Research And Feasibility Agreement

Exhibit 10.1 Certain portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are marked with brackets [ ] and an asterisk*. RESEARCH AND FEASIBILITY AGREEMENT C060616 This Research and Feasibility Agreement (this " Agreement" ) is dated as of March 26, 2007 by and between Electro-Optical Sciences, Inc., a Delaware corporation (" EOS" ), and L' Oreal , a corporation organized under French law (" L' Oreal" ) (EOS and L' Oreal each a " Party" , and collectively, the " Parties" ). RECITALS 1.1. WHEREAS, EOS has developed and owns certain proprietary EOS Technology (as defined below), for which it is seeking regulatory approval in various jurisdictions; 1.2. WHEREAS, EOS owns or controls (as defined below) patents, know-how, and other proprietary rights in relation thereto; 1.3. WHEREAS, L' Oreal has developed certain proprietary cosmeceutical products for the treatment of various skin conditions, and possesses patents, know-how, and other proprietary rights in relation thereto, including in vitro model systems; 1.4. WHEREAS, EOS and L' Oreal desire to study [*] the skin [*]; 1.5. WHEREAS, EOS and L' Oreal desire to conduct a two-phase study for such purpose on the terms and conditions set forth below, the first phase using an [*] model developed by L' Oreal, and the second phase a clinical study conducted using biopsied pigmented skin lesions; 1.6. WHEREAS, the further goal of EOS and L' Oreal is to evaluate the feasibility of using the EOS Technology to differentiate in vivo human [*] lesions from other pigmented skin lesions [*]; NOW, THEREFORE, in consideration of the recitals and the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

Page 1


CONFIDENTIAL ARTICLE II DEFINITIONS 2.1. " Affiliate" of a Person shall mean any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person. For purposes of this definition only, " control" and, with correlative meanings, the terms " controlled by" and " under common control with" shall mean (A) the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, resolution, regulation or otherwise, or (B) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a Person. 2.2. " Agreement" shall have the meaning set forth in the preamble hereto. 2.3. " Applicable Law" shall mean the applicable laws, rules, and regulations, including, without limitation, any rules, regulations, guidelines or other requirements of the Regulatory Authorities that may be in effect from time to time. 2.4. " Business Day" shall mean a day that is not a Saturday, Sunday, or day on which banking institutions in New York, New York, or Paris, France, are required by law to remain closed. 2.5. " Calendar Quarter" shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30, and December 31. 2.6. " Confidential Information" shall have the meaning set forth in Section 6.1 hereof. 2.7. " Control" shall mean, with respect to any item of information or other intellectual property, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise (other than by operation of the license and other grants in this Agreement), to assign or grant a license, sublicense or other right to or under such information or intellectual property right as provided for herein. 2.8. " Disclosing Party" shall have the meaning set forth in Section 6.1 hereof. 2.9. " Dispute" shall have the meaning set forth in Section 8.2(a) hereof. 2.10. " Effective Date" shall mean the date set forth in the preamble hereto. 2.11. " EOS" shall have the meaning set forth in the preamble hereto. 2.12. " EOS Improvements" shall have the meaning set forth in Section 5.1(a) hereof.

Page 2


CONFIDENTIAL 2.13. " EOS Know-How" shall mean all Know-How owned or otherwise Controlled by EOS that relates to the EOS Technology and is reasonably necessary or useful in the performance of the Feasibility Activities designated for L' Oreal. 2.14. " EOS Patents" shall mean any and all Patents owned or otherwise Controlled by EOS, to the extent that such Patents relate to the EOS Technology. 2.15. " EOS Technology" shall mean (i) the EOS proprietary, non-invasive, point-of-care instrument known as Melafind, and the corresponding methods for imaging, analyzing, diagnosing, or reporting with respect to malignant, non-malignant, medical and non-medical conditions of the skin or other biological tissues, including melanoma; and (ii) all multispectral devices and multispectral methods for imaging, analyzing, diagnosing, or reporting with respect to pigmented conditions of the skin (malignant, non-malignant, medical, and non-medical), including melanoma. 2.16. " Feasibility Activities" shall mean all activities that are performed by or on behalf of either Party as specifically included in the Feasibility Program. 2.17. " Feasibility Budget" shall mean the budget for the Feasibility Activities to be performed by EOS, and for the Feasibility Activities to be performed by third parties under a separate agreement, as updated from time to time pursuant to Section 3.2(b). The initial Feasibility Budget is set forth in Exhibit A hereto. 2.18. " Feasibility Plan" shall mean the detailed program of tests and studies set forth in Exhibit B hereto, as amended by the Parties from time to time in writing. 2.19. " Feasibility Program" shall have the meaning set forth in Section 3.1 hereof. 2.20. " Improvement" shall mean any modification to a compound, composition, product or technology or to any discovery, device, method of analysis or quantization, process or formulation related to such compound, composition, product or technology, whether or not patented or patentable, including, without limitation, any enhancement in the efficiency, operation, manufacture, ingredients, preparation, presentation, formulation, means of delivery, packaging or dosage of a compound, composition, product or technology, or of any discovery, device, process or formulation related thereto; any discovery or development of any new or expanded indications or applications for a compound, composition, product or technology; any discovery or development that improves the stability, performance, profile, efficiency, safety or efficacy of a compound, composition, product or technology; or any discovery or development of a new dosage regimen for a product or method of use or administration for a compound, composition, product or technology. 2.21. " Information and Inventions" shall mean all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulas, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including, without limitation,

Page 3


CONFIDENTIALCertain portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are marked with brackets [ ] and an asterisk*.pre-clinical and clinical trial results, manufacturing procedures, test procedures, and purification and isolation techniques, (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed, and all Improvements, whether to the foregoing or otherwise, and all other discoveries, developments, inventions (whether or not confidential, proprietary, patented or patentable), and tangible embodiments of any of the foregoing. 2.22. " Know-How" shall mean any Information and Inventions that are not generally known and are not claimed in or covered by Patents. 2.23. " L' Oreal" shall have the meaning set forth in the preamble hereto. 2.24. " L' Oreal Field" shall mean all skin disorders relating to [*], excluding melanoma, pigmented basal and squamous cell carcinomas, and pigmented pre-cancerous lesions. For the avoidance of doubt, the L' Oreal Field shall not include the diagnosis of any medical conditions. 2.25. " L' Oreal Know-How" shall mean all Know-How owned or otherwise Controlled by L' Oreal that relates to the L' Oreal Products, Technologies and Methods or the L' Oreal Field and is reasonably necessary or useful in the performance of the Feasibility Activities designated for EOS. 2.26. " L' Oreal Patents" shall mean any and all Patents owned or otherwise Controlled by L' Oreal, to the extent that such Patents relate to the L' Oreal Products, Technologies and Methods or the L' Oreal Field. 2.27. " L' Oreal Products, Technologies and Methods" shall mean certain of L' Oreal' s proprietary products, technologies and methods for the treatment of various skin conditions, as more specifically described on Exhibit C hereto. L' Oreal Products, Technologies and Methods includes L' Oreal' s proprietary [*]. 2.28. " Party" shall have the meaning set forth in the preamble hereto. 2.29. " Patent" shall mean (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from any of these, including divisional, continuations, continuations-in-part, provisional, converted provisional, and requests for continued prosecution, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents.

Page 4


CONFIDENTIAL 2.30. " Person" shall mean an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including without limitation a government or political subdivision, department or agency of a government. 2.31. " Receiving Party" shall have the meaning set forth in Section 6.1 hereof. 2.32. " Regulatory Authorities" shall mean any applicable supra-national, federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities, including, without limitation, the U.S. Food and Drug Administration and the European Medicines Agency, exercising regulatory authority with respect to the conduct of the Feasibility Activities. ARTICLE III FEASIBILITY PROGRAM 3.1. Conduct of Feasibility Program. Each Party shall use commercially reasonable efforts to conduct and complete those activities designated for it in the Feasibility Plan or that are otherwise required by this Article II (the " Feasibility Program" ), in accordance with the schedule set forth in the Feasibility Plan and, in the case of EOS, in accordance with the Feasibility Budget. Each Party agrees to conduct its designated Feasibility Activities in good scientific manner and in compliance in all material respects with Applicable Law. Further, each Party agrees to endeavor to achieve the objectives of the Feasibility Program efficiently and expeditiously and to allocate sufficient time, effort, equipment, and skilled personnel to complete its designated Feasibility Activities successfully and in a timely manner. 3.2. Coordination. (a) During the term of this Agreement, the contacts designated by the Parties pursuant to Section 3.5 hereof shall discuss with each other the conduct and progress of the Feasibility Program, by telephone or in person, not less frequently than once a month. In such discussions, the contacts shall cover the status of the Feasibility Activities, review relevant results and data, consider technical and other issues that have arisen, and review and advise on any scientific and budgetary matters relating to the Feasibility Program. (b) Either Party may propose amendments to the Feasibility Plan. Any such proposed amendments shall be subject to mutual agreement of the Parties. In the event that changes to the Feasibility Plan are approved, the Parties agree that the Feasibility Budget shall be amended by mutual agreement to reflect any anticipated changes in the costs of the Feasibility Activities designated for EOS that are associated with such amendments to the Feasibility Plan. 3.3. Reporting Requirements.

Page 5


CONFIDENTIAL (a) Within ten (10) days after the end of each Calendar Quarter during the term of this Agreement, each Party shall provide to the other Party a written progress report which describes the Feasibility Activities that the first Party has performed to date, evaluate the work performed in relation to the goals of the Feasibility Plan, and provide such other information as may be required by the Feasibility Plan or reasonably requested by the other Party relating to the Feasibility Program. (b) Within thirty (30) days after completion of the Feasibility Program, EOS shall prepare and provide to L' Oreal a final report analyzing and evaluating the results of the Feasibility Program. 3.4. Regulatory Records. Each Party shall maintain records with respect to the conduct of its designated Feasibility Activities in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall fully and properly reflect all work done and results achieved in the performance of the Feasibility Program. Each Party shall retain such records for at least five (5) years after the termination of this Agreement, or for such longer period as may be required by Applicable Law. The other Party and its representatives shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records. 3.5. Contacts. For purposes of the Feasibility Program the contact person of the respective Party hereto shall be the person named below or any person subsequently notified by either Party to the other for this purpose. EOS: Dina Gutkowicz-Krusin (for technical matters) Joanna Adrian (for administrative matters) L' Oreal: Olivier De Lacharrie8re Ste9phanie NOUVEAU 3.6. Subcontracting. Each Party may perform any or all of its obligations under this Article II through one or more of its Affiliates or, with the prior written consent of the other Party, through one or more subcontractors. 3.7. Communications with Regulatory Authorities. EOS shall have the sole right to conduct all communications with the Regulatory Authorities and shall have the sole responsibility to secure any approvals required from the Regulatory Authorities in connection with the conduct of the Feasibility Program; provided, however, that L' Oreal shall provide reasonable assistance to EOS in securing such approvals, at EOS' s request. 3.8. Supplies. Except as specifically set forth in the Feasibility Plan, each Party shall be responsible for providing such equipment, materials and other supplies as it may require for the purpose of performing its designated Feasibility Activities.

Page 6


CONFIDENTIAL ARTICLE IV EXPENSES AND PAYMENTS 4.1. Costs and Expenses. L' Oreal shall be solely responsible for all costs and expenses that it or its Affiliates or permitted subcontractors incur in connection with the Feasibility Program, and shall reimburse all costs and expenses that EOS or its Affiliates incur in connection with the Feasibility Program to the extent provided in Section 4.2 hereof. 4.2. Payments to EOS. In consideration of EOS' s performance of its designated Feasibility Activities, L' Oreal shall reimburse EOS, in the manner provided in Section 4.3 hereof, for the costs and expenses (including such employee salaries and fully-loaded general and administrative expenses as are allocable to the Feasibility Program) that are (i) set forth in the Feasibility Budget and (ii) incurred by EOS or its Affiliates in connection with the conduct by EOS, its affiliates or duly appointed third parties, of the Feasibility Program, up to the maximum amount set forth in the Feasibility Budget. In the event that EOS reasonably anticipates that the costs and expenses incurred in the performance of its designated Feasibility Activities will exceed such maximum amount, the Parties shall discuss the matter in good faith and make revisions as appropriate to the Feasibility Budget; provided, however, that EOS shall not be required to perform such Feasibility Activities to the extent that such performance would give rise to such overruns, in the event that the Parties fails to amend the Feasibility Budget to provide for reimbursement of such overruns. 4.3. Invoices and Payments. Within thirty (30) days of the commencement of each Calendar Quarter, EOS shall send L' Oreal an invoice in the amount of the budget for such Calendar Quarter, as set forth in the Feasibility Budget. Such invoice shall be payable by L' Oreal within thirty (30) days after receipt thereof. Within thirty (30) days of the end of such Calendar Quarter, EOS shall send L' Oreal (i) a statement of the total amount of reimbursable expenses incurred by EOS during such Calendar Quarter, which statement shall be accompanied by reasonable documentation thereof, and (ii) an invoice for the positive difference, if any, between such amount and the amount paid by L' Oreal with respect to such Calendar Quarter pursuant to the second sentence of this Section 4.3, which invoice shall be payable by L' Oreal within thirty (30) days after receipt thereof. In the event that the amount paid by L' Oreal pursuant to the second sentence of this Section 4.3 with respect to such Calendar Quarter exceeds the amount of reimbursable expenses incurred by EOS during such Calendar Quarter, the excess shall be credited against the amount payable by L' Oreal to EOS with respect to the following Calendar Quarter. Any delinquent payments by L' Oreal shall accrue interest from the date on which payment was due, at the prime rate, as published in The Wall Street Journal, Eastern United States Edition, on the last Business Day preceding such date. 4.4. Books and Records. EOS shall maintain complete and accurate books, records and accounts that, in reasonable detail, fairly reflect any reimbursable Feasibility Plan costs and expenses incurred by it or its Affiliates in conformity with U.S. GAAP. EOS shall retain such books, records and accounts until the later of (a) three (3) years after the end of the period to which such books, records and accounts pertain, and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law. Upon the written request of L' Oreal and not

Page 7


CONFIDENTIALmore than once in each calendar year, EOS shall permit an independent certified public accounting firm of internationally recognized standing selected by L' Oreal, and reasonably acceptable to EOS, to have access, during normal business hours and upon reasonable prior written notice, to such of the records of EOS as may be reasonably necessary to verify the accuracy of the calculation of any amounts payable by L' Oreal, for any calendar year ending not more than twenty-four (24) months prior to the date of such request. ARTICLE V INTELLECTUAL PROPERTY 5.1. Ownership. (a) Subject to Section 5.2 hereof, as between the Parties, EOS owns all right, title and interest in and to the EOS Know -How, the EOS Patents, and the EOS Technology. EOS shall own all right, title and interest in and to any and all Information and Inventions relating to the EOS Technology that either Party (or its Affiliates or subcontractors) may independently or jointly with the other Party conceive, develop or invent in the course of performing its designated Feasibility Activities (collectively, " EOS Improvements" ). L' Oreal shall promptly disclose in writing to EOS the development, making, conception or reduction to practice of any EOS Improvements, assign to EOS any right, title or interest that L' Oreal may have therein, and assist EOS as reasonably required to enable EOS to perfect its rights in such EOS Improvements. EOS shall have the sole right, in its sole discretion, to prepare, file, prosecute, maintain, and enforce Patents covering or claiming the EOS Improvements. (b) Subject to Section 5.2 hereof, as between the Parties, L' Oreal owns all right, title and interest in and to the L' Oreal Know-How, the L' Oreal Patents, and the L' Oreal Products, Technologies and Methods. (c) Subject to Section 5.2 hereof, as between the Parties, EOS shall own all right, title and interest in and to the images generated through use of the Melafind device and any diagnostic hematoxylin and eosin (" H&E" ) slides produced by either Party in the course of the Feasibility Program (hereinafter " New EOS Intellectual Property" ); provided, however, that L' Oreal may, at its own expense, obtain copies of such images and slides and use the same for any purpose on a non-exclusive, royalty-free basis. (d) Subject to Section 5.2 hereof, as between the Parties, L' Oreal shall own all right, title and interest in and to the clinical data and other data (other than the New EOS Intellectual Property) generated during the Feasibility Program (hereinafter " New L' Oreal Intellectual Property" ). (e) It is understood and agreed that, except as expressly provided in this Section 5.1 or Section 5.2 hereof, nothing contained in this Agreement or otherwise shall be construed to mean that one Party will obtain any right, title or interest, by implication or otherwise, to or under any intellectual property right of the other Party. In particular, L' Oreal will not obtain any right, title or interest in or to the EOS Know-How, the EOS Patents, the EOS Improvements, the EOS Technology, or the New EOS Intellectual

Page 8


CONFIDENTIALCertain portions of this Exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are marked with brackets [ ] and an asterisk*.Property, and EOS will not obtain any right, title or interest in or to L' Oreal Know-How, the L' Oreal Patents, the L' Oreal Products, Technologies and Methods or the New L' Oreal Intellectual Property, in each case except as provided in this Section 5.1 and Section 5.2 hereof. 5.2. License and Option Grants. (i) EOS hereby grants to L' Oreal a royalty-free, worldwide, exclusive license, with the right to sublicense to Affiliates and permitted subcontractors, under the EOS Know-How, the EOS Patents, the EOS Improvements, and the New EOS Intellectual Property, to perform its designated Feasibility Activities. (ii) L' Oreal hereby grants to EOS a royalty-free, worldwide, exclusive license, with the right to sublicense to Affiliates and permitted subcontractors, under the L' Oreal Know-How, the L' Oreal Patents, the L' Oreal Products, Technologies and Methods, and the New L' Oreal Intellectual Property, to perform its designated Feasibility Activities. (iii) L' Oreal hereby grants to EOS a royalty-free, worldwide, exclusive license, with the right to sublicense to Affiliates and permitted subcontractors, under the New L' Oreal Intellectual Property, outside the L' Oreal Field. (iv) EOS hereby grants to L' Oreal an option to obtain an exclusive license, on terms and conditions to be mutually agreed, under any EOS Technology Controlled by EOS or its Affiliates, for [*] non-medical uses, which option shall expire on the earlier to occur of six (6) months after Feasibility Plan completion and August 31, 2008. L' Oreal shall give EOS written notice in the event that L' Oreal decides to exercise the option. Upon receipt by EOS of such notice, the Parties shall use good faith efforts to negotiate and execute a definitive license agreement. In the event that the Parties shall not have executed such a license agreement within ninety (90) days after receipt by EOS of such notice, then such option shall automatically terminate unless otherwise mutually agreed by the Parties. 5.3. Clinical Research Agreement. The provisions of this Agreement, including this Article 5 and Article 6 hereof, shall govern the rights and obligations of the Parties under that certain Clinical Research Agreement among L' Oreal, EOS and [*] relating to the Study (as defined therein). Such Clinical Research Agreement shall be substantially in the form attached hereto as Exhibit D. The Study shall comprise an integral part of the Feasibility Program. ARTICLE VI CONFIDENTIALITY 6.1. Confidential Information. Except to the extent permitted by this Agreement or as otherwise agreed by the Parties in writing, the Parties agree that, at all times during the term of the Feasibility Program and for a five (5) year period following the completion or termination thereof, the Party receiving information (the " Receiving Party" ) shall keep confidential and shall not disclose any information (including any multispectral images and

Page 9


CONFIDENTIALhistological slides) furnished to it by the other Party (the " Disclosing Party" ) on or after the Effective Date pursuant to this Agreement or prior to the Effective Date pursuant to that certain Letter Agreement of Confidentiality dated June 20, 2006 between the Parties (the " Confidential Information" ), except to the extent that the Receiving Party can establish by competent proof that such information: (a) was already known to the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party; (b) was part of the public domain at the time of its disclosure by the Disclosing Party; (c) became part of the public domain after its disclosure by the Disclosing Party, other than through any act or omission of the Receiving Party in breach of this Agreement; (d) was disclosed to the Receiving Party by a third party who had no obligation not to disclose such information to others; or (e) was independently developed or discovered by employees or agents of the Receiving Party who had no access to the Confidential Information. 6.2. Disclosure. (a) Each Party may disclose Confidential Information of the other Party to the extent that such disclosure is: (i) made in response to a valid order of a court of competent jurisdiction or other governmental body of a country or any political subdivision thereof of competent jurisdiction; provided , however , that the Receiving Party shall first have given notice to the Disclosing Party and given the Disclosing Party a reasonable opportunity to quash such order and to obtain a protective order requiring that the Confidential Information and/or documents that are the subject of such order be held in confidence by such court or governmental body or, if disclosed, be used only for the purposes for which the order was issued; and provided further that if a disclosure order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in such response to such court or governmental order; (ii) otherwise required by law, including the U.S. federal securities laws, or the rules of any stock exchange on which such Party is listed; (iii) made to the Regulatory Authorities as required in connection with any filing, application or request for regulatory approval; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information; (iv) made to existing or potential acquirers or merger candidates; existing or potential pharmaceutical collaborators; investment bankers; existing or potential

Page 10


CON ...