IMRIS Inc. announced it has entered into a secured loan facility agreement (the "Agreement") with Deerfield Management Company, L.P. ("Deerfield") for $25 million in financing. Deerfield is a leading healthcare investment firm with more than $3.5 billion of assets currently under management.

Commented Jay D. Miller, IMRIS president and chief executive officer: "We are pleased with Deerfield's confidence in our cutting-edge technology, growth prospects and business strategy. IMRIS has a compelling line-up of FDA-approved and development-stage products for the surgical theater that will provide a strong foundation for future growth. This agreement provides capital to fund our growth initiatives, strengthen our balance sheet and enable us to focus on developing a world-class medical device company."

In accordance with the terms of the Agreement, Deerfield advanced $25 million immediately following execution of the Agreement. The loan matures five years from the date of the Agreement and may be prepaid subject to certain restrictions contained in the Agreement. The principal amount of the loan is payable in three equal annual installments on the third, fourth and fifth anniversaries of the date of the disbursement, except that, if IMRIS achieves certain revenue targets, the principal payment due on the third anniversary can be deferred for up to two years and the payment due on the fourth anniversary can be deferred for one year. The outstanding principal amount of the loan at any time will accrue interest at a rate of 9% per annum. The Agreement contains customary terms and conditions. In connection with the loan, Deerfield will receive warrants to purchase 6.1 million shares of IMRIS common stock at an exercise price of $1.94 per share, which represents a premium of 5% over the closing price of the Company's common stock preceding the execution of the Agreement. Cowen and Company acted as financial advisor to IMRIS and served as sole arranger for the transaction.