Document:

EX-10.1

 

Exhibit 10.1

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

RESEARCH AND FEASIBILITY AGREEMENT

C060616

     This Research and Feasibility Agreement (this “Agreement”) is dated as of
March 26, 2007 by and between Electro-Optical Sciences, Inc., a Delaware
corporation (“EOS”), and L’Oreal, a corporation organized under French law
(“L’Oreal”) (EOS and L’Oreal each a “Party”, and collectively, the “Parties”).

RECITALS

     1.1. WHEREAS, EOS has developed and owns certain proprietary EOS Technology (as defined
below), for which it is seeking regulatory approval in various jurisdictions;

     1.2. WHEREAS, EOS owns or controls (as defined below) patents, know-how, and other
proprietary rights in relation thereto;

     1.3. WHEREAS, L’Oreal has developed certain proprietary cosmeceutical products for the
treatment of various skin conditions, and possesses patents, know-how, and other proprietary
rights in relation thereto, including in vitro model systems;

     1.4. WHEREAS, EOS and L’Oreal desire to study [*] the skin [*];

     1.5. WHEREAS, EOS and L’Oreal desire to conduct a two-phase study for such purpose on the terms and
conditions set forth below, the first phase using an [*] model developed by L’Oreal, and the second
phase a clinical study conducted using biopsied pigmented skin lesions;

     1.6. WHEREAS, the further goal of EOS and L’Oreal is to evaluate the feasibility of using
the EOS Technology to differentiate in vivo human [*] lesions from
other pigmented skin lesions [*];

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

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ARTICLE II DEFINITIONS

     2.1. “Affiliate” of a Person shall mean any other Person that directly, or indirectly through
one or more intermediaries, controls, is controlled by or is under common control with such Person.
For purposes of this definition only, “control” and, with correlative meanings, the terms
“controlled by” and “under common control with” shall mean (A) the possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract, resolution, regulation or
otherwise, or (B) the ownership, directly or indirectly, of more than fifty percent (50%) of the
voting securities or other ownership interest of a Person.

     2.2. “Agreement” shall have the meaning set forth in the preamble hereto.

     2.3. “Applicable Law” shall mean the applicable laws, rules, and regulations, including,
without limitation, any rules, regulations, guidelines or other requirements of the Regulatory
Authorities that may be in effect from time to time.

     2.4. “Business Day” shall mean a day that is not a Saturday, Sunday, or day on which banking
institutions in New York, New York, or Paris, France, are required by law to remain closed.

     2.5. “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar
months ending on March 31, June 30, September 30, and December 31.

     2.6. “Confidential Information” shall have the meaning set forth in Section 6.1 hereof.

     2.7. “Control” shall mean, with respect to any item of information or other intellectual
property, possession of the right, whether directly or indirectly, and whether by ownership,
license or otherwise (other than by operation of the license and other grants in this Agreement),
to assign or grant a license, sublicense or other right to or under such information or
intellectual property right as provided for herein.

     2.8. “Disclosing Party” shall have the meaning set forth in Section 6.1 hereof.

     2.9. “Dispute” shall have the meaning set forth in Section 8.2(a) hereof.

     2.10. “Effective Date” shall mean the date set forth in the preamble hereto.

     2.11. “EOS” shall have the meaning set forth in the preamble hereto.

     2.12. “EOS Improvements” shall have the meaning set forth in Section 5.1(a) hereof.

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     2.13. “EOS Know-How” shall mean all Know-How owned or otherwise Controlled by EOS that relates
to the EOS Technology and is reasonably necessary or useful in the performance of the Feasibility
Activities designated for L’Oreal.

     2.14. “EOS Patents” shall mean any and all Patents owned or otherwise Controlled by EOS, to
the extent that such Patents relate to the EOS Technology.

     2.15. “EOS Technology” shall mean (i) the EOS proprietary, non-invasive, point-of-care
instrument known as Melafind, and the corresponding methods for imaging, analyzing, diagnosing, or
reporting with respect to malignant, non-malignant, medical and non-medical conditions of the skin
or other biological tissues, including melanoma; and (ii) all multispectral devices and
multispectral methods for imaging, analyzing, diagnosing, or reporting with respect to pigmented
conditions of the skin (malignant, non-malignant, medical, and non-medical), including melanoma.

     2.16. “Feasibility Activities” shall mean all activities that are performed by or on behalf
of either Party as specifically included in the Feasibility Program.

     2.17. “Feasibility Budget” shall mean the budget for the Feasibility Activities to be
performed by EOS, and for the Feasibility Activities to be performed by third parties under a
separate agreement, as updated from time to time pursuant to Section 3.2(b). The initial
Feasibility Budget is set forth in Exhibit A hereto.

     2.18. “Feasibility Plan” shall mean the detailed program of tests and studies set forth in
Exhibit B hereto, as amended by the Parties from time to time in writing.

     2.19. “Feasibility Program” shall have the meaning set forth in Section 3.1 hereof.

     2.20. “Improvement” shall mean any modification to a compound, composition, product or
technology or to any discovery, device, method of analysis or quantization, process or formulation
related to such compound, composition, product or technology, whether or not patented or
patentable, including, without limitation, any enhancement in the efficiency, operation,
manufacture, ingredients, preparation, presentation, formulation, means of delivery, packaging or
dosage of a compound, composition, product or technology, or of any discovery, device, process or
formulation related thereto; any discovery or development of any new or expanded indications or
applications for a compound, composition, product or technology; any discovery or development that
improves the stability, performance, profile, efficiency, safety or efficacy of a compound,
composition, product or technology; or any discovery or development of a new dosage regimen for a
product or method of use or administration for a compound, composition, product or technology.

     2.21. “Information and Inventions” shall mean all technical, scientific and other know-how
and information, trade secrets, knowledge, technology, means, methods, processes, practices,
formulas, instructions, skills, techniques, procedures, experiences, ideas, technical assistance,
designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data,
results and other material, including, without limitation,

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Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

pre-clinical and clinical trial results, manufacturing procedures, test procedures, and
purification and isolation techniques, (whether or not confidential, proprietary, patented or
patentable) in written, electronic or any other form now known or hereafter developed, and all
Improvements, whether to the foregoing or otherwise, and all other discoveries, developments,
inventions (whether or not confidential, proprietary, patented or patentable), and tangible
embodiments of any of the foregoing.

     2.22. “Know-How” shall mean any Information and Inventions that are not generally known and
are not claimed in or covered by Patents.

     2.23. “L’Oreal” shall have the meaning set forth in the preamble hereto.

     2.24. “L’Oreal Field” shall mean all skin disorders relating to [*], excluding
melanoma, pigmented basal and squamous cell carcinomas, and pigmented
pre-cancerous lesions. For
the avoidance of doubt, the L’Oreal Field shall not include the diagnosis of any medical
conditions.

     2.25. “L’Oreal Know-How” shall mean all Know-How owned or otherwise Controlled by L’Oreal
that relates to the L’Oreal Products, Technologies and Methods or the L’Oreal Field and is
reasonably necessary or useful in the performance of the Feasibility Activities designated for
EOS.

     2.26. “L’Oreal Patents” shall mean any and all Patents owned or otherwise Controlled by
L’Oreal, to the extent that such Patents relate to the L’Oreal Products, Technologies and Methods
or the L’Oreal Field.

     2.27. “L’Oreal Products, Technologies and Methods” shall mean certain of L’Oreal’s
proprietary products, technologies and methods for the treatment of various skin conditions, as
more specifically described on Exhibit C hereto. L’Oreal Products, Technologies and Methods
includes L’Oreal’s proprietary [*].

     2.28. “Party” shall have the meaning set forth in the preamble hereto.

     2.29. “Patent” shall mean (a) all national, regional and international patents and patent
applications, including provisional patent applications, (b) all patent applications filed either
from such patents, patent applications or provisional applications or from an application claiming
priority from any of these, including divisional, continuations, continuations-in-part,
provisional, converted provisional, and requests for continued prosecution, (c) any and all
patents that have issued or in the future issue from the foregoing patent applications ((a) and
(b)), including utility models, petty patents and design patents and certificates of invention,
(d) any and all extensions or restorations by existing or future extension or restoration
mechanisms, including revalidations, reissues, re-examinations and extensions (including any
supplementary protection certificates and the like) of the foregoing patents or patent
applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline
protection or any importation, revalidation, confirmation or introduction patent or registration
patent or patent of additions to any of such foregoing patent applications and patents.

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     2.30. “Person” shall mean an individual, sole proprietorship, partnership, limited
partnership, limited liability partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture or other similar
entity or organization, including without limitation a government or political subdivision,
department or agency of a government.

     2.31. “Receiving Party” shall have the meaning set forth in Section 6.1 hereof.

     2.32. “Regulatory Authorities” shall mean any applicable supra-national, federal, national,
regional, state, provincial or local regulatory agencies, departments, bureaus, commissions,
councils or other government entities, including, without limitation, the U.S. Food and Drug
Administration and the European Medicines Agency, exercising regulatory authority with respect to
the conduct of the Feasibility Activities.

ARTICLE III FEASIBILITY PROGRAM

     3.1. Conduct of Feasibility Program. Each Party shall use commercially reasonable efforts to
conduct and complete those activities designated for it in the Feasibility Plan or that are
otherwise required by this Article II (the “Feasibility Program”), in accordance with the schedule
set forth in the Feasibility Plan and, in the case of EOS, in accordance with the Feasibility
Budget. Each Party agrees to conduct its designated Feasibility Activities in good scientific
manner and in compliance in all material respects with Applicable Law. Further, each Party agrees
to endeavor to achieve the objectives of the Feasibility Program efficiently and expeditiously and
to allocate sufficient time, effort, equipment, and skilled personnel to complete its designated
Feasibility Activities successfully and in a timely manner.

     3.2. Coordination.

          (a) During the term of this Agreement, the contacts designated by the Parties pursuant to
Section 3.5 hereof shall discuss with each other the conduct and progress of the Feasibility
Program, by telephone or in person, not less frequently than once a month. In such discussions,
the contacts shall cover the status of the Feasibility Activities, review relevant results and
data, consider technical and other issues that have arisen, and review and advise on any
scientific and budgetary matters relating to the Feasibility Program.

          (b) Either Party may propose amendments to the Feasibility Plan. Any such proposed amendments
shall be subject to mutual agreement of the Parties. In the event that changes to the Feasibility
Plan are approved, the Parties agree that the Feasibility Budget shall be amended by mutual
agreement to reflect any anticipated changes in the costs of the Feasibility Activities designated
for EOS that are associated with such amendments to the Feasibility Plan.

     3.3. Reporting Requirements.

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          (a) Within ten (10) days after the end of each Calendar Quarter during the term of this
Agreement, each Party shall provide to the other Party a written progress report which describes
the Feasibility Activities that the first Party has performed to date, evaluate the work performed
in relation to the goals of the Feasibility Plan, and provide such other information as may be
required by the Feasibility Plan or reasonably requested by the other Party relating to the
Feasibility Program.

          (b) Within thirty (30) days after completion of the Feasibility Program, EOS shall prepare
and provide to L’Oreal a final report analyzing and evaluating the results of the Feasibility
Program.

     3.4. Regulatory Records. Each Party shall maintain records with respect to the conduct of its
designated Feasibility Activities in sufficient detail and in good scientific manner appropriate
for patent and regulatory purposes, which shall be complete and accurate and shall fully and
properly reflect all work done and results achieved in the performance of the Feasibility Program.
Each Party shall retain such records for at least five (5) years after the termination of this
Agreement, or for such longer period as may be required by Applicable Law. The other Party and its
representatives shall have the right, during normal business hours and upon reasonable notice, to
inspect and copy any such records.

     3.5. Contacts. For purposes of the Feasibility Program the contact person of the respective
Party hereto shall be the person named below or any person subsequently notified by either Party
to the other for this purpose.

	 	 	 	 	 
	 

	 	EOS:
	 	Dina Gutkowicz-Krusin (for technical matters)
	 
	 

	 	 	 	Joanna Adrian (for administrative matters)
	 
	 	 	 	 
	 

	 	L’Oreal:
	 	Olivier De Lacharrière
	 
	 

	 	 	 	Stéphanie NOUVEAU

     3.6. Subcontracting. Each Party may perform any or all of its obligations under this Article
II through one or more of its Affiliates or, with the prior written consent of the other Party,
through one or more subcontractors.

     3.7. Communications with Regulatory Authorities. EOS shall have the sole right to conduct all
communications with the Regulatory Authorities and shall have the sole responsibility to secure
any approvals required from the Regulatory Authorities in connection with the conduct of the
Feasibility Program; provided, however, that L’Oreal shall provide reasonable assistance to EOS in
securing such approvals, at EOS’s request.

     3.8. Supplies. Except as specifically set forth in the Feasibility Plan, each Party shall be
responsible for providing such equipment, materials and other supplies as it may require for the
purpose of performing its designated Feasibility Activities.

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ARTICLE IV EXPENSES AND PAYMENTS

     4.1. Costs and Expenses. L’Oreal shall be solely responsible for all costs and expenses that
it or its Affiliates or permitted subcontractors incur in connection with the Feasibility Program,
and shall reimburse all costs and expenses that EOS or its Affiliates incur in connection with the
Feasibility Program to the extent provided in Section 4.2 hereof.

     4.2. Payments to EOS. In consideration of EOS’s performance of its designated Feasibility
Activities, L’Oreal shall reimburse EOS, in the manner provided in Section 4.3 hereof, for the
costs and expenses (including such employee salaries and fully-loaded general and administrative
expenses as are allocable to the Feasibility Program) that are (i) set forth in the Feasibility
Budget and (ii) incurred by EOS or its Affiliates in connection with the conduct by EOS, its
affiliates or duly appointed third parties, of the Feasibility Program, up to the maximum amount
set forth in the Feasibility Budget. In the event that EOS reasonably anticipates that the costs
and expenses incurred in the performance of its designated Feasibility Activities will exceed such
maximum amount, the Parties shall discuss the matter in good faith and make revisions as
appropriate to the Feasibility Budget; provided, however, that EOS shall not be required to
perform such Feasibility Activities to the extent that such performance would give rise to such
overruns, in the event that the Parties fails to amend the Feasibility Budget to provide for
reimbursement of such overruns.

     4.3. Invoices and Payments. Within thirty (30) days of the commencement of each Calendar
Quarter, EOS shall send L’Oreal an invoice in the amount of the budget for such Calendar Quarter,
as set forth in the Feasibility Budget. Such invoice shall be payable by L’Oreal within thirty (30)
days after receipt thereof. Within thirty (30) days of the end of such Calendar Quarter, EOS shall
send L’Oreal (i) a statement of the total amount of reimbursable expenses incurred by EOS during
such Calendar Quarter, which statement shall be accompanied by reasonable documentation thereof,
and (ii) an invoice for the positive difference, if any, between such amount and the amount paid by
L’Oreal with respect to such Calendar Quarter pursuant to the second sentence of this Section 4.3,
which invoice shall be payable by L’Oreal within thirty (30) days after receipt thereof. In the
event that the amount paid by L’Oreal pursuant to the second sentence of this Section 4.3 with
respect to such Calendar Quarter exceeds the amount of reimbursable expenses incurred by EOS during
such Calendar Quarter, the excess shall be credited against the amount payable by L’Oreal to EOS
with respect to the following Calendar Quarter. Any delinquent payments by L’Oreal shall accrue
interest from the date on which payment was due, at the prime rate, as published in The Wall Street
Journal, Eastern United States Edition, on the last Business Day preceding such date.

     4.4. Books and Records. EOS shall maintain complete and accurate books, records and accounts
that, in reasonable detail, fairly reflect any reimbursable Feasibility Plan costs and expenses
incurred by it or its Affiliates in conformity with U.S. GAAP. EOS shall retain such books,
records and accounts until the later of (a) three (3) years after the end of the period to which
such books, records and accounts pertain, and (b) the expiration of the applicable tax statute of
limitations (or any extensions thereof), or for such longer period as may be required by
Applicable Law. Upon the written request of L’Oreal and not

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more than once in each calendar year, EOS shall permit an independent certified public accounting
firm of internationally recognized standing selected by L’Oreal, and reasonably acceptable to EOS,
to have access, during normal business hours and upon reasonable prior written notice, to such of
the records of EOS as may be reasonably necessary to verify the accuracy of the calculation of any
amounts payable by L’Oreal, for any calendar year ending not more than twenty-four (24) months
prior to the date of such request.

ARTICLE V INTELLECTUAL PROPERTY

     5.1. Ownership.

          (a) Subject to Section 5.2 hereof, as between the Parties, EOS owns all right, title and
interest in and to the EOS Know -How, the EOS Patents, and the EOS Technology. EOS shall own all
right, title and interest in and to any and all Information and Inventions relating to the EOS
Technology that either Party (or its Affiliates or subcontractors) may independently or jointly
with the other Party conceive, develop or invent in the course of performing its designated
Feasibility Activities (collectively, “EOS Improvements”). L’Oreal shall promptly disclose in
writing to EOS the development, making, conception or reduction to practice of any EOS
Improvements, assign to EOS any right, title or interest that L’Oreal may have therein, and assist
EOS as reasonably required to enable EOS to perfect its rights in such EOS Improvements. EOS shall
have the sole right, in its sole discretion, to prepare, file, prosecute, maintain, and enforce
Patents covering or claiming the EOS Improvements.

          (b) Subject to Section 5.2 hereof, as between the Parties, L’Oreal owns all right, title and
interest in and to the L’Oreal Know-How, the L’Oreal Patents, and the L’Oreal Products,
Technologies and Methods.

          (c) Subject to Section 5.2 hereof, as between the Parties, EOS shall own all right, title and
interest in and to the images generated through use of the Melafind device and any diagnostic
hematoxylin and eosin (“H&E”) slides produced by either Party in the course of the Feasibility
Program (hereinafter “New EOS Intellectual Property”); provided, however, that L’Oreal may, at its
own expense, obtain copies of such images and slides and use the same for any purpose on a
non-exclusive, royalty-free basis.

          (d) Subject to Section 5.2 hereof, as between the Parties, L’Oreal shall own all right, title
and interest in and to the clinical data and other data (other than the New EOS Intellectual
Property) generated during the Feasibility Program (hereinafter “New L’Oreal Intellectual
Property”).

          (e) It is understood and agreed that, except as expressly provided in this Section 5.1 or
Section 5.2 hereof, nothing contained in this Agreement or otherwise shall be construed to mean
that one Party will obtain any right, title or interest, by implication or otherwise, to or under
any intellectual property right of the other Party. In particular, L’Oreal will not obtain any
right, title or interest in or to the EOS Know-How, the EOS Patents, the EOS Improvements, the EOS
Technology, or the New EOS Intellectual

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Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

Property, and EOS will not obtain any right, title or interest in or to L’Oreal Know-How, the
L’Oreal Patents, the L’Oreal Products, Technologies and Methods or the New L’Oreal Intellectual
Property, in each case except as provided in this Section 5.1 and Section 5.2 hereof.

     5.2. License and Option Grants.

               (i) EOS hereby grants to L’Oreal a royalty-free, worldwide, exclusive license,
with the right to sublicense to Affiliates and permitted subcontractors, under the EOS
Know-How, the EOS Patents, the EOS Improvements, and the New EOS Intellectual Property, to
perform its designated Feasibility Activities.

               (ii) L’Oreal hereby grants to EOS a royalty-free, worldwide, exclusive license, with the
right to sublicense to Affiliates and permitted subcontractors, under the L’Oreal Know-How, the
L’Oreal Patents, the L’Oreal Products, Technologies and Methods, and the New L’Oreal Intellectual
Property, to perform its designated Feasibility Activities.

               (iii) L’Oreal hereby grants to EOS a royalty-free, worldwide, exclusive license, with the
right to sublicense to Affiliates and permitted subcontractors, under the New L’Oreal
Intellectual Property, outside the L’Oreal Field.

               (iv) EOS hereby grants to L’Oreal an option to obtain an exclusive license, on terms and
conditions to be mutually agreed, under any EOS Technology Controlled by EOS or its Affiliates,
for [*] non-medical uses, which option shall expire on the
earlier to occur of six (6) months after
Feasibility Plan completion and August 31, 2008. L’Oreal shall give EOS written notice in the event that
L’Oreal decides to exercise the option. Upon receipt by EOS of such notice, the Parties shall use
good faith efforts to negotiate and execute a definitive license agreement. In the event that the
Parties shall not have executed such a license agreement within ninety (90) days after receipt by
EOS of such notice, then such option shall automatically terminate unless otherwise mutually agreed
by the Parties.

     5.3. Clinical
 Research Agreement. The provisions of this Agreement, including
this Article 5 and Article 6 hereof, shall govern the rights and obligations of the Parties
under that certain Clinical Research Agreement among L’Oreal,
EOS and [*] relating to the Study (as defined therein).
 Such Clinical Research Agreement shall be
substantially in the form attached hereto as Exhibit D. The Study shall comprise an integral
part of the Feasibility Program.

ARTICLE VI CONFIDENTIALITY

     6.1. Confidential Information. Except to the extent permitted by this Agreement or as
otherwise agreed by the Parties in writing, the Parties agree that, at all times during the term
of the Feasibility Program and for a five (5) year period following the completion or
termination thereof, the Party receiving information (the “Receiving Party”) shall keep
confidential and shall not disclose any information (including any multispectral images and

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histological slides) furnished to it by the other Party (the “Disclosing Party”) on or after the
Effective Date pursuant to this Agreement or prior to the Effective Date pursuant to that certain
Letter Agreement of Confidentiality dated June 20, 2006 between the Parties (the “Confidential
Information”), except to the extent that the Receiving Party can establish by competent proof that
such information:

          (a) was already known to the Receiving Party, other than under an obligation of
confidentiality, at the time of disclosure by the Disclosing Party;

          (b) was part of the public domain at the time of its disclosure by the Disclosing Party;

          (c) became part of the public domain after its disclosure by the Disclosing Party, other than
through any act or omission of the Receiving Party in breach of this Agreement;

          (d) was disclosed to the Receiving Party by a third party who had no obligation not to
disclose such information to others; or

          (e) was independently developed or discovered by employees or agents of the Receiving Party
who had no access to the Confidential Information.

     6.2. Disclosure.

          (a) Each Party may disclose Confidential Information of the other Party to the extent that
such disclosure is:

               (i) made in response to a valid order of a court of competent jurisdiction or other
governmental body of a country or any political subdivision thereof of competent jurisdiction;
provided, however, that the Receiving Party shall first have given notice to the
Disclosing Party and given the Disclosing Party a reasonable opportunity to quash such order and
to obtain a protective order requiring that the Confidential Information and/or documents that are
the subject of such order be held in confidence by such court or governmental body or, if
disclosed, be used only for the purposes for which the order was issued; and provided
further that if a disclosure order is not quashed or a protective order is not obtained, the
Confidential Information disclosed in response to such court or governmental order shall be
limited to that information which is legally required to be disclosed in such response to such
court or governmental order;

               (ii) otherwise required by law, including the U.S. federal securities laws, or the rules of
any stock exchange on which such Party is listed;

               (iii) made to the Regulatory Authorities as required in connection with any filing,
application or request for regulatory approval; provided, however, that reasonable measures shall
be taken to assure confidential treatment of such information;

               (iv) made to existing or potential acquirers or merger candidates; existing or potential
pharmaceutical collaborators; investment bankers; existing or potential

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investors, venture capital firms or other financial institutions for purposes of obtaining
financing, each of whom prior to disclosure shall be bound by obligations of confidentiality at
least equivalent in scope to those set forth in this Article V; or

               (v) made by EOS or its Affiliates to third parties as may be necessary or reasonably useful in
connection with the development or commercialization of the EOS Technology, including publications
and subcontracting and sublicensing transactions in connection with such development or
commercialization.

     6.3. Use of Confidential Information. Subject to Section 6.1 hereof, the Receiving Party may
use (i) for the purpose of performing its designated Feasibility Activities, any Confidential
Information of the Disclosing Party, and (ii) for any internal purpose, such Confidential
Information of the Disclosing Party as was developed by the Disclosing Party in the performance of
its designated Feasibility Activities.

     6.4.
Notification. The Receiving Party shall notify the Disclosing Party immediately, and
cooperate with the Disclosing Party as the Disclosing Party may reasonably request, upon the
Receiving Party’s discovery of any loss or compromise of the Disclosing Party’s information.

     6.5. Remedies. Each Party agrees that the unauthorized use or disclosure of any information
by the Receiving Party in violation of this Agreement will cause severe and irreparable damage to
the Disclosing Party. In the event of any violation of this Article VI, the Receiving Party agrees
that the Disclosing Party shall be authorized and entitled to obtain from any court of competent
jurisdiction injunctive relief, whether preliminary or permanent, without the necessity of proving
irreparable harm or monetary damages, as well as any other relief permitted by applicable law. The
Receiving Party agrees to waive any requirement that the Disclosing Party post bond as a condition
for obtaining any such relief.

     6.6. Use of Name. Neither Party shall use the name, symbol, trademark, trade name or logotype
of the other Party in any publication, press release, promotional material or other form of
publicity without the prior written approval of such other Party. The restrictions imposed by this
Section shall not prohibit either Party from making any disclosure identifying the other Party
that is required by applicable law.

ARTICLE VII TERM AND TERMINATION

     7.1. Term. This Agreement shall commence as of the Effective Date and, unless earlier
terminated in accordance with this Article VII, shall remain in force until the later to occur of
(i) the completion of the Feasibility Program or (ii) the second anniversary of the Effective
Date, or as otherwise mutually agreed by the Parties.

     7.2. Termination. This Agreement shall be subject to termination (a) by either Party in the
event of a material breach hereof by the other Party, which breach is not cured within thirty (30)
days (or, in the case of a payment default, ten (10) Business Days)

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following written notice thereof by the non-breaching party, or (b) by mutual agreement of the
Parties.

     7.3. Effect of Termination. The termination of this Agreement, shall be without prejudice to
any rights or obligations of the parties that may have accrued prior to such termination, and the
provisions of Sections 3.3, 3.4, 4.3, 4.4, 5.1, 5.2, 9.3, 9.6, 9.12, and 9.13, Articles VI and
VIII, and this Section 7.3 shall survive the termination of this Agreement. Except as otherwise
expressly provided herein, termination of this Agreement in accordance with the provisions hereof
shall not limit any remedies that may otherwise be available to a Party in law or equity.

ARTICLE VIII GOVERNING LAW AND DISPUTE RESOLUTION

     8.1. Governing Law. This Agreement shall be governed and interpreted in accordance with
English law, without regard to its conflict of law principles.

     8.2. Dispute Resolution.

          (a) The Parties shall negotiate in good faith and use reasonable efforts to settle any
dispute, controversy or claim arising from or related to this Agreement (or any document or
instrument delivered in connection herewith) (each, a “Dispute”). In the event that the Parties
are unable, within ten (10) days, to reach a resolution, such Dispute shall be referred to
designees of the chief executive officers of EOS and L’Oreal, who shall attempt in good faith to
reach a resolution of the Dispute. If the foregoing procedures fail to achieve a mutually
satisfactory resolution within thirty (30) days, then either Party may, by written notice to the
other Party, elect to have the matter settled by binding arbitration pursuant to Section 8.2(b).

          (b) Any arbitration under this Agreement shall take place at a location to be agreed by the
Parties; provided, however, that in the event that the Parties are unable to agree on a
location for an arbitration under this Agreement within five (5) days of the demand therefor, such
arbitration shall be held in London, England. Any arbitration under this Agreement shall be
administered by the London Court of International Arbitration under its Commercial Arbitration
Rules (the “Rules”). The Parties shall appoint an arbitrator by mutual agreement. If the Parties
cannot agree on the appointment of an arbitrator within thirty (30) days of the demand for
arbitration, an arbitrator shall be appointed in accordance with the Rules. The arbitrator shall
have the authority to grant any equitable and legal remedies that would be available in any
judicial proceeding instituted to resolve the Dispute submitted to such arbitration in accordance
with this Agreement; provided, however, that the arbitrator shall not have the
power to alter, amend or otherwise affect the terms or the provisions of this Agreement. Judgment
upon any award rendered pursuant to this Section may be entered by any court having jurisdiction
over the Parties other assets. The arbitrator shall have no authority to award punitive or any
other type of damages not measured by a Party’s compensatory damages. Each Party shall bear its
own costs and expenses and attorneys’ fees and an equal share of the arbitrator’s fees and any
administrative fees of

Page 12

 

CONFIDENTIAL

arbitration, unless the arbitrator shall otherwise allocate such costs, expenses and fees between
the Parties. The Parties agree that all arbitration awards shall be final and binding on the
Parties and their Affiliates. The Parties hereby waive the right to contest the award in any court
or other forum. Except to the extent necessary to confirm an award or as may be required by law,
neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration
without the prior written consent of both Parties. In no event shall an arbitration be initiated
after the date when commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable English statute of limitations.

          (c) Nothing in this Section 8.2 shall preclude either party from seeking interim or
provisional relief, including without limitation a temporary restraining order, preliminary
injunction, or other interim equitable relief concerning a Dispute if necessary to protect the
interests of such party. This Article VIII shall be specifically enforceable.

ARTICLE IX MISCELLANEOUS

     9.1. Force Majeure. Neither Party shall be held liable or responsible to the other Party or
be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or
performing any term of this Agreement, when such failure or delay is caused by or results from
causes beyond the reasonable control of the non-performing Party, including fires, floods,
embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances, acts of God
or acts, omissions or delays in acting by any governmental authority. The non-performing Party
shall notify the other Party of such force majeure within ten (10) days after such occurrence by
giving written notice to the other Party stating the nature of the event, its anticipated
duration, and any action being taken to avoid or minimize its effect. The suspension of
performance shall be of no greater scope and no longer duration than is necessary and the
non-performing Party shall use commercially reasonable efforts to remedy its inability to perform;
provided, however, that in the event the suspension of performance continues for one-hundred and
eighty (180) days after the date of the occurrence, the Parties shall meet and discuss in good
faith how best to proceed.

     9.2. Export Control Regulations. The rights and obligations of the Parties under this
Agreement shall be subject in all respects to United States laws and regulations as shall from
time to time govern the license and delivery of technology and products between the United States
and other countries, including the United States Foreign Assets Control Regulations, Transaction
Control Regulations and Expert Control Regulations, as amended, and any successor legislation
issued by the Department of Commerce, International Trade Administration, Office of Export
Licensing. Without in any way limiting the provisions of this Agreement, each Party agrees that,
unless prior authorization is obtained from the Office of Export Licensing, it shall not export,
re-export, or transship, directly or indirectly, to any country, any of the technical data
disclosed to it by the other party if such export would

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CONFIDENTIAL

violate the laws of the United States or the regulations of any department or agency of the United
States Government.

     9.3. Notices. All notices, requests and other communications hereunder must be in writing and
will be deemed to have been duly given only if delivered personally against written receipt or by
facsimile transmission with answer back confirmation or by internationally-recognized overnight
courier to the Parties at the following addresses or facsimile numbers:

	 	 	 	 	 
	 

	 	If to EOS to:
	 	Electro-Optical Sciences, Inc.
	 

	 	 	 	3 West Main Street, Suite 201
	 

	 	 	 	Irvington, New York
	 

	 	 	 	Attention: Chief Executive Officer
	 

	 	 	 	Fax: 914-591-3701
	 
	 	 	 	 
	 

	 	With a copy to:
	 	James C. Snipes, Esq.
	 

	 	 	 	Covington & Burling LLP
	 

	 	 	 	One Front Street
	 

	 	 	 	San Francisco, CA 94111
	 

	 	 	 	Fax: 415-955-6571
	 
	 	 	 	 
	 

	 	If to L’Oreal to:
	 	L’OREAL
	 

	 	 	 	90 rue du Général Roguet
	 

	 	 	 	92583 Clichy Cedex
	 

	 	 	 	Attention: Dr. Olivier de LACHARRIERE
	 

	 	 	 	Phone: 01.47.56.77.35
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Alain ROMAN
	 

	 	 	 	L’OREAL
	 

	 	 	 	25-29 quai Aulagnier
	 

	 	 	 	92600 Asnières
	 

	 	 	 	Fax: 01.47.56.72.12
	 

	 	 	 	Phone: 01.47.56.85.64

     All such notices, requests and other communications will (a) if delivered personally to the
address as provided in this Section, be deemed given upon receipt, (b) if delivered by facsimile
to the facsimile number as provided in this Section, be deemed given upon receipt by Sender of the
answer back confirmation and (c) if delivered by internationally-recognized courier service to the
address as provided in this Section, be deemed given three (3) business days after acceptance by
the overnight courier service (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice, request or other
communication is to be delivered pursuant to this Section). Any Party from time to time may change
its address, facsimile number or other information for the purpose of notices to that Party by
giving notice specifying such change to the other parties hereto. It is understood and agreed that
this Section 9.3 is not intended to

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CONFIDENTIAL

govern the day-to-day business communications necessary between the Parties in
performing their duties, in due course, under the terms of this Agreement.

     9.4. Representations and Warranties. Each Party represents and warrants to the other Party as
follows: (i) it is a duly organized and validly existing corporation under the laws of its
jurisdiction of incorporation; (ii) it has full corporate power and authority and has taken all
corporate action necessary to enter into and perform this Agreement; (iii)the execution and
delivery of this Agreement and the transactions contemplated herein do not violate, conflict with,
or constitute a default under its articles of incorporation or similar organizational document,
its bylaws, or the terms or provisions of any material agreement or other instrument to which it
is a party or by which it is bound, or any order, award, judgment or decree to which it is a party
or by which it is bound; (iv) this Agreement is its legal, valid and binding obligation,
enforceable in accordance with the terms and conditions hereof; and (v) to the best of its
knowledge, the exercise by such other Party of its rights under Section 5.2 hereof will not
infringe the intellectual property rights of any third party. EXCEPT FOR THOSE WARRANTIES SET
FORTH IN THIS SECTION 9.4, EACH PARTY HEREBY DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS AND
TERMS, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING (A) ANY WARRANTY OF QUALITY,
PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE, (B) ANY WARRANTY WITH
RESPECT TO THE VALIDITY OR ENFORCEABILITY OF ANY PATENT OR OTHER INTELLECTUAL PROPERTY, AND (C)
ANY WARRANTY THAT THE PERFORMANCE OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WILL NOT INFRINGE THE
INTELLECTUAL PROPERTY RIGHTS OF ANY PERSON. NO PARTY MAKES ANY REPRESENTATIONS HEREUNDER OTHER
THAN THOSE SET FORTH EXPRESSLY HEREIN.

     9.5. Entire Agreement; Amendment. This Agreement, including the Exhibits hereto, constitutes
the entire agreement between the Parties with respect to the subject matter hereof, and supersedes
and cancels all previous agreements and understandings, whether oral or in writing, in respect of
the subject matter hereof, including that certain Letter Agreement of Confidentiality dated June
20, 2006, and may not be amended or modified except by an express declaration in writing signed on
behalf of EOS and L’Oreal by duly authorized officers and referring specifically to this
Agreement.

     9.6. Further Assurances. Each Party shall duly execute and deliver, or cause to be duly
executed and delivered, such further instruments and do and cause to be done such further acts and
things, including without limitation the execution, delivery, and filing of such assignments,
agreements, documents and instruments, as may be necessary or as the other Party may reasonably
request in connection with this Agreement or to carry out more effectively the provisions and
purposes hereof, or to better assure and confirm unto such other Party its rights and remedies
under this Agreement.

     9.7. Successors and Assigns. The terms and provisions hereof shall inure to the benefit of,
and be binding upon, EOS, L’Oreal and their respective Affiliates, successors and permitted
assigns. The representations, warranties, covenants and agreements set forth in

Page 15

 

CONFIDENTIAL

this Agreement are for the sole benefit of the Parties and their successors and permitted assigns,
and they shall not be construed as conferring any rights on any other Persons.

     9.8. Assignment. Except as expressly provided herein, neither Party may, without the prior
written consent of the other Party, sell, transfer, assign, delegate, pledge, or otherwise dispose
of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of
its rights or duties hereunder; provided, however, that EOS may, without such consent, assign this
Agreement and its rights and obligations hereunder to an Affiliate, to the purchaser of all or
substantially all of its assets related to the EOS Technology, or to its successor entity or
acquiror in the event of a merger, consolidation or change in control of EOS; and provided,
further, that L’Oreal may, without such consent, assign this Agreement and its rights and
obligations hereunder to an Affiliate, to the purchaser of all or substantially all of its assets
related to the L’Oreal Products, Technologies and Methods, or to its successor entity or acquirer
in the event of a merger, consolidation or change in control of L’Oreal. Any attempt to assign,
transfer, subcontract or delegate any portion of this Agreement in violation of this Section shall
be null and void. All validly assigned and delegated rights and obligations of the parties
hereunder shall be binding upon and inure to the benefit of and be enforceable by and against the
successors and permitted assigns of EOS or L’Oreal, as the case may be. In the event either Party
seeks and obtains the other Party’s consent to assign or delegate its rights or obligations to
another Party, the assignee or transferee shall assume all obligations of its assignor or
transferor under this Agreement and the performance of such obligations must be guaranteed in
writing by the assignor or transferor.

     9.9. Waiver. Any term or condition of this Agreement may be waived at any time by the Party
that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in
a written instrument duly executed by or on behalf of the Party waiving such term or condition. No
waiver by a Party hereto of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.

     9.10. Severability. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, and if the rights or obligations of any Party under
this Agreement will not be materially and adversely affected thereby, (a) such provision shall be
fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and reasonably acceptable to the Parties. To the
fullest extent permitted by applicable law, each Party hereby waives any provision of law that
would render any provision hereof prohibited or unenforceable in any respect.

     9.11. Independent Contractors. The status of the Parties under this Agreement shall be that
of independent contractors. Nothing in this Agreement is intended or shall be

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CONFIDENTIAL

deemed to constitute a partnership, agency, employer, employee, or joint venture relationship
between the Parties. Neither Party shall have the right to enter into any agreements on behalf of
the other Party, nor shall it represent to any Person that it has any such right or authority.

     9.12. Construction. Except where the context otherwise requires, wherever used
the singular shall include the plural, the plural the singular, the use of any gender shall be
applicable to all genders and the word “or” is used in the inclusive sense. The term
“including” as used herein shall mean including, without limiting the generality of any
description preceding such term. The captions of this Agreement are for convenience of
reference only and in no way define, describe, extend, or limit the scope or intent of this
Agreement or the intent of any provision contained in this Agreement. The language of this
Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of
strict construction shall be applied against either Party.

     9.13. English Language. This Agreement shall be written and executed in the
English language. Any translation into any other language shall not be an official version
thereof, and in the event of any conflict in interpretation between the English version and
such translation, the English version shall control. All notices and other disclosure
required
of the Parties hereunder shall be in English.

     9.14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which, taken
together, shall constitute one and the same instrument.

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year first
above written.

	 	 	 	 	 	 	 	 	 	 	 
	ELECTRO-OPTICAL SCIENCES, INC.	 	 	 	L’OREAL	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/
Joseph V. Guifo	 	 	 	By:	 	/s/ Jacques Leclaire	 	 
	Name:

	 	Joseph V. Guifo	 	 	 	Name:
	 	Jacques Leclaire 	 	 
	Title:

	 	March
26, 2007	 	 	 	Title:	 	16/3/07	 	 

Page 17

 

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

EXHIBIT A

[*]

Project Budget — January 31, 2007

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Action	 	Responsible Parties	 	Hours	 	Rate	 	Other Costs	 	Total
	Protocol development
	 	EOS / L’Oreal	 	 	[*]	 	 	$	[*]	 	 	$	—	 	 	 	[*]	 
	Database design
	 	EOS	 	 	[*]	 	 	$	[*]	 	 	$	—	 	 	 	[*]	 
	Database development
	 	EOS	 	 	[*]	 	 	$	[*]	 	 	$	—	 	 	 	[*]	 
	Clinical Research Agreements
	 	EOS / Corporate Counsel	 	 	[*]	 	 	$	[*]	 	 	$	[*]	 	 	 	[*]	 
	Site visit
	 	EOS	 	 	[*]	 	 	$	[*]	 	 	$	[*]	 	 	 	[*]	 
	Field and Technical support
	 	EOS	 	 	[*]	 	 	$	[*]	 	 	$	[*]	 	 	 	[*]	 
	Central dermatohistopathology for reference standard
	 	EOS	 	 	[*]	 	 	$	—	 	 	$	[*]	 	 	 	[*]	 
	Study coordination
	 	EOS / L’Oreal	 	 	[*]	 	 	$	[*]	 	 	$	—	 	 	 	[*]	 
	Image processing
	 	EOS	 	 	[*]	 	 	$	[*]	 	 	$	—	 	 	 	[*]	 
	Algorithm development
	 	EOS	 	 	[*]	 	 	$	[*]	 	 	 	 	 	 	 	[*]	 
	Estimated Costs
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 
	+10%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 
	 
	Total Estimated Budget
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 
	 

 

 

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

[*]

EXHIBIT B

[*]

L’OREAL — R&D, Life Sciences

Prospective Clinical Research

[*]

Goals
Definitions

	 	 	 	[*]

Study
steps

- Phase 1: [*]

The phase 1 will goal on [*] calibration of Melafind®.

. In vitro measurements (L’Oréal)

Measurements
will be done on phantoms based on in vitro L’Oréal technology.

. Model development (EOS)

Phase 2: [*]

The phase 2 will goal on in vivo measurements with Melafind® of [*]
associated to histological assessment.

.
Data collection (clinical studies [*]). (L’Oréal)

.
Histology [*].  (L’Oréal)

. Model Development — Validation. (EOS)

			
	 	 	 
	March 19th, 2007
	 	CONFIDENTIAL — L’OREAL

This document is the
property of/ L’Oréal. Reproduction prohibited without
written agreement of L’Oréal

Page 1 of 4

 

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

[*]

Time schedule

	 	 	 	 	 
	 

	 	April 2007:
	 	Planning
	 

	 	May 2007:
	 	Skin samples production
	 

	 	June 2007:
	 	Image acquisition with Melafind®
	 

	 	July/Sept. 2007:
	 	Model development

			
	 	 	 
	March 19th, 2007 
	 	CONFIDENTIAL — L’OREAL

This document is the
property of L’Oréal. Reproduction prohibited without
written agreement of L’Oréal

Page 2 of 4

 

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

[*]

			
	 	 	 
	March 19th, 2007 
	 	CONFIDENTIAL — L’OREAL

This document is the
property of L’Oréal. Reproduction prohibited without
written agreement of L’Oréal

Page 3 of 4

 

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

[*]

Study management

Promotor: L’Oréal Recherche

The study will be managed by L’Oréal and EOS.

Time schedule

	 	 	 	 	 
	 

	 	April/May 2007:
	 	Clinical protocol initiation
	 

	 	June/Nov 2007:
	 	Collection of clinical cases
sections staining and reading [*]
	 

	 	April/July 2007:
	 	Training phase for horizontal sections
	 

	 	July/Dec 2007:
	 	Histological staining [*]
	 

	 	Dec./Feb. 2008:
	 	Model development, Validation

			
	 	 	 
	March 19th, 2007 
	 	CONFIDENTIAL — L’OREAL

This document is the
property of L’Oréal. Reproduction prohibited without
written agreement of L’Oréal

Page 4 of 4

 

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

[*]

 

Exhibit C

Exhibit C

L’OREAL ‘s proprietary products, technologies and methods

[*]

			
	 	 	 
	February 12th, 2007
	 	CONFIDENTIAL — L’OREAL

This document is the property of L’Oréal. Reproduction prohibited without written agreement of
L’Oréal

Page 1 of 1

 

Certain portions of this Exhibit have been omitted and filed separately with the Securities
and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.

CONFIDENTIAL

EXHIBIT D

CLINICAL RESEARCH AGREEMENT

This Clinical Research Agreement (this “Agreement”) is made by and between:

L’OREAL, a Company organized and existing under the laws of France, having its office situated at
14 rue Royale, 75008 Paris, France, represented for the purpose of this Agreement by Mr. J.
LECLAIRE acting as Director of Advanced Research, Life Sciences
situated 90, rue du Général Roguet
- 92583 Clichy cedex, France, hereinafter referred to as “L’OREAL”,

AND

Electro-Optical Sciences, Inc., a Delaware Corporation, 3 West Main Street, Suite 201, Irvington
New York 10533, represented for the purpose of this Agreement by Joseph V. Gulfo, M.D., as Chief
Executive Officer, hereinafter referred to as “EOS”

L’OREAL and EOS being hereinafter referred to collectively as the “Sponsors”

AND

[       ], represented for the purpose of this Agreement by Ralph Braun, M.D., acting as
Investigator, hereinafter the “Institution”

Sponsors and Institution being hereinafter referred to collectively as the “Parties”

RECITALS:

	-	 	The Sponsors have concluded a Research and Feasibility Agreement under which they have decided
to sponsor jointly a clinical trial.
	 
	-	 	Consequently, the Sponsors have proposed to the Institution which has agreed to, and is
equipped to, carry out a clinical study entitled, [*] (hereinafter referred to in this Agreement as the “Study”);
	 
	-	 	To that effect, the Sponsors have written a technical protocol (including appendices),
attached to this Agreement and made an integral part of it (hereinafter referred to as the
“Protocol”).
	 
	-	 	It is the intention of all Parties that the Institution will proceed with the conduct of the
Study in accordance with the Protocol and its attachment, under the terms and conditions set
forth below.

IT HAS BEEN AGREED AS FOLLOWS.

ARTICLE 1: DEFINITIONS

	-	 	The “Volunteer(s)”: shall mean volunteer(s) entered by the Investigator into the Study
satisfying the recruitment criteria set out in the Protocol.
	 
	-	 	“Case Report Form”: shall mean the completed data form provided to Sponsors by Institution
in respect of each Volunteer included in the Study.

Page 1

 

CONFIDENTIAL

	-	 	The “Investigator” shall mean Dr. Ralph Braun, or such other person as designated pursuant
to Section 2.1.
	 
	-	 	The “Study Staff” shall mean the Investigator and all other employees, contractors and
agents performing or assisting with the Study on behalf of the Institution.
	 
	-	 	The “Results” shall mean the Case Report Forms, electronic databases required under the
Protocol, Study reports prepared by the Institution for the Sponsors and the underlying
data compilations, including the final report provided for in the Protocol (“Final
Report”), any other deliverables required by the Protocol, and any other documents or
records generated hereunder.
	 
	-	 	The “Sponsor Data” shall mean the Protocol, the operations manuals provided by the
Sponsors for use at the Study site, and any other scientific, technical, business, or
other data or information relating to the Test Materials (as defined in Article 4) or
this Agreement that is disclosed to the Institution by the Sponsors.

ARTICLE 2: GENERAL

	2.1.	 	The Institution shall conduct and supervise the Study through the Investigator, who shall be
an employee of the Institution. The Institution shall notify the Sponsors promptly if the
Investigator is unable or unwilling to continue the Study or if the Investigator’s
affiliation with the Institution ceases, whereupon the Sponsors will have a right of approval
with respect to the designation of a new Investigator, subject to Section 11.3.
	 
	2.2.	 	Under the conditions of this Agreement, the Institution shall (and shall cause the
Investigator to) conduct the Study in strict compliance with this Agreement, the Protocol (as
amended from time to time), all reasonable written instructions of the Sponsors, all
applicable laws, regulations and guidelines governing clinical trials, including current good
clinical practice guidelines of the International Conference on Harmonization (ICH) Guidance
E6, “Good Clinical Practice,” and associated national implementing legislation and guidelines
(“Applicable Law”); provided, however, that the Institution may deviate from the Protocol and
such instructions to the extent that the safety of the Volunteers so requires.
	 
	2.3.	 	The Institution shall deliver the Results, including the Final Report, to the Sponsors on
the schedule provided for in the Protocol.
	 
	2.4.	 	Under this Agreement, the primary contacts for the Study shall be the Investigator at the
Institution, Dr. O. de LACHARRIERE at L’OREAL and Dr. J. GULFO at EOS.
	 
	2.5.	 	The Study shall be performed at the Institution and shall commence as soon as proper
authorizations are obtained and be completed no later than the dates agreed upon by the
Parties in the Protocol, subject to the terms of Article 11.
	 
	2.6.	 	Any modification to this Agreement or the Protocol shall only be implemented by a written
document signed by all Parties.
	 
	2.7.	 	Nothing in this Agreement shall be construed as to create any relationship between the
Sponsors and the Institution on the one hand, and between the Sponsors and the Investigator
on the other hand, other than that of independent contracting parties. No Party shall have
any right, power, authority to assume, create or incur any expense, liability, or obligation,
express or implied, on behalf of any other.

ARTICLE 3: GENERAL OBLIGATIONS OF THE INSTITUTION

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CONFIDENTIAL

	3.1.	 	Before beginning the Study, the Institution shall obtain and have in place (i) appropriate
authorizations and approvals of the Study, Protocol and a written form of the Informed Consent
mutually acceptable to the Institution and the Sponsors, compliant with Applicable Law and the
rules of the relevant Ethics Committee (hereinafter referred to as the “Committee”) and (ii)
valid informed consents (“Informed Consent”) signed by each Volunteer. No change to the
Protocol and/or the Informed Consent form may be made without prior written approval of the
Sponsors and the Committee, except when such change is necessary to eliminate apparent
immediate hazard to the Volunteers, in which case the Institution shall notify the Sponsors
and the Committee immediately.
	 
	3.2.	 	The Institution shall (and shall cause the Investigator to) conduct the Study in a manner
consistent with the Informed Consents, the Applicable Law and all other applicable approvals,
authorizations and consents.
	 
	3.3.	 	The Institution shall comply with Applicable Law in the collection, storage, and transfer of
any samples or other biological materials taken from Volunteers, and shall obtain any
Informed Consents required for the use of such materials in accordance with the Protocol. Any
use of such materials by a Party, whether in the Study or otherwise, shall be consistent with
such Informed Consents and Applicable Law.
	 
	3.4.	 	The Institution shall supervise the Study Staff and shall ensure (directly in the case of
employees, and by contract in the case of contractors) that all Study Staff are appropriately
trained, qualified, and certified, and are informed of and abide by the applicable terms of
this Agreement.

ARTICLE 4: SUPPLY OF TEST MATERIALS

EOS shall provide the Institution with the Melafind system to be used for the performance of
the Study (“Test Materials”). The Institution shall (and shall cause the Study Staff, including
the Investigator, to) use the Test Materials only for the performance of the Study, and to refrain
from using the Test Materials in any manner that is contrary to the provisions of, or outside the
scope of, the Protocol or the written instructions of the Sponsors.

ARTICLE 5: MEETINGS

The Sponsors and the Institution shall meet as necessary, upon sixty (60) days’ notice given by
one of the Parties.

ARTICLE 6: ADVERSE EVENTS

The Institution undertakes to report immediately, by e-mail, confirmed by facsimile or mail, to
the Sponsors any injury or illness to a Volunteer that is directly related to the use of the Test
Materials or the performance of any other procedure in accordance with the Protocol or the
Sponsor’s written instructions (“Adverse Events”). The Sponsor shall reimburse medical expenses
related to any Adverse Events in accordance with Article 10.

ARTICLE 7: MAINTENANCE OF RECORDS

	7.1.	 	The Institution shall keep the Sponsors informed of the Study’s status, shall maintain such
Study data and records as are required by the Protocol and Applicable Law (the “Study
Documents”), and shall maintain the Study Documents for at least as long as required by the
Protocol and Applicable Law.

Page 3

 

CONFIDENTIAL

	7.2.	 	Sponsors shall have the unrestricted right to use all information resulting from the Study
for any and all purposes consistent with the Applicable Law and the Informed Consents, provided
that Volunteer confidentiality is maintained.

	7.3.	 	The Institution shall make available to the Sponsors the Study site, the Study Staff, and,
subject to Applicable Law relating to patient confidentiality, the Study Documents for
purposes of review and audit upon reasonable advance notice during regular business hours.

	7.4.	 	The Institution shall make the Study Documents available for the purposes of any audit by a
regulatory authority or by the Committee. The Institution shall promptly notify the Sponsors,
in advance if practicable, of any audit by a regulatory authority, which audit is directly
related to the Study and, to the extent possible and permissible, permit the Sponsors to
review and comment in advance on any written communication from the Institution to the
regulatory authority in connection with such audit and permit the Sponsors’ representatives
to be present at such audit.

ARTICLE 8: CONFIDENTIALITY; OWNERSHIP OF DATA AND DOCUMENTS

	8.1.	 	It is understood by the Parties that the Institution shall (and shall cause the Investigator
and Study Staff to), (i) treat (a) any and all information transmitted by the Sponsors for the
purpose of the Study, including Sponsor Data, (b) the Results and (c) source data included in the
Results (collectively referred to in this Agreement as the “Information”) as strictly confidential,
(ii) not transmit or transfer any of the Information to any third party other than the Committee, and
(iii) use the Information only for the purpose of the Study in strict compliance with the
Protocol.
	 
	 	 	The Institution shall be allowed to disclose the Information, on a need-to-know basis, to
the Study Staff, to Volunteers and physicians (prospective or otherwise) as is reasonably
necessary with regard to obtaining Informed Consent or the medical treatment of the
Volunteers, or to any governmental authority as required by law. The Institution shall
exercise due care and take all necessary measures to prevent any unauthorized disclosure or
use of the Information by those persons and ensure that such persons are subject to the
confidentiality provisions of this Article.

	8.2.	 	The above mentioned provisions shall not apply to such part of the Information which:

	 	-	 	at the time of disclosure by the Sponsors is in the public domain; or
	 
	 	-	 	after disclosure by the Sponsors, comes into the public domain otherwise than by
fault of the Institution or Study Staff, including the Investigator; or
	 
	 	-	 	the Institution can conclusively prove in writing was known to it prior to its
disclosure by the Sponsor or was independently developed by the Institution or the
Study Staff, including the Investigator; or
	 
	 	-	 	the Institution can prove to have been lawfully obtained from an independent
third party having an unrestricted right to disclose and use it.

	8.3.	 	The Sponsors shall be the exclusive owners of the Results and the Sponsor Data, including the
related copyrights. The Sponsors shall comply with Applicable Law regarding the
confidentiality of Volunteers’ medical records and other health information, shall hold the
Volunteers’ personal identifying information in confidence, and
shall act in accordance with
the Informed Consents. Subject to the foregoing, the Sponsors may copy Institution records
containing such information to the extent permitted by Applicable Law and the express
authorization of Informed Consents from relevant Volunteers. The Sponsors shall not attempt
to contact any Volunteer except to the extent expressly permitted by the Committee or as
required to comply with Applicable Law.

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CONFIDENTIAL

	8.4.	 	All rights, title, and interest in “Source Documents” (as defined by International
Conference on Harmonization (ICH) Guidance E6 “Good Clinical Practice”) generated by the
Institution in the course of the Study shall be the sole and exclusive property of the
Institution.

	8.5.	 	The Institution shall (and shall cause the Investigator to):

	 	-	 	comply with all applicable laws and regulations with respect to the processing
of all personal data collected by the Institution or Investigator in connection with
the Study (the “Personal Data”) relating to any Volunteer, together with any next of
kin, if appropriate, and/or any other person about whom data may be collected in
connection with the Study (“Data Subject”);
	 
	 	-	 	ensure that the Institution and Investigator only collect the categories of data
specified in the Protocol;
	 
	 	-	 	collect and process Personal Data only in accordance with the Protocol and only
for the Study;
	 
	 	-	 	not disclose Personal Data to any third party without the prior written consent
of Sponsors except in accordance with this Agreement. The Institution shall, whenever
possible, notify Sponsors prior to complying with any request for disclosure and shall
comply with all reasonable directions of Sponsors with respect to such disclosure;
	 
	 	-	 	except as required by applicable law or regulation, not transfer Personal Data
outside the European Economic Area (EEA) without the consent of Sponsors;
	 
	 	-	 	ensure that all Personal Data are accurate and kept up to date and that Personal
Data that are inaccurate or incomplete are corrected or completed;
	 
	 	-	 	anonymize the Personal Data if requested in writing by Sponsors;
	 
	 	-	 	notify Sponsors (and in any event within five (5) days of receipt) of any
communication received from a Data Subject relating to access rights;
	 
	 	-	 	ensure that all measures specified in the Protocol or required by law or
guidance are taken to protect Personal Data against accidental or unlawful destruction,
loss or damage, alteration and against all unauthorized disclosure or access and all
other unauthorized forms of processing; and
	 
	 	-	 	comply with its obligations (if any) under Applicable Law to notify any
applicable supervisory authority of its collection and processing activities under this
Agreement and further agrees to take all such steps as may be reasonably required from
time to time in order to enable Sponsors to comply with any notification obligation.

	8.6.	 	Sponsors shall be entitled to publish the Results and Sponsor Data, provided that the name
of the Institution is mentioned in such publication and that Sponsors shall first inform the
Institution of such publication. The Institution shall be entitled to delete its name. The
Institution shall not publish all or any part of the Results or Sponsor Data without the
prior written consent of the Sponsors.

	8.7.	 	The Institution shall promptly disclose, and shall cause the Study Staff to promptly
disclose to the Sponsors in writing any (a) patentable inventions (“Inventions”) made
in the performance of the Study by or on behalf of the Institution, and (b) any know-how,
unpatentable inventions, or other discoveries made in the performance of the Study by or on
behalf of the Institution.

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	8.8.	 	As between the Parties, the Sponsors shall own all right, title, and interest in and to any
Invention (i) made solely by employees or agents of the Sponsors; (ii) made in the performance
of the Study solely by employees or agents of the Institution or jointly by employees or
agents of the Institution and employees or agents of the Sponsors that relates to the Test
Materials or any diagnostic, prophylactic, or therapeutic use of the Test Materials; or (iii)
made in violation of the Protocol. The Institution shall (and shall cause the Investigator to)
execute all documents as are necessary to confer such exclusive ownership upon Sponsors and to
cooperate and assist Sponsor (at Sponsors’ expense as
necessary), in the preparation, filing
and prosecution of any patent applications that Sponsors determine, in their sole discretion,
are necessary to protect its interest in Inventions. Any other Invention made jointly by
employees or agents of the Institution and employees or agents of the Sponsors shall be
jointly owned by the Sponsors and the Institution, and any other Invention made solely by the
Institution’s employees or agents shall be the sole and exclusive property of the Institution.

	8.9.	 	The obligation of confidentiality and of non-use under this Agreement shall remain in full
force and effect for a period of ten (10) years from the expiration or termination of this
Agreement for whatever reason.

	8.10.	 	The Institution undertakes (and shall cause the Investigator) to immediately return to the
Sponsors at the end of the Study, or the termination of this Agreement should this Agreement
be earlier terminated for whatever reason, any and all Information (other than the Source
Documents), without retaining copies thereof; any remaining Test Materials; and any equipment
on loan or lease from the Sponsors, in each case except as required by Applicable Law and
Article 7 of this Agreement.

ARTICLE 9: FINANCIAL TERMS

	9.1.	 	For conducting the Study in compliance with terms and conditions of its Protocol, the
Institution shall be paid by L’OREAL on behalf of the Sponsors
the amount of           , which
represents the fair market value of the covered costs.
	 
	 	 	It is understood and agreed that modifications to the Protocol can lead to modifications to
its agreed budget. In such a case, a revised budget will be established and shall have to be
accepted by all Parties before implementation of the modifications.
	 
	 	 	Institution agrees that: (a) all claims that either Institution or Investigator submit for
reimbursement to any third party payor for any procedure that involves any materials
(including, but not limited to, Test Materials) provided by or on behalf of Sponsor at no
cost to Institution will accurately reflect the provision of those materials by or on behalf
of Sponsor; (b) Institution will not seek reimbursement from any third party payor for any
amounts paid by Sponsor; (c) any equipment supplied by Sponsors for use in the Study will be
used solely in connection with the Study; and (d) Institution shall secure all necessary
approvals, permissions, authorizations or permits required by Applicable Laws, guidelines or
internal Institution policies and shall make all necessary disclosures necessary to accept
fees payable to Institution under this Agreement.

9.2. The payment shall be made upon receipt by L’OREAL of invoices, according to the following
schedule, subject to Article 11:

	 	-	 	50% at the signing of this Agreement,
	 
	 	-	 	50% at the time of delivery of the Final Report.

The invoices shall be sent to L’OREAL — To the attn of Mrs. Nathalie VIVIEZ — Controller — 1
avenue Eugène Schueller — 93601 Aulnay-sous-Bois.

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ARTICLE 10: COMPENSATION AND INDEMNIFICATION

	10.1.	 	If any Adverse Events occur as a result of the direct conduct of the Study, the Sponsors
undertake to provide compensation for actual and reasonable medical expenses incurred in
treating any injury or illness to a Volunteer, provided that the Institution (including the
Investigator and Study Staff):

	-	 	has conducted the Study in accordance with the Protocol or Sponsor’s written instructions;
	 
	-	 	has not acted negligently;
	 
	-	 	has not violated any Applicable Laws or any applicable instructions of Sponsors;
	 
	-	 	has not made any warranty regarding the Test Materials.

	10.2.	 	The Sponsors are not required to provide reimbursement under
Section 10.1 for (a) other
injury- or illness-related costs (such as lost wages),
(b) medical expenses that are paid for
by a third party (provided that neither the Institution nor the Volunteer shall be obligated
to seek reimbursement from a third party insurer), medical expenses for injury or illness
unrelated to the Test Materials and unrelated to the proper performance of any other
procedure required by the Protocol or Sponsor’s written instructions.

	10.3.	 	The Sponsors shall indemnify, defend, and hold harmless the Institution and its officers,
directors, employees, and agents from any loss, liability, damage, or expense (including
reasonable attorneys’ fees and costs until such time as the Sponsors assume the defense) from
any claim of bodily injury that might arise directly from the proper administration of the
Test Materials or the proper performance of any procedure in accordance with the Protocol or
the Sponsors’ written instructions (or if the Sponsors’ written instructions conflict with
the Protocol, the Sponsors’ written instructions only);
provided, however,
that to the extent that the claim is a direct result of (a) the failure of the Institution or
one of its officers, employees, or agents (including the Investigator) to follow the Protocol
or the Sponsors’ written instructions (each when applicable), accepted medical practice, or
Applicable Law, or (b) any other negligence or willful misconduct of the Institution or one
of its officers, employees, or agents (including the Investigator), the Sponsors shall have
no such obligation, and the Institution shall indemnify, defend, and hold harmless the
Sponsors (and their officers, directors, employees, and agents, as applicable) from any loss,
liability, damage or expense, but only to the extent arising from any such claim.

	10.4.	 	The obligation of the indemnifying party under Article 10.3 shall apply only if the party
seeking indemnification provides prompt notification upon receipt of notice of any claim,
loss or expense along with all material related information, permits the indemnifying party
to manage the defense and settlement of any claim, and fully cooperates and assists in the
defense. The party seeking indemnification further agrees that it will not settle or
compromise any such claim or suit without the prior written consent of the indemnifying
party.

ARTICLE 11: DURATION AND TERMINATION RIGHTS

	11.1.	 	This Agreement shall become effective as of its date of signature by both parties, and
shall remain in full force and effect, unless sooner terminated as provided below, until the
completion of the Study and receipt by the Sponsors of the Results, which is expected to be
twelve months from the date of signature.

	11.2.	 	The Sponsors may terminate this Agreement upon thirty (30) days’ written notice to the
Institution in their sole discretion.

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CONFIDENTIAL

	11.3.	 	Either party may, at any time, immediately terminate this Agreement, and consequently put an
end to the Study, by providing:

	 	-	 	written notice to the other party if the other party commits any material breach
of its obligations hereunder and fails to remedy such breach within thirty (30) days
after being called upon to do so by prior written notice;
	 
	 	-	 	written notice to the other party if laws, regulations or
governmental actions
substantially frustrate this Agreement;
	 
	 	-	 	thirty (30) days’ written notice to the other party for failure of the Parties
to agree upon a new Investigator pursuant to Article 2.1;
	 
	 	-	 	written notice to the other party, if the Parties are unable to agree on
amendments to this Agreement related to amendments to the Protocol pursuant to Article
2.6; and
	 
	 	-	 	oral notice (promptly followed by written notice) to the other party if the
terminating party determines that termination of the Study is necessary for the safety
of the Volunteers.

Termination shall be effective automatically without prior judicial resolution as of the date
of receipt of the letter of termination.

	11.4.	 	In case of termination of this Agreement under Articles 11.2 or 11.3, the Institution shall
cease enrolling Volunteers immediately (or, in the case of termination by the Sponsors, as soon as
the Institution has been notified of such termination), and shall cease conducting the
procedures set out in the Protocol to the extent that doing so is medically permissible and appropriate.
	 
	 	 	Sponsors shall reimburse the Institution for (i) obligations incurred in accordance with the
Study budget that cannot be cancelled or mitigated by the Institution using reasonable
efforts, (ii) reasonable costs incurred in connection with the safe withdrawal of Volunteers
from the Study, and (iii) mutually agreed post-termination expenses. In case of termination
by the Sponsor because of a fault of the Institution, the Institution shall reimburse any
advance payment made in connection with the Study by the Sponsors which exceeds the cost so
calculated. In case of termination by the Institution because of a fault of the Sponsors,
all expenses relating to the Study in progress to date shall be paid by the Sponsors.
	 
	 	 	The Sponsors and the Institution shall negotiate in good faith on the subsequent treatment
or transfer of the Volunteers. The Institution shall, and shall cause the Investigator to,
return to the Sponsors, at the Sponsors’ expense, within thirty (30) days the Test Materials
(except as required by law), any equipment on loan or lease from the Sponsors, and any
copies of Information provided by the Sponsors that are in the possession or under the
control of the Institution or the Investigator; provided, however, that the Institution may
retain any copies of such Information to the extent required by Applicable Law.
	 
	 	 	The Institution shall deliver to the Sponsors, within ninety (90) days after expiration or
early termination of this Agreement, a final accounting of amounts due (and reasonable
supporting documentation, which requirement shall be satisfied by properly completed Case
Report Forms as to completed visits by Volunteers), taking into account payments made and
not yet made under Article 9, and expenses reimbursabie pursuant to Section 10.1 from one
Party to the other Party. Undisputed amounts due shall be paid within sixty (60) days
thereafter.
	 
	 	 	The rights and obligations of the Parties that have accrued prior to the expiration or
termination of this Agreement, and Articles [1, 7, 8, and 10], Sections [12.7, 12.8 and
12.9] and this Section 11.4 shall survive the expiration or termination of this Agreement.

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ARTICLE 12: OTHER PROVISIONS

	12.1	 	RIGHTS AND OBLIGATIONS BETWEEN L’OREAL AND EOS
	 
	 	 	As between the Sponsors, L’Oreal and EOS, the respective rights and obligations pursuant to
this Agreement shall be determined in accordance with the Research and Feasibility Agreement
dated as of [        ] by and between L’Oreal and EOS.

	12.2	 	DEBARMENT
	 
	 	 	The Institution certifies that it will not engage, directly or indirectly, any person
(including the Investigator) to perform services under this Agreement if that person is
debarred, excluded, prohibited, disqualified or under consideration to be debarred, excluded,
prohibited or disqualified, by any relevant regulatory authority or under any applicable law
or regulation, from conducting clinical research or working in, or providing services to, any
pharmaceutical or biotechnology company.
	 
	 	 	The Institution certifies that it will immediately notify the Sponsors in writing if any such
debarment, exclusion, prohibition or disqualification occurs, or if any such debarment,
exclusion, prohibition or disqualification proceeding, action, or investigation is commenced
or, to the Institution’s knowledge, is threatened, with respect to any such person.
	 
	12.3	 	FORCE MAJEURE
	 
	 	 	Neither Party shall be liabie to the other for failure to perform any obligation on its part
herein contained for so long as and to the extent that such performance is prevented by
reason of Force Majeure provided, however, that the affected Party notifies the other Party
of any Force Majeure circumstances within ten (10) days after their occurrence. Force
Majeure shall mean any unforeseen circumstance of whatever kind which is beyond the control
of the affected Party. The following circumstances shall be deemed to fall within the above
definition: Act of God, war, national emergency, civil commotion, fire, tempest, flood or
natural disasters. Should Force Majeure circumstances persist for more than three (3) months
from the date of their notification, then the Parties shall mutually agree on the
appropriate measures to be taken.
	 
	12.4.	 	AUTHORITY
	 
	 	 	The Institution shall ensure, and represents that it, before signing this Agreement, has the
necessary power and authority to cause all Study Staff (including the Investigator) to
strictly comply with the Institution’s obligations under this Agreement and the Protocol.
	 
	12.5.	 	ASSIGNMENT
	 
	 	 	The Institution shall not assign its rights or delegate its responsibilities hereunder
without the prior written consent of the Sponsors.
	 
	12.6.	 	SEVERABILITY
	 
	 	 	If any part, term or provision of this Agreement is determined to be invalid or
unenforceable, the remainder of this Agreement shall not be affected, and this Agreement
shall otherwise remain in full force and effect.
	 
	12.7.	 	GOVERNING LAW

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CONFIDENTIAL

This Agreement shall be governed by the substantive law of the country where the
Investigator is carrying out the Study without regard to any choice of law principles that
would dictate the application of the law from another jurisdiction.

	12.8.	 	LITIGATION
	 
	 	 	If any dispute arises out of this Agreement, the Parties shall endeavor to settle such
dispute amicably between themselves. If the Parties fail to agree, the settlement shall be
made in accordance with the Rules of Conciliation and Arbitration of the International
Chamber of Commerce, by one or more arbitrators appointed in accordance with said rules.
Arbitration shall be conducted in the English language and held in Geneva, Switzerland..
	 
	12.9.	 	NOTICES
	 
	 	 	The Parties shall send notices in writing, referencing this Agreement. Notice shall be
deemed given: (a) when delivered personally; (b) one (1) day after having been sent by
facsimile, with a copy sent promptly by registered or certified mail, return receipt
requested, postage prepaid; (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (d) three (3) days after
deposit with an internationally recognized courier service, with written verification of
receipt. Notice shall be given to the addresses below (or to such other addressee as a Party
subsequently designates pursuant to this Section 12.9):

	 	 	 	 	 	 	 
	 

	 	To Institution:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Attention:	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Facsimile:	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	with a copy to	the Investigator	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	To L’OREAL:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Attention: Dr. O de LaCharriere	 	 
	 

	 	 	 	Facsimile:	 	 
	 

	 	 	 	 

	 	 
	 

	 	To EOS:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Attention: Dr. Gulfo	 	 
	 

	 	 	 	Facsimile:	 	 
	 

	 	 	 	 

	 	 

	12.10.	 	ENTIRE AGREEMENT
	 
	 	 	This Agreement, together with the Exhibits hereto, constitutes the entire agreement of the
Parties with respect to its subject matter, and supersedes all previous written or oral
representations, agreements, and understandings between the Parties with respect to that
subject matter. This Agreement may only be amended by a written document signed by all
Parties. In the event of any conflict between the terms of the Protocol and this Agreement,
this Agreement shall control.

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IN WITNESS THEREOF, the Parties have caused this Agreement to be executed in three (3) original
copies by their duly authorized representatives.

	 	 	 
	For L’OREAL	 	For EOS
	 
	By: J. LECLAIRE

	 	By: JOSEPH V. GULFO
	Director of Advanced Research,

	 	Chief Executive Officer
	Life Sciences
	 	 
	 
	 	 
	Date:

	 	Date:
	 
	 	 
	FOR THE INSTITUTION
	 	 
	 
	 	 
	By:
	 	 
	 
	 	 
	Date:
	 	 
	 
	 	 
	READ AND ACKNOWLEDGED:
	 	 
	 
	 	 
	By: Dr.
	 	 
	Investigator
	 	 
	 
	 	 
	Date:
	 	 

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     CONFIDENTIAL

ANNEX 

PROTOCOL

Page 12<PAGE>

                                                                     EXHIBIT 4.1

                           DUSA PHARMACEUTICALS, INC.

                          2006 EQUITY COMPENSATION PLAN
                           AS AMENDED OCTOBER 18, 2006

     The purpose of the DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan
(the "Plan") is to provide (i) designated employees of DUSA Pharmaceuticals,
Inc. (the "Company") and its parents and subsidiaries, (ii) certain consultants
and advisors who perform services for the Company or its parents or
subsidiaries, and (iii) non-employee members of the Board of Directors of the
Company (the "Board") with the opportunity to receive grants of incentive stock
options, nonqualified stock options, stock awards, and stock appreciation
rights. The Company believes that the Plan will encourage the participants to
contribute materially to the growth of the Company, thereby benefiting the
Company's shareholders, and will align the economic interests of the
participants with those of the shareholders.

     1.   ADMINISTRATION

     (a) Committee. The Plan shall be administered and interpreted by the
members of the Compensation Committee of the Board (the "Committee"), which
consists of "outside directors" as defined under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and related Treasury regulations,
and "non-employee directors" as defined under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). However, the Board may
ratify or approve any grants as it deems appropriate, and the Board shall
approve and administer all grants made to non-employee directors. The Committee
may delegate authority to one (1) or more delegates as it deems appropriate.

     (b) Committee Authority. The Committee or its delegate shall have the sole
authority to (i) determine the individuals to whom grants shall be made under
the Plan; (ii) determine the type, size, and terms of the grants to be made to
each such individual; (iii) determine the time when the grants will be made and
the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability; (iv) amend
the terms of any previously issued grant; and (v) deal with any other matters
arising under the Plan. Notwithstanding anything in this Plan to the contrary,
in no event may the Board, the Committee or its or their delegate (i) amend or
modify an Option in a manner that would reduce the exercise price of such
Option; (ii) substitute an Option for another Option with a lower exercise
price; (iii) cancel an Option and issue a new Option with a lower exercise price
to the holder of the cancelled Option within six (6) months following the date
of the cancellation of the cancelled Option; (iv) cancel an outstanding Option
that is under water (i.e., for which the Fair Market Value, as defined below, of
the underlying Shares are less than the Option's Exercise Price, as defined
below) for the purpose of granting a replacement Grant (as defined below) of a
different type; (v) grant a full value performance award pursuant to Section 6
that vests in less than one year from the date of grant; (vi) grant a full value
award that is not subject to performance vesting that vests in less than three
years; or (vii) waive the minimum vesting periods described in Sections 1(b)(v)
or (vi) above.

     (c) Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements, and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.

     (d) Other Equity Awards. The terms of this Plan shall not impact or govern
the administration by the Company or the rights of any holders of an option or
stock award granted pursuant to the DUSA Pharmaceuticals, Inc., 1996 Omnibus
Plan, as amended (the "Prior Plan"). Unless otherwise provided by the Company
and agreed to by the recipient of an award under the Prior Plan, all awards
granted pursuant to the Prior Plan shall continue to be governed by the terms of
such plan.

<PAGE>
     2.   GRANTS

     (a) Awards under the Plan may consist of grants of incentive stock options
as described in Section 5 ("Incentive Stock Options"), nonqualified stock
options as described in Section 5 ("Nonqualified Stock Options") (Incentive
Stock Options and Nonqualified Stock Options are collectively referred to as
"Options"), stock awards as described in Section 6 ("Stock Awards") and Stock
Appreciation Rights described in Section 7 ("SARs") (hereinafter collectively
referred to as "Grants"). All Grants shall be subject to the terms and
conditions set forth herein and to such other terms and conditions consistent
with this Plan and as specified in the individual grant instrument or an
amendment to the grant instrument (the "Grant Instrument"). All Grants shall be
made conditional upon the Grantee's acknowledgement, in writing or by acceptance
of the Grant, that all decisions and determinations of the Company shall be
final and binding on the Grantee, his or her beneficiaries and any other person
having or claiming an interest under such Grant. Grants under a particular
Section of the Plan need not be uniform as among the grantees.

     3.   SHARES SUBJECT TO THE PLAN

     (a) Shares Authorized. Subject to adjustment as described below, (i) the
maximum aggregate number of shares of common stock of the Company ("Company
Stock") that may be issued or transferred under any forms of grants under the
Plan is the lesser of (i) 20% of the total number of shares of common stock of
the Company issued and outstanding at any given time less the number of shares
issued and outstanding under any other equity compensation plan of the Company
at such time; or (ii) 3,888,488 shares less the number of shares issued and
outstanding under any other equity compensation plan of the Company from time to
time, all of which may be issued as Incentive Stock Options. The maximum
aggregate number of shares of Company Stock that shall be subject to Grants made
under the Plan to any individual during any calendar year shall be 300,000
shares, subject to adjustment as described below. The shares may be authorized
but unissued shares of Company Stock or reacquired shares of Company Stock,
including shares purchased by the Company on the open market for purposes of the
Plan. If and to the extent Options granted under the Plan terminate, expire, or
are canceled, forfeited, exchanged, or surrendered without having been exercised
or if any Stock Awards (including restricted Stock Awards received upon the
exercise of Options) are forfeited, the shares subject to such Grants shall
again be available for purposes of the Plan.

     (b) Adjustments. If there is any change in the number or kind of shares of
Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares; (ii) by
reason of a merger, reorganization, or consolidation; (iii) by reason of a
reclassification or change in par value; or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Company Stock as a
class without the Company's receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a
spinoff or the Company's payment of an extraordinary dividend or distribution,
the maximum number of shares of Company Stock available for Grants, the maximum
number of shares of Company Stock that any individual participating in the Plan
may be granted in any year, the number of shares covered by outstanding Grants,
the kind of shares issued under the Plan, and the price per share of such Grants
may be appropriately adjusted by the Company to reflect any increase or decrease
in the number of, or change in the kind or value of, issued shares of Company
Stock to preclude, to the extent practicable, the enlargement or dilution of
rights and benefits under such Grants; provided, however, that any fractional
shares resulting from such adjustment shall be rounded down to the nearest whole
share. Any adjustments determined by the Company shall be final, binding, and
conclusive.

     4.   ELIGIBILITY FOR PARTICIPATION

     (a) Eligible Persons. All employees of the Company and its parents or
subsidiaries ("Employees"), including Employees who are officers or members of
the Board, and members of the Board who are not Employees ("Non-Employee
Directors") shall be eligible to participate in the Plan. Consultants and
advisors who perform services for the Company or any of its parents or
subsidiaries ("Key Advisors") shall be eligible to participate in the Plan if
the Key Advisors render bona fide services to the Company or its parents or
subsidiaries, the services are not in connection with the offer and sale of
securities in a capital-raising transaction, and the Key Advisors do not
directly or indirectly promote or maintain a market for the Company's
securities.

                                      -2-

<PAGE>

     (b) Selection of Grantees. The Company shall select the Employees,
Non-Employee Directors, and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant. Employees,
Key Advisors, and Non-Employee Directors who receive Grants under this Plan
shall hereinafter be referred to as "Grantees."

     5.   GRANTING OF OPTIONS

     The Company may grant an Option to an Employee, Non-Employee Director, or
Key Advisor. The following provisions are applicable to Options.

     (a) Number of Shares. The Company shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to Employees,
Non-Employee Directors, and Key Advisors.

     (b) Type of Option and Price.

          (i) Incentive Stock Options are intended to satisfy the requirements
of Section 422 of the Code. Nonqualified Stock Options are not intended to so
qualify. Incentive Stock Options may be granted only to employees of the Company
or its parents or subsidiaries, as defined in Section 424 of the Code.
Nonqualified Stock Options may be granted to Employees, Non-Employee Directors,
and Key Advisors.

          (ii) The purchase price (the "Exercise Price") of Company Stock
subject to an Option may be equal to or greater than the Fair Market Value (as
defined below) of a share of Company Stock on the date the Option is granted;
provided, however, that (x) the Exercise Price of an Incentive Stock Option
shall be equal to, or greater than, the Fair Market Value of a share of Company
Stock on the date the Incentive Stock Option is granted and (y) an Incentive
Stock Option may not be granted to an Employee who, at the time of grant, owns
or beneficially owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any parent or
subsidiary of the Company, unless the Exercise Price per share is not less than
one hundred ten percent (110%) of the Fair Market Value of Company Stock on the
date of grant.

          (iii) So long as the Company Stock is publicly traded, the Fair Market
Value per share shall be determined as follows: (x) if the principal trading
market for the Company Stock is a national securities exchange or the NASDAQ
National Market, the last reported sale price thereof on the relevant date or
(if there were no trades on that date) the latest preceding date upon which a
sale was reported, or (y) if the Company Stock is not principally traded on such
exchange or market, the mean between the last reported "bid" and "asked" prices
of Company Stock on the relevant date, as reported on NASDAQ or, if not so
reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Company determines. If the Company Stock is not publicly traded or, if publicly
traded, is not subject to reported transactions or "bid" or "asked" quotations
as set forth above, the Fair Market Value per share shall be as determined by
the Company.

     (c) Option Term. The term of any Option shall not exceed seven (7) years
from the date of grant. However, an Incentive Stock Option that is granted to an
Employee who, at the time of grant, owns or beneficially owns stock possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, or any parent or subsidiary of the Company, may not have a
term that exceeds five (5) years from the date of grant.

     (d) Exercisability of Options.

          (i) Options shall become exercisable in accordance with such terms and
conditions of the Plan and specified in the Grant Instrument. The Company may
accelerate the exercisability of any or all outstanding Options at any time for
any reason.

          (ii) The Company may provide in a Grant Instrument that the Grantee
may elect to exercise part or all of an Option before it otherwise has become
exercisable. Any shares so purchased shall be restricted shares and shall be
subject to a repurchase right in favor of the Company during a specified
restriction period, with

                                      -3-

<PAGE>

the repurchase price equal to the lesser of (i) the Exercise Price or (ii) the
Fair Market Value of such shares at the time of repurchase, and (iii) any other
restrictions determined by the Company.

     (e) Grants to Non-Exempt Employees. Options granted to persons who are
non-exempt employees under the Fair Labor Standards Act of 1938, as amended,
shall have an Exercise Price not less than one hundred percent (100%) of the
Fair Market Value of the Company Stock on the date of grant, and may not be
exercisable for at least six (6) months after the date of grant (except that
such Options may become exercisable upon the Grantee's death, Disability or
retirement, or upon a Change in Control or other circumstances permitted by
applicable regulations).

     (f) Termination of Employment, Disability, or Death.

          (i) Except as provided below, an Option may only be exercised while
the Grantee is employed by, or providing service to, the Employer (as defined
below) as an Employee, Key Advisor or member of the Board. In the event that a
Grantee ceases to be employed by, or provide service to, the Employer for any
reason other than Disability, death, termination for Misconduct, or as set forth
in subsection 5(f)(v) of this Plan, any Option which is otherwise exercisable by
the Grantee shall terminate unless exercised within ninety (90) days after the
date on which the Grantee ceases to be employed by, or provide service to, the
Employer (or within such other period of time as may be specified by the
Company), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided, any of the Grantee's Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide service to, the Employer shall terminate as of such date.

          (ii) In the event the Grantee ceases to be employed by, or provide
service to, the Employer on account of a termination by the Employer for
Misconduct, any Option held by the Grantee shall terminate at the time that the
Grantee ceases to be employed by, or provide service to, the Employer or the
date on which such Option would otherwise expire, if earlier. In addition,
notwithstanding any other provisions of this Section 5, if the Company
determines that the Grantee has engaged in conduct that constitutes Misconduct
at any time while the Grantee is employed by, or providing service to, the
Employer or after the Grantee's termination of employment or service, any Option
held by the Grantee shall terminate as of the thirtieth (30th) day after the
date on which such Misconduct first occurred, or the date on which such Option
would otherwise expire, if earlier. Upon any exercise of an Option, the Company
may withhold delivery of share certificates pending resolution of an inquiry
that could lead to a finding resulting in a forfeiture.

          (iii) In the event the Grantee ceases to be employed by, or provide
service to, the Employer because the Grantee is Disabled, any Option which is
otherwise exercisable by the Grantee shall terminate unless exercised within one
(1) year after the date on which the Grantee ceases to be employed by, or
provide service to, the Employer (or within such other period of time as may be
specified by the Company), but in any event no later than the date of expiration
of the Option term. Except as otherwise provided, any of the Grantee's Options
that are not otherwise exercisable as of the date on which the Grantee ceases to
be employed by, or provide service to, the Employer shall terminate as of such
date.

          (iv) If the Grantee dies while employed by, or providing service to,
the Employer, all of the unexercised outstanding Options of Grantee shall become
immediately exercisable and remain exercisable for a period of one (1) year from
his or her date of death, but in no event later than the date of expiration of
the Option term. If the Grantee dies within ninety (90) days after the date on
which the Grantee ceases to be employed or provide service on account of a
termination specified in Section 5(f)(i) above (or within such other period of
time as may be specified by the Company), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised within one (1) year
after the date on which the Grantee ceases to be employed by, or provide service
to, the Employer (or within such other period of time as may be specified), but
in any event no later than the date of expiration of the Option term. Except as
otherwise provided, any of the Grantee's Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or
provide service to, the Employer shall terminate as of such date.

          (v) Notwithstanding anything herein to the contrary, to the extent
that any Company-sponsored plan or arrangement, or any agreement to which the
Company is a party expressly provides for a longer exercise period for a
Grantee's Options under applicable circumstances than the exercise period that
is provided for

                                      -4-

<PAGE>

in this Section 5(f) under those circumstances, then the exercise period set
forth in such plan, arrangement or agreement applicable to such circumstances
shall apply in lieu of the exercise period provided for in this Section 5(f).

          (vi) For purposes of this Section 5(f) and Section 6:

          (A) The term "Employer" shall mean the Company and its parent and
     subsidiary corporations or other entities, as determined by the Board.

          (B) "Employed by, or provide service to, the Employer" shall mean
     employment or service as an Employee, Key Advisor or member of the Board
     (so that, for purposes of exercising Options or SARs and satisfying
     conditions with respect to Stock Awards, a Grantee shall not be considered
     to have terminated employment or service until the Grantee ceases to be an
     Employee, Key Advisor or member of the Board).

          (C) "Disability" shall mean a Grantee's becoming disabled within the
     meaning of the Employer's long-term disability plan applicable to the
     Grantee, as determined in the sole discretion of the Committee or its
     delegate.

          (D) "Misconduct" means (i) any activity that constitutes a material
     violation of a provision of the Company's handbook or a breach of any
     conduct clause in an employment agreement between the Company and Grantee;
     (ii) indictment for, or conviction of, a crime that constitutes a felony or
     for which imprisonment for more than one year is a possible penalty; or
     (iii) habitual or regular intoxication.

     (g) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company. The Grantee shall pay the Exercise Price for an Option as specified by
the Company (i) in cash, (ii) payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board, or (iii) by
such other method as the Company may approve. Shares of Company Stock used to
exercise an Option shall have been held by the Grantee for the requisite period
of time to avoid adverse accounting consequences to the Company with respect to
the Option. The Grantee shall pay the Exercise Price and the amount of any
withholding tax due (pursuant to Section 8).

     (h) Limits on Incentive Stock Options. Each Incentive Stock Option shall
provide that, if the aggregate Fair Market Value of the Company Stock on the
date of the grant with respect to which Incentive Stock Options are exercisable
for the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds One
Hundred Thousand Dollars ($100,000), then the Option, as to the excess, shall be
treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be
granted to any person who is not an Employee of the Company or a parent or
subsidiary (within the meaning of Section 424(f) of the Code) of the Company.

     (i) Formula Grants. Non-Employee Directors shall be eligible to receive a
nonqualified stock option under the Plan. Each individual who agrees to become a
Non-Employee Director shall receive, on June 30th of the first year of such
service or as of the close of business thirty (30) days following his/her
election, whichever shall first occur, and without the exercise of the
discretion of any person, an Option relating to the purchase of 15,000 shares of
Company Stock at an exercise price equal to the Fair Market Value on the date
the Option is granted. Thereafter, on June 30th of each year, each individual
who is a continuing Non-Employee Director shall receive, without the exercise of
the discretion of any person, an Option under the Plan relating to the purchase
of 10,000 shares of Company Stock. Each Option granted under this paragraph
shall vest in full on the date of the grant and have a term not to exceed seven
(7) years from the date of grant, or, if later, the date the Grantee becomes a
Non-Employee Director. Notwithstanding the exercise period of any such Option,
all such Options shall immediately become exercisable upon (i) the death of
Non-Employee Director while serving as such, or (ii) upon a Change of Control.

                                      -5-

<PAGE>

     6.   STOCK AWARDS

     The Company may transfer shares of Company Stock or cash to an Employee,
Non-Employee Director, or Key Advisor under a Stock Award. The following
provisions are applicable to Stock Awards:

     (a) General Requirements. Shares of Company Stock issued or transferred
pursuant to Stock Awards may be issued or transferred for consideration or for
no consideration, and subject to a minimum of a one (1) year vesting period for
performance awards and a minimum three (3) year vesting period for awards not
subject to performance vesting. The Committee shall not be permitted to waive
such vesting periods except in the case of death, disability, retirement, change
in control or termination of a Grantee without cause. Restrictions on Stock
Awards shall lapse over a period of time or according to such other criteria as
set forth in the Grant Instrument. The period of time during which the Stock
Award will remain subject to restrictions will be designated in the Grant
Instrument as the "Restriction Period."

     (b) Number of Shares. The Grant Instrument shall set forth the number of
shares of Company Stock to be issued or transferred pursuant to a Stock Award
and the restrictions applicable to such shares.

     (c) Requirement of Employment or Service. If the Grantee ceases to be
employed by, or provide service to, the Employer (as defined in Section 5(f))
during a period designated in the Grant Instrument as the Restriction Period, or
if other specified conditions are not met, the Stock Award shall terminate as to
all shares covered by the award as to which the restrictions have not lapsed,
and those shares of Company Stock must be immediately returned to the Company.
The Company may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

     (d) Restrictions on Transfer and Legend on Stock Certificate. During the
Restriction Period, a Grantee may not sell, assign, transfer, pledge, or
otherwise dispose of the shares of the Stock Award except to a successor under
Section 9(a). Each certificate for Stock Awards shall contain a legend giving
appropriate notice of the restrictions in the Grant. The Grantee shall be
entitled to have the legend removed from the stock certificate covering the
shares subject to restrictions when all restrictions on such shares have lapsed.
The Company may determine that it will not issue certificates for Stock Awards
until all restrictions on such shares have lapsed, or that the Company will
retain possession of certificates for Stock Awards until all restrictions on
such shares have lapsed.

     (e) Right to Vote and to Receive Dividends. During the Restriction Period,
the Grantee shall not have the right to vote shares subject to Stock Awards or
to receive any dividends or other distributions paid on such shares.

     (f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall
lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions. The Company may determine, as to any or all
Stock Awards, that the restrictions shall lapse without regard to any
Restriction Period.

     (g) Designation as Qualified Performance-Based Compensation. The Committee
may determine that Stock Awards granted to an Employee shall be considered
"qualified performance-based compensation" under Section 162(m) of the Code. The
provisions of this paragraph (g) shall apply to Stock Awards that are to be
considered "qualified performance-based compensation" under Section 162(m) of
the Code.

          (i) Performance Goals. When Stock Awards that are to be considered
"qualified performance-based compensation" are granted, the Committee shall
establish in writing (A) the objective performance goals that must be met, (B)
the performance period during which the performance goals must be met (the
"Performance Period"), (C) the threshold, target and maximum amounts that may be
paid if the performance goals are met, and (D) any other conditions that the
Committee deems appropriate and consistent with the Plan and Section 162(m) of
the Code. The performance goals may relate to the Employee's business unit or
the performance of the Company and its parents and subsidiaries as a whole, or
any combination of the foregoing. The Committee shall use objectively
determinable performance goals based on one or more of the following criteria:
stock price, earnings per share, net earnings, operating earnings, return on
assets, shareholder return, return on equity, growth in assets, unit volume,
sales, market share, or strategic business criteria consisting of one or more
objectives based on

                                      -6-

<PAGE>

meeting specified revenue goals, market penetration goals, geographic business
expansion goals, cost targets or goals relating to acquisitions or divestitures.

          (ii) Establishment of Goals. The Committee shall establish the
performance goals in writing either before the beginning of the Performance
Period or during a period ending no later than the earlier of (i) ninety (90)
days after the beginning of the Performance Period or (ii) the date on which
twenty-five percent (25%) of the Performance Period has been completed, or such
other date as may be required or permitted under applicable regulations under
Section 162(m) of the Code. The performance goals shall satisfy the requirements
for "qualified performance-based compensation," including the requirement that
the achievement of the goals be substantially uncertain at the time they are
established and that the goals be established in such a way that a third party
with knowledge of the relevant facts could determine whether and to what extent
the performance goals have been met. The Committee shall not have discretion to
increase the amount of compensation that is payable upon achievement of the
designated performance goals.

          (iii) Maximum Payment. If Stock Awards, measured with respect to the
Fair Market Value of Company Stock, are granted, not more than one hundred
thousand (100,000) shares of Company Stock may be granted to an Employee under
the Stock Award for any Performance Period.

          (iv) Announcement of Grants. The Committee shall certify and announce
the results for each Performance Period to all Grantees immediately following
the announcement of the Company's financial results for the Performance Period.
If and to the extent that the Committee does not certify that the performance
goals have been met, the grants of Stock Awards for the Performance Period shall
be forfeited or shall not be made, as applicable.

          (v) Death, Disability or Other Circumstances. The Committee may
provide that Stock Awards shall be payable or restrictions on Stock Awards shall
lapse, in whole or in part, in the event of the Grantee's death or Disability
during the Performance Period, or under other circumstances consistent with the
Treasury regulations and rulings under Section 162(m) of the Code.

     (h) Restricted Stock Units. The Committee or its delegate may grant
restricted stock units ("Restricted Units") to an Employee or Key Advisor. Each
Restricted Unit shall represent the right of the Grantee to receive an amount in
cash or Common Stock (as determined by the Committee or its delegate) based on
the value of the Restricted Unit, if performance goals established by the
Committee are met or upon the lapse of a specified vesting period. A Restricted
Unit shall be based on the Fair Market Value of a share of Company Stock or on
such other measurement base as the Committee or its delegate deems appropriate.
The Committee or its delegate shall determine the number of Restricted Units to
be granted and the requirements applicable to such Restricted Units.

     7.   STOCK APPRECIATION RIGHTS

     The Company may grant SARs to an Employee, Non-Employee Director, or Key
Advisor. The following provisions are applicable to SARs.

     (a) General Requirements. The Company may grant SARs to an Employee,
Non-Employee Director or Key Advisor separately or in tandem with any Option
(for all or a portion of the applicable Option). Tandem SARs may be granted
either at the time the Option is granted or at any time thereafter while the
Option remains outstanding; provided, however, that, in the case of an Incentive
Stock Option, SARs may be granted only at the time of the grant of the Incentive
Stock Option. Unless otherwise specified in the Grant Instrument, the base
amount of each SAR shall be equal to the per share Exercise Price of the related
Option or, if there is no related Option, the Fair Market Value of a share of
Company Stock as of the date of grant of the SAR.

     (b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to
a Grantee that shall be exercisable during a specified period shall not exceed
the number of shares of Company Stock that the Grantee may purchase upon the
exercise of the related Option during such period. Upon the exercise of an
Option, the SARs relating to the Company Stock covered by such Option shall
terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.

                                      -7-

<PAGE>

     (c) Exercisability. A SAR shall be exercisable during the period specified
in the Grant Instrument and shall be subject to such vesting and other
restrictions as may be specified. The Company may accelerate the exercisability
of any or all outstanding SARs at any time for any reason. SARs may only be
exercised while the Grantee is employed by, or providing service to, the
Employer or during the applicable period after termination of employment or
service as described in Section 5(f). A tandem SAR shall be exercisable only
during the period when the Option to which it is related is also exercisable.

     (d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, shall have a base amount not less than one hundred
percent (100%) of the Fair Market Value of the Company Stock on the date of
grant, and may not be exercisable for at least six (6) months after the date of
grant (except that such SARs may become exercisable, as determined by the
Committee, upon the Grantee's death, Disability or retirement, or upon a Change
of Control or other circumstances permitted by applicable regulations).

     (e) Value of SARs. When a Grantee exercises SARs, the Grantee shall receive
in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised, payable in Company Stock. The
stock appreciation for a SAR is the amount by which the Fair Market Value of the
underlying Company Stock on the date of exercise of the SAR exceeds the base
amount of the SAR as described in subsection (a). For purposes of calculating
the number of shares of Company Stock to be received, shares of Company Stock
shall be valued at their Fair Market Value on the date of exercise of the SAR.
Notwithstanding anything to the contrary, the Company may pay the appreciation
of a SAR in the form of cash, shares of Company Stock, or a combination of the
two, so long as the ability to pay such amount in cash does not result in the
Grantee incurring taxable income related to the SAR prior to the Grantee's
exercise of the SAR.

     (f) Number of SARs Authorized for Issuance. For purposes of 3(a) of the
Plan, stock appreciation rights to be settled in shares of Company Stock shall
be counted in full against the number of shares available for award under the
Plan, regardless of the number of exercise gain shares issued upon the
settlement of the stock appreciation right.

     8.   WITHHOLDING OF TAXES

     (a) Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state, and local tax withholding
requirements. The Employer may require that the Grantee or other person
receiving or exercising Grants pay to the Employer the amount of any federal,
state, or local taxes that the Employer is required to withhold with respect to
such Grants, or the Employer may deduct from other wages paid by the Employer
the amount of any withholding taxes due with respect to such Grants.

     (b) Election to Withhold Shares. If the Company so permits, a Grantee may
elect to satisfy the Employer's income tax withholding obligation with respect
to a Grant by having shares withheld up to an amount that does not exceed the
Grantee's minimum applicable withholding tax rate for federal (including FICA),
state, and local tax liabilities. The election must be in a form and manner
prescribed by the Company.

     9.   TRANSFERABILITY OF GRANTS

     (a) Nontransferability of Grants. Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee's lifetime. A
Grantee may not transfer those rights except (i) by will or by the laws of
descent and distribution or (ii) with respect to SARs and Option grants other
than Incentive Stock Options, pursuant to a domestic relations order or
otherwise as permitted by the Company. When a Grantee dies, the personal
representative or other person entitled to succeed to the rights of the Grantee
may exercise such rights. Any such successor must furnish proof satisfactory to
the Company of his or her right to receive the Grant under the Grantee's will or
under the applicable laws of descent and distribution.

     (b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing,
the Grant Instrument may provide that a Grantee may transfer Nonqualified Stock
Options to family members, or one or more trusts or other entities for the
benefit of or owned by family members, consistent with applicable securities
laws, provided

                                      -8-

<PAGE>

that the Grantee receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.

     10.  CHANGE IN CONTROL OF THE COMPANY

     (a) "Change in Control" means the consummation of a transaction that is the
subject of a determination (which may be made effective as of a particular date
specified by the Board) by the Board, made by a majority vote that a change in
control has occurred, or is about to occur. Such a change shall not include,
however, a restructuring, reorganization, merger or other change in
capitalization in which the Persons who own an interest in the Company on the
date hereof (the "Current Owners") (or any individual or entity which receives
from a Current Owner an interest in the Company through will or the laws of
descent and distribution) maintain more than a fifty percent (50%) interest in
the resultant entity. Regardless of the vote of the Board or whether or not the
Board votes, a Change in Control will be deemed to have occurred as of the first
day any one (1) or more of the following subsections shall have been satisfied:

     (b) Any Person (other than the Person in control of the Company as of the
date of this Plan, or other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or a company owned directly or
indirectly by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), becomes the beneficial
owner, directly or indirectly, of securities of the Company representing more
than thirty-five percent (35%) of the combined voting power of the Company's
then outstanding securities; or

     (c) The shareholders of the Company approve:

          (i) A plan of complete liquidation of the Company;

          (ii) An agreement for the sale or disposition of all or substantially
all of the Company's assets; or

          (iii) A merger, consolidation or reorganization of the Company with or
involving any other company, other than a merger, consolidation or
reorganization that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the combined voting power of
the voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation or reorganization.

     (d) However, in no event shall a Change in Control be deemed to have
occurred, with respect to a Grantee, if the Employee is part of a purchasing
group which consummates the Change in Control transaction. A Grantee shall be
deemed "part of the purchasing group" for purposes of the preceding sentence if
the Grantee is an equity participant or has agreed to become an equity
participant in the purchasing company or group (except for (i) passive ownership
of less than five percent (5%) of the voting securities of the purchasing
company; or (ii) ownership of equity participation in the purchasing company or
group which is otherwise deemed not to be significant, as determined prior to
the Change in Control by a majority of the non-employee continuing Directors of
the Board).

     11.  CONSEQUENCES OF A CHANGE IN CONTROL

     (a) Notice and Acceleration. Upon a Change in Control, unless the Company
determines otherwise, (i) the Company shall provide each Grantee with
outstanding Grants written notice of such Change in Control, (ii) all
outstanding Options and SARs shall automatically accelerate and become fully
exercisable, and (iii) the restrictions and conditions on all outstanding Stock
Awards shall immediately lapse.

     (b) Assumption of Grants. Upon a Change in Control where the Company is not
the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Board determines otherwise, all outstanding Options and
SARs that are not exercised shall be assumed by, or replaced with comparable
options or

                                      -9-

<PAGE>

stock appreciation rights by, the surviving corporation (or a parent or
subsidiary of the surviving corporation), and outstanding Stock Awards shall be
converted to Stock Awards of the surviving corporation (or a parent or
subsidiary of the surviving corporation). However, the Board may require each
Grantee to surrender his or her outstanding Options, SARs, or Stock Awards in
exchange for a payment by the Company, in cash or Company Stock (as the Board
may determine) in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock underlying the Option or SAR exceeds the
Exercise Price of the Grantee's unexercised Options or the based amount of the
Grantee's unexercised SARs or for the then Fair Market Value of shares of
Company Stock underlying the Grantee's Stock Awards.

     12. REQUIREMENTS FOR ISSUANCE OR TRANSFER OF SHARES

     (a) Limitations on Issuance or Transfer of Shares. No Company Stock shall
be issued or transferred in connection with any Grant hereunder unless and until
all legal requirements applicable to the issuance or transfer of such Company
Stock have been complied with. Any Grant made shall be conditioned on the
Grantee's undertaking in writing to comply with such restrictions on his or her
subsequent disposition of such shares of Company Stock, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.

     (b) Lock-Up Period. If so requested by the Company or any representative of
the underwriters (the "Managing Underwriter") in connection with any
underwritten offering of securities of the Company under the Securities Act of
1933, as amended (the "Securities Act"), a Grantee (including any successor or
assigns) shall not sell or otherwise transfer any shares or other securities of
the Company during the thirty (30) day period preceding and the one hundred
eighty (180)-day period following the effective date of a registration statement
of the Company filed under the Securities Act for such underwriting (or such
shorter period as may be requested by the Managing Underwriter and agreed to by
the Company) (the "Market Standoff Period"). The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such Market Standoff Period.

     13.  AMENDMENT AND TERMINATION OF THE PLAN

     (a) Amendment. The Board or its delegate may amend or terminate the Plan at
any time; provided, however, that neither the Board nor its delegate shall have
the authority to amend the Plan without shareholder approval if such approval is
required in order to comply with the Code or other applicable laws, or to comply
with applicable stock exchange requirements.

     (b) Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth (10th) anniversary of its effective date, unless the Plan is
terminated earlier by the Company or is extended by the Company with the
approval of the shareholders.

     (c) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the Company
acts under Section 19(b). The termination of the Plan shall not impair the power
and authority of the Company with respect to an outstanding Grant. Whether or
not the Plan has terminated, an outstanding Grant may be terminated or amended
under Section 19(b) or may be amended by agreement of the Company and the
Grantee consistent with the Plan.

     (d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.

                                      -10-

<PAGE>

     14.  FUNDING OF THE PLAN

     This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Grants under this Plan. In no event shall interest be
paid or accrued on any Grant, including unpaid installments of Grants.

     15.  RIGHTS OF PARTICIPANTS

     Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee
Director, or other person to any claim or right to be granted a Grant under this
Plan. Neither this Plan nor any action taken hereunder shall be construed as
giving any individual any rights to be retained by or in the employ of the
Employer or any other employment rights.

     16.  NO FRACTIONAL SHARES

     No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Grant. The Company shall determine whether cash, other awards
or other property shall be issued or paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be forfeited or
otherwise eliminated.

     17.  HEADINGS

     Section headings are for reference only. In the event of a conflict between
a title and the content of a Section, the content of the Section shall control.

     18.  EFFECTIVE DATE OF THE PLAN

     The Plan shall be effective on April 11, 2006.

     19.  MISCELLANEOUS

     (a) Grants in Connection with Corporate Transactions and Otherwise. Nothing
contained in this Plan shall be construed to (i) limit the right of the Company
to make Grants under this Plan in connection with the acquisition, by purchase,
lease, merger, consolidation or otherwise, of the business or assets of any
corporation, firm or association, including Grants to employees thereof who
become Employees, or for other proper corporate purposes, or (ii) limit the
right of the Company to grant stock options or make other awards outside of this
Plan. Without limiting the foregoing, the Company may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company, the parent or any of their subsidiaries in
substitution for a stock option or Stock Awards grant made by such corporation.
The terms and conditions of the substitute grants may vary from the terms and
conditions required by the Plan and from those of the substituted stock
incentives. The Company shall prescribe the provisions of the substitute grants.

     (b) Compliance with Law. The Plan, the exercise of Options and SARs, and
the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. In addition,
it is the intent of the Company that the Plan and applicable Grants under the
Plan comply with the applicable provisions of Section 162(m) of the Code and
Section 422 of the Code. To the extent that any legal requirement of Section 16
of the Exchange Act or Section 162(m) or 422 of the Code as set forth in the
Plan ceases to be required under Section 16 of the Exchange Act or Section
162(m) or 422 of the Code, that Plan provision shall cease to apply. The Company
may revoke any Grant if it is contrary to law or modify a Grant to bring it into
compliance with any valid and mandatory government regulation. The Company may
also adopt rules regarding the withholding of taxes on payments to Grantees. The
Company may, in its sole discretion, agree to limit its authority under this
Section.

                                      -11-

<PAGE>

     (c) Employees Subject to Taxation Outside the United States. With respect
to Grantees who are subject to taxation in countries other than the United
States, Grants may be made on such terms and conditions as the Company deems
appropriate to comply with the laws of the applicable countries, and the Company
may create such procedures, addenda and subplans and make such modifications as
may be necessary or advisable to comply with such laws.

     (d) Governing Law. The validity, construction, interpretation, and effect
of the Plan and Grant Instruments issued under the Plan shall be governed and
construed by and determined in accordance with the laws of the State of New
Jersey, without giving effect to the conflict of laws provisions thereof.

                                      -12-

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