Document:

Exhibit
      10.1

     

    EXECUTION
      COPY

     

    DUPUYTREN’S
      DISEASE LICENSE AGREEMENT

    

    This
      DUPUYTREN’S DISEASE LICENSE AGREEMENT (the “Agreement”),
      effective as of November 21, 2006 (the “Effective
      Date”),
      is
      entered into by and between BioSpecifics Technologies Corp., a corporation
      organized and existing under the laws of Delaware (“BTC”),
      and
      the Research Foundation of the State University of New York for and on behalf
      of
      Stony Brook University, a nonprofit, educational corporation organized and
      existing under the laws of New York (the “Research
      Foundation”).
      BTC
      and the Research Foundation shall sometimes be referred to herein individually
      as a “Party”
and
      collectively as “Parties.”

    

    RECITALS

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      the
      Research Foundation now wishes to license the Licensed Know-How to BTC, and
      BTC
      wishes to license the Licensed Know-How from the Research

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Foundation,
      on the terms and conditions set forth in this Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual promises, covenants and agreements
      set
      forth below, the Parties agree as follows:

     

    ARTICLE
      I.

    DEFINITIONS

    

    For
      the
      purposes of this Agreement, the following capitalized words and phrases, whether
      used in the singular or plural, shall have the following meanings:

    

    1.1        “Affiliate”
means
      any corporation or other business entity controlled by, controlling, or under
      common control with another entity, with “control” meaning direct or indirect
      beneficial ownership of more than 50% (or such lesser percent provided that
      ownership is accompanied by the power to direct the management or policies
      of
      the entity) of (a) the voting stock in the case of a corporation, or (b) the
      profits interest or decision-making authority in the case of an unincorporated
      business entity.

     

    1.2      “Auxilium”
means
      Auxilium Pharmaceuticals, Inc., a corporation organized and existing under
      the
      laws of Delaware. 

     

    1.3    “Auxilium
      License Agreement”
means
      the agreement dated as of June 3, 2004 by and between BTC and Auxilium, as
      amended on May 6, 2005 and as may be subsequently amended from time to time,
      by
      which BTC granted to Auxilium certain licenses, as defined therein.

     

    1.4      “BTC
      Patents”
has
      the
      meaning set forth above in the recitals. 

     

    1.5      “Combination
      Product”
means
      any product containing both an agent or ingredient which constitutes a Licensed
      Product and one or more other active agents or ingredients which do not
      constitute Licensed Products.

     

    1.6      “Development
      Program”
means
      the clinical studies previously performed by B&H with injectable collagenase
      pertaining to Dupuytren’s disease, as described more fully in Article II hereof.

     

    1.7      “EMEA”
means
      the European Medicines Evaluation Agency, which coordinates the scientific
      review of human pharmaceutical products under the centralized licensing
      procedure of the European Community, and includes any successor
      agency.

     

    1.8      “Enzyme”
means
      an enzyme constituted of collagenase obtained by fermentation of Clostridium
      histolyticum, purified
      by chromatography, lyophilized and substantially free from other proteinases,
      and any variants or derivatives thereof. 

     

    1.9      “European
      Union“
or
“EU”
      means the countries of the European Union (or its successor) as constituted
      on
      the Effective Date and future members of the European Union upon their admission
      for full membership with commercial rights and privileges. 

     

    
      
        
        

      

      
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    1.10     “FDA”
has
      the
      meaning set forth above in the recitals. 

     

    1.11     “Field”
means
      the prevention or treatment of Dupuytren’s disease. 

     

    1.12     “First
      Commercial Sale”
means
      (a) the date of first sale following FDA or other regulatory approval of the
      NDA, MAA (as defined below) or equivalent marketing license application filed
      for a Licensed Product in any country, or (b) if regulatory approval is not
      required the first commercial sale of a Licensed Product in either case, to
      an
      independent party not an Affiliate, Sublicensee or subagent of the seller.
      

     

    1.13    
“Information”
means
      (a) techniques, technology, practices, methods, procedures, inventions,
      discoveries, knowledge, know-how, trade secrets, skill, experience, gene or
      protein sequences, technical data, test data, analytical and quality control
      data, formulas or software programs, and (b) all compounds, compositions of
      matter, cells, cell lines, assays, and all other biological or chemical
      materials and samples.

     

    1.14    
“Joint
      Inventions”
means
      any inventions in the Field, whether patentable or not, which are jointly
      conceived, discovered, developed or otherwise made, during the Development
      Program by at least one BTC employee or person contractually required to assign
      or license the intellectual property rights covering such inventions to BTC
      and
      at least one Stony Brook employee or person contractually required by virtue
      of
      New York state law to assign or license the intellectual property rights
      covering such inventions to the Research Foundation. 

     

    1.15     “Licensed
      Know-How”
means
      (i) any proprietary Information or materials related to the manufacture,
      preparation, formulation, use or development of the Enzyme, the Licensed
      Products or injectable collagenase pertaining to Dupuytren’s disease and shall
      include formulations, processes, techniques, formulas, biological, chemical,
      assay control and manufacturing, technical, pre-clinical, clinical or other
      data, methods, know-how, and trade secrets; (ii) all Information, not generally
      known, which is owned by the Research Foundation or is rightfully held with
      right to sublicense as of the Effective Date, or which was developed,
      discovered, conceived, reduced to practice, or acquired by the Research
      Foundation or by B&H and assigned by B&H to the Research Foundation as a
      result of the Development Program and which (a) relates to the Licensed Products
      or (b) relates to the methods, processes or techniques for the manufacture
      or
      use of the Licensed Products or (c) relates to injectable collagenase pertaining
      to Dupuytren’s disease and (iii) any Joint Inventions. 

     

    1.16     “Licensed
      Products”
means
      pharmaceutical products containing Enzyme as an active ingredient and any
      reformulation, improvement, enhancement, combination, refinement, or
      modification thereof, which are made, used and sold in the Field; provided
      however, the Licensed Products shall specifically exclude dermal formulations
      labeled for topical administration. 

     

    1.17     “MAA”
means
      a
      Marketing Authorization Application filed with the EMEA.

     

    
      
        
        

      

      
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    1.18     “NDA”
means
      a
      New Drug Application, Biologics License Application or a Product License
      Application filed with the FDA.

     

    1.19     “Net
      Sales”
means
      

    

    (a)  with
      respect to sales of Licensed Products by BTC or its Affiliates, the gross sales
      price actually received less the following items to the extent they are paid
      and
      included in the invoice price:

     

    
      
        	
              	(i)	
                customary
                  trade discounts actually allowed;

              

      

      
        	
              	(ii)	
                packing,
                  freight, and insurance costs;

              

      

      
        	
              	(iii)	
                sales,
                  use, value-added and excise taxes; 

              

      

      
        	
              	(iv)	
                import,
                  export and customs duties and
                  taxes;

              

      

      
        	
              	(v)	
                credit
                  for returns, allowances or trades actually allowed;
                  and

              

      

      
        	
              	(vi)	
                government
                  mandated rebates, if any; and

              

      

       

    

    (b)  with
      respect to sales of Licensed Products by a Sublicensee (as defined below),
      the
      net sales price as required to be reported to BTC by the Sublicensee pursuant
      to
      the written sublicense agreement between them. 

    

    Sales
      by
      BTC, its Affiliates and Sublicensees to resellers or others for further
      formulation, processing, repackaging or relabeling shall be excluded, and only
      the subsequent resale to independent customers shall be deemed Net Sales.

    

    In
      the
      case of Combination Products for which the agent or ingredient constituting
      a
      Licensed Product and each of the other active agents or ingredients not
      constituting a Licensed Product have established market prices when sold
      separately, Net Sales shall be determined by multiplying the Net Sales for
      each
      such Combination Product by a fraction, the numerator of which shall be the
      established market price for the Licensed Products contained in the Combination
      Product and the denominator of which shall be the sum of the established market
      prices for the Licensed Products plus the other active agents or ingredients
      contained in the Combination Product. When separate market prices are not
      established, then the Parties shall negotiate in good faith to determine a
      fair
      and equitable method of calculating Net Sales for the Combination Product in
      question, taking into account factors such as relative cost and relative
      therapeutic or diagnostic contribution.

    

    1.20    
“Orphan
      Drug Designation”
means
      the special designation of Licensed Product(s) by FDA’s Orphan Product Division
      which provides the Licensed Product(s) with the opportunity to obtain additional
      market exclusivity from the date the drug receives FDA approval and also
      possible tax and regulatory approval benefits. The term “Orphan Drug
      Designation” shall include any foreign counterparts of the foregoing.

     

    1.21    
“Sublicensee”
means
      Auxilium or any person or entity who receives in the future a sublicense from
      BTC pursuant to Article III hereof.

     

    
      
        
        

      

      
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    1.22     “Territory”
means
      all countries of the world. 

     

    ARTICLE
      II.

    DEVELOPMENT
      PROGRAM

    

    2.1      
      Development
      Program.
      Pursuant to the Royalty Agreement and certain other prior agreements, which
      are
      being terminated contemporaneously herewith, B & H, individually or
      collectively together with other Stony Brook employees, performed certain
      pre-clinical, clinical, regulatory, process development and manufacturing work
      related to injectable collagenase pertaining to Dupuytren’s
      disease.

     

    2.2      
      FDA
      Letters.
      The
      Research Foundation consents to, and otherwise ratifies, the action previously
      taken by B&H pursuant to the Royalty Agreement in executing and delivering
      the FDA Letters.

     

    ARTICLE
      III.

    LICENSE
      GRANT

    

    3.1     
      License
      Grant.
      The
      Research Foundation hereby grants to BTC and its Affiliates a worldwide
      exclusive license for the Licensed Know-How in the Field. The Research
      Foundation further grants to BTC and its Affiliates a worldwide exclusive
      license to use the Licensed Know-How to make, use and sell in any manner
      Licensed Products in the Field, except to the extent that BTC, its Affiliates
      or
      Sublicensees enters into a material transfer agreement, clinical trial agreement
      or any similar agreement that allows the Research Foundation to do research
      or
      clinical development. 

     

    3.2      
      Sublicenses. 

     

    (a)  BTC
      shall
      be entitled to grant sublicenses of its rights hereunder, provided that any
      Net
      Sales of Licensed Products by a BTC Sublicensee shall be deemed to be Net Sales
      of BTC for purposes of royalty payments due hereunder, and BTC shall remain
      obligated to pay all royalties due with respect to Licensed Products sold by
      any
      Sublicensee. If BTC shall grant any sublicenses in addition to the Auxilium
      License Agreement under this Agreement, then it shall obtain the written
      commitment of such additional Sublicensees to abide by all applicable terms
      and
      conditions of this Agreement and BTC shall remain fully responsible to the
      Research Foundation for the performance of all such terms by such additional
      Sublicensees. Upon the termination of this Agreement, each additional
      Sublicensee shall have the option to convert its sublicense to a direct license
      with the Research Foundation on the same terms as in the sublicense
      agreement.

     

    (b)  The
      Research Foundation hereby acknowledges and consents to the sublicense that
      BTC
      has previously granted to Auxilium pursuant to the Auxilium License Agreement
      in
      respect of the Licensed Products. 

     

    
      
        
        

      

      
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    3.3      
      Subagents.
      It is
      agreed that BTC has the right to take the following actions, none of which
      shall
      constitute a sublicense hereunder and none of which shall be subject to Section
      3.2 herein:

     

    (a)  appointing
      an agent or distributor to market, sell or otherwise dispose of Licensed
      Products; and

     

    (b)  subcontracting
      the development, manufacture or packaging of Licensed Products.

     

    3.4      
      Term.
      The term
      of said license will continue in effect for as long as the Licensed Products
      are
      sold. 

     

    3.5    
        <OMITTED AND FILED SEPARATELY WITH THE
      SECURITIES AND EXCHANGE COMMISSION>

     

    ARTICLE
      IV.

    ROYALTIES

    

    4.1      
      Royalties.
      Commencing with the First Commercial Sale, BTC will pay running royalties on
      Net
      Sales of Licensed Products by BTC and its Affiliates and Sublicensees on a
      country-by-country basis. <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    4.2      Royalty
      Period.
      The
      royalty obligations of BTC shall commence upon the date of the First Commercial
      Sale and continue for the longer of (i) the last to expire valid claim of a
      patent covering the Licensed Product, (ii) the expiration of the regulatory
      exclusivity period conveyed by Orphan Drug Designation with respect to the
      Licensed Product or (iii) June 3, 2016. 

     

    4.3     
       Currency;
      Conversion; Taxes.
      Royalty
      payments shall be paid in U.S. Dollars at the address of the Research Foundation
      set forth in Section 10.6 below, or such other place as the Research Foundation
      may reasonably designate in writing, consistent with applicable laws and
      regulations. Any taxes which BTC or its Affiliates or Sublicensees shall be
      required by law to withhold or pay upon remittance of the royalty payments
      shall
      be deducted from the royalty payable to the Research Foundation and paid on
      its
      behalf as required. BTC shall furnish the original of any official receipts
      for
      such taxes. If any currency conversion shall be required in connection with
      the
      payment of royalties hereunder, such conversion shall be made by using the
      average of the daily exchange rates for such currency quoted by the Wall Street
      Journal’s (New York edition) foreign exchange desk for each of the last three
      (3) banking days of each calendar quarter, or, in the case of sales by
      Sublicensees, using the exchange rates provided for in the written agreements
      between BTC and such Sublicensees.

     

    4.4      
      Currency
      Transfer Restrictions.
      If in
      any country in the Territory the payment or transfer of royalties on Net Sales
      in such country is prohibited by law or regulation, BTC shall notify the
      Research Foundation of the conditions preventing such 

     

    
      
        
        

      

      
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    transfer,
      and shall deposit the blocked payments in local currency in a recognized banking
      institution in the relevant country for the credit of the Research Foundation.
      

     

    4.5      
      Payments
      by Others.
      With
      respect to any sales of Licensed Products by BTC, its Affiliates or
      Sublicensees, BTC shall have the right to cause any Affiliate, Sublicensee
      or
      other designee to make direct payment to the Research Foundation of the
      royalties otherwise due for such sales. The Research Foundation shall accept
      such payments and the amount of royalties to be paid by BTC shall be reduced
      by
      the amount of such payments actually received by the Research Foundation.

     

    ARTICLE
      V.

    REPORTS,
      PAYMENTS AND ACCOUNTING

    

    5.1      
      Royalty
      Reports and Payments.
      BTC
      agrees to make written reports and royalty payments to the Research Foundation
      within 90 days after the close of each calendar quarter during the term of
      this
      Agreement, beginning with the quarter in which the First Commercial Sale occurs.
      These reports shall show for the calendar quarter in question all Net Sales
      of
      Licensed Products and the royalty due thereon, together with the same
      information for Licensed Products sold by Affiliates and Sublicensees (if
      applicable). With respect to sales of Licensed Products by Sublicensees, reports
      need only include information reflected in the reports required by Section
      5.4
      below which are actually received during the calendar quarter in question.
      Concurrently with the making of each report, BTC shall remit any royalty payment
      due for the period covered by the report. BTC will make a good faith attempt,
      using commercially reasonable biotech industry practices, to differentiate
      between Net Sales of Licensed Products and sales of similar products outside
      of
      the Field in calculating the amount of the royalty due hereunder to the Research
      Foundation. Absent manifest error, BTC’s good faith differentiation shall be
      binding and conclusive on the Parties. 

    

    5.2      
      Termination
      Report.
      Within
      ninety (90) days after the date on which BTC and its Affiliates and Sublicensees
      last sell any Licensed Products, BTC shall make a final termination report
      containing the same quarterly information required above.

    

    5.3      
      Accounting.
      BTC
      agrees to keep written or digitally stored records for a period of three (3)
      years from the end of each reporting period in sufficient detail to enable
      the
      royalties payable to be determined, and further agrees to permit its books
      and
      records to be examined during normal business hours by an independent accounting
      firm, selected by the Research Foundation and reasonably satisfactory to BTC,
      from time-to-time on reasonable notice, but not more often than once per year.
      Such examination must be made confidentially and the auditing firm shall be
      required to enter into reasonable confidentiality agreements. The expense of
      such examination shall be borne by the Research Foundation except that in the
      event the results of the audit reveal a discrepancy in the Research Foundation’s
      favor of 10% or more, then reasonable out-of-pocket audit fees shall be paid
      by
      BTC. Any discrepancy will be promptly corrected by a payment or refund, as
      appropriate.

     

    
      
        
        

      

      
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    5.4      Third
      Party Reports.
      BTC
      agrees to require, as a term of any sublicense agreement, that the Sublicensee
      shall render written reports to BTC of Net Sales of Licensed Products no less
      frequently than twice per year and in sufficient detail to enable the royalties
      payable by BTC hereunder to be determined (“Third
      Party Reports”).
      BTC
      shall also require Sublicensees to keep records concerning Net Sales for a
      period of at least three (3) years, and to permit reasonable examination of
      such
      records by an independent accounting firm selected by BTC. Notwithstanding
      the
      foregoing, nothing in this Agreement shall be construed as enlarging, or
      requiring BTC to modify, Auxilium’s, its Affiliate’s or its Sublicensee’s
      existing reporting and record keeping obligations pursuant to the Auxilium
      License Agreement. 

     

    5.5      
      Confidentiality
      of Reports.
      The
      Research Foundation agrees that the information set forth in (a) the reports
      required by Sections 5.1 and 5.2, (b) the records subject to examination under
      Section 5.3, and (c) all Third Party Reports, shall be maintained in confidence
      by the Research Foundation and any independent accounting firm selected under
      Section 5.3, shall not be used for any purpose other than verification of the
      performance by BTC of its obligations hereunder, and shall not be disclosed
      by
      the Research Foundation or such accounting firm to any other
      person.

     

    ARTICLE
      VI.

    WARRANTIES;
      DISCLAIMED WARRANTIES; INDEMNIFICATION

     

    6.1      
      Title;
      Authority.
      The
      Research Foundation represents and warrants that B&H, by virtue of New York
      state law, have assigned to the Research Foundation all of the rights pertaining
      to the Licensed Know-How licensed to BTC hereunder and that therefore the
      Research Foundation has the full unrestricted legal right to enter into this
      Agreement and to grant the licenses granted hereunder.

     

    6.2      No
      Other Licenses Granted.
      The
      Research Foundation represents and warrants that it has not granted any license
      pertaining to the Licensed Know-How to any party other than to BTC pursuant
      to
      this Agreement. In addition, after reasonable investigation, the Research
      Foundation to the best of its knowledge is not aware that B&H have granted
      any license pertaining to the Licensed Know-How to any other party.

     

    6.3      
      No
      Known Infringement.
      As of
      the Effective Date, the Research Foundation has not received any notice of
      infringement of or conflict with any patent, trade secret, copyright, trademark
      or other intellectual property right of any other person with respect to the
      Licensed Know-How. 

     

    6.4      
      No
      Warranty of Non-Infringement.
      Nothing
      in this Agreement shall be construed as a warranty or representation that any
      Licensed Products made, used or sold pursuant to any license granted hereunder
      is or will be free from infringement of patents, copyrights, trademarks, trade
      secrets or other intellectual property rights of third parties. 

     

    6.5       Indemnification
      by Research Foundation.
      Notwithstanding the absence of any warranty of non-infringement, the Research
      Foundation shall, during the term of this Agreement and thereafter, indemnify
      and hold harmless BTC, its Affiliates, Sublicensees

     

    
      
        
        

      

      
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    and
      its
      and their directors, officers, agents and employees, from any losses, damages,
      expenses and liabilities of any kind (including legal expenses and reasonable
      attorneys’ fees and costs ) resulting from the Research Foundation’s gross
      negligence or willful misconduct in connection with:

     

    (a)  the
      action or inaction of the Research Foundation, its Affiliates or B&H; or

     

    (b)  any
      breach of this Agreement by the Research Foundation or its Affiliates.

     

    6.6     
      Indemnification
      by BTC.
      BTC
      shall, during the term of this Agreement and thereafter, indemnify and hold
      harmless the Research Foundation and its Affiliates and its and their directors,
      officers, agents and employees, from any losses, damages, expenses, and
      liability of any kind whatsoever (including legal expenses and reasonable
      attorneys’ fees and costs) resulting from BTC’s (and its Affiliates’ and
      Sublicensees’) gross negligence or willful misconduct in connection with the
      manufacture, use, testing, sale or advertisement of Licensed Products; provided,
      however, that in no case will the foregoing indemnity obligation apply to the
      extent that such claim, proceeding, loss, expense, or liability is the result
      of: 

     

    (a)  any
      action or inaction of the Research Foundation or its Affiliates, or its or
      their
      agents; or

     

    (b)  any
      alleged or actual infringement by the Licensed Know-How of any patents,
      copyrights, trademarks, trade secrets or other intellectual property rights
      of
      third parties; or

     

    (c)  any
      breach of this Agreement by the Research Foundation.

     

    ARTICLE
      VII.

    TERM
      AND TERMINATION

    

    7.1      
      Term.
      Unless
      earlier terminated in accordance with this Article VII, this Agreement and
      the
      licenses granted hereunder shall continue in effect until the termination of
      BTC’s royalty obligations. Thereafter, all licenses granted shall become fully
      paid-up, irrevocable exclusive licenses. 

     

    7.2      
      Termination
      by the Research Foundation for Default.
      The
      Research Foundation may terminate this Agreement if BTC commits any material
      default of any of BTC’s material obligations, by notice to BTC specifying in
      reasonable detail the nature of the default, provided that such default has
      not
      been remedied within 90 days of such notice. 

     

    7.3      
      Termination
      by BTC.
      BTC may
      terminate this Agreement (a) on 30 days’ notice to the Research Foundation if
      BTC elects to cease utilizing all license rights granted hereunder; (b) if
      the
      Research Foundation or any of its Affiliates is in material default of any
      of
      the Research Foundation’s material obligations or covenants, which

     

    
      
        
        

      

      
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    default
      has not been remedied within 90 days’ of notice to the Research Foundation
      specifying in reasonable detail the nature of the default. 

     

    7.4      
      Termination
      for Bankruptcy.
      If
      voluntary or involuntary proceedings in bankruptcy by or against the Research
      Foundation are instituted under any insolvency law, or a receiver or custodian
      is appointed for the Research Foundation, or proceedings are instituted by
      or
      against the Research Foundation for corporate reorganization or dissolution,
      which proceedings shall not have been dismissed within 60 days after the date
      of
      filing, or if the Research Foundation makes an assignment for the benefit of
      creditors, or substantially all of the assets of the Research Foundation are
      seized or attached and not released within 60 days thereafter, BTC may
      immediately terminate this Agreement by notice to the Research Foundation.
      However, in the event that BTC elects not to terminate the Agreement, the
      Parties intend that the rights and licenses granted under this Agreement shall
      be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code
      (or
      any equivalent provision of applicable foreign law), licenses or rights to
      “intellectual property” as defined under Section 101(52) of the U.S. Bankruptcy
      Code. BTC, as a licensee of such rights under this Agreement, shall retain
      and
      may fully exercise all of its rights and elections under the U.S. Bankruptcy
      Code, subject to performance by the Research Foundation or its successor of
      its
      preexisting obligations under this Agreement. 

     

    7.5      
      Rights
      and Obligations Upon Termination.
      Following termination of this Agreement for any reason, nothing herein shall
      be
      construed to release either Party from any obligation that arose prior to the
      date of such termination. After termination, BTC and its Affiliates and
      Sublicensees may complete Licensed Products in the process of manufacture at
      the
      date of termination and sell them along with any other Licensed Products in
      inventory, provided that BTC shall pay royalties as required by Article IV
      and
      shall submit the reports required by Article V for such Licensed Products.
      

     

    7.6      
      Return
      of Confidential Information.
      Upon
      termination of this Agreement, BTC shall return or destroy all Licensed Know-How
      that is written, to the Research Foundation, provided that BTC may retain one
      copy of all written materials for legal and archival purposes only.

     

    ARTICLE
      VIII.

    CONFIDENTIALITY,
      DISCLOSURE, AND PUBLICATIONS

    

    8.1       
      Confidentiality.
      

     

    (a)  During
      the term of this Agreement and for a period of five (5) years following its
      expiration or termination, each Party shall maintain in confidence all
      Information disclosed by the other Party which is marked or identified as
      confidential or which the receiving Party has reason to know is confidential
      or
      proprietary (referred to herein as “Confidential
      Information“),
      and
      shall not disclose Confidential Information to anyone except those Affiliates,
      Sublicensees, employees, subagents, consultants, or subcontractors having a
      “need to know” in order to carry out the receiving Party‘s activities as
      contemplated by this Agreement. Each receiving Party shall obtain
      written

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    agreements
      from its Affiliates, Sublicensees, employees, subagents, consultants or
      subcontractors, prior to disclosure to them of Confidential Information,
      obligating them to hold in confidence and not use any Confidential Information
      except as permitted by this Agreement. Notwithstanding the foregoing sentence,
      if employees or consultants of a receiving Party have previously signed general
      confidentiality agreements in favor the receiving Party as employer, and if
      those agreements bind the employees or consultants to protect Information
      disclosed hereunder to at least the same extent required by this Section ,
      then
      it shall be sufficient for the employing Party to (i) notify the employees
      or
      consultants of the fact that Information disclosed hereunder is governed by
      such
      confidentiality agreements and (ii) identify to such employees or consultants
      the specific Information so governed. Each Party shall use the same degree
      of
      effort used to protect its own most valuable proprietary Information from
      unauthorized use or disclosure, and shall be responsible for ensuring compliance
      with these obligations by its Affiliates, Sublicensees, employees, subagents,
      consultants and subcontractors. Each Party shall promptly notify the other
      upon
      discovery of any unauthorized use or disclosure of the other’s Confidential
      Information.

     

    (b)  The
      receiving Party shall not use Confidential Information for any purpose,
      including for the development of products in the Field, except as specifically
      permitted by this Agreement.

     

    8.2      
      Exceptions.
      The
      obligation of confidentiality and non-use in this Article shall not apply to
      the
      extent that:

     

    (a)  either
      Party (the “Recipient”)
      is
      required to disclose Confidential Information by law, order or regulation of
      a
      governmental agency or a court of competent jurisdiction, or

     

    (b)  the
      Recipient can demonstrate that (i) the disclosed Information was, at the time
      of
      disclosure to the Recipient, already in the public domain or which, after
      disclosure, becomes part of the public domain other than as a result of action
      of the Recipient, its Affiliates, Sublicensees, employees, subagents,
      consultants or subcontractors in violation hereof; (ii) the Recipient can
      demonstrate that the disclosed Information was rightfully known or independently
      developed by the Recipient or its Affiliates prior to the date of disclosure
      to
      the Recipient, or (iii) the disclosed Information was received by the Recipient
      or its Affiliates on an unrestricted basis from a source unrelated to any Party
      to this Agreement and not under a duty of confidentiality to the other Party
      or

     

    (c)  the
      disclosure is made to the FDA, EMEA or other regulatory agency as part of a
      product approval process.

     

    8.3      
      Legally
      Compelled Information.
      In the
      event that either Party becomes legally compelled to disclose any Confidential
      Information belonging to the other Party, it shall notify the other Party prior
      to disclosure so that the other Party can seek a protective order or other
      appropriate remedy. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    8.4      
      Publications.
      Prior to
      public disclosure of or submission for publication of an abstract, manuscript
      or
      oral presentation describing the results of any aspect of the Development
      Program or other scientific activity between BTC and the Research Foundation,
      the Party disclosing or submitting such abstract, manuscript or oral
      presentation (“Disclosing
      Party”)
      shall
      send the other Party (“Responding
      Party”)
      by a
      recognized delivery service for next day delivery a copy of the abstract,
      manuscript or oral presentation materials to be submitted. The Responding Party
      shall have 30 days, in the case of an abstract or oral presentation materials,
      or 60 days, in the case of a manuscript, from the date of receipt of the
      abstract, manuscript or oral presentation materials. If the Responding Party
      believes the subject matter of such abstract, manuscript or oral presentation
      contains Confidential Information or a patentable invention of significant
      commercial value to the Responding Party, then prior to the expiration of the
      relevant period, the Responding Party shall notify the Disclosing Party in
      writing of its determination and the basis for its conclusion. Upon receipt
      of
      such notice, the Disclosing Party shall delay public disclosure of or submission
      of abstract, manuscript or oral presentation for an additional period of 60
      days
      to permit preparation and filing of a patent application on the disclosed
      subject matter. No publication or presentation shall be made by the Disclosing
      Party unless and until the Responding Party’s comments have been addressed and
      any information determined by the Responding Party to be Confidential
      Information of the Responding Party has been removed. Determination of
      authorship for any paper or inventorship for any patent shall be in accordance
      with accepted scientific practice or patent law, as appropriate. Should any
      questions of authorship or inventorship arise, they will be determined by good
      faith consultation between the senior management of the respective Parties.
      

     

    ARTICLE
      IX.

    DISPUTE
      RESOLUTION; ARBITRATION

    

    9.1     
      Exclusive
      Remedy.
      The
      Parties agree that the terms of this Article shall be the exclusive means of
      resolving any dispute, controversy or claim (a “Dispute”)
      arising out of or relating to this Agreement, except that either Party may
      seek
      injunctive relief or other provisional remedies from a court of competent
      jurisdiction if necessary to protect such Party’s name, intellectual property
      rights, or to prevent irreparable harm.

     

    9.2      
      Good
      Faith Negotiations.
      In the
      event of any Dispute arising out of or relating to or in connection with any
      provision of the Agreement, or the rights or obligations hereunder, the Parties
      shall try to settle their differences amicably between themselves. Either Party
      may initiate such informal dispute resolution by sending written notice of
      the
      dispute to the other Party, and within ten (10) business days after such notice
      appropriate representatives of the Parties shall meet for attempted resolutions
      by good faith negotiations. If such representatives are unable to resolve such
      disputed matters, they shall be referred to the senior management of the
      respective Parties, for discussion and resolution. If they are unable to resolve
      the dispute within thirty (30) days (or such longer period of time as the
      Parties may agree to in writing) of initiating such negotiations, then the
      Parties must resort to binding arbitration, as set forth in Section 9.3 below.
      

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    9.3      
      Binding
      Arbitration.
      Any
      Dispute not so resolved shall be submitted, by a written notice of request
      to
      arbitrate given by either Party, to final and binding arbitration under the
      Commercial Arbitration Rules of the American Arbitration Association
      (“AAA”)
      then
      in force except as modified in accordance with the provisions of this Section.
      The arbitration proceedings shall be held in the City of New York in New York
      State. 

     

    9.4      
      Arbitrators.
      The
      arbitral tribunal shall be composed of three arbitrators, one appointed by
      each
      Party within 15 days, and the two arbitrators so appointed shall, within 15
      days
      of their appointment, appoint a third arbitrator who shall act as Chairman
      of
      the tribunal. If the Dispute involves scientific or technical matters, at least
      2 of the 3 arbitrators chosen shall have educational training and/or experience
      sufficient to demonstrate a reasonable level of knowledge in the field of
      biotechnology.

     

    9.5      
      Procedures.
      

     

    (a)  Prompt
      resolution of any Dispute is important to both Parties; and the Parties agree
      that the arbitration of any Dispute shall be conducted expeditiously. The
      arbitrators shall be instructed and directed to assume management initiative
      and
      control over the arbitration process (including scheduling of events,
      pre-hearing discovery and activities, and the conduct of the hearing), in order
      to complete the arbitration as expeditiously as is reasonably practical for
      obtaining a just resolution of the Dispute. The arbitrators shall be directed
      that any arbitration shall be completed within 1 year from the filing of notice
      of a request for such arbitration. 

     

    (b)  The
      arbitrators shall determine what discovery shall be permitted, consistent with
      the goal of limiting the cost and time which the Parties must expend for
      discovery; provided that the arbitrators shall permit such discovery as they
      deem necessary to permit an equitable resolution of the Dispute.

     

    (c)  In
      arriving at decisions, the arbitrators shall apply the terms and conditions
      of
      this Agreement in accordance with the rules of law governing it in accordance
      with Section 10.4. The arbitrators are empowered to render the following awards
      in accordance with any provision of this Agreement: (i) enjoining a Party from
      performing any act prohibited, or compelling a Party to perform any act
      required, by the terms of this Agreement or any related agreement, and (ii)
      ordering such other legal or equitable relief, including any provisional legal
      or equitable relief, or specifying such procedures as the arbitrator deems
      appropriate, to resolve any Dispute submitted for arbitration. Any monetary
      award made and shall be payable in U.S. Dollars free of any tax or any
      deduction. The arbitrators shall issue to both Parties a written explanation
      in
      English of the reasons for the award and a full statement of the facts as found
      and the rules of law applied in reaching the decision. An award rendered in
      connection with an arbitration pursuant to this Article shall be the sole,
      exclusive, final and binding remedy between the Parties regarding the Dispute
      and any counterclaims made, and judgment upon any award may be entered and
      enforced in any court of competent jurisdiction. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    9.6      
      Expenses.
      The
      award rendered by the arbitrators shall include the costs of arbitration,
      arbitrator fees, reasonable attorneys’ fees and reasonable costs for expert and
      other witnesses.

     

    9.7      
      Confidentiality
      of Proceedings.
      The
      arbitration proceedings shall not be made public without the joint consent
      of
      the Parties, and each Party shall maintain the confidentiality of such
      proceedings and decision unless otherwise required by law or permitted in
      writing by the other Party.

     

    ARTICLE
      X.

    MISCELLANEOUS
      PROVISIONS

    

    10.1    
Indemnification
      Procedures.
      In the
      event either Party seeks indemnification under any provision for indemnification
      afforded by this Agreement, the following procedures shall be
      followed:

     

    (a)  Notice
      of Claim.
      The
      Party seeking indemnification (the “Indemnitee”)
      shall
      give the other Party (the “Indemnifying
      Party”)
      prompt
      notice of any losses or of the discovery of facts upon which a request for
      indemnification may be made. The Indemnifying Party shall not be liable for
      any
      losses that it can show resulted from any delay in providing such notice. The
      notice must contain a description of the claim and the nature and amount of
      the
      loss (to the extent known), and shall include copies of all papers and official
      documents received in respect of any losses. 

     

    (b)  Control
      of Defense.
      At its
      option, the Indemnifying Party may assume the defense of any third party claim
      by giving written notice to the Indemnitee within thirty (30) days of the
      Indemnitee’s notice. The assumption of the defense of a third party claim by the
      Indemnifying Party shall not be construed as an acknowledgment that the
      Indemnifying Party is liable to the Indemnitee. Upon assuming the defense of
      a
      third party claim, the Indemnifying Party shall have the right to choose legal
      counsel and direct and control the defense in its sole discretion. In the event
      that it is ultimately determined that the Indemnifying Party is not obligated
      to
      indemnify the Indemnitee from the claim, the Indemnitee shall reimburse the
      Indemnifying Party for all costs and expenses incurred.

     

    (c)  Right
      to Participate in Defense.
      The
      Indemnitee shall be entitled to participate in, but not control, the defense
      of
      a third party claim and to employ counsel of its choice for such purpose;
      provided, however, that such participation shall be at the Indemnitee's own
      expense unless the indemnifying Party has failed to assume the defense, in
      which
      case the Indemnitee shall control the defense. 

     

    (d)  Settlement.
      If the
      Indemnifying Party has acknowledged in writing the obligation to indemnify
      the
      Indemnitee for losses requiring only the payment of money damages in connection
      with a third party claim, and that will not result in the Indemnitee's becoming
      subject to injunctive or other, the Indemnifying Party shall have the sole
      right
      to consent to the entry of any judgment, enter into any settlement or otherwise
      dispose of such claim on such terms as the Indemnifying Party deems

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    appropriate
      in its sole discretion. With respect to all other claims or losses, the
      Indemnifying Party shall have authority to consent to the entry of any judgment,
      enter into any settlement or otherwise dispose of such claim or loss provided
      it
      obtains the prior written consent of the Indemnitee (which consent shall not
      be
      unreasonably withheld or delayed). Regardless of whether the Indemnifying Party
      chooses to defend or prosecute any third party claim, no Indemnitee shall admit
      any liability with respect to, or settle, compromise or discharge, any such
      claim without the prior written consent of the Indemnifying Party. 

     

    (e)  Cooperation
      of Indemnitee.
      Regardless of whether the Indemnifying Party chooses to defend or prosecute
      any
      third party claim, the Indemnitee shall cooperate in the defense or prosecution
      thereof and shall furnish such records, information and testimony, provide
      such
      witnesses and attend such conferences, discovery proceedings, hearings, trials
      and appeals as may be reasonably requested. Such cooperation shall include
      access to and reasonable retention by the Indemnified Party of, records and
      information that are reasonably relevant to such third party claim, and making
      the Indemnitee’s employees and agents available on a mutually convenient basis
      to provide additional information and explanation of any material provided
      hereunder. The Indemnifying Party shall reimburse the Indemnitee for all its
      reasonable out-of-pocket expenses in connection therewith. 

     

    (f)  Reimbursement
      of Expenses.
      The
      verifiable costs and expenses, including fees and disbursements of counsel,
      incurred by the Indemnitee in connection with any claim shall be reimbursed
      quarterly by the Indemnifying Party, without prejudice to the Indemnifying
      Party's right to contest its indemnification obligations, and such
      reimbursements shall be subject to refund in the event the Indemnifying Party
      is
      ultimately held not to be obligated to indemnify the Indemnitee.

     

    10.2    
Assignment.
      This
      Agreement may not be assigned by either Party without the prior written consent
      of the other, except that BTC may assign this Agreement to a party which
      acquires (whether by merger, sale of assets or otherwise) all or substantially
      all of that portion of BTC’s business to which this Agreement
      pertains.

     

    10.3    
Entire
      Agreement.
      This
      Agreement constitutes the entire Agreement between the Parties with respect
      to
      the subject matter hereof, and supersedes all previous agreements, whether
      written or oral. This Agreement may not be modified orally, but only by an
      instrument in writing signed by both Parties.

     

    10.4    
Choice
      of Law.
      The
      validity, performance, construction and effect of the Agreement shall be
      governed by the substantive laws of the state of New York without reference
      to
      conflicts of laws provisions.

     

    10.5    
Severability.
      If any
      provision of this Agreement is declared invalid or unenforceable by an
      arbitrator pursuant to Section 9.5 (or by a court whose decision is final and
      binding pursuant to subsection 9.1) that provision shall be deemed fully
      severable. The remaining provisions of this Agreement shall remain in full
      force
      and effect and will be construed as if the invalid or unenforceable provision
      had been deleted.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    10.6    
Notices.
      Any
      notice or report required or permitted to be given shall be in writing and
      delivered personally, sent by facsimile (and promptly confirmed by personal
      delivery, registered or certified mail or overnight courier as provided herein),
      sent by nationally-recognized overnight courier, or sent by registered or
      certified mail, postage prepaid, return receipt requested. Such notices and
      reports shall be sent to the following addresses and persons (or such other
      address or person as a Party may provide by a communication complying with
      this
      section), and shall be effective upon personal delivery or 5 days after dispatch
      by mail or courier, whichever is applicable:

     

    If
      to
      BTC,

    

    BioSpecifics
      Technologies Corp.

    35
      Wilbur
      Street

    Lynbrook,
      New York 11563

    Tel:
      (516) 593 7000

    Fax:
      (516) 593-7039

    Attn:
      President

    

    with
      a
      copy to:

    

    Carl
      A.
      Valenstein

    Thelen
      Reid & Priest LLP

    701
      8th
      Street NW

    Washington,
      DC 20001 

    Tel:
      (202) 508 4195

    Fax:
      (202) 654-1836 

    

    If
      to the
      Research Foundation,  

     

    Office
      of
      Technology Licensing and Industry Relations

    N5002
      Melville

    Memorial
      Library

    Stony
      Brook, New York

    11794-3369

    Tel:
      (631) 632-9009

    Fax:
      (631) 632-1505

    Attn:
      Director

    

    10.7    
Waiver.
      The
      delay or failure of any Party to require performance of any provision in any
      one
      instance shall not be deemed a waiver and shall not affect the right to enforce
      the provision later or in any other instance. The observance of any term or
      condition may be waived, either generally or in a particular instance by the
      Party entitled to enforce such term or condition, but shall only be effective
      if
      in writing and signed by such Party. 

     

    10.8    
Force
      Majeure.
      If
      either Party shall be delayed, interrupted in or prevented from the performance
      of any obligation hereunder (other than an obligation to

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    make
      a
      payment) by reason of force
      majeure, including
      an act of God, fire, flood, earthquake, war (declared or undeclared), acts
      of
      terrorism, public disaster, strike or labor unrest, governmental act, rule
      or
      regulation, or any other cause beyond such Party’s control, such Party shall not
      be liable to the other therefore and the time for performance of such obligation
      shall be extended for a period equal to the duration of the contingency which
      occasioned the delay, interruption or prevention. The Party invoking such
force
      majeure rights
      must notify the other Party within a period of 15 days from the first and last
      day of the force
      majeure unless
      it
      renders such notification impossible, in which case, notification shall be
      made
      as soon as possible. If the resulting delay exceeds 4 months, both Parties
      shall
      consult in good faith to determine an appropriate course of action.

     

    10.9    
Independent
      Contractors.
      It is
      expressly agreed that the Parties shall be independent contractors and that
      the
      relationship shall not constitute a partnership or agency of any kind. Neither
      Party may bind the other or make statements on behalf of the other without
      prior
      written consent. 

     

    10.10    Publicity.
      Neither
      Party shall use the name of the other Party in any publicity release without
      the
      prior written permission of the other, which shall not be unreasonably withheld.
      Except as required by law, neither Party shall publicly disclose the terms
      and
      conditions of the Agreement without the prior written consent of the other
      Party.

     

    10.11    Headings.
      The
      captions used in this Agreement are inserted for convenience of reference only
      and shall not be construed to create obligations, benefits or
      limitations.

     

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

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Parties have executed this Agreement on the dates set
      forth
      below.

     

     

    
      
        	
                BIOSPECIFICS
                  TECHNOLOGIES CORP.

              	 	
                THE
                  RESEARCH FOUNDATION OF THE STATE UNIVERSITY NEW YORK AT STONY
                  BROOK

              
	 	 	 	 	 
	 	 	 	 	 
	
                By:

              	
                /s/
                  Thomas L. Wegman

              	 	
                By:

              	
                /s/
                  Donna L. Tumminello

              
	
                Name:

              	
                Thomas
                  L. Wegman

              	 	
                Name:

              	
                Donna
                  L. Tumminello

              
	
                Title:

              	
                President

              	 	
                Title:

              	
                Assistant
                  Director of Business Development

              
	
                Date:

              	
                November
                  21, 2006

              	 	
                Date:

              	
                November
                  21, 2006

              

      

       

       

       

       

       

      Signature
        Page to Dupuytren’s
        License AgreementFrozen Shoulder License Agreement

    Exhibit
      10.2

     

    EXECUTION
      COPY

     

    FROZEN
      SHOULDER LICENSE AGREEMENT

    

    This
      FROZEN SHOULDER LICENSE AGREEMENT (the “Agreement”),
      effective as of November 21, 2006 (the “Effective
      Date”),
      is
      entered into by and between BioSpecifics Technologies Corp., a corporation
      organized and existing under the laws of Delaware (“BTC”),
      and
      the Research Foundation of the State University of New York for and on behalf
      of
      Stony Brook University, a nonprofit, educational corporation organized and
      existing under the laws of New York (the “Research
      Foundation”).
      BTC
      and the Research Foundation shall sometimes be referred to herein individually
      as a “Party”
and
      collectively as “Parties.”

    

    RECITALS

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION> 

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    WHEREAS,
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      the Research Foundation now wishes to license the University Know-How and the
      University Patents in respect of Frozen Shoulder to BTC, and BTC wishes to
      license the University Know-How and the University Patents in respect of Frozen
      Shoulder from the Research Foundation, on the terms and conditions set forth
      in
      this Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual promises, covenants and agreements
      set
      forth below, the Parties agree as follows:

    

    ARTICLE
      I.

    DEFINITIONS

    

    For
      the
      purposes of this Agreement, the following capitalized words and phrases, whether
      used in the singular or plural, shall have the following meanings:

    

    1.1   “Affiliate”
means
      any corporation or other business entity controlled by, controlling, or under
      common control with another entity, with “control” meaning direct or indirect
      beneficial ownership of more than 50% (or such lesser percent provided that
      ownership is accompanied by the power to direct the management or policies
      of
      the entity) of (a) the voting stock in the case of a corporation, or (b) the
      profits interest or decision-making authority in the case of an unincorporated
      business entity.

     

    1.2   “Auxilium”
means
      Auxilium Pharmaceuticals, Inc., a corporation organized and existing under
      the
      laws of Delaware. 

     

    1.3   “Auxilium
      License Agreement”
means
      the agreement dated as of June 3, 2004 by and between BTC and Auxilium, as
      amended on May 6, 2005 and as may be subsequently amended from time to time,
      by
      which BTC granted to Auxilium certain licenses, as defined therein.

     

    1.4   “Combination
      Product”
means
      any product containing both an agent or ingredient which constitutes a Licensed
      Product and one or more other active agents or ingredients which do not
      constitute Licensed Products.

     

    1.5   “Development
      Program”
means
      the clinical studies previously performed by B&W with injectable collagenase
      pertaining to Frozen Shoulder, as described more fully in Article II hereof.
      

     

    1.6   “EMEA”
means
      the European Medicines Evaluation Agency, which coordinates the scientific
      review of human pharmaceutical products under the centralized licensing
      procedure of the European Community, and includes any successor
      agency.

     

    1.7   “Enzyme”
means
      an enzyme constituted of collagenase obtained by fermentation of Clostridium
      histolyticum, purified
      by chromatography, lyophilized and substantially free from other proteinases,
      and any variants or derivatives thereof. 

     

    1.8   “European
      Union“
or
“EU”
      means the countries of the European Union (or its successor) as constituted
      on
      the Effective Date and future members of the

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    European
      Union upon their admission for full membership with commercial rights and
      privileges. 

     

    1.9   “FDA”
has
      the
      meaning set forth above in the recitals.

     

    1.10  “Field”
means
      the prevention or treatment of Frozen Shoulder.

     

    1.11  “First
      Commercial Sale”
means
      the first commercial sale of a Licensed Product by BTC under the terms of a
      Supply Agreement or by a Sublicensee to a Third Party. 

     

    1.12  “Frozen
      Shoulder”
means
      the condition or syndrome of shoulder adhesive capsulitis or other conditions
      or
      syndromes of the shoulder. 

     

    1.13  “Indication”
shall
      mean a pharmaceutical application of injectable collagenase. 

     

    1.14  “Information”
means
      (a) techniques, technology, practices, methods, procedures, inventions,
      discoveries, knowledge, know-how, trade secrets, skill, experience, gene or
      protein sequences, technical data, test data, analytical and quality control
      data, formulas or software programs, and (b) all compounds, compositions of
      matter, cells, cell lines, assays, and all other biological or chemical
      materials and samples.

     

    1.15  “Joint
      Inventions”
means
      any inventions in the Field, whether patentable or not, which are jointly
      conceived, discovered, developed or otherwise made, during the Development
      Program by at least one BTC employee or person contractually required to assign
      or license the intellectual property rights covering such inventions to BTC
      and
      at least one Stony Brook employee or person contractually required by virtue
      of
      New York state law to assign or license the intellectual property rights
      covering such inventions to the Research Foundation. 

     

    1.16  “Licensed
      Products”
means
      pharmaceutical products containing Enzyme as an active ingredient and any
      reformulation, improvement, enhancement, combination, refinement, or
      modification thereof, which are made, used and sold in the Field and the
      development, manufacture, use or sale of which would, in the absence of this
      Agreement, infringe one or more Valid Claims; provided however, the Licensed
      Products shall specifically exclude dermal formulations labeled for topical
      administration. 

     

    1.17  “MAA”
means
      a
      Marketing Authorization Application filed with the EMEA.

     

    1.18  “NDA”
means
      a
      New Drug Application, Biologics License Application or a Product License
      Application filed with the FDA.

     

    1.19  “Net
      Sales”
means
      

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (a)  with
      respect to sales of Licensed Products by BTC or its Affiliates, the gross sales
      price actually received less the following items to the extent they are paid
      and
      included in the invoice price:

     

    
      
        	
              	(i)	
                customary
                  trade discounts actually allowed;

              

      

      
        	
              	(ii)	
                packing,
                  freight, and insurance costs;

              

      

      
        	
              	(iii)	
                sales,
                  use, value-added and excise taxes; 

              

      

      
        	
              	(iv)	
                import,
                  export and customs duties and
                  taxes;

              

      

      
        	
              	(v)	
                credit
                  for returns, allowances or trades actually allowed;
                  and

              

      

      
        	
              	(vi)	
                government
                  mandated rebates, if any; and

              

      

    

     

    (b)  with
      respect to sales of Licensed Products by a Sublicensee (as defined below) where
      BTC has elected not to supply the Licensed Product, the net sales price as
      required to be reported to BTC by the Sublicensee pursuant to the written
      sublicense agreement between them. For
      purposes of clarification, if Auxilium acquires BTC, then notwithstanding any
      termination of the Auxilium License Agreement, the Net Sales price shall be
      the
      price that would have been reported by Auxilium to BTC under the Auxilium
      License Agreement as if the Auxilium License Agreement had remained in
      effect.
       

    

    (c)  with
      respect to sales of Licensed Products by a Sublicensee (as defined below) where
      BTC has elected to supply the Licensed Product, the net sales price as required
      to be reported to BTC under the Supply Agreement entered into between
      them.

    

    In
      the
      case of (a) and (b) above, sales by BTC, its Affiliates and Sublicensees to
      resellers or others for further formulation, processing, repackaging or
      relabeling shall be excluded, and only the subsequent resale to independent
      customers shall be deemed Net Sales. 

    

    In
      the
      case of Combination Products for which the agent or ingredient constituting
      a
      Licensed Product and each of the other active agents or ingredients not
      constituting a Licensed Product have established market prices when sold
      separately, Net Sales shall be determined by
      multiplying the Net Sales for each such Combination Product by a fraction,
      the
      numerator of which shall be the established market price for the Licensed
      Products contained in the Combination Product and the denominator of which
      shall
      be the sum of the established market prices for the Licensed Products plus
      the
      other active agents or ingredients contained in the Combination Product. When
      separate market prices are not established, then the Parties shall negotiate
      in
      good faith to determine a fair and equitable method of calculating Net Sales
      for
      the Combination Product in question, taking into account factors such as
      relative cost and relative therapeutic or diagnostic contribution.
       

    

    1.20  “Patent”
means
      any patent issued with respect to the Patent Applications, and any reissues
      or
      extensions thereof. 

     

    1.21  “Sublicensee”
means
      Auxilium or any person or entity who receives in the future a sublicense from
      BTC pursuant to Article III hereof.

     

    1.22  “Sublicense
      Income”
means
      the upfront payments and milestone payments actually received by BTC from (i)
      Auxilium and included within the definition of Sublicense Income as defined
      in
      the Auxilium License Agreement, or (ii) any other Sublicensee pursuant to
      Article III hereof. 

     

    1.23  “Supply
      Agreement”
shall
      mean any commercial supply agreement related to the manufacturing and/or supply
      of the Licensed Product between BTC and a Sublicensee or any Third Party.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    1.24  “Territory”
means
      all countries of the world. 

     

    1.25  “Third
      Party”
shall
      mean any person or other entity other than BTC or its Affiliates.

     

    1.26  “University
      Know-How”
means
      (i) any proprietary Information or materials related to the manufacture,
      preparation, formulation, use or development of the Enzyme and the Licensed
      Products and shall include formulations, processes, techniques, formulas,
      biological, chemical, assay control and manufacturing, technical, pre-clinical,
      clinical or other data, methods, and know-how, and trade secrets; (ii) all
      Information, not generally known, which is owned by the Research Foundation
      or
      is rightfully held with right to sublicense as of the Effective Date, or which
      was developed, discovered, conceived, reduced to practice, or acquired by the
      Research Foundation or by Stony Brook inventors and assigned by Stony Brook
      inventors to the Research Foundation as a result of the Development Program
      and
      which (a) relates to the Licensed Products or (b) relates to the methods,
      processes or techniques for the manufacture or use of the Licensed Products
      and
      (iii) any Joint Inventions. 

     

    1.27  “University
      Patents”
means
      the patent applications in respect of Frozen Shoulder that is covered by the
      assignment agreement attached hereto as Exhibit
      A,
      and any
      divisions, continuations and continuations-in-part thereof, any foreign patent
      applications corresponding thereto, and any patent issued with respect to such
      patent applications, and any reissues or extensions thereof. 

     

    1.28  “Valid
      Claim”
means
      a
      claim of an issued and unexpired patent included within the University Patents,
      which has not been held permanently revoked, unenforceable or invalid by a
      decision of a governmental agency or court of competent jurisdiction,
      unappealable or unappealed within the time allowed for appeal, and which has
      not
      been admitted to be invalid or unenforceable through reissue or disclaimer
      or
      otherwise. 

     

    ARTICLE
      II.

    DEVELOPMENT
      PROGRAM

    

    2.1   Frozen
      Shoulder Development Program.
      Pursuant to certain protocols, B&W, individually or collectively, together
      with other Stony Brook employees, performed certain pre-clinical, clinical,
      regulatory, process development and manufacturing work related to injectable
      collagenase pertaining to Frozen Shoulder. 

     

    ARTICLE
      III.

    LICENSE
      GRANT

    

    3.1   License
      Grant.
      The
      Research Foundation hereby grants to BTC and its Affiliates a worldwide
      exclusive license for the University Know-How in the Field and the University
      Patents in the Field. The Research Foundation hereby reserves all rights to
      any
      University Know How and University Patents outside of the Field. The Research
      Foundation further grants to BTC a worldwide exclusive license to use the
      University

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Know-How
      and the University Patents to develop, manufacture, use and sell in any manner
      Licensed Products in the Field, except to the extent that BTC, its Affiliates
      or
      Sublicensees enters into a material transfer agreement, clinical trial agreement
      or any similar agreement that allows the Research Foundation to do research
      or
      clinical development. This grant is subject to the payment by BTC to Research
      Foundation of any consideration required to be paid by Article IV of this
      Agreement.

     

    3.2   Government
      Rights.
      BTC
      acknowledges that the license granted to it hereunder are subject to a certain
      license granted to the United States government by the Research Foundation,
      as
      described in a letter dated as of October 6, 2006, a copy of which is attached
      hereto as Exhibit
      C.
      

     

    3.3   Sublicenses. 

     

    (a)  BTC
      shall
      be entitled to grant sublicenses of its rights hereunder, provided that any
      Net
      Sales of Licensed Products by a BTC Sublicensee shall be deemed to be Net Sales
      of a Sublicensee for purposes of royalty payments due hereunder, and BTC shall
      remain obligated to pay all royalties due with respect to Licensed Products
      sold
      by BTC and any Sublicensee. If BTC shall grant any sublicenses in addition
      to
      the Auxilium License Agreement under this Agreement, then it shall obtain the
      written commitment of such additional Sublicensees to abide by all applicable
      terms and conditions of this Agreement and BTC shall remain fully responsible
      to
      the Research Foundation for the performance of all such terms by such additional
      Sublicensees. Upon the termination of this Agreement, each Sublicensee shall
      have the option to convert its sublicense to a direct license with the Research
      Foundation on the same terms as in the sublicense agreement.

     

    (b)  The
      Research Foundation hereby acknowledges and consents to the sublicense that
      BTC
      has previously granted to Auxilium pursuant to the Auxilium License Agreement
      in
      respect of the Licensed Products. 

     

    3.4   Subagents.
      It is
      agreed that BTC has the right to take the following actions, none of which
      shall
      constitute a sublicense hereunder and none of which shall be subject to Section
      3.3 herein:

     

    (a)  appointing
      an agent or distributor to market, sell or otherwise dispose of Licensed
      Products; and

     

    (b)  subcontracting
      the development, manufacture or packaging of Licensed Products.

     

    3.5   Term.
      The term
      of said license will continue in effect for as long as the Licensed Products
      are
      sold. 

     

    ARTICLE
      IV.

    ROYALTIES
      AND MILESTONE PAYMENTS

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    4.1   Royalties. <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    4.2   Royalty
      Period.
      The
      royalty obligations of BTC shall commence on the date of the First Commercial
      Sale and continue for the longer of (i) the last to expire Valid Claim of a
      Patent covering the Licensed Product or (ii) June 3, 2016. 

     

    4.3   Currency;
      Conversion; Taxes.
      Royalty
      payments shall be paid in U.S. Dollars at the address of the Research Foundation
      set forth in Section 11.6 below, or such other place as the Research Foundation
      may reasonably designate in writing, consistent with applicable laws and
      regulations. Any taxes which BTC or its Affiliates or Sublicensees shall be
      required by law to withhold or pay upon remittance of the royalty payments
      shall
      be deducted from the royalty payable to the Research Foundation and paid on
      its
      behalf as required. BTC shall furnish the original of any official receipts
      for
      such taxes. If any currency conversion shall be required in connection with
      the
      payment of royalties hereunder, such conversion shall be made by using the
      average of the daily exchange rates for such currency quoted by the Wall Street
      Journal’s (New York edition) foreign exchange desk for each of the last three
      (3) banking days of each calendar quarter, or, in the case of sales by
      Sublicensees, using the exchange rates provided for in the written agreements
      between BTC and such Sublicensees.

     

    4.4   Currency
      Transfer Restrictions.
      If in
      any country in the Territory the payment or transfer of royalties on Net Sales
      in such country is prohibited by law or regulation, BTC shall notify the
      Research Foundation of the conditions preventing such transfer, and shall
      deposit the blocked payments in local currency in a recognized banking
      institution in the relevant country for the credit of the Research Foundation.
      

     

    4.5   Payments
      by Others.
      With
      respect to any sales of Licensed Products by BTC, its Affiliates or
      Sublicensees, BTC shall have the right to cause any Affiliate, Sublicensee
      or
      other designee to make direct payment to the Research Foundation of the
      royalties otherwise due for such sales. The Research Foundation shall accept
      such payments and the amount of royalties to be paid by BTC shall be reduced
      by
      the amount of such payments actually received by Research
      Foundation.

     

    4.6   Offsets
      for Third Party Licenses.
      If the
      Parties agree in writing that BTC, its Affiliates or Sublicensees must obtain
      a
      license from an independent Third Party in order for BTC to manufacture, use
      or
      sell a Licensed Product and if BTC and the Research Foundation agree on the
      terms of such license (a “Third
      Party License”),
      then
      the Parties shall share the cost of that license as defined herein. Such cost
      includes license fees, royalties and other fixed costs associated with the
      Third
      Party License minus the costs apportioned to any Sublicensee. <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION> 

     

    4.7   Milestone
      Payments.
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>.
      

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.8   Payments
      Related to Sublicense Income.
      <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

     

    ARTICLE
      V.

    REPORTS,
      PAYMENTS AND ACCOUNTING

    

    5.1   Royalty
      Reports and Payments.
      BTC
      agrees to make written reports and royalty payments to the Research Foundation
      within ninety (90) days after the close of each calendar quarter during the
      term
      of this Agreement, beginning with the quarter in which the First Commercial
      Sale
      occurs. These reports shall show for the calendar quarter in question all Net
      Sales of Licensed Products and the royalty due thereon, together with the same
      information for Licensed Products sold by Affiliates and Sublicensees (if
      applicable). With respect to sales of Licensed Products by Sublicensees, reports
      need only include information reflected in the reports required by Section
      5.4
      below which are actually received during the calendar quarter in question.
      Concurrently with the making of each report, BTC shall remit any royalty payment
      due for the period covered by the report. BTC will make a good faith attempt,
      using commercially reasonable biotech industry practices, to differentiate
      between Net Sales of Licensed Products and sales of similar products outside
      of
      the Field in calculating the amount of the royalty due hereunder to the Research
      Foundation. Absent manifest error, BTC’s good faith differentiation shall be
      binding and conclusive on the Parties. 

    

    5.2   Termination
      Report.
      Within
      ninety (90) days after the date on which BTC and its Affiliates and Sublicensees
      last sell any Licensed Products, BTC shall make a final termination report
      containing the same quarterly information required above.

    

    5.3   Accounting.
      BTC
      agrees to keep written or digitally stored records for a period of three (3)
      years from the end of each reporting period in sufficient detail to enable
      the
      royalties payable to be determined, and further agrees to permit its books
      and
      records to be examined during normal business hours by an independent accounting
      firm, selected by the Research Foundation and reasonably satisfactory to BTC,
      from time-to-time on reasonable notice, but not more often than once per year.
      Such examination must be made confidentially and the auditing firm shall be
      required to enter into reasonable confidentiality agreements. The expense of
      such examination shall be borne by the Research Foundation except that in the
      event the results of the audit reveal a discrepancy in the Research Foundation’s
      favor of 10% or more, then reasonable out-of-pocket audit fees shall be paid
      by
      BTC. Any discrepancy will be promptly corrected by a payment or refund, as
      appropriate.

     

    5.4   Third
      Party Reports.
      BTC
      agrees to require, as a term of any sublicense agreement, that the Sublicensee
      shall render written reports to BTC of Net Sales of Licensed Products no less
      frequently than twice per year and in sufficient detail to enable the royalties
      payable by BTC hereunder to be determined (“Third
      Party Reports”).
      BTC
      shall also require Sublicensees to keep records concerning Net Sales for a
      period of at least three (3) years, and to permit reasonable examination of
      such
      records by an independent accounting firm selected by BTC. Notwithstanding
      the
      foregoing, nothing in this Agreement shall be construed as enlarging, or
      requiring BTC to modify,

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Auxilium’s,
      its Affiliate’s or its Sublicensee’s existing reporting and record keeping
      obligations pursuant to the Auxilium License Agreement. 

     

    5.5   Confidentiality
      of Reports.
      The
      Research Foundation agrees that the information set forth in (a) the reports
      required by Sections 5.1 and 5.2, (b) the records subject to examination under
      Section 5.3, and (c) all Third Party Reports, shall be maintained in confidence
      by the Research Foundation and any independent accounting firm selected under
      Section 5.3, shall not be used for any purpose other than verification of the
      performance by BTC of its obligations hereunder, and shall not be disclosed
      by
      the Research Foundation or such accounting firm to any other
      person.

     

    ARTICLE
      VI.

    WARRANTIES;
      DISCLAIMED WARRANTIES; INDEMNIFICATION

     

    6.1   Title;
      Authority.
      The
      Research Foundation represents and warrants that B&W, by virtue of New York
      state law, have assigned to the Research Foundation all of the rights pertaining
      to the University Know-How and the University Patents licensed to BTC hereunder
      and that therefore the Research Foundation has the full unrestricted legal
      right
      to enter into this Agreement and to grant the licenses granted
      hereunder.

     

    6.2   No
      Other Licenses Granted.
      The
      Research Foundation represents and warrants that it has not granted any license
      pertaining to the University Know-How or the University Patents to any party
      other than to BTC pursuant to this Agreement. In addition, after reasonable
      investigation, the Research Foundation to the best of its knowledge is not
      aware
      that B&W, individually or collectively, have granted any license pertaining
      to the University Know-How or the University Patents to any Third Party, other
      than the United States government, as set forth in Section 3.2 of this
      Agreement. 

     

    6.3   No
      Known Infringement.
      As of
      the Effective Date, the Research Foundation has not received any notice of
      infringement of or conflict with any patent, trade secret, copyright, trademark
      or other intellectual property right of any other person with respect to the
      University Know-How. 

     

    6.4   No
      Warranty of Non-Infringement.
      Nothing
      in this Agreement shall be construed as a warranty or representation that any
      Licensed Products made, used or sold pursuant to any license granted hereunder
      is or will be free from infringement of patents, copyrights, trademarks, trade
      secrets or other intellectual property rights of Third Parties. 

     

    6.5   Indemnification
      by Research Foundation.
      Notwithstanding the absence of any warranty of non-infringement, the Research
      Foundation shall, during the term of this Agreement and thereafter, indemnify
      and hold harmless BTC, its Affiliates, Sublicensees and its and their directors,
      officers, agents and employees, from any losses, damages, expenses and
      liabilities of any kind (including legal expenses and reasonable attorneys’ fees
      and costs ) resulting from the Research Foundation’s gross negligence or willful
      misconduct in connection with:

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (a)  the
      action or inaction of the Research Foundation, its Affiliates or B&W; or

     

    (b)  any
      breach of this Agreement by the Research Foundation or its Affiliates.

     

    6.6    Indemnification
      by BTC.
      BTC
      shall, during the term of this Agreement and thereafter, indemnify and hold
      harmless the Research Foundation and its Affiliates and its and their directors,
      officers, agents and employees, from any losses, damages, expenses, and
      liability of any kind whatsoever (including legal expenses and reasonable
      attorneys’ fees and costs) resulting from BTC’s (and its Affiliates’ and
      Sublicensees’) gross negligence or willful misconduct in connection with the
      manufacture, use, testing, sale or advertisement of Licensed Products; provided,
      however, that in no case will the foregoing indemnity obligation apply to the
      extent that such claim, proceeding, loss, expense, or liability is the result
      of: 

     

    (a)  any
      action or inaction of the Research Foundation or its Affiliates, or its or
      their
      agents; or

     

    (b)  any
      alleged or actual infringement by the University Know-How of any patents,
      copyrights, trademarks, trade secrets or other intellectual property rights
      of
      Third Parties; or

     

    (c)  any
      breach of this Agreement by the Research Foundation.

     

    ARTICLE
      VII.

    TERM
      AND TERMINATION

    

    7.1   Term.
      Unless
      earlier terminated in accordance with this Article VII, this Agreement and
      the
      licenses granted hereunder shall continue in effect until the termination of
      BTC’s royalty obligations. Thereafter, all licenses granted shall become fully
      paid-up, irrevocable exclusive licenses. 

     

    7.2   Termination
      by the Research Foundation for Default.
      The
      Research Foundation may terminate this Agreement if BTC commits any material
      default of any of BTC’s material obligations, by notice to BTC specifying in
      reasonable detail the nature of the default, provided that such default has
      not
      been remedied within ninety (90) days of such notice. 

     

    7.3   Termination
      by BTC.
      BTC may
      terminate this Agreement (a) on 30 days’ notice to the Research Foundation if
      BTC elects to cease utilizing all license rights granted hereunder or (b) if
      the
      Research Foundation or any of its Affiliates is in material default of any
      of
      the Research Foundation’s material obligations or covenants, which default has
      not been remedied within ninety (90) days of notice to the Research Foundation
      specifying in reasonable detail the nature of the default. 

     

    7.4   Termination
      for Bankruptcy.
      If
      voluntary or involuntary proceedings in bankruptcy by or against a Party are
      instituted under any insolvency law, or a receiver or

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    custodian
      is appointed for a Party, or proceedings are instituted by or against a Party
      for corporate reorganization or dissolution, which proceedings shall not have
      been dismissed within sixty (60) days after the date of filing, or if a Party
      makes an assignment for the benefit of creditors, or substantially all of the
      assets of a Party are seized or attached and not released within sixty (60)
      days
      thereafter (that Party, a “Bankruptcy Party”), then the other Party may
      immediately terminate this Agreement by notice to the Bankruptcy Party. However,
      in the event that the other Party elects not to terminate the Agreement, the
      Parties intend that the rights and licenses granted under this Agreement shall
      be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code
      (or
      any equivalent provision of applicable foreign law), licenses or rights to
      “intellectual property” as defined under Section 101(52) of the U.S. Bankruptcy
      Code. 

     

    7.5   Rights
      and Obligations Upon Termination.
      Following termination of this Agreement for any reason, nothing herein shall
      be
      construed to release either Party from any obligation that arose prior to the
      date of such termination. After termination, BTC and its Affiliates and
      Sublicensees may complete Licensed Products in the process of manufacture at
      the
      date of termination and sell them along with any other Licensed Products in
      inventory, provided that BTC shall pay royalties as required by Article IV
      and
      shall submit the reports required by Article V for such Licensed Products.
      

     

    7.6   Return
      of Confidential Information.
      Upon
      termination of this Agreement, BTC shall return or destroy all University
      Know-How that is written, to the Research Foundation, provided that BTC may
      retain one copy of all written materials for legal and archival purposes
      only.

     

    7.7   Third
      Party Beneficiary Status of Auxilium.
      In the
      event of BTC’s bankruptcy and inability to perform its obligations hereunder,
      Auxilium shall have the right to cure any default by BTC and perform BTC’s
      obligations, and enforce BTC’s rights, hereunder, as a third party beneficiary.

     

    ARTICLE
      VIII.

    CONFIDENTIALITY,
      DISCLOSURE, AND PUBLICATIONS

    

    8.1   Confidentiality.
      

     

    (a)  During
      the term of this Agreement and for a period of five (5) years following its
      expiration or termination, each Party shall maintain in confidence all
      Information disclosed by the other Party which is marked or identified as
      confidential or which the receiving Party has reason to know is confidential
      or
      proprietary (referred to herein as “Confidential
      Information“),
      and
      shall not disclose Confidential Information to anyone except those Affiliates,
      Sublicensees, employees, subagents, consultants, or subcontractors having a
      “need to know” in order to carry out the receiving Party‘s activities as
      contemplated by this Agreement. Each receiving Party shall obtain written
      agreements from its Affiliates, Sublicensees, employees, subagents, consultants
      or subcontractors, prior to disclosure to them of Confidential Information,
      obligating them to hold in confidence and not use any Confidential Information
      except as permitted by this Agreement. Notwithstanding the foregoing sentence,
      if employees or consultants of

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    a
      receiving Party have previously signed general confidentiality agreements in
      favor the receiving Party as employer, and if those agreements bind the
      employees or consultants to protect Information disclosed hereunder to at least
      the same extent required by this Section , then it shall be sufficient for
      the
      employing Party to (i) notify the employees or consultants of the fact that
      Information disclosed hereunder is governed by such confidentiality agreements
      and (ii) identify to such employees or consultants the specific Information
      so
      governed. Each Party shall use the same degree of effort used to protect its
      own
      most valuable proprietary Information from unauthorized use or disclosure,
      and
      shall be responsible for ensuring compliance with these obligations by its
      Affiliates, Sublicensees, employees, subagents, consultants and subcontractors.
      Each Party shall promptly notify the other upon discovery of any unauthorized
      use or disclosure of the other’s Confidential Information.

     

    (b)  The
      receiving Party shall not use Confidential Information for any purpose,
      including for the development of products in the Field, except as specifically
      permitted by this Agreement.

     

    8.2   Exceptions.
      The
      obligation of confidentiality and non-use in this Article shall not apply to
      the
      extent that:

     

    (a)  either
      Party (the “Recipient”)
      is
      required to disclose Confidential Information by law, order or regulation of
      a
      governmental agency or a court of competent jurisdiction, or

     

    (b)  the
      Recipient can demonstrate that (i) the disclosed Information was, at the time
      of
      disclosure to the Recipient, already in the public domain or which, after
      disclosure, becomes part of the public domain other than as a result of action
      of the Recipient, its Affiliates, Sublicensees, employees, subagents,
      consultants or subcontractors in violation hereof; (ii) the Recipient can
      demonstrate that the disclosed Information was rightfully known or independently
      developed by the Recipient or its Affiliates prior to the date of disclosure
      to
      the Recipient, or (iii) the disclosed Information was received by the Recipient
      or its Affiliates on an unrestricted basis from a source unrelated to any Party
      to this Agreement and not under a duty of confidentiality to the other Party
      or

     

    (c)  the
      disclosure is made to the FDA, EMEA or other regulatory agency as part of a
      product approval process.

     

    8.3   Legally
      Compelled Information.
      In the
      event that either Party becomes legally compelled to disclose any Confidential
      Information belonging to the other Party, it shall notify the other Party prior
      to disclosure so that the other Party can seek a protective order or other
      appropriate remedy. 

     

    8.4
        Publications.
      Prior to
      public disclosure of or submission for publication of an abstract, manuscript
      or
      oral presentation describing the results of any aspect of the Development
      Program or other scientific activity between BTC and the Research Foundation,
      the Party disclosing or submitting such abstract, manuscript or
      oral

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    presentation
      (“Disclosing
      Party”)
      shall
      send the other Party (“Responding
      Party”)
      by a
      recognized delivery service for next day delivery a copy of the abstract,
      manuscript or oral presentation materials to be submitted. The Responding Party
      shall have 30 days, in the case of an abstract or oral presentation materials,
      or 60 days, in the case of a manuscript, from the date of receipt of the
      abstract, manuscript or oral presentation materials. If the Responding Party
      believes the subject matter of such abstract, manuscript or oral presentation
      contains Confidential Information or a patentable invention of significant
      commercial value to the Responding Party, then prior to the expiration of the
      relevant period, the Responding Party shall notify the Disclosing Party in
      writing of its determination and the basis for its conclusion. Upon receipt
      of
      such notice, the Disclosing Party shall delay public disclosure of or submission
      of abstract, manuscript or oral presentation for an additional period of 60
      days
      to permit preparation and filing of a patent application on the disclosed
      subject matter. No publication or presentation shall be made by the Disclosing
      Party unless and until the Responding Party’s comments have been addressed and
      any information determined by the Responding Party to be Confidential
      Information of the Responding Party has been removed. Determination of
      authorship for any paper or inventorship for any patent shall be in accordance
      with accepted scientific practice or patent law, as appropriate. Should any
      questions of authorship or inventorship arise, they will be determined by good
      faith consultation between the senior management of the respective Parties.
      

     

    ARTICLE
      IX.

    PATENT
      MATTERS

    

    9.1   Filing
      and Prosecution of Patents.
      

    

    (a)  During
      the term of the Agreement, BTC or any Sublicensee, pursuant to any sublicense
      agreement, shall have the right to, and in the reasonable exercise of its
      commercial discretion, prepare, file, prosecute, maintain, renew and defend
      all
      of the patents and applications included within the University Patents in the
      countries where such University Patents are filed as of the Effective Date.
      In
      the event that neither BTC nor any of its Sublicensees intend to file for patent
      protection or wish to continue preparation, prosecution, or maintenance of
      the
      patents and applications included within the University Patents, then BTC shall
      give at least thirty (30) days advance notice to the Research Foundation, and
      in
      no event less than a reasonable period of time for the Research Foundation
      to
      act. In such case, the Research Foundation shall have the right to prepare,
      file, prosecute, maintain, renew and defend all of the patents and applications
      included within the University Patents in the countries where such University
      Patents are filed as of the Effective Date.

    

    (b)  BTC
      or
      its Sublicensee shall be responsible for all costs and expenses incurred for
      such prosecution and maintenance. At BTC’s or any of its Sublicensee’s request,
      the Research Foundation shall cooperate and provide BTC or such Sublicensee
      with
      all necessary assistance and documentation in connection with the filing,
      prosecution and maintenance of all applications included within the University
      Patents. At the request of the Research Foundation, BTC or its Sublicensee
      will
      provide

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    the
      Research Foundation with reports relating to the filing, prosecution and
      maintenance of the University Patents and copies of any intended filings.

    

    9.2   Enforcement
      of University Patents.

    

    (a)  In
      the
      event that either Party becomes aware of a suspected infringement of a
      University Patent, or of the institution by a Third Party of any proceedings
      alleging the invalidity or unenforceability of any University Patent, such
      Party
      shall promptly notify the other Party, and, following such notification, the
      Parties shall confer. BTC or any Sublicensee, pursuant to any sublicense
      agreement, shall have the right, but shall not be obligated, to prosecute an
      infringement action or to defend such proceedings at its own expense, in its
      own
      name and entirely under its own direction and control. BTC may deduct any
      unreimbursed litigation expenses and legal fees from any recovery of damages
      or
      settlement received by BTC from any such suit, and twenty percent (20%) of
      the
      balance of the proceeds shall be paid to Research Foundation. The Research
      Foundation will reasonably assist BTC or its Sublicensee in such actions or
      proceedings if so requested, and will lend its name to such actions or
      proceedings if requested by BTC or its Sublicensee or if required by law,
      provided that BTC shall pay or reimburse the Research Foundation for all costs
      which the Research Foundation may incur in providing such asssistance. If BTC
      or
      its Sublicensee elect not to bring any action for infringement or defend any
      proceeding challenging any claims in an issued patent included within the
      University Patents within 90 days of being requested to do so, the Research
      Foundation may bring such action or defend such proceeding at its own expense,
      in its own name and entirely under its own direction and control. BTC or its
      Sublicensee will reasonably assist the Research Foundation in any action or
      proceeding if so requested by the Research Foundation or required by law,
      provided that the Research Foundation shall pay or reimburse BTC or its
      Sublicensee for all costs which BTC or its Sublicensee may incur in affording
      such assistance. No settlement of any action or proceeding may be entered into
      by either Party without the prior written consent of the other, which consent,
      in the case of the Research Foundation shall not be unreasonably withheld,
      and
      in the case of BTC or any Sublicensee may be withheld in BTC’s or any
      Sublicensee’s sole and absolute discretion.

    

    (b)  If
      either
      Party brings such an action or defends such a proceeding and subsequently ceases
      to pursue it or withdraws therefrom, that Party shall promptly notify the other
      Party who may then substitute itself for the withdrawing Party under the terms
      of this Section.

    

    ARTICLE
      X.

    DISPUTE
      RESOLUTION; ARBITRATION

    

    10.1   Exclusive
      Remedy.
      The
      Parties agree that the terms of this Article shall be the exclusive means of
      resolving any dispute, controversy or claim (a “Dispute”)
      arising out of or relating to this Agreement, except that either Party may
      seek
      injunctive relief or other provisional remedies from a court of competent
      jurisdiction if necessary to protect such Party’s name, intellectual property
      rights, or to prevent irreparable harm.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    10.2   Good
      Faith Negotiations.
      In the
      event of any Dispute arising out of or relating to or in connection with any
      provision of the Agreement, or the rights or obligations hereunder, the Parties
      shall try to settle their differences amicably between themselves. Either Party
      may initiate such informal dispute resolution by sending written notice of
      the
      dispute to the other Party, and within ten (10) business days after such notice
      appropriate representatives of the Parties shall meet for attempted resolutions
      by good faith negotiations. If such representatives are unable to resolve such
      disputed matters, they shall be referred to the senior management of the
      respective Parties, for discussion and resolution. If they are unable to resolve
      the dispute within thirty (30) days (or such longer period of time as the
      Parties may agree to in writing) of initiating such negotiations, then the
      Parties must resort to binding arbitration, as set forth in Section 10.3 below.
      

     

    10.3   Binding
      Arbitration.
      Any
      Dispute not so resolved shall be submitted, by a written notice of request
      to
      arbitrate given by either Party, to final and binding arbitration under the
      Commercial Arbitration Rules of the American Arbitration Association
      (“AAA”)
      then
      in force except as modified in accordance with the provisions of this Section.
      The arbitration proceedings shall be held in the City of New York in New York
      State. 

     

    10.4   Arbitrators.
      The
      arbitral tribunal shall be composed of three arbitrators, one appointed by
      each
      Party within 15 days, and the two arbitrators so appointed shall, within 15
      days
      of their appointment, appoint a third arbitrator who shall act as Chairman
      of
      the tribunal. If the Dispute involves scientific or technical matters, at least
      2 of the 3 arbitrators chosen shall have educational training and/or experience
      sufficient to demonstrate a reasonable level of knowledge in the field of
      biotechnology.

     

    10.5   Procedures.
      

     

    (a)  Prompt
      resolution of any Dispute is important to both Parties; and the Parties agree
      that the arbitration of any Dispute shall be conducted expeditiously. The
      arbitrators shall be instructed and directed to assume management initiative
      and
      control over the arbitration process (including scheduling of events,
      pre-hearing discovery and activities, and the conduct of the hearing), in order
      to complete the arbitration as expeditiously as is reasonably practical for
      obtaining a just resolution of the Dispute. The arbitrators shall be directed
      that any arbitration shall be completed within 1 year from the filing of notice
      of a request for such arbitration. 

     

    (b)  The
      arbitrators shall determine what discovery shall be permitted, consistent with
      the goal of limiting the cost and time which the Parties must expend for
      discovery; provided that the arbitrators shall permit such discovery as they
      deem necessary to permit an equitable resolution of the Dispute.

     

    (c)  In
      arriving at decisions, the arbitrators shall apply the terms and conditions
      of
      this Agreement in accordance with the rules of law governing it in accordance
      with Section 11.4. The arbitrators are empowered to render the following awards
      in accordance with any provision of this Agreement: (i) enjoining a Party
      from

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    performing
      any act prohibited, or compelling a Party to perform any act required, by the
      terms of this Agreement or any related agreement, and (ii) ordering such other
      legal or equitable relief, including any provisional legal or equitable relief,
      or specifying such procedures as the arbitrator deems appropriate, to resolve
      any Dispute submitted for arbitration. Any monetary award made and shall be
      payable in U.S. Dollars free of any tax or any deduction. The arbitrators shall
      issue to both Parties a written explanation in English of the reasons for the
      award and a full statement of the facts as found and the rules of law applied
      in
      reaching the decision. An award rendered in connection with an arbitration
      pursuant to this Article shall be the sole, exclusive, final and binding remedy
      between the Parties regarding the Dispute and any counterclaims made, and
      judgment upon any award may be entered and enforced in any court of competent
      jurisdiction. 

     

    10.6   Expenses.
      The
      award rendered by the arbitrators shall include the costs of arbitration,
      arbitrator fees, reasonable attorneys’ fees and reasonable costs for expert and
      other witnesses.

     

    10.7   Confidentiality
      of Proceedings.
      The
      arbitration proceedings shall not be made public without the joint consent
      of
      the Parties, and each Party shall maintain the confidentiality of such
      proceedings and decision unless otherwise required by law or permitted in
      writing by the other Party.

     

    ARTICLE
      XI.

    MISCELLANEOUS
      PROVISIONS

    

    11.1   Indemnification
      Procedures.
      In the
      event either Party seeks indemnification under any provision for indemnification
      afforded by this Agreement, the following procedures shall be
      followed:

     

    (a)  Notice
      of Claim.
      The
      Party seeking indemnification (the “Indemnitee”)
      shall
      give the other Party (the “Indemnifying
      Party”)
      prompt
      notice of any losses or of the discovery of facts upon which a request for
      indemnification may be made. The Indemnifying Party shall not be liable for
      any
      losses that it can show resulted from any delay in providing such notice. The
      notice must contain a description of the claim and the nature and amount of
      the
      loss (to the extent known), and shall include copies of all papers and official
      documents received in respect of any losses. 

     

    (b)  Control
      of Defense.
      At its
      option, the Indemnifying Party may assume the defense of any Third Party claim
      by giving written notice to the Indemnitee within thirty (30) days of the
      Indemnitee’s notice. The assumption of the defense of a Third Party claim by the
      Indemnifying Party shall not be construed as an acknowledgment that the
      Indemnifying Party is liable to the Indemnitee. Upon assuming the defense of
      a
      Third Party claim, the Indemnifying Party shall have the right to choose legal
      counsel and direct and control the defense in its sole discretion. In the event
      that it is ultimately determined that the Indemnifying Party is not obligated
      to
      indemnify the Indemnitee from the claim, the Indemnitee shall reimburse the
      Indemnifying Party for all costs and expenses incurred.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (c)  Right
      to Participate in Defense.
      The
      Indemnitee shall be entitled to participate in, but not control, the defense
      of
      a Third Party claim and to employ counsel of its choice for such purpose;
      provided, however, that such participation shall be at the Indemnitee's own
      expense unless the indemnifying Party has failed to assume the defense, in
      which
      case the Indemnitee shall control the defense. 

     

    (d)  Settlement.
      If the
      Indemnifying Party has acknowledged in writing the obligation to indemnify
      the
      Indemnitee for losses requiring only the payment of money damages in connection
      with a Third Party claim, and that will not result in the Indemnitee's becoming
      subject to injunctive or other, the Indemnifying Party shall have the sole
      right
      to consent to the entry of any judgment, enter into any settlement or otherwise
      dispose of such claim on such terms as the Indemnifying Party deems appropriate
      in its sole discretion. With respect to all other claims or losses, the
      Indemnifying Party shall have authority to consent to the entry of any judgment,
      enter into any settlement or otherwise dispose of such claim or loss provided
      it
      obtains the prior written consent of the Indemnitee (which consent shall not
      be
      unreasonably withheld or delayed). Regardless of whether the Indemnifying Party
      chooses to defend or prosecute any Third Party claim, no Indemnitee shall admit
      any liability with respect to, or settle, compromise or discharge, any such
      claim without the prior written consent of the Indemnifying Party. 

     

    (e)  Cooperation
      of Indemnitee.
      Regardless of whether the Indemnifying Party chooses to defend or prosecute
      any
      Third Party claim, the Indemnitee shall cooperate in the defense or prosecution
      thereof and shall furnish such records, information and testimony, provide
      such
      witnesses and attend such conferences, discovery proceedings, hearings, trials
      and appeals as may be reasonably requested. Such cooperation shall include
      access to and reasonable retention by the Indemnified Party of, records and
      information that are reasonably relevant to such Third Party claim, and making
      the Indemnitee’s employees and agents available on a mutually convenient basis
      to provide additional information and explanation of any material provided
      hereunder. The Indemnifying Party shall reimburse the Indemnitee for all its
      costs incurred in providing such cooperation. 

     

    (f)  Reimbursement
      of Expenses.
      The
      verifiable costs and expenses, including fees and disbursements of counsel,
      incurred by the Indemnitee in connection with any claim shall be reimbursed
      quarterly by the Indemnifying Party, without prejudice to the Indemnifying
      Party's right to contest its indemnification obligations, and such
      reimbursements shall be subject to refund in the event the Indemnifying Party
      is
      ultimately held not to be obligated to indemnify the Indemnitee.

     

    11.2   Assignment.
      This
      Agreement may not be assigned by either Party without the prior written consent
      of the other, except that BTC may assign this Agreement to a party which
      acquires (whether by merger, sale of assets or otherwise) all or substantially
      all of that portion of BTC’s business to which this Agreement
      pertains.

     

    11.3   Entire
      Agreement.
      This
      Agreement constitutes the entire Agreement between the Parties with respect
      to
      the subject matter hereof, and supersedes all previous

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    agreements,
      whether written or oral. This Agreement may not be modified orally, but only
      by
      an instrument in writing signed by both Parties.

     

    11.4   Choice
      of Law.
      The
      validity, performance, construction and effect of the Agreement shall be
      governed by the substantive laws of the state of New York without reference
      to
      conflicts of laws provisions.

     

    11.5   Severability.
      If any
      provision of this Agreement is declared invalid or unenforceable by an
      arbitrator pursuant to Section 10.5 (or by a court whose decision is final
      and
      binding pursuant to subsection 10.1) that provision shall be deemed fully
      severable. The remaining provisions of this Agreement shall remain in full
      force
      and effect and will be construed as if the invalid or unenforceable provision
      had been deleted.

     

    11.6   Notices.
      Any
      notice or report required or permitted to be given shall be in writing and
      delivered personally, sent by facsimile (and promptly confirmed by personal
      delivery, registered or certified mail or overnight courier as provided herein),
      sent by nationally-recognized overnight courier, or sent by registered or
      certified mail, postage prepaid, return receipt requested. Such notices and
      reports shall be sent to the following addresses and persons (or such other
      address or person as a Party may provide by a communication complying with
      this
      section), and shall be effective upon personal delivery or 5 days after dispatch
      by mail or courier, whichever is applicable:

     

    If
      to
      BTC,

    

    BioSpecifics
      Technologies Corp.

    35
      Wilbur
      Street

    Lynbrook,
      New York 11563

    Tel:
      (516) 593-7000

    Fax:
      (516) 593-7039

    Attn:
      President

    

    with
      a
      copy to:

    

    Carl
      A.
      Valenstein

    Thelen
      Reid & Priest LLP

    701
      8th
      Street NW

    Washington,
      DC 20001 

    Tel:
      (202) 508-4195

    Fax:
      (202) 654-1836 

    

    If
      to the
      Research Foundation,  

     

    Office
      of
      Technology Licensing and Industry Relations

    N5002
      Melville

    Memorial
      Library

    Stony
      Brook, New York

    11794-3369

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Tel:
      (631) 632-9009

    Fax:
      (631) 632-1505

    Attn:
      Director

    

    11.7   Waiver.
      The
      delay or failure of any Party to require performance of any provision in any
      one
      instance shall not be deemed a waiver and shall not affect the right to enforce
      the provision later or in any other instance. The observance of any term or
      condition may be waived, either generally or in a particular instance by the
      Party entitled to enforce such term or condition, but shall only be effective
      if
      in writing and signed by such Party. 

     

    11.8   Force
      Majeure.
      If
      either Party shall be delayed, interrupted in or prevented from the performance
      of any obligation hereunder (other than an obligation to make a payment) by
      reason of force
      majeure, including
      an act of God, fire, flood, earthquake, war (declared or undeclared), acts
      of
      terrorism, public disaster, strike or labor unrest, governmental act, rule
      or
      regulation, or any other cause beyond such Party’s control, such Party shall not
      be liable to the other therefore and the time for performance of such obligation
      shall be extended for a period equal to the duration of the contingency which
      occasioned the delay, interruption or prevention. The Party invoking such
force
      majeure rights
      must notify the other Party within a period of 15 days from the first and last
      day of the force
      majeure unless
      it
      renders such notification impossible, in which case, notification shall be
      made
      as soon as possible. If the resulting delay exceeds 4 months, both Parties
      shall
      consult in good faith to determine an appropriate course of action.

     

    11.9  
Independent
      Contractors.
      It is
      expressly agreed that the Parties shall be independent contractors and that
      the
      relationship shall not constitute a partnership or agency of any kind. Neither
      Party may bind the other or make statements on behalf of the other without
      prior
      written consent. 

     

    11.10  
Publicity.
      Neither
      Party shall use the name of the other Party in any publicity release without
      the
      prior written permission of the other, which shall not be unreasonably withheld.
      Except as required by law, neither Party shall publicly disclose the terms
      and
      conditions of the Agreement without the prior written consent of the other
      Party.

     

    11.11   Headings.
      The
      captions used in this Agreement are inserted for convenience of reference only
      and shall not be construed to create obligations, benefits or
      limitations.

     

    11.12  
Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall constitute an
      original and all of which taken together shall constitute one and the same
      instrument. 

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Parties have executed this Agreement on the dates set
      forth
      below.

     

    

    
      	
              BIOSPECIFICS
                TECHNOLOGIES CORP.

            	 	
              THE
                RESEARCH FOUNDATION OF THE STATE UNIVERSITY NEW YORK AT STONY
                BROOK

            
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	
              /s/
                Thomas L. Wegman

            	 	
              By:

            	
              /s/
                Donna L. Tumminello

            
	
              Name:

            	
              Thomas
                L. Wegman

            	 	
              Name:

            	
              Donna
                L. Tumminello

            
	
              Title:

            	
              President

            	 	
              Title:

            	
              Assistant
                Director of Business Development

            
	
              Date:

            	
              November
                21, 2006

            	 	
              Date:

            	
              November
                21, 2006

            

    

     

     

     

     

     

    Signature
      Page to Frozen Shoulder License Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    

    <OMITTED
      AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION>

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