<PAGE>

                                                                    EXHIBIT 4.13

                                                               Execution Version

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                             COLLABORATION AGREEMENT

                                 BY AND BETWEEN

                         CONTROL DELIVERY SYSTEMS, INC.

                                       AND

                             ALIMERA SCIENCES, INC.

                          DATED AS OF FEBRUARY 11, 2005

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  Page
<S>                                                                                               <C>
ARTICLE  1  DEFINITIONS..................................................................           1

ARTICLE  2  JOINT DEVELOPMENT TEAM.......................................................          15
   2.1        Establishment of Joint Development Team....................................          15
   2.2        Responsibilities of the Joint Development Team.............................          16
   2.3        Meetings; Minutes..........................................................          16
   2.4        Decision-Making and Dispute Resolution.....................................          17
   2.5        Expenses...................................................................          17
   2.6        Dissolution of JDT.........................................................          17

ARTICLE  3  DEVELOPMENT ACTIVITIES.......................................................          17
   3.1        General....................................................................          18
   3.2        Development Plan...........................................................          18
   3.3        Performance................................................................          21
   3.4        Primary Contact Persons....................................................          22
   3.5        Availability of Employees..................................................          22
   3.6        Visit of Facilities........................................................          23
   3.7        Subcontracts...............................................................          23
   3.8        Information Sharing........................................................          23
   3.9        Records....................................................................          23
   3.10       Manufacturing for Clinical Supply Requirements.............................          23
   3.11       Technology Transfer by CDS.................................................          24

ARTICLE  4  COMMERCIALIZATION............................................................          24
   4.1        Commercialization of Product(s) in the Collaboration Field.................          24
   4.2        Commercialization Budget...................................................          24
   4.3        Diligence..................................................................          25
   4.4        Costs of Commercialization.................................................          27
   4.5        Manufacturing for Commercial Supply Requirements...........................          27
   4.6        Product Recalls............................................................          27

ARTICLE  5  GRANT OF RIGHTS..............................................................          28
   5.1        Grant of License by CDS....................................................          28
   5.2        Grant of License by Alimera................................................          29
   5.3        Sublicenses and Subcontracts...............................................          29
   5.4        Ownership of and Rights to Inventions......................................          29
   5.5        Limitation on Use..........................................................          30
   5.6        Reservation of Rights......................................................          30
   5.7        No Grant of Other Technology or Patent Rights..............................          31
   5.8        Options to Licenses in the Collaboration Field.............................          31
   5.9        Clinical IP................................................................          32
   5.10       Section 365(n) of the Bankruptcy Code......................................          32
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                                <C>
ARTICLE  6  COSTS & REVENUES - PRE AND POST PROFITABILITY DATE...........................          33
   6.1        License Fee................................................................          33
   6.2        Milestone Payment..........................................................          33
   6.3        Direct Development Costs...................................................          33
   6.4        Revenues Prior to Profitability Date.......................................          35
   6.5        Costs and Revenues After the Profitability Date............................          35
   6.6        Revenues from Third Party Agreements.......................................          38
   6.7        Records; Audits............................................................          38

ARTICLE  7  INTELLECTUAL PROPERTY........................................................          39
   7.1        CDS-Prosecuted Patent Rights...............................................          39
   7.2        Abandonment................................................................          40
   7.3        Alimera-Prosecuted Patent Rights...........................................          40
   7.4        Information Disclosure; Cooperation........................................          41
   7.5        Employees and Sublicensees Assignment of Inventions........................          41
   7.6        Infringement...............................................................          41
   7.7        Marking....................................................................          44
   7.8        Trademarks.................................................................          44
   7.9        UKRF Licenses and B&L Agreement............................................          45

ARTICLE  8  CONFIDENTIALITY..............................................................          45
   8.1        Confidentiality............................................................          45
   8.2        Disclosure.................................................................          46

ARTICLE  9  REPRESENTATIONS AND WARRANTIES...............................................          46
   9.1        Representations and Warranties of CDS......................................          46
   9.2        Representations and Warranties of Alimera..................................          47
   9.3        Warranty Disclaimer........................................................          48
   9.4        Limited Liability..........................................................          48

ARTICLE  10  INDEMNITY...................................................................          48
   10.1       Cross Indemnity............................................................          48
   10.2       Limitation on Indemnity Obligations........................................          49
   10.3       Procedure..................................................................          49
   10.4       Insurance..................................................................          49
   10.5       Product Liability Claims...................................................          50

ARTICLE  11  TERM AND TERMINATION........................................................          50
   11.1       Term.......................................................................          50
   11.2       Termination for Default by Either Party....................................          50
   11.3       Termination for Non-Payment of Development Payment.........................          50
   11.4       Termination for Failure to Approve an Initial Development Plan.............          51
   11.5       Termination for Abandonment................................................          52
   11.6       Effect of Expiration or Termination of the Agreement.......................          54
   11.7       Survival of Provisions Upon Expiration or Termination......................          54
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<S>                                                                                                <C>
ARTICLE  12  MISCELLANEOUS...............................................................          54
   12.1       Interpretation.............................................................          54
   12.2       Assignment.................................................................          55
   12.3       Severability...............................................................          55
   12.4       Notices....................................................................          55
   12.5       Governing Law and Venue....................................................          56
   12.6       Compliance with Applicable Laws............................................          56
   12.7       Dispute Resolution.........................................................          56
   12.8       Use of Name/Publicity......................................................          57
   12.9       Entire Agreement...........................................................          57
   12.10      Headings...................................................................          58
   12.11      Independent Contractors....................................................          58
   12.12      Waiver.....................................................................          58
   12.13      Counterparts...............................................................          58
</TABLE>

SIGNATURE PAGE

EXHIBITS

      EXHIBIT 1.11A     CDS EXISTING PATENT RIGHTS

      EXHIBIT 1.11B     EXCLUDED CDS PATENT RIGHTS

      EXHIBIT 1.15      CDS PATENT COST-SHARING COUNTRIES

      EXHIBIT 1.42      EXCLUDED PRODUCT SPECIFICATIONS/DRAWINGS

      EXHIBIT 1.87      UKRF LICENSES

      EXHIBIT 3.2       INITIAL DEVELOPMENT PLAN

      EXHIBIT 5.8.3     TERMS FOR OPTION LICENSE AGREEMENT

      EXHIBIT 11.5.1    TERMS FOR THE [*] LICENSE AGREEMENT

      [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
      TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED
      WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
      SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.

                                     -iii-
<PAGE>

                             COLLABORATION AGREEMENT

THIS COLLABORATION AGREEMENT (the "Agreement") dated as of February 11, 2005
(the "Effective Date"), is made by and between CONTROL DELIVERY SYSTEMS, INC., a
corporation organized and existing under the laws of the State of Delaware
having its offices at 400 Pleasant St., Watertown, Massachusetts 02472 ("CDS"),
and ALIMERA SCIENCES, INC., a corporation organized and existing under the laws
of the State of Delaware having its offices at 6120 Windward Parkway,
Alpharetta, GA 30005 ("Alimera"). CDS and Alimera are sometimes referred to
herein individually as a "Party" and collectively as the "Parties."

                                 R E C I T A L S

      WHEREAS, CDS designs and develops innovative ophthalmic drug delivery
products; and

      WHEREAS, Alimera develops and commercializes ophthalmic drug products; and

      WHEREAS, the Parties are interested in collaborating with one another and
jointly funding the development, and sharing Net Profits from the sale, of novel
products for treating eye diseases in humans, including a product for the
treatment of diabetic macular edema using a corticosteroid; and

      WHEREAS, CDS is willing to grant Alimera a license to certain of its
proprietary technology and know-how relating to developing products for treating
eye diseases and enter into such a collaboration upon the terms and conditions
set forth below;

      NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
agree as follows:

                             ARTICLE 1 DEFINITIONS

For purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below, whether used in their singular or plural form:

      1.1 "Affiliate" shall mean any corporation or other entity that controls,
is controlled by, or is under common control with a Party to this Agreement. A
corporation or other entity shall be regarded as in control of another
corporation or entity if it directly or indirectly owns or controls more than
fifty percent (50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint more than fifty percent (50%)
of the members of the governing body of the corporation or other entity.

      1.2 "Alimera Improvements" shall mean any and all Improvements created,
conceived or reduced to practice by Alimera, or its Affiliates, agents,
subcontractors or sublicensees, alone or with others, or by Third Parties acting
on their behalf, that are (a) Improvements covered by or derived from practice
of the CDS Technology, and/or (b)

                                      -1-
<PAGE>

Improvements covered by or derived from the practice of the Improvements set
forth in clause (a); provided, however, that Alimera Improvements shall not
include any Improvement that meets each of the following: (x) is related
specifically to an active ingredient provided by Alimera and used in the
Products, (y) can be practiced without infringing any CDS Existing Patent Rights
and any Patent Rights included within CDS Improvements, or without utilizing any
CDS Know-How, and (z) does not fall within the definition of the CDS Core
Technology.

      1.3 "Alimera Know-How" shall mean Know-How Controlled by Alimera.

      1.4 "Alimera Patent Costs" shall mean fees and costs associated with
filing, prosecution and maintenance of the Alimera-Prosecuted Patent Rights, as
defined in Section 7.3, in the Territory.

      1.5 "Approval" shall mean the approvals from applicable regulatory
authorities in any country or region required to lawfully market a Product in
such country or region, including, but not limited to, approval of an NDA. The
term "Approved" shall mean the receipt of Approval.

      1.6 "Bankruptcy Code" shall mean Title 11 of the United States Code, as
amended from time to time.

      1.7 "B&L" shall mean Bausch & Lomb Incorporated.

      1.8 "B&L Agreement" shall mean the Amended and Restated License Agreement
between CDS and B&L dated as of December 9, 2003 as in existence and effect on
the Effective Date, a full and complete copy of which has been provided to
Alimera.

      1.9 "Business Day" shall mean each day of the week excluding Saturday,
Sunday and U.S. federal holidays.

      1.10 "CDS Core Technology" shall mean (a) any drug delivery device, or
component thereof, for ophthalmic use that includes a core containing one or
more drugs, and (b) any method or process for using a device described in clause
(a).

      1.11 "CDS Existing Patent Rights" shall mean (a) the United States and
foreign patents and patent applications listed in Exhibit 1.11A, (b) any Patent
Rights arising from those patents and patent applications during the Term, and
(c) any other patents or patent applications Controlled by CDS as of the
Effective Date, a Valid Claim of which, absent the licenses granted by CDS to
Alimera under Section 5.1, would be infringed by the making, having made, using,
selling, offering to sell or importing of a Product in the Collaboration Field
by Alimera or its subcontractors or sublicensees as permitted under this
Agreement; provided, however, that CDS Existing Patent Rights shall in no event
include the patents and patent applications listed in Exhibit 1.11B or any
Patent Rights arising from those patents or patent applications.

      1.12 "CDS Improvements" shall mean any and all Improvements created,
conceived or reduced to practice by CDS, or its Affiliates, agents, or
sublicensees, alone or with others or by Third Parties acting on their behalf,
during the course of activities conducted as set forth in the Development Plan,
that are (a) Improvements covered by or derived from practice of the CDS
Technology, and (b) Improvements covered by or derived from the practice of the
Improvements

                                      -2-
<PAGE>

set forth in clause (a); provided, however, that CDS Improvements shall not
include any Improvement that is an Alimera Improvement.

      1.13 "CDS Know-How" shall mean Know-How Controlled by CDS that is required
for development and Commercialization of a Product.

      1.14 "CDS Net Income" or "CDS Net Losses" shall mean, for the first
calendar quarter after the CDS Profitability Date and for any calendar quarter
thereafter, Net Sales by CDS, and/or CDS Sublicense Revenue actually received by
CDS, for a Product in that calendar quarter minus the CDS Product Costs for such
Product in that calendar quarter; provided that in the event any portions of the
CDS Product Costs are already included in arriving at CDS Sublicense Revenue,
such portions of the CDS Product Costs shall be excluded from the above
calculation to determine the CDS Net Income or CDS Net Losses. To the extent Net
Sales and/or CDS Sublicense Revenue actually received by CDS exceed the CDS
Product Costs for the relevant calendar quarter, such amount of difference shall
be deemed "CDS Net Income," and to the extent CDS Product Costs exceed Net Sales
and/or CDS Sublicense Revenue actually received by CDS for the relevant calendar
quarter, the amount of such difference shall be deemed "CDS Net Losses." For
clarification, with respect to calculating CDS Net Income for any unit of
Product, the Manufacturing Cost incurred to manufacture such unit shall be
deemed to be incurred in that country and quarter in which such unit is sold.

      1.15 "CDS Patent Costs" shall mean fees and costs associated with filing,
prosecution and maintenance of the CDS-Prosecuted Patent Rights, as defined in
Section 7.1.2, in the countries listed on Exhibit 1.15.

      1.16 "CDS Patent Rights" shall mean CDS Existing Patent Rights and CDS'
interest in any Patent Rights included within Alimera Improvements and CDS
Improvements.

      1.17 "CDS Product Costs" shall mean, with respect to a Product, all costs
CDS incurred for developing and Commercializing such Product, including, without
limitation, the following costs: (a) all Direct Development Costs incurred by
CDS during the Term of this Agreement, (b) each of the following to the extent
paid by CDS to Alimera pursuant to this Agreement: all Development Payments,
Compounded Development Payments, Determined Disputed Costs and Compounded
Disputed Payments, (c) each of the following, if any, owed by Alimera to CDS to
the extent not already paid by Alimera: any Compounded Development Payments and
Compounded Disputed Payments, plus any interest on such unpaid amount that has
accrued in accordance with the terms of this Agreement after termination of
either this entire Agreement or this Agreement with respect to a Product, as
applicable, (d) each of the following to the extent not already included in
Direct Development Costs or reimbursed by Alimera: CDS Patent Costs, UKRF Costs
and insurance premiums paid by CDS to maintain insurance required by Section
10.4, as compounded, if applicable, pursuant to Section 4.4, and (e) any other
costs incurred by CDS for developing and Commercializing such Product.

      1.18 "CDS Profitability Date" shall mean, with respect to a Product, the
first day of the first calendar quarter in which the aggregate of Net Sales by
CDS, and CDS Sublicense Revenue actually received by CDS, of such Product for
all preceding calendar quarters and the

                                      -3-
<PAGE>

current calendar quarter exceeds the CDS Product Costs during all preceding
calendar quarters and the current calendar quarter; provided that in the event
that any portions of the CDS Product Costs are already included in arriving at
the CDS Sublicense Revenue, such portions of the costs shall be excluded from
the above calculation to determine the CDS Profitability Date. For
clarification, all preceding calendar quarters include the Term of this
Agreement and for any applicable periods thereafter.

      1.19 "CDS Sublicense Revenue" shall mean any form of consideration
(excluding any amounts paid for equity securities of CDS other than amounts that
exceed the fair market value of such securities) in connection with a sublicense
agreement that CDS enters into with a Third Party to sell or otherwise transfer
some or all of CDS' rights to a Product, including, but not limited to,
marketing rights and/or distribution rights, provided that (1) the fair market
value of such securities shall be determined by mutual agreement of both
Parties, and (2) in the event that the Parties fail to reach such mutual
agreement, the matter shall be resolved by arbitration in accordance with
Section 12.7.2 herein.

      1.20 "CDS Technology" shall mean CDS Patent Rights, CDS Know-How and CDS'
interest in Alimera Improvements and CDS Improvements.

      1.21 "Change of Control" shall mean, with respect to a Party, (a) a merger
or consolidation of such Party with a Third Party which results in the voting
securities of such Party outstanding immediately prior thereto ceasing to
represent at least fifty percent (50%) of the combined voting power of the
surviving entity immediately after such merger or consolidation, or (b) except
in the case of a bona fide equity financing in which a Party issues new shares
of its capital stock, a transaction or series of related transactions in which a
Third Party, together with its Affiliates, becomes the beneficial owner of fifty
percent (50%) or more of the combined voting power of the outstanding securities
of such Party, or (c) the sale or other transfer to a Third Party of all or
substantially all of such Party's assets related to the Collaboration Field.

      1.22 "Clinical IP" shall mean (a) all preclinical and clinical protocols,
studies, data, results, study-related forms, materials and reports (e.g.,
investigator brochures, informed consent forms, data safety monitoring board
related documents, patient recruitment related materials, biocompatibility
studies, animal studies, safety studies, and chemistry, manufacturing and
control data) resulting from any preclinical or clinical study or trial of any
Product in the Collaboration Field that is conducted by or under the direction
of Alimera or CDS, or their Permitted Subcontractors or sublicensees, pursuant
to this Agreement, and any audit of any such preclinical or clinical study or
trial, and (b) all INDs, NDAs, any unfiled applications, components or materials
normally associated with an IND or NDA, regulatory filings or applications
comparable to INDs or NDAs in any foreign jurisdictions, and other regulatory
applications and Approvals regarding any Product in the Collaboration Field that
are prepared or submitted by or under the direction of Alimera or CDS, or their
Permitted Subcontractors or sublicensees, pursuant to this Agreement; provided,
however, that Clinical IP shall not include any Pre-Existing Clinical IP.

      1.23 "Clinical Supply Requirements" shall mean, with respect to each
Product, the quantities of such Product that are required for the conduct of
preclinical studies and clinical trials required to procure data necessary for
the acceptance of filing of an NDA for the Product,

                                      -4-
<PAGE>

pursuant to the Development Plan. For the avoidance of doubt, supplies for
Non-NDA Trials are excluded from the definition of Clinical Supply Requirements.

      1.24 "CODRUG(TM)" shall mean a compound or a pharmaceutically acceptable
salt thereof comprising one constituent moiety covalently or ionically
associated with at least one other constituent moiety, wherein each moiety, in
its separate form (i.e., in the absence of the association), is a
therapeutically or pharmacologically active agent or a prodrug or
pharmaceutically acceptable salt of such an agent. The covalent association
between said moieties can be either direct or indirect through a linker.
Examples of covalent association include without limitation ester, amide,
carbamate, carbonate, cyclic ketal, thioester, thioamide, thiocarbamate,
thiocarbonate, xanthate, and phosphate ester bonds. Each constituent moiety of a
CODRUG(TM) compound can be the same as or different from the other constituent
moiety. Upon cleavage of the covalent or ionic association, the individual
constituent moieties are reconstituted as the therapeutically or
pharmacologically active forms of the same moieties prior to conjugation.

       1.25 "Collaboration Field" shall mean the treatment and prevention of eye
diseases in humans; provided, however, that the treatment and prevention of [*]
is excluded from the Collaboration Field.

      1.26 "Commercial Supply Requirements" shall mean, with respect to each
Product, quantities of such Product that are required to fulfill requirements
for commercial sales, Product sampling, and Non-NDA Trials, in the Collaboration
Field in the Territory.

      1.27 "Commercialize" or "Commercialization" shall mean any and all
activities directed to marketing, promoting, Detailing, distributing, importing,
offering for sale, having sold and/or selling a product, including, but not
limited to, sampling, and conducting Non-NDA Trials.

      1.28 "Commercialization Budget" shall have the meaning set forth in
Section 4.2 hereof.

      1.29 "Commercially Reasonable Efforts" shall mean efforts and resources
that parties in the pharmaceutical industry would consider normal to use for a
compound or product owned by a party in that industry or to which that party has
rights, which is of similar market potential at a similar stage in its
development or product life, taking into account the competitiveness of the
marketplace, the proprietary position of the compound or product, the regulatory
structure involved, the profitability of the applicable products, and other
relevant factors. In determining Commercially Reasonable Efforts with respect to
a particular Product, a Party may not consider any other product(s) owned or
licensed by it.

      1.30 "Compounded Development Payment" shall have the meaning set forth in
Section 6.3.2 hereof.

      1.31 "Confidential Information" shall have the meaning set forth in
Section 8.1 hereof.

      1.32 "Control" or "Controlled by" shall mean, in the context of a license
to or ownership of intellectual property, possession of the ability on the part
of a Party to grant access

      [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
                                      -5-
<PAGE>

to or a license or sublicense 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 grant the other Party such access or
license or sublicense.

      1.33 "Detail" shall mean a face-to-face meeting (including a live video
presentation) with one or more healthcare professionals with prescribing
authority during which scientific and/or medical information about the Product
is discussed. Detailing does not include merely a reminder or a promotional
sample drop. When used as a verb, the term "Detailing" shall mean to engage in
the activity of a Detail.

      1.34 "Development Budget" shall mean the initial Development Budget and
thereafter each budget in the rolling three (3) year development plan agreed to
by the Parties as described in Section 3.2 hereof.

      1.35 "Development Plan" shall mean the initial Development Plan and
thereafter each rolling three (3) year development plan agreed to by the Parties
as described in Section 3.2 hereof. Each Development Plan (including the initial
Development Plan) (a) shall set forth a strategy and plan for development
(including, but not limited to, preclinical development and clinical trials),
manufacturing and regulatory approval for each Product, shall indicate which
Party shall have responsibility for the various development activities specified
therein consistent with the other terms of this Agreement, and shall specify the
expected timing of such activities, including the estimated dates of the
initiation and completion of such activities, and (b) shall include a
Development Budget as described in Section 3.2.

      1.36 "Direct Commercialization Costs" shall mean only the following costs
incurred, on a cash basis, by Alimera for Commercializing a Product in
accordance with this Agreement and pursuant to the Commercialization Budget:

            (a) Direct Costs of marketing activities for the Product, including
pre-launch, launch, advertising, packaging, activities necessary for seeking and
maintaining pricing and reimbursement approvals from Third Party payors,
literature, lectures, training (including wet labs for training healthcare
professionals) and sales promotion;

            (b) [*]

            (c) Direct Costs associated with maintaining Approvals for the
Product;

            (d) Direct Costs of package development and package maintenance for
the Product;

            (e) Selling Expenses for the Product;

            (f) Manufacturing Costs to satisfy Commercial Supply Requirements
for the Product;

            (g) Direct Costs of distribution of the Product other than the costs
specified in Section 1.60(d);

      [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -6-
<PAGE>

            (h) Royalties, milestones and other fees paid by Alimera under Third
Party license(s) [*] that are at arms' length to the extent they relate to the
Product, to the extent such licenses are necessary for Alimera to make, have
made, use, offer to sell, sell, and import the Product without infringing
patents of such Third Parties, including without limitation as provided for in
Section 7.6.4;

            (i) Direct Costs of selection, filing, prosecution and maintenance
of trademarks used solely for the Product (or an appropriate allocation in the
case of any trademarks used for the Product and other products);

            (j) Direct Costs of Medical Advisory Services for the Product;

            (k) Recall expenses that are Direct Commercialization Costs as set
forth in Section 4.6;

            (l) Product Liability Losses that are Direct Commercialization Costs
as set forth in Section 10.5;

            (m) Insurance premiums paid by Alimera for the insurance required by
Section 10.4 to the extent such insurance relates to Commercialization of the
Product (i.e., if insurance covers risks other than risks related to
Commercialization of the Product, then only an appropriate portion of such
premiums shall be included); and

            (n) Taxes, duties, tariffs and other governmental charges (excluding
taxes on income) associated with manufacture and distribution of the Product, to
the extent not deducted from Net Sales pursuant to Section 1.60(c).

Notwithstanding any other provisions in this Agreement, Direct Commercialization
Costs shall include only the costs of labor for those individuals who spent
greater than fifty percent (50%) of their time on activities within the
Commercialization Budget during any calendar month (the "Majority Time
Individuals"), and such costs shall be determined according to the amount of the
Majority Time Individuals' time actually spent on such Commercialization
activities, provided that, if the Commercialization activity is Detailing, then
such costs for the Majority Time Individuals shall be determined in accordance
with Section 1.81. In the event there is more than one Product on the market at
any given time, Direct Commercialization Costs attributable to more than one
Product shall be allocated to each Product as appropriate; provided, however,
that in no event shall any Direct Commercialization Costs be accounted for more
than once. Notwithstanding the foregoing, in the event that a person devotes
time to activities under both the Commercialization Budget and the Development
Plan, the time spent shall be aggregated in determining whether such person
meets the fifty percent (50%) threshold set forth in this definition and in the
definition of Direct Development Costs, and the person's time shall be allocated
accordingly between development and Commercialization.

      1.37 "Direct Costs" shall mean, on a cash basis, the costs of labor
(including only salaries, wages and current period employee benefits (but
specifically excluding expenses associated with stock options or other
equity-based or deferred compensation)), raw materials, supplies, services,
fees, and other resources, directly and exclusively consumed or used in the
conduct of the applicable activity; provided, however, that the following costs
shall not be

      [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -7-
<PAGE>

deemed Direct Costs: (i) corporate overhead expenses, including, but not limited
to, general administration, business development, travel, entertainment,
executive management, facilities, finance, information system and data
management services, investor relations, human resources, legal, payroll,
purchasing, and corporate supervisory services; (ii) amortization and
depreciation expenses, interest expenses, taxes, extraordinary or nonrecurring
losses customarily deducted by a Party in calculating and reporting consolidated
net income, capital expenditures (including, but not limited to, purchases of
facilities, property or equipment), and inventory write-offs (to the extent not
attributable to a Product); (iii) consulting (including legal) fees unless
specifically set forth in a mutually approved budget; and (iv) payments made to
any related party or Affiliates in excess of an arm's length charge for the
relevant product or service.

      1.38 "Direct Development Costs" shall mean the following costs incurred,
on a cash basis, by either Party for developing a Product, to the extent set
forth in the Development Budget approved by the Parties:

            (a) Direct Costs for development activities for the Product,
incurred, on a cash basis, by a Party or paid by a Party to Permitted
Subcontractors, conducted pursuant to the Development Plan, including, but not
limited to, research, formulation development and testing, clinical development
activities, data management, toxicology, and planning and execution of clinical
trials required to procure data necessary for the acceptance of filing of an
NDA;

            (b) Manufacturing Costs to satisfy Clinical Supply Requirements;

            (c) Direct Costs for regulatory filings pursuant to the Development
Plan (specifically excluding any filing related to Non-NDA Trials) for the
Product;

            (d) Insurance premiums paid by either Party for commercial insurance
to the extent such insurance relates to development activities conducted
pursuant to the Development Plan in accordance with Section 10.4 hereof (i.e.,
if insurance covers risks other than risks related to development of the
Product, then only an appropriate portion of such premiums shall be included);

            (e) CDS Patent Costs paid from the Effective Date up to the first
Product Profitability Date that are not otherwise reimbursed by a Third Party;
provided, however, that CDS Patent Costs in excess of [*] in any calendar
year shall not be included as Direct Development Costs;

            (f) Direct Costs of the activities conducted under Section 3.11,
including, but not limited to, technology transfer assistance from CDS to
Alimera to enable Alimera to manufacture the Product for Commercialization;

            (g) Direct Costs for capital expenditures to the extent attributable
to the Product as specifically approved in the Development Plan and set forth in
the Development Budget; and

            (h) Other Direct Costs as described in the Development Plan and set
forth in the Development Budget.

            [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN
FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.

                                      -8-
<PAGE>

Notwithstanding any other provisions in this Agreement, Direct Development Costs
shall (1) with the exception of (e) and (f) above, include only Direct Costs
incurred, on a cash basis, in connection with activities conducted to procure
data necessary for the acceptance of filing of an NDA for the Product; and (2)
include only the costs of labor for those individuals who spent greater than
fifty percent (50%) of their time on activities under the Development Plan
during any calendar month, and such costs shall be determined according to the
percentage of the individuals' time actually spent on such development
activities; and (3) not include any Commercialization costs. Notwithstanding the
foregoing, in the event that a person devotes time to activities under both the
Commercialization Budget and the Development Plan, the time spent shall be
aggregated in determining whether such person meets the fifty percent (50%)
threshold set forth in this definition and in the definition of Direct
Commercialization Costs, and the person's time shall be allocated accordingly
between development and Commercialization.

      1.39 "DME" shall mean diabetic macular edema.

      1.40 "Effective Date" shall mean the date first set forth above.

      1.41 "Earnest Money Loan" shall mean the aggregate of the loan under the
Secured Promissory Notes from CDS to Alimera dated October 19, 2004, November
18, 2004 and December 22, 2004.

      1.42 "Excluded Product" shall mean a [*] that generally conforms to the
drawings and specifications (and any prior iterations thereof in whole or in
part) shown in Exhibit 1.42.

      1.43 "FDA" shall mean the United States Food and Drug Administration or
any successor agency with responsibilities comparable to those of the United
States Food and Drug Administration.

      1.44 "First Commercial Sale" shall mean, with respect to each Product, the
first sale for use or consumption by the general public of such Product in a
country after required Approval has been granted by the applicable regulatory
authority of such country.

      1.45 "First Product" shall have the meaning set forth in Section 1.77
hereof.

      1.46 "GAAP" shall mean the current United States generally accepted
accounting principles, consistently applied.

      1.47 "Gross Sales" shall mean, for any period, on a cash basis (a) for any
arm's length transaction in which Products are sold separately by Alimera or its
Affiliates to a Third Party, the gross invoice price for Products in such
transactions, and (b) for all other transactions (i.e., other than those
described in subsection (a)) in which Products are sold, used or otherwise
disposed of by Alimera or its Affiliates (including in barter or similar
transactions, or transactions that are not at arm's length to a Third Party, or
transactions in which Products are not sold separately, but not including the
provision of Products intended for use solely as samples), the total imputed
sales price for Products in such transactions, using as the imputed sales price
the weighted

      [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -9-
<PAGE>

average gross invoice price for Products under subsection (a) during the
preceding calendar quarter or, if there have been no Gross Sales under
subsection (a) in the preceding quarter, using a reasonable imputed price to be
determined at the time by the parties. For purposes of this Section 1.47, "sold
separately" shall mean sold, solely for monetary consideration, on a stand-alone
basis (i.e., with a selling price independent of any other product) for not less
than arm's length value.

      1.48 "Improvements" shall mean any and all Inventions, enhancements,
derivatives, new uses, developments, techniques, materials, compounds, products,
designs, processes or other technology or intellectual property, whether or not
patentable and all Patent Rights and other intellectual property rights in any
of the foregoing.

      1.49 "IND" shall mean the Investigational New Drug Application filed with
FDA or a similar application filed with an applicable regulatory authority
outside of the United States.

      1.50 "Invention" shall mean ideas, information, Know-How, data research
results, writings, inventions, discoveries, modifications, improvements and
other technology (including, but not limited to, any proprietary biological or
other materials, compounds or reagents and computer software), whether or not
patentable or copyrightable.

      1.51 "Joint Development Team" or "JDT" shall mean the body organized and
acting pursuant to Article 2 hereof.

      1.52 "Know-How" shall mean unpatented information, whether or not
patentable, including, but not limited to, technical information, processes,
formulae, trade secrets, materials, designs, drawings and data.

      1.53 "Majority Time Individuals" shall have the meaning set forth in
Section 1.36.

      1.54 "Manufacturing Costs" shall mean:

      (A) with respect to Product manufactured by a Third Party, a Party's cost
of procuring such Product on an arms' length basis; or

      (B) with respect to Product manufactured by a Party or one of its
Affiliates, (1) Direct Costs incurred, on a cash basis, by such Party or one of
its Affiliates to manufacture such Product, including Direct Costs of
purchasing, inspection, quality assurance, quality control, storage, scrap and
training, and (2) a portion of depreciation, amortization, interest expense,
utilities, rent, maintenance and repairs, insurance and other manufacturing
overhead (the "Manufacturing Overhead") allocable to Product as determined by
the following formula: the Manufacturing Overhead multiplied by a fraction, the
numerator of which is the number of direct labor hours of individuals who spent
time on the production of Product at a plant at which Product is manufactured,
and the denominator of which is the number of direct labor hours devoted to the
production of all products at such plant when the plant is operating at full
capacity, provided that Manufacturing Costs shall exclude costs associated with
excess capacity, selling costs (including, without limitation, marketing,
advertising, salaries and commissions), corporate overhead, costs that are
otherwise attributed as Direct Development Costs or Direct Commercialization
Costs under this Agreement, royalties (earned or paid up) and other amounts

                                      -10-
<PAGE>

payable to Third Parties under any license taken by a Party in connection with
the manufacture of the Product, and all amounts spent on research and
development;

provided, however, that any amount determined pursuant to clause (B) shall not
exceed the amount that a qualified Third Party manufacturer would charge for
supplying comparable quantities of the relevant Product in a timely manner on
reasonable and customary terms and conditions.

      1.55 "Medical Advisory Services" shall mean those health care
professionals employed or engaged by a Party with sufficient medical or other
pertinent health care experience to engage in in-depth dialogues with physicians
regarding medical issues associated with a Product.

      1.56 "Milestone Payment" shall have the meaning set forth in Section 6.2
hereof.

      1.57 "NDA" shall mean a new drug application or product license
application or its equivalent filed with and accepted by the FDA after
completion of human clinical trials to obtain marketing approval for a Product,
or any comparable application filed with and accepted by the regulatory
authorities of a country other than the United States, including, where
applicable, any applications for governmental pricing and marketing approval.

      1.58 "Net Profits" or "Net Losses" shall mean, for a particular calendar
quarter, the Net Sales for a Product in a country minus the Direct
Commercialization Costs for such Product in that country. For the avoidance of
doubt, Net Profits shall be calculated on a Product-by-Product and calendar
quarter-by-quarter basis. To the extent Net Sales exceed Direct
Commercialization Costs for the relevant calendar quarter, such amount of
difference shall be deemed "Net Profits," and to the extent Direct
Commercialization Costs exceed Net Sales for the relevant calendar quarter, such
amount of difference shall be deemed "Net Losses." For clarification, with
respect to calculating Net Profits or Net Losses for any unit of Product, the
Manufacturing Cost incurred to manufacture such unit shall be deemed to be
incurred in the country and quarter in which such unit is sold.

      1.59 "Net Profits Payment" shall have the meaning set forth in Section
6.5.1(b) hereof.

      1.60 "Net Sales" shall mean, with regard to a Product, on a cash basis,
for any period, Gross Sales less the following reasonable and customary
deductions:

            (a) normal and customary trade, cash and other discounts, allowances
and credits allowed and actually taken directly with respect to sales of the
Product;

            (b) credits or allowances actually granted for damaged goods or
returns or rejections of the Product;

            (c) taxes or other governmental charges imposed directly on the
sales of Products, including value added taxes or other similar governmental
charges, but not including any tax levied with respect to income;

            (d) freight, postage, shipping, and insurance charges; and

                                      -11-
<PAGE>

            (e) charge back payments and government rebates allowed and taken.

      1.61 "Non-NDA Trial" shall mean any clinical trial, or part of a clinical
trial, of a Product that is not designed or required to procure data necessary
for the acceptance of filing of an NDA. Non-NDA Trials may be conducted before
or after the filing of an NDA, before Approval or at any time after Approval.
Non-NDA Trials shall specifically not include (that is, costs associated with
such trials may be deemed Direct Development Costs) any (i) clinical trials
designed to obtain favorable labeling at the time of initial Approval pursuant
to the Development Plan, (ii) post-Approval or post-marketing trials required by
the FDA or other regulatory authority in granting a conditional Approval, or
(iii) trials required to obtain Approval for pediatric use of a Product, whether
such trials are prior or subsequent to the filing of an NDA or Approval.

      1.62 "Non-Paying Party" shall have the meaning set forth in Section 6.3.2
hereof.

      1.63 "Option Compound" shall mean a compound, other than a compound that
is a corticosteroid, that (i) Alimera has a right to use and (ii) is selected by
Alimera under an Alimera Compound Option set forth in Section 5.8; provided,
however, that Option Compound shall not include any compound that is included in
a license or option by CDS to a Third Party, or is included in a term sheet with
a Third Party, as of the date on which Alimera notifies CDS under Section 5.8
that Alimera wishes to exercise an Alimera Compound Option with regard to such
compound. For the avoidance of doubt, a "compound," as used herein, shall be a
specific compound and shall not be a category or class of compounds.

      1.64 "Option Product" shall mean (i) a product that meets the definition
of "Product" in Section 1.77, except that the term "Option Compound" shall be
substituted in place of "corticosteroid," and (ii) clause (B)(2) and the third
sentence of Section 1.77 shall be omitted.

      1.65 "Option Term" shall mean the period commencing on the Effective Date
and expiring on the earliest of (i) [*] months after the Effective Date;
(ii) the date on which [*]; and (iii) Alimera's exercise of all [*] Alimera
Compound Options under Section 5.8.

      1.66 "Owed Party" shall have the meaning set forth in Section 6.3.2
hereof.

      1.67 "Party" shall mean CDS or Alimera.

      1.68 "Patent Rights" shall mean any United States or foreign patent or
patent applications, any patents issuing from such patent applications, and any
continuations, continuations-in-part to the extent specifically directed to
subject matter specifically described in such patent applications, divisionals,
renewals, reexaminations, reissues, extensions or provisional applications of
any of the foregoing and any corresponding patent, patent application, utility
model, inventor certificate, registration or the like in any country of the
world with respect to the foregoing.

      1.69 "Permitted Subcontractor" shall mean a Third Party or an Affiliate
that has been awarded a subcontract with one Party in accordance with Section
3.7 hereof.

      [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -12-
<PAGE>

      1.70 "Phase I Clinical Trial" shall mean a clinical trial as defined in 21
C.F.R. 312.21(a), as may be amended from time to time, or any foreign equivalent
thereto.

      1.71 "Phase I/II Clinical Trial" shall mean a combined Phase I Clinical
Trial and Phase II Clinical Trial.

      1.72 "Phase II Clinical Trial" shall mean a clinical trial as defined in
21 C.F.R. 312.21(b), as may be amended from time to time, or any foreign
equivalent thereto.

      1.73 "Phase III Clinical Trial" shall mean a clinical trial as defined in
21 C.F.R. 312.21(c), as may be amended from time to time, or any foreign
equivalent thereto.

      1.74 "Pre-Existing Clinical IP" shall mean [*].

      1.75 "Primary Contact Person" shall have the meaning set forth in Section
3.4.

      1.76 "Prime" shall have the meaning set forth in Section 6.5.1(b).

      1.77 "Product" shall mean a drug delivery device that meets all of the
following criteria: (A) it has a core within a polymer layer that contains a
drug in a form other than a CODRUG(TM) and no other active ingredient, where the
core does not include a CODRUG(TM), (B) it is Approved or designed to be
Approved (1) to deliver a corticosteroid and no other active ingredient by
implantation, injection, or other direct delivery method to the posterior
portion of the eye, or (2) to treat DME by delivering a compound or formulation
by implantation, injection, or other direct delivery method other than through
an incision smaller than that required for a 25 gauge needle, (C) it does not
fall under the definition of Excluded Product, and (D) it is Approved or
designed to be Approved for a particular indication in a particular country. For
clarification, eye drops or other topical administration and tablets or other
oral administration shall not be deemed to be direct delivery to the posterior
portion of the eye. For example, "Product" shall specifically include a drug
delivery device that meets all of the following criteria (such product sometimes
referred to as the "First Product"): (1) consists of [*] (2) is Approved or
designed to be Approved to be administered [*]; (3) is Approved or designed to
be Approved [*] and (4) is Approved or designed to be Approved for a particular
indication in a particular country. For clarification, with regard to the same
drug delivery device described above, each indication in each country shall be a
separate Product. By way of non-limiting examples, with regard to a particular
drug delivery device X, (i) X for DME and X for age-related macular degeneration
shall be two different Products, and (ii) X for DME in the United States and X
for DME in Japan shall be two different Products.

      [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED. -13-
<PAGE>

      1.78 "Profitability Date" shall mean, with respect to each Product, the
first day of the first calendar quarter in which Net Profits are realized for
such Product.

      1.79 "Recall" shall mean any recall of a product or any related actions
(e.g., market withdrawal and stock recovery). For avoidance of doubt, Recall
includes recall of product packaging.

      1.80 "Right of Access to Clinical IP" shall mean the right to reference,
cross-reference, review, have access to, incorporate and use Clinical IP in any
regulatory applications or filings, any patent filings, or for any research or
development purpose.

      1.81 "Selling Expenses" shall mean Direct Costs incurred, on a cash basis,
by Alimera for the sales force who are employees of Alimera or its Affiliates,
all only pursuant to the Commercialization Budget; provided, however, that if a
portion of time of Alimera Majority Time Individuals involved in Detailing
Products is devoted to Detailing products other than Products, then only the
following percentages of the Alimera Majority Time Individuals' time spent in
Detailing shall be Direct Commercialization Costs:

            (a) [*] if the Product is carried in the sole Detail position, in
which the Product is the only product presented during a Detail and the key
Product attributes are verbally presented in a presentation delivered during the
Detail by Alimera's or its Affiliates' sales representative;

            (b) [*] if the Product is carried in the primary Detail position, in
which key Product attributes are verbally presented in the first position during
a Detail, where the Product is given primary emphasis (i.e., an emphasis that is
more important than the emphasis given to any other product presented), and
where no more than three products are presented during such Detail;

            (c) [*] if the Product is carried in the secondary Detail position,
in which key Product attributes are presented in the second position during a
Detail, where the Product is given significant but not primary emphasis, and
where no more than three products are presented during such Detail;

            (d) [*] if the Product is carried in the tertiary Detail position,
in which key Product attributes are presented in the third position during a
Detail, where the Product is given some emphasis, and where three products are
presented during such Detail; provided that (1) if more than one Product is the
subject of a Detail, the foregoing percentages shall be cumulative, not to
exceed 100% (e.g., if one Product is carried in the primary Detail position and
another Product is carried in the secondary Detail position, then [*] of the
sales force time shall be a Direct Commercialization Cost with respect to the
first Product and [*] shall be a Direct Commercialization Cost with respect to
the second Product), and (2) if there are more than three products presented in
a Detail, the percentages specified in (b)-(d) above shall be multiplied by a
fraction, the numerator of which is three and the denominator of which is the
number of products presented in that Detail (e.g., if a Product is carried in
the secondary Detail position and there are four products presented during such
Detail, then [*] is multiplied by -3/4 and [*] of the sales force time shall be
a Direct Commercialization Cost with respect to that

            [*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN
FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.

                                      -14-
<PAGE>

Product). For clarification, the costs of Majority Time Individuals shall be
determined according to the amount of Majority Time Individuals' time actually
spent on Detailing multiplied by the applicable percentage as specified in this
Section 1.81 above. For example, if a Majority Time Individual spends
twenty-five (25) hours on Detailing, in which Products are carried in the
primary Detail positions, then Direct Commercialization Costs attributable to
such Detailing shall be the Direct Costs of 25 hours multiplied by [*] (as may
be further adjusted as specified above). For further clarification, Selling
Expenses relating to a Product may be incurred prior to First Commercial Sale of
such Product (e.g., for sales force training); in such event, the percentages
referred to in this Section 1.81 initially shall be based on the Detail position
for the relevant Product contemplated in the Commercialization Budget. For
example, if the Product is projected in the Commercialization Budget to be the
sole product Detailed by the sales force, then initially [*] of the Direct Costs
associated with the sales force shall be allocated as Selling Expenses. In the
event that the actual Detail position for a Product differs from that projected
in the Commercialization Budget, then the amount of the Direct Costs that are
included as Direct Commercialization Costs shall be adjusted subsequently to
reflect the actual Detail position.

      1.82 "Term" shall have the meaning set forth in Section 11.1.

      1.83 "Territory" shall mean all countries and territories worldwide.

      1.84 "Third Party" shall mean any person or entity other than CDS, Alimera
or their respective Affiliates.

      1.85 "UKRF" shall mean the University of Kentucky Research Foundation.

      1.86 "UKRF Costs" shall mean all royalties, milestones and other fees due
to UKRF related to a Product pursuant to the UKRF Licenses.

      1.87 "UKRF Licenses" shall mean the licenses set forth in Exhibit 1.87, as
may be amended from time to time consistent with Section 7.9, full and complete
copies of which agreements in effect as of the Effective Date have been provided
to Alimera.

      1.88 "Valid Claim" shall mean a claim of an issued and unexpired patent,
or a claim of a pending patent application, which has not been withdrawn,
cancelled, abandoned, disclaimed, or held permanently revoked, unenforceable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal.

                        ARTICLE 2 JOINT DEVELOPMENT TEAM

      2.1 Establishment of Joint Development Team. The Parties shall establish a
Joint Development Team ("JDT"), which shall consist of a total of four members,
with two members from each Party. Members of the JDT may be represented at any
meeting by a designee appointed by such member for such meeting, provided that
reasonable advance notice is provided to the other Party and such designee shall
be subject to an appropriate confidentiality agreement. Each Party shall be free
to change its members on prior written notice to the other Party. Each Party
may, in its discretion, upon reasonable notice to the other Party, invite
non-


[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -15-
<PAGE>

JDT employees and consultants of such Party to attend such meeting, provided
that such non-JDT employees and consultants shall be subject to appropriate
confidentiality agreements. The JDT shall remain in place until the expiration
or termination of its responsibilities set forth in this Agreement.

      2.2 Responsibilities of the Joint Development Team. In addition to the
responsibilities expressly described elsewhere in this Agreement, the JDT shall:

            (a) draft the Development Plan and present it to the Parties for
approval and monitor development activities and execution of the development
activities under the Development Plan;

            (b) develop updates or amendments to the Development Plan, and the
Development Budget, including, but not limited to, the annual updates pursuant
to Section 3.2, and make recommendations to the Parties for approval by the
Parties of such updates or amendments;

            (c) quarterly review and evaluate progress under the Development
Plan; provided, however, that the JDT shall not have authority to make any
determination that either Party is in breach of its obligations under the
Development Plan;

            (d) attempt to settle disputes or disagreements that are unresolved
by the Primary Contact Persons; provided, however, that the JDT shall not have
authority to make any determination that either Party is in breach of its
obligations under the Development Plan; and

            (e) perform any other activities related to the Development Plan as
jointly requested by both Parties from time to time.

      For the avoidance of doubt, the JDT shall have no authority to amend
either this Agreement or the Development Plan.

      2.3 Meetings; Minutes. During the course of implementing the Development
Plan, the JDT shall meet at least once each calendar quarter, and more
frequently as the Parties mutually agree is appropriate, on such dates, in such
places and at such times as the Parties shall agree. The meetings shall
alternate between the offices of the Parties unless the Parties otherwise agree.
Meetings may be by teleconference or videoconference; provided, however, that
the JDT shall meet in person at least twice every calendar year during the
course of implementing the Development Plan. In addition to these required
meetings, the JDT may also be polled or consulted from time to time by means of
telecommunications, video conferences or correspondence, as deemed necessary or
appropriate in order to fulfill its obligations under this Agreement. The JDT
will be chaired by CDS until June 30, 2005 and by Alimera during the second half
of 2005, and the chairmanship of the JDT shall alternate between the Parties
semi-annually thereafter. The role of the chairperson shall be to convene and
preside at meetings of the JDT, but the chairperson shall not be entitled to
prevent items from being discussed or to cast any tie-breaking vote. Not later
than thirty (30) days after the Effective Date, the JDT shall hold an
organizational meeting. Reasonably detailed written minutes will be kept of all
JDT meetings and will reflect without limitation material decisions made at such
meetings. The chairperson of the JDT shall have responsibility for keeping
minutes. Draft meeting minutes will be sent to each

                                      -16-
<PAGE>

member of the JDT for review and approval within ten (10) Business Days after a
meeting. Minutes will be deemed approved unless a member of the JDT objects to
the accuracy or completeness of such minutes within thirty (30) calendar days of
receipt.

      2.4 Decision-Making and Dispute Resolution. From the Effective Date until
the termination of the Development Plan, neither Party shall undertake
development of a Product except in accordance with the Development Plan or as
otherwise permitted by Section 6.3.3. The representatives of each Party shall
have collectively one vote on behalf of such Party; provided, however, that no
such vote taken at a meeting shall be valid unless a representative of each
Party is present and participating in the vote. The JDT shall operate by
unanimous consent, provided that any deadlock shall be resolved as follows: in
the case of any matter which cannot be resolved by the JDT, including, but not
limited to, disputes referred to the JDT by the Primary Contact Persons pursuant
to Section 3.4 hereof, at the written request of either Party, the issue shall
be referred to senior management of the Parties in accordance with Section 12.7.
The JDT shall meet to consider any dispute referred to it pursuant to Section
3.4 within fifteen (15) days of such referral and at the conclusion of such
meeting shall either (1) have resolved the dispute and report such resolution in
writing to the Parties or (2) refer the matter for resolution as set forth in
the preceding sentence. If such executives cannot resolve such matter within the
relevant time period, the matter shall be resolved in accordance with the
following provisions:

            (a) If the deadlock relates to subject matter (other than subject
matter that would have an impact on the Development Budget, Direct Development
Costs and/or the reconciliation of Direct Development Costs) for which one Party
has the primary responsibility as set forth in Sections 3.2.3 and 3.2.4, that
Party shall have the right to resolve the deadlock in its reasonable
determination; and

            (b) If the deadlock relates to subject matter that would have an
impact on the Development Budget, Direct Development Costs and/or the
reconciliation of Direct Development Costs, or to subject matter for which
neither Party has the primary responsibility under Sections 3.2.3 and 3.2.4,
then the matter may be referred to arbitration in accordance with Section 12.7.2
hereof.

      2.5 Expenses. Each Party shall be responsible for all travel and related
costs and expenses for its members, designees and non-JDT invitees to attend
meetings of, and otherwise participate on, the JDT, and such costs and expenses
shall not be Direct Development Costs or Direct Commercialization Costs but time
spent in connection with such meetings shall be treated as time devoted to
development in determining whether a person devotes at least 50% of his time to
development and/or Commercialization activities.

      2.6 Dissolution of JDT. Upon the mutual agreement of the Parties, the
activities and obligations of the JDT and its members may be suspended until
such time as (1) active development is being undertaken, or contemplated to be
undertaken, under the Development Plan, or (2) the JDT is dissolved.

                        ARTICLE 3 DEVELOPMENT ACTIVITIES

                                      -17-
<PAGE>

      3.1 General. CDS and Alimera shall undertake development activities for
the Products in the Collaboration Field in accordance with the Development Plan.
During the course of implementing the Development Plan, CDS and Alimera shall
communicate regularly and shall assume certain rights and responsibilities for
the development of the Products in the Collaboration Field in accordance with
Section 3.2.3 and the Development Plan, all as described more specifically
herein.

      3.2 Development Plan.

            3.2.1. Initial Development Plan. No later than thirty (30) days
after the Effective Date, the Parties will approve an initial Development Plan
for the First Product. Such Development Plan will describe in reasonable detail
the activities to be undertaken by each of the Parties for the period commencing
on the Effective Date and ending on December 31, 2007, and shall be appended
hereto as Exhibit 3.2 and incorporated herein by reference. In the event that an
initial Development Plan is not approved within 30 days after the Effective
Date, either Party may terminate this Agreement in accordance with Section 11.4.

            3.2.2. Annual Updates. Not later than September 30 of each year
during the course of implementing the Development Plan and commencing on
September 30, 2005, the Parties shall agree to an update to the Development
Plan, describing in reasonable detail the activities to be undertaken during the
next three (3) calendar years and the expected timing of such activities,
including the estimated dates of the initiation and completion of such
activities (which may be adjusted by the Parties as necessary). For example, the
annual update taking place on or before September 30, 2005 will describe
development activities and the expected timing for such activities for calendar
years 2006, 2007 and 2008. The most recently updated Development Plan shall be
incorporated into Exhibit 3.2 and shall be deemed the Development Plan for the
applicable time period. The initial Development Plan and each updated
Development Plan shall (a) reflect Commercially Reasonable Efforts to be
undertaken by the Parties to develop Products, and (b) include a Development
Budget, which sets forth, for the time period covered by the applicable
Development Plan, on a calendar quarter-by-quarter and Product-by-Product basis,
the budget for development of each Product during the applicable time period.
The Development Budget shall also specifically allocate the Direct Development
Costs to be incurred by CDS and by Alimera for the period covered in the
Development Budget, broken down on a calendar quarter-by-quarter and
Product-by-Product basis. At any time during the course of development, upon
mutual written agreement, the Parties may amend the Development Plan, including,
but not limited to, the Development Budget. In the event the Parties fail to
agree to an updated Development Plan, the Parties shall refer the matter to
dispute resolution in accordance with Section 12.7 and shall proceed in
accordance with the then existing Development Plan until the matter is resolved;
provided, however, that if the dispute relates to costs proposed by a Party to
implement an agreed to Development Plan, then the Parties shall proceed in
accordance with Section 6.3.3.

      Each Development Budget shall be prepared on a cash basis, shall provide a
level of detail that is reasonably consistent with the initial Development
Budget, and shall provide a greater level of detail for the immediately
succeeding calendar year than for the remaining two (2) calendar years.

                                      -18-
<PAGE>


            3.2.3. Allocation of Responsibility for Development Activities. The
Parties acknowledge and agree that each Development Plan shall allocate primary
responsibility for the various activities (and any related or ancillary
activities) listed below to be performed by the responsible Party as follows:

<TABLE>
<CAPTION>
     Activity                                                                Responsible Party
     --------                                                                -----------------
<S>  <C>                                                                     <C>
A.   Preclinical research and development, including Product design,
     formulation, preclinical safety studies and in vivo pharmacology
     studies                                                                 CDS

B.   Technology transfer as described in Section 3.11                        CDS

C.   Phase I, Phase I/II, Phase II and Phase III Clinical Trials, as
     needed to procure data necessary for the acceptance of filing of an
     NDA                                                                     Alimera

D.   Preparation, filing and maintenance of regulatory filings
     including, but not limited to, NDA, but excluding the CDS IND
     (defined below in Section 3.2.4)                                        Alimera

E.   Filing and maintenance of the CDS IND (defined below in Section
     3.2.4)                                                                  CDS

F.   Manufacturing for Clinical Supply Requirements                          CDS

G.   Filing, prosecution and maintenance of CDS Patent Rights (subject
     to Alimera's rights in Article 7)                                       CDS
</TABLE>

For clarification, commercial manufacturing is Commercialization for which
Alimera has primary responsibility as set forth in greater detail in Article 4.

            3.2.4. Regulatory Approvals.

            (a) Regulatory Filings.

                        (i) The CDS IND. Alimera and CDS shall be jointly
                  responsible for preparing, and CDS shall be responsible for
                  submitting (in the name of CDS), an IND in the United States
                  (the "CDS IND") for the first Product. CDS shall have primary
                  responsibility and final decision-making authority for all
                  regulatory matters related to the CDS IND, including
                  communicating with the FDA about such IND. CDS shall have
                  final decision-making authority for all clinical trials
                  conducted pursuant to such IND. Together with the CDS IND, CDS
                  shall submit to the FDA a letter in form and substance
                  satisfactory to both Parties authorizing a person designated
                  by Alimera and reasonably acceptable to CDS (initially, [*])
                  to communicate directly with the FDA regarding the CDS


[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.


                                      -19-
<PAGE>

                  IND. In exercising its right to communicate directly with the
                  FDA related to the CDS IND, (1) Alimera shall not propose any
                  change, or accept any FDA proposals for any change, or make
                  any other decisions, with respect to the CDS IND, (2) if
                  Alimera wishes to initiate communications with the FDA,
                  Alimera shall afford a representative of CDS the opportunity
                  to participate in all such communications, provided that CDS
                  may decline such participation, and (3) if the FDA initiates
                  unsolicited communications with Alimera, Alimera shall use
                  Commercially Reasonable Efforts to afford a representative of
                  CDS the opportunity to participate in all such communications,
                  provided that CDS may decline such participation. In the event
                  that CDS does not participate in any such communication with
                  the FDA, Alimera shall, as soon as possible, but no later than
                  two (2) Business Day after such communication, report to CDS
                  the occurrence of such communication and provide CDS with a
                  reasonably detailed summary of the content of the
                  communication. In the event that the Parties have disagreement
                  prior to, during, or after such communications, CDS shall have
                  the final decision-making authority.

                        (ii) Other Regulatory Filings. When sufficient
                  preclinical data are available from preclinical studies for
                  the first Product conducted pursuant to the Development Plan,
                  Alimera shall have the right and responsibility for filing an
                  IND (in the name of Alimera) including such preclinical data
                  but not including any Pre-Existing Clinical IP. No later than
                  seven days after FDA issues a letter authorizing Alimera's
                  IND, CDS shall request approval from FDA for transferring (1)
                  its clinical protocol for the first Product, and (2)
                  responsibility for the patients in its clinical studies for
                  the first Product, to Alimera's IND. Promptly after receiving
                  such approval from the FDA, and in accordance with any other
                  legal requirements, CDS shall effect such transfer as approved
                  and CDS shall thereafter withdraw the CDS IND. Unless
                  otherwise agreed by the parties, Alimera shall be responsible
                  for all subsequent and non-U.S. regulatory matters, including
                  filing an NDA, provided that no regulatory filings by Alimera
                  shall include any Pre-Existing Clinical IP. Alimera shall be
                  responsible for obtaining Approvals and for subsequent
                  maintenance of Approvals. For regulatory filings made in the
                  name of Alimera, Alimera shall have the primary authority and
                  responsibility, with input from CDS, for submitting
                  supplements, communications, annual reports, adverse event
                  reports, manufacturing changes, supplier designations and
                  other related filings, and for communicating with FDA. The
                  Party responsible for submitting regulatory filings (the
                  "Regulatory Submission Party") shall provide the other Party
                  (the "Regulatory Non-Submission Party") with copies of all
                  substantive submissions to (which may be in draft form), and
                  all correspondences from, the FDA or other regulatory
                  authorities. The Regulatory Non-Submission Party may provide
                  comments regarding such submission prior to such planned
                  submission, and the Regulatory Submission Party shall consider
                  in good faith incorporating into the planned submission any
                  such comments. The Regulatory Non-

                                      -20-
<PAGE>

                  Submission Party shall supply Know-How necessary to obtain
                  Approvals for each Product.

            (b) Manufacture-related Activities. Alimera shall be responsible for
preparing and submitting all documentation to regulatory authorities regarding
the manufacture of the Product for commercial sale necessary to obtain Approvals
for such Product. Alimera shall be responsible for all activities related to
pre-Approval inspections of Alimera's (or its subcontractor's) manufacturing
facility. Each Party shall have the right to inspect and audit the other Party's
manufacturing facility and related records and its operations, upon reasonable
notice. Any information obtained by a Party during such visits shall be treated
as Confidential Information in accordance with Article 8 of this Agreement.

            (c) Documentation. Each Party shall maintain all records, including,
but not limited to, batch records and supporting documentation required by the
FDA and other applicable regulatory authorities with respect to each Product for
the periods of time required by such authorities and shall provide a copy of all
such records to the other Party within ten (10) Business Days of reasonable
request by the other Party. Each Party shall provide the other Party with
reasonable access to documents and other materials Controlled by the other Party
that are useful in the regulatory filings and maintenance of Approvals in the
Territory.

            (d) Reporting. Each Party shall use Commercially Reasonable Efforts
to immediately provide notice to the other Party (and shall in any event provide
such notice within five (5) days) of: (a) discovery by such Party of any event
that triggers a filing requirement with FDA or other regulatory authorities; and
(b) any requirements that FDA may impose with respect to the Approval
(including, but not limited to, additional clinical trials) and all FDA
inquiries requiring a response.

            (e) Meetings. In connection with Section 3.2.4 (a)-(d) above, the
Regulatory Submission Party shall provide the Regulatory Non-Submission Party
with notice of all meetings, conferences, and discussions (including, but not
limited to, advisory committee meetings and any other meeting of experts
convened by FDA or other regulatory authorities concerning any topic relevant to
the Product) scheduled with FDA or such other regulatory authorities concerning
any regulatory matters relating to the Product within one (1) Business Day after
the Regulatory Submission Party receives notice of the scheduling of such
meetings, conferences, or discussions. The Parties shall jointly prepare for and
participate in such meetings, conferences or discussions. The Parties shall
confer in advance on the scheduling of, the objectives to be accomplished at,
and the agenda and strategy for, such meetings, conferences, and discussions
with FDA or other regulatory authorities. In the event that the Parties have
disagreement relating to such meetings, conferences and discussions, the
Regulatory Submission Party shall have the final decision-making authority.

      3.3 Performance.

            3.3.1. Commercially Reasonable Efforts. Each Party shall use
Commercially Reasonable Efforts to conduct all activities and responsibilities
assigned to it under the Development Plan and to cooperate with and provide
reasonable support to the other Party in such other Party's conduct of
activities under such plan.

                                      -21-
<PAGE>

            3.3.2. Allocation of Responsibilities. The Development Plan shall
allocate responsibility between the Parties for each of the activities described
herein in accordance with Section 3.2.3. CDS and Alimera shall each expend
resources in the performance of the development activities in accordance with
the Development Plan. For the avoidance of doubt, neither Party shall have any
right or obligation to undertake any development activity for Products licensed
under this Agreement, other than those allocated to it in the Development Plan
and included in the Development Budget, except as set forth in Section 6.3.3. In
the event that a Party (a) fails to make any payment to a Third Party due to be
made by such Non-Performing Party in connection with development activities as
set forth in the Development Plan and Development Budget, or (b) fails to
perform development activities allocated to it in the Development Plan and
included in the Development Budget, that Party shall be called the
"Non-Performing Party." In the event that the Non-Performing Party fails to make
any payment to a Third Party due to be made by such Non-Performing Party in
connection with development activities as set forth in the Development Plan and
Development Budget, it shall notify the other Party in writing within ten (10)
Business Days after the missed payment due date. The other Party (the "March-In
Party") may, in its sole discretion, decide to make any such payment that the
Non-Performing Party fails to make. The associated costs paid by the March-In
Party shall be Direct Development Costs, and the Non-Performing Party's failure
to pay its share of such costs shall be treated as non-payment of Development
Payment pursuant to Section 6.3.2. In the event that the Non-Performing Party
fails to perform development activities allocated to it in the Development Plan
and included in the Development Budget, (1) it shall so notify the other Party,
and (2) the other Party may, in its sole discretion, after providing the
Non-Performing Party a reasonable opportunity to cure the failure, perform the
relevant activities, in which case the associated costs incurred by the other
Party shall be Direct Development Costs, and the Non-Performing Party's failure
to pay its share of costs shall be treated as non-payment of Development Payment
pursuant to Section 6.3.2.

      3.4 Primary Contact Persons. As of the Effective Date, CDS has designated
[*] as CDS' primary contact person and Alimera has designated [*] as Alimera's
primary contact person (each, a "Primary Contact Person"). The Primary Contact
Persons shall be responsible for the day-to-day interactions between the Parties
related to activities pursuant to the Development Plan and oversight of the
day-to-day operations of these activities. The Primary Contact Persons shall
attempt to resolve any disputes that arise during the course of implementing the
Development Plan. If the Primary Contact Persons cannot resolve any such dispute
within thirty (30) days (or such longer reasonable period of time as they may
agree) after their initial discussion of such issue, the dispute shall be
submitted to the JDT and resolved in accordance with Section 2.4. Each Party may
change its Primary Contact Person upon written notice to the other Party.

      3.5 Availability of Employees. Each Party agrees to make its employees
involved in the conduct of the development activities reasonably available upon
reasonable advance notice and during business hours at their respective places
of employment to consult with the other Party on issues, including, but not
limited to, regulatory, scientific, technical and clinical testing issues,
arising under the Development Plan and in connection with any request from any
regulatory agency.


[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.


                                      -22-
<PAGE>

      3.6 Visit of Facilities. Subject to the provisions of Article 8, each
Party shall permit the other Party or the representatives of the other Party to
visit, upon reasonable notice and at reasonably acceptable times, their
respective facilities where the development activities are being conducted, and
to consult informally, during such visits and by telephone, facsimile and email,
with their respective personnel performing work on the development activities.
Any information obtained by a Party during such visits shall be treated as
Confidential Information in accordance with Article 8 of this Agreement. Each
Party shall use Commercially Reasonable Efforts to obtain comparable inspection
rights with respect to subcontractors.

      3.7 Subcontracts. Subject to the provisions of Article 8 and Section 7.3
hereof, each Party may subcontract portions of the development activities to be
performed by it to subcontractors so long as either (a) the JDT has authorized
the subcontract and subcontractor (which subcontract shall be consistent with an
approved Development Budget), or (b) such Party has obtained the prior written
consent of the other Party, which consent shall not be unreasonably delayed or
withheld (each such subcontractor, a "Permitted Subcontractor"). In addition to
obtaining prior written authorization or consent as required by the foregoing,
if the JDT adopts a standard form of subcontract, the Parties shall use
Commercially Reasonable Efforts to utilize such standard form of subcontract
agreement, as may be modified by the JDT from time to time. In any event, any
subcontract entered into pursuant to this Section 3.7, including any standard
form of subcontract, shall be consistent with the terms of this Agreement,
including providing for intellectual property ownership as set forth herein and
all confidentiality obligations of the Parties. With respect to any subcontract,
the subcontracting Party shall provide the JDT with a copy of the subcontract
within thirty (30) days of execution of such subcontract.

      3.8 Information Sharing. Each Party shall provide the other Party or the
JDT with such information related to the Development Plan as the other Party may
reasonably request.

      3.9 Records. The Parties will make available and disclose to one another
all results of the work conducted pursuant to the Development Plan and shall
keep such records as described in this Section 3.9 or elsewhere in this
Agreement; provided, however, that each Party shall maintain in confidence, and
shall limit its use of, such results and records in confidence in accordance
with Article 8 hereof and shall not use such results or records without written
consent of the other Party except to the extent provided in Section 5.9 or other
provisions of this Agreement. The Parties shall maintain records of the results
in sufficient detail and in good scientific manner appropriate for patent
purposes and FDA filings and as will properly reflect all work done and results
achieved in the performance of the development activities pursuant to the
Development Plan (including, but not limited to, all data in the form required
to be maintained under any applicable governmental regulations). Such records
shall include books, records, reports, research notes, charts, graphs, comments,
computations, analyses, recordings, photographs, computer programs and
documentation thereof, computer information storage means, samples of materials
and other graphic or written data generated in connection with the development
activities pursuant to Development Plan. Each Party hereby grants the other
Party the right to inspect and copy such records upon reasonable advance notice
by the other Party for purposes of this Agreement.

      3.10 Manufacturing for Clinical Supply Requirements. CDS and/or its
Permitted Subcontractors shall use Commercially Reasonable Efforts to provide an
adequate and timely

                                      -23-
<PAGE>

supply to satisfy Clinical Supply Requirements, in such quantities and of such
type and specification as set forth in the Development Plan and all in
accordance with GMP and/or ISO standards, to the extent applicable for clinical
trials in the relevant country, and other applicable laws and regulations. The
Manufacturing Costs for such supply shall be Direct Development Costs.

      3.11 Technology Transfer by CDS. Upon the earlier of: (i) the
determination by the JDT and (ii) [*] prior to [*], CDS and/or its Permitted
Subcontractors shall be responsible for providing to Alimera all information,
support and materials reasonably necessary to enable Alimera and/or its
subcontractors to manufacture and perform quality testing on the Product to
satisfy Commercial Supply Requirements, all in accordance with the Development
Plan. CDS and/or its Permitted Subcontractors shall be responsible for the
following activities in accordance with the Development Plan: (a) oversee and
manage technology transfer to commercial manufacture site, (b) oversee and
manage manufacturing scale-up and validation activities, (c) transfer analytical
methods to commercial manufacture site for stability monitoring, and (d) procure
and oversee stability data necessary for IND and NDA filings. Alimera shall have
primary responsibility, with reasonable input and assistance from CDS, for the
preparation of the Chemistry, Manufacturing and Controls (the "CMC") section of
Alimera's IND and NDA filings. Technology transfer shall be effected in
accordance with GMP and ISO guidelines, to the extent applicable for
Commercialization in the relevant country.

                          ARTICLE 4 COMMERCIALIZATION

      4.1 Commercialization of Product(s) in the Collaboration Field. Alimera is
granted a license under this Agreement to market, distribute and/or sell any
Product in the Collaboration Field in the Territory, including, but not limited
to, the right to conduct marketing, reimbursement (e.g., seeking and maintaining
pricing and reimbursement approvals from Third Party payors), sales and
distribution activities. Alimera may subcontract with any Affiliate or Third
Party to perform any of the foregoing activities in accordance with Section 5.3.

      4.2 Commercialization Budget. Alimera shall have sole responsibility for
implementing Commercialization based on Alimera's commercially reasonable
expectations of the resources and expenses required to Commercialize each
Product in the Territory, taking into account industry standards and the
competitive environment in effect from time to time with regard to each Product.
Alimera shall prepare a budget ("Commercialization Budget") and consider in good
faith incorporating into the Commercialization Budget any comments made by CDS
prior to finalizing such budget. The Commercialization Budget shall set forth,
on a rolling two (2) year basis, the projected sales and the projected Direct
Commercialization Costs broken down on a calendar quarter-by-quarter and
Product-by-Product basis. Alimera shall prepare semi-annual updates to the
Commercialization Budget prior to June 30 and December 31 of each year in which
Alimera has a Commercialization Budget or engages in Commercialization of any
Products, and shall provide CDS with copies of such semi-annual updates. Prior
to finalizing the initial Commercialization Budget and prior to finalizing each
subsequent semi-annual updated Commercialization Budget, Alimera shall arrange
for the Parties to have an in-person meeting (or, at CDS' option, a meeting by
telephone, videoconference or other means), during which an executive from
Alimera shall present in reasonable detail its planned Commercialization


[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -24-
<PAGE>

activities and Commercialization Budget for the time period covered in the
subject Commercialization Budget and CDS shall have opportunities to ask
questions and to present its comments on the applicable Commercialization
Budget. It is understood and agreed that [*] shall have the right and ability to
[*]. Alimera shall provide an initial draft Commercialization Budget to CDS for
its review as soon as it is available, but in no event later than the earlier of
(a) [*] prior to [*] or (b) [*] prior to incurring Direct Commercialization
Costs estimated to be in excess of [*] in the aggregate.

      4.3 Diligence. Alimera shall use Commercially Reasonable Efforts to
Commercialize each Product in [*] (collectively, the "Major Markets") and in
all countries outside the Major Markets, except for any country outside the
Major Markets as to which Alimera has made an election pursuant to Section
4.3.9. For purposes of this Section 4.3 (including Subsections 4.3.1- 4.3.9),
the term "Alimera" shall include Alimera and any of its Affiliates, sublicensees
and subcontractors. Without limiting the foregoing, Alimera agrees to the
following specific obligations:

            4.3.1. Alimera shall effect a First Commercial Sale in the United
States of the first Product to receive Approval in the United States (the
"Alimera First Product") no later than [*] after obtaining such Approval.
Alimera's nonperformance of an obligation in this Section 4.3.1 shall be excused
to the extent directly attributable to a disruption in Commercial Supply
Requirements, but only to the extent that such disruption and the impact thereof
is outside the control of Alimera.

            4.3.2. With respect to Commercialization of the Alimera First
Product, Alimera shall expend not less than [*] in Direct Commercialization
Costs (excluding Manufacturing Costs) on or before [*], provided that if Alimera
is making Commercialization expenditures substantially in accordance with a
Commercialization Budget designed to provide for such level of expenditures and
the FDA provides Approval sooner than reasonably contemplated by the
Commercialization Budget, then the failure to spend at least [*] in Direct
Commercialization Costs (excluding Manufacturing Costs) on or before [*] shall
be excused.

            4.3.3. With respect to Commercialization of the Alimera First
Product, Alimera shall expend not less than [*] in Direct Commercialization
Costs (excluding Manufacturing Costs, but including expenditures referred to in
Section 4.3.2) on or before [*].

            4.3.4. With respect to Commercialization of the Alimera First
Product, Alimera shall expend not less than [*] in Direct Commercialization
Costs (excluding Manufacturing Costs) between [*] and [*].

            4.3.5. Alimera shall cause Gross Sales of Products in the United
States during the [*] period referred to in Section 4.3.4 to be at least [*]
more than Gross Sales of Products in the United States during the immediately
preceding [*] period. Alimera's


[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -25-
<PAGE>

nonperformance of an obligation in this Section 4.3.5 shall be excused to the
extent directly attributable to (1) one or more of the following events, but
only to the extent that such event is outside the control of Alimera: a breach
of this Agreement by CDS, a disruption in Commercial Supply Requirements, or a
Product Recall, or (2) one or more of the following events, but only to the
extent that such event materially and adversely affects the market for the first
Product: FDA action or regulatory guidance affecting Product, a change in
reimbursement rates or policies relating to Product, or the introduction of one
or more competitive products or services that provide for superior dosing,
safety or efficacy.

            4.3.6. If Alimera fails to meet any spending obligation set forth in
Sections 4.3.2, 4.3.3 or 4.3.4 and such nonperformance is not excused, Alimera
may cure such failure by paying to CDS an amount equal to [*]. Alimera's right
to cure under this Section 4.3.6 shall terminate upon a Change of Control of
Alimera.

            4.3.7. If Alimera fails to achieve the Gross Sales obligation set
forth in Section 4.3.5, Alimera may cure such failure by paying to CDS an amount
equal to [*] (the "Extrapolated Net Profits"). For purposes of this Section
4.3.7, the Extrapolated Net Profits for the [*] period referred to in Section
4.3.4 shall be determined by the following formula: [*]. Alimera's right to cure
under this Section 4.3.7 shall terminate upon a Change of Control of Alimera.

            4.3.8. If Alimera fails to meet any of its obligations under
subsections 4.3.1 - 4.3.5 and does not cure such failure in accordance with this
Agreement within thirty (30) days of receiving a written notice from CDS
requesting Alimera to cure such failure, then CDS may choose one of the
following two options: (a) terminate this Agreement, or (b) terminate this
Agreement only with respect to the Alimera First Product. In the event of
termination pursuant to this Section 4.3.8, Alimera shall not, for a period of
[*] from the date of such termination, Develop or Commercialize, or license or
otherwise assist an Affiliate or a Third Party to Develop or Commercialize, any
product that is Approved or designed to be Approved (1) to [*] or (2) to deliver
a [*]. For purposes of this Section 4.3.8, the term "Develop" shall mean
performance of human clinical trials for a product. In the event of termination
of this Agreement with respect to the Alimera First Product, CDS shall no longer
be bound by Section 5.1.2(1), (2), (3) or (4) with respect to such Product.
After termination pursuant to this Section 4.3.8 and in the event that CDS (i)
makes a First Commercial Sale of the Alimera First Product in the United States
and (ii) reaches the CDS Profitability Date for the Alimera First Product, CDS
shall thereafter pay Alimera [*] of CDS Net Income realized by CDS in the United
States with respect to such Product until such time as the sum of all such
payments plus the revenues otherwise realized by Alimera with respect to such

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -26-
<PAGE>
Product in the United States equal the amount of Direct Development Costs and
Direct Commercialization Costs previously incurred, on a cash basis, or
reimbursed by Alimera with respect to such Product in the United States;
provided, however, that in the event that there are CDS Net Losses in any
calendar quarter after the CDS Profitability Date, any payment to Alimera shall
be offset by such CDS Net Losses.

            4.3.9. For clarification, Alimera may elect not to engage in
Commercialization in any country outside the Major Markets. If Alimera
determines not to engage in Commercialization of any Product in any country
outside the Major Markets, Alimera shall so notify CDS. At any time after
receipt of such notice, CDS may by written notice to Alimera, effective upon the
giving of such notice, terminate Alimera's license(s), and rights to
Commercialize, in such country. Thereafter CDS may, in its sole discretion,
directly or through an Affiliate or Third Party, Commercialize the relevant
Product(s) in such country. In the event of such termination with respect to a
country, CDS shall no longer be bound by Section 5.1.2(1), (2), (3) or (4) with
respect to such country.

            4.4 Costs of Commercialization. Regardless of the Profitability Date
for a Product, Alimera shall have sole responsibility for paying all costs and
expenses incurred in connection with Commercializing such Product in the
Collaboration Field in the Territory, including, but not limited to, Direct
Commercialization Costs; with the exception that CDS shall be responsible for
paying: (a) the CDS Patent Costs paid after the first Product Profitability
Date, subject to Section 7.1.2, (b) all UKRF Costs and (c) insurance premiums
paid by CDS to maintain insurance required by Section 10.4 to the extent such
insurance relates to Product (i.e., if insurance covers risks other than risks
related to Commercialization of Products, then only an appropriate portion of
such premiums shall be reimbursed). Alimera shall reimburse CDS for [*] of the
amount described in clauses (a), (b) and (c) of the preceding sentence within
thirty (30) days after the date of invoice from CDS; provided, however, that the
amount of the [*] that Alimera reimburses CDS in any calendar year shall not
exceed [*]. The costs set forth in (a), (b) and (c) of this Section 4.4 for
which Alimera has a reimbursement responsibility shall be collectively referred
to herein as the "CDS Commercialization Costs". In the event that Alimera fails
to reimburse CDS within the time period specified above, any future payment to
CDS shall be increased by an amount that is calculated as follows: the amount of
the non-reimbursed CDS Commercialization Costs is multiplied by [*], and that
amount is compounded annually at the compounding rate of [*] per annum, for any
period in which any portion of such costs remains non-reimbursed. Alimera may
pay all or any portion of the unpaid CDS Commercialization Costs plus any
interest accrued and due at any time. Notwithstanding the foregoing, CDS may
exercise its rights pursuant to Section 11.2 of this Agreement.

      4.5 Manufacturing for Commercial Supply Requirements. Alimera shall use
Commercially Reasonable Efforts to provide an adequate and timely supply to
satisfy Commercial Supply Requirements. Subject to the terms of this Agreement,
Alimera shall have the right to manufacture, itself or through any Third Party,
any Product, under the licenses granted to Alimera pursuant to Article 5 and in
accordance with Section 5.3. Alimera shall be responsible for ensuring that all
such manufacturing is carried out in accordance with GMP and/or ISO standards to
the extent applicable for Commercialization in the relevant country.

      4.6 Product Recalls. Alimera shall have the sole right and responsibility
and authority to carry out any Product Recall, whether or not such Recall is
required or requested by a

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governmental authority. If any governmental authority having jurisdiction
requires or reasonably requests Alimera to Recall a Product due to a defect in
the manufacture, processing, packaging or labeling of the Product or for any
other reason whatsoever, Alimera shall immediately notify CDS. Alimera shall be
responsible for carrying out any Recall as expeditiously as possible and in such
a way designed to cause the least disruption to the sales of the Product and to
preserve the goodwill and reputation attached to the Product and to the names of
Alimera and CDS. Alimera agrees to maintain the appropriate records and
procedures to permit a Product Recall. All Direct Costs associated with any
Product Recall, to the extent such costs are not covered by insurance, shall be
Direct Commercialization Costs; provided, however, that in the event that the
Product Recall is required due to Alimera's negligence or misconduct (including
a manufacturing quality defect in the Product) or any other reason within
Alimera's control, all such expenses shall be borne solely by Alimera and, in
such event, shall not be Direct Commercialization Costs.

                           ARTICLE 5 GRANT OF RIGHTS

      5.1 Grant of License by CDS.

            5.1.1. License to First Product. Subject to the terms and conditions
of this Agreement, CDS hereby grants to Alimera an exclusive (even as to CDS)
right and license under CDS' interest (i.e. subject to the UKRF Licenses) in the
CDS Technology, solely to make, have made, use, offer to sell, sell, and import
First Product in the Collaboration Field in the Territory.

            5.1.2. License to Products Other Than First Product. Subject to the
terms and conditions of this Agreement and the B&L Agreement (wherein CDS
granted certain rights to the CDS Technology), CDS hereby grants to Alimera a
non-exclusive right and license under CDS' interest (i.e. subject to the UKRF
Licenses) in the CDS Technology, solely to make, have made, use, offer to sell,
sell, and import Products other than First Product in the Collaboration Field in
the Territory, provided that during the Term of this Agreement, and subject to
the terms and conditions of this Agreement and the B&L Agreement, (1) CDS shall
not grant a license to any Affiliate or Third Party under CDS' interest in the
CDS Technology to make, have made, use, offer to sell, sell, or import Products
in the Collaboration Field in the Territory, (2) CDS shall not itself use the
CDS Technology to make, have made, use, offer to sell, sell, or import Products
in the Collaboration Field in the Territory, (3) CDS shall not grant a license
to any Affiliate or Third Party under CDS' interest in the CDS Technology to
make, have made, use, offer to sell, sell, or import in the Collaboration Field
in the Territory any product that otherwise meets the definition of Product
under Section 1.77 except that such product is Approved or designed to be
Approved to deliver [*] and (4) CDS shall not itself use the CDS
Technology to make, have made, use, offer to sell, sell, or import in the
Collaboration Field in the Territory any product that otherwise meets the
definition of Product under Section 1.77 except that such product is Approved or
designed to be Approved to deliver [*]

            5.1.3 License to Exhibit 1.11B Patents. Subject to the terms and
conditions of this Agreement and only to the extent permitted by the B&L
Agreement, CDS hereby grants to

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Alimera a non-exclusive right and license under any interest CDS may have from
time to time in the United States and foreign patents and patent applications
listed in Exhibit 1.11B, solely to make, have made, use, offer to sell, sell,
and import Products in the Collaboration Field in the Territory, except for
products that would fall under the definition of Licensed Products in the B&L
Agreement.

      5.2 Grant of License by Alimera. Subject to the terms of this Agreement,
Alimera hereby grants to CDS a right and license under Alimera's interest in the
Alimera Know-How as necessary for CDS to perform its obligations under this
Agreement, including, but not limited to, its obligations under the Development
Plan.

      5.3 Sublicenses and Subcontracts. Subject to the terms and conditions of
this Agreement, Alimera may grant sublicenses and subcontracts to its Affiliates
or to Third Parties to perform Commercialization activities for Products under
the licenses granted pursuant to Sections 5.1.1 and 5.1.2 of this Agreement,
provided that for sublicenses and subcontracts under which (1) some or all of
Alimera's rights to a Product, including, but not limited to, marketing rights
and/or distributing rights, are sold, licensed or otherwise transferred and/or
(2) consideration owed by Alimera exceeds [*] Alimera shall obtain CDS'
prior written consent, which consent shall not be unreasonably withheld or
delayed. In the event of a proposed sublicense or subcontract that requires CDS'
prior written consent as described in the foregoing, Alimera shall present CDS
with a summary of the principal terms of the proposed transaction, including the
identity of the proposed subcontractor or sublicensee. CDS shall promptly
consent or provide justification for its objection and negotiate in good faith
with Alimera regarding terms that would be satisfactory. Each sublicense or
subcontract shall be consistent with the terms and conditions of this Agreement,
shall be at arm's length and shall include such terms as are necessary to permit
Alimera to fulfill its obligations hereunder. Alimera shall be responsible for
the operations of any sublicensee or subcontractor relative to this Agreement as
if such operations were carried out by Alimera itself, including, but not
limited to, any payment provided for hereunder, regardless of whether the terms
of any sublicense or subcontract provide for such payment to be paid by the
sublicensee or subcontractor directly to CDS. Alimera shall provide CDS with a
copy of each such sublicense or subcontract promptly after its execution;
provided, however, that Alimera may redact such copies in order to protect the
confidential information of the Third Party. The terms of any sublicense or
subcontract, or proposed sublicense or subcontract, shall be deemed to be
Confidential Information of Alimera. CDS acknowledges that Alimera intends to
grant a sublicense of rights to one or more Third Parties for the development
and Commercialization of Product in [*]. For avoidance of doubt, CDS'
acknowledgement in the preceding sentence shall not constitute CDS' consent,
which is required before Alimera enters into such a sublicense pursuant to this
Section 5.3. Each sublicensee or subcontractor and its employees, contractors,
consultants, clinical investigators and agents shall be required to assign all
Improvements to Alimera pursuant to Section 7.3.

      5.4 Ownership of and Rights to Inventions. Except as otherwise provided
under this Agreement, ownership of all Inventions made by either Party shall be
governed by applicable United States patent law. Alimera hereby assigns and
agrees to assign to CDS a co-ownership interest in Alimera's interest in any
Alimera Improvements, excluding any rights to any trademarks. Subject to Section
5.5, each Party shall have worldwide rights to use, practice and

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sublicense any such Alimera Improvements, without any accounting to, reporting
to, or other obligation to, or consent from, the other Party. If a Party
licenses or otherwise transfers to a Third Party any Alimera Improvements, the
other Party shall cooperate and give such consent to such Party to enter into
such license or transfer as may be required to permit such Party to license or
transfer the Alimera Improvements to the Third Party without a duty to account
to such other Party.

      5.5 Limitation on Use. Notwithstanding any other provisions of this
Agreement, neither Alimera nor any of its Affiliates, subcontractors or
sublicensees shall use Alimera Improvements for any product that falls within
the definition of CDS Core Technology, except for (1) Products (other than any
Product(s) for which Alimera's license(s) have been terminated pursuant to
Sections 4.3.8, 4.3.9 or 11.5 of this Agreement) during the Term of this
Agreement, (2) any Product(s) for which CDS has granted a license to Alimera
pursuant to Section 11.5.1, during the term of such license, and (3) Option
Products for which CDS has granted a license to Alimera pursuant to Section
5.8.2, during the term of such license. Alimera shall ensure that any agreement
it enters into with a licensee, sublicensee, acquirer, acquiree, transferee or
merger or consolidation partner of or with Alimera, or acquirer or transferee of
substantially all of the assets or stock of Alimera, or of the assets or
business relating to this Agreement or the Alimera Improvements, includes the
same limitation of use as set forth in this Section 5.5, and any such party
shall be bound by such limitation.

      5.6 Reservation of Rights.

            5.6.1. Reservation of Rights by CDS. All rights and interests not
expressly granted to Alimera are reserved by CDS (the "Reserved Interests") for
itself, its Affiliates and partners (other than Alimera) and other licensees and
sublicensees, including, but not limited to, the rights to use and grant
licenses under the CDS Technology or any other technology owned or controlled by
CDS to make, have made, use, offer to sell, sell, have sold and import products
(other than Products for so long as Alimera has a license to such Products under
this Agreement). It shall not be a breach of this Agreement for CDS, acting
directly or indirectly, to exploit its Reserved Interests in any manner anywhere
in the Territory, whether or not such activity is competitive with the
activities of Alimera, including, but not limited to, the research, development
and Commercialization or licensing of others to research, develop and
Commercialize products (other than Products for so long as Alimera has a license
to such Products under this Agreement). Except as otherwise expressly provided
in this Agreement, for the avoidance of doubt, CDS shall be free to enter into
an agreement with any Third Party or Third Parties under the CDS Technology or
any other technology owned or controlled by CDS or its Affiliate or a Third
Party, to research, develop and Commercialize any and all products (other than
Products for so long as Alimera has a license to such Products under this
Agreement), including, but not limited to, products that potentially compete in
the same indication or product market as a Product, and products that use or
include any or all compounds that are not, at the time of such agreement, the
subject of a license granted pursuant to Section 5.8.3.

            5.6.2. Reservation of Rights by Alimera. Except as otherwise
expressly provided in this Agreement, for the avoidance of doubt, Alimera shall
be free to enter into an agreement with any Third Party or Third Parties under
the Alimera Know-How, the Alimera-Prosecuted Patent Rights or any other
technology owned or controlled by Alimera or its Affiliate or a Third

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Party, to research, develop and Commercialize any and all products, including,
but not limited to, products that potentially compete in the same indication or
product market as a Product.

      5.7 No Grant of Other Technology or Patent 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 license
in or other right to any technology, Know-How, patents, patent applications,
products, or biological materials of the other Party, including, but not limited
to, items owned, Controlled or developed by the other Party, at any time
pursuant to this Agreement. This Agreement does not create, and shall under no
circumstances be construed or interpreted as creating, an obligation on the part
of either Party to grant any license to the other Party other than as expressly
set forth herein. Any further contract or license agreement between the Parties
shall be in writing.

      5.8 Options to Licenses in the Collaboration Field.

            5.8.1. Options. Subject to the terms and conditions of this
Agreement and the B&L Agreement, CDS hereby grants to Alimera three (3) options
to obtain a non-exclusive right and license under CDS' interest (i.e. subject to
the UKRF Licenses) in the CDS Technology, solely to make, have made, use, offer
to sell, sell and import an Option Product in the Collaboration Field (each
option relating to a particular compound is referred to herein as an "Alimera
Compound Option," and the three (3) options are collectively referred to herein
as the "Alimera Compound Options"). Each license granted in connection with an
Alimera Compound Option will provide that during the term of such license, and
subject to the B&L Agreement, CDS shall not (a) grant a license to any Affiliate
or Third Party under CDS' interest in the CDS Technology to make, have made,
use, offer to sell, sell, or import such Option Product in the Collaboration
Field in the Territory, and (b) itself use the CDS Technology to make, have
made, use, offer to sell, sell, or import such Option Product in the
Collaboration Field in the Territory during the term of such license.

            5.8.2. Exercise of Options. Alimera may exercise, in accordance with
this Section 5.8, an Alimera Compound Option at any time during the Option Term,
by submitting a written request to CDS indicating its intent to exercise such
option and specifying the specific compound as to which it wishes to exercise
the option. CDS shall have [*] Business Days, after it receives such
notice, in which to notify Alimera in the event that CDS, acting in good faith,
has already entered into an agreement or term sheet with a Third Party that
includes the specific compound specified by Alimera. In that event, Alimera may
not exercise the Alimera Compound Option with respect to that specific compound;
provided, however, that if CDS and such Third Party fail to consummate a license
or other agreement relating to such compound or such agreement is terminated
during the Option Term, CDS shall promptly notify Alimera that such compound is
no longer subject to any Third Party rights and Alimera may exercise the Alimera
Compound Option with respect to such compound in accordance with this Section
5.8.2. If CDS has not notified Alimera within the time period set forth above,
then Alimera shall be permitted to exercise the Alimera Compound Option with
regard to that specific compound.

            5.8.3. Grant of License. Upon the exercise of any Alimera Compound
Option under Section 5.8.2, CDS may choose one of the following two options: (a)
the Parties will enter into a collaboration agreement (the "Option Collaboration
Agreement") to develop and

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Commercialize the Option Product on the same terms as this Agreement (including,
but not limited to, the same economic terms, including license fee, milestone
payment and profit split) and Alimera shall reimburse CDS for [*] of all costs
and expenses CDS incurred (excluding any CDS Patent Costs related to Existing
CDS Patent Rights or costs that are Development Costs or otherwise reimbursed by
Alimera under this Agreement) with respect to the Option Compound and the Option
Product from the Effective Date of this Agreement until the effective date of
the Option Collaboration Agreement; or (b) CDS shall grant Alimera a license
under the CDS Technology, as then in effect, to make, have made, use, offer to
sell, sell and import the Option Product in the Collaboration Field in the
Territory, under the following terms: (A) CDS shall receive a royalty of [*] of
Net Sales of the Option Product in the Territory, and (B) Alimera shall
reimburse CDS [*] with respect to the Option Compound and the Option Product
from the Effective Date of this Agreement until the effective date of such
license, and (C) such other non-financial terms and conditions as set forth on
Exhibit 5.8.3 and other customary terms and conditions. If the Parties have not
entered into an agreement under (a) or (b), as CDS chooses, within [*] Business
Days after Alimera exercises an Alimera Compound Option, then the matter shall
be referred to dispute resolution in accordance with Section 12.7 hereof, and
the terms of such agreement shall be consistent with those specified above in
(a) or (b), as applicable.

            5.8.4. Reservation of Rights by CDS. The existence of the Alimera
Compound Options under Section 5.8.1 shall not limit the reservation of rights
by CDS pursuant to Section 5.6, and CDS shall have no obligation to refrain from
including any or all compounds in a license with a Third Party or Third Parties,
except to the extent of any license that is actually granted to Alimera pursuant
to Section 5.8.3 or to the extent restricted by Sections 5.1.1 and 5.1.2, from
and after the date of such license. In the event that CDS grants Alimera a
license to one or more Option Products pursuant to Section 5.8.3, the
reservation of rights by CDS will remain the same as set forth in Section 5.6.1,
except that the phrase "Products and Option Products for which CDS has granted a
license to Alimera" shall be substituted in place of "Products" wherever it is
used in Section 5.6.1 during the term of any such license.

      5.9 Clinical IP.

            5.9.1. Right of Access to Clinical IP. Alimera and CDS shall jointly
own all Clinical IP and shall provide each other with a Right of Access to
Clinical IP. Each Party may exercise this right of access for itself, its
Affiliates and any licensees, sublicensees or any other Third Party without the
consent of the other Party.

            5.9.2. Cooperation. Each Party shall use Commercially Reasonable
Efforts, and shall reasonably cooperate with the other Party, to provide the
other Party with such waivers, irrevocable cross reference letters, assignments,
and/or other reasonable documentation as may be necessary or useful for the
other Party's full exercise of any Right of Access to Clinical IP granted
pursuant to this Section 5.9.

      5.10 Section 365(n) of the Bankruptcy Code. All rights and licenses
granted under or pursuant to any section of this Agreement are rights to
"intellectual property" as defined in Section 101(35A) of the Bankruptcy Code.
CDS acknowledges and agrees that in connection

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with such rights and licenses Alimera is hereby granted a right of access and a
right to obtain possession of and to benefit from (i) copies of research data,
(ii) laboratory samples, (iii) product samples and inventory, (iv) formulas, (v)
laboratory notes and notebooks, (vi) data and results related to clinical
trials, (vii) copies of regulatory filings and Approvals, (viii) rights of
reference in respect of regulatory filings and Approvals, (ix) preclinical
research data and results, and (x) marketing, advertising and promotional
materials, all of which constitute "embodiments" of intellectual property
pursuant to Section 365(n) of the Bankruptcy Code and (xi) all other embodiments
of such intellectual property, whether any of the foregoing are in CDS'
possession or control or in the possession and control of Alimera or Third
Parties. CDS agrees not to interfere with Alimera's exercise of rights and
licenses to intellectual property licensed hereunder and embodiments thereof in
accordance with this Agreement.

          ARTICLE 6 COSTS & REVENUES - PRE AND POST PROFITABILITY DATE

      6.1 License Fee. If this Agreement is not terminated pursuant to Section
11.4, then the [*] in principal plus all accrued interest due under the
Earnest Money Loan shall thereafter be treated as paid in full as the payment of
a license fee, and the security interest under the Security Agreement (the
"Security Agreement") made by CDS in favor of Alimera and effective as of
October 19, 2004, as amended on November 18, 2004, shall terminate, and Alimera
shall execute and deliver to CDS such documents as CDS may reasonably request to
evidence such termination pursuant to Section 4 of the Security Agreement. If
this Agreement is terminated pursuant to Section 11.4, then the Security
Agreement and the promissory notes issued in respect of the Earnest Money Loan
shall remain in full force and effect.

      6.2 Milestone Payment. Alimera shall make an additional payment of [*]
("Milestone Payment") to CDS upon [*]. For purposes of this Section 6.2, the
Parties agree that [*].

      6.3 Direct Development Costs. Each Party shall pay [*] of the total Direct
Development Costs of a Product incurred in accordance with the Development
Budget.

            6.3.1. Monthly Reporting, Sharing and Reconciling of Direct
Development Costs. During the course of implementing the Development Plan,
within fifteen (15) calendar days after the end of each calendar month, each
Party shall report in writing to the other Party a detailed itemization
(including copies of any third party invoices) of the actual Direct Development
Costs incurred, on a cash basis, by each Party in the preceding calendar month.
The Parties shall reconcile amounts owed for actual Direct Development Costs on
a monthly basis as follows: to the extent (i) a Party incurred, on a cash basis,
Direct Development Costs in a calendar month that are within (and do not exceed)
the costs allocated to be incurred by that Party in the Development Budget and
(ii) the amounts in (i) exceed the Direct Development Costs incurred, on a cash
basis, by the other Party in that calendar month that are within (and do not
exceed) the costs allocated to be incurred, on a cash basis, by the other Party
in the Development Budget, the Party that paid the greater amount of budgeted
Direct Development Costs shall issue an invoice to the other Party for [*] of
the excess and the other Party shall pay

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to the invoicing Party the amount of such invoice (the "Development Payment")
within thirty (30) calendar days after delivery of the invoice.

            6.3.2. Non-Payment. In the event that a Party (the "Non-Paying
Party") fails to make timely payment to the other Party (the "Owed Party") for
all or a portion of its Development Payment for a Product pursuant to Section
6.3, then any distribution of Net Profits and the Milestone Payment to CDS shall
be adjusted by an amount that is calculated as follows: the amount of the unpaid
Development Payment is multiplied by [*], and that amount is compounded annually
at the compounding rate of [*] per annum (the total amount is called the
"Compounded Development Payment"), for any period in which any portion of the
Compounded Development Payment remains outstanding. Specifically, if Alimera is
the Owed Party, then any Net Profits Payment and the Milestone Payment to CDS
shall be reduced by the Compounded Development Payment due from CDS to Alimera
until the amount of such Net Profits Payment and the Milestone Payment to CDS is
[*] and any remaining balance of the Compounded Development Payments that CDS
owes to Alimera shall be carried forward until the amount of such Compounded
Development Payments are paid off. If CDS is the Owed Party, then any Net
Profits Payment to CDS shall be increased by the Compounded Development Payment
due from Alimera to CDS up to [*] of Alimera's share of Net Profits and any
remaining balance of the Compounded Development Payments that Alimera owes to
CDS shall be carried forward and offset against Alimera's share of Net Profits
in subsequent periods until such Compounded Development Payments are paid off.
All or any portion of the unpaid Compounded Development Payment may be paid at
any time for such Product. Notwithstanding the foregoing, the Owed Party may
exercise its rights pursuant to Section 11.3 or 11.5 of this Agreement.

            6.3.3. Dispute over Direct Development Costs. Pursuant to the
process described in Section 3.2.2, in the event that the JDT and/or the Parties
cannot reach an agreement over direct development costs proposed by a Party to
implement the Development Plan, the issue shall be referred to the senior
management of the Parties in accordance with Section 12.7.1. In the event that
the senior management of the Parties cannot reach an agreement over such
proposed costs (the "Disputed Costs"), such dispute may be resolved through
arbitration in accordance with Section 12.7.2. In the meantime, while the matter
is in arbitration, the Party that proposed the Disputed Costs may, in its sole
discretion, incur such costs, in addition to those allocated to such Party in
the Development Budget, and the Parties otherwise would proceed in accordance
with the then existing Development Plan and Development Budget until the matter
is resolved.

            (a) If the Disputed Costs, or any portion thereof, are determined
through arbitration in accordance with Section 12.7.2 to be Direct Development
Costs that are reasonably necessary to develop the Product and the proposing
Party has paid such costs in accordance with the preceding sentence (the
"Determined Disputed Costs"), then the non-proposing Party shall pay to the
proposing Party an amount that is calculated as follows: an amount that
corresponds to [*] of the Determined Disputed Costs is multiplied by [*] and
that amount is compounded annually at the compounding rate of [*] per annum (the
total amount is called the "Compounded Disputed Costs"), for the period
commencing on the date the determination is made by the dispute resolution
procedure for so long as any portion of the Compounded Disputed Costs remain
outstanding. In the event that the non-proposing Party fails

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 to pay the Compounded Disputed Costs, any distribution of Net Profits and the
Milestone Payment for that Product to CDS shall be adjusted by the Compounded
Disputed Costs according to the following: (i) if CDS owes Compounded Disputed
Costs to Alimera, then any Net Profits Payment and Milestone Payment to CDS
shall be reduced by the Compounded Disputed Costs due from CDS to Alimera until
the amount of such Net Profits Payment to CDS is [*] and any remaining balance
of the Compounded Disputed Costs that CDS owes to Alimera shall be carried
forward until such Compounded Disputed Costs are paid off, or (ii) If Alimera
owes Compounded Disputed Costs to CDS, then any Net Profits Payment to CDS shall
be increased by the Compounded Disputed Costs due from Alimera to CDS up to [*]
of Alimera's share of Net Profits and any remaining balance of the Compounded
Disputed Costs that Alimera owes to CDS shall be carried forward and offset
against Alimera's share of Net Profits in subsequent periods until such
Compounded Disputed Costs are paid off. All or any portion of the unpaid
Compounded Disputed Costs may be paid at any time for such Product.
Notwithstanding the foregoing, the Owed Party may exercise its rights pursuant
to Section 11.3 or 11.5 of this Agreement.

            (b) If the Disputed Costs are determined pursuant to Section 2.4 or
through the dispute resolution procedure in accordance with Section 12.7 not to
be Direct Development Costs that are reasonably necessary to develop the
Product, and the proposing Party has paid such costs, then the proposing Party
shall bear the Disputed Costs and the non-proposing Party shall have no
obligation to pay.

      6.4 Revenues Prior to Profitability Date. Prior to the Profitability Date
for each Product, Alimera shall retain all Gross Sales generated from such
Product in the Collaboration Field in the Territory.

      6.5 Costs and Revenues After the Profitability Date.

            6.5.1. Net Profits. From and after the Profitability Date for each
Product and subject to (b) below, each Party shall be entitled to [*] of Net
Profits for that Product, calculated on a calendar quarter-by-quarter and
country-by-country basis. Such Net Profits Payment to CDS shall be deemed
royalty for licenses granted by CDS to Alimera under Article 5, provided that
Alimera has a right to recoup from such royalty to CDS any Compounded
Development Payment and Compounded Disputed Costs that CDS owes Alimera pursuant
to Sections 6.3.2 and 6.3.3 as pre-payments of such royalty.

            (a) Reporting; Reconciliation of Net Profits. After the incurrence
of Commercialization costs by Alimera, Alimera shall be responsible for issuing
a written report to CDS within [*] calendar days (or as the Parties
may otherwise agree) after the end of each calendar quarter, which such report
shall include the following calculations:

                        (i) Direct Commercialization Costs incurred, on a cash
                  basis, by Alimera for each Product in the preceding calendar
                  quarter and, in the event that there are Net Profits in such
                  preceding calendar quarter, Direct Commercialization Costs
                  incurred in prior quarters to the extent such costs are taken
                  into account in calculating Net Losses that are offset from
                  such Net Profits pursuant to Section 6.5.1 (b);

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

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<PAGE>

                        (ii) the quantity of each Product sold in the preceding
                  calendar quarter;

                        (iii) for each calendar quarter with Net Losses, the
                  calculation of Gross Sales, Net Sales and Net Losses;

                        (iv) for each calendar quarter with Net Profits, the
                  calculation of Gross Sales, Net Sales, Net Profits; and in the
                  event that Net Profits are offset by Net Losses previously
                  realized pursuant to Section 6.5.1(b), such Net Losses; and

                        (v) the amount of Net Profits, if any, to which each
                  Party is entitled for such calendar quarter.

All of the reports and payments in this Section 6.5 shall be made in U.S.
dollars. If any currency conversion is required in connection with the
calculation of Gross Sales, Net Sales and Net Profits hereunder, such conversion
shall be made in accordance with GAAP.

            (b) Net Profits Payment. Alimera shall pay to CDS the amount of Net
Profits to which CDS is entitled for such calendar quarter within [*] calendar
days after the end of such calendar quarter (the "Net Profits Payment");
provided that Alimera may offset [*] of the Net Losses previously realized by
Alimera (plus interest as described below, if applicable) on a
Product-by-Product and country-by-country basis up to a maximum offset of [*] of
the amount of Net Profits Payment to which CDS is otherwise entitled for such
calendar quarter until [*] of such Net Losses previously realized by Alimera
(plus interest as described below if applicable) are offset. In the event that
Alimera incurs Net Losses, Alimera shall be entitled to recover under the
preceding offset an amount equal to [*] of the amount of the Net Losses
previously realized by Alimera plus interest, compounded annually at the
compounding rate of [*] per annum from the time that such Net Losses are
incurred until the time such Net Losses (plus interest), or portion thereof,
have been offset pursuant to this paragraph. [*] Notwithstanding the foregoing,
CDS may, at any time, elect to permit Alimera to retain [*] of Net Profits until
[*] of the Net Losses previously realized by Alimera have been offset. If CDS
makes such an election, then no interest charge shall accrue with respect to the
Net Losses between the time CDS makes such election and the time they are
recovered by Alimera by operation of the offset. In the event that, during any
calendar quarter, Alimera makes Commercial sales of two Products that are
otherwise identical except that they are Approved for two different indications
(the first Product for which Alimera has made Commercial sales shall be called
"Product 1" and the second Product for which Alimera has made Commercial sales
shall be called "Product 2"), so that it is not reasonably possible to allocate
Net Sales attributable to each such Product, then Net Profits and Net Losses for
such Products shall be determined as follows for periods in which there are
Commercial sales of both Product 1 and Product 2:

      The "Product 2 Profitability Date" shall be deemed to be the first day of
the first calendar quarter (i) that begins at least [*] after [*] and (ii) in

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
                                      -36-
<PAGE>

which the aggregate of Net Sales of Product 1 and Product 2 exceed the aggregate
of Direct Commercialization Costs for Product 1 and Product 2. Before the
Product 2 Profitability Date, Net Profits for Product 1 shall be the aggregate
of Net Sales of Product 1 and Net Sales of Product 2 minus the Direct
Commercialization Costs of Product 1, and such Net Profits shall be distributed
as provided in the foregoing in this Section 6.5.1(b). After the Product 2
Profitability Date, Net Sales and Direct Commercialization Costs of Product 1
and Product 2 shall be aggregated for the purpose of determining Net Profits and
Net Losses for Product 1 and Product 2, such that (i) to the extent the
aggregate Net Sales for Product 1 and Product 2 exceeds the Direct
Commercialization Costs of Product 1 and Product 2, such amount of difference
shall be the aggregate Net Profits for Product 1 and Product 2, and (ii) to the
extent the Direct Commercialization Costs of Product 1 and Product 2 exceeds the
aggregate Net Sales for Product 1 and Product 2, such amount of difference shall
be the aggregate Net Losses for Product 1 and Product 2, provided that all
Direct Commercialization Costs incurred by Alimera for Product 2 prior to the
Product 2 Profitability Date (plus interest as described above, if applicable),
shall be treated as aggregate Net Losses for Product 1 and Product 2; further
provided that to the extent it is not possible to separately track Direct
Commercialization Costs for Product 1 and Product 2, such Direct
Commercialization Costs shall be reasonably allocated between Product 1 and
Product 2. The distribution of such aggregate Net Profits and offset of such
aggregate Net Losses shall be as provided in the foregoing in this Section
6.5.1(b). In the event that, during any calendar quarter, Alimera makes
Commercial sales of three or more Products that are otherwise identical except
that they are Approved for three or more different indications so that it is not
reasonably possible to allocate Net Sales attributable to each such Product, the
Parties agree to work together in good faith to extend the principles reflected
in the foregoing method of calculation to include such third or additional
Products.

            (c) Non-Payment. In the event that Alimera fails to make timely
payment to CDS for all or a portion of a Net Profits Payment pursuant to this
Section 6.5.1, CDS shall provide written notice to Alimera and Alimera shall
have fifteen (15) business days in which to cure the nonpayment. If after such
notice, Alimera fails to cure the nonpayment within such fifteen (15) business
day period, the portion of the unpaid Net Profits Payment shall increase any
future Net Profits Payments to CDS for any future period by an amount that is
calculated as follows: the amount of the unpaid Net Profits Payment is
multiplied by [*], and that amount is compounded annually at the rate of [*] per
annum (the total amount is called the "Compounded Net Profits Payment"), for the
period in which any portion of the Net Profits Payment remain outstanding.
Alimera shall have the right to pay all or any portion of the unpaid Compounded
Net Profits Payment plus any interest accrued and due at any time.
Notwithstanding the foregoing, CDS may exercise its rights pursuant to Section
11.2 of this Agreement.

            (d) Consideration for Net Profits Payments. In consideration of all
rights granted, and information provided by CDS to Alimera, and the amount of
Direct Development Costs paid by CDS under this Agreement with respect to
Product(s), the Parties agree that the amount of Net Profits Payments set forth
in Section 6.5 reflects the value of all such rights granted, information
provided and costs paid, and such Net Profits Payments shall be paid whether or
not such Product is covered by a Valid Claim in the CDS Patent Rights, and
whether or not such Net Profits Payments under this Section 6.5 extend beyond
the term of any CDS Patent Rights containing Valid Claims covering such Product.

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -37-
<PAGE>
            6.5.2. Net Losses. In the event that there are Net Losses in a
calendar quarter, Alimera shall be solely responsible for bearing such Net
Losses, subject to Alimera's right to recover [*] of such Net Losses as provided
for in Section 6.5.1.

      6.6 Revenues from Third Party Agreements. In the event that Alimera enters
into a sublicense or other agreement, or otherwise agrees, with a Third Party,
before or after the Profitability Date for a Product, to sell or otherwise
transfer some or all of Alimera's rights to a Product, including, but not
limited to, marketing rights and/or distribution rights, and Alimera obtains any
form of consideration in connection therewith, CDS shall be entitled to receive
[*] of the excess of (i) such consideration (excluding any amounts paid for
equity securities of Alimera other than amounts that exceed the fair market
value of such securities) over (ii) Alimera's reasonable out-of-pocket costs
that are directly and solely incurred to secure such Third Party agreement,
promptly after any such consideration is received by Alimera, provided that (1)
the fair market value of such securities shall be determined by mutual agreement
of both Parties, and (2) in the event that the Parties fail to reach such mutual
agreement, the matter shall be resolved by arbitration in accordance with
Section 12.7.2 herein. The amount of payment that CDS is entitled to receive
from Alimera pursuant to the foregoing shall be deemed royalty for licenses
granted by CDS to Alimera under Article 5, provided that Alimera shall have the
right to recoup from all or any portion of such payment to CDS any Compounded
Development Payment, Compounded Disputed Costs or other amount then owed by CDS
to Alimera under this Agreement as pre-payments of royalty.

      6.7 Records; Audits.

            6.7.1. Each Party shall keep, and shall cause its Affiliates, agents
and sublicensees to keep, full and accurate records and books of account
containing all particulars that may be necessary for the purpose of calculating
Direct Development Costs, Direct Commercialization Costs, Gross Sales, Net
Sales, and Net Profits or Net Losses for Products to be received or borne by the
Parties pursuant to this Agreement, including, but not limited to, inventory,
purchase and invoice records, manufacturing records, sales analysis, general
ledgers, financial statements, and tax returns relating to Products. Such books
of account, with all necessary supporting data, shall be kept by each Party at
its place of business for the three (3) years next following the end of the
calendar year to which each shall pertain. Each Party (the "Audited Party")
shall permit an independent accounting firm selected by the other Party (the
"Auditing Party") and reasonably acceptable to the Audited Party, which
acceptance shall not be unreasonably withheld or delayed, to have access during
normal business hours to such records as may be reasonably necessary to verify
the accuracy of the Audited Party's reports of Direct Development Costs, Direct
Commercialization Costs, Gross Sales, Net Sales, and Net Profits or Net Losses
as provided herein. All such verifications shall be conducted at the expense of
the Auditing Party and not more than once in each calendar year. In the event
such audit concludes that adjustments should be made in the Auditing Party's
favor, then any appropriate payments (plus accrued interest at a rate announced
by the Bank of America as its prime rate in effect on the date that such payment
was first due plus three percent (3%) for the period starting from the date the
payment was first due ending on the date the payment was made) shall be paid by
the Audited Party within thirty (30) days of the date the Audited Party receives
the Auditing Party's accounting firm's written report so concluding, unless the
Audited Party shall have a good faith dispute as to the conclusions set forth in
such written report, in which case the audited Party shall

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -38-
<PAGE>

provide written notice to the Auditing Party within such thirty (30) day period
of the nature of its disagreement with such written report. The Parties shall
thereafter, for a period of sixty (60) days, attempt in good faith to resolve
such dispute and if they are unable to do so then the matter will be submitted
to dispute resolution in accordance with Section 12.7 hereof. The fees charged
by such accounting firm shall be paid by the Auditing Party unless the audit
discloses that adjustments in favor of the Auditing Party for the period are
five percent (5%) or more of the aggregate amount paid or payable by the Audited
Party to the Auditing Party during the period, in which case the Audited Party
shall pay the reasonable fees and expenses charged by such accounting firm. The
Parties agree that all information subject to review under this Section 6.7 is
confidential and that it shall cause its accounting firm to retain all such
information subject to the confidentiality restrictions of Article 8 hereof.

            6.7.2. In addition to the foregoing, Alimera shall permit an
independent certified public accountant retained by UKRF to inspect the records
and books of account described in Section 6.7.1 during normal business hours and
upon reasonable notice to the extent required by the UKRF Licenses. Such right
of inspection shall last for two (2) years following the end of the calendar
quarter to which such records and books of account pertain, shall be limited
solely to those matters directly related to CDS royalty obligations under the
UKRF Licenses, and shall be allowed no more than once a year.

                        ARTICLE 7 INTELLECTUAL PROPERTY

      7.1 CDS-Prosecuted Patent Rights.

            7.1.1. Filing, Prosecution and Maintenance. CDS shall have primary
responsibility for and control over the preparation, filing, prosecution and
maintenance of (a) any of the CDS Existing Patent Rights, (b) any Patent Rights
included within the CDS Improvements, and (c) any Patent Rights included within
the Alimera Improvements that fall within the definition of or relate to the CDS
Core Technology (collectively, the "CDS-Prosecuted Patent Rights"). For
CDS-Prosecuted Patent Rights, CDS shall have the authority to select patent
counsel, and to determine the form and content of such prosecution documents and
to make all decisions regarding whether to file, prosecute and maintain patents
and patent applications, and in which countries to do so.

            7.1.2. CDS Patent Costs. Alimera shall be responsible for
reimbursement of CDS Patent Costs only in the jurisdictions identified in
Exhibit 1.15 as follows: the CDS Patent Costs in such jurisdictions paid up to
the first Product Profitability Date shall be Direct Development Costs, as
provided in Section 1.34, and shall be paid by CDS and split between CDS and
Alimera in accordance with Section 6.3. The CDS Patent Costs paid after the
first Product Profitability Date shall be paid by CDS and Alimera shall
reimburse CDS [*] for all such costs paid by CDS within thirty
(30) days after the date of invoice by CDS in accordance with Section 4.4. The
list of countries identified in Exhibit 1.15 may be amended (i.e., to add or to
drop one or more countries) only upon mutual agreement by the Parties. If, after
the Effective Date of this Agreement, CDS grants to any Third Party a license to
any of the CDS-Prosecuted Patent Rights for which Alimera has continuing
reimbursement obligations, thereafter Alimera's share of costs for those
particular CDS-Prosecuted Patent Rights shall be reduced on a per capita basis
during the term of such license (by way of example, if CDS grants

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
                                      -39-
<PAGE>

a license to one Third Party to any of the CDS-Prosecuted Patent Rights,
Alimera's share of costs for those particular CDS-Prosecuted Patent Rights shall
be [*]).

            7.1.3. Communication. CDS shall provide Alimera with copies of all
official correspondence (including, but not limited to, applications, office
actions, responses, etc.) relating to prosecution and maintenance of
CDS-Prosecuted Patent Rights in countries identified in Exhibit 1.15. Alimera
may provide comments and CDS will give good faith consideration thereto. In
order to facilitate Alimera's rights to comment, CDS shall provide copies of all
such official correspondence and any proposed responses by CDS at least ten (10)
business days prior to any filing or response deadlines. In the event that the
Parties have a material disagreement relating to the prosecution or maintenance
of any of the CDS-Prosecuted Patent Rights (other than a determination by CDS to
abandon any CDS-Prosecuted Patent Rights as described below), CDS shall have the
right to decide on the course of action. Thereafter, Alimera may choose not to
pay any portion of the CDS Patent Costs associated with the applicable
CDS-Prosecuted Patent Rights. In the event that Alimera chooses not to pay for
one or more countries, then, with respect to such countries, (a) the license for
the applicable CDS-Prosecuted Patent Rights shall automatically terminate, and
(b) CDS shall no longer be bound by Section 5.1.2(1), (2), (3) or (4).

      7.2 Abandonment. CDS shall not abandon prosecution or maintenance of any
CDS-Prosecuted Patent Rights already pending in any country identified in
Exhibit 1.15 without notifying Alimera in a timely manner of CDS' intention and
reason therefore and providing Alimera with reasonable opportunity to comment
upon such abandonment and to assume responsibility for prosecution or
maintenance of such Patent Rights as set forth below. For avoidance of doubt,
for CDS-Prosecuted Patent Rights, CDS has the sole discretion to decide whether
or not to file in a country, and a decision not to file in a country shall not
be deemed as abandonment of CDS-Prosecuted Patent Rights in that country for
purpose of this Article 7. In the event that CDS abandons prosecution or
maintenance of CDS-Prosecuted Patent Rights in any country identified in Exhibit
1.15 at any time during the Term of this Agreement, Alimera may assume
prosecution responsibility therefor in the name of CDS, and such patent costs
shall be paid by Alimera and CDS may reimburse Alimera for [*] of such patent
costs within thirty (30) days after the date of invoice from Alimera (the "CDS
Reimbursement Amount"). In the event that CDS fails to reimburse Alimera within
the time period as specified above, any future payment to CDS shall be decreased
by an amount that is calculated as follows: the amount of the non-reimbursed CDS
Reimbursement Amount is multiplied by [*], and that amount is compounded
annually at the compounding rate of [*] per annum, for any period in which any
portion of such costs remains non-reimbursed. CDS may pay all or any portion of
the unpaid CDS Reimbursement Amount plus any interest accrued and due at any
time.

      7.3 Alimera-Prosecuted Patent Rights.

            7.3.1. Filing, Prosecution and Maintenance. Alimera shall have
primary responsibility for and control over the preparation, filing, prosecution
and maintenance of any Patent Rights included within Alimera Improvements that
are not CDS-Prosecuted Patent Rights ("Alimera-Prosecuted Patent Rights"). For
Alimera-Prosecuted Patent Rights, Alimera shall have the authority to select
patent counsel, and to determine the form and content of such

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -40-
<PAGE>

prosecution documents and to make all decisions regarding whether to file,
prosecute and maintain patents and patent applications, and in which countries
to do so. Alimera shall be solely responsible for Alimera Patent Costs and such
costs shall be neither Direct Development Costs nor Direct Commercialization
Costs. Alimera shall provide CDS with copies of all official correspondence
(including, but not limited to, applications, office actions, responses, etc.)
relating to prosecution and maintenance of Alimera-Prosecuted Patent Rights.

            7.3.2. Abandonment. Alimera shall not abandon prosecution or
maintenance of any Alimera-Prosecuted Patent Rights in the Territory without
notifying CDS in a timely manner of Alimera's intention and reason therefore and
providing CDS with reasonable opportunity to comment upon such abandonment and
to assume responsibility for prosecution or maintenance of such
Alimera-Prosecuted Patent Rights. For avoidance of doubt, for Alimera-Prosecuted
Patent Rights, Alimera has the sole discretion to decide whether or not to file
in a country, and a decision not to file in a country shall not be deemed as
abandonment of Alimera-Prosecuted Patent Rights in that country for purpose of
this Article 7. In the event that Alimera abandons prosecution or maintenance of
Alimera-Prosecuted Patent Rights in any country in the Territory, CDS may assume
prosecution responsibility for such Patent Rights in that country, and
thereafter such Patent Rights will cease to being Alimera-Prosecuted Patent
Rights and will become CDS-Prosecuted Patent Rights. Notwithstanding the
foregoing, if Alimera, acting in good faith, grants a Third Party prosecution
rights with respect to any Alimera-Prosecuted Patent Rights, then CDS' rights
under this Section 7.2.2 shall be subject to the rights granted to such Third
Party.

      7.4 Information Disclosure; Cooperation. Each Party shall disclose and
make available to the other Party all material information controlled by such
Party that is reasonably necessary for the other Party to perform its
obligations and exercise its rights under this Article 7, including the
preparation, filing, prosecution and maintenance of patents and patent
applications pursuant to this Article 7. All such information shall be disclosed
to the other Party reasonably promptly after it is first developed or learned or
its significance is first appreciated. Without limiting the foregoing, each
Party agrees to disclose and make available to the other Party all Alimera
Improvements and CDS Improvements, as applicable. Neither Alimera or CDS shall
publicly disclose any Alimera Improvements before the Party responsible for
filing and prosecuting such Improvements has an opportunity to make appropriate
patent filings. Each Party agrees to cooperate with the other Party with respect
to the preparation, filing, prosecution and maintenance of patents and patent
applications pursuant to this Article 7.

      7.5 Employees and Sublicensees Assignment of Inventions. Each Party shall
cause all of its employees, Affiliates, contractors, sublicensees, consultants,
clinical investigators and agents, acting under authority from such Party or its
sublicensees, (i) to enter into written agreements pursuant to which each such
person or entity assigns to such Party all Improvements and other Inventions
that such individual or entity discovers, develops, creates, conceives or
reduces to practice in the course of their relationship with such Party or its
sublicensees; and (ii) to execute such other documents and take such other
actions as may be necessary to effectuate the foregoing assignments. Each Party
agrees to undertake to enforce the agreements referenced in this Section 7.3
(including, where appropriate, by legal action).

      7.6 Infringement

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<PAGE>

            7.6.1. Notification. Each party shall promptly report in writing to
the other Party during the Term of this Agreement any known infringement or
suspected infringement of any of its Patent Rights that covers a Product and
shall provide the other Party with all available evidence supporting said
infringement or suspected infringement.

            7.6.2. Prosecution. CDS shall have the initial right, but not the
obligation, to initiate or prosecute an infringement or other appropriate suit
or action against any Third Party who at any time has infringed or is suspected
of infringing (an "Infringer"), any of the CDS Patent Rights covering a Product.
CDS shall give Alimera sufficient advance notice of its intent to file said suit
and the reasons therefore, and shall provide Alimera with an opportunity to make
suggestions and comments regarding such filing; provided, however, that Alimera
shall provide any such comments sufficiently in advance of any filing dates to
allow for consideration by CDS, and further provided that it shall be within
CDS' sole discretion whether to incorporate such suggestions or comments. CDS
shall keep Alimera reasonably informed of the status and progress of the
litigation. CDS shall have the sole and exclusive right to select counsel for
any such suit and action and shall pay [*] including, but not limited to,
attorneys' fees and court costs. If CDS has not taken legal action or been
successful in obtaining cessation of the infringement within (a) ninety (90)
days from the date of notice by Alimera under Section 7.4.1; (b) thirty (30)
days after Alimera notifies CDS that Alimera would like to move for injunctive
relief; or (c) ten (10) days before the expiration of a period of time set by
applicable law in which action must be taken with respect to the alleged
infringement (e.g., as may be required under the Hatch-Waxman Act and 35 USC
Section 271), then subject to any rights granted to B&L under the B&L Agreement,
to enforce or prosecute any Patent Rights owned or Controlled by CDS, Alimera
shall have the right to bring suit against an Infringer at Alimera's own
expense. This right of Alimera to bring suit, as well as to continue an existing
suit, is also conditioned on all of the following requirements:

                        (i) The allegedly infringing product, device or method
                  (collectively, the "Accused Device") falls within the
                  definition of Product;

                        (ii) If Alimera owns (or has licensed from a Third Party
                  and has the right to enforce) any patent(s) that reads on the
                  Accused Device practiced by the Infringer, Alimera will
                  include in the complaint one or more claims alleging
                  infringement of all such other patent(s);

                        (iii) Alimera has provided evidence to CDS that there is
                  a good faith basis to believe that the Accused Device is being
                  prepared for Commercialization or is already Commercialized;

                        (iv) Alimera shall keep CDS reasonably and timely
                  informed of the pre-litigation and litigation issues and
                  strategy (including, without limitation, furnishing copies of
                  communications, pleading, and other documents and keeping CDS
                  informed of settlement efforts and developments), and shall
                  obtain suggestions and strategy from CDS, including during
                  pre-trial motions and discovery;

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

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                        (v) In the instance of litigation issues and strategies
                  pertaining to defenses or setting strategy for the scope of
                  claims, Alimera shall incorporate all reasonable suggestions
                  and strategy from CDS as may be deemed appropriate in the
                  reasonable business judgment of CDS; and

                        (vi) Except for joining the legal actions described in
                  this Section 7.4.2 as a party at Alimera's request and matters
                  discussed in the following paragraph, CDS shall have no
                  obligation regarding such actions unless required to
                  participate by law or contract. However, CDS shall have the
                  right to participate in any such actions through its own
                  counsel and at its expense.

Upon request of the other Party, either Party shall join as a party to the suit,
at its own expense, and shall offer reasonable assistance to the other Party in
connection therewith at its own expense. Any damages, royalties, settlement fees
or other consideration for infringement resulting from such suit shall be
distributed as follows: (i) first, each Party shall be reimbursed for its
reasonable out-of-pocket costs paid in connection with the proceeding; and (ii)
thereafter, shall be [*]. Neither Party shall settle any such action or
otherwise consent to an adverse judgment in any such action that adversely
affects the rights or interests of the other Party under this Agreement,
including, without limitation, issues of validity of the CDS Patent Rights,
without the prior written consent of the other Party.

            7.6.3. Notification of Third Party Claim. Each Party shall promptly
report in writing to the other Party during the Term of this Agreement any claim
or allegation by any Third Party that the development or Commercialization of
any Product infringes the intellectual property rights of any Third Party and
shall provide the other Party with all available evidence supporting said
infringement or suspected infringement.

            7.6.4. Responsibility. Subject to any rights granted to B&L under
the B&L Agreement, Alimera shall have the initial right, but not the obligation,
to defend any suit or action initiated by any Third Party alleging solely that a
Product developed or Commercialized hereunder has infringed, or is suspected of
infringing any Third Party intellectual property rights. Upon Alimera's request,
CDS shall offer reasonable assistance to Alimera in connection therewith at
Alimera's expense. Alimera shall give CDS advance notice of its intent to defend
any said suit and shall provide CDS with an opportunity to make suggestions and
comments regarding such defense; provided, however, that CDS shall provide any
such comments sufficiently in advance of any filing dates to allow for
consideration by Alimera, and further provided that it shall be within Alimera's
sole discretion whether to incorporate such suggestions or comments. Alimera
shall keep CDS reasonably informed of the status and progress of the litigation.
Alimera shall have the sole and exclusive right to select counsel for any such
suit and action and shall pay all expenses of the suit, including, but not
limited to, attorneys' fees and court costs. Alimera shall have the right to
settle any such litigation and shall specifically have the right, whether or not
litigation commences, to negotiate a license or other rights from any Third
Party authorizing the use of Third Party intellectual property rights in
connection with Products; provided, however, that Alimera shall not settle any
such action, or otherwise consent to an adverse judgment in any such action, or
make any admission in any such license and negotiation that adversely affects
the rights or interests of CDS under this Agreement, including,

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

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<PAGE>

without limitation, issues of validity of the CDS Patent Rights, without the
prior written consent of CDS. Any such license shall be at arm's length and
otherwise on terms and conditions as may be deemed appropriate in the reasonable
business judgment of Alimera. Alimera shall provide CDS with a copy of any such
license promptly after its execution. All reasonable costs incurred in
connection with such litigation and any amounts payable to the Third Party
relating to Products under such license shall constitute Direct
Commercialization Costs as follows: (i) any litigation, negotiation or
settlement-related costs and expenses or up-front payments shall be deemed to be
a Direct Commercialization Cost of Product or Products as reasonably allocated
by Alimera in good faith, subject to the dispute resolution procedures provided
for in Section 12.7; (ii) any royalties on net sales or similar payments
calculated by reference to sales shall be allocated to Products on a
Product-by-Product and country-by-country basis; (iii) any other amounts (e.g.,
milestone payments or patent reimbursement fees) shall be reasonably allocated
by Alimera to one or more Products in good faith, subject to the dispute
resolution procedures provided for in Section 12.7. If Alimera recovers any
damages or any other payments, by way of settlement or otherwise, in connection
with any counterclaim made by it in any such actions, such damages shall be
considered "Net Sales" for purposes of this Agreement.

      If Alimera does not defend a claim, suit or proceeding as set forth above
within ninety (90) days of the date Alimera was reasonably aware or notified of
the Third Party claim alleging infringement (or within such shorter period as
may be necessary for submitting or filing a response), then CDS may, in its sole
discretion, elect to defend such claim, suit or proceeding, using counsel of its
own choice and the provisions of Section 7.6.4 shall apply as if the term "CDS"
were changed to "Alimera" and the term "Alimera" were changed to "CDS."

      7.7 Marking. Alimera and any Affiliates or sublicensees shall mark all
Products with the numbers of all patents included in CDS Technology that cover
the Products. Without limiting the foregoing, all Products shall be marked in
such a manner as to conform with the patent laws of the country to which such
Products are shipped or in which such products are sold, including, but not
limited to, the requirements of 35 U.S.C. Section 287.

      7.8 Trademarks. Alimera shall be free to adopt, use and register in any
trademark offices any trademarks for use with a Product in its sole discretion.
Subject to Section 11.5.2, Alimera shall own all right, title and interest in
and to any such trademark in its own name during and after the Term of this
Agreement.

            7.8.1. The "Medidur" Mark. CDS hereby grants to Alimera a
royalty-free non-exclusive right and license, with right to sublicense, to use
the "MEDIDUR" mark Controlled by CDS on or in connection with any Products
marketed, distributed or sold pursuant to this Agreement. Alimera shall not use
the "MEDIDUR" mark in direct association with another mark such that the two
marks appear to be a single mark or in any other composite manner with any marks
of Alimera or any Third Party. Alimera shall cause to appear on all items
bearing the "MEDIDUR" mark such legends, markings and notices as may be required
by applicable law or reasonably requested by CDS to establish, perfect, defend
or exploit the proprietary character of the "MEDIDUR" mark. Alimera shall not
grant, attempt to grant, or record anywhere, a security interest in the
"MEDIDUR" mark. Alimera hereby assigns and will assign any goodwill associated
with its use of the "MEDIDUR" mark to CDS. CDS has the right to control the
quality of the Products Commercialized in connection with the commercial

                                      -44-
<PAGE>

exploitation of the MEDIDUR Mark as follows: (1) CDS may, in its sole
discretion, request and carry out periodic inspections of the operation of
Alimera, its Affiliates, subcontractors and sublicensees, and (2) Alimera agrees
to reasonably cooperate, and to cause its Affiliates, subcontractors and
sublicensees to cooperate, with such periodic inspections of its operations upon
reasonable prior written notice by CDS. Alimera acknowledges and agrees that the
"MEDIDUR" mark shall remain the property of CDS. ALIMERA ACKNOWLEDGES AND AGREES
THAT THE "MEDIDUR" MARK IS PROVIDED ON AN "AS IS" BASIS AND THAT CDS MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES WHATSOEVER, EXPRESS, IMPLIED OR
STATUTORY, WITH RESPECT THERETO INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF TITLE, VALIDITY, ENFORCEABILITY OR NON-INFRINGEMENT. CDS is not
obligated to (i) file any application for registration of the "MEDIDUR" mark, or
to secure any rights in the "MEDIDUR" mark, (ii) to maintain the "MEDIDUR" mark,
or (iii) to police or pursue (including for infringement) any Third Parties
using the "MEDIDUR" mark.

      7.9 UKRF Licenses and B&L Agreement. CDS shall not amend or modify any of
the UKRF Licenses or the B&L Agreement, or waive any right thereunder, in any
manner that would adversely affect Alimera's rights hereunder without the prior
written authorization of Alimera.

                           ARTICLE 8 CONFIDENTIALITY

      8.1 Confidentiality. Except as otherwise provided in this Article 8, each
Party shall maintain Confidential Information of the other Party in confidence
and shall not disclose Confidential Information of the other Party to any Third
Party and shall not use Confidential Information of the other Party except as
expressly authorized under this Agreement. "Confidential Information" shall mean
any and all information (whether in written, electronic, visual, verbal or other
form) received from the other Party or its representatives, including, but not
limited to, all information relating to any technology, product, method, process
or intellectual property of such disclosing Party (including, but not limited
to, Patent Rights, and other owned or licensed intellectual property rights,
data, Know-How, samples, technical and non-technical materials and
specifications), as well as any business plan, financial information, research
data or results, or other confidential commercial information of or about such
disclosing Party; provided, however, that Confidential Information shall not
include any information that: (a) is or becomes part of the public domain other
than by unauthorized acts or omissions of the Party obligated not to disclose
such Confidential Information or its employees, directors, officers, or agents
(collectively, the "Receiving Party"); (b) can be shown by written documents to
have been disclosed to the Receiving Party by a Third Party; provided, however,
that such Third Party had no obligation of confidentiality or non-use to the
disclosing party with respect to such Confidential Information; (c) can be shown
by written documents to have been in the possession of the Receiving Party prior
to disclosure by the disclosing Party; provided, however, that such Confidential
Information was not obtained directly or indirectly from the other Party to this
Agreement pursuant to a confidentiality agreement; or (d) is required to be
disclosed by the Receiving Party pursuant to interrogatories, requests for
information or documents, subpoena, civil investigative demand issued by a court
or governmental agency or as otherwise required by law; provided, however, that
in connection with this clause (d) the Receiving Party shall notify the other
Party immediately upon receipt thereof and give such other Party sufficient
advance

                                      -45-
<PAGE>

notice to permit it to seek a protective order or other similar order with
respect to such Confidential Information; and provided, further, that the
Receiving Party furnishes only that portion of the Confidential Information that
it is advised by counsel is legally required whether or not a protective order
or other similar order is obtained by the other Party. Notwithstanding any other
provisions of this Article, (1) Alimera Know-How shall be Confidential
Information of Alimera and CDS Technology shall be Confidential Information of
CDS; and (2) each Party shall treat the terms and conditions of this Agreement
as Confidential Information of the other Party.

      8.2 Disclosure. To the extent that it is reasonably necessary, a Party may
disclose Confidential Information it is otherwise obligated under this Article 8
not to disclose to its employees on a need-to-know basis and on condition that
such employees agree in writing to non-use and non-disclosure obligations
essentially the same as those set forth herein and to keep the Confidential
Information confidential to the same extent as such Party is required to keep
the Confidential Information confidential. In addition, a Party may disclose
such Confidential Information: (a) to government or other regulatory authorities
to the extent that such disclosure is required by law, regulation or order (i)
in connection with the filing, prosecution or maintenance of patents for which
the Party disclosing the Confidential Information has responsibility or is
permitted under this Agreement to file, prosecute and maintain, or (ii) to
obtain authorizations to conduct clinical trials of, and to Commercialize,
Products pursuant to this Agreement; (b) to any applicable securities exchange
or the National Association of Securities Dealers ("NASD"), as required by
applicable law or any listing agreement with, or the rules and regulations of,
any applicable securities exchange or NASD, provided, that, the Party who makes
the filing will seek confidential treatment for such filing; (c) in confidence,
to lawyers, accountants and sources of funding of a Party and (d) to
sublicensees in connection with any sublicense of the technology or intellectual
property, or portion thereof, licensed hereunder as permitted under this
Agreement. In addition, a Party may disclose the terms of this Agreement to any
investors or potential investors, lenders, and other potential financing
sources, or to a Third Party in connection with a merger or acquisition or
proposed merger or acquisition or a license or proposed license of the
technology or intellectual property licensed hereunder, and to Affiliates,
attorneys, accountants, stockholders, investment bankers, advisers or other
consultants of the foregoing, in each case provided that the Person to which
such disclosure is made is obligated by written agreement to keep such
information confidential on essentially the same terms as set forth herein and
to use such Confidential Information solely to evaluate such investment,
financing, acquisition, merger or license.

                    ARTICLE 9 REPRESENTATIONS AND WARRANTIES

      9.1 Representations and Warranties of CDS. CDS represents and warrants as
of the Effective Date that:

            (a) CDS is a corporation duly organized, validly existing and in
corporate good standing under the laws of Delaware;

            (b) CDS has the legal right, authority and power to enter into this
Agreement, and to extend the rights and licenses granted to Alimera in this
Agreement;

                                      -46-
<PAGE>

            (c) CDS has taken all necessary action to authorize the execution,
delivery and performance of this Agreement;

            (d) upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of CDS enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);

            (e) the performance of its obligations under this Agreement will not
conflict with its charter documents or result in a breach of any agreements,
contracts or other arrangements to which it is a party;

            (f) CDS is the sole and exclusive owner or the licensee of CDS
Existing Patent Rights;

            (g) to the best of CDS' knowledge, no claim has been threatened or
asserted that the practice of any patent or patent application listed in Exhibit
1.11A infringes patent rights of any Third Party;

            (h) CDS has not received any complaint, demand or notice from a
Third Party in writing challenging the validity or enforceability of any patent
listed in Exhibit 1.11A;

            (i) CDS has no present intention [*] any patent listed in Exhibit
1.11A and has not instructed its patent counsel or taken any other actions [*]
any patent listed in Exhibit 1.11A;

            (j) CDS is in compliance in all material respects with the UKRF
Licenses and the B&L Agreement; to CDS' knowledge, there is no noncompliance by
UKRF or B&L under the UKRF Licenses and the B&L Agreement, respectively, other
than noncompliance that would not adversely affect Alimera's rights hereunder;
and

            (k) neither CDS nor any of its Affiliates has initiated for CDS a
filing for protection under the bankruptcy laws, an assignment for the benefit
of creditors, appointment of a receiver or trustee over its property or any
similar undertaking.

      9.2 Representations and Warranties of Alimera. Alimera represents and
warrants as of the Effective Date that:

            (a) Alimera is a corporation duly organized, validly existing and in
corporate good standing under the laws of Delaware.

            (b) Alimera has the legal right, authority and power to enter into
this Agreement, and to extend the rights and licenses granted to CDS in this
Agreement;

            (c) Alimera has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
                                     -47-

<PAGE>

            (d) upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of Alimera enforceable
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws,
affecting creditors' and contracting parties' rights generally and except as
enforceability maybe subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);

            (e) the performance of its obligations under this Agreement will not
conflict with Alimera's charter documents or result in a breach of any
agreements, contracts or other arrangements to which it is a party; and

            (f) to the knowledge of Alimera, Alimera is the sole and exclusive
owner of the Alimera Know-How.

      9.3 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY CDS TECHNOLOGY,
CDS KNOW-HOW, ALIMERA IMPROVEMENTS, ALIMERA KNOW-HOW, GOODS, SERVICES OR OTHER
SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY, SCOPE AND
NON-INFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

      9.4 Limited Liability. EXCEPT FOR THEIR RESPECTIVE OBLIGATIONS UNDER
ARTICLE 8 or ARTICLE 10, NEITHER CDS NOR ALIMERA WILL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY PUNITIVE, EXEMPLARY,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR LOST PROFITS.

                              ARTICLE 10 INDEMNITY

      10.1 Cross Indemnity. Each Party (the "Indemnifying Party") agrees to
defend, indemnify and hold the other party (the "Indemnified Party"), its
Affiliates and their respective directors, officers, employees and agents and
their respective heirs and assigns harmless from all Third Party claims,
actions, losses, damages, liabilities or expenses (including, but not limited
to, reasonable attorneys' fees) (each, a "Loss") arising as a result of (a) a
breach by the Indemnifying Party of any of its representations, warranties or
obligations under this Agreement, (b) actual or asserted violations of any
applicable law or regulation by the Indemnifying Party or any of its employees,
Affiliates, sublicensees, consultants, or other agents in connection with the
research, development, manufacture, distribution, marketing, promotion, sale, or
use of Products, or the reporting requirements for Products, including, but not
limited to, any allegation or determination that a Product has been adulterated,
misbranded, mislabeled or otherwise is not in compliance with any applicable law
or regulation, or (c) except as provided in Section 7.4.4 or 10.5, bodily
injury, death, property damage or other harm or damage attributable to the
research, development, manufacture, distribution, marketing, promotion, sale or
use of any Products by the Indemnifying Party or its employees, Affiliates,
sublicensees, consultants, or other agents.

                                     -48-

<PAGE>

      10.2 Limitation on Indemnity Obligations. A Party, its Affiliates and
their respective directors, officers, employees and agents shall not be entitled
to the indemnities set forth in Sections 10.1 to the extent the Loss for which
indemnification is sought was caused by the negligence, or by the reckless or
intentional misconduct or omission, of such Party or its directors, officers,
employees or agents.

      10.3 Procedure. If an Indemnified Party intends to claim indemnification
under Article 10, the Indemnified Party shall notify the Indemnifying Party of
any Loss in respect of which the Indemnified Party intends to claim such
indemnification, and the Indemnifying Party shall assume the defense thereof
with counsel mutually satisfactory to the Parties. The failure to deliver notice
to the Indemnifying Party within a reasonable time after the commencement of any
such action, shall relieve such Indemnifying Party of liability to the
Indemnified Party under Article 10 only to the extent that the delay adversely
affects Indemnifying Party's rights or ability to defend such claim or action,
but the failure so to deliver notice to the Indemnifying Party will not relieve
the Indemnifying Party of any liability that it may have to any Indemnified
Party otherwise than under Article 10. The Indemnified Party under Article 10
shall provide reasonable assistance to the Indemnifying Party and its legal
representatives, at the Indemnifying Party's expense, in the investigation of
any action, claim or liability covered by this indemnification. The Indemnifying
Party shall additionally be liable to pay the reasonable legal costs and
attorneys' fees incurred by the Indemnified Party in establishing its claim for
indemnity. Except as provided in the last sentence of this Section 10.3, the
indemnity agreement in this Article 10 shall not apply to amounts paid in
settlement of any Loss if such settlement is effected without the consent of the
Indemnifying Party, which consent shall not be withheld unreasonably or delayed.
Indemnifying Party shall not, without the written consent of Indemnified Party,
settle or compromise any Loss or consent to the entry of any judgment with
respect to any Loss (a) that does not release Indemnified Party from all
liability with respect to such Loss or (b) which may materially adversely affect
Indemnified Party or under which Indemnified Party would incur any obligation or
liability, other than one as to which Indemnifying Party has an indemnity
obligation hereunder. If Indemnifying Party, within ten (10) days of receiving
notice of a Loss or such shorter period as may be necessary for submitting or
filing a response, fails to assume the defense of such Loss or fails to notify
Indemnified Party that is assuming such defense, Indemnified Party shall have
the right to assume the defense, compromise or settlement of such Loss at the
risk and expense of Indemnifying Party.

      10.4 Insurance. Each Party shall maintain, and shall cause its Affiliates
and each sublicensee conducting activities under this Agreement to maintain, at
such Party's, an Affiliate's, or sublicensee's sole expense, appropriate product
liability insurance coverage in amounts reasonably determined by the Party from
time to time but at least sufficient to insure against claims which may arise
from the performance of obligations or exercise of rights granted under this
Agreement or from indemnification obligations under this Article 10, but in no
event shall a Party's insurance coverage be in an amount less than $5,000,000
per occurrence and $10,000,000 annual aggregate. The policy of insurance shall
contain a provision of non-cancellation except upon the provision of thirty (30)
days notice to the other Party. The policy of insurance with respect to any
Product that would, absent the licenses herein, infringe a Valid Claim under a
patent licensed under one or more of the UKRF Licenses shall contain an
endorsement naming UKRF, and the University of Kentucky (and its Board of
Trustees, agents, officers, and employees) as additional insureds. Each Party
shall maintain such insurance

                                     -49-

<PAGE>

commencing on the Effective Date and for so long as it continues to research,
produce, develop, manufacture, distribute, sell or use the Products, and
thereafter for so long as each Party maintains insurance for itself covering
such manufacture or sales.

      10.5 Product Liability Claims. If either Party incurs any losses, costs,
damages (including amounts paid in settlement of claims), fees (including
reasonable attorneys' fees) or expenses arising out of any Third Party claim
relating to injuries or death resulting from the use of any Product developed or
Commercialized pursuant to this Agreement, then such losses, costs, damages,
fees or expenses that are not attributable to the gross negligence and/or
willful misconduct of a Party and are not covered by an insurance policy
("Product Liability Losses") shall be Direct Commercialization Costs. If CDS
incurs Product Liability Losses, Alimera shall reimburse CDS for [*] of the
Product Liability Losses within forty-five (45) days of receipt of a request for
reimbursement for such Product Liability Losses. If either Party incurs any
losses, costs, damages (including amounts paid in settlement of claims), fees
(including reasonable attorneys' fees) or expenses arising out of any Third
Party claim relating to injuries or death resulting from the use of any Product
developed or Commercialized pursuant to this Agreement, then to the extent such
losses, costs, damages, fees or expenses are attributable to the gross
negligence and/or willful misconduct of a Party, such Party shall bear [*] of
such losses, damages, fees or expenses.

                        ARTICLE 11 TERM AND TERMINATION

      11.1 Term. If not earlier terminated as provided in this Article 11, the
term of this Agreement (the "Term") shall commence on the Effective Date and
expire upon the later of (i) ten (10) years after the Effective Date, or (ii)
the expiration or abandonment of the last Valid Claim included in the CDS Patent
Rights, or (iii) as long as Alimera, any Affiliate of Alimera or any sublicensee
is selling a Product in any part of the Territory.

      11.2 Termination for Default by Either Party. Either Party may terminate
this Agreement (i) upon the occurrence of a breach of a material term of this
Agreement (other than a material breach described in clause (ii) below or in
Section 11.3, 11.4 or 11.5) if the breaching Party fails to remedy such breach
within thirty (30) days after notice thereof by the non-breaching Party or, with
respect to a breach (other than a failure to make a payment) that cannot be
cured within such period, then such longer period (up to 90 days) as may be
reasonably necessary, using Commercially Reasonable Efforts, to cure the breach,
or (ii) if the other Party files for protection under the bankruptcy laws, makes
an assignment for the benefit of creditors, appoints or suffers appointment of a
receiver or trustee over its property, files a petition under any bankruptcy or
insolvency act or has any such petition filed against it and such proceeding
remains undismissed or unstayed for a period of more than sixty days. Upon
termination, the non-breaching Party shall, subject to the dispute resolution
procedures set forth in Section 12.7, have the right, in its sole discretion, to
seek any other rights or remedies available to it at law or in equity.

      11.3 Termination for Non-Payment of Development Payment. Either Party (the
"Terminating Party") may terminate this Agreement upon the other Party's failure
to make a timely payment of all or a portion of any of its Development Payments,
or if the other Party has outstanding Compounded Development Payments and/or
Compounded Disputed Costs under

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                     -50-

<PAGE>
 Section 6.3 (the "Non-Terminating Party"); provided, however, that the
Terminating Party gives notice of termination to the Non-Terminating Party, and
the Non-Terminating Party fails to pay all such payments under this Agreement
within thirty (30) days of receiving such notice (provided that each Party has a
one-time right to use sixty (60) days to cure hereunder). The Terminating
Party's sole and exclusive remedy for the Non-Terminating Party's failure to
make any of its Development Payments, Compounded Development Payments and/or
Compounded Disputed Costs, shall be the following: (i) the Terminating Party may
terminate this Agreement under this Section 11.3, (ii) the amounts of Compounded
Development Payments plus Compounded Disputed Costs owed by each Party shall be
determined, as of the date of termination (provided that solely for purposes of
this Section 11.3, the amounts of Compounded Development Payments and Compounded
Disputed Costs shall be calculated as set forth in Sections 6.3.2 and 6.3.3
except that the words [*] shall be substituted in place of [*] in Sections 6.3.2
and 6.3.3) and the Party with the larger total amount of such costs shall pay
the other Party the difference between the paying Party's total amount of such
costs and the other Party's total amount of such costs (the "Termination
Amount"), provided that, from and after the date of termination, interest on any
unpaid Termination Amount shall accrue at [*] compounded annually, until the
full Termination Amount plus accrued interest has been paid; further provided
that the accrual of such interest or payment shall not preclude the Terminating
Party from seeking full payment of amounts owed under this Section 11.3, and
(iii) if (A) CDS is the Terminating Party, (B) Alimera has paid more than [*]
pursuant to Sections 6.1-6.3, and (C) CDS terminates this Agreement pursuant to
this Section 11.3 and thereafter directly or through an Affiliate or a Third
Party Commercializes any Product that was under development pursuant to the
Development Plan at the time of termination, then (x) CDS shall, after the CDS
Profitability Date, on a quarterly basis, pay Alimera [*] of CDS Net Income
realized by CDS that is attributable to such Product, until the aggregate amount
of such payments equals [*] of the total amount of Development Payments and
Determined Disputed Costs paid by Alimera pursuant to Sections 6.1-6.3
(provided, however, that such total amount of Development Payments and
Determined Disputed Costs paid by Alimera shall exclude (1) any amount Alimera
paid to CDS upon termination pursuant to this Section 11.3, and (2) any amount
Alimera paid to CDS solely due to the [*] multiplier and the [*] annual
compounding pursuant to Sections 6.3.2 and 6.3.3); further provided that in the
event that there are CDS Net Losses in any calendar quarter after the CDS
Profitability Date, any payment to Alimera shall be offset by such CDS Net
Losses, and (y) Alimera shall not, for as long as CDS makes, or is obligated to
make, payment to Alimera pursuant to the foregoing, Develop or Commercialize, or
license or otherwise assist an Affiliate or a Third Party to Develop or
Commercialize, any product that is Approved or designed to be Approved (1) to
treat DME or (2) to deliver a corticosteroid by injection, implantation or other
direct delivery method to the posterior portion of the eye. Solely for purposes
of the preceding sentence, the term "Develop" shall mean performance of human
clinical trials for a product.

      11.4 Termination for Failure to Approve an Initial Development Plan.
Either Party may terminate this Agreement in the event that an initial
Development Plan is not approved within 30 days after the Effective Date. If
either Party chooses to terminate this Agreement under this Section 11.4, such
termination shall be the sole and exclusive remedy for each Party for failure to
approve an initial Development Plan, provided that CDS shall repay to Alimera
[*] in accordance with the terms of the Secured Promissory Notes from CDS to
Alimera dated October 19, 2004, November 18, 2004 and December 22, 2004.

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                     -51-

<PAGE>

      11.5 Termination for Abandonment. For purposes of this Section 11.5,
"Abandonment" by a Party or to "Abandon" shall mean either (i) delivery of a
written election by a Party to abandon this Agreement with respect to a Product
or (ii) the event in which the aggregate amount of a Party's overdue Development
Payments and/or overdue Determined Disputed Costs exceeds [*] with respect to
such Product in the Territory, and the Non-Paying Party fails to pay all
Compounded Development Payments and Compounded Disputed Costs then owing related
to such Product in the Territory under this Agreement within thirty (30) days of
receiving written request of payment of such outstanding Compounded Development
Payments and Compounded Disputed Costs from the other Party. If a Party Abandons
a Product pursuant to this Section 11.5, then the other Party's sole remedy
shall be termination with respect to such Product pursuant to this Section 11.5.
Solely for purposes of this Section 11.5 (including 11.5.1 and 11.5.2), the term
"Product" shall have the meaning set forth in Section 1.77 except that in (E)
and (4) the words "in a particular country" shall be omitted, in the next to
last sentence the words "in each country" shall be omitted, and in the last
sentence example (ii) shall be omitted.

      11.5.1. Effect of Abandonment by CDS. In the event that CDS Abandons a
Product, Alimera shall terminate this Agreement with respect to that Product in
the Territory for Abandonment of that Product by CDS under this Section 11.5.
Upon such termination, Alimera shall choose one of the following two options:
(1) the Parties will enter into a license agreement under which CDS grants
Alimera an exclusive license under the CDS Technology to make, have made, use,
offer to sell, sell, and import such Product in the Collaboration Field, and, in
consideration of the grant of such license, CDS shall receive a royalty of [*]
of Net Sales of such Product in the Territory (after recovery by Alimera of all
Development Payments and Determined Disputed Costs owed by CDS to Alimera
pursuant to Sections 6.3.2 and 6.3.3 as pre-payments of royalty, without giving
effect to the [*] multiplier or the [*] annual compounding otherwise provided
for in Sections 6.3.2 and 6.3.3) and the license shall include those other terms
and conditions set forth on Exhibit 11.5.1, or (2) CDS shall pay to Alimera any
Compounded Development Payments or Compounded Disputed Costs that CDS owes
Alimera as of the date of termination, after deducting the amounts of any
outstanding Compounded Development and/or Compounded Disputed Costs that Alimera
owes CDS as of that date (the "CDS Abandonment Amount") (provided that solely
for purposes of this Section 11.5.1 and Section 11.5.2, the amounts of
Compounded Development Payments and Compounded Disputed Costs shall be
calculated as set forth in Sections 6.3.2 and 6.3.3 except that the words [*]
shall be substituted in place of [*] in Sections 6.3.2 and 6.3.3) further
provided that, from and after the date of termination, interest on any unpaid
CDS Abandonment Amount shall accrue at [*] (rather than at [*]), compounded
annually, until such costs have been paid. In the event that the Parties enter
into a license agreement pursuant to this Section 11.5.1(a), upon execution of
such license agreement and at Alimera's request: (a) any and all Confidential
Information and materials solely related to such Product provided by Alimera
pursuant to this Agreement shall be promptly returned by CDS to Alimera, (b) CDS
shall promptly deliver to Alimera copies of all Clinical IP owned or Controlled
by CDS and necessary or useful to the development or Commercialization of such
Product and CDS shall not use any such Clinical IP thereafter for any regulatory
applications or filings for such Product, provided that the foregoing shall not
prevent CDS from using such Clinical IP for other Products or from performing
preclinical and clinical studies or other research of any nature, including
research that reproduces data contained in the Clinical IP, or from using the
results of

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
                                     -52-

<PAGE>

such research in regulatory applications or filings or for any other purpose,
(c) any regulatory filings for such Product which have been submitted in CDS'
name which have not been transferred to Alimera, subject to FDA approval, will
be transferred to Alimera's name, and (d) CDS will assign to Alimera all of its
right, title and interest in any trademark under which CDS shall solely have
marketed such Product or registered for use solely with such Product together
with the goodwill associated therewith. Termination of this Agreement with
respect to such Product and the options described this Section 11.5.1 with
respect to such Product shall be Alimera's sole and exclusive remedy for
Abandonment of such Product by CDS. In the event that, (x) Alimera chooses
option (2) upon termination with respect to a Product and CDS pays to Alimera
the amounts described therein, and (y) at the time of such termination, no
Product designed for treating DME is being developed pursuant to a Development
Plan or being Commercialized pursuant to the Commercialization Budget, then CDS
shall no longer be bound by Section 5.1.2(1), (2), (3) or (4) with respect to
that Product.

      11.5.2. Effect of Abandonment by Alimera. In the event that CDS terminates
this Agreement with respect to a Product in the Territory for Abandonment of
that Product by Alimera under this Section 11.5, the rights and licenses granted
to Alimera pursuant to Article 5 shall terminate with respect to that Product in
the Territory and the Parties shall negotiate in good faith a license agreement
under which Alimera shall grant to CDS a non-exclusive license to any Alimera
Know-How related to such Product. After termination with respect to such Product
as set forth in this Section 11.5 and at CDS' request: (a) any and all
Confidential Information and materials solely related to such Product provided
by CDS pursuant to this Agreement shall be promptly returned by Alimera to CDS,
(b) Alimera shall promptly deliver to CDS copies of all Clinical IP owned or
Controlled by Alimera and necessary or useful to the development or
Commercialization of such Product and Alimera shall not use any such Clinical IP
thereafter for any regulatory applications or filings for such Product, provided
that the foregoing shall not prevent Alimera from using such Clinical IP for
other Products or from performing preclinical and clinical studies or other
research of any nature, including research that reproduces data contained in the
Clinical IP, or from using the results of such research in regulatory
applications or filings or for any other purpose, (c) if Alimera has applied for
or obtained any Approvals in any country for the Product, then Alimera shall, to
the extent legally permissible, take all additional action reasonably necessary
to assign all of its right, title and interest in and transfer possession and
control to CDS of such applications or Approvals, (d) any regulatory filings for
the Product which have been submitted in Alimera's name, subject to FDA
approval, will be transferred to CDS' name, (e) Alimera will assign to CDS all
of its right, title and interest in any trademark under which Alimera shall
solely have marketed the Product or registered for use solely with such Product
together with the goodwill associated therewith, and (f) CDS shall no longer be
bound by Section 5.1.2(1), (2), (3) or (4) with respect to the Product Abandoned
by Alimera. Termination of this Agreement with respect to the Product shall be
CDS' sole and exclusive remedy for Abandonment of that product by Alimera,
except that Alimera shall promptly pay to CDS all Compounded Development
Payments and/or Compounded Disputed Costs that Alimera owes CDS as of the date
of termination, after deducting the amounts of any outstanding Compounded
Development and/or Compounded Disputed Costs that CDS owes Alimera as of that
date (the "Alimera Abandonment Amount"), provided that, from and after the date
of termination, interest on any unpaid Alimera Abandonment Amount shall accrue
at [*] (rather than at [*]), compounded annually, until such costs
have been paid; further

                                     -53-

[*]- Indicates material that has been omitted and for which confidential
treatment has been requested. All such information has been filed with the
Commission pursuant to Rule 24b-2 promulgated under the Securities and Exchange
Act of 1934, as amended.

<PAGE>

provided that the accrual of such interest or payment shall not preclude CDS
from seeking full payment of amounts owed under this Section 11.5.2.

            11.6 Effect of Expiration or Termination of the Agreement. Except as
expressly provided herein, the expiration or termination of this Agreement shall
not relieve the Parties of any obligation accruing prior to such expiration or
termination and all rights and licenses granted under this Agreement shall be
terminated. In the event of termination of this Agreement pursuant to Section
11.2, (a) any and all Confidential Information and materials provided by the
non-breaching Party to the breaching Party pursuant to this Agreement shall be
promptly returned by the breaching Party to the non-breaching Party, and (b) the
breaching Party shall not use any Clinical IP arising from the activities
conducted under this Agreement at any time thereafter; provided that the
foregoing shall not prevent the breaching Party from performing preclinical and
clinical studies or other research of any nature, including research that
reproduces data contained in the Clinical IP, or from using the results of such
research in regulatory applications or filings or for any other purpose.

            11.7 Survival of Provisions Upon Expiration or Termination. The
provisions of Articles 8, 10 and 11, and Sections 5.2 (in the event of
termination of this Agreement by CDS under Section 11.5.2), 5.4, 5.5, 5.6, 5.9,
9.3, 9.4, 11.5.1 (in the event of termination of this Agreement by Alimera under
Section 11.5), 11.5.2 (in the event of termination of this Agreement by CDS
under Section 11.5), 11.6, 12.5, 12.6 and 12.7 shall survive the expiration or
termination of this Agreement for any reason.

                            ARTICLE 12 MISCELLANEOUS

      12.1 Interpretation.

            (a) If an ambiguity or a question of intent or interpretation arises
with respect to this Agreement, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any provisions
of this Agreement.

            (b) Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "but not
limited to." The word "will" shall be construed to have the same meaning and
effect as the word "shall." Unless the context requires otherwise, (A) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or therein), (B) any reference to any laws herein shall be construed as
referring to such laws as from time to time enacted, repealed or amended, (C)
any reference herein to any Person shall be construed to include the Person's
permitted successors and assigns, (D) the words "herein", "hereof and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof unless
specifically stated, (E) any reference herein to the words "mutually agree" or
"mutual written agreement" shall not impose any obligation on either Party to
agree to any terms relating thereto or to engage in discussions relating to such
terms except as

                                     -54-

<PAGE>

such Party may determine in such Party's sole discretion and
unless otherwise stated; and (F) all references herein to Articles, Sections or
Schedules shall be construed to refer to Articles, Sections and Schedules of
this Agreement unless otherwise noted.

      12.2 Assignment. This Agreement may not be assigned or otherwise
transferred by either Party without the consent of the other Party; provided,
however, that either Party may, without such consent, assign its rights and
obligations under this Agreement in connection with a Change of Control of such
Party; provided, however, that such Party's rights and obligations under this
Agreement shall be assumed by its successor in interest in any such transaction.
Any purported assignment in violation of the preceding sentence shall be void.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement.

      12.3 Severability. Each Party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the Parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid 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 invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
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 provisions.

      12.4 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier) or courier, postage prepaid (where
applicable), addressed to such other Party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor and shall be effective upon receipt by the addressee.

            If to CDS:           Control Delivery Systems, Inc.
                                 400 Pleasant Street
                                 Watertown, MA 02472
                                 Attention:  President
                                 Fax:  (617)-926-5050

            With a copy to:      Control Delivery Systems, Inc.
                                 400 Pleasant Street
                                 Watertown, MA 02472
                                 Attention:  General Counsel
                                 Fax: (617) 926-5050

            With a copy to:      Ropes & Gray LLP
                                 One International Place
                                 Boston, MA  02110
                                 Attention: Susan Galli, Esq.

                                     -55-

<PAGE>

                                 Fax: (617) 951-7050

            If to Alimera:       Alimera Sciences, Inc.
                                 6120 Windward Parkway, Suite 290
                                 Alpharetta, GA 30005
                                 Attention: President
                                 Fax: (678) 990-5744

            With a copy to:      Hutchison & Mason PLLC
                                 3110 Edwards Mill Road, Suite 100
                                 Raleigh, NC 26712
                                 Attention:  William N. Wofford
                                 Fax: (919) 829-9696

      12.5 Governing Law and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of New York,
without regard to any choice of law principle that would dictate the application
of the laws of another jurisdiction. Any suit brought by Alimera arising under
or relating to this Agreement shall be brought in a court of competent
jurisdiction in the Commonwealth of Massachusetts, and Alimera hereby consents
to the jurisdiction of the state and federal courts sitting in the Commonwealth
of Massachusetts. Any suit brought by CDS arising under or relating to this
Agreement shall be brought in a court of competent jurisdiction in the state of
Georgia, and CDS hereby consents to the jurisdiction of the state and federal
courts sitting in the state of Georgia. Each Party agrees not to raise any
objection at any time to the laying or maintaining of the venue of any such
action, suit or proceeding in any of the specified courts, irrevocably waives
any claim that such action, suit or other proceeding has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such action, suit or other proceeding, that such court does not have
any jurisdiction over such Party.

      12.6 Compliance with Applicable Laws. The Parties shall use their best
efforts to comply with all provisions of any applicable laws, regulations, rules
and orders relating to the license granted and to the testing, production,
transportation, export, packaging, labeling, sale or use of Products. The
Parties shall use their best efforts to obtain written assurances regarding
export and re-export of technical data (including Products made by use of
technical data) as may be required by the Office of Export Administration
Regulations. Notwithstanding any other provision of this Agreement, each Party
(and each Affiliate and agent of the Party) may disclose the tax treatment and
tax structure of the transaction and all materials of any kind (including, but
not limited to, opinions and other tax analyses) that are provided to the Party
relating to such tax treatment and tax structure as contemplated by section
1.6011-4(b)(3)(iii) of the Code of Federal Regulations.

      12.7 Dispute Resolution. Any disputes, other than disputes regarding the
construction, validity or enforcement of patents (which disputes shall be
resolved by Section 12.5), arising between the Parties relating to, arising out
of or in any way connected with this Agreement or any term or condition hereof,
or the performance by either Party of its obligations hereunder, whether before
or after termination of this Agreement, shall be resolved as follows:

                                     -56-

<PAGE>

            12.7.1. Senior Management. If the dispute cannot be resolved by the
Primary Contact Persons in accordance with Section 3.4 hereof or then in
accordance with Section 2.4, the Primary Contact Persons shall promptly notify
the chief executive officer of each Party (or their designee), who shall meet in
person at a mutually acceptable time and location or by means of telephone or
video conference within sixty (60) days of such notice and attempt to negotiate
a settlement.

            12.7.2. Arbitration. If the chief executive officers are not able to
resolve the dispute within thirty (30) days of their first meeting or within
such extended period as they agree upon, either Party may submit the matter to
binding arbitration in accordance with this Section 12.7.2. Except as specified
below, the arbitration shall be conducted in accordance with the rules of, and
under the auspices of, the American Arbitration Association (the "AAA"). The
arbitration will be conducted by a single arbitrator with relevant technical
expertise who is jointly selected by the Parties or, if the Parties cannot
mutually agree, is selected by the AAA administrator and is not employed by and
does not have a material financial relationship with, a Party or any of its
Affiliates. If Alimera is the claimant, the location of the arbitration shall be
in the Boston, Massachusetts and if CDS is the claimant, the location of the
arbitration shall be in Atlanta, Georgia. This Agreement shall remain in effect
pending completion of the proceedings brought under this Section 12.7.2. 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. All arbitration proceedings must be completed within 30
days after the arbitration is convened. The Parties hereby agree that the
arbitrator has authority to issue rulings and orders regarding all procedural
and evidentiary matters that the arbitrator deems reasonable and necessary with
or without petition therefor by the Parties as well as the final ruling and
judgment. Rulings shall be issued by written order summarizing the arbitration
proceedings. Any judgment or award by the arbitrator in any dispute shall have
the same force and effect as the final judgment of a court of competent
jurisdiction. Nothing in this arbitration clause shall prevent either Party from
seeking a pre-award attachment of assets or preliminary relief to enforce its
rights in intellectual property or confidentiality obligations under this
Agreement, or to enjoin any event that might cause irreparable injury, in a
court of competent jurisdiction prior to an award on the merits by the
arbitrator.

      12.8 Use of Name/Publicity. Except as otherwise expressly permitted under
this Agreement, neither Party shall (i) use the name of the other in any press
releases, public announcements or other publicity or advertising materials, or
(ii) disclose the existence or terms of this Agreement, in each case, without
written approval of the other Party. The Parties agree that a public
announcement of the execution of this Agreement shall be made in the form of a
mutually acceptable press release within ten Business Days after the Effective
Date. Thereafter, each Party, with the prior written consent from the other
Party, shall have the right to publicly announce the achievement of any event
relating to Product deemed newsworthy by such Party and to publish results of
clinical trials and other publications relating to the Products, provided that
no such publications by one Party shall include Confidential Information of the
other Party.

      12.9 Entire Agreement. This Agreement, together with the Exhibits hereto,
contains the entire understanding of the Parties with respect to the subject
matter hereof. All express or implied agreements and understandings, either oral
or written, heretofore made are expressly merged in and made a part of this
Agreement. In the event of any conflict or inconsistency

                                     -57-

<PAGE>

between any provision of any Exhibits hereto and any provision of this
Agreement, the provisions of this Agreement shall prevail. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by both Parties hereto. The Confidentiality Agreement between Alimera and CDS
with an effective date of August 17, 2004 remains effective until the Effective
Date of this Agreement, whereupon the provisions of such agreement shall survive
to the extent set forth in that agreement.

      12.10 Headings. The captions to the several Articles and Sections hereof
and Exhibits hereto are not a part of this Agreement, but are merely guides or
labels to assist in locating and reading the several Articles and Sections
hereof.

      12.11 Independent Contractors. It is expressly agreed that CDS and Alimera
shall be independent contractors and that the relationship between the two
Parties shall not constitute a partnership, joint venture or agency. Neither CDS
nor Alimera shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior consent of the other Party to do so.

      12.12 Waiver. The waiver by either Party hereto of any right hereunder or
the failure to perform or of a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.

      12.13 Counterparts. This Agreement may be executed by facsimile and/or 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.

[signature page to follow]

                                     -58-

<PAGE>

IN WITNESS WHEREOF, the Parties have executed this Collaboration Agreement as of
the date first set forth above.

CONTROL DELIVERY SYSTEMS, INC.            ALIMERA SCIENCE, INC.

By:    /s/ Paul Ashton                    By:    /s/ Dan Myers
       ------------------------------            -------------------------------

Name:  Paul Ashton                        Name:  Dan Myers
       ------------------------------            -------------------------------

Title: CEO                                Title: President, CEO
       ------------------------------            -------------------------------


                                     -59-
<PAGE>

                                    EXHIBITS
<TABLE>
<S>                 <C>
EXHIBIT 1.11A:      CDS EXISTING PATENT RIGHTS

EXHIBIT 1.11B:      EXCLUDED CDS PATENTS AND PATENT APPLICATIONS

EXHIBIT 1.15:       CDS PATENT COST-SHARING COUNTRIES

EXHIBIT 1.42:       EXCLUDED PRODUCT SPECIFICATIONS/DRAWINGS

EXHIBIT 1.87:       UKRF LICENSES

EXHIBIT 3.2:        INITIAL DEVELOPMENT PLAN

EXHIBIT 5.8.3:      TERMS FOR OPTION LICENSE AGREEMENT

EXHIBIT 11.5.1      TERMS FOR THE [*] LICENSE AGREEMENT
</TABLE>

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -60-
<PAGE>

                                  EXHIBIT 1.11A

                           CDS EXISTING PATENT RIGHTS

[*]

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -61-
<PAGE>
                                 EXHIBIT 1.11B
                           EXCLUDED CDS PATENT RIGHTS

[*]

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

                                      -69-
<PAGE>

                                  EXHIBIT 1.42


                    EXCLUDED PRODUCT SPECIFICATIONS/DRAWINGS

                                    FIGURE 1

                                      [*]


                                    FIGURE 2

                                      [*]



[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>

                                  EXHIBIT 1.87

                                  UKRF LICENSES

<TABLE>
<S>   <C>
A.    License Agreement dated October 20, 1991, as amended August 10, 1993,
      relating to U.S. Patent No. 5,378,475 (Application No. 07/658,695)

B.    License Agreement dated September 9, 1997 relating to U.S. Patent Nos.
      5,773,109 and 6,001,386 (Application No. 08/534,854)
</TABLE>

<PAGE>

                                   EXHIBIT 3.2

                            INITIAL DEVELOPMENT PLAN

[*]

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

<PAGE>

                                  EXHIBIT 5.8.3

                       TERMS FOR OPTION LICENSE AGREEMENT

<TABLE>
<S>                   <C>
                      Any terms not defined herein shall have those definitions set forth in the
                      Collaboration Agreement

LICENSE               Alimera shall have a non-exclusive license under the CDS Technology (as in
                      existence on the Option License Effective Date (as defined below), with the right
                      to sublicense, to make, have made, use, import, sell, and offer for sale the Option
                      Product in the Collaboration Field in the Territory.  During the term of this
                      option license, CDS shall not (a) grant a license to any Affiliate or Third Party
                      under CDS' interest in the CDS Technology to make, have made, use, offer to sell,
                      sell, or import such Option Product in the Collaboration Field in the Territory,
                      and (b) itself use the CDS Technology to make, have made, use, offer to sell, sell,
                      or import such Option Product in the Collaboration Field in the Territory.

                      Alimera shall have an exclusive royalty-free license to use the "MEDIDUR"
                      mark Controlled by CDS on or in connection with the Option Product marketed,
                      distributed or sold pursuant to this license.

ROYALTIES             During the option license term, Alimera shall pay to CDS on a quarterly basis
                      a royalty of [*] of Net Sales by Alimera or its Affiliates.

DILIGENCE             As provided in Section 4.3 of the Collaboration Agreement.

SUBLICENSES           Alimera shall have full rights to sublicense without
                      consent, provided that such sublicense shall be consistent
                      with the term of the option license. [*]

OWNERSHIP OF AND      As provided in Section 5.4 of the Collaboration Agreement.
RIGHTS TO
INVENTIONS

LIMITATION ON USE,    As provided in Section 5.5, 5.6 and 5.7 of the Collaboration Agreement.
RESERVATION OF
RIGHTS BY CDS, AND
NO GRANT OF OTHER
TECHNOLOGY OR
PATENT RIGHTS
</TABLE>


[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

<PAGE>
<TABLE>
<S>                   <C>
PATENT                As provided for in Article 7 of the Collaboration Agreement. Neither Party is
MAINTENANCE AND       obligated to pay for patent costs or enforcement costs under this license as
ENFORCEMENT           long as either the Collaboration Agreement or the [*] license pursuant to Section
                      11.5.1 of the Collaboration Agreement is in effect. If neither the Collaboration
                      Agreement nor the [*] license pursuant to Section 11.5.1 of the Collaboration
                      Agreement is in effect, then CDS shall have the primary control in filing, prosecution,
                      maintenance and enforcement of CDS Patent Rights. The Parties [*] patent
                      costs. Any amounts recovered as a result of any infringement action taken by the
                      Parties hereunder shall be first applied, on a pro-rata basis, to reimburse each
                      Party for its out-of-pocket expenses incurred in connection with such action and
                      the remainder, if any, shall be divided appropriately [*].

REGULATORY            All regulatory filings and/or Approvals related to the Option Product that are
                      subject of this license will be immediately transferred to Alimera and Alimera shall
                      own all such filings and Approvals.

PATENT MARKING        As provided in Section 7.7 of the Collaboration Agreement.

INDEMNITY             As provided for in Article 10, except that CDS shall not be responsible for product
                      liability claims as described in Section 10.5 arising based on acts or omissions
                      after the Option License Effective Date except to the extent the claims are
                      attributable to CDS' gross negligence or willful misconduct.

REPORTS               Alimera will provide to CDS a quarterly written account of the Net Sales of Option
                      Products together with any relevant sublicense revenues and royalty payments.

TERM; TERMINATION     Commences upon Alimera's exercise of its rights pursuant to Section
                      5.8.3 under the Collaboration Agreement (the "Option License Effective Date") and
                      expires upon the expiration or abandonment of the last Valid Claim included in the
                      relevant CDS Patent Rights.

                      Alimera may terminate the license at any time by giving CDS ninety (90) days written
                      notice. CDS may terminate the license if Alimera: (a) fails to make any payment due
                      under the license, unless Alimera makes such payments within sixty (60) days after
                      receipt of written notice from CDS, or (b) commits a material breach of any other
                      provision of the license, and such breach is not cured within ninety (90) days after
                      receipt of written notice from CDS.
</TABLE>

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
<TABLE>
<S>                   <C>
REPRESENTATIONS       As provided in Article 9 of the Collaboration Agreement.
AND WARRANTIES

CONFIDENTIALITY       As provided in Article 8 and Sections 12.1-12.8 and 12.10-12.13 of
AND MISCELLANEOUS     the Collaboration Agreement.
</TABLE>

<PAGE>

                                 EXHIBIT 11.5.1

                       TERMS FOR THE [*] LICENSE AGREEMENT

<TABLE>
<S>                   <C>
                      Any terms not defined herein shall have those definitions set forth in the
                      Collaboration Agreement

LICENSE               Alimera shall have a non-exclusive license under the CDS Technology (as in
                      existence on the License Effective Date (as defined below), with the right to
                      sublicense, to make, have made, use, import, sell, and offer for sale the Product
                      that CDS has abandoned pursuant to Section 11.5.1 of the Collaboration Agreement in
                      the Collaboration Field in the Territory.  During the term of the license, CDS
                      shall not (a) grant a license to any Affiliate or Third Party under CDS' interest
                      in the CDS Technology to make, have made, use, offer to sell, sell, or import such
                      Product in the Collaboration Field in the Territory, and (b) itself use the CDS
                      Technology to make, have made, use, offer to sell, sell, or import such Product in
                      the Collaboration Field in the Territory.

                      Alimera shall have an exclusive royalty-free license to use the "MEDIDUR"
                      mark Controlled by CDS on or in connection with any Products marketed, distributed or
                      sold pursuant to this license.

ROYALTIES             During the license term, Alimera shall pay to CDS on a quarterly basis a royalty of
                      [*] of Net Sales by Alimera or its Affiliates.

DILIGENCE             As provided in Section 4.3 of the Collaboration Agreement.

SUBLICENSES           and subcontracts Alimera shall have full rights to sublicense without consent,
                      provided that such sublicense shall be consistent with the term of this license.
                      [*]

CLINICAL IP/KNOW-     CDS shall have transferred, or shall transfer, to Alimera copies of all
HOW                   pre-clinical and clinical data that (1) relate to the Product that is the subject
                      of this license, and (2) are owned or Controlled by CDS as of the License Effective
                      Date.  Alimera shall have the exclusive right to use such preclinical and clinical
                      data to make, have made, use, import, sell, and offer for sale such Product in the
                      Field in the Territory.

OWNERSHIP OF AND      As provided in Section 5.4 of the Collaboration Agreement.
RIGHTS TO
INVENTIONS

PATENT                As provided for in Article 7 of the Collaboration Agreement.  Neither Party is
MAINTENANCE AND       obligated to pay for patent costs or enforcement costs under

</TABLE>

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>
<TABLE>
<S>                   <C>
ENFORCEMENT           this license as long as the Collaboration Agreement is in effect.  Thereafter, CDS shall have the
                      primary control in filing, prosecution, maintenance and enforcement of CDS Patent
                      Rights.  The Parties shall [*] patent costs.  Any amounts recovered as a
                      result of any infringement action taken by the Parties hereunder shall be first
                      applied, on a pro-rata basis, to reimburse each Party for its out-of-pocket
                      expenses incurred in connection with such action and the remainder, if any, shall
                      be divided appropriately between the Parties [*].

PATENT MARKING        As provided in Section 7.7 of the Collaboration Agreement.

REGULATORY            Subject to applicable legal and regulatory requirements, all regulatory filings and/or
                      Approvals related to the Product that is the subject of this license will be
                      promptly transferred to Alimera and Alimera shall own all such filings and Approvals.

INDEMNITY             As provided for in Article 10, except that CDS shall not be responsible for product
                      liability claims as described in Section 10.5 arising based on acts or omissions
                      after the License Effective Date except to the extent the claims are attributable to
                      CDS' gross negligence or willful misconduct.

REPORTS               Alimera will provide to CDS a quarterly written account of the Net Sales of the
                      Products, together with any relevant sublicense revenues and royalty payments.

TERM; TERMINATION     Commences upon Alimera's exercise of its rights pursuant to Section
                      11.5.1 under the Collaboration Agreement (the "License Effective Date") and expires
                      upon the expiration or abandonment of the last Valid Claim included in the relevant
                      CDS Patent Rights.

                      Alimera may terminate the license at any time by giving CDS ninety (90) days written
                      notice. CDS may terminate the license if Alimera: (a) fails to make any payment due
                      under the license, unless Alimera makes such payments within sixty (60) days after
                      receipt of written notice from CDS, or (b) commits a material breach of any other
                      provision of the license, and such breach is not cured within ninety (90) days after
                      receipt of written notice from CDS.

REPRESENTATIONS       As provided in Article 9 of the Collaboration Agreement.
AND WARRANTIES

CONFIDENTIALITY       As provided in Article 8 and Sections 12.1-12.8 and 12.10-12.13 of
AND                   the Collaboration Agreement.
MISCELLANEOUS
</TABLE>

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

<PAGE>

                               AMENDMENT NO. 1 TO

                             COLLABORATION AGREEMENT

                                 BY AND BETWEEN

                         CONTROL DELIVERY SYSTEMS, INC.

                                       AND

                             ALIMERA SCIENCES, INC.

This Amendment No. 1 to the Collaboration Agreement by and between Control
Delivery Systems, Inc. and Alimera Sciences, Inc. dated as of February 11, 2005
(the "Agreement") is made as of February 23, 2005, and modifies certain terms of
the Agreement.

The undersigned Parties hereby agree as follows:

      1.    The fourth sentence of Section 3.2.4 (a) (i) of the Agreement is
            amended to read as follows:

                  As soon as practicable, CDS shall submit to the FDA a letter
                  in form and substance satisfactory to both Parties authorizing
                  a person designated by Alimera and reasonably acceptable to
                  CDS (initially [*]) to communicate directly with
                  the FDA regarding the CDS IND.

      2.    Section 6.2 of the Agreement is amended to read as follows:

       6.2 Milestone Payments. Alimera shall make an additional payment of
$750,000 to CDS ("Milestone Payment"), which shall be  disbursed as follows:

            (a)   [*] upon [*]

            (b)   [*] upon [*]

            (c)   [*] when [*]

            (d)   [*] upon [*] and

            (e)   [*] and any unpaid amounts from (a) through (d) above
                  upon the [*]

      3.    Except as otherwise set forth in this Amendment No. 1, the terms of
the Agreement shall remain in full force and effect.

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
<PAGE>

IN WITNESS WHEREOF, the parties have caused this instrument to be executed by
their duly authorized representatives.

CONTROL DELIVERY SYSTEMS, INC.              ALIMERA SCIENCES, INC.

By: /s/ Paul Ashton                         By: /s/ Dan Myers
   ----------------------------                -----------------------------
Name: Paul Ashton                           Name: Dan Myers
     --------------------------                  ---------------------------
Title: Chief Executive Officer              Title: President, CEO
      -------------------------                   --------------------------


<PAGE>

                               AMENDMENT NO. 2 TO

                             COLLABORATION AGREEMENT

                                 BY AND BETWEEN

                         CONTROL DELIVERY SYSTEMS, INC.

                                       AND

                             ALIMERA SCIENCES, INC.

This Amendment No. 2 to the Collaboration Agreement by and between Control
Delivery Systems, Inc. and Alimera Sciences, Inc. dated as of February 11, 2005
and amended on February 23, 2005 (the "Agreement") is made as of May 11, 2005,
and modifies certain terms of the Agreement.

The undersigned Parties hereby agree as follows:

      1. Section 3.2.3 of the Agreement is hereby deleted in its entirety and
the following is substituted in place thereof:

            3.2.3. Allocation of Responsibility for Development Activities. The
Parties acknowledge and agree that each Development Plan shall allocate primary
responsibility for the various activities (and any related or ancillary
activities) listed below to be performed by the responsible Party as follows:

<TABLE>
<CAPTION>
                  Activity                                                             Responsible Party
------------------------------------------------------------------------               -----------------
<S>                                                                                    <C>
A.      Preclinical research and development, including Product
        design,formulation, preclinical safety studies and in                          CDS
        vivo pharmacology studies

B.      Technology transfer as described in Section 3.11                               CDS

C.      Phase I, Phase I/II, Phase II and Phase III Clinical Trials, as
        needed to procure data necessary for the acceptance of filing of
        an NDA                                                                         Alimera

D.      Preparation, filing and maintenance of regulatory filings                      Alimera

E.      Manufacturing for Clinical Supply Requirements                                 CDS

F.      Filing, prosecution and maintenance of CDS Patent Rights
        (subject to Alimera's rights in Article 7)                                     CDS
</TABLE>

For clarification, commercial manufacturing is Commercialization for which
Alimera has primary responsibility as set forth in greater detail in Article 4.

<PAGE>

      2. Section 3.2.4 (a) of the Agreement is hereby deleted in its entirety
and the following is substituted in place thereof:

            3.2.4 Regulatory Approvals.

            (a) Regulatory Filings. Unless otherwise agreed by the Parties,
Alimera shall be responsible for all U.S. and non-U.S. regulatory matters,
including filing an IND and NDA for the first Product, provided that no
regulatory filings by Alimera shall include any Pre-Existing Clinical IP.
Alimera shall be responsible for obtaining Approvals and for subsequent
maintenance of Approvals. For all regulatory filings made in the name of
Alimera, Alimera shall have the primary authority and responsibility, with input
from CDS, for submitting supplements, communications, annual reports, adverse
event reports, manufacturing changes, supplier designations and other related
filings, and for communicating with FDA. The Party responsible for submitting
regulatory filings (the "Regulatory Submission Party") shall provide the other
Party (the "Regulatory Non-Submission Party") with copies of all substantive
submissions to (which may be in draft form), and all correspondences from, the
FDA or other regulatory authorities. The Regulatory Non-Submission Party may
provide comments regarding such submission prior to such planned submission, and
the Regulatory Submission Party shall consider in good faith incorporating into
the planned submission any such comments. The Regulatory Non-Submission Party
shall supply Know-How necessary to obtain Approvals for each Product.

      3. Section 6.2 of the Agreement is hereby deleted in its entirety and the
following is substituted in place thereof:

      6.2 Milestone Payments. Alimera shall make an additional payment of
[*] to CDS ("Milestone Payment"), which shall be disbursed as follows:

            (a)   [*] upon [*]

            (b)   [*] upon execution of this Amendment No. 2; and

            (c)   [*] when a [*]

      4. Except as otherwise set forth in this Amendment No. 2, the terms of the
Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this instrument to be executed by
their duly authorized representatives.

CONTROL DELIVERY SYSTEMS, INC.              ALIMERA SCIENCES, INC.

    /s/ Michael J. Soja                         /s/ Daniel H. White
By:____________________________             By:_____________________________

      Michael J. Soja                             Daniel H. White
Name:__________________________             Name:___________________________

                                                   VP Finance and Corporate
       VP Finance                                  Development
Title:_________________________             Title:__________________________

[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.