in favor of the company if the officer or director does not satisfy the applicable vesting requirements. In any event, unvested restricted shares may not be disposed of until the vesting period has been satisfied.	
 
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DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock and provisions of our amended and restated certificate of incorporation and amended and restated bylaws are summaries. You should also refer to the amended and restated certificate of incorporation and the amended and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus is part.
General
Upon the completion of this offering, our amended and restated certificate of incorporation will authorize us to issue up to              shares of common stock, $0.001 par value per share, and              shares of preferred stock, $0.001 par value per share, all of which shares of preferred stock will be undesignated. Our board of directors may establish the rights and preferences of the preferred stock from time to time. As of December 31, 2015, we had outstanding 5,864,701 shares of common stock, held by 52 stockholders of record. As of December 31, 2015, after giving effect to the conversion of all outstanding preferred stock into shares of common stock, there would have been 26,704,334 shares of common stock issued and outstanding, held of record by 83 stockholders.
Common Stock
Voting Rights
Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Under our amended and restated certificate of incorporation and amended and restated bylaws, our stockholders will not have cumulative voting rights. Because of this, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose.
Dividends
Subject to preferences that may be applicable to any then-outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds.
Liquidation
In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock.
Rights and Preferences
Holders of common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate in the future.
 
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Preferred Stock
As of December 31, 2015, there were outstanding 20,839,633 shares of convertible preferred stock. All currently outstanding shares of convertible preferred stock will be converted automatically into an aggregate of 20,839,633 shares of common stock immediately prior to the completion of this offering.
Following the completion of this offering, our board of directors will have the authority, without further action by our stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of us and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock.
We have no present plans to issue any shares of preferred stock following completion of this offering.
Options
As of December 31, 2015, under our 2011 plan, options to purchase an aggregate of 2,775,680 shares of common stock were outstanding. For additional information regarding the terms of this plan, see “Executive Compensation — Equity Incentive Plans.”
Warrants
We have outstanding an immediately exercisable warrant to purchase 57,143 shares of our Series B convertible preferred stock at an exercise price of $3.50 per share, which expires in April 2025. This warrant has a net exercise provision under which the holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of our stock at the time of exercise of the warrant after deduction of the aggregate exercise price. The warrant also contains provisions for the adjustment of the exercise price and the number of shares issuable upon exercise of the warrant in the event of certain stock dividends, stock splits, reorganizations, reclassifications and consolidations. Upon completion of this offering, unless earlier exercised, this warrant will be converted into a warrant to purchase 57,143 shares of our common stock at $3.50 per share.
We have outstanding an immediately exercisable warrant to purchase 16,550 shares of our Series A-1 convertible preferred stock at an exercise price of $1.81 per share, which expires in February 2023. This warrant has a net exercise provision under which the holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of our stock at the time of exercise of the warrant after deduction of the aggregate exercise price. The warrant also contains
 
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provisions for the adjustment of the exercise price and the number of shares issuable upon the exercise of the warrant in the event of certain stock dividends, stock splits, reorganizations, reclassifications and consolidations. Upon the completion of this offering, unless earlier exercised, this warrant will be converted into a warrant to purchase 16,550 shares of our common stock at $1.81 per share.
As of December 31, 2015, we also had outstanding immediately exercisable warrants to purchase an aggregate of 248,175 shares of our common stock at an exercise price of $0.01 per share, which expire in April 2024. These warrants have net exercise provisions under which the holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of our common stock at the time of exercise of the warrant after deduction of the aggregate exercise price. These warrants also contain provisions for the adjustment of the exercise price and the number of shares issuable upon the exercise of the warrant in the event of certain stock dividends, stock splits, reorganizations, reclassifications and consolidations. If unexercised, these warrants will expire upon the closing of this offering, and therefore we expect that these warrants will be exercised in connection with the completion of this offering and that we will issue approximately 248,175 shares of our common stock upon their exercise.
Registration Rights
We and the holders of our existing convertible preferred stock have entered into an investor rights agreement. The registration rights provisions of this agreement provide those holders with demand and piggyback registration rights with respect to the shares of our common stock currently held by them and issuable to them upon exercise of warrants and upon conversion of our convertible preferred stock in connection with this offering.
Demand Registration Rights
At any time beginning 180 days following the effective date of the registration statement of which this prospectus is a part, the holders of at least 40% of the shares held by parties to the investor rights agreement in the aggregate have the right to demand that we file up to two Form S-1 registration statements, as long as the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $10.0 million. These registration rights are subject to specified conditions and limitations, including the right of the underwriters, if any, to limit the number of shares included in any such registration under specified circumstances. Upon such a request, we are required to effect the registration as soon as reasonably possible. An aggregate of              shares of common stock and              shares issuable upon the exercise of warrants will be entitled to these demand registration rights.
Piggyback Registration Rights
At any time after the completion of this offering, if we propose to register any of our securities under the Securities Act either for our own account or for the account of other stockholders, the parties to the investor rights agreement will each be entitled to notice of the registration and will be entitled to include their shares of common stock in the registration statement. These piggyback registration rights are subject to specified conditions and limitations, including the right of the underwriters to limit the number of shares included in any such registration under specified circumstances. An aggregate of              shares of common stock and              shares issuable upon the exercise of warrants will be entitled to these piggyback registration rights.
 
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Registration on Form S-3
At any time after we become eligible to file a registration statement on Form S-3, the holders of at least 20% of the shares held by parties to the investor rights agreement will be entitled to have their shares registered by us on a Form S-3 registration statement at our expense, provided that such requested registration has an anticipated aggregate offering price, net of underwriting discounts and commissions, of at least $1.0 million and subject to other specified conditions and limitations. An aggregate of              shares of common stock and              shares issuable upon the exercise of warrants will be entitled to these Form S-3 registration rights.
Expenses of Registration
We will pay all expenses relating to any demand, piggyback or Form S-3 registration, other than underwriting discounts and commissions, subject to specified conditions and limitations.
Termination of Registration Rights
The registration rights granted under the investor rights agreement will terminate upon the earliest to occur of (i) the fifth anniversary of the completion of this offering or (ii) the closing of a liquidating event.
Anti-Takeover Provisions
Section 203 of the Delaware General Corporation Law
We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
 
 	•	 	before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;	
 
 	•	 	upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or	
 
 	•	 	on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66  2 ⁄ 3 % of the outstanding voting stock that is not owned by the interested stockholder.	
In general, Section 203 defines a “business combination” to include the following:
 
 	•	 	any merger or consolidation involving the corporation and the interested stockholder;	
 
 	•	 	any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;	
 
 	•	 	subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;	
 
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 	•	 	any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or	
 
 	•	 	the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation.	
In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
Certificate of Incorporation and Bylaws to be in Effect Upon the Completion of this Offering
Our amended and restated certificate of incorporation to be in effect upon the completion of this offering, or our restated certificate, will provide for our board of directors to be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, stockholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors. Our restated certificate and our amended and restated bylaws to be effective upon the completion of this offering, or our restated bylaws, will also provide that directors may be removed by the stockholders only for cause upon the vote of 66  2 ⁄ 3 % or more of our outstanding common stock. Furthermore, the authorized number of directors may be changed only by resolution of the board of directors, and vacancies and newly created directorships on the board of directors may, except as otherwise required by law or determined by the board, only be filled by a majority vote of the directors then serving on the board, even though less than a quorum.
Our restated certificate and restated bylaws will also provide that all stockholder actions must be effected at a duly called meeting of stockholders and will eliminate the right of stockholders to act by written consent without a meeting. Our restated bylaws will also provide that only our chairman of the board, chief executive officer or the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors may call a special meeting of stockholders.
Our restated bylaws will also provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide timely advance notice in writing, and will specify requirements as to the form and content of a stockholder’s notice.
Our restated certificate and restated bylaws will provide that the stockholders cannot amend many of the provisions described above except by a vote of 66  2 ⁄ 3 % or more of our outstanding common stock.
The combination of these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.
 
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These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts. We believe that the benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company, outweigh the disadvantages of discouraging takeover proposals, because negotiation of takeover proposals could result in an improvement of their terms.
Choice of Forum
Our restated certificate will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for:
 
 	•	 	any derivative action or proceeding brought on our behalf;	
 
 	•	 	any action asserting a breach of fiduciary duty;	
 
 	•	 	any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our restated certificate, or our amended and restated bylaws; or	
 
 	•	 	any action asserting a claim against us that is governed by the internal affairs doctrine.	
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any action, a court could find the choice of forum provisions contained in our restated certificate to be inapplicable or unenforceable in such action.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company. The transfer agent’s address is 6201 15 th  Avenue, Brooklyn, NY 11219.
NASDAQ Global Market Listing
We have applied for listing of our common stock on The NASDAQ Global Market under the trading symbol “CLSD.”
 
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SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, no public market existed for our common stock. Future sales of shares of our common stock in the public market after this offering, or the perception that these sales could occur, could adversely affect prevailing market prices for our common stock and could impair our future ability to raise equity capital.
Based on the number of shares outstanding as of December 31, 2015, upon completion of this offering and assuming no exercise of the underwriters’ option to purchase additional shares,              shares of common stock will be outstanding, assuming no outstanding options or warrants are exercised. All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act, except for any shares sold to our “affiliates,” as that term is defined under Rule 144 under the Securities Act. The remaining shares of common stock held by existing stockholders are “restricted securities,” as that term is defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if registered or if their resale qualifies for exemption from registration described below under Rule 144 promulgated under the Securities Act.
As a result of contractual restrictions described below and the provisions of Rules 144 and 701, the shares sold in this offering and the restricted securities will be available for sale in the public market as follows:
 
 	•	 	the              shares sold in this offering and              of the existing restricted shares will be eligible for immediate sale upon the completion of this offering;	
 
 	•	 	approximately              restricted shares will be eligible for sale in the public market 90 days after the date of this prospectus, subject to the volume, manner of sale and other limitations under Rule 144 and Rule 701; and	
 
 	•	 	approximately              restricted shares will be eligible for sale in the public market upon expiration of lock-up agreements 180 days after the date of this prospectus, subject in certain circumstances to the volume, manner of sale and other limitations under Rule 144 and Rule 701.	
Rule 144
In general, persons who have beneficially owned restricted shares of our common stock for at least six months, and any affiliate of the company who owns either restricted or unrestricted shares of our common stock, are entitled to sell their securities without registration with the SEC under an exemption from registration provided by Rule 144 under the Securities Act.
Non-Affiliates
Any person who is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale may sell an unlimited number of restricted securities under Rule 144 if:
 
 	•	 	the restricted securities have been held for at least six months, including the holding period of any prior owner other than one of our affiliates;	
 
 	•	 	we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale; and	
 
 	•	 	we are current in our Exchange Act reporting at the time of sale.	
 
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Any person who is not deemed to have been an affiliate of ours at the time of, or at any time during the three months preceding, a sale and has held the restricted securities for at least one year, including the holding period of any prior owner other than one of our affiliates, will be entitled to sell an unlimited number of restricted securities without regard to the length of time we have been subject to Exchange Act periodic reporting or whether we are current in our Exchange Act reporting.
Affiliates
Persons seeking to sell restricted securities who are our affiliates at the time of, or any time during the three months preceding, a sale, would be subject to the restrictions described above. They are also subject to additional restrictions, by which such person would be required to comply with the manner of sale and notice provisions of Rule 144 and would be entitled to sell within any three-month period only that number of securities that does not exceed the greater of either of the following:
 
 	•	 	1% of the number of shares of our common stock then outstanding, which will equal approximately             shares immediately after the completion of this offering based on the number of shares outstanding as of December 31, 2015; or	
 
 	•	 	the average weekly trading volume of our common stock on The NASDAQ Global Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.	
Additionally, persons who are our affiliates at the time of, or any time during the three months preceding, a sale may sell unrestricted securities under the requirements of Rule 144 described above, without regard to the six month holding period of Rule 144, which does not apply to sales of unrestricted securities.
Rule 701
Rule 701 under the Securities Act, as in effect on the date of this prospectus, permits resales of shares in reliance upon Rule 144 but without compliance with certain restrictions of Rule 144, including the holding period requirement. Most of our employees, executive officers or directors who purchased shares under a written compensatory plan or contract may be entitled to rely on the resale provisions of Rule 701, but all holders of Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling their shares. However, substantially all Rule 701 shares are subject to lock-up agreements as described below and in the section of this prospectus titled “Underwriting” and will become eligible for sale upon the expiration of the restrictions set forth in those agreements.
Form S-8 Registration Statements
As soon as practicable after the completion of this offering, we intend to file with the SEC one or more registration statements on Form S-8 under the Securities Act to register the shares of our common stock that are issuable pursuant to our 2011 plan, 2016 plan and 2016 ESPP. These registration statements will become effective immediately upon filing. Shares covered by these registration statements will then be eligible for sale in the public markets, subject to vesting restrictions, any applicable lock-up agreements described below and Rule 144 limitations applicable to affiliates.
Lock-Up Agreements
We and the holders of substantially all of our common stock outstanding on the date of this prospectus, including each of our executive officers and directors, have entered into lock-up agreements with the
 
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underwriters or otherwise agreed, subject to certain exceptions, that we and they will not, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, or otherwise dispose of or hedge any of our shares of common stock, any options or warrants to purchase shares of our common stock, or any securities convertible into, or exchangeable for or that represent the right to receive shares of our common stock, without the prior written consent of the representatives of the underwriters for a period of 180 days from the date of this prospectus.
 
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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO
NON-U.S. HOLDERS
The following is a general discussion of the material U.S. federal income tax considerations applicable to non-U.S. holders with respect to their ownership and disposition of shares of our common stock issued pursuant to this offering. All prospective non-U.S. holders of our common stock should consult their own tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the purchase, ownership and disposition of our common stock. In general, a non-U.S. holder means a beneficial owner of our common stock (other than a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is not, for U.S. federal income tax purposes:
 
 	•	 	an individual who is a citizen or resident of the United States;	
 
 	•	 	a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia;	
 
 	•	 	an estate, the income of which is subject to U.S. federal income tax regardless of its source; or	
 
 	•	 	a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all of the trust’s substantial decisions or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.	
This discussion is based on current provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, existing U.S. Treasury Regulations promulgated thereunder, published administrative rulings and judicial decisions, all as in effect as of the date of this prospectus. These laws are subject to change and to differing interpretation, possibly with retroactive effect. Any change or differing interpretation could alter the tax consequences to non-U.S. holders described in this prospectus.
We assume in this discussion that a non-U.S. holder holds shares of our common stock as a capital asset within the meaning of Section 1221 of the Code (generally, for investment). This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular non-U.S. holder in light of that non-U.S. holder’s individual circumstances, nor does it address any aspects of U.S. federal taxes other than income taxes (except to the limited extent set forth below), or U.S. state, local or non-U.S. taxes. This discussion also does not consider any specific facts or circumstances that may apply to a non-U.S. holder and does not address the special tax rules applicable to particular non-U.S. holders, such as holders that own, or are deemed to own, more than 5% of our capital stock (except to the extent specifically set forth below), corporations that accumulate earnings to avoid U.S. federal income tax, tax-exempt organizations, banks, financial institutions, insurance companies, brokers, dealers or traders in securities, commodities or currencies, tax-qualified retirement plans, holders subject to the alternative minimum tax or the Medicare contribution tax, holders who hold or receive our common stock pursuant to the exercise of employee stock options or otherwise as compensation, holders holding our common stock as part of a hedge, straddle or other risk reduction strategy, conversion transaction or other integrated investment, holders deemed to sell our common stock under the constructive sale provisions of the Code, controlled foreign corporations, passive foreign investment companies and certain former U.S. citizens or long-term residents.
In addition, this discussion does not address the tax treatment of partnerships (or entities or arrangements that are treated as partnerships for U.S. federal income tax purposes) or persons that hold their common stock through such partnerships. If a partnership, including any entity or arrangement treated as a
 
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partnership for U.S. federal income tax purposes, holds shares of our common stock, the U.S. federal income tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partnership. Such partners and partnerships should consult their own tax advisors regarding the tax consequences of the purchase, ownership and disposition of our common stock.
There can be no assurance that the Internal Revenue Service, which we refer to as the IRS, will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling with respect to the U.S. federal income tax consequences to a non-U.S. holder of the purchase, ownership or disposition of our common stock.
Distributions on Our Common Stock
Distributions, if any, on our common stock generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder’s investment, up to such holder’s adjusted tax basis in the common stock. Any remaining excess will be treated as capital gain from the sale or exchange of such common stock, subject to the tax treatment described below in “Gain on Sale, Exchange or Other Disposition of Our Common Stock.” Any such distribution will also be subject to the discussion below under the heading “Foreign Accounts.”
Dividends paid to a non-U.S. holder will generally be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country of residence.
Dividends that are treated as effectively connected with a trade or business conducted by a non-U.S. holder within the United States and, if an applicable income tax treaty so provides, that are attributable to a permanent establishment or a fixed base maintained by the non-U.S. holder within the United States, are generally exempt from the 30% withholding tax if the non-U.S. holder satisfies applicable certification and disclosure requirements. However, such U.S. effectively connected income, net of specified deductions and credits, is taxed at the same graduated U.S. federal income tax rates applicable to U.S. persons (as defined in the Code). Any U.S. effectively connected income received by a non-U.S. holder that is a corporation may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country of residence.
A non-U.S. holder of our common stock who claims the benefit of an applicable income tax treaty between the United States and such holder’s country of residence generally will be required to provide a properly executed IRS Form W-8BEN or W-8BEN-E (or successor form) and satisfy applicable certification and other requirements. Non-U.S. holders are urged to consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty.
A non-U.S. holder that is eligible for a reduced rate of U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
 
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Gain on Sale, Exchange or Other Disposition of Our Common Stock
Subject to the discussion below regarding backup withholding and foreign accounts, in general, a non-U.S. holder will not be subject to any U.S. federal income tax on any gain realized upon such holder’s sale, exchange or other disposition of shares of our common stock unless:
 
 	•	 	the gain is effectively connected with a U.S. trade or business of the non-U.S. holder and, if an applicable income tax treaty so provides, is attributable to a permanent establishment or a fixed base maintained in the United States by such non-U.S. holder, in which case the non-U.S. holder generally will be taxed at the graduated U.S. federal income tax rates applicable to U.S. persons (as defined in the Code) and, if the non-U.S. holder is a foreign corporation, the branch profits tax described above in “Distributions on Our Common Stock” also may apply;	
 
 	•	 	the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty) on the net gain derived from the disposition, which may be offset by U.S. source capital losses of the non-U.S. holder, if any (even though the individual is not considered a resident of the United States); or	
 
 	•	 	our common stock constitutes a U.S. real property interest because we are, or have been, at any time during the five-year period preceding such disposition (or the non-U.S. holder’s holding period, if shorter) a “U.S. real property holding corporation.” Even if we are or become a U.S. real property holding corporation, provided that our common stock is regularly traded on an established securities market, our common stock will be treated as a U.S. real property interest only with respect to a non-U.S. holder that holds more than 5% of our outstanding common stock, directly or indirectly, actually or constructively, during the shorter of the 5-year period ending on the date of the disposition or the period that the non-U.S. holder held our common stock. In such case, such non-U.S. holder generally will be taxed on its net gain derived from the disposition at the graduated U.S. federal income tax rates applicable to U.S. persons (as defined in the Code). Generally, a corporation is a U.S. real property holding corporation only if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Although there can be no assurance, we do not believe that we are, or have been, a U.S. real property holding corporation, or that we are likely to become one in the future. No assurance can be provided that our common stock will be regularly traded on an established securities market for purposes of the rules described above.	
U.S. Federal Estate Tax
Shares of our common stock that are owned or treated as owned at the time of death by an individual who is not a citizen or resident of the United States, as specifically defined for U.S. federal estate tax purposes, are considered U.S. situs assets and will be included in the individual’s gross estate for U.S. federal estate tax purposes. Such shares, therefore, may be subject to U.S. federal estate tax, unless an applicable estate tax or other treaty provides otherwise.
Backup Withholding and Information Reporting
We must report annually to the IRS and to each non-U.S. holder the gross amount of the dividends on our common stock paid to such holder and the tax withheld, if any, with respect to such dividends. Non-
 
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U.S. holders will have to comply with specific certification procedures to establish that the holder is not a U.S. person (as defined in the Code) in order to avoid backup withholding at the applicable rate with respect to dividends on our common stock. Dividends paid to non-U.S. holders subject to the U.S. withholding tax, as described above in “Distributions on Our Common Stock,” generally will be exempt from U.S. backup withholding.
Information reporting and backup withholding will generally apply to the proceeds of a disposition of our common stock by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the United States through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.
Copies of information returns may be made available to the tax authorities of the country in which the non-U.S. holder resides or is incorporated under the provisions of a specific treaty or agreement.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder may be allowed as a credit against the non-U.S. holder’s U.S. federal income tax liability, if any, and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
Foreign Accounts
The Code generally imposes a U.S. federal withholding tax of 30% on dividends and the gross proceeds of a disposition of our common stock paid to a “foreign financial institution” (as specifically defined for this purpose), unless such institution enters into an agreement with the U.S. government to, among other things, withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing this withholding tax may be subject to different rules. A U.S. federal withholding tax of 30% also applies to dividends and the gross proceeds of a disposition of our common stock paid to a non-financial foreign entity, unless such entity provides the withholding agent with either a certification that it does not have any substantial direct or indirect U.S. owners or provides information regarding substantial direct and indirect U.S. owners of the entity. The withholding provisions described above generally apply to dividends on our common stock and will apply with respect to gross proceeds of a sale or other disposition of our common stock on or after January 1, 2019. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes.
 
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UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement, to be dated the date of this prospectus, between us and RBC Capital Markets, LLC and Stifel, Nicolaus & Company, Incorporated, as the representatives of the underwriters named below and the joint book-running managers of this offering, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the respective number of shares of common stock shown opposite its name below:

Underwriter	  	Number of Shares	
RBC Capital Markets, LLC	  	 	
Stifel, Nicolaus & Company, Incorporated	  	 	
Needham & Company, LLC	  	 	
Wedbush Securities, Inc.	  	 	
 	  	 	
Total	  	 	
 	  	 	
The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the shares of common stock if any of them are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated. We have agreed to indemnify the underwriters, their affiliates and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.
The underwriters have advised us that, following the completion of this offering, they currently intend to make a market in the common stock as permitted by applicable laws and regulations. However, the underwriters are not obligated to do so, and the underwriters may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can be given as to the liquidity of the trading market for the common stock, that you will be able to sell any of the common stock held by you at a particular time or that the prices that you receive when you sell will be favorable.
The underwriters are offering the shares of common stock subject to their acceptance of the shares of common stock from us and subject to prior sale. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. In addition, the underwriters have advised us that they do not expect sales to accounts over which they have discretionary authority to exceed 5% of the common stock being offered.
Commissions and Expenses
The underwriters have advised us that they propose to offer the shares of common stock to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers, which may include the underwriters, at that price less a concession not in excess of $         per share of common stock. After the offering, the initial public offering price and the concession to dealers may be reduced by the representatives. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus. Certain of the underwriters may sell shares to the public through one or more of their affiliates as selling agents.
 
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The following table shows the public offering price, the underwriting discounts and commissions that we are to pay the underwriters and the proceeds, before expenses, to us in connection with this offering. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

 	 	Per Share	 	 	Total	 	
 	 	Without
Option
To
Purchase
Additional
Shares	 	 	With
Option
To
Purchase
Additional
Shares	 	 	Without
Option
To
Purchase
Additional
Shares	 	 	With
Option
To
Purchase
Additional
Shares	 	
Public offering price	 	$	            	  	 	$	            	  	 	$	        	  	 	$	            	  	
Underwriting discounts and commissions paid by us	 	$	            	  	 	$	            	  	 	$	        	  	 	$	            	  	
Proceeds to us, before expenses	 	$	            	  	 	$	            	  	 	$	            	  	 	$	            	  	
We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $         million. We have agreed to reimburse the underwriters for certain expenses in an amount up to $         .
Determination of Offering Price
Prior to this offering, there has not been a public market for our common stock. Consequently, the initial public offering price for our common stock will be determined by negotiations between us and the representatives. Among the factors to be considered in these negotiations will be prevailing market conditions, our financial information, market valuations of other companies that we and the underwriters believe to be comparable to us, estimates of our business potential, the present state of our development and other factors deemed relevant.
We offer no assurances that the initial public offering price will correspond to the price at which the common stock will trade in the public market subsequent to the offering or that an active trading market for the common stock will develop and continue after the offering.
Listing
We have applied to list our common stock on The NASDAQ Global Market under the symbol “CLSD.”
Option to Purchase Additional Shares
We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase, from time to time, in whole or in part, up to an aggregate of             shares from us at the public offering price set forth on the cover page of this prospectus, less underwriting discounts and commissions. If the underwriters exercise this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional shares proportionate to that underwriter’s initial purchase commitment as indicated in the table above. This option may be exercised only if the underwriters sell more shares than the total number set forth on the cover page of this prospectus.
 
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No Sales of Similar Securities
We, our officers, directors and holders of substantially all of our outstanding capital stock have agreed, subject to specified exceptions, not to directly or indirectly:
 
 	•	 	sell, offer to sell, contract to sell, effect any short sale, pledge, transfer, establish a “put equivalent position” within the meaning of Rule 16a-l(h) under the Exchange Act;	
 
 	•	 	otherwise dispose of, or enter into any swap, hedge or similar arrangement that transfers, in whole or in part, the economic risk of ownership of, any shares of common stock, options or warrants to acquire shares of common stock, or securities exchangeable or exercisable for or convertible into shares of common stock currently or hereafter owned either of record or beneficially;	
 
 	•	 	make any demand for, or exercise any right with respect to, the registration under the Securities Act of the offer and sale of any shares of common stock, options or warrants to acquire shares of common stock, or securities exchangeable or exercisable for or convertible into shares of common stock; or	
 
 	•	 	publicly announce any intention to do any of the foregoing;	
for a period of 180 days after the date of this prospectus without the prior written consent of the representatives.
The lock-up restrictions terminate after the close of trading of the common stock on and including the 180th day after the date of this prospectus. The representatives may, in their sole discretion and at any time or from time to time before the termination of the 180-day period release all or any portion of the securities subject to lock-up agreements.
The restrictions described above to do not apply to:
 
 	•	 	transfers of shares of our common stock or any security convertible into or exercisable or exchangeable for shares of our common stock (i) as a bona fide gift, or gifts, (ii) to an immediate family member or a trust for the direct or indirect benefit of the lock-up signatory or such immediate family member of the lock-up signatory or (iii) by will or intestacy;	
 
 	•	 	transactions relating to shares of our common stock or other securities acquired in the open market after the completion of this offering;	
 
 	•	 	if the lock-up signatory is a corporation, limited partnership, trust or other business entity, transfers of shares of our common stock to (i) another corporation, member, partner, trust or other business entity that is a direct or indirect affiliate (as defined in Rule 405 promulgated under the Securities Act) of the lock-up signatory or (ii) as part of a pro rata distribution or transfer by the lock-up signatory to its stockholders, members, partners, beneficiaries or other equity holders provided however, that any such transfer or distribution shall not involve a disposition for value;	
 
 	•	 	transfers to us in connection with the “cashless” exercise of options to purchase shares of our common stock pursuant to employee benefit plans disclosed in this prospectus;	
 
 	•	 	transfers in connection with the “net exercise” of warrants held by the lock-up signatory;	
 
 	•	 	transfers to us to satisfy tax withholding obligations in connection with the vesting or exercise of equity incentive awards under our employee benefit plans after the completion of this offering;	
 
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 	•	 	transfers to us in connection with the repurchase of shares of our common stock issued pursuant to employee benefit plans disclosed in this prospectus upon the termination of service pursuant to an existing company right;	
 
 	•	 	transfers, sales, tenders or other dispositions of shares of our common stock, or any securities convertible into or exercisable or exchangeable for our common stock, occurring after the consummation of this offering, pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of our capital stock that would result in the disposition of not less than a majority of the outstanding shares of our voting securities, provided that in the event that the tender offer, merger, consolidation or other such transaction is not completed, our common stock and any security convertible into or exchangeable for our common stock shall remain subject to the same restrictions;	
 
 	•	 	transfers pursuant to operation of law, including pursuant to a domestic order or negotiated divorce settlement;	
 
 	•	 	any issuance by us of shares of our common stock or securities convertible or exercisable or exchangeable for shares of our common stock pursuant to the exercise or conversion of warrants, options, or other convertible or exchangeable securities, in each case outstanding as of the date of this prospectus; and	
 
 	•	 	the establishment of a trading plan that complies with Rule 10b5-1 under the Exchange Act; provided, however, that (i) the restrictions shall apply in full force to sales or other dispositions pursuant to such Rule 10b5-1 plan during the 180-day lock-up period described above and (ii) no public announcement or disclosure of entry into such Rule 10b5-1 plan is made or required to be made;	
provided, however, that in the case of any transfer or distribution pursuant to the first, third, ninth and tenth clauses above, each donee, distributee recipient or transferee shall sign and deliver a lock-up agreement substantially in the form of the lock-up agreements described above; and in the case of any transfer or distribution pursuant to the first (except for sub-clause (iii)), second, third, fourth, fifth, sixth and eleventh clauses above, no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of our common stock, shall be required or shall be voluntarily made during the restricted period.
There are no existing agreements between the underwriters and any of our stockholders who will execute a lock-up agreement, providing consent to the sale of shares prior to the expiration of the lock-up period.
Stabilization
The underwriters have advised us that they, pursuant to Regulation M under the Exchange Act, certain persons participating in the offering may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of the common stock at a level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either “covered” short sales or “naked” short sales.
“Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares of our common stock in this offering. The underwriters may close out any
 
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covered short position by either exercising their option to purchase additional shares of our common stock or purchasing shares of our common stock in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option to purchase additional shares.
“Naked” short sales are sales in excess of the option to purchase additional shares of our common stock. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares of our common stock in the open market after pricing that could adversely affect investors who purchase in this offering.
A stabilizing bid is a bid for the purchase of shares of common stock on behalf of the underwriters for the purpose of fixing or maintaining the price of the common stock. A syndicate covering transaction is the bid for or the purchase of shares of common stock on behalf of the underwriters to reduce a short position incurred by the underwriters in connection with the offering. Similar to other purchase transactions, the underwriter’s purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if the common stock originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.
Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. The underwriters are not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.
Electronic Distribution
A prospectus in electronic format may be made available by e-mail or through online services maintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of shares of common stock for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters’ websites and any information contained in any other website maintained by any of the underwriters is not part of this prospectus, has not been approved or endorsed by us or the underwriters and should not be relied upon by investors.
Other Activities and Relationships
The underwriters and certain of their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of their respective affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses.
 
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In the ordinary course of their various business activities, the underwriters and certain of their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities or instruments issued by us and our affiliates. If the underwriters or their respective affiliates have a lending relationship with us, they routinely hedge their credit exposure to us consistent with their customary risk management policies. The underwriters and their respective affiliates may hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities or the securities of our affiliates, including potentially the common stock offered hereby. Any such short positions could adversely affect future trading prices of the common stock offered hereby. The underwriters and certain of their respective affiliates may also communicate independent investment recommendations, market color or trading ideas or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long or short positions in such securities and instruments.
Notice to Residents of Canada
The securities may be sold only to purchasers purchasing as principal that are both “accredited investors” as defined in National Instrument 45-106 Prospectus and Registration Exemptions and “permitted clients” as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from the prospectus requirements and in compliance with the registration requirements of applicable securities laws.
Notice to Prospective Investors in the EEA
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), including each Relevant Member State that has implemented amendments to Article 3(2) of the Prospectus Directive introduced by the 2010 PD Amending Directive (each, an “Early Implementing Member State”), an offer of shares of common stock to the public may not be made in that Relevant Member State and each initial purchaser represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of the shares of common stock to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares of common stock which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that an offer of the shares of common stock to the public in that Relevant Member State may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:
 
 	(a)	to any legal entity which is a “qualified investor” as defined in the Prospectus Directive;	
 
 	(b)	to fewer than 100 (or, in the case of Early Implementing Member States, 150) natural or legal persons (other than “qualified investors” as defined in the Prospectus Directive) subject to obtaining the prior consent of the Subscribers; or	
 
 	(c)	in any other circumstances falling within Article 3(2) of the Prospectus Directive,	
provided that no such offer of the shares of common stock referred to in (a) to (c) above shall require the issuer or any Subscriber to publish a prospectus pursuant to Article 3 of the Prospectus Directive or
 
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supplement a prospectus pursuant to Article 16 of the Prospectus Directive and each person who initially acquires any shares of common stock or to whom any offer is made will be deemed to have represented, warranted and agreed to and with the issuer or any Subscriber that it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive.
For the purposes of this provision, the expression an “offer to the public” in relation to any shares of common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares of common stock to be offered so as to enable an investor to decide to purchase or subscribe to the shares of common stock, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State. The expression “2010 PD Amending Directive” means Directive 2010/73/EU.
Notice to Prospective Investors in Hong Kong
The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571 Laws of Hong Kong) and any rules made thereunder.
Notice to Prospective Investors in Israel
The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority, or the ISA, nor have such securities been registered for sale in Israel. The shares of common stock may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the Offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.
Notice to Prospective Investors in Japan
The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the Financial Instruments and Exchange Law) and may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to
 
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others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.
Notice to Prospective Investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (SFA), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.
Notice to Prospective Investors in the United Kingdom
In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, which we refer to as the Order, or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.
Notice to Prospective Investors in Switzerland
The Prospectus does not constitute an issue prospectus pursuant to Article 652a or Article 1156 of the Swiss Code of Obligations (“CO”) and the shares will not be listed on the SIX Swiss Exchange. Therefore, the Prospectus may not comply with the disclosure standards of the CO or the listing rules (including any prospectus schemes) of the SIX Swiss Exchange. Accordingly, the shares may not be offered to the public in or from Switzerland, but only to a selected and limited circle of investors, which do not subscribe to the shares with a view to distribution.
 
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LEGAL MATTERS
The validity of the shares of common stock being offered by this prospectus will be passed upon for us by Cooley LLP, Reston, Virginia. Certain legal matters related to this offering will be passed upon for the underwriters by Latham  & Watkins LLP.
EXPERTS
The financial statements of Clearside Biomedical, Inc. at December 31, 2013 and 2014, and for each of the two years in the period ended December 31, 2014, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act, with respect to the shares of common stock being offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information in the registration statement and its exhibits. For further information with respect to our company and the common stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.
You can read our SEC filings, including the registration statement, over the internet at the SEC’s website at www.sec.gov . You may also read and copy any document we file with the SEC at its public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.
Upon completion of this offering, we will be subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above. We also maintain a website at  www.clearsidebio.com , at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus.
 
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Index to Financial Statements

Report of Independent Registered Public Accounting Firm	  	 	F-2	  	
Balance sheets as of December 31, 2013 and 2014 and September 30, 2015 (unaudited)	  	 	F-3	  	
Statements of operations for the years ended December  31, 2013 and 2014 and for the nine months ended September 30, 2014 and 2015 (unaudited)	  	 	F-4	  	
Statements of stockholders’ deficit for the years ended December  31, 2013 and 2014 and the nine months ended September 30, 2015 (unaudited)	  	 	F-5	  	
Statements of cash flows for the years ended December  31, 2013 and 2014 and for the nine months ended September 30, 2014 and 2015 (unaudited)	  	 	F-6	  	
Notes to financial statements	  	 	F-7	  	
 
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Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of
Clearside Biomedical, Inc.
We have audited the accompanying balance sheets of Clearside Biomedical, Inc. (the Company) as of December 31, 2013 and 2014, and the related statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Clearside Biomedical, Inc. at December 31, 2013 and 2014, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Atlanta, Georgia
February 27, 2015
 
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CLEARSIDE BIOMEDICAL, INC.
Balance Sheets
(in thousands, except share and per share data)

 	 	December 31,	 	 	September 30,
2015	 	 	Pro forma
Liabilities,
Convertible
Preferred Stock
and Stockholders’
Deficit
September 30,
2015	 	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	2013	 	 	2014	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	(unaudited)	 	 	(unaudited)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	1,909	  	 	$	8,269	  	 	$	4,186	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Prepaid expenses	 	 	63	  	 	 	47	  	 	 	172	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other current assets	 	 	45	  	 	 	7	  	 	 	4	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total current assets	 	 	2,017	  	 	 	8,323	  	 	 	4,362	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property and equipment, net	 	 	98	  	 	 	205	  	 	 	147	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deferred offering costs	 	 	—	  	 	 	1,750	  	 	 	—	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other assets	 	 	22	  	 	 	21	  	 	 	7	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	2,137	  	 	$	10,299	  	 	$	4,516	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities, convertible preferred stock and stockholders’ deficit	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable	 	$	248	  	 	$	1,257	  	 	$	750	  	 	$	750	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accrued liabilities	 	 	427	  	 	 	1,157	  	 	 	1,265	  	 	 	1,265	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current portion of long-term debt	 	 	—	  	 	 	—	  	 	 	1,133	  	 	 	1,133	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current portion of deferred rent	 	 	8	  	 	 	10	  	 	 	8	  	 	 	8	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total current liabilities	 	 	683	  	 	 	2,424	  	 	 	3,156	  	 	 	3,156	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deferred revenue	 	 	—	  	 	 	200	  	 	 	700	  	 	 	700	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deferred rent	 	 	22	  	 	 	11	  	 	 	5	  	 	 	5	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt	 	 	268	  	 	 	—	  	 	 	4,782	  	 	 	4,782	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other non-current liabilities	 	 	31	  	 	 	42	  	 	 	205	  	 	 	205	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities	 	 	1,004	  	 	 	2,677	  	 	 	8,848	  	 	 	8,848	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Convertible preferred stock:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Series A preferred stock, $0.001 par value, 5,200,000 shares authorized at December 31, 2013 and 5,198,826 shares authorized at December 31, 2014 and September 30, 2015; 5,198,826 shares issued and outstanding at December 31, 2013 and 2014 and September 30, 2015; no shares authorized, issued or outstanding, pro forma; liquidation preference of $4,086 at December 31, 2013 and 2014 and September 30, 2015	 	 	4,040	  	 	 	4,086	  	 	 	4,086	  	 	 	—	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Series A-1 preferred stock, $0.001 par value; 4,800,000 shares authorized at December 31, 2013, 4,373,481 shares authorized at December 31, 2014 and September 30, 2015; 4,356,931 shares issued and outstanding at December 31, 2013 and 2014 and September 30, 2015; no shares authorized, issued or outstanding, pro forma; liquidation preference of $7,900 at December 31, 2013 and 2014 and September 30, 2015	 	 	7,831	  	 	 	7,858	  	 	 	7,890	  	 	 	—	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Series B preferred stock, $0.001 par value, 7,413,365 shares authorized; 6,009,202 shares issued and outstanding at December 31, 2014 and September 30, 2015; no shares authorized, issued or outstanding, pro forma; liquidation preference of $16,212 at December 31, 2014 and September 30, 2015	 	 	—	  	 	 	14,891	  	 	 	15,252	  	 	 	—	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total convertible preferred stock	 	 	11,871	  	 	 	26,835	  	 	 	27,228	  	 	 	—	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Stockholders’ deficit:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Common stock, $0.001 par value; 17,000,000 shares authorized at December 31, 2013, 30,000,000 shares authorized at December 31, 2014 and September 30, 2015; 3,482,916, 3,996,233 and 5,839,334 shares issued and outstanding at December 31, 2013 and 2014 and September 30, 2015, respectively; 30,000,000 shares authorized, 21,404,293 shares issued and outstanding, pro forma at September 30, 2015	 	 	3	  	 	 	4	  	 	 	5	  	 	 	21	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Additional paid-in capital	 	 	794	  	 	 	2,507	  	 	 	2,628	  	 	 	29,840	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated deficit	 	 	(11,535	) 	 	 	(21,724	) 	 	 	(34,193	) 	 	 	(34,193	) 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total stockholders’ deficit	 	 	(10,738	) 	 	 	(19,213	) 	 	 	(31,560	) 	 	 	(4,332	) 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities, convertible preferred stock and stockholders’ deficit	 	$	2,137	  	 	$	10,299	  	 	$	4,516	  	 	$	4,516	  	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to the financial statements.
 
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CLEARSIDE BIOMEDICAL, INC.
Statements of Operations
(in thousands, except share and per share data)

 	 	Year Ended December 31,	 	 	Nine Months
Ended September 30,	 	
 	 	      2013      	 	 	      2014      	 	 	          2014        	 	 	        2015        	 	
 	 	 	 	 	 	 	 	(unaudited)	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	$	5,045	  	 	$	6,692	  	 	$	4,776	  	 	$	6,964	  	
General and administrative	 	 	2,193	  	 	 	3,131	  	 	 	2,398	  	 	 	5,337	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	7,238	  	 	 	9,823	  	 	 	7,174	  	 	 	12,301	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from operations	 	 	(7,238	) 	 	 	(9,823	) 	 	 	(7,174	) 	 	 	(12,301	) 	
 	 	 	 	 	
Other income (expense):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(23	) 	 	 	(371	) 	 	 	(353	) 	 	 	(174	) 	
Interest income	 	 	7	  	 	 	5	  	 	 	1	  	 	 	6	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other expense	 	 	(16	) 	 	 	(366	) 	 	 	(352	) 	 	 	(168	) 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(7,254	) 	 	$	(10,189	) 	 	$	(7,526	) 	 	$	(12,469	) 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share of common stock — basic and diluted	 	$	(2.45	) 	 	$	(2.66	) 	 	$	(2.00	) 	 	$	(2.54	) 	

Weighted average shares outstanding — basic and diluted	 	 	2,956,285	  	 	 	3,825,052	  	 	 	3,769,091	  	 	 	4,910,055	  	
 	 	 	 	 	
Pro forma net loss per share — basic and diluted (unaudited)	 	 	 	 	 	$	(0.53	) 	 	 	 	 	 	$	(0.61	) 	

Pro forma weighted average shares outstanding — basic and diluted (unaudited)	 	 	 	 	 	 	19,390,011	  	 	 	 	 	 	 	20,475,014	  	
See accompanying notes to the financial statements.
 
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Table of Contents
CLEARSIDE BIOMEDICAL, INC.
Statements of Stockholders’ Deficit
(in thousands, except share and per share data)

 	 	 
Common Stock	 	 	Additional
Paid-In Capital	 	 	Accumulated
Deficit 	 	 	Total
Stockholders’
Deficit	 	 	
 	 	Shares	 	 	Amount	 	 	 	 	 	 	 	 	 	 	 	 	
January 1, 2013	 	 	2,547,243	  	 	$	2	  	 	$	489	  	 	$	(4,281	) 	 	$	(3,790	) 	 	 	
Exercise of stock options	 	 	74,108	  	 	 	—	  	 	 	5	  	 	 	—	  	 	 	5	  	 	 	
Vesting of restricted stock	 	 	861,565	  	 	 	1	  	 	 	—	  	 	 	—	  	 	 	1	  	 	 	
Accretion of stock issuance costs	 	 	—	  	 	 	—	  	 	 	(22	) 	 	 	—	  	 	 	(22	) 	 	 	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	322	  	 	 	—	  	 	 	322	  	 	 	
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(7,254	) 	 	 	(7,254	) 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2013	 	 	3,482,916	  	 	 	3	  	 	 	794	  	 	 	(11,535	) 	 	 	(10,738	) 	 	 	
Exercise of stock options	 	 	54,569	  	 	 	—	  	 	 	5	  	 	 	—	  	 	 	5	  	 	 	
Vesting of restricted stock	 	 	458,748	  	 	 	1	  	 	 	6	  	 	 	—	  	 	 	7	  	 	 	
Issuance of warrants to purchase common stock	 	 	—	  	 	 	—	  	 	 	1,506	  	 	 	—	  	 	 	1,506	  	 	 	
Accretion of stock issuance costs	 	 	—	  	 	 	—	  	 	 	(231	) 	 	 	—	  	 	 	(231	) 	 	 	
Share-based compensation expense	 	 	—	  	 	 	—	  	 	 	427	  	 	 	—	  	 	 	427	  	 	 	
Net loss	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(10,189	) 	 	 	(10,189	) 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2014	 	 	3,996,233	  	 	 	4	  	 	 	2,507	  	 	 	(21,724	) 	 	 	(19,213	) 	 	 	
Exercise of stock options (unaudited)	 	 	108,893	  	 	 	—	  	 	 	13	  	 	 	—	  	 	 	13	  	 	 	
Exercise of warrants (unaudited)	 	 	1,710,772	  	 	 	1	  	 	 	(2	) 	 	 	—	  	 	 	(1	) 	 	 	
Vesting of restricted stock (unaudited)	 	 	23,436	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	
Accretion of stock issuance costs (unaudited)	 	 	—	  	 	 	—	  	 	 	(392	) 	 	 	—	  	 	 	(392	) 	 	 	
Share-based compensation expense (unaudited)	 	 	—	  	 	 	—	  	 	 	502	  	 	 	—	  	 	 	502	  	 	 	
Net loss (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(12,469	) 	 	 	(12,469	) 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2015 (unaudited)	 	 	5,839,334	  	 	$	5	  	 	$	2,628	  	 	$	(34,193	) 	 	$	(31,560	) 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See accompanying notes to the financial statements.
 
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Table of Contents
CLEARSIDE BIOMEDICAL, INC.
Statements of Cash Flows
(in thousands, except share and per share data)

 	 	Year Ended
December 31,	 	 	Nine Months Ended
September 30,	 	
 	 	  2013  	 	 	  2014  	 	 	  2014  	 	 	  2015  	 	
 	 	 	 	 	 	 	 	(unaudited)	 	
Operating activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(7,254	) 	 	$	(10,189	) 	 	$	(7,526	) 	 	$	(12,469	) 	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation	 	 	15	  	 	 	33	  	 	 	22	  	 	 	45	  	
Share-based compensation expense	 	 	322	  	 	 	427	  	 	 	290	  	 	 	502	  	
Non-cash interest expense	 	 	—	  	 	 	82	  	 	 	82	  	 	 	66	  	
Accretion of debt discount	 	 	—	  	 	 	277	  	 	 	277	  	 	 	32	  	
Change in fair value of warrant liability	 	 	6	  	 	 	18	  	 	 	—	  	 	 	(1	) 	
Loss on sale of fixed assets	 	 	—	  	 	 	—	  	 	 	—	  	 	 	15	  	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Prepaid expenses and other current assets	 	 	(78	) 	 	 	54	  	 	 	(617	) 	 	 	(122	) 	
Other assets	 	 	2	  	 	 	(1,154	) 	 	 	(3	) 	 	 	1,764	  	
Accounts payable and accrued liabilities	 	 	146	  	 	 	1,137	  	 	 	870	  	 	 	(399	) 	
Deferred revenue	 	 	—	  	 	 	200	  	 	 	200	  	 	 	500	  	
Deferred rent	 	 	2	  	 	 	(9	) 	 	 	(4	) 	 	 	(6	) 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in operating activities	 	 	(6,839	) 	 	 	(9,124	) 	 	 	(6,409	) 	 	 	(10,073	) 	
Investing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Acquisition of property and equipment	 	 	(63	) 	 	 	(140	) 	 	 	(68	) 	 	 	(8	) 	
Proceeds from the sale of fixed assets	 	 	—	  	 	 	—	  	 	 	—	  	 	 	4	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in investing activities	 	 	(63	) 	 	 	(140	) 	 	 	(68	) 	 	 	(4	) 	
Financing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from issuance of long-term debt	 	 	125	  	 	 	3,000	  	 	 	3,000	  	 	 	5,981	  	
Principal payments made on long-term debt	 	 	—	  	 	 	(125	) 	 	 	(125	) 	 	 	—	  	
Proceeds from exercise of stock options	 	 	10	  	 	 	5	  	 	 	5	  	 	 	13	  	
Proceeds from issuance of Series A-1 Preferred Stock, net of issuance cost	 	 	7,820	  	 	 	—	  	 	 	—	  	 	 	—	  	
Proceeds from issuance of Series B Preferred Stock and common warrants, net of issuance cost	 	 	—	  	 	 	12,744	  	 	 	12,755	  	 	 	—	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by financing activities	 	 	7,955	  	 	 	15,624	  	 	 	15,635	  	 	 	5,994	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	 	 	1,053	  	 	 	6,360	  	 	 	9,158	  	 	 	(4,083	) 	
Cash and cash equivalents, beginning of period	 	 	856	  	 	 	1,909	  	 	 	1,909	  	 	 	8,269	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	 	$	1,909	  	 	$	8,269	  	 	$	11,067	  	 	$	4,186	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Supplemental schedule of noncash investing and financing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Conversion of shareholder loan, promissory note and accrued interest	 	$	—	  	 	$	3,232	  	 	$	3,232	  	 	$	—	  	
Issuance of warrant to purchase Series A-1 preferred stock	 	 	19	  	 	 	—	  	 	 	—	  	 	 	—	  	
Issuance of warrant to purchase Series B preferred stock	 	 	—	  	 	 	—	  	 	 	—	  	 	 	164	  	
Accretion of redeemable convertible preferred stock to redemption value	 	 	22	  	 	 	231	  	 	 	84	  	 	 	392	  	
Vesting of restricted stock	 	 	1	  	 	 	7	  	 	 	3	  	 	 	—	  	
Amortization of debt discount	 	 	2	  	 	 	(7	) 	 	 	7	  	 	 	—	  	
Deferred initial public offering costs in accounts payable and accrued expenses	 	 	—	  	 	 	602	  	 	 	898	  	 	 	228	  	
See accompanying notes to the financial statements
 
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Table of Contents
CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements
1. The Company
Clearside Biomedical, Inc. (the “Company”) is a late-stage clinical biopharmaceutical company developing first-in-class drug therapies to treat blinding diseases of the eye. The Company’s current product candidates focus on diseases affecting the retina and choroid, especially diseases associated with macular edema, and are injected into the suprachoroidal space using its proprietary SCS Microinjector. Incorporated in the State of Delaware on May 26, 2011, the Company has its corporate headquarters in Alpharetta, Georgia.
The Company’s activities since inception have primarily consisted of developing product and technology rights, raising capital and performing research and development activities. The Company has no current source of revenue to sustain present activities, and does not expect to generate revenue until and unless the Company receives regulatory approval of and successfully commercialize its product candidates. The Company is subject to a number of risks and uncertainties similar to those of other life science companies at a similar stage of development, including, among others, the need to obtain adequate additional financing, successful development efforts including regulatory approval of products, compliance with government regulations, successful commercialization of potential products, protection of proprietary technology and dependence on key individuals.
Liquidity
The Company has funded its operations to date primarily through the sale of convertible preferred stock and the issuance of long-term debt. The Company will need to obtain additional financing to fund future operations, including completing the development and commercialization of its primary product candidates. The Company will need to expend substantial resources for research and development, including costs associated with the clinical testing of its product candidates. The Company will need to obtain additional financing to conduct additional trials for the regulatory approval of its drug candidates if requested by regulatory bodies, and completing the development of any additional product candidates that might be acquired. If such products were to receive regulatory approval, the Company would need to prepare for the potential commercialization of its product candidates and fund the commercial launch of the products, if the Company decides to commercialize the products on its own. Moreover, the Company’s fixed expenses such as rent and other contractual commitments are substantial and are expected to increase in the future.
The Company has incurred losses and experienced negative operating cash flows since inception, and has cumulative net cash flows used in operating activities of $29.3 million (unaudited) and cumulative net losses of $34.2 million (unaudited) for the period from May 26, 2011 (inception) to September 30, 2015. The total future need for operating capital and research and development funding significantly exceeds the cash and cash equivalents that the Company has on its balance sheet. As a result, the Company will require additional funding in the future and may not be able to raise such additional funds. In the absence of product or other revenues, the amount, timing, nature or source of which cannot be predicted, the Company’s losses will continue as it conducts its research and development activities. Until the Company can generate a sufficient amount of revenue, the Company may finance future cash needs through public or private equity offerings, license agreements, debt financings, collaborations, strategic alliances and marketing or distribution arrangements. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in restrictive covenants, such as limitations on the Company’s ability to incur additional debt, limitations on its ability to acquire, sell or license intellectual property rights and other
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
operating restrictions that could adversely impact the ability of the Company to conduct its business. If adequate funds are not available, the Company plans to delay, reduce or eliminate research and development programs or reduce administrative expenses. The Company may seek to access the public or private capital markets whenever conditions are favorable, even if the Company does not have an immediate need for additional capital at that time. In addition, if the Company raises additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, the Company may have to relinquish valuable rights to its technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to the Company. There is no assurance that the Company will be successful in obtaining sufficient financing on acceptable terms and conditions to fund continuing operations, if at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition. However, the Company is able to control spending on development activities while still advancing clinical trials for key drug candidates through January 1, 2016 with cash on hand as of December 31, 2014.
2. Significant Accounting Policies
Basis of Presentation
The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Unaudited Interim Financial Information
The accompanying balance sheet as of September 30, 2015, statements of operations and statements of cash flows for the nine months ended September 30, 2014 and 2015 and statement of stockholders’ deficit as of September 30, 2015 are unaudited. The interim unaudited financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2015 and the results of its operations and its cash flows for the nine months ended September 30, 2014 and 2015. The financial data and other information disclosed in these notes related to the nine months ended September 30, 2014 and 2015 are unaudited. The results for the nine months ended September 30, 2015 are not indicative of results to be expected for the year ending December 31, 2015, any other interim periods or any future year or period.
Unaudited Pro Forma Information
The unaudited pro forma balance sheet data as of September 30, 2015 gives effect to the automatic conversion of all outstanding shares of the Company’s convertible preferred stock into an aggregate of 15,564,959 shares of common stock upon completion of the Company’s planned initial public offering. The unaudited pro forma basic and diluted net loss per share for the year ended December 31, 2014 and the nine months ended September 30, 2015 gives effect to such automatic conversion as if it had occurred as of the beginning of the periods presented.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
contingent assets and liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the accounting for useful lives to calculate depreciation and amortization, accrued liabilities, share-based compensation expense and income tax valuation allowance. Actual results could differ from these estimates.
Segment Information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment. All operations are located in the United States.
Property and Equipment, Net
Property and equipment is recorded at historical cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Repairs and maintenance are expensed when incurred. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net income.
Cash Equivalents
Cash equivalents consist of short-term, highly liquid investments with an original term of three months or less at the date of purchase.
Concentration of Credit Risk Arising From Cash Deposits in Excess of Insured Limits
The Company maintains its cash in bank deposits that at times may exceed federally insured limits. The Company has not experienced any loss in such accounts. The Company believes it is not exposed to any significant risks with respect to its cash balances.
Deferred Offering Costs
The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as other assets until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ deficit as a reduction of additional paid-in capital generated as a result of the offering or as a reduction to the carrying value of preferred stock issued, if such stock is classified outside of stockholders’ deficit. Should the equity financing no longer be considered probable of being consummated, the deferred offering costs would be expensed immediately as a charge to operating expenses in the statement of operations. The Company had not recorded any deferred offering costs as of December 31, 2013. As of December 31, 2014, the Company had recorded $1.8 million of deferred offering costs. During the nine months ended September 30, 2015 (unaudited), all deferred offering costs, in the amount of $1.9 million, were charged to operating expenses as a result of the postponement of the proposed equity financing.
Research and Development Costs
Research and development costs are charged to expense as incurred and include, but are not limited to:
 
 	•	 	employee-related expenses, including salaries, benefits, travel and share-based compensation expense for research and development personnel;	
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
 	•	 	expenses incurred under agreements with contract research organizations, contract manufacturing organizations and consultants that conduct clinical and preclinical studies;	
 
 	•	 	costs associated with preclinical and development activities;	
 
 	•	 	costs associated with technology and intellectual property licenses;	
 
 	•	 	costs for the Company’s research and development facility; and	
 
 	•	 	depreciation expense for assets used in research and development activities.	
Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the financial statements as prepaid or accrued expense, which are reported in accounts payable. No material adjustments to these estimates have been recorded in these financial statements.
Share-Based Compensation
Compensation cost related to share-based awards granted to employees is measured at grant date, based on the estimated fair value of the award. The Company estimates the fair value of stock options using a Black-Scholes option pricing model. Compensation expense for options granted to non-employees is determined as the fair value of consideration received or the fair value of the equity instruments issued, whichever is more reliably measured. The fair value of restricted stock awards is determined based on the fair value of the Company’s common stock on the date of grant. Share-based compensation costs are expensed on a straight-line basis (net of estimated forfeitures) over the relevant vesting period. The fair value of awards granted to non-employees is re-measured each period until the related service is complete. All share-based compensation costs are recorded in general and administrative or research and development costs in the statements of operations based upon the underlying employees’ roles within the Company.
Debt Discount
The Company follows the authoritative guidance in Accounting Standards Codification (“ASC”) 470-20-25-2,  Debt with Conversion of Other Options , for accounting for debt discount related to the detachable stock purchase warrants issued in connection with a debt obligation. The fair value of the warrant is recorded as a discount against the related debt obligation, and is amortized using the effective interest rate method over the term of the underlying debt obligation and reflected in interest expense.
Fair Value Measurements
The Company records certain financial assets and liabilities at fair value in accordance with the provisions of ASC Topic 820,  Fair Value Measurements and Disclosures , on fair value measurements. As defined in the guidance, fair value, defined as an exit price, represents the amount that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
participants would use in pricing an asset or a liability. As a basis for considering these assumptions, the guidance defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value.
 
 	•	 	Level 1—Unadjusted quoted prices in active, accessible markets for identical assets or liabilities.	
 
 	•	 	Level 2—Other inputs that are directly or indirectly observable in the marketplace.	
 
 	•	 	Level 3—Unobservable inputs that are supported by little or no market activity.	
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The Company’s material financial instruments at December 31, 2013 and 2014 and September 30, 2015 (unaudited) consisted primarily of cash and cash equivalents, long-term debt and stock purchase warrant liabilities. The fair value of cash and cash equivalents, other current assets and accounts payable approximate their respective carrying values due to the short term nature of these instruments. The Company has determined its stock purchase warrants liability to be a Level 3 fair value measurement (Note 10).
Stock Purchase Warrants
The Company accounts for stock purchase warrants as liabilities based upon the characteristics and provisions of the underlying instruments. These liabilities are recorded at their fair value on the date of issuance within other non-current liabilities on the balance sheet and are remeasured on each subsequent reporting date, with fair value changes recognized as income (decreases in fair value) or expenses (increases in fair value) in other income (expense), net in the statements of operations. The fair value of these liabilities is estimated using the Black-Scholes method.
Income Taxes
Deferred tax assets or liabilities are recorded for temporary differences between financial statement and tax basis of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. The Company has provided a full valuation allowance on its deferred tax assets, which primarily consist of cumulative net operating losses of $7.9 million for the period from May 26, 2011 (inception) to December 31, 2014. Due to its history of operating losses since inception and losses expected to be incurred in the foreseeable future, a full valuation allowance was considered necessary.
Recent Accounting Pronouncements
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03,  Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs  (“ASU 2015-03”). This pronouncement requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the pronouncement, debt issuance costs were required to be presented in the balance sheet as an asset. ASU 2015-03 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and early adoption is permitted. The Company adopted this pronouncement as of April 15, 2015, and it did not have a material impact on the Company’s financial statements or related disclosures.
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern,  which provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for the Company for the annual period ending after December 15, 2016 and for annual and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of this accounting standard update on the Company’s financial statements or related disclosures.
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements . This pronouncement allows the removal of the incremental reporting requirements of the development stage entity distinction, the inception-to-date information and certain other disclosures. The Company adopted this pronouncement as of January 1, 2015, and it did not have a material impact on its consolidated financial statements or related disclosures.
Net Loss per Share of Common Stock
Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration of the dilutive effect of potential common stock equivalents. Diluted net loss per share gives effect to all dilutive potential shares of common stock outstanding during this period.
For all periods presented, the Company’s potential common stock equivalents, which include convertible preferred stock, stock options, unvested restricted stock and stock purchase warrants, have been excluded from the computation of diluted net loss per share as their inclusion would have the effect of reducing the net loss per share. Therefore, the denominator used to calculate both basic and diluted net loss per share is the same in all periods presented.
The Company’s potential common stock equivalents that have been excluded from the computation of diluted net loss per share for all periods presented because of their antidilutive effect consisted of the following:

 	  	Year Ended
December 31,	 	  	Nine Months Ended
September 30,	 	
 	  	2013	 	  	2014	 	  	2014	 	  	2015	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Convertible preferred stock	  	 	9,555,757	  	  	 	15,564,959	  	  	 	15,564,959	  	  	 	15,564,959	  	
Outstanding stock options	  	 	1,694,198	  	  	 	2,416,746	  	  	 	1,659,246	  	  	 	2,266,776	  	
Unvested restricted stock	  	 	504,271	  	  	 	45,523	  	  	 	53,335	  	  	 	22,087	  	
Stock purchase warrants	  	 	16,550	  	  	 	1,981,639	  	  	 	1,981,639	  	  	 	321,868	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	 	11,770,776	  	  	 	20,008,867	  	  	 	19,259,179	  	  	 	18,175,690	  	

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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
3. Property and Equipment, Net
Property and equipment, net consisted of the following (dollar amounts in thousands):

 	  	Estimated
Useful Lives
(Years)	  	December 31,	 	  	September 30,
2015	 	 	
 	  	 	  	2013	 	  	2014	 	  	 	 	 	
 	  	 	  	 	 	  	 	 	  	(unaudited)	 	 	
Furniture and fixtures	  	5	  	$	77	  	  	$	95	  	  	$	66	  	 	
Machinery and equipment	  	5	  	 	26	  	  	 	105	  	  	 	103	  	 	
Computer equipment	  	3	  	 	7	  	  	 	27	  	  	 	27	  	 	
Leasehold improvements	  	Lesser of
useful life or
remaining
lease term	  	 	10	  	  	 	33	  	  	 	39	  	 	
 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	 	
 	  	 	  	 	120	  	  	 	260	  	  	 	235	  	 	
Less: Accumulated depreciation	  	 	  	 	(22	) 	  	 	(55	) 	  	 	(88	) 	 	
 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	 	
 	  	 	  	$	98	  	  	$	205	  	  	$	147	  	 	
 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	 	
4. Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):

 	  	December 31,	 	  	September 30,
2015	 	
 	  	2013	 	  	2014	 	  	 	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Accrued expenses	  	$	93	  	  	$	825	  	  	$	797	  	
Accrued bonuses	  	 	289	  	  	 	279	  	  	 	383	  	
Accrued vacation	  	 	33	  	  	 	53	  	  	 	71	  	
Accrued interest payable	  	 	12	  	  	 	—	  	  	 	14	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	$	427	  	  	$	1,157	  	  	$	1,265	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
5. Long-Term Debt
Note Purchase Agreement
On December 20, 2012, the Company entered into a $150,000 unsecured note purchase agreement with a lender and borrowed $150,000 on that date. Amounts borrowed under the agreement bore interest at 5% per annum. All unpaid principal, together with the balance of unpaid and accrued interest, were due and payable on demand at any time after the earlier of (i) the maturity date of December 2017, (ii) the date on which the Company has achieved sustainable profitability for a period of at least two consecutive fiscal years in accordance with generally accepted accounting principles, (iii) without the prior written consent of the lender, the date on which an equity financing of the Company in which the Company issues shares of common stock, preferred stock or other equity interests in the Company in a transaction or series of related transactions and receives an investment of cash in consideration of such issuance in the amount of not less than $7.0 million or consolidation of the Company or the sale or transfer by the Company’s stockholders of
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
capital stock of the Company representing more than 50% of the voting power occurs or (iv) upon or after the occurrence of an event of default. The repayment acceleration provision specifically excluded the Series A-1 Preferred Stock financing that occurred in January 2013. The unsecured promissory note converted into 60,291 shares of Series B convertible preferred stock in connection with the Company’s August 2014 Series B convertible preferred stock financing.
Interest expense on the borrowings under the note purchase agreement was $8,000 and $5,000 for the years ended December 31, 2013 and 2014, respectively. As of December 31, 2013 and 2014, the total amount of borrowings due under this note purchase agreement was $150,000 and $0, respectively.
Loan Agreements
In April 2013, the Company borrowed $125,000 under a loan agreement, which borrowings bore interest at a compounded annual rate of 4.25%. As of December 31, 2013, the total amount of borrowings due under the loan agreement was $125,000. All unpaid principal, together with the balance of unpaid and accrued interest, was due and payable on demand at any time after the earlier of (i) the maturity date of February 2016, (ii) the date on which the Company sells, leases, transfers or otherwise disposes of all or substantially all of its assets now owned or hereafter acquired, (iii) the date on which the Company makes a public offering of the Company’s capital stock or equity interests, (iv) the date on which the Company takes any action which would result in a change in the direct or indirect control of 50% or more of the capital stock or equity interest ownership of the Company, (v) the date after December 31, 2013 on which the Company had received additional equity investments or milestone payments or license fees totaling $2.5 million in the aggregate over any 12-month period or (vi) upon or after the occurrence of an event of default. In May 2014, the Company repaid this loan in full.
Interest expense on the borrowings under the loan agreement was $4,000 and $2,000 for the years ended December 31, 2013 and 2014, respectively.
As of December 31, 2013, the Company had recorded unamortized debt discount of $7,000, relating to the detachable warrants issued in conjunction with the loan agreement (Note 10). Debt discounts are amortized using the effective interest method through the earlier of the date of maturity or the conversion of the debt. As of December 31, 2013, cumulative amortization of debt discount amounted to $3,000. The remaining debt discount was written off to interest expense during 2014 when the loan was repaid.
On April 15, 2015, the Company entered into a loan agreement with a bank for borrowings up to $6.0 million, with a floating interest rate equal to the Wall Street Journal’s prime rate minus 0.50 percent. Under the terms of the loan, an initial tranche of $4.0 million was advanced on April 15, 2015 and an additional tranche of $2.0 million was advanced on May 15, 2015. The Company is required to pay accrued interest only for a period of 12 months from the date of each advance, followed by 30 equal monthly payments of principal and accrued interest. A final payment of $0.3 million, or 5.50% of the aggregate borrowed amount, is due at maturity of the loan in 2018 and is being accreted in long-term debt over the life of the loan. Closing costs of $23,000 were recorded in long-term debt and are also being accreted over the life of the loan.
Interest expense on the borrowings under the loan agreement was $72,000 for the nine months ended September 30, 2015 (unaudited). Accretion of the scheduled final payment was $65,000 for the nine months
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
ended September 30, 2015 (unaudited). Accretion of the deferred closing costs was $4,600 for the nine months ended September 30, 2015 (unaudited).
As of September 30, 2015 (unaudited), the annual payments for the loan agreement with SVB, including the scheduled final payment in 2018, were as follows:

Year Ending December 31,	  	Principal	 	  	Interest and
Final Payment	 	  	Total	 	
2015	  	$	—	  	  	$	42	  	  	$	42	  	
2016	  	 	1,733	  	  	 	152	  	  	 	1,885	  	
2017	  	 	2,400	  	  	 	88	  	  	 	2,488	  	
2018	  	 	1,867	  	  	 	352	  	  	 	2,219	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	$	6,000	  	  	$	634	  	  	$	6,634	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	
6. Convertible Shareholder Notes Payable
In April 2014, the Company authorized the sale of convertible promissory notes (the “Bridge Notes”) to its existing stockholders, including two of its executive officers and one of its directors in their individual capacities, in the aggregate principal amount of $6.0 million. In April 2014, the Company issued $3.0 million in aggregate principal amount of Bridge Notes. The outstanding notes accrued interest at a rate of 7%, with principal plus interest due upon maturity in April 2015, unless earlier converted. The Bridge Notes were convertible upon the occurrence of a qualified financing. The Company’s August 2014 Series B convertible preferred stock financing was a qualified financing as contemplated by the Bridge Notes, and accordingly the principal and interest under all of the Bridge Notes was converted automatically into an aggregate of 1,137,652 shares of Series B convertible preferred stock in connection with this financing. In connection with the issuance of the Bridge Notes, the Company also issued warrants to the lenders to purchase an aggregate of 248,175 shares of common stock at an exercise price of $0.01 per share. Unless earlier exercised, these warrants will expire upon the closing of an initial public offering.
Interest expense on the borrowings under the Bridge Notes was $69,000 for the year ended December 31, 2014.
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
7. Income Taxes
No provision for U.S. federal or state income taxes has been recorded as the Company has incurred net operating losses since inception. Significant components of the Company’s net deferred income tax assets consist of the following (in thousands):

 	  	December 31,	 	
 	  	2013	 	  	2014	 	
Current	  	 	 	 	  	 	 	 	
Deferred tax asset (liability)	  	 	 	 	  	 	 	 	
Non-deductible accrued expenses	  	$	125	  	  	$	20	  	
Deferred rent	  	 	3	  	  	 	4	  	
Valuation allowance	  	 	(128	) 	  	 	(24	) 	
 	  	 	 	 	  	 	 	 	
Net current deferred tax asset	  	$	—	  	  	$	—	  	
 	  	 	 	 	  	 	 	 	
Non-current	  	 	 	 	  	 	 	 	
Deferred tax asset (liability)	  	 	 	 	  	 	 	 	
Stock compensation expense	  	$	39	  	  	$	70	  	
Net operating loss carryforwards	  	 	4,005	  	  	 	7,891	  	
Depreciation differences	  	 	(17	) 	  	 	(31	) 	
Federal tax credits	  	 	136	  	  	 	447	  	
State tax credits	  	 	45	  	  	 	196	  	
Deferred rent	  	 	8	  	  	 	4	  	
Charitable contributions	  	 	2	  	  	 	3	  	
Valuation allowance	  	 	(4,218	) 	  	 	(8,580	) 	
 	  	 	 	 	  	 	 	 	
Net non-current deferred tax asset	  	$	—	  	  	$	—	  	
 	  	 	 	 	  	 	 	 	
A reconciliation of the statutory tax rates and the effective tax rates is as follows:

 	  	Year Ended
December 31,	 	
 	  	2013	 	 	2014	 	
U.S. federal tax rate	  	 	34.00	% 	 	 	34.00	% 	
State tax rate	  	 	4.43	  	 	 	4.41	  	
Permanent difference and other	  	 	(1.60	) 	 	 	(1.15	) 	
Tax credit	  	 	2.47	  	 	 	4.54	  	
Valuation allowance	  	 	(39.30	) 	 	 	(41.79	) 	
 	  	 	 	 	 	 	 	 	
 	  	 	0.00	% 	 	 	0.00	% 	
 	  	 	 	 	 	 	 	 	
Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Due to the Company’s history of operating losses, the deferred tax assets arising from the aforementioned future tax benefits are currently not likely to be realized and, accordingly, are offset by a full valuation allowance. The income tax provision varies from the expected provision determined by applying the federal statutory income tax rate to income (loss). The reasons for the difference in the expected provision, as determined by applying the federal statutory income tax rate to net income (loss) is primarily due to the increase in the deferred income tax valuation allowance of $2.8 million and $4.2 million for the years ended December 31, 2013 and 2014, respectively.
As of December 31, 2014, the Company had net deferred tax assets primarily related to net operating loss carryforwards of $7.9 million, which expire through 2034. Utilization of the net operating loss
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The effect of an ownership change could be an imposition of an annual limitation on the use of net operating loss carryforwards attributable to periods before the change.
The U.S. federal statute of limitations remains open for the periods from inception and forward. The Company has not been the subject of examination by the taxing authorities.
The Company has no uncertain tax positions.
8. Convertible Preferred Stock
The Company has authorized 16,985,672 shares of preferred stock. Of the authorized shares of preferred stock, 5,198,826 shares have been designated as Series A Convertible Preferred Stock (“Series A”), 4,373,481 shares have been designated as Series A-1 Preferred Stock (“Series A-1”) and 7,413,365 shares have been designated as Series B Preferred Stock (“Series B”). The Series A, Series A-1 and Series B shares were issued at a price of $0.78589, $1.81320 and $2.69783 per share, respectively.
The following table summarizes the activity of convertible preferred stock (dollar amounts in thousands, except per share amounts):

 	 	Series A
Preferred Stock	 	 	Series A-1
Preferred Stock	 	 	Series B
Preferred Stock	 	 	Total
Convertible
Preferred
Stock	 	
 	 	Shares	 	 	Amount	 	 	Shares	 	 	Amount	 	 	Shares	 	 	Amount	 	 	 	 	
Balance at January 1, 2013	 	 	5,198,826	  	 	$	4,029	  	 	 	—	  	 	$	—	  	 	 	—	  	 	$	—	  	 	$	4,029	  	
Issuance of Series A-1 at $1.81320 per share, on January 31, 2013, net of issuance costs of $75	 	 	—	  	 	 	—	  	 	 	4,081,177	  	 	 	7,325	  	 	 	—	  	 	 	—	  	 	 	7,325	  	
Issuance of Series A-1 at $1.81320 per share, on February 12, 2013, net of issuance costs of $5	 	 	—	  	 	 	—	  	 	 	275,754	  	 	 	495	  	 	 	—	  	 	 	—	  	 	 	495	  	
Accretion of preferred stock issuance costs	 	 	—	  	 	 	11	  	 	 	—	  	 	 	11	  	 	 	—	  	 	 	—	  	 	 	22	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2013	 	 	5,198,826	  	 	 	4,040	  	 	 	4,356,931	  	 	 	7,831	  	 	 	—	  	 	 	—	  	 	 	11,871	  	
Issuance of Series B at $2.69783 per share, on August 29, 2014, net of issuance costs of $236	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	4,811,259	  	 	 	11,501	  	 	 	11,501	  	
Conversion of promissory note and interest payable at $2.69783 per share on August 29, 2014	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	1,197,943	  	 	 	3,232	  	 	 	3,232	  	
Accretion of preferred stock issuance costs	 	 	—	  	 	 	46	  	 	 	—	  	 	 	27	  	 	 	—	  	 	 	158	  	 	 	231	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2014	 	 	5,198,826	  	 	 	4,086	  	 	 	4,356,931	  	 	 	7,858	  	 	 	6,009,202	  	 	 	14,891	  	 	 	26,835	  	
Accretion of preferred stock issuance costs (unaudited)	 	 	—	  	 	 	—	  	 	 	—	  	 	 	32	  	 	 	—	  	 	 	361	  	 	 	393	  	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2015 (unaudited)	 	 	5,198,826	  	 	$	4,086	  	 	 	4,356,931	  	 	$	7,890	  	 	 	6,009,202	  	 	$	15,252	  	 	$	27,228	  	

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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
Dividends
Holders of Series A, Series A-1 and Series B shares, in preference of common stockholders, shall be entitled to receive (a) when, as and if declared by the board of directors (the “Board”), but only out of funds that are legally available therefore, or (b) upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, cumulative cash dividends at the rate of 8% per annum of the applicable original issuance price of such series of preferred stock.
The total cumulative preferred dividends in arrears, if declared, for the preferred stock as of December 31, 2013 and 2014 and September 30, 2015 (unaudited) were $1.1 million, $2.5 million and $4.2 million, respectively.
Liquidation
Upon a liquidation event (as defined in the amended and restated certificate of incorporation) the Series A, Series A-1 and Series B holders will be paid their liquidation preference of $0.78589, $1.81320 and $2.69783 per share, respectively, which is the original issue price plus any accrued and declared but unpaid dividends on such class of capital stock. If the net assets of the Company are insufficient to cover the liquidation preference, the Company will distribute the available funds among the holders of Series A, Series A-1 and Series B shares at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be entitled if such amounts had been paid in full.
Conversion
Each share of Series A, Series A-1 and Series B is convertible into a number of fully paid shares of common stock at any time at the option of the stockholder. The Series A, Series A-1 and Series B shares may be converted into common stock at a conversion price of $0.78589, $1.81320 and $2.69783, respectively. In addition, the Series A, Series A-1 and Series B shares are convertible into common stock immediately upon: (i) the closing of an initial public offering generating net proceeds of not less than $50.0 million to the Company, at a price per share of at least $8.09349; or (ii) the written consent of the holders of at least a majority of the outstanding shares of preferred stock and the holders of at least 70% of the outstanding shares of Series B convertible preferred stock. As described in the amended and restated certificate of incorporation, a reduction in the conversion price will occur if the Company sells common stock for less than the conversion price of the Series A, Series A-1 and Series B shares. Based on the conversion terms, there were no beneficial conversion features associated with Series A, Series A-1 and Series B shares.
In addition, the potential reduction in the conversion price did not result in the conversion price feature meeting the definition of a derivative, which would require separate accounting.
Voting
Each holder of the Series A, Series A-1 and Series B shares shall be entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A, Series A-1 and Series B may be converted, and shall have voting rights and powers equal to the voting rights and powers of the common stock, with certain limitations.
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
Redemption
Series A, Series A-1 preferred stock and Series B will be subject to redemption at the option of the investors holding a majority of the Series A, Series A-1 and Series B shares at any time after the sixth anniversary of the issuance in an amount equal to the liquidation preference. On such redemption date, the Company shall redeem, on a pro rata basis in accordance with the number of shares of Series A, Series A-1 and Series B owned by each holder, that number of outstanding shares of Series A, Series A-1 and Series B determined by dividing (i) the total number of shares of Series A, Series A-1 and Series B outstanding immediately prior to such redemption date by (ii) the number of remaining redemption dates including the redemption date to which such calculation applies. If the Company does not have sufficient funds legally available to redeem on any redemption date all Series A, Series A-1 and Series B shares to be redeemed on such redemption date, the Company shall redeem a pro rata portion of each holder’s Series A, Series A-1 and Series B shares out of funds legally available therefor, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the legally available funds were sufficient to redeem all such shares, and shall redeem the remaining shares to have been redeemed as soon as practicable after the Company has funds legally available therefor.
9. Common Stock
The Company’s amended and restated certificate of incorporation authorizes the Company to issue 30,000,000 shares of $0.001 par value common stock. As of December 31, 2013 and 2014 and September 30, 2015 (unaudited), there were 3,482,916, 3,996,233 and 5,839,334 shares of common stock outstanding, respectively, which excludes 504,271, 45,523 and 22,087 shares, respectively, of unvested restricted stock. The terms, rights, preferences and privileges of the Company’s common stock are as follows:
Voting
Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders, including the election of directors. The Company’s amended and restated certificate of incorporation and bylaws do not provide for cumulative voting rights.
Dividends
Subject to preferences that may be attributable to any then outstanding convertible preferred stock, the holders of the Company’s outstanding shares of common stock are entitled to receive dividends, if any, as may be declared by the Company’s board of directors out of legally available funds.
Liquidation
In the event of the Company’s liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all the Company’s debts and other liabilities, subject to satisfaction of the liquidation preferences granted to the holders of any outstanding preferred stock.
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
Rights and Preference
Holders of the Company’s common stock have no preemptive, conversion or subscription rights, and there are no redemption or other related provisions attributable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock of the Company that may be issued.
10. Stock Purchase Warrants
During 2013, in connection with the loan agreement (Note 5), the Company issued a warrant to the lender to purchase up to 16,550 shares of Series A-1 preferred stock at a price per share of $1.8132. The term of the warrant extends until 10 years from the grant date and the warrant is exercisable at any time during that 10-year period. This warrant was outstanding at December 31, 2013 and 2014 and September 30, 2015 (unaudited) and had a weighted average remaining life of 9.12, 8.08 and 7.34 years, respectively.
The Company estimated the fair value of the warrants at issuance using the Black-Scholes option-pricing model utilizing the fair value of the underlying preferred stock. The estimates in the Black-Scholes option pricing model are based, in part, on assumptions, including but not limited to the volatility of comparable public companies, the expected life of the warrants, the risk-free interest rate and the fair value of the equity underlying the warrants.
Key assumptions utilized in the fair value calculation for the warrants appear in the table below:

 	  	December 31,	 	 	September 30, 2015	 	
 	  	2013	 	 	2014	 	 	 	 	
 	  	 	 	 	 	 	 	(unaudited)	 	
Expected term (years)	  	 	5.00	  	 	 	5.00	  	 	 	5.00	  	
Volatility	  	 	100.28	% 	 	 	109.60	% 	 	 	113.60	% 	
Risk-free interest rate	  	 	1.38	% 	 	 	2.10	% 	 	 	1.96	% 	
Dividend yield	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	
The fair value of the Series A-1 warrant was $24,000, $42,000 and $45,000 at December 31, 2013 and 2014 and September 30, 2015 (unaudited), respectively.
 
During 2014, in connection with the issuance of the Bridge Notes (Note 6), the Company issued warrants to the lenders to purchase up to 248,175 shares of common stock at a price per share of $0.01. These warrants were outstanding at December 31, 2014 and September 30, 2015 (unaudited) and had a remaining life of 9.2 and 8.6 years, respectively. If unexercised, these warrants will expire upon the closing of an initial public offering.
In connection with its Series B convertible preferred stock financing in August 2014, the Company issued warrants to purchase an aggregate of 1,716,914 shares of common stock at an exercise price of $0.01 per share. These warrants were exercised on May 20, 2015.
At the date of issuance, the total value of the common stock warrants issued in connection with the Series B financing was estimated to be $1.2 million. In order to determine the fair value of these common warrants, the Company used a hybrid of an option pricing model and a probability-weighted expected return method (“PWERM”). The estimates in the option pricing model were based, in part, on assumptions,
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
including but not limited to the volatility of comparable public companies, the expected life of the warrants, the risk-free interest rate and the fair value of the equity underlying the warrants. Significant inputs for the PWERM included an estimate of the Company’s equity value and an estimated probability and timing for each valuation scenario. The Company attributed a 60% weighting to option pricing model, a 24% weighting to an early 2015 IPO scenario within the PWERM and a 16% weighting to a late 2015 IPO scenario within the PWERM.
In April 2015, in connection with the loan agreement, the Company issued a warrant to the lenders to purchase up to 57,143 shares of Series B preferred stock at a price per share of $3.50. The term of the warrant extends until 10 years from the grant date and the warrant is exercisable at any time during that 10-year period. This warrant was outstanding at September 30, 2015 (unaudited) and had a weighted average remaining life of 9.50 years.
The Company estimated the fair value of the Series B preferred warrants under three scenarios, the option price modeling, for which the Company took the value from the model discounted for the lack of marketability, and two IPO scenarios, early and late. Under the IPO scenarios, the Company calculated the value of the warrant based on a call option of the common share at IPO (assuming the Series B preferred stock would convert to common stock) given the time to exit and the term of the warrants stipulated in the contract. The Company then applied a discount for lack of marketability.
The Company also ran the valuation for the Series B preferred warrants at the issue date of April 15, 2015 based on the model, financials, and capitalization table as of March 31, 2015, assuming there had been no material changes to the business over the 15-day period since the March 31, 2015 valuation. The Company utilized the same methodology to calculate the value of the warrants as of September 30, 2015. The fair value of the Series B preferred warrant was $160,000 at September 30, 2015 (unaudited).
11. Share-Based Compensation
In November 2011, the Company’s Board adopted and approved the Clearside Biomedical, Inc. 2011 Stock Incentive Plan (the “Plan”) which provides for the grant of share-based awards to employees, directors and consultants of the Company. The Company has reserved 3,338,776 shares of common stock for issuance under the Plan. The Board shall determine price, term and vesting conditions of all share-based awards at their grant date. Absent a public market price for the Company’s common stock, the board of directors will determine the estimated fair value for the underlying common stock. Share-based awards vest over variable periods, generally from one to five years, and expire not more than ten years after the date of grant.
The total share-based compensation expense recognized is reflected in the statements of operations as follows (in thousands):

 	  	Year Ended December 31,	 	  	Nine Months
Ended September 30,	 	
 	  	 2013 	 	  	 2014 	 	  	  2014  	 	  	  2015  	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Research and development	  	$	213	  	  	$	218	  	  	$	166	  	  	$	229	  	
General and administrative	  	 	109	  	  	 	209	  	  	 	124	  	  	 	273	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	322	  	  	$	427	  	  	$	290	  	  	$	502	  	

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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
Share-based compensation is accounted for in accordance with the provisions of ASC 718, Compensation-Stock Compensation . The estimated fair value of options granted is determined as of the date of grant using the Black-Scholes option pricing model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the awards. Options granted to non-employees are re-measured at each financial reporting period until required services are performed.
The following table sets forth the weighted average assumptions utilized in the fair value calculation for the underlying common stock for the years ended December 31, 2013 and 2014 and the nine months ended September 30, 2014 and 2015.

 	  	Year Ended December 31,	 	 	Nine Months Ended
September 30,	 	
 	  	    2013    	 	 	    2014    	 	 	  2014  	 	 	  2015  	 	
 	  	 	 	 	 	 	 	(unaudited)	 	
Expected term (years)	  	 	7.00	  	 	 	7.00	  	 	 	7.00	  	 	 	7.00	  	
Expected stock price volatility	  	 	97.02	% 	 	 	85.64	% 	 	 	87.85	% 	 	 	89.00	% 	
Risk-free interest rate	  	 	1.69	% 	 	 	1.99	% 	 	 	2.10	% 	 	 	2.04	% 	
Expected dividend yield	  	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	 	 	0.00	% 	
Expected term (in years):    The Company utilized the guidance set forth in ASC 718 to determine the expected term of options. The Company utilized the simplified method as prescribed by ASC 718, as the Company does not have sufficient historical exercise and post-vesting termination data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees.
Risk-free interest rate:    The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to a possible liquidity event.
Expected dividend yield:    The Company has not paid and does not anticipate paying any dividends in the foreseeable future.
Expected stock price volatility:    The volatility assumption is based on the historical volatilities of the stock of several public entities that are similar to the Company, as the Company does not have sufficient historical transactions in its own shares on which to base expected volatility. The same peer group of companies was utilized for 2013, 2014 and the nine months ended September 30, 2015.
Stock Options
The Company has granted stock option awards to employees, directors and consultants. Share-based compensation expense for options granted is reflected in the statements of operations as follows (in thousands):

 	  	Year Ended December 31,	 	  	Nine Months
Ended September 30,	 	
 	  	2013	 	  	2014	 	  	  2014  	 	  	  2015  	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Research and development	  	$	50	  	  	$	91	  	  	$	80	  	  	$	229	  	
General and administrative	  	 	71	  	  	 	192	  	  	 	107	  	  	 	273	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	121	  	  	$	283	  	  	$	187	  	  	$	502	  	

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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
The following table summarizes the activity related to stock options:

 	  	Number of
Shares	 	  	Weighted
Average
Exercise  Price	 	
Options outstanding at January 1, 2013	  	 	617,250	  	  	$	0.07	  	
Granted	  	 	1,435,500	  	  	 	0.18	  	
Exercised	  	 	(157,444	) 	  	 	0.07	  	
Cancelled/Forfeited	  	 	(201,108	) 	  	 	0.13	  	
 	  	 	 	 	  	 	 	 	
Options outstanding at December 31, 2013	  	 	1,694,198	  	  	 	0.16	  	
Granted	  	 	827,500	  	  	 	1.54	  	
Exercised	  	 	(54,569	) 	  	 	0.08	  	
Cancelled/Forfeited	  	 	(50,383	) 	  	 	0.07	  	
 	  	 	 	 	  	 	 	 	
Options outstanding at December 31, 2014	  	 	2,416,746	  	  	 	0.63	  	
Granted (unaudited)	  	 	125,000	  	  	 	2.80	  	
Exercised (unaudited)	  	 	(108,893	) 	  	 	0.12	  	
Cancelled/Forfeited (unaudited)	  	 	(166,077	) 	  	 	0.76	  	
 	  	 	 	 	  	 	 	 	
Options outstanding at September 30, 2015 (unaudited)	  	 	2,266,776	  	  	 	0.77	  	
 	  	 	 	 	  	 	 	 	
Options exercisable at December 31, 2014	  	 	641,210	  	  	 	0.14	  	
 	  	 	 	 	  	 	 	 	
Options exercisable at September 30, 2015 (unaudited)	  	 	839,862	  	  	 	0.20	  	
 	  	 	 	 	  	 	 	 	
The following table provides additional information about the Company’s stock options that were outstanding and exercisable at December 31, 2014 (aggregate intrinsic values in thousands):

Exercise

Price	  	Options
Outstanding	 	  	Weighted
Average
Exercise
Price	 	  	Aggregate
Intrinsic
Value	 	  	Weighted
Average
Remaining
Contractual
Life (Years)	 	  	Options
Exercisable	 	  	Weighted
Average
Exercise
Price	 	  	Aggregate
Intrinsic
Value	 	
$0.01	  	 	25,000	  	  	 	 	 	  	 	 	 	  	 	6.9	  	  	 	25,000	  	  	 	 	 	  	 	 	 	
0.07	  	 	248,079	  	  	 	 	 	  	 	 	 	  	 	7.5	  	  	 	165,928	  	  	 	 	 	  	 	 	 	
0.18	  	 	1,316,167	  	  	 	 	 	  	 	 	 	  	 	8.6	  	  	 	450,282	  	  	 	 	 	  	 	 	 	
1.40	  	 	70,000	  	  	 	 	 	  	 	 	 	  	 	9.6	  	  	 	—	  	  	 	 	 	  	 	 	 	
1.55	  	 	757,500	  	  	 	 	 	  	 	 	 	  	 	10.0	  	  	 	—	  	  	 	 	 	  	 	 	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	 	2,416,746	  	  	$	0.63	  	  	$	5,071	  	  	 	 	 	  	 	641,210	  	  	$	0.14	  	  	$	1,658	  	

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Table of Contents
CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
The following table provides additional information about the Company’s stock options that were outstanding and exercisable at September 30, 2015 (unaudited) (aggregate intrinsic values in thousands):

Exercise
Price	  	Options
Outstanding	 	  	Weighted
Average
Exercise
Price	 	  	Aggregate
Intrinsic
Value	 	  	Weighted
Average
Remaining
Contractual
Life (Years)	 	  	Options
Exercisable	 	  	Weighted
Average
Exercise
Price	 	  	Aggregate
Intrinsic
Value	 	
$0.01	  	 	25,000	  	  	 	 	 	  	 	 	 	  	 	6.1	  	  	 	25,000	  	  	 	 	 	  	 	 	 	
0.07	  	 	160,579	  	  	 	 	 	  	 	 	 	  	 	6.7	  	  	 	140,487	  	  	 	 	 	  	 	 	 	
0.18	  	 	1,201,197	  	  	 	 	 	  	 	 	 	  	 	7.8	  	  	 	647,709	  	  	 	 	 	  	 	 	 	
1.40	  	 	70,000	  	  	 	 	 	  	 	 	 	  	 	8.9	  	  	 	20,416	  	  	 	 	 	  	 	 	 	
1.55	  	 	685,000	  	  	 	 	 	  	 	 	 	  	 	9.2	  	  	 	3,750	  	  	 	 	 	  	 	 	 	
2.80	  	 	125,000	  	  	 	 	 	  	 	 	 	  	 	9.8	  	  	 	2,500	  	  	 	 	 	  	 	 	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
 	  	 	2,266,776	  	  	$	0.77	  	  	$	4,814	  	  	 	 	 	  	 	839,862	  	  	$	0.20	  	  	$	2,259	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2014 and September 30, 2015 (unaudited), the Company had $2.2 million and $1.8 million, respectively, of unrecognized compensation expense related to unvested stock options granted under the Plan. This cost is expected to be recognized over a weighted average period of 1.9 and 1.6 years as of December 31, 2014 and September 30, 2015 (unaudited), respectively. The weighted average remaining contractual life of all outstanding options as of December 31, 2014 and September 30, 2015 (unaudited) was 8.9 and 9.8 years, respectively.
The intrinsic value is calculated as the difference between the estimated fair market value and the exercise price per share of the stock options. The estimated fair market value per share of common stock as of December 31, 2014 and September 30, 2015 (unaudited) was $2.73 and $2.87, respectively.
Restricted Stock
In 2011, the founders of the Company purchased restricted common stock. These shares are subject to repurchase rights whereby the Company has the right to repurchase the unvested shares at price per share equal to the lesser of (i) the fair market value of the shares at the time the right of repurchase is exercised and (ii) the original issuance price of the shares. A summary of the status of unvested restricted stock is presented below:

 	  	Shares	 	  	Weighted
Average
Grant Date
Value	 	
Unvested at January 1, 2013	  	 	1,282,500	  	  	$	0.16	  	
Granted	  	 	83,336	  	  	 	0.61	  	
Vested	  	 	(861,565	) 	  	 	0.16	  	
 	  	 	 	 	  	 	 	 	
Unvested at December 31, 2013	  	 	504,271	  	  	 	0.23	  	
Vested	  	 	(458,748	) 	  	 	0.18	  	
 	  	 	 	 	  	 	 	 	
Unvested at December 31, 2014	  	 	45,523	  	  	 	0.26	  	
Vested (unaudited)	  	 	(23,436	) 	  	 	0.25	  	
 	  	 	 	 	  	 	 	 	
Unvested at September 30, 2015 (unaudited)	  	 	22,087	  	  	 	0.26	  	

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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
Share-based compensation expense for restricted stock granted is reflected in the statements of operations as follows (in thousands):

 	  	Year Ended
December 31,	 	  	Nine Months Ended
September 30,	 	
 	  	2013	 	  	2014 	 	  	2014	 	  	2015 	 	
 	  	 	 	  	 	 	  	(unaudited)	 	
Research and development	  	$	163	  	  	$	127	  	  	$	86	  	  	$	—	  	
General and administrative	  	 	38	  	  	 	17	  	  	 	17	  	  	 	—	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	201	  	  	$	144	  	  	$	103	  	  	$	—	  	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2014 and September 30, 2015 (unaudited), the Company had $0 of unrecognized compensation expense related to unvested restricted stock.
12. Commitments and Contingencies
Lease Commitment Summary
The Company leases office space under non-cancelable operating leases which expire in March 2017. The operating leases have renewal options and rent escalation clauses. The following table presents future minimum commitments of the Company due under non-cancelable operating leases with original or remaining terms in excess of one year at December 31, 2014.
Minimum lease payments were as follows at December 31, 2014 (in thousands):

2015	  	$	180	  	
2016	  	 	90	  	
2017	  	 	23	  	
 	  	 	 	 	
Total minimum lease payments	  	$	293	  	
 	  	 	 	 	
Rent expense, net of sublease income, was $182,000 and $198,000 for years ended December 31, 2013 and 2014, respectively, and $155,000 and $129,000 for the nine months ended September 30, 2014 and 2015 (unaudited), respectively. Total future rent income from the sub-lease agreement on an operating lease due through May 2015 was $14,000 as of December 31, 2014.
Litigation
The Company is not party to any litigation and does not have contingency reserves established for any litigation liabilities.
Contract Service Providers
In the course of the Company’s normal business operations, it has agreements with contract service providers to assist in the performance of its research and development, clinical research and manufacturing. Substantially all of these contracts are on an as needed basis.
Employment Contracts
The Company has employment agreements with its executive officers and has at will employment contracts with substantially all other employees providing for salary, benefits and bonuses.
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
13. License Agreements
On July 4, 2012, the Company entered into an Exclusive License Agreement with Emory University and Georgia Tech Research Corporation (“Emory/GTRC”), whereby the Company purchased a license for Methods and Devices For Drug Delivery Using Microneedles. The Company paid $30,000 for the license and made a milestone payment of $35,000 during the year ended December 31, 2012. No payments were made to Emory/ GTRC during the years ended December 31, 2013 or 2014 or during the nine months ended September 30, 2015. The Exclusive License Agreement requires the Company to make a milestone payment upon the occurrence of a specified event relating to the commercialization of a drug developed using the licensed patents. Beginning on the third anniversary of this license agreement, the Company will be obligated to pay an annual license maintenance fee of $25,000, which will continue until the first commercial sale of a product covered by the licensed patents. Additionally, the Company will owe a low single-digit royalty on any worldwide net product sales related to the licensed patents, with minimum annual royalties of $15,000 after commercialization. The minimum annual royalty increases thereafter to $100,000.
In connection with the Company’s Series B financing, in August 2014, the Company entered into a license agreement with NovaMedica LLC (“NovaMedica”). Under this agreement, the Company granted to NovaMedica the exclusive right in Russia and specified adjacent territories to use the Company’s intellectual property to develop and commercialize products involving the use of the corticosteroid triamcinolone acetonide as the sole active pharmaceutical ingredient for administration in the suprachoroidal space. In connection with this license, NovaMedica made an upfront payment to the Company of $200,000. In addition, NovaMedica has agreed to make royalty payments equal to the amount of any royalties the Company owes to Emory or GTRC pursuant to the Emory/GTRC License Agreement as a result of NovaMedica’s sales of products and services covered by the license granted to NovaMedica, up to a maximum of a low single-digit percentage of net sales of such products or services by NovaMedica. NovaMedica has also agreed to make milestone payments, totaling $12.7 million in the aggregate, upon the achievement of specified development and commercial milestones. The term of the NovaMedica license agreement will expire upon the expiration of the last-to-expire valid claim within the patents licensed to NovaMedica pursuant to the agreement. Either the Company or NovaMedica may terminate the agreement upon written notice in the event of the other party’s material breach that is not cured within 20 business days of receiving written notice requesting a cure of a payment breach, and within 60 business days of receiving written notice requesting a cure in the case of all other breaches. Each party also has the right to terminate the agreement in the event of the other party’s bankruptcy or insolvency. The Company may terminate the agreement immediately upon written notice in the event that NovaMedica commences or participates in any action challenging the validity or enforceability of the patents licensed to NovaMedica under the agreement.
On April 28, 2015, the Company entered into an option agreement with Spark Therapeutics, Inc. (“Spark”) under which Spark acquired exclusive rights to license the Company’s SCS Microinjector technology to deliver gene therapies to the back of the eye. If Spark exercises its option, in return for exclusive, worldwide rights to use the Company’s microinjection technology and related intellectual property in the field of gene therapy, Spark will pay the Company an upfront licensing fee, development related milestones and commercial royalties on sales of Spark’s products covered by the licensed technology. As of September 30, 2015, under this agreement Spark has made an upfront payment of $500,000.
 
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CLEARSIDE BIOMEDICAL, INC.
Notes to the Financial Statements (Continued)
 
14. Collaborative Agreement
On January 31, 2013, the Company entered into a collaborative research agreement with one of the holders of the Series A-1 preferred stock, whereby the two parties agreed to conduct feasibility studies for certain compounds. Each party to the collaborative research agreement will bear its own costs, except that certain costs incurred by the Company are limited to a defined maximum amount. The Company incurred research and development costs in relation to the collaborative research agreement of $162,000 and $98,000 for the years ended December 31, 2013 and 2014, respectively, and $51,000 and $131,000 for the nine months ended September 30, 2014 and 2015 (unaudited), respectively.
15. Unaudited Pro Forma Net Loss Per Share
The unaudited pro forma basic and diluted net loss per share for the year ended December 31, 2014 and the nine months ended September 30, 2015 gives effect to the conversion of outstanding convertible preferred stock, which will occur automatically upon the completion of the planned initial public offering, as if such conversion occurred as of the beginning of the periods presented. The following table sets forth the computation of unaudited pro forma basic and diluted net loss per share of common stock for the periods indicated (in thousands except share and per share amounts):

 	 	Year Ended
December 31,
2014	 	 	Nine Months Ended
September 30,
2015	 	
Numerator pro forma calculation:	 	 	 	 	 	 	 	 	
Net loss	 	$	(10,189	) 	 	$	(12,469	) 	
 	 	 	
Denominator for pro forma calculation:	 	 	 	 	 	 	 	 	
Weighted average number of shares outstanding—basic and diluted	 	 	3,825,052	  	 	 	4,910,055	  	
Pro forma adjustment to reflect automatic conversion of outstanding convertible preferred stock	 	 	15,564,959	  	 	 	15,564,959	  	
 	 	 	 	 	 	 	 	 	
Weighted average number of pro forma shares outstanding—basic and diluted	 	 	19,390,011	  	 	 	20,475,014	  	
Pro forma net loss per share—basic and diluted	 	$	(0.53	) 	 	$	(0.61	) 	
 	 	 	 	 	 	 	 	 	
16. Subsequent Events (unaudited)
The Company evaluated subsequent events through January 8, 2016, the date on which these financial statements were issued.
In November and December 2015, the Company issued an aggregate of 5,274,674 shares of Series C convertible preferred stock to 17 accredited investors at a per share price of $3.7917, for aggregate consideration of $20.0 million. The shares of Series C convertible preferred stock are convertible into common stock immediately upon either (i) the closing of an initial public offering generating net proceeds to the Company of at least $50.0 million and the price per share to the public is at least $5.68755 if the offering closes on or before June 30, 2016 or $11.3751 if the offering closes after June 30, 2016; or (ii) the written consent of the holders of at least a majority of the outstanding shares of preferred stock, voting on an as converted to common stock basis, and the holders of at least 50% of the outstanding shares of Series C convertible preferred stock.
 
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             Shares

COMMON STOCK

RBC CAPITAL MARKETS	 	STIFEL	

NEEDHAM & COMPANY	 	WEDBUSH PACGROW	
                    , 2016

 

Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
 
Item 13.	Other Expenses of Issuance and Distribution.	
The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale of the common stock being registered. All amounts shown are estimates except for the SEC registration fee, the Financial Industry Regulatory Authority, or FINRA, filing fee and The NASDAQ Global Market initial listing fee.

 	  	Amount to
be Paid	 	
SEC registration fee	  	$	5,790.25	  	
FINRA filing fee	  	 	9,125.00	  	
NASDAQ Global Market initial listing fee	  	 	125,000.00	  	
Blue sky fees and expenses	  	 	  *	  	
Printing and engraving expenses	  	 	  *	  	
Legal fees and expenses	  	 	  *	  	
Accounting fees and expenses	  	 	  *	  	
Transfer agent and registrar fees and expenses	  	 	  *	  	
Miscellaneous fees and expenses	  	 	  *	  	
 	  	 	 	 	
Total	  	$	*	  	

 	*	To be filed by amendment.	
 
Item 14.	Indemnification of Directors and Officers.	
We are incorporated under the laws of the State of Delaware. Section 102 of the Delaware General Corporation Law permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit.
Section 145 of the Delaware General Corporation Law provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons serving at the request of the corporation in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he is or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
 
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As permitted by the Delaware General Corporation Law, our amended and restated certificate of incorporation and bylaws to be in effect upon the closing of this offering will provide that: (i) we are required to indemnify our directors to the fullest extent permitted by the Delaware General Corporation Law; (ii) we may, in our discretion, indemnify our officers, employees and agents as set forth in the Delaware General Corporation Law; (iii) we are required, upon satisfaction of certain conditions, to advance all expenses incurred by our directors in connection with certain legal proceedings; (iv) the rights conferred in the bylaws are not exclusive; and (v) we are authorized to enter into indemnification agreements with our directors, officers, employees and agents.
We have entered into agreements with our directors that require us to indemnify them against expenses, judgments, fines, settlements and other amounts that any such person becomes legally obligated to pay (including with respect to a derivative action) in connection with any proceeding, whether actual or threatened, to which such person may be made a party by reason of the fact that such person is or was a director or officer of us or any of our affiliates, provided such person acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, our best interests. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. We intend to enter into similar indemnification agreements with our executive officers prior to the completion of this offering. At present, no litigation or proceeding is pending that involves any of our directors or officers regarding which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.
We maintain a directors’ and officers’ liability insurance policy. The policy insures directors and officers against unindemnified losses arising from certain wrongful acts in their capacities as directors and officers and reimburses us for those losses for which we have lawfully indemnified the directors and officers. The policy contains various exclusions.
In addition, the underwriting agreement filed as Exhibit 1.1 to this Registration Statement provides for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act, or otherwise.
 
Item 15.	Recent Sales of Unregistered Securities.	
Issuances of Capital Stock, Promissory Notes and Warrants
The following list sets forth information regarding all unregistered securities sold by us since January 1, 2013 through January 8, 2016.
 
 	1)	In January 2013, we issued an aggregate of 4,356,931 shares of our Series A-1 convertible preferred stock to 13 accredited investors at a per share price of $1.8132, for aggregate consideration of $7.9 million.	
 
 	2)	In February 2013, in connection with a loan agreement, we borrowed $125,000 from a lender pursuant to a promissory note and issued the lender a warrant to purchase 16,550 shares of our Series A-1 convertible preferred stock at an exercise price of $1.81 per share, which will become a warrant to purchase 16,550 shares of our common stock following the completion of this offering.	
 
 	3)	In April and May 2014, we issued an aggregate principal amount of $3.0 million of unsecured 7% convertible promissory notes and warrants to purchase 248,175 shares of our common stock at an exercise price of $0.01 per share to 10 accredited investors.	
 
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 	4)	In August 2014, we issued an aggregate of 6,009,202 shares of our Series B convertible preferred stock at a per share price of $2.69783 and warrants to purchase 1,716,914 shares of our common stock at an exercise price of $0.01 per share to 31 accredited investors, for aggregate consideration of $16.2 million. In some cases, some or all of the purchase price for these shares took the form of conversion of principal and interest under outstanding convertible promissory notes held by the respective investors.	
 
 	5)	In April 2015, in connection with a loan agreement, we issued the lender a warrant to purchase 57,143 shares of our Series B convertible preferred stock at an exercise price of $3.50 per share, which will become a warrant to purchase 57,143 shares of our common stock following the completion of this offering.	
 
 	6)	In November and December 2015, we issued an aggregate of 5,274,674 shares of our Series C convertible preferred stock at a per share price of $3.7917 to 17 accredited investors, for aggregate consideration of $20.0 million.	
The offers, sales and issuances of the securities described in the paragraphs above were exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated under the Securities Act. The recipients represented to us that they acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. The recipients also represented to us that they were accredited investors as defined in Rule 501 promulgated under the Securities Act.
Stock Option Grants
From January 1, 2013 through January 8, 2016, we have granted options under our 2011 stock incentive plan to purchase an aggregate of 2,900,184 shares of our common stock to employees, consultants and directors, having exercise prices ranging from $0.18 to $2.80 per share. Of these, options to purchase an aggregate of 250,716 shares have been cancelled without being exercised and 59,367 shares were issued upon the exercise of stock options, at a weighted average exercise price of $0.18 per share, for aggregate proceeds of $10,686.
The offers, sales and issuances of the securities described in the foregoing paragraph were exempt from registration under Rule 701 promulgated under the Securities Act in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of such securities were our employees, directors or consultants and received the securities under our 2011 stock incentive plan. Appropriate legends were affixed to the securities issued in these transactions.
 
Item 16.	Exhibits and Financial Statement Schedules.	
The exhibits to the registration statement are listed in the Exhibit Index attached hereto and are incorporated by reference herein.
 
Item 17.	Undertakings.	
The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
 
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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alpharetta, State of Georgia, on the 8 th day of January, 2016.

CLEARSIDE BIOMEDICAL, INC.	
 	 	
By:	 	/s/ Daniel H. White	
 	 	Daniel H. White
President and Chief Executive Officer	
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Daniel H. White, Charles A. Deignan and Brent B. Siler, and each of them, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments (including post-effective amendments) to this registration statement together with all schedules and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together with all schedules and exhibits thereto, (ii) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, (iii) act on and file any supplement to any prospectus included in this registration statement or any such amendment or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (iv) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes as he or she might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	  	Title	 	Date	
 	 	 	
/s/ Daniel H. White
Daniel H. White	  	President, Chief Executive Officer and Director (Principal Executive Officer)	 	January 8, 2016

/s/ Charles A. Deignan
Charles A. Deignan	  	Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)	 	January 8, 2016

 	 	 	
/s/ Christy L. Shaffer
Christy L. Shaffer, Ph.D.	  	 
Director	 	January 8, 2016	
 	 	 	
/s/ Clay B. Thorp
Clay B. Thorp	  	 
Director	 	January 8, 2016	
 
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Signature	  	Title	 	Date	
 	 	 	
/s/ William D. Humphries
William D. Humphries	  	 
Director	 	 
January 8, 2016	
 	 	 	
/s/ Evgeny Zaytsev
Evgeny Zaytsev, M.D.	  	 
Director	 	 
January 8, 2016	
 	 	 	
/s/ Gerald D. Cagle
Gerald D. Cagle, Ph.D.	  	 
Director	 	 
January 8, 2016	
 	 	 	
/s/ Derek Yoon
Derek Yoon	  	 
Director	 	 
January 8, 2016	
 
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EXHIBIT INDEX

Exhibit
  Number  	 	 	 	Description of Document	
 	 	 	
1.1	 	†	 	Form of Underwriting Agreement.	
 	 	 	
3.1	 	 	 	Fifth Amended and Restated Certificate of Incorporation, as currently in effect.	
 	 	 	
3.2	 	†	 	Form of Certificate of Amendment of Fifth Amended and Restated Certificate of Incorporation to be filed prior to the completion of this offering.	
 	 	 	
3.3	 	†	 	Form of Amended and Restated Certificate of Incorporation to be effective upon completion of this offering.	
 	 	 	
3.4	 	 	 	Bylaws, as currently in effect.	
 	 	 	
3.5	 	†	 	Form of Amended and Restated Bylaws to be effective upon completion of this offering.	
 	 	 	
4.1	 	†	 	Specimen stock certificate evidencing shares of Common Stock.	
 	 	 	
4.2	 	 	 	Third Amended and Restated Investor Rights Agreement, dated as of November 23, 2015, by and among the Registrant and certain of its stockholders.	
 	 	 	
4.3	 	 	 	Form of Common Stock Purchase Warrant issued in bridge financing.	
 	 	 	
4.4	 	 	 	Stock Warrant issued to North Carolina Biotechnology Center, dated as of February 12, 2013.	
 	 	 	
4.5	 	 	 	Warrant to Purchase Stock issued to Silicon Valley Bank, dated as of April 15, 2015.	
 	 	 	
5.1	 	†	 	Opinion of Cooley LLP as to legality.	
 	 	 	
10.1	 	#	 	License Agreement, by and among the Registrant, Emory University and The Georgia Tech Research Corporation, dated as of July 4, 2012, as amended by the First Amendment to License Agreement, dated April 2, 2014.	
 	 	 	
10.2	 	 	 	Lease Agreement, dated as of March 14, 2012, by and between the Registrant and McDonald Ventures XI, LLC, as amended by the renewal letter from McDonald Ventures XI, LLC to the Registrant, dated March 18, 2014, and by the First Amendment to the Lease Agreement, dated August 22, 2014.	
 	 	 	
10.3	 	+	 	2011 Stock Incentive Plan, as amended to date.	
 	 	 	
10.4	 	+	 	Form of Incentive Stock Option Grant Notice and Incentive Stock Option Agreement under 2011 Stock Incentive Plan.	
 	 	 	
10.5	 	+	 	Form of Nonqualified Stock Option Grant Notice and Nonqualified Stock Option Agreement under 2011 Stock Incentive Plan.	
 	 	 	
10.6	 	+†	 	Form of 2016 Equity Incentive Plan	
 	 	 	
10.7	 	+†	 	Form of Stock Option Grant Notice and Stock Option Agreement under 2016 Equity Incentive Plan.	
 	 	 	
10.8	 	+†	 	Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under 2016 Equity Incentive Plan.	
 	 	 	
10.9	 	+	 	Form of Indemnification Agreement with non-employee directors.	
 
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Exhibit
  Number  	 	Description of Document	
 	 	
10.10#	 	Collaboration Agreement, dated as of January 31, 2013, by and among the Registrant and Santen Pharmaceutical Co., Ltd., as amended by Amendment No. 1 to Collaboration Agreement, dated as of April 29, 2014.	
 	 	
10.11#      	 	Amendment No. 2 to Collaboration Agreement, dated as of April 30, 2015, by and among the Registrant and Santen Pharmaceutical Co., Ltd.	
 	 	
10.12+†  	 	Form of 2016 Employee Stock Purchase Plan.	
 	 	
10.13+    	 	Executive Employment Agreement, by and between the Registrant and Daniel H. White, dated as of January 1, 2015.	
 	 	
10.14+    	 	Executive Employment Agreement, by and between the Registrant and Charles Deignan, dated as of January 1, 2015.	
 	 	
10.15+    	 	Executive Employment Agreement, by and between the Registrant and Glenn Noronha, dated as of January 1, 2015.	
 	 	
10.16+†  	 	Non-Employee Director Compensation Policy to be in effect upon completion of this offering.	
 	 	
10.17#	 	License Agreement, by and between the Registrant and NovaMedica LLC, dated as of August 29, 2014.	
 	 	
10.18#    	 	Research, Option and License Agreement, by and between the Registrant and Spark Therapeutics, Inc., dated as of April 27, 2015.	
 	 	
10.19      	 	Loan and Security Agreement, by and between and Registrant and Silicon Valley Bank, dated as of April 15, 2015.	
 	 	
23.1       	 	Consent of Ernst & Young LLP, independent registered public accounting firm.	
 	 	
23.2†      	 	Consent of Cooley LLP (included in Exhibit 5.1).	
 
†	To be filed by amendment.	
 
+	Indicates management contract or compensatory plan.	
 
#	Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and have been separately filed with the Securities and Exchange Commission.	
 
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Exhibit 3.1
FIFTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CLEARSIDE BIOMEDICAL, INC.
Pursuant to Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, the undersigned corporation hereby submits the following for the purpose of amending and restating its Fourth Amended and Restated Certificate of Incorporation, and does hereby certify as follows.
1. The name of the corporation is Clearside Biomedical, Inc. The corporation’s original Certificate of Incorporation was filed on May 26, 2011.
2. The corporation’s Fourth Amended and Restated Certificate of Incorporation was filed on August 27, 2014.
3. The corporation’s Fourth Amended and Restated Certificate of Incorporation is hereby amended and restated in its entirety, as set forth in the text of the Fifth Amended and Restated Certificate of Incorporation attached hereto as  Exhibit A .
4. This Fifth Amended and Restated Certificate of Incorporation will be effective upon filing.
[Signature page to follow.]

IN WITNESS WHEREOF, said Clearside Biomedical, Inc. has caused this Fifth Amended and Restated Certificate of Incorporation to be signed by its Chief Executive Officer this 23rd day of November, 2015.

CLEARSIDE BIOMEDICAL, INC.	
 	 	
By:	 	/s/ Daniel White	
Name:	 	Daniel White	
Title:	 	Chief Executive Officer	

EXHIBIT A
FIFTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CLEARSIDE BIOMEDICAL, INC.
ARTICLE I
The name of the corporation shall be “Clearside Biomedical, Inc.” (the “Corporation”).
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808, and the name of the registered agent is Corporation Service Company.
ARTICLE III
The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
ARTICLE IV
The Corporation shall have the authority to issue 60,913,331 shares of capital stock, $0.001 par value per share, of which 40,000,000 shares shall be designated Common Stock (the “ Common Stock ”) and 20,913,331 shares shall be designated Preferred Stock (the “ Preferred Stock ”). Of the authorized shares of Preferred Stock, 5,198,826 shares shall be designated Series A Preferred Stock (the “ Series A Preferred Stock ”), 4,373,481 shares shall be designated Series A-1 Preferred Stock (the “ Series A-1 Preferred Stock ” and together with the Series A Preferred Stock, the “ Series A/A-1 Preferred Stock ”), 6,066,345 shares shall be designated Series B Preferred Stock (the “ Series B Preferred Stock ”) and 5,274,679 shares shall be designated Series C Preferred Stock (the “ Series C Preferred Stock ”). The Preferred Stock shall have the rights, preferences, privileges and restrictions set forth below in Article V.
ARTICLE V
The rights, preferences, privileges, restrictions and other matters relating to the Preferred Stock are as follows.
A. Dividends.
1. Preferred Stock. From and after the date of the issuance of any shares of Preferred Stock, dividends at the rate per annum of: $0.06287 per share shall accrue on such shares of Series A Preferred Stock; $0.14506 per share shall accrue on such shares of Series A-1 Preferred Stock; $0.215826 per share shall accrue on such shares of Series B Preferred Stock; and $0.303336 per share shall accrue on such shares of Series C Preferred Stock (in each case, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Preferred Stock) (the “ Accruing Dividends ” ). Accruing Dividends shall accrue from day to day, whether or not declared; provided however, that except as set forth in Subsections B.1, B.2 or B.3, such

Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors and the Corporation shall be under no obligation to pay such Accruing Dividends. The Corporation shall, upon the written request of any holder of Preferred Stock, furnish or cause to be furnished to such holder a certificate setting forth the accrued dividends with respect to that holder’s Preferred Stock and the basis for calculating the accrued dividends.
2. Series C Preferred Stock Dividend. The Corporation shall not declare, pay or set aside any dividend on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in this Fifth Amended and Restated Certificate of Incorporation (this “ Restated Certificate ”)) the holders of the Series C Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series C Preferred Stock in an amount equal to the amount of the aggregate Accruing Dividends then accrued on such share of Series C Preferred Stock and not previously paid.
3. Series B Preferred Stock Dividend. The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends permitted by Section A(2) above or dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in this Restated Certificate) the holders of the Series B Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series B Preferred Stock in an amount equal to the amount of the aggregate Accruing Dividends then accrued on such share of Series B Preferred Stock and not previously paid.
3. Series A/A-1 Preferred Stock Dividend. The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends permitted by Section A(2) or A(3) above or dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in this Restated Certificate) the holders of Series A Preferred Stock and Series A-1 Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred Stock and Series A-1 Preferred Stock in an amount equal to the amount of the aggregate Accruing Dividends then accrued on such share of Series A Preferred Stock or Series A-1 Preferred Stock, as applicable, and not previously paid. Payment of any dividends to the holders of Series A Preferred Stock and Series A-1 Preferred Stock shall be on a  pro rata ,  pari passu  basis in proportion to the Accrued Dividends for such series of Preferred Stock.
4. Additional Dividends. After the payment or setting aside for payment of the dividends described in Sections A(1), A(2) and A(3), any additional dividends (other than dividends on Common Stock payable solely in Common Stock) set aside or paid in any fiscal year shall be set aside or paid among the holders of the Preferred Stock and Common Stock then outstanding in proportion to the greatest whole number of shares of Common Stock which would be held by each such holder if all shares of Preferred Stock were converted at the then-effective Conversion Rate (as defined in Section D).
B. Preference on Liquidation.
1. Upon the occurrence of any Liquidating Event (as defined below), before any payment shall be made in respect of the Corporation’s Common Stock, the Series A/A-1 Preferred Stock, the Series B Preferred Stock or any other class or series of the Corporation’s capital stock, each holder of Series C Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Corporation available for distribution to its stockholders an amount per share of Series C Preferred Stock equal to $3.7917, subject to equitable adjustment for any stock splits, combinations, consolidations,
 
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recapitalizations, reorganizations, reclassifications, stock distributions, stock dividends or other similar events (collectively, “ Recapitalizations ”) with respect to such share (as so adjusted from time to time, the “ Series C Original Price ”), plus all declared but unpaid Accruing Dividends plus (without duplication) any other declared but unpaid dividends on such share (such amounts, the “ Series C Preference Amount ”).
If, upon the occurrence of a Liquidating Event, the assets and funds distributed among the holders of Series C Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid Series C Preference Amount then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of Series C Preferred Stock in proportion to the aggregate of the Series C Preference Amount each such holder is entitled to receive.
2. Upon the occurrence of any Liquidating Event (as defined below), after payment of the Series C Preference Amount and before any payment shall be made in respect of the Corporation’s Common Stock, the Series A/A-1 Preferred Stock or any other class or series of the Corporation’s capital stock, each holder of Series B Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Corporation available for distribution to its stockholders an amount per share of Series B Preferred Stock equal to the product of (i) $2.69783, subject to equitable adjustment for any Recapitalizations with respect to such share (as so adjusted from time to time, the “ Series B Original Price ”),  multiplied by  (ii) 1.50, plus all declared but unpaid Accruing Dividends plus (without duplication) any other declared but unpaid dividends on such share (such amounts, the “ Series B Preference Amount ”).
If, upon the occurrence of a Liquidating Event, and after the payment in full of the Series C Preference Amount, the remaining assets and funds distributed among the holders of Series B Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid Series B Preference Amount then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of Series B Preferred Stock in proportion to the aggregate of the Series B Preference Amount each such holder is entitled to receive.
3. Upon the occurrence of any Liquidating Event, after payment of the Series C Preference Amount and the Series B Preference Amount and before any payment shall be made in respect of the Corporation’s Common Stock, each holder of Series A/A-1 Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Corporation available for distribution to its stockholders:
(a) an amount per share of Series A Preferred Stock equal to $0.78589, subject to equitable adjustment for any Recapitalizations with respect to such share (as so adjusted from time to time, the “ Series A Original Price ”), plus all declared but unpaid Accruing Dividends plus (without duplication) any other declared but unpaid dividends on such share;
(b) an amount per share of Series A-1 Preferred Stock equal to $1.8132, subject to equitable adjustment for any Recapitalizations with respect to such share (as so adjusted from time to time, the “ Series A-1 Original Price ”), plus all declared but unpaid Accruing Dividends plus (without duplication) any other declared but unpaid dividends on such share (together with the amounts set forth in subsection (a), the “ Series A/A-1 Preference Amount ” and, together with the Series C Preference Amount and the Series B Preference Amount, the “ Preference Amount ”);
 
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If, upon the occurrence of a Liquidating Event, and after the payment in full of the Series B Preference Amount, the remaining assets and funds available for distribution among the holders of Series A/A-1 Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid Series A/A-1 Preference Amount then such remaining funds shall be distributed ratably among the holders of Series A/A-1 Preferred Stock in proportion to the aggregate of the Series A/A-1 Preference Amount each such holder is entitled to receive.
4. After payment has been made to the holders of Preferred Stock of the full Preference Amount to which they shall be entitled as aforesaid, the remaining assets of the Corporation legally available for distribution, if any, shall be distributed ratably among the holders of the Corporation’s Common Stock and Preferred Stock, as if the shares of Preferred Stock had been converted voluntarily into Common Stock immediately prior to such Liquidating Event at the then-applicable conversion rate.
5. A “Liquidating Event” shall mean (a) any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, or (b) a transaction or series of related transactions resulting in any of the following: (1) a sale, lease, transfer, exclusive license, exchange or other disposition of all or substantially all the assets of the Corporation, (2) a merger, consolidation, sale or reorganization as a result of which stockholders of the Corporation immediately prior to such merger, consolidation, sale or reorganization possess less than 50% of the voting power of the acquiring, surviving or successor entity immediately following such merger, consolidation, sale or reorganization, or (3) the transfer by one or more stockholders of the Corporation of securities of the Corporation representing 50% or more of the combined voting power of the then outstanding securities of the Corporation; provided, however, if the holders of at least a majority of the shares of Preferred Stock then outstanding, voting on an as-if converted basis (a “ Preferred Majority ”), so elect by giving written notice to the Corporation before the effective date of a merger, consolidation, sale or reorganization that would otherwise be a Liquidating Event as defined herein, such merger, consolidation, sale or reorganization shall not be deemed a Liquidating Event and the provisions of Subsection D.7 shall apply, and provided further that a “Liquidating Event” shall not include any transaction or series of related transactions principally undertaken for bona fide equity financing purposes in which cash is received by the Corporation or any successor or indebtedness of the Corporation is cancelled or converted, or a combination thereof. Upon the occurrence of any Liquidating Event that would involve the distribution of assets other than cash with respect to the outstanding shares of Preferred Stock, the amount of such distribution shall be the fair market value thereof at the time of such distribution as determined in good faith by the Board of Directors of the Corporation, and any securities to be distributed in such event shall be valued as follows:
(i) Securities not subject to investment letter or other similar restrictions on free marketability covered by subsection (ii) hereof:
(A) if traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the 30-day period ending three (3) business days prior to the closing;
(B) if actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the 30-day period ending three (3) business days prior to the closing; and
(C) if there is no active public market, the value shall be the fair market value thereof, as reasonably determined by the Board of Directors of the Corporation in good faith.
(ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as provided in clauses (A), (B) or (C) of subsection (i) hereof, to reflect the adjusted fair market value thereof, as reasonably determined by the Board of Directors of the Corporation in good faith.
 
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6. Allocation of Escrow and Contingent Consideration. Upon the occurrence of any Liquidating Event, if any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies (the “ Additional Consideration ”), the transaction documents for such Liquidating Event shall provide that (a) the portion of such consideration that is not Additional Consideration (such portion, the “ Initial Consideration ”) shall be allocated among the holders of capital stock of the Corporation in accordance with this Section B as if the Initial Consideration were the only consideration payable in connection with such Liquidating Event and (b) any Additional Consideration which becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with this Section B after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Section 5, consideration placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such Liquidating Event shall be deemed to be Additional Consideration.
C. Voting.
1. General Rights. Except as otherwise expressly provided herein or as required by law, the holder of each share of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Preferred Stock could then be converted and shall have voting rights and powers equal to the voting rights and powers of the Common Stock (except as otherwise expressly provided herein or as required by law, voting together with the Common Stock as a single class) and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares of Common Stock into which shares of Preferred Stock held by each holder could be converted) shall be reduced to the nearest whole number.
2. Protective Provisions. In addition to any other rights provided by law or as set forth in this Restated Certificate, for so long as any shares of Preferred Stock are outstanding the Corporation shall not, without first obtaining the affirmative vote or written consent of the holders of at least a majority of the then outstanding shares of Preferred Stock, including holders of at least 50% of the then outstanding shares of Series C Preferred Stock (such required holders, the “ Requisite Preferred Holders ”), consenting or voting together as a separate class on an as-converted to Common Stock basis, take any of the following actions (whether by merger, consolidation, recapitalization or otherwise):
(a) authorize or effect any Liquidating Event;
 
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(b) authorize or effect a merger, consolidation or share exchange between the Corporation and another entity or a sale, lease, license or other disposition of all or substantially all of the Corporation’s assets, or effect a sale or other disposition which results in the holders of the Corporation’s capital stock prior to the transaction owning less than fifty percent (50%) of the voting power of the Corporation’s capital stock after the transaction, or some other reorganization or acquisition of the Corporation, whether or not any of the foregoing would constitute a Liquidating Event;
(c) redeem, purchase, pay any dividend on or otherwise acquire for value any shares of Common Stock or any Preferred Stock (other than employee, director or consultant shares repurchased at the lower of cost or fair market value pursuant to equity incentive agreements or other similar arrangements providing for the right to repurchase shares upon the termination of services) prior to the Preferred Stock;
(d) authorize or issue any shares of capital stock having rights, preferences or privileges superior to or on parity with the Preferred Stock, or authorize or issue any securities exchangeable, convertible or exercisable for shares of such capital stock;
(e) reclassify any shares of Common Stock or any other class or series of capital stock of the Corporation;
(f) increase the authorized number of shares of any class or series of capital stock of the Corporation;
(g) alter or change any of the powers, preferences, privileges or rights of the Preferred Stock;
(h) amend, repeal or add to any provision of this Restated Certificate or the Corporation’s Bylaws as in effect on the date this Restated Certificate is filed with the Secretary of State of the State of Delaware (the “ Effective Date ”);
(i) convert the Corporation into another form of business entity or into a corporation organized in a jurisdiction other than Delaware;
(j) change the fundamental business of the Corporation;
(k) increase or decrease the size of the Corporation’s Board of Directors;
(l) create or authorize the creation of any debt security, other than equipment leases or bank lines of credit unless such debt security has received the prior approval of the Board of Directors of the Corporation, including the approval of the Series C Director then serving;
(m) create or hold capital stock in any subsidiary that is not a wholly-owned subsidiary or dispose of any subsidiary stock or all or substantially all of the assets of any subsidiary; or
(n) incur any indebtedness in excess of $500,000.
3. Election of Directors. At each meeting of the stockholders held for the election of directors, or upon the taking of a written consent of stockholders for such purpose, (i) the holders of Common Stock shall be entitled, voting as a separate class, to elect one (1) member of the Board of Directors of the Corporation, (ii) for so long as at least 1,000,000 shares of the Series A/A-1 Preferred Stock
 
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remain outstanding (subject to equitable adjustment for any Recapitalizations), the holders of Series A/A-1 Preferred Stock shall be entitled, voting together as a separate class on an as-converted to Common Stock basis, to elect two (2) members of the Board of Directors of the Corporation (the “ Series A Directors ”), (iii) for so long as at least 1,000,000 shares of the Series B Preferred Stock remain outstanding (subject to equitable adjustment for any Recapitalizations), the holders of Series B Preferred Stock shall be entitled, voting together as a separate class, to elect one (1) member of the Board of Directors of the Corporation (the “ Series B Director ”) and (iv) for so long as at least 1,000,000 shares of the Series C Preferred Stock remain outstanding (subject to equitable adjustment for any Recapitalizations), the holders of Series C Preferred Stock shall be entitled, voting together as a separate class, to elect one (1) member of the Board of Directors of the Corporation (the “ Series C Director ”). All remaining directors of the Corporation shall be elected by the holders of Common Stock and Preferred Stock, voting together as a single class on an as-converted to Common Stock basis. In the event the holders of Series C Preferred Stock, Series B Preferred Stock, Series A/A-1 Preferred Stock or Common Stock, as the case may be, fail to elect a member of the Board of Directors of the Corporation as set forth above, such directorship shall remain vacant until a member of the Board of Directors is elected by the holders of Series C Preferred Stock, Series B Preferred Stock, Series A/A-1 Preferred Stock or Common Stock, as the case may be, and no such directorship shall be filled by stockholders of the Corporation other than by the stockholders of the Corporation that are entitled to elect a person to fill such directorship, voting as a separate class. Any director who shall have been elected by the holders of Series C Preferred Stock, Series B Preferred Stock, Series A/A-1 Preferred Stock or Common Stock, as the case may be, may be removed during the aforesaid term of office, either with or without cause, by, and only by, the affirmative vote of the holders of a majority of the shares of Series C Preferred Stock, Series B Preferred Stock, Series A/A-1 Preferred Stock or Common Stock, as the case may be, in accordance with the Bylaws of the Corporation, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of a majority of the shares of the Series C Preferred Stock, Series B Preferred Stock, Series A/A-1 Preferred Stock or Common Stock, as the case may be, represented at a meeting or pursuant to written consent.
D. Conversion Rights.
Each share of Preferred Stock shall be convertible at the option of the holder thereof, at any time after the issuance of such share, into fully paid and nonassessable shares of Common Stock of the Corporation. The number of shares of Common Stock into which each share of the Series A Preferred Stock, Series A-1 Preferred Stock, Series B Preferred Stock or Series C Preferred Stock may be converted shall be determined by dividing the Series A Original Price by the Series A Conversion Price, the Series A-1 Original Price by the Series A-1 Conversion Price, the Series B Original Price by the Series B Conversion Price or the Series C Original Price by the Series C Conversion Price, as applicable, (each as determined as hereinafter provided) in effect at the time of the conversion.
1. Conversion Price. Before any adjustment pursuant to Section E hereof, the Series A conversion price (the “ Series A Conversion Price ”) shall be equal to the Series A Original Price, the Series A-1 conversion price (the “ Series A-1 Conversion Price ”) shall be equal to the Series A-1 Original Price, the Series B conversion price (the “ Series B Conversion Price ”) shall be equal to the Series B Original Price and the Series C conversion price (the “ Series C Conversion Price ”) shall be equal to the Series C Original Price (the Series A Conversion Price, the Series A-1 Conversion Price, the Series B Conversion Price and the Series C Conversion Price shall each be a “ Conversion Price ”).
2. Mechanics of Conversion. The holder of any shares of Preferred Stock may exercise the conversion rights as to such shares or any part thereof by delivering to the Corporation
 
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during regular business hours, at the office of any transfer agent of the Corporation for the Preferred Stock, or at the principal office of the Corporation or at such other place as may be designated by the Corporation, the certificate or certificates for the shares to be converted, duly endorsed for transfer to the Corporation or accompanied by a written instrument or instruments of transfer (if required by it), accompanied by written notice stating that the holder elects to convert all or a number of such shares represented by the certificate or certificates. Such notice shall also state such holder’s name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. Conversion shall be deemed to have been effected on the date when such delivery is made, and such date is referred to herein as the “ Conversion Date .” As promptly as practicable thereafter the Corporation shall issue and deliver to such holder, at such office or other place designated by the Corporation, a certificate or certificates for the number of full shares of Common Stock to which such holder is entitled and a check for cash with respect to any fractional interest in a share of Common Stock as provided in Subsection D.3 below. All shares of Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate upon the Conversion Date, except only the right of the holder thereof to receive shares of Common Stock in exchange therefor. The holder shall be deemed to have become a stockholder of record with respect to the shares of Common Stock on the applicable Conversion Date. Upon conversion of only a portion of the number of shares of Preferred Stock represented by a certificate surrendered for conversion, the Corporation shall issue and deliver to the holder of the certificate so surrendered for conversion, at the expense of the Corporation, a new certificate covering the number of shares of Preferred Stock representing the unconverted portion of the certificate so surrendered.
3. Fractional Shares. No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Preferred Stock. If more than one share of Preferred Stock shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Preferred Stock so surrendered. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any shares of Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest equal to the fair market value of such fractional interest as determined in good faith by the Corporation’s Board of Directors.
4. Payment of Taxes. The Corporation shall pay any and all issue and transfer taxes that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of the Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax that may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the Preferred Stock so converted was registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.
5. Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of the Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion of all the Preferred Stock from time to time outstanding. The Corporation shall from time to time use its best effort to obtain necessary director and stockholder approvals, in accordance with the laws of the State of Delaware, to increase the authorized amount of its Common Stock if at any time the authorized amount of its Common Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of Preferred Stock at the time outstanding, and
 
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shall take all such actions as are necessary to increase such authorized amount of Common Stock upon obtaining such approvals. Before taking any action that would cause an adjustment reducing the Series A Conversion Price, Series A-1 Conversion Price, the Series B Conversion Price or the Series C Conversion Price below the then-par value of the shares of Common Stock issuable upon the conversion of the Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price.
6. Adjustment for Reclassification, Exchange and Substitution. If the Common Stock issuable upon the conversion of the Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend provided for in Subsection E.1), then and in each such event the holder of each share of Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification, or other change, by holders of the number of shares of Common Stock into which such shares of Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change.
7. Reorganizations, Mergers or Consolidations. In case of any consolidation or merger of the Corporation with or into another corporation (other than a consolidation, merger or sale treated as a Liquidating Event pursuant to Subsection B.5 above), each share of Preferred Stock shall thereafter be convertible into the kind and amount of shares of stock or other securities or property to which a holder of the number of shares of Common Stock of the Corporation deliverable upon conversion of the Preferred Stock would have been entitled upon such consolidation, merger or sale; and in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in the application of the provisions of Sections D and E with respect to the rights and interest thereafter of the holders of Preferred Stock, to the end that the provisions set forth in Sections D and E shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the conversion of the Preferred Stock.
8. Listing of Shares Issuable Upon Conversion. If any shares of Common Stock to be reserved for the purpose of conversion of shares of Preferred Stock require registration or listing with, or approval of, any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise, before such shares may be validly issued or delivered upon conversion, the Corporation will in good faith and as expeditiously as possible endeavor to secure such registration, listing or approval, as the case may be.
9. Valid Issuance. All shares of Common Stock that may be issued upon conversion of the shares of Preferred Stock will, upon issuance by the Corporation, be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.
10. No Dilution or Impairment. The Corporation will not, by amendment of this Restated Certificate or through any 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 hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all of the provisions of Sections D and E and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of Preferred Stock against impairment.
 
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E. Adjustment of Conversion Prices.
The Conversion Prices from time to time in effect shall be subject to adjustment from time to time as follows.
1. Stock Splits, Dividends and Combinations. In case the Corporation shall at any time subdivide the outstanding shares of Common Stock or shall issue a dividend in Common Stock on its outstanding Common Stock without a corresponding subdivision of or dividend on each series of Preferred Stock, the Conversion Price in effect for each non-participating series of Preferred Stock immediately prior to such subdivision or the issuance of such dividend shall be proportionately decreased, and in case the Corporation shall at any time combine the outstanding shares of Common Stock into a lesser number of shares of Common Stock without a corresponding combination of each series of Preferred Stock, the Conversion Price in effect for each non-participating series of Preferred Stock immediately prior to such combination shall be proportionately increased, concurrently with the effectiveness of such subdivision, dividend or combination, as the case may be.
2. Noncash Dividends, Stock Purchase Rights, Capital Reorganizations and Dissolutions. In case:
(a) the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or any other distribution, payable otherwise than in cash; or
(b) the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to subscribe for or purchase any shares of stock of any class or to receive any other rights; or
(c) of any capital reorganization of the Corporation, reclassification of the capital stock of the Corporation (other than a subdivision or combination of its outstanding shares of Common Stock), consolidation or merger of the Corporation with or into another Corporation that is not a Liquidating Event or conveyance of all or substantially all of the assets of the Corporation to another corporation that is not a Liquidating Event;
then, and in any such case, the Corporation shall cause to be mailed to the transfer agent for the Preferred Stock (if any) and to the holders of record of the outstanding Preferred Stock, at least ten (10) days prior to the date hereinafter specified, a notice stating the date on which (i) a record is to be taken for the purpose of such dividend, distribution or rights, or (ii) such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up is to take place and the date, if any is to be fixed, as of which holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up.
3. Issuances at Less Than the Conversion Price. Upon the issuance or sale by the Corporation of:
(a) Common Stock for a consideration per share less than a Conversion Price in effect immediately prior to the time of such issue or sale; or
(b) any Stock Purchase Rights (as hereinafter defined) where the consideration per share for which shares of Common Stock may at any time thereafter be issuable upon
 
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exercise thereof (or, in the case of Stock Purchase Rights exercisable for the purchase of Convertible Securities (as hereinafter defined), upon the subsequent conversion or exchange of such Convertible Securities) shall be less than a Conversion Price in effect immediately prior to the time of the issue or sale of such Stock Purchase Rights; or
(c) any Convertible Securities where the consideration per share for which shares of Common Stock may at any time thereafter be issuable pursuant to the terms of such Convertible Securities shall be less than a Conversion Price in effect immediately prior to the time of the issue or sale of such Convertible Securities;
other than an issuance of Common Stock pursuant to Subsections E.1 or E.6 hereof (any such issuance shall be referred to hereinafter as a “ Dilutive Issuance ”), then, forthwith upon such issue or sale, each then effective Conversion Price which exceeds the consideration per share received, shall be reduced concurrently with such issue in order to increase the number of shares of Common Stock into which the Preferred Stock, as applicable, is convertible to a price (calculated to the nearest cent) determined by the following formula:

CP1 = CP *	 	N + C	 	 	 	
 	 	N + AS    	 	 	 	
where:

 	 	CP1	 	=	 	the Conversion Price as so adjusted;	
 	 	 	 	
 	 	CP	 	=	 	the former Conversion Price immediately prior to the Dilutive Issuance;	
 	 	 	 	
 	 	N	 	=	 	the number of shares of Common Stock outstanding immediately prior to such issuance (or deemed issuance) assuming exercise or conversion of all outstanding Convertible Securities and Stock Purchase Rights;	
 	 	 	 	
 	 	C	 	=	 	the number of shares of Common Stock that the aggregate consideration received or deemed to be received by the Corporation for the total number of additional securities so issued or deemed to be issued would purchase if the purchase price per share were equal to CP; and	
 	 	 	 	
 	 	AS	 	=	 	the number of shares of Common Stock so issued or deemed to be issued.	
Notwithstanding the foregoing, the applicable Conversion Price shall not at such time be reduced if such reduction would be an amount less than $0.01, but any such amount shall be carried forward and deduction with respect thereto made at the time of and together with any subsequent reduction that, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or more.
4. Defined Terms. For purposes of this Section E, the following provisions will be applicable.
(a) “Convertible Securities” shall mean evidences of indebtedness, shares of stock (including, without limitation, the Preferred Stock) or other securities that are convertible into or exchangeable for, with or without payment of additional consideration, shares of Common Stock.
 
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(b) “Stock Purchase Rights” shall mean any warrants, options or other rights to subscribe for, purchase or otherwise acquire any shares of Common Stock or any Convertible Securities.
(c) The Common Stock underlying the Convertible Securities and Stock Purchase Rights shall be deemed outstanding and issued or sold at the time of the issue or sale of the Convertible Security or Stock Purchase Right.
5. Determination of Consideration. The “consideration” actually received by the Corporation for the issuance, sale, grant or assumption of shares of Common Stock, Stock Purchase Rights or Convertible Securities, irrespective of the accounting treatment of such consideration, shall be valued as follows:
(a) in the case of cash, the net amount received by the Corporation after deduction of any accrued interest or dividends and before deducting any expenses paid or incurred and any underwriting commissions or concessions paid or allowed by the Corporation in connection with such issue or sale;
(b) in the case of consideration other than cash, the fair market value of such consideration, which shall not include the value of any Convertible Securities being converted or exchanged, as determined by the Board of Directors of the Corporation in good faith, after deducting any accrued interest or dividends; and
(c) with respect to the issuance of Stock Purchase Rights and Convertible Securities, the total consideration, if any, received by the Corporation as consideration for the issuance of the Stock Purchase Rights or the Convertible Securities, as the case may be, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the exercise of such Stock Purchase Rights or upon the conversion or exchange of such Convertible Securities, as the case may be, in each case after deducting any accrued interest or dividends.
In the event of any change in (i) the consideration, if any, payable upon exercise of any Stock Purchase Rights or upon the conversion or exchange of any Convertible Securities, or (ii) the rate at which any Convertible Securities are convertible into or exchangeable for shares of Common Stock, the applicable Conversion Price, as computed upon the original issue thereof shall forthwith be readjusted to the Conversion Price that would have been in effect at such time had such Stock Purchase Rights or Convertible Securities provided for such changed purchase price, consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. On the expiration of any Stock Purchase Rights not exercised or of any right to convert or exchange under any Convertible Securities not exercised, the Conversion Price then in effect shall forthwith be increased to the Conversion Price that would have been in effect at the time of such expiration had such Stock Purchase Rights or Convertible Securities never been issued. No readjustment of the Conversion Price pursuant to this paragraph shall (A) increase the Conversion Price by an amount in excess of the adjustment originally made to the Conversion Price in respect of the issue, sale or grant of the applicable Stock Purchase Rights or Convertible Securities, or (B) require any adjustment to the amount paid or number of shares of Common Stock received by any holder of Preferred Stock upon any conversion of any share of Preferred Stock prior to the date upon which such readjustment to the Conversion Price shall occur.
6. Exclusions for Adjustment for Issuances at Less Than the Conversion Price. Anything herein to the contrary notwithstanding, the Corporation shall not be required to make any adjustment of any Conversion Price in the case of: (a) Common Stock or Stock Purchase Rights issued
 
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or issuable to employees, officers, consultants or directors of the Corporation pursuant to any incentive plan, agreement or arrangement approved by the Board of Directors of the Corporation, which approval must include the Series C Director then serving; (b) securities issued in a Qualified Public Offering; (c) securities issued upon conversion of the Convertible Securities or the exercise of Stock Purchase Rights; or (d) Common Stock or Preferred Stock issued by way of dividend or other comparable distribution on the Preferred Stock (each of (a) through (d), “ Excluded Securities ”).
7. Certificate of Adjustment. Upon the occurrence of each adjustment or readjustment of any Conversion Price pursuant to this Section E, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms thereof, and prepare and furnish to each holder of Preferred Stock affected thereby a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written notice at any time of any affected holder of Preferred Stock furnish or cause to be furnished to such holder a like certificate setting forth (a) such adjustment or readjustment, (b) the Conversion Price at the time in effect, and (c) the number of shares of Common Stock and the amount, if any, of other property that at the time would be received upon the conversion of such holder’s shares.
F. Mandatory Conversion.
1. Mandatory Conversion Triggers. Each share of Preferred Stock shall automatically be converted into shares of Common Stock at the then-applicable conversion rate upon the occurrence of a Qualified Public Offering. “ Qualified Public Offering ” means a closing of an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock of the Corporation to the public where the Corporation receives proceeds of not less than $50,000,000 (net of underwriters discounts and commissions), and the price per share to the public yields a price per share to the public of not less than (a) if occurring on or prior to June 30, 2016, 1.50 times the Series C Original Price or (b) if occurring after June 30, 2016, 3.0 times the Series C Original Price. In addition, each share of Preferred Stock shall automatically be converted into shares of Common Stock at the then applicable conversion rate upon the affirmative vote of the Requisite Preferred Holders, voting separately as a single class on an as-converted to Common Stock basis. All holders of record of shares of Preferred Stock will be given at least thirty (30) days prior written notice of the date fixed for mandatory conversion of the Preferred Stock and the event causing the mandatory conversion of the Preferred Stock into Common Stock. Such notice shall be sent by first class mail, postage prepaid, to each holder of record of Preferred Stock at such holder’s address as shown in the records of the Corporation.
2. Mechanics of Mandatory Conversion. On or before the date so fixed for conversion, each holder of shares of the Preferred Stock shall surrender the certificate or certificates for all such shares to the Corporation at the place designated in such notice and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled. All certificates evidencing shares of Preferred Stock which are required to be surrendered for conversion on such date shall, from and after such date, be deemed to have been retired and cancelled and the shares of Preferred Stock represented thereby shall be deemed converted into shares of Common Stock for all purposes, notwithstanding the failure of the holder or holders thereof to surrender such certificates or warrants on or prior to such date. The mechanics for conversion and other provisions relating to conversion of Preferred Stock into Common Stock set forth elsewhere in this Restated Certificate shall apply to the mandatory conversion of the Preferred Stock.
 
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G. Redemption
1. Redemption. Shares of Preferred Stock shall be redeemed by the Corporation at a price equal to the Series A Original Price, Series A-1 Original Price, Series B Original Price or Series C Original Price, as applicable, plus all declared but unpaid dividends as of the Redemption Date (the “ Redemption Price ”), in three (3) equal annual installments commencing not more than sixty (60) days after receipt by the Corporation at any time on or after the third anniversary of the first sale by the Corporation of the Series C Preferred Stock, from the Requisite Preferred Holders, voting together as a separate class on an as-converted to Common Stock basis, of written notice requesting redemption of all shares of Preferred Stock (a “ Redemption Request ”). Upon receipt of a Redemption Request, the Corporation shall apply all of its assets to any such redemption, and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders. The date of each installment shall be referred to as a “ Redemption Date . ”
2. Redemption Mechanics.
(a) Notice. The Corporation shall send written notice of the redemption (the “Redemption Notice ”) to each holder of record of Preferred Stock not less than 30 days prior to the Redemption Date. The Redemption Notice shall state:
(i) the number of shares of Preferred Stock held by the holder that the Corporation shall redeem on the Redemption Date specified in the Redemption Notice;
(ii) the Redemption Date and the Redemption Price;
(iii) that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares of Preferred Stock to be redeemed.
(b) Number of Shares to Be Redeemed. On each Redemption Date, the Corporation shall redeem, on a pro rata basis in accordance with the number of shares of Preferred Stock, to be redeemed from each holder, that number of shares of Preferred Stock, determined by dividing (i) the total number of shares of each series of Preferred Stock to be redeemed immediately prior to such Redemption Date by (ii) the number of applicable remaining Redemption Dates (including the Redemption Date to which such calculation applies). If the redemption by the Corporation of all shares of Preferred Stock to be redeemed on such Redemption Date would be prohibited by Delaware law governing distributions to stockholders, the Corporation shall redeem a pro rata portion of each holder’s redeemable shares of each series of Preferred Stock to the extent such redemption would not be prohibited by the DGCL governing distributions to stockholders, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the redemption of all such shares would not be prohibited by Delaware law governing distributions to stockholders, and shall redeem the remaining shares of Preferred Stock to have been redeemed as soon as practicable after the Corporation would not be prohibited from making such redemption under Delaware law governing distributions to stockholders.
(c) Exchange of Certificates; Payment. On or before the applicable Redemption Date, each holder of shares of Preferred Stock to be redeemed on the Redemption Date, unless such holder has exercised his, her or its right to convert such shares as provided in  Section 4 , shall surrender the certificate or certificates representing such shares (or, if such registered holder alleges that
 
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such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Preferred Stock represented by a certificate are redeemed, a new certificate representing the unredeemed shares of Preferred Stock shall promptly be issued to such holder.
3. Rights Subsequent to Redemption. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Price payable upon redemption of the shares of Preferred Stock to be redeemed on such Redemption Date is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor in a timely manner, then notwithstanding that the certificates evidencing any of the shares of Preferred Stock so called for redemption shall not have been surrendered, dividends with respect to such shares of Preferred Stock shall cease to accrue after such Redemption Date and all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Price without interest upon surrender of their certificate or certificates therefor.
4. Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following redemption.
ARTICLE VI
The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of Preferred Stock set forth herein. The holders of the Common Stock are entitled to one vote for each share of Common Stock held by them at all meetings of stockholders (and for all written actions of stockholders in lieu of meetings).
ARTICLE VII
The number of directors of the Corporation, which constitute the whole Board of Directors of the Corporation, may be fixed by the Bylaws of the Corporation. Elections of directors may be, but shall not be required to be, by written ballot.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors of the Corporation is expressly authorized to make, alter and repeal the Bylaws of the Corporation, subject to the power of the stockholders of the Corporation to alter or repeal any bylaw whether adopted by them or otherwise.
ARTICLE IX
The Corporation is to have perpetual existence.
 
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ARTICLE X
Notwithstanding the provisions of Section 242 of the Delaware General Corporation Law but subject to obtaining any other vote expressly provided for herein, the number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares of Common Stock then outstanding) by an affirmative vote of the holders of a majority of the outstanding capital stock of the Corporation.
ARTICLE XI
To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, no present or former director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Neither any amendment nor repeal of this Article, nor the adoption of any provision of this Restated Certificate inconsistent with this Article, shall eliminate or reduce the effect of this Article in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
ARTICLE XII
The Corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to, or testifies in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, by reason of the fact such person is or was a director, officer or employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding to the full extent permitted by law, and the Corporation may adopt bylaws or enter into agreements with any such person for the purpose of providing for such indemnification.
ARTICLE XIII
All provisions relating to any exchange, reclassification or cancellation of issued shares are set forth in this Restated Certificate.
ARTICLE XIV
Any shares of Preferred Stock redeemed, purchased, converted or otherwise acquired by the Corporation shall be deemed retired and shall be cancelled and may not under any circumstances thereafter be reissued or otherwise disposed of by the Corporation.
ARTICLE XV
Any of the rights, powers, preferences and other terms of a series of Preferred Stock set forth herein may be waived on behalf of all holders of such series of Preferred Stock only by the affirmative written consent or affirmative vote of (a) in the case of Series A Preferred Stock or Series A-1 Preferred Stock, the holders of a majority of the then outstanding shares of Series A/A-1 Preferred Stock, (b) in the case of Series B Preferred Stock, the holders of a majority of the then outstanding shares of Series B Preferred Stock or (c) in the case of Series C Preferred Stock, the Requisite Preferred Holders, in each case voting together as a separate class on an as-converted to Common Stock basis.
 
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ARTICLE XVI
The Corporation renounces, to the fullest extent permitted by law, any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded Opportunity. An “ Excluded Opportunity ” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any partner, member, director, stockholder, employee or agent of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, “ Covered Persons ”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation.
*        *        *         *        *        *        *
 
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Exhibit 3.4
BYLAWS
OF
CLEARSIDE BIOMEDICAL, INC.,
A DELAWARE CORPORATION
MAY 26, 2011

BYLAWS
OF
Clearside BioMedical, Inc.
ARTICLE I
OFFICES
Section 1.1.Principal Office. The principal office of Clearside BioMedical, Inc. (the “Company”) shall be located in such place as is designated by the Board.
Section 1.2.Registered Office. The registered office of the Company required by law to be maintained in the State of Delaware may be, but need not be, identical with the principal office.
Section 1.3.Other Offices. The Company may have offices at such other places, either within or without the State of Delaware, as the Board may from time to time determine or as the affairs of the Company may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1.Place of Meetings. All meetings of stockholders shall be held at the principal office of the Company or at such other place, either within or without the State of Delaware, as shall determined by the Board (the “ Board ”). The Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided by Section 211(a)(2) of the Delaware General Corporation Law (the “ DGCL ”).
Section 2.2.Annual Meeting. An annual meeting of stockholders shall be held for the election of Directors at such date and time as may be designated by resolution of the Board from time to time. Any other proper business may be transacted at the annual meeting. The Company shall not be required to hold an annual meeting of stockholders, provided that (i) the stockholders are permitted to act by written consent under the Certificate of Incorporation of the Company (the “ Certificate of Incorporation ”) and these Bylaws, (ii) the stockholders take action by written consent to elect Directors and (iii) the stockholders unanimously consent to such action or, if such consent is less than unanimous, all of the directorships to which Directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.
Section 2.3.Special Meetings. A special meeting of the stockholders may be called at any time by the Board, the Chairperson of the Board, the Chief Executive Officer or the President (in the absence of a Chief Executive Officer) or by one or more stockholders holding shares in the aggregate entitled to cast not less than 10% of the votes at that meeting. If any person(s) other
 
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than the Board calls a special meeting, the request shall: (i) be in writing; (ii) specify the time of such meeting and the general nature of the business proposed to be transacted; and (iii) be delivered personally or sent by registered mail or by facsimile transmission to the Chairperson of the Board, the Chief Executive Officer, the President (in the absence of a Chief Executive Officer) or the Secretary of the Company. The officer(s) receiving the request shall cause notice to be promptly given to the stockholders entitled to vote at such meeting, in accordance with the provisions of  Section 2.5  of these Bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting. No business may be transacted at such special meeting other than the business specified in such notice to stockholders. Nothing contained in this paragraph of this  Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.
Section 2.4.Notice of Stockholders’ Meetings. All notices of meetings of stockholders shall be sent or otherwise given in accordance with either  Section 2.5  or  Section 8.5  of these Bylaws not less than 10 or more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.
Section 2.5.Manner of Giving Notice; Affidavit of Notice. Notice of any meeting of stockholders shall be given:
(a) if mailed, when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the Company’s records; or
(b) if electronically transmitted as provided in Section 8.5 of these Bylaws.
An affidavit of the Secretary or an Assistant Secretary of the Company or of the transfer agent or any other agent of the Company that the notice has been given by mail or by a form of electronic transmission, as applicable, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
Section 2.6.Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. If, however, such quorum is not present or represented at any meeting of the stockholders, then either: (i) the chairperson of the meeting; or (ii) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, in the manner provided in  Section 2.7  of these Bylaws, until a quorum is present or represented. The stockholders at a meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of sufficient stockholders to leave less than a quorum.
Section 2.7.Adjourned Meeting; Notice. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be
 
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given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 2.8.Conduct of Meetings.
(a) Chairperson of the Meeting. Meetings of stockholders shall be presided over by the Chairperson of the Board, if any, or in the Chairperson’s absence by the Vice Chairperson of the Board, if any, or in the Vice Chairperson’s absence by the Chief Executive Officer (if one has been duly elected), or in the Chief Executive Officer’s absence by the President, or in the President’s absence by a Vice President, or in the absence of all of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation by a chairperson chosen by vote of the stockholders at the meeting. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
(b) Rules and Procedures. The Board may adopt by resolution such rule, regulations and procedures for the conduct of any meeting of stockholders as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board, the chairperson of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are appropriate for the proper conduct of the meeting. Such rules, regulation or procedures, whether adopted by the Board or prescribed by the chairperson of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restriction on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
Section 2.9.List of Stockholders Entitled to Vote. The officer of the Company who has charge of the stock ledger of the Company shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Company shall not be required to include the electronic mail address or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period
 
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of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting; or (ii) during ordinary business hours, at the Company’s principal executive office. In the event that the Company determines to make the list available on an electronic network, the Company may take reasonable steps to ensure that such information is available only to stockholders of the Company. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders or the books of the Company, or to vote in person or by proxy at any meeting of stockholders and of the number of shares held by each such stockholder.
Section 2.10.Voting.
(a) Except as may be otherwise provided in the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of capital stock held by such stockholder which has voting power upon the matter in question.
(b) At all meetings of stockholders for the election of Directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by law, the Certificate of Incorporation or these Bylaws, be decided by the vote of the holders of shares of stock having a majority of the votes which could be cast by the holders of all shares of stock entitled to vote thereon which are present in person or represented by proxy at the meeting.
(c) Voting at meetings of stockholders need not be by written ballot and, unless otherwise required by law, need not be conducted by inspectors of election unless so determined by the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote thereon which are present in person or by proxy at such meeting. If authorized by the Board, the requirement of a written ballot for the election of Directors shall be satisfied by a ballot submitted by electronic transmission (as defined in  Section 8.5  of these Bylaws), provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.
(d) Shares of its own stock owned by the Company, directly or indirectly, through a subsidiary or otherwise, shall not be voted and shall not be counted in determining the total number of shares entitled to vote;  provided ,  however , that shares held in a fiduciary capacity may be voted and shall be counted to the extent provided by law.
Section 2.11.Record Date for Stockholder Notice; Voting; Giving Consents. In order that the Company may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in
 
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writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which record date:
(i) in the case of determination of stockholders entitled to notice of or to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting;
(ii) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board; and
(iii) in the case of determination of stockholders for any other action, shall not be more than 60 days prior to such other action.
If no record date is fixed by the Board:
(i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;
(ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Company in accordance with applicable law, or, if prior action by the Board is required by law, shall be at the close of business on the day on which the Board adopts the resolution taking such prior action; and
(iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting,  provided ,  however , that the Board may fix a new record date for the adjourned meeting.
Section 2.12.Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
 
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Section 2.13.Stockholder Action by Written Consent Without a Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required or permitted by the DGCL to be taken at any annual or special meeting of the stockholders of a corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed and dated by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Such signed and dated consent must be delivered to the Company, whether done before or after the action so taken, but in no event later than 60 days after the earliest dated consent delivered in accordance with Section 228 of the DGCL. When corporate action is taken without a meeting by less than unanimous written consent, prompt notice shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Company as provided in Section 228 of the DGCL. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the DGCL, if such action had been voted on by stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.
ARTICLE III
DIRECTORS
Section 3.1.General Powers. Subject to the provisions of the DGCL and any limitations in the Certificate of Incorporation or these Bylaws related to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the Company shall be managed by or under the direction of the Board.
Section 3.2.Number, Term and Qualification.
(a) Number of Directors. Except as otherwise provided in the Certificate of Incorporation, the number of Directors which shall constitute the whole Board of Directors shall be determined from time to time by resolution of the Board,  provided , that the Board shall consist of at least one member. No reduction of the authorized number of Directors shall have the effect of removing any Director before that Director’s term of office otherwise expires.
(b) Term of Office. Each Director shall hold office until such Director’s death, resignation, retirement, removal, disqualification, or such Director’s successor is elected and qualifies.
(c) Qualification. Directors need not be residents of the State of Delaware or stockholders of the Company.
Section 3.3.Election of Directors. Except as provided in Section 3.5 of these Bylaws and unless Directors are elected by written consent in lieu of an annual meeting, the Directors shall be elected at each annual meeting of stockholders. Those persons who receive the highest number of votes shall be deemed to have been elected. Unless otherwise provided in the Certificate of Incorporation, election of Directors shall be by written ballot, voice vote or such other means as permitted by law.
 
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Section 3.4.Removal; Resignation.
(a) Removal. Unless otherwise restricted by statute, the Certificate of Incorporation or these Bylaws, any Director or the entire Board may be removed from office, with or without cause, by a vote of stockholders holding a majority of the outstanding shares entitled to vote at an election of Directors. If a Director is elected by the holders of any class or classes of stock or series thereof, only such stockholders may participate in the vote to remove that Director. If any Directors are so removed, new Directors may be elected at the same meeting.
(b) Resignation. Any Director may resign by delivering a resignation in writing or by electronic transmission to the Company. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later time or upon the happening of some later event.
Section 3.5.Vacancies. Unless otherwise provided in the Certificate of Incorporation or these Bylaws:
(i) Vacancies and newly created directorships resulting from any increase in the authorized number of Directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director.
(ii) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more Directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the Directors elected by such class or classes or series thereof then in office, or by the sole remaining Director so elected.
A Director elected to fill a vacancy shall be elected for the unexpired term of such Director’s predecessor in office.
If at any time, by reason of death or resignation or other cause, the Company should have no Directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the Certificate of Incorporation or these Bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the DGCL.
If, at the time of filling any vacancy or any newly created directorship, the Directors then in office constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the total number of the shares at the time outstanding having the right to vote for such Directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the Directors chosen by the Directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the DGCL as far as applicable.
 
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Section 3.6.Compensation. The Board may provide for the compensation of Directors for their services as such and may provide for the payment of any and all expenses incurred by the Directors in connection with such services.
Section 3.7.Committees.
(a) Establishment; Composition of Committees. The Board, by resolution adopted by a majority of the Directors then in office, may designate one or more committees, each committee to consist of one or more of the Directors of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any member of any such committee may be removed at any time with or without cause by resolution adopted by a majority of the Board.
(b) Powers of Committees. Any such committee, to the extent provided in the resolution of the Board or these Bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers which may require it; but no such committee shall have the power or authority to: (i) adopt, amend or repeal any bylaw of the Company; or (ii) approve or adopt, or recommend to the stockholders any action or matter expressly required by the DGCL to be submitted to stockholders for approval.
(c) Meetings and Action of Committees. Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
 
 	(i)	Section 4.1 (Place of Meetings; Meetings by Telephone);	
 
 	(ii)	Section 4.3 (Regular Meetings);	
 
 	(iii)	Section 4.4 (Special Meetings);	
 
 	(iv)	Section 4.5 (Notice of Meetings);	
 
 	(v)	Section 4.6 (Quorum);	
 
 	(v)	Section 4.8 (Board Action by Written Consent Without a Meeting); and	
 
 	(vi)	Section 9.3 (Waiver of Notice)	
 
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with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members;  provided ,  however :
(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;
(ii) special meetings of committees may also be called by resolution of the Board or by resolution of the committee; and
(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these Bylaws.
ARTICLE IV
MEETINGS OF DIRECTORS
Section 4.1.Place of Meetings; Meetings by Telephone. The Board may hold meetings, both regular and special, either within or outside the State of Delaware. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Section 4.2.Conduct of Business. Meetings of the Board shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in the absence of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 4.3.Regular Meetings. Regular meetings of the Board may be held at such time and place as shall be determined from time to time by the Board.
Section 4.4.Special Meetings. Special meetings of the Board for any purpose or purposes may be called at any time by the Chairperson of the Board, the Chief Executive Officer, the President, the Secretary or any two Directors.
Section 4.5.Notice of Meetings.
 
 	(a)	Regular Meetings. Regular meetings of the Board may be held without notice.	
 
 	(b)	Special Meetings. Notice of the time and place of special meetings shall be:	
 
 	(i)	delivered personally by hand, by courier or by telephone;	
 
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 	(ii)	sent by United States first-class mail, postage prepaid;	
 
 	(iii)	sent by facsimile; or	
 
 	(iv)	sent by electronic mail,	
directed to each Director at that Director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Company’s records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated to the Director. The notice need not specify the place of the meeting (if the meeting is to be held at the Company’s principal executive office) nor the purpose of the meeting.
Section 4.6.Quorum. A majority of the Directors in office immediately before the meeting shall constitute a quorum for the transaction of business at any meeting of the Board. If a quorum is not present at any meeting of the Board, then the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
Section 4.7.Manner of Acting.
(a) The act of a majority of the Directors then in office shall be the act of the Board, unless a greater number is required by law, the Certificate of Incorporation, or a bylaw adopted by the stockholders.
(b) A Director of the Company, who is present at a meeting of the Board at which action on any corporate matter is taken, shall be presumed to have assented to the action taken unless such Director’s contrary vote is recorded or such Director’s dissent is otherwise entered in the minutes of the meeting or unless he or she shall file such Director’s written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Company immediately after the adjournment of the meeting. Such right of dissent shall not apply to a Director who voted in favor of such action.
Section 4.8.Board Action By Consent Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may by taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
 
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ARTICLE V
OFFICERS
Section 5.1.Officers. The officers of the Company shall be a President and a Secretary. The Company may also have, at the discretion of the Board, a Chairperson of the Board, a Vice Chairperson of the Board, a Chief Executive Officer, one or more Vice Presidents, a Chief Financial Officer, a Treasurer, one or more Assistant Treasurers, one or more Assistant Secretaries, and any such other officers as may be appointed in accordance with the provisions of these Bylaws. Any number of offices may be held by the same person.
Section 5.2.Appointment; Term. The Board shall appoint the officers of the Company, except such officers as may be appointed in accordance with the provisions of  Sections 5.3  and  5.5  of these Bylaws, subject to the rights, if any, of an officer under any contract of employment. Each officer shall hold office until such officer’s death, resignation, retirement, removal, disqualification, or until such officer’s successor is elected and qualifies, unless a different term is specified in the resolution of the Board appointing such officer.
Section 5.3.Subordinate Officers. The Board may appoint, or empower the Chief Executive Officer or, in the absence of a Chief Executive Officer, the President, to appoint, such other officers and agents as the business of the Company may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
Section 5.4.Removal and Resignation of Officers.
(a) Removal. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.
(b) Resignation. Any officer may resign at any time by giving written notice to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.
Section 5.5.Vacancies in Office. Any vacancy occurring in any office of the Company shall be filled by the Board or as provided in  Section 5.2  of these Bylaws.
Section 5.6.Representation of Shares of Other Corporations. Unless otherwise directed by the Board, the President or any other person authorized by the Board or the President is authorized to vote, represent and exercise on behalf of the Company all rights incident to any and all shares of any other corporation or corporations standing in the name of the Company. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
 
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Section 5.7.Authority and Duties of Officers. Except as otherwise provided in these Bylaws, the officers of the Company shall have such powers and duties in the management of the Company as may be designated from time to time by the Board and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.
ARTICLE VI
CERTIFICATES FOR SHARES AND OTHER TRANSFERS
Section 6.1.Stock Certificates; Partly Paid Shares. The shares of the Company shall be represented by certificates, provided, however , that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Company. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Company by the Chairperson of the Board or Vice-Chairperson of the Board, or the President or any Vice President of the Company, and by the Secretary, Assistant Secretary, Treasurer or Assistant Treasurer of the Company representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile or may be engraved or printed or omitted if the certificate is countersigned by a transfer agent, or registered by a registrar, other than the Company itself or an employee of the Company. In case any officer, transfer agent or registrar who signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. The certificates shall be consecutively numbered or otherwise identified; and the name and address of the persons to whom they are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Company.
The Company may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the Company in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Company shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
Section 6.2.Transfer of Shares. Transfer of shares shall be made on the stock transfer books of the Company only upon surrender of the certificates for the shares sought to be transferred by the record holder thereof or by such holder’s duly authorized agent, transferee or legal representative. All certificates surrendered for transfer shall be canceled before new certificates for the transferred shares shall be issued.
 
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Section 6.3.Restrictions on Transfer.
(a) S-Corp Preservation. If the Company has elected Subchapter S status under Section 1362 of the Internal Revenue Code of 1986, as amended, no stockholder or involuntary transferee shall dispose of or transfer any shares of the Company which such stockholder now owns or may hereafter acquire if such disposition or transfer would, or in the reasonable discretion of the Board, foreseeably could result in the termination of such Subchapter S status, unless such disposition or transfer is consented to by all stockholders of the Company. Any such disposition or transfer that does not comply with the terms of this  Section 6.3(a)  shall be void and have no legal force or effect and shall not be recognized on the share transfer books of the Company as effective.
(b) Right of First Refusal. No stockholder or involuntary transferee shall dispose of or transfer any shares of the Company which such stockholder now owns or may hereafter acquire except as set forth in this  Section 6.3(b) . Any purported transfer or disposition of shares in violation of the terms of this  Section 6.3(b)  shall be void and the Company shall not recognize or give any effect to such transaction.
i. An individual stockholder shall be free to transfer, during such stockholder’s lifetime or by testamentary transfer, any or all of such stockholder’s shares of the Company to such stockholder’s spouse, any of such stockholder’s children, grandchildren or direct lineal descendants, whether by blood or by adoption, spouses of such issue, parents, siblings, or direct lineal descendents, whether by blood or by adoption, of such siblings, domestic partner sharing the same household, university or charitable organization or a trust or family limited partnership for the sole benefit of those persons or any of them, a Section 501(c)(3) organization or a non-profit foundation or other non-profit organization; and a stockholder which is a partnership, corporation or limited liability company shall be free to transfer any or all of its shares of the Company to its partners, stockholders or members, respectively, if there is no consideration for such transfer; but, in case of any such transfer, the transferee shall be bound by all the terms of this provision and no further transfer of such shares shall be made by such transferee except back to the stockholder who originally owned them or except in accordance with the provisions of this Section 6.3(b) .
ii. Any stockholder or transferee who wishes to transfer all or any part of such stockholder’s shares of the Company (hereinafter “ Offeror ”), other than as permitted in  Section 6.3(b)(i)  above, first shall submit a written offer to sell such shares to the Company at the same price per share and upon the same terms and conditions offered by a bona fide prospective purchaser of such shares. Such written offer to the Company shall continue to be a binding offer to sell until: (1) rejected by the Company; or (2) the expiration of a period of 30 days after delivery of such written offer to the Company, whichever shall first occur.
iii. Every written offer submitted in accordance with the provisions of this Section 6.3(b) shall specifically name the person to whom the Offeror intends to transfer the shares, the number of shares which such Offeror intends so to transfer to each person and the price per share and other terms upon which each intended transfer is to be made. Upon the
 
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termination of all such written offers, the Offeror shall be free to transfer, for a period of 3 months thereafter, any unpurchased shares to the persons so named at the price per share and upon the other terms and conditions so named, provided that any such transferee of those shares shall thereafter be bound by all the provisions of these Bylaws.
iv. Every written offer submitted to the Company shall be deemed to have been delivered when delivered to the principal office of the Company or if and when sent by prepaid certified mail, or delivered by hand to the President of the Company at the principal office of the Company.
v. If any consideration to be received by the Offeror for the shares offered is property other than cash, then the price per share shall be measured to the extent of the fair market value of such noncash consideration.
vi. The provisions contained herein shall not apply to the pledge of any shares of the Company as collateral for a loan but shall apply to the sale or other disposition of shares under any such pledge.
vii. The provisions of this Section 6.3(b) may be waived with respect to any transfer either by the Company, upon duly authorized action by the Board, or by the stockholders, upon the written consent of the holders of at least a majority of the voting power of the Company (excluding the votes represented by those shares to be transferred by the Offeror).
viii. In the event of any conflict between the terms of this Section 6.3(b) and any written agreement between the Company and any stockholder of the Company, the terms of such written agreement shall control, and the provisions of this Section shall not be applicable.
ix. The restrictions set forth in this Section 6.3(b) shall terminate upon the closing of a public offering of securities of the Company registered under the Securities Act of 1933, as amended.
x. Every certificate representing shares of the Company shall bear the following legend in substantially the following form prominently displayed:
“THE SHARES REPRESENTED BY THIS CERTIFICATE, AND THE TRANSFER THEREOF, ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVISIONS OF THE BYLAWS OF THE COMPANY, A COPY OF WHICH IS ON FILE IN, AND MAY BE EXAMINED AT, THE PRINCIPAL OFFICE OF THE COMPANY.”
Section 6.4.Lost Certificates. The officers of the Company may authorize the issuance of a new share certificate in place of a certificate claimed to have been lost or destroyed, upon receipt of an affidavit of such fact from the person claiming the loss or destruction. When authorizing such issuance of a new certificate, the officers of the Company may require the claimant to give the Company a bond in such sum as it may direct to indemnify the Company against loss from any claim with respect to the certificate claimed to have been lost or destroyed, or otherwise to indemnify the Company against such loss.
 
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Section 6.5.Holder of Record. The Company may treat as absolute owner of the shares the person in whose name the shares stand of record on its books just as if that person had full competency, capacity, and authority to exercise all rights of ownership irrespective of any knowledge or notice to the contrary or any description indicating a representative, pledge or other fiduciary relation or any reference to any other instrument or to the rights of any other person appearing upon its record or upon the share certificate; except that any person furnishing to the Company proof of his/her appointment as a fiduciary shall be treated as if he or she were a holder of record of the Company’s shares.
Section 6.6.Treasury Shares. Treasury shares of the Company shall consist of such shares as have been issued and thereafter acquired but not canceled by the Company. Treasury shares shall not carry voting or dividend rights, except rights in share dividends.
ARTICLE VII
INDEMNIFICATION AND REIMBURSEMENT
OF DIRECTORS AND OFFICERS
Section 7.1.Indemnification for Expenses and Liabilities. Any person who at any time serves or has served: (i) as a Director, officer, employee or agent of the Company; (ii) at the request of the Company as a Director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise; or (iii) at the request of the Company as a trustee or administrator under an employee benefit plan, or is called as a witness at a time when he or she has not been made a named defendant or respondent to any Proceeding, shall have a right to be indemnified by the Company to the fullest extent permitted by the DGCL against all Liability (as defined) and Expenses (as defined) in any Proceeding (as defined) (including without limitation a Proceeding brought by or on behalf of the Company itself) arising out of his or her status as such or activities in any of the foregoing capacities.
The Board shall take all such action as may be necessary and appropriate to authorize the Company to pay the indemnification required by this Article VII, including, without limitation, to the extent required, making a good faith evaluation of the manner in which the claimant for indemnity acted and of the reasonable amount of indemnity due him or her.
Any person who at any time serves or has served in any of the aforesaid capacities for or on behalf of the Company shall be deemed to be doing or to have done so in reliance upon, and as consideration for, the rights provided for herein. Any repeal or modification of these indemnification provisions shall not affect any rights or obligations existing at the time of such repeal or modification. The rights provided for herein shall inure to the benefit of the legal representatives of any such person and shall not be exclusive of any other rights to which such person may be entitled apart from this provision.
The rights granted herein shall not be limited by the provisions contained in Section 145 of the DGCL or any successor to such statute.
Section 7.2.Advance Payment of Expenses. The Company shall (upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent involved to repay the
 
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Expenses described herein unless it shall ultimately be determined that he or she is entitled to be indemnified by the Company against such Expenses) pay Expenses incurred by such Director, officer, employee or agent in defending a Proceeding or appearing as a witness at a time when he or she has not been named as a defendant or a respondent with respect thereto in advance of the final disposition of such Proceeding.
Section 7.3.Insurance. The Company shall have the power to purchase and maintain insurance (on behalf of any person who is or was a Director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a Director, officer, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust or other enterprise or as a trustee or administrator under an employee benefit plan) against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Company would have the power to indemnify him or her against such liability.
Section 7.4.Definitions. The following terms as used in this Article shall have the following meanings. “ Proceeding ” means any threatened, pending or completed action, suit, or proceeding and any appeal therein (and any inquiry or investigation that could lead to such action, suit, or proceeding), whether civil, criminal, administrative, investigative or arbitrative and whether formal or informal. “ Expenses ” means expenses of every kind, including counsel fees. “ Liability ” means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), reasonable expenses incurred with respect to a Proceeding, and all reasonable expenses incurred in enforcing the indemnification rights provided herein. “ Director ,” “ officer ,” “ employee ” and “ agent ” include the estate or personal representative of a Director, officer, employee or agent. “ Company ” shall include any domestic or foreign predecessor of this Company in a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1.Dividends. The Board, subject to any restrictions contained in either: (i) the DGCL; or (ii) the Certificate of Incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the Company’s capital stock.
The Board may set apart out of any of the funds of the Company available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the Company, and meeting contingencies.
Section 8.2.Seal. The corporate seal shall be in such form as may be approved from time to time by the Board. Such seal may be an impression or stamp and may be used by the officers of the Company by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced. In addition to any form of seal adopted by the Board, the officers of the
 
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Company may use as the corporate seal a seal in the form of a circle containing the name of the Company and the state of its incorporation (or an abbreviation thereof) on the circumference and the word “Seal” in the center.
Section 8.3.Waiver of Notice. Whenever notice is required to be given to any stockholder or Director under the provisions of the DGCL, the Certificate of Incorporation or these Bylaws, a written waiver, signed by the person or persons entitled to notice, or a waiver by electronic transmission by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, Directors, or members of a committee of Directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these Bylaws.
Section 8.4.Fiscal Year. The fiscal year of the Company shall be determined by the Board.
Section 8.5.Notice by Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the Certificate of Incorporation or these Bylaws, any notice to stockholders given by the Company under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Company. Any such consent shall be deemed revoked if:
(i) the Company is unable to deliver by electronic transmission two consecutive notices given by the Company in accordance with such consent; and
(ii) such inability becomes known to the Secretary or an Assistant Secretary of the Company or to the transfer agent, or other person responsible for the giving of notice.
However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
Any notice given pursuant to the preceding paragraph shall be deemed given:
(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
(ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;
(iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and
(iv) if by any other form of electronic transmission, when directed to the stockholder.
 
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An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Company that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
Notwithstanding the foregoing, notice by a form of electronic transmission shall not apply to Sections 164, 296, 311, 312 or 324 of the DGCL.
An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 8.6.Records and Reports.
(a) Maintenance and Inspection of Records. The Company shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these Bylaws as amended to date, accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Company’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder. The demand under oath shall be directed to the Company at its registered office in Delaware or at its principal executive office.
(b) Inspection by Directors. Any Director shall have the right to examine the Company’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a Director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a Director is entitled to the inspection sought. The Court may summarily order the Company to permit the Director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.
Section 8.7.Amendments. Except as otherwise provided herein, these Bylaws may be amended or repealed and new Bylaws may be adopted by the affirmative vote of the holders of a majority of the voting power of the Company, or, if the Certificate of Incorporation so permits, by the affirmative vote of a majority of the Directors then holding office at any regular or special meeting of the Board or by unanimous written consent.
 
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Section 8.8. All terms used in these Bylaws shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the context may require.
[Remainder of Page Intentionally Left Blank]
 
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THIS IS TO CERTIFY that the above Bylaws were duly adopted by the Board, effective as of the date first set forth above.

/s/ Daniel H. White	
Daniel H. White	
Secretary	
Clearside BioMedical, Inc.
Bylaws
- Signature Page -

Exhibit 4.2
CLEARSIDE BIOMEDICAL, INC.

 	 	 	 	 	
THIRD AMENDED AND RESTATED INVESTOR
RIGHTS AGREEMENT

 	 	 	 	 	
November 23, 2015

CLEARSIDE BIOMEDICAL, INC.

 	 	 	 	 	
THIRD AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT

 	 	 	 	 	
This Third Amended and Restated Investor Rights Agreement (this “Agreement”) is entered into as of the 23rd day of November, 2015, by and among Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), and the holders of shares of the Company’s Preferred Stock from time to time outstanding (the “ Investor Stock ”) listed on  Exhibit A  attached hereto (the “ Investors ”).
RECITAL
WHEREAS, certain of the Investors (the “Prior Investors”) are holders of shares of the Company’s Series A Preferred Stock, Series A-1 Preferred Stock and Series B Preferred Stock and are party to a Second Amended and Restated Investor Rights Agreement dated as of August 29, 2014 (the “ Prior Agreement ”);
WHEREAS, in connection with the issuance and sale of shares of Series C Preferred Stock to certain of the Investors pursuant to that certain Series C Preferred Stock Purchase Agreement, dated as of the date hereof, by and among the Company and certain Investors (the “ Purchase Agreement ”), the parties to the Prior Agreement desire to amend and restate the Prior Agreement in its entirety, to accept the rights, obligations and covenants hereof in lieu of their rights, obligations and covenants under the Prior Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements, covenants and conditions contained herein, the Company and the Investors hereby agree as follows.
 
Section 1.	RESTRICTIONS ON TRANSFER	
1.1 Restrictive Legend. Each certificate representing (a) the Investor Stock, (b) the Common Stock of the Company (the “ Common Stock ”) issued upon conversion of the Investor Stock, and (c) any other securities issued in respect of the Investor Stock or Common Stock issued upon conversion of the Investor Stock upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of Section 1.2 below) be stamped or otherwise imprinted with a legend in substantially the following form (in addition to any legend required under applicable state securities laws).
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS
 
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AMENDED, AND APPLICABLE STATE SECURITIES LAWS. COPIES OF THE INVESTOR RIGHTS AGREEMENT PROVIDING FOR RESTRICTIONS ON TRANSFER OF THESE SECURITIES MAY BE OBTAINED UPON WRITTEN REQUEST BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
Each stockholder consents to the Company’s making a notation on its records and giving instructions to any transfer agent of the Investor Stock or the Common Stock in order to implement the restrictions on transfer established in this Section 1. Such legend shall be removed by the Company from any certificate at such time as the holder of the shares represented by the certificate satisfies the requirements of Rule 144(d) under the Securities Act of 1933, as amended (the “ 1933 Act ”).
1.2 Notice of Proposed Transfers. The holder of each certificate representing company capital stock (the “Company Stock ”) by acceptance thereof agrees to comply in all respects with the provisions of this Section 1.2. Prior to any proposed sale, assignment, transfer or pledge of any Company Stock, unless there is in effect a registration statement under the 1933 Act and any applicable state securities laws covering the proposed transfer, the holder thereof shall give written notice to the Company of such stockholder’s intention to effect such transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such holder’s expense by a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company addressed to the Company, to the effect that the proposed transfer of the Company Stock may be effected without such registration. Each certificate evidencing the Company Stock transferred as above provided shall bear, except if such transfer is made pursuant to Rule 144, the appropriate restrictive legend set forth in Section 1.1 above, except that such certificate shall not bear such restrictive legend if in the opinion of counsel for such holder and the Company such legend is not required in order to establish compliance with any provisions of the 1933 Act or any applicable state securities laws. Notwithstanding the foregoing, no such opinion of counsel shall be necessary for a transfer by a stockholder which is (a) a partnership transferring to its partners or former partners in accordance with the partnership interests, (b) a limited liability company transferring to its members or former members in accordance with their interest in the limited liability company, or (c) a corporation transferring to its stockholders in accordance with their interest in the corporation;  provided that  in each case the transferee will be subject to the terms of this Agreement to the same extent as if he or she were an original stockholder hereunder.
 
Section 2.	PREEMPTIVE RIGHTS	
2.1 Certain Definitions. As used in this Section 2:
(a) The term “Eligible Holder” shall mean a holder of Investor Stock, that holds (either individually or collectively with its affiliates) at least 500,000 shares of the outstanding Preferred Stock of the Company (subject to adjustment in the case of a stock split, stock dividend, recapitalization, merger, consolidation or similar event).
(b) The term “New Securities” shall mean any capital stock of the Company, whether now authorized or not, and rights, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, convertible into such capital stock;  provided that  the term “New Securities” does not include the following issuances: (i) Excluded Securities (as such term is defined in the Company’s Fifth Amended and Restated Certificate of Incorporation (as it may be amended from time to time, the “ Charter ”); or (ii) the securities sold or to be sold in the future pursuant to the Purchase Agreement.
(c) The term “Pro Rata Share” shall mean the ratio, (i) the numerator of which is the number of shares of Common Stock held by such Eligible Holder, or issuable to such Eligible Holder upon the conversion of shares of Investor Stock held by such Eligible Holder, on the date of the Company’s written notice pursuant to Section 2.3 hereof, and (ii) the denominator of which is the number of shares of Common Stock outstanding, assuming for this purpose conversion or exercise of all securities convertible into or exercisable for Common Stock of the Company.
 
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2.2 Preemptive Rights. The Company hereby grants to each Eligible Holder, subject to the terms and conditions specified in this Section 2, the right of first refusal to purchase, on the terms and conditions set forth in the Company’s notice pursuant to Section 2.3 hereof, up to its Pro Rata Share of all New Securities that the Company may, from time to time, propose to sell and issue.
2.3 Required Notices. In the event the Company proposes to undertake an issuance of New Securities, it shall give each Eligible Holder written notice of its intention, describing the type of New Securities, the price and the general terms upon which the Company proposes to issue the same. Each Eligible Holder shall have thirty (30) days from the date of any such notice to exercise its preemptive right under Section 2.2 hereof to purchase such New Securities for the price and upon the general terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased.
2.4 Company’s Right to Sell. If not all of the Eligible Holders elect to purchase their Pro Rata Share of the New Securities, then the Company shall promptly notify in writing the Eligible Holders who do so elect and shall offer such Eligible Holders the right to acquire such unsubscribed securities on a  pro rata  basis. The Eligible Holders shall have five (5) days after receipt of such notice to notify the Company of its election to purchase all or a portion of such unsubscribed securities. The Company shall have ninety (90) days after the thirty (30) day period described in Section 2.3 hereof to sell all such New Securities respecting which the Eligible Holders’ preemptive rights hereunder were not exercised, at a price and upon terms no more favorable in any material respect to the purchasers thereof than specified in the Company’s notice. In the event the Company has not sold all such New Securities within such ninety (90) day period, the Company shall not thereafter issue or sell any New Securities without first offering such New Securities to the Eligible Holders in the manner provided herein.
2.5 Assignment of Preemptive Rights. The rights contained in this Section 2 may be assigned or otherwise conveyed to transferees or assignees of Eligible Holders;  provided that  (i) such transfer is effected in compliance with Section 1.2 hereof, (ii) such transferee (A) is a current or former principal, manager, member, limited partner, general partner, stockholder, subsidiary, officer or affiliate of such transferor of the capital stock, (B) is a family member of the transferor or a trust or other similar entity for the benefit of the transferor or a family member of the transferor, or (C) acquires at least 250,000 shares of the transferor’s capital stock (as adjusted for stock splits, stock dividends, recapitalizations and other combinations), (iii) such transferee agrees to be subject to all restrictions set forth in this Agreement, (iv) the Company is provided with written notice of such transfer and (v) such transferee is an accredited investor or otherwise eligible under applicable securities law to acquire the New Securities without the same being registered under the 1933 Act or any similar law.
2.6 Expiration of Right. The rights granted under this Section 2 shall not apply to, and shall expire upon, the first to occur of (a) the effectiveness of a registration statement for the sale of the Company’s shares of Common Stock in a firm commitment underwritten public offering registered under the 1933 Act (a “ Qualified Public Offering ”), or (b) a merger, consolidation, sale or reorganization that constitutes a Liquidating Event under the Charter.
 
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Section 3.	COMPANY COVENANTS	
3.1 Affirmative Covenants.
(a) Financial Statements and Information. The Company will cause to be furnished to each Major Investor (as defined below) the following reports (prepared in accordance with United States generally accepted accounting principles applied on a consistent basis, except that the unaudited reports may not contain notes or reserves and will be subject to year-end adjustment), provided ,  however , that the Company shall not be obligated pursuant to this Section 3.1(a) to provide financial information to any person whom the Company reasonably believes is a competitor of the Company;  provided ,  further , that the Company agrees and acknowledges that Santen Pharmaceutical Co., Ltd. (“ Santen ”) shall not be deemed a competitor for purposes of Sections 3.1(a) and 3.1(b). As used herein, the term “ Major Investor ” means any Investor owning (either individually or collectively with its affiliates) not less than 500,000 of the outstanding shares of the Company’s Preferred Stock and each transferee who holds no less than that number of shares of the Company’s Preferred Stock.
(i) As soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, the Company will furnish to each Major Investor (A) reviewed or audited consolidated balance sheets of the Company and its subsidiaries, if any, as at the end of such fiscal year, and reviewed or audited consolidated statements of income and losses, stockholders’ equity and cash flows of the Company and its subsidiaries, if any, for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, if any, all in reasonable detail and accompanied by a report and opinion thereon by independent auditors selected by the Company’s Board of Directors (the “ Board ”), and (B) a copy of such auditors’ management letter prepared in connection therewith, if any.
(ii) As soon as practicable after the end of each quarter, but in any event within thirty (30) days after the end of each such quarter, the Company will furnish to each Major Investor the unaudited consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of such quarter, an up-to-date capitalization table and its unaudited consolidated statements of income and losses, stockholders’ equity and cash flows for such quarter, setting forth in each case in comparative form the figures for the corresponding period of the preceding fiscal year, all in reasonable detail except that such financial statements may not contain notes or reserves and will be subject to year-end adjustment.
(iii) The Company will furnish to each Major Investor with reasonable promptness, such other information respecting the business, properties or the condition or operations, financial or other, of the Company or any subsidiary as any Major Investor may from time to time reasonably request or as determined by the Board.
(iv) As soon as practicable, but in any event no less than thirty (30) days before the beginning of each fiscal year, the Company will furnish to each Major Investor an annual operating plan and budget for the following fiscal year (which budget and plan shall include capital and operating expense budgets, cash flow projections, profit and loss projections and projected balance sheets for such year on a monthly basis), accompanied by a report from the CEO detailing the assumptions underlying the budget and any other information necessary to make such budget and plan accurate and not misleading, and, as soon as practicable after the adoption thereof, copies of any revisions to such annual operating plan.
 
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(b) Inspection. The Company shall permit each Major Investor and its transferee(s) (provided such transfer is effected in compliance with Section 1.2 hereof), its attorney or its other representative, after executing a confidentiality agreement reasonably acceptable to the Board, to visit and inspect the Company’s properties, to examine the Company’s books of account and other records, to make copies or extracts therefrom and to discuss the Company’s affairs, finances and accounts with its officers, management, employees and independent auditors all at such reasonable times during the Company’s normal business hours and as often as such Major Investor or transferee may reasonably request;  provided , however , that the Company shall not be obligated pursuant to this Section 3.1(b) to provide trade secrets or confidential information or to provide information to any person whom the Company reasonably believes is a competitor of the Company; provided ,  further , that such Investor shall bear any out-of-pocket costs or expenses of such investigations or inquiries.
(c) Confidentiality. Unless otherwise expressly set forth in another agreement between an Investor and the Company, each Investor agrees not to use Confidential Information (as hereinafter defined) of the Company for its own use or for any purpose except to evaluate and enforce its equity investment in the Company. Except as permitted under this Section, each Investor agrees to use all reasonable efforts not to disclose such Confidential Information to any third parties. Each Investor shall undertake to treat such Confidential Information in a manner consistent with the treatment of its own information of such proprietary nature and agrees that it shall protect the confidentiality of and use all reasonable efforts to prevent disclosure of the Confidential Information to prevent it from falling into the public domain or the possession of unauthorized persons. Each transferee of any Investor who receives Confidential Information shall agree to be bound by such provisions. For purposes of this Section, “ Confidential Information ” means any information, trade secrets, data, or know-how, including, but not limited to, the Company’s patent applications, test or clinical data, licenses, research, products, services, development, inventions, consultants’ or advisors’ identities, samples, processes, designs, engineering, marketing, finances, or business partners disclosed by the Company either directly or indirectly in writing, orally or by drawings or inspection of samples. Confidential Information does not include information, technical data or know-how which (i) is in the Investor’s possession at the time of disclosure as shown by Investor’s files and records immediately prior to the time of disclosure; (ii) before or after it has been disclosed to the Investor, it is part of the public knowledge or literature, not as a result of any action or inaction of the Investor; (iii) is approved for release by written authorization of Company; or (iv) is rightfully disclosed to Investor by a third party without restriction. The provisions of this Section shall not apply (a) to the extent that an Investor is required to disclose Confidential Information pursuant to any law, statute, rule or regulation or any order of any court or judicial process or pursuant to any direction, request or requirement (whether or not having the force of law but if not having the force of law being of a type with which institutional investors in the relevant jurisdiction are accustomed to comply) of any self-regulating organization or any governmental, fiscal, monetary or other authority; (b) to the disclosure of Confidential Information to an Investor’s employees, counsel, accountants or other professional advisors; (c) to the extent that an Investor needs to disclose Confidential Information for the protection of any of such Investor’s rights or interest against the Company, whether under this Agreement or otherwise; or (d) to the disclosure of Confidential Information to a prospective transferee of securities which agrees to be bound by the provisions of this Section 3.1(c) in connection with the receipt of such Confidential Information.
(d) Reservation of Common Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Investor Stock, all shares of Common Stock issuable upon such conversion.
(e) Board Matters. The reasonable out-of-pocket expenses of members of the Board associated with attending meetings or business related to the Company will be borne by the Company, and all directors will be treated identically with regard to expense reimbursement related to their service as members of the Board. The Board shall meet at least quarterly, unless otherwise agreed to by a vote of a majority of the Board.
 
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(f) Observer Rights.
(i) For so long as it or its affiliates (i) hold less than two (2) seats on the Board; and (ii) own at least 500,000 shares of the Preferred Stock of the Company, Hatteras shall have the right to designate one person to receive notice of all meetings of the Board, to attend any such meeting as a nonvoting observer and to comment for the record at any such meeting (for purposes of this Section 3.1(f)(i), the term “meeting” shall be deemed to include all “executive sessions” and any other similar meeting of all or part of the Board or any committee thereof);  provided ,  however , that such observer shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and  provided further , that the Company reserves the right to withhold any information and to exclude such observer from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a competitor of the Company. Each observer so appointed as provided above shall sign a confidentiality agreement reasonably acceptable to the Board of the Company prior to his or her first attendance to his or her first meeting of the Board.
(ii) Until the later of January 31, 2016 or such time as Santen does not hold at least 5% of the Company’s capital stock (on an as converted, fully diluted basis), Santen shall have the right to designate one person to receive notice of all meetings of the Board, to attend any such meeting as a nonvoting observer, to comment for the record at any such meeting and to receive copies of all notices, minutes, consents, and other materials that it provides, at the same time such materials are provided, to its members of the Board;  provided ,  however , that such observer shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and  provided further , that the Company reserves the right to withhold any information and to exclude such observer from any meeting or portion thereof if (a) access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel, (b) access to such information or attendance at such meeting could result in disclosure of trade secrets or a conflict of interest, (c) such Investor or its representative is a competitor of the Company or (d) such information or materials relate to the use of the Company’s technology with any proprietary pharmaceutical molecule or formulation of a third party, including preclinical and clinical data and the terms of any agreement related to the combined use of Company technology with any such third party molecule or formulation. The rights in this Section 3.1(f)(ii) are personal to Santen and shall in no event be assignable to any person or entity without the express consent of the Company.
(iii) For so long as MGC Venture Partners 2013, L.P. and its affiliates (collectively, “MGC”) own at least 250,000 shares of the Preferred Stock of the Company (subject to adjustment for stock splits, consolidations, reclassifications, etc.), MGC shall have the right to designate one person to receive notice of all meetings of the Board, to attend any such meeting as a nonvoting observer, to comment for the record at any such meeting and to receive copies of all notices, minutes, consents, and other materials that it provides, at the same time such materials are provided, to its members of the Board; provided ,  however , that such observer shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and  provided further , that the Company reserves the right to withhold any information and to exclude such observer from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a competitor of the Company.
(iv) For so long as RMI Investments S.a.r.l. and its affiliates (collectively, “RMI”) own at least 250,000 shares of the Preferred Stock of the Company (subject to adjustment for stock splits, consolidations, reclassifications, etc.), RMI shall have the right to designate one person to receive notice of all meetings of the Board, to attend any such meeting as a nonvoting observer, to comment for the record at any such meeting and to receive copies of all notices, minutes, consents, and other materials that it provides, at the same time such materials are provided, to its members of the Board;  provided ,  however , that such observer shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and  provided further , that the Company reserves the right to withhold any information and to exclude such observer from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a competitor of the Company.
 
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(g) Committees of the Board. The Series B Director and the Series C Director shall have the right to serve as a member of the Compensation Committee, the Audit Committee and the Pricing Committee of the Board.
(h) Directors and Officers Insurance. The Company will maintain a Directors and Officers insurance policy in an amount of at least five million dollars ($5,000,000).
(i) Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, its Certificate of Incorporation, an indemnification agreement between the Company and each member of the Board or elsewhere, as the case may be.
(j) Key Person Insurance. The Company hereby covenants and agrees that it shall use commercially reasonable efforts to secure and maintain “key man” life and disability insurance on Daniel White in an amount acceptable to the Board. The proceeds of such policy shall be payable to the Company.
(k) Employee Agreements. The Company has previously caused or will cause (i) each person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement; and (ii) each Key Employee to enter into a one (1) year noncompetition and nonsolicitation agreement, substantially in the form approved by the Board. For purposes of this Agreement, the term “ Key Employee ” shall mean each of Daniel H. White, Raphael V. Andino, Charles A. Deignan and Glenn Noronha, each executive-level employee (including, division director and vice president-level positions) as well as any employee who, either alone or in concert with others, develops, invents, programs, or designs any material intellectual property of the Company.
3.2 Negative Covenants. During the term of this Agreement and so long as the holders of Series C Preferred Stock are entitled to elect a Series C Director (as such term is defined in the Charter) (each member of the Board so elected by the holders of Series C Preferred Stock, a “ Series C Director ”) pursuant to the terms of the Charter, and notwithstanding anything to the contrary contained in any other agreements, the following actions of the Company shall require the prior approval of the Board (which approval must specifically include the affirmative vote, consent or approval of the Series C Director then serving):
(a) make any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership or other entity unless it is wholly owned by the Company;
 
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(b) make any loan or advance to any person, including, any employee or director, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board;
(c) guarantee any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;
(d) make any investment inconsistent with any investment policy approved by the Board;
(e) incur any aggregate indebtedness in excess of US$100,000 that is not already included in a Board-approved budget, other than trade credit incurred in the ordinary course of business;
(f) enter into or be a party to any transaction with any director, officer or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person, or transactions made in the ordinary course of business and pursuant to reasonable requirements of the Company’s business and upon fair and reasonable terms that are approved by a majority of the Board;
(g) hire, fire, or change the compensation of the executive officers, including approving any option grants to such executive officers;
(h) change the principal business of the Company, enter new lines of business, or exit the current line of business;
(i) sell, assign, license, sublicense, pledge or encumber material technology or intellectual property, other than licenses granted in the ordinary course of business; or
(j) enter into any corporate strategic relationship involving the payment, contribution or assignment by the Company or to the Company of assets greater than US$500,000 other than in the ordinary course of business.
3.3 Expiration of Covenants. The covenants set forth in this Section 3 shall expire and be of no further force or effect upon the effectiveness of a Qualified Public Offering (as defined in Section 2.6 hereof). After such time, the Investors shall be entitled to receive such annual and quarterly reports as the Company shall distribute to its stockholders generally.
 
Section 4.	REGISTRATION RIGHTS	
4.1 Certain Definitions. For purposes of this Section 4:
(a) “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(b) “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the 1933 Act, the 1934 Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any
 
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amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the 1933 Act, the 1934 Act, any state securities law, or any rule or regulation promulgated under the 1933 Act, the 1934 Act, or any state securities law.
(c) “Excluded Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.
(d) “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.
(e) “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.
(f) “Holder” means any holder of Registrable Securities who is a party to this Agreement.
(g) “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural person referred to herein.
(h) “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.
(i) “IPO” means the Company’s first underwritten public offering of its Common Stock under the 1933 Act.
(j) “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.
(k) “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Company’s Preferred Stock; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the Investors after the date hereof; and (iii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above.
(l) “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.
 
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(m) “SEC” means the Securities and Exchange Commission.
(n) “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Subsection 4.7.
4.2 Demand Registration.
(a) If at any time after the earlier of (i) three (3) years after the date of this Agreement or (ii) one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from Holders holding forty percent (40%) of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to the Registrable Securities then outstanding if the anticipated aggregate offering price, net of Selling Expenses, would exceed $10 million, then the Company shall (x) within ten (10) days after the date such request is given, give notice thereof (the “ Demand Notice ”) to all Holders other than the Initiating Holders; and (y) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 4.2(c) and 4.4.
(b) If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least twenty percent (20%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $1 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within forty-five (45) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 4.2(c) and 4.4.
(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Subsection 4.2 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the 1933 Act or 1934 Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the Initiating Holders is given;  provided , however, that the Company may not invoke this right more than twice in any twelve (12) month period; and  provided further  that the Company shall not register any securities for its own account or that of any other stockholder during such ninety (90) day period other than an Excluded Registration.
 
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(d) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 4.2(a): (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two registrations pursuant to Subsection 4.2(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Subsection 4.2(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 4.2(b): (i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two registrations pursuant to Subsection 4.2(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Subsection 4.2(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Subsection 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Subsection 4.2(d).
4.3 Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its securities under the 1933 Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Subsection 4.4, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Subsection 4.3 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Subsection 4.7.
4.4 Underwriting Requirements.
(a) If, pursuant to Subsection 4.2, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Subsection 4.2, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Subsection 4.5(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Subsection 4.4, if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities
 
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owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.
(b) In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Subsection 4.3, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below twenty percent (20%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering. For purposes of the provision in this Subsection 4.4(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, shareholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.
(c) For purposes of Subsection 4.2, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Subsection 4.4(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.
4.5 Obligations of the Company. Whenever required under this Section 4 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty
 
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(120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;
(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;
(c) furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the 1933 Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;
(d) use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided  that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the 1933 Act;
(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;
(f) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;
(h) promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;
(i) notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and
(j) after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.
 
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In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.
4.6 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 4 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.
4.7 Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 4, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements (not to exceed $30,000), of one counsel for the selling Holders (“ Selling Holder Counsel ”), shall be borne and paid by the Company; provided ,  however , that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Subsection 4.2 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Subsections 4.2(a) or 4.2(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Subsections 4.2(a) or 4.2(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 4 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.
4.8 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 4.
4.9 Indemnification. If any Registrable Securities are included in a registration statement under this Section 4:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and shareholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the 1933 Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the 1933 Act or the 1934 Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 4.9(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out
 
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of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.
(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the 1933 Act, legal counsel and accountants for the Company, any underwriter (as defined in the 1933 Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 4.9(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Subsections 4.9(b) and 4.9(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under this Subsection 4.9 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 4.9, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Subsection 4.9, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 4.9.
(d) To provide for just and equitable contribution to joint liability under the 1933 Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 4.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Subsection 4.9 provides for indemnification in such case, or (ii) contribution under the 1933 Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 4.9, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss,
 
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claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Subsection 4.9(d), when combined with the amounts paid or payable by such Holder pursuant to Subsection 4.9(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
(f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Subsection 4.9 shall survive the completion of any offering of Registrable Securities in a registration under this Section 4, and otherwise shall survive the termination of this Agreement.
4.10 Reports Under 1934 Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:
(a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;
(b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934Act (at any time after the Company has become subject to such reporting requirements); and
(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the 1933 Act, and the 1934 Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the 1934 Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).
4.11 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the
 
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Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder the right to include securities in any registration on other than either a pro rata basis with respect to the Registrable Securities or on a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include;  provided  that this limitation shall not apply to any additional Investor who becomes a party to this Agreement.
4.12 “Market Stand off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the 1933 Act on a registration statement on Form S-1, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days in the case of the IPO, or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports, and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock (whether such shares or any such securities are then owned by the Holder or are thereafter acquired) or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Subsection 4.12 shall apply only to the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers, directors and shareholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock) are subject to the same restrictions. The underwriters in connection with such registration are intended third party beneficiaries of this Subsection 4.12 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Subsection 4.12 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.
4.13 Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Subsections 4.2 or 4.3 shall terminate upon the earliest to occur of:
(a) the closing of a Liquidating Event, as such term is defined in the Charter; and
(b) the fifth (5th) anniversary of the IPO.
 
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Section 5.	MISCELLANEOUS	
5.1 Governing Law. This Agreement shall be governed by the laws of the State of Delaware without regard to conflicts of law provisions.
5.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.
5.3 Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto and their successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.
5.4 Severability. Any invalidity, illegality or limitation of the enforceability with respect to any stockholder of any one or more of the provisions of this Agreement, or any part thereof, whether arising by reason of the law of any such person’s domicile or otherwise, shall in no way affect or impair the validity, legality or enforceability of this Agreement with respect to any other stockholder. In case any provision of this Agreement shall be invalid, illegal or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
5.5 Amendment and Waiver. Except as otherwise expressly provided herein, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely) with the written consent of the Company and the Investors, or their transferees, holding at least a majority of the shares of Investor Stock and voting together as a single group (treated as if converted at the conversion rate then in effect and including, for such purposes, shares of Common Stock into which any shares of Investor Stock shall have been converted that are held by a stockholder);  provided ,  however , that no such amendment or waiver shall reduce the aforesaid percentage of Investor Stock and Common Stock issued upon conversion thereof, the holders of which are required to consent to any waiver or supplemental agreement, without the consent of the holders of all of such Investor Stock and Common Stock. Notwithstanding anything to the contrary in this Section 5.5, this Agreement may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Investor without the written consent of such Investor unless such amendment, modification, termination or waiver applies to all Investors in the same fashion. Notwithstanding anything to the contrary in this Section 5.5, Section 3.1(f)(ii) of this Agreement may not be amended without the consent of Santen. Notwithstanding anything to the contrary in this Section 5.5, Investors purchasing Series C Preferred Stock of the Company pursuant to the Purchase Agreement may join as a party to this Agreement and Exhibit A hereto may be amended without the written consent of the Investors. Any amendment or waiver effected in accordance with this Section 5.5 shall be binding upon the Company, each Investor and each transferee of the Company Stock. Upon the effectuation of each such amendment or waiver, the Company shall promptly give written notice thereof to the Investors who have not previously consented thereto in writing.
5.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to the Company, the Investors, or any transferees upon any breach, default or noncompliance of the Investors or any transferee or the Company under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the part of the Company
 
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or the Investors of any breach, default or noncompliance under this Agreement or any waiver on the Company’s or the Investors’ part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing and that all remedies, either under this Agreement, by law, or otherwise afforded to the Company and the Investors, shall be cumulative and not alternative.
5.7 Notices, etc. Any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given and received: (a) upon personal delivery to the party to be notified; (b) upon delivery by confirmed facsimile transmission if received by the recipient before 5:00 p.m. local time on a business day, and if not, then the next business day; (c) if to a U.S. resident, five (5) days after deposit with the United States Post Office, by registered or certified mail, postage prepaid; or (d) if to a U.S. resident, one (1) business day after deposit with a nationally recognized overnight courier service (or if to a non-U.S. resident, two (2) business days after deposit with an internationally recognized overnight courier service, specifying international priority delivery), and addressed:
(a) if to the Company, at:
Clearside Biomedical, Inc.
1220 Old Alpharetta Rd., Suite 300
Alpharetta, GA 30005
Attn: Chief Executive Officer
With copies to:
Hutchison PLLC
3110 Edwards Mill Road, Suite 300
Raleigh, North Carolina 27612
Attn: William N. Wofford
Telephone: (919) 829-9600
Facsimile: (919) 829-9696
Cooley LLP
1299 Pennsylvania Avenue, NW
Suite 700
Washington, DC 20004
Attn : Brent Siler
Telephone : (202) 728-7040
Facsimile : (703) 456-8100
or at such other address as the Company shall have furnished to the Investors in writing;
(b) if to the Investors, at the addresses of such Investors specified on Exhibit A hereto, or at such other addresses as the Investors shall have furnished to the Company in writing; and
(c) if to a stockholder other than the Investors, at such stockholder’s address as shall have been furnished to the Company in writing.
5.8 Attorneys’ Fees. In the event that any suit or action is instituted under or in relation to this Agreement, including without limitation to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
 
19

5.9 Aggregation of Stock. All shares of Company Stock held or acquired by affiliated entities or persons or persons or entities under common management or control shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
5.10 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
5.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.
[The next page is the signature page.]
 
20

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

COMPANY:	 	 	 	Clearside Biomedical, Inc.	
 	 	 	 	
 	 	 	 	By:	 	/s/ Daniel H. White	
 	 	 	 	Name:	 	Daniel H. White	
 	 	 	 	Title:	 	President & CEO	

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

INVESTOR:	 	 	 	Cormorant Global Healthcare Master Fund, LP	
 	 	 	 	
 	 	 	 	By:	 	/s/ Bihua Chen	
 	 	 	 	Name:	 	Bihua Chen	
 	 	 	 	Title:	 	Managing Member of the General Partner	

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

INVESTOR:	 	 	 	Hatteras Venture Partners III, LP	
 	 	 	 	
 	 	 	 	By:	 	Hatteras Venture Advisors III, LLC, its General Partner	
 	 	 	 	
 	 	 	 	By:	 	/s/ Clay Thorp	
 	 	 	 	Name:	 	Clay Thorp	
 	 	 	 	Title:	 	Manager	
 	 	 	
INVESTOR:	 	 	 	Hatteras Venture Partners IV SBIC, LP	
 	 	 	 	
 	 	 	 	By:	 	Hatteras Venture Advisors IV, SBIC, LLC, its General Partner	
 	 	 	 	
 	 	 	 	By:	 	/s/ Clay Thorp	
 	 	 	 	Name:	 	Clay Thorp	
 	 	 	 	Title:	 	Manager	
 	 	 	
INVESTOR:	 	 	 	Hatteras Venture Affiliates III, LP	
 	 	 	 	
 	 	 	 	By:	 	Hatteras Venture Advisors III, LLC, its General Partner	
 	 	 	 	
 	 	 	 	By:	 	/s/ Clay Thorp	
 	 	 	 	Name:	 	Clay Thorp	
 	 	 	 	Title:	 	Manager	

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

INVESTOR:	 	 	 	MGC Venture Partners 2013, LP	
 	 	 	 	By:	 	MGC Venture Partners 2013 GP, LLC	
 	 	 	 	Its:	 	General Partner	
 	 	 	 	
 	 	 	 	By:	 	/s/ Joe C. Cook, III	
 	 	 	 	 	 	Joe C. Cook, III	
 	 	 	 	 	 	Managing Member	

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

INVESTOR:	 	 	 	MMIC Investment Holdings, Inc.	
 	 	 	 	
 	 	 	 	By:	 	/s/ Jason T. Sander	
 	 	 	 	Name:	 	Jason T. Sander	
 	 	 	 	Title:	 	CFO	

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

INVESTOR:	 	 	 	Perceptive Life Sciences Master Fund LTD	
 	 	 	 	
 	 	 	 	By:	 	/s/ James H. Mannix	
 	 	 	 	Name:	 	James H. Mannix	
 	 	 	 	Title:	 	C.O.O	

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

INVESTOR:	 	 	 	Rock Springs Capital Master Fund LP	
 	 	 	 	
 	 	 	 	By:	 	Rock Springs GP LLC, its General Partner	
 	 	 	 	
 	 	 	 	By:	 	/s/ Graham McPhail	
 	 	 	 	Name:	 	Graham McPhail	
 	 	 	 	Title:	 	Managing Director	

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

INVESTOR:	 	 	 	Titan Perc LTD	
 	 	 	 	
 	 	 	 	By:	 	/s/ Darren Ross	
 	 	 	 	Name:	 	Darren Ross	
 	 	 	 	Title:	 	Director	

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

INVESTOR:	 	 	 	By:	 	/s/ Jerry Cagle	
 	 	 	 	 	 	Jerry Cagle	

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

INVESTOR:	 	 	 	By:	 	/s/ Charles A. Deignan	
 	 	 	 	 	 	Charles A. Deignan	

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

INVESTOR:	 	 	 	Hatteras NC Fund	
 	 	 	 	
 	 	 	 	By:	 	/s/ Clay Thorp	
 	 	 	 	Name:	 	Clay Thorp	
 	 	 	 	Title:	 	Manager	

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

INVESTOR:	 	 	 	H&M Holdings, LLC	
 	 	 	 	
 	 	 	 	By:	 	/s/ William N. Wofford	
 	 	 	 	Name:	 	William N. Wofford	
 	 	 	 	Title:	 	Manager	

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

INVESTOR:	 	 	 	RMI Investments	
 	 	 	 	
 	 	 	 	By:	 	/s/ PAVEL ILIEV	
 	 	 	 	Name:	 	PAVEL ILIEV	
 	 	 	 	Title:	 	CATEGORY A MANAGER	

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

INVESTOR:	 	 	 	By:	 	/s/ Daniel H. White	
 	 	 	 	 	 	Daniel H. White	

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

INVESTOR:	 	 	 	Santen Pharmaceutical Co., Ltd.	
 	 	 	 	
 	 	 	 	By:	 	/s/ Akira Kurokawa	
 	 	 	 	Name:	 	Akira Kurokawa	
 	 	 	 	Title:	 	President and Chief Executive Officer	

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

INVESTOR:	 	 	 	AJU Life Science Overseas Expansion Platform Fund	
 	 	 	 	
 	 	 	 	By:	 	AJU IB Investment Co. Ltd., its General Partner	
 	 	 	 	
 	 	 	 	By:	 	/s/ Ji-Won Kim	
 	 	 	 	Name:	 	Ji-Won Kim	
 	 	 	 	Title:	 	CEO	

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

INVESTOR:	 	 	 	By:	 	/s/ Daniel Kiernan	
 	 	 	 	 	 	Daniel Kiernan	

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

INVESTOR:	 	 	 	By:	 	/s/ Joseph Cook, Jr.	
 	 	 	 	 	 	Joseph Cook, Jr.	

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

INVESTOR:	 	 	 	Farview Management, LP	
 	 	 	 	
 	 	 	 	By:	 	/s/ Joe C. Cook, Jr.	
 	 	 	 	Name:	 	Joe C. Cook, Jr.	
 	 	 	 	Title:	 	General Partner	

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

INVESTOR:	 	 	 	By:	 	/s/ Byron Smith	
 	 	 	 	 	 	Byron Smith	

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

INVESTOR:	 	 	 	GRA Venture Fund, LLC	
 	 	 	 	
 	 	 	 	By:	 	/s/ Diana Murphy	
 	 	 	 	Name:	 	Diana Murphy	
 	 	 	 	Title:	 	Managing Director	
 	 	 	
INVESTOR:	 	 	 	GRA Venture Fund (T.E.), LLC	
 	 	 	 	
 	 	 	 	By:	 	/s/ Diana Murphy	
 	 	 	 	Name:	 	Diana Murphy	
 	 	 	 	Title:	 	Managing Director	

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

INVESTOR:	 	 	 	KFBSF Private Equity Fund III, L.P.	
 	 	 	 	
 	 	 	 	By:	 	KFBSF, Inc., its General Partner	
 	 	 	 	
 	 	 	 	By:	 	/s/ David W. Stevens	
 	 	 	 	Name:	 	David W. Stevens	
 	 	 	 	Title:	 	Treasurer	

EXHIBIT A
SCHEDULE OF INVESTORS

Investor	  	Address	
AJU Life Science Overseas Expansion Platform Fund	  	c/o AJU IB Investment Co. Ltd.
201 Teheran-ro, 5th floor
Gangnam-gu
Seoul, Korea 135-978
Attention: Mr. Ji-Won Kim, CEO	
 	 	
Cormorant Global Healthcare Master Fund, LP	  	200 Clarendon Street, 52nd Floor
Boston, MA 02116	
 	 	
Rock Springs Capital Master Fund LP	  	650 S. Exeter Street, Suite 1070
Baltimore, MD 21202	
 	 	
Titan Perc LTD	  	750 Washington Blvd, 10th Floor
Stamford, CT 06901	
 	 	
Perceptive Life Sciences Master Fund LTD	  	499 Park Ave
New York, NY 10022	
 	 	
Bansal, Amar	  	1187 CleAnder Court
Naperville, IL 60540	
 	 	
Biren M. Patel Revocable Trust	  	16 Baker Ln.
Naperville, IL 60565	
 	 	
Cagle, Jerry	  	6309 Greenway Rd.
Fort Worth, TX 76116	
 	 	
Cook, Jr., Joseph	  	3835 Cleghorn Ave.
Suite 300
Nashville, TN 37215
Attn: Joseph Cook, Jr.	
 	 	
Deignan, Charlie	  	1860 Broadwell Oaks Drive
Alpharetta, GA 30004	
 	 	
Farview Management, LP	  	3835 Cleghorn Ave.
Suite 300
Nashville, TN 37215
Attn: Joseph Cook, Jr.	
 	 	
Georgia Research Alliance, Inc.	  	191 Peachtree Street, NE
Suite 849
Atlanta, GA 30303
Attention: Ashley Cornelison and Diana Murphy	
 	 	
GRA Venture Fund (T.E.), LLC	  	c/o Georgia Research Alliance, Inc.
191 Peachtree Street, NE
Suite 849
Atlanta, GA 30303
Attention: Ashley Cornelison and Diana Murphy	

 	 	 	
GRA Venture Fund, LLC	  	c/o Georgia Research Alliance, Inc.
191 Peachtree Street, NE
Suite 849
Atlanta, GA 30303
Attention: Ashley Cornelison and Diana Murphy	
 	 	
H&M Holdings, LLC	  	3110 Edwards Mill Road, Suite 300
Raleigh, NC 27612
Attn: William N. Wofford	
 	 	
Hariprasad, Jaya	  	4626 South Woodlawn Avenue
Chicago, IL 60653	
 	 	
Hatteras NC Fund	  	280 S. Mangum St., Suite 350
Durham, NC 27701
Attn: Clay Thorp	
 	 	
Hatteras Venture Affiliates III, LP	  	280 S. Mangum St., Suite 350
Durham, NC 27701
Attn: Clay Thorp	
 	 	
Hatteras Venture Partners III, LP	  	280 S. Mangum St., Suite 350
Durham, NC 27701
Attn: Clay Thorp	
 	 	
Hatteras Venture Partners IV SBIC, LP	  	280 S. Mangum St., Suite 350
Durham, NC 27701
Attn: Clay Thorp	
 	 	
Jain, Sidney	  	3386 Harvest Ridge Road
Geneva, IL 60134	
 	 	
Johnson, Wyatt Thomas	  	3290 Northside Parkway, Suite 375
Atlanta, GA 30327	
 	 	
KFBSF Private Equity Fund II, LP	  	University of North Carolina
Center for Entrepreneurial Studies
Kenan-Flagler Business School
CB# 3440 Kenan Center
Chapel Hill, NC 27599-3440
Attn: Tamala M. Grissett	
 	 	
KFBSF Private Equity Fund III, L.P.	  	Kenan-Flagler Business School
Attention: Mr. David W. Stevens
McColl Building, Bowles Drive
Chapel Hill, NC 27599-3490	
 	 	
Kiernan, Daniel F.	  	100 Banks Ave #1311
Rockville Centre, NY 11570	
 	 	
MGC Venture Partners 2013, L.P.	  	3835 Cleghorn Ave.
Suite 300
Nashville, TN 37215
Attn: Joseph Cook, Jr.	
 	 	
MMIC Investment Holdings, Inc.	  	c/o Medical Mutual Insurance Company of North Carolina
700 Spring Forest Road Suite 400
Raleigh, North Carolina 27609
Attn: Jason Sandner, CFO	

 	 	 	
Rao, Sanjay	  	16 Kimberley Circle
Oak Brook, IL. 60523	
 	 	
RMI Investments S.a.r.l.	  	7, Rue Robert Stümper
L-2557 Luxembourg
Attn: Vladimir Gurdus	
 	 	
Rogers, Jr., Joe W.	  	3290 Northside Parkway, Suite 375
Atlanta, GA 30327	
 	 	
Santen Pharmaceutical Co., Ltd.	  	4-20, Ofukacho
Kita-ku3Osaka 530-8552, Japan
Attn: ¬General Manager, Finance & Accounting Group
Facsimile: 81-6-6321-7332
 
With a copy to:
 
Head of Global Business Development
Facsimile: 81-6-6359-3832
 
With a second copy to:
 
Santen, Inc.
2100 Powell Street, Suite 1600
Emeryville, California 94608
Attn: Yusuf Ali	
 	 	
Smith, Byron	  	3835 Cleghorn Ave.
Suite 300
Nashville, TN 37215
Attn: Byron Smith	
 	 	
Starr Moore 2007 Revocable Trust	  	3290 Northside Parkway, Suite 375
Atlanta, GA 30327	
 	 	
Sunil Raichand Revocable Trust Dated May 7, 2014 Sunil Raichand Trustee	  	3012 Lincoln Road
Oak Brook IL 60523	
 	 	
Thakur, Tripti Prasad	  	1728 Waller Street
San Francisco, CA 94117	
 	 	
The JWR Jr Family Trust	  	3290 Northside Parkway, Suite 375
Atlanta, GA 30327	
 	 	
White, Daniel H.	  	212 Rivergate Dr.
Sawanee, GA 30024	
 	 	
White, Daniel H. (IRA)	  	Millennium Trust Company
c/o Daniel White
2001 Spring Road, Suite 700
Oak Brook, IL 60523	

Exhibit 4.3
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION. THIS WARRANT AND SUCH UNDERLYING SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, RENOUNCED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY FOREIGN JURISDICTION, OR THE AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.
CLEARSIDE BIOMEDICAL, INC.
COMMON STOCK PURCHASE WARRANT
This Common Stock Purchase Warrant (the “Warrant”) is issued as of the      day of              2014, by Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), to                      (the “ Holder ”).
1. Issuance of Warrant; Term; Price.
1.1. Issuance. Concurrently herewith, the Holder is making a loan to the Company in the amount of $             (the “ Loan ”) pursuant to the terms of that certain Note Purchase Agreement dated as of April 28, 2014, between the Company and the Holder (the “ Purchase Agreement ”). The Loan is evidenced by an Unsecured Convertible Promissory Note dated as of             , 2014 (together with any and all extensions, replacements and renewals thereof, the “ Note ”). In consideration of the funding of the Loan, the receipt and sufficiency of which are hereby acknowledged, the Company hereby grants to Holder the right to purchase                  shares (the “ Shares ”) of the Company’s Common Stock, par value $0.001 per share (the “ Warrant Stock ”). This Warrant is one of a series of Common Stock Purchase Warrants (the “ Bridge Warrants ”) issued by the Company pursuant to the Purchase Agreement.
1.2 Term. This Warrant shall be exercisable in whole or in part from the date hereof until the earlier of (1)             , 2024 and (2) the occurrence of a closing of an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock of the Company to the public that results in the conversion of all of the Company’s Preferred Stock into shares of the Company’s Common Stock (an “IPO”) pursuant to the terms of the Company’s Certificate of Incorporation, as amended.
1.3 Exercise Price. Subject to adjustment as hereinafter provided, the exercise price (the “Warrant Price ”) per share for which all or any of the Shares may be purchased pursuant to the terms of this Warrant shall be equal to $0.01 per share

2. Adjustment of Warrant Price, Number and Kind of Shares. The Warrant Price and the number and kind of Shares issuable upon the exercise of this Warrant shall be subject to adjustment from time to time as follows.
2.1. Dividends in Stock Adjustment. In case at any time or from time to time on or after the date on which this Warrant is exercisable for Warrant Stock and while this Warrant is outstanding and unexpired, the holders of the Warrant Stock of the Company (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional securities or other property (other than cash) of the Company by way of dividend or distribution, then and in each case, the holder of this Warrant shall, upon the exercise hereof, be entitled to receive, in addition to the number of shares of Warrant Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of such other or additional securities or other property (other than cash) of the Company which such holder would have been entitled to receive if it had exercised this Warrant on the date hereof and thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional securities or other property receivable by it as aforesaid during such period, giving effect to all adjustments called for during such period by this Section 2.
2.2. Reclassification or Reorganization Adjustment. In case of any changes in the class or kind of securities issuable upon exercise of this Warrant or any reclassification or change of the outstanding securities of the Company or of any merger, consolidation or reorganization of the Company (or any other corporation the stock or securities of which are at the time receivable upon the exercise of this Warrant) on or after the date hereof, then the holder of this Warrant, upon the exercise hereof at any time after the consummation of such reclassification, change, merger, consolidation or reorganization, shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the exercise hereof prior to such consummation, the stock or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised this Warrant immediately prior thereto, and the Warrant Price therefore shall be appropriately adjusted, all subject to further adjustment as provided in this Section 2.
2.3. Stock Splits and Reverse Stock Splits. If at any time on or after the date hereof the Company shall split, subdivide or otherwise change its outstanding shares of any securities receivable upon exercise of this Warrant into a greater number of shares, the Warrant Price in effect immediately prior to such subdivision shall thereby be proportionately reduced and the number of shares receivable upon exercise of this Warrant shall thereby be proportionately increased; and, conversely, if at any time on or after the date hereof the outstanding number of shares of any securities receivable upon exercise of this Warrant shall be combined into a smaller number of shares, the Warrant Price in effect immediately prior to such combination shall thereby be proportionately increased and the number of shares receivable upon exercise of this Warrant shall thereby be proportionately decreased, all subject to further adjustment as provided in this Section 2.
 
2

2.4 Other Impairment. The Company will not, by amendment of its Certificate of Incorporation or Bylaws or through any 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 of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and conditions and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder against impairment.
3. No Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with any subscription hereunder. In lieu of any fractional shares that would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the fair market value of one share of Warrant Stock on the date of exercise, as determined in good faith by the Company’s Board of Directors.
4. No Stockholder Rights. This Warrant as such shall not entitle its holder to any of the rights of a stockholder of the Company until the holder has exercised this Warrant in accordance with Section 6 or Section 7 hereof.
5. Reservation of Stock. The Company covenants that during the period this Warrant is exercisable, the Company will reserve from its authorized and unissued Warrant Stock a sufficient number of shares to provide for the issuance of Warrant Stock upon the exercise of this Warrant. The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Warrant Stock upon the exercise of this Warrant.
6. Exercise of Warrant. This Warrant may be exercised by Holder by the surrender of this Warrant at the principal office of the Company, accompanied by payment in full of the purchase price of the shares purchased thereby, as described above. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person or entity entitled to receive the shares or other securities issuable upon such exercise shall be treated for all purposes as the holder of such shares of record as of the close of business on such date. As promptly as practicable, the Company shall issue and deliver to the person or entity entitled to receive the same a certificate or certificates for the number of full shares of Warrant Stock issuable upon such exercise, together with cash in lieu of any fraction of a share as provided above. The shares of Warrant Stock issuable upon exercise hereof shall, upon their issuance, be fully paid and nonassessable. If this Warrant shall be exercised in part only, the Company shall, at the time of delivery of the certificate representing the Shares or other securities in respect of which this Warrant has been exercised, deliver to the Holder a new Warrant evidencing the right to purchase the remaining Shares or other securities purchasable under this Warrant, which new warrant shall, in all other respects, be identical to this Warrant.
7. Net Issue Election.
7.1. Right to Convert. In addition to and without limiting the rights of the Holder under the terms of this Warrant, the Holder shall have the right to convert this Warrant or
 
3

any portion hereof (the “Conversion Right”) into shares of Warrant Stock as provided in this Section 7. Upon exercise of the Conversion Right with respect to a particular number of shares subject to this Warrant (the “ Converted Warrant Shares ”), the Company shall deliver to the Holder (without payment by the Holder of any cash or other consideration) that number of shares of Warrant Stock equal to the quotient obtained by dividing (x) the value of this Warrant (or the specified portion hereof) on the Conversion Date (as defined in subsection 7.2 hereof), which value shall be determined by subtracting (A) the aggregate Warrant Price of the Converted Warrant Shares immediately prior to the exercise of the Conversion Right from (B) the aggregate fair market value of the Converted Warrant Shares issuable upon exercise of this Warrant (or the specified portion hereof) on the Conversion Date (as herein defined) by (y) the fair market value of one share of Warrant Stock on the Conversion Date (as herein defined). No fractional shares shall be issuable upon exercise of the Conversion Right, and if the number of shares to be issued determined in accordance with the foregoing formula is other than a whole number, the Company shall pay to the Holder an amount in cash in lieu of such fractional share as set forth in Section 3. If not earlier exercised pursuant to Section 6 hereof, this Warrant automatically shall be deemed exercised pursuant to this Section 7 upon closing of a Liquidating Event (as defined in the Company’s Certificate of Incorporation, as amended) or upon an IPO.
7.2. Method of Exercise. The Conversion Right may be exercised by the Holder by the surrender of this Warrant at the principal office of the Company together with a written statement specifying that the Holder thereby intends to exercise the Conversion Right and indicating the number of shares subject to this Warrant that are being surrendered (referred to in subsection 7.1 hereof as the Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon such surrender of this Warrant (the “ Conversion Date ”). Certificates for the shares of Warrant Stock issuable upon exercise of the Conversion Right (or any other securities deliverable in lieu thereof under Section 2) shall be issued as of the Conversion Date and shall be delivered to the Holder immediately following the Conversion Date, or, if requested at the time of surrender of this Warrant, held for pick-up by the Holder at the Company’s principal office.
7.3. Determination of Fair Market Value. For purposes of this Section 7, fair market value (the “Market Price ”) of a share of Warrant Stock as of a particular date (the “ Determination Date ”) shall mean the average of the closing prices of such security’s sales on the principal securities exchanges on which such security may at the time be listed, or, if there has been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such security is not so listed, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization, in each such case averaged over a period of five (5) days consisting of the day prior to the day as of which “Market Price” is being determined and the five (5) consecutive business days prior to such day. If at any time such security is not listed on any securities exchange or quoted in the over-the-counter market, the “Market Price” shall be the fair market value thereof as determined in good faith by the Company’s Board of Directors (including at least one director designated by the holders of Series A-1 Preferred Stock, if any); provided, that in the event that the Requisite Majority (as defined in the Note) disagree with the Board of Directors’ determination of such fair market value, such value shall be determined by an independent third party appraiser of national standing agreed to by the Company and the
 
4

Requisite Majority. If they fail to agree on such appraiser, then each of the Company and such Requisite Majority shall promptly engage a nationally or internationally recognized investment banking firm, certified public accounting firm or business appraisal firm not providing services to the Company or such holders of Bridge Notes (as defined in the Note) at the time of the engagement to determine such fair market value within a 30-day period. If the higher appraisal is no more than 10% greater than the lower appraisal, the average of the appraisals will be deemed to be the fair market value of such securities. If the higher appraisal is more than 10% greater than the lower appraisal, the Company and such holders agree to negotiate in good faith for an additional 15 days to determine such fair market value. If at the end of such 15-day period, the parties are unable to reach agreement with respect to a mutually acceptable fair market value, then the two appraisers shall promptly thereafter select a third appraiser not providing services to the Company or such holders at the time of the engagement to complete an appraisal within 30 days. The average of the two closest appraisals shall be the fair market value and shall be binding on the Company and all holders of Bridge Notes. The cost of any such appraisers would be shared equally among the Company, on the one hand, and such holders of Bridge Notes, on the other hand. Notwithstanding the foregoing, if this Warrant is automatically exercised pursuant to Section 7 upon an IPO, the Market Price shall mean the price to the public in such IPO.
8. Certificate of Adjustment. Whenever the Warrant Price or number or type of securities issuable upon exercise of this Warrant is adjusted, as herein provided, the Company shall promptly deliver to the record holder of this Warrant a certificate of an officer of the Company setting forth the nature of such adjustment and a brief statement of the facts requiring such adjustment.
9. Notice of Proposed Transfers. This Warrant is transferable by the Holder hereof subject to compliance with this Section 9. Prior to any proposed transfer of this Warrant or the shares of Warrant Stock received on the exercise of this Warrant (the “ Securities ”), unless there is in effect a registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), covering the proposed transfer, the Holder thereof shall give written notice to the Company of such Holder’s intention to effect such transfer. Each such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail, and shall, if the Company so requests, be accompanied (except in transactions in compliance with Rule 144) by either (i) an unqualified written opinion of legal counsel who shall be reasonably satisfactory to the Company addressed to the Company and reasonably satisfactory in form and substance to the Company’s counsel, to the effect that the proposed transfer of the Securities may be effected without registration under the Securities Act and any applicable state securities laws, or (ii) a “no action” letter from the Securities and Exchange Commission (the “ Commission ”) to the effect that the transfer of such Securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the Holder of the Securities shall be entitled to transfer the Securities in accordance with the terms of the notice delivered by the Holder to the Company; provided ,  however , no such registration statement or opinion of counsel shall be necessary for a transfer by a Holder to any affiliate of such Holder, or a transfer by a Holder which is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer by gift, will or intestate succession of any partner to his spouse or lineal
 
5

descendants or ancestors, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if such transferee were the original Holder hereunder. Each certificate evidencing the Securities transferred as above provided shall bear the appropriate restrictive legend set forth above, except that such certificate shall not bear such restrictive legend if in the opinion of counsel for the Company such legend is not required in order to establish compliance with any provisions of the Securities Act.
10. Replacement of Warrants. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of the Warrant, and in the case of any such loss, theft or destruction of the Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrant if mutilated, the Company will execute and deliver, in lieu thereof, a new Warrant of like tenor.
11. Miscellaneous. This Warrant shall be governed by the laws of the State of Delaware, without regard to the conflict of laws provisions thereof. The headings in this Warrant are for purposes of convenience of reference only, and shall not be deemed to constitute a part hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provisions. All notices and other communications from the Company to the holder of this Warrant shall be given in writing and shall be deemed effectively given as provided in the Purchase Agreement.
12. Amendment; Waiver. Any term of this Warrant may be amended, and any provision hereof waived, with the written consent of the Company and the holders of Bridge Warrants representing the right to purchase not less than a majority of the shares of Warrant Stock that may then be purchased under all of the Bridge Warrants, even without the consent of the Holder hereof; provided, however, that neither the number of Shares issuable pursuant to Section 1.1, the exercise period in Section 1.2, nor the Warrant Price in Section 1.3 may be amended without the consent of the Holder, other than as expressly provided for herein. Any amendment effected in accordance with this Section shall be binding upon each holder of any Bridge Warrant (including the Holder), each future holder of all such Bridge Warrant, and the Company.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
 
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IN WITNESS WHEREOF, the undersigned officer of the Company has set his hand as of the date first above written.

CLEARSIDE BIOMEDICAL, INC.	
 	 	
By:	 	 	
Name:	 	 	
Title:	 	 	
SIGNATURE PAGE TO COMMON STOCK PURCHASE WARRANT

Exhibit 4.4
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

STOCK WARRANT

Issue Date: February 12, 2013	  	Expiration Date: February 11, 2023	
THIS CERTIFIES that, for value received, the North Carolina Biotechnology Center (the “Center”) is entitled to subscribe for and purchase from Clearside Biomedical, Inc. (the “Company”), 16,550 shares of the Company’s Series A-1 Preferred Stock (the “Shares”), subject to adjustment as set forth herein, at a price per Share of $1.8132, subject to adjustment as set forth herein (the “Exercise Price”). Should Loan #2013-SGL-2702 be paid off in full on or before February 11, 2014, the number of Shares would be reduced by 50% to 8,275
Section 1.Method of Exercise and Expiration.
1.1 Term and Expiration. Subject to the terms and conditions set forth in this Warrant, this Warrant may be exercised in whole or in part at any time and from time to time from the date hereof through the Expiration Date (the “Exercise Period”). If this Warrant is exercised in part from time to time during the Exercise Period, it shall be exercised in minimum quantities of Shares equal to 100 shares (or such lesser number of shares which may then constitute the maximum number purchasable; such number being subject to adjustment as set forth herein).
1.2 Deliverables by the Center Upon Exercise. This Warrant shall be exercised by delivery of the following to the Company at the address of the Company in the Center’s records, Attention: President / CEO (or at such other agency or office of the Company as it may designate by notice in writing to the Center at the address of the Center appearing in the books of the Company):
(a) an executed Notice of Exercise in the form attached hereto as Exhibit A;
(b) payment of the Exercise Price for the aggregate amount of Shares being purchased (i) in cash or by cashier’s check, (ii) by cancellation by the Center of indebtedness or other obligations of the Company to the Center, (iii) by a combination of (i) and (ii), or (iv) pursuant to Section 1.4 below; and
(c) this Warrant.
1.3 Deliverables by the Company Upon Exercise. In the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the Shares so purchased, registered in the name of the person or entity entitled to receive the same, shall be delivered to the Center within thirty (30) days (or such later time agreed to in writing by the Center) after the rights represented by this Warrant shall have been so exercised; provided, that if the Company

does not customarily issue share certificates, an appropriate and binding entry in the stock ledger of the Company may be made in lieu of the certificates called for by this Section 1.3 and the Company shall deliver to the Center a copy of such stock ledger certified by an appropriate officer of the Company. Unless this Warrant has expired or been fully exercised, a new warrant representing the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Center within such time, containing the same terms and conditions specified herein. The person or entity in whose name any certificate or certificates for Shares are to be issued upon exercise of this Warrant shall for all purposes be deemed to have become the holder of record of such Shares on the date on which this Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person or entity shall be deemed to have become the holder of record of such Shares at the close of business on the next succeeding date on which the stock transfer books are open.
1.4 Net Issue Exercise. Notwithstanding any provisions herein to the contrary, if the fair market value of one (1) Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Center may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being exercised) (such election being referred to herein as a “Net Issue Exercise Election”) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise and notice of such election in which event the Company shall issue to Center a number of Shares computed using the following formula:

 	  	 	  	X = Y(A-B)
            A
 	
Where	  	X =	  	the number of Shares to be issued to the Center.	
 	 	 	
 	  	Y =	  	the number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised.	
 	 	 	
 	  	A =	  	the “fair market value” (as defined below) of one (1) Share.	
 	 	 	
 	  	B =	  	the Exercise Price per Share (as adjusted to the date of such calculation).	
For purposes of this Section 1.4, the fair market value per Share shall be the product of (i) the average of the closing bid and asked prices of the Shares quoted in any applicable over the counter market summary or the last reported sale price of the Shares or the average closing price quoted on any exchange on which the Shares are listed, whichever is applicable, for thirty (30) trading days prior to the date of determination of fair market value and (ii) the number of Shares into which each Share is convertible at the time of such exercise. If the Shares are not traded over the counter or on an exchange, the fair market value shall be the price per Share which the Company could obtain from a willing buyer for Shares sold by the Company from authorized but unissued shares, as such price shall be agreed in good faith by the Company and the Center. If

the Company and the Center are unable to agree on the “fair market value” of the Shares within ten (10) days of receipt of the Notice of Exercise required under Section 1.2(a) above, then the fair market value shall be determined by an independent valuation expert selected by the Company and reasonably acceptable to the Center. Notwithstanding the foregoing, in the event the Warrant is exercised in connection with the Company’s initial public offering of Shares, the fair market value per Share shall be the product of (i) the per Share offering price to the public of the Company’s initial public offering, and (ii) the number of Shares into which each Share is convertible at the time of exercise.
In the event that the Center makes a Net Issue Exercise Election pursuant to this Section 1.4, the provisions of Section 1.2 regarding certain delivery obligations of the Center, and Section 1.3 regarding certain delivery obligations of the Company, shall be fully applicable upon such election.
Section 2.Representations and Warranties of Company.
2.1 Organization. The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated and is duly qualified and is in good standing as a foreign Company in those jurisdictions where the conduct of its business or ownership of its property requires qualification. The Company has the corporate power to carry out the business in which it is engaged.
2.2 Valid Obligation. The execution and delivery of this Warrant and any related documents have been duly authorized by all necessary action of the Board of Directors and shareholders of the Company under applicable law, and are not and will not be in contravention of any provision of law, nor in contravention of any certificate of authority, bylaw or other applicable corporate documents of the Company, nor result in the breach of any agreement, indenture, or undertaking to which the Company is a party or by which it is bound.
2.3 Shares. All Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, with no personal liability attaching to the ownership thereof, and free from all taxes, liens and charges with respect to the issuance thereof.
Section 3.Covenants of Company.
3.1 Covenants as to Shares. The Company covenants and agrees that the Company shall authorize and reserve a sufficient number of Shares to provide for all permitted exercises of the rights represented by this Warrant. If at any time the number of authorized but unissued Shares shall not be sufficient to effect any permitted exercise of this Warrant, the Company shall take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Shares to such number of shares as shall be sufficient for such purposes. The Company shall give the Center at least thirty (30) days prior written notice of the filing of a registration statement under the Securities Act of 1933, as amended (the “Act”), covering the offering and sale of the Company’s securities.
3.2 No Impairment. Except and to the extent waived or consented to by the Center in writing, the Company will not, by amendment of its charter or through any reorganization,

transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions in this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect from impairment the rights of the Center to purchase the Shares hereunder.
3.3 Notice of Record Date. In the event the Company establishes a record date in order to determine the holders of any class of securities of the Company as of such record date: (i) for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in the previous two (2) quarters) or any other distribution as regards any securities of the Company (whether in cash, in securities, or pursuant to any spin-off, split-off or distribution of the Company’s assets); (ii) for the purpose of entitling them to subscribe for or purchase any shares of any class of securities or to receive any other rights; (iii) for any classification, reclassification, or other reorganization of the securities which the Company is now or hereafter authorized to issue, the consolidation or merger of the Company with or into another Company, or the conveyance of all or substantially all of the assets of the Company; or (iv) for a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, the Company shall provide written notice to the Center, at least thirty (30) days prior to the proposed record date, specifying the record date.
3.4 Adjustment Due to Change in Number of Outstanding Shares. In any of the following events (each, a “Triggering Event”), appropriate adjustment shall be made in the number of Shares which may be purchased by the Center upon the exercise of this Warrant, or in the Exercise Price per Share to be paid, so as to maintain the proportional interest of the Center in the ownership, on a fully diluted basis, of the Company, as follows:
(a) If the Company shall at any time subdivide any class of its equity securities by split-up or otherwise, or combine its outstanding equity securities, or issue additional shares of its equity securities in payment of a dividend in respect of its equity securities, the number of Shares underlying this Warrant shall be proportionately increased and the Exercise Price proportionately decreased in the case of a subdivision or stock dividend, and the number of Shares underlying this Warrant shall be proportionately decreased and the Exercise Price proportionally increased in the case of a combination.
(b) In case of any reclassification or change of the outstanding equity securities of the Company (other than as a result of a subdivision, combination or dividend), or in case of any consolidation of the Company with, or merger of the Company into, another company or other business organization (other than a consolidation or merger in which the Company is the continuing Company and which does not result in any reclassification or change of the outstanding equity securities of the Company or in the issuance of any other securities of the Company), or in the case of any sale or conveyance to another Company or other business organization of the property of the Company as an entirety or substantially as an entirety, then the Center or other holder of this Warrant shall have the right to acquire the kind and amount of shares of capital stock and other securities and property receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the number of Shares of the Company which might have been acquired by the Center upon exercise of this Warrant immediately prior to such reclassification, change, consolidation, merger, sale or conveyance.

(c) If the Company shall, after the date hereof, at any time or from time to time issue, or is deemed to have been issued (as defined below), any Shares for a purchase price per Share less than the then-current Exercise Price, then the Exercise Price shall immediately be reduced to the price determined using the following formula, on a fully diluted basis:

 	 	 	  	X = ((AxB) + C)	
 	 	 	  	                Y
 	
Where	 	X =	  	the reduced Exercise Price.	
 	 	 	
 	 	A =	  	the number of Shares outstanding or deemed outstanding immediately prior to such issuance.	
 	 	 	
 	 	B =	  	the Exercise Price in effect immediately prior to such issuance.	
 	 	 	
 	 	C =	  	the aggregate fair value of the consideration, if any, received or receivable by the Company upon each and every issuance or deemed issuance of additional Shares (including without limitation consideration receivable upon the issuance of securities underlying any other securities).	
 	 	 	
 	 	Y =	  	the aggregate number of Shares outstanding or deemed outstanding immediately after such issuance.	
Upon termination of rights to purchase or acquire Shares, by lapse or otherwise, the Shares theretofore issuable, but not issued, shall cease to be included in the formula set forth above, and the Exercise Price shall be readjusted to reflect such termination. Notwithstanding the foregoing, there shall be no adjustment to the Exercise Price or the number of Shares obtainable upon exercise of this Warrant with respect to a Permitted Issuance. A “Permitted Issuance” means (i) the granting of options to purchase Shares, or other stock-based benefits, to employees, directors or consultants of the Company or the exercise thereof, pursuant to any reservation under any employee benefit plan to the extent and as in effect on the date of this Warrant, or approved thereafter by the Board of Directors of the Company, or (ii) the issuance of Shares pursuant to the exercise of options, convertible equity securities, or other rights to acquire Shares that are outstanding on the date of this Warrant.
For purposes of this Warrant, additional Shares shall be “deemed to have been issued”, “deemed issued”, or “deemed outstanding”, if the Company shall at any time issue any of its Shares or other securities, or other rights, warrants, or options to subscribe for or purchase Shares or other securities, which, in any such case, ranks at an equal priority with the Shares, or which includes an option to acquire or a right to convert to Shares or other securities ranking at an equal priority with the Shares at a price per share after such acquisition or conversion less than the Exercise Price.

Upon any Triggering Event, adequate provision shall be made whereby the Center or other holder of this Warrant shall have the right to receive and acquire (upon exercise of this Warrant) such Shares, securities, cash, or other property as would have been issuable or payable (as part of the Triggering Event) with respect to or in exchange for such number of outstanding Shares as would have been received had this Warrant been exercised immediately prior to such Triggering Event (as set forth more specifically above), and the number of shares reserved by the Company for purposes of this Warrant shall be adjusted by the same proportion. In the event of a proportional adjustment under subparagraphs (a), (b) or (c) of this Section 3.4, no adjustment shall be made in the aggregate purchase price of the Shares then covered by this Warrant, and the per-Share Exercise Price shall be adjusted accordingly. All such adjustments shall be made by the Company, whose determination upon the same shall be subject to review and approval by the Center. No fractional Shares shall be issued; and any fractional Share resulting from the computations pursuant to this Section 3.4 shall be rounded up to the next whole share. The Company shall provide thirty (30) days’ prior written notice to the Center of a Triggering Event (to the extent legally permissible, but in no case later than five (5) days after the occurrence of a Triggering Event), its effective date, and the proposed adjustment for such Triggering Event.
Section 4.Shareholder Rights. Until the valid exercise of this Warrant, the Center shall not be entitled to any rights of a stockholder with regard to the Shares, but immediately upon the exercise of this Warrant and upon payment of the Exercise Price as provided herein, the Center shall be deemed to be a record holder of the Company’s Shares. Notwithstanding the foregoing, and provided the Center agrees in a manner reasonably satisfactory to the Company to maintain in confidence confidential and proprietary information of the Company, the Company shall provide financial and operating information regarding the Company to the Center annually. In addition, the Center may request financial and operating information regarding the Company with thirty (30) days after its receipt of the each of the notices the Company is required to provide pursuant to Sections 3.3 and 3.4 above.
Section 5.Transfer of Warrant.
5.1 Transfer. Subject to compliance with applicable state and federal securities laws, and the terms of this Warrant, this Warrant shall be transferable, in whole or in part, by the Center or other holder of record upon surrender of this Warrant properly endorsed.
5.2 Transferee Obligations. Any transferee shall represent and warrant to the Company that it will hold this Warrant (or any portion thereof) subject to the provisions and upon the conditions specified herein.
5.3 New Warrants. On any transfer referenced in this Section 5, the Company shall issue (as applicable) a new Warrant or Warrants to the transferee (who shall then become a holder of record for all purposes under the terms of this Warrant) and to the Center (in the event the Warrant is only partially transferred) containing the same terms and conditions specified herein. The surrendered Warrant shall thereafter be canceled. Each such transferee shall succeed to all of the rights and assume all obligations of the Center under this Warrant.
Section 6.Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated, or destroyed, the Company shall, on delivery of an indemnity agreement reasonably satisfactory to the Company (and, in the case of a mutilated Warrant, the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.

Section 7.Notices, etc.. All notices and other communications required or permitted hereunder shall be in writing and shall be (i) personally delivered, (ii) sent by facsimile (with a copy sent the same day by certified mail, postage prepaid), or (iii) sent Federal Express or other express service addressed: (a) if to the Center, to the Center’s address appearing in the records of the Company or such other address as the Center shall have furnished to the Company in writing, (b) if to any other holder of the Warrant, to such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of the Warrant who has so furnished an address to the Company, or (c) if to the Company, to the Company’s address appearing in the records of the Center, or at such other address as the Company shall have furnished to the Center and each such other holder in writing. Notice shall be deemed effective on the date dispatched if by personal delivery, on the date transmitted by facsimile (if confirmed by mail pursuant to this Section 7) or two (2) days after mailing if by Federal Express or express service.
Section 8.General Provisions. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning hereof. The provisions of this Warrant are deemed by the parties to be severable, and the unenforceability of any one or more provisions shall not invalidate or make unenforceable the other provisions. The rights, duties, and obligations of the parties shall inure to the benefit of and be binding on their respective successors and assigns. Neither this Warrant nor any term hereof may be changed, waived, discharged, or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge, or termination is sought.
Section 9.Choice of Law. This Warrant shall be construed and governed by the laws of the State of North Carolina, excepting only its conflict of law principles.
Section 10.Acceptance. Receipt of this Warrant by the Center shall constitute acceptance of and agreement to the foregoing terms and conditions by the parties hereto.
Section 11.Entire Agreement. This Warrant reflects the complete understanding of the parties and constitutes their entire agreement regarding the subject matter hereof, all prior negotiations, representations, agreements and understanding having been merged herein.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officers.

CLEARSIDE BIOMEDICAL, INC.	
 	 	
By:	 	/s/ Daniel White [SEAL]	

 	 	
Printed Name:	 	Daniel White	

 	 	
Title:	 	President and CEO	

Exhibit A
NOTICE OF EXERCISE OF WARRANT
[To be signed only upon exercise of Warrant]
The undersigned, the holder of the within Warrant, hereby (i) irrevocably elects to exercise the right of purchase represented by such Warrant for, and to purchase thereunder,              Shares (as that term is defined in the within Warrant) pursuant to the terms of the Warrant, and (ii) hereby elects to make payment in full for the number of Shares so purchased by (a) payment of $             cash or cashier’s check or, hereby serves notice that $             has been credited as payment in principal of the Company’s loan from the Center in full payment of the aggregate purchase price for such Shares, or (b) in lieu of the payment of cash, the exchange of the Warrant for a lesser number of Shares, as provided in the within Warrant.
The undersigned requests that the certificates for such Shares be issued in the name of, and be delivered to,                     , whose address is                                         .
Dated:                     .

[HOLDER]	
 	 	
By:	 	 	

 	 	
Printed Name:	 	 	

 	 	
Title:	 	 	

Exhibit 4.5
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 AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
WARRANT TO PURCHASE STOCK

Company: CLEARSIDE BIOMEDICAL, INC.	
Number of Shares: 57,143	
Type/Series of Stock: Series B Preferred	
Warrant Price: $3.50 per share	
Issue Date: April 15, 2015	
Expiration Date: April 15, 2025    See also Section 5.1(b).	
Credit Facility:	  	This Warrant to Purchase Stock (“Warrant”) is issued in connection with that certain Loan and Security Agreement of even date herewith between Silicon Valley Bank and the Company (the “ Loan Agreement ”).	
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “ Holder ”) is entitled to purchase the number of fully paid and non-assessable shares (the “ Shares ”) of the above-stated Type/Series of Stock (the “ Class ”) of the above-named company (the “ Company ”) at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. Reference is made to Section 5.4 of this Warrant whereby Silicon Valley Bank shall transfer this Warrant to its parent company, SVB Financial Group.
SECTION 1. EXERCISE.
1.1 Method of Exercise. Holder may at any time and from time to time through the Expiration Date exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (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.
 
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1.2 Cashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised as set forth in the following sentence. Thereupon, the Company shall issue to Holder such number of fully paid and non-assessable Shares as are computed using the following formula:
X = Y(A-B)/A
where:

 	 	X	 	=	  	the number of Shares to be issued to Holder;	
 	 	 	 	
 	 	Y	 	=	  	the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);	
 	 	 	 	
 	 	A	 	=	  	the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and	
 	 	 	 	
 	 	B	 	=	  	the Warrant Price.	
1.3 Fair Market Value. If the Company’s common stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “ Trading Market ”) and the Class is common stock, the fair market value of a Share shall be the closing price or last sale price of a share of common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is then traded in a Trading Market and the Class is a series of the Company’s convertible preferred stock, the fair market value of a Share shall be the closing price or last sale price of a share of the Company’s common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company multiplied by the number of shares of the Company’s common stock into which a Share is then convertible. If the Company’s common stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment; provided, however, if the Warrant is exercised in connection with the Company’s initial, underwritten public offering and sale of its common stock pursuant to an effective registration statement under the Act (the “ IPO ”), the fair market value of one Share shall be the per share offering price set forth in the final prospectus filed by the Company under Rule 424(b) of the Act in connection with the IPO.
1.4 Delivery of Certificate and New Warrant. Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.
1.5 Replacement of Warrant. 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, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.
 
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1.6 Treatment of Warrant Upon Acquisition of Company.
(a) Acquisition. For the purpose of this Warrant, “Acquisition” means any transaction or series of related transactions involving: (i) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization; or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power. For avoidance of doubt, “Acquisition” shall exclude any transaction in which the Company sells and issues its capital stock to venture capital investors, for capital raising purposes, in a bona fide round of preferred stock financing.
(b) Treatment of Warrant at Acquisition. In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “Cash/Public Acquisition”), and the fair market value of one Share as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date immediately prior to such Cash/Public Acquisition, and Holder has not exercised this Warrant pursuant to Section 1.1 above as to all Shares, then this Warrant shall automatically be deemed to be Cashless Exercised pursuant to Section 1.2 above as to all Shares effective immediately prior to and contingent upon the consummation of a Cash/Public Acquisition. In connection with such Cashless Exercise, Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof and the Company shall promptly notify Holder of the number of Shares (or such other securities) issued upon exercise. In the event of a Cash/Public Acquisition where the fair market value of one Share as determined in accordance with Section 1.3 above would be less than the Warrant Price in effect immediately prior to such Cash/Public Acquisition, then this Warrant will expire immediately prior to the consummation of such Cash/Public Acquisition and shall no longer be exercisable.
(c) Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.
(d) As used in this Warrant, “Marketable Securities” means securities meeting all of the following requirements, determined as of immediately prior to the closing of an Acquisition: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be
 
3

received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) Holder would be able to publicly re-sell, within six (6) months following the closing of such Acquisition, all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise this Warrant in full on or prior to the closing of such Acquisition.
SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.
2.2 Reclassification, Exchange, Combinations or Substitution. Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events.
2.3 Conversion of Preferred Stock. If the Class is a class and series of the Company’s convertible preferred stock, in the event that all outstanding shares of the Class are converted, automatically or by action of the holders thereof, into common stock pursuant to the provisions of the Company’s Certificate of Incorporation, including, without limitation, in connection with the IPO, then from and after the date on which all outstanding shares of the Class have been so converted, this Warrant shall be exercisable for such number of shares of common stock into which the Shares would have been converted had the Shares been outstanding on the date of such conversion, and the Warrant Price shall equal the Warrant Price in effect as of immediately prior to such conversion divided by the number of shares of common stock into which one Share would have been converted, all subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant.
2.4 Adjustments for Diluting Issuances. Without duplication of any adjustment otherwise provided for in this Section 2, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s Articles or Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment.
 
4

2.5 No Fractional Share. No fractional Share shall be issuable upon exercise of this 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 of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.
2.6 Notice/Certificate as to Adjustments. Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and facts upon which such adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company represents and warrants to, and agrees with, Holder as follows:
(a) The initial Warrant Price referenced on the first page of this Warrant is not greater than the fair market value of a share of the Company’s common stock as determined by a valuation of the Company’s common stock for purposes of compliance with Section 409A of the Internal Revenue Code of 1986, as amended.
(b) All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares, 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, under the Company’s Certificate of Incorporation, Bylaws, as amended from time to time, and the Second Amended and Restated Investor Rights Agreement, dated August 29, 2014, by and among the Company and the Stockholders (as defined therein), as amended from time to time (the “ Investor Rights Agreement ”), or under applicable federal and state securities laws. The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise in full of this Warrant and the conversion of the Shares into common stock or such other securities.
(c) The Company’s capitalization table attached hereto as Schedule 1 is true and complete, in all material respects, as of the Issue Date.
3.2 Notice of Certain Events. If the Company proposes at any time to:
(a) declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;
 
5

(b) offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);
(c) effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class;
(d) effect an Acquisition or to liquidate, dissolve or wind up; or
(e) effect an IPO;
then, in connection with each such event, the Company shall give Holder:
(1) at least seven (7) Business 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 outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above;
(2) in the case of the matters referred to in (c) and (d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding 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 such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice); and
(3) with respect to the IPO, at least seven (7) Business Days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith.
Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDER.
Holder represents, warrants and covenants 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 are being acquired for investment for Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.
4.2 Disclosure of Information. Holder is aware of the Company’s business affairs and financial condition and 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
 
6

to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.
4.3 Investment Experience. Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.
4.4 Accredited Investor Status. Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.
4.5 The Act. Holder understands that this Warrant and the Shares issuable upon exercise 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 Holder’s investment intent as expressed herein. Holder understands that this Warrant and the Shares issued upon any exercise 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. Holder is aware of the provisions of Rule 144 promulgated under the Act. Holder acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period, and requirements relating to the Company which are outside of Holder’s control, and which the Company is under no obligation and may not reasonably be able to satisfy.
4.6 Market Stand-off Agreement. Holder agrees that the Shares shall be subject to the Market Standoff provisions in Section 4.12 of the Investor Rights Agreement or similar agreement.
4.7 No Voting Rights; No Stockholder Rights. Holder, as a Holder of this Warrant, will not have any voting rights or otherwise be entitled to any other rights afforded to a stockholder of the Company until the exercise of this Warrant.
SECTION 5. MISCELLANEOUS.
5.1 Term and Automatic Conversion Upon Expiration.
(a) Term. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Pacific time, on the Expiration Date and shall be void thereafter.
(b) Automatic Cashless Exercise 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 Section 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 exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder.
 
7

5.2 Legends. The Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form (as well as any other legends required by the Company’s Certificate of Incorporation, Bylaws, each as amended from time to time, and the Investor Rights Agreement, as applicable):
(a) Securities Law Legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SILICON VALLEY BANK DATED APRIL 15, 2015, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
(b) Market Stand-Off Legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF AN INITIAL PUBLIC OFFERING, AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO SILICON VALLEY BANK DATED APRIL 15, 2015, PURSUANT TO WHICH THESE SHARES WERE ISSUED.
5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in 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 SVB Financial Group (Silicon Valley Bank’s parent company) or any other affiliate
 
8

of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act; provided that, Holder represents that it has complied with Rule 144 in reasonable detail, the selling broker represents that it has complied with Rule 144, and the Company is provided with a copy of Holder’s notice of proposed sale.
5.4 Transfer Procedure. After receipt by Silicon Valley Bank of the executed Warrant, Silicon Valley Bank will transfer all of this Warrant to its parent company, SVB Financial Group. By its acceptance of this Warrant, SVB Financial Group hereby makes to the Company each of the representations and warranties set forth in Section 4 hereof and agrees to be bound by all of the terms and conditions of this Warrant as if the original Holder hereof. Subject to the provisions of Section 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 any 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); and provided further, that any subsequent transferee other than SVB Financial Group shall agree in writing with the Company to be bound by all of the terms and conditions of this Warrant. Notwithstanding any contrary provision herein, at all times prior to the IPO, Holder may not, without the Company’s prior written consent, transfer this Warrant or any portion hereof, or any Shares issued upon any exercise hereof, or any shares or other securities issued upon any conversion of any Shares issued upon any exercise hereof, to any person or entity who directly competes with the Company, except in connection with an Acquisition of the Company by such a direct competitor.
5.5 Notices. All notices and other communications hereunder from the Company to Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case 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 in accordance with the provisions of this Section 5.5. 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, HC 215
Santa Clara, CA 95054
Telephone: (408) 654-7400
Facsimile: (408) 988-8317
Email address: derivatives@svb.com
 
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Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:

CLEARSIDE BIOMEDICAL, INC.	
Attn: Charles A. Deignan – Chief Financial Officer	
1220 Old Alpharetta Road, Suite 300	
Alpharetta, Georgia 30005	
Telephone:	 	 	  	 	
Facsimile:	 	 	  	 	
Email: charlie.deignan@clearsidebio.com	  	 	
5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.
5.7 Attorney’s Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.
5.8 Counterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.
5.9 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law.
5.10 Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.
5.11 Business Days. “Business Day” is any day that is not a Saturday, Sunday or a day on which Silicon Valley Bank is closed.
[Remainder of page left blank intentionally]
[Signature page follows]
 
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IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

“COMPANY”	
 	
CLEARSIDE BIOMEDICAL, INC.	
 	 	
By:	 	/s/ Daniel H White	
 	 	
Name:	 	Daniel H White	
 	 	(Print)	
Title:	 	President & CEO	
 	
“HOLDER”	
 	
SILICON VALLEY BANK	
 	 	
By:	 	 	
 	 	
Name:	 	 	
 	 	(Print)	
Title:	 	 	

IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.

“COMPANY”	
 	
CLEARSIDE BIOMEDICAL, INC.	
 	 	
By:	 	 	
 	 	
Name:	 	 	
 	 	(Print)	
Title:	 	 	
 	
“HOLDER”	
 	
SILICON VALLEY BANK	
 	 	
By:	 	/s/ Ryan Roller	
 	 	
Name:	 	Ryan Roller	
 	 	(Print)	
Title:	 	Vice President	

APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned Holder hereby exercises its right purchase                  shares of the Series B Preferred Stock of CLEARSIDE BIOMEDICAL, INC. (the “Company”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:

[    ]	  	check in the amount of $         payable to order of the Company enclosed herewith	
 	 	
[    ]	  	Wire transfer of immediately available funds to the Company’s account	
 	 	
[    ]	  	Cashless Exercise pursuant to Section 1.2 of the Warrant	
 	 	 	 	
[    ]	  	Other [Describe]	  	 	  	 	
2. Please issue a certificate or certificates representing the Shares in the name specified below:

 	 	 	  	 	
 	 	Holder’s Name	  	 	

 	 	 	
 	 	 	  	 	
 	 	(Address)	  	 	
3. By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof.

HOLDER:	

 	 	
By:	 	 	
 	 	
Name:	 	 	
 	 	
Title:	 	 	
 	 	
(Date):	 	 	
 
1

Exhibit 10.1
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 CFR §§ 200. 80(b)(4) and 230.406

LICENSE AGREEMENT
between
EMORY UNIVERSITY,
THE GEORGIA TECH RESEARCH CORPORATION
and
CLEARSIDE BIOMEDICAL, INC.

TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS	  	 	3	  	
ARTICLE 2. GRANT OF LICENSE	  	 	6	  	
ARTICLE 3. CONSIDERATION FOR LICENSE	  	 	9	  	
ARTICLE 4. REPORTS AND ACCOUNTING	  	 	12	  	
ARTICLE 5. PAYMENTS	  	 	14	  	
ARTICLE 6. DILIGENCE AND COMMERCIALIZATION	  	 	15	  	
ARTICLE 7. PATENT PROSECUTION	  	 	16	  	
ARTICLE 8. INFRINGEMENT	  	 	17	  	
ARTICLE 9. LIMITED WARRANTY AND EXCLUSION OF WARRANTIES	  	 	18	  	
ARTICLE 10. DAMAGES, INDEMNIFICATION AND INSURANCE	  	 	19	  	
ARTICLE 11. CONFIDENTIALITY	  	 	21	  	
ARTICLE 12. TERM AND TERMINATION	  	 	22	  	
ARTICLE 13. ASSIGNMENT	  	 	25	  	
ARTICLE 14. ARBITRATION	  	 	25	  	
ARTICLE 15. MISCELLANEOUS	  	 	26	  	
ARTICLE 16. NOTICES	  	 	28	  	
APPENDIX A COMPANY’S DEVELOPMENT PLAN	  	 	31	  	
APPENDIX B LICENSED PATENTS	  	 	32	  	
APPENDIX C [omitted]	  	 	33	  	
APPENDIX D RUNNING ROYALTY PERCENTAGES	  	 	34	  	
APPENDIX E MINIMUM ROYALTIES	  	 	35	  	
APPENDIX F MILESTONE PAYMENTS	  	 	36	  	
APPENDIX G LICENSE MAINTENANCE FEES	  	 	37	  	
APPENDIX H DEVELOPMENT MILESTONES AND DATES	  	 	38	  	
APPENDIX I [* * *] TERM SHEET]	  	 	39	  	
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

THIS LICENSE AGREEMENT is made and entered into as of the 4th day of July, 2012, (hereinafter referred to as the “ Effective Date ”) by and among EMORY UNIVERSITY, a nonprofit Georgia corporation with offices located at 1599 Clifton Road NE, 4 th  Floor, Mailstop 1599/001/1AZ Atlanta, Georgia 30322, (hereinafter referred to as “ EMORY ”), “), the GEORGIA TECH RESEARCH CORPORATION, a nonprofit corporation with offices located at 505 10 th  Street, NW, Atlanta, Georgia 30332-0415 (hereinafter referred to as “ GTRC ”) and Clearside Biomedical, Inc., a corporation organized under the laws of the state of Delaware having a principal place of business located at, 1220 Old Alpharetta Road—Suite 300, Alpharetta, Georgia 30005 (hereinafter referred to as “ COMPANY ”).
WHEREAS, EMORY and GTRC (hereinafter together, “LICENSOR”) are the owners of all right, title, and interest in inventions and technology, developed by their respective employees and are responsible for their protection and commercial development; and
WHEREAS, LICENSOR has developed certain inventions and technology related to “Microneedle for Ocular Procedure” and “Microneedles for Tissue Injections”, which is in part described in [* * *]; and
WHEREAS, COMPANY wishes to obtain and LICENSOR wishes to grant certain rights to pursue the development and commercialization of the inventions in accordance with the terms and conditions of the Agreement;
WHEREAS, COMPANY understands and acknowledges that GTRC may have one or more patent(s) which may be required to practice the inventions licensed in this Agreement, and subject to a separate agreement with  GTRC ,  COMPANY may obtain commercial rights that may be available at that time;
NOW, THEREFORE, for and in consideration of the mutual covenants and the premises herein, the parties, intending to be legally bound, hereby agree as follows.
ARTICLE 1. DEFINITIONS
The following terms as used herein shall have the following meaning:
“Affiliate” shall mean any corporation or non-corporate business entity which controls, is controlled by, or is under common control with a party to this Agreement. A corporation or non-corporate business entity shall be regarded as in control of another corporation if it owns, or directly or indirectly controls, at least fifty (50%) percent of the voting stock of the other corporation, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity.
“Agreement” or “License Agreement” shall mean this Agreement, including all APPENDICES.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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“COMPANY’s Development Plan” shall mean the plan detailed in APPENDIX A of this Agreement, which may be amended upon written agreement by the parties.
“Dollars” shall mean United States dollars.
“Field of Use” shall mean all ophthalmic uses in mammals and birds.
“Indemnitees” shall mean the Inventors, EMORY, GTRC, the Georgia Institute of Technology, (“GIT”), the Board of Regents of the University System of Georgia, its directors, officers, employees and students, and their heirs, executors, administrators, successors and legal representatives.
“Improvements” shall mean any inventions with utility solely in the Field of Use (a) that are claimed in patent applications filed or identified in invention disclosures made to Licensor within two years of the Effective Date, (b) which if practiced would infringe any Valid Claim of any of the Licensed Patents listed in Appendix B, and (c) are invented solely by Inventors of one or more Licensed Patents.
“Inventors” shall mean the named inventors of the Licensed Patents.
“Licensed Patents” shall mean the patent applications identified in APPENDIX B, together with any and all substitutions, extensions, divisionals, continuations, continuations-in-part (to the extent that the claimed subject matter of such continuations-in-part is disclosed and enabled in the parent Licensed Patent application or extensions based thereon), foreign counterparts of such patent applications and any patents which issue thereon anywhere in the world, including reexamined and reissued patents.
“Licensed Product(s)” shall mean any process, service or product covered by a Valid Claim of any Licensed Patent. For purposes of clarity, Licensed Product specifically includes any proprietary needle having measured gauge of thirty (30) or smaller and length of less than [* * *] millimeters, or any product that may be packaged in combination with a syringe containing drug active, excipient, or similar substance (for example balanced saline), in each case to the extent covered by Licensed Patents.
“Licensed Know-How” shall mean certain techniques, technology, prototypes, data, methods and other information known to the Inventors of the Licensed Patents and owned by LICENSOR as of the Effective Date that is reasonably necessary to practice the Licensed Patents that is disclosed but not claimed in a patent or patent application. For clarification, any information available in the public domain or that may otherwise be used by any person who is not an employee of LICENSOR without violating the intellectual property rights of LICENSOR shall no longer constitute Licensed Know-How and COMPANY may use any such information without any restriction or obligation hereunder.
“Licensed Technology” means Licensed Patents and Licensed Know-How.
“Licensed Territory” means the world.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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“Net Selling Price” of Licensed Products shall mean the gross selling price paid by a purchaser of a Licensed Product to COMPANY, an Affiliate or Sublicensee of COMPANY, or any other party authorized by COMPANY to sell Licensed Products less the following discounts:
 
 	a)	customary trade, quantity and cash discounts, service allowances (including without limitation wholesalers’ fees for services and stocking fees) and retroactive price adjustments actually allowed and taken, including rebates granted to vendors, managed health care or governmental organizations and independent brokers or agents’ commissions, if any, as accrued and adjusted for actual amounts taken, allowed or paid;	
 
 	b)	credits actually given for rejected or returned Licensed Products;	
 
 	c)	freight, postage, shipping, transportation and insurance costs, third-party handling charges and other costs directly related to bringing Licensed Product to the purchaser or end user, in each case in accordance with industry norms; and	
 
 	d)	sales, excise taxes and customs duties included in the invoiced amount.	
Notwithstanding the foregoing in this Section, amounts received by COMPANY, its Affiliates or Sublicensees of COMPANY or its Affiliates for the sale of Licensed Products among COMPANY, its Affiliates and Sublicensees for resale shall not be included in the computation of Net Selling Price hereunder.
Notwithstanding anything in this Agreement to the contrary, in the event that COMPANY grants a sublicense to a third party in a bona fide, arm’s length transaction and the Sublicensee requires, as a condition to entering into the sublicense agreement, that running royalties on sales of Licensed Product by or on behalf of the sublicensee be calculated and paid based on a different definition of Net Selling Price, then a substitute definition of Net Selling Price may be used with respect to such sublicense provided that the substitute definition (i) is consistent with generally accepted accounting principles as consistently applied by such sublicensee and (ii) does not materially reduce royalties payable hereunder to LICENSOR.
“Prosecution and Maintenance” or “Prosecute and Maintain” shall mean, with respect to a particular patent application or patent, means the preparation, filing, prosecution and maintenance of such patent or patent application, as well as re-examinations, reissues, applications for patent term extensions and the like with respect to such patent or patent application, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to such patent or patent application.
“Sale,” “Sell” or “Sold” shall mean the sale, transfer, exchange, or other disposition of Licensed Products whether by gift or otherwise by COMPANY, its Affiliates, Sublicensees or any third party authorized by COMPANY to make such sale, transfer, exchange or disposition. Sales of
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Licensed Products shall be deemed consummated upon the first to occur of: (a) receipt of payment from the purchaser; (b) delivery of Licensed Products to the purchaser or a common carrier; (c) release of Licensed Products from consignment; (d) if deemed Sold by use, when first put to such use; or (e) if otherwise transferred, exchanged, gifted, or disposed of, when such transfer, exchange, gift, or other disposition occurs.
“U.S. Government Licenses” shall mean the non-exclusive license to the U.S. Government or agencies thereof pursuant to 37 CFR Section 401 in connection with NIH grant Nos.: [* * *].
“Valid Claim” shall mean a claim in an unexpired patent or pending patent application so long as such claim shall not have been irrevocably abandoned or held invalid in an unappealable decision of a court or other authority of competent jurisdiction in the relevant country.
ARTICLE 2. GRANT OF LICENSE
2.1. License.
 
 	2.1.1.	LICENSOR hereby grants COMPANY and its Affiliates an exclusive right and license under the Licensed Patents, subject to Sections 2.2 through 2.4, including the right to sublicense, to make, have made, use, perform, sell, offer for sale, import, manufacture and distribute Licensed Products in the Field of Use in the Licensed Territory during the term of the Agreement.	
 
 	2.1.2.	LICENSOR hereby grants COMPANY and its Affiliates a non-exclusive right and license to the Licensed Know-How, subject to Sections 2.2 through 2.4, including the right to sublicense, to make, have made, use, perform, sell, offer for sale, import, manufacture and distribute Licensed Products and products that would be Licensed Products if covered by one or more Valid Claims in the Field of Use in the Licensed Territory during the term of the Agreement.	
2.2. Government Rights. COMPANY acknowledges that LICENSOR and COMPANY may have certain obligations and the United States government may have certain rights in the Licensed Technology if such was developed with any assistance through grants or contracts from the United States government. COMPANY hereby warrants that it shall take all action requested to enable LICENSOR to satisfy such obligations. If the United States government should take action which renders it impossible or impractical for LICENSOR to grant, or which conditions or reduces the rights and licenses granted herein, LICENSOR or COMPANY may terminate this Agreement upon reasonable prior notice or cause it to be equitably reformed upon reasonable prior notice to reflect such conditioned or reduced rights and licenses (including without limitation with respect to the value and price of such rights and licenses). COMPANY shall not have any right to the return of any payments of any kind made by it to EMORY prior to the date of such action. To LICENSOR’s knowledge as of the Effective Date, the only rights of the United States Federal government with respect to the Licensed Patent are the U.S. Government Licenses.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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2.3. Option. LICENSOR hereby grants COMPANY, subject to third party rights, an exclusive option to an exclusive license to Improvements for a period of two years from the Effective Date. LICENSOR agrees to disclose, within a reasonable amount of time, any Improvements to COMPANY. COMPANY shall provide LICENSOR written notice of its intent to exercise its option within [* * *] days of notification by LICENSOR. Unless otherwise agreed, if COMPANY exercises its option to license any IMPROVEMENT, such Improvements shall be included in the definition of Licensed Patent herein.
2.4. Retained License. The exclusive license granted herein is further conditional on the right retained by LICENSOR, on behalf of itself, its employees and LICENSOR research collaborators, to make, have made, use, import, and transfer Licensed Products and practice Technology for research, educational and non-commercial and humanitarian clinical purposes, subject to the following limitations: LICENSOR shall not engage in any human use of any of the Licensed Technology in the Field of Use without the express written consent of COMPANY and shall not transfer microneedles to any third party for research purposes in the Field of Use without COMPANY’s permission, such permission not to be unreasonably withheld. Should COMPANY not provide a response within [* * *] days of a request for permission, permission shall be presumed. Should COMPANY deny permission to transfer microneedles, then COMPANY shall provide the microneedles requested to the third party on reasonable and appropriate terms and conditions.
2.5. Sublicenses. COMPANY may grant sublicenses to third parties (“Sublicensees”) provided that COMPANY shall be responsible for the operations of its Sublicensees that are relevant to this Agreement and remain responsible for any reporting and any payment of all fees and royalties due under this Agreement.
 
 	2.5.1.	COMPANY shall include in any sublicense granted pursuant to this Agreement which sublicense provides a Sublicense with the right to sell Licensed Products, a provision requiring the Sublicensee to indemnify Indemnitees and maintain liability coverage to the same extent that COMPANY is so required pursuant to Section 10.3 of this Agreement.	
 
 	2.5.2.	COMPANY shall include in any sublicense granted pursuant to this Agreement that provides a Sublicensee with the right to sell Licensed Products, a provision that grants LICENSOR the right to audit the Sublicensee to the same extent that LICENSOR has the right to audit the COMPANY pursuant to Section 4.4 of this Agreement.	
 
 	2.5.3.	COMPANY shall provide LICENSOR with copies of all sublicense agreements within [* * *] days of their execution date, which, if redacted, must include the relevant provisions under this Article 2 and a disclosure of the financial terms of the sublicense (the use and disclosure of such sublicense agreement and information contained therein by LICENSOR shall be subject to the confidentiality provisions set forth in Section 11 unless otherwise obligated to disclose to the federal government under Bayh-Dole provisions);	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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 	2.5.4.	COMPANY shall ensure that any sublicense or distributor agreements will include a provision that causes automatic termination of the sublicense or distribution agreement in the event that a Sublicensee or distributor challenges, either directly or indirectly, the validity, enforceability or scope of any claim within the Licensed Patent in a court or other governmental agency of competent jurisdiction, including in a reexamination or opposition proceeding.	
 
 	2.5.5.	If this Agreement terminates for any reason, any Sublicensee shall, unless the sublicense agreement also terminates, from the effective date of such termination, automatically become a direct licensee of LICENSOR with respect to the rights originally sublicensed to it by COMPANY, provided such Sublicensee did not cause the termination of the Agreement, Sublicensee agrees to comply with all the terms of this Agreement and Sublicensee assumes the responsibilities of COMPANY hereunder, to the extent applicable to the sublicense originally granted to it.	
 
 	2.5.6.	If COMPANY does not enter into a sublicense to the Licensed Patents with [* * *] in a field of use for [* * *] to ocular tissue using microneedle for the purpose of [* * *], with the right to grant further sublicenses in the [* * *], no later than [* * *] from the Effective Date unless Licensee demonstrates to LICENSOR’s reasonable satisfaction that such a sublicense could reasonably be expected to interfere with COMPANY’s business as evidenced by documentation of secured funding in and business development plan for the [* * *], all rights and licenses to the Licensed Technology in the [* * *] shall revert to LICENSOR. Such license to [* * *] shall generally be in accordance with the term sheet attached hereto as  Appendix I  and shall include such other terms and conditions as COMPANY may reasonably require to protect its business interests with respect to Licensed Products. Should no sublicense agreement be executed by [* * *] from the Effective Date despite reasonable commercial efforts, this paragraph shall not apply unless LICENSOR confirms in writing that [* * *] is still interested in obtaining a license to the Licensed Patents in the [* * *].	
2.6. No Implied License. The license and rights granted in this Agreement shall not be construed to confer any rights upon COMPANY by implication, estoppel, or otherwise as to any technology not specifically identified in this Agreement as Licensed Technology.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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2.7. U.S. Manufacturing. To the extent that any Licensed Technology is developed using any funding from the United States, COMPANY agrees that any Licensed Products used or sold in the United States will be manufactured substantially in the United States unless any waivers required are obtained from the United States Government by COMPANY.
ARTICLE 3. CONSIDERATION FOR LICENSE
3.1. License Fee. As partial consideration for the license granted to COMPANY under this Agreement, COMPANY shall pay LICENSOR a license fee in the amount of thirty thousand ($30,000) Dollars (less the $10,000 option fee paid) within thirty (30) days of the Effective Date of this Agreement.
3.2. Running Royalties. As partial consideration for the license granted to COMPANY under this Agreement, COMPANY shall pay LICENSOR a total royalty equal to the percentage set forth on  APPENDIX D  times the Net Selling Price of all Licensed Products Sold during the term of this Agreement by COMPANY, its Affiliates, its Sublicensees or any third party authorized by COMPANY to Sell Licensed Products. Royalties shall be due and payable on a quarterly basis (March 31, June 30, September 30 and December 31).
 
 	3.2.1.	Sublicensee Royalties. As partial consideration for the license granted to COMPANY under this Agreement, COMPANY shall pay LICENSOR a total royalty equal to, (a) the greater of the royalty rate listed in  Appendix D or [* * *] of the running royalty payable to the COMPANY or its Affiliates on sales of any Licensed Product Sold during the term of this Agreement by a Sublicensee, if the sublicense is granted prior to the $35,000 Milestone Event referenced in  Appendix F , or (b) otherwise, the greater of the royalty rate listed in  Appendix D  or [* * *] of the running royalty payable to the COMPANY or its Affiliates on sales of any Licensed Product Sold during the term of this Agreement by a Sublicensee. Any such Sublicense Royalties due under this Agreement shall be due and payable on a quarterly basis (March 31, June 30, September 30 and December 31) and payments due LICENSOR on such Sublicense Royalty payments shall be due and payable thirty (30) days from receipt by COMPANY.	
 
 	3.2.2.	Reduction of Running Royalties-Compulsory Licenses. Should a compulsory license be granted to a third party with respect to Licensed Products in the Licensed Field of Use in any country in the Licensed Territory with a royalty rate lower than the royalty rate provided herein, then the royalty rate to be paid by COMPANY on Sales of Licensed Product in that country under Article 3.2 shall be reduced to the rate paid by the compulsory third party licensee. COMPANY shall provide LICENSOR with prompt written notice of any governmental or judicial procedures initiated in any country to impose a compulsory	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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 	license of which it is aware. If permitted by law, COMPANY shall use commercially reasonable efforts to oppose such compulsory license. At COMPANY’s request, LICENSOR will cooperate reasonably in any legal action which COMPANY may wish to take to oppose such compulsory license, which action shall be at COMPANY’s sole expense.	
 
 	3.2.3.	Reduction of Royalties-Third Party Royalties. In the event it becomes necessary for COMPANY or its Sublicensee, in the reasonable opinion of its counsel, to obtain a license from a third party in order to make, have made, develop, import, export, use, sell, offer for sale, have sold or otherwise exploit any Licensed Product because, except for a license granted by the third party, sale of a Licensed Product in the relevant country would infringe an intellectual property right of a third party in that country, COMPANY or its Sublicensee may offset the royalty rate paid to LICENSOR on a Licensed Product-by-Licensed Product and country-by-country basis by up to [* * *] of the royalties paid to such third party in any calendar quarter. Notwithstanding the foregoing, however, in no event shall the royalties due to LICENSOR on Net Sales of such Licensed Products in any country be reduced by more than [* * *] of the Running Royalty Percent as identified in  APPENDIX D .	
3.3. Minimum Royalties. In the event that, following the first Sale of a Licensed Product (“First Sale”), the aggregate royalties paid to LICENSOR pursuant to Section 3.2 hereof during any calendar year after the calendar year in which the First Sale occurs do not exceed the minimum royalty set forth in  APPENDIX E , COMPANY shall pay to LICENSOR no later than [* * *] following the last day of such calendar year the difference between such minimum royalty amount and the actual royalties paid. This Section 3.3 shall terminate upon expiration of the last Valid Claim of a Licensed Patent in the United States.
3.4. Sublicensee Payments. Within thirty (30) days of receipt by COMPANY, COMPANY shall pay LICENSOR [* * *] of any fees or payments paid to COMPANY by a Sublicensee (“Sublicensee Percentage”) as consideration for a sublicense grant under this Agreement. Such Sublicense Percentage shall be applied to any payments made to COMPANY by a Sublicensee as consideration for a sublicense grant, including but not limited to any initial licensing fees, milestone fees, maintenance fees and minimum royalty payments, to the extent any such payment is directly attributable to the sublicense of the Licensed Patents and Licensed Technology, but excluding (i) amounts paid to reimburse COMPANY for actual costs (including overhead but excluding profit) incurred in connection with research and development of Licensed Products and the prosecution, maintenance and enforcement of intellectual property rights covering Licensed Products, (ii) the value of any intellectual property rights transferred or granted to COMPANY if such rights are necessary or helpful to the development or commercialization of Licensed Products and (iii) amounts paid for shares of Company stock. If COMPANY in-licenses third
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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party technology and/or intellectual property rights and incorporates it into Licensed Product, and receives sublicense revenue with respect to such Licensed Product, then the [* * *] sublicense revenue sharing provided for above shall apply to that portion of the value of the Licensed Product that is attributable to the intellectual property licensed from LICENSOR. For example, the sublicense revenue that is subject to sharing with LICENSOR shall be that fraction A/(A+B) of non-royalty revenue received where A is the amount attributable to the LICENSOR intellectual property, and B is the aggregate amount attributable to the remainder of the technology so licensed. If it is not feasible to accurately determine such amounts, then the allocation shall be commercially reasonable and determined by good faith negotiation between COMPANY and LICENSOR.
3.5. Milestone Payments. COMPANY shall pay LICENSOR a one-time Milestone Payment in the amount specified in APPENDIX F  no later than [* * *] after the first occurrence of the corresponding Milestone Event. To the extent that a Milestone Payment is due to the COMPANY from a Sublicensee, the COMPANY shall pay LICENSOR the amount of the Milestone Payment due, as well as a Sublicense Percentage of any additional amount paid to COMPANY.
3.6. License Maintenance Fees. In the event no Milestone Payment has been paid to LICENSOR prior to an anniversary of the Effective Date as set forth on  APPENDIX G , COMPANY shall pay to LICENSOR the corresponding Maintenance Fee. No Maintenance Fee pursuant to this Section 3.6 shall be payable by COMPANY during any year in which (a) it has achieved at least one Milestone Event, (b) it has spent at least $100,000 on research and development of the Licensed Products or (c) it has sold a Licensed Product.
3.7. Reimbursement for Patent Expenses.
(i) COMPANY shall reimburse LICENSOR for all fees, costs, and expenses incurred by LICENSOR after the Effective Date and during the term of this Agreement related to Prosecuting or Maintaining the Licensed Patents in the Licensed Territory, as provided for in Section 7. COMPANY shall deliver such payment to LICENSOR within [* * *] days after LICENSOR notifies COMPANY of the amount of such fees, costs, and expenses.
(ii) COMPANY shall reimburse LICENSOR for all previously unreimbursed fees, costs, and expenses incurred by LICENSOR as of the Effective Date related to Prosecuting or Maintaining the Licensed Patents. These unreimbursed fees, costs, and expenses incurred up to the Effective Date are estimated to be $[* * *], however this amount may be subject to change upon final notification, but in no event shall it be greater than $50,000. COMPANY shall deliver such payment to LICENSOR within [* * *] days after LICENSOR notifies COMPANY of the amount.
3.8. Tax Payments. All payments made to LICENSOR under this Agreement shall be made free and clear of any tax, withholding or other governmental charge or levy (other than taxes imposed on the net income of LICENSOR), all such non-excluded amounts being “Taxes.” However, should the
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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COMPANY (or a Sublicensee) be obligated by law to withhold any Taxes on such payments. COMPANY shall promptly pay such tax, levy or charge for and on behalf of LICENSOR to the proper governmental authority, and shall promptly furnish LICENSOR with receipt evidencing such payment. COMPANY shall have the right to deduct any such tax, levy or charge actually paid from payment due LICENSOR. COMPANY shall promptly advise LICENSOR in the event it determines that any tax withholding may be required. COMPANY shall reasonably cooperate with LICENSOR in any lawful action to claim exemption from such deductions or withholdings and otherwise to minimize the amount required to be so withheld or deducted.
ARTICLE 4. REPORTS AND ACCOUNTING
4.1. Progress Reports. Within five (5) days after the Board Meetings directly following each January 1st and July 1st of each calendar year until the First Sale, COMPANY shall provide LICENSOR with a written report detailing the activities of the COMPANY relevant to the COMPANY’s Development Plan and the development and commercialization of Licensed Products. For avoidance of doubt, non-receipt of such written report within the specified time period shall be considered a material breach of this Agreement under Section 12.2. For clarification, delivery to Licensor of the materials provided to COMPANY’s Board of Directors related to the development and commercialization of Licensed Products shall be deemed to satisfy the written report requirement. If Licensor reasonably determines that such information is not sufficient to determine that Company has met its obligations hereunder or that such information is not sufficient to enable LICENSOR to fulfill its obligation of reporting under Bayh-Dole, Licensor may notify COMPANY of such matter and Licensor shall promptly provide such additional information as may be reasonably necessary to verify or enable such compliance.
4.2. Royalty Reports. During the term of this Agreement, COMPANY shall provide LICENSOR written reports semiannually until the first Sale of a Licensed Product and quarterly thereafter showing:
 
 	i.	the occurrence of any event triggering a Milestone Payment obligation or any other payment in accordance with Article 3; and	
 
 	ii.	a summary of all reports provided to COMPANY by COMPANY’S Sublicensees, including the names and addresses of all Sublicensees; and	
 
 	iii.	the amount of any consideration received by COMPANY from Sublicensees and an explanation of the contractual obligation satisfied by such consideration;	
 
 	iv.	within a given fiscal quarter, the gross selling price and the number of units of all Licensed Products (identified by product number/name) Sold in each country of the Licensed Territory, together with the calculations of Net Selling Price; and	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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 	v.	within a given fiscal quarter, the royalties payable in Dollars which accrued hereunder; and	
 
 	vi.	within a given fiscal quarter, the exchange rates, if any, used in determining the amount due	
4.3. Records. During the term of this Agreement and for a period of [* * *] thereafter, COMPANY shall keep at its principal place of business true and accurate records of all Sales in accordance with generally accepted accounting principles in the respective country where such Sales occur and in such form and manner so that all royalties owed to LICENSOR may be readily and accurately determined. COMPANY shall furnish LICENSOR copies of such records upon LICENSOR’s request.
4.4. Right to Audit. LICENSOR shall have the right, upon prior notice to COMPANY or a Sublicensee, not more than once in each calendar year and the calendar year immediately following termination of the Agreement, through an independent certified public accountant selected by LICENSOR, to have access during normal business hours as may be reasonably necessary to examine the records of COMPANY or Sublicensee to include, but not be limited to, sales invoice registers, sales analysis reports, original invoices, inventory records, price lists, sublicense and distributor agreements, accounting general ledgers, and sales tax returns, in order to verify the accuracy of the of the calculation of any payment due under this Agreement. Such audit shall be limited in scope to the preceding [* * *] from the date of the notice of audit. If such independent public accountant’s report shows any underpayment of royalties by COMPANY, its Affiliates or Sublicensees, within [* * *] days after COMPANY’S receipt of such report, COMPANY shall remit or shall cause its Sublicensees to remit to LICENSOR:
 
 	i.	the amount of such underpayment; and	
 
 	ii.	if such underpayment exceeds [* * *] of the total royalties owed for the fiscal year then being reviewed, the reasonably necessary fees and expenses of such independent public accountant performing the audit. Otherwise, LICENSOR’s accountant’s fees and expenses shall be borne by LICENSOR.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 5. PAYMENTS
5.1. Payment Due Dates. Royalties shall be due commencing upon the first Sale of a Licensed Product in the Licensed Field of Use in any country in the Licensed Territory. Royalties and sublicense fees payable to LICENSOR as a result of activities occurring during the period covered by each royalty report provided for under Article 4 of this Agreement shall be due and payable on the date such royalty report is due. All other payments required under this Agreement, if not specified otherwise in this Agreement, shall be payable within [* * *] days of the due date for each payment.
5.2. Payment Delivery. Unless otherwise requested by LICENSOR, all payments due to LICENSOR under this Agreement shall be made in person or via the United States mail or private carrier to the following address:
Emory University
Attn: Director, Office of Technology Transfer
1599 Clifton Rd. 4th Floor
Atlanta, Georgia 30322
Facsimile: (404) 727-1271
Any payment in excess of [* * *] or originating outside of the United States shall be made by wire transfer to an account of LICENSOR designated by LICENSOR from time to time and royalty reports shall be sent by facsimile or express courier to the Director, Office of Technology Transfer on the same date. Royalty reports may also be transmitted via email to [* * *], provided that if no confirmation of receipt is received, COMPANY agrees to forward the report via facsimile.
5.3. Currency Conversion. Except as hereinafter provided in this Section 5.3, all royalties shall be paid in Dollars. If any Licensed Products are Sold for consideration other than Dollars, the Net Selling price of such Licensed Products shall first be determined in the foreign currency of the country in which such Licensed Products are Sold and then converted to Dollars at a ninety (90)-day trailing average published by the  Wall Street Journal  (U.S. editions) for conversion of the foreign currency into Dollars on the last day of the quarter for which such payment is due.
5.4. Interest. Royalties and other payments, including patent expense reimbursements, required to be paid by COMPANY pursuant to this Agreement shall, if overdue, bear interest until payment at a rate [* * *] per month. The interest payment shall be due from the day the original payment was due until the day that the payment was received by LICENSOR. The payment of such interest shall not foreclose LICENSOR from exercising any other rights it may have because any payment is overdue.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 6. DILIGENCE AND COMMERCIALIZATION
6.1. Diligence. COMPANY represents and warrants that it has the necessary expertise and will, as appropriate, acquire the necessary resources to reasonably develop and commercialize Licensed Products. COMPANY shall use its commercially reasonable efforts, either directly or through Affiliates or Sublicensees, throughout the term of this Agreement to comply with COMPANY’s Development Plan and to bring Licensed Products to market through a commercially reasonable and diligent program for exploitation of the right and license granted in this Agreement to COMPANY and to create, supply, and service in the Licensed Territory as extensive a market as reasonably commercially practicable. In no instance shall COMPANY’s commercially reasonable efforts be less than efforts customary in COMPANY’s industry.
6.2. Development Milestones. COMPANY shall adhere to the schedule of development milestones and dates set forth in APPENDIX H . If COMPANY fails to meet any deadline set forth in  APPENDIX H , COMPANY shall provide LICENSOR with a written report outlining the efforts undertaken thus far and the steps COMPANY will take to meet the unsatisfied milestone, which shall also include an adjustment in the time required to meet such milestone or a substitute milestone (“Time Adjustment Proposal”). For clarity, a non-limiting example of a reasonable request for a Time Adjusted Delay contemplated herein is regulatory review delay of the responsible agency. Such report shall be submitted to LICENSOR for consideration within [* * *] days after the failure to meet the milestone. If COMPANY fails to provide the report, LICENSOR reasonably declines to accept the Time Adjustment Proposal, or if COMPANY fails to meet the new deadlines set in the Time Adjustment Proposal approved by LICENSOR, LICENSOR shall have the option in its sole discretion and following [* * *] days written notice to COMPANY to terminate the license granted hereunder, to allow this Agreement to continue in full force and effect, or to convert the license granted hereunder to a nonexclusive license upon written notice to COMPANY. Notwithstanding the foregoing, if COMPANY effects an assignment permitted by Article 13 prior to the first commercial Sale of a Licensed Product, the deadline set forth on Appendix H for such due diligence milestone event may, at the election of the COMPANY, be extended by a period of [* * *], with the option to extend by a period of an additional [* * *] with payment of a nonrefundable fee of [* * *], provided, however that such extensions shall not relive COMPANY of its obligation to continue to use commercially reasonable efforts to bring Licensed Product to market.
6.3. Sublicensee Performance. LICENSOR agrees that a Sublicensee’s performance of its diligence obligations regarding a Licensed Product as set forth in the sublicense agreement shall be deemed to be performance by COMPANY of its diligence obligations for such Licensed Product under this License Agreement, including, but not limited to, those set forth in Article 6 hereof. COMPANY further agrees to attach copies of pertinent portions of this Agreement to executed sublicense agreements.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 7. PATENT PROSECUTION
7.1. Licensed Patents. The Prosecution and Maintenance of the Licensed Patents shall be the primary responsibility of LICENSOR. LICENSOR shall utilize patent counsel that is acceptable to COMPANY for the Prosecution and Maintenance of the Licensed Patents.
 
 	i.	Comment. LICENSOR shall use reasonable efforts to provide COMPANY with copies of all filings and official correspondence pertaining to such Prosecution and Maintenance of the Licensed Patents at least thirty days prior to any deadline so as to give COMPANY an opportunity to advise and cooperate with LICENSOR in such Prosecution and Maintenance. In the event LICENSOR desires to transfer the prosecution of any of the Licensed Patents to new patent counsel, LICENSOR shall be responsible for costs associated with effecting the transfer and COMPANY’s written consent shall be obtained, which consent shall not be unreasonably withheld or delayed.	
 
 	ii.	New Applications. COMPANY shall notify LICENSOR in writing of the countries in which COMPANY wishes additional patent applications to be filed, including but not limited to national phase filings and regional registrations. LICENSOR shall, at COMPANY’s expense, file such additional patent applications. LICENSOR may, at its own expense, file patent applications in any country in which COMPANY elects not to file and such applications shall not be subject to any license granted to COMPANY hereunder.	
 
 	iii.	Reimbursement. If COMPANY should fail to timely make reimbursement for patent expenses for any Licensed Patent, LICENSOR, in addition to any other remedies under the Agreement, shall have no further obligation to Prosecute or Maintain such Licensed Patent(s). COMPANY, upon [* * *] days written notice, may advise LICENSOR that it no longer wishes to pay expenses for Prosecution or Maintenance of one or more Licensed Patents on a country-by-country basis. LICENSOR may, at its sole option, elect to pay such expenses and, if so, such patents or patent applications shall cease to be subject to any license granted to COMPANY hereunder.	
7.2 Extension of Licensed Patents. COMPANY, at its expense, may request that LICENSOR have the normal term of any Licensed Patents extended or restored under any country’s procedure for extending patent term and LICENSOR shall use all reasonable efforts to do so. Royalties shall be payable until the end of the extended term of the patent. LICENSOR acknowledges that there are limits on the number of patents that may be extended with respect to any product and that COMPANY shall have the right in its sole discretion to determine which patent, if any, shall be extended with respect to any Licensed Product.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 8. INFRINGEMENT
8.1 The parties shall promptly notify each other of any suspected infringement of any Licensed Patents.
 
 	i.	During the Term, COMPANY shall, at its expense, have the right to enforce any Licensed Patents against such infringer and may defend any declaratory judgment action brought against it alleging the invalidity of a Licensed Patent. COMPANY agrees to defend LICENSOR against any counterclaim brought against it in such action. LICENSOR shall cooperate with COMPANY in such effort, and EMORY agrees that it will, at COMPANY’S expense, be joined as a party to such action, if necessary. It is LICENSOR’s intention that COMPANY be able to prosecute an alleged infringement without including LICENSOR as a party to the litigation, should LICENSOR choose at its discretion not to be a party to the litigation, and as such herein grants COMPANY the rights in Licensed Patents to sue an infringer alone. Should GTRC choose not to join in such action and COMPANY is unable to initiate or prosecute such action in its name only by a ruling of a court of competent jurisdiction, GTRC shall assign to EMORY only such rights to the applicable Licensed Patent that may be necessary to permit COMPANY to initiate or prosecute such action without GTRC, provided that COMPANY shall be responsible for all reasonable attorney’s fees and costs associated with LICENSOR’s participation in such suit. COMPANY shall reimburse LICENSOR for any costs incurred, including reasonable attorneys’ fees, as part of any action brought by COMPANY.	
 
 	ii.	COMPANY shall not enter into any settlement agreement, voluntary dismissal, consent judgment or other voluntary final disposition in any action regarding the Licensed Patents, without the express written consent of LICENSOR if such agreement would or would be reasonably likely to have a material adverse effect on the validity or enforceability of the Licensed Patents, which consent shall not be unreasonably withheld, conditioned or delayed. Consent shall be deemed given hereunder if no objection is provided in writing within fifteen days of delivery of the request for such consent. Any recovery or settlement received (whether for punitive or exemplary damages, or any other recovery or settlement received, including compensatory damages or damages based on loss or revenues (hereinafter referred to as “Recovery”)), shall first be used to reimburse the documented out-of-pocket costs and expenses incurred by COMPANY and LICENSOR in pursuing such action, and to the extent any portion of the balance of the	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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 	Recovery represents compensatory damages, for example, compensation for loss of revenues, such portion shall be deemed to be the Sales of Licensed Products in the fiscal quarter received by COMPANY, and COMPANY shall pay to LICENSOR an amount representing the royalty which would have been paid by COMPANY in accordance with the provisions of Article 3.2 had such portion of the Recovery been accrued by COMPANY as Sales. Any remaining amounts of such Recovery that represents, for example, additional damages (such as enhanced or punitive damages) shall be paid (a) [* * *] to the extent the Recovery is attributable to infringement in the United States of Licensed Patents and (b) otherwise [* * *].	
8.2 If COMPANY fails, within [* * *] days after receiving notice of a potential infringement that would or would be reasonably likely to have a material adverse effect the validity or enforceability of the Licensed Patents , to institute an action against such infringer or notifies LICENSOR that it does not plan to institute such action, then LICENSOR shall have the right to do so at its own expense unless COMPANY notifies LICENSOR that COMPANY is engaged in bona fide negotiations for the grant to the alleged infringer of a sublicense. COMPANY shall cooperate with LICENSOR in such effort including being joined as a party to such action if necessary. LICENSOR shall be entitled to retain all damages or costs awarded in such action. Should either LICENSOR or COMPANY be a party to a suit under the provisions of this Article and thereafter elect to abandon such suit, the abandoning party shall give timely notice to the other party who may, at its discretion, continue prosecution of such suit.
ARTICLE 9. LIMITED WARRANTY AND EXCLUSION OF WARRANTIES
9.1 Representation by Licensor. LICENSOR represents that it has the right and authority to enter into this Agreement and that, to the best of its knowledge, neither the execution of this Agreement nor the performance of its obligations hereunder will constitute a breach of the terms and provisions of any other agreement to which LICENSOR is a party. LICENSOR represents that, to the best of its knowledge, it is an owner of the Licensed Technology and has the right to issue licenses to the same. LICENSOR has provided to the COMPANY copies of assignments whereby each inventor named in a Licensed Patent has assigned to LICENSOR all of such inventor’s interest in any inventions claimed in any such Licensed Patent.
It is hereby acknowledged and expressly understood by COMPANY that GTRC and EMORY do not represent or warrant that COMPANY may practice the Licensed Technology hereunder without infringing one or more patents, which may be owned by GTRC. Furthermore, GTRC and EMORY do not warrant that the Licensed Patents licensed hereunder or Licensed Technology may be exploited by COMPANY or its Affiliates or Sublicensees without infringing other patents, which may be owned by GTRC. To the extent GTRC is able and GRTC and COMPANY can reach agreement, and upon COMPANY’s election, GTRC will grant COMPANY non-exclusive rights to additional technologies owned by GTRC under a completely separate agreement.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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LICENSOR does not warrant the validity of the Licensed Patents licensed hereunder and makes no representation whatsoever with regard to the scope of the Licensed Patents or that such Licensed Patents or Licensed Technology may be exploited by COMPANY or its Affiliates or Sublicensees without infringing other patents including those owned by GTRC.
9.2 Merchantability and Exclusion of Warranties. COMPANY possesses the necessary expertise and skill in the technical areas pertaining to the Licensed Products and Licensed Technology to make, and has made, its own evaluation of the capabilities, safety, utility and commercial application of the Licensed Products and Licensed Technology. ACCORDINGLY, LICENSOR DOES NOT MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE LICENSED TECHNOLOGY OR LICENSED PRODUCTS AND EXPRESSLY DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER IMPLIED WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY, UTILITY, OR COMMERCIAL APPLICATION OF THE LICENSED TECHNOLOGY OR LICENSED PRODUCTS.
9.3 FDA and Other Regulations. COMPANY represents and warrants that any Products made or Sold by COMPANY or its Affiliates pursuant to this Agreement shall comply with all applicable federal and state law regulations, including but not limited to regulations of the Federal Drug Administration, the Environmental Protection Agency, and their state equivalents. COMPANY further warrants to include in any sublicense agreement in which a Sublicensee is granted the right to make and sell Licensed Products, that such agreement shall include a comparable covenant by the Sublicensee.
ARTICLE 10. DAMAGES, INDEMNIFICATION AND INSURANCE
10.1 No Liability. LICENSOR shall not be liable to COMPANY or COMPANY’S Affiliates, or customers and/or Sublicensees of COMPANY or COMPANY’S Affiliates, for compensatory, special, incidental, indirect, consequential or exemplary damages resulting from the manufacture, testing, design, labeling, use or sale of Licensed Products.
10.2 Indemnification. COMPANY shall defend, indemnify, and hold harmless the Indemnitees, from and against any and all claims, demands, loss, liability, expense, or damage (including investigative costs, court costs and attorneys’ fees) Indemnitees may suffer, pay, or incur as a result of claims, demands or actions against any of the Indemnitees caused or contributed to, in whole or in part, by COMPANY’S or COMPANY’S Affiliates, contractors, agents, or Sublicensees manufacture, testing, design, use, Sale, or labeling of any Licensed Products or the use of any Licensed Technology. COMPANY’S obligations under this Article shall survive the expiration or termination of this Agreement for any reason.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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COMPANY agrees to provide attorneys reasonably acceptable to LICENSOR to defend against such a claim. LICENSOR shall cooperate with COMPANY in any defense of such claim. COMPANY shall not settle any such claims, demands or actions under this Section 10.2, without the express, prior written consent of LICENSOR, which consent shall not be unreasonably withheld or delayed. COMPANY’S obligations under this Article shall survive the expiration or termination of this Agreement for any reason. Notwithstanding the foregoing, in the case of both the Georgia Institute of Technology and the Board of Regents of the State of Georgia, at their sole discretion, the Attorney General of the State of Georgia may represent them on any such matter.
10.3 Insurance. Without limiting COMPANY’S indemnity obligations under the preceding paragraph, COMPANY shall, prior to any clinical trial or Sale of any Licensed Product, cause to be in force a products liability insurance (or, prior to first commercial Sale, general commercial liability and/or clinical trials insurance) policy. Such polic(y)(ies) shall:
 
 	i.	provide Indemnitees product liability, clinical trial and/or general liability coverage in an amount no less than $Two Million Dollars ($2,000,000.00) per occurrence for personal injury and $1,000,000 per occurrence for property damage;	
 
 	ii.	insure Indemnitees for all claims, damages, and actions mentioned in Section 10.2 of this Agreement;	
 
 	iii.	include contractual liability coverage for all liability which may be incurred by Indemnitees in connection with this Agreement;	
 
 	iv.	require the insurance carrier to provide LICENSOR with no less than thirty (30) days’ written notice of any change in the terms or coverage of the policy or its cancellation; and	
 
 	v.	If written on a “claims made” basis, the Company agrees to provide coverage for five years after termination of the Agreement.	
Company shall purchase statutory Workers Compensation insurance including employers liability as required by applicable law
All insurance coverage required under this Agreement shall be primary to any coverage carried by LICENSOR, shall waive all rights of subrogation against any additional insured and shall be placed with insurers whose A.M. Best’s rating is at least A-X.
As detailed in Section 2.5, COMPANY agrees to require any Sublicensee under Section 2.5 of this Agreement to maintain insurance coverage consistent with this Section 10.3. Notwithstanding the foregoing, self-insurance may be substituted for insurance meeting the above standards if (a) Company has become an Affiliate of a company with a market capitalization in excess of US$10 billion or (b) trials are conducted by or on behalf of a Sublicensee that, together with its Affiliates, meets the foregoing market capitalization test.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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10.4 Notification. COMPANY shall provide to LICENSOR prior to its, Affiliate’s and/or Sublicensee’s first clinical trial or commercial Sale of any Licensed Product, certificates of insurance evidencing the coverages required in section 10.3 above and adding LICENSOR as an additional insured.
10.5 Notice of Claims. COMPANY shall promptly notify LICENSOR of all claims involving the Indemnitees and shall advise LICENSOR of the amounts that might be needed to defend and pay any such claims. LICENSOR shall promptly notify COMPANY of any and all claims brought to its attention relating to COMPANY’s indemnity obligations under this Agreement.
ARTICLE 11. CONFIDENTIALITY
11.1 Treatment of Confidential Information. Except as otherwise provided hereunder, during the term of this Agreement and for a period of five (5) years thereafter:
 
 	i.	COMPANY and its Affiliates and Sublicensees shall retain in confidence and use only for purposes of this Agreement, any written information and data supplied by LICENSOR under this Agreement;	
 
 	ii.	LICENSOR shall retain in confidence and use only for purposes of this Agreement any written information and data supplied by COMPANY under this Agreement and marked as proprietary, except for any information required to be provided to the federal funding agency under 35 CFR Part 401 and its accompanying legislation (commonly referred to as the “Bayh-Dole Act”).	
For purposes of this Agreement, all such information and data which a party is obligated to retain in confidence shall be called “Confidential Information.”
11.2 Right to Disclose. To the extent that it is reasonably necessary to fulfill its obligations or exercise its rights under this Agreement, or any rights which survive termination or expiration hereof, each party may disclose Confidential Information to its Affiliates, Sublicensees, consultants, outside contractors, governmental regulatory authorities and clinical investigators on condition that such entities or persons agree:
 
 	i.	to keep the Confidential Information confidential for at least the same time periods and to the same extent as each party is required to keep it confidential;	
 
 	ii.	to use the Confidential Information only for such purposes as such parties are authorized to use it.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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11.3 Release from Restrictions. Each party or its Affiliates or Sublicensees may use or disclose Confidential Information to the government or other regulatory authorities to the extent that such disclosure is reasonably necessary for the prosecution and enforcement of patents, or to obtain or maintain any regulatory approval, including authorizations to conduct clinical trials, or commercially market or obtain pricing approval of any Licensed Products, provided that such party is otherwise entitled to engage in such activities under this Agreement.
The obligation not to disclose Confidential Information shall not apply to any part of such Confidential Information that:
 
 	i.	is or becomes patented, published or otherwise part of the public domain, other than by unauthorized acts of the party obligated not to disclose such Confidential Information (for purposes of this Article 11 the “receiving party”) or its Affiliates or Sublicensees in contravention of this Agreement;	
 
 	ii.	is disclosed to the receiving party or its Affiliates or Sublicensees by a third party provided that such Confidential Information was not obtained by such third party directly or indirectly from the other party under this Agreement; or	
 
 	iii.	prior to disclosure under this Agreement, was already in the possession of the receiving party, its Affiliates or Sublicensees, provided that such Confidential Information was not obtained directly or indirectly from the other party under this Agreement; or	
 
 	iv.	results from research and development by the receiving party or its Affiliates or Sublicensees, independent of disclosures from the other party of this Agreement, provided that the persons developing it have not had exposure to the Confidential Information from the disclosing party; or	
 
 	v.	is required by law to be disclosed by the receiving party, provided that the receiving party uses its best efforts to notify the other party immediately upon learning of such requirement in order to give the other party reasonable opportunity to oppose such requirement; or	
 
 	vi.	COMPANY and LICENSOR agree in writing may be disclosed; or	
 
 	vii.	is subject to an open records request under the laws of the State of Georgia. LICENSOR shall reasonably cooperate with COMPANY in any lawful effort requested by COMPANY to minimize disclosures pursuant to any such law.	
ARTICLE 12. TERM AND TERMINATION
12.1 Term. Unless sooner terminated as otherwise provided in this Agreement, the term of this Agreement shall commence on the effective date hereof and shall continue in full force and effect until the expiration of the last to expire of the Licensed Patents. Following termination resulting from expiration of Licensed Patents only, on a country by country basis, COMPANY shall have a perpetual, irrevocable non-exclusive royalty-free license to the Licensed Know-How.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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12.2 Termination. LICENSOR shall have the right to terminate this Agreement upon the occurrence of a material breach. Without limitation, any one or more of the following shall each be deemed a material breach of this Agreement by COMPANY:
 
 	i.	failure of COMPANY to make any payment required under this Agreement when due; or	
 
 	ii.	failure of COMPANY to provide Progress Reports or Royalty Reports; or	
 
 	iii.	lack of Diligence as set forth in Article 6; or	
 
 	iv.	the dissolution of the Company, the institution of any proceeding under any bankruptcy, insolvency, or moratorium law, by or on behalf of COMPANY or its creditors (excluding a reorganization under Chapter 11 of the US Bankruptcy Code or similar law of another jurisdiction in which the reorganized entity assumes and timely satisfies the obligations under this Agreement and excluding an involuntary bankruptcy, insolvency or similar proceeding initiated by creditors and dismissed within sixty days of commencement); or	
 
 	v.	any COMPANY decision to cease developing or quit the business of selling Licensed Products; or	
 
 	vi.	the breach by COMPANY of any other material term of this Agreement.	
12.3 LICENSOR shall provide COMPANY written notice describing the breach, which notice shall include LICENSOR’s intention to terminate the Agreement. If COMPANY does not cure the breach within thirty (30) days after receipt of such notice, this Agreement will terminate immediately without further action by LICENSOR. If COMPANY disputes such breach in good faith by written notice to LICENSOR within the thirty (30) day period, the matter will be submitted to dispute resolution as described under Article 14. LICENSOR’s right to terminate shall be suspended until resolution of the dispute. The procedures set forth in this Section 12.2 shall not prejudice LICENSOR’s right to receive royalties or other sums due hereunder and shall not prejudice any cause of action or claim due to any breach or default by the COMPANY.
Notwithstanding the foregoing, if the COMPANY challenges the validity or enforceability of any Licensed Patents in a court or other governmental agency of competent jurisdiction, this Agreement shall terminate immediately.
12.4 Notice of Bankruptcy. COMPANY must inform LICENSOR of its intention to file a voluntary petition in bankruptcy or of another’s intention to file an involuntary petition in bankruptcy to be received at least forty five (45) days prior to filing such a petition. If COMPANY files a petition of bankruptcy without conforming to this requirement, this shall be deemed a material, pre-petition, incurable breach.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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12.5 Failure to Enforce. The failure of LICENSOR, at any time, or for any period of time, to enforce any of the provisions of this Agreement, shall not be construed as a waiver of such provisions or as a waiver of the right of LICENSOR thereafter to enforce each and every such provision of this Agreement.
12.6 Termination by COMPANY. COMPANY shall have the right to terminate this Agreement at its sole discretion upon sixty (60) days written notice to LICENSOR and upon payment of any amounts due to LICENSOR under this Agreement through the effective date of such termination.
12.7 Effect. If this Agreement is terminated for any reason whatsoever (other than expiration or as a result of material breach by LICENSOR), COMPANY shall return, or at LICENSOR’s direction, destroy, all tangible materials (including plans, documents, samples, biological materials, models and the like) pertaining to the Licensed Patents or Licensed Technology supplied to COMPANY by LICENSOR, retaining archival copies in its corporate legal or data management department as required so that compliance with any continuing obligations may be determined. Within [* * *] days after termination of this Agreement for any reason (other than expiration or as a result of material breach by LICENSOR), COMPANY shall provide LICENSOR full and complete copies of development information, including in vitro studies, toxicology, pharmacokinetic, efficacy, clinical and other technical data and all correspondence to and from regulatory agencies relating to approval of Licensed Products generated by COMPANY and/or its Affiliates, contractors and agents to the extent the Company can do so without violating the rights of any third party (hereinafter “Development Information”). Development Information shall remain the Confidential Information of Licensee, subject to the protections of Article 11 and subject to the rights in favor of LICENSOR set forth in Section 12.8. Upon termination of this Agreement (other than upon expiration), COMPANY shall cease manufacturing, processing, producing, using, importing or Selling Licensed Products; provided, however, that COMPANY may continue to Sell in the ordinary course of business for a period of [* * *] reasonable quantities of Licensed Products which are fully manufactured or on order at the date of termination if (a) all monetary obligations of COMPANY to LICENSOR have been satisfied and (b) royalties on such sales are paid to LICENSOR in the amounts and in the manner provided in this Agreement. However, nothing herein shall be construed to release either party of any obligation which matured prior to the effective date of such termination.
12.8 Development Information. COMPANY shall, subject to any rights any Sublicensees or other third parties may have with respect to Development Information, grant to LICENSOR a right for LICENSOR to access and to refer to all Development Information delivered or required to be delivered pursuant to Section 12.7, and to provide a copy thereof to potential licensees of the Licensed Patents (under conditions of confidentiality consistent with Article 11), solely for use in LICENSOR’s efforts to license the Licensed Patents to any third party; LICENSOR shall not be entitled to license, grant, or transfer to any third party any rights in such Development Information. In the event LICENSOR agrees
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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in writing to material economic terms with a third party concerning the grant of a license to such third party under the Licensed Patents formerly licensed to COMPANY hereunder, LICENSOR shall provide written notice thereof to COMPANY and COMPANY shall enter into good faith negotiations with such third party concerning the granting of rights to, or transfer of title in, the Development Information to such third party on commercially reasonable terms, subject to any rights any Sublicensees or other third parties may have with respect to any of the foregoing that survive termination of this Agreement.
ARTICLE 13. ASSIGNMENT
COMPANY may grant, transfer, convey, or otherwise assign any or all of its rights and obligations under this Agreement in conjunction with the transfer of all, or substantially all, of the business interests of COMPANY related to Licensed Products. LICENSOR’s written consent, which shall not be unreasonably withheld, shall be required prior to any other assignment of COMPANY’S rights or obligations under this Agreement. This Agreement shall be assignable by LICENSOR to any other nonprofit corporation which promotes the research purposes of LICENSOR, including but not limited to GIT, the Georgia Tech Foundation, and/or the Board of Regents of the University System of Georgia.
ARTICLE 14. DISPUTE RESOLUTION
14.1. Negotiation. Any dispute related to this License Agreement shall be settled in accordance with the procedures specified in this Section. COMPANY and LICENSOR agree to attempt to settle any claim or controversy arising out of this Agreement through consultation and negotiation in good faith and spirit of mutual cooperation. Any dispute between the parties relating to this Agreement will first be submitted in writing to a senior executive of COMPANY and LICENSOR (the “Dispute Notice”), who will promptly meet and confer in an effort to resolve such dispute. Any agreed decisions of the executives will be final and binding on the parties. All negotiations pursuant to this Section are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.
14.2. Non-binding Mediation. If the parties are unable to resolve any dispute by negotiation within [* * *] days of the Dispute Notice, then either party may initiate mediation upon written notice to the other party demanding mediation (the “Mediation Notice”), whereupon the dispute will be mediated by a mutually acceptable mediator to be chosen within [* * *] days after the Mediation Notice. The parties will share the costs of the mediator equally. If the parties cannot agree upon selection of a mediator within [* * *] days of the notice, then upon request of either party, the AAA shall appoint the mediator. Mediation shall take place in Atlanta, Georgia and shall proceed under the then current American Arbitration Association Model Commercial Mediation Procedures to the extent that the Model Procedure does not conflict with provisions of this article.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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14.3. Costs. The fees and expenses, but not attorney’s fees, incurred in connection with any non-binding mediation shall be borne by the party initiating the non-binding mediation proceeding (or equally by both parties if both parties jointly initiate such proceeding) subject to reimbursement by the party which does not prevail in such proceeding promptly upon the termination thereof in the event that the party initiating such proceeding is the prevailing party.
14.4. Continued Obligations. Each party shall continue to perform its undisputed obligations under this Agreement, including payments due, pending final resolution of any dispute arising out of or relating to this Agreement; provided, however that a party may suspend performance during any period in which the other party fails to perform its undisputed obligations.
ARTICLE 15. MISCELLANEOUS
15.1 Export Controls. COMPANY acknowledges that Licensed Products and Licensed Technology may be subject to United States laws and regulations controlling the export of technical data, biological materials, chemical compositions, computer software, laboratory prototypes and other commodities and that LICENSOR’s obligations under this Agreement are contingent upon compliance with applicable United States export laws and regulations. The transfer of technical data and commodities may require a license from the cognizant agency of the United States government or written assurances by COMPANY that COMPANY shall not export data or commodities to certain foreign countries without the prior approval of certain United States agencies. LICENSOR neither represents that an export license shall not be required nor that, if required, such export license shall issue.
15.2 Legal Compliance. COMPANY shall comply in all material respects with all laws and regulations relating to its manufacture, processing, producing, using, importing Selling, labeling or distribution of Licensed Products and Licensed Technology and shall not take any action which would cause LICENSOR to violate any laws or regulations.
15.3 Independent Contractor. COMPANY’s relationship to LICENSOR shall be that of a licensee only. COMPANY shall not be the agent of LICENSOR and shall have no authority to act for, or on behalf of, LICENSOR in any matter. Persons retained by COMPANY as employees or agents shall not, by reason thereof, be deemed to be employees or agents of LICENSOR.
15.4 Patent Marking. COMPANY shall mark Licensed Products Sold in the United States with United States patent numbers. Licensed Products manufactured or Sold in other countries shall be marked in compliance with the intellectual property laws in force in such foreign countries.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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15.5 Use of Names. COMPANY shall obtain the prior written approval of LICENSOR prior to making use of their names for any commercial purpose, except as required by law. As an exception to the foregoing, both COMPANY and LICENSOR shall have the right to publicize the existence of this Agreement; however, neither COMPANY nor LICENSOR shall disclose the terms and conditions of this Agreement without the other party’s consent, except as required by law. Notwithstanding the foregoing, (a) COMPANY shall not use the names of Georgia Tech Research Corporation, the Georgia Institute of Technology, Georgia Tech, the Georgia Tech Foundation or any of their respective affiliates or divisions or any derivations thereof in any advertisement, publications, or sales materials without the prior written consent of GTRC and (b) COMPANY may disclose this Agreement and the terms hereof on a confidential basis to actual or prospective acquirors, merger partners, sources of funding, professional advisors, Sublicensees and research and commercialization collaborators.
15.6 Place of Execution. This Agreement and any subsequent modifications or amendments hereto shall be deemed to have been executed in the State of Georgia, U.S.A.
15.7 Governing Law. This Agreement and all amendments, modifications, alterations, or supplements hereto, and the rights of the parties hereunder, shall be construed under and governed by the laws of the State of Georgia and the United States of America.
15.8 Venue. Only courts in the State of Georgia, U.S.A., shall have jurisdiction to hear and decide any controversy or claim between the parties arising under or relating to this Agreement.
15.9 Entire Agreement. This Agreement constitutes the entire agreement between LICENSOR and COMPANY with respect to the subject matter hereof and shall not be modified, amended or terminated, except as herein provided or except by another agreement in writing executed by the parties hereto.
15.10 Survival. Articles 9, 10, 11, 12.7 and 12.8 shall survive termination of this Agreement for any reason.
15.11 Severability. All rights and restrictions contained herein may be exercised and shall be applicable and binding only to the extent that they do not violate any applicable laws and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid or unenforceable. If any provision or portion of any provision of this Agreement, not essential to the commercial purpose of this Agreement, shall be held to be illegal, invalid or unenforceable by a court of competent jurisdiction, it is the intention of the parties that the remaining provisions or portions thereof shall constitute their agreement with respect to the subject matter hereof, and all such remaining provisions, or portions thereof, shall remain in full force and effect. To the extent legally permissible, any illegal, invalid or unenforceable provision of this Agreement shall be replaced by a valid provision which shall implement the commercial purpose of the illegal, invalid, or unenforceable provision.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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15.12 Force Majeure. Any delays in, or failure of performance of any party to this Agreement, shall not constitute a default hereunder, or give rise to any claim for damages, if and to the extent caused by occurrences beyond the control of the party affected, including, but not limited to, acts of God, strikes or other concerted acts of workmen, civil disturbances, fires, floods, explosions, riots, war, rebellion, sabotage, acts of governmental authority or failure of governmental authority to issue licenses or approvals which may be required.
15.13 Counterparts. This Agreement may be executed by facsimile and in counterparts, each of which is deemed an original, but all of which together shall constitute one and the same instrument
ARTICLE 16. NOTICES
All notices, statements, and reports required to be given by one party to the other shall be in writing. Progress and Royalty reports required under Article 4 may be delivered electronically with a copy to [* * *] and to [* * *].
Except for progress and royalty reports required under Article 4, all reports shall be hand delivered, sent by private overnight mail service, or sent by registered or certified U.S. mail, postage prepaid, return receipt requested and addressed as follows:

If to EMORY:	  	Emory University
Office of Technology Transfer
1599 Clifton Rd., 4th Floor
Atlanta, Georgia 30322
ATTN: Director
Facsimile: (404) 727-1271	
 	 	
If to GTRC:	  	Director, Office of Innovation Commercialization
Georgia Tech Research Corporation
505 Tenth St NW
Atlanta, GA 30332-0415
Fax: (404) 894-9728	
 	 	
If to COMPANY:	  	Clearside Biomedical, Inc.
1220 Old Alpharetta Rd. Suite 300
Alpharetta GA 30005
Attn: CEO	
 	 	
 	  	With a copy to	
 	 	
 	  	Hutchison Law Group
5410 Trinity Road, Suite 400
Raleigh, NC 27607
bwofford@hutchlaw.com	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Such notices or other communications shall be effective upon receipt by an employee, agent or representative of the receiving party authorized to receive notices or other communications sent or delivered in the manner set forth above. Any party hereto may change the address to which notices to such party are to be sent by giving notice to the other party at the address and in the manner provided above. Any notice may be given, in addition to the manner set forth above by facsimile provided that the party giving such notice obtains acknowledgement by facsimile that such notice has been received by the party to be notified. Notice made in this manner shall be deemed to have been given when such acknowledgement has been transmitted.
[signature page follows]
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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IN WITNESS WHEREOF, LICENSOR and COMPANY have caused this Agreement to be signed by their duly authorized representatives as of the Effective Date.

 	 	EMORY UNIVERSITY	 	 	 	 	 	CLEARSIDE BIOMEDICAL, INC.	
 	 	 	 	 	
By:	 	/s/ Todd Sherer	 	 	 	By:	 	/s/ Daniel H. White	
Name:	 	Todd T. Sherer, Ph.D.	 	 	 	Name:	 	Daniel H. White	
Title:	 	Assistant Vice President for Research	 	 	 	Title:	 	President & CEO	
and Director office of Technology Transfer	 	 	 	 	 	 	
LIC.    .    

 	 	GEORGIA TECH RESEARCH CORPORATION	
 	 	
By:	 	/s/ Jilda Diehl Garton	
Name:	 	Jilda Diehl Garton	
Title:	 	General Manager	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX A
COMPANY’S DEVELOPMENT PLAN
[* * *]
 
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APPENDIX B
LICENSED PATENTS
U.S. Patent No. 7,918,814 entitled “Method for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Patent Serial No. 12/767,768 “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
PCT Patent Application No. PCT/US2011/033987 “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Patent Serial No. 13/447,246 “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Patent Serial No. 13/453,407 “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Draft provisional patent application based on the invention disclosure [* * *], which application is titled, “METHODS AND DEVICES FOR DRUG DELIVERY USING MICRONEEDLES” .
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX C
[omitted]
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX D
RUNNING ROYALTY PERCENTAGES

 	  	Percentage of Net Selling
Price	
510k/CE device disposable tip	  	[***]%	
510k/CE device syringe plus tip	  	[***]%	
Device in combination or packaged with enabling instrument	  	[***]%	
Device in combination with Patent Protected Active Pharmaceutical Ingredient (API)	  	[***]%	
Device in combination with a Generic active pharmaceutical ingredient	  	[***]%	
Device in combination with Non API (e.g., balanced saline)	  	[***]%	

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX E
MINIMUM ROYALTIES

Calendar Year after First commercial Sale	  	Minimum Royalty	 	
Year 1 and 2 (1st and 2nd calendar year following First Sale)	  	$	15,000	  	
Year 3	  	$	25,000	  	
Year 4	  	$	50,000	  	
Year 5	  	$	75,000	  	
Year 6 and subsequent years	  	$	100,000	  	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX F
MILESTONES

Milestone Event	  	Milestone Payment	 	
a)	  	First FDA 510(k) regulatory approval, CE Mark approval or dosing of a first human patient in a Company-sponsored clinical trial	  	$	35,000	  	
b)	  	First commercial Sale of an FDA approved product as a human therapeutic	  	$	75,000	  	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX G
LICENSE MAINTENANCE FEES

Effective Date Anniversary	  	License Maintenance Fee	 	
First and Second Anniversary	  	 	None	  	
Third and Each Subsequent Anniversary	  	$	25,000	  	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX H
DEVELOPMENT MILESTONES AND DATES
 
1.	Initiate GLP safety studies in a suitable animal model within [* * *] of the Effective Date of this Agreement; and	
 
2.	Submission of first application for FDA 510(k) or CE Mark or IND within [* * *] of the Effective Date of this Agreement; and	
 
3.	Initiate human clinical studies within [* * *] of successful completion of GLP safety studies; and	
 
4.	First commercial Sale of a Licensed Product within [* * *] of the Effective Date of this Agreement. *	
 
*	Company may extend the date for achievement of this milestone by [* * *] by providing written notice to LICENSOR together with the $75,000 milestone payment set forth on Appendix F, with the option to extend by a period of an additional [* * *] with payment of a nonrefundable fee of [* * *], provided, however that such extension shall not relive COMPANY of its obligation to continue to use commercially reasonable efforts to bring Licensed Product to market.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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APPENDIX I
[* * *] TERM SHEET
[* * *]
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT WHICH INCLUDE THIS AND NINE ADDITIONAL PAGES OF OMISSIONS. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Exhibit A
Patent Rights
Emory File No [* * *].
U.S. Patent No. 7,918,814 entitled “Method for Drug Delivery to Ocular Tissue Using Microneedle”
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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FIRST AMENDMENT TO
LICENSE AGREEMENT
This First Amendment (the “First Amendment”) to the License Agreement (the “Agreement”) dated July 4, 2012, by and among Clearside Biomedical, Inc., a Delaware corporation having a principal place of business at 1220 Old Alpharetta Road, Suite 300, Alpharetta, Georgia 30005 (“ Clearside ” or “ COMPANY ”), Emory University, a nonprofit Georgia corporation having offices located at 1599 Clifton Road NE, 4 th  Floor, Mailstop 1599/001/1AZ, Atlanta, Georgia 30322 (“ Emory ”) and the Georgia Tech Research Corporation, a nonprofit corporation with offices located at offices located at 505 10 th  Street NW, Atlanta, Georgia 30332-0415 (“ GTRC ” and together with Emory, “ LICENSOR ”) is effective this 2nd day of April, 2014 (the “ First Amendment Effective Date ”).
WHEREAS, the parties have made joint advances to the technology licensed pursuant to the Agreement;
WHEREAS, the parties desire to treat patents that may issue based on certain joint discoveries as “Licensed Patents” during the term of the Agreement;
WHEREAS, the parties also desire to treat patents that may issue based on U.S. Provisional Patent Application Serial No. 61/918,992 (the “ 2014 Patent Application ”) as “ Licensed Patents ” during the term of the Agreement.
WHEREAS, in connection with such advances, the parties hereto wish to make certain changes to the Agreement.
NOW THEREFORE, in consideration of the promises, undertakings and covenants set forth in this First Amendment, the receipt and sufficiency of which are hereby agreed and acknowledged, the parties agree as follows:
 
1.	Additional License Fee. As partial consideration for the license granted to COMPANY with respect to the 2014 Patent Application, COMPANY shall pay LICENSOR a license fee in the amount of fifteen thousand ($15,000) Dollars within thirty (30) days of the First Amendment Effective Date.	
 
2.	Amendment of Section 2.5.6. Section 2.5.6 shall be revised to read as follows: “Notwithstanding anything herein to the contrary, in no event shall Clearside have any obligation to grant any sublicense to any person with respect to any Licensed Patent that is jointly owned by Clearside and Licensor during the term of this License.”	
 
3.	Amendment to Section 11. The following sentence shall be added at the end of Section 11.1(i):	
“COMPANY and its Affiliates and Sublicensees shall retain in confidence and use only for the purposes of this Agreement any written information and data supplied by LICENSOR before the First Amendment Effective Date regarding the 2014 Patent Application.
 
4.	Amendment of Section 12. The following sentence shall be added at the end of Section 12.7:	
“Notwithstanding the foregoing, with respect to any Licensed Patents that are jointly owned by COMPANY and Licensor, upon termination of this Agreement, COMPANY agrees, at LICENSOR’s request within one year of termination to negotiate in good faith an exclusive license to any jointly owned rights.”
 
5.	Amendment of Appendix B. Appendix B shall be deleted and replaced with the Appendix B attached hereto.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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6.	Miscellaneous.	
 
 	6.1.	Defined Terms. Capitalized terms undefined herein shall have the meaning ascribed to them in the Agreement.	
 
 	6.2.	No Other Amendment; Effectiveness. Except as expressly amended herein, the Agreement remains in full force and effect according to its original terms.	
 
 	6.3.	Governing Law. This First Amendment shall be construed under and governed by the laws of the State of Georgia and the United States of America.	
 
 	6.4.	Severability. All rights and restrictions contained herein may be exercised and shall be applicable and binding only to the extent that they do not violate any applicable laws and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid or unenforceable. If any provision or portion of any provision of this Agreement, not essential to the commercial purpose of this Agreement, shall be held to be illegal, invalid or unenforceable by a court of competent jurisdiction, it is the intention of the parties that the remaining provisions or portions thereof shall constitute their agreement with respect to the subject matter hereof, and all such remaining provisions, or portions thereof, shall remain in full force and effect. To the extent legally permissible, any illegal, invalid or unenforceable provision of this Agreement shall be replaced by a valid provision which shall implement the commercial purpose of the illegal, invalid, or unenforceable provision.	
 
 	6.5.	Counterparts. This First Agreement may be executed electronically and in counterparts, each of which is deemed an original, but all of which together shall constitute one and the same instrument.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2

IN WITNESS WHEREOF, the parties have caused this First Amendment to be executed by their duly authorized representatives as of the First Amendment Effective Date.

EMORY UNIVERSITY	 	 	 	GEORGIA TECH RESEARCH CORPORATION	
 	 	 	 	 	
By:	 	/s/ Todd Sherer	 	 	 	By:	 	/s/ Lauren MacLanahan	
Name:	 	Todd Sherer	 	 	 	Name:	 	Lauren MacLanahan	
Title:	 	Director, OTT	 	 	 	Title:	 	Director	
Date:	 	April 3, 2014	 	 	 	Date:	 	April 1, 2014	
 	 	
CLEARSIDE BIOMEDICAL, INC.	 	 	
 	 	 	 	 	
By:	 	/s/ Daniel H. White	 	 	 	 	 	 	
Name:	 	Daniel White	 	 	 	 	 	 	
Title:	 	President and CEO	 	 	 	 	 	 	
Date:	 	April 11, 2014	 	 	 	 	 	 	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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APPENDIX B
LICENSED PATENTS
Licensor solely owned
U.S. Patent No. 7,918,814, issued April 5, 2011, entitled “Method for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Patent No. 8,197,435, issued June 12, 2012, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Patent No. 8,636,713, issued January 28, 2014, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Patent Application Serial No. 13/447,246, filed April 15, 2012, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Patent Application Serial No. 14/136,657, filed December 20, 2013, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle
PCT Patent Application No. PCT/US2011/033987, filed April 26, 2011, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Australia Patent Application No. 2011248624, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Brazil Patent Application No. 11 2012 027416-3, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Canada Patent Application No. 2797258, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
China national phase of PCT/US2011/033987, filed April 26, 2011, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
European Patent Application No. 11777924.9, filed April 26, 2011, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
India Patent Application No. 10099/DELNP/2012, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Israel Patent Application No. 222638, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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Japan Patent Application No. 2013-508168, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Mexico Patent Application No. MX/a/2012/012495, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
New Zealand Patent Application No. 603185, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Russia Patent Application No. 2012147341, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
Singapore Patent Application No. 201207910-9, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
South Africa Patent Application No. 2012/08069, filed April 26, 2011, which is the National Phase of PCT/US2011/033987, entitled “Methods and Devices for Drug Delivery to Ocular Tissue Using Microneedle”
U.S. Provisional Patent Application Serial No. 61/698,254, filed September 7, 2012, entitled “Microneedles and Systems for Administration of Drug to the Suprachoroidal Space and Other Tissue Sites”
U.S. Provisional Patent Application Serial No. 61/918,992, filed December 20, 2013, entitled “Ocular Drug Delivery”
Jointly Owned Patents
U.S. Provisional Patent Application Serial No. 61/693,542, filed August 27, 2012, entitled “Apparatus and Methods for Drug Delivery Using Microneedles”
U.S. Provisional Patent Application Serial No. 61/754,495, filed January 18, 2013, entitled “Apparatus and Methods for Drug Delivery Using Microneedles”
U.S. Provisional Patent Application Serial No. 61/784,817, filed March 14, 2013, entitled “Apparatus and Methods for Drug Delivery Using Microneedles”
PCT Patent Application No. PCT/US2013/056863, filed August 27, 2013, entitled “Apparatus and Methods for Drug Delivery Using Microneedles”
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. OMISSIONS ARE DESIGNATED BY [* * *]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
5

Exhibit 10.2
LEASE AGREEMENT
THIS LEASE AGREEMENT (the “Lease”), made and entered into as of March 14, 2012 (the “date of this Lease”) by and between Clearside Biomedical, Inc., a Delaware corporation (hereinafter referred to as “Tenant”), and McDonald Ventures XI, LLC, a Georgia limited liability company (hereinafter referred to as “Landlord”);
W I T N E S S E T H
1. PREMISES. For and in consideration of the obligation of Tenant to pay rent as herein provided, and in consideration of the other terms, provisions and covenants hereof, Landlord hereby demises and leases to Tenant, and Tenant hereby leases from Landlord certain premises (Suite 300) being approximately 8,823 square feet of space (the “Premises”) shown on Exhibit “B”, within the building known as Windward Chase 300, (the “Building”), located at 1220 Old Alpharetta Road, Alpharetta, Forsyth County, Georgia, described on Exhibit “A” attached hereto and incorporated herein by reference, together with all rights, privileges, easements, and appurtenances belonging to or in any way pertaining to said Premises (hereinafter collectively the “Property”).
TO HAVE AND TO HOLD the Premises for the Demised Term, as hereinafter defined.
2. TERM. The Term of this Lease (hereinafter referred to as the “Demised Term”) shall be for a period commencing on the Commencement Date, as hereinafter defined, and ending thirty (30) full calendar months thereafter, unless sooner terminated as provided in this Lease; provided, however, that, in the event the Commencement Date is not the first day of a calendar month, the Demised Term shall extend for the remainder of the calendar month in which the Commencement Date occurs plus said number of months.
The “Commencement Date” shall be the earlier of: (i) April 1, 2012; or (ii) the date upon which the buildings and other improvements erected and to be erected upon the Premises shall have been substantially completed in accordance with the plans and specifications described on Exhibit “B” attached hereto and incorporated herein by reference (the “Plans”). In the event of delays caused by Tenant due to changes to the Plans or delayed approval of final construction drawings, the Commencement Date shall be the date upon which Landlord would have achieved substantial completion in the absence of Tenant’s delays.
Landlord shall provide the improvements more particularly described on Exhibit “B” attached hereto. Landlord shall over perform the improvements described on the Plans, excluding those improvements to be installed by Tenant. Tenant shall have the right to enter the Premises during the final stages of construction for purposes of installing its phone and data cabling and security systems, if applicable. Upon substantial completion, Landlord shall notify Tenant in writing that the improvements are ready for occupancy. In the event that said buildings and other improvements have not in fact been substantially completed as aforesaid, Tenant shall notify Landlord in writing of its objections. Landlord shall have a reasonable time after delivery of such notice in which to take such corrective action as may be necessary, and shall notify Tenant in writing as soon as it deems such corrective action has been completed so that said buildings and other improvements are completed and ready for occupancy, subject to punch list items. Taking of possession by Tenant shall be deemed conclusively to establish that said buildings and other improvements have been completed in accordance with the plans and specifications and are in good and satisfactory condition. In the event of any dispute as to substantial completion of work performed or required to be performed by Landlord, or the date of substantial completion of such work, the certificate of the Landlord’s contractor shall be conclusive. Tenant acknowledges that no representations as to the condition of the Premises have been made by Landlord, unless such are expressly set forth in this Lease. After the Commencement Date, Tenant shall, upon demand, execute and deliver to Landlord a letter of acceptance of delivery of the Premises.
3. BASE RENT.
A. Tenant agrees to pay Landlord rent for the Premises (“Base Rent”), in advance, without demand, deduction or set off, for the Demised Term at the rate of Six Thousand Six Hundred Eighteen and No/100s ($6,618.00) per month. The first monthly installment of Base Rent shall be due and payable on the date hereof and a like monthly installment of Base Rent shall be due and payable on or before the first day of each calendar month thereafter during the Demised Term, except that the rent payment for any fractional calendar month at the commencement or end of the Demised Term shall be prorated on the basis of a thirty-day month.

 	 	 	 	 	
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B. Landlord and Tenant agree that the Base Rent set forth in Paragraph 3.A. above shall increase by three percent (3%) at the beginning of the thirteenth (13th) full calendar month of the Demised Term, which adjusted rent amount shall remain in effect for the next twelve (12) consecutive months and shall increase by three percent (3%) each twelve (12) months thereafter for the balance of the Demised Term; it being the express intention of the parties that in the event the Commencement Date is not the first day of a calendar month, the anniversary date of the rent adjustment hereunder shall be the first day of the first full calendar month. Whenever Base Rent is escalated under this Lease based on a percentage increase, the resulting escalated Base Rent amount shall be rounded up or down to the nearest whole dollar.
4. SECURITY DEPOSIT. Tenant agrees to deposit with Landlord on the date hereof, in addition to the rent specified in Paragraph 3, the sum off Six Thousand Six Hundred Eighteen and No/100s ($6,618.00), which sum shall be held by Landlord, without obligation for interest (except as may be required by law), as security for the performance of Tenant’s covenants and obligations under this Lease, it being expressly understood and agreed that such deposit is not an advance rent payment or a measure of Landlord’s damages in case of Tenant’s default. Upon the occurrence of any event of default by Tenant under this Lease, Landlord may (but without obligation to do so), from time to time, without prejudice to any other remedy provided herein or provided by law or in equity, use this security deposit to the extent necessary to make good any arrears of rent or other payments due Landlord hereunder, and any other damage, injury, expense or liability caused by such event of default. Tenant shall pay Landlord, on demand, the amount of the security deposit so applied in order to restore the security deposit to its original amount. This security deposit shall be deemed the property of Landlord, but any remaining balance of such deposit shall be returned by Landlord to Tenant within thirty (30) days after termination of this Lease and date that all of Tenant’s obligations under this fulfilled.
5. USE. The Premises shall be used only for general office purposes, engineering to include (a) visual inspection – requires microscope and special light as well as computer and digital camera; (b) mechanical inspection – requires force-displacement station and video camera; (c) micro processing including polishing, sharpening; (d) assembly of devices and tools; (e) electrical testing – requires oscilloscopes and amplifiers; (f) light manufacturing; (g) research and development; and for the purpose of receiving, storing, shipping and selling (other than retail) products, materials and merchandise made and/or distributed by Tenant and for such other lawful purposes as may be incidental thereto. In the event, Tenant’s uses should require any permits, variances, or other requirements as in order to occupy and use the Premises, Tenant shall be responsible for securing them at its sole cost and expense. Outside storage, including without limitation, trucks and other vehicles, is prohibited without Landlord’s prior written consent. Tenant shall at its own cost and expense, obtain any and all other licenses and permits necessary for any such use. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises, and shall promptly comply with all governmental orders and directives for the correction, prevention and abatement of nuisances in or upon, or connected with, the Premises, all at Tenant’s sole expense. Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises, nor take any other action which would constitute a nuisance or would disturb or endanger any other tenants of the building or buildings in which the Premises are situated or unreasonably interfere with their use of their respective premises. Without Landlord’s prior written consent, Tenant shall not receive, store or otherwise handle any product, material or merchandise which is explosive or highly inflammable. Tenant will not permit the Premises to be used for any purpose or in any manner (including without limitation, any method of storage) which would render the insurance thereon void or the insurance risk more hazardous or cause the State Board of Insurance or other insurance authority to disallow any sprinkler credits. Tenant shall not use the Premises for the generation, storage, transportation or disposal of dangerous, toxic or hazardous materials, chemicals, wastes or similar substances.
6. TAXES.
A. Landlord agrees to pay before delinquency, all taxes, assessments and governmental charges of any kind and nature whatsoever (hereinafter collectively referred to as “taxes”) lawfully levied or assessed against the Property. Tenant agrees to pay to Landlord, as additional rent, upon demand, the amount of Tenant’s projected “proportionate share” of the taxes assessed against the Property. Tenant’s “proportionate share”,

 	 	 	 	 	
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as used in this Lease, shall mean a fraction, the numerator of which is the gross square footage contained in the Premises and the denominator of which is the gross square footage contained in the building or buildings located on the Property.
B. If at any time during the Term of this Lease, the present method of taxation shall be changed so that in lieu of the whole or any part of any taxes, assessments or governmental charges, levied, assessed or imposed on real estate and the improvements thereon, there shall be charged, levied, assessed or imposed on Landlord a capital levy or other tax directly on the rents received therefrom and/or a franchise tax, assessment, levy or charge measured by or based, in whole or in part, upon such rents for the present or any future building or buildings on the Property, then all such taxes, assessments, levies or charges, or the part thereof so measured or based, shall be deemed to be included within the term “taxes” for the purposes hereof.
C. The Landlord shall have the right (but no obligation) to employ a tax-consulting firm to attempt to assure a fair tax burden on the building or buildings on the Property within the applicable tax jurisdiction. Tenant shall pay to Landlord upon demand from time to time, as additional rent, the amount of Tenant’s “proportionate share” (as defined in subparagraph 6.A herein) of the cost of such service, which is normally a contingency fee based on a percentage of tax savings generated by the tax firm.
D. Any payment to be made pursuant to this Paragraph 6 shall be prorated in the event any portion of the Demised Term is not within a full real estate tax year.
7. LANDLORD’S REPAIRS. Landlord, at its expense, shall maintain only the roof, foundation, and the structural soundness of the exterior walls of the Premises in good repair, reasonable wear and tear excepted. Tenant shall repair and pay for any damage caused by the negligence of Tenant, or Tenant’s employees, agents or invitees, or caused by Tenant’s default hereunder. The term “walls” as used herein shall not include windows, glass or plate glass, doors, special storefronts or office entries. Tenant shall immediately give Landlord written notice of defects or need for repairs, after which Landlord shall have reasonable opportunity to repair same or cure such defects. Landlord’s liability with respect to any defects, repairs or maintenance for which Landlord is responsible under any of the provisions of this Lease shall be limited to the cost of such repairs or maintenance or the curing of such defects.
8. TENANT’S REPAIRS.
A. Tenant shall at its own cost and expense keep and maintain all parts of the Premises (except those for which Landlord is expressly responsible under the terms of this Lease) in good condition, promptly making all necessary repairs and replacements, including but not limited to, windows, glass and plate glass, doors, any special office entry, interior walls and finish work, floors and floor covering, heating and air condition systems, dock boards, truck doors, dock bumpers, plumbing work and fixtures, termite and pest extermination, and regular removal of trash and debris.
Tenant shall provide Landlord with prior notice of any repair to be undertaken by Tenant costing in excess of $1,000 (in Tenant’s reasonable estimation) and such other information as Landlord may reasonably request with respect to such repair, except such notice shall not be required if immediate repair is necessary for security or safety reasons.
B. Tenant shall not damage any wall or disturb the integrity and support provided by any wall and shall, at its sole cost and expense, promptly repair any damage or injury to any wall caused by Tenant or its employees, agents or invitees.
C. Tenant shall, at its own cost and expense, enter into a quarterly preventative maintenance/service contract with one of Landlord’s preferred licensed HVAC contractors for servicing all heating and air conditioning systems and equipment, within the Premises over the term of the lease. In the event Landlord has not received a copy of Tenant’s service contract described herein within 30 days after the commencement date of the Lease or Tenant fails to maintain the contract during the Term, Landlord may, at its option, enter into a service contract on behalf of Tenant, and Tenant shall reimburse Landlord, within 10 days notice from Landlord, for

 	 	 	 	 	
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the cost of such service contract. Tenant shall keep accurate and complete records of the performance of all scheduled maintenance under such contract and shall provide copies thereof to Landlord from time to time upon request by Landlord. The service contract must i) include all services suggested by the licensed contractor to keep the units in good repair, and ii) comply with any warranties (if applicable). Notwithstanding the foregoing, Landlord will warrant, for the first six (6) months of the Demised Term (“Warranty Period”), that all heating, cooling, ventilation, air conditioning systems are in good working order. Landlord will assume responsibility for repairs and replacements during the Warranty Period, by but not routine maintenance. During the Warranty Period and throughout the term of the Lease, Tenant will be responsible for any required maintenance to all systems in compliance with any warranties as recommended as part of the preventative maintenance agreement. Upon expiration of the Warranty Period, Tenant will be responsible for repairs, replacements, and maintenance of the HVAC units as required herein. Upon expiration of the Warranty Period, Landlord will agree to cap HVAC repairs or replacement at $3,000.00 per unit per lease year for the balance of the Demised Term. Tenant will not be allowed to apply the cost of the regular maintenance contract towards the cap. Tenant shall notify Landlord in writing of any repairs or replacements needed that exceed the above referenced cap prior to such repairs and replacements being made. Landlord shall have the right to approve the contractor who is to perform such work or use a contractor of Landlord’s choosing. The cap will be null and void if Tenant has not i) kept a quarterly maintenance contract with a licensed contractor, approved by Landlord, in place over the term of the lease to maintain the applicable equipment per the manufacturer’s recommendations and ii) performed the maintenance recommended by the licensed contractor to keep the units in good repairs, iii) complied with any warranties (if applicable), (iv) notified Landlord in writing prior to such repairs and replacements being made, and (v) kept accurate and complete records of the performance of all scheduled maintenance under the service contract and provided copies thereof to Landlord from time to time upon request by Landlord.
9. COMMON AREA MAINTENANCE.
A. Tenant shall pay to Landlord as additional rent a common area operating and maintenance fee (“CAM”) equal to Tenant’s “proportionate share” (as defined in subparagraph 6.A. herein) of the cost and expense for the operation and maintenance of the common areas of the building and park in which the Premises are located, including, but not limited to, the mowing of grass, care of shrubs, general landscaping, common sewage line plumbing, maintenance of building, parking areas, entrances, driveways, and management thereof. If Tenant or any other particular tenant of the building can be clearly identified as being responsible for obstructions or stoppage of the common sanitary sewage line, then Tenant, if Tenant is responsible, or such other responsible tenant, shall pay the entire cost thereof, upon demand, as additional rent. Payment shall be made on the first day of each month based on the projected cost of such maintenance. At the end of each year, Landlord shall determine the actual costs of such maintenance. Any additional costs due from Tenant based on the actual costs shall be promptly paid by Tenant. Any savings will be credited against the following year’s payments.
B. In addition to the CAM costs above, Tenant shall pay to Landlord a management fee equal to three percent (3%) of all rents paid in accordance with the Lease on a monthly basis, which payment shall be made on the first day of each month and shall be capped at three percent (3%) during the term of the Lease.
10. TENANT IMPROVEMENTS TO PREMISES. Notwithstanding Landlord’s obligations under Exhibit “B”, Tenant shall not make any alterations, additions or improvements to the Premises, exterior or interior (the “Tenant Alterations”), without the prior written consent of Landlord, except for unattached movable furniture and equipment which may be installed without drilling, cutting or otherwise defacing, damaging or overloading the Premises. In the event, Tenant desires to make an alterations to the Premises, Tenant shall submit to Landlord for approval: i) scope of work of the requested alterations, along with, ii) design drawings, and iii) the proposed contractors to perform as reasonably acceptable to Landlord. Upon Approval, Tenant shall prepare, if applicable, for review and approval for Landlord: i) all architectural, ii) mechanical, iii) electrical, iv) plumbing, v) and partition drawings. Once the work is completed, Tenant will provide Landlord with certificate of completion or equivalent documentation from governing authority and provide Landlord with all drawings. Without limiting the generality of the foregoing, Tenant acknowledges that floor striping of any kind constitutes a Tenant Alteration requiring the prior written approval of Landlord. The Tenant Alterations shall be deemed for all purposes a part of the real property of the Building immediately upon the installation thereof and shall remain on the Premises as

 	 	 	 	 	
Lease Agreement	 	4	 	March 13, 2012	

Landlord’s property at the expiration or earlier termination of the term hereof without compensation to Tenant, unless Landlord elects by notice to Tenant to have Tenant remove such Tenant Alterations, in which event, Tenant, at its sole cost and expense, shall promptly remove such Tenant Alterations and restore the Premises to its condition prior to the installation of such Tenant Alterations, normal wear and tear excepted (it being agreed that any damages resulting from the removal of any Tenant Alterations shall not constitute normal wear and tear). Tenant may not use or penetrate the roof of the Premises for any purpose whatsoever without Landlord’s prior written consent. All construction work done by Tenant in the Premises shall be performed in a good and workmanlike manner, in compliance with all governmental requirements, and at such times and in such manner as will cause a minimum of interference with other construction in progress and with the transaction of business in the building or buildings in which the Premises are located.
11. SIGNAGE. Landlord shall install, at its expense, Tenant’s name and suite number on the building directory sign and Tenant may install its name and logo on the door to the Premises. Tenant shall not install any signs visible from outside the Premises except with the prior written consent of Landlord. Any permitted signs shall be maintained in compliance with applicable governmental rules and regulations governing such signs. Tenant shall be responsible to Landlord for any damage caused by the installation, use or maintenance of said signs. Tenant agrees, upon removal of said signs, to repair all damage (including discoloration) incident thereto.
12. RIGHT OF ENTRY INSPECTION. Landlord and Landlord’s agents and representatives shall have the right to enter and inspect the Premises at any reasonable time during business hours, upon reasonable advance notice (except in cases of emergency), to ascertain the condition of the Premises, to make such repairs as may be required or permitted to be made by Landlord under the terms of this Lease, or to show the Premises to prospective purchasers or tenants. Landlord shall have the right to place or erect on the Property, but not directly in the Premises a suitable sign indicating the Premises are available for rent (during the last six (6) months of the Demised Term
Tenant shall give written notice to Landlord at least thirty (30) days prior to vacating the Premises and shall arrange to meet with Landlord for a joint inspection of the Premises prior to vacating. In the event of Tenant’s failure to give such notice or arrange a joint inspection, Landlord’s inspection at or after Tenant’s vacating the Premises shall be conclusively deemed correct for purposes of determining Tenant’s responsibility for repairs and restoration.
13. UTILITIES. Landlord agrees to provide at its cost water, electricity and telephone service connections into the Premises; but Tenant shall pay for all water, gas, heat, light, power, telephone, sewer, sprinkler charges and other utilities and services used in or from the Premises, together with any taxes, penalties, surcharges or the like pertaining thereto and any maintenance charges for utilities and shall furnish all electric light bulbs and tubes. If any such services are not separately metered to Tenant, Tenant shall pay a reasonable proportion as determined by Landlord of all charges jointly metered with other premises. Landlord shall in no event be liable for any interruption or failure of utility services on the Premises;.
14. ASSIGNMENT AND SUBLETTING.
A. Tenant shall not, directly or indirectly, have the right to assign this Lease or to sublet the whole or any part of the Premises without the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed. Consent to any assignment or sublease shall not be deemed a waiver of the right of Landlord to approve or disapprove a further assignment or subletting. Notwithstanding any permitted assignment or subletting, Tenant shall at all times remain directly, primarily and fully responsible and liable for the payment of the rent herein specified and for compliance with all of its other obligations under the terms, provisions and covenants of this Lease. Upon the occurrence of an “event of default”, as hereinafter defined, if the Premises or any part thereof are then assigned or sublet, Landlord, in addition to any other remedies herein provided, or provided by law, may at its option collect directly from such assignee or subtenant all rents becoming due to Tenant under such assignment or sublease and apply such rent against any sums due to Landlord from Tenant hereunder, and no such collection shall be construed to constitute a novation or a release of Tenant from the further performance of Tenant’s obligations hereunder. For purposes of this Paragraph 14, each of the following events shall be deemed an assignment:
 
 	(i)	if Tenant is a partnership, a dissolution of the partnership or a change in ownership, legal or beneficial, of 50% or more of the partnership interests, whether by withdrawal or admission, voluntary or by operation of law;	

 	 	 	 	 	
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 	(ii)	if Tenant is a corporation, the dissolution, consolidation or merger of Tenant or the sale or transfer of more than 50% of the voting shares of Tenant;	
 
 	(iii)	distribution or sale of over 50% of the value of Tenant’s assets (net of undistributed consideration received); or	
 
 	(iv)	any other change of effective control of Tenant.	
Notwithstanding (ii) & (iii) the above, Tenant shall have the right to assign this Lease in the event of sale or transfer of more than 50% of the voting shares or assets of Tenant without Landlord’s consent, provided however, Tenant must provide Landlord written notice of its election to assign this Lease and execute those reasonable instruments recognizing such transfer. In the event of assignment, Tenant shall not be released from its obligations and shall remain liable for all obligations of the Lease under the Demised Term including any Renewal Options as provided for in Section 32.
B. In the event that Tenant assigns this Lease or sublets the Premises or any part thereof, as permitted herein, and at any time receives rent and/or other consideration which exceeds that which Tenant would at that time be obligated to pay Landlord, Tenant shall pay to Landlord 50% of the gross excess in such rent as such rent is received by Tenant and 50% of any other consideration received by Tenant from such assignee or subtenant. In addition, should Landlord agree to an assignment or sublease agreement, Tenant will pay to Landlord on demand a sum equal to all Landlord’s costs, including reasonable attorney’s fees, incurred in connection with such assignment or transfer not to exceed $2,500.00. If an assignment or subletting is approved, Tenant shall be entitled to deduct from any excess proceeds described in this subparagraph 14.B. its reasonable expenses incurred in connection with such assignment or subletting.
15. INSURANCE.
A. Landlord agrees to maintain standard all risk insurance covering the building or buildings of which the Premises are a part in an amount not less than 80% (or such greater percentage as may be necessary to comply with the provisions of any co-insurance clauses of the policy) of the “replacement cost” thereof as such term is defined in the Replacement Cost Endorsement to be attached thereto, insuring against the perils of Fire, Lightning and Extended Coverage, such coverage and endorsements to be as defined, provided and limited in the standard bureau forms prescribed by the insurance regulatory authority for the State in which the Premises are situated for use by insurance companies admitted in such state for the writing of such insurance on risks located within such state. Subject to the provisions of this Paragraph 15, such insurance shall be for the sole benefit of Landlord and under its sole control.
Tenant agrees to pay to Landlord, as additional rent, the amount of Tenant’s “proportionate share” of the cost of Landlord’s insurance coverage on the building, all costs and premiums of all insurance, including but not limited to fire, casualty, business interruption, boiler and machinery (equipment breakdown) and commercial general liability insurance applicable to the building, the common areas and the operation thereof and Landlord’s personal property used in connection therewith. Said payments shall be made to Landlord within ten (10) days after presentation to Tenant of Landlord’s statement setting forth the amount due. Any payment to be made pursuant to this subparagraph 15.A. shall be prorated for any portion of the Demised Term that is not a full premium period under said insurance policy.
B. Tenant shall, throughout the Term of this Lease, at its cost and expense, provide and keep in force a commercial general liability insurance policy for bodily injury, property damage, and personal injury to a third party in the amount of not less than $1,000,000 per occurrence and $2,000,000 on an aggregate basis. Tenant shall be solely responsible for keeping insured, to the extent Tenant elects, its own personal property located on the Premises. All such insurances shall provide that the coverage there under shall be primary and noncontributing with

 	 	 	 	 	
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other coverage maintained by any additional insured affiliates and subsidiaries, including w/o limitation McDonald Development Company and McDonald Investments, Ltd. Tenant agrees to provide to Landlord a copy of the insurance policy endorsement confirming that the Landlord, McDonald Development Company, and McDonald Investments, Ltd. Area are additionally insured.
All insurance provided by Tenant as required by this subparagraph 15.B. shall name, as additional insured, Landlord and any mortgagees or deed to secure debt holders of the Premises, and be carried by such responsible companies and in such form satisfactory to Landlord.
Tenant agrees to deliver to Landlord on or before the Commencement Date the original policy of insurance required by this subparagraph 15.B. or certificate thereof and evidence of payment of premium. Prior to the expiration of each such policy, Tenant shall deliver to Landlord the new original policy or certificate for renewal insurance and evidence of payment of premium. In the event Landlord has not received (on or before the Commencement Date) evidence of Tenant’s compliance with the insurance coverage’s required by this subparagraph 15.B., Landlord may, but shall not be required to, secure coverage on behalf of Tenant in the amounts required by this subparagraph 15.B with companies satisfactory to Landlord. Tenant shall pay the costs of such coverage directly, or, if paid by Landlord, reimburse Landlord as additional rent, within ten (10) days of notice, for all costs incurred by Landlord in securing such coverage.
Tenant shall not violate or knowingly permit to be violated any of the conditions or provisions of any policy required by this subparagraph 15.B.
Each insurance policy (including renewal insurance) or certificates thereof issued by the insurer shall contain an agreement by the insurer that should any of the policies be cancelled before the expiration date thereof, notice will be delivered in accordance with the policy provisions, and in no event shall such policies be canceled by Tenant without Landlord’s prior written consent.
C. Tenant and Landlord shall cooperate in connection with the collection of any insurance monies that may be due in the event of loss. Tenant and Landlord shall execute and deliver such proofs of loss and other instruments that may be required for the purpose of obtaining the recovery of any such insurance monies.
D. Any insurance provided for in this Paragraph 15 may be effected by a policy or policies of blanket insurance; provided, however, that the amount of the total insurance allocated to the Premises shall be such as to furnish in protection the equivalent of separate policies in the amount herein required, and provided further that in all other respects, any such policy or policies shall comply with the other provisions of this Lease. In any such case, it shall not be necessary to deliver the original of any such blanket policy, but rather a certified duplicate of such policy or certificate thereof.
16. DAMAGE OR DESTRUCTION; MUTUAL WAIVER OF SUBROGATION.
A. If the Premises should be damaged or destroyed by fire, tornado or other casualty, Tenant shall give written notice thereof to Landlord as soon as practicable.
B. If the Premises should be totally destroyed by fire, tornado or other casualty, or if they should be so damaged thereby that rebuilding or repairs cannot, in Landlord’s estimation, be completed within one hundred fifty (150) days after the date upon which Landlord is notified by Tenant of such damage, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective upon the date of the occurrence of such damage.
C. If 80% or more of the gross square footage of the building in which the Premises are located is damaged or destroyed by any peril or casualty, Landlord shall have the right to terminate this Lease. Subject to the foregoing, if the Premises should be damaged or destroyed by any peril covered by the insurance to be provided by Landlord under subparagraph 15.A., but only to the extent that rebuilding or repairs can in Landlord’s estimation be completed one hundred fifty (150) days after the date upon which the Landlord is notified by Tenant of such damage, this Lease shall not terminate, and Landlord shall at its sole cost and expense thereupon proceed

 	 	 	 	 	
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with reasonable diligence to rebuild and repair such buildings to substantially the condition in which they existed prior to such damage, except that Landlord shall not be required to rebuild, repair or replace any part of the partitions, fixtures, addition and other improvements which may have been placed in, on or about the Premises by Tenant. If the Premises are untenantable in whole or in part following such damage, the rent payable hereunder during the period in which they are untenantable shall be reduced to such extent Tenant is able to conduct its business. In the event that Landlord should fail to complete such repairs and rebuilding within one hundred fifty (150) days after the date upon which Landlord is notified by Tenant of such damage, Tenant may at its option terminate this Lease by delivering written notice of termination to Landlord as Tenant’s exclusive remedy, whereupon all rights and obligations hereunder shall cease and terminate as of the date of such notice.
D. Notwithstanding anything herein to the contrary, in the event the holder of any indebtedness secured by a mortgage or deed to secure debt covering the Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right to terminate this Lease by delivering written notice of termination to Tenant within fifteen (15) days after such requirement is made by any such holder, whereupon all rights and obligations hereunder shall cease and terminate.
E. Each of Landlord and Tenant hereby releases the other from any loss or damage to property caused by fire or any other perils insured through or under them by way of subrogation or otherwise for any loss or damage to property caused by fire or any other perils insured in policies of insurance covering such property, even if such loss or damage shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible; provided, however, that this release shall be applicable and in force and effect only with respect to loss or damage occurring during such times as the releasor’s policies shall contain a clause or endorsement to the effect that any such release shall not adversely affect or impair said policies or prejudice the right of the releasor to recover thereunder and then only to the extent of the insurance proceeds payable under such policies. Each of the Landlord and Tenant agrees that it will request its insurance carriers to include in its policies such a clause or endorsement. If extra cost shall be charged therefore, each party shall advise the other thereof and of the amount of the extra cost, and the other party, at its election, may pay the same, but shall not be obligated to do so.
17. LIABILITY; MUTUAL INDEMNIFICATION.
A. Landlord shall not be liable to Tenant or Tenant’s employees, agents, invitees, patrons or visitors, or to any other person whomsoever, for any injury to person or damage to property on or about the Premises, resulting from and/or caused in part or whole by, the negligence or misconduct of Tenant, its employees, agents, invitees, patrons or visitors, or of any other person entering upon the Premises, or caused by the buildings and improvements located on the Premises becoming out of repair, use, generation, storage or disposal of toxic or hazardous materials or substances on or about the Premises, or caused by leakage of gas, oil, water or steam or by electricity emanating from the Premises, or due to any cause whatsoever. Tenant hereby covenants and agrees that it will at all times indemnify and hold safe and harmless the property, the Landlord (including without limitation, the trustee and beneficiaries if Landlord is a trust), Landlord’s agents and employees from any loss, liability, claims, suits, costs, expenses, including without limitation, attorney’s fees and damages, both real and alleged, arising out of any such damage or injury, except injury to persons or damage to property the sole cause of which is the negligence of Landlord or the failure of Landlord to repair any part of the Premises which Landlord is obligated to repair and maintain hereunder within a reasonable time after the receipt of written notice from Tenant of needed repairs.
B. Tenant shall not be liable to Landlord or Landlord’s employees, agents, invitees, patrons or visitors, or to any other person whomsoever, for any injury to person or damage to property on or about the Building, resulting from and/or caused in part or whole by, the negligence or misconduct of Landlord, its employees, agents, invitees, patrons or visitors, or caused by the Building (other than the Premises) becoming out of repair, or caused by the use, generation, storage or disposal of toxic or hazardous materials or substances on or about the Building (other than the Premises),, or caused by leakage of gas, oil, water or steam or by electricity emanating from the Building, or due to any cause whatsoever Subject to the waiver of subrogation provision in Section 16(E) of this Lease, Landlord hereby covenants and agrees that it will at all times indemnify and hold safe and harmless the Tenant (including without limitation, the trustee and beneficiaries if Tenant is a trust), Tenant’s agents and employees from any loss, liability, claims, suits, costs, expenses, including without limitation, attorney’s fees and damages arising out of any such damage or injury, except injury to persons or damage to property the cause of

 	 	 	 	 	
Lease Agreement	 	8	 	March 13, 2012	

which is the negligence of Tenant or the failure of Tenant to repair any part of the Premises which Tenant is obligated to repair and maintain hereunder within a reasonable time after the receipt of written notice from Landlord of needed repairs.
18. CONDEMNATION.
A. If 80% or more of the gross square footage of the building in which the Premises are located should be taken for public or quasi-public use under governmental law, ordinance or regulation by right of eminent domain, or by private purchase in lieu thereof, Landlord shall have the right to terminate this Lease and the rent shall be abated effective on the date of Landlord’s election to so terminate. Additionally, if the whole or any substantial part of the Premises should be taken for any public or quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain, or by private purchase in lieu thereof and the taking would prevent or materially interfere with the use of the Premises for the purpose for which that are being used, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective on the date of the physical taking of the Premises.
B. If part of the Premises shall be taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain, or by private purchase in lieu thereof, and this Lease is not terminated as provided in subparagraph 18A., this Lease shall not terminate but the rent payable hereunder during the unexpired portion of this Lease shall be reduced to such extent as may be fair and reasonable under all of the circumstances.
C. In the event of any such taking or private purchase in lieu thereof, Landlord and Tenant shall each be entitled to receive and retain such separate awards and/or portion of lump sum awards as may be allocated to their respective interests in any condemnation proceedings.
19. HOLDING OVER. Tenant shall, at the termination of this Lease by lapse of time or otherwise, deliver immediate possession of the Premises to Landlord. If Landlord agrees in writing that Tenant may hold over after the expiration or termination of this Lease, unless the parties hereto otherwise agree in writing on the terms of such holding over, the hold over tenancy shall be subject to termination by Landlord at any time upon not less than thirty (30) days advance written notice, or by Tenant at any time upon not less than thirty (30) days advance written notice, and all of the other terms and provisions of this Lease shall be applicable during that period, except that Tenant shall pay Landlord from time to time, upon demand, as rent for the period of any such hold over, an amount equal to one hundred fifty percent (150%) of the rent in effect on the termination date, computed on a daily basis for each day of the hold over period. No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided. The preceding provisions of this Paragraph 19 shall not be construed as Landlord’s consent for Tenant to hold over.
20. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and authority to enter into this Lease and that Tenant, upon paying the rent herein set forth and performing its other covenants agreements herein set forth, shall peaceably and quietly have, hold and enjoy the Premises for the Demised Term hereof, subject to the terms and provisions of this Lease.
21. EVENTS OF DEFAULT. The following events shall each be deemed an event of default by Tenant under this Lease:
A. Tenant shall fail to pay any installment of the rent herein required when due, or any payment with respect to taxes hereunder when due, or any other payment or reimbursement to Landlord required herein when due, and such failure shall continue for a period of five (5) days from the date of written notice from Landlord, provided, however, that Landlord shall not be required to give such notice more than twice in a twelve (12) month period.
B. Tenant shall become insolvent, or shall make a transfer to defraud creditors, or shall make an assignment for the benefit of creditors.

 	 	 	 	 	
Lease Agreement	 	9	 	March 13, 2012	

C. Tenant shall file a petition under any section or chapter of the National Bankruptcy Act, as amended, or under any similar law or statute of the United States or any State thereof, or Tenant shall be adjudged bankrupt or insolvent in proceedings filed against Tenant thereunder.
D. A receiver or trustee shall be appointed for all or substantially all of the assets of Tenant.
E. Tenant shall desert, abandon or vacate any substantial portion of the Premises.
F. Tenant shall fail to deliver an estoppel certificate to Landlord within the time frame set forth in Paragraph 24.
G. Tenant shall fail to comply with any term, provision or covenant of this Lease (other than as set forth in clauses A through F in this Paragraph 21), and shall not cure such failure within twenty (20) days after written notice thereof to Tenant; except however, in the event such cure is not available within twenty (20) days and Tenant continuously works to cure, then it shall have an extension until the compliance date.
22. REMEDIES. Upon the occurrence of any of the events of default described in Paragraph 21 hereof, Landlord shall have the option to pursue any one or more of the following remedies without notice or demand whatsoever:
A. Immediately or at any time thereafter terminate this Lease, and this Lease shall be deemed to have been terminated upon giving of notice of such termination pursuant to Paragraph 26 hereof. Upon such termination, Landlord shall have the right to recover from Tenant, as liquidated damages, the following:
(1) the worth, at the time of the award, of the unpaid rent that has been earned at the time of termination of this Lease: and
(2) the worth, at the time of the award, of the amount by which the unpaid rent that would have been earned after the date of termination of this Lease until the time of the award exceeds the net amount of rent that could have been reasonably obtained by Landlord using reasonable diligence to relet the Premises; and
(3) the worth, at the time of the award, of the amount by which the unpaid rent for the balance of the Lease term (as extended), if applicable) after the time of the award exceeds the net amount of rent that reasonably could have been obtained by Landlord using reasonable diligence to relet the Premises; and
(4) any other amount and court costs necessary to compensate Landlord for all detriment directly caused by Tenant’s failure to perform its obligations under this Lease.
Any such payment shall constitute liquidated damages to Landlord, Landlord and Tenant acknowledging and agreeing that it is difficult to determine the actual damages Landlord would suffer by virtue of an event of default and that the agreed-upon liquidated damages are not punitive or a penalty and are just, fair, and reasonable, all in accordance with O.C.G.A. sec. 13-6-7.
The following words and phrases as used above in this Paragraph 22.A. shall have the following meanings:
(i) the “worth at the time of the award” as used in Paragraph 22.A. (1) and (2) shall be computed by allowing interest at the lesser of (A) eight percent (8%) per annum or (B) the maximum rate permitted by law.
(ii) the “worth at the time of the award” as used in Paragraph 22.A (3) shall be computed by discounting the amount at the discount rate of six percent (6%) per annum;
(iii) the term “time of the award” shall mean either the date upon which Tenant pays to Landlord the amount recoverable by Landlord as set forth above or the date of entry of any determination, order, or judgment of any court, whichever first occurs: and

 	 	 	 	 	
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(iv) the term “net amount of rent” means the gross rent payable under a lease reletting the Premises on market terms for the remaining Term of this Lease from and after the time of the award, less the amortized portion (such amortization being on a straightline basis over the term of the subject lease) attributable to the remaining Term of this Lease from and after the time of the award of brokerage commissions and fees, design fees, attorney’s fees, improvement allowances, rent concessions, improvement costs, and other economic concessions and costs made or incurred in connection with a reletting of the Premises to a third party on market terms.
B. Enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, by force if necessary (to the extent permitted by law), without being liable for prosecution or any claim for damages thereof, and relet the Premises and receive the rent therefore; and Tenant agrees to pay to the Landlord on demand any deficiency that may arise by reason of such reletting. In the event Landlord is successful in reletting the Premises at a rent in excess of that agreed to be paid by Tenant pursuant to the terms of this Lease, Landlord and Tenant each mutually agree that Tenant shall not be entitled, under any circumstances, to such excess rent, and Tenant does hereby specifically waive any claim to such excess rent.
C. Enter upon the Premises, by force if necessary (to the extent permitted by law), without being liable for prosecution or any claim for damages therefore, and do whatever Tenant is obligated to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease, and Tenant further agrees that Landlord shall not be liable for any damages resulting to the Tenant from such action, whether caused by the negligence of Landlord or otherwise.
D. Landlord shall have all other rights and remedies provided by law or in equity.
In the event Tenant fails to pay any installment of rent hereunder within five (5) days after such installment is due, to help defray the additional cost to Landlord for processing such late payments, Tenant shall pay to Landlord a late charge in an amount equal to five percent (5%) of such installment; and the failure to pay such amount within ten (10) days shall be an event of default hereunder. The provision for such late charge shall be in addition to all Landlord’s other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein provided or any other remedies provided by law, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of any rent due to Landlord hereunder or any damages accruing to Landlord by reason of the violation of any of the terms, provisions and covenants herein contained. Notwithstanding the foregoing, if Landlord elects to terminate this Lease pursuant to Paragraph 22.A. hereof, Landlord’s remedies thereunder constituting liquidated damages shall be Landlord’s exclusive remedies hereunder respecting Landlord’s breach of contract damages resulting from the termination of this Lease. No act or thing done by the Landlord or its agents during the Demised Term shall be deemed a termination of this Lease or an acceptance of the surrender of the Premises, and no agreement to terminate this Lease or accept a surrender of the Premises shall be valid unless in writing signed by Landlord. No waiver by Landlord of any violation or breach of any of the terms, provisions and covenants herein contained shall be deemed or construed to constitute a waiver of any other violation or breach of any of the terms, provisions and covenants herein contained. Landlord’s acceptance of the payment of rent or other payments hereunder after the occurrence of an event of default shall not be construed as a waiver of such default, unless Landlord so notifies Tenant in writing. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default or of Landlord’s right to enforce any such remedies with respect to such default or any subsequent default. If, on account of any breach or default by Tenant in Tenant’s obligations under the terms and conditions of this Lease, it shall become necessary or appropriate for Landlord to employ or consult with an attorney concerning or to enforce or defend any of Landlord’s rights or remedies hereunder, Tenant agrees to pay any reasonable attorney’s fees so incurred.
Tenant agrees to indemnify and hold Landlord harmless from any and all losses, costs, expenses (including, without limitation, attorney’s fees), liabilities, causes of action, suits, claims, and damages arising out of, or in connection with any violation or breach of, or failure of Tenant to fully and completely observe, satisfy, perform and comply with, the terms and conditions of this Lease.

 	 	 	 	 	
Lease Agreement	 	11	 	March 13, 2012	

23. LANDLORD’S LIEN. [Intentionally Deleted]
24. MORTGAGES, GROUND LEASES AND ESTOPPEL CERTIFICATES.
A. Tenant hereby agrees and accepts that this Lease is and shall be subject and subordinate to any mortgage(s) and/or deeds to secure debt (collectively referred to as the “Mortgage”) now or any time hereafter constituting a lien or charge upon the Premises or the improvements situated thereon; provided, however, that if the holder of any such Mortgage elects to have Tenant’s interest in this Lease superior to any such instrument, then by notice to Tenant from such holder, this Lease shall be deemed superior to such lien, whether this Lease was executed before or after said Mortgage. If the holder of the Mortgage or any successor in interest shall succeed to the rights of Landlord under this Lease through a foreclosure sale or a sale in lieu of foreclosure, Tenant will attorn to and recognize such successor-landlord as Tenant’s landlord and such successor-landlord shall accept such attornment and recognize Tenant’s rights of possession and use of the Premises in accordance with the provisions of this Lease. At the request of any holder of a Mortgage, Tenant, Landlord and such holder shall enter into a subordination, non- disturbance and attornment agreement reasonably acceptable to Landlord, Tenant and such holder, but in any event substantially consistent with the terms of this Lease. Tenant shall at any time hereafter on demand execute any instruments, releases or other documents which may be required by the holder of the Mortgage for the purpose of subjecting and subordinating this Lease to the lien of any such Mortgage.
If, in connection with obtaining financing or refinancing for the Premises, or a sale of the Premises, any lender or purchaser shall request reasonable modifications in this Lease as a condition to such financing or purchase, Tenant will not unreasonably withhold or delay or defer its consent thereto, provided that such modifications do not increase the obligations of Tenant hereunder or materially and adversely affect Tenant’s rights hereunder.
B. Tenant hereby further agrees and accepts that this Lease is and shall be subject and subordinate to any ground lease now or at any time hereafter affecting the Premises. Tenant shall at any time hereafter on demand execute any instruments, releases or other documents which may be required by the ground lessor of any ground lease affecting the Premises for the purpose of subjecting and subordinating this Lease to any such ground lease.
In the event any ground lessor of a ground lease affecting the Premises requests reasonable modifications in this Lease, Tenant will not unreasonably withhold or delay or defer its consent thereto, provided that such modifications do not increase the obligations of Tenant hereunder or materially and adversely affect Tenant’s rights hereunder.
C. At any time and from time to time designated by Landlord, Tenant will execute, acknowledge and deliver to Landlord, within ten (10) days after receipt of a request from Landlord, a certificate certifying (a) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date and nature of each modification), (b) the date, if any, to which rent and other sums payable hereunder have been paid, (c) that no notice has been received by Tenant of any default which has not been cured, except as to defaults specified in said certificate, and (d) such other matters as may be requested by Landlord. Any such certificate may be relied upon by any existing or prospective purchaser, investor, ground lessor, mortgagee or holder of any deed to secure debt on the Building or any part thereof.
25. MECHANIC’S LIENS. Tenant shall have no authority, express or implied, to create or place any lien or encumbrance of any kind or nature whatever upon or in any matter to bind, the interest of Landlord in the Premises or to charge the rent payable hereunder for any claim in favor of any person dealing with Tenant, including those who may furnish materials or perform labor for any construction or repairs and each such claim shall affect and each such lien shall attach to, if at all, only the leasehold interest granted to Tenant by this instrument. Tenant

 	 	 	 	 	
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covenants and agrees that it will pay or cause to be paid all sums legally due and payable by it on account of any labor performed or materials furnished in connection with any work performed on the Premises on which any lien is or can be validly and legally asserted against its leasehold interest in the Premises or the improvements thereon and that it will save and hold Landlord harmless from any and all loss, cost or expense based on or arising out of asserted claims or liens against the leasehold estate or against the right, title and interest of the Landlord in the Premises or under the terms of the lease.
26. NOTICES. Any notice, demands, payments or other communications required or permitted to be delivered under this Lease shall be given by personal delivery, by deposit with a courier service that provides next-business-day service, or by deposit in the United States Mail, postage prepaid, Certified or Registered Mail, addressed to the parties hereto at the respective addresses set out below, or at such other address as they have theretofore specified by written notice delivered in accordance herewith:

LANDLORD:	 	TENANT:	
 	 	
McDonald Ventures XI, LLC	 	Clearside Biomedical, Inc.	
c/o McDonald Development Company	 	1220 Old Alpharetta Road	
3715 Northside Parkway, Bldg 200, Suite 700	 	Suite 300	
Atlanta, Georgia 30327	 	Alpharetta, Georgia 30005	
Attn: John R. McDonald	 	 	
All notices shall be deemed given upon personal delivery, or upon deposit with a courier service that provides next-business-day service, or deposit in the United States Mail, postage prepaid, Certified or Registered Mail, except as otherwise specifically provided in this Lease and except as to the payments of rent to Landlord which shall be effective upon receipt by Landlord.
If and when included within the term “Landlord”, as used in this instrument, there are more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution of such a notice specifying some individual at some specific address for the receipt of notices and payments to Landlord; if and when included within the term “Tenant”, as used in this instrument, there are more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution of such a notice specifying some individual at some specific address within the continental United States for the receipt of notices and payments to Tenant. All parties within the terms “Landlord” and “Tenant”, respectively, shall be bound by notices given in accordance with the provisions of this Paragraph 26 to the same effect as if each had received such notice.
27. RESTRICTIVE COVENANTS. Tenant acknowledges that this Lease shall be subject and subordinate at all times to the Declaration of Easements, recorded, or to be recorded, in County, Georgia Records, as the same may be amended from time to time (hereinafter referred to as the “Declaration”), which affects the Premises. Tenant agrees to comply with all of the terms and provisions of the Declaration, and not suffer or cause any act by Tenant or any of its employees, agents or invitees, which would violate the Declaration.
28. REAL ESTATE BROKER. Tenant represents and warrants that the Tenant has dealt with no broker, agent or finder in connection with this Lease other than Lavista Associates, Inc. (“Broker”), which broker is acting on behalf of Tenant and shall be paid a commission by Landlord pursuant to a separate agreement, and insofar as the Tenant knows, no other brokers, agent or finder negotiated this Lease or is entitled to any commission or fee in connection herewith. Tenant agrees to indemnify, defend and hold Landlord free and harmless from and against all claims for broker’s or agent’s commissions or finder’s fees by any person claiming to have been retained by Tenant in connection with this transaction, or any other losses, costs, expenses (including, without limitation, attorney’s fees), liabilities, damages, causes of actions or suits arising out of the alleged employment or use of a broker, agent or finder by Tenant.

 	 	 	 	 	
Lease Agreement	 	13	 	March 20, 2012	

29. LIMITATIONS ON LANDLORD’S LIABILITY LANDLORD’S LIABILITY FOR DAMAGES OR BREACH OR NONPERFORMANCE BY LANDLORD, OR ARISING OUT OF THE SUBJECT MATTER OF THIS LEASE OR THE RELATIONSHIP CREATED HEREBY, SHALL BE LIMITED TO, AND COLLECTIBLE ONLY OUT OF, LANDLORD’S INTEREST IN THE PREMISES AND NO PERSONAL LIABILITY IS ASSUMED BY, OR SHALL AT ANY TIME BE ASSERTED AGAINST, LANDLORD OR ITS AFFILIATED CORPORATIONS, ITS AND THEIR PARTNERS, VENTURERS, DIRECTORS, SHAREHOLDERS, OFFICERS, AGENTS, SERVANTS AND EMPLOYEES, OR ANY OF ITS OR THEIR SUCCESSORS OR ASSIGNS; ALL SUCH LIABILITY, IF ANY, BEING EXPRESSLY WAIVED AND RELEASED BY TENANT. IF LANDLORD, IN VIOLATION OF THE TERMS OF THIS LEASE OR THE PROVISIONS OF LAW, WITHHOLDS, DENIES OR DELAYS ANY CONSENT WHICH TENANT IS REQUIRED TO OBTAIN HEREUNDER, TENANT MAY SEEK SPECIFIC PERFORMANCE BUT SHALL NOT BE ENTITLED TO DAMAGES THEREFORE. LANDLORD’S REVIEW, SUPERVISION, COMMENTING ON OR APPROVAL OF ANY ASPECT OF WORK TO BE DONE BY OR FOR TENANT IS SOLELY FOR LANDLORD’S PROTECTION AND, EXCEPT AS EXPRESSLY PROVIDED, CREATES NO WARRANTIES OR DUTIES TO TENANT OR TO THIRD PARTIES. LANDLORD SHALL NOT BE LIABLE IN ANY EVENT FOR INDIRECT, CONSEQUENTIAL, OR SPECULATIVE DAMAGES SUCH AS BUSINESS LOSS.
30. RIGHT TO RELOCATE. Anytime after the Twenty-fourth (24) month following the Commencement Date, or anytime after the after sixieth (60 th ) month following the Commencement Date provided Tenant has exercised its Renewal Option under Section 32 (Renewal Option), Landlord shall have the option to relocate the Tenant to alternative space (“Relocated Space”) in the Building or Park at any time during the Term of the Lease, which alternative space shall be substantially the same size as the Premises. In the event, Landlord is interested in relocating Tenant to a purposed Relocated Space, Landlord shall send written notice to Tenant with the location of the Relocated Space and Tenant shall have five (5) business days to decide in writing, to Landlord, if the Relocation Space is acceptable or not to Tenant. If Tenant does not send written notice to Landlord of its decision to accept or reject the purposed Relocated Space, Tenant shall have deemed to have accepted the Relocated Space. If Tenant responds in writing, that the Relocated Space is not acceptable, Landlord, at it’s option, shall have five (5) business days to decide whether or not to terminate the Lease with written notice to Tenant. If Landlord elects to terminate the Lease, Landlord shall provide Tenant an $8,000 reimbursement allowance for reasonable and actual out of pocket relocation expenses of for its actual move to another facility. If Tenant elects to accept that the Relocated Space, Landlord shall, at its option, give not less than sixty (60) days’ prior written notice, to Tenant, of such relocation, which notice shall include the date on which the Tenant shall be required to relocate or move and a description of the space to which Tenant will be relocated. Landlord shall pay all reasonable and actual out-of-pocket costs and expenses of relocating Tenant. If the Premises have already been improved for Tenant’s occupancy, Landlord shall improve the new premises at its expense such that they are in substantially the same condition as the Premises. In the event of such relocation, such alternative space shall, for all purposes, be deemed the Premises hereunder and this Lease shall continue in full force and effect without any change in the other terms or conditions hereof; provided however, the Base Rent and other expenses paid hereunder shall be adjusted such that the Base Rent and other expenses paid by Tenant for the new premises shall be the same on a per square foot basis as they are for the Premises.
31. MISCELLANEOUS.
A. Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires.
B. The terms, provisions and covenants and conditions contained in this Lease shall apply to, inure to the benefit of, and be binding upon, the parties hereto and upon their respective heirs, legal representatives, successors and permitted assigns, except as otherwise herein expressly provided. Landlord shall have the right to assign any of its rights and obligations under this Lease.
C . Tenant agrees to furnish to the Landlord promptly upon demand, a corporate resolution, proof of due authorization by partners, or other appropriate documentation evidencing the due authorization of such Tenant to enter into this Lease.

 	 	 	 	 	
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D. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.
E. Time is of the essence of this Lease.
F. Tenant agrees from time to time within ten (10) days after request of Landlord, to deliver to Landlord, or Landlord’s designee, an estoppel certificate stating whether this Lease is in full force and effect, the date to which rent has been paid, the unexpired Term of this Lease and such other matters pertaining to this Lease as may be requested by Landlord. It is understood and agreed that Tenant’s obligation to furnish such estoppel certificates in a timely fashion is a material inducement for Landlord’s execution of this Lease.
G. This Lease may not be altered, changed, or amended except by an instrument in writing signed by both parties hereto.
H. All obligations of Tenant hereunder not fully performed as of the expiration or earlier termination of the Demised Term shall survive the expiration or earlier termination of the Demised Term, including without limitation, all payment obligations with respect to taxes and insurance and all obligations concerning the condition of the Premises. Upon the expiration or earlier termination of the Demised Term, and prior to Tenant vacating the Premises, Tenant shall pay to Landlord any amount reasonably estimated by Landlord as necessary to put the Premises, including without limitation, all heating and air conditioning systems and equipment therein, in good condition and repair. Tenant shall also, prior to vacating the Premises, pay to Landlord the amount, as estimated by Landlord, of Tenant’s obligation hereunder for real estate taxes and insurance premiums for the year in which the lease expires or terminates. All such amounts shall be used and held by Landlord for payment of such obligations of Tenant hereunder, with Tenant being liable for any additional costs therefore upon demand by Landlord, or being liable for any additional costs therefore upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied, as the case may be. Any security deposit held by Landlord shall be credited against the amount payable by Tenant under this Paragraph 31.H.
I. If any clause, sentence, paragraph or provision of this Lease is illegal, invalid or unenforceable under present or future laws effective during the Term of this Lease, then and in that event it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby, and it is also the intention of the parties to this Lease that in lieu of each clause, sentence, paragraph or provision of this Lease that is illegal, invalid or unenforceable, there be added as a part of this Lease contract a clause, sentence, paragraph or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable.
J. Provided Landlord is the prevailing party, Tenant agrees to pay any and all attorneys’ fees and expenses Landlord incurs in enforcing any of the obligations of Tenant under this Lease, or in any litigation or negotiation in which Landlord shall, by virtue of this Lease or Landlord’s ownership of the Premises, become involved in, through or on account of this Lease. Provided Tenant is the prevailing party, Landlord agrees to pay any and all attorneys’ fees and expenses Tenant incurs in enforcing any of the obligations of Landlord under this Lease.
K. This Lease shall create the relationship of landlord and tenant between Landlord and Tenant; no estate shall pass out of Landlord; Tenant has only a usufruct, not subject to levy and sale.
L. Neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease voidable at Landlord’s election.
M. Because the Premises are on the open market and are presently being shown, this Lease shall be treated as an offer with the Premises being subject to prior lease and such offer subject to withdrawal or non-acceptance by Landlord or to other use of the Premises without notice, and this Lease shall not be valid or binding unless and until accepted by Landlord in writing and a fully executed copy delivered to both parties hereto.

 	 	 	 	 	
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N. All references in this Lease to “the date hereof” or similar references shall be deemed to refer to the last date, in point of time, on which all parties hereto have executed this Lease.
O. This Lease may be executed in counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same lease agreement
P. Landlord and Tenant each hereby covenant and agree that this lease, including the exhibits hereto, sets forth all of the promises, covenants, agreements, conditions and understandings between them with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings relating to such subject matter except as otherwise set forth herein. In entering into this lease, neither party has relied upon any representation, warranty, covenant or other inducement not expressly set forth in this lease.
32. RENEWAL OPTION. Provided that Tenant is not in default at the time of exercise of this option or at the expiration of the initial Demised Term, Tenant shall have the right to renew the term of the lease for a single, thirty (30) month period, upon not less than six (6) months and no more than eighteen (18) months written notice to Landlord. The base rental rate shall increase by three percent (3%) over the then escalated Base Rent at the beginning of the Renewal Period and shall increase by three percent (3%) every twelve (12) months during the Renewal Period. Additionally, Landlord as part of the Renewal Period will provide Tenant with $2.00 per square foot allowance to make improvements to the Premises.
(Signatures on the following Page)

 	 	 	 	 	
Lease Agreement	 	16	 	March 13, 2012	

IN WITNESS WHEREOF, the parties have executed this Lease with intent to be bound hereby as of the day and year indicated above each signature block, respectively, but effective as of the day and year first above written.
EXECUTED BY LANDLORD, this 15 day of March, 2012.

LANDLORD	
 	
McDonald Ventures XI, LLC, a Georgia limited liability company	
 	 	
By:	 	McDonald Industrial XI, LLC, a Georgia limited liability company, its Manager	
 	 	
By:	 	McDonald Development Company, a Georgia
corporation, its Manager	
 	 	
By:	 	/s/ John R. McDonald	
 	 	John R. McDonald, President	
EXECUTED BY TENANT, this 14 day of March, 2012.

TENANT	
 	
Clearside Biomedical, Inc., a Delaware corporartion	
 	 	
By:	 	/s/ Daniel H. White	
Title:	 	Daniel H. White	
 	 	President & CEO	

 	 	 	 	 	
Lease Agreement	 	17	 	March 13, 2012	

Exhibit A
Exhibit A
Site 300
ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lots 961, 984, 985, and 1032 of the 2nd District, 1 st  Section, Forsyth County, Georgia and being more particularly described as follows:
BEGINNING at an iron pin set (1/2” rebar) in the centerline of a creek, said point being 595.28 feet Easterly along the Northern right-of-way of Old Alpharetta Road (80’ right-of-way) from the intersection of said right-of-way with the Eastern right-of-way of Curie Drive (right-of-way varies); thence along the centerline of said creek the following courses and distances: North 25 degrees 15 minutes 00 seconds West, a distance of 35.53 feet to a point; thence North 76 degrees 58 minutes 18 seconds West, a distance of 38.18 feet to a point; thence North 68 degrees 03 minutes 59 seconds West, a distance of 54.22 feet to a point; thence North 79 degrees 37 minutes 19 seconds West, a distance of 93.86 feet to a point; thence North 43 degrees 29 minutes 10 seconds West, a distance of 41.28 feet to a point in the centerline of a ditch; thence leaving said creek run along the centerline of said ditch the following courses and distances: North 85 degrees 37 minutes 32 seconds East a distance of 56.58 feet to a point; thence South 87 degrees 26 minutes 32 seconds East, a distance of 57.91 feet to a point; thence South 87 degrees 46 minutes 39 seconds East, a distance of 56.41 feet to a point; thence North 85 degrees 24 minutes 48 seconds East, a distance of 74.94 feet to an iron pin set (1/2” rebar): thence leaving said centerline, run North 12 degrees 55 minutes 23 seconds West, a distance of 193.67 feet to an iron pin set (1/2” rebar); thence North 03 degrees 35 minutes 37 seconds West, a distance of 239.39 feet to an iron pin set (1/2” rebar); thence North 02 degrees 43 minutes 53 seconds East, a distance of 155.00 feet to an iron pin set (1/2” rebar); thence North 09 degrees 50 minutes 59 seconds West; a distance of 530.00 feet to an iron pin set (1/2” rebar); thence North 08 degrees 40 minutes 54 seconds West, a distance of 318.37 feet to a point in the centerline of a creek, thence along the centerline of said creek the following courses and distances: North 74 degrees 51 minutes 04 seconds East, a distance of 2.98 feet to a point; thence 61 degrees 47 minutes 22 seconds East, a distance of 69.08 feet to a point; thence North 71 degrees 58 minutes 52 seconds East, a distance of 49.00 feet to a point; thence North 54 degrees 40 minutes 01 seconds East, a distance of 85.21 feet to a point; thence North 34 degrees 05 minutes 43 seconds East, a distance of 43.55 feet to a point; thence North 44 degrees 21 minutes 22 seconds East, a distance of 80.85 feet to a point; thence North 55 degrees 24 minutes 53 seconds East, a distance of 29.08 feet to a point; thence North 78 degrees 05 minutes 36 seconds East, a distance of 39.31 feet to a point; thence North 20 degrees 47 minutes 30 seconds East, a distance of 60.84 feet to a point; thence North 03 degrees 41 minutes 47 seconds West, a distance of 52.09 feet to a point; thence North 08 degree s 25 minutes 09 seconds East, a distance of 42.24 feet to a point; thence North 12 degrees 45 minutes 07 seconds West, a distance of 35.00 feet to a point; thence North 37 degrees 35 minutes 10 seconds East, a distance of 102.08 feet to a point; thence North 22 degrees 14 minutes 09 seconds West, a distance of 16.34 feet to a point; thence North 67 degrees 28 minutes 23 seconds East, a distance of 59.20 feet to a point: thence North 12 degrees 04 minutes 49 seconds East, a distance of 65.65 feet to a point; thence North 45 degrees 16 minutes 17 seconds East, a distance of 12.33 feet to a point; thence South 70 degrees 34 minutes 30 seconds East, a distance of 30.58 feet to a point; thence North 25 degrees 37 minutes 40 seconds East, a distance of 7.33 feet to a point; thence leaving said centerline of creek run South 09 degrees 41 minutes 02 seconds East, a distance of 1348.01 feet to an iron pin found (1/2” open top pipe); thence South 00 degrees 30 minutes 04 seconds West, a distance of 199.99 feet to an iron pin found (1/2” open top pipe): thence South 18 degrees 29 minutes 50 seconds West, a distance of 199.95 feet to an iron pin found (1/2” rebar): thence South 09 degrees 33 minutes 05 seconds West, a distance of 241.90 feet an iron pin set (1/2” rebar) on said Northern right-of-way line of Old Alpharetta Road; thence along said right-of-way line 447.43 feet along the arc of a curve to the left, having a chord bearing a distance of South 68 degrees 05 minutes 06 seconds West, 447.42 feet and a radius of 26,773.81 feet to the POINT OF BEGINNING.
Said tract contains 22.818 acres.
Being the same tract of land as depicted on Survey for McDonald Ventures XI, LLC, Chicago Title Insurance Company and Regions Bank, prepared by Rochester  &  Associates, Inc., dated March 26, 1999, last revised April 14,1999.

 	 	 	 	 	
Exhibit A	 	18	 	March 13, 2012	

Exhibit B
Premises

 

Exhibit B	 	19	 	March 13, 2012	

Exhibit B
Landlord will make the following improvements to the Premises:
 
 	•	 	Paint walls and frames with one coat to match existing colors	
 
 	•	 	Repaint accent walls with one coat to match existing	
 
 	•	 	Wall covering to remain “as-is”. Glue as needed	
 
 	•	 	Provide new vct in the restrooms, break room, and electrical room.	
 
 	•	 	Provide new cove base throughout the Premises.	
 
 	•	 	Re-Seal doors to match	
 
 	•	 	Luxury vinyl composite tile (wood look) in lobby area	
 
 	•	 	Provide new building standard carpet.	
 
 	•	 	Replace 32 T-12 lights.	
 
 	•	 	Re-Lamp 1 exit sign, re-charge 3 fire extinguishers,	
 
 	•	 	Patch sheet rock in corner of 1 office	
 
 	•	 	Demolish phone board, remove wiring,	
Note: All work to be performed using Landlord’s building standards attached hereto or as mutually agreed to by both Tenant and Landlord.

 	 	 	 	 	
Exhibit B	 	20	 	March 13, 2012	

Exhibit B
McDONALD DEVELOPMENT COMPANY
OUTLINE OF
STANDARD TENANT FINISH SPECIFICATIONS
 
1.	CARPENTRY & MILLWORK	
 
 	A.	Single fixture toilet rooms to have a wall-hung lavatory. Multiple fixture toilet rooms shall have plastic laminate lavatory counter-tops without base cabinet for handicap access.	
 
 	B.	One coat rod and shelf in each coat closet.	
 
 	C.	Two levels of adjustable shelves in storage room.	
 
 	D.	Toilet partitions to be metal, in standard colors.	
 
2.	DOORS & HARDWARE	
 
 	A.	Glass entrance door is existing.	
 
 	B.	Interior Doors	
3’ - 0” x 6’ - 8” x 1 - 3/4” flush solid core, stain grade, birch veneer door or to match existing (New doors to have Minwax Dark Walnut #2716).
Door frames shall be KD hollow metal.
(3) 4 x 4 hinges with 26 D finish (Brushed finish).
Hardware shall be lever action Cal-Royal SL Series with 26D finish (Grade 2 or better).
Function to be compatible with room types indicated on drawings
Wall mounted door stops with interior wall blocking.
Provide closers on all bathroom doors (excluding single fixture bathrooms) and doors leading to warehouse.
 
 	C.	Labeled Doors (where required)	
Provide labeled doors and frames with rated hinges.
Lever action Cal-Royal SL Series locksets.
Surface mounted closers.
 
3.	PARTITIONS	
 
 	A.	Demising Walls	
Demising wall partitions shall be 1-hour rated extending from finished slab to deck (height varies) and shall be constructed with 5/8” type C gypsum wallboard screwed to both sides of 6” wide metal studs. Provide R-l1 fiberglass blankets in wall cavity floor to roof deck (UL Des. U-465), painted white with black cove base.
 
 	B.	Interior Partitions	
Typical 9’ - 0” interior partitions shall extend from finished slab to finished ceiling. Construction to be of 3-5/8” wide metal studs (25 Ga.) spaced 24” o.c. with 1/2” gypsum wallboard screwed to both sides. Toilet room walls shall extend to 10’.
Insulation - sound attenuation blanket is to be installed in all toilet room, break room, and conference room walls.
All exterior tilt-up walls in office areas to receive 1/2” gypsum board on 3-5/8” wide metal studs (25 Ga.) spaced 24” o.c. with R-ll insulation.

 	 	 	 	 	
Exhibit B	 	21	 	March 13, 2012	

Exhibit B
 
 	C.	Office/Warehouse Separation Wall	
If not 1-hour rated: Construction to be of 6” wide metal studs with 1/2” gypsum wallboard screwed to both sides (one side to the deck, one side to 10’) and R-11 insulation to deck. Warehouse side to be painted white with black cove base.
 
4.	ACOUSTICAL CEILINGS	
 
 	A.	2’ - 0” x 2’ - 0” standard grid system with 5/8” non-directional fissured mineral board ceiling panels installed at 9’ a.f.f. with no insulation above ceiling grid.	
 
 	B.	Ceiling to be continuous over all interior partitions, except at toilet rooms.	
 
5.	FLOORING	
 
 	A.	Vinyl composition tile (VCT) is to be installed in bathrooms and kitchen/break room,	
 
 	B.	All other finished office areas are to be carpeted using building standard carpet.	
 
 	C.	4” rubber cove base is to be installed in all finished office areas and the warehouse side of the warehouse/office separation wall. Pre-molded tab corners to be used on all outside corners.	
 
 	D.	The warehouse floor shall be sealed with Lapidolith.	
 
6.	PAINTING	
 
 	A.	All walls in finished office area are to be painted with a minimum of two coats of eggshell paint.	
 
 	B.	Warehouse side of office warehouse separation wall to be painted white with a minimum of two coats of eggshell paint.	
 
 	C.	All door frames to be painted with oil-based enamel, semi-gloss.	
 
 	D.	Toilet room walls to be painted with eggshell latex paint.	
 
7.	HVAC	
 
 	A.	Heating and air conditioning in office area to be furnished by either split systems or roof top/package units to maintain a maximum 75°F with 94°F outside air temperature. Higher cooling loads imposed by equipment or heavier than normal occupancy would be an additional cost. Roof mounted equipment shall not be installed within thirty feet (30’) of building perimeter unless a parapet provides adequate screening.	
 
 	B.	Provide exhaust fans in toilet rooms.	
 
 	C.	Heating in the warehouse is to be furnished by gas-fired unit heaters in order to maintain 50°F with 32°F outside air temperature. All vent stacks shall be provided with appropriate roof flashing that has fully soldered joints.	
 
 	D.	Provide additional structural reinforcement as required for all roof mounted equipment.	
 
 	E.	Warehouse ventilation provided by roof-mounted up blast fans.	
 
8.	PLUMBING	
 
 	A.	Water closet and urinals in toilet rooms in quantities as indicated on drawings.	
 
 	B.	Lavatory in each toilet room per drawings.	
 
 	C.	48” grab bar and 36” grab bar in handicapped toilet.	
 
 	D.	Single roll toilet paper holder.	
 
 	E.	Surface mounted towel dispenser.	

 	 	 	 	 	
Exhibit B	 	22	 	March 13, 2012	

Exhibit B
 
 	F.	One mirror extending the full width of the lavatory counter top.	
 
 	G.	Provided water heater (above ceiling in office area) sized as required to server fixtures indicated.	
 
 	H.	All drinking fountains to be non-electric.	
 
9.	FIRE PROTECTION	
 
 	A.	Provide sprinkler drops to accommodate the office lay-out.	
 
 	B.	Provide fire extinguishers per local fire marshal’s requirements.	
 
10.	ELECTRICAL	
 
 	A.	Provide service as recommended by electrical contractor.	
 
 	B.	Provide 3-phase, 277/480 volt electric service.	
 
 	C.	Provide warehouse lighting of 20 f.c. (unracked at 36” a.f.f.) using metal halide fixtures. Switching at panel with one fixture on continuous circuit for night-light.	
 
 	D.	Office lighting by 2’ - 0” x 4’ - 0” lay-in fluorescent fixtures with acrylic lens to maintain 50 foot candles at desk top.	
 
 	E.	Provide duplex receptacles and telephone boxes as shown on the drawings (Phone and data wiring to be provided by tenant.).	
 
 	F.	Exit signs and battery-pack emergency lighting as required by code.	
 
 	G.	Fire alarm and security system to be provided by tenant.	
 
 	H.	Provide electrical room lay-out drawing for owner’s approval prior to beginning work.	
 
11.	MISCELLANEOUS	
 
 	A.	Bali customizer mini blinds, 6 gauge aluminum, Snow Cap White (#386) to be placed at all storefront glass in first generation build-out. Repair and replace as necessary to match existing in renovated spaces.	

 	 	 	 	 	
Exhibit B	 	23	 	March 13, 2012	

McDonald Ventures XI, LLC
c/o McDonald Development Company
3715 Northside Parkway NW
Building 200, Suite 700
Atlanta, Georgia 30327
March 18, 2014

Charles A. Deignan
Chief Financial Officer
Clearside Biomedical, Inc.
1220 Old Alpharetta Road, Suite 300
Alpharetta, Georgia 30005	 	 	 	Via Overnight Mail &
Email	
 
RE:	1220 Old Alpharetta Road, Suite 100, Alpharetta GA 30005	
Renewal Notice dated November 26, 2013
Dear Charles:
We are in receipt of your letter of November 26, 2013, in which Clearside Biomedical, Inc. exercised its option to renew its Lease Agreement between McDonald Ventures XI, LLC and Clearside Biomedical, Inc. dated March 14, 2012. Please consider this letter as an acknowledgement of Clearside Biomedical, Inc.’s exercising of its Renewal Option outlined in Section 32 of the Lease Agreement.
Beginning October 1, 2014, Base Rent shall be $7,233.00 per month ($9.84 per square foot) and shall increase by 3% on October 151 each year thereafter. The Lease Term is extended by thirty (30) months, expiring March 31, 2017.
Sincerely,

McDonald Ventures XI, LLC, a
Georgia limited liability company	
 	 	 	
 	 	By:  	 	McDonald Industrial XI, LLC, a
Georgia limited liability company, its Manager	
 	 	 	 	
 	 	 	 	By:	 	McDonald Development Company, a Georgia corporation , its Manager	
 	 	 	 	 	
 	 	 	 	 	 	By:	 	/s/ John R. McDonald	
 	 	 	 	 	 	 	 	John R. McDonald, President	
 
cc:	Tom Davenport	

FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT (“Amendment”), made and entered into this 22nd day of August 2014, by and between Clearside Biomedical, Inc., a Delaware corporation (hereinafter referred to as “Tenant”), and McDonald Ventures XI, LLC, a Georgia limited liability company (hereinafter referred to as “Landlord”):
W I T N E S S E T H:
WHEREAS, Landlord and Tenant entered into a lease agreement of certain premises located at 1220 Old Alpharetta Road, Suite 300, Alpharetta, Forsyth County, Georgia 30005, as evidenced by that certain Lease Agreement dated March 14, 2012 (the “Lease”); and
WHEREAS, Tenant exercised is Renewal Option via a letter to Landlord dated November 26, 2013, a copy of which is attached hereto as Exhibit “A”; and
WHEREAS, Landlord and Tenant desire to amend the Lease to set forth the terms of renewal.
NOW, THEREFORE, for and in consideration of TEN AND NO/100 DOLLARS ($10.00), and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the same meaning as in the Lease, unless otherwise expressly defined herein.
2. Extension of Demised Term. The Demised Term under Paragraph 2 of the Lease is hereby extended for thirty (30) full calendar months beginning October 1, 2014 (the “Renewal Commencement Date”) and ending March 31, 2017.
3. Base Rent. Commencing on the Renewal Commencement Date, Base Rent under Paragraph 3.A. of the Lease shall be Seven Thousand Two Hundred Thirty-Three and No/100s Dollars ($7,233.00) per month.
4. Rent Increase. Base Rent set forth in Paragraph 3. above shall increase at the beginning of the thirteenth (13th) full calendar month from the Renewal Commencement Date by three percent (3%), which adjusted rent amount shall remain in effect for the next twelve (12) consecutive months and shall increase by three percent (3%) each twelve (12) months thereafter for the balance of the Demised Term.
5. Tenant Improvements. Landlord shall provide Tenant with a onetime tenant improvement allowance in the amount of $17,646.00 ($2.00 per square foot) (the “Allowance”) for the costs relating to construction of the Tenant Improvement Work, as hereinafter defined. Landlord shall perform the improvements shown on the space plan prepared by Loia Budde Associates dated August 7, 2014, attached hereto as Exhibit “B” (the “Tenant Improvement Work”), which shall be completed in accordance with the Standard Tenant Finish Specifications attached hereto as Exhibit “C”. The current estimate for the Tenant Improvement Work is Forty Thousand Three Hundred Forty-Two and No/100 Dollars ($40,342.00) (the “Total Projected Cost”). Tenant shall fund the cost of any Tenant Improvement Work that exceeds the Allowance. Tenant shall pay to Landlord at execution of the Amendment the estimated overage of the Tenant Improvement Work equal to the Total Projected Cost less the Allowance, which is currently estimated to be Twenty-Two Thousand Six Hundred Ninety-Six and No/100 Dollars ($22,696.00) (the “Estimated Tenant Overage”). Landlord and Tenant agree, that upon determination of the actual costs of the Tenant Improvement Work, the unused portion of the Estimated Tenant Overage collected from Tenant, if any, will either be returned to Tenant or applied towards Tenant’s Base Rent obligation within thirty (30) days. In the event, the Tenant Improvement Work exceeds the Estimated Tenant Overage, Tenant shall have thirty (30) days after receipt of invoice from Landlord to pay to Landlord the balance due for any cost of the Tenant Improvement Work that exceeded the Total Projected Cost. The Tenant Improvement Work shall begin after execution of the Amendment by both Tenant and Landlord and shall be completed per a mutually agreeable schedule. McDonald Construction Services shall be the General Contractor for all construction, and McDonald Development Company will oversee the construction process.

Lease Agreement	 	25	 	 	

Except as expressly modified hereby, the Lease shall remain in full force and effect, Landlord and Tenant ratifying and affirming the same.
IN WITNESS WHEREOF, the parties have executed this Amendment with intent to be bound hereby as of the day and year indicated above each signature block, respectively, but effective as of the day and year first above written.
EXECUTED BY LANDLORD, this 22nd day of August, 2014.

LANDLORD	
 	
McDonald Ventures XI, LLC, a Georgia limited liability company	
 	 	
By:	 	McDonald Industrial XI, LLC, a Georgia limited liability company, its Manager	
 	 	
By:	 	McDonald Development Company, a Georgia corporation, its Manager	
 	 	
By:	 	/s/ John R. McDonald, President	
 	 	John R. McDonald, President	
EXECUTED BY TENANT, this 18th day of August, 2014.

 	 	TENANT	
 	 	
 	 	Clearside Biomedical, Inc., a Delaware corporation	
 	 	 	
 	 	By:	 	/s/ Daniel White	
 	 	Title:	 	President and CEO	

Lease Agreement	 	26	 	 	

Exhibit “A”

November 26, 2013
Mr. John T. Downing
McDonald Development Company
3715 Northside Parkway, Bldg 200, Ste. 700
Atlanta, GA 30327
 
RE:	    Lease Renewal Option	
Dear Mr. Downing,
Clearside Biomedical is exercising its Renewal Option as provided for in Section 32 of the lease dated March 14, 2012.
Attached please find a copy of our audited financial statements from May 26, 2011 through December 31, 2012.
If you need additional information, please do not hesitate to contact me.
Sincerely,
CLEARSIDE BIOMEDICAL, INC.

Charles A. Deignan
Chief Financial Officer
CAS/sgk
Attachment (1)

 
 	 	 	 	 	
Lease Amendment – Exhibit “A”	 	27	 	 	

Exhibit “B”

 
 	 	 	 	 	
Lease Amendment – Exhibit “B”	 	28	 	 	

Exhibit “B”

 
 	 	 	 	 	
Lease Amendment – Exhibit “B”	 	29	 	 	

Exhibit “B”

 
 	 	 	 	 	
Lease Amendment – Exhibit “B”	 	30	 	 	

Exhibit “C”
McDONALD DEVELOPMENT COMPANY
OUTLINE OF
STANDARD OFFICE FINISH SPECIFICATIONS
 
1.	CARPENTRY & MILLWORK	
 
 	A.	Single fixture toilet rooms to have a wall-hung lavatory. Multiple fixture toilet rooms shall have plastic laminate lavatory counter-tops without base cabinet for handicap access.	
 
 	B.	One coat rod and shelf in each coat closet.	
 
 	C.	Two levels of adjustable shelves in storage room.	
 
 	D.	Toilet partitions to be metal, in standard colors.	
 
2.	DOORS & HARDWARE	
 
 	A.	Glass entrance door is existing.	
 
 	B.	Interior Doors	
3’ - 0” x 6’ - 8” x 1 - 3/4” flush solid core, stain grade, birch veneer door or to match existing (New doors to have Minwax Dark Walnut #2716).
Door frames shall be KD hollow metal.
(3) 4 x 4 hinges with 26 D finish (Brushed finish).
Hardware shall be lever action Cal-Royal SL Series with 26D finish (Grade 2 or better).
Function to be compatible with room types indicated on drawings
Wall mounted door stops with interior wall blocking.
Provide closers on all bathroom doors (excluding single fixture bathrooms) and doors leading to warehouse.
 
 	C.	Labeled Doors (where required)	
Provide labeled doors and frames with rated hinges.
Lever action Cal-Royal SL Series locksets.
Surface mounted closers.
 
3.	PARTITIONS	
 
 	A.	Demising Walls	
Demising wall partitions shall be 1-hour rated extending from finished slab to deck (height varies) and shall be constructed with 5/8” type C gypsum wallboard screwed to both sides of 6” wide metal studs Provide R-11 fiberglass blankets in wall cavity floor to roof deck (UL Des. U-465), painted white with black cove base.
 
 	B.	Interior Partitions	
Typical 9’ - 0” interior partitions shall extend from finished slab to finished ceiling. Construction to be of 3-5/8” wide metal studs (25 Ga.) spaced 24” o.c. with 1/2” gypsum wallboard screwed to both sides. Toilet room walls shall extend to 10’.
Insulation — sound attenuation blanket is to be installed in all toilet room, break room, and conference room walls.
All exterior tilt-up walls in office areas to receive 1/2” gypsum board on 3-5/8” wide metal studs (25 Ga.) spaced 24” o.c. with R-11 insulation.

Lease Amendment – Exhibit “C”	 	31	 	 	

Exhibit “C”
 
4.	ACOUSTICAL CEILINGS	
 
 	A.	2’ - 0” x 2’ - 0” standard grid system with 5/8” non-directional reveal-edge mineral board ceiling panels.	
 
 	B.	Ceiling to be continuous over all interior partitions, except at toilet rooms.	
 
5.	FLOORING	
 
 	A.	Vinyl composition tile (VCT) is to be installed in bathrooms and kitchen/break room.	
 
 	B.	All other finished areas are to be carpeted using building standard carpet.	
 
 	C.	4” rubber cove base is to be installed in all finished areas. Pre-molded tab corners to be used on all outside corners.	
 
6.	PAINTING	
 
 	A.	All walls are to be painted with a minimum of two coats of eggshell paint.	
 
 	B.	All door frames to be painted with oil-based enamel, semi-gloss.	
 
 	C.	Toilet room walls to be painted with eggshell latex paint.	
 
7.	HVAC	
 
 	A.	Heating and air conditioning to be furnished by either split systems or roof top/package units to maintain a maximum 75ºF with 94ºF outside air temperature. Higher cooling loads imposed by equipment or heavier than normal occupancy would be an additional cost. Roof mounted equipment shall not be installed within thirty feet (30’) of building perimeter unless a parapet provides adequate screening.	
 
 	B.	Provide exhaust fans in toilet rooms.	
 
 	C.	Provide additional structural reinforcement as required for all roof mounted equipment.	
 
8.	PLUMBING	
 
 	A.	Water closet and urinals in toilet rooms in quantities as indicated on drawings.	
 
 	B.	Lavatory in each toilet room per drawings.	
 
 	C.	48” grab bar and 36” grab bar in handicapped toilet.	
 
 	D.	Single roll toilet paper holder.	
 
 	E.	Surface mounted towel dispenser.	
 
 	F.	One mirror extending the full width of the lavatory counter top.	
 
 	G.	Provide water heater (above ceiling in office area) sized as required to serve fixtures indicated.	
 
 	H.	All drinking fountains to be non-electric.	
 
9.	FIRE PROTECTION	
 
 	A.	Provide sprinkler drops to accommodate the office lay-out.	
 
 	B.	Provide fire extinguishers per local fire marshal’s requirements.	

Lease Amendment – Exhibit “C”	 	32	 	 	

Exhibit “C”
 
10.	ELECTRICAL	
 
 	A.	Provide service as recommended by electrical contractor.	
 
 	B.	Office lighting by 2’ - 0” x 4’ - 0” lay-in fluorescent fixtures with parabolic lens to maintain 50 foot candles at desk top.	
 
 	C.	Provide duplex receptacles and telephone boxes as shown on the drawings (Phone and data wiring to be provided by tenant.).	
 
 	D.	Exit signs and battery-pack emergency lighting as required by code.	
 
 	E.	Fire alarm and security system to be provided by tenant.	
 
11.	MISCELLANEOUS	
 
 	A.	Bali customizer mini blinds, 6 gauge aluminum, Snow Cap White (#386) to be placed at all storefront glass in first generation build-out. Repair and replace as necessary to match existing in renovated spaces.	

Lease Amendment – Exhibit “C”	 	33	 	 	

Exhibit 10.3
CLEARSIDE BIOMEDICAL, INC.
2011 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 2011 Stock Incentive Plan (the “Plan”) of Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to align their interests with those of the Company’s stockholders. Except where the context otherwise requires, the term “ Company ” includes the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “ Code ”) and other business ventures (including, without limitation, any joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “ Board ”).
2. Eligibility
All of the Company’s employees, officers, directors, and individual consultants and advisors (each a “Service Provider ”) are eligible to receive options, restricted stock, restricted stock units and other stock-based awards (each, an “ Award ”) under the Plan. Each person who receives an Award under the Plan is deemed a “ Participant .”
3. Administration and Delegation
(a) Administration by Board of Directors. The Plan shall be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.
(b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “ Committee ”). All references in the Plan to the “ Board ” shall mean the Board or a Committee of the Board to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.
4. Stock Available for Awards.
(a) Subject to adjustment under Section 8, Awards may be made under the Plan for up to 1,119,744 shares of the common stock of the Company, $0.001 par value per share (the “ Common Stock ”). If any Award expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to

such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or results in any Common Stock not being issued, the unused Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. Further, shares of Common Stock tendered to the Company by a Participant to exercise an Award shall be added to the number of shares of Common Stock available for the grant of Awards under the Plan. However, in the case of Incentive Stock Options (as hereinafter defined), the foregoing provisions shall be subject to any limitations under the Code. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares. At no time while there is any Option (as defined below) outstanding and held by a Participant who was a resident of the State of California on the date of grant of such Option, shall the total number of shares of Common Stock issuable upon exercise of all outstanding options and the total number of shares provided for under any stock bonus or similar plan or agreement of the Company exceed the applicable percentage as calculated in accordance with the conditions and exclusions of Section 260.140.45 of the California Code of Regulations, as amended (the “ California Regulations ”), based on the shares of the Company which are outstanding at the time the calculation is made unless the Plan complies with all conditions of Rule 701 of the Securities Act of 1933, as amended.
(b) Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a), except as may be required by reason of Section 422 and related provisions of the Code.
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. An Option, or portion of an Option, which is not intended to be or fails to qualify as an Incentive Stock Option (as hereinafter defined) shall be designated a “ Nonstatutory Stock Option. ”
(b) Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “ Incentive Stock Option ”) shall only be granted to employees of the Company and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. A Participant who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company shall not be eligible for the grant of an Incentive Stock Option unless (i) the exercise price is at least 110% of the Fair Market Value (as defined below) on the date the Option is granted and (ii) such Incentive Stock Option by its terms is not exercisable after the expiration of five years from the date the Option is granted. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board pursuant to Section 9(f), including without limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.
(c) Exercise Price. The Board shall establish the exercise price of each Option and specify such exercise price in the applicable option agreement. The exercise price shall be not less than 100% of the Fair Market Value on the date the Option is granted unless the Board specifically determines that the
 
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exercise price is intended to be less than such Fair Market Value, in which case the option agreement shall contain provisions complying with Section 409A of the Code; provided that if the Board approves the grant of an Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Fair Market Value on such future date. The term “ Fair Market Value ” shall mean, as of a given date: (i) if the Common Stock is listed on a national securities exchange, the last sale price of the Common Stock in the principal trading market for the Common Stock on such date; (ii) if the Common Stock is not listed on a national securities exchange, but is traded in the over-the counter market, the closing bid price for the Common Stock on such date, as reported by the OTC Bulletin Board or the National Quotation Bureau, Incorporated or similar publisher of such quotations; or (iii) if the Common Stock is not listed on a national securities exchange or traded in the over-the-counter market, such price as shall be determined by (or in a manner approved by) the Board in good faith and in compliance with applicable provisions of the Code and the regulations issued thereunder.
(d) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement.
(e) Exercise of Option. Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in Section 5(f) for the number of shares of Common Stock for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company following exercise either as soon as practicable or, subject to such conditions as the Board shall specify, on a deferred basis (with the Company’s obligation to be evidenced by an instrument providing for future delivery of the deferred shares at the time or times specified by the Board).
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as may otherwise be provided in the applicable option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;
(3) when the Common Stock is registered under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) and to the extent provided for in the applicable option agreement or approved by the Board, in its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their Fair Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;
(4) to the extent permitted by applicable law and provided for in the applicable option agreement or approved by the Board, in its sole discretion, by (i) delivery of a promissory note of the Participant to the Company on terms determined by the Board, or (ii) payment of such other lawful consideration as the Board may determine; or
(5) by any combination of the above permitted forms of payment.
 
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6. Restricted Stock; Restricted Stock Units
(a) General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock ”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive shares of Common Stock to be delivered at the time such shares of Common Stock vest (“ Restricted Stock Units ”) (Restricted Stock and Restricted Stock Units are each referred to herein as a “ Restricted Stock Award ”).
(b) Terms and Conditions. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue price, if any.
(c) Additional Provisions Relating to Restricted Stock.
(1) Dividends. Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the Board. If any such dividends or distributions are paid in shares, or consist of a dividend or distribution to holders of Common Stock other than an ordinary cash dividend, the shares, cash or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. Each dividend payment will be made no later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the date the dividends are paid to stockholders of that class of stock.
(2) Stock Certificates. The Company may require that any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant and be deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). After the expiration of the applicable restriction periods, upon request of a Participant or as otherwise determined by the Company, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “ Designated Beneficiary ”). In the absence of an effective designation by a Participant, “Designated Beneficiary” shall mean the Participant’s then living spouse, or, if none, the Participant’s estate.
7. Other Stock-Based Awards
Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“ Other Stock-Based Awards ”), including without limitation stock appreciation rights and Awards entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board shall determine. Subject to the provisions of the Plan, the Board shall determine the conditions of each Other Stock-Based Award, including any purchase price applicable thereto.
 
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8. Adjustments for Changes in Common Stock and Certain Other Events
(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan, (ii) the number and class of securities and exercise price per share of each outstanding Option, (iii) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award, and (iv) the terms of each other outstanding Award shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.
(b) Change in Control
(1) Definition. Unless otherwise specifically provided in an Award agreement, a “Change in Control” shall be deemed to have occurred upon the first to occur of:
(i) any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) becoming a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing either (A) more than a majority of the voting power of the then outstanding securities of the Company, or (B) more than a majority of the aggregate fair market value of the then outstanding securities of the Company;  provided , however , that a Change in Control shall not be deemed to occur as a result of (x) a transaction in which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such stockholders to more than majority of all votes to which all stockholders of the parent corporation would be entitled in the election of directors, or (y) a transaction in which the person acquires newly issued securities of the Company in exchange for an investment in the Company; or
(ii) the consummation of either: (A) a merger, share exchange, consolidation or reorganization of the Company where the stockholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger, share exchange, consolidation or reorganization, shares entitling such stockholders to either (x) more than a majority of all votes to which all stockholders of the surviving corporation would be entitled in the election of directors, or (y) more than a majority of the aggregate fair market value of then outstanding securities of the Company; or (B) a sale or other disposition of all or substantially all of the assets of the Company.
(2) Consequences of a Change in Control on Awards Other than Restricted Stock Awards. In connection with a Change in Control, the Board may take any one or more of the following actions as to all (or any portion of) outstanding Awards other than Restricted Stock Awards on such terms as the Board determines: (i) provide that Awards shall be assumed, or substantially equivalent Awards
 
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shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) in compliance with the applicable provisions of the Code, including Code Sections 409A, 422 and 424, (ii) upon written notice to a Participant, provide that the Participant’s unexercised Options or other unexercised Awards will terminate immediately prior to the consummation of such Change in Control unless exercised by the Participant within a specified period following the date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such Change in Control, (iv) in the event of a Change in Control under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Change in Control (the “ Acquisition Price ”), make or provide for a cash payment to a Participant equal to the excess, if any, of (A) the Acquisition Price times the number of shares of Common Stock subject to the Participant’s Options or other Awards (to the extent the exercise price does not exceed the Acquisition Price) less (B) the aggregate exercise price of all such outstanding Options or other Awards and any applicable tax withholdings, in exchange for the termination of such Options or other Awards, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise price thereof) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 8(b), the Board shall not be obligated by the Plan to treat all Awards, or all Awards of the same type, identically.
For purposes of clause (i) above, an Option shall be considered assumed if, following consummation of the Change in Control, the Option confers the right to purchase, for each share of Common Stock subject to the Option immediately prior to the consummation of the Change in Control, the consideration (whether cash, securities or other property) received as a result of the Change in Control by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Change in Control (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock);  provided ,  however , that if the consideration received as a result of the Change in Control is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) with equivalent in value (as determined by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Change in Control.
(3) Consequences of a Change in Control on Restricted Stock Awards. Upon the occurrence of a Change in Control other than a liquidation or dissolution of the Company, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise, apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Change in Control in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a Change in Control involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied.
9. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise expressly determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the
 
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laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.
(b) Documentation. Unless otherwise expressly determined by the Board, each Incentive Stock Option shall be evidenced by a Notice of Incentive Stock Option and Incentive Stock Option Agreement substantially in the form attached as Exhibit A , each Nonstatutory Stock Option shall be evidenced by a Notice of Nonstatutory Stock Option and Nonstatutory Stock Option Agreement substantially in the form attached as Exhibit B , and each Restricted Stock Award shall be evidenced by a Summary of Restricted Stock Purchase and Restricted Stock Purchase Agreement substantially in the form attached as Exhibit C . Each Award may contain terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an Award of the disability, death, termination of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.
(e) Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on exercise or release from forfeiture of an Award or, if the Company so requires, at the same time as is payment of the exercise price unless the Company determines otherwise. If provided for in an Award or approved by the Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value;  provided ,  however , except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). Shares surrendered to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.
(f) Amendment of Award.
(1) The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.
 
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(2) The Board may, without stockholder approval, amend any outstanding Award granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Award provided that such amended exercise price is at least equal to the then-current Fair Market Value. The Board may also, without stockholder approval, cancel any outstanding award (whether or not granted under the Plan) and grant in substitution new Awards under the Plan covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled award.
(g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules, regulations or contracts of the Company.
(h) Acceleration. The Board may at any time provide that any Award shall become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.
10. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend or otherwise and the exercise price of and the number of shares subject to such Option are adjusted as of the effective date of the stock dividend or split (rather than as of the record date for such stock dividend or split), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend or split shall be entitled to receive, on the distribution date, the stock dividend or split with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend or split.
(c) Effective Date and Term of Plan. The Plan shall become effective on the date on which it is adopted by the Board. No Awards shall be granted under the Plan after the expiration of 10 years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Company’s stockholders, but Awards previously granted may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time; provided ,  however , that if at any time the approval of the Company’s stockholders is required as to any modification or amendment under Section 422 of the Code or any
 
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successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 10(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment does not materially and adversely affect the rights of Participants under the Plan.
(e) Authorization of Sub-Plans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to this Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.
(f) Compliance with Code Section 409A. It is intended that all Awards granted hereunder be either exempt from, or issued in compliance with, Code Section 409A. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Code Section 409A is not so exempt or compliant, or for any action taken by the Board.
(g) Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware, as to matters within the scope thereof, and the internal laws of the State of North Carolina (without reference to conflict of law provisions), as to all other matters.
*  *  *  *  *  *  *  *
 
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CLEARSIDE BIOMEDICAL, INC.
2011 STOCK INCENTIVE PLAN
CALIFORNIA SUPPLEMENT
Pursuant to Section 10(e) of the Plan, the Board has adopted this supplement for purposes of satisfying the requirements of Section 25102(o) of the California Corporations Code, as amended:
Any Awards granted under the Plan to a Participant who is a resident of the State of California on the date of grant (a “ California Participant ”) shall be subject to the following additional limitations, terms and conditions:
1. Additional Limitations on Awards.
(a) Generally. The terms of all Awards granted to a California Participant under Sections 5, 6 or 7 of the Plan shall comply, to the extent applicable, with Section 260.140.41 or Section 260.140.42 of the California Regulations.
(b) Maximum Duration of Options. No Options granted to California Participants shall have a term in excess of 10 years measured from the Option grant date.
(c) Minimum Exercise Period Following Termination. Unless a California Participant’s employment is terminated for cause (as defined by applicable law, the terms of any contract of employment between the Company and such Participant, or in the instrument evidencing the grant of such Participant’s Option), in the event of termination of employment of such Participant, such Participant shall have the right to exercise an Option, to the extent that he or she was otherwise entitled to exercise such Option on the date employment terminated, until the earlier of the Option expiration date or: (i) at least six months from the date of termination, if termination was caused by such Participant’s death or “ permanent and total disability ” (within the meaning of Section 22(e)(3) of the Code) and (ii) at least 30 days from the date of termination, if termination was caused other than by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code).
2. Additional Requirement to Provide Information to California Participants. Unless the Plan or agreement complies with all conditions of Rule 701 of the Securities Act of 1933, as amended (“ Rule 701 ”), the Company shall provide to each California Participant and to each California Participant who acquires Common Stock pursuant to the Plan, not less frequently than annually, copies of annual financial statements (which need not be audited). The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information or when the Plan or agreement complies with all conditions of Rule 701.
3. Additional Limitations on Timing of Awards. No Award granted to a California Participant shall become exercisable, vested or realizable, as applicable to such Award, unless the Plan has been approved by the holders of at least a majority of the Company’s outstanding voting securities by the later of (i) within 12 months before or after the date the Plan was adopted by the Board or the agreement entered into; and (ii) prior to or within 12 months of the granting of any option or issuance of any security under the Plan or agreement to a California Participant.
4. Additional Restriction Regarding Recapitalizations, Stock Splits, Etc. For purposes of Section 8 of the Plan, in the event of a stock split, reverse stock split, stock dividend, recapitalization, combination,

reclassification or other distribution of the Company’s securities, the number of securities allocated to each California Participant must be adjusted proportionately and without the receipt by the Company of any consideration from any California Participant.
 
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EXHIBIT A
Notice of Incentive Stock Option
and
Incentive Stock Option Agreement

EXHIBIT B
Notice of Nonstatutory Stock Option
and
Nonstatutory Stock Option Agreement

EXHIBIT C
Summary of Restricted Stock Purchase and Restricted Stock Purchase Agreement

FIRST AMENDMENT TO THE
CLEARSIDE BIOMEDICAL, INC. 2011 STOCK INCENTIVE PLAN
December 29, 2011
THIS FIRST AMENDMENT to the Clearside BioMedical, Inc. 2011 Stock Incentive Plan (the “Plan”) is effective as of the date set forth above.
WHEREAS, the Board of Directors (the “Board”) of Clearside BioMedical, Inc., a Delaware corporation (the “ Company ”), has adopted and the stockholders of the Company have approved the Plan; and
WHEREAS, the Board has approved this amendment of the Plan in order to increase the number of shares of Common Stock of the Company issuable pursuant to awards granted under the Plan by 569,744 shares, from 550,000 to 1,119,744 shares.
NOW, THEREFORE, the Plan shall be amended as follows:
1. The first sentence of Paragraph 4(a) of the Plan shall be deleted in its entirety and the following substituted in lieu thereof:
“Subject to adjustment under Section 8, Awards may be made under the Plan for up to 1,119,744 shares of the Common Stock of the Company, $0.001 par value per share (the “ Common Stock ).”
2. Except as amended herein, the terms and provisions of the Plan shall remain unchanged and in full force and effect.
[Remainder of Page Intentionally Left Blank]

SECOND AMENDMENT TO THE
CLEARSIDE BIOMEDICAL, INC. 2011 STOCK INCENTIVE PLAN
THIS SECOND AMENDMENT to the Clearside Biomedical, Inc. 2011 Stock Incentive Plan (the “Plan”) is effective as of January 31, 2013.
WHEREAS, the Board of Directors (the “Board”) of Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), has adopted, and the stockholders of the Company have approved, the Plan; and
WHEREAS, the Board and the stockholders of the Company have approved this amendment of the Plan in order to increase the number of shares of stock issuable pursuant to awards granted under the Plan by 1,120,764 shares from 1,119,744 shares to 2,240,508 shares.
NOW, THEREFORE, the Plan shall be amended as follows:
1. The first sentence of Section 4(a) of the Plan shall be deleted in its entirety and the following substituted in lieu thereof:
“Subject to adjustment under Section 8, Awards may be made under the Plan for up to 2,240,508 shares of the common stock of the Company, $0.001 par value per share (the “ Common Stock ”).”
2. Except as amended herein, the terms and provisions of the Plan shall remain unchanged and in full force and effect.
[Remainder of Page Intentionally Left Blank]

THIRD AMENDMENT TO THE
CLEARSIDE BIOMEDICAL, INC. 2011 STOCK INCENTIVE PLAN
THIS THIRD AMENDMENT to the Clearside Biomedical, Inc. 2011 Stock Incentive Plan (the “Plan”) is effective as of August 28, 2014.
WHEREAS, the Board of Directors (the “Board”) of Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), has adopted, and the stockholders of the Company have approved, the Plan; and
WHEREAS, the Board and the stockholders of the Company have approved this amendment of the Plan in order to increase the number of shares of stock issuable pursuant to awards granted under the Plan by 1,098,268 shares from 2,240,508 shares to 3,338,776 shares.
NOW, THEREFORE, the Plan shall be amended as follows:
1. The first sentence of Section 4(a) of the Plan shall be deleted in its entirety and the following substituted in lieu thereof:
“Subject to adjustment under Section 8, Awards may be made under the Plan for up to 3,338,776 shares of the common stock of the Company, $0.001 par value per share (the “ Common Stock ”).”
2. Except as amended herein, the terms and provisions of the Plan shall remain unchanged and in full force and effect.
[Remainder of Page Intentionally Left Blank]

Exhibit 10.4
CLEARSIDE BIOMEDICAL, INC.
NOTICE OF INCENTIVE STOCK OPTION
2011 STOCK INCENTIVE PLAN
Clearside BioMedical, Inc., a Delaware corporation (the “Company”) grants to the undersigned (the “ Participant ”) the following incentive stock option to purchase shares (the “ Shares ”) of the common stock of the Company, par value $0.001 per share (the “ Common Stock ”), pursuant to the Company’s 2011 Stock Incentive Plan (the “ Plan ”):

Participant:	  	*[Participant Name]	
 	 	
Total Number of Shares:	  	*[Number of Shares]	
 	 	
Grant Date:	  	*[Grant Date]	
 	 	
Exercise Price per Share:	  	$*[Exercise Price]	
 	 	
Vesting Commencement Date:	  	*[Vesting Date]	
 	 	
Vesting Schedule:	  	*[Describe Vesting Schedule – for example: “25% of the Total Number of Shares shall vest and become exercisable on the 1 year anniversary of the Vesting Commencement Date and 1/48 of the Total Number of Shares shall vest and become exercisable on the corresponding day of each month thereafter, or on the last day of each month, to the extent each month thereafter does not have the corresponding day, until all of the Shares have vested on the fourth anniversary of the Vesting Commencement Date, subject to Participant continuing to be a Service Provider through each such date.” ]
 
*[In addition, this Option may vest and become exercisable on an accelerated basis under Section 2 of the Incentive Stock Option Agreement. ]	
 	 	
Final Exercise Date:	  	*[Expiration Date].1 This Option may expire earlier pursuant to Section 3 of the Incentive Stock Option Agreement if the Participant’s relationship with the Company is terminated or pursuant to Section 8 of the Plan.	
This incentive stock option is granted under and governed by the terms and conditions of the Plan and the Incentive Stock Option Agreement, both of which are incorporated herein by reference. By signing below, the Participant accepts this incentive stock option, acknowledges receipt of a copy of the Plan and the Incentive Stock Option Agreement, and agrees to the terms thereof.
 
1 	The Final Exercise Date must be no more than 10 years from the Grant Date for the Option to qualify as an ISO. For example, an Option with a Grant Date of October 1, 2006 would have a Final Exercise Date of September 30, 2016.	

 	 	 	
*[PARTICIPANT NAME]:	

(Signature)	
 	 	
Address:	 	 	

 	 	 	
CLEARSIDE BIOMEDICAL, INC.:	
 	 	
By:	 	 	
 	 	
Name:	 	 	
 	 	
Title:	 	 	
 	 	
Date:	 	 	

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THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
CLEARSIDE BIOMEDICAL, INC.
INCENTIVE STOCK OPTION AGREEMENT
Granted under 2011 Stock Incentive Plan
1. Grant of Option.
This Incentive Stock Option Agreement (the “Agreement”) evidences the grant by Clearside BioMedical, Inc., a Delaware corporation (the “ Company ”), on the Grant Date to the Participant, an employee of the Company, of an option (this “ Option ”) to purchase, in whole or in part, on the terms provided herein and in the Plan, the Total Number of Shares at the Exercise Price per Share, all as defined and set forth in the accompanying Notice of Incentive Stock Option (the “ Notice ”). Capitalized terms that are not otherwise defined herein or in the Notice shall have the meanings given to such terms in the Plan.
It is intended that this Option shall be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “ Code ”). If for any reason the Option, or any portion thereof, does not meet the requirements of Section 422 of the Code, then the Option, or any portion thereof, as necessary, shall be deemed a nonstatutory stock option granted under the Plan. Except as otherwise indicated by the context, the term “Participant,” as used in this Agreement, shall include any person who acquires the right to exercise this Option validly under its terms.
2. Vesting Schedule.
This Option shall vest and become exercisable at the time or times set forth in the accompanying Notice. In addition, this Option may vest and become exercisable on an accelerated basis as follows:
[Immediately prior to the effective date of a Change in Control, this Option shall vest and become exercisable as to 100% of the Total Number of Shares, it being understood that in no event shall the Participant be entitled to exercise the Option to purchase greater than the Total Number of Shares as a result of this provision.]
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this Option shall be in writing in substantially the form of the Notice of Stock Option Exercise attached to this Agreement as Exhibit A , signed by the Participant, and received by the Company at its principal office, accompanied by this Agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of Shares subject to this Option;  provided that , no partial exercise of this Option may be for any fractional share.

(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this Option may not be exercised unless the Participant, at the time of the exercise of this Option, is, and has been at all times since the Grant Date, a Service Provider to or of the Company or any subsidiary of the Company as defined in Section 424 (f) of the Code (an “ Eligible Participant ”).
(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this Option shall terminate three months after such cessation (but in no event after the Final Exercise Date);  provided that,  this Option shall be exercisable only to the extent that the Participant was entitled to exercise this Option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment agreement, confidentiality and nondisclosure agreement, or other agreement between the Participant and the Company, the right to exercise this Option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while the Participant is an Eligible Participant and the Company has not terminated such relationship for “Cause” (as defined below), this Option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee);  provided that,  this Option shall be exercisable only to the extent that this Option was exercisable by the Participant on the date of the Participant’s death or disability, and further provided that this Option shall not be exercisable after the Final Exercise Date.
(e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s status as a Service Provider is terminated by the Company for Cause (as defined below), the right to exercise this Option shall terminate immediately upon the effective date of such termination. If the Participant is party to an agreement with the Company that contains an applicable definition of “cause”, “ Cause ” shall have the meaning ascribed to such term in such agreement. Otherwise, “ Cause ” shall mean willful misconduct by the Participant or willful failure by the Participant to perform the Participant’s responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant shall be considered to have been discharged for Cause if the Company determines, within 30 days after the Participant’s resignation, that discharge for cause was warranted.
4. Restrictions on Transfer; Rights of First Refusal and Stockholder Agreements.
(a) Bylaws. The Participant acknowledges and agrees that the Shares are subject to the provisions of the Company’s Bylaws, as amended from time to time (the “ Bylaws ”), including without limitation, all restrictions on transfer and rights of first refusal described in the Bylaws. The Participant may inspect the Bylaws at the Company’s principal office.
(b) Legend. Any certificate representing Shares shall bear a legend substantially in the following form (in addition to, or in combination with, any legend required by applicable federal and state securities laws and agreements relating to the transfer and/or voting of the Company securities):
“The securities represented by this certificate, and the transfer thereof, are subject to the restriction on transfer provisions of the Bylaws of the Company, a copy of which is on file in, and may be examined at, the principal office of the Company”
(c) Stockholder Agreements. The Participant acknowledges and agrees that the Company may condition the issuance of the Shares upon the Participant joining and becoming a party to such stockholder agreements, which may impose certain contractual rights and obligations on the Shares, as may be entered into from time to time by and among the Company and certain holders of the Company’s capital stock.
 
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5. Agreement in Connection with Public Offering. The Participant agrees, in connection with the initial underwritten public offering of the Company’s securities pursuant to a registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”): (i) not to sell, make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of Common Stock held by the Participant (other than those shares included in the offering) without the prior written consent of the Company or the underwriters managing such initial underwritten public offering of the Company’s securities for a period of 180 days from the effective date of such registration statement, which period may be extended upon the request of the underwriters for an additional period of up to fifteen (15) days if the Company issues or proposes to issue an earnings or other public release within fifteen (15) days of the expiration of the 180-day lockup period, and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering.
The Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters of such offering which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested, by the Company or the underwriters of such offering, the Participant shall provide, within 10 days of such request, such information as may be required by the Company or such underwriters in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 5 shall not apply to a registration relating solely to employee benefits plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of the applicable period. Participant agrees that any transferee of this Option or Shares pursuant to this Agreement shall be bound by this Section 5.
6. Tax Matters.
(a) Withholding. No Shares shall be issued pursuant to the exercise of this Option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this Option.
(b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon exercise of this Option within two years from the Grant Date or one year after such Shares were acquired pursuant to exercise of this Option, the Participant shall immediately notify the Company in writing of such disposition and shall timely satisfy all resulting tax obligations and shall hold the Company harmless with respect to any such tax obligations.
(c) Code Section 409A. The Exercise Price is intended to be the Fair Market Value of the Common Stock on the Grant Date. The Company has determined the Fair Market Value of the Common Stock in good faith and using the reasonable application of a reasonable valuation method, for purposes of determining the Exercise Price. Notwithstanding this, the Internal Revenue Service may assert that the Fair Market Value of the Common Stock on the Grant Date was greater than the Exercise Price. Under Code Section 409A, if the Exercise Price is less than the Fair Market Value of the Common Stock as of the Grant Date, this Option may be treated as a form of deferred compensation and the Participant may be
 
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subject to an additional twenty percent (20%) tax, plus interest and possible penalties. The Participant acknowledges that the Company has advised the Participant to consult with a tax adviser regarding the potential impact of Code Section 409A and that the Company, in the exercise of its sole discretion and without the consent of the Participant, may amend or modify this Agreement in any manner and delay the payment of any amounts payable pursuant to this Agreement to the minimum extent necessary to meet the requirements of Code Section 409A, as amplified by any Internal Revenue Service or U.S. Treasury Department regulations or guidance as the Company deems appropriate or advisable.
7. Nontransferability of Option. This Option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this Option shall be exercisable only by the Participant.
8. Provisions of the Plan. This Option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this Option.
9 Entire Agreement; Governing Law. The Plan and the accompanying Notice are incorporated herein by reference. This Agreement, the Notice and the Plan constitute the entire agreement between the Company and the Participant with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof. This Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware, as to matters within the scope thereof, and the internal laws of the State of North Carolina (without reference to conflict of law provisions), as to all other matters.
10. Amendment. Except as set forth in Section 6(c), this Agreement may not be modified or amended in any manner adverse to the Participant’s interest except by means of a writing signed by the Company and Participant.
11. No Guarantee of Continued Service. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF OPTIONS PURSUANT TO THE VESTING SCHEDULE SET FORTH HEREIN AND IN THE NOTICE ARE EARNED ONLY BY CONTINUING SERVICE AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED SERVICE FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PARTICIPANT’S SERVICE WITH OR WITHOUT CAUSE.
*        *        *
 
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Exhibit A
CLEARSIDE BIOMEDICAL, INC.
NOTICE OF INCENTIVE STOCK OPTION EXERCISE
2011 STOCK INCENTIVE PLAN
The undersigned (the “Participant”) has previously been awarded an incentive stock option (the “ Option ”) to purchase shares (the “ Shares ”) of the common stock of Clearside BioMedical, Inc., a Delaware corporation (the “ Company ”), pursuant to the Company’s 2011 Stock Incentive Plan (the “ Plan ”), and hereby notifies the Company of the Participant’s desire to exercise the Option on the terms set forth herein:

PARTICIPANT INFORMATION:	  	 	 	OPTION INFORMATION:	
 	 	 	 	 	
Name:	  	 	  	 	 	Grant Date:	  	 	
 	 	 	 	 	
Address:	  	 	  	 	 	Exercise Price Per Share:	  	$            	

 	  	 	 	 	  	 	
 	 	 	 	 	 	
Taxpayer ID #:	  	 	  	 	  	 	 	Total Shares Covered by Option:	  	 	

EXERCISE INFORMATION:	  	 	  	 	
 	 	 	 	
Number of Shares Being Purchased:	  	 	  	 	  	 	
 	 	 	 	
Aggregate Exercise Price:	  	$            	  	 	  	 	
 	 	 	
Form of Payment (check all that apply):	  	¨ Check for $             made payable to “Clearside BioMedical, Inc.”
 
¨ Cash in the amount of $            	  	 	
 	 	 	
Please register the Shares in my name as follows:	  	 	  	 	
 	  	(Print name as it is to appear on stock certificate)	  	 	

REPRESENTATIONS AND WARRANTIES OF THE PARTICIPANT:
The Participant hereby represents and warrants to the Company that, as of the date hereof:
1. I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933 (the “ Securities Act ”), or any rule or regulation under the Securities Act.
2. I have had such opportunity as I have deemed adequate to obtain from representatives of the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company.
3. I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.
4. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.
5. I acknowledge that I am acquiring the Shares subject to all other terms of the Plan, including the Notice of Incentive Stock Option and related Incentive Stock Option Agreement.
6. I acknowledge that the Company has encouraged me to consult my own adviser to determine the tax consequences of acquiring the Shares at this time. I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me.
7. I acknowledge that the Shares remain subject to the Company’s right of first refusal and the market stand-off (sometimes referred to as the “lock-up”), all in accordance with the applicable Notice of Incentive Stock Option and related Incentive Stock Option Agreement.
8. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least six months or one year (depending on whether the Company is subject to the reporting obligations of the Securities Exchange Act of 1934, as amended) and even then will not be available unless applicable terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

 	
(Print Participant Name)	

(Signature)	
 	 	
Date:	 	 	

Exhibit 10.5
CLEARSIDE BIOMEDICAL, INC.
NOTICE OF NONSTATUTORY STOCK OPTION
2011 STOCK INCENTIVE PLAN
Clearside BioMedical, Inc., a Delaware corporation (the “Company”) grants to the undersigned (the “ Participant ”) the following nonstatutory stock option to purchase shares (the “ Shares ”) of the common stock of the Company, par value $0.001 per share (the “ Common Stock ”) pursuant to the Company’s 2011 Stock Incentive Plan (the “ Plan ”):

Participant:	  	*[Participant Name]	
 	 	
Total Number of Shares:	  	*[Number of Shares]	
 	 	
Grant Date:	  	*[Grant Date]	
 	 	
Exercise Price per Share:	  	$*[Exercise Price]	
 	 	
Vesting Commencement Date:	  	*[Vesting Date]	
 	 	
Vesting Schedule:	  	*[Describe Vesting Schedule – for example: “25% of the Total Number of Shares shall vest and become exercisable on the 1 year anniversary of the Vesting Commencement Date and 1/48 of the Total Number of Shares shall vest and become exercisable on the corresponding day of each month thereafter, or on the last day of each month, to the extent each month thereafter does not have the corresponding day, until all of the Shares have vested on the fourth anniversary of the Vesting Commencement Date, subject to Participant continuing to be a Service Provider through each such date.” ]
 
*[In addition, this option may vest and become exercisable on an accelerated basis under Section 2 of the Nonstatutory Stock Option Agreement. ]	
 	 	
Final Exercise Date:	  	*[Expiration Date]. This option may expire earlier pursuant to Section 3 of the Nonstatutory Stock Option Agreement if the Participant’s relationship with the Company is terminated, or pursuant to Section 8 of the Plan.	
This nonstatutory stock option is granted under and governed by the terms and conditions of the Plan and the accompanying Nonstatutory Stock Option Agreement, both of which are incorporated herein by reference. By signing below, the Participant accepts this nonstatutory stock option, acknowledges receipt of a copy of the Plan and the Nonstatutory Stock Option Agreement, and agrees to the terms thereof.

 	 	 	 	 	 	 	 	 	
[PARTICIPANT NAME]:	 	 	 	CLEARSIDE BIOMEDICAL, INC.	
 	 	 	 	
 	 	 	 	By:	 	 	
(Signature)	 	 	 	 	 	 	
 	 	 	 	 	 	Name:	 	 	
 	 	 	 	 	
Address:	 	 	 	 	 	Title:	 	 	
 	 	 	 	
 	 	 	 	Date:	 	 	
 
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THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
CLEARSIDE BIOMEDICAL, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
Granted Under 2011 Stock Incentive Plan
1. Grant of Option.
This Nonstatutory Stock Option Agreement (the “Agreement”) evidences the grant by Clearside BioMedical, Inc., a Delaware corporation (the “ Company ”), on the Grant Date to the Participant, a [ n ] * [ employee/officer/director/consultant/advisor ]  of the Company, of an option (this “ Option ”) to purchase, in whole or in part, on the terms provided herein and in the Plan, the Total Number of Shares of Common Stock at the Exercise Price per Share, all as defined and set forth in the accompanying Notice of Nonstatutory Stock Option (the “ Notice ”). Capitalized terms that are not otherwise defined herein or in the Notice shall have the meanings given to such terms in the Plan.
It is intended that this Option shall not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “ Code ”). Except as otherwise indicated by the context, the term “Participant,” as used in this Agreement, shall include any person who acquires the right to exercise this Option validly under its terms.
2. Vesting Schedule.
This Option shall vest and become exercisable at the time or times set forth in the accompanying Notice.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this Option shall be in writing in substantially the form of the Notice of Stock Option Exercise attached to this Agreement as Exhibit A , signed by the Participant, and received by the Company at its principal office, accompanied by this Agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of Shares subject to this Option;  provided that,  no partial exercise of this Option may be for any fractional share.
(b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this Option may not be exercised unless the Participant, at the time of the exercise of this Option, is, and has been at all times since the Grant Date, a Service Provider to or of the Company or any subsidiary of the Company as defined in Section 424 (f) of the Code (an “ Eligible Participant ”).
(c) Termination of Relationship with the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this Option shall terminate  *[ three months ]  after such cessation (but in no event after the Final Exercise Date);  provided that,  this Option shall be exercisable only to the extent that the Participant was

entitled to exercise this Option on the date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment agreement, confidentiality and nondisclosure agreement, or other agreement between the Participant and the Company, the right to exercise this Option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while the Participant is an Eligible Participant and the Company has not terminated such relationship for “Cause” (as defined below), this Option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee);  provided that,  this Option shall be exercisable only to the extent that this Option was exercisable by the Participant on the date of the Participant’s death or disability, and further provided that this Option shall not be exercisable after the Final Exercise Date.
(e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s status as a Service Provider is terminated by the Company for Cause (as defined below), the right to exercise this Option shall terminate immediately upon the effective date of such termination. If the Participant is party to an agreement with the Company that contains an applicable definition of “cause”, “ Cause ” shall have the meaning ascribed to such term in such agreement. Otherwise, “ Cause ” shall mean willful misconduct by the Participant or willful failure by the Participant to perform the Participant’s responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for cause was warranted.
4. Restrictions on Transfer; Rights of First Refusal and Stockholder Agreements.
(a) Bylaws. The Participant acknowledges and agrees that the Shares are subject to the provisions of the Company’s Bylaws, as amended from time to time (the “ Bylaws ”), including without limitation, all restrictions on transfer and rights of first refusal described in the Bylaws. The Participant may inspect the Bylaws at the Company’s principal office.
(b) Legend. Any certificate representing Shares shall bear a legend substantially in the following form (in addition to, or in combination with, any legend required by applicable federal and state securities laws and agreements relating to the transfer and/or voting of the Company’s securities):
“The securities represented by this certificate, and the transfer thereof, are subject to the restriction on transfer provisions of the Bylaws of the Company, a copy of which is on file in, and may be examined at, the principal office of the Company.”
(c) Stockholder Agreements. The Participant acknowledges and agrees that [the Company may condition the issuance of the Shares upon the Participant joining and becoming a party to such stockholder agreements, which may impose certain contractual rights and obligations on the Shares, as may be entered into from time to time by and among the Company and certain holders of the Company’s capital stock.
 
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5. Agreement in Connection with Public Offering.
The Participant agrees, in connection with the initial underwritten public offering of the Company’s securities pursuant to a registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”): (i) not to sell, make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of Common Stock held by the Participant (other than those shares included in the offering) without the prior written consent of the Company or the underwriters managing such initial underwritten public offering of the Company’s securities for a period of 180 days from the effective date of such registration statement, which period may be extended upon the request of the underwriters for an additional period of up to fifteen (15) days if the Company issues or proposes to issue an earnings or other public release within fifteen (15) days of the expiration of the 180-day lockup period, and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering.
The Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters of such offering which are consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the underwriters of such offering, the Participant shall provide, within 10 days of such request, such information as may be required by the Company or such underwriters in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 5 shall not apply to a registration relating solely to employee benefits plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of the applicable period. Participant agrees that any transferee of this Option or Shares pursuant to this Agreement shall be bound by this Section 5.
6. Tax Matters.
(a) Withholding. No Shares shall be issued pursuant to the exercise of this Option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding or other taxes required by law to be withheld in respect of this Option.
(b) Code Section 409A. The Exercise Price is intended to be not less than the Fair Market Value of the Common Stock on the Grant Date. The Company has determined the Fair Market Value of the Common Stock in good faith and using the reasonable application of a reasonable valuation method, for purposes of determining the Exercise Price. Notwithstanding this, the Internal Revenue Service may assert that the Fair Market Value of the Common Stock on the Grant Date was greater than the Exercise Price. Under Code Section 409A, if the Exercise Price is less than the Fair Market Value of the Common Stock as of the Grant Date, this Option may be treated as a form of deferred compensation and the Participant may be subject to an additional twenty percent (20%) tax, plus interest and possible penalties. The Participant acknowledges that the Company has advised the Participant to consult with a tax adviser regarding the potential impact of Code Section 409A and that the Company, in the exercise of its sole discretion and without the consent of the Participant, may amend or modify this Agreement in any manner and delay the payment of any amounts payable pursuant to this Agreement to the minimum extent necessary to meet the requirements of Code Section 409A, as amplified by any Internal Revenue Service or U.S. Treasury Department regulations or guidance as the Company deems appropriate or advisable.
7. Nontransferability of Option. This Option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this Option shall be exercisable only by the Participant.
 
3

8. Provisions of the Plan. This Option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this Option.
9 Entire Agreement; Governing Law. The Plan and the Notice are incorporated herein by reference. This Agreement, the Notice and the Plan constitute the entire agreement between the Company and the Participant with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof. This Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware, as to matters within the scope thereof, and the internal laws of the State of North Carolina (without reference to conflict of law provisions), as to all other matters.
10. Amendment. Except as set forth in Section 6(b), this Agreement may not be modified or amended in any manner adverse to the Participant’s interest except by means of a writing signed by the Company and Participant.
11. No Guarantee of Continued Service. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF OPTIONS PURSUANT TO THE VESTING SCHEDULE SET FORTH HEREIN AND IN THE NOTICE ARE EARNED ONLY BY CONTINUING SERVICE AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED SERVICE FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PARTICIPANT’S SERVICE WITH OR WITHOUT CAUSE.
*  *  *  *  *  *  *  *  *  *  *
 
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Exhibit A
CLEARSIDE BIOMEDICAL, INC.
NOTICE OF NONSTATUTORY STOCK OPTION EXERCISE
2011 STOCK INCENTIVE PLAN
The undersigned (the “Participant”) has previously been awarded a nonstatutory stock option (the “ Option ”) to purchase shares (the “ Shares ”) of the common stock of Clearside BioMedical, Inc., a Delaware corporation (the “ Company ”), pursuant to the Company’s 2011 Stock Incentive Plan (the “ Plan ”), and hereby notifies the Company of the Participant’s desire to exercise the Option on the terms set forth herein:

PARTICIPANT INFORMATION:	  	 	  	 	  	OPTION INFORMATION:	
 	 	 	 	 	
Name:	  	 	  	 	  	Grant Date:	  	 	
 	 	 	 	 	
Address:	  	 	  	 	  	Exercise Price Per Share:	  	$            	

 	  	 	  	 	  	 	
 	 	 	 	 	 	
Taxpayer ID #:	  	 	  	 	  	 	  	Total Shares Covered by Option:	  	 	

EXERCISE INFORMATION:	 	 	  	 	
 	 	 	 	
Number of Shares Being Purchased:	  	 	 	 	  	 	
 	 	 	 	
Aggregate Exercise Price:	  	$            	 	 	  	 	
 	 	
Form of Payment (check all that apply):	  	¨ Check for $             made payable to “Clearside BioMedical, Inc.”
 
¨ Cash in the amount of $            	
 	 	 	
Please register the Shares in my name as follows:	  	 	  	 	
 	  	(Print name as it is to appear on stock certificate)	  	 	

REPRESENTATIONS AND WARRANTIES OF THE PARTICIPANT:
The Participant hereby represents and warrants to the Company that, as of the date hereof:
1. I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933 (the “ Securities Act ”), or any rule or regulation under the Securities Act.
2. I have had such opportunity as I have deemed adequate to obtain from representatives of the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company.
3. I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.
4. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.
5. I acknowledge that I am acquiring the Shares subject to all other terms of the Plan, including the Notice of Nonstatutory Stock Option and related Nonstatutory Stock Option Agreement.
6. I acknowledge that the Company has encouraged me to consult my own adviser to determine the tax consequences of acquiring the Shares at this time. I acknowledge that the Company has encouraged me to consult my own adviser to determine the form of ownership that is appropriate for me.
7. I acknowledge that the Shares remain subject to the Company’s right of first refusal and the market stand-off (sometimes referred to as the “lock-up”), all in accordance with the applicable Notice of Nonstatutory Stock Option and related Nonstatutory Stock Option Agreement.
8. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least six months or one year (depending on whether the Company is subject to the reporting obligations of the Securities Exchange Act of 1934, as amended) and even then will not be available unless applicable terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

 	
(Print Participant Name)	

(Signature)	
 	 	
Date:	 	 	

Exhibit 10.9
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of [            ] between Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), and              (“ Indemnitee ”).
WITNESSETH THAT:
WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The Bylaws of the Company require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“ DGCL ”). The Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee does not regard the protection available under the Company’s Bylaws and insurance as adequate in the present circumstances, and may not be willing to serve

as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified; and
WHEREAS, Indemnitee has certain rights to indemnification and/or insurance provided by              (“Fund”), which Indemnitee and Fund intend to be secondary to the primary obligation of the Company to indemnify Indemnitee as provided herein, with the Company’s acknowledgement and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve on the Board; and
WHEREAS, the Indemnitee and the Company are parties to an Indemnification Agreement dated as of              (the “ Prior Agreement ”); and
WHEREAS, the parties to the Prior Agreement desire to amend and restate the Prior Agreement and accept the rights and covenants hereof in lieu of their rights and covenants under the Prior Agreement.
NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director from and after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this  Section 1(a)  if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this  Section 1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.
(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this  Section 1(b)  if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this  Section 1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
(d) Indemnification of Appointing Stockholder. If (i) Indemnitee is or was affiliated with one or more venture capital funds that has invested in the Company (an “ Appointing Stockholder ”), and (ii) the Appointing Stockholder is, or is threatened to be made, a party to or a participant in any Proceeding relating to or arising by reason of Appointing Stockholder’s position as a stockholder of, or lender to, the Company, or Appointing Stockholder’s appointment of or affiliation with Indemnitee or any other director, including without limitation any alleged misappropriation of a Company asset or corporate opportunity, any claim of misappropriation or infringement of intellectual property relating to the Company, any alleged false or misleading statement or omission made by the Company (or on its behalf) or its employees or agents, or any allegation of inappropriate control or influence over the Company or its Board members, officers, equity holders or debt holders, then the Appointing Stockholder will be entitled to all of the indemnification rights and remedies under this Agreement pursuant to this Agreement as if the Appointing Stockholder were the Indemnitee. The Company and Indemnitee agree that the Appointing Stockholder is an express third party beneficiary of the terms of this  Section 1(d) .
2. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1  of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in  Sections 6  and  7  hereof) to be unlawful.
3. Contribution.
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or

proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness,

or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
5. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5  shall be unsecured and interest free.
6. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (1) by a majority vote of the disinterested directors, even though less than a quorum, (2) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum, (3) if there are no disinterested directors or if the disinterested directors so direct, by independent legal counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company. For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought by Indemnitee.
(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b)  hereof, the Independent Counsel shall be selected as provided in this  Section 6(c) . The Independent Counsel shall be selected by the Board. Indemnitee may, within 10 days after such written notice of selection shall have been given,

deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “ Independent Counsel ” as defined in  Section 13  of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to  Section 6(a)  hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under  Section 6(b)  hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to  Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this  Section 6(c) , regardless of the manner in which such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this  Section 6(e)  are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination

within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this  Section 6(g)  shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to  Section 6(b)  of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

7. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to  Section 5  of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to  Section 6(b)  of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to  Section 6  of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a) . The Company shall not oppose Indemnitee’s right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this  Section 7  shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b) .
(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7 , absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in  Section 13  of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by

law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders, a resolution of directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate of Incorporation, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
(c) The Company hereby acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by Fund and certain of its affiliates (collectively, the “ Fund Indemnitors ”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all

Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Certificate of Incorporation or Bylaws of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, and, (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Section 8(c).
(d) Except as provided in paragraph (c) above, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee (other than against the Fund Indemnitors), who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) Except as provided in paragraph (c) above, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(f) Except as provided in paragraph (c) above, the Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
9. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision, provided, that the foregoing shall not affect the rights of Indemnitee or the Fund Indemnitors set forth in Section 8(c) above; or
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of  Section 16(b)  of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or
(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by

Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
10. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under  Section 7  hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.
11. Security. To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.
12. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of expenses under this Agreement.
13. Definitions. For purposes of this Agreement:
(a) “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.

(b) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(c) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.
(d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to  Section 7  of this Agreement to enforce his rights under this Agreement.

14. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee and Appointing Stockholder indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.
15. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.
17. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:
(a) To Indemnitee at the address set forth below Indemnitee signature hereto.
(b) To the Company at:
Clearside BioMedical, Inc.
212 Rivergate Drive
Suwanee, Georgia 30024
Attention: Daniel H. White
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
20. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
SIGNATURE PAGE TO FOLLOW

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Indemnification Agreement on and as of the day and year first above written.

 	 	 	 	COMPANY	
 	 	 	 	
 	 	 	 	By:	 	 	
 	 	 	 	Name:	 	 	
 	 	 	 	Title:	 	 	
 	 	 	
 	 	 	 	INDEMNITEE	

 	 	 	 	Name: [            ]	
 	 	 	
 	 	Address:	 	 	

 	 	 	 	 	

Exhibit 10.10
COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (“Agreement”) is entered into as of January 31, 2013 (“ Effective Date ”) by and between  Santen Pharmaceutical Co., Ltd. , a corporation organized under the laws of Japan, with offices at 3-9-19, Shimoshinjo, Higashiyodogawa-ku, Osaka 533-8651 Japan (“ SANTEN ”), and Clearside Biomedical, Inc. , a corporation organized under the laws of Delaware, with offices at 1220 Old Alpharetta Rd., Suite 300, Alpharetta, GA 30005 (“Clearside”). SANTEN and Clearside are herein sometimes referred to collectively as the “ Parties ” and individually as “ Party .”
Background
SANTEN controls commercial rights to certain molecular compounds that it wishes to develop as ophthalmic drugs (each such compound a “ SANTEN” Compound ” and as described in Exhibit A).
Clearside controls commercial rights to proprietary technology for the delivery of pharmaceutical agents to the suprachoroidal space including with the use of proprietary microneedles (“ Clearside Technology ”).
SANTEN and Clearside desire to explore the potential application of Clearside Technology to certain SANTEN Compounds through a program of collaborative research (the “ Collaboration Program ”).
Pursuant to the Collaboration Program, the Parties intend to conduct two feasibility studies, one for one SANTEN Compound and one for a [***] (and potentially one or more backup compounds), in accordance with the terms and conditions of this Agreement and research plans to be agreed upon in accordance with the terms of this Agreement (each, a “ Feasibility Study ”).
Now, therefore, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Conduct of the Collaboration Program.
1.1 Feasibility Studies.
 
 	(a)	The Parties shall use commercially reasonable, good faith efforts to agree upon the initial Feasibility Study for each of two SANTEN Compounds within nine (9) months after the Effective Date. Should SANTEN designate additional SANTEN Compounds for the additional feasibility study(ies) pursuant to Article 2, such feasibility study(ies) to be performed shall be deemed as the Feasibility Study(ies).	
 
1
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 	(b)	Each Feasibility Study shall include a work plan (each, a “Feasibility Study Work Plan”) that sets forth the details of administration of the SANTEN Compound designated by SANTEN to the suprachoroidal space via Clearside microneedles in animal models under non-GLP testing. Each Feasibility Study Work Plan shall set forth specific activities to be pursued by each Party, including, without limitation, the activities specified in this Agreement.	
1.2 Clearside’s Responsibilities.
 
 	(a)	Clearside shall have the responsibility for contracting, under a separate agreement, with a contract research organization (“ CRO ”) selected by Clearside and reasonably acceptable to SANTEN to conduct injectability testing, drug property improvement, animal housing, animal injection, and animal monitoring and testing under non-GLP conditions, all in accordance with the applicable Feasibility Study unless otherwise agreed by the Parties.	
 
 	(b)	Clearside shall use diligent efforts to ensure that each Feasibility Study is conducted by the CRO in compliance with all requirements of applicable laws and regulations.	
 
 	(c)	Clearside shall receive the results of each Feasibility Study including those performed for the additional SANTEN Compounds pursuant to Article 2 (the “ Study Results ”) from the CRO, and provide a copy to SANTEN together with a summary report prepared by Clearside evaluating the Study Results within one (1) month of the completion of such Feasibility Study.	
1.3 SANTEN Responsibilities. SANTEN shall provide to the CRO, at no cost to Clearside, sufficient quantities of each SANTEN Compound to conduct the Feasibility Study. In addition, SANTEN shall be responsible for the performance of any bioanalytical testing under the Feasibility Studies.
1.4 Collaboration Committee. The Parties shall establish a committee (the “Collaboration Committee”), alternately chaired by Clearside SANTEN, with Clearside chairing the first meeting, SANTEN chairing the next meeting so on. The Collaboration Committee shall consist of up to two (2) members from each Party, provided, however, that additional representatives from either Party may participate in the meeting depending
 
2
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

on the agenda as appropriately required for a meaningful contribution to the meeting. The chairperson’s duties shall include site selection (if applicable), agenda and facilitation; provided however, that a non-chairing Party’s committee member may submit agenda items to the chairperson and such items may be included in the next regular meeting of the Collaboration Committee at the chairperson’s reasonable discretion. The Collaboration Committee shall meet in person or via tele-conference each calendar month or otherwise at the call of the chairperson to review, coordinate, and discuss the progress, issues and disputes regarding the Collaboration Program.
2. Costs of Collaboration Program. Clearside shall bear its own internal costs and the external costs set forth in the Feasibility Studies Work Plans with respect to its performance of the Collaboration Program. Notwithstanding the foregoing, in no event shall Clearside be obligated to pay external costs (the “ Program Cost ”), in the aggregate for the Collaboration Program, in excess of $400,000. In the event that the Program Costs for the initial two Feasibility Studies are, in the aggregate, less than $400,000, SANTEN would be able to designate additional SANTEN Compounds for the additional feasibility study(ies) provided that in no event shall the duration of the Product Option with respect to any SANTEN Compound be extended beyond the period provided for in Section 5.3. SANTEN shall bear its own internal costs with respect to its performance of the Collaboration Program and any Program Costs reasonably incurred by Clearside in excess of $400,000. In the event SANTEN elects in writing to not pay any agreed upon Program Costs, this Agreement shall immediately terminate. The Parties agree to discuss in good faith whether to incur such excess Program Costs in advance.
3. Ownership and Use of Study Results. Clearside shall receive the Study Results from the CRO, and provide a copy to SANTEN together with a summary report prepared by Clearside evaluating the Study Results. Notwithstanding anything in this Agreement to the contrary, the ownership of the data incorporated into the Study Results by Clearside or bioanalytical testing data generated by SANTEN (together “ Data ”) shall be determined in accordance with Section 5.
4. Confidentiality.
4.1 All information and materials provided by either Party to the other will be treated as confidential information of the disclosing Party by the receiving Party (“ Confidential Information ”). In particular, SANTEN Background IP (as defined in Section 5.1) and SANTEN IP (as defined in Section 5.2(a)) shall be Confidential Information of SANTEN; Clearside Background IP (as defined in Section 5.1) and Clearside IP (as defined in Section 5.2(a)) shall be Confidential Information of Clearside; and the Joint IP (as defined in Section 5.2(a)) and Study Results including Data shall be Confidential Information of both Parties (except that those Study Results or Data related directly to Clearside Technology, Clearside Background IP and Clearside IP shall be Confidential Information of Clearside and those Study Results and Data related directly
 
3
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

to SANTEN Compounds, SANTEN Background IP and SANTEN IP shall be Confidential Information of SANTEN). Each Party agrees that it shall hold the other Party’s Confidential Information at all times in strict confidence and under conditions of secrecy. The receiving Party shall not disclose or use the Confidential Information of the other Party for any purposes other than for the Collaboration Program and shall not disclose such Confidential Information to any third party or use it for the benefit of any third party. For the avoidance of doubt, neither Party shall use or disclose any jointly owned Confidential Information for any purposes other than for the Feasibility Studies and shall not disclose such Confidential Information to any third party or use it for the benefit of any third party without the prior written consent of the other Party except as permitted by this Agreement. Notwithstanding the foregoing, each Party may disclose the Confidential Information of the other Party or jointly owned Confidential Information which is required by law, regulation or order of a competent authority including any regulatory or governmental body or securities and exchange commission to be disclosed, provided that, where practicable, the disclosing Party is given reasonable advance notice of the intended disclosure. The obligations of confidentiality, nondisclosure and non-use in this Section 4.1 shall survive the expiration or termination, for whatever reason, of this Agreement for ten (10) years.
4.2 Each Party may provide or make available the Confidential Information disclosed by the other to those of its and its Affiliates’ employees and contractors who have a need to know consistent with the receiving Party’s authorized use of that Confidential Information and are bound by confidentiality, nondisclosure and non-use obligations substantially similar to those set forth herein. For purposes of this Agreement, “ Affiliate ” means any person, corporation or other entity, which controls, is controlled by, or is under common control with SANTEN or Clearside. A person, corporation or other entity shall be deemed to control another person, corporation or entity if it owns, directly or indirectly, more than fifty percent (50%) of the voting shares or other interest, or has the power to elect more than half the directors, of such other corporation or entity or has the ability, via contract or otherwise, to direct the affairs of such entity.
4.3 The restrictions in Section 4.1 shall not apply to any Confidential Information:
 
 	(a)	which at the time of disclosure is in the public domain;	
 
 	 	or	
 
 	(b)	which, after its disclosure hereunder, becomes part of the public domain by publication or otherwise, except in breach of this Agreement by the receiving Party; or	
 
 	(c)	which the receiving Party can establish by written documentation was in its possession at the time of disclosure hereunder or was subsequently and independently developed by its employees or its Affiliate’s employees without use or reference to the Confidential Information disclosed; or	
 
4
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 	(d)	which the receiving Party receives from a third party, provided, however, that such information was not obtained by the third party, directly or indirectly, from the disclosing Party under conditions of confidentiality; or	
 
 	(e)	which is excepted from the restrictions in Section 4.1 by prior written approval of the disclosing Party.	
4.4 Each Party reserves all rights in its Confidential Information and no rights or obligations other than those expressly recited herein are granted or are to be implied from this Agreement.
4.5 Upon termination of this Agreement, each Party, upon request by the other Party, shall return to the requesting Party any Confidential Information provided by the requesting Party which remains in its possession, including any copies of tangible materials embodying Confidential Information of the requesting Party, except for one copy which may be retained for each Party’s confidential files.
5. Ownership of Study Results and Intellectual Property.
5.1 Background IP. Each of SANTEN and Clearside shall own and retain, respectively, all intellectual property rights owned or controlled by such Party, and all rights, title and interest in and to any and all discoveries, inventions and other subject matter (whether patentable or not) conceived, reduced to practice or otherwise discovered by its or its Affiliates’ employees, consultants or agents, in each case prior to the commencement of the Collaboration Program or outside of the exercise of its rights or performance of its obligations hereunder (“ SANTEN Background IP ” and “ Clearside Background IP ”, respectively).
5.2 Arising IP. Ownership of intellectual property arising from the Collaboration Program shall be determined as follows:
(a) All rights, title and interest in and to any and all inventions, discoveries, and other subject matter, including Data (whether patentable or not) conceived, reduced to practice or otherwise discovered solely by SANTEN’s (or its Affiliates’) or Clearside’s (or its Affiliates’) employees, consultants or agents, or jointly by Clearside’s and SANTEN’s employees, their consultants or their agents, in any case in the performance of obligations under the Collaboration Program: (a) that are solely related to Clearside Technology, Clearside Background IP or otherwise related to the delivery of pharmaceutical agents to the suprachoroidal space shall be owned by Clearside (“ Clearside IP ”); (b) that are solely related to any SANTEN Compound or SANTEN Background IP would be
 
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owned by SANTEN (“SANTEN IP”); and (c) that are not included in the scope of Clearside IP or SANTEN IP would be owned jointly by SANTEN and Clearside (“ Joint IP ”).
(b) SANTEN shall have the right to file patent applications on any SANTEN IP and to use such SANTEN IP for any purpose whatsoever. Clearside hereby assigns all rights in and to SANTEN IP to SANTEN and shall cooperate with SANTEN in the execution of such documents as may be required to (1) file patent applications on any SANTEN IP, and (2) effect the transfer of all right, title and interest in and to SANTEN IP, and to record and perfect title therein in the sole name of SANTEN. Upon request from SANTEN, and upon consent of Clearside, which consent shall not be unreasonably withheld, Clearside shall cooperate with and assist SANTEN in obtaining patent protection on SANTEN IP by disclosing any details of Clearside Technology, Clearside Background IP or how the results were obtained to the extent necessary for SANTEN to obtain patent protection on SANTEN IP.
(c) Clearside shall have the right to file patent applications on any Clearside IP and to use such Clearside IP for any purpose whatsoever. SANTEN hereby assigns all rights in and to Clearside IP to Clearside and shall cooperate with Clearside in the execution of such documents as may be required to (1) file patent applications on any Clearside IP, and (2) effect the transfer of all right, title and interest in and to Clearside IP, and to record and perfect title therein in the sole name of Clearside. Upon request from Clearside, and upon consent of SANTEN, which consent shall not be unreasonably withheld, SANTEN shall cooperate with and assist Clearside in obtaining patent protection on Clearside IP by disclosing any details of the applicable SANTEN Compound, SANTEN Background IP or how the results were obtained to the extent necessary for Clearside to obtain patent protection on Clearside IP.
(d) Each Party shall have the right to grant licenses to others and to assign or otherwise transfer its rights under the Joint IP without consent from or accounting to the other Party. Each Party shall give notice to the other of its intention to file any patent application relating to the Joint IP, including notice of the contents of the application, sufficiently in advance to permit the Parties to cooperate with each other. The costs of filing the application shall be equally shared by the Parties and each Party shall reasonably cooperate with the other in the application process. If either Party elects not to pursue filing of a patent application for the Joint IP that the other Party considers necessary or appropriate to protect its interests in the Joint IP, that Party shall, at the other Party’s request, assign its right to such Joint IP to the other Party, who may in its discretion file any applications it deems desirable and shall solely bear the costs thereof.
 
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(e) Notwithstanding the foregoing, in the event that Clearside IP includes claims or material related to the use of SANTEN Compound(s), Clearside shall grant to SANTEN a co-exclusive (exclusive also to Clearside), irrevocable, perpetual, worldwide, sublicenseable, and fully paid-up license under such Clearside IP to make, use, exhibit, have made, sell, offer for sale, import, lease or otherwise dispose of any product containing SANTEN Compound(s), provided, however, that this provision shall not be construed to oblige Clearside to grant SANTEN any license under Clearside Background IP.
5.3 SANTEN Option.
(a) Clearside grants to SANTEN an exclusive option to an exclusive, worldwide, sublicensable, royalty-bearing license under Clearside Background IP, Clearside IP and Clearside’s interest in the Joint IP to make, use, exhibit, have made, sell, offer for sale, import, lease or otherwise dispose of Products in the field of ophthalmology (the “ Product Option ”), on financial terms to be negotiated and subject to mutually agreed upon diligence efforts and applicable provisions of Clearside’s license applicable to Clearside Background IP. “Products” mean pharmaceutical products incorporating a SANTEN Compound that was the subject matter of a Feasibility Study with Clearside Technology. The license agreement would provide for Clearside (or its designee) to supply microneedle components solely for use in the Products together with a standby license authorizing SANTEN to source microneedle components from a third party under Clearside Background IP, Clearside IP and Clearside’s interest in the Joint IP under reasonable financial conditions in the event that Clearside is unable to fulfill its supply obligations.
(b) SANTEN may exercise the Product Option with respect to a SANTEN Compound until six (6) months after delivery by Clearside of the applicable Study Results, provided, however, that such six (6) months period shall be extended by up to three (3) months in the event that SANTEN reasonably determines within such six (6) month period that it is necessary to conduct additional tests, including but not limited to toxicity test. All Product Options shall expire no later than December 31, 2014. Notwithstanding the foregoing, should the delivery of Study Results to SANTEN be delayed due to no fault of SANTEN, then the expiration date of such Product Option shall be extended by the duration of such delay.
(c) Upon exercise of the Product Option for a SANTEN Compound, the Parties would commence good faith negotiation for the grant to SANTEN of the license under Clearside Background IP, Clearside IP and Clearside’s interest in Joint IP described above. If the Parties do not enter into a definitive agreement
 
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for such SANTEN Compound within three (3) months of exercise of the applicable Product Option, then Clearside will have no further obligation to grant any license or negotiate for the grant of a license to SANTEN related to such SANTEN Compound.
(d) If SANTEN exercises a Product Option and the Parties enter into a definitive license agreement, (i) SANTEN would have a sole responsibility for, and have final decision-making with respect to, the development and commercialization of the Products on a worldwide basis, and (ii) Clearside shall, at SANTEN’s expense, collaborate with SANTEN on the continued development and manufacturing process and scale-up activities and be responsible for supply of microneedles under an agreement on development and commercial supply to be negotiated in good faith between the Parties.
6. Grant of Licenses. SANTEN grants to Clearside a non-exclusive license under SANTEN Background IP to use each SANTEN Compound solely for the performance of the Feasibility Studies, and unless extended by the mutual written agreement of the Parties, this license shall terminate upon termination of this Agreement pursuant to Section 18. Other than as expressly granted in this Section 6, and pursuant to Section 5, nothing herein contained shall be construed as (a) granting any rights and licenses or otherwise to any of Clearside Technology, Clearside Background IP, Clearside IP or Clearside’s interest in the Joint IP, or (b) granting any rights and licenses or otherwise to any of the SANTEN Compounds, SANTEN Background IP, SANTEN IP or SANTEN’s interest in the Joint IP.
7. Use of SANTEN Compound. Each SANTEN Compound supplied to Clearside in connection with the performance of the Feasibility Studies hereunder will remain the sole property of SANTEN, provided that Clearside shall only have the right to use and handle each SANTEN Compound in the course of performing the Feasibility Studies hereunder. No modification of any SANTEN Compound or use other than specified under this Agreement will be permitted without the prior express written agreement of SANTEN. Clearside shall not reverse engineer any SANTEN Compound for any purpose, including to identify structures or properties of the SANTEN Compound. Clearside shall not transfer, and shall take reasonable steps to prevent the transfer of any SANTEN Compound to any third party, other than CRO, without the express written permission of SANTEN. Clearside shall use the SANTEN Compound(s) solely  in vitro  or in laboratory animals (and any animals that receive the SANTEN Compound in the course of this Feasibility Study or products derived from these animals such as eggs or milk, will not be used as food for humans or any other animals), and shall not use the SANTEN Compound for diagnostic or other purposes involving human subjects without the prior written consent of SANTEN. Upon expiration or early termination of this Agreement, Clearside shall stop using the SANTEN Compound received hereunder, and shall have no right thereafter to continue using any part of any SANTEN Compound
 
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received hereunder for any purpose except as expressly stated herein. Clearside shall not destroy any SANTEN Compound without first contacting SANTEN and obtaining SANTEN’s prior written consent.
8 Clearside Covenant. Clearside shall not develop or commercialize solely or jointly with a third party, other than SANTEN, any product incorporating [***] Clearside Technology during the Term of this Agreement.
9. Experimental Acknowledgments.
(a) The Parties acknowledge and agree that the SANTEN Compounds are experimental in nature and may have hazardous properties. Clearside will handle the SANTEN Compound accordingly and will inform SANTEN in writing of any adverse effects experienced by persons handling the SANTEN Compound. Clearside shall notify SANTEN within twenty-four (24) hours by telephone to communicate any findings of toxicity that has not been previously discussed with SANTEN. The telephone report must be followed up with a written report addressed to the applicable SANTEN representative and sent so that receipt by SANTEN should occur within three (3) days of the identification of the event. THE SANTEN COMPOUNDS ARE SUPPLIED “AS IS” WITH NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, TITLE OR FITNESS FOR A PARTICULAR PURPOSE.
(b) The Parties acknowledge that the Feasibility Study is experimental in nature and any materials developed therefrom may have unknown characteristics. The Parties shall use prudence and reasonable care in the use, handling, storage, transportation, disposition and containment of any materials resulting from the Feasibility Study. CLEARSIDE MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR STATUTORY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OR WITH RESPECT TO THE QUALITY, NATURE AND EXTENT OF PERFORMANCE OF ITS TECHNOLOGY (INCLUDING THE CLEARSIDE TECHNOLOGY), ANY STUDY RESULTS THEREFROM AND ANY OTHER MATTER.
(c) THE DRUG DELIVERY DEVICES AND SYSTEMS ARE SUPPLIED BY CLEARSIDE TO SANTEN “AS IS” WITH NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, TITLE OR FITNESS FOR A PARTICULAR PURPOSE.
 
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10. Representations and Warranties.
(a) Clearside and SANTEN represent and warrant to each other that (i) it is duly organized and validly existing under the laws of its jurisdiction of incorporation, and has the full corporate power and authority to enter into this Agreement and to carry out the provisions hereof; (ii) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action; (iii) this Agreement is legally binding upon it and upon its successors, heirs and permitted assigns, and is enforceable in accordance with its terms, (iv) to the best of its knowledge, the execution, delivery and performance of this Agreement and the obligations hereunder by it does not conflict with any agreement, instrument or understanding, oral or written, now existing or to be entered into during the term of this Agreement, to which it is a party or by which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it; (v) it has not granted, and will not grant during the term of this Agreement, any right or license to any third party that would prevent or conflict with any of the rights granted to the other party hereunder; and (vi) it is not aware of any third party rights that would be infringed or misappropriated by its participation in this Agreement.
(b) SANTEN represents and warrants to Clearside that it has the right to transfer the SANTEN Compound to Clearside for purposes of the Feasibility Study.
(c) EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.
11. Compliance with Laws. The Parties shall comply fully at all times with all applicable laws and regulations, including but not limited to anti-corruption laws in the territories in which the Parties conduct business.
12. Indemnification. Each Party (the “Indemnifying Party”) shall indemnify, defend and hold the other Party, its Affiliates and their respective employees (collectively, the “Indemnitees”) harmless from and against any Claim brought by third parties to the extent arising out of or resulting from (a) the Indemnifying Party’s use of the Study Results (except to the extent such Claim was caused by the negligence or willful misconduct of an Indemnitee, or a breach of this Agreement by an Indemnitee); (b) the negligence of willful misconduct of the Indemnifying Party, its employees, agents or contractors; or (c) a breach of this Agreement by the Indemnifying Party. “ Claim ” means any and all liabilities, damages, losses, claims, lawsuits, proceedings, appeals,
 
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assessments, fines, actions, causes of action, decrees, judgments, settlements, court orders, investigations, civil penalties and/or demands of any kind, costs, costs to replace, attorneys’ fees and associated expenses.
13. Nonexclusivity. Nothing in this Agreement shall restrict SANTEN from providing any SANTEN Compound to other organizations or from using any SANTEN Compound in any manner SANTEN desires. Likewise, except as set forth in Section 8, nothing in this Agreement shall restrict Clearside from entering into agreements with other organizations in any manner it desires, including to evaluate whether compounds other than the SANTEN Compounds (including compounds in the same class as any SANTEN Compound) can be effectively delivered using Clearside Technology (including Clearside IP) for ophthalmic use.
14. Entire Understanding. This Agreement sets forth the entire understanding of the Parties hereto regarding the subject matter of this Agreement and supersedes any agreements whether written or oral between the Parties with respect thereto. Any amendment or modification of this Agreement shall be effective only to the extent it is reduced to writing and signed by both Parties. SANTEN and Clearside each will pay their respective legal and other fees and expenses associated with all aspects of the negotiation and execution of this Agreement and any definitive agreement giving effect to a Product Option.
15. Assignment. Either Party may assign this Agreement in whole or in part to any of its Affiliates, and further may assign this Agreement in whole or in part, or its rights and obligations hereunder to any third party with which it may merge or consolidate or to which it may transfer all or substantially all of its assets to which this Agreement relates, without the consent of the other Party. Except as otherwise set forth above, neither Party may assign this Agreement in whole or in part, or its right and obligations hereunder to any third party without the prior written consent of the other Party, such consent not to be unreasonably withheld or delayed.
16. Governing Law and Arbitration. This Agreement shall be construed and interpreted under the laws of the State of California, without reference to its choice of laws provision. Any dispute or difference of opinion arising out of or relating to this Agreement or the breach thereof which cannot be settled amicably by the parties hereto shall be settled by arbitration in accordance with the International Chamber of Commerce (“ ICC ”) under its International Rules of Arbitration, and judgment on the award rendered by the arbitrator shall be binding and may be entered in any court having jurisdiction thereof. Such arbitration, shall be filed and conducted at the office of the ICC closest to San Francisco, California . The arbitration shall be conducted by one arbitrator mutually acceptable to the parties selected in accordance with ICC Rules. The award shall be final and binding upon both parties. Notwithstanding the foregoing, the counterclaim to any arbitration shall be filed and conducted in the place of such original arbitration.
 
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17. Relationship of Parties. It is understood that Clearside will be serving under this Agreement as an independent contractor, and that the relationship of employer and employee shall not exist between Clearside and SANTEN. Nothing contained in this Agreement shall create a partnership or joint venture between the Parties. Except as specifically provided herein, neither of the Parties shall hold itself out as the agent or representative of the other, nor shall either of the Parties incur any indebtedness or obligation in the name of, or which shall be binding on the other, without the prior written consent of the other. No employees or agents of any Party shall be deemed employees or agents of the other Party.
18. Term and Termination. This Agreement will expire upon the expiration of the exercisable period for the Product Option for the last Compound studied hereunder (the “ Term ”). The obligations set forth in Sections 3, 4, 5, 8, 9, 10, 12, 16, 18, 19 and 20 hereof shall survive the expiration or termination of this Agreement in accordance with their terms.
19. Notices. Except as otherwise provided herein, any notice or other communications sent or delivered hereunder shall be in writing and shall be effective if hand delivered or if sent by fax, express delivery service or certified or registered mail, postage prepaid.

If to Clearside:	  	Clearside Biomedical, Inc.	
 	  	1220 Old Alpharetta Rd., Suite 300	
 	  	Alpharetta, GA 30005	
 	  	Facsimile: (678) 990-5744	
 	  	Attn: CEO	
 	 	
With a copy to:	  	Hutchison PLLC	
 	  	5410 Trinity Road, Suite 400	
 	  	Raleigh, NC 27607	
 	  	Facsimile: 866-479-7550	
 	  	Attn: William N. Wofford	
 	 	
If to SANTEN:	  	Santen Pharmaceutical Co., Ltd.	
 	  	3-9-19, Shimoshinjo, Higashiyodogawa-ku	
 	  	Osaka 533-8651 Japan	
 	  	Facsimile:   +81-6-6321-7256	
 	  	Attn:           Head of Global Business Development	
or to such address as each Party shall hereafter designate by notice to the other Party. A notice shall be deemed to have been given on the date of delivery to the Party concerned.
 
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20. Publicity and Publications. Neither Party will issue any press release or make any other public disclosures, announcements, statements or communications concerning the transactions contemplated by, or the contents of, this Agreement without the prior written consent of the other Party. Neither Party will use any trademarks owned or licensed by the other Party, whether registered or not, for any reason without first obtaining the prior written approval of such other Party. Notwithstanding the above, nothing in this Section will preclude a Party from making any disclosures required by law or necessary and proper in conjunction with the filing of any tax return or other document required to be filed with any governmental body, authority or agency; provided, however, that the disclosing Party will notify the other Party in writing of such disclosures and will, to the extent practicable allow the other Party reasonable time to comment on such release or statement in advance of such issuance.
21. Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if the Parties hereto had signed the same document. All of these counterparts will for all purposes constitute one agreement, binding on the Parties hereto, notwithstanding that the Parties hereto are not signatories to the same counterpart. A fax transcribed copy, pdf (or similar format) or photocopy of this Agreement executed by a Party hereto in counterpart will constitute a properly executed, delivered and binding agreement or counterpart of the executing Party.
 
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IN WITNESS WHEREOF, the Parties have executed this Collaboration Agreement by their duly authorized representatives as of the date and year first written above.

CLEARSIDE BIOMEDICAL, INC.	 	 	 	SANTEN PHARMACEUTICAL CO., LTD.	
 	 	 	 	 	
By:	 	/s/ Daniel H. White	 	 	 	By:	 	/s/ Toshiaki Nishihata, Ph.D.	
Name:	 	Daniel H. White	 	 	 	Name:	 	Toshiaki Nishihata, Ph.D.	
Title:	 	President & CEO	 	 	 	Title:	 	Member of the Board	
 	 	 	 	 	 	 	 	Executive Corporate Officer,	
 	 	 	 	 	 	 	 	Head of R&D Division	
 
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Exhibit A – Santen Compounds
[***]
 
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AMENDMENT NO. 1 TO
COLLABORATION AGREEMENT
This Amendment No. 1 to COLLABORATION AGREEMENT (“Amendment”) is entered into as of April 29, 2014 (“ Amendment Date ”), by and between  Santen Pharmaceutical Co., Ltd. , a corporation organized under the laws of Japan, with offices at 4-20, Ofukacho, Kita-ku3, Osaka 530-8552 Japan (“ SANTEN ”), and  Clearside Biomedical, Inc. , a corporation organized under the laws of Delaware, with offices at 1220 Old Alpharetta Rd., Suite 300, Alpharetta, GA 30005 (“Clearside”). SANTEN and Clearside are herein sometimes referred to collectively as the “ Parties ” and individually as “ Party .”
Background
SANTEN and Clearside are parties to a Collaboration Agreement (the “Original Agreement”) dated January 31, 2013 (the “ Effective Date ”).
Pursuant to the Collaboration Agreement, the Parties have conducted preliminary studies involving the use of Clearside Technology with certain SANTEN Compounds.
The Parties have determined that the results of preliminary studies warrant additional research and development and, accordingly, the Parties desire to amend the Original Agreement in order to facilitate such additional work.
Now, therefore, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to amend the Original Agreement as follows:
 
 	A.	Section 1-1 (a) of the Collaboration Agreement shall be revised to read as follows:	
(a) The Parties shall use commercially reasonable, good faith efforts to agree upon the initial Feasibility Study for each of two SANTEN Compounds as soon as reasonably practicable. Should SANTEN designate additional SANTEN Compounds for the additional feasibility study(ies) pursuant to Article 2, such feasibility study(ies) to be performed shall be deemed as the Feasibility Study(ies).
 
 	B.	Section 2 of the Collaboration Agreement shall be revised to read as follows:	
2. Costs of Collaboration Program. Clearside shall bear its own internal costs and the external costs set forth in the Feasibility Studies Work Plans with respect to its performance of the Collaboration Program. Notwithstanding the foregoing, in no event
 
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shall Clearside be obligated to pay external costs (the “Program Cost”), in the aggregate for the Collaboration Program, in excess of $[***], or in excess of $[***] after March 31, 2014. In the event that the Program Costs for the initial two Feasibility Studies are, in the aggregate, less than $[***] in total or $[***] for the period after March 31, 2014, SANTEN would be able to designate additional SANTEN Compounds for the additional feasibility study(ies) provided that in no event shall the duration of the Product Option with respect to any SANTEN Compound be extended beyond the period provided for in Section 5.3. SANTEN shall bear its own internal costs with respect to its performance of the Collaboration Program and any Program Costs reasonably incurred by Clearside in excess of $[***] in the aggregate or in excess of $[***] after March 31, 2014. In the event SANTEN elects in writing to not pay any agreed upon Program Costs, this Agreement shall immediately terminate. The Parties agree to discuss in good faith whether to incur such excess Program Costs in advance.
 
 	C.	Section 5.3(b) shall be amended to read as follows:	
(b) SANTEN may exercise the Product Option with respect to a SANTEN Compound until six (6) months after delivery by Clearside of the applicable Study Results, provided, however, that such six (6) months period shall be extended by up to three (3) months in the event that SANTEN reasonably determines within such six (6) month period that it is necessary to conduct additional tests, including but not limited to toxicity test. All Product Options shall expire no later than December 31, 2015. Notwithstanding the foregoing, should the delivery of Study Results to SANTEN be delayed due to no fault of SANTEN, then the expiration date of such Product Option shall be extended by the duration of such delay.
 
 	D.	Section 19 (Notices) shall be amended to reflect the following notice address for Santen:	

If to SANTEN:	  	Santen Pharmaceutical Co., Ltd.	
 	  	4-20, Ofukacho, Kita-ku	
 	  	Osaka 530-3-8552 Japan	
 	  	Facsimile:   +81-6-6359-3832	
 	  	Attn:           Head of Global Business Development	
 
 	E.	Except as expressly set forth in this Amendment, the Original Agreement shall remain in full force and effect. All capitalized terms used and not defined in this Amendment shall have the meaning given in the Original Agreement. This Amendment may be executed in any number of counterparts with the same effect as if the Parties hereto had signed the same document. All of these counterparts will for all purposes constitute one agreement, binding on the Parties hereto, notwithstanding that the Parties hereto are not signatories to	
 
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 	the same counterpart. A fax transcribed copy, pdf (or similar format) or photocopy of this Amendment executed by a Party hereto in counterpart will constitute a properly executed, delivered and binding agreement or counterpart of the executing Party.	
IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 to Collaboration Agreement by their duly authorized representatives as of the date and year first written above.

CLEARSIDE BIOMEDICAL, INC.	 	 	 	SANTEN PHARMACEUTICAL CO., LTD.	
 	 	 	 	 	
By:	 	/s/ Daniel H. White	 	 	 	By:	 	/s/ Akira Kurokawa	
Name:	 	Daniel H. White	 	 	 	Name:	 	Akira Kurokawa	
Title:	 	President & CEO	 	 	 	Title:	 	President and CEO	
 
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Exhibit 10.11
AMENDMENT NO. 2 TO
COLLABORATION AGREEMENT
This Amendment No. 2 to COLLABORATION AGREEMENT (“Second Amendment”) is entered into as of April 30, 2015 (the “ Second Amendment Date ”), by and between  Santen Pharmaceutical Co., Ltd. , a corporation organized under the laws of Japan, with offices at 4-20, Ofukacho, Kita-ku3, Osaka 530-8552 Japan (“ SANTEN ”), and  Clearside Biomedical, Inc. , a corporation organized under the laws of Delaware, with offices at 1220 Old Alpharetta Rd., Suite 300, Alpharetta, GA 30005 (“Clearside”). SANTEN and Clearside are herein sometimes referred to collectively as the “ Parties ” and individually as “ Party .”
Background
SANTEN and Clearside are parties to a Collaboration Agreement (the “Original Agreement”) dated January 31, 2013 (the “ Effective Date ”), as amended by Amendment No. 1 dated April 29, 2014 (as amended, the “Collaboration Agreement”).
Pursuant to the Collaboration Agreement, the Parties have conducted preliminary studies involving the use of Clearside Technology with certain SANTEN Compounds.
The Parties have determined that the results of preliminary studies warrant additional research and development and, accordingly, the Parties desire to amend the Collaboration Agreement in order to facilitate such additional work.
Now, therefore, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to amend the Collaboration Agreement as follows:
 
 	A.	The parties agree to use commercially reasonable efforts to conduct the Feasibility Study Work Plan attached as Appendix A hereto and hereby agree that for purposes of this Agreement, the glaucoma program active pharmaceutical ingredient supplied by SANTEN for use in such work plan shall constitute a SANTEN Compound. The parties further acknowledge that the budget update set forth in Appendix A reflects the status of Program Costs paid and committed through April 24, 2015. Santen acknowledges that research involving external costs, including identified rodent studies for [***], would result in Program Costs exceeding $[***] and would, therefore, be borne by Santen as provided for in Section 2 of the Agreement.	
 
 	B.	The Parties shall issue the initial press release set forth on Appendix B hereto promptly following the Second Amendment Date.	
 
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 	C.	Section 5.3(b) shall be amended to read as follows:	
“(b) SANTEN may exercise the Product Option with respect to a SANTEN Compound until six (6) months after delivery by Clearside of the applicable Study Results, provided, however, that such six (6) months period shall be extended by up to three (3) months in the event that SANTEN reasonably determines within such six (6) month period that it is necessary to conduct additional tests, including but not limited to toxicity test. All Product Options shall expire no later than March 31, 2016. Notwithstanding the foregoing, should the delivery of Study Results to SANTEN be delayed due to no fault of SANTEN, then the expiration date of such Product Option shall be extended by the duration of such delay.”
 
 	D.	Except as expressly set forth in this Second Amendment, the Collaboration Agreement shall remain in full force and effect. All capitalized terms used and not defined in this Amendment shall have the meaning given in the Collaboration Agreement. This Second Amendment may be executed in any number of counterparts with the same effect as if the Parties hereto had signed the same document. All of these counterparts will for all purposes constitute one agreement, binding on the Parties hereto, notwithstanding that the Parties hereto are not signatories to the same counterpart. A fax transcribed copy, pdf (or similar format) or photocopy of this Amendment executed by a Party hereto in counterpart will constitute a properly executed, delivered and binding agreement or counterpart of the executing Party.	
IN WITNESS WHEREOF, the Parties have executed this Amendment No. 2 to Collaboration Agreement by their duly authorized representatives as of the date and year first written above.

CLEARSIDE BIOMEDICAL, INC.	 	 	 	SANTEN PHARMACEUTICAL CO., LTD.	
 	 	 	 	 	
By:	 	/s/ Daniel H. White	 	 	 	By:	 	/s/ Naveed Shams	
 	 	 	 	 	
Name:	 	Daniel H. White	 	 	 	Name:	 	Naveed Shams	
 	 	 	 	 	
Title:	 	President & CEO	 	 	 	Title:	 	Senior Corporate Officer	
 	 	 	 	 	 	 	 	Chief Scientific Officer	
 	 	 	 	 	 	 	 	Head of Global R&D	
 
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Appendix A
Feasibility Study Work Plan
Background
 
 	1.	This collaboration started to evaluate our two compounds ([***]) two years ago (put the date for the agreement).	
 
 	2.	Major findings are following:	
 
 	a.	[***] clinical formulation (probably PEG) was not tolerable following SCS injection.	
 
 	b.	Suspensions of [***] were tolerable, but not pharmacologically active in a rabbit hyperpermeability model.	
 
 	c.	Suspensions of a [***] were tolerable and pharmacologically active in a pig uveitis model.	
 
 	d.	Several sustained release platform (placebo) formulations were tested and three potential formulations have been identified.	
Objectives for further collaboration
To explore further possibilities to develop new formulations for suprachoroidal injections of [***] and to extend our collaborations to a new field like glaucoma, we will extend the current collaborations to achieve the followings:
 
 	1.	To identify a potential candidate formulation for clinical development by determining tolerability, pharmacokinetic profiles and biological activities of a sustained release formulation for suprachoroidal injection instead of [***]	
 
 	2.	To explore a possibility of collaborative co-development of a [***] by determining tolerability, pharmacokinetic profiles and biological activities of a sustained release formulation for suprachoroidal injection of [***]	
 
 	3.	To explore a possibility to create sustained release formulations for suprachoroidal injection of anti-glaucoma agents such as Prostaglandins by determining their tolerability, pharmacokinetic profiles and biological activities.	
Candidate Compounds
Santen Compounds identified as of the Effective Date:
[***]
Santen Compounds identified as of the Effective Date:
[***]
Santen Compounds to be identified during the Term of the Agreement:
Anti-glaucoma compounds are the class of prostaglandins
 
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Work Plan
 
1.	[***]	
Target Product Profile (TPP)
 
 	•	 	Target disease: wet Age-related Macular Degeneration (wAMD)	
 
 	•	 	Every three-month injection into suprachoroidal space or longer	
 
 	•	 	Superior efficacy to that for [***] intravitreal injection	
 
 	•	 	Non-inferior safety or superior to that for [***] intravitreal injection	
Planned studies
 
 	•	 	Formulation study with sustained release formulations	
 
 	•	 	Ocular tolerability study in rabbits	
 
 	•	 	Ocular pharmacokinetic study in rabbits	
 
 	•	 	Ocular pharmacological study in laser-induced rat Choroidal Neovascularization (CNV) model	
 
 	•	 	Ocular pharmacological study in laser-induced monkey Choroidal Neovascularization model	
Status Update:
 
 	•	 	A rabbit ocular tolerability study with two formulations for sustained release through the SCS following suprachoroidal injection is currently ongoing and is being conducted by Covance. The objective is to choose an appropriate sustained release formulation	
 
 	•	 	The study is expected to be completed in May 2015	
 
 	•	 	Results are anticipated in June 2015	
 
 	•	 	A rat laser CNV model study will be conducted with one or both of these formulations, or a modified formulation once an appropriate time outcome is achieved	
 
2.	[***]	
Target Product Profile (TPP): To be discussed during the term of the agreement
 
 	•	 	Target disease: Non-infectious uveitis	
 
 	•	 	Every two-month or longer injection into suprachoroidal space	
 
 	•	 	Superior efficacy to that for triamcinolone intravitreal injection	
 
 	•	 	Non-inferior safety or superior to that of Triamcinolone acetonide intravitreal injection	
Planned studies
 
 	•	 	Formulation study with suspension or sustained release formulations	
 
 	•	 	Ocular tolerability study in rabbits	
 
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 	•	 	Ocular pharmacokinetic study in rabbits	
 
 	•	 	Ocular pharmacological study in a pig EIU model	
Status Update:
 
 	•	 	An ocular tolerability study in rabbits has been completed	
 
 	•	 	An ocular pharmacodynamic study in a pig inflammatory model is ongoing	
 
 	•	 	The study is expected to be complete in April	
 
 	•	 	Preliminary results were shared with the joint team March 2015; final results will be shared with the joint team in May 2015	
 
 	•	 	A pharmacology study following determining a new formulation or a pharmacological study with a suspension in the same EIU model in pigs is being considered	
 
 	•	 	The study is anticipated to start in June 2015	
 
 	•	 	Study results anticipated in August 2015	
 
 	•	 	Estimated cost for the study is ~ $40,000	
 
3.	Anti-glaucoma compounds [***]	
Target Product Profile (TPP): To be discussed during the term of the agreement
 
 	•	 	Target disease: Glaucoma	
 
 	•	 	Every three-month injection into suprachoroidal space or longer	
 
 	•	 	Non-inferior efficacy compared to Xalatan® eye drop	
 
 	•	 	Non-inferior efficacy compared to Xalatan® eye drop or Santen compounds	
Planned studies
 
 	•	 	Formulation study with sustained release formulations	
 
 	•	 	Ocular tolerability study in rabbits	
 
 	•	 	Ocular pharmacokinetic study in rabbits	
 
 	•	 	Ocular pharmacological study in a dog or monkey model	
Status Update:
 
 	•	 	A rabbit ocular tolerability study evaluating latanoprost in an emulsion formulation is ongoing at Covance.	
 
 	•	 	The study is expected to be completed May 2015	
 
 	•	 	Results are expected in June 2015	
 
 	•	 	A pharmacodynamics dog model study is being planned comparing daily Xalatan eye drops to a single suprachoroidal injection of latanoprost.	
 
 	•	 	The study is expected to start in June 2015	
 
 	•	 	The results are anticipated to be available in September 2015	
 
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Appendix B
Press Release

Clearside Biomedical, Inc. and Santen, Inc. Announce
Research Collaboration in Glaucoma
Expands Previous Research Collaboration to Include 2nd Largest Ophthalmic Market
Alpharetta, GA and Emeryville, CA (April XX, 2015) – Clearside Biomedical, Inc., a clinical-stage biopharmaceutical company developing first-in-class drug therapies to treat blinding diseases of the eye, and Santen Inc., a wholly owned subsidiary of Santen Pharmaceuticals Co., Ltd., today announced the expansion of its research collaboration to include the field of glaucoma. The two companies have been working together since January 2013 to develop drugs to treat diseases afflicting the retina and choroid that can eventually lead to blindness. The expanded collaboration will now study the use of Clearside’s proprietary microinjector to deliver sustained intraocular pressure-lowering medications.
“We are very pleased with our current retinal disease research collaboration focusing on select Santen sustained-release formulations administered via suprachoroidal (SCS)
 
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administration using Clearside’s proprietary microinjector,” said Yusuf Ali, PhD, Vice President, Research and Development at Santen. “We look forward to expanding our relationship with Clearside to investigate Clearside’s proprietary methods of accessing the SCS for the treatment of additional blinding diseases such as glaucoma.”
“Santen has been an excellent collaborator in exploring the emerging field of SCS administration. Their access to new compounds and formulation technology has helped us understand the possibilities of SCS administration,” stated Daniel White, Clearside’s president and CEO. “Our collaborative goal is to provide effective and safe long-term drug therapy via SCS administration that may eliminate the daily requirement of eye drop therapy to treat causes leading to glaucoma.”
About Glaucoma
Glaucoma is a group of eye diseases that, in most cases, produce increased intraocular pressure (IOP) within the eye. This elevated IOP is caused by a backup of fluid in the eye that, if left untreated, causes damage to the optic nerve leading to decreased visual acuity and potentially blindness. According to the World Health Organization, glaucoma is the second leading cause of blindness in the world and it is estimated that more than 2.7 million Americans have this disease. The treatment for glaucoma depends on the nature and severity of each case. In general, glaucoma cannot be cured but it can be controlled. Eye drops, laser procedures and surgical procedures are most commonly used to prevent or slow further damage from occurring.
About Clearside Biomedical, Inc.
Clearside Biomedical, Inc., headquartered in Alpharetta, GA, is a clinical-stage biopharmaceutical company developing first-in-class drug therapies to treat chronic, blinding diseases of the eye. Clearside’s product candidates focus on diseases affecting the retina and the choroid, especially diseases associated with macular edema. Visit  www.clearsidebio.com  for more information.
About Santen, Inc.
Santen Inc., based in Emeryville, CA is the U.S. subsidiary of Santen Pharmaceuticals Co., Ltd., a specialty company dedicated to the ophthalmic and anti-rheumatic fields that carries out the research, development, sales, and marketing of pharmaceuticals. The company has 15 bases in 12 countries and delivers products to consumers in more than 70 countries. In
 
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Japan, Santen holds the No. 1 share in the prescription ophthalmic pharmaceutical market. As a leading company in the field of ophthalmology, Santen aims to contribute to society by supplying valuable products and services to satisfy unmet medical needs. Additional corporate information is available online at  www.santen.com .
Contact
Clearside Biomedical, Inc.
Charles Deignan, 678-270-4005
charlie.deignan@clearsidebio.com
 
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Exhibit 10.13
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), is entered into effective as of January 1, 2015, (the “ Effective Date ”), by and between Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), and Daniel H. White (the “ Executive ”), an individual residing in Georgia.
W I T N E S S E T H:
WHEREAS, the Company and Executive are parties to an Executive Employment Agreement dated September 1, 2012 (the “ Original Agreement ”);
WHEREAS, the Company and Executive desire to amend and restated the Original Agreement upon the terms and conditions of this Agreement to set forth the terms and conditions of the Executive’s continued employment from and after the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein, and of other good and valuable consideration, including the continued employment of the Executive by the Company and the compensation to be received by the Executive from the Company from time to time, and specifically the compensation to be received by the Executive pursuant to Section 4 hereof, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive hereby accepts employment as the President and Chief Executive Officer of the Company upon the terms and conditions of this Agreement.
2. Duties. The Executive shall faithfully perform all duties of the Company related to the position or positions held by the Executive, including but not limited to all duties set forth in this Agreement and/or in the Bylaws of the Company related to the position or positions held by the Executive and all additional duties that are prescribed from time to time by the Board of Directors of the Company (the “ Board ”) of the Company. The Executive shall devote the Executive’s full time and attention to the performance of the Executive’s duties and responsibilities on behalf of the Company and in furtherance of its best interests; provided, however, that the Executive, subject to the Executive’s obligations hereunder, shall also be permitted to make personal investments, perform reasonable volunteer services and, with the prior consent of the Company, serve on outside boards of directors for non-profit corporations. The Executive shall comply with all Company policies, standards, rules and regulations (the “ Company Policies ”) and all applicable government laws, rules and regulations that are now or hereafter in effect. The Executive acknowledges receipt of copies of all written Company Policies that are in effect as of the date of this Agreement.
3. Term. Unless earlier terminated as provided herein, the initial term of this Agreement shall commence on the Effective Date and shall continue until December 31, 2015. Thereafter, this Agreement shall automatically renew on a year-to-year basis on the same terms and conditions set forth herein unless: (a) earlier terminated or amended as provided herein or (b) either party gives written notice of non-renewal at least sixty (60) days prior to the end of the initial term or any renewal term of this Agreement. The initial term of this Agreement and all renewals thereof are referred to herein as the “ Term .”

4. Compensation. During the Term, as compensation for the services rendered by the Executive under this Agreement, the Executive shall be entitled to receive the following (all payments are subject to applicable withholdings)
(a) Base Salary. The Executive shall receive a monthly salary at a rate of $27,083.33 (equal to an annual salary rate of $325,000) payable in accordance with the then-current payroll schedule of the Company (the “ Base Salary ”). The Executive’s salary may be increased from time to time by the Board.
(b) Bonuses. The Executive shall be eligible to participate in all bonus or similar incentive plans adopted by the Board. The amount awarded, if any, to the Executive under any bonus or incentive plan shall be in the discretion of the Board or any committee administering such plan, based on its assessment of the Executive’s and the Company’s performance during the relevant period, but it is the expectation of the Company that any such bonus would be up to 50% of the Executive’s then-current annual Base Salary. If a bonus is awarded, unless otherwise specifically provided by the Board or committee administering such plan, it shall be paid between January 1 and March 15 of the year following the year in which such bonus was earned.
(c) Options. In connection with the Executive’s employment, the Company has issued to the Executive options to purchase shares of the common stock of the Company (the “ Options ”). The Options have vested or shall vest in accordance with the terms of the stock option Agreements. During the Term of the Agreement, Executive will be eligible to receive additional stock options, restricted stock grants, or other equity incentive awards under or outside of any current or successor equity incentive plans of the Company, as the Board in its sole discretion determines to be appropriate (any such awards, collectively with the Options, “ Equity Awards ”).
(d) Benefits. The Executive shall be entitled to receive those benefits provided from time to time to other executive employees of the Company, in accordance with the terms and conditions of the applicable plan documents; provided that the Executive meets the eligibility requirements thereof. All such benefits are subject to amendment or termination from time to time by the Company without the consent of the Executive or any other employee of the Company.
(e) Vacation. The Executive shall be entitled to four (4) weeks paid vacation per calendar year (with the vacation for any partial year being prorated) and shall be entitled to carry over one-half of the total Vacation days earned in one calendar year to the subsequent calendar year;  provided, however,  that in no event may the Executive carry over more than two (2) weeks of paid vacation into a subsequent year. Upon the termination of the Executive’s employment with the Company, no cash shall be paid in lieu of accrued but unused vacation.
(f) Annual Physical Exam. The Company shall bear the cost of one comprehensive physical examination per calendar year.
 
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(g) Business Expenses. The Company shall pay, or reimburse the Executive for, all reasonable expenses incurred by the Executive directly related to conduct of the business of the Company; provided that, the Executive complies with the Company’s policies for the reimbursement or advancement of business expenses that are now or hereafter in effect.
5. Termination. This Agreement and the Executive’s employment by the Company shall or may be terminated, as the case may be, as follows:
(a) Termination upon Expiration of the Term. This Agreement and the Executive’s employment by the Company shall terminate upon the expiration of the Term, unless renewed.
(b) Termination by the Executive. The Executive may terminate this Agreement and Executive’s employment by the Company:
(i) for “Good Reason” (as defined herein). For purposes of this Agreement, “Good Reason ” shall mean, the existence, without the consent of the Executive, of any of the following events: (A) the Executive’s duties and responsibilities or salary are substantially reduced or diminished; (B) the Company materially breaches its obligations under this Agreement; or (C) the Executive’s place of employment is relocated by more than fifty (50) miles. In addition to any requirements set forth above, in order for any of the above events to constitute “Good Reason”, the Executive must (X) inform the Company of the existence of the event within ninety (90) days of the initial existence of the event, after which date the Company shall have no less than thirty (30) days to cure the event which otherwise would constitute “Good Reason” hereunder and (Y) the Executive must terminate Executive’s employment with the Company for such “Good Reason” no later than two (2) years after the initial existence of the event which prompted the Executive’s termination.
(ii) Other than for Good Reason thirty (30) days after notice to the Company.
(c) Termination by the Company. The Company may terminate this Agreement and the Executive’s employment by the Company upon notice to the Executive (or Executive’s personal representative):
(i) at any time and for any reason;
(ii) upon the death of the Executive, in which case this Agreement shall terminate immediately; provided that, such termination shall not prejudice any benefits payable to the Executive’s spouse or beneficiaries which are fully vested as of the date of death;
(iii) if the Executive is “permanently disabled” (as defined herein), in which case this Agreement shall terminate immediately; provided that, such termination shall not prejudice any benefits payable to the Executive, the Executive’s spouse or beneficiaries which are fully vested as of the date of the termination of this Agreement. For purposes of this Agreement, the Executive shall be considered “ permanently disabled ” when a qualified medical doctor
 
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mutually acceptable to the Company and the Executive or the Executive’s personal representative shall have certified in writing that: (A) the Executive is unable, because of a medically determinable physical or mental disability, to perform substantially all of the Executive’s duties, with or without a reasonable accommodation, for more than one hundred and eighty (180) calendar days measured from the last full day of work; or (B) by reason of mental or physical disability, it is unlikely that the Executive will be able, within one hundred and eighty (180) calendar days, to resume substantially all business duties and responsibilities in which the Executive was previously engaged and otherwise discharge the Executive’s duties under this Agreement;
(iv) upon the liquidation, dissolution or discontinuance of business by the Company in any manner or the filing of any petition by or against the Company under any federal or state bankruptcy or insolvency laws, which petition shall not be dismissed within sixty (60) days after filing; provided that, such termination shall not prejudice the Executive’s rights as a stockholder or a creditor of the Company; or
(v) “for cause” (as defined herein). “For cause” shall be determined by the Board by a majority vote without the participation of the Executive in such vote and shall mean:
(A) Any material breach of the terms of this Agreement by the Executive, or the failure of the Executive to diligently and properly perform the Executive’s duties for the Company or the Executive’s failure to achieve the objectives specified by the Board , which breach or failure is not cured within thirty (30) days after written notice thereof;
(B) The Executive’s misappropriation or unauthorized use of the Company’s tangible or intangible property, or breach of the Proprietary Information Agreement (as defined herein) or any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation;
(C) Any material failure to comply with the Company Policies or any other policies and/or directives of the Board, which failure is not cured within thirty (30) days after written notice thereof;  provided, however , in the case of failure to comply with Company Policies related to harassment, unlawful discrimination, retaliation or workplace violence a thirty (30) day cure period and written notice thereof is not required;
(D) The Executive’s use of illegal drugs or any illegal substance, or the Executive’s use of alcohol in any manner that materially interferes with the performance of the Executive’s duties under this Agreement;
(E) Any dishonest or illegal action (including, without limitation, embezzlement) or any other action whether or not dishonest or illegal by the Executive which is materially detrimental to the interest and well-being of the Company, including, without limitation, harm to its reputation;
(F) The Executive’s failure to fully disclose any material conflict of interest that the Executive may have with the Company in a transaction between the Company and any third party which is materially detrimental to the interest and well-being of the Company; or
 
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(G) Any adverse action or omission by the Executive which would be required to be disclosed pursuant to public securities laws or which would limit the ability of the Company or any entity affiliated with the Company to sell securities under any Federal or state law or which would disqualify the Company or any affiliated entity from any exemption otherwise available to it.
(d) Obligations of the Company Upon Termination.
(i) Upon the termination of this Agreement: (A) pursuant to the expiration of the Term upon notice of non-renewal of the Term given by the Executive; (B) by the Executive pursuant to paragraph 5(b)(ii); or (C) by the Company pursuant to paragraph 5(c)(ii), (iii), (iv), or (v), the Company shall have no further obligations hereunder other than the payment of all compensation and other benefits payable to the Executive through the date of such termination which shall be paid on or before the Company’s next regularly scheduled payday unless such amount is not then-calculable, in which case payment shall be made on the first regularly scheduled payday after the amount is calculable.
(ii) Upon termination of this Agreement: (A) by the Executive pursuant to paragraph 5(b)(i), or (B) by the Company pursuant to paragraph 5(c)(i) or upon notice of non-renewal of the Term given by the Company and, in any such case, provided that the Executive first executes and does not revoke a release and settlement agreement in the form acceptable to the Company within the time period then-specified by the Company but in any event no later than sixty (60) days after the date of termination (the “ Release ”):
(1) the Company shall pay the Executive an amount equal to eighteen (18) months of Executive’s then-current Base Salary (less all applicable deductions) payable in installments in accordance with the then-current generally applicable payroll schedule of the Company commencing on the first regularly scheduled pay date of the Company processed after Executive has executed, delivered to the Company and not revoked the Release;
(2) provided that the Executive properly elects and maintains continued health insurance coverage under the Company sponsored plan and provided further that such benefits continue to be offered under the Company sponsored plan, the Company shall reimburse the Executive in an amount equal to the cost of the premium for such continued health insurance coverage at the same average level and on the same terms and conditions which applied immediately prior to the date of the Executive’s termination for the shorter of (a) eighteen (18) months from the date of termination or (b) until the Executive obtains reasonably comparable coverage; and
(3) each Equity Award held by Executive shall immediately vest and be exercisable to the extent such Equity Award would have vested had Executive remained employed by the Company for a period of eighteen (18) months from the date of termination of this Agreement. The Company and the Executive hereby agree that the Equity Awards shall be deemed amended to the extent necessary to give effect to this provision.
 
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(iii) Upon termination of this Agreement within twelve months following a Change in Control or Corporate Transaction: (A) by the Executive pursuant to paragraph 5(b)(i), or (B) by the Company pursuant to paragraph 5(c)(i) or upon notice of non-renewal of the Term given by the Company in any such case, Executive shall be entitled to the following severance benefits in addition to the compensation set forth in the preceding clause (ii), subject to execution of the Release:
(1) the Company shall pay the Executive an amount equal to 100% of the performance bonus earned by the Executive in the most recently completed calendar year; and
(2) each Equity Award held by Executive at the time of termination shall immediately vest and be exercisable until the earlier to occur of the final exercise date set forth in the Equity Award or the end of the severance period. The Company and the Executive hereby agree that the Equity Awards shall be deemed amended to the extent necessary to give effect to this provision.
(e) Resignation as Officer and Director. Upon termination of this Agreement and the Executive’s employment hereunder for any reason by either party, the Executive shall be deemed to have resigned from all offices and positions the Executive may hold with the Company at such time including without limitation Board membership and/or positions as an officer of the Company.
(f) Payment in Lieu of Notice Period. Upon the termination of this Agreement: (A) pursuant to the expiration of the Term based on a non-renewal notice given by either party in accordance with paragraph 3(b); or (B) by the Executive pursuant to paragraph 5(b)(i) or 5(b)(ii), the Company may, at its sole election, pay the Executive an amount equal to Executive’s then-current Base Salary for all or any portion of the applicable notice period required by paragraph 3(b) or paragraph 5(b)(i) or 5(b)(ii) in lieu of all or any portion of such notice period; provided, however, any such election by the Company shall not be deemed to be a termination by the Company that invokes the obligations set forth in Section 5(d)(ii) of this Agreement. Notwithstanding the above, if the Executive requests that Executive’s final day of employment occur prior to the expiration of any applicable notice period and the Company consents, pay in lieu of notice shall not be required.
6. Parachute Payment upon Corporate Transaction.
(a) For the period of two (2) years following the Effective Date, in the event of a Corporate Transaction which results in a change (i) in the ownership of effective control of the Company, or (ii) in the ownership of a substantial portion of the assets of the corporation (within the meaning of Section 280G of the Code and the regulations thereunder (“ Section 280G ”)) (a “ 280G Change in Control ”) payments and benefits under this Agreement, together with other payments and benefits provided to Executive by the Company (including, without limitation, any accelerated vesting of stock options) (the “ Total Payments ”) shall be made without regard to whether the deductibility of the Total Payments would be limited or precluded by Section 280G and without regard to whether the Total Payments would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “ Excise Tax ”). If any portion of the Total Payments constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments (or portions thereof) being hereinafter referred to
 
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as the “Excess Parachute Payments”), the Company shall within 60 days of the date of the 280G Change in Control pay to Executive an additional amount equal to thirty six months of the monthly base salary of the Executive as set forth in Section 4(a) of the Agreement (the “ Gross-up Payment ”) to compensate the Executive for the additional tax burden imposed, including but not limited to, the Excise Tax plus the additional taxes due on the amount of the payment of such taxes, with respect to the Excess Parachute Payments.
(b) In the event of the consummation of a 280G Change in Control of the Company occurring more two (2) years after the Effective Date, the provisions of this Section 6(b) shall apply in lieu of the provisions of Section 6(a) above. If all or a portion of the Total Payments would constitute Excess Parachute Payments, Executive will be entitled to receive: (i) an amount limited so that no portion thereof shall fail to be tax deductible under Section 280G of the Code (the “ Limited Amount ”), or (ii) if the amount otherwise payable hereunder or otherwise (without regarding to clause (i)) reduced by all taxes applicable thereto (including, for the avoidance of doubt, the Excise Tax) would be greater than the Limited Amount reduced by all taxes applicable thereto, the amount otherwise payable hereunder.
(c) The determination as to whether the Total Payments include Excess Parachute Payments and, if so, the amount of such Excess Parachute Payments, the amount of any Excise Tax with respect thereto, the amount of any Gross-up Payment, if applicable, and the amount of any reduction in Total Payments shall be made at the Company’s expense by the independent public accounting firm most recently serving as the Company’s outside auditors or such other accounting or benefits consulting group or firm as the Company may designate (the “ Accountants ”). In the event that any payments under this Agreement or otherwise are required to be reduced as described in Section 6(b), the adjustment will be made, first, by reducing the amount of base salary and bonus payable pursuant to  Section 5(d)(iii)(1),  as applicable; second, if additional reductions are necessary, by reducing the payment of health insurance premium due to Executive pursuant to Section 5(d)(iii)(2) , as applicable; and third, if additional reductions are still necessary, by eliminating the accelerated vesting of time-based equity-based awards under  Section 5(d)(iii)(3) , if any, starting with those awards for which the amount required to be taken into account under Section 280G is the greatest.
(d) In the event that there has been an underpayment or overpayment under this Agreement or otherwise as determined by the Accountants, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.
7. Proprietary Information Agreement. The terms of the Proprietary Information and Inventions Agreement by and between the Company and the Executive with effective date of August 31, 2011 (the “ Proprietary Information Agreement ”) and any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation between the Company and the Executive, are hereby incorporated by reference and are a material part of this Agreement.
 
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8. Representations and Warranties.
(a) The Executive represents and warrants to the Company that the Executive’s performance of this Agreement and as an employee of the Company does not and will not breach any noncompetition agreement or any agreement to keep in confidence proprietary information acquired by the Executive in confidence or in trust prior to the Executive’s employment by the Company. The Executive represents and warrants to the Company that the Executive has not entered into, and agrees not to enter into, any agreement that conflicts with or violates this Agreement.
(b) The Executive represents and warrants to the Company that the Executive has not brought and shall not bring with the Executive to the Company, or use in the performance of the Executive’s responsibilities for the Company, any materials or documents of a former employer which are not generally available to the public or which did not belong to the Executive prior to the Executive’s employment with the Company, unless the Executive has obtained written authorization from the former employer or other owner for their possession and use and provided the Company with a copy thereof.
9. Indemnification by the Executive. The Executive shall indemnify and hold harmless the Company, its directors, officers, stockholders, agents, and employees against all claims, costs, expenses, liabilities, and lost profits, including amounts paid in settlement, incurred by any of them as a result of the material breach by the Executive of any provision of Section 2, 6 and/or 7 of this Agreement.
10. Notices. All notices, requests, consents, approvals, and other communications to, upon, and between the parties shall be in writing and shall be deemed to have been given, delivered, made, and received when: (a) personally delivered; (b) deposited for next day delivery by Federal Express, or other similar overnight courier services; (c) transmitted via telefacsimile or other similar device to the attention of the Board of Directors of the Company with receipt acknowledged; or (d) three (3) days after being sent or mailed by certified mail, postage prepaid and return receipt requested, addressed to the Company at 1220 Old Alpharetta Road, Alpharetta, GA 30005 and to the Executive at the Executive’s last listed address in the payroll records of the Company.
11. Effect. This Agreement shall be binding on and inure to the respective benefit of the Company and its successors and assigns and the Executive and Executive’s personal representatives.
12. Entire Agreement. This Agreement, the RSPA and the Proprietary Information Agreement and any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation constitute the entire agreement between the parties with respect to the matters set forth herein and supersede all prior agreements and understandings between the parties with respect to the same, including the Original Agreement.
13. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision.
 
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14. Amendment and Waiver. No provision of this Agreement, including the provisions of this Section, may be amended, modified, deleted, or waived in any manner except by a written agreement executed by the parties.
15. Section 409A Matters. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the Treasury Regulations and other applicable guidance thereunder (“ Section 409A ”). To the extent that there is any ambiguity as to whether this Agreement (or any of its provisions) contravenes one or more requirements of Section 409A, such provision shall be interpreted and applied in a matter that does not result in a Section 409A violation. Without limiting the generality of the above:
(a) For clarity, the severance benefits specified in this Agreement (the “Severance Benefits”) are only payable upon a “separation from service” as defined in Section 409A. The Severance Benefits shall be deemed to be series of separate payments, with each installment being treated as a separate payment. The time and form of payment of any compensation may not be deferred or accelerated to the extent it would result in an impermissible acceleration or deferral under Section 409A.
(b) To the extent this Agreement contains payments which are subject to Section 409A (as opposed to exempt from Section 409A), the Executive’s rights to such payments are not subject to anticipation, alienation, sale, transfer, pledge, encumbrance, attachment or garnishment and, where applicable, may only be transferred by will or the laws of descent and distribution.
(c) To the extent the Severance Benefits are intended to be exempt from Section 409A as a result of an “involuntary separation from service” under Section 409A, if all conditions necessary to establish the Executive’s entitlement to such Severance Benefits have been satisfied, all Severance Benefits shall be paid or provided in full no later than December 31 st  of the second calendar year following the calendar year in which the Executive’s employment terminated unless another time period is applicable.
(d) If the Employee is a “specified employee” (as defined in Section 409A) on the termination date and a delayed payment is required by Section 409A to avoid a prohibited distribution under Section 409A, then no Severance Benefits that constitute “non-qualified deferred compensation” under Section 409A shall be paid until the earlier of (i) the first day of the 7 th  month following the date of the Executive’s “separation from service” as defined in Section 409A, or (ii) the date of the Executive’s death. Upon the expiration of the applicable deferral period, all payments deferred under this clause shall be paid in a lump sum and any remaining severance benefits shall be paid per the schedule specified in this Agreement.
(e) The Company makes no representation that this Agreement will be exempt from or compliant with Section 409A and makes no affirmative undertaking to preclude Section 409A from applying, but does reserve the right to unilaterally amend this Agreement as may be necessary or advisable to permit the Agreement to be in documentary and operational compliance with Section 409A which determination will be made in the sole discretion of the Company.
 
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16. Governing Law. This Agreement will be governed by and construed according to the laws of the Georgia as such laws are applied to agreements entered into and to be performed entirely within Georgia between Georgia residents.
17. Consent to Jurisdiction and Venue. Each of the parties agrees that any suit, action, or proceeding arising out of this Agreement may be instituted against it in the state or federal courts located in Georgia. Each of the parties hereby waives any objection that it may have to the venue of any such suit, action, or proceeding, and each of the parties hereby irrevocably consents to the personal jurisdiction of any such court in any such suit, action, or proceeding.
18. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, and all of which shall be deemed a single agreement.
19. Headings. The headings herein are for convenience only and shall not affect the interpretation of this Agreement.
[The remainder of this page is intentionally left blank.]
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

COMPANY:	
 	
Clearside Biomedical, Inc.	
 	 	
By:	 	/s/ Charles A. Deignan	
Printed Name: Charles A. Deignan	
Title: CFO and Secretary	

EXECUTIVE:	
 	
/s/ Daniel H. White	
Daniel H. White	
 
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Exhibit 10.14
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), is entered into effective as of January 1, 2015, (the “ Effective Date ”), by and between Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), and Charles Deignan (the “ Executive ”), an individual residing in Georgia.
W I T N E S S E T H:
WHEREAS, the Company and Executive are parties to that certain Offer Letter dated August 30, 2012 (the “Original Agreement ”);
WHEREAS, the Company and Executive desire to amend and restated the Original Agreement upon the terms and conditions of this Agreement to set forth the terms and conditions of the Executive’s continued employment from and after the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein, and of other good and valuable consideration, including the continued employment of the Executive by the Company and the compensation to be received by the Executive from the Company from time to time, and specifically the compensation to be received by the Executive pursuant to Section 4 hereof, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive hereby accepts employment as the Chief Financial Officer of the Company upon the terms and conditions of this Agreement.
2. Duties. The Executive shall faithfully perform all duties of the Company related to the position or positions held by the Executive, including but not limited to all duties set forth in this Agreement and/or in the Bylaws of the Company related to the position or positions held by the Executive and all additional duties that are prescribed from time to time by the Chief Executive Officer of the Company. The Executive shall devote the Executive’s full time and attention to the performance of the Executive’s duties and responsibilities on behalf of the Company and in furtherance of its best interests; provided, however, that the Executive, subject to the Executive’s obligations hereunder, shall also be permitted to make personal investments, perform reasonable volunteer services and, with the prior consent of the Company, serve on outside boards of directors for non-profit corporations. The Executive shall comply with all Company policies, standards, rules and regulations (the “ Company Policies ”) and all applicable government laws, rules and regulations that are now or hereafter in effect. The Executive acknowledges receipt of copies of all written Company Policies that are in effect as of the date of this Agreement.
3. Term. Unless earlier terminated as provided herein, the initial term of this Agreement shall commence on the Effective Date and shall continue until December 31, 2015. Thereafter, this Agreement shall automatically renew on a year-to-year basis on the same terms and conditions set forth herein unless: (a) earlier terminated or amended as provided herein or (b) either party gives written notice of non-renewal at least sixty (60) days prior to the end of the initial term or any renewal term of this Agreement. The initial term of this Agreement and all renewals thereof are referred to herein as the “ Term .”

4. Compensation. During the Term, as compensation for the services rendered by the Executive under this Agreement, the Executive shall be entitled to receive the following (all payments are subject to applicable withholdings)
(a) Base Salary. The Executive shall receive a monthly salary at a rate of $20,833.33 (equal to an annual salary rate of $250,000) payable in accordance with the then-current payroll schedule of the Company (the “ Base Salary ”). The Executive’s salary may be increased from time to time by the Board of Directors (the “ Board ”).
(b) Bonuses. The Executive shall be eligible to participate in all bonus or similar incentive plans adopted by the Board. The amount awarded, if any, to the Executive under any bonus or incentive plan shall be in the discretion of the Board or any committee administering such plan, based on its assessment of the Executive’s and the Company’s performance during the relevant period, but it is the expectation of the Company that any such bonus would be up to 35% of the Executive’s then-current annual Base Salary. If a bonus is awarded, unless otherwise specifically provided by the Board or committee administering such plan, it shall be paid between January 1 and March 15 of the year following the year in which such bonus was earned.
(c) Options. In connection with the Executive’s employment, the Company has issued to the Executive options to purchase shares of the common stock of the Company (the “ Options ”). The Options have vested or shall vest in accordance with the terms of the stock option Agreements. During the Term of the Agreement, Executive will be eligible to receive additional stock options, restricted stock grants, or other equity incentive awards under or outside of any current or successor equity incentive plans of the Company, as the Board in its sole discretion determines to be appropriate (any such awards, collectively with the Options, “ Equity Awards ”).
(d) Benefits. The Executive shall be entitled to receive those benefits provided from time to time to other executive employees of the Company, in accordance with the terms and conditions of the applicable plan documents; provided that the Executive meets the eligibility requirements thereof. All such benefits are subject to amendment or termination from time to time by the Company without the consent of the Executive or any other employee of the Company.
(e) Vacation. The Executive shall be entitled to four (4) weeks paid vacation per calendar year (with the vacation for any partial year being prorated) and shall be entitled to carry over one-half of the total Vacation days earned in one calendar year to the subsequent calendar year;  provided, however,  that in no event may the Executive carry over more than two (2) weeks of paid vacation into a subsequent year. Upon the termination of the Executive’s employment with the Company, no cash shall be paid in lieu of accrued but unused vacation.
(f) Annual Physical Exam. The Company shall bear the cost of one comprehensive physical examination per calendar year.
 
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(g) Business Expenses. The Company shall pay, or reimburse the Executive for, all reasonable expenses incurred by the Executive directly related to conduct of the business of the Company; provided that, the Executive complies with the Company’s policies for the reimbursement or advancement of business expenses that are now or hereafter in effect.
5. Termination. This Agreement and the Executive’s employment by the Company shall or may be terminated, as the case may be, as follows:
(a) Termination upon Expiration of the Term. This Agreement and the Executive’s employment by the Company shall terminate upon the expiration of the Term, unless renewed.
(b) Termination by the Executive. The Executive may terminate this Agreement and Executive’s employment by the Company:
(i) for “Good Reason” (as defined herein). For purposes of this Agreement, “Good Reason ” shall mean, the existence, without the consent of the Executive, of any of the following events: (A) the Executive’s duties and responsibilities or salary are substantially reduced or diminished; (B) the Company materially breaches its obligations under this Agreement; or (C) the Executive’s place of employment is relocated by more than fifty (50) miles. In addition to any requirements set forth above, in order for any of the above events to constitute “Good Reason”, the Executive must (X) inform the Company of the existence of the event within ninety (90) days of the initial existence of the event, after which date the Company shall have no less than thirty (30) days to cure the event which otherwise would constitute “Good Reason” hereunder and (Y) the Executive must terminate Executive’s employment with the Company for such “Good Reason” no later than two (2) years after the initial existence of the event which prompted the Executive’s termination.
(ii) Other than for Good Reason thirty (30) days after notice to the Company.
(c) Termination by the Company. The Company may terminate this Agreement and the Executive’s employment by the Company upon notice to the Executive (or Executive’s personal representative):
(i) at any time and for any reason;
(ii) upon the death of the Executive, in which case this Agreement shall terminate immediately; provided that, such termination shall not prejudice any benefits payable to the Executive’s spouse or beneficiaries which are fully vested as of the date of death;
(iii) if the Executive is “permanently disabled” (as defined herein), in which case this Agreement shall terminate immediately; provided that, such termination shall not prejudice any benefits payable to the Executive, the Executive’s spouse or beneficiaries which are fully vested as of the date of the termination of this Agreement. For purposes of this Agreement, the Executive shall be considered “ permanently disabled ” when a qualified medical doctor mutually acceptable to the Company and the Executive or the Executive’s personal representative
 
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shall have certified in writing that: (A) the Executive is unable, because of a medically determinable physical or mental disability, to perform substantially all of the Executive’s duties, with or without a reasonable accommodation, for more than one hundred and eighty (180) calendar days measured from the last full day of work; or (B) by reason of mental or physical disability, it is unlikely that the Executive will be able, within one hundred and eighty (180) calendar days, to resume substantially all business duties and responsibilities in which the Executive was previously engaged and otherwise discharge the Executive’s duties under this Agreement;
(iv) upon the liquidation, dissolution or discontinuance of business by the Company in any manner or the filing of any petition by or against the Company under any federal or state bankruptcy or insolvency laws, which petition shall not be dismissed within sixty (60) days after filing; provided that, such termination shall not prejudice the Executive’s rights as a stockholder or a creditor of the Company; or
(v) “for cause” (as defined herein). “For cause” shall be determined by the Board by a majority vote without the participation of the Executive in such vote and shall mean:
(A) Any material breach of the terms of this Agreement by the Executive, or the failure of the Executive to diligently and properly perform the Executive’s duties for the Company or the Executive’s failure to achieve the objectives specified by the Board , which breach or failure is not cured within thirty (30) days after written notice thereof;
(B) The Executive’s misappropriation or unauthorized use of the Company’s tangible or intangible property, or breach of the Proprietary Information Agreement (as defined herein) or any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation;
(C) Any material failure to comply with the Company Policies or any other policies and/or directives of the Board, which failure is not cured within thirty (30) days after written notice thereof;  provided, however , in the case of failure to comply with Company Policies related to harassment, unlawful discrimination, retaliation or workplace violence a thirty (30) day cure period and written notice thereof is not required;
(D) The Executive’s use of illegal drugs or any illegal substance, or the Executive’s use of alcohol in any manner that materially interferes with the performance of the Executive’s duties under this Agreement;
(E) Any dishonest or illegal action (including, without limitation, embezzlement) or any other action whether or not dishonest or illegal by the Executive which is materially detrimental to the interest and well-being of the Company, including, without limitation, harm to its reputation;
(F) The Executive’s failure to fully disclose any material conflict of interest that the Executive may have with the Company in a transaction between the Company and any third party which is materially detrimental to the interest and well-being of the Company; or
 
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(G) Any adverse action or omission by the Executive which would be required to be disclosed pursuant to public securities laws or which would limit the ability of the Company or any entity affiliated with the Company to sell securities under any Federal or state law or which would disqualify the Company or any affiliated entity from any exemption otherwise available to it.
(d) Obligations of the Company Upon Termination.
(i) Upon the termination of this Agreement: (A) pursuant to the expiration of the Term upon notice of non-renewal of the Term given by the Executive; (B) by the Executive pursuant to paragraph 5(b)(ii); or (C) by the Company pursuant to paragraph 5(c)(ii), (iii), (iv), or (v), the Company shall have no further obligations hereunder other than the payment of all compensation and other benefits payable to the Executive through the date of such termination which shall be paid on or before the Company’s next regularly scheduled payday unless such amount is not then-calculable, in which case payment shall be made on the first regularly scheduled payday after the amount is calculable.
(ii) Upon termination of this Agreement: (A) by the Executive pursuant to paragraph 5(b)(i), or (B) by the Company pursuant to paragraph 5(c)(i) or upon notice of non-renewal of the Term given by the Company and, in any such case, provided that the Executive first executes and does not revoke a release and settlement agreement in the form acceptable to the Company within the time period then-specified by the Company but in any event no later than sixty (60) days after the date of termination (the “ Release ”):
(1) the Company shall pay the Executive an amount equal to 12 months of Executive’s then-current Base Salary (less all applicable deductions) payable in installments in accordance with the then-current generally applicable payroll schedule of the Company commencing on the first regularly scheduled pay date of the Company processed after Executive has executed, delivered to the Company and not revoked the Release;
(2) provided that the Executive properly elects and maintains continued health insurance coverage under the Company sponsored plan and provided further that such benefits continue to be offered under the Company sponsored plan, the Company shall reimburse the Executive in an amount equal to the cost of the premium for such continued health insurance coverage at the same average level and on the same terms and conditions which applied immediately prior to the date of the Executive’s termination for the shorter of (a) 12 months from the date of termination or (b) until the Executive obtains reasonably comparable coverage; and
(3) each Equity Award held by Executive shall immediately vest and be exercisable to the extent such Equity Award would have vested had Executive remained employed by the Company for a period of 12 months from the date of termination of this Agreement. The Company and the Executive hereby agree that the Equity Awards shall be deemed amended to the extent necessary to give effect to this provision.
 
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(iii) Upon termination of this Agreement within twelve months following a Change in Control or Corporate Transaction: (A) by the Executive pursuant to paragraph 5(b)(i), or (B) by the Company pursuant to paragraph 5(c)(i) or upon notice of non-renewal of the Term given by the Company in any such case, Executive shall be entitled to the following severance benefits in addition to the compensation set forth in the preceding clause (ii), subject to execution of the Release:
(1) the Company shall pay the Executive an amount equal to 67% of the performance bonus earned by the Executive in the most recently completed calendar year; and
(2) each Equity Award held by Executive at the time of termination shall immediately vest and be exercisable until the earlier to occur of the final exercise date set forth in the Equity Award or the end of the severance period. The Company and the Executive hereby agree that the Equity Awards shall be deemed amended to the extent necessary to give effect to this provision.
(e) Resignation as Officer and Director. Upon termination of this Agreement and the Executive’s employment hereunder for any reason by either party, the Executive shall be deemed to have resigned from all offices and positions the Executive may hold with the Company at such time including without limitation Board membership and/or positions as an officer of the Company.
(f) Payment in Lieu of Notice Period. Upon the termination of this Agreement: (A) pursuant to the expiration of the Term based on a non-renewal notice given by either party in accordance with paragraph 3(b); or (B) by the Executive pursuant to paragraph 5(b)(i) or 5(b)(ii), the Company may, at its sole election, pay the Executive an amount equal to Executive’s then-current Base Salary for all or any portion of the applicable notice period required by paragraph 3(b) or paragraph 5(b)(i) or 5(b)(ii) in lieu of all or any portion of such notice period; provided, however, any such election by the Company shall not be deemed to be a termination by the Company that invokes the obligations set forth in Section 5(d)(ii) of this Agreement. Notwithstanding the above, if the Executive requests that Executive’s final day of employment occur prior to the expiration of any applicable notice period and the Company consents, pay in lieu of notice shall not be required.
6. Parachute Payment upon Corporate Transaction.
(a) For the period of two (2) years following the Effective Date, in the event of a Corporate Transaction which results in a change (i) in the ownership of effective control of the Company, or (ii) in the ownership of a substantial portion of the assets of the corporation (within the meaning of Section 280G of the Code and the regulations thereunder (“ Section 280G ”)) (a “ 280G Change in Control ”) payments and benefits under this Agreement, together with other payments and benefits provided to Executive by the Company (including, without limitation, any accelerated vesting of stock options) (the “ Total Payments ”) shall be made without regard to whether the deductibility of the Total Payments would be limited or precluded by Section 280G and without regard to whether the Total Payments would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “ Excise Tax ”). If any portion of the Total Payments constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments (or portions thereof) being hereinafter referred to as the “ Excess Parachute Payments ”), the Company shall within 60 days of the date of the 280G Change in Control pay to Executive an additional amount equal to eighteen months of the monthly
 
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base salary of the Executive as set forth in Section 4(a) of the Agreement (the “Gross-up Payment”) to compensate the Executive for the additional tax burden imposed, including but not limited to, the Excise Tax plus the additional taxes due on the amount of the payment of such taxes, with respect to the Excess Parachute Payments.
(b) In the event of the consummation of a 280G Change in Control of the Company occurring more two (2) years after the Effective Date, the provisions of this Section 6(b) shall apply in lieu of the provisions of Section 6(a) above. If all or a portion of the Total Payments would constitute Excess Parachute Payments, Executive will be entitled to receive: (i) an amount limited so that no portion thereof shall fail to be tax deductible under Section 280G of the Code (the “ Limited Amount ”), or (ii) if the amount otherwise payable hereunder or otherwise (without regarding to clause (i)) reduced by all taxes applicable thereto (including, for the avoidance of doubt, the Excise Tax) would be greater than the Limited Amount reduced by all taxes applicable thereto, the amount otherwise payable hereunder.
(c) The determination as to whether the Total Payments include Excess Parachute Payments and, if so, the amount of such Excess Parachute Payments, the amount of any Excise Tax with respect thereto, the amount of any Gross-up Payment, if applicable, and the amount of any reduction in Total Payments shall be made at the Company’s expense by the independent public accounting firm most recently serving as the Company’s outside auditors or such other accounting or benefits consulting group or firm as the Company may designate (the “ Accountants ”). In the event that any payments under this Agreement or otherwise are required to be reduced as described in Section 6(b), the adjustment will be made, first, by reducing the amount of base salary and bonus payable pursuant to  Section 5(d)(iii)(1),  as applicable; second, if additional reductions are necessary, by reducing the payment of health insurance premium due to Executive pursuant to Section 5(d)(iii)(2) , as applicable; and third, if additional reductions are still necessary, by eliminating the accelerated vesting of time-based equity-based awards under  Section 5(d)(iii)(3) , if any, starting with those awards for which the amount required to be taken into account under Section 280G is the greatest.
(d) In the event that there has been an underpayment or overpayment under this Agreement or otherwise as determined by the Accountants, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.
7. Proprietary Information Agreement. The terms of the Proprietary Information and Inventions Agreement by and between the Company and the Executive dated August 31, 2012, (the “ Proprietary Information Agreement ”) and any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation between the Company and the Executive, are hereby incorporated by reference and are a material part of this Agreement.
 
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8. Representations and Warranties.
(a) The Executive represents and warrants to the Company that the Executive’s performance of this Agreement and as an employee of the Company does not and will not breach any noncompetition agreement or any agreement to keep in confidence proprietary information acquired by the Executive in confidence or in trust prior to the Executive’s employment by the Company. The Executive represents and warrants to the Company that the Executive has not entered into, and agrees not to enter into, any agreement that conflicts with or violates this Agreement.
(b) The Executive represents and warrants to the Company that the Executive has not brought and shall not bring with the Executive to the Company, or use in the performance of the Executive’s responsibilities for the Company, any materials or documents of a former employer which are not generally available to the public or which did not belong to the Executive prior to the Executive’s employment with the Company, unless the Executive has obtained written authorization from the former employer or other owner for their possession and use and provided the Company with a copy thereof.
9. Indemnification by the Executive. The Executive shall indemnify and hold harmless the Company, its directors, officers, stockholders, agents, and employees against all claims, costs, expenses, liabilities, and lost profits, including amounts paid in settlement, incurred by any of them as a result of the material breach by the Executive of any provision of Section 2, 6 and/or 7 of this Agreement.
10. Notices. All notices, requests, consents, approvals, and other communications to, upon, and between the parties shall be in writing and shall be deemed to have been given, delivered, made, and received when: (a) personally delivered; (b) deposited for next day delivery by Federal Express, or other similar overnight courier services; (c) transmitted via telefacsimile or other similar device to the attention of the Board of Directors of the Company with receipt acknowledged; or (d) three (3) days after being sent or mailed by certified mail, postage prepaid and return receipt requested, addressed to the Company at 1220 Old Alpharetta Road, Alpharetta, GA 30005 and to the Executive at the Executive’s last listed address in the payroll records of the Company.
11. Effect. This Agreement shall be binding on and inure to the respective benefit of the Company and its successors and assigns and the Executive and Executive’s personal representatives.
12. Entire Agreement. This Agreement, the RSPA and the Proprietary Information Agreement and any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation constitute the entire agreement between the parties with respect to the matters set forth herein and supersede all prior agreements and understandings between the parties with respect to the same, including the Original Agreement.
13. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision.
 
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14. Amendment and Waiver. No provision of this Agreement, including the provisions of this Section, may be amended, modified, deleted, or waived in any manner except by a written agreement executed by the parties.
15. Section 409A Matters. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the Treasury Regulations and other applicable guidance thereunder (“ Section 409A ”). To the extent that there is any ambiguity as to whether this Agreement (or any of its provisions) contravenes one or more requirements of Section 409A, such provision shall be interpreted and applied in a matter that does not result in a Section 409A violation. Without limiting the generality of the above:
(a) For clarity, the severance benefits specified in this Agreement (the “Severance Benefits”) are only payable upon a “separation from service” as defined in Section 409A. The Severance Benefits shall be deemed to be series of separate payments, with each installment being treated as a separate payment. The time and form of payment of any compensation may not be deferred or accelerated to the extent it would result in an impermissible acceleration or deferral under Section 409A.
(b) To the extent this Agreement contains payments which are subject to Section 409A (as opposed to exempt from Section 409A), the Executive’s rights to such payments are not subject to anticipation, alienation, sale, transfer, pledge, encumbrance, attachment or garnishment and, where applicable, may only be transferred by will or the laws of descent and distribution.
(c) To the extent the Severance Benefits are intended to be exempt from Section 409A as a result of an “involuntary separation from service” under Section 409A, if all conditions necessary to establish the Executive’s entitlement to such Severance Benefits have been satisfied, all Severance Benefits shall be paid or provided in full no later than December 31 st  of the second calendar year following the calendar year in which the Executive’s employment terminated unless another time period is applicable.
(d) If the Employee is a “specified employee” (as defined in Section 409A) on the termination date and a delayed payment is required by Section 409A to avoid a prohibited distribution under Section 409A, then no Severance Benefits that constitute “non-qualified deferred compensation” under Section 409A shall be paid until the earlier of (i) the first day of the 7 th  month following the date of the Executive’s “separation from service” as defined in Section 409A, or (ii) the date of the Executive’s death. Upon the expiration of the applicable deferral period, all payments deferred under this clause shall be paid in a lump sum and any remaining severance benefits shall be paid per the schedule specified in this Agreement.
(e) The Company makes no representation that this Agreement will be exempt from or compliant with Section 409A and makes no affirmative undertaking to preclude Section 409A from applying, but does reserve the right to unilaterally amend this Agreement as may be necessary or advisable to permit the Agreement to be in documentary and operational compliance with Section 409A which determination will be made in the sole discretion of the Company.
 
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16. Governing Law. This Agreement will be governed by and construed according to the laws of the Georgia as such laws are applied to agreements entered into and to be performed entirely within Georgia between Georgia residents.
17. Consent to Jurisdiction and Venue. Each of the parties agrees that any suit, action, or proceeding arising out of this Agreement may be instituted against it in the state or federal courts located in Georgia. Each of the parties hereby waives any objection that it may have to the venue of any such suit, action, or proceeding, and each of the parties hereby irrevocably consents to the personal jurisdiction of any such court in any such suit, action, or proceeding.
18. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, and all of which shall be deemed a single agreement.
19. Headings. The headings herein are for convenience only and shall not affect the interpretation of this Agreement.
[The remainder of this page is intentionally left blank.]
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

COMPANY:	
 	
Clearside Biomedical, Inc.	
 	 	
By: 	 	/s/ Daniel H. White	
Printed Name: Daniel H. White	
Title: President and CEO	

EXECUTIVE:	
 	
/s/ Charles Deignan	
Charles Deignan	
 
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Exhibit 10.15
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), is entered into effective as of January 1, 2015, (the “ Effective Date ”), by and between Clearside Biomedical, Inc., a Delaware corporation (the “ Company ”), and Glenn Noronha (the “ Executive ”), an individual residing in Georgia.
W I T N E S S E T H:
WHEREAS, the Company and Executive are parties to that certain Offer Letter dated July 11, 2013 (the “Original Agreement ”);
WHEREAS, the Company and Executive desire to amend and restated the Original Agreement upon the terms and conditions of this Agreement to set forth the terms and conditions of the Executive’s continued employment from and after the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein, and of other good and valuable consideration, including the continued employment of the Executive by the Company and the compensation to be received by the Executive from the Company from time to time, and specifically the compensation to be received by the Executive pursuant to Section 4 hereof, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive hereby accepts employment as the Executive Vice President of Research & Development of the Company upon the terms and conditions of this Agreement.
2. Duties. The Executive shall faithfully perform all duties of the Company related to the position or positions held by the Executive, including but not limited to all duties set forth in this Agreement and/or in the Bylaws of the Company related to the position or positions held by the Executive and all additional duties that are prescribed from time to time by the Chief Executive Officer of the Company. The Executive shall devote the Executive’s full time and attention to the performance of the Executive’s duties and responsibilities on behalf of the Company and in furtherance of its best interests; provided, however, that the Executive, subject to the Executive’s obligations hereunder, shall also be permitted to make personal investments, perform reasonable volunteer services and, with the prior consent of the Company, serve on outside boards of directors for non-profit corporations. The Executive shall comply with all Company policies, standards, rules and regulations (the “ Company Policies ”) and all applicable government laws, rules and regulations that are now or hereafter in effect. The Executive acknowledges receipt of copies of all written Company Policies that are in effect as of the date of this Agreement.
3. Term. Unless earlier terminated as provided herein, the initial term of this Agreement shall commence on the Effective Date and shall continue until December 31, 2015. Thereafter, this Agreement shall automatically renew on a year-to-year basis on the same terms and conditions set forth herein unless: (a) earlier terminated or amended as provided herein or (b) either party gives written notice of non-renewal at least sixty (60) days prior to the end of the initial term or any renewal term of this Agreement. The initial term of this Agreement and all renewals thereof are referred to herein as the “ Term .”

4. Compensation. During the Term, as compensation for the services rendered by the Executive under this Agreement, the Executive shall be entitled to receive the following (all payments are subject to applicable withholdings)
(a) Base Salary. The Executive shall receive a monthly salary at a rate of $22,874.58 (equal to an annual salary of $274,495) payable in accordance with the then-current payroll schedule of the Company (the “ Base Salary ”). The Executive’s salary may be increased from time to time by the Board of Directors (the “ Board ”) of the Company.
(b) Bonuses. The Executive shall be eligible to participate in all bonus or similar incentive plans adopted by the Board. The amount awarded, if any, to the Executive under any bonus or incentive plan shall be in the discretion of the Board or any committee administering such plan, based on its assessment of the Executive’s and the Company’s performance during the relevant period, but it is the expectation of the Company that any such bonus would be up to 35% of the Executive’s then-current annual Base Salary. If a bonus is awarded, unless otherwise specifically provided by the Board or committee administering such plan, it shall be paid between January 1 and March 15 of the year following the year in which such bonus was earned.
(c) Options. In connection with the Executive’s employment, the Company has issued to the Executive options to purchase shares of the common stock of the Company (the “ Options ”). The Options have vested or shall vest in accordance with the terms of the stock option Agreements. During the Term of the Agreement, Executive will be eligible to receive additional stock options, restricted stock grants, or other equity incentive awards under or outside of any current or successor equity incentive plans of the Company, as the Board in its sole discretion determines to be appropriate (any such awards, collectively with the Options, “ Equity Awards ”).
(d) Benefits. The Executive shall be entitled to receive those benefits provided from time to time to other executive employees of the Company, in accordance with the terms and conditions of the applicable plan documents; provided that the Executive meets the eligibility requirements thereof. All such benefits are subject to amendment or termination from time to time by the Company without the consent of the Executive or any other employee of the Company.
(e) Vacation. The Executive shall be entitled to four (4) weeks paid vacation per calendar year (with the vacation for any partial year being prorated) and shall be entitled to carry over one-half of the total Vacation days earned in one calendar year to the subsequent calendar year;  provided, however,  that in no event may the Executive carry over more than two (2) weeks of paid vacation into a subsequent year. Upon the termination of the Executive’s employment with the Company, no cash shall be paid in lieu of accrued but unused vacation.
(f) Annual Physical Exam. The Company shall bear the cost of one comprehensive physical examination per calendar year.
 
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(g) Business Expenses. The Company shall pay, or reimburse the Executive for, all reasonable expenses incurred by the Executive directly related to conduct of the business of the Company; provided that, the Executive complies with the Company’s policies for the reimbursement or advancement of business expenses that are now or hereafter in effect.
5. Termination. This Agreement and the Executive’s employment by the Company shall or may be terminated, as the case may be, as follows:
(a) Termination upon Expiration of the Term. This Agreement and the Executive’s employment by the Company shall terminate upon the expiration of the Term, unless renewed.
(b) Termination by the Executive. The Executive may terminate this Agreement and Executive’s employment by the Company:
(i) for “Good Reason” (as defined herein). For purposes of this Agreement, “Good Reason ” shall mean, the existence, without the consent of the Executive, of any of the following events: (A) the Executive’s duties and responsibilities or salary are substantially reduced or diminished; (B) the Company materially breaches its obligations under this Agreement; or (C) the Executive’s place of employment is relocated by more than fifty (50) miles. In addition to any requirements set forth above, in order for any of the above events to constitute “Good Reason”, the Executive must (X) inform the Company of the existence of the event within ninety (90) days of the initial existence of the event, after which date the Company shall have no less than thirty (30) days to cure the event which otherwise would constitute “Good Reason” hereunder and (Y) the Executive must terminate Executive’s employment with the Company for such “Good Reason” no later than two (2) years after the initial existence of the event which prompted the Executive’s termination.
(ii) Other than for Good Reason thirty (30) days after notice to the Company.
(c) Termination by the Company. The Company may terminate this Agreement and the Executive’s employment by the Company upon notice to the Executive (or Executive’s personal representative):
(i) at any time and for any reason;
(ii) upon the death of the Executive, in which case this Agreement shall terminate immediately; provided that, such termination shall not prejudice any benefits payable to the Executive’s spouse or beneficiaries which are fully vested as of the date of death;
(iii) if the Executive is “permanently disabled” (as defined herein), in which case this Agreement shall terminate immediately; provided that, such termination shall not prejudice any benefits payable to the Executive, the Executive’s spouse or beneficiaries which are fully vested as of the date of the termination of this Agreement. For purposes of this Agreement, the Executive shall be considered “ permanently disabled ” when a qualified medical doctor
 
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mutually acceptable to the Company and the Executive or the Executive’s personal representative shall have certified in writing that: (A) the Executive is unable, because of a medically determinable physical or mental disability, to perform substantially all of the Executive’s duties, with or without a reasonable accommodation, for more than one hundred and eighty (180) calendar days measured from the last full day of work; or (B) by reason of mental or physical disability, it is unlikely that the Executive will be able, within one hundred and eighty (180) calendar days, to resume substantially all business duties and responsibilities in which the Executive was previously engaged and otherwise discharge the Executive’s duties under this Agreement;
(iv) upon the liquidation, dissolution or discontinuance of business by the Company in any manner or the filing of any petition by or against the Company under any federal or state bankruptcy or insolvency laws, which petition shall not be dismissed within sixty (60) days after filing; provided that, such termination shall not prejudice the Executive’s rights as a stockholder or a creditor of the Company; or
(v) “for cause” (as defined herein). “For cause” shall be determined by the Board by a majority vote without the participation of the Executive in such vote and shall mean:
(A) Any material breach of the terms of this Agreement by the Executive, or the failure of the Executive to diligently and properly perform the Executive’s duties for the Company or the Executive’s failure to achieve the objectives specified by the Board , which breach or failure is not cured within thirty (30) days after written notice thereof;
(B) The Executive’s misappropriation or unauthorized use of the Company’s tangible or intangible property, or breach of the Proprietary Information Agreement (as defined herein) or any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation;
(C) Any material failure to comply with the Company Policies or any other policies and/or directives of the Board, which failure is not cured within thirty (30) days after written notice thereof;  provided, however , in the case of failure to comply with Company Policies related to harassment, unlawful discrimination, retaliation or workplace violence a thirty (30) day cure period and written notice thereof is not required;
(D) The Executive’s use of illegal drugs or any illegal substance, or the Executive’s use of alcohol in any manner that materially interferes with the performance of the Executive’s duties under this Agreement;
(E) Any dishonest or illegal action (including, without limitation, embezzlement) or any other action whether or not dishonest or illegal by the Executive which is materially detrimental to the interest and well-being of the Company, including, without limitation, harm to its reputation;
(F) The Executive’s failure to fully disclose any material conflict of interest that the Executive may have with the Company in a transaction between the Company and any third party which is materially detrimental to the interest and well-being of the Company; or
 
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(G) Any adverse action or omission by the Executive which would be required to be disclosed pursuant to public securities laws or which would limit the ability of the Company or any entity affiliated with the Company to sell securities under any Federal or state law or which would disqualify the Company or any affiliated entity from any exemption otherwise available to it.
(d) Obligations of the Company Upon Termination.
(i) Upon the termination of this Agreement: (A) pursuant to the expiration of the Term upon notice of non-renewal of the Term given by the Executive; (B) by the Executive pursuant to paragraph 5(b)(ii); or (C) by the Company pursuant to paragraph 5(c)(ii), (iii), (iv), or (v), the Company shall have no further obligations hereunder other than the payment of all compensation and other benefits payable to the Executive through the date of such termination which shall be paid on or before the Company’s next regularly scheduled payday unless such amount is not then-calculable, in which case payment shall be made on the first regularly scheduled payday after the amount is calculable.
(ii) Upon termination of this Agreement: (A) by the Executive pursuant to paragraph 5(b)(i), or (B) by the Company pursuant to paragraph 5(c)(i) or upon notice of non-renewal of the Term given by the Company and, in any such case, provided that the Executive first executes and does not revoke a release and settlement agreement in the form acceptable to the Company within the time period then-specified by the Company but in any event no later than sixty (60) days after the date of termination (the “ Release ”):
(1) the Company shall pay the Executive an amount equal to 12 months of Executive’s then-current Base Salary (less all applicable deductions) payable in installments in accordance with the then-current generally applicable payroll schedule of the Company commencing on the first regularly scheduled pay date of the Company processed after Executive has executed, delivered to the Company and not revoked the Release;
(2) provided that the Executive properly elects and maintains continued health insurance coverage under the Company sponsored plan and provided further that such benefits continue to be offered under the Company sponsored plan, the Company shall reimburse the Executive in an amount equal to the cost of the premium for such continued health insurance coverage at the same average level and on the same terms and conditions which applied immediately prior to the date of the Executive’s termination for the shorter of (a) 12 months from the date of termination or (b) until the Executive obtains reasonably comparable coverage; and
(3) each Equity Award held by Executive shall immediately vest and be exercisable to the extent such Equity Award would have vested had Executive remained employed by the Company for a period of 12 months from the date of termination of this Agreement. The Company and the Executive hereby agree that the Equity Awards shall be deemed amended to the extent necessary to give effect to this provision.
 
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(iii) Upon termination of this Agreement within twelve months following a Change in Control or Corporate Transaction: (A) by the Executive pursuant to paragraph 5(b)(i), or (B) by the Company pursuant to paragraph 5(c)(i) or upon notice of non-renewal of the Term given by the Company in any such case, Executive shall be entitled to the following severance benefits in addition to the compensation set forth in the preceding clause (ii), subject to execution of the Release:
(1) the Company shall pay the Executive an amount equal to 67% of the performance bonus earned by the Executive in the most recently completed calendar year; and
(2) each Equity Award held by Executive at the time of termination shall immediately vest and be exercisable until the earlier to occur of the final exercise date set forth in the Equity Award or the end of the severance period. The Company and the Executive hereby agree that the Equity Awards shall be deemed amended to the extent necessary to give effect to this provision.
(e) Resignation as Officer and Director. Upon termination of this Agreement and the Executive’s employment hereunder for any reason by either party, the Executive shall be deemed to have resigned from all offices and positions the Executive may hold with the Company at such time including without limitation Board membership and/or positions as an officer of the Company.
(f) Payment in Lieu of Notice Period. Upon the termination of this Agreement: (A) pursuant to the expiration of the Term based on a non-renewal notice given by either party in accordance with paragraph 3(b); or (B) by the Executive pursuant to paragraph 5(b)(i) or 5(b)(ii), the Company may, at its sole election, pay the Executive an amount equal to Executive’s then-current Base Salary for all or any portion of the applicable notice period required by paragraph 3(b) or paragraph 5(b)(i) or 5(b)(ii) in lieu of all or any portion of such notice period; provided, however, any such election by the Company shall not be deemed to be a termination by the Company that invokes the obligations set forth in Section 5(d)(ii) of this Agreement. Notwithstanding the above, if the Executive requests that Executive’s final day of employment occur prior to the expiration of any applicable notice period and the Company consents, pay in lieu of notice shall not be required.
6. Parachute Payment upon Corporate Transaction.
(a) For the period of two (2) years following the Effective Date, in the event of a Corporate Transaction which results in a change (i) in the ownership of effective control of the Company, or (ii) in the ownership of a substantial portion of the assets of the corporation (within the meaning of Section 280G of the Code and the regulations thereunder (“ Section 280G ”)) (a “ 280G Change in Control ”) payments and benefits under this Agreement, together with other payments and benefits provided to Executive by the Company (including, without limitation, any accelerated vesting of stock options) (the “ Total Payments ”) shall be made without regard to whether the deductibility of the Total Payments would be limited or precluded by Section 280G and without regard to whether the Total Payments would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “ Excise Tax ”). If any portion of the Total Payments constitutes an “excess parachute payment” within the meaning of Section 280G (the aggregate of such payments (or portions thereof) being hereinafter referred to as the “ Excess Parachute Payments ”), the Company shall within 60 days of the date of the 280G
 
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Change in Control pay to Executive an additional amount equal to eighteen months of the monthly base salary of the Executive as set forth in Section 4(a) of the Agreement (the “ Gross-up Payment ”) to compensate the Executive for the additional tax burden imposed, including but not limited to, the Excise Tax plus the additional taxes due on the amount of the payment of such taxes, with respect to the Excess Parachute Payments.
(b) In the event of the consummation of a 280G Change in Control of the Company occurring more two (2) years after the Effective Date, the provisions of this Section 6(b) shall apply in lieu of the provisions of Section 6(a) above. If all or a portion of the Total Payments would constitute Excess Parachute Payments, Executive will be entitled to receive: (i) an amount limited so that no portion thereof shall fail to be tax deductible under Section 280G of the Code (the “ Limited Amount ”), or (ii) if the amount otherwise payable hereunder or otherwise (without regarding to clause (i)) reduced by all taxes applicable thereto (including, for the avoidance of doubt, the Excise Tax) would be greater than the Limited Amount reduced by all taxes applicable thereto, the amount otherwise payable hereunder.
(c) The determination as to whether the Total Payments include Excess Parachute Payments and, if so, the amount of such Excess Parachute Payments, the amount of any Excise Tax with respect thereto, the amount of any Gross-up Payment, if applicable, and the amount of any reduction in Total Payments shall be made at the Company’s expense by the independent public accounting firm most recently serving as the Company’s outside auditors or such other accounting or benefits consulting group or firm as the Company may designate (the “ Accountants ”). In the event that any payments under this Agreement or otherwise are required to be reduced as described in Section 6(b), the adjustment will be made, first, by reducing the amount of base salary and bonus payable pursuant to  Section 5(d)(iii)(1),  as applicable; second, if additional reductions are necessary, by reducing the payment of health insurance premium due to Executive pursuant to Section 5(d)(iii)(2),  as applicable; and third, if additional reductions are still necessary, by eliminating the accelerated vesting of time-based equity-based awards under  Section 5(d)(iii)(3) , if any, starting with those awards for which the amount required to be taken into account under Section 280G is the greatest.
(d) In the event that there has been an underpayment or overpayment under this Agreement or otherwise as determined by the Accountants, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.
7. Proprietary Information Agreement. The terms of the Proprietary Information and Inventions Agreement by and between the Company and the Executive, dated July 26, 2013, (the “ Proprietary Information Agreement ”) and any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation between the Company and the Executive, are hereby incorporated by reference and are a material part of this Agreement.
 
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8. Representations and Warranties.
(a) The Executive represents and warrants to the Company that the Executive’s performance of this Agreement and as an employee of the Company does not and will not breach any noncompetition agreement or any agreement to keep in confidence proprietary information acquired by the Executive in confidence or in trust prior to the Executive’s employment by the Company. The Executive represents and warrants to the Company that the Executive has not entered into, and agrees not to enter into, any agreement that conflicts with or violates this Agreement.
(b) The Executive represents and warrants to the Company that the Executive has not brought and shall not bring with the Executive to the Company, or use in the performance of the Executive’s responsibilities for the Company, any materials or documents of a former employer which are not generally available to the public or which did not belong to the Executive prior to the Executive’s employment with the Company, unless the Executive has obtained written authorization from the former employer or other owner for their possession and use and provided the Company with a copy thereof.
9. Indemnification by the Executive. The Executive shall indemnify and hold harmless the Company, its directors, officers, stockholders, agents, and employees against all claims, costs, expenses, liabilities, and lost profits, including amounts paid in settlement, incurred by any of them as a result of the material breach by the Executive of any provision of Section 2, 6 and/or 7 of this Agreement.
10. Notices. All notices, requests, consents, approvals, and other communications to, upon, and between the parties shall be in writing and shall be deemed to have been given, delivered, made, and received when: (a) personally delivered; (b) deposited for next day delivery by Federal Express, or other similar overnight courier services; (c) transmitted via telefacsimile or other similar device to the attention of the Board of Directors of the Company with receipt acknowledged; or (d) three (3) days after being sent or mailed by certified mail, postage prepaid and return receipt requested, addressed to the Company at 1220 Old Alpharetta Road, Alpharetta, GA 30005 and to the Executive at the Executive’s last listed address in the payroll records of the Company.
11. Effect. This Agreement shall be binding on and inure to the respective benefit of the Company and its successors and assigns and the Executive and Executive’s personal representatives.
12. Entire Agreement. This Agreement, the RSPA and the Proprietary Information Agreement and any other similar agreement regarding confidentiality, intellectual property rights, non-competition or non-solicitation constitute the entire agreement between the parties with respect to the matters set forth herein and supersede all prior agreements and understandings between the parties with respect to the same, including the Original Agreement.
13. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision.
 
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14. Amendment and Waiver. No provision of this Agreement, including the provisions of this Section, may be amended, modified, deleted, or waived in any manner except by a written agreement executed by the parties.
15. Section 409A Matters. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the Treasury Regulations and other applicable guidance thereunder (“ Section 409A ”). To the extent that there is any ambiguity as to whether this Agreement (or any of its provisions) contravenes one or more requirements of Section 409A, such provision shall be interpreted and applied in a matter that does not result in a Section 409A violation. Without limiting the generality of the above:
(a) For clarity, the severance benefits specified in this Agreement (the “Severance Benefits”) are only payable upon a “separation from service” as defined in Section 409A. The Severance Benefits shall be deemed to be series of separate payments, with each installment being treated as a separate payment. The time and form of payment of any compensation may not be deferred or accelerated to the extent it would result in an impermissible acceleration or deferral under Section 409A.
(b) To the extent this Agreement contains payments which are subject to Section 409A (as opposed to exempt from Section 409A), the Executive’s rights to such payments are not subject to anticipation, alienation, sale, transfer, pledge, encumbrance, attachment or garnishment and, where applicable, may only be transferred by will or the laws of descent and distribution.
(c) To the extent the Severance Benefits are intended to be exempt from Section 409A as a result of an “involuntary separation from service” under Section 409A, if all conditions necessary to establish the Executive’s entitlement to such Severance Benefits have been satisfied, all Severance Benefits shall be paid or provided in full no later than December 31 st  of the second calendar year following the calendar year in which the Executive’s employment terminated unless another time period is applicable.
(d) If the Employee is a “specified employee” (as defined in Section 409A) on the termination date and a delayed payment is required by Section 409A to avoid a prohibited distribution under Section 409A, then no Severance Benefits that constitute “non-qualified deferred compensation” under Section 409A shall be paid until the earlier of (i) the first day of the 7 th  month following the date of the Executive’s “separation from service” as defined in Section 409A, or (ii) the date of the Executive’s death. Upon the expiration of the applicable deferral period, all payments deferred under this clause shall be paid in a lump sum and any remaining severance benefits shall be paid per the schedule specified in this Agreement.
(e) The Company makes no representation that this Agreement will be exempt from or compliant with Section 409A and makes no affirmative undertaking to preclude Section 409A from applying, but does reserve the right to unilaterally amend this Agreement as may be necessary or advisable to permit the Agreement to be in documentary and operational compliance with Section 409A which determination will be made in the sole discretion of the Company.
 
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16. Governing Law. This Agreement will be governed by and construed according to the laws of the Georgia as such laws are applied to agreements entered into and to be performed entirely within Georgia between Georgia residents.
17. Consent to Jurisdiction and Venue. Each of the parties agrees that any suit, action, or proceeding arising out of this Agreement may be instituted against it in the state or federal courts located in Georgia. Each of the parties hereby waives any objection that it may have to the venue of any such suit, action, or proceeding, and each of the parties hereby irrevocably consents to the personal jurisdiction of any such court in any such suit, action, or proceeding.
18. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, and all of which shall be deemed a single agreement.
19. Headings. The headings herein are for convenience only and shall not affect the interpretation of this Agreement.
[The remainder of this page is intentionally left blank.]
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

COMPANY:	
 	
Clearside Biomedical, Inc.	
 	 	
By:	 	/s/ Daniel H. White	

Printed Name:	 	Daniel H. White	

Title:	 	President and CEO	
 	
EXECUTIVE:	
 	
/s/ Glenn Noronha	
Glenn Noronha	
 
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Exhibit 10.17
LICENSE AGREEMENT
by and between
CLEARSIDE BIOMEDICAL, INC.
and
NOVAMEDICA LLC

Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the “Agreement”), effective as of August 29, 2014 (the “ Effective Date ”), is by and between Clearside Biomedical, Inc., a corporation organized and existing under the laws of Delaware and having a principal place of business at 1220 Old Alpharetta Road—Suite 300, Alpharetta, Georgia 30005 (“ Clearside ”) and NovaMedica LLC, a Russian limited liability company and having its principal place of business at 29, 1-st Brestskaya Street, Moscow, 125047, Russia (“ NovaMedica ”).
RECITALS:
WHEREAS, Clearside controls a proprietary tissue targeting microinjection platform for the treatment of diseases of the eye;
WHEREAS, Clearside is developing a proprietary therapeutic product that includes triamcinolone acetonide targeting the treatment of certain ocular condition including macular edema associated with infectious uveitis and with retinal vein occlusions (as further defined below, the “ Covered Product ”);
WHEREAS, NovaMedica desires to develop and commercialize the Covered Product as set forth in this Agreement in the NovaMedica Territory (hereinafter defined); and
WHEREAS, NovaMedica also desires to obtain samples of Clearside devices for use in clinical development and a technology transfer of the Licensed IP (hereinafter defined) from Clearside;
WHEREAS, Clearside and NovaMedica believe that a license for such purpose on the terms and conditions of this Agreement would be desirable.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows:
 
1.	DEFINITIONS	
Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below:
1.1 “Affiliate” means a corporation or non-corporate business entity that, directly or indirectly, controls, is controlled by, or is under common control with the Person specified, for so long as such control continues. An entity will be regarded as in control of another entity if: (a) it owns, directly or indirectly, at least 50% of the voting securities or capital stock of such entity, or has other comparable ownership interest with respect to any entity other than a corporation; or (b) it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or non-corporate business entity, as applicable, whether through the ownership or control of voting securities, by contract or otherwise.
1.2 “Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31;  provided , that the first Calendar Quarter of the Term shall begin on the Effective Date and end on the first to occur of March 31, June 30, September 30 or December 31 thereafter and the last Calendar Quarter of the Term shall end on the last day of the Term and (b) the first Calendar Quarter of a Royalty Term for the Covered Product in a country shall begin on the First Commercial Sale of the Covered Product in such country and end on the first to occur of March 31, June 30, September 30 or December 31 thereafter and the last Calendar Quarter of a Royalty Term shall end on the last day of such Royalty Term.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.3 “Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending on December 31;  provided , that (a) the first Calendar Year of the Term shall begin on the Effective Date and end on the first December 31 thereafter and the last Calendar Year of the Term shall end on the last day of the Term.
1.4 “Change of Control “ means any transaction or series of related transactions which shall result in (i) direct or indirect ownership of more than fifty percent (50%) of the voting stock or assets of a Party or an Affiliate that controls such Party by Persons who are not shareholders of the Party or the controlling Affiliate of such Party prior to such transaction or series related transactions, provided, however that a bona fide financing in which new shares of capital stock are sold shall not constitute a Change of Control, (ii) the merger of a Party with or into a Third Party in a transaction in which the shareholders of the merging Party prior to such transaction do not retain a majority interest in the entity surviving the merger, or (iii) the sale of all or substantially all of the assets of a Party.
1.5 “Clearside Data” means all clinical data that is produced or generated by Clearside or its Related Parties during a Clinical Study for the Covered Product.
1.6 “Clearside Improvements” mean any improvements, ideas, inventions, developments, derivatives, modifications, technologies, discoveries, Know-How and techniques, whether or not patentable, conceived or reduced to practice during the Term of this Agreement that are Controlled by Clearside or Related Parties and Cover or relate to Licensed IP, Sublicensed IP or the Covered Product, including without limitation Clearside Data.
1.7 “Clearside In-License” means (i) the Existing Clearside In-License, and (ii) any other agreement entered into between Clearside and a Third Party after the Effective Date (A) pursuant to which NovaMedica has rights and obligations with respect to, or which otherwise Cover, the Covered Product and is necessary to Develop, Commercialize and/or Manufacture such Covered Product in the Field and (B) with respect to which the Parties have executed a supplemental agreement pursuant to Section 2.4.
1.8 “Clearside Territory” means all countries of the world other than the NovaMedica Territory.
1.9 “Clinical Data” means Clearside Data and/or NovaMedica Data, as the context requires.
1.10 “Clinical Study” means a Phase I Study, Phase II Study (including a Phase II(a) and Phase II(b) Study), Phase III Study or Post-Approval Studies, as applicable.
1.11 “Commercialization” or “Commercialize” means any and all activities directed to marketing, promoting, distributing, importing, exporting, using, offering to sell and/or selling the Covered Product, including the conduct of Post-Approval Studies, and activities directed to obtaining pricing and reimbursement approvals, as applicable.
1.12 “Commercially Reasonable Efforts” means the carrying out of obligations in a diligent and sustained manner using such effort and employing such resources as would normally be exerted or employed by a similarly situated pharmaceutical company for a product of similar market or profit potential or strategic value at a similar stage of its product life.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.13 “Completion” means, with respect to a Clinical Study, the completion of full subject accrual and database lock for such Clinical Study.
1.14 “Confidential Information” means any and all information and data, including without limitation all scientific, pre-clinical, clinical, regulatory, manufacturing, marketing, financial, trade secret and commercial information or data, whether communicated in writing or orally or by any other method, which is provided by one Party to the other Party in connection with this Agreement. Licensed IP and Sublicensed IP are Confidential Information of Clearside.
1.15 “Control”, “Controls” or “Controlled by” means, with respect to any (a) material, Know-How or other information, or (b) intellectual property right, the possession of (whether by ownership or license, other than pursuant to this Agreement), or the ability of a Party or its Affiliates to assign, transfer, grant access to, or a license or sublicense of, such item or right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required hereunder to assign, transfer or grant the other Party such access or license or sublicense.
1.16 “Cover,” “Covering” or “Covers” means that in the absence of a license granted under a Valid Claim, the Development, Manufacture or Commercialization of the Covered Product would or is reasonably likely to infringe such Valid Claim.
1.17 “Covered Product” means any process, service or product covered by a Valid Claim of any Licensed Patent Rights and/or Sublicensed Patent Rights and involving the use of triamcinolone acetonide (TA) as the sole active pharmaceutical ingredient for use in the suprachoroidal space (SCS). For purposes of clarity, Covered Product specifically includes the product under development by Clearside as of the Effective Date consisting of an injection to the SCS of a proprietary formulation of TA administered with a microinjector developed by Clearside, as such product may be modified or improved, it being understood that a product that includes any active pharmaceutical ingredient other than TA is not a “Covered Product”.
1.18 “Development,” “Developing” or “Develop” means the research and development activities related to the generation, characterization, optimization, construction, expression, use and production of the Covered Product, any other research and development activities related to the pre-clinical testing and qualification of the Covered Product for clinical testing, and such other tests, studies and activities as may be required or recommended from time to time by any Regulatory Authority to obtain Regulatory Approval of the Covered Product, including toxicology studies, statistical analysis and report writing, pre-clinical testing, Clinical Studies and regulatory affairs, product approval and registration activities.
1.19 “Existing Clearside In-Licenses” means the Clearside In-License set forth on Schedule A.
1.20 “Field” means all ophthalmic uses in mammals and birds.
1.21 “First Commercial Sale” means, with respect to the Covered Product in a country, the first sale for end use or consumption of such Covered Product in such country after all required Regulatory Approvals have been granted by the Regulatory Authority of such country.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.22 “GAAP” means generally accepted accounting principles in the United States, or internationally, as appropriate, consistently applied.
1.23 “IND” means an Investigational New Drug application, Clinical Trial Application or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority. Without limiting the generality of the foregoing, a Clinical Trial Application and any accompanying Investigational Medicinal Product Dossier filing with the Federal Service on Surveillance in Healthcare and Social Development of the Russian Federation (ROSZDRAVNADZOR) constitutes an IND.
1.24 “Initiate”, “Initiated” or “Initiation” means, with respect to a Clinical Study, the administration of the first dose to the first subject in such study;  provided ,  however , that in the case of a Clinical Study in which the protocol is a combination of a Phase I Study and a Phase II Study, the Phase II Study portion of such Clinical Study shall be deemed Initiated only upon commencement of the Phase II Study portion of such Clinical Study.
1.25 “In-Licenses” means, collectively, the Clearside In-Licenses and the NovaMedica In-Licenses.
1.26 “Know-How” means all biological materials and other tangible materials, inventions, practices, methods, protocols, formulas, knowledge, know-how, trade secrets, processes, assays, skills, experience, technology, prototypes, techniques and results of experimentation and testing, including without limitation pharmacological, toxicological and pre-clinical and clinical test data and stability, analytical and quality control data, patentable or otherwise.
1.27 “Knowledge,” with respect to a Party, means the actual knowledge of any of the executive officers of such Party.
1.28 “Licensed Know-How” means all Know-How that is Controlled by Clearside or its Affiliates and is useful or necessary in connection with the Development, Manufacture, and Commercialization of Covered Products.
1.29 “Licensed IP” means Licensed Patent Rights, Licensed Know-How, Licensed Marks, and Clearside Improvements.
1.30 “Licensed Marks” mean the trademarks listed in Schedule B and any foreign counterparts thereof anywhere in the NovaMedica Territory.
1.31 “Licensed Patent Rights” means (a) the Patent Rights set forth on Schedule C and any foreign counterparts thereof anywhere in the NovaMedica Territory, and (b) all new Patent Rights Controlled by Clearside or Related Parties that are filed or issued in the NovaMedica Territory or globally with opportunity to be filed in the NovaMedica Territory with claims Covering the Covered Products.
1.32 “Manufacturing” or “Manufacture” means, as applicable, all activities associated with the production, manufacture, processing, filling, finishing, packaging, labeling, shipping, and storage of the Covered Product, including process and formulation development, process validation, stability testing, manufacturing scale-up, pre-clinical, clinical and commercial manufacture and analytical development, product characterization, quality assurance and quality control development, testing and release.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.33 “Necessary Third Party IP” means, with respect to any country, on a country-by-country basis, Know-How or Patent Rights in such country owned or controlled by a Third Party that Cover the Development, Manufacturing and/or Commercialization of the Covered Product in or for such country.
1.34 “Net Sales” mean the gross selling price paid by a purchaser of the Covered Product to NovaMedica, an Affiliate or Sublicensee of NovaMedica, or any other party authorized by NovaMedica to sell the Covered Product less the following discounts:
 
 	(a)	customary trade, quantity and cash discounts, service allowances (including without limitation wholesalers’ fees for services and stocking fees) and retroactive price adjustments actually allowed and taken, including rebates granted to vendors, managed health care or governmental organizations and independent brokers or agents’ commissions, if any, as accrued and adjusted for actual amounts taken, allowed or paid;	
 
 	(b)	credits actually given for rejected or returned Covered Product;	
 
 	(c)	freight, postage, shipping, transportation and insurance costs, third-party handling charges and other costs directly related to bringing Covered Product to the purchaser or end user, in each case in accordance with industry norms; and	
 
 	(d)	sales, excise taxes and customs duties included in the invoiced amount.	
Notwithstanding the foregoing in this Section, amounts received by NovaMedica, its Affiliates or Sublicensees of NovaMedica or its Affiliates for the sale of the Covered Product among NovaMedica, its Affiliates and Sublicensees for resale shall not be included in the computation of Net Sales hereunder.
1.35 “NovaMedica Data” means all clinical data that is produced or generated by NovaMedica or its Related Parties during a Clinical Study for the Covered Product.
1.36 “NovaMedica Improvements” mean any improvements, ideas, inventions, developments, derivatives, modifications, technologies, discoveries, Know-How and techniques, whether or not patentable, conceived or reduced to practice by NovaMedica or Related Parties during the Term of this Agreement that are Controlled by NovaMedica and Cover or relate to Licensed IP, Sublicensed IP or the Covered Product.
1.37 “NovaMedica In-License” means an agreement between NovaMedica and a Third Party pursuant to which NovaMedica has rights and obligations with respect to, or which otherwise Cover, the Covered Product and is necessary to Develop, Commercialize and/or Manufacture such Covered Product in the Field.
1.38 “NovaMedica Territory” means the Russian Federation together with Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Ukraine, Uzbekistan, Turkmenistan and Georgia.
1.39 “Party” means NovaMedica or Clearside; “Parties” means NovaMedica and Clearside.
1.40 “Patent Rights” means all patents (including all reissues, extensions, substitutions, confirmations, re-registrations, re-examinations, invalidations, supplementary protection certificates and patents of addition) and patent applications (including all provisional applications, requests for continuation, continuations, continuations-in-part and divisions) and all foreign equivalents of the foregoing.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.41 “Person” means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.
1.42 “Phase I Study” means a clinical study of the Covered Product in human volunteers or patients the purpose of which is preliminary determination of pharmacokinetics, safety and tolerability of a dosing regime and for which there are no primary endpoints (as understood by the applicable Regulatory Authorities) in the protocol relating to efficacy.
1.43 “Phase II Study” means a Phase II(a) Study and/or Phase II(b) Study.
1.44 “Phase II (a) Study” means a pilot clinical study to evaluate efficacy and safety of the Covered Product in patients with the diseases or condition to be treated and to identify possible adverse effects and safety risks dose exploration, dose response, duration of effect, kinetics, dynamic relationship or preliminary efficacy and safety study of the Covered Product in a limited patient population
1.45 “Phase II (b) Study” means a subsequent clinical study to a Phase II (a) specifically designed to include a comparison of the Covered Product to an accepted standard of care in a larger number of patients which represents a more rigorous demonstration of the efficacy and safety of the Covered Product in the target patient population to define the optimal regimen to evaluate in a pivotal Phase III Study.
1.46 “Phase III Study” means a controlled clinical study of the Covered Product that is prospectively designed to demonstrate with statistical significance the efficacy and safety of the Covered Product for use in a particular indication and that is sufficient to obtain Regulatory Approval to market the Covered Product in such indication.
1.47 “Post-Approval Study” means a clinical study of the Covered Product Initiated in a country after receipt of Regulatory Approval for such Covered Product in such country.
1.48 “Regulatory Approval” means any and all approvals (including pricing and reimbursement approvals), licenses, registrations or authorizations of any Regulatory Authority, necessary for the Development, Commercialization and Manufacture of the Covered Product.
1.49 “Regulatory Authority” means any applicable government regulatory authority involved in granting approvals for the Development, Manufacturing, Commercialization, reimbursement and/or pricing of the Covered Product.
1.50 “Related Party” means a Party’s Affiliates, Clearside’s licensees (other than NovaMedica) and NovaMedica’s Sublicensees.
1.51 “Sublicense Agreement” means a written agreement between NovaMedica (or its Affiliate) and a Third Party in which NovaMedica grants a sublicense to such Third Party of the rights granted by Clearside to NovaMedica pursuant to this Agreement.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.52 “Sublicensee” means a Third Party to whom NovaMedica grants a sublicense under the rights granted to NovaMedica by Clearside hereunder.
1.53 “Sublicensed IP” means Sublicensed Patent Rights and Sublicensed Know-How.
1.54 “Sublicensed Know-How” means the Know-How Controlled by Clearside under the Emory/GTRC License Agreement.
1.55 “Sublicensed Patent Rights” means the patents and patent applications licensed to Clearside pursuant to the License Agreement between Emory University, The Georgia Tech Research Foundation and Clearside dated as of 4 th  day of July, 2012, as amended April 2, 2014 (the “ Emory/GTRC License Agreement ”), and all divisional, continuations, continuations-in-part, and foreign counterparts thereof, together with all registrations, reissues, re-examinations, supplemental protection certificates, or extensions thereof, and any foreign counterparts thereof anywhere in the NovaMedica Territory. For avoidance of doubt, the list of above mentioned patents and patent applications as of the Effective Date is set forth on  Schedule D  hereto.
1.56 “Territory” means (a) with respect to Clearside, the Clearside Territory and (b) with respect to NovaMedica, the NovaMedica Territory.
1.57 “Third Party” means an entity other than a Party and its Affiliates.
1.58 “United States” means the United States of America and its territories, possessions and commonwealths.
1.59 “Valid Claim” means a claim of: (a) an issued and unexpired Licensed Patent Right or Sublicensed Patent Right, which claim has not been revoked or held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which is not appealable or has not been appealed within the time allowed for appeal, and which has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise, or (b) a patent application for a patent included within the Licensed Patent Rights or Sublicensed Patent Rights which has been pending for less than twelve (12) years and that has not been cancelled, withdrawn or abandoned or finally rejected by an administrative agency action from which no appeal can be taken.
 
2.	LICENSES	
2.1 License Grants.
2.1.1 Licensed IP. Subject to the terms and conditions of this Agreement, Clearside hereby grants NovaMedica an exclusive (even as to Clearside), royalty-bearing license under and to the Licensed IP to Develop and Commercialize the Covered Product in the Field in the NovaMedica Territory.
2.1.2 Sublicensed IP. Subject to the terms and conditions of this Agreement and the Emory/GTRC License Agreement, Clearside hereby grants NovaMedica an exclusive (even as to Clearside), royalty-bearing sublicense under and to Sublicensed IP to Develop and Commercialize the Covered Product in the Field in the NovaMedica Territory.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

2.1.3 No Manufacturing Rights. Notwithstanding anything in Sections 2.1.1 and 2.1.2 to the contrary, the rights granted to NovaMedica do not include the right to Manufacture or have Manufactured the Covered Product except as set forth in Section 4.3 below. For clarity Clearside retains the full right to Manufacture and have Manufactured the Covered Product (and components thereof) in the NovaMedica Territory, import (and have imported) Covered Product (and components thereof) from the NovaMedica Territory, and export (and have exported) Covered Product (and components thereof) to the Clearside Territory, for Development, Commercialization and/or Manufacture of the Covered Product in the Clearside Territory.
2.1.4 Clearside License. In the event NovaMedica or its Related Parties conceives or reduces to practice a NovaMedica Improvement, subject to reimbursement as provided for in Section 4.2.2 with respect to certain data related to AMD Product ,  NovaMedica shall, and does hereby grant to Clearside (a) an exclusive, royalty-free, fully paid license under and to any and all such NovaMedica Improvements to Develop and/or Commercialize products in the Clearside Territory; and (b) a non-exclusive, worldwide, royalty-free, fully paid license under any NovaMedica Improvements to Manufacture products anywhere in the world. Such licenses include the right to grant sublicenses. NovaMedica shall promptly notify Clearside in writing after conceiving or reducing to practice a NovaMedica Improvement.
2.2 Affiliates; Sublicenses.
2.2.1 Affiliates. The license grants in Section 2.1 shall apply to an entity that is an Affiliate only for so long as such entity remains an Affiliate of such Party and complies in all respects with the obligations of such Party under this Agreement. Each Party hereby guarantees the full payment and performance of its Affiliates under this Agreement.
2.2.2 Sublicense of NovaMedica’s Rights. Subject to the terms of Section 2.2.3, NovaMedica and its Affiliates are entitled to grant sublicenses of all or any portion of their rights under this Agreement;  provided ,  however , that NovaMedica may not grant a sublicense of Commercialization rights under this Agreement to more than one (1) Third Party in each country in the NovaMedica Territory unless it has received the prior written consent of Clearside which shall not be unreasonably withheld.
2.2.3 Sublicensing Terms. Each sublicense granted by NovaMedica pursuant to this Section 2.2 shall be subject and subordinate to the terms and conditions of this Agreement and shall contain terms and conditions consistent with those in this Agreement. NovaMedica shall promptly provide Clearside with a copy of the executed Sublicense Agreement with any Sublicensee which shall contain the identity of the Sublicensee and shall provide sufficient information to show that the following provisions have been imposed on the Sublicensee: (a) a requirement that such Sublicensee submit applicable sales or other reports consistent with those required under this Agreement; (b) the audit requirement set forth in Section 3.5; (c) a requirement that such Sublicensee comply with the confidentiality and non-use provisions of Article 5 with respect to both Parties’ Confidential Information; and (d) any other provisions required to be imposed on a Sublicensee under any Clearside In-License. In the event NovaMedica becomes aware of a material breach of any Sublicense Agreement by a Sublicensee, that has not been cured pursuant to the terms of such Sublicense Agreement, NovaMedica shall promptly notify Clearside of the particulars of same and shall enforce the terms of such sublicense. If NovaMedica does not cause the Sublicensee to comply with the terms of the Sublicense Agreement within ninety (90) days of Clearside’s request, NovaMedica shall, upon Clearside’s written direction, terminate the Sublicense Agreement.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

2.2.4 Liability. NovaMedica shall at all times be responsible for the performance of its Sublicensees under this Agreement.
2.3 In-Licenses. All licenses and other rights granted to NovaMedica under this Agreement are subject to the rights and obligations of Clearside under the Clearside In-License. During the Term, Clearside shall comply with and maintain the Existing Clearside In-License in full force and effect with respect to the rights granted to NovaMedica under this Agreement. Clearside may not alter the terms of the Existing Clearside In-License in a manner that would have an adverse effect on NovaMedica’s rights hereunder in the NovaMedica Territory without the prior written consent of NovaMedica, such consent not to be unreasonably withheld or delayed. NovaMedica shall comply with all applicable terms and conditions of the Clearside In-Licenses, and shall perform and take such actions as may be required to allow Clearside to comply with its obligations thereunder, including but not limited to, obligations relating to sublicensing, patent matters, confidentiality, reporting, audit rights, indemnification and diligence. Without limiting the provisions of Section 2.4, Clearside agrees to provide NovaMedica with copies of any Clearside In-Licenses that are relevant to the rights granted to NovaMedica under this Agreement, and will promptly provide to NovaMedica any notices received by Clearside and keep NovaMedica fully apprised of circumstances arising under the Clearside In-Licenses, in each case that may affect the rights or obligations of NovaMedica as a sublicensee thereunder. Confidential Information of Clearside or the counterparty may be redacted from such copies, except to the extent that such information is required in order to enable NovaMedica to comply with its obligations under this Section 2.3 with respect to such Clearside In-License.
2.4 Licenses of Necessary Third Party IP. During the Term, NovaMedica shall be responsible for obtaining licenses of any Necessary Third Party IP for the NovaMedica Territory that it does not Control, and shall notify Clearside in writing and provide Clearside with a copy of any license of Necessary Third Party IP entered into by NovaMedica after the Effective Date. If, during the Term, Clearside obtains a license to Necessary Third Party IP for the NovaMedica Territory that is not already Controlled by NovaMedica or Clearside, then Clearside shall notify NovaMedica in writing and include in such notification a summary of such Necessary Third Party IP, the commercial and sublicensing terms of the license and any other relevant information together with a copy of the fully executed license. NovaMedica will have sixty (60) days thereafter to notify Clearside of its desire to obtain a sublicense to such Necessary Third Party IP. Upon receipt of such written notice from NovaMedica, Clearside shall grant to NovaMedica a sublicense of such Necessary Third Party IP, which shall include terms that pass through Clearside’s costs of granting such sublicense as well as any terms that Clearside is required to impose on its Sublicensees pursuant to the relevant in-license, but shall include no incremental compensation to Clearside. Upon execution of such supplemental agreement, Clearside’s license of such Necessary Third Party IP will be deemed a Clearside In-License,  Schedule A  will be updated accordingly. The Parties agree that this Section 2.4 shall not apply to the Existing Clearside In-License.
2.5 Rights to Regulatory Materials. NovaMedica shall provide Clearside in writing letters of reference, granting Clearside (and its Affiliates and other licensees) the right of reference for all purposes relating to development or commercialization of Covered Products outside the NovaMedica Territory, with respect to all filings with Regulatory Authorities made by or on behalf of NovaMedica or its Affiliate in the NovaMedica Territory relating to Covered Product, and to all Regulatory Approvals. Such letters of reference shall expressly permit Clearside to transfer such rights to its Affiliates and licensees and allow such entities the right of reference to all such filings and Regulatory Approvals for anywhere outside the NovaMedica Territory, and such rights of reference shall expressly be binding on any assignee or transferee of NovaMedica’ s rights to such filings and Regulatory Approvals under this Agreement. If any Regulatory Authority outside the NovaMedica Territory, requires access to certain portions of any such filings, registrations and approvals related
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

to Covered Products for legal or regulatory purposes in connection with Clearside’s or its Affiliate’s or licensee’s development and/or commercialization efforts, including without limitation, for filing patent-related submissions, then NovaMedica shall cooperate with such Regulatory Authority and make such portions available to the Regulatory Authority and, if legally required for Clearside to submit or pursue an application for Regulatory Approval, to Clearside (or its Affiliate or sublicensee) solely for such purpose.
2.6 Technology Transfer. Clearside shall transfer the Licensed IP and Sublicensed IP in existence as of the Effective Date (together with all physical and electronic embodiments of the foregoing) to NovaMedica as soon as practicable after the Effective Date. NovaMedica shall provide assistance to Clearside and make its facilities and personnel available to Clearside as requested by Clearside. NovaMedica shall reimburse Clearside for the reasonable out of pocket costs it incurs in transferring such technology, which expenses shall be estimated in advance and shall be subject to NovaMedica’s prior written consent, which shall not be unreasonably withheld.
2.7 Preferred Partner/Right of First Negotiation. For so long as NovaMedica is actively Developing or Commercializing Covered Product in the NovaMedica Territory, NovaMedica will be Clearside’s preferred commercialization partner in the NovaMedica Territory, such that Clearside shall afford NovaMedica the opportunity to acquire exclusive Commercialization rights in the NovaMedica Territory to Clearside’s rights with respect to certain new products or Development candidates in accordance with this Section 2.7. Clearside will promptly notify NovaMedica in writing (“ Clearside Notice ”) prior to entering into bona fide negotiations with a Third Party for Development and Commercialization rights in the NovaMedica Territory for a product Covered by the Licensed Patent Rights and/or Sublicensed Patent Rights (the “ New Product ”). Such Clearside Notice shall include material information relating to such New Product that NovaMedica may reasonably need in order for NovaMedica to evaluate the New Product. NovaMedica shall have sixty (60) days after receipt of the Clearside Notice to notify Clearside in writing of its interest in obtaining a royalty-bearing license to such New Product in the Field in the NovaMedica Territory. If NovaMedica notifies Clearside in writing within such sixty (60) day period that it is interested in such New Product in the Field in the NovaMedica Territory, then the Parties shall promptly commence good faith negotiations for a period of up to three (3) months after Clearside’s receipt of such notice in an effort to reach a mutually acceptable definitive agreement (or amendment to this Agreement) for such New Product (the “ New Product Negotiation Period ”). If (x) NovaMedica does not notify Clearside in writing within such sixty (60) day period that it is interested in such New Product, or (y) despite each Party’s good faith efforts, Clearside and NovaMedica are not able to reach agreement on and execute a definitive agreement within such three (3) month period, then Clearside may execute an agreement with any Third Party for Development, Manufacture and Commercialization rights to, or Develop, Manufacture and Commercialize on its own, such New Product in the Field in the NovaMedica Territory provided that any such agreement with a Third Party shall not be on more favorable terms to the Third Party that any final offer proposed by NovaMedica during the Negotiation Period (and NovaMedica reinstates such offer). The Parties acknowledge and agree that this Section 2.7 shall not apply to AMD Product, it being understood that Section 4.2 shall govern the parties’ rights and obligations with respect to AMD Product. NovaMedica acknowledges that any New Product may include an active pharmaceutical ingredient, formulation or other proprietary material Controlled by a Third Party in which case any obligation of Clearside to make available to NovaMedica information or rights related to such New Product shall be subject to the applicable rights of such Third Party. In such event Clearside shall use Commercially Reasonable Efforts to obtain license and any consents or approvals necessary or required to sublicense such Third Party rights to NovaMedica for use in the Field in the Territory. If Clearside obtains such license then Parties shall proceed in accordance with section 2.4. If, due to any abovementioned Third Party rights, Clearside is unable to provide NovaMedica with exclusive Commercialization rights in the NovaMedica Territory to one or more specified New Products, Clearside shall promptly notify NovaMedica and shall have no further obligation under this Section 2.7 with respect to the applicable New Product(s) Clearside (or its successor in interest) may elect to terminate this Section 2.7 effective upon or at any time after a Change of Control of Clearside.
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

2.8 No Other Rights. Except as otherwise expressly provided in this Agreement, under no circumstances shall a Party hereto, as a result of this Agreement, obtain any ownership interest or other right in any Know-How or Patent Rights of the other Party, including items owned, controlled or developed by the other Party, or provided by the other Party to the receiving Party at any time pursuant to this Agreement.
 
3.	CERTAIN FINANCIAL TERMS	
3.1 Upfront Payment. Within thirty (30) days of the Effective Date, NovaMedica shall pay to Clearside Two Hundred Thousand United States Dollars (US$200,000) by wire transfer to an account designated by Clearside. The Parties agree that such payment constitutes reimbursement for certain expenses incurred prior to the Effective Date as well as a license fee and sublicense fee, as set forth in greater detail in  Schedule E.
3.2 Milestone Payments. Within thirty (30) days of NovaMedica or its Related Party achieving a milestone event listed below with respect to the Covered Product, NovaMedica shall notify Clearside in writing thereof and pay the below-specified non-creditable and non-refundable milestone payments to Clearside.

Milestone Event	  	Payment	
 	 	
Earlier of (i) First Commercial Sale of the Covered Product in the NovaMedica Territory, and (ii) Completion* of a Clinical Study in the NovaMedica Territory for a New Product or Joint Product for the treatment of AMD.	  	[***]	
 	 	
Upon the first occurrence of [***] of Net Sales in the NovaMedica Territory during a Calendar Year	  	[***]	
 	 	
Upon the first occurrence of [***] of Net Sales in the NovaMedica Territory during a Calendar Year	  	[***]	
For the avoidance of doubt, both Net Sales Milestone Payment shall become due and payable if both Milestone Events occur in the same Calendar Year.
 
*	For purposes of this Milestone Event, “Completion” means that such Clinical Study has been Completed and Parties have elected to continue Development of the New Product or Joint Product for the treatment of AMD.	
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

3.3 Royalties.
3.3.1 Royalties Payable on the Covered Product. Subject to the terms and conditions of this Agreement, NovaMedica shall pay to Clearside on a quarterly basis any amounts payable by Clearside to Emory and/or GTRC pursuant to the Emory/GTRC License Agreement as a result of Net Sales of Covered Product by NovaMedica or its Related Parties ( “NovaMedica Royalty Payments” ); provided, however, that in no event shall the NovaMedica Royalty Payments attributable to any Calendar Quarter exceed [***] of Net Sales by NovaMedica or its Related Parties during such Calendar Quarter.
3.3.2 Necessary Third Party IP. Any royalties and any fees, milestones or other payments under all NovaMedica In-Licenses of Necessary Third Party IP shall be borne exclusively by NovaMedica. Except as set forth in Section 3.3.1, any royalties and any fees, milestones or other payments under the Existing Clearside In-License shall be borne exclusively by Clearside. Any royalties and any fees, milestones or other payments under all Clearside In-Licenses of Necessary Third Party IP other than the Existing Clearside In-License shall be borne by NovaMedica.
3.4 Reports; Payment of NovaMedica Royalty Payments. During the Term and after First Commercial Sale in the Territory, NovaMedica shall furnish to Clearside a written report within 30 days after the end of each Calendar Quarter showing the quantity of Covered Product sold in each country, the gross sales of Covered Product in each country, the itemized deductions for Covered Product for each country included in the calculation of Net Sales, and the Net Sales in each country of the Covered Product during the reporting period. Clearside shall, based on the information in such report, determine the NovaMedica Royalty Payment attributable to such Calendar Quarter. Clearside shall invoice NovaMedica for the NovaMedica Royalty Payment and NovaMedica shall make such NovaMedica Royalty Payment within ten (10) days of receipt of such invoice. In addition, NovaMedica shall prepare and deliver to Clearside any additional reports as required under the Clearside In-Licenses, in each case within a time period sufficiently in advance to enable Clearside to comply with its obligations under such Clearside In-Licenses. NovaMedica and its Related Parties shall keep complete and accurate records in sufficient detail to enable the royalties and other payments payable hereunder and to Third Parties under the Clearside In-Licenses to be determined.
3.5 Audits.
3.5.1 Upon the written request of Clearside delivered at least 30 days in advance and not more than once in each Calendar Year, NovaMedica and its Related Parties shall permit an independent certified public accounting firm of internationally-recognized standing selected by Clearside and reasonably acceptable to NovaMedica, at Clearside’s expense except as set forth below, to have access during normal business hours to such of the records of NovaMedica and its Related Parties as may be reasonably necessary to verify the accuracy of the royalty and other reports hereunder for any year ending not more than five (5) years prior to the date of such request for the sole purpose of verifying the basis and accuracy of payments made under this Agreement.
3.5.2 If such accounting firm identifies a discrepancy made during such period, the appropriate Party shall pay the other Party the amount of the discrepancy, together with interest calculated at the annual rate of 10% above LIBOR for the time period as determined by the European Central Bank (or such higher rate as may be required pursuant to any applicable In-License) or the maximum amount permitted by applicable law, from the time of the over-payment or under-payment, within ten (10) business days of the date Clearside delivers to NovaMedica such accounting firm’s written report so concluding, or as otherwise agreed by the Parties in writing. Such written report shall be binding upon the Parties. The fees charged by such accounting firm shall be paid by Clearside, unless such discrepancy represents an underpayment or excess charge by NovaMedica of at least the lesser of [***] or [***] of the total amounts due hereunder in the audited period, in which case such fees shall be paid by NovaMedica.
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

3.5.3 NovaMedica shall comply with all applicable audit requirements in the Clearside In-Licenses and shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the Sublicensee to make reports to Clearside, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by Clearside’s independent accountant to the same extent required of NovaMedica under this Agreement.
3.6 Payment Exchange Rate. All payments to be made under this Agreement shall be made in United States dollars and shall be paid by bank wire transfer in immediately available funds to such bank account in the United States as may be designated in writing by Clearside from time to time. In the case of Net Sales made or expenses incurred by NovaMedica and its Related Parties, the rate of exchange to be used in computing the amount of currency equivalent in United States dollars due shall be made at the rate of exchange utilized by such party in its worldwide accounting system and calculated in accordance with GAAP (or in accordance with NovaMedica’s accounting methods applied in the NovaMedica Territory consistent with applicable law), prevailing on the third to the last business day of the month preceding the month in which such sales or expenses are recorded, as the case may be, but in any case consistent with the requirements of the Clearside In-Licenses.
3.7 Registration. NovaMedica will promptly make all filings with and submissions to all governmental or regulatory authorities and obtain and maintain all consents, permits, registrations and authorizations that are necessary or required in order for NovaMedica to make timely payments under this Agreement, including, without limitation, any foreign exchange approvals or requirements. NovaMedica will promptly provide Clearside with evidence thereof upon Clearside’s written request.
3.8 Income Tax Withholding. If laws, rules or regulations require withholding of income taxes or other taxes imposed upon payments set forth in this Article 3, NovaMedica shall make such withholding payments as required and subtract such withholding payments from the payments set forth in this Article 3. NovaMedica shall submit appropriate proof of payment of the withholding taxes to Clearside within a reasonable period of time. At the request of Clearside, NovaMedica shall, at its cost, give Clearside such reasonable assistance, which shall include the provision of appropriate certificates of such deductions made together with other supporting documentation as may be required by the relevant tax authority, to enable Clearside to claim exemption from such withholding or other tax imposed or obtain a repayment, reduction or credit and shall upon request provide such additional documentation from time to time as is reasonably required to confirm the payment of tax.
3.9 Late Payments. Any payments required to be paid hereunder that are not paid when due shall accrue interest calculated at the annual rate of 10% above LIBOR for the time period as determined by the European Central Bank (or such higher rate as may be required pursuant to any applicable In-License) or the maximum amount permitted by applicable law.
 
4.	DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION RESPONSIBILITIES	
4.1 Diligence. Clearside shall use Commercially Reasonable Efforts to Develop Covered Product for Regulatory Approval in one or more countries in the Clearside Territory. NovaMedica will use Commercially Reasonable Efforts to Develop the Covered Product for Regulatory Approval and
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Commercialization in the NovaMedica Territory. In addition, NovaMedica shall use Commercially Reasonable Efforts to Commercialize the Covered Product in the Field in the NovaMedica Territory. At a minimum, NovaMedica shall use sustained and diligent efforts to Develop and Commercialize Covered Product for use in the Russian Federation. If NovaMedica determines to discontinue such activity in the Russian Federation, NovaMedica shall promptly notify Clearside and Clearside shall have the right to terminate this Agreement in which case the provisions of Section 8.2.3 shall apply.
4.2 Development Activities; AMD Product.
4.2.1 Clearside shall be responsible, at its expense, for all Development activities that are necessary for the Regulatory Approval of the Covered Product in the Clearside Territory. NovaMedica shall be responsible, at its expense, for all Development activities that are necessary for Regulatory Approval of the Covered Product in the NovaMedica Territory. NovaMedica shall be responsible at its expense, for preparation and submission of all regulatory filings for Covered Products within the NovaMedica Territory, in consultation with the Company. NovaMedica shall have the right to own all regulatory filings in the NovaMedica Territory. NovaMedica will be identified as marketing authorization holder in the NovaMedica Territory. Neither Party may conduct Clinical Studies or other Development activities with respect to the Covered Product in the Field in the Territory of the other Party without the other Party’s prior written consent, which consent may be granted or withheld in the sole discretion of the other Party.
4.2.2 Upon reasonable request by NovaMedica, Clearside shall enter into a Clinical Development and Collaboration Agreement under which the Parties would conduct Development in the NovaMedica Territory of a product directed to the treatment of AMD by way of injection to the suprachoroidal space of a pharmaceutical agent and formulation to be determined by mutual agreement (such product is referred to as  “AMD Product ” and the associated activities are referred to as “ AMD Product Development ”). The Clinical Development and Collaboration Agreement will detail the Parties’ roles and responsibilities with respect to such Development, including the following provisions: (a) Clearside shall supply all reasonable (required) quantities of devices for the AMD Product Development in the NovaMedica Territory (“ Clinical Study Material ”) at Clearside’s cost and expense as well as for other clinical trials mandatory for regulatory approvals in the NovaMedica Territory in reasonable (required) quantities at Clearside’s cost and expense; (b) NovaMedica shall be responsible, at its expense, for the design and conduct of the AMD Product Development activities; and (c) NovaMedica shall share with Clearside, on a quarterly basis, data generated in the course of AMD Product Development. Clearside shall have a right of reference to data generated in any such study as provided for in Section 2.5 if Clearside reimburses NovaMedica for [***]% of NovaMedica’ s out of pocket costs incurred in any such study. If Clearside elects to make such reimbursement and acquire the rights to utilize the associated data in the Clearside Territory, the cost of Clinical Study Material supplied by Clearside for such study shall be credited against the amounts payable by Clearside pursuant to the immediately preceding sentence. If Clearside does not provide such reimbursement, the resulting data shall constitute Confidential Information of NovaMedica.
4.2.3 Upon Completion of a Phase I Study for AMD Product, the Parties shall promptly commence good faith negotiations for a period of up to three (3) months in an effort to reach a mutually acceptable definitive agreement (or amendment to this Agreement) granting NovaMedica exclusive Development and Commercialization rights for such AMD Product in the Field in the NovaMedica Territory. The financial and other terms of such license shall be reasonable and customary and shall take into account any third party intellectual property rights associated with any active pharmaceutical ingredient, pharmaceutical formulation or other aspects of the AMD Product. If (x) NovaMedica does not notify Clearside in writing that it desires to
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

secure exclusive rights in the NovaMedica Territory to Clearside’s intellectual property related to such AMD Product, or (y) despite each Party’s good faith efforts, Clearside and NovaMedica are not able to reach agreement on and execute a definitive agreement within such three (3) month period, then NovaMedica may use and dispose of the information generated in the AMD Product Development activity as it deems appropriate, provided that Clearside retains all rights to the Licensed IP and Sublicensed IP.
4.3 Manufacture of Covered Product. NovaMedica shall have the right to purchase from Clearside (or Clearside’s supplier) supplies of the Covered Product prefilled with triamcinolone for Development or Commercialization within the NovaMedica Territory. Upon request of NovaMedica or Clearside, NovaMedica and Clearside shall negotiate in good faith (or Clearside shall facilitate its supplier to enter into) a supply agreement governing the supply of the Covered Products for Development or Commercialization within the NovaMedica Territory (the “ Supply Agreement ”). The Supply Agreement will include usual and customary terms such as reasonable lead times, batch size orders, and payment in United States Dollars. Under the Supply Agreement NovaMedica shall pay the Company a price for the Covered Product equal to the greater of $[***] or [***] ( “Manufacturing Costs” ). NovaMedica shall have the right to audit the Manufacturing Costs. During any period in which Clearside and its supplier are unable or unwilling to supply Covered Product, the licenses granted pursuant to Section 2.1 shall include the right to Manufacture Covered Product or have Covered Product Manufactured for Development and Commercialization in the Field solely in the NovaMedica Territory Clearside shall be responsible for paying royalties or other amounts due under the Emory/GTRC License Agreement upon the sale of materials to NovaMedica under the Supply Agreement. Clearside shall not appoint another distributor of Covered Products in the NovaMedica Territory.
4.4 Commercialization Plan. Commencing with the Initiation of the Clinical Study of the Covered Product in the NovaMedica Territory, NovaMedica shall prepare and deliver to Clearside, (a) a Commercialization strategy plan for the following three (3) year period that would include, among other things, a description of the planned Studies, if applicable, which plan would be updated at least annually, and (b) by no later than each November 1, a written plan that describes in detail the Commercialization activities to be undertaken with respect to the Covered Product in the NovaMedica Territory in the next Calendar Year and the dates by which such activities are targeted to be accomplished (each, a “ Commercialization Plan ”).
4.5 Reporting Obligations. NovaMedica shall prepare and deliver to Clearside, by no later than each March 30 (for the period ending December 31 of the prior Calendar Year), written reports summarizing NovaMedica’s Commercialization activities for the Covered Product performed to date (or updating such report for activities performed since the last such report submitted hereunder, as applicable). In addition, NovaMedica shall provide Clearside with written notice of (a) all filings and submissions for Regulatory Approval regarding the Covered Product in the NovaMedica Territory in a timely manner; (b) all Regulatory Approvals obtained or denied, the filing of any IND for the Covered Product, and the First Commercial Sale of the Covered Product in each country of the NovaMedica Territory, within fifteen (15) business days of such event; and (c) the Initiation of each Clinical Study of the Covered Product by or on behalf of NovaMedica within ten (10) business days of such event;  provided ,  however , that in all circumstances, NovaMedica shall if possible inform Clearside of such event prior to public disclosure of such event by NovaMedica. Moreover, NovaMedica shall use Commercially Reasonable Efforts to prepare and deliver to Clearside any additional reports reasonably requested by Clearside to enable it to meet its obligations under the Clearside In-Licenses, in each case sufficiently in advance to enable Clearside to comply with its obligations under the Clearside In-Licenses. NovaMedica shall also provide such other information to the Clearside as Clearside may reasonably request and shall keep Clearside reasonably informed of NovaMedica’s Commercialization activities with respect to the Covered Product.
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

4.6 Sales and Distribution. Each Party and its Related Parties shall be responsible for booking sales and shall store and distribute the Covered Products in its own Territory. If a Party receives any orders for the Covered Product in the other Party’s Territory or if a Party has reason to believe that the Covered Product is intended to be administered in the Territory to a Person whose primary domicile is outside the that Party’s Territory, it shall refer such orders to the other Party. Moreover, each Party and its Related Parties shall be solely responsible for handling all returns of the Covered Product, as well as all aspects of the Covered Product order processing, invoicing and collection, distribution, inventory and receivables, in its own Territory.
4.7 Advertising and Promotional Materials. NovaMedica will be responsible for the creation, preparation, production, reproduction and filing with the applicable Regulatory Authorities, of relevant written sales, promotion and advertising materials relating to the Covered Products (“ Promotional Materials ”) for use in the NovaMedica Territory. All such Promotional Materials will be compliant with all applicable laws, rules and regulations, and consistent with the Commercialization Plan for the NovaMedica Territory.
4.8 Export Monitoring. Each Party and its Related Parties will use Commercially Reasonable Efforts to monitor and prevent (i) exports of the Covered Product from its own Territory to the other Party’s Territory, and (ii) sales of Covered Product in its Territory from being administered in the Territory to a Person whose primary domicile is outside the that Party’s Territory, in each case using methods commonly used in the industry for such purpose, and shall promptly inform the other Party of any such activities, and the actions taken to prevent such activities. Each Party agrees to take any actions reasonably requested in writing by the other Party that are consistent with applicable law and regulation to prevent such activities.
4.9 Records. NovaMedica will maintain scientific records, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which will fully and properly reflect all work done and results achieved in the performance of the Development activities with respect to the Covered Products.
4.10 Regulatory Matters.
4.10.1 Regulatory Filings and Interactions. As between the Parties, each Party will own any regulatory documents and applications submitted to the applicable Regulatory Authorities in its own Territory with respect to the Covered Product, and each Party will, with respect to its own Territory and the Covered Product, (i) oversee, monitor and coordinate all regulatory actions, communications and filings with, and submissions to, each Regulatory Authority, (ii) be responsible for interfacing, corresponding and meeting with each Regulatory Authority, (iii) be responsible for maintaining all regulatory filings, and (iv) apprise the other Party of all material communications from Regulatory Authorities that may affect the Covered Products in the other Party’s Territory as soon as reasonably possible but in any event within five (5) business days.
4.10.2 Complaints; Adverse Event Reporting Procedures; Notice of Adverse Events Affecting the Covered Product . Each Party will maintain a record of any and all complaints it or its Related Parties receive with respect to the Covered Product. Each Party will notify the other Party in reasonable detail of any such complaints within sufficient time to allow the other Party and its Related Parties to comply with any and all regulatory and other requirements imposed upon them in any jurisdiction in which the Covered Product is being marketed or tested in Clinical Studies and/or Post-Approval Studies. Each Party will maintain at its own expense an adverse event database for the Covered Product, and the other Party will have access to all data in such adverse event database. Notwithstanding the foregoing, each Party will report to the other Party the details around any adverse events and serious adverse events relating to the Covered Product in its Control within the
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

time periods for such reporting as specified in the Pharmacovigilance Agreement (defined below). Each Party shall be responsible, at its own expense, for obtaining all adverse event information and safety data relating to the Covered Product from its Related Parties in a timely manner, and for submitting adverse event reports with respect to the Covered Product to the applicable Regulatory Authorities in its own Territory. Within 12 months after the Effective Date, the Parties will develop and agree in writing upon a pharmacovigilance agreement (“ Pharmacovigilance Agreement ”) that will include safety data exchange procedures governing the coordination of collection, investigation, reporting, and exchange of information concerning any adverse experiences, and any product quality and product complaints involving adverse experiences, related to the Covered Product, sufficient to enable each Party to comply with its legal and regulatory obligations. In addition, each Party shall promptly notify the other if such Party becomes aware of any information or circumstance that is likely to have a material adverse effect on the Development, Manufacture or Commercialization of the Covered Product in the other Party’s Territory.
4.10.3 Recalls, Market Withdrawals or Corrective Actions. In the event that any Regulatory Authority issues or requests a recall or takes a similar action in connection with the Covered Product in a Territory, or in the event either Party determines that an event, incident or circumstance has occurred that may result in the need for a recall or market withdrawal in its own Territory, the Party notified of such recall or similar action, or the Party that desires such recall or similar action, shall within twenty-four (24) hours advise the other Party thereof by telephone, or by email or facsimile together with telephone confirmation. Each Party, in consultation with the other Party, shall decide whether to conduct a recall in its own Territory and the manner in which any such recall shall be conducted (except in the case of a government mandated recall, when such Party may act without such advance notice but shall notify the other Party as soon as possible). Each Party shall bear the expense of any such recall in its own Territory. Each Party will make available all of its pertinent records that may be reasonably requested in order to effecting a recall in the other Party’s Territory.
 
5.	CONFIDENTIALITY AND PUBLICATION	
5.1 Nondisclosure Obligation. (a) All Confidential Information disclosed by one Party to the other Party hereunder shall be maintained in confidence by the receiving Party and shall not be disclosed to a Third Party or used for any purpose except as set forth herein without the prior written consent of the disclosing Party, except that the obligations set forth in this Section 5.1 shall not apply to Confidential Information to the extent that such Confidential Information:
 
 	(i)	is known by the receiving Party at the time of its receipt, and not through a prior disclosure, directly or indirectly, by the disclosing Party, as documented by the receiving Party’s business records;	
 
 	(ii)	is in the public domain by use and/or publication before its receipt from the disclosing Party, or thereafter enters the public domain through no fault of the receiving Party or its Related Parties;	
 
 	(iii)	is subsequently disclosed to the receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the disclosing Party; or	
 
 	(iv)	is developed by the receiving Party independently of Confidential Information received from the disclosing Party, as documented by the receiving Party’s business records.	
(b) Notwithstanding the obligations of confidentiality, non-disclosure and non-use set forth above and in Section 5.2 below, a receiving Party may provide Confidential Information disclosed to it, and disclose the existence and terms of this Agreement as may be reasonably required in order to perform its obligations and
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

to exploit its rights under this Agreement, and specifically to (i) Related Parties, and their employees, directors, agents, consultants, advisors and/or other Third Parties for the performance of its obligations hereunder (or for such entities to determine their interest in performing such activities) in accordance with this Agreement in each case who are bound by confidentiality, non-disclosure and non-use obligations substantially similar to those set forth herein; (ii) governmental or other Regulatory Authorities in order to obtain patents or perform its obligations or exploit its rights under this Agreement; provided , that such Confidential Information shall be disclosed only to the extent reasonably necessary to do so, (iii) the extent required by applicable law, including without limitation by the rules or regulations of the United States Securities and Exchange Commission, Russian Federal Financial Markets Service or similar regulatory agency in a country other than the United States or of any stock exchange or listing entity, (iv) any bona fide actual or prospective underwriters, investors, lenders or other financing sources and any bona fide actual or prospective collaborators or strategic partners and to consultants and advisors of such Party, in each case who are bound by confidentiality, non-disclosure and non-use obligations substantially similar to those set forth herein, and (v) Third Parties to the extent a Party is required to do so pursuant to the terms of an In-License.
If a Party is required by judicial or administrative process to disclose Confidential Information that is subject to the non-disclosure provisions of this Section 5.1 or Section 5.2, such Party shall promptly inform the other Party of the disclosure that is being sought in order to provide the other Party an opportunity to challenge or limit the disclosure obligations. Confidential Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality, non-disclosure and non-use provisions of this Section 5.1 and Section 5.2, and the Party disclosing Confidential Information pursuant to law or court order shall, at the other Party’s expense, take all steps reasonably practical, including without limitation seeking an order of confidentiality, to ensure the continued confidential treatment of such Confidential Information. In addition to the foregoing restrictions on public disclosure, if either Party concludes that a copy of this Agreement must be filed with the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States, such Party shall provide the other Party with a copy of this Agreement showing any sections as to which the Party proposes to request confidential treatment, will provide the other Party with an opportunity to comment on any such proposal and to suggest additional portions of the Agreement for confidential treatment, and will take such Party’s reasonable comments into consideration before filing the Agreement.
5.2 Publicity. (a) Except as set forth in Section 5.1 above and clause (b) below, the terms of this Agreement may not be disclosed by either Party, and no Party shall use the name, trademark, trade name or logo of the other Party or its employees in any publicity, news release or disclosure relating to this Agreement or its subject matter, without the prior express written permission of the other Party, except as may be required by law or expressly permitted by the terms hereof.
(b) As soon as practicable after the execution of this Agreement by both Parties, the Parties shall use good faith efforts to agree in writing upon a press release to be issued jointly by the Parties publicizing the execution of this Agreement. After such initial press release, neither Party shall issue a press release or public announcement relating to this Agreement without the prior written approval of the other Party, which approval shall not be unreasonably withheld or delayed, except that a Party may (i) once a press release or other written statement is approved in writing by both Parties, make subsequent public disclosure of the information contained in such press release or other written statement without the further approval of the other Party, and (ii) issue a press release or public announcement as required, in the reasonable judgment of such Party, by applicable law, including without limitation by the rules or regulations of the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States or of any stock exchange or listing entity.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

6.	REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION	
6.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party that as of the Effective Date of this Agreement:
6.1.1 It is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement, and to carry out the provisions hereof.
6.1.2 It is duly authorized to execute and deliver this Agreement, and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action.
6.1.3 This Agreement is legally binding upon it and enforceable in accordance with its terms. The execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party and by which it may be bound, or with its charter or by-laws.
6.1.4 It has not granted, and will not grant, during the Term, any right to any Third Party that would conflict with the rights granted to the other Party hereunder.
6.1.5 Neither Party nor any of its Affiliates has been debarred or is subject to debarment and neither Party nor any of its Affiliates will use in any capacity, in connection with the exercise of its rights and the performance of its obligations under this Agreement, any person or entity that has been debarred pursuant to Section 306 of the United States Federal Food, Drug, and Cosmetic Act or any similar law in any foreign jurisdiction, or that is the subject of a conviction described in such section or similar law in any foreign jurisdiction. Each Party agrees to inform the other Party in writing immediately if it or any person or entity that is performing activities under this Agreement, is debarred or is the subject of a conviction described in Section 306 or similar law in any foreign jurisdiction, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the best of the notifying Party’s knowledge, is threatened, relating to the debarment or conviction of the notifying Party or any person or entity used in any capacity by such Party or any of its Affiliates in connection with the performance of its obligations under this Agreement.
6.2 Additional Representations and Warranties of the Parties.
6.2.1 Additional Representations and Warranties of Clearside. Clearside represents and warrants to NovaMedica that:
(a) Clearside is the sole and exclusive owner of all right, title and interest in and to the Licensed IP in existence as of the Effective Date in the NovaMedica Territory, and Clearside is in Control of the Sublicensed IP. As of the Effective Date, to Clearside’s Knowledge there are no claims challenging Clearside’s Control of the Licensed IP and Sublicensed IP in existence as of the Effective Date in the NovaMedica Territory or making any adverse claim of ownership of the Licensed IP or Sublicensed IP in existence as of the Effective Date in the NovaMedica Territory.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

(b) Listed on Schedule A is the only Clearside In-License applicable to the NovaMedica Territory existing as of the Effective Date.
(c) As of the Effective Date, (i) the Existing Clearside In-License is valid, binding and in full force and effect, (ii) Clearside is in compliance in all material respects with its material obligations under the Existing Clearside In-License, (iii) to Clearside’s Knowledge, each Third Party is in compliance in all materials respects with its material obligations under the Existing Clearside In-License and (iv) no party has claimed a breach of, or initiated any dispute resolution proceedings under, the Existing Clearside In-License.
(d) As of the Effective Date, Clearside has not received any written notice from any Third Party asserting or alleging that any Development, Manufacture or Commercialization of the Covered Product by Clearside prior to the Effective Date infringed or misappropriated the Patent Rights or other intellectual property rights of such Third Party.
(e) As of the Effective Date to Clearside’s Knowledge, there are no Third Party rights that could interfere with or materially conflict with the grant of rights by Clearside to NovaMedica under this Agreement, nor is there any Necessary Third Party IP applicable to the NovaMedica Territory.
(f) It will comply with all laws applicable to the exercise of its rights and performance of its obligations hereunder. Without limitation of the foregoing, all Clinical Data delivered by Clearside pursuant to this Agreement will have been collected in compliance with all applicable laws in the country in which the applicable Clinical Study(s) were conducted, and, to Clearside’s Knowledge, will be true and accurate in all material respects.
(g) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, CLEARSIDE MAKES NO REPRESENTATIONS OR WARRANTIES THAT ANY PATENT RIGHTS THAT COVER OR PURPORT TO COVER THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF COVERED PRODUCT WILL ISSUE IN ANY COUNTRY IN THE NOVAMEDICA TERRITORY.
6.2.2 Additional Representations and Warranties of NovaMedica. NovaMedica represents, warrants and covenants to Clearside that:
(a) It has or has the ability to obtain and will maintain as and when necessary the financial and other capabilities reasonably necessary to discharge its obligations under this Agreement.
(b) All Clinical Data delivered by NovaMedica pursuant to this Agreement, if any, will have been collected in compliance with all applicable laws in the country in which the applicable Clinical Study(s) were conducted, and, to NovaMedica’s Knowledge, will be true and accurate in all material respects.
(c) It will comply with all laws in the NovaMedica Territory applicable to the exercise of its rights and performance of its obligations hereunder.
6.3 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

TITLE AND NONINFRINGEMENT. EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF THE COVERED PRODUCT PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL OR THAT ANY PARTICULAR SALES LEVEL WITH RESPECT TO THE COVERED PRODUCT WILL BE ACHIEVED.
6.4 Certain Covenants.
6.4.1 Restrictive Covenants.
(a) Except as expressly provided in this Agreement, neither NovaMedica nor its Affiliates will, alone or with or through a Third Party, during the Term, research, develop, manufacture or commercialize any injectable product for use in the Field in the suprachoroidal space that includes a corticosteroid as an active pharmaceutical ingredient.
(b) Notwithstanding anything in this Agreement to the contrary, including without limitation Sections 2.7 and 4.2, so long as NovaMedica is meeting its due diligence obligations under Section 4.1 above, neither Clearside nor its Affiliates shall, during the Term, use or make available to a Third Party the Licensed IP or Sublicensed IP to Develop or Commercialize in the NovaMedica Territory a product that includes a corticosteroid as an active pharmaceutical ingredient.
6.4.2 Compliance. NovaMedica and its Related Parties shall conduct the Development, Manufacture (if applicable) and Commercialization of the Covered Product in accordance with all applicable laws, rules and regulations, including without limitation current governmental regulations concerning good laboratory practices, good clinical practices and good manufacturing practices (including but not limited the guidelines of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH)).
6.4.3 Employee Inventions. Prior to performing any activities in connection with this Agreement, the Parties shall ensure that its and its Affiliates’ employees, agents and consultants have executed valid and binding agreements with it that assign and otherwise effectively vest in them any and all rights that such employees, agents and/or consultants might otherwise have in any invention including but not limited to NovaMedica Improvements made by such employees, agents and/or consultants. Should any royalties or other consideration become payable to such employees, agents and/or consultants, the respective Party shall remain solely responsible for making such payments.
6.5 Indemnification.
6.5.1 General Indemnification by NovaMedica. NovaMedica shall indemnify, hold harmless, and defend Clearside, its Affiliates, its Related Parties and the other parties to the Clearside In-Licenses, and their respective directors, officers, employees and agents (“ Clearside Indemnitees ”) from and against any and all Third Party claims, suits, losses, liabilities, damages, costs, fees and expenses (including reasonable attorneys’ fees) (collectively, “ Losses ”) to the extent arising out of or resulting from, directly or indirectly, (a) any breach of this Agreement by NovaMedica, or (b) the negligence or willful misconduct by or of NovaMedica, its Related Parties, and their respective directors, officers, employees and agents.
6.5.2 General Indemnification by Clearside. Clearside shall indemnify, hold harmless, and defend NovaMedica, its Affiliates, and their respective directors, officers, employees and agents (“ NovaMedica Indemnitees ”) from and against any and all Losses to the extent arising out of or resulting from, directly or indirectly, (a) any breach of this Agreement by Clearside, or (b) the negligence or willful misconduct by or of Clearside, its Related Parties, and their respective directors, officers, employees and agents.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

6.5.3 Product Liability.
(a) Except as otherwise set forth in the Supply Agreement and subject to Section 6.5.2 NovaMedica shall indemnify, defend and hold harmless the Clearside Indemnitees from, against and in respect of any and all Losses arising out of Third Party product liability claims incurred or suffered by the Clearside Indemnitees, or any of them, directly or indirectly relating to the use of Covered Product in the NovaMedica Territory.
(b) Clearside shall indemnify, defend and hold harmless the NovaMedica Indemnitees from, against and in respect of any and all Losses arising out of Third Party product liability claims incurred or suffered by the NovaMedica Indemnitees, or any of them, directly or indirectly relating to the use of Covered Product in the Clearside Territory.
6.5.4 Indemnification Procedure. In the event of any such claim against any NovaMedica Indemnitee or Clearside Indemnitee (individually, an “ Indemnitee ”), the indemnified Party shall promptly notify the other Party in writing of the claim and the indemnifying Party shall manage and control, at its sole expense, the defense of the claim and its settlement. The Indemnitee shall cooperate with the indemnifying Party and may, at its option and expense, be represented in any such action or proceeding. The indemnifying Party shall not be liable for any settlements, litigation costs or expenses incurred by any Indemnitee without the indemnifying Party’s written authorization. Notwithstanding the foregoing, if the indemnifying Party believes that any of the exceptions to its obligation of indemnification of the Indemnitees set forth in Sections 6.5.1, 6.5.2 or 6.5.3 may apply, the indemnifying Party shall promptly notify the Indemnitees, which shall then have the right to be represented in any such action or proceeding by separate counsel at their expense; provided, that the indemnifying Party shall be responsible for payment of such expenses if the Indemnitees are ultimately determined to be entitled to indemnification from the indemnifying Party.
6.6 Limitation of Liability. NEITHER PARTY HERETO WILL BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES, EXCEPT AS A RESULT OF A PARTY’S WILLFUL MISCONDUCT OR GROSSLY NEGLIGENT BREACH OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS IN ARTICLE 6. NOTHING IN THIS SECTION 6.6 SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY.
6.7 Insurance. Each Party shall obtain and/or maintain insurance during the Term and for a period of at least five (5) years after the last commercial sale of the Covered Product under this Agreement, with a reputable, solvent insurer in an amount appropriate for its business and products of the type that are the subject of this Agreement and in the geographical market in which the relevant insurable activity is being performed, and for its obligations under this Agreement. Upon request, Clearside, NovaMedica and their respective Related Parties, successor or assign shall provide the other Party with evidence of the existence and maintenance of such insurance coverage.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

7.	INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS	
7.1 Inventorship. Inventorship for patentable inventions conceived or reduced to practice during the course of the performance of activities pursuant to this Agreement shall be determined in accordance with the principles that are used to determine inventorship under the patent laws of the country where such invention is made; provided, however, that if Joint IP is invented in more than one country and one of such countries is the United States, such inventorship shall if permitted by the applicable local law be determined by United States patent laws; provided, further, however, that any patent application filed in the United States shall comply with the United States patent laws relating to inventorship.
7.2 Ownership. Subject to the licenses granted by Clearside pursuant to this Agreement, Clearside shall own the entire right, title and interest in and to all inventions and discoveries (and Patent Rights claiming patentable inventions therein) first made or discovered solely by employees or consultants of Clearside or acquired solely by Clearside. Subject to the licenses granted by NovaMedica pursuant to this Agreement, if applicable, NovaMedica shall own the entire right, title and interest in and to all inventions and discoveries (and Patent Rights claiming patentable inventions therein) first made or discovered solely by employees or consultants of NovaMedica or acquired solely by NovaMedica. The Parties shall jointly own any inventions and discoveries (and Patent Rights claiming patentable inventions therein) first made or discovered jointly during the Term (“ Joint IP ”).
7.3 Prosecution and Maintenance of Patent Rights.
7.3.1 Licensed Patent Rights. Clearside has the sole right to, at Clearside’s discretion, file, conduct prosecution, and maintain (including without limitation the defense of any interference or opposition proceedings), all Licensed Patent Rights in the Clearside Territory. The Parties acknowledge that the Sublicensed Patent Rights are being prosecuted and maintained pursuant to the Emory/GTRC License Agreement. Clearside shall use Commercially Reasonable Efforts to (a) facilitate Emory University and The Georgia Tech Research Foundation to file, conduct prosecution and maintain (including without limitation the defense of any interference or opposition proceedings) all Sublicensed Patent Rights in the NovaMedica Territory. Clearside shall file, conduct prosecution and (b) maintain (including without limitation the defense of any interference or opposition proceedings) all Licensed Patent Rights in the NovaMedica Territory. If Clearside elects not to continue to seek or maintain any Licensed Patent Rights in the NovaMedica Territory, Clearside will provide NovaMedica with timely notice and will provide NovaMedica with a reasonable opportunity to assume responsibility for the continued prosecution and maintenance of such Licensed Patents in the NovaMedica Territory. If Clearside, Emory University or The Georgia Tech Research Foundation elects not to continue to seek or maintain any Sublicensed Patent Right in the NovaMedica Territory, Clearside will provide NovaMedica with timely notice and will provide NovaMedica with a reasonable opportunity to assume responsibility for the continued prosecution and maintenance of such Sublicensed Patents, subject to the terms of the Emory/GTRC License Agreement.
7.3.2 NovaMedica Technology. NovaMedica has the sole right to, at NovaMedica’s discretion, file, conduct prosecution, and maintain (including without limitation the defense of any interference or opposition proceedings), all Patent Rights comprising NovaMedica Improvements. NovaMedica agrees to use Commercially Reasonable Efforts to prosecute and maintain the NovaMedica Improvements in the Clearside Territory, and will notify Clearside in writing if NovaMedica elects not to continue to seek or maintain any such Patent Rights in the Clearside Territory.
7.3.3 Joint IP. Subject to NovaMedica’s continuing right to the timely prior review of and comment on material documents, Clearside has the sole right to, at Clearside’s discretion, incorporate reasonable and
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

timely presented comments, file, conduct prosecution, and maintain (including without limitation the defense of any interference or opposition proceedings), all Patent Rights comprising Joint IP, in the names of both Clearside and NovaMedica. NovaMedica shall use Commercially Reasonable Efforts to make available to Clearside or its authorized attorneys, agents or representatives, such of its employees, consultants or representatives as Clearside in its reasonable judgment deems necessary in order to assist it in obtaining patent protection for such Joint IP. Each Party shall sign, or use Commercially Reasonable Efforts to have signed, all legal documents necessary to file and prosecute patent applications or to obtain or maintain patents in respect of such Joint IP, at its own cost.
7.3.4 Contingent Rights. (a) In the event Clearside has been granted a license under such NovaMedica Improvements and NovaMedica elects not to seek or continue to seek or maintain patent protection on any NovaMedica Inventions in the Clearside Territory, Clearside shall have the right (but not the obligation), at its expense, to seek, prosecute and maintain in any country patent protection on such NovaMedica Improvements in the name of NovaMedica. NovaMedica shall use Commercially Reasonable Efforts to make available to Clearside its authorized attorneys, agents or representatives, and such of its employees as are reasonably necessary to assist Clearside in obtaining and maintaining the patent protection described under this Section 7.3.4(a). NovaMedica shall sign or use Commercially Reasonable Efforts to have signed all legal documents necessary to file and prosecute such patent applications or to obtain or maintain such patents.
(b) In the event that Clearside elects not to seek or continue to seek or maintain patent protection on any Licensed Patent Rights or Joint IP in the NovaMedica Territory, then Clearside shall notify NovaMedica promptly in writing sufficiently in advance of any applicable filing deadline to avoid abandonment thereof, and NovaMedica shall have the right (but not the obligation), at its expense, to seek, prosecute and maintain in any country in the NovaMedica Territory patent protection on such Licensed Patent Rights and Joint IP in the name of Clearside with respect to Licensed Patent Rights and the names of both Clearside and NovaMedica with respect to Joint IP. Clearside shall use Commercially Reasonable Efforts to make available to NovaMedica its authorized attorneys, agents or representatives, and such of its employees as are reasonably necessary to assist NovaMedica in obtaining and maintaining the patent protection described under this Section 7.3.4(b). Clearside shall sign or use Commercially Reasonable Efforts to have signed all legal documents necessary to file and prosecute such patent applications or to obtain or maintain such patents.
7.3.5 Cooperation; Patent Challenges. Each Party hereby agrees: (a) to make its employees, agents and consultants reasonably available to the other Party (or to the other Party’s authorized attorneys, agents or representatives), to the extent reasonably necessary to enable such Party to undertake patent prosecution; (b) to provide the other Party with copies of all material correspondence pertaining to prosecution with the patent offices in the NovaMedica Territory; (c) to cooperate, if necessary and appropriate, with the other Party in gaining patent term extensions wherever applicable to the Patent Rights Covering the Covered Product in their respective Territories; and (d) to endeavor in good faith to coordinate its efforts with the other Party to minimize or avoid interference with the prosecution and maintenance of the other Party’s patent applications. Without limiting the foregoing, the Party prosecuting and maintaining the Patent Right shall furnish to the other Party copies of substantive documents ( e.g. , applications, office actions and responses) relevant to any such efforts in advance with sufficient time for such other Party to review and provide comments on such documents, and shall in good faith take such comments into account; provided, however, that NovaMedica shall implement all comments designated by Clearside as necessary to implement Clearside’s global strategy with respect to such Licensed Patent Rights. The parties acknowledge that they have a shared community of legal interest in the development of products that can be manufactured, used, sold and otherwise commercialized without infringing the intellectual property rights of any third party. The parties may exchange confidential attorney-client communications to advance certain common legal interests in accordance with this Agreement, and shall not disclose such communications to a third party, nor to employees of either party who do not have a need to know the content of such communication.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

7.3.6 Patent Expenses. The patent filing, prosecution and maintenance expenses incurred after the Effective Date with respect to Patent Rights (“ Patent Expenses ”) shall be borne by each Party filing, prosecuting and maintaining such Patent Rights under this Section 7.3; provided, however, that NovaMedica shall reimburse Clearside on a quarterly basis for such expenses incurred with respect to Licensed Patent Rights, Sublicensed Patent Rights and Joint IP in the NovaMedica Territory.
7.3.7 Registration of licenses and sublicenses in the NovaMedica Territory. NovaMedica and Clearside will perform all actions required to ensure that the licenses of the Licensed IP and sublicenses of the Sublicensed IP to NovaMedica are approved, registered, recorded or noticed with the applicable governmental bodies in each country in the NovaMedica Territory, and that all other actions required under applicable laws are taken to ensure that such licenses and sublicenses are fully effective and enforceable. NovaMedica and Clearside shall each use all reasonable efforts to ensure that such actions are completed as soon as practicable after the Effective Date. Clearside shall provide to NovaMedica all such assistance as shall be reasonably required in connection with above mentioned activities upon NovaMedica’s reasonable request, which request shall not be unreasonably refused, withheld or delayed, and shall promptly provide NovaMedica with all information and sign all documents required in order to complete activities mentioned above in this Section 7.3.7.
7.4 Third Party Infringement.
7.4.1 Notices. Each Party shall promptly report in writing to the other Party during the Term any (a) known or suspected infringement of any Licensed IP, Sublicensed IP, NovaMedica Improvements or Joint IP, or (b) unauthorized use or misappropriation of any Confidential Information, Licensed IP, Sublicensed IP, NovaMedica Improvements or Joint IP by a Third Party of which it becomes aware, and shall provide the other Party with all available evidence supporting such infringement, or unauthorized use or misappropriation.
7.4.2 Rights to Enforce.
(a)NovaMedica’s First Right. NovaMedica shall have the sole and exclusive right (but not obligation) to initiate an infringement or other appropriate suit anywhere in the world against any Third Party who at any time has infringed, or is suspected of infringing, any NovaMedica Improvements. Notwithstanding the foregoing, in the event such infringement, suspected infringement, or unauthorized use is by a Clearside Related Party, the Parties shall discuss in good faith a resolution to the foregoing prior to engaging in litigation.
(b)Clearside’s First Right. Clearside shall have the sole and exclusive right (but not obligation) to initiate an infringement or other appropriate suit anywhere in the world against any Third Party who at any time has infringed or misappropriated, or is suspected of infringing or misappropriating, any Licensed IP or Sublicensed IP.
7.4.3 Step-In Rights. (a) Clearside will consider in good faith any request from NovaMedica to initiate an infringement or other appropriate suit against any Third Party with respect to matters described in Section 7.4.2(b) occurring in the NovaMedica Territory;  provided ,  however , that Clearside shall not be required to initiate any such suit. In the event that Clearside does not promptly initiate and diligently prosecute such a suit reasonably requested by NovaMedica, then NovaMedica shall have the right, at its expense, to initiate and conduct such suit in the NovaMedica Territory, subject, as applicable to the terms of any Clearside In-License.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

(b) NovaMedica will consider in good faith any request from Clearside to initiate an infringement or other appropriate suit against any Third Party with respect to matters described in Section 7.4.2(a) occurring in the Clearside Territory, however NovaMedica shall not be required to initiate any such suit. In the event that NovaMedica does not promptly initiate and diligently prosecute such a suit reasonably requested by Clearside, then Clearside shall have the right, at its expense, to initiate and conduct such suit in the Clearside Territory.
7.4.4 Procedures; Expenses and Recoveries. The Party having the right to initiate any infringement suit under Section 7.4.2 or 7.4.3 above shall have the sole and exclusive right to select counsel for any such suit and shall pay all expenses of the suit, including but not limited to attorneys’ fees and court costs and reimbursement of the other Party’s reasonable out-of-pocket expense in rendering assistance requested by the initiating Party. If required under applicable law in order for the initiating Party to initiate and/or maintain such suit, or if either Party is unable to initiate or prosecute such suit solely in its own name or it is otherwise advisable to obtain an effective legal remedy, in each case, the other Party shall join as a party to the suit and will execute and cause its Affiliates to execute all documents necessary for the initiating Party to initiate litigation to prosecute and maintain such action. In addition, at the initiating Party’s request, the other Party shall provide reasonable assistance to the initiating Party in connection with an infringement suit at no charge to the initiating Party except for reimbursement by the initiating Party of reasonable out-of-pocket expenses incurred in rendering such assistance. The non-initiating Party shall have the right to participate and be represented in any such suit by its own counsel at its own expense. If the Parties obtain from a Third Party, in connection with such suit, any damages, license fees, royalties or other compensation (including but not limited to any amount received in settlement of such litigation) ( “Recoveries” ), such amounts shall be allocated in all cases as follows regardless of which Party brings the enforcement action:
 
 	(a)	first, to reimburse each Party for all expenses of the suit incurred by such Party, including but not limited to attorneys’ fees and disbursements, travel costs, court costs and other litigation expenses;	
 
 	(b)	second, if such suit is related to the Sublicensed IP, any amounts required to be paid to Emory University and/or Georgia Tech Research Corporation pursuant to the Emory/GTRC Licensed Agreement shall be so paid;	
 
 	(c)	third, (i) if such suit is related to the Licensed Technology or Sublicensed Technology in the NovaMedica Territory, then NovaMedica shall be entitled to receive that portion of the remaining Recoveries reasonably attributable to Net Sales of the Covered Product in the NovaMedica Territory (as determined by a court of competent jurisdiction in a final, non-appealable decision); provided, that the Recoveries reasonably attributable to Net Sales of Covered Product to which NovaMedica is entitled after reimbursement of expenses shall be treated as Net Sales for purposes of this Agreement and Clearside shall be entitled to receive NovaMedica Royalty Payments on such constructive Net Sales pursuant to the terms of Section 3.1 as if such Net Sales had occurred during the time period of the infringement, and (ii) if such suit is related to NovaMedica Improvements in the Clearside Territory, then Clearside shall be entitled to receive that portion of the remaining Recoveries reasonably attributable to Net Sales of the Covered Product in the Clearside Territory (as determined by a court of competent jurisdiction in a final, non-appealable decision); and	
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 	(d)	the Party initiating the suit shall be entitled to seventy-five percent (75%), and the non-initiating Party shall be entitled to twenty five percent (25%), of the balance of the Recoveries.	
7.5 Claimed Infringement.
7.5.1 Notice. In the event that after the Effective Date a Third Party at any time provides written notice of a claim to, or brings an action, suit or proceeding against, any Party, or any of their respective Affiliates or Sublicensees, claiming infringement of its Patent Rights or unauthorized use or misappropriation of its Know-How, based upon an assertion or claim arising out of the Development, Manufacture or Commercialization of the Covered Product in the Field (“ Infringement Claim ”), such Party shall promptly notify the other Party of the claim or the commencement of such action, suit or proceeding, enclosing a copy of the claim and all papers served. Each Party agrees to make available to the other Party its advice and counsel regarding the technical merits of any such claim at no cost to the other Party and to offer reasonable assistance to the other Party at no cost to the other Party.
7.5.2 Responsibility. NovaMedica shall assume full responsibility for any Infringement Claims brought against either Party or its Affiliates or Sublicensees arising out of the Development or Commercialization of the Covered Product in, or Manufacture of Covered Product for, if applicable, the NovaMedica Territory. Subject to any applicable indemnification obligations of Clearside, all liabilities, damages, costs and expenses arising out of such Third Party Infringement Claims shall be borne by NovaMedica. Clearside shall assume full responsibility for any Infringement Claims brought against either Party or its Affiliates or Sublicensees arising out of the Commercialization of the Covered Product in, or Manufacture of Covered Product for, the Clearside Territory. All liabilities, damages, costs and expenses arising out of such Third Party Infringement Claims shall be borne by Clearside.
7.5.3 Procedure. Each Party shall have the sole and exclusive right to select counsel for any Infringement Claim that it defends;  provided , that it shall consult with the other Party with respect to selection of counsel for such defense. Each Party will keep the other Party informed, and shall from time to time consult with the other Party regarding the status of any such claims and shall provide the other Party with copies of all documents filed in any suit brought in connection with such claims. The other Party shall also have the right to participate and be represented in any such claim or related suit, at its own expense. Clearside shall have the sole and exclusive right (but not the obligation) to control the defense of an Infringement Claim for which NovaMedica has the responsibility in the event NovaMedica fails to assume such defense within thirty (30) days following written notice from Clearside. No Party shall settle any claims or suits involving rights of another Party without obtaining the prior written consent of such other Party, which consent shall not be unreasonably withheld or delayed.
7.6 Other Infringement Resolutions. In the event of a dispute or potential dispute that has not ripened into a demand, claim or suit of the types described in Sections 7.4 and 7.5 of this Agreement (e.g., actions seeking declaratory judgments and revocation proceedings), the same principles governing control of the resolution of the dispute, consent to settlements of the dispute, and implementation of the settlement of the dispute (including but not limited to the sharing in and allocating the payment or receipt of damages, license fees, royalties and other compensation) shall apply.
7.7 Patent Certification. To the extent required by law or permitted by law, the Parties shall use Commercially Reasonable Efforts to maintain with the applicable Regulatory Authorities during the Term correct and complete listings of applicable Patent Rights for the Covered Product being commercialized.
 
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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

7.8 Trademarks.
7.8.1 Each Party and its Affiliates shall retain all right, title and interest in and to its and their respective corporate names and logos.
7.8.2 NovaMedica shall have sole discretion whether to use the Licensed Marks, independently or in combination with trademark(s) of NovaMedica or its logotype, or solely under NovaMedica’s trademark(s) and/or NovaMedica’s logotype without combination with Licensed Marks. Upon request of NovaMedica, Clearside shall use its commercially reasonable efforts to register the Licensed Marks in the competent offices in the Russian Federation and to keep such registrations in force during the entire Term of the Agreement and shall cooperate with NovaMedica (at NovaMedica’ s expense) regarding trademark matters in other countries in the NovaMedica Territory. The registration and maintenance costs of the Licensed Marks in the Russian Federation shall be borne by Clearside.
7.8.3 To the extent NovaMedica does not use the Licensed Marks on Covered Product, NovaMedica will develop and propose, and Clearside shall review and comment on for approval by NovaMedica, one or more trademarks for the Covered Products (together with the Licensed Marks, the “ Covered Product Trademarks ”) for use by NovaMedica and its Related Parties throughout the NovaMedica Territory. Any Covered Product Trademark(s) (other than the Clearside Trademarks and Licensed Marks) that are used by NovaMedica to promote and sell the Covered Product in the NovaMedica Territory are hereinafter referred to as the “ NovaMedica Trademarks ”. Clearside (or its Related Parties, as appropriate) shall own all rights to the trademarks developed and/or used by Clearside with respect to the Commercialization of the Covered Product in the Clearside Territory (the “ Clearside Trademarks ”), and all goodwill associated therewith. NovaMedica (or its Related Parties, as appropriate) shall own all rights to NovaMedica Trademarks and all goodwill associated therewith. Clearside shall also own rights to any Internet domain names incorporating the applicable Clearside Trademarks or any variation or part of such Clearside Trademarks used as its URL address or any part of such address; and NovaMedica shall also own rights to any Internet domain names incorporating the applicable NovaMedica Trademarks or any variation or part of such NovaMedica Trademarks used as its URL address or any part of such address.
7.8.4 If NovaMedica Trademarks and/or the Licensed Marks are used to promote and sell the Covered Product in the NovaMedica Territory then NovaMedica will use Commercially Reasonable Efforts to establish, maintain and enforce the NovaMedica Trademarks and/or the Licensed Marks in the NovaMedica Territory during the Term, at its expense. If NovaMedica requests a license to Clearside Trademarks in writing to promote and sell the Covered Product in the NovaMedica Territory, then Clearside shall grant NovaMedica an exclusive license to use such Clearside Trademarks to Commercialize the Covered Product in the NovaMedica Territory on terms and conditions to be negotiated by the Parties in good faith. Clearside shall be entitled to no additional compensation for the grant of such license other than the reimbursement in full of Clearside’s costs and expenses of establishing, maintaining and enforcing such Clearside Trademarks in the NovaMedica Territory. If NovaMedica Trademarks are used to promote and sell the Covered Product in the Clearside Territory, then NovaMedica shall grant Clearside an exclusive license to use such NovaMedica Trademarks to Commercialize the Covered Product in the Clearside Territory on terms and conditions to be negotiated by the Parties in good faith. NovaMedica shall be entitled to no additional compensation for the grant of such license other than the reimbursement in full of NovaMedica’s costs and expenses of establishing, maintaining and enforcing such NovaMedica Trademarks in the Clearside Territory.
7.8.5 In the event either Party becomes aware of any infringement of any Covered Product Trademark or Clearside Trademark by a Third Party, such Party shall promptly notify the other Party and the Parties shall consult with each other and jointly determine the best way to prevent such infringement, including, without limitation, by the institution of legal proceedings against such Third Party.
 
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8.	TERM AND TERMINATION	
8.1 Term. This Agreement shall be effective as of the Effective Date and, unless terminated earlier pursuant to Section 9.2 below, this Agreement shall continue in effect until expiration of the last to expire Valid Claim (“ Term ”). Upon expiration of the Term, all licenses of the Parties under Article 2 then in effect shall become fully paid-up, perpetual, irrevocable, exclusive licenses.
8.2 Termination Rights.
8.2.1 Termination for Cause. This Agreement may be terminated at any time during the Term:
(a) upon written notice by either Party if the other Party is in breach of its material obligations hereunder and has not cured such breach within twenty (20) business days in the case of a payment breach, or sixty (60) days in the case of all other breaches, after written notice requesting cure of the breach; or
(b) by either Party upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings of the other Party, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party;  provided ,  however , that in the event of any involuntary bankruptcy or receivership proceeding such right to terminate shall only become effective if the Party consents to the involuntary bankruptcy or receivership or such proceeding is not dismissed within sixty (60) days after the filing thereof.
8.2.2 Challenges of Patent Rights. In the event that NovaMedica or any of its Related Parties (a) commences or participates in any action or proceeding (including, without limitation, any patent opposition or re-examination proceeding), or otherwise asserts any claim, challenging or denying the validity or enforceability of any of the Clearside Patent Rights licensed NovaMedica under this Agreement, or any claim thereof, or (b) actively assists any other person or entity in bringing or prosecuting any action or proceeding (including, without limitation, any patent opposition or re-examination proceeding) challenging or denying the validity or enforceability of any of such Clearside Patent Rights or any claim thereof, then Clearside shall have the right to terminate this Agreement upon written notice to NovaMedica.
8.2.3 Effect of Termination.
(a)Termination by Clearside. Without limiting any other legal or equitable remedies that Clearside may have, if Clearside terminates this Agreement in accordance with Section 8.2.1 or 8.2.2 then, (i) notwithstanding anything in Section 6.4.1 to the contrary, NovaMedica’ s obligations under Section 6.4.1 shall survive for a period of one (1) year after the effective date of termination (without in any way implying a grant of any rights to the Licensed IP or Sublicensed IP), (ii) the license grant to Clearside in Section 2.1.5 shall, solely with respect to licensable subject matter in existence on the effective date of termination and to the extent the Parties entered into such license, survive and shall be fully-paid, perpetual and include an unrestricted right to grant sublicenses, (iii) NovaMedica shall as promptly as practicable transfer to Clearside or Clearside’s designee (A) possession and ownership of all governmental or regulatory correspondence, conversation logs, filings and approvals (including without limitation all Regulatory Approvals and pricing and reimbursement approvals) relating to the Development, Manufacture or Commercialization of the Covered Product and all Covered Product Trademarks and execute any and all documents and carry out any other actions as may be
 
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requested by Clearside to assist Clearside with all regulatory filings with the applicable Regulatory Authorities required in connection with the termination of this Agreement to ensure that all Regulatory Approvals in the NovaMedica Territory can be transferred or issued to Clearside or Clearside’s designee, (B) copies of all data, reports, records and materials in NovaMedica’s possession or Control relating to the Development, Manufacture or Commercialization of the Covered Product, including without limitation all non-clinical and clinical data relating to the Covered Product, including without limitation customer lists and customer contact information and all adverse event data in NovaMedica’s possession or Control, and (C) all records and materials in NovaMedica’s possession or Control containing Confidential Information of Clearside, (iv) if Clearside so requests, NovaMedica shall use Commercially Reasonable Efforts to transfer to Clearside any Third Party agreements relating to the Development, Manufacture or Commercialization of the Covered Product to which NovaMedica is a party, subject to any required consents of such Third Party, which NovaMedica shall use Commercially Reasonable Efforts to obtain promptly, and (v) all Sublicense Agreements that are in compliance with the terms of Section 2.2 shall be assigned by NovaMedica to Clearside and shall continue in full force and effect unless the Sublicensee is in material breach or has failed to remedy such breach pursuant to the provisions of the Sublicense Agreement, in which case such Sublicense Agreement shall automatically terminate. The license granted and other transfers to be effected pursuant to this Section 8.2.3(a) shall be royalty-free, fully paid and perpetual except as they relate to any Necessary Third Party IP which Clearside shall be obliged to pay and in respect of sublicensees which are in compliance. NovaMedica shall execute all documents and take all such further actions as may be reasonably requested by Clearside in order to give effect to the foregoing clauses (i) through (v).
(b)Termination by NovaMedica for Cause. Without limiting any other legal or equitable remedies that NovaMedica may have, if NovaMedica terminates this Agreement in accordance with Section 8.2.1(a) or (b), then (i) the licenses granted to Clearside under this Agreement shall terminate and all the licenses granted to NovaMedica under this Agreement with respect to Covered Product shall continue in full force and effect and shall be, subject to this Section 8.2.3(b), perpetual and irrevocable, and include an unrestricted right to grant sublicenses in the NovaMedica Territory;  provided , that NovaMedica continues to pay all pass through royalties that are due in respect of the Clearside In-Licenses and comply in all respects with the requirements applicable to the NovaMedica Territory under each Clearside In-License and pay Clearside at the reduced rate of 75% of all sums otherwise due pursuant to Article 3 as a result of any Commercialization and (ii) return all records and materials in Clearside’s possession or Control containing Confidential Information of NovaMedica. Clearside shall execute all documents and take all such further actions as may be reasonably requested by NovaMedica in order to give effect to this Section 8.2.3(b).
(c)Termination upon Bankruptcy of a Party. If this Agreement is terminated by either Party (the “ Non-Bankrupt Party ”) pursuant to Section 8.2.1(b) due to the rejection of this Agreement by or on behalf of the other Party (the “ Bankrupt Party ”) under Section 365 of the United States Bankruptcy Code (the “ Code ”) or an equivalent type of provision under a relevant law applicable to the Party in question, all licenses and rights to licenses granted under or pursuant to this Agreement by the Bankrupt Party to the Non-Bankrupt Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Code. The Parties agree that the Non-Bankrupt Party, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Code, and that upon commencement of a bankruptcy proceeding by or against the Bankrupt Party under the Code, the Non-Bankrupt Party shall be entitled to a complete duplicate of, or complete access to (as the Non-Bankrupt Party deems appropriate), any such intellectual property and all embodiments of such intellectual property. Such intellectual property and all embodiments thereof shall be promptly delivered to the Non-Bankrupt Party (i) upon any such commencement of a bankruptcy proceeding upon written request therefor by the Non-Bankrupt Party, unless the Bankrupt Party elects to continue to perform all of its obligations under
 
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this Agreement or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of the Bankrupt Party upon written request therefor by the Non-Bankrupt Party. The foregoing provisions are without prejudice to any rights the Non-Bankrupt Party may have arising under the Code or other applicable law. The parties intend for the substance of this Section 8.2(c) to apply worldwide, even if the Code does not expressly apply to the Bankrupt Party or to the Non-Bankrupt Party.
8.3 Effect of Expiration or Termination; Survival. Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Any expiration or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to expiration or termination, including without limitation the obligation to pay royalties for the Covered Products sold prior to such expiration or termination. The provisions of Articles 5 and 9, and Sections 3.5, 3.9, 4.5, 4.10.2, 4.10.3, 6.2.1(f), 6.3, 6.5, 6.6, 6.7, 7.3.1, 7.3.2, 7.3.3, 8.2.3 and 8.3 shall survive any expiration or termination of this Agreement. Except as set forth in this Article 8, upon termination or expiration of this Agreement all other rights and obligations of the Parties under this Agreement cease.
 
9.	MISCELLANEOUS	
9.1 Assignment. Except as provided in this Section 9.1, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the consent of the other Party. However, either Party may, without the other Party’s consent, assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate or pursuant to or in connection with a Change of Control of such Party. The assigning Party shall remain responsible for the performance by its assignee of this Agreement or any obligations hereunder so assigned.
9.2 Governing Law. This Agreement shall be construed and the respective rights of the Parties determined in accordance with the substantive laws of the State of New York, notwithstanding any provisions of New York law governing conflicts of laws to the contrary, and the patent laws of the relevant jurisdiction without reference to any rules of conflict of laws. Notwithstanding the foregoing, the Parties acknowledge that the laws of the State of Georgia shall apply to matters related to the Sublicensed IP to the extent required by the Emory/GTRC License Agreement.
9.3 Entire Agreement; Amendments. This Agreement contains the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all previous arrangements with respect to the subject matter hereof, whether written or oral. This Agreement (including the Schedules hereto) may be amended, or any term hereof modified, only by a written instrument duly-executed by authorized representatives of both Parties hereto.
9.4 Severability. If any provision hereof should be held invalid, illegal or unenforceable in any respect in any jurisdiction, the Parties hereto shall substitute, by mutual consent, valid provisions for such invalid, illegal or unenforceable provisions, which valid provisions in their economic effect are sufficiently similar to the invalid, illegal or unenforceable provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such valid provisions. In case such valid provisions cannot be agreed upon, the invalid, illegal or unenforceable of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid, illegal or unenforceable provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid, illegal or unenforceable provisions.
 
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9.5 Headings. The captions to the Articles and Sections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.
9.6 Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.
9.7 No Implied Waivers; Rights Cumulative. No failure on the part of Clearside or NovaMedica to exercise, and no delay in exercising, any right, power, remedy or privilege under this Agreement, or provided by statute or at law or in equity or otherwise, shall impair, prejudice or constitute a waiver of any such right, power, remedy or privilege or be construed as a waiver of any breach of this Agreement or as an acquiescence therein, nor shall any single or partial exercise of any such right, power, remedy or privilege preclude any other or further exercise thereof or the exercise of any other right, power, remedy or privilege.
9.8 Notices. All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile, sent by email, sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Clearside, to:	  	 	  	Clearside Biomedical, Inc.	
 	  	 	  	1220 Old Alpharetta Road, Suite 300	
 	  	 	  	Alpharetta, Georgia 30005	
 	  	 	  	Attention: CEO	
 	  	 	  	Email: dwhite@clearsidebio.com	
 	 	 	
 	  	With a copy to:	  	Hutchison PLLC	
 	  	 	  	3110 Edwards Mill Road, Suite 300	
 	  	 	  	Raleigh, NC 27612	
 	  	 	  	Attention: William N. Wofford	
 	  	 	  	Facsimile No.: (866) 479-7550	
 	  	 	  	Email: bwofford@hutchlaw.com	
 	 	 	
If to NovaMedica, to:	  	 	  	NovaMedica, LLC	
 	  	 	  	29, 1-st Brestskaya Street	
 	  	 	  	Moscow, 125047, Russia	
 	  	 	  	Attention: Fabrice Egros	
 	  	 	  	Email: fegros@novamedica.com	
 	 	 	
 	  	With a copy to:	  	Dmitry Kopytin	
 	  	 	  	Email: dkopytin@novamedica.com	
or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile or email on a business day (or if delivered or sent on a non-business day, then on the next business day); (b) on receipt if sent by overnight courier; and/or (c) on receipt if sent by mail.
 
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9.9 Compliance with Export Regulations. Neither Party shall export any technology licensed to it by the other Party under this Agreement except in compliance with U.S., the Russian Federation and all other applicable export laws and regulations.
9.10Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent that such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including without limitation embargoes, war, acts of war (whether war be declared or not), insurrections, terrorism, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party. The affected Party shall notify the other Party of such force majeure  circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such  force majeure  circumstances.
9.11 Dispute Resolution.
9.11.1 Disputes. The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy or claim arising from, or related to, this Agreement or to the breach hereof (collectively, “ Dispute ”). In particular, the Chief Executive Officers of the Parties shall attempt to resolve all Disputes. In the event that the Chief Executive Officers cannot reach an agreement regarding a Dispute, and a Party wishes to pursue the matter, each such Dispute that is not an “Excluded Claim” shall be finally resolved by binding arbitration under the then-current Rules of Arbitration of the International Chamber of Commerce (“ ICC ”) by three (3) arbitrators appointed in accordance with the said Rules and Section 10.11.2 below, and judgment on the arbitration award may be entered in any court having jurisdiction thereof. As used in this Section 9.11, the term “ Excluded Claim ” shall mean a dispute that concerns the validity or infringement of a patent, trademark or copyright.
9.11.2 Arbitration. The arbitration shall be conducted by a panel of three (3) persons experienced in the pharmaceutical business who are independent of both Parties and neutral with respect to the Dispute presented for arbitration. Within thirty (30) days after initiation of arbitration, each Party shall select one person to act as arbitrator and the two Party-selected arbitrators shall select a third arbitrator within thirty (30) days of their appointment. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by the ICC International Court of Arbitration. The place of arbitration shall be Atlanta, Georgia, and all proceedings and communications shall be in English.
Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the arbitration award. The arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages. Each Party shall bear its own costs and expenses and attorneys’ fees, and the Party that does not prevail in the arbitration proceeding shall pay the arbitrators’ and any administrative fees of arbitration. Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable Georgia statute of limitations.
 
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(a) The Parties agree that, in the event of a Dispute over the nature or quality of performance under this Agreement, neither Party may terminate this Agreement until final resolution of the Dispute through arbitration or other judicial determination. The Parties further agree that any payments made pursuant to this Agreement pending resolution of the Dispute shall be refunded promptly if an arbitrator or court determines that such payments are not due.
(b) The Parties hereby agree that any disputed performance or suspended performances pending the resolution of the arbitration that the arbitrators determine to be required to be performed by a Party must be completed within a reasonable time period following the final decision of the arbitrator.
(c) The Parties hereby agree that any monetary payment to be made by a Party pursuant to a decision of the arbitrators shall be made in United States dollars, free of any tax or other deduction. The Parties further agree that the decision of the arbitrators shall be the sole, exclusive and binding remedy between them regarding determination of the matters presented to the arbitrator.
9.12 Independent Contractors. It is expressly agreed that Clearside and NovaMedica shall be independent contractors and that the relationship between Clearside and NovaMedica shall not constitute a partnership, joint venture or agency. Clearside shall not have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on NovaMedica, without the prior written consent of NovaMedica, and NovaMedica shall not have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on Clearside without the prior written consent of Clearside.
9.13 Counterparts. The Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
9.14 Binding Effect; No Third Party Beneficiaries. As of the Effective Date, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and permitted assigns. Except as expressly set forth in this Agreement, no person or entity other than the Parties and their respective Affiliates and permitted assignees hereunder shall be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

NOVAMEDICA LLC	 	 	 	CLEARSIDE BIOMEDICAL, INC.	
 	 	 	 	 	
BY:	 	/s/ Fabrice Egros	 	 	 	BY:	 	/s/ Daniel H. White	
NAME:	 	Fabrice Egros	 	 	 	NAME:	 	Daniel H. White	
TITLE:	 	Deputy CEO/COO	 	 	 	TITLE:	 	President and CEO	

 
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SCHEDULE A
EXISTING CLEARSIDE IN-LICENSE
 
1.	Emory/GTRC License Agreement.	
SCHEDULE B
LICENSED MARKS
US trademarks ## 85561295, 85561286, 85639727
SCHEDULE C
LICENSED PATENT RIGHTS
Application or patent number
PCT/US2013/056863
PCT/US2013/069156
SCHEDULE D
SUBLICENSED PATENT RIGHTS
Application or patent number
PCT/US2013/056863
European Patent Application No. 11777924.9 (National Phase of PCT/US2011/033987), which published as EP 2563429
RU 2012147341
 
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SCHEDULE E
ALLOCATION OF UPFRONT PAYMENT
The parties agree that the relative value of the Licensed IP and the Sublicensed IP is as follows:

        Licensed IP	  	 	[***] %	  	
 	 	
        Sublicensed IP	  	 	[***] %	  	
Clearside shall be responsible for reporting and making payment to Emory and GTRC, including determining the amount of reimbursable expenses to deduct in calculating the amount payable to Emory and GTRC.
 
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit 10.18
RESEARCH, OPTION AND LICENSE AGREEMENT
This Research, Option and License Agreement (hereinafter “Agreement”), effective as of April 27, 2015 (the “ Effective Date ”), is made by and between Spark Therapeutics, Inc., a Delaware corporation with corporate offices at 3737 Market Street, Suite 1300, Philadelphia, PA 19104 (“ Spark ”) and Clearside Biomedical, Inc., a Delaware corporation with corporate offices at 1220 Old Alpharetta Rd., Suite 300, Alpharetta, GA 30005 (“ Clearside ”) (each, a “ Party ” and collectively, the “ Parties ”).
Whereas, Spark is a biopharmaceutical company specializing in the development of gene therapies.
Whereas, Clearside is a biopharmaceutical company with proprietary technology designed to administer drugs to the targeted tissue of the eye using a microneedle injection into the suprachoroidal space and related formulation technology (the “ Clearside Technology ”).
Whereas, Spark desires to collaborate with Clearside on researching the use of Clearside Technology for the delivery of gene therapies, and, if such efforts are successful, Spark desires to have the right to further develop and commercialize gene therapy products delivered using the Clearside Technology.
Now, therefore, in consideration of the mutual covenants and agreements provided herein below and other consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
 
1.1	Definitions. Unless the context otherwise requires, the terms in this Agreement, when used with initial capital letters, shall have the meanings set forth below or at their first use in this Agreement:	
“Affiliate” means, with respect to a Party, any person, corporation, firm, joint venture or other entity which, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Party. As used in this definition, “control” means the possession of the majority of the ownership, or the power to direct or cause the direction of the management and policies, of an entity, whether through the ownership of the outstanding voting securities thereof, by contract or otherwise. Notwithstanding the foregoing, CHOP shall be deemed to not be an Affiliate of Spark.
“Annual Net Sales” means, with respect to a particular calendar year, all Net Sales of a Licensed Product or multiple Licensed Products in the Field in the Territory during such calendar year.
“Bankruptcy Laws” is defined in Section 3.6.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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“CHOP” means The Children’s Hospital of Philadelphia.
“Clearside Background IP” means all Patents and Know-How relating to the Clearside Technology (a) that are Controlled by Clearside or its Affiliates as of the Effective Date, including the Patents set forth on  Exhibit B  or (b) that become Controlled by Clearside or its Affiliates on or after the Effective Date independent of the activities undertaken hereunder and that claim or embody Clearside Technology or improvements thereto. In no event shall the term “Clearside Background IP” include Patents or Know-How of any Person that becomes an Affiliate of Clearside after the Effective Date, provided that such excluded Patents and Know-How of such future Affiliate of Clearside claim and embody only technology that is conceived and reduced to practice independently from the Clearside Technology and do not comprise improvements thereto.
“Clearside Collaboration IP” is defined in Section 8.1(b)(i).
“Clearside IP” means Clearside Background IP, Clearside Collaboration IP, and Clearside’s interest in Joint Collaboration IP.
“Clearside Technology” is defined in the Preamble.
“Clinical Trial” means any study of a product in human subjects.
“Collaboration IP” means the Clearside Collaboration IP, the Spark Collaboration IP and the Joint Collaboration IP.
“Commercialization” means activities directed to marketing, promoting, distributing or selling a Licensed Product, including all activities directed to obtaining pricing approval in the Territory; and excluding Development, Manufacturing and supply of such product. “ Commercialize ” and “ Commercializing ” shall have their correlative meanings.
“Commercially Reasonable Efforts” means (a) with respect to the efforts to be expended by a Party with respect to an agreed objective, except as otherwise provided in clause (b), such reasonable, diligent and good faith efforts as such Party would normally use to accomplish a similar objective under similar circumstances, and (b) with respect to Spark’s obligations relating to the Development or Commercialization of Licensed Product(s) pursuant to Section 4.1 or Section 5.1, the efforts and resources normally used by a company in the biopharmaceutical industry for a product that is of similar market potential at a similar stage in its Development or product life, taking into account all relevant factors, including the potential profitability of the product, the costs and risks of Developing, Manufacturing and Commercializing the product, scientific, safety and regulatory concerns, product profile, the competitiveness of the marketplace and the proprietary position of the product. Commercially Reasonable Efforts under the foregoing clause (b) shall be determined on a country-by-country or market-by-market basis (as most applicable) for a Licensed Product, and it is anticipated that the level of effort will change over time, including to reflect changes in the status of the Licensed Product and the countries (or markets) involved.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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“Confidential Information” means any confidential information disclosed in any form whatsoever by one Party to the other Party, including the content of the transactions contemplated herein, all technology belonging to the disclosing Party and any improvements thereto, any information relating to a Party’s interests, business, finances, products, operations, sales, marketing, customers, suppliers and suppliers’ bills of materials, trade secrets, Know-How, data, processes, methods, techniques, formulas, test data, presentations, analyses, studies, patent applications (as long as unpublished and/or undisclosed), financial data, product development, assays, strategic and market research information, other relevant marketing information, clinical data and any other information, whether developed in connection with this Agreement or not.
“Control” means with respect to any Know-How, Patent or other tangible or intangible intellectual property right, the possession (whether by ownership or license, other than licenses granted pursuant to this Agreement) by a Party or its Affiliate of the ability to grant to the other Party access to, ownership of, or a license or sublicense under, such Know-How, Patent, or other intellectual property, in each case as provided under this Agreement, without violating the terms of any agreement or other arrangement with any Third Party.
“Development” means, with respect to a product, research (other than Research) and any and all processes and activities conducted to obtain and maintain Marketing Authorization for a product, including pre- and post-marketing approval clinical studies and activities relating to development or preparation of such product for Commercialization. Development includes performance of Clinical Trials. “ Develop ” and “ Developing ” shall have their correlative meanings.
“Dollar” or “$” means the legal currency of the United States.
“Early Stage Sublicense” means a sublicense under Clearside Background IP that includes the right to Commercialize in the Field a Licensed Product as to which Spark has not, prior to the grant of such sublicense, dosed an aggregate of ten (10) or more subjects in one or more clinical study(-ies) with the applicable Gene Therapeutic (i.e., the applicable combination of Vector and nucleic acid(s)).
“Early Stage Sublicense Revenue” shall mean, with respect to any Licensed Product that is the subject of an Early Stage Sublicense, the aggregate consideration received by Spark or its Affiliates in consideration for granting the Early Stage Sublicense with respect to such Licensed Product, including license fees, sales and other milestone fees and minimum royalties (in excess of earned royalties), but excluding (i) royalties on Net Sales, (ii) proceeds from the issuance of debt or equity securities of Spark or its Affiliates up to the fair market value of such securities at the time of their issuance to the Early Stage Sublicensee (with any excess proceeds over such fair market value to be included
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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in Early Stage Sublicense Revenue) and (iii) payments received by Spark or its Affiliates to fund or reimburse the actual costs of its research, development and similar services (including such amounts calculated on a commercially reasonable full-time equivalent, or FTE, rate basis, which FTE rates may include normal and customary allocations of overhead) for such Licensed Product performed for such Early Stage Sublicensee during the term of the Early Stage Sublicense.
“Early Stage Sublicensee” means any Third Party that is a sublicensee under an Early Stage Sublicense granted in accordance with Section 3.4(b).
“Emory License Agreement” means the License Agreement between Emory University, the Georgia Tech Research Corporation and Clearside, executed on July 4, 2012, as amended as of April 2, 2014, and otherwise from time to time.
“Field” means delivery of any ocular Gene Therapeutic for all ophthalmic therapeutic, diagnostic, prophylactic, palliative and veterinary purposes.
“First Commercial Sale” means, with respect to a Licensed Product and a country, the first sale of such Licensed Product in such country for use or consumption in commerce made by Spark, its Affiliates or sublicensees after all required Marketing Authorizations have been received from the applicable Regulatory Authority for such country. Sales for Clinical Trial purposes or compassionate, named patient or similar use shall not constitute a First Commercial Sale.
“Gene Therapeutic” means any product incorporating a Vector and a nucleic acid that confers a therapeutic benefit.
“Government Authority” means any multi-national, federal, state, local, municipal or other government authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).
“IND” means an Investigational New Drug application as defined in the U.S. Federal Food, Drug, and Cosmetic Act, as amended, and applicable regulations promulgated thereunder by the U.S Food and Drug Administration (“ FDA ”), or an equivalent application submitted to an equivalent Regulatory Authority in any other country or jurisdiction in the Territory, the filing of which is necessary to initiate Clinical Trials in such country or jurisdiction, including a clinical trial application.
“Invention” means any discovery, development, innovation, modification, update, enhancement, improvement or invention (whether or not patentable) that is conceived, made, developed or reduced to practice in activities undertaken under this Agreement.
“Joint Collaboration IP” is defined in Section 8.1(b)(iii).
“Joint Data” is defined in Section 8.1(b)(iii).
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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“Know-How” means any tangible and intangible information, data, results (including pharmacological, research and development data, reports and batch records), and materials, discoveries, improvements, inventions, compositions of matter, cell lines, assays, sequences, processes, methods, knowledge, protocols, formulas, utility, formulations, inventions (whether patentable or not), strategy, know-how and trade secrets, and all other scientific, pre-clinical, clinical, regulatory, manufacturing, marketing, financial and commercial information or data, in each case that either Party has treated as confidential or proprietary information.
“Law” means the applicable laws, rules and regulations, including any rules, regulations, guidelines or other requirements of any Government Authorities (including any Regulatory Authorities) that may be in effect from time to time in any country or jurisdiction of the Territory.
“Licensed Product” means any product that incorporates a Gene Therapeutic delivered with the use of a Microinjector.
“Major EU Country” means France, Germany, Italy, Spain or the United Kingdom.
“Manufacture” means activities directed to the manufacture, receipt, incoming inspections, storage and handling of raw materials and the manufacture, processing, formulation, packaging, labeling, warehousing, quality control testing (including in-process release and stability testing), supplying, shipping and release of a product, as the case may be and to the extent applicable, including manufacturing process development, scale-up and validation. “ Manufacturing ” shall have the correlative meaning.
“Marketing Authorization” means the technical, medical and scientific licenses, registrations, authorizations and approvals (including supplements and amendments, pre- and post-approvals, pricing approvals, and labeling approvals) of any Regulatory Authority necessary for the Commercialization of a product in the Field in such Regulatory Authority’s jurisdiction in the Territory.
“Microinjector” means any device containing a microneedle for injecting material into the suprachoroidal space that comprises Clearside Technology.
“Net Sales” of a Licensed Product in a particular period means the amount calculated by deducting from invoiced sales of such Licensed Product made by or on behalf of Spark or its Affiliates or sublicensees (other than Early Stage Sublicensees) (a “ Selling Party ”) to Third Parties for such period: (a) normal, customary trade discounts (including volume discounts), credits, chargebacks, reductions and rebates; (b) allowances and adjustments for rejections, recalls, outdated products or returns (in each event whether voluntary or required); (c) freight, shipping, insurance, sales, use, excise, value-added, consumption and similar tariffs, taxes or duties imposed on such sale; (d) credits actually given or allowances actually made for wastage replacement, Medicare/Medicaid or other governmental rebates, indigent patient, compassionate use and similar programs to
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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provide Licensed Product on at-cost (or lower) basis, to the extent actually deducted from the gross amount invoiced and either not required to be paid by or refunded to the customer or other payor; (e) annual fees due under Section 9008 of the United States Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-48) allocable to sales of such Licensed Product; (f) compensation paid to Third Party distributors and wholesalers for maintaining agreed inventory levels; and (g) uncollectible amounts included in Net Sales on previously sold Licensed Products. Each of the foregoing deductions shall be determined on a basis consistent with the Selling Party’s audited consolidated financial statements and consistently applied across all products of the Selling Party. Even if there is overlap between any of deductions described in (a) through (g), each individual item shall only be deducted once in the overall Net Sales calculation.
Licensed Products transferred between Selling Parties and Early Stage Sublicensees shall not count toward Net Sales unless the Early Stage Sublicensee is an end-user of such Licensed Product.
In the event that a Licensed Product under this Agreement is sold in combination (a “Combination Product ”) with active ingredient(s) other than Gene Therapeutics delivered via Microinjector (“ Supplemental Ingredient(s) ”), then “Net Sales” of the Combination Product shall be calculated using one of the following methods:
(x) By multiplying the Net Sales of the Combination Product (calculated prior to the application of this formula) by the fraction A/A+B, where A is the average gross selling price, during the applicable quarter in the country concerned, of the Licensed Product when sold separately, and B is the average gross selling price, during the applicable quarter in the country concerned, of the Supplemental Ingredient(s) when sold separately; or
(y) In the event that no such separate sales are made of the Licensed Product or any of Supplemental Ingredients in such Combination Product during the applicable quarter in the country concerned, Net Sales shall be calculated using the above formula where A is the reasonably estimated commercial value of the Licensed Product sold separately and B is the reasonably estimated commercial value of the Supplemental Ingredient(s) sold separately. Any such estimates shall be determined using criteria to be mutually agreed upon by the Parties. Such estimates shall be reported to Clearside in the reports to be provided pursuant to Section 7.7(b). If the Parties are unable to agree on the criteria for determining such estimates, either Party may submit such dispute for resolution pursuant to the provisions of Article 13.
For the avoidance of doubt, active ingredients that are Gene Therapeutics delivered via Microinjectors do not constitute Supplemental Ingredients, and no license is granted to Spark hereunder with respect to the use of Microinjectors to deliver active ingredients other than Gene Therapeutics.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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“New Microinjector” means a New Spark Microinjector, a New Clearside Microinjector or a Third Party-Funded New Microinjector, each as defined or described in Section 4.6.
“Option” is defined in Section 3.1.
“Option Exercise Date” is defined in Section 3.1.
“Option Exercise Period” means the Option Period #1 Exercise Period or the Option Period #2 Exercise Period, as applicable.
“Option Period #1” shall, unless otherwise mutually agreed by the Parties, be a period of six (6) months from the Effective Date, and is subject to extension pursuant to Section 2.4.
“Option Period #1 Exercise Period” means the period commencing upon the Effective Date and ending thirty (30) days after the later to occur of (i) Spark’s receipt of all data from the Research conducted pursuant to the Option Period #1 Workplan or (ii) the expiration of Option Period #1.
“Option Period #1 Workplan” means the initial Option Period #1 Workplan attached hereto as Exhibit A-1 , as such workplan may be modified by the Parties in accordance with Section 2.2.
“Option Period #2” shall, unless otherwise mutually agreed by the Parties, be a period of twelve (12) months commencing upon Spark’s election to initiate Option Period #2 in accordance with Section 2.3, and is subject to extension pursuant to Section 2.4.
“Option Period #2 Exercise Period” means the period commencing upon Spark’s election to commence Option Period #2 in accordance with Section 2.3 and ending ninety (90) days after the later of (i) Spark’s receipt of all data from the Research conducted pursuant to the Option Period #2 Workplan or (ii) the expiration of Option Period #2 .
“Option Period #2 Workplan” means the initial Option Period #2 Workplan attached hereto as Exhibit A-2 , as such workplan may be modified by the Parties in accordance with Section 2.3.
“Option Periods” means Option Period #1 and Option Period #2.
“Patent” means (a) any patent, re-examination, reissue, renewal, extension, supplementary protection certificate and term restoration, any confirmation patent or registration patent or patent of addition based on any such patent, (b) any pending application for patents, including provisional, converted provisional, continuations, continuations-in-part, divisional and substitute applications, and inventors’ certificates, (c) all foreign counterparts of any of the foregoing, and (d) all applications claiming priority to any of the foregoing.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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“Person” means any individual, incorporated or unincorporated organization or association, Government Authority, or other entity.
“Pivotal Clinical Study” means a well-controlled, randomized pivotal study in the Field in human patients of a Licensed Product designed to ascertain efficacy and safety of such Licensed Product for the purposes of enabling the preparation and submission of applications for Marketing Authorization to the competent Regulatory Authorities in a country of the Territory and that is adequate to satisfy the requirements of 21 C.F.R. § 312.21(c) or its equivalent in that country.
“Prosecution and Maintenance” means, with respect to a Patent, the preparing, filing, prosecuting and maintenance of such Patent, as well as re-examinations, reissues, requests for Patent term extensions and the like (including Supplementary Protection Certificates and other ex-US equivalents) with respect to such Patent, together with the conduct of interferences, the defense of oppositions and other similar post-grant proceedings with respect to the particular Patent; and “ Prosecute and Maintain ” shall have the correlative meaning.
“Regulatory Authority” means, in a particular country or jurisdiction in the Territory, any applicable Governmental Authority involved in granting (a) approval to initiate or conduct clinical testing in humans, (b) the authorizations, approvals, licenses, permits, consents, registrations and filings necessary for the Commercialization of a product in a country in the Territory including Marketing Authorizations and manufacturing licenses, or (c) to the extent required in such country or jurisdiction, pricing approval for a product in such country or jurisdiction.
“Regulatory Exclusivity” means, with respect to a Licensed Product and a country in the Territory, any exclusive marketing rights or data exclusivity rights conferred by a Regulatory Authority or other applicable Government Authority in such country, other than a Patent, including biological reference product exclusivity, orphan drug exclusivity, pediatric exclusivity and other relevant exclusivity rights, including those conferred in the European Union under Directive 2001/EC/83 and rights similar thereto in any country in the Territory.
“Regulatory Materials” means regulatory applications, submissions, notifications, registrations, Marketing Authorizations or other submissions made to or with a Regulatory Authority that are necessary or reasonably desirable in order to Develop, Manufacture or Commercialize the Licensed Products in the Field in a particular country.
“Research” means the activities to be performed by the Parties pursuant to the Workplans.
“Royalty Term” means, as to a Licensed Product and a country, the period commencing on the First Commercial Sale of such Licensed Product in such country and terminating upon the expiration of the last-to-expire Valid Claim included in the Clearside IP that
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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covers the manufacture, use, offer for sale or sale of the Microinjector contained in such Licensed Product in such country (including as such Microinjector is incorporated into such Licensed Product).
“Spark Background IP” means all Patents and Know-How relating to Gene Therapeutics that are Controlled by Spark or its Affiliates as of the Effective Date or become Controlled by Spark or its Affiliates on or after the Effective Date independent of the activities undertaken hereunder.
“Spark Collaboration IP” is defined in Section 8.1(b)(ii).
“Spark IP” means the Spark Background IP, the Spark Collaboration IP and Spark’s interest in the Joint Collaboration IP.
“Standard Microinjector” means a Microinjector meeting the technical specifications set forth on Exhibit D .
“Territory” means worldwide.
“Third Party” means any Person other than Clearside, Spark or any Affiliate of either Party.
“Valid Claim” means (a) an issued and unexpired claim of a Patent that has not been revoked or held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which is not appealable or has not been appealed within the time allowed for appeal, and which has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise, or (b) pending claim of a Patent that has been pending for less than five (5) years from the filing of the earliest patent application from which such pending claim derives priority and that has not been cancelled, withdrawn or abandoned or finally rejected.
“Vector” means a DNA molecule used to deliver foreign genetic material to a cell.
“Workplans” mean the Option Period #1 Workplan and, if applicable, the Option Period #2 Workplan.
 
1.2	Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Sections or Exhibits shall refer to the particular Sections or Exhibits of or to this Agreement and references to this Agreement include all Exhibits hereto. Unless context otherwise clearly requires, whenever used in this Agreement:	
(a) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;”
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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(b) the word “day,” “quarter” or “year” (and derivatives thereof, e.g., “quarterly”) shall mean a calendar day, calendar quarter or calendar year unless otherwise specified (and “annual” or “annually” refer to a calendar year);
(c) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement;
(d) the word “hereof,” “herein,” “hereby” and derivative or similar word refers to this Agreement (including any Exhibits);
(e) the word “or” shall have its inclusive meaning identified with the phrase “and/or;”
(f) the words “will” and “shall” shall have the same obligatory meaning;
(g) provisions that require that a party or the parties hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise;
(h) words of any gender include the other gender; and
(i) words using the singular or plural number also include the plural or singular number, respectively.
ARTICLE 2
RESEARCH COLLABORATION
 
2.1	Scope of Collaboration. Clearside and Spark shall, in accordance with the terms and conditions of this Agreement, collaborate during Option Period #1 and, if Spark elects to initiate Option Period #2 pursuant to Section 2.3 in Spark’s sole discretion, during Option Period #2, on research relating to the application of Clearside Technology to gene therapy, as further set forth in this Article 2. During Option Period #1 and, if Spark elects to initiate Option Period #2 pursuant to Section 2.3 in Spark’s sole discretion, during Option Period #2, Clearside shall not participate in any human clinical study, primate study or GLP safety study conducted hereunder associated with Gene Therapeutics beyond providing Standard Microinjectors for such studies.	
 
2.2	Option Period #1. Clearside shall collaborate exclusively with Spark during Option Period #1 to conduct initial proof-of-principle experiments, including  in vivo  studies of Clearside Technology and its application to gene therapy, in accordance with the Option Period #1 Workplan. Following the conduct of initial experiments under the Option Period #1 Workplan, the Parties will agree in good faith on appropriate modifications, if any, to the Option Period #1 Workplan. Each Party shall use Commercially Reasonable Efforts to carry out the responsibilities under the Option Period #1 Workplan assigned to such Party.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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2.3	Option Period #2. During Option Period #1, the Parties shall agree on an initial workplan for follow-on studies consistent with Exhibit A-2 including a budget therefor (the “ Option Period #2 Workplan ”) that would (if Spark does not exercise the Option during the Option Period #1 Exercise Period and elects to initiate Option Period #2 as set forth below) be undertaken to establish the utility of Clearside Technology and its application to gene therapy. If Spark does not exercise the Option during the Option Period #1 Exercise Period, then, within thirty (30) days thereafter, Spark shall notify Clearside in writing as to whether or not Spark intends to initiate Option Period #2. If Spark elects to initiate Option Period #2, the Parties shall collaborate on the conduct of follow-on studies in accordance with the initial Option Period #2 Workplan and thereafter will agree in good faith on appropriate modifications, if any, to the Option Period #2 Workplan. If Option Period #2 is initiated by Spark as set forth above, each Party shall use Commercially Reasonable Efforts to carry out the responsibilities under the Option Period #2 Workplan assigned to such Party.	
 
2.4	Option Period Extensions. Clearside will not unreasonably withhold its agreement to extensions of Option Period #1 or Option Period #2 to the extent such extensions are necessary to complete the scope of work contemplated in the Option Period #1 Workplan or the Option Period #2 Workplan, respectively.	
 
2.5.	Research Supplies; Costs. Spark shall provide Gene Therapeutics at no charge, and Clearside shall provide the Standard Microinjectors at no charge, in each case as needed for Research conducted as part of Option Period #1 and, if applicable, Option Period #2. All other expenses incurred in the conduct of the Research shall be borne by the Parties as set forth in Section 7.2.	
ARTICLE 3
OPTION AND LICENSES
 
3.1	Option. Spark shall have the right to exercise an option to obtain the exclusive license set forth in Section 3.3(b) (the “ Option ”) at any time during the Option #1 Period Exercise Period or, if Spark initiates Option Period #2, during the Option #2 Period Exercise Period, in either case by providing written notice of exercise to Clearside within the applicable Option Exercise Period (the date of such notice, the “ Option Exercise Date ”). If Spark does not exercise the Option within the Option #1 Period Exercise Period and does not elect to initiate Option Period #2 in accordance with Section 2.3, or if Spark elects to initiate Option Period #2 in accordance with Section 2.3 and does not exercise the Option within the Option #2 Period Exercise Period, then this Agreement shall terminate at the end of the applicable Option Exercise Period in accordance with Section 10.1.	
 
3.2	Grants to Spark.	
(a) Research License. Subject to the terms and conditions of this Agreement and, in the case of intellectual property rights licensed to Clearside pursuant to the Emory
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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License Agreement, the applicable terms of the Emory License Agreement set forth in Exhibit C, Clearside hereby grants Spark a royalty-free, non-exclusive license, without any right to grant sublicenses, under the Clearside IP solely to the extent necessary for Spark to perform activities allocated to Spark under the Workplans.
(b) Commercialization License. Subject to the terms and conditions of this Agreement and, in the case of intellectual property rights licensed to Clearside pursuant to the Emory License Agreement, the applicable terms of the Emory License Agreement set forth in  Exhibit C , effective upon timely payment of the option exercise fee provided for in Section 7.3, Clearside hereby grants to Spark an exclusive license, with the right to grant sublicenses in accordance with Section 3.4, under the Clearside IP to Research, Develop, have Developed, Manufacture, have Manufactured, Commercialize and have Commercialized Licensed Products in the Field in the Territory, provided that Clearside shall retain the exclusive right to manufacture and supply to Spark the Microinjector component of Licensed Products subject to and in accordance with Article 6.
 
3.3	Grant to Clearside. Subject to the terms and conditions of this Agreement, Spark hereby grants Clearside (i) a royalty-free, non-exclusive license, without any right to grant sublicenses, under the Spark IP solely to the extent necessary for Clearside to perform activities allocated to Clearside under the Workplans and (ii) a royalty-free, non-exclusive worldwide license outside the Field, with the right to grant sublicenses, under any Spark IP related to improvements to Clearside IP, in each case as necessary or helpful to research, Develop, have Developed, Manufacture, have Manufactured, Commercialize and have Commercialized products that incorporate Microinjectors. If Clearside requests a royalty-bearing, exclusive license outside the Field under Spark IP related to improvements to Clearside IP as described (other than its royalty-bearing and exclusive nature) in clause (ii) above, and Spark is willing in its discretion to grant such license, Clearside and Spark will negotiate a mutually acceptable royalty therefor and document such license and royalty in a separate agreement.	
 
3.4	Sublicenses.	
(a) Spark-Developed Products. Spark may grant sublicenses (other than Early Stage Sublicenses) under the rights granted to it in Section 3.2(b); provided that each such sublicense is subject to the applicable terms of the Emory License Agreement set forth in  Exhibit C .
(b) Early Stage Sublicenses. Spark shall notify Clearside in writing within thirty (30) days following Spark’s grant of any Early Stage Sublicense. Any such Early Stage Sublicense shall be subject to the applicable terms of the Emory License Agreement set forth in  Exhibit C.  If any Early Stage Sublicensee requires any customization, R&D, training, commercial support or other services to be provided by Clearside related to the Standard Microinjector, such services shall be subject to a separate services agreement with Clearside, which agreement shall include reimbursement of Clearside’s actual direct costs plus 50% and shall otherwise be made available by Clearside on reasonable terms.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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For clarification, Clearside shall use Commercially Reasonable Efforts to make such services available but shall have no obligation to render services that would require hiring or training additional staff or that would materially interfere with Clearside’s other business activities. In addition, any Standard Microinjector supply required by the Early Stage Sublicensee shall be provided pursuant to separate supply agreement between Clearside and the Sublicensee, royalties due Clearside shall be payable as set forth in Section 7.6(a) and Spark shall pay Clearside [***] of any Early Stage Sublicense Revenue received by Spark and its Affiliates from the Early Stage Sublicensee as set forth in greater detail in Section 7.10.
(c) Early Stage Sublicense Opportunities. If Clearside becomes aware that a Third Party desires to obtain an Early Stage Sublicense, Clearside shall provide Spark with written notice. Spark shall consider any such request in good faith and shall keep Clearside apprised of the status of discussions. When negotiations cease, Spark shall notify Clearside and advise Clearside the reason or reasons for the termination of negotiations.
 
3.5	No Implied Rights. Except as specifically set forth in this Agreement, neither Party shall acquire any license, intellectual property interest or other rights, by implication or otherwise, in any Know-How disclosed to it under this Agreement or under any Patents Controlled by the other Party or its Affiliates.	
 
3.6	Rights Upon Bankruptcy. All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code and other similar laws in any jurisdiction outside the U.S. (collectively, the “ Bankruptcy Laws ”), licenses of rights to “intellectual property” as defined under the Bankruptcy Laws. If a case is commenced during the term of this Agreement by or against a Party under Bankruptcy Laws then, unless and until this Agreement is rejected as provided in such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall perform all of the obligations provided in this Agreement to be performed by such Party. If a case is commenced during the term of this Agreement by or against a Party under the Bankruptcy Laws, this Agreement is rejected as provided in the Bankruptcy Laws and the other Party elects to retain its rights hereunder as provided in the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee), shall provide to the other Party copies of all information necessary for such other Party to prosecute, maintain and enjoy its rights under the terms of this Agreement promptly upon such other Party’s written request therefor. All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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3.7	Information Rights. During the Option Period, Clearside shall notify Spark within five (5) business days following each time that the cash Clearside has on hand falls below [***].	
 
3.8	Exclusivity. Notwithstanding that Clearside’s obligation to supply Microinjectors and related services to Spark, its Affiliates and sublicensees is limited to Standard Microinjectors and related services, Clearside and its Affiliates shall not, and shall not grant any license to or otherwise assist any Third Party, directly or indirectly, to research, develop, manufacture or commercialize any Microinjector in or for use in the Field.	
ARTICLE 4
DEVELOPMENT
 
4.1	Development.	
(a) Diligence by Spark. At Spark’s sole discretion, Spark may Develop Licensed Products and shall be solely responsible to undertake Development of Licensed Products in the Field in the Territory; provided that Spark shall use Commercially Reasonable Efforts to (a) Develop a Licensed Product in the Field, and (b) seek Marketing Authorization in the United States and Europe for a Licensed Product in the Field. In addition, Spark shall conduct preclinical research with respect to Licensed Products directed to at least two (2) biological targets in the sixty (60) months following the Option Exercise Date. Clearside may provide Spark with written notice if Spark fails to conduct such preclinical research on [***] during such sixty (60) month period, in which event, if Spark does not commence such preclinical research within one hundred eighty (180) days after receipt of such notice, as Spark’s sole and exclusive liability and Clearside’s sole and exclusive remedy for such failure, Spark’s license under Section 3.2(b) shall thereafter be limited to Licensed Products directed to the biological target, if any, as to which Spark has conducted preclinical research as of the end of such one hundred eighty (180) day period. The foregoing due diligence obligations may be modified as provided for in Section 14.3(b).
 
4.2	Regulatory Activities.	
(a) By Clearside. Clearside shall use all reasonable efforts to secure from Regulatory Authorities or other Government Authorities and maintain all licenses, waivers and approvals solely related to Standard Microinjectors (and any New Microinjectors supplied to Spark by Clearside) that are required under Law for Spark to fully exercise its rights hereunder to Develop, Manufacture or Commercialize Licensed Products in the Field in the United States and Europe and for Clearside to perform its manufacturing and supply obligations pursuant to Article 6. Without limiting the foregoing, as between Spark and Clearside, Clearside shall be solely responsible for obtaining and shall use all reasonable efforts to secure from all national, state and local Regulatory Authorities and other Government Authorities all approvals required for the Development, Manufacture and Commercialization of Standard Microinjectors (and any New Microinjectors
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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supplied to Spark by Clearside) for use with Gene Therapeutics, including such approvals from (i) institutional review boards, (ii) hospital formularies, (iii) pharmacy and therapeutics committees and (iv) other hospital governing bodies.
(b) By Spark. Except as otherwise set forth in Section 4.2(a), Spark shall prepare and file all INDs and applications and otherwise obtain and maintain approvals from Regulatory Authorities (including Marketing Authorizations) that are necessary for Development and Commercialization of the Licensed Products in the Field in the Territory, and otherwise interact with Regulatory Authorities as appropriate with respect to the Licensed Products. Spark will own all such INDs, applications and other Regulatory Materials for Licensed Products.
(c) Safety Information Regarding Microinjectors. Clearside shall promptly, and in all cases within timeframes that enable Spark to meet its safety reporting obligations to Regulatory Authorities, provide Spark with all adverse event and other material safety information relating to Standard Microinjectors (and any New Microinjectors supplied to Spark by Clearside) that is or becomes known to Clearside. Spark shall promptly, and in all cases within timeframes that enable Clearside to meet its safety reporting obligations to Regulatory Authorities, provide Clearside with all adverse event and other material safety information relating to Microinjectors using Clearside Technology that is or becomes known to Spark.
 
4.3	Assistance by Clearside. Clearside shall assist Spark (including by taking actions or providing data, documents and other information in accordance with Spark’s reasonable request) as required by any of the following: (a) a Regulatory Authority, (b) an investigational review board, (c) a hospital formulary, (d) a pharmacy and therapeutics committee, or (e) other hospital governing authority, in each case for the use of the Clearside Technology for the conduct of Clinical Trials or Commercialization of Licensed Products in the Field. Clearside shall also provide any support reasonably requested by Spark in any FDA and EMA meetings and correspondence conducted pursuant to Section 4.2(b).	
 
4.4	Progress Reports. Within sixty (60) days after the end of each June and December of each year prior to the First Commercial Sale of a Licensed Product in the Field in the United States or Europe, Spark shall provide to Clearside a reasonably detailed written report describing the progress made with respect to the Development of Licensed Products in the Field in the Territory and, if requested by Clearside, shall participate in a telephone conference with Clearside to discuss the contents of the report. Unless otherwise agreed, each such telephone conference shall include an officer with appropriate decision-making authority (e.g., the CEO or another officer who reports directly to the CEO) from each Party.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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4.5	Development Costs.	
(a) Except as otherwise set forth in Sections 2.5, 4.5(b) and 7.2(b), Spark shall bear all costs and expenses relating to its Development of Licensed Products in the Field.
(b) Except as otherwise set forth in Sections 2.5, 4.6(b) and 7.2(b), Clearside shall bear all costs and expenses relating to Development of Standard Microinjectors (and any New Microinjectors supplied to Spark by Clearside) for use in Licensed Products and obtaining necessary approvals from Regulatory Authorities to support the use, Manufacture and Commercialization of Standard Microinjectors (and any New Microinjectors supplied to Spark by Clearside) in connection with the Development and Commercialization of Licensed Products as set forth in Section 4.2(a).
 
4.6	Reservation of Rights; New Microinjectors.	
(a) Clearside expressly reserves the right to research, Develop, and Commercialize Microinjectors for all purposes outside the Field.
(b) Spark shall not seek to develop a Microinjector incorporating any proprietary Clearside Technology without first presenting the proposed modification to Clearside for development as provided in this section. Any Microinjector incorporating any proprietary Clearside Technology developed based on Spark’s proposed modifications is referred to as a “New Spark Microinjector”. During the term of this Agreement, the Parties shall discuss in good faith whether the Parties wish to collaborate on the New Spark Microinjector and, if so, how to allocate development responsibilities and costs between the Parties and a supply price for the New Spark Microinjector. Such allocation shall be reflected in an agreed-upon written Workplan. Neither Party shall be bound to go forward with any new Workplan unless the new Workplan has been signed by an authorized signatory of each Party.
(c) If Clearside independently develops a Microinjector which is not a Standard Microinjector, a New Spark Microinjector or a Third Party-Funded New Microinjector (as described in the next paragraph) (such independently developed Microinjector, a “New Clearside Microinjector”), the license granted pursuant to Section 3.2(b) shall extend to the right to practice Clearside Technology incorporated into such New Clearside Microinjector.
(d) If Clearside develops any New Microinjector in a program funded by or otherwise the subject of a bona fide collaboration with one or more Third Parties, the resulting Microinjector shall be referred to as a “Third Party-Funded New Microinjector”. Clearside shall use Commercially Reasonable Efforts to acquire “Control” over any Patents or Know-How developed in such collaboration sufficient to enable Clearside to grant a license in the Field to Spark to practice such inventions. Clearside shall not, without Spark’s prior written consent, grant any sublicense to any Third Party under, use, incorporate or permit any Third Party to do any of the foregoing, any Joint Collaboration IP for use in or in connection with any Third Party-Funded New Microinjector if such Third Party does not grant Clearside rights sufficient to enable Clearside to permit Spark to Commercialize the Third Party-Funded New Microinjector in the Field in accordance with the terms of this Agreement.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 5
COMMERCIALIZATION
 
5.1	Licensed Products. Spark shall in its sole discretion determine whether or not to Commercialize any Licensed Product, and which, if any, Licensed Products to Commercialize; provided that, following receipt of Marketing Authorization for a Licensed Product in the Field in the United States or Europe, Spark shall use Commercially Reasonable Efforts to Commercialize such Licensed Product in the Field in the United States or Europe, respectively.	
 
5.2	Pricing. Spark shall be solely responsible for determining the pricing of each Licensed Product in the Field in the Territory.	
ARTICLE 6
MANUFACTURE
 
6.1	General. Spark shall retain all rights to Manufacture Licensed Products and Clearside shall retain all rights to Manufacture clinical and commercial supplies of Microinjectors that use Clearside Technology to be included in Licensed Products, subject to Section 6.3, and shall supply Spark’s clinical and commercial requirements of Standard Microinjectors. Clearside shall supply at its own expense all Standard Microinjectors required to perform the Research in accordance with the Workplans. In consideration of clinical and commercial supplies of Standard Microinjectors that are Manufactured by or on behalf of Clearside (after an initial 250 Standard Microinjectors to be provided by Clearside at no charge with respect to each Licensed Product during the post-Research Development period) and supplied to Spark, Spark shall pay Clearside [***] per Standard Microinjector, which price shall be included as term of the Supply Agreement described in Section 6.2 below.	
 
6.2	Supply. All Manufacturing and supply by Clearside of Microinjectors using Clearside Technology for the clinical Development and Commercialization by Spark of Licensed Products shall be covered by a mutually acceptable supply agreement to include the terms set forth on  Exhibit E  and such other terms and conditions as are reasonable and customary for an agreement governing the Manufacturing and supply of a product similar to a Standard Microinjector to be entered into by the Parties concurrent with exercise by Spark of the Option or at such later date as may be agreed by Clearside and Spark, pursuant to which Clearside shall supply exclusively to Spark Spark’s requirements for clinical and commercial supply of the Standard Microinjector solely for inclusion in Licensed Products (the “ Supply Agreement ”). The Supply Agreement shall provide for authorization by Clearside, including any rights and licenses necessary, for Spark to	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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 	obtain supply of Standard Microinjectors directly from Clearside’s Third Party contract manufacturer in the event that Clearside fails to supply as required thereunder and shall also include provisions that permit Spark to qualify another Third Party contract manufacturer designated by Spark and that is reasonably acceptable to Clearside as a second source manufacturer for Standard Microinjectors. Concurrently with the Supply Agreement, the Parties shall negotiate and enter into a quality agreement (the “ Quality Agreement ”).	
 
6.3	Manufacturing Transfer. If the Parties fail to agree upon and execute the Supply Agreement within the time period therefor set forth in Section 6.2, or if a “Failure to Supply” occurs under the Supply Agreement (as defined therein), then Spark shall have the option of obtaining the right to have Manufactured clinical and commercial supplies of Standard Microinjectors (or any New Microinjectors supplied to Spark by Clearside prior to such Failure to Supply) solely for inclusion in Licensed Products upon written notice to Clearside. If Spark exercises such option, the Parties will promptly enter into a technology transfer agreement pursuant to which Clearside shall transfer to a Third Party contract manufacturer designated by Spark and reasonably acceptable to Clearside Clearside’s Know-How concerning the Manufacture of such Standard Microinjectors (or any New Microinjectors supplied to Spark by Clearside prior to such Failure to Supply), grant Spark an exclusive (in the Field), worldwide license under Clearside IP to have Manufactured such Microinjectors for inclusion in Licensed Products in the Field, and provide Spark with reasonable assistance in Spark’s preparations to have Manufactured such Microinjectors. Spark acknowledges that Manufacture of Licensed Product for sale in the United States may be required to take place in the United States to the extent required by the Emory License Agreement. Such technology transfer agreement shall include provisions under which Spark shall reimburse Clearside for its reasonable costs and expenses in conducting such technology transfer and assistance, which shall be Spark’s only payment obligations thereunder. In addition, such technology transfer agreement shall include reasonable provisions necessary for the protection of Clearside’s rights in the transferred Know-How.	
ARTICLE 7
PAYMENTS
 
7.1	Initial Payments.	
(a) In consideration of the rights granted hereunder with respect to Option Period #1 , Spark shall reimburse Clearside for costs incurred in the development of Licensed Products by making an upfront option payment of Five Hundred Thousand Dollars ($500,000), which payment shall be payable by Spark within five (5) days after the Effective Date.
(b) If Spark elects to initiate Option Period #2 pursuant to Section 2.3, Spark shall pay Clearside an additional option payment of One Million Dollars ($1,000,000), which payment shall be payable by Spark within thirty (30) days after Spark’s notice that it is initiating Option Period #2.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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7.2	Research and Development Expenses and Payments.	
(a) Each Party shall bear the expense of its own human resources necessary for the conduct of the Research during each Option Period.
(b) Subject to Sections 2.5 and 7.2(a), each Party shall share equally in the out-of-pocket cost of the studies conducted hereunder during each Option Period in accordance with the applicable Workplan and budget set forth therein, excluding the cost of Gene Therapeutics and Standard Microinjectors. Notwithstanding the foregoing, Clearside’s cost-sharing obligations (i) for vendors shall be limited to agreed-upon vendors associated with maximizing gene expression using suprachoroidal dosing, and (ii) for studies shall be limited to studies other than human clinical studies, primate studies and GLP safety studies associated with Gene Therapeutics. Following the Option Exercise Date, Clearside shall use Commercially Reasonable Efforts to make trained personnel available to assist with training professionals on the use of Standard Microinjectors as reasonably requested by Spark, subject to reimbursement of direct personnel costs plus 50% for personnel time following the training of the first five (5) retinal surgeons designated by Spark and out of pocket expenses. Clearside shall not invoice Spark for personnel time for (a) the training (at an ophthalmic medical conference or other location reasonably acceptable to Clearside) of the first five (5) retinal surgeons designated by Spark or (b) incidental calls and correspondence which calls and correspondence, in aggregate, do not exceed eight hours per month.
(c) All other costs relating to Development of Microinjectors and Licensed Products hereunder shall be borne by the Parties as set forth in Section 4.5.
 
7.3	Option Exercise Payments.	
(a) If Spark exercises the Option during the Option Period #1 Exercise Period, Spark shall pay Clearside an option exercise payment of Two Million Dollars ($2,000,000), which payment is payable by Spark thirty (30) days after Spark’s notice that it is so exercising the Option. For clarity, if Spark exercises the Option during the Option Period #1 Exercise Period, Spark shall not be obligated to pay Clearside the additional option payment under Section 7.1(b).
(b) If Spark exercises the Option during the Option Period #2 Exercise Period, Spark shall pay Clearside an option exercise payment of Three Million Dollars ($3,000,000), which payment is payable by Spark thirty (30) days after Spark’s notice that it is so exercising the Option.
(c) For clarity, if Spark exercises the Option, only one of the two option exercise payments set forth in Sections 7.3(a) and 7.3(b) above shall become payable.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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7.4	Development and Launch Milestones. Spark shall pay Clearside a milestone payment upon the first achievement with a Licensed Product by Spark, its Affiliate or a sublicensee (other than an Early Stage Sublicensee) of the applicable milestone event set forth in the table below. Each such milestone payment shall be paid no more than once and the maximum aggregate amount that can become payable under this Section 7.4 is $13,500,000.	

Milestone Event (for a Licensed Product)	  	Milestone Payment	 	
[***]	  	 	[***	] 	
[***]	  	 	[***	] 	
[***]	  	 	[***	] 	
[***]	  	 	[***	] 	
 
7.5	Annual Net Sales Milestones. Spark shall pay Clearside the corresponding one-time milestone payment upon the first occurrence in a calendar year of Annual Net Sales for a Licensed Product or multiple Licensed Products achieving an Annual Net Sales milestone set forth in the table below. Each such milestone payment shall be paid no more than once and the maximum aggregate amount that can become payable under this Section 7.5 is $12,000,000.	

Annual Net Sales Milestone	  	Milestone Payment	 	
[***]	  	 	[***	] 	
[***]	  	 	[***	] 	
[***]	  	 	[***	] 	
 
7.6	Royalties.	
(a) Base Rates. Subject to Section 7.7, Spark shall pay to Clearside royalties on a Licensed Product-by-Licensed Product basis and country-by-country basis, in respect of Net Sales of Licensed Products in the Field in the Territory during the applicable Royalty Term, at a royalty rate of (a) [***] of Net Sales of the first Licensed Product to obtain Marketing Authorization in such country and (b) [***] of Net Sales of each subsequent Licensed Product to obtain Marketing Authorization in such country.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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(b) Bonus Royalty. In addition to the royalty under Section 7.6(a), subject to Section 7.7(b), Spark shall pay Clearside a bonus royalty of [***] of Net Sales of a Licensed Product in a country during any portion of the Royalty Term when, at the time of sale, the only Valid Claim(s) covering the manufacture, use, offer for sale or sale of such Licensed Product in such country are Valid Claim(s) in the Clearside Background IP, and such Licensed Product is not covered in such country by any Regulatory Exclusivity at the time of sale.
(c) Expiration of Royalty Term. Upon expiration (but not following earlier termination) of the Royalty Term for a Licensed Product in a country, all licenses granted to Spark hereunder with respect to such Licensed Product in such country shall become royalty-free, fully paid-up, perpetual, irrevocable and will survive any termination or expiration of this Agreement.
 
7.7	Royalty Reductions.	
(a) Cost of Microinjectors. Spark may deduct from royalties payable to Clearside under Section 7.6 amounts paid to Clearside pursuant to Article 6 for Microinjectors included in the Licensed Products the Net Sales of which were used to calculate such royalties. For example, if Net Sales of the first Licensed Product in a given period during the applicable Royalty Term are $100,000 and the cost to Spark of the Microinjectors incorporated into such Licensed Product sold during such period is [***], Spark would pay Clearside royalties on such Net Sales equal to ($100,000 [***] minus the [***] paid for the Microinjector supply x the number of units sold), assuming Section 7.6(b) and the other reductions under this Section 7.7 are not applicable.
(b) Competitive Products. In the event a Third Party Gene Therapeutic product that uses a non-surgical delivery to the suprachoroidal space receives Marketing Authorization from the applicable Regulatory Authority in a country to treat the same indication as a Licensed Product, and such product competes with a Licensed Product in such country, then the additional royalty bonus of [***] described in Section 7.6(b), if otherwise applicable, shall cease to apply to Net Sales of such Licensed Product in such country and the royalty rate for Net Sales of such Licensed Product in such country shall thereafter be reduced by [***] from the applicable base royalty rate set forth in Section 7.6(a)  (i.e. , shall be reduced from [***] or from [***], as applicable).
(c) If Clearside elects not to take an Enforcement Action with respect to Competitive Infringement pursuant to Section 8.4(b), Spark’s obligation to pay royalties on Net Sales of the affected Licensed Product in such country shall be limited to that amount that Clearside owes to its upstream licensor(s) and which is attributable to such Net Sales as documented by Clearside to Spark’s reasonable satisfaction, not to exceed an aggregate of [***] of Net Sales.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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7.8	Reports and Payments.	
(a) Research Expenses. Spark shall enter into services agreements and purchase orders with, and pay invoices from, Third Party contractors engaged to perform Research in accordance with the Workplans. Within thirty (30) days after the end of each quarter in which Spark has incurred out-of-pocket costs in connection with the Research that the Parties are required to share pursuant to Section 7.2(b), Spark shall submit to Clearside a statement detailing such costs and will prepare and provide to Clearside an invoice for Clearside’s share of such costs as contemplated under Section 7.2(b). Clearside shall pay such amount to Spark within thirty (30) days after the provision of such invoice, provided that in no event shall Clearside be obligated to pay more than the amount allocated to Clearside in a mutually agreed budget that is consistent with the Workplans and Section 7.2(b).
(b) Milestones. Spark shall promptly notify Clearside of the achievement of any milestone event for a Licensed Product in the Field achieved in accordance with Sections 7.4 and 7.5. Each milestone payment pursuant to Section 7.4 shall be due within thirty (30) days after achievement of the applicable milestone event, and each milestone payment under Section 7.5 shall be paid pursuant to Section 7.8(b) below concurrently with royalties for the quarter during which such milestone was achieved.
(c) Royalties. Within forty-five (45) days after the end of each quarter, Spark shall deliver to Clearside a report setting forth for such quarter the following information: (i) the Net Sales for Licensed Products, and the basis for the calculation of Net Sales; (ii) the applicable royalty rate; (iii) the royalty amount due hereunder for the sale of Licensed Products; and (iv) any Annual Net Sales milestone achieved during such quarter pursuant to Section 7.5. No such reports shall be due for any Licensed Product before the First Commercial Sale of a Licensed Product in the Territory. The total royalty and any Annual Net Sales milestone payment(s) due for the sale of Licensed Products and/or the achievement of Annual Net Sales milestone(s) during such quarter shall be remitted no later than forty-five (45) days after the end of each such quarter.
 
7.9	Third Party Licenses for Microinjectors.	
(a) Clearside shall be responsible for all upfront payments, milestone payments, royalties or other payments due to the licensors under the Emory License Agreement and to any other licensor of any Clearside IP for rights to use the Standard Microinjector (and, subject to Section 7.9(c), any New Microinjector supplied to Spark by Clearside) in Licensed Products, whether the agreements with such licensors are entered into before or after the Option Exercise Date. For clarification, Clearside’s responsibility under this Section 7.9(a) shall not extend to rights held by any Third Party which rights are not necessary for the Commercialization of the Standard Microinjector (or any New Microinjector supplied to Spark by Clearside) contained in Licensed Products (including as such Microinjector is incorporated into Licensed Products, but excluding rights of any Third Party that are necessary based on specific Gene Therapeutics included in Licensed Products).
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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(b) If Spark believes that any intellectual property rights of a Third Party are necessary for the Commercialization of a Licensed Product incorporating a Standard Microinjector, then Spark shall promptly notify Clearside of such belief and the Parties shall discuss in good faith whether a license to such Third Party intellectual property is needed or advisable. If (a) Spark determines that a license from a Third Party is needed or advisable for the Commercialization of a Licensed Product incorporating a Standard Microinjector in the Territory, (b) Clearside does not enter into an appropriate license agreement for such technology within a reasonably period not to exceed one hundred eighty (180) days after Spark’s written request, (c) Spark enters into such a license agreement, and (d) upfront payments, milestone payments, royalties or other payments are owed to such Third Party for rights to incorporate a Standard Microinjector into a Licensed Product pursuant to the Third Party license, then Spark may deduct, on a country-by-country basis from royalties owed to Clearside under this Agreement one hundred percent (100%) of any such payment not made by Clearside to such Third Party licensor, provided that in no event shall the amount payable to Clearside for any calendar quarter be reduced by more than [***] by operation of this Section 7.9(b). For clarification, Clearside’s responsibility under this Section 7.9(b) shall not extend to rights held by any Third Party which rights are not necessary for the Commercialization of the Standard Microinjector contained in such Licensed Product (including as such Microinjector is incorporated into such Licensed Product, but excluding rights of any Third Party that are necessary based on the specific Gene Therapeutic included in such Licensed Product).
(c) If, during the Term, Clearside obtains Control in the Field over Third Party intellectual property rights that are necessary for the Commercialization of a New Microinjector supplied by Clearside to Spark, then Clearside shall notify Spark in writing and include in such notification a summary of such Third Party intellectual property rights, the commercial and sublicensing terms of the license and other relevant information. Spark will have ninety (90) days thereafter to notify Clearside of its desire to obtain a sublicense to such Third Party intellectual property rights. Upon receipt of such written notice from Spark, Clearside shall grant to Spark a sublicense of such Third Party property rights, which shall include terms that require payment by Spark of [***] of the royalties due to the Third Party attributable to the manufacture, use or sale of Licensed Products incorporating the New Microinjector by Spark, its sublicensees and their respective Affiliates as well as any terms that Clearside is required to impose on its sublicensees pursuant to the relevant in-license. If Spark believes that any intellectual property rights of a Third Party are necessary for the Commercialization of a Licensed Product incorporating a New Microinjector supplied by Clearside to Spark, then Spark shall promptly notify Clearside of such belief and the Parties shall discuss in good faith whether a license to such Third Party intellectual property is needed or advisable. If (a) Spark determines that a license from a Third Party is needed or advisable for the Commercialization of a Licensed Product incorporating the New Microinjector in the
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Territory, (b) Clearside does not enter into an appropriate license agreement for such technology within a reasonably period not to exceed one hundred eighty (180) days after Spark’s written request, (c) Spark enters into such a license agreement, and (d) upfront payments, milestone payments, royalties or other payments are owed to such Third Party for rights to incorporate the New Microinjector into a Licensed Product pursuant to the Third Party license, then Spark may deduct, on a country-by-country basis from royalties owed to Clearside under this Agreement [***] of any such payment not made by Clearside to such Third Party licensor, provided that in no event shall the amount payable to Clearside for any calendar quarter be reduced by more than [***] by operation of this Section 7.9(c). For clarification, Clearside’s responsibility under this Section 7.9(c) shall not extend to rights held by any Third Party which rights are not necessary for the Commercialization of the New Microinjector contained in such Licensed Product (including as such Microinjector is incorporated into such Licensed Product, but excluding rights of any Third Party that are necessary based on the specific Gene Therapeutic included in such Licensed Product).
 
7.10	Early Stage Sublicense Revenue. When Spark receives Early Stage Sublicense Revenue with respect to an Early Stage Sublicense, Spark will pay [***] of Early Stage Sublicense Revenue to Clearside; provided that in the event any such Sublicensee is the first to achieve any development or launch-based milestone event set forth in Section 7.4 above, Spark shall pay Clearside the greater of (i) [***] of Early Stage Sublicense Revenue received from such Sublicensee upon the occurrence of such milestone or (ii) the milestone payment set forth in Section 7.4; provided further that with regard to sales-based milestones received from such Sublicensee, Spark shall pay Clearside the greater of (i) [***] of such sales-based milestone fees received from Sublicensees or (ii) the aggregate sales-based milestone payments as set forth in Section 7.5 above for all sales-based milestone events achieved (based on the combined sales of Spark and all Sublicensees).	
 
7.11	Payment Method; Late Payments. Payments hereunder shall be paid by wire transfer, or electronic funds transfer (EFT) in immediately available funds to a bank account designated by the receiving Party at least ten (10) days in advance of such payment. Royalties and other payments, including patent expense reimbursements, required to be paid by Spark pursuant to this Agreement shall, if overdue, bear interest until payment at a rate equal to the London Interbank Offered Rate plus two hundred basis points. The interest payment shall be due from the day the original payment was due until the day that the payment was received by Clearside. The payment of such interest shall not restrict Clearside from exercising any other rights it may have because any payment is overdue.	
 
7.12	Currency. All amounts payable and calculations hereunder shall be in Dollars. Conversion of sales recorded in local currencies to Dollars will first be determined in the foreign currency of the country in which such Licensed Products are sold and then converted to Dollars at a ninety (90)-day trailing average published by the  Wall Street Journal  (U.S. editions) for conversion of the foreign currency into dollars on the last day of the quarter for which such payment is due.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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7.13	Taxes and Withholding. All payments due under this Agreement will be made without any deduction or withholding for or on account of any tax unless such deduction or withholding is required by Law to be assessed against the receiving Party. If the paying Party is so required to deduct or withhold, the paying Party will (a) promptly notify the receiving Party of such requirement, (b) pay to the relevant authorities the full amount required to be deducted or withheld promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against the receiving Party, and (c) promptly forward to the receiving Party an official receipt (or certified copy) or other documentation reasonably acceptable to the receiving Party, to the extent available, evidencing such payment to such authorities. Spark shall reasonably cooperate with Clearside in any lawful action to claim exemption from such deductions or withholdings and otherwise to minimize the amount required to be so withheld or deducted.	
 
7.14	Maintenance of Records. Each Party shall keep accurate books and accounts of record in connection with the calculation of payments to be made by such Party under this Agreement in sufficient detail to permit accurate determination of all figures necessary for verification of payments to be paid under this Agreement. Each Party shall maintain such records for a period of at least five (5) years after the end of the year in which they were generated or longer if and to the extent required by applicable law or regulation	
 
7.15	Audits. Each Party shall have the right, at its own expense and no more than once per year, to have an independent, certified public accountant of national standing, selected by such Party and reasonably acceptable to the other Party, review all records maintained in accordance with Section 7.14 upon reasonable notice and during regular business hours and under obligations of strict confidence, for the sole purpose of verifying the basis and accuracy of payments required and made under this Agreement within the prior thirty six (36) month period. No quarter may be audited more than one time. The audited Party shall receive a copy of each audit report promptly from the auditing Party. Should the inspection lead to the discovery of a discrepancy to the auditing Party’s detriment, the audited Party shall pay the amount of the discrepancy in the audited Party’s favor within thirty (30) days after being notified thereof. The auditing Party shall pay the full cost of the inspection unless the discrepancy is greater than ten percent (10%) of the amount paid for the applicable year that is the subject of such inspection, in which case the audited Party shall pay to the auditing Party the reasonable and documented cost charged by such accountant for such inspection. If such audit shows a discrepancy in the auditing Party’s favor, then the auditing Party shall pay the audited Party the amount of the discrepancy within thirty (30) days after being notified thereof.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 8
INTELLECTUAL PROPERTY
 
8.1	Ownership.	
(a) Background IP. As between the Parties, Clearside shall solely own the Clearside Background IP, and Spark shall solely own the Spark Background IP.
(b) Inventions.
(i) Any Invention arising from the Research that is solely invented by or on behalf of Clearside or its Affiliates (“ Clearside Collaboration IP ”) shall be solely owned by Clearside. Spark shall assign and transfer, and hereby assigns and transfers, to Clearside, without further consideration, Spark’s entire right title and interest in and to any such Clearside Collaboration IP.
(ii) Any Invention arising from the Research that is solely invented by or on behalf of Spark or its Affiliates and all data arising from the Research whether generated by or on behalf of Clearside or its Affiliates or by or on behalf of Spark or its Affiliates and all data arising from the Research other than Joint Data (as defined in Section 8.1(b)(iii)) (such inventions and data, the “ Spark Collaboration IP ”) shall be owned by Spark. Clearside shall assign and transfer, and hereby assigns and transfers, to Spark, without further consideration, Clearside’s entire right title and interest in and to any such Spark Collaboration IP.
(iii) Any (a) Inventions that are jointly invented by or on behalf of Spark or its Affiliates, on the one hand, and by or on behalf of Clearside or its Affiliates, on the other hand and (b) data arising from the portion of the Research that Clearside co-funds pursuant to Section 7.2(b) (such data, the “ Joint Data ”) (such Inventions and Joint Data, the “ Joint Collaboration IP ”) shall be jointly owned. Each Party shall assign and transfer, and hereby assigns and transfers, to the other Party, without further consideration, sufficient of its right title and interest in and to Joint Collaboration IP such that each Party has one-half of an undivided interest in the whole of such Joint Collaboration IP. Each Party shall have the right to freely exploit and license its interest in Joint Collaboration IP, without any duty to account or obtain consent from the other Party for such exploitation and licensing.
(iv) Each Party shall promptly and fully disclose to the other Party any and all Inventions to the extent related to Licensed Product made by its employees, agents, consultants or sub-contractors. In order to effect the intent of Sections 8.1(b)(i), 8.1(b)(ii) and 8.1(b)(iii), each Party shall ensure and hereby represents and warrants that all Persons performing Research or Development hereunder (1) have in writing assigned to such Party all right, title and interest in and to
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Inventions, including all Intellectual Property in Inventions conceived by such persons; and (2) have agreed in writing to assist such Party in the same manner that such Party shall assist the other Party as set forth in this Section 8.1(b)(iv).
(v) Inventorship as to Inventions shall be determined in accordance with applicable United States Law.
 
8.2	Prosecution and Maintenance of Patents.	
(a) Subject to Section 8.2(b), each Party shall have the right, but not the obligation, at its sole expense to Prosecute and Maintain Patents solely owned by such Party in accordance with Section 8.1(a), Section 8.1(b)(i) or Section 8.1(b)(ii), including, except as otherwise set forth in Section 8.2(e), filing and pursuing any valid request for a patent term adjustment or extension.
(b) Clearside shall keep Spark apprised of the status of each Patent application and Patent within the Clearside Collaboration IP and shall seek the advice of Spark with respect to patent strategy and draft patent applications and shall give reasonable consideration to any suggestions or recommendations promptly provided by Spark concerning the preparation, filing, Prosecution and Maintenance thereof. Clearside shall cooperate reasonably in the prosecution of all such Patent applications and Patents within the Clearside Collaboration IP and shall share all material information relating thereto promptly after receipt of such information. If, during the term of this Agreement, Clearside intends to allow any Patent or Patent application within the Clearside Collaboration IP to lapse or become abandoned without having first filed a substitute, ( e.g. , a continuation, continuation-in-part, or divisional application), Clearside shall notify Spark of such intention at least sixty (60) days prior to the date upon which such Patent application or Patent shall lapse or become abandoned, and Spark shall thereupon have the right, but not the obligation, to assume responsibility for the Prosecution and Maintenance thereof at its own expense.
(c) In the event, as to a Patent solely owned by a Party in accordance with Section 8.1(b)(i) or Section 8.1(b)(ii), such Party is unable for any reason to secure the signature of the relevant other Party’s employees to any document required to file, prosecute, register, or memorialize the assignment, the other Party does hereby irrevocably designate and appoint such Party and such Party’s duly authorized officers and agents as such other Party’s agents and attorneys-in-fact to act for and on such other Party’s behalf and instead for such Party to do all lawfully permitted acts to further the Prosecution and Maintenance of Clearside Collaboration IP or Spark Collaboration IP, as applicable, all with the same legal force and effect as if executed by such other Party.
(d) Subject to Sections 8.2(b) and 8.2(e), unless otherwise agreed, Spark shall be responsible for Prosecuting and Maintaining Patents within the Joint Collaboration IP and the Parties shall each pay fifty percent (50%) of Spark’s out-of-pocket costs incurred for such Prosecution and Maintenance.
(e) For clarity, Spark shall have the right to file and pursue any valid request for a patent term adjustment or extension as to any Patent within the Spark IP, the Clearside Collaboration IP or the Joint Collaboration IP in connection with any Marketing Authorization of a Licensed Product hereunder.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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8.3	Defense of Third Party Infringement Claims. Subject to the Parties’ respective indemnification rights and obligations pursuant to Article 12, if a Licensed Product becomes the subject of a Third Party’s claim or assertion of infringement of a Patent relating to Development, Manufacture or Commercialization of the Licensed Product in the Field in the Territory (each, an “ Infringement Claim ”), the Party first having notice of the claim or assertion shall promptly notify the other Party, and the Parties shall promptly confer to consider the claim or assertion and the appropriate course of action. Unless the Parties otherwise agree in writing, Spark shall have the right to defend any Infringement Claim, and Clearside shall reasonably assist Spark and cooperate in any such litigation at Spark’s request and expense. Spark shall keep Clearside reasonably informed with respect to the progress of any such litigation. Spark shall not enter into any settlement of any claim described in this Section 8.3 that adversely affects Clearside’s rights and interests without Clearside’s written consent, which consent shall not be unreasonably conditioned, withheld or delayed.	
 
8.4	Enforcement; Patent Challenges.	
(a) If a Party reasonably believes that any Patent covering a Licensed Product is being infringed by a Third Party in the Field (including through notification of a Paragraph IV certification) (“ Third Party Infringement ”) or is subject to a declaratory judgment action arising from such infringement (“ Declaratory Judgment Action ”) or becomes aware of any actual or threatened challenge by a Third Party with respect to the scope, validity or enforceability of any such Patent in the Territory, whether through opposition,  inter partes  dispute or otherwise (“ Third Party Challenge ”), then such Party shall promptly notify the other Party.
(b) If any Patent included in the Clearside Background IP is implicated by Third Party Infringement, a Declaratory Judgment Action or a Third Party Challenge, Clearside shall have the sole right (but not the obligation) to enforce such Patent with respect to such Third Party Infringement and to defend any such Declaratory Judgment Action or Third Party Challenge as to such Patent (each, an “ Enforcement Action ”), at its sole expense. Clearside shall consult with Spark and shall reasonably consider Spark’s views regarding the desirability and conduct of any such Enforcement Action. If Clearside does not take an Enforcement Action against any Third Party that is manufacturing or commercializing a Gene Therapeutic product in the Field in a country that competes or is likely to compete with a Licensed Product in the Field in such country (“ Competitive Infringement ”) within sixty (60) days after Spark has notified Clearside of the Third Party Infringement, Declaratory Judgment Action or Third Party Challenge and requested that Clearside bring such Enforcement Action, then Spark’s obligation to pay royalties thereafter on Net Sales of such Licensed Product shall be limited as set forth in Section 7.7(c).
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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If Clearside determines not to undertake a proposed Enforcement Action with respect to Competitive Infringement for purely financial reasons (i.e., that anticipated costs do not justify potential returns to Clearside), Clearside shall grant Spark the right to undertake the Enforcement Action. However, Clearside reserves the right in its sole discretion to not pursue or permit any Enforcement Action if such action could, in Clearside’s determination, jeopardize Clearside’s interests outside the Field.
(c) If any Patent included in the Collaboration IP is implicated by the Third Party Infringement, Declaratory Judgment Action or Third Party Challenge, Spark shall have the sole right (but not the obligation) to take an Enforcement Action as to such Patent, at its sole expense. If Spark determines not to undertake a proposed Enforcement Action with respect to Collaboration IP for purely financial reasons (i.e., that anticipated costs do not justify potential returns to Spark), Spark shall grant Clearside the right to undertake the Enforcement Action. However, Spark reserves the right in its sole discretion to not pursue or permit any Enforcement Action if such action could, in Spark’s determination, jeopardize Spark’s interests in the Field.
(d) Each Party shall reasonably cooperate, at the other Party’s expense, with the Party taking an Enforcement Action including joining as a party to such Enforcement Action as may be necessary or desirable for purposes of standing or establishing damages.
 
8.5	Recoveries. Any recovery received as a result of any Enforcement Action pursuant to Section 8.4(b) shall be used first to reimburse the Party taking the Enforcement Action for the costs and expenses (including attorneys’ and professional fees) incurred in connection with such Enforcement Action, then any amount payable to Clearside’s licensor(s) under the Emory License Agreement based on such recovery shall be paid to such licensor(s), and finally [***] of the remainder of the recovery shall be retained by or paid to Spark and the remaining [***] shall be retained by or paid to Clearside. Any recovery received as a result of any Enforcement Action pursuant to Section 8.4(c) shall be used first to reimburse the Party taking the Enforcement Action for the costs and expenses (including attorneys’ and professional fees) incurred in connection with such Enforcement Action, and then [***] of the remainder of the recovery shall be retained by or paid to Spark and the remaining [***] shall be retained by or paid to Clearside.	
 
8.6	Hatch-Waxman Act Litigation. Notwithstanding anything herein to the contrary, should a Party receive a certification as to a Licensed Product pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984 (Public Law 98-417), as amended (the “ Hatch-Waxman Act ”), or its equivalent with respect to biologics in the United States or in a country other than the United States, then such Party shall immediately provide the other Party with a copy of such certification. The Party with the right to take an Enforcement Action pursuant to Section 8.4 with respect to the applicable Patent(s) shall, within thirty (30) days from the date on which it receives or provides a copy of such certification provide written notice to the other Party (“ H-W Suit Notice ”) stating whether it will bring suit, at its expense, within a forty-five (45) day period from the date of such certification, and if not, whether the applicable step-in right of the other Party pursuant to Section 8.4(b) or 8.4(c) will apply (i.e., whether such Party is exercising its right pursuant to such Section not to permit the other Party to exercise such step-in right).	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 9
CONFIDENTIALITY
 
9.1	Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed by the Parties in writing, during the term of this Agreement and for ten (10) years thereafter, the Parties agree that the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any Confidential Information furnished to it by the other Party pursuant to this Agreement. For clarity, Confidential Information of a Party shall include all information and materials disclosed by such Party or its designee that (x) if disclosed in writing or other tangible form, is marked as “Confidential,” “Proprietary” or with similar designation at the time of disclosure, (y) if disclosed verbally or in other intangible form, is indicated upon first disclosure as being confidential or (z) by its nature can reasonably be expected to be considered Confidential Information by the recipient. Notwithstanding the foregoing, Confidential Information shall not be deemed to include information or materials to the extent that it can be established by written documentation by the receiving Party that such information or material:	
(a) was already known to or possessed by the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation established), at the time of disclosure;
(b) was generally available to the public or otherwise part of the public domain at the time of its first disclosure to the receiving Party;
(c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement;
(d) was independently developed by the receiving Party as demonstrated by documented evidence prepared contemporaneously with such independent development; or
(e) was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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9.2	Authorized Use and Disclosure. Each Party may use and disclose Confidential Information of the other Party as follows:	
(a) under appropriate confidentiality provisions substantially equivalent to those in this Agreement, in connection with the performance of its obligations or exercise of rights granted to such Party in this Agreement; and
(b) to the extent such disclosure is reasonably necessary in Prosecuting and Maintaining Patents, copyrights and trademarks (including applications therefor) in accordance with this Agreement, prosecuting or defending litigation, complying with applicable governmental regulations, filing for, conducting Development hereunder, obtaining and maintaining Marketing Authorizations, or otherwise required by Law, the rules of a recognized stock exchange or automated quotation system applicable to such Party; provided, however, that if a Party is required by Law, the rules of a recognized stock exchange or automated quotation system (collectively, “ Securities Laws ”) applicable to such Party to make any such disclosure of the other Party’s Confidential Information it will, except where prohibited by Law or impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, where practicable, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed.
 
9.3	Injunctive Relief. Given the nature of the Confidential Information and the competitive damage that would result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this Article 9. In addition to all other remedies, a disclosing Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 9. The receiving Party waives its right to have bond posted for the injunctive relief in a court of law.	
 
9.4	Terms of Agreement.	
(a) The Parties shall treat the existence and material terms of this Agreement as confidential and shall not disclose such information to Third Parties without the prior written consent of the other Parties or except as provided in Section 9.2 or Section 9.4(b) below. With respect to complying with the disclosure requirements of Securities Laws applicable to a Party, the Parties shall consult with each other concerning which terms of this Agreement shall be requested to be redacted in any public disclosure of the Agreement by the agency, and each Party shall seek confidential treatment, to the extent available, from the agency in public disclosure of the Agreement for all sensitive commercial, financial and technical information, including any dollar amounts set forth herein.
(b) Either Party may disclose to bona fide potential investors, lenders and acquirors/acquirees, and to such Party’s consultants and advisors, the existence and terms of this Agreement to the extent necessary in connection with a proposed equity or debt financing of such Party, or a proposed acquisition or business combination, or to  bona fide  potential sublicensees, so long as such recipients are bound in writing to maintain the confidentiality of such information in accordance with the terms of this Agreement.
(c) Clearside may provide, subject to confidentiality obligations, a copy of this Agreement (and any Sublicense) to the licensors under the Emory License Agreement as required by the terms of such Agreement.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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9.5	Publications. During the Option Periods, neither party nor its Affiliates shall publish or publicly disclose the results generated in the course of performing any of the Research without the prior written consent of the other party, which shall not be unreasonably withheld. After Spark’s exercise of the Option, Spark and its Affiliates shall have the right to publish or publicly disclose the results generated in the course of performing any of the Research, provided that Spark submits the proposed publication or disclosure to Clearside for its review at least thirty (30) days prior to the scheduled submission of such proposed publication or public disclosure (including, without limitation, to any journal for review). If, during its thirty (30) day review period, Clearside notifies Spark that it desires changes to the publication or public disclosure reasonably necessary to protect proprietary information of Clearside specifically related to Microinjectors or Clearside’s Background IP, Spark shall use reasonable efforts to accommodate such request. Following Spark’s exercise of the Option, all publications and presentations of the results generated in the course of performing the Research shall be made in a manner and have content consistent with the publication strategy developed by Spark and Clearside shall not publish or publicly disclose the results generated in the course of performing any of the Research without the prior written consent of Spark. If Spark does not exercise the Option, Clearside shall thereafter have the right to publish or publicly disclose the results generated in the course of performing any of the Research, provided that such publications do not disclose the identity of any Gene Therapeutic or information from which the identity of any Gene Therapeutic can be deduced.	
 
9.6	Publicity; Press Releases.	
(a) The Parties shall issue the initial press release set forth on Exhibit F hereto following the Effective Date.
(b) Except as otherwise mutually agreed by the Parties or as required by Law or the rules of any stock exchange, no Party shall issue or cause the publication of any other press release or public announcement regarding the terms of this Agreement without the express prior approval of the other Party, which approval shall not be unreasonably withheld or delayed, provided that if any such publication, press release or public announcement is required by Law, the Party obligated to make such publication, press release or public announcement shall, if practicable, notify the other Party in advance thereof and reasonably consider any timely comments from such other Party, including any reasonable request to limit such publication, press release or public announcement. Without limiting the generality of the foregoing, the achievement of an event giving rise to a payment obligation under Section 7.3, 7.4 or 7.5 shall be deemed to be an event required to be disclosed pursuant to Securities Laws if so determined by either Party.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 10
TERM AND TERMINATION
 
10.1	Term. This Agreement is effective as of the Effective Date and, following the Option Exercise Date, shall continue in full force and effect unless earlier terminated by a Party in accordance with Section 10.2 and shall expire on a Licensed Product-by-Licensed Product and country-by-country basis upon the expiration of the Royalty Term with respect to such Licensed Product in such country. Notwithstanding the foregoing, only the following provisions of this Agreement shall be in effect from and after the Effective Date and prior to the Option Exercise Date: Articles 1, 2, 9, 11, 12, 13 and 14, and Sections 3.2(a), 3.3, 3.5, 7.1, 7.2, 7.8-7.14 (solely as applicable to amounts payable prior to the Option Exercise Date), 8.1, 8.2, 10.1 and 10.2. If Spark does not exercise the Option as provided in Section 2.1, this Agreement shall terminate upon expiration of the last applicable Option Exercise Period.	
 
10.2	Termination.	
(a) Convenience. At any time following the Option Exercise Date, Spark may terminate this Agreement in its entirety or with respect to any Licensed Product or country upon written notice to Clearside, for any reason or for no reason, without liability to Clearside.
(b) Material Breach. Subject to Section 4.1, either Party may terminate the Agreement, on a Licensed Product-by-Licensed Product, at any time upon an uncured material breach by the other Party of its obligations hereunder with respect to such Licensed Product by giving written notice to the other Party specifying the nature of the material breach not less than ninety (90) days prior to the date the non-breaching Party intends to terminate the Agreement. If such material breach has been cured by such breaching Party within such ninety (90) day period, no such termination shall occur. If such material breach has not been cured by the breaching Party within such ninety (90) day period, then the non-breaching Party shall be entitled to terminate this Agreement with respect to such Licensed Product with immediate effect upon delivery to the breaching Party of a written notice terminating the Agreement; provided, however, that if the Party accused of materially beaching notifies the accusing Party in writing (i) within such ninety (90) day cure period, that the accused Party disputes that it is in material breach, or (ii) within thirty (30) days after delivery of a termination notice for failure to cure a material breach, that the accused Party contends it cured such material breach, then in either such case no such termination shall become effective until (1) a final, binding determination pursuant to Article 13 that the accused Party was in material breach and failed to cure such material breach during the ninety (90) day cure period, and (2) the accusing Party’s delivery to the accused Party, after such determination, of a written notice terminating the Agreement with respect to the applicable Licensed Product(s).
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Any breach involving a disputed failure to make a payment when due may be cured by the breaching Party by paying such amount within fifteen (15) days following final resolution of such dispute.
(c) Bankruptcy. Either Party may terminate the Agreement if the other Party makes a voluntary or involuntary general assignment of its assets for the benefit of creditors, a petition in bankruptcy is filed by or against the other Party and is not dismissed in ninety (90) days, or a receiver or trustee is appointed for all or any part of the other Party’s property.
 
10.3	Consequences of Termination.	
(a) Accrued Obligations. Expiration or termination of this Agreement for any reason shall not release any Party of any obligation or liability which, at the time of such expiration or termination, has already accrued or which is attributable to a period prior to such expiration or termination. Upon expiration or earlier termination of this Agreement (including due to Spark not exercising the Option). Clearside shall have a royalty-free, fully paid-up, perpetual, irrevocable, transferable and sublicensable license to all of Spark’s interest in Collaboration IP to the extent necessary or useful for the commercialization of products incorporating Microinjectors, but excluding any such rights relating to any specific Gene Therapeutic.
(b) Ancillary Agreements. Unless otherwise agreed in writing by the Parties, the termination of this Agreement shall cause the automatic termination of the Supply Agreement and the Quality Agreement, to the extent such agreement(s) are in force as of the termination of this Agreement, with respect to the terminated Licensed Product(s).
(c) Non-Exclusive Remedy. Notwithstanding anything herein to the contrary, but subject to Section 4.1, termination of this Agreement by a Party shall be without prejudice to other remedies such Party may have at law or equity.
(d) Survival. The following provisions shall survive expiration or termination of this Agreement and continue to be enforceable: Section 3.3(ii), Section 7.6(c) (Expiration of Royalty Term), Article 9 (Confidentiality), Section 11.3 (Disclaimer), Article 12 (Indemnification, Insurance and Liability), Article 13 (Dispute Resolution), and Article 14 (Miscellaneous); and Sections 8.1 (Ownership) and 10.3 (Consequences of Termination).
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
 
11.1	Representations, Warranties and Covenants By Both Parties. Each Party hereby severally represents, warrants and covenants to the other Party as of the Effective Date:	
(a) it is duly organized and validly existing under the laws of the jurisdiction of its incorporation or continuance, as the case may be, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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(b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the individual executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;
(c) this Agreement is legally binding upon it and enforceable in accordance with its terms;
(d) the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Law;
(e) it has not granted, and shall not grant during the Term, any right to any Third Party which would conflict with the rights granted to the other Party hereunder;
(f) it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement; and
(g) no consent or approval from any Third Party (including any governmental or administrative body or court) is necessary to consummate this Agreement or, to its knowledge, to conduct the activities contemplated hereunder.
 
11.2	Clearside Representations, Warranties and Covenants. Clearside hereby represents and warrants that as of the Effective Date:	
(a) it shall perform the activities allocated to it under the Workplans in a timely and professional manner, with due care and in accordance with industry standards;
(b) it has full legal rights and authority to grant the licenses and rights under the Clearside Background IP granted under this Agreement and has not assigned, transferred, conveyed or licensed its right, title and interest in the Clearside Background IP in any manner inconsistent with such license grant or the other terms of this Agreement;
(c) there is no pending litigation or written threat of litigation that has been received by Clearside (and has not been resolved by taking a license or otherwise), which alleges that Clearside’s activities with respect to the Clearside Background IP have infringed or misappropriated any of the intellectual property rights of any Third Party;
(d) the performance by Clearside of the activities allocated to it under the Workplans and its other obligations under this Agreement shall not infringe or otherwise violate the intellectual property rights of any Third Party related to Standard Microinjectors; and
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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(e) neither Clearside nor any of its Affiliates, nor, to its knowledge, any other Person that will be involved in activities under this Agreement has been debarred or is subject to debarment, and neither Clearside nor any of its Affiliates will knowingly use in any capacity, in connection with this Agreement, any Person who has been debarred pursuant to Section 306 of the United States Federal Food, Drug, and Cosmetic Act, or who is the subject of a conviction described in such section. Clearside agrees to inform Spark in writing immediately if it or any Person who is performing activities hereunder is debarred or is the subject of a conviction described in Section 306, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the best of Clearside’s knowledge, is threatened, relating to the debarment or conviction of Clearside or any Person used in any capacity by Clearside or any of its Affiliates in connection with this Agreement.
(f) Clearside covenants that Clearside shall not, without Spark’s prior written consent, (i) waive, amend, cancel or terminate any material provision of, or fail to maintain, the Emory License Agreement in any manner that would be materially detrimental to the rights granted to Spark hereunder or that would impose additional or more onerous obligations on Spark, or (ii) take or fail to take any action that would give any counterparty to the Emory License Agreement the right to terminate the Emory License Agreement.
(g) Clearside has been advised by the United States (US) Food and Drug Administration (FDA) that products comprised of a Standard Microinjector used to deliver an active pharmaceutical ingredient to the suprachoroidal space (SCS) will be regulated as a drug subject to a new drug application (NDA) regulatory pathway, without any requirement for 510(k) or premarket approval of the Microinjector, and to Clearside’s knowledge, a biologics license application (BLA) regulatory pathway will apply to Licensed Products comprising a Standard Microinjector hereunder.
(h) The Patents set forth on Exhibit B are all of the Patents relating to the Clearside Technology that are Controlled by Clearside or its Affiliates as of the Effective Date. If any Patents relating to the Clearside Technology that are Controlled by Clearside or its Affiliates as of the Effective Date are determined to have been omitted from  Exhibit B ,  Exhibit B  shall automatically be updated to include such omitted Patents.
 
11.3	Spark Representations, Warranties and Covenants. Spark hereby represents and warrants that as of the Effective Date:	
(a) it shall perform the activities allocated to it under the Workplans in a timely and professional manner, with due care and in accordance with industry standards;
(b) the performance by Clearside of the activities allocated to it under the Workplans and its other obligations under this Agreement shall not infringe or otherwise violate the intellectual property rights of any Third Party related to Gene Therapeutics; and
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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(c) neither Spark nor any of its Affiliates, nor, to its knowledge, any other Person that will be involved in activities under this Agreement has been debarred or is subject to debarment, and neither Spark nor any of its Affiliates will knowingly use in any capacity, in connection with this Agreement, any Person who has been debarred pursuant to Section 306 of the United States Federal Food, Drug, and Cosmetic Act, or who is the subject of a conviction described in such section. Spark agrees to inform Clearside in writing immediately if it or any Person who is performing activities hereunder is debarred or is the subject of a conviction described in Section 306, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the best of Spark’s knowledge, is threatened, relating to the debarment or conviction of Spark or any Person used in any capacity by Spark or any of its Affiliates in connection with this Agreement.
(d) Spark covenants that Spark shall comply with the terms of the Emory License Agreement set forth in Exhibit C. Spark covenants that any Licensed Products made or sold by or on behalf of Spark, its Affiliates and Sublicensees pursuant to this Agreement shall comply with all applicable federal and state law regulations, including but not limited to regulations of the Federal Drug Administration, the Environmental Protection Agency, and their state equivalents.
 
11.4	Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTIONS 11.1, 11.2 AND- 11.3, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND PARTICULARLY THAT LICENSED PRODUCTS WILL BE SUCCESSFULLY DEVELOPED OR COMMERCIALIZED HEREUNDER, AND IF LICENSED PRODUCTS ARE DEVELOPED, WITH RESPECT TO SUCH LICENSED PRODUCTS, AND TO THE EXTENT PERMITTED BY LAW, THE PARTIES EXCLUDE ALL IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.	
ARTICLE 12
INDEMNIFICATION, INSURANCE AND LIABILITY
 
12.1	Indemnification by Clearside. Clearside shall defend, indemnify and hold harmless Spark and its officers, directors, employees, agents, representatives, successor and assigns (“ Spark Indemnitee ”) from and against any liability or expense (including reasonable legal expenses, costs of litigation and attorneys’ fees), damages, or judgments, whether for money or equitable relief (collectively, “ Losses ”) resulting from suits, proceedings, claims, actions, demands, or threatened claims, actions or demands, in each case brought by a Third Party (each, a “ Claim ”) against a Spark Indemnitee arising out of: (a) any negligent act or omission, or willful wrongdoing by Clearside or its Affiliates in the performance of this Agreement, (b) the failure by Clearside to comply with any Law, (c) any breach of any representation or warranty or covenant of Clearside under this Agreement, except, in each case, to the extent any such Losses result from the gross negligence or willful misconduct of a Spark Indemnitee or from the breach of any representation or warranty or obligation under this Agreement by Spark.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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12.2	Indemnification by Spark. Spark shall defend, indemnify and hold harmless Clearside and its Affiliates, the “Indemnitees” (under and as such term is defined in the Emory License Agreement), and its and their officers, directors, employees, agents, representatives, successor and assigns (“ Clearside Indemnitee ”) from and against any and all Losses resulting from Claims, including, bodily, injury, risk of bodily injury, death, property damage and product liability, against an Clearside Indemnitee arising out of or relating to, directly or indirectly: (a) any negligent act or omission, or willful wrongdoing by Spark in the performance of this Agreement, (b) the failure by Spark to comply with any Law, (c) any alleged personal injuries or death resulting from, arising out of or relating to any Clinical Trials or use of a Licensed Product, or (d) any breach of any representation or warranty or covenant of Spark under this Agreement; except, in each case, to the extent any such Losses result from the gross negligence or willful misconduct of a Clearside Indemnitee or from the breach of any representation or warranty or obligation under this Agreement by Clearside.	
 
12.3	Limitations on Indemnification. The obligations to indemnify, defend, and hold harmless set forth in Sections 12.1 and 12.2 shall be contingent upon the Party seeking indemnification (the “ Indemnitee ”): (a) notifying the indemnifying Party of a claim, demand or suit within ten (10) days of receipt of same; provided, however, that Indemnitee’s failure or delay in providing such notice shall not relieve the indemnifying Party of its indemnification obligation except to the extent the indemnifying Party is prejudiced thereby; (b) allowing the indemnifying Party or its insurers the right to assume direction and control of the defense of any such claim, demand or suit; (c) using its best efforts to cooperate with the indemnifying Party or its insurers, at the indemnifying Party’s expense, in the defense of such claim, demand or suit; and (d) agreeing not to settle or compromise any claim, demand or suit without prior written authorization of the indemnifying Party. The Indemnitee shall have the right to participate in the defense of any such claim, demand or suit referred to in this Section utilizing attorneys of its choice, at its own expense, provided, however, that the indemnifying Party shall have full authority and control to handle any such claim, demand or suit.	
 
12.4	Limitation on Liability. IN NO EVENT SHALL ANY PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE), EVEN IF SUCH PARTY WAS ADVISED OR OTHERWISE AWARE OF THE LIKELIHOOD OF SUCH DAMAGES. The limitations set forth in this Section 12.4 shall not apply with respect to (a) the Party’s indemnification obligations under Sections 12.1 and 12.2, as applicable, (b) breach of Article 9, or (c) intentional misconduct of a Party. Nothing in this Section 12.4 shall exclude a Party’s liability for death or injury caused by that Party’s negligence, or fraud or fraudulent misrepresentation.	
 
12.5	Insurance. During the term of this Agreement and for a period of five (5) years after termination or expiration, each Party shall obtain or maintain, at its sole cost and expense, insurance policies, including product liability insurance, adequate to cover its obligations hereunder and which are consistent with normal business practices of prudent companies similarly situated (which may include programs of self insurance).	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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ARTICLE 13
DISPUTE RESOLUTION
 
13.1	General. Any controversy, claim or dispute arising out of or relating to this Agreement shall be settled, if possible, through good faith negotiations between the Parties. If, however, the Parties are unable to settle such dispute after good faith negotiations, the matter shall be referred to executive officers of the Parties to be resolved by negotiation in good faith as soon as is practicable but in no event later than thirty (30) days after referral.	
 
13.2	Failure of Executive Officers to Resolve Dispute. If the executive officers are unable to settle the dispute after good faith negotiation in the manner set forth above, either Party may submit the matter for resolution by binding arbitration in accordance with Section 13.3.	
 
13.3	Arbitration. A Party submitting a dispute for resolution by binding arbitration pursuant to this Section 13.3 shall provide the other Party with written notice thereof (an “ Arbitration Notice ”). Any arbitration hereunder shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association, except as modified herein, and the arbitration proceeding shall be governed by the United States Federal Arbitration Act (the “ FAA ”). Except as specified below, such arbitration shall be conducted by a single arbitrator and the arbitrator shall be either mutually acceptable or, if the parties cannot agree on an arbitrator within fifteen (15) days after the matter is referred to arbitration, the single arbitrator shall be a person selected by the applicable rules. Within ten (10) business days after the arbitrator is selected, each party shall submit to the arbitrator that party’s proposed resolution of the dispute and justification therefor. The arbitrator shall, within ten (10) business days after receiving the proposed resolution from each party, select one of the proposals, and such selection shall be deemed to be the arbitrator’s conclusive decision and shall be binding on the parties. Notwithstanding the foregoing, in the case of a dispute relating to an alleged material breach, then the arbitration shall be conducted by a panel of three arbitrators, in which case each Party shall select one arbitrator within thirty (30) days after the date of the Arbitration Notice and the two (2) arbitrators so selected shall choose a third arbitrator to resolve the dispute within thirty (30) days after the date the second of the initial two (2) arbitrators is selected. All arbitrators shall be independent of the Parties and shall not have any present or past relationship with either Party. An arbitration decision shall be rendered in writing and shall be binding and not be appealable to any court in any jurisdiction except pursuant to the FAA. The arbitration proceedings shall be conducted in the English language and shall be held in: (a) Philadelphia, PA, if brought by Spark, and (b) Atlanta,	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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 	Georgia, if brought by Clearside. The arbitrators shall have the authority to grant specific performance, and to allocate between the Parties the costs and legal fees of arbitration in such equitable manner as they determine. Judgment upon the award so rendered may be entered in any court having jurisdiction and application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be.	
ARTICLE 14
MISCELLANEOUS
 
14.1	Governing Law. This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles thereof, and excluding the United National Convention on Contracts for the International Sales of Goods.	
 
14.2	Compliance with Laws. Each Party shall conduct its activities under this Agreement in accordance with Law and good business practices. Furthermore, each Party represents, warrants and agrees that it has been at all times and will continue to be in compliance with all potentially applicable anti-bribery and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977. Each Party represents, warrants and agrees that no bribes, payments, kickbacks, gifts, hospitality, donations, loans, or anything of value have been or will be made or received, offered, promised, or authorized, directly or indirectly, to improperly influence any act or decision of any person or entity, induce any person or entity to do or omit to do any act in violation of any person’s or entities’ lawful duties, or secure any improper advantage.	
 
14.3	Assignment of Rights and Obligations.	
(a) General Rule. This Agreement and its rights or obligations may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party.
(b) Permitted Assignments to Affiliates and in Case of Sale of Business Transactions. Notwithstanding Section 14.3(a), either Party may, even without the consent of the other Party, assign this Agreement or any of its rights or obligations (i) to any of its Affiliates, or (ii) in connection with a sale or transfer of all or substantially all of such Party’s business or assets relating to the subject matter of this Agreement, whether by merger, sale of assets or otherwise; provided, however, that such Party’s rights and obligations under this Agreement shall be assumed in writing by its successor in interest in any such transaction. In the event of an assignment of this Agreement by Spark, the successor or assignee shall be obligated, in addition to and without limiting the provisions of Section 4.1(a), if an IND clearance is obtained by Spark (or such successor or assignee) with respect to a second Licensed Product, to use Commercially Reasonable Efforts to Develop a second Licensed Product in the Field if warranted by safety, efficacy,
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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commercial opportunity and the other considerations included in the definition of “Commercially Reasonable Efforts.” In addition, either Party may assign its rights hereunder, subject to any applicable defenses or set offs, as collateral security to its senior secured creditor(s).
 
14.4	Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of the Agreement.	
 
14.5	Force Majeure. Except with respect to payment of money, no Party shall be liable to the other Party for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by earthquake, riot, civil commotion, war, terrorist acts, strike, flood, or governmental acts or restriction, or other cause that is beyond the reasonable control of the respective Party (“ Force Majeure ”). The Party affected by such Force Majeure will provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to an event of Force Majeure for any continuous period of more than ninety (90) days, the Parties will consult with respect to an equitable solution, including the possibility of the termination of this Agreement.	
 
14.6	Representation by Legal Counsel. Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the Party which drafted such terms and provisions.	
 
14.7	Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) or five (5) days after it was sent by registered letter, return receipt requested (or its equivalent), provided that no postal strike or other disruption is then in effect or comes into effect within two (2) days after such mailing, to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such Party will have last given by notice to the other Party.	

If to Spark:	  	Spark Therapeutics, Inc.
3737 Market Street, Suite 1300
Philadelphia, PA 19104	
 	  	Attention: General Counsel	
 	  	Facsimile: (215) 790-6248	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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If to Clearside:	  	Clearside Biomedical, Inc.
1220 Old Alpharetta Rd., Suite 300
Alpharetta, GA 30005	
 	  	Attention: Chief Executive Officer	
 	 	
With a copy to:	  	Hutchison PLLC
3110 Edwards Mill Road, Suite 300
Raleigh, NC 27612	
 	  	Attn: William N. Wofford	
 
14.8	Entire Agreement. The Parties hereto acknowledge that this Agreement, together with the Exhibits attached hereto, set forth the entire agreement and understanding of the Parties hereto as to the subject matter hereof, and supersedes all prior and contemporaneous discussions, agreements and writings in respect. Except as required by statute, no terms shall be implied (whether by custom, usage or otherwise) into this Agreement.	
 
14.9	Amendment. No amendment, modification or supplement of any provision of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party.	
 
14.10	Waiver. No provision of the Agreement shall be waived by any act, omission or knowledge of a Party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party. The waiver by any of the Parties of any breach of any provision hereof by another Party shall not be construed to be a waiver of any succeeding breach of such provision or a waiver of the provision itself.	
 
14.11	Severability. If any clause or portion thereof in this Agreement is for any reason held to be invalid, illegal or unenforceable, the same shall not affect any other portion of this Agreement, as it is the intent of the Parties that this Agreement shall be construed in such fashion as to maintain its existence, validity and enforceability to the greatest extent possible. In any such event, this Agreement shall be construed as if such clause of portion thereof had never been contained in this Agreement, and there shall be deemed substituted therefor such provision as will most nearly carry out the intent of the Parties as expressed in this Agreement to the fullest extent permitted by Law.	
 
14.12	Relationship of the Parties. The Parties agree that the relationship of Spark and Clearside established by this Agreement is that of independent contractors. Furthermore, the Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an employment, agency, partnership or any other relationship. Except as may be specifically provided herein, no Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of any other Party, or otherwise act as an agent for any other Party for any purpose.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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14.13	Third Party Beneficiaries. Except for the rights to indemnification provided for a Party’s Indemnitees pursuant to Article 12, all rights, benefits and remedies under this Agreement are solely intended for the benefit of the Parties (including any successor in interest or permitted assigns), and except rights to indemnification expressly provided pursuant to Article 12, no Third Party shall have any rights whatsoever to (a) enforce any obligation contained in this Agreement, (b) seek a benefit or remedy for any breach of this Agreement, or (c) take any other action relating to this Agreement under any legal theory, including actions in contract, tort (including negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.	
 
14.14	Nonsolicitation. During the term of this Agreement and for a period of twelve (12) months thereafter, neither Party shall solicit an employee of the other Party who is or has been involved in the performance or oversight of any of the Research hereunder to terminate his or her employment and accept employment or work as a consultant with the soliciting Party. Notwithstanding the foregoing, nothing herein shall restrict or preclude the Parties’ right to make generalized searches for employees by way of a general solicitation for employment placed in a trade journal, newspaper or website.	
 
14.15	Counterparts. This Agreement may be executed in any number of counterparts, each of which need not contain the signature of more than one Party but all such counterparts taken together shall constitute one and the same agreement. Any signature page delivered by facsimile or electronic image transmission shall be binding to the same extent as an original signature page.	
[Signature page follows]
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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INWITNESSWHEREOF, the Parties have executed this Agreement by their duly authorized representatives as of the dates set forth below.

SPARK THERAPEUTICS, INC.	 	 	 	CLEARSIDE BIOMEDICAL, INC.	
 	 	 	 	 	
By:	 	/s/ Jeffrey D. Marrazzo	 	 	 	By:	 	/s/ Daniel H. White	
 	 	 	 	 	
Name:	 	Jeffrey D. Marrazzo	 	 	 	Name:	 	Daniel H. White	
 	 	 	 	 	
Title:	 	CEO	 	 	 	Title:	 	President & CEO	
 	 	 	 	 	
Date:	 	 	 	 	 	Date:	 	4-27-2015	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Exhibits:
Exhibit A-1 – Initial Option Period #1 Workplan
Proposal Summary

Study Title	  	Price (USD)	 	
Ocular Distribution of AAV Vector by Suprachoroidal or Subretinal Injection in Pigmented Rabbits with a Tolerability Phase	  	$	[***	] 	
Assumptions
In the preparation of this quotation, certain assumptions have been made which are presented below:
The study information presented within this document is based on standard Covance practices and the study outline/assumptions included.
This document is not a contract. A contract will typically be issued at study plan finalization.
Price estimate has been prepared according to the information provided in the study outline/assumptions listed.
Price estimate is subject to change should there be any alteration to the study outline/assumptions.
The final study price will be calculated on the authorized definitive protocol.
Prices are valid for 60 days from the document date.
Where costs of shipping are included in this quotation, these are for convenience only and may vary depending upon the type and volume of material shipped. All shipping is provided by a third party vendor and is not considered part of the services provided by Covance.
One-year archive period included (can be extended if required). After retention has ended, Archives will request disposition decisions and communicate the applicable charges.
Ocular Distribution of AAV Vector by Suprachoroidal or Subretinal Injection in Pigmented Rabbits with a Tolerability Phase

Quote No.:	  	98777	
 	 	
Quote (USD):	  	$[***]	
 	 	
Study Location:	  	Madison, WI, USA	
 	 	
Estimated Study Start:        	  	Late March/Early April 2015 – based on study outline and current capacity. No schedule reserved at this time.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
45

Client Authorization
If Clearside Biomedical, Inc. would like Covance Laboratories Inc. to proceed with the scheduling and initial setup of the following project:

Study Title	  	Price (USD)	 	
Ocular Distribution of AAV Vector by Suprachoroidal or Subretinal Injection in Pigmented Rabbits with a Tolerability Phase	  	$	[***	] 	
Please sign below and e-mail as a .pdf to the Client Manager noted on Page 1.
Please issue a Purchase Order Number for the project.
Purchase Order Number (if applicable):                                         
Covance Laboratories Inc. and Clearside Biomedical, Inc. agree that the final contract values of the above-mentioned project will be determined upon completion of the definitive protocol before study start.
Upon receipt of this authorization, the appropriate resources will be reserved for the project, and you will be notified of the scheduled start date. Any subsequent delay or cancellation of the study may be subject to additional charges as noted below.
In the event of a delay or cancellation of a study contracted between the parties, Delay/Cancellation costs will be in accordance with the policy as established and mutually agreed upon under the Master Laboratory Services Agreement or Laboratory Services Agreement.

Signed for and on behalf of Clearside Biomedical, Inc.	

(Name & Title)	

(Date)	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
46

Exhibit A-2
Preliminary Work Plan #2
Following the successful completion of the first rabbit study as evidenced by the expression of GFP from an AAV5 vector in RPE and photoreceptor cells, the additional studies are anticipated. Based on the data from the initial study Clearside and Spark may recommend revision of this proposal.
 
 	1.	Dose Optimization Study	
[***]
 
 	2.	Efficacy study	
[***]
 
 	3.	Non-human primate study	
[***]
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit B – Existing Clearside Background IP
Owned by Emory University and/or Georgia Tech Research Corporation and subject to Emory License Agreement

Patent No.	  	Issue date	  	Docket No.	
 	 	 	
U.S. Patent No. 7,918,814	  	April 5, 2011	  	CLRS-004/02US	
 	 	 	
U.S. Patent No. 8,197,435	  	June 12, 2012	  	CLRS-004/03US	
 	 	 	
U.S. Patent No. 8,636,713	  	January 28, 2014	  	CLRS-004/04US	
 	 	 	
U.S. Patent No. 8,808,225	  	August 19, 2014	  	CLRS-004/05US	

Application No.	  	Filing date	  	Docket No.	
 	 	 	
International Patent Application No. PCT/US14/71623	  	December 19, 2014	  	CLRS-023/01WO	
 	 	 	
U.S. Provisional Patent Application No. 61/918,992	  	December 20, 2013	  	CLRS-023/00US	
 	 	 	
U.S. Provisional Patent Application No. 60/746,237	  	May 2, 2006	  	CLRS-004/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/172,409	  	April 24, 2009	  	CLRS-004/01US	
 	 	 	
U.S. Provisional Patent Application No. 61/698,254	  	September 7, 2012	  	CLRS-005/00US	
 	 	 	
U.S. Patent Application Serial No. 14/136,657	  	December 20, 2013	  	CLRS-004/06US	
 	 	 	
International Patent Application No. PCT/US2011/033987	  	April 26, 2011	  	CLRS-004/03WO	
 	 	 	
Australia Patent Application No. 2011248624	  	April 26, 2011	  	CLRS-004/03AU	
 	 	 	
Brazil Patent Application No. 11 2012 027416-3	  	April 26, 2011	  	CLRS-004/03BR	
 	 	 	
Canada Patent Application No. 2797258	  	April 26, 2011	  	CLRS-004/03CA	
 	 	 	
Chinese Patent Application No. 201180024176.5	  	April 26, 2011	  	CLRS-004/03CN	
 	 	 	
European Patent Application No. 11777924.9	  	April 26, 2011	  	CLRS-004/03EP	
 	 	 	
India Patent Application No. 10099/DELNP/2012	  	April 26, 2011	  	CLRS-004/03IN	
 	 	 	
Israel Patent Application No. 222638	  	April 26, 2011	  	CLRS-004/03IL	
 	 	 	
Japan Patent Application No. 2013-508168	  	April 26, 2011	  	CLRS-004/03JP	
 	 	 	
Mexico Patent Application No. MX/a/2012/012495	  	April 26, 2011	  	CLRS-004/03MX	
 	 	 	
New Zealand Patent Application No. 603185	  	April 26, 2011	  	CLRS-004/03NZ	
 	 	 	
New Zealand Patent Application No. 623752	  	April 26, 2011	  	CLRS-004/04NZ	
 	 	 	
Russia Patent Application No. 2012147341	  	April 26, 2011	  	CLRS-004/03RU	
 	 	 	
Singapore Patent Application No. 201207910-9	  	April 26, 2011	  	CLRS-004/03SG	
 	 	 	
South Africa Application No. 2012/08069	  	April 26, 2011	  	CLRS-004/03ZA	
 	 	 	
South Africa Application No. 2014/00616	  	April 26, 2011	  	CLRS-004/04ZA	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
48

Owned jointly by Clearside and Emory University and/or Georgia Tech Research Corporation and subject to Emory License Agreement

Application No.	  	Filing date	  	Docket No.	
 	 	 	
U.S. Provisional Patent Application No. 61/693,542	  	August 27, 2012	  	CLRS-006/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/754,495	  	January 18, 2013	  	CLRS-006/01US	
 	 	 	
U.S. Provisional Patent Application No. 61/784,817	  	March 14, 2013	  	CLRS-006/02US	
 	 	 	
PCT Patent Application No. PCT/US2013/056863	  	August 27, 2013	  	CLRS-006/03WO	
 	 	 	
U.S. Patent Application No. 14/424,685	  	August 27, 2013	  	CLRS-006/03US	
 	 	 	
EU national phase of PCT Patent Application No. PCT/US2013/056863	  	August 27, 2013	  	CLRS-006/00EP	
 	 	 	
CA national phase of PCT Patent Application No. PCT/US2013/056863	  	August 27, 2013	  	CLRS-006/03CA	
Independently developed and owned solely by Clearside

Application No.	  	Filing date	  	Docket No.	
 	 	 	
U.S. Provisional Patent Application No. 61/759,771	  	February 1, 2013	  	CLRS-011/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/724,144	  	November 8, 2012	  	CLRS-007/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/734,872	  	December 7, 2012	  	CLRS-008/00US	
 	 	 	
U.S. Provisional Patent Application No.61/745,237	  	December 21, 2012	  	CLRS-010/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/773,124	  	March 5, 2013	  	CLRS-012/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/785,229	  	March 14, 2013	  	CLRS-012/01US	
 	 	 	
U.S. Provisional Patent Application No. 61/819,388	  	May 3, 2013	  	CLRS-012/02US	
 	 	 	
U.S. Provisional Patent Application No. 61/873,660	  	September 4, 2013	  	CLRS-017/00US	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
49

 	 	 	 	 	
Application No.	  	Filing date	  	Docket No.	
 	 	 	
U.S. Provisional Patent Application No. 61/898,926	  	November 1, 2013	  	CLRS-017/01US	
 	 	 	
International Application No. PCT/US2013/069156	  	November 8, 2013	  	CLRS-007/01WO	
 	 	 	
U.S. Provisional Patent Application No. 61/830,324	  	June 3, 2013	  	CLRS-013/00US	
 	 	 	
International Application No. PCT/US2014/040254	  	May 30, 2014	  	CLRS-013/01WO	
 	 	 	
U.S. Provisional Patent Application No. 61/819,048	  	May 3, 2013	  	CLRS-014/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/819,052	  	May 3, 2013	  	CLRS-015/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/827,371	  	May 24, 2013	  	CLRS-016/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/944,214	  	February 25, 2014	  	CLRS-014/01US	
 	 	 	
U.S. Provisional Patent Application No. 61/953,147	  	March 14, 2014	  	CLRS-018/00US	
 	 	 	
International Application No. PCT/US2014/036590	  	May 2, 2014	  	CLRS-018/01WO	
 	 	 	
U.S. Patent Application No. 14/268,687	  	May 2, 2014	  	CLRS-018/01US	
 	 	 	
U.S. Patent Application No. 14/523,243	  	May 2, 2014	  	CLRS-018/02US	
 	 	 	
U.S. Provisional Patent Application No. 62/014,766	  	June 20, 2014	  	CLRS-021/00US	
 	 	 	
U.S. Provisional Patent Application No. 62/035,682	  	August 11, 2014	  	CLRS-014/02US	
 	 	 	
U.S. Design Patent Application No. 29/506,275	  	October 14, 2014	  	CLRS-022/00US	
 	 	 	
U.S. Provisional Patent Application No. 62/063,792	  	October 14, 2014	  	CLRS-022/01US	
Acquired from iScience and owned solely by Clearside

Case
Numbers	 	Title	  	Application
Information	 	Status	
641-008BR
(ISSCP008BR)	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Filed: 02/22/2007
App. #: PI0708133-2	 	[***]	
641-008C
(ISSCP008C1US)	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Filed: 03/15/2013
App. #: 13/842,288	 	[***]	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
50

 	 	 	 	 	 	 	
641-008CN
(ISSCP008CN)	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Issued: 06/8/2011
Pat. #: ZL200780014501.3
Filed: 2/22/2007
App. #: 200780014501.3	 	[***]	
641-008CN-DV1
(ISSCP008CND1)	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Issued: 10/30/2013
Pat. #: ZL2001110093644.6
Filed: 2/22/2007
App. #: 201110093644.6	 	[***]	
641-008DV
(ISSCP008D1US)	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Filed: 03/15/2013
App. #: 13/842,218	 	[***]	
641-008EP
(ISSCP008EP)	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Filed: 02/22/2007
App. #: 07751620.1	 	[***]	
641-008US
(ISSCP008US)	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Filed: 02/21/2007
App. #: 11/709,941	 	[***]	
641-015BR
(ISSCP015BR)	 	Title: DEVICE FOR OCULAR ACCESS	  	Filed: 04/15/2013
App. #: 1120130092050	 	[***]	
641-015CN
(ISSCP015CN)	 	Title: DEVICE FOR OCULAR ACCESS	  	Filed: 10/14/2011
App. #: 201180060268.9	 	[***]	
641-015CN-DV	 	Title: DEVICE FOR OCULAR ACCESS	  	Filed: Not yet
App. #:	 	[***]	
641-015EP
(ISSCP015EP)	 	Title: DEVICE FOR OCULAR ACCESS	  	Filed: 05/09/2013
App. #: 11776049.6	 	[***]	
641-015JP
(ISSCP015JP)	 	Title: DEVICE FOR OCULAR ACCESS	  	Filed: 4/12/2012
App. #: 2013-534049	 	[***]	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
51

 	 	 	 	 	 	 	
641-015US
(ISSCP015US)	 	Title: DEVICE FOR OCULAR ACCESS	  	Filed: 10/14/2011
App. #: 13/273,775	 	[***]	
 	 	Title: APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	Filed: February 22, 2006
U.S. Provisional Patent Application Serial No.: 60/776,903	 	 	
 	 	APPARATUS AND FORMULATIONS FOR SUPRACHOROIDAL DRUG DELIVERY	  	International Patent Application Serial No.:PCT/US2007/004874	 	[***]	
 	 	DEVICE FOR OCULAR ACCESS	  	U.S. Provisional Patent Application Serial No.: 61/393,741	 	[***]	
 	 	DEVICE FOR OCULAR ACCESS	  	International Patent Application Serial No.: PCT/US2011/056433	 	[***]	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
52

Developed and owned solely by Clearside

Application No.	  	Filing date	  	Docket No.	
 	 	 	
U.S. Provisional Patent Application No. 61/759,771	  	February 1, 2013	  	CLRS-011/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/724,144	  	November 8, 2012	  	CLRS-007/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/734,872	  	December 7, 2012	  	CLRS-008/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/745,237	  	December 21, 2012	  	CLRS-010/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/773,124	  	March 5, 2013	  	CLRS-012/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/785,229	  	March 14, 2013	  	CLRS-012/01US	
 	 	 	
U.S. Provisional Patent Application No. 61/819,388	  	May 3, 2013	  	CLRS-012/02US	
 	 	 	
U.S. Provisional Patent Application No. 61/873,660	  	September 4, 2013	  	CLRS-017/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/898,926	  	November 1, 2013	  	CLRS-017/01US	
 	 	 	
International Application No. PCT/US2013/069156	  	November 8, 2013	  	CLRS-007/01WO	
 	 	 	
U.S. Provisional Patent Application No. 61/830,324	  	June 3, 2013	  	CLRS-013/00US	
 	 	 	
International Application No. PCT/US2014/040254	  	May 30, 2014	  	CLRS-013/01WO	
 	 	 	
U.S. Provisional Patent Application No. 61/819,048	  	May 3, 2013	  	CLRS-014/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/819,052	  	May 3, 2013	  	CLRS-015/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/827,371	  	May 24, 2013	  	CLRS-016/00US	
 	 	 	
U.S. Provisional Patent Application No. 61/944,214	  	February 25, 2014	  	CLRS-014/01US	
 	 	 	
U.S. Provisional Patent Application No. 61/953,147	  	March 14, 2014	  	CLRS-018/00US	
 	 	 	
International Application No. PCT/US2014/036590	  	May 2, 2014	  	CLRS-018/01WO	
 	 	 	
U.S. Patent Application No. 14/268,687	  	May 2, 2014	  	CLRS-018/01US	
 	 	 	
U.S. Patent Application No. 14/523,243	  	May 2, 2014	  	CLRS-018/02US	
 	 	 	
U.S. Provisional Patent Application No. 62/014,766	  	June 20, 2014	  	CLRS-021/00US	
 	 	 	
U.S. Provisional Patent Application No. 62/035,682	  	August 11, 2014	  	CLRS-014/02US	
 	 	 	
U.S. Design Patent Application No. 29/506,275	  	October 14, 2014	  	CLRS-022/00US	
 	 	 	
U.S. Provisional Patent Application No. 62/063,792	  	October 14, 2014	  	CLRS-022/01US	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
53

Exhibit C – Provisions of Emory License Agreement
The following provisions of the Emory License Agreement shall be included in any Sublicense:
2.5.1. Spark or Sublicensee shall indemnify Emory/GTRC and maintain liability coverage to the same extent that Clearside is so required pursuant to Section 10.3 of the Emory License Agreement.
2.5.2. Emory/GTRC has the right to audit Spark or the Sublicensee as described below.
2.5.3. Spark shall provide Clearside with copies of all sublicense agreements within thirty (30) days of their execution date, which, if redacted, must include the relevant provisions under this Article 2 and a disclosure of the financial terms of the sublicense;
2.5.4. Sublicense to Spark or to a Sublicensee is subject to automatic termination in the event that Spark, a Sublicensee or distributor challenges, either directly or indirectly, the validity, enforceability or scope of any claim within the patent rights licensed under the Emory License Agreement in a court or other governmental agency of competent jurisdiction, including in a reexamination or opposition proceeding.
2.5.5. If the Emory License Agreement terminates for any reason, Spark or any Sublicensee shall, unless the sublicense agreement also terminates, from the effective date of such termination, automatically become a direct licensee of Emory/GTRC with respect to the rights originally sublicensed to it by Clearside, provided Spark or such Sublicensee did not cause the termination of the Agreement, agrees to comply with all the terms of the Emory License Agreement and assumes the responsibilities of Clearside, to the extent applicable to the sublicense originally granted to it.
2.7 Any Licensed Products used or sold in the United States will be manufactured substantially in the United States unless any waivers required are obtained from the United States Government by COMPANY
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
54

4.3.	Right to Audit. Emory/GTRC shall have the right, upon prior notice, not more than once in each calendar year and the calendar year immediately following termination of the Agreement, through an independent certified public accountant selected by Emory/GTRC, to have access during normal business hours as may be reasonably necessary to examine the records of Spark or Sublicensee to include, but not be limited to, sales invoice registers, sales analysis reports, original invoices, inventory records, price lists, sublicense and distributor agreements, accounting general ledgers, and sales tax returns, in order to verify the accuracy of the of the calculation of any payment due under the Emory License Agreement. Such audit shall be limited in scope to the preceding thirty-six (36) months from the date of the notice of audit. If such independent public accountant’s report shows any underpayment of royalties by Spark, its Affiliates or Sublicensees, within thirty (30) days after receipt of such report, Spark or Sublicensee shall remit to Emory/GTRC:	
 
 	i.	the amount of such underpayment; and	
 
 	ii.	if such underpayment exceeds five (5%) percent of the total royalties owed for the fiscal year then being reviewed, the reasonably necessary fees and expenses of such independent public accountant performing the audit. Otherwise, Emory/GTRC’s accountant’s fees and expenses shall be borne by Emory/GTRC’s.	
9.3 FDA and Other Regulations. Any Sublicensee shall represent and warrant that any Licensed Products made or sold by it or its Affiliates under this license shall comply with all applicable federal and state law regulations, including but not limited to regulations of the Federal Drug Administration, the Environmental Protection Agency, and their state equivalents.
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
55

Exhibit D – Standard Microinjector Technical Specifications
As of the Effective Date, the Standard Microinjector is a single needle, single-use device sterilized with ethylene oxide and designed to be filled at the point of use with a vial adapter tube and used at room temperature. See accompanying image.

Length of microneedle:	  	[***]	
 	 	
Needle gauge:	  	[***]	
 	 	
Size of Bevel opening:	  	[***]	
 	 	
Volume:	  	[***]	
 	 	
Force:	  	[***]	
For the sake of clarification, improved versions of the Standard Microinjector made after the Effective Date (including improved versions that include changes to the above parameters) shall also constitute Standard Microinjectors, but in no event shall a Microinjector constitute a “Standard Microinjector” if such device incorporates any of the following components or characteristics:
 
 	1.	Battery power	
 
 	2.	Thermodynamic modulation (i.e., insulation, heating or cooling elements)	
 
 	3.	Glass barrel	
 
 	4.	Multiple chambers	
 
 	5.	Multi-pronged needle(s)	
 
 	6.	Sterilization with autoclave/heat or radiation	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
56

 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
57

Exhibit E – Supply Agreement Terms

Pricing:	  	[***] (subject to inflation adjuster 5 years after first commercial sale)	
 	 	
 	  	If the parties agree for Clearside to supply New Microinjectors, unit pricing would be at the greater of [***].	
 	 	
Delivery:	  	F.O.B., Clearside’s designated manufacturing facility in the US	
 	 	
Product Warrants:	  	Microinjectors to be manufactured to GMP standards and to meet specifications	
 	 	 	
Forecast; Lead times:	  	Firm Period	  	[tbd]	
 	  	Semi-firm Period	  	[tbd]	
 	  	Non-binding forecast	  	[tbd]	
 	 	
“Failure to Supply”	  	[Failure to meet at least [tbd]% of firm orders in consecutive calendar quarters]	
 	 	
“Most Favored Nation”	  	Clearside will commit to performance, warranty, indemnification, priority allocation, quality and similar terms no less favorable to Spark than comparable terms offered by Clearside to Third Party customers and no less favorable to Spark than comparable terms obtained by Clearside from its Third Party contract manufacturer. The Parties acknowledge that, due to the relatively modest quantities that Spark anticipates requiring, the Parties will need to cooperate with respect to forecasting and ordering to enable Spark to obtain timely supply, which cooperation may include joint planning to enable Spark’s orders to be fulfilled concurrently with larger production runs but without undue delay.	
 	 	
Production Ready Date:	  	Timeline for commercial scale production readiness to be negotiated.	
 	 	
Payment Terms:	  	Payment for supplies of commercial Standard Microinjector will be due net thirty (30) days after the later of the date of invoice or the date of delivery of such Microinjectors.	
 	 	
Late Payments:	  	Overdue amounts will carry an annual interest charge, calculated monthly, at London Interbank Offered Rate plus two hundred basis points.	
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
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Exhibit F – Initial Press Release
[To be provided]
 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
 
59

Exhibit 10.19
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of April 15, 2015 (the “ Effective Date ”) between  SILICON VALLEY BANK , a California corporation (“ Bank ”), and CLEARSIDE BIOMEDICAL, INC. , a Delaware corporation (“ Borrower ”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties agree as follows:
1 ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.
2 LOAN AND TERMS OF PAYMENT
2.1 Promise to Pay. Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement.
2.1.1 Growth Capital Advances.
(a) Availability. Subject to the terms and conditions of this Agreement, Bank agrees to make up to two (2) Growth Capital Advances to Borrower in two (2) tranches: “Tranche A” and “Tranche B”. Provided that (i) Borrower has achieved the Positive Phase I/II Milestone, and (ii) all other conditions precedent to the initial Credit Extension have been satisfied, Bank shall make a Growth Capital Advance under Tranche A to Borrower in an amount equal to Four Million Dollars ($4,000,000) (the “ Tranche A Growth Capital Advance ”) on the Effective Date. During the Tranche B Draw Period, Borrower may request a Growth Capital Advance under Tranche B, in an amount not to exceed Two Million Dollars ($2,000,000) (the “ Tranche B Growth Capital Advance ”, and together with the Tranche A Growth Capital Advance, each a “ Growth Capital Advance ” and collectively, the “ Growth Capital Advances ”). The aggregate outstanding amount of the Growth Capital Advances shall not exceed the Growth Capital Line.
(b) Repayment. The Growth Capital Advances shall be “interest only” through the Amortization Start Date and shall be payable in accordance with Section 2.3(d) below. Borrower shall repay the Growth Capital Advances in thirty (30) equal installments of principal, plus monthly payments of accrued interest (each, a “ Growth Capital Advance Payment ”). Beginning on the Amortization Start Date, each Growth Capital Advance Payment shall be payable on the first (1st) day of each month. Borrower’s final Growth Capital Advance Payment, due on the Growth Capital Maturity Date, shall include all outstanding principal and accrued and unpaid interest under the Growth Capital Advances and the Final Payment. Once repaid, no Growth Capital Advance may be reborrowed.
(c) Prepayment.
(i) Mandatory Prepayment Upon an Acceleration. If the Growth Capital Advances are accelerated following the occurrence and during the continuance of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of (i) all outstanding principal, plus accrued and unpaid interest with respect to Growth Capital Advances, (ii) the Final Payment, (iii) the Termination Fee and (iv) all other sums, if any, that shall have become due and payable hereunder in connection with the Growth Capital Advances.
(ii) Voluntary Prepayment. Borrower shall have the option to prepay all, but not less than all, of the Growth Capital Advances advanced by Bank under this Agreement, provided Borrower (a) delivers written notice to Bank of its election to prepay the Growth Capital Advances at least ten (10) days prior to such prepayment, (b) pays, on the date of such prepayment (i) all outstanding principal, plus accrued and unpaid interest thereon, (ii) the Final Payment, (iii) the Termination Fee and (iv) all other sums, if any, that shall have become due and payable hereunder in connection with the Growth Capital Advances.

2.2 Intentionally Omitted.
2.3 Payment of Interest on the Credit Extensions.
(a) Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Growth Capital Line shall accrue interest at a floating per annum rate equal to one half of one percentage point (0.50%) below the Prime Rate, which interest shall be payable monthly in accordance with Section 2.3(d) below.
(b) Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is four percentage points (4.0%) above the rate that is otherwise applicable thereto (the “ Default Rate ”). Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.
(c) Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change.
(d) Payment; Interest Computation. Interest is payable monthly on the first (1st) calendar day of each month and shall be computed on the basis of a 360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 12:00 p.m. Eastern time on any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension.
2.4 Fees. Borrower shall pay to Bank:
(a) Final Payment. The Final Payment, when due hereunder;
(b) Termination Fee. Upon termination of this Agreement for any reason prior to the Growth Capital Maturity Date, in addition to the payment of any other amounts then-owing, a termination fee (the “ Termination Fee ”) in an amount equal to (i) two percent (2.00%) of the original principal amount of the aggregate Growth Capital Advances made to Borrower if such termination occurs prior to the first anniversary of the Effective Date, (ii) one percent (1.00%) of the original principal amount of the aggregate Growth Capital Advances made to Borrower if such termination occurs on or after the first anniversary of the Effective Date but prior to the second anniversary of the Effective Date or (iii) one half of one percent (0.50%) of the original principal amount of the aggregate Growth Capital Advances made to Borrower if such termination occurs on or after the second anniversary of the Effective Date but prior to the Growth Capital Maturity Date; provided that no termination fee shall be charged if the credit facility hereunder is replaced with a new facility from Bank; and
(c) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank). Borrower has paid to Bank a deposit of Fifteen Thousand Dollars ($15,000) (the “ Good Faith Deposit ”). If Borrower executes the Loan Documents, the Good Faith Deposit shall be applied to Bank Expenses due on the Effective Date. If Borrower chooses not to execute the Loan Documents, the Good Faith Deposit shall be applied to Bank Expenses incurred with the remainder to be kept by Bank.
(d) Fees Fully Earned. Unless otherwise provided in this Agreement or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned by Bank pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of Bank’s
 
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obligation to make loans and advances hereunder. Bank may deduct amounts owing by Borrower under the clauses of this Section 2.4 pursuant to the terms of Section 2.5(c). Bank shall provide Borrower written notice of deductions made from the Designated Deposit Account pursuant to the terms of the clauses of this Section 2.4.
2.5 Payments; Application of Payments; Debit of Accounts.
(a) All payments to be made by Borrower under any Loan Document shall be made in immediately available funds in Dollars, without setoff or counterclaim, before 12:00 p.m. Pacific time on the date when due. Payments of principal and/or interest received after 12:00 p.m. Pacific time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.
(b) Bank has the exclusive right to determine the order and manner in which all payments with respect to the Obligations may be applied. Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.
(c) Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off.
2.6 Withholding.
(a) Payments received by Bank from Borrower under this Agreement will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto). Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to Bank, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, Bank receives a net sum equal to the sum which it would have received had no withholding or deduction been required, and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority. Borrower will, upon request, furnish Bank with proof reasonably satisfactory to Bank indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower. The agreements and obligations of Borrower contained in this Section 2.6 shall survive the termination of this Agreement.
(b) If any assignee of Bank’s rights under Section 12.2 of this Agreement is not a “United States Person” as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended from time to time (such assignee, a “ Non-U.S. Lender ”), such Non-U.S. Lender shall, upon becoming party to this Agreement, to the extent that such Non-U.S. Lender is entitled to an exemption from U.S. withholding tax on interest, deliver to Borrower a complete and properly executed IRS Form W-8BEN, W-8ECI or W-8IMY, as appropriate, or any successor form prescribed by the IRS, certifying that such Non-U.S. Lender is entitled to such exemption from U.S. withholding tax on interest. Notwithstanding Section 2.6(a) above, Borrower shall not be required to pay any additional amount to any Non-U.S. Lender under Section 2.6(a) if such Non-U.S. Lender fails or is unable to deliver the forms, certificates or other evidence described in the preceding sentence, unless such non-U.S. Lender’s failure or inability to deliver such forms is the result of any change in any applicable law, treaty or governmental rule, or any change in the interpretation thereof after such Non-U.S. Lender became a party to this Agreement.
 
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3 CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:
(a) duly executed original signatures to the Loan Documents;
(b) duly executed original signatures to the Warrant;
(c) duly executed original signatures to the Control Agreements, if any;
(d) the Operating Documents and long-form good standing certificates of Borrower and its Subsidiaries certified by the Secretary of State (or equivalent agency) of Borrower’s and such Subsidiaries’ jurisdiction of organization or formation and each jurisdiction in which Borrower and each Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date;
(e) duly executed original signatures to the completed Borrowing Resolutions for Borrower;
(f) certified copies, dated as of a recent date, of financing statement searches, as Bank may request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;
(g) the Perfection Certificate(s) of Borrower, together with the duly executed original signature thereto;
(h) a landlord’s consent in favor of Bank for 1220 Old Alpharetta Road, Suite 300, Alpharetta, GA 30005, by the landlord thereof, together with the duly executed original signatures thereto;
(i) a bailee’s waiver in favor of Bank for each location where Borrower maintains property with a third party (unless such leased location contain less than Fifty Thousand Dollars ($50,000) in Borrower’s assets or property), by each such third party, together with the duly executed original signatures thereto;
(j) a copy of Borrower’s Registration Rights Agreement or Investors’ Rights Agreement and any amendments thereto;
(k) evidence satisfactory to Bank that the insurance policies and endorsements required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank; and
(l) payment of the fees and Bank Expenses then due as specified in Section 2.5 hereof.
3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent:
(a) except as otherwise provided in Section 3.5(a), timely receipt of an executed Payment/Advance Form;
(b) the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of
 
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such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and
(c) Bank determines to its satisfaction that there has not been a Material Adverse Change.
3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion.
3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of a Growth Capital Advance set forth in this Agreement, to obtain a Growth Capital Advance, Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 p.m. Eastern time on the Funding Date of the Growth Capital Advance. Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Payment/Advance Form executed by a Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Bank shall credit Growth Capital Advances to the Designated Deposit Account. Bank may make Growth Capital Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Growth Capital Advances are necessary to meet Obligations which have become due.
4 CREATION OF SECURITY INTEREST
4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations, 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 acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank. Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to have all such Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien in this Agreement).
If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower. In the event (x) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment for Bank Services, if any. In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at least one hundred five percent (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten percent (110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its business judgment), to secure all of the Obligations relating to such Letters of Credit.
 
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4.2 Priority of Security Interest. 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 are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien under this Agreement). If Borrower shall acquire a commercial tort claim in excess of Fifty Thousand Dollars ($50,000), 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 reasonably satisfactory to Bank.
4.3 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral except as permitted under Section 7.1 hereof, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code. Such financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or lesser scope, or with greater detail, all in Bank’s discretion.
5 REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
5.1 Due Organization, Authorization; Power and Authority. Borrower is duly existing and in good standing as a Registered Organization in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s business. In connection with this Agreement, Borrower has delivered to Bank a completed certificate signed by Borrower entitled “Perfection Certificate”. Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete in all material respects (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number.
The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect (or are being obtained pursuant to Section 6.1(b))) or (v) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.
5.2 Collateral. Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no Collateral Accounts at or with any bank or financial institution other than Bank or Bank’s Affiliates except for the Collateral Accounts described in the Perfection Certificate delivered to Bank in connection herewith and which Borrower has taken such actions as are necessary to give Bank a perfected security interest therein, pursuant to the terms of Section 6.6(b). The Accounts are bona fide, existing obligations of the Account Debtors.
 
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The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate or as permitted pursuant to Section 7.2. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2.
Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States, (b) over-the-counter software that is commercially available to the public, and (c) Intellectual Property licensed to Borrower and noted on the Perfection Certificate. To the best of Borrower’s knowledge, each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business.
Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.
5.3 Litigation. There are no actions or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against Borrower or any of its Subsidiaries involving more than, individually or in the aggregate, One Hundred Thousand Dollars ($100,000).
5.4 Financial Statements; Financial Condition. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations as of the dates and periods covered thereby. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.
5.5 Solvency. The fair salable value of Borrower’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.
5.6 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower (a) has complied in all material respects with all Requirements of Law, and (b) has not violated any Requirements of Law the violation of which could reasonably be expected to have a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Government Authorities that are necessary to continue their respective businesses as currently conducted.
5.7 Subsidiaries; Investments. Borrower does not own any stock, partnership, or other ownership interest or other equity securities except for Permitted Investments.
5.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed, or has obtained extensions for filing, all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except (a) to the extent such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor, or (b) if such taxes, assessments, deposits and contributions do not, individually or in the aggregate, exceed Twenty-Five Thousand Dollars ($25,000).
 
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To the extent Borrower defers payment of any contested taxes, Borrower shall (i) notify Bank in writing of the commencement of, and any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.” Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower in excess of Twenty-Five Thousand Dollars ($25,000). Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.
5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements and not for personal, family, household or agricultural purposes.
5.10 Full Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).
5.11 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of any Responsible Officer.
6 AFFIRMATIVE COVENANTS
Borrower shall do all of the following:
6.1 Government Compliance.
(a) Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each other jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, in all material respects, with all laws, ordinances and regulations to which it is subject.
(b) Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies of any such obtained Governmental Approvals to Bank.
6.2 Financial Statements, Reports, Certificates. Provide Bank with the following:
(a) Revenue Reports. Within thirty (30) days after the last day of each month, (i) aged listings of accounts receivable and accounts payable (by invoice date), (ii) Deferred Revenue reports, (iii) current backlog report, all in form and substance reasonably satisfactory to Bank;
 
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(b) Monthly Financial Statements. As soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations for such month certified by a Responsible Officer and in a form acceptable to Bank (the “ Monthly Financial Statements ”);
(c) Monthly Compliance Certificate. Within thirty (30) days after the last day of each month and together with the Monthly Financial Statements, a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank may reasonably request;
(d) Annual Operating Budget and Financial Projections. Within forty-five (45) days after the end of each fiscal year of Borrower, (i) annual operating budgets (including income statements, balance sheets and cash flow statements, by month) for the upcoming fiscal year of Borrower, and (ii) annual financial projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with any related business forecasts used in the preparation of such annual financial projections and, as soon as available, any periodic updates thereto;
(e) Annual Audited Financial Statements. As soon as available, but no later than one hundred twenty (120) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank;
(f) Other Statements. Within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt;
(g) SEC Filings. In the event that Borrower becomes subject to the reporting requirements under the Exchange Act within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Borrower with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be. Documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the Internet at Borrower’s website address; provided, however, Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such documents;
(h) Legal Action Notice. A prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, One Hundred Thousand Dollars ($100,000) or more; and
(i) Other Financial Information. Promptly after Bank’s reasonable request therefor, such other information regarding Borrower’s or any of its Subsidiaries’ operations, business affairs, financial condition and/or compliance with this Agreement.
6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary practices as they exist at the Effective Date. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than One Hundred Thousand Dollars ($100,000).
6.4 Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely file, or obtain extensions for filing, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.
 
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6.5 Insurance.
(a) Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates of Borrower, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee. All liability policies shall show, or have endorsements showing, Bank as an additional insured. Bank shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral.
(b) Ensure that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to One Hundred Thousand Dollars ($100,000) with respect to any loss, but not exceeding One Hundred Thousand Dollars ($100,000) in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations.
(c) At Bank’s request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments. Each provider of any such insurance required under this Section 6.5 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Bank, that it will give Bank twenty (20) days (ten (10) days for non-payment of premiums) prior written notice before any such policy or policies shall be materially altered or canceled. If Borrower fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Bank deems prudent.
6.6 Operating Accounts.
(a) Maintain its primary operating and other deposit accounts and securities accounts, letters of credit and foreign exchange transactions and excess cash with Bank and Bank’s Affiliates.
(b) Provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.
6.7 Intentionally Omitted.
6.8 Protection of Intellectual Property Rights.
(a) (i) Use commercially reasonable efforts to protect, defend and maintain the validity and enforceability of its Intellectual Property material to Borrower’s business; (ii) promptly advise Bank in writing of material infringements or any other event that could reasonably be expected to materially and adversely affect the value of its Intellectual Property material to Borrower’s business; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent.

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(b) Provide written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter software that is commercially available to the public). Borrower shall take such commercially reasonable steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents, provided that the failure to obtain such consent or waiver, after talking the steps set forth above, shall not constitute an Event of Default hereunder.
6.9 Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.
6.10 Access to Collateral; Books and Records. Allow Bank, or its agents, at reasonable times, on three (3) Business Days’ notice (provided no notice is required if an Event of Default has occurred and is continuing), to inspect the Collateral and audit and copy Borrower’s Books. Such inspections or audits shall be conducted no more often than once every twelve (12) months unless an Event of Default has occurred and is continuing in which case such inspections and audits shall occur as often as Bank shall determine is necessary. The foregoing inspections and audits shall be at Borrower’s expense, and the charge therefor shall be Eight Hundred Fifty Dollars ($850) per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to reschedule the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of One Thousand Dollars ($1,000) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.
6.11 Formation or Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the time that Borrower forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Effective Date, Borrower shall (a) with respect to Domestic Subsidiaries only, cause such new Domestic Subsidiary to provide to Bank a joinder to the Loan Agreement to cause such Domestic Subsidiary to become a co-borrower hereunder, together with such appropriate financing statements and/or Control Agreements, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Domestic Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary, in form and substance satisfactory to Bank, provided, however, that Borrower shall not be required to pledge more than sixty-five percent (65%) of the direct or beneficial ownership interest of any Foreign Subsidiary and (c) provide to Bank all other documentation in form and substance reasonably satisfactory to Bank, which in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above. Any document, agreement, or instrument executed or issued pursuant to this Section 6.11 shall be a Loan Document.
6.12 Further Assurances. Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement. Deliver to Bank, within five (5) days after the same are sent or received, copies of all correspondence, reports, documents and other filings with any Governmental Authority regarding compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material effect on any of the Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries.
 
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7 NEGATIVE COVENANTS
Borrower shall not do any of the following without Bank’s prior written consent:
7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of surplus, worn-out or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted Liens and Permitted Investments; (d) consisting of the sale or issuance of any stock of Borrower permitted under Section 7.2 of this Agreement; (e) consisting of Borrower’s use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents; (f) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business and licenses that could not result in a legal transfer of title of the licensed property but that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States, and (g) not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year.
7.2 Changes in Business, Management, Ownership or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) fail to provide notice to Bank of any Key Person departing from or ceasing to be employed by Borrower within five (5) days after his or her departure from Borrower; or (ii) enter into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty-nine percent (49%) of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower’s equity securities in a public offering or to venture capital or private equity investors so long as Borrower identifies to Bank the venture capital or private equity investors at least seven (7) Business Days prior to the closing of the transaction and provides to Bank a description of the material terms of the transaction).
Borrower shall not, without at least ten (10) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Fifty Thousand Dollars ($50,000) in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization. If Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Fifty Thousand Dollars ($50,000) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank in its reasonable discretion.
7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation, by the formation of any Subsidiary). A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.
7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.
7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any agreement, document, instrument or other arrangement (except with or in favor of Bank and Liens described in clause (c) of Permitted Liens) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.

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7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.6(b) hereof.
7.7 Distributions; Investments. (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock provided that (i) Borrower may convert any of its convertible securities into other securities pursuant to the terms of such convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends solely in common stock; and (iii) Borrower may repurchase the stock of former employees or consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase, provided that the aggregate amount of all such repurchases does not exceed One Hundred Thousand Dollars ($100,000) per fiscal year; or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.
7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for (i) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, (ii) transactions permitted pursuant to the terms of Section 7.2 hereof, (iii) transactions permitted pursuant to the terms of the second sentence of Section 7.3 hereof, (iv) Investments permitted under sub-clause (f) of the definition of Permitted Investments, and (v) debt financings from Borrower’s existing investors so long as all such Indebtedness is Subordinated Debt.
7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the subordination thereof to Obligations owed to Bank (except as otherwise provided for by the terms of the subordination agreement, intercreditor, or other similar agreement between such Person and Bank).
7.10 Compliance. Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to (a) meet the minimum funding requirements of ERISA, (b) prevent a Reportable Event or Prohibited Transaction as defined in ERISA, or (c) comply with the Federal Labor Standards Act, the failure of any of the conditions in clauses (a) through (c) which could reasonably be expected to have a material adverse effect on Borrower’s business, or violate any other law or regulation, if the violation could reasonably be expected to have a materials adverse effect on Borrower’s business or permit any Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.
8 EVENTS OF DEFAULT
Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:
8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension when due, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the Growth Capital Maturity Date). During the cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);
 
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8.2 Covenant Default.
(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4, 6.5, 6.6, 6.8(b), 6.10 or 6.11 or violates any covenant in Section 7; or
(b) Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified elsewhere in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Cure periods provided under this section shall not apply, among other things, to financial covenants or any other covenants set forth in clause (a) above;
8.3 Material Adverse Change. A Material Adverse Change occurs;
8.4 Attachment; Levy; Restraint on Business.
(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the control of Borrower (including a Subsidiary) in excess of One Hundred Thousand Dollars ($100,000), or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; or
(b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business;
8.5 Insolvency. (a) Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and is not dismissed or stayed within thirty (30) days (but no Credit Extensions shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);
8.6 Other Agreements. There is, under any agreement to which Borrower or any Guarantor is a party with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of One Hundred Thousand Dollars ($100,000); or (b) any breach or default by Borrower, the result of which could reasonably be expected to have a material adverse effect on Borrower’s business; provided, however, that the Event of Default under this Section 8.6 caused by the occurrence of a default under such other agreement shall be cured or waived for purposes of this Agreement upon Bank receiving written notice from the party asserting such default of such cure or waiver of the default under such other agreement, if at the time of such cure or waiver under such other agreement (x) Bank has not declared an Event of Default under this Agreement and/or exercised any rights with respect thereto; (y) any such cure or waiver does not result in an Event of Default under any other provision of this Agreement or any Loan Document; and (z) in connection with any such cure or waiver under such other agreement, the terms of any agreement with such third party are not modified or amended in any manner which could in the good faith judgment of Bank be materially less advantageous to Borrower;
8.7 Judgments; Penalties. One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower by any Governmental Authority, and the same are not, within
 
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ten (10) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution thereof, stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine, penalty, judgment, order or decree);
8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;
8.9 Subordinated Debt. Any document, instrument, or agreement evidencing the subordination of any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement; or
8.10 Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i) cause, or could reasonably be expected to cause, a Material Adverse Change, or (ii) adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction.
9 BANK’S RIGHTS AND REMEDIES
9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, without notice or demand, do any or all of the following:
(a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);
(b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;
(c) demand that Co-Borrower (i) deposit cash with Bank in an amount equal to at least (x) if one hundred five percent (105.0%), with respect to Letters of Credit denominated in Dollars, and (y) one hundred ten percent (110.0%), with respect to Letters of Credit denominated in a Foreign Currency, of the Dollar Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn (plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;
(d) terminate any FX Contracts;
(e) verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify any Person owing Borrower money of Bank’s security interest in such funds;
 
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(f) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates. Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;
(g) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or the account of Borrower;
(h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;
(i) place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;
(j) demand and receive possession of Borrower’s Books; and
(k) exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).
9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates.
9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required to preserve the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.
9.4 Application of Payments and Proceeds Upon Default. If an Event of Default has occurred and is continuing, Bank shall have the right to apply in any order any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to Borrower by credit to the Designated
 
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Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.
9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.
9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.
9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable.
10 NOTICES
All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Bank or Borrower may change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

                    If to Borrower:	  	CLEARSIDE BIOMEDICAL, INC.	
 	  	1220 Old Alpharetta Road, Suite 300	
 	  	Alpharetta, GA 30005	
 	  	Attn: Charles A. Deignan – Chief Financial Officer	
 	  	Fax:                                                                                  	
 	  	Email: charlie.deignan@clearsidebio.com	
 
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                    If to Bank:	  	Silicon Valley Bank	
 	  	3353 Peachtree Road N.E., North Tower, Suite M-10	
 	  	Atlanta, GA 30326	
 	  	Attn: Ryan Roller – Vice President	
 	  	Fax:                                                              	
 	  	Email: rroller@svb.com	
11 CHOICE OF LAW, VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE
Except as otherwise expressly provided in any of the Loan Documents, California law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a). Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.
 
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This Section 11 shall survive the termination of this Agreement.
12 GENERAL PROVISIONS
12.1 Termination Prior to Growth Capital Maturity Date; Survival. All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations have been satisfied. So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement), this Agreement may be terminated prior to the Growth Capital Maturity Date by Borrower, effective three (3) Business Days after written notice of termination is given to Bank. Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination.
12.2 Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion). Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents (other than the Warrant, as to which assignment, transfer and other such actions are governed by the terms thereof).
12.3 Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “ Indemnified Person ”) harmless against: (i) all obligations, demands, claims, and liabilities (collectively, “ Claims ”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses and/or expenses (including Bank Expenses) directly caused by such Indemnified Person’s gross negligence or willful misconduct.
This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run.
12.4 Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.
12.5 Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.
12.6 Correction of Loan Documents. Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties so long as Bank provides Borrower with written notice of such correction and allows Borrower at least ten (10) days to object to such correction. In the event of such objection, such correction shall not be made except by an amendment signed by both Bank and Borrower.
12.7 Amendments in Writing; Waiver; Integration. No purported amendment or modification of any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which enforcement or admission is sought. Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on any Loan Document. Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver. The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents.
 
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12.8 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.
12.9 Confidentiality. In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with Bank, collectively, “ Bank Entities ”); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use its best efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; and (f) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein. Confidential information does not include information that is either: (i) in the public domain or in Bank’s possession when disclosed to Bank through no fault of Bank, or becomes part of the public domain (other than as a result of its disclosure by Bank in violation of this Agreement) after disclosure to Bank; or (ii) disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information.
Bank Entities may use anonymous forms of confidential information for aggregate datasets, for analyses or reporting, and for any other uses not expressly prohibited in writing by Borrower. The provisions of the immediately preceding sentence shall survive termination of this Agreement.
12.10 Attorneys’ Fees, Costs and Expenses. In any action or proceeding between Borrower and Bank arising out of or relating to the Loan Documents, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled.
12.11 Electronic Execution of Documents. The words “execution,” “signed,” “signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.
12.12 Captions. The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.
12.13 Construction of Agreement. The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist.
12.14 Relationship. The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement. The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an arm’s-length contract.
12.15 Third Parties. Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any party to this Agreement.
 
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13 DEFINITIONS
13.1 Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative. As used in this Agreement, the following capitalized terms have the following meanings:
“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.
“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.
“Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.
“Agreement” is defined in the preamble hereof. “Amortization Start Date” is May 1, 2016.
“Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents, including any Advance request, on behalf of Borrower.
“Bank” is defined in the preamble hereof. “Bank Entities” is defined in Section 12.9.
“Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.
“Bank Services” are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “ Bank Services Agreement ”).
“Borrower” is defined in the preamble hereof.
“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.
“Borrowing Resolutions” are, with respect to any Person, those resolutions substantially in the form attached hereto as  Exhibit D .
“Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.
“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating
 
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from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.
“Claims” is defined in Section 12.3.
“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of California; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of California, the term “ Code ” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.
“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.
“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.
“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.
“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit B.
“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.
“Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.
“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.
“Credit Extension” is any Growth Capital Advance or any other extension of credit by Bank for Borrower’s benefit.
“Currency” is coined money and such other banknotes or other paper money as are authorized by law and circulate as a medium of exchange.
“Default Rate” is defined in Section 2.3(b).
 
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“Deferred Revenue” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue.
“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.
“Designated Deposit Account” is the multicurrency account denominated in Dollars, account number                    , maintained by Borrower with Bank.
“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.
“Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.
“Domestic Subsidiary” means a Subsidiary organized under the laws of the United States or any state or territory thereof or the District of Columbia.
“Effective Date” is defined in the preamble hereof.
“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.
“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.
“Event of Default” is defined in Section 8.
“Exchange Act” is the Securities Exchange Act of 1934, as amended.
“FDA” is the U.S. Food and Drug Administration.
“Final Payment” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due on the earliest to occur of (a) the Growth Capital Maturity Date, (b) the acceleration of the Growth Capital Advances, or (c) the prepayment of the Growth Capital Advances, equal to the original principal amount of the Growth Capital Advances made to Borrower multiplied by the Final Payment Percentage.
“Final Payment Percentage” is five and one half of one percentage points (5.50%).
“Foreign Currency” means lawful money of a country other than the United States.
“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.
“Funding Date” is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business Day.
“FX Contract” is any foreign exchange contract by and between Borrower and Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency on a specified date.
“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.
 
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“General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.
“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.
“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.
“Growth Capital Advance” or “Growth Capital Advances” is defined in Section 2.1.1(a).
“Growth Capital Advance Payment” is defined in Section 2.1.1(b).
“Growth Capital Line” is an aggregate principal amount of up to Six Million Dollars ($6,000,000).
“Growth Capital Maturity Date” is the date twenty nine (29) months after the Amortization Start Date.
“Guarantor” is any Person providing a Guaranty in favor of Bank.
“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.
“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.
“Indemnified Person” is defined in Section 12.3.
“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Intellectual Property” means, with respect to any Person, means all of such Person’s right, title, and interest in and to the following:
(a) its Copyrights, Trademarks and Patents;
(b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals;
(c) any and all source code;
(d) any and all design rights which may be available to such Person;
 
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(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and
(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.
“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.
“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.
“Key Person” is each of Borrower’s (a) Chief Executive Officer, who is Daniel H. White as of the Effective Date, (b) Chief Financial Officer, who is Charles A. Deignan as of the Effective Date, and (c) Executive VP, Research & Development, who is Glenn Noronha as of the Effective Date.
“Letter of Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an application, guarantee, indemnity, or similar agreement.
“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.
“Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement, the Warrant, any Bank Services Agreement, any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement by Borrower and/or any Guarantor with or for the benefit of Bank in connection with this Agreement or Bank Services, all as amended, restated, or otherwise modified.
“Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.
“Monthly Financial Statements” is defined in Section 6.2(b).
“Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, fees, Bank Expenses, and other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents (other than the Warrant), or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents (other than the Warrant).
“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.
“Parent” is defined in Section 3.8(b).
 
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“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.
“Payment/Advance Form” is that certain form attached hereto as Exhibit C.
“Perfection Certificate” is defined in Section 5.1.
“Permitted Indebtedness” is:
(a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;
(b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate;
(c) Subordinated Debt;
(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;
(e) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;
(f) Indebtedness secured by Liens permitted under clauses (a) and (c) of the definition of “Permitted Liens” hereunder;
(g) Indebtedness of Borrower to any Subsidiary and Contingent Obligations of any Subsidiary with respect to obligations of Borrower (provided that the primary obligations are not prohibited hereby), and Indebtedness of any Subsidiary to Borrower in an aggregate principal amount not to exceed One Hundred Thousand Dollars ($100,000) or any other Subsidiary and Contingent Obligations of any Subsidiary with respect to obligations of any other Subsidiary (provided that the primary obligations are not prohibited hereby); and
(h) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (g) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.
“Permitted Investments” are:
(a) Investments (including, without limitation, Subsidiaries) existing on the Effective Date and shown on the Perfection Certificate;
(b) Investments consisting of Cash Equivalents;
(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower;
(d) Investments consisting of deposit accounts in which Bank has a perfected security interest;
(e) Investments accepted in connection with Transfers permitted by Section 7.1;
(f) Investments consisting of the creation of a Subsidiary for the purpose of consummating a merger transaction permitted by Section 7.3 of this Agreement, which is otherwise a Permitted Investment;
(g) Investments (i) by Borrower in Subsidiaries not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year and (ii) by Subsidiaries in other Subsidiaries not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year or in Borrower;
 
-26-

(h) Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;
(i) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;
(j) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (j) shall not apply to Investments of Borrower in any Subsidiary; and
(k) joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash investments by Borrower do not exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year.
“Permitted Liens” are:
(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books,  provided  that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;
(c) purchase money Liens and capital leases (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than One Hundred Thousand Dollars ($100,000) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired,  if  the Lien is confined to the property and improvements and the proceeds of the Equipment;
(d) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);
(f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c),  but  any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase;
(g) leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business),  if  the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest therein;
(h) non-exclusive license of Intellectual Property granted to third parties in the ordinary course of business, and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States;
 
-27-

(i) Liens arising from attachments or judgments, orders, or decrees in circumstances not constituting an Event of Default under Sections 8.4 and 8.7;
(j) Easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and other similar Liens affecting real property not interfering in any material respect with the ordinary course of the business of Borrower;
(k) deposits to secure the performance of leases incurred in the ordinary course of business and not representing an obligation for borrowed money so long as each such deposit: (1) is made at the commencement of a lease or its renewal when there is no underlying default under such lease, and (2) is in an amount not exceeding One Hundred Thousand Dollars ($100,000); and
(l) deposits to secure the performance of bids, trade contracts (other than for borrowed money), contracts for the purchase of property permitted hereunder, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business not representing an obligation for borrowed money in an amount not to exceed One Hundred Thousand Dollars ($100,000);
(m) Liens in favor of other financial institutions arising in connection with Borrower’s deposit and/or securities accounts held at such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit and/or securities accounts.
“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
“Positive FDA Review Date” is the date that Bank receives evidence, in form and substance reasonably satisfactory to Bank, that Borrower has completed successful meetings with the FDA (scheduled in May, 2015) in which the Phase I/II trial results for CLS-1001 were reviewed and the final design and structure of the Phase III trial for CLS-1001 were discussed.
“Positive Phase I/II Milestone” means the receipt by Bank of evidence, in form and substance reasonably satisfactory to Bank, on or prior to April 30, 2015 that Borrower has received positive data results from the Phase I/II trials for CLS-1001.
“Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors).
“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.
“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
 
-28-

“Responsible Officer” is any of the President & Chief Executive Officer, Chief Financial Officer and Executive VP, Research & Development of Borrower.
“Restricted License” is any material license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral.
“SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.
“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.
“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.
“Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower.
“Termination Fee” is defined in Section 2.4(b).
“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.
“Tranche A” is defined in Section 2.1.1(a).
“Tranche A Growth Capital Advance” is defined in Section 2.1.1(a).
“Tranche B” is defined in Section 2.1.1(a).
“Tranche B Draw Period” is the period commencing on the Positive FDA Review Date and ending on the earlier of (i) June 30, 2015 and (ii) the occurrence of an Event of Default; provided, however, that the Tranche B Draw Period shall not commence if on the date of the occurrence of the Positive FDA Review Date an Event of Default has occurred and is continuing.
“Tranche B Growth Capital Advance” is defined in Section 2.1.1(a).
“Transfer” is defined in Section 7.1.
“Warrant” is that certain Warrant to Purchase Stock dated as of the Effective Date executed by Borrower in favor of Bank.
[Signature page follows.]
 
-29-

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

BORROWER:	
 	
CLEARSIDE BIOMEDICAL, INC.	
 	 	
By	 	/s/ Daniel H. White	
Name:	 	Daniel H. White	
Title:	 	President & CEO	

BANK:	
 	
SILICON VALLYY BANK	
 	 	
By	 	/s/ Ryan Roller	
Name:	 	Ryan Roller	
Title:	 	Vice President	
[Signature Page to Loan and Security Agreement]

EXHIBIT A
COLLATERAL DESCRIPTION
The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and
all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.
Notwithstanding the foregoing, the Collateral does not include: (a) more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any Foreign Subsidiary which shares entitle the holder thereof to vote for directors or any other matter; or (b) any Intellectual Property; provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual Property. If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Bank’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property.
Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed not to encumber any of its Intellectual Property without Bank’s prior written consent.

EXHIBIT B
COMPLIANCE CERTIFICATE

TO: SILICON VALLEY BANK
FROM: CLEARSIDE BIOMEDICAL, INC.	  	Date:                     	
The undersigned authorized officer of CLEARSIDE BIOMEDICAL, INC. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”):
(1) Borrower is in complete compliance for the period ending                     with all required covenants except as noted below; (2) there are no Events of Default; (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; (4) Borrower, and each of its Subsidiaries, has timely filed, or obtained extensions for filing, all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement; and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.
Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.

Reporting Covenants	  	Required	  	Complies	
Monthly financial statements with
Compliance Certificate	  	Monthly within 30 days	  	Yes No	
Annual financial statement (CPA Audited) + CC	  	FYE within 120 days	  	Yes No	
10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	  	Yes No	
A/R & A/P Agings, Deferred Revenue report, current backlog report	  	Monthly within 30 days	  	Yes No	
Annual Budget and Projections	  	FYE within 45 days*	  	Yes No	
 
*	and as soon as possible after any updates thereto	
Other Matters

Have there been any amendments of or other changes to the capitalization table of
Borrower and to the Operating Documents of Borrower or any of its Subsidiaries? If yes,
provide copies of any such amendments or changes with this Compliance Certificate.	  	Yes                 No	
The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)
 
1

 	 	 	 	 	 	 	 	 	
CLEARSIDE BIOMEDICAL, INC.	 	BANK USE ONLY	
 	 	 	 	 	
 	 	 	 	 	 	Received by:	 	 	
 	 	 	 	 	 	 	 	AUTHORIZED SIGNER	
By:	 	 	 	 	 	Date:	 	 	
Name:
Title:	 	 
 	 	 	 	 
Verified:	 	 
 	
 	 	 	 	 	 	 	 	AUTHORIZED SIGNER	
 	 	 	 	 	 	Date:	 	 	
 	 	 	 	
 	 	 	 	 	 	Compliance Status:                     Yes             No	
 
2

EXHIBIT C – LOAN PAYMENT/ADVANCE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS NOON PACIFIC TIME*

Fax To:	  	Date: 4/14/2015	
LOAN PAYMENT:
CLEARSIDE BIOMEDICAL, INC.

From Account #                                                                  	  	To Account #                                                                	
(Deposit Account #)	  	(Loan Account #)	
Principal $                                                                          	  	and/or Interest $                                                            	
 	 	
Authorized Signature:                                                        	  	Phone Number:                                                             	
Print Name/Title:                                                                	  	 	
LOAN ADVANCE:
Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

From Account #New Loan                                             	  	To Account #                                                          	
(Loan Account #)	  	(Deposit Account #)	
 	 	
Amount of Advance $ 4,000,000.00                                	  	 	
All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, furture that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:

Authorized Signature: /s/ Charles Deignan                                	  	Phone Number: 678-270-4005	
Print Name/Title: Charles Deignan / CFO                	  	 	
OUTGOING WIRE REQUEST:
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, Pacific Time

Beneficiary Name:                                                                    	  	Amount of Wire: $                                                                	
Beneficiary Bank:                                                                    	  	Account Number:                                                                  	
City and State:                                                                          	  	 	
 	 	
Beneficiary Bank Transit (ABA) #:                                       	  	Beneficiary Bank Code (Swift, Sort, Chip, etc.):                     
(For International Wire Only)              	
 	 	
Intermediary Bank:                                                                	  	Transit (ABA) #:                                                                	
 	
For Further Credit to:                                                                                                                                                                               	
 	
Special Instruction:                                                                                                                                                                                     	
By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).

Authorized Signature:                                                                	  	2nd Signature (if required):                                                 	
 	 	
Print Name/Title:                                                                	  	Print Name/Title:                                                                	
 	 	
Telephone #:                                                                        	  	Telephone #:                                                                        	
 
*	Unless otherwise provided for an Advance bearing interest at LIBOR.	
 
3

EXHIBIT D
BORROWING RESOLUTIONS

CORPORATE BORROWING CERTIFICATE
BORROWER: CLEARSIDE BIOMEDICAL, INC.        DATE: Apr 14, 2015
BANK:            Silicon Valley Bank
I hereby certify as follows, as of the date set forth above:
1. I am the Secretary, Assistant Secretary or other officer of Borrower. My title is as set forth below.
2. Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the laws of the State of Delaware.
3. Attached hereto are true, correct and complete copies of Borrower’s Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth above. Such Certificate of Incorporation have not been amended, annulled, rescinded, revoked or supplemented, and remain in full force and effect as of the date hereof.
4. The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action). Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and Silicon Valley Bank (“Bank”) may rely on them until Bank receives written notice of revocation from Borrower.
RESOLVED, that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on behalf of Borrower:

Name	  	Title	  	Signature	  	Authorized
to Add or
Remove
Signatories	
Daniel White	  	CEO	  	/s/ Daniel White	  	x	
Charles Deignan	  	CFO/Secretary	  	/s/ Charles Deignan	  	x	
 	  	 	  	 	  	¨	
 	  	 	  	 	  	¨	
 
4

RESOLVED FURTHER, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.
RESOLVED FURTHER, that such individuals may, on behalf of Borrower:
Borrow Money. Borrow money from Bank.
Execute Loan Documents. Execute any loan documents Bank requires.
Grant Security. Grant Bank a security interest in any of Borrower’s assets.
Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.
Apply for Letters of Credit. Apply for letters of credit from Bank.
Enter Derivative Transactions. Execute spot or forward foreign exchange contracts, interest rate swap agreements, or other derivative transactions.
Issue Warrants. Issue warrants for Borrower’s capital stock.
Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effect these resolutions.
RESOLVED FURTHER, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.
5. The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.

 	 	
By:	 	/s/ Charles A. Deignan	
Name:	 	Charles A. Deignan	
Title:	 	CFO/Secretary	
***If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.
I, the President & CEO of Borrower, hereby certify as to paragraphs 1 through 5 above, as of the date set forth above.

 	 	
By:	 	/s/ Daniel H. White	
Name:	 	Daniel H. White	
Title:	 	President & CEO	
 
5

Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption “Experts” and to the use of our report dated February 27, 2015, in the Registration Statement (Form S-1 No. 333-00000) and related Prospectus of Clearside Biomedical, Inc. for the registration of shares of its common stock.
/s/ Ernst & Young LLP
Atlanta, Georgia
January 8, 2016