EXCLUSIVE LICENSE 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*.

EXCLUSIVE LICENSE AGREEMENT

     This Exclusive License Agreement (the “Agreement” ) is made and entered into as of December 1 , 2006 (the “ Effective Date ”) by and between Electro-Optical Sciences, Inc. , a Delaware corporation, having its principal place of business at 3 West Main Street, Suite 201, Irvington, New York (“EOS” ), and KaVo Dental GmbH, a corporation incorporated under the laws of the Federal Republic of Germany with its principal place of business at Bismarckring 39, 88400 Biberach an der Riss ( “Licensee” ). EOS and Licensee are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

      WHEREAS , EOS owns or controls certain intellectual property relating to the EOS Technology (as defined below) and has obtained 510(k) approval from the FDA for use of the EOS Technology for the early detection of coronal tooth decay and fractures, using light rather than X-ray; and

      WHEREAS , Licensee has considerable expertise in the development, marketing and sale of dental diagnostic products, and has in place the large and experienced development and marketing staff needed to develop and distribute such products effectively and expeditiously; and

      WHEREAS , EOS desires to grant a license to Licensee, and Licensee desires to obtain a license, to develop and commercialize the EOS Technology in accordance with the terms and conditions set forth below;

      NOW, THEREFORE , in consideration of the foregoing premises, the mutual promises and covenants of the Parties contained therein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, do hereby agree as follows:

ARTICLE I
DEFINITIONS

Unless otherwise specifically provided herein, the following terms shall have the following meanings:

           1.1 “510(k) Notification” shall mean a 510(k) Notification within the meaning of FFDCA and the regulations promulgated thereunder.

           1.2 “Additional Patents” shall mean any Patents, other than the Core Patents, that are Controlled by EOS as of the Effective Date or at any time during the term of this Agreement and, in the absence of a license from EOS, would necessarily be infringed by the practice in the Field of the technology claimed by the Core Patents.

           1.3 “Affiliate” shall mean, with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes of this definition, “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 the management or policies of a business entity, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise, or (b) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of a business entity (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity).

           1.4 “Agreement” shall have the meaning set forth in the preamble to this Agreement.

           1.5 “Applicable Law” shall mean applicable laws, rules and regulations, including any rules, regulations, guidelines or other requirements of the Regulatory Authorities, that may be in effect from time to time.

           1.6 “Arbitration Rules” shall have the meaning set forth in Section 14.6.3.

           1.7 “Audit Referee” shall have the meaning set forth in Section 6.11.

           1.8 “Breaching Party” shall have the meaning set forth in Section 13.2.

           1.9 “Business Day” shall mean a day other than a Saturday or Sunday on which banking institutions in New York, New York are open for business.

           1.10 “Calendar Quarter” shall mean each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1.

           1.11 “Calendar Year” shall mean each successive period of twelve (12) calendar months commencing on January 1 and ending on December 31.

           1.12 “ Change of Control ” shall mean, with respect to a Person, any of the following transactions with a Third Party (a “ Third Party Acquirer ”), whether accomplished in one or a series of related transactions: (a) a merger or consolidation of such Person with the Third Party Acquirer which results in the holders of the voting securities of such Person outstanding immediately prior thereto (other than the Third Party Acquirer, its “affiliates” and “associates” (as such terms are used in the Exchange Act)) ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity (or, if applicable, its parent company) immediately after such merger or consolidation; (b) the sale to the Third Party Acquirer of all or substantially all of the business of such Person to which this Agreement relates (whether by merger, consolidation, sale of stock, sale of assets or other similar transaction); or (c) the Third Party Acquirer (which shall not be any trustee or other fiduciary holding securities under an employee benefit plan of such Person, or any corporation owned directly or indirectly by the stockholders of such Person, in substantially the same proportion as their ownership of stock of such Person), together with any of the Third Party Acquirer’s “affiliates” or “associates”, as such terms are used in the Exchange Act, becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of such Person or by contract or otherwise having the

right to control the Board of Directors or equivalent governing body of such Person or the ability to cause the direction of management of such Person. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur on account of the acquisition of securities of a Party by any institutional investor, or affiliate thereof, that acquires the Party’s securities in a transaction or series of related transactions that are primarily a private financing transaction for the Party.

           1.13 “Clinical Data” shall mean all information with respect to the Licensed Product made, collected or otherwise generated under or in connection with any Clinical Studies of the Licensed Product, including any data, reports and results with respect thereto.

           1.14 “Clinical Studies” shall mean, with respect to a Licensed Product, any clinical trials required by the FDA for Regulatory Approval of such product in the United States, or equivalent trials required by Regulatory Authorities for Regulatory Approval of such product outside the United States.

           1.15 “Combination Product” shall mean a product that contains (a) one or more components that constitute a Licensed Product and (b) one or more other proprietary components, whether sold as a single device or as separate devices in a single package.

           1.16 “Commercialization” shall mean any and all activities (whether conducted before or after Regulatory Approval) directed to the marketing, detailing and promotion of the Licensed Product after Regulatory Approval has been obtained, and shall include post-launch marketing, promoting, detailing, marketing research, distributing, and commercially selling the Licensed Product, importing, exporting or transporting the Licensed Product for commercial sale and regulatory affairs with respect to the foregoing, but shall not include Manufacturing. When used as a verb, “Commercializing” means to engage in Commercialization and “Commercialize” and “Commercialized” shall have a corresponding meanings.

           1.17 “Commercially Reasonable Efforts” shall mean, with respect to the Development or Commercialization of the Licensed Product, that level of efforts and resources commonly dedicated in the medical device industry to the development or commercialization, as the case may be, of an internally-developed device of similar commercial potential at a similar stage in its lifecycle. Commercially Reasonable Efforts shall be determined on a market-by-market basis for the Licensed Product without regard to the particular circumstances of a Party, including any other product opportunities of such Party and, with respect to Licensee, without regard to any payments owed to EOS hereunder.

           1.18 “Complaining Party” shall have the meaning set forth in Section 13.2.

           1.19 “Confidential Information” shall have the meaning set forth in Section 10.1.

           1.20 “Consumable” shall mean a product, or a part or component of a product, which product, part or component thereof (a) is intended to be depleted by consumer use ( e.g. , mouth pieces), (b) requires periodic replacement, or (c) is a replacement part for any Licensed Product.

           1.21 “Control” shall mean, with respect to any item of Information, Regulatory Documentation, Patent or Intellectual Property Right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise (other than by operation of the licenses and other grants in Article V and Article XIII of this Agreement), to assign or grant a license, sublicense or other right to or under, such Information, Regulatory Documentation, Patent or Intellectual Property Right as provided for herein without violating the terms of any written agreement or other formal arrangement with any Third Party.

           1.22 “Core Patents” shall mean (a) the Patents set forth on Exhibit A, (b) any Patents issuing from any Patent application claiming priority from any Patent described in the foregoing clause (a), (c) any foreign equivalents of any Patents described in the foregoing clauses (a) and (b), and (d) any Patents Controlled by EOS as of the Effective Date or at any time during the term of this Agreement that relate solely to the Existing Products or any Improvements thereto.

           1.23 “Corporate Names” shall mean (a) in the case of EOS, the EOS corporate logo or such other names and logos as EOS may designate in writing from time to time and (b) in the case of Licensee, Licensee’s corporate logo or such other names and logos of Licensee, in each case ((a) and (b)) together with any variations and derivatives thereof.

           1.24 “Development” shall mean all activities related to research, preclinical and other non-clinical testing, test method development, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control and Clinical Studies, including manufacturing in support thereof, statistical analysis and report writing, the preparation and submission of any application for Regulatory Approval, regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval. When used as a verb, “Develop” shall mean to engage in Development.

           1.25 “Development Agreement” shall have the meaning set forth in Section 2.1.3.

           1.26 “Dispute” shall have the meaning set forth in Section 14.6.1.

           1.27 “Distributor” shall mean a Person, other than a Sublicensee or an Affiliate of Licensee, in one or more countries in the Territory that (a) purchases the Licensed Product from the Licensee, its Affiliate or Sublicensee for such country(ies), (b) assumes responsibility from the Licensee for all or a portion of the Commercialization of the Licensed Product in such country(ies) and (c) sells the Licensed Product in such country(ies).

           1.28 “Effective Date” shall have the meaning set forth in the preamble to this Agreement.

           1.29 “EOS” shall have the meaning set forth in the preamble to this Agreement.

           1.30 “EOS Know-How” shall mean all Information that is Controlled by EOS as of the Effective Date or during the term of this Agreement that (a) is not generally known and (b) is reasonably necessary or useful for the Exploitation of the Licensed Product

in the Field in the Territory, but excluding any Information to the extent covered or claimed by EOS Patents.

           1.31 “EOS Patents” shall mean the Core Patents and the Additional Patents, collectively.

           1.32 “EOS Technology” shall mean the EOS Patents and the EOS Know-How, collectively.

           1.33 “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

           1.34 “Existing Products” shall mean the products listed in Exhibit B.

           1.35 “Exploit” shall mean to make, have made, import, use, sell or offer for sale, including to research, Develop, Commercialize, register, Manufacture, have Manufactured, hold or keep (whether for disposal or otherwise), have used, export, transport, distribute, promote, market or have sold or otherwise dispose of.

           1.36 “Exploitation” shall mean the act of Exploiting a product or process.

           1.37 “Field” shall mean all dental applications.

           1.38 “FDA” shall mean the United States Food and Drug Administration and any successor agency thereto.

           1.39 “FFDCA” shall mean the United States Food, Drug, and Cosmetic Act, as amended from time to time.

           1.40 “First Commercial Sale” shall mean the first bona fide sale of any Licensed Product by Licensee, its Affiliates, Sublicensees or Distributors (other than a sale or other distribution without consideration and, solely for the purpose of marketing, alpha or beta testing, or product demonstration) occurring after the grant of the first Regulatory Approval for such Licensed Product.

           1.41 “IDE” shall mean an investigational device exemption as defined in the regulations promulgated by the FDA for the authorization to commence human clinical trials, and its equivalent in other countries or regulatory jurisdictions in the Territory.

           1.42 “Improvement” shall mean any modification, variation, enhancement or revision to the design, operation or method of any EOS Technology, the result of which would remain covered by one or more Valid Claims of any EOS Patent.

           1.43 “Incorporating Patents” shall mean any Patent the Valid Claims of which are primarily related to the incorporation of the EOS Technology into an Incorporating Product.

           1.44 “Incorporating Product” shall mean any Combination Product developed by Licensee wherein the EOS Technology is incorporated into a product (unrelated to the EOS Technology) currently existing or separately developed by Licensee, and in which Licensee has in the past or may in the future Manufacture, Develop or Exploit alternate versions of such product which do not incorporate the EOS Technology (e.g. Licensee

manufactures a camera, the general design of which is Controlled by Licensee, and as a feature of the camera offers a version which incorporates the EOS Technology).

           1.45 “Indemnification Claim Notice” shall have the meaning set forth in Section 12.3.

           1.46 “Indemnified Party” shall have the meaning set forth in Section 12.3.

           1.47 “Information” shall mean all commercial, technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed, but excluding the Regulatory Documentation.

           1.48 “Intellectual Property Rights” shall mean Trademarks, service marks, trade names, Internet domain names, registered designs, design rights, copyrights (including rights in computer software), database rights, trade secrets and any rights or property similar to any of the foregoing (other than Patents) in any part of the Territory whether registered or not registered, together with the right to apply for the registration of any such rights.

           1.49 “Invoiced Sales” shall have the meaning set forth in Section 1.62.

           1.50 “Knowledge” shall mean the collective good faith understanding of each of the vice presidents, senior vice presidents, president and chief executive officer of a Party of the facts and information then in their possession without any duty to conduct any specific investigation with respect to such facts and information.

           1.51 “Licensed Product” shall mean any product (a) the Exploitation of which infringes any EOS Patent, or (b) that incorporates, embodies, comprises, is comprised of, in whole or in part, or is manufactured using, any EOS Know-How, including the Existing Products and any Improvements thereto, including any Incorporating Product, but expressly excluding any Next Generation Products.

           1.52 “Licensed Product System” shall mean any Licensed Product that is not a Consumable.

           1.53 “Licensed Trademarks” shall mean (a) the Trademarks set forth on Exhibit C, and (b) any Corporate Name of EOS that Licensee is required to use hereunder.

           1.54 “Licensee” shall have the meaning set forth in the preamble to this Agreement.

           1.55 “Licensee Know-How” shall mean all Information Controlled (other than pursuant to this Agreement) or developed by Licensee or any of its Affiliates during the term of this Agreement that is not generally known and is reasonably necessary or useful for the Exploitation of the Licensed Product, but excluding any Information to the extent claimed by Licensee Patents.

           1.56 “Licensee Patents” shall mean all Patents Controlled (other than pursuant to this Agreement) by Licensee and any of its Affiliates developed during the term of this Agreement that claim any technology that is reasonably necessary or useful for the Exploitation of the Licensed Product, including any Patents that claim any Licensed Product or its Exploitation.

           1.57 “Licensee Technology” shall mean the Licensee Patents and the Licensee Know-How, collectively.

           1.58 “Losses” shall have the meaning set forth in Section 12.1.

           1.59 “Manufacture” and “Manufacturing” shall mean all activities related to the production, manufacture, packaging, labeling, shipping and holding of the Licensed Product or any component thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture, quality assurance and quality control.

           1.60 “Manufacturing Process” shall mean any process or step thereof that is necessary or useful for Manufacturing any Licensed Product or any Improvement thereto.

           1.61 “ Minimum Royalty Payment ” shall mean the amount set forth in Section 6.2.2.

           1.62 “Net Sales” shall mean, for any period, the gross amount invoiced by Licensee and its Affiliates, or Sublicensees for the sale, rental, lease, use on a fee-per-patient basis or other disposal of the Licensed Product (the “ Invoiced Sales ”), less the following, with respect thereto: (a) sales and use taxes, and tariff duties, invoiced and actually paid to the applicable governmental entity, (b) transportation costs, including insurance and shipping, freight and handling charges, to the extent billed separately to customers; (c) any trade discounts and allowances actually granted, including, but not limited to, discounts pursuant to patient discount programs, rebates and administrative fees paid to medical health care organizations in line with approved contract terms, rebates resulting from government-mandated rebate programs or chargeback programs, and rebates paid to wholesalers for inventory management programs or distribution management agreements; (d) sales commissions paid to Distributors or selling agents (excluding any commissions paid to inside sales representatives); (e) any credits actually given for returned or defective Licensed Products, (f) any Third Party Royalty Payments; and (g) any Recall Expenses incurred by Licensee in the Calendar Quarter for which the royalties payable are calculated. Notwithstanding the foregoing, in the case of any sale, rental, lease, use on a fee-per-patient basis or other disposal of Licensed Product that occurs other than in an arm’s length transaction exclusively for money, Net Sales shall mean the fair market value of such Licensed Product in the relevant country of disposal. For purposes of determining Net Sales, the Licensed Product shall be deemed to be sold when invoiced.

Notwithstanding the foregoing, in the event that the Licensed Product is sold in conjunction with another proprietary component so as to be a Combination Product, Net Sales shall be calculated by multiplying the Net Sales of such Combination Product by a fraction, the numerator of which shall be the fair market value of the Licensed Product if sold separately (determined in accordance with the local generally accepted accounting principles) and the denominator of which shall be the aggregate fair market value of all the proprietary components of such Combination Product, including the Licensed Product, if sold separately.

In the event that no such separate sales are made by Licensee or its Affiliates, Sublicensees or Distributors, Net Sales of the Combination Product shall be calculated in a manner to be negotiated and agreed upon by the Parties, reasonably and in good faith, prior to any sale of such Combination Product, which shall be based upon the relative estimated commercial values of the proprietary components of such Combination Product.

Licensee’s or any of its Affiliates’ or Sublicensees’ transfer of Licensed Product to an Affiliate of Licensee or a Sublicensee shall not result in any Net Sales, unless such Affiliate or Sublicensee is the end user of such Licensed Product.

           1.63 “Next Generation Patents” shall mean any Patents Controlled by Licensee which may, directly or indirectly, relate to the design, operation or method of the EOS Technology, but are not covered by one or more Valid Claims of the EOS Patents.

           1.64 “Next Generation Products” shall mean any products the Manufacture, Commercialization or Exploitation of which infringes any Next Generation Patent, but expressly excluding any Incorporating Product.

           1.65 “Notice Date” shall have the meaning set forth in Section 13.9.

           1.66 “Notice Period” shall have the meaning set forth in Section 13.2.

           1.67 “Party” and “Parties” shall have the meaning set forth in the preamble to this Agreement.

           1.68 “Patents” 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 either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), (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.

           1.69 “Payments” shall have the meaning set forth in Section 6.7.

           1.70 “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 a government or political subdivision, department or agency of a government.

           1.71 “PMA Product” shall mean a product, the sale of which requires the filing with and approval by the FDA of a PMA.

           1.72 “Premarket Approval” or “PMA” shall mean a premarket approval as defined in the FFDCA and the regulations promulgated thereunder.

           1.73 “Product Labeling” shall mean, with respect to a country, (a) the full information relating to use of the Licensed Product approved by the relevant Regulatory Authority for such country, including any required patient information, and (b) all labels and other written, printed or graphic matter utilized with the Licensed Product, including the instructions for use.

           1.74 “Promotional Materials” shall mean all sales representative training materials with respect to the Licensed Product and all written, printed, graphic, electronic, audio or video matter, including journal advertisements, sales visual aids, direct mail, medical information/education monographs, direct-to-consumer advertising, Internet postings, broadcast advertisements and sales reminder aids ( e.g. , scratch pads, pens and other such items) intended for use or used by Licensee, or its Affiliates, Sublicensees or Distributors, in connection with any promotion of the Licensed Product (but excluding Product Labeling).

           1.75 “Recall Expenses” shall have the meaning set forth in Section 9.2.

           1.76 “Regulatory Approval” shall mean, on a country-by-country basis, the right to commercially distribute, sell or market the Licensed Product in such country, including in the case of the United States, a determination by the FDA of substantial equivalence (within the meaning of 21 C.F.R. § 807.100) following the filing with the FDA of a 510(k) Notification, or in the event that a PMA is required, the approval by the FDA of such PMA, and in the case of any other country or territory, any necessary approvals in such country or territory.

           1.77 “Regulatory Authority” shall mean any supra-national, federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the Exploitation of the Licensed Product.

           1.78 “Regulatory Documentation” shall mean all applications, registrations, licenses, authorizations and approvals (including all Regulatory Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents and all results of clinical studies and tests, in each case relating to any Licensed Product, and all data contained in any of the foregoing, including all IDEs, 510K Notifications, PMA Notifications, Regulatory Approvals, advertising and promotion documents, adverse event files, complaint files and Manufacturing records.

           1.79 “Sublicensee” shall mean any Person, other than an Affiliate of Licensee, that is granted a sublicense by Licensee as provided in Section 5.2.

           1.80 “Territory” shall mean all countries in the world.

           1.81 “Third Party” shall mean any Person other than EOS, Licensee and their respective Affiliates.

           1.82 “Third Party Acquirer” shall have the meaning set forth in Section 1.12.

          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*.

           1.83 “Third Party Claims” shall have the meaning set forth in Section 12.1.

           1.84 “Third Party Royalty Payments” shall have the meaning set forth in Section 7.4.1.

           1.85 “Trademark” shall include any word, name, symbol, color, designation or device or any combination thereof, including any trademark, trade dress, brand mark, service mark, trade name, brand name, logo or business symbol, whether or not registered.

           1.86 “Valid Claim” shall mean, with respect to a particular country, (a) any claim of an issued and unexpired Patent in such country that (i) has not been held permanently revoked, unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction, which decision is unappealable or unappealed within the time allowed for appeal and (ii) has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise in such country; or (b) a claim of a pending Patent application, which claim has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application.

ARTICLE II
DEVELOPMENT AND REGULATORY MATTERS

           2.1 Development of the Licensed Product .

                2.1.1 In General. Subject to the terms and conditions of this Agreement, Licensee shall have the sole right to Develop the Licensed Product in the Field in the Territory. Any such Development shall be conducted in good scientific manner and in compliance with this Agreement and Applicable Law. Except as otherwise expressly provided herein, Licensee shall be solely responsible for all costs and expenses in connection with such Development activities.

                2.1.2 Diligence. Licensee agrees to (a) use Commercially Reasonable Efforts achieve the First Commercial Sale of the Licensed Product in the Field in the Territory by July 1, 2008 (provided that failure to meet such deadline shall not be considered a material breach entitling EOS to terminate this Agreement under Section 13.2) and (b) except as expressly limited by Section 13.8.9 shall incur costs and expenses (including internal costs reasonably allocable to the Licensed Product program under GAAP) of at least [*] by July 1, 2009 in support of the Development of, and market preparation for, the Licensed Product.

                2.1.3 EOS Development Activities. The Parties acknowledge that they may enter into one or more separate agreements (each, a “ Development Agreement ”) pursuant to which Licensee would engage EOS to perform certain Development activities relating to the Licensed Product, at Licensee’s sole cost and expense, on terms and conditions to be mutually agreed by the Parties in writing. Except as expressly provided herein or in any Development Agreement, EOS shall have no obligation to perform any Development activities with respect to the Licensed Product. Except to the extent expressly provided otherwise in a Development Agreement, the respective rights of the Parties with respect to any intellectual property developed thereunder shall be as set forth in Section 7.1.2 of this Agreement.

                2.1.4 Know-How Disclosure. EOS shall, and shall cause its Affiliates to, without additional compensation, disclose and make available to Licensee all EOS Know-How and any Information claimed by any unpublished EOS Patent within ten (10) Business Days after the Effective Date, including, but not limited to, lab work papers and other research documentation relating to the Existing Products or any Improvements thereto; any testing and test protocol documentation relating to the efficacy, validation, or manufacturing thereof; and research study documentation, incidence reports and other manufacturing history documentation, parts lists and supplier information (including any pricing information and contracts) relating thereto.

                2.1.5 Audit. Licensee shall keep complete and accurate books and financial records (in accordance with generally accepted accounting principles) pertaining to the costs and expenses it incurs in connection with the Development of the Licensed Product in connection with its obligations under Section 2.1.2, which books and financial records shall be retained by Licensee until three (3) years after the end of the period to which such books and records pertain, or such longer period as Applicable Law may require. EOS shall have the right, at its expense, to have certified public accountants, who shall be reasonably acceptable to Licensee, audit the books and financial records of Licensee relating to such expenses incurred in connection with the Development of the Licensed Product for the sole purpose of assessing compliance with Section 2.1.2; provided , however , that EOS shall not have the right to audit a Calendar Quarter more than three (3) years after the end of such Calendar Quarter, to conduct more than one such audit in any twelve (12) month period, or to audit any Calendar Quarter more than once. Any Information obtained by the certified public accountant from Licensee, other than the aggregate amount of costs and expenses incurred by Licensee, shall be maintained in strict confidence by the certified public accountant. The certified public accountant shall be obligated to execute a written undertaking with respect to such confidentiality prior to the commencement of the audit.

           2.2 Regulatory Matters.

                2.2.1 Assignment and Transfer of Regulatory Documentation and Approvals. EOS shall transfer to Licensee all of EOS’ and its Affiliates’ right, title and interest in and to all Regulatory Documentation, including, to the extent permitted by Applicable Law, all IDEs and Regulatory Approvals, Controlled by EOS or its Affiliates, as of a date to be mutually agreed by the Parties, which date shall not be later than thirty (30) days after the Effective Date. In connection with the foregoing, EOS shall execute and deliver to the FDA (and any other Regulatory Authority as reasonably requested by Licensee in writing) a letter in a form approved by Licensee transferring ownership to Licensee of any and all such Regulatory Approvals filed with the FDA or such other Regulatory Authority in the Territory by or on behalf of EOS. The costs and expenses associated with the performance of EOS’s obligations under this Section 2.2.1 shall be borne by EOS.

                2.2.2 Regulatory Responsibilities. Licensee shall have sole responsibility for preparing and maintaining all regulatory submissions and responding to all inquiries from Regulatory Authorities with respect to (a) Regulatory Approvals for the Licensed Product in the Field in the Territory and (b) Development activities for the Licensed Product that are conducted in support of Regulatory Approvals for the Licensed Product or Commercialization of the Licensed Product in the Field in the Territory, and for complying with all requirements of Applicable Law with respect thereto. Subject to Article XIII, all Regulatory Approvals with respect to the Licensed Product, and related submissions by or on

behalf of License, in the Field in the Territory shall be the property of Licensee and held in the name of Licensee.

                2.2.3 Communications with Regulatory Authorities. Licensee shall be responsible for all communications with the Regulatory Authorities relating to the Licensed Product in the Field in the Territory.

                2.2.4 Regulatory Records. Licensee shall maintain, or cause to be maintained, records of Development activities conducted by or on behalf of Licensee with respect to the Licensed Product 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 such Development activities, and which shall be retained for at least three (3) years after the termination of this Agreement, or for such longer period as may be required by Applicable Law.

           2.3 Reports. Upon the request of EOS, which request may not be made more than once every calendar quarter, Licensee shall provide to EOS a brief summary of any material Development activities with respect to Licensed Products that Licensee has performed, or has caused to be performed, to date.

ARTICLE III
MANUFACTURING AND SUPPLY

           3.1 Manufacturing. Subject to the terms and conditions of this Agreement, Licensee shall have the sole right, at its expense, to Manufacture the Licensed Product, including performing manufacturing process development and scale-up with respect thereto, for clinical and commercial use in the Field in the Territory. Licensee may elect to Manufacture supplies of the Licensed Product itself or through Third Party suppliers. In the event that Licensee elects to use Third Party suppliers, (a) all payment obligations to such Third Party suppliers shall be the sole responsibility of Licensee, and (b) Licensee shall have sole responsibility for supervising any Manufacturing activities conducted by such Third Party suppliers.

           3.2 Transfer of Manufacturing-Related Materials and Documentation. Without limitation of Section 2.1.4 or Section 2.2.1, EOS hereby assigns and transfers to Licensee all of EOS’s right, title and interest in and to the tooling, manufacturing drawings and other materials and documentation with respect to the Licensed Product described in Exhibit D. Promptly following Licensee’s request, and in no event later than two (2) weeks thereafter, EOS shall cause such materials and documentation to be delivered to Licensee at such location designated by Licensee, at Licensee’s expense. For the avoidance of doubt, subject to Section 13.6.l and the other terms of this Agreement, any tooling and manufacturing drawings developed by or on behalf of Licensee shall be owned by Licensee.

ARTICLE IV
COMMERCIALIZATION

           4.1 Generally; Diligence. Subject to the terms and conditions of this Agreement, Licensee shall have the sole right, at its expense, to Commercialize the Licensed Product in the Field in the Territory. Any such Commercialization shall be in compliance with this Agreement and Applicable Law.

           4.2 Promotional Materials and Activities. Licensee shall be responsible, at its sole expense, for preparing all Promotional Materials used to support the Commercialization of the Licensed Product in the Field in the Territory. All Promotional Materials shall be consistent with Applicable Law and with the Product Labeling approved by Licensee for the Licensed Product. Licensee shall be responsible for obtaining any approvals from the Regulatory Authorities required for the use of any Promotional Materials in the Field in the Territory and shall submit all applicable Promotional Materials to such Regulatory Authorities as required by Applicable Law.

           4.3 Statements and Compliance with Applicable Law .

                4.3.1 Sales Force Compliance. Licensee shall use Commercially Reasonable Efforts to train and monitor its sales representatives to (a) use only Promotional Materials (without any addition, deletion or other modification) approved for use by Licensee for the promotion of the Licensed Product in the Field in the Territory, (b) limit claims of efficacy and safety for the Licensed Product to those that are consistent with Applicable Law and with approved (by the appropriate Regulatory Authority) promotional claims in Product Labeling and Promotional Materials for the Licensed Product, and not add, delete or otherwise modify claims of efficacy and safety in the promotion of the Licensed Product in any respect from those claims of efficacy and safety that are contained in such approved Product Labeling and Promotional Materials and (c) Commercialize the Licensed Product in adherence in all material respects with Applicable Law.

                4.3.2 Medical and Other Inquiries. Licensee shall be responsible for responding to all medical questions or inquiries relating to the Licensed Product sold in the Field in the Territory. Licensee shall keep such records and make such reports as are reasonably necessary to document such communications in compliance with all Applicable Law.

                4.3.3 Compliance with Laws. Licensee shall use Commercially Reasonable Efforts to, and shall use Commercially Reasonable Efforts to cause its Affiliates, employees, representatives, agents, Sublicensees and Distributors to, avoid taking, or failing to take, any actions that Licensee knows or reasonably should know would jeopardize the goodwill or reputation of the Licensed Product or any Trademark associated therewith. Licensee shall in all material respects conform its practices and procedures relating to educating the dental community in the Territory with respect to the Licensed Product to any applicable industry association regulations, policies and guidelines, as the same may be amended from time to time, and shall comply with Applicable Law with respect thereto.

           4.4 Sales and Distribution in the Territory. Licensee shall be solely responsible for invoicing and booking sales of the Licensed Product in the Territory, establishing all terms of such sales (including pricing and discounts), and warehousing and distributing the Licensed Product in the Territory and shall perform all related activities, in each case in a manner consistent with the terms and conditions of this Agreement. Licensee shall also be solely responsible for handling all returns, order processing, invoicing and collection, distribution and inventory and receivables with respect to the Licensed Product in the Field in the Territory. If EOS receives any orders for the Licensed Product in the Field in the Territory, it shall refer such orders to Licensee.

           4.5 Customer Notification. Promptly after the Effective Date, the Parties shall mutually agree on the manner, timing and form of notification to be sent to existing

customers of the Licensed Product concerning this Agreement and the related transfer of customer support functions and regulatory compliance responsibilities from EOS to Licensee.

ARTICLE V
GRANT OF RIGHTS

           5.1 License Grant. Subject to the terms and conditions of this Agreement, EOS hereby grants to Licensee an exclusive (including with respect to EOS and its Affiliates), royalty-bearing license, with the right to grant sublicenses in accordance with Section 5.2, under the EOS Technology and the Licensed Trademarks to Exploit the Licensed Product in the Field in the Territory; provided, however, that such license shall be non-exclusive with respect to the Additional Patents.

           5.2 Sublicenses. The rights and licenses granted to Licensee under Section 5.1 shall include the right to grant sublicenses to any Person, subject to the consent of EOS, such consent not to be unreasonably withheld or delayed. Any such permitted sublicenses shall be the subject of a written agreement between Licensee and such Person, which agreement shall be consistent with and subject to the terms and conditions of this Agreement. Licensee agrees (a) to use all commercially reasonable efforts to procure the performance by each Sublicensee, if any, of the terms of each such sublicense agreement and (b) to cause each Sublicensee, if any, to comply with the applicable terms and conditions of this Agreement. The grant of any such sublicense shall not relieve the Licensee of its obligations under this Agreement, except to the extent they are satisfactorily performed by such Sublicensee. A copy of any sublicense agreement executed by Licensee and a Sublicensee shall be provided to EOS within fourteen (14) days of its execution.

           5.3 Use of Trademarks and Corporate Names.

                5.3.1 Subject to this Section 5.3, Licensee shall have the sole right to determine the Trademarks to be used with respect to the Commercialization of the Licensed Product in the Field in the Territory. Licensee shall not, and shall not permit its Sublicensees, Distributors or Affiliates to use in connection with the Exploitation of the Licensed Product, any Trademark (other than the Licensed Trademarks to the extent licensed hereunder) that is confusingly similar to, misleading or deceptive with respect to or that dilutes any (or any part) of the Trademarks owned or Controlled by EOS. Licensee shall execute any documents required, in the reasonable opinion of EOS, for Licensee to be entered as a “registered user” or recorded licensee of the Licensed Trademarks or (in the case of termination of this Agreement) to be removed as a registered user or licensee thereof.

                5.3.2 With respect to any Licensed Trademarks, Licensee agrees to comply with the customary guidelines of EOS with respect to manner of use (as provided in writing by EOS from time to time), and to maintain the quality standards of EOS with respect to the goods sold and services provided in connection with such Trademarks.

                5.3.3 EOS agrees to transfer to Licensee, promptly after the Effective Date, all right, title and interest of EOS in and to the domain name www.difoti.com ; provided , however , that Licensee shall transfer to EOS all right, title and interest of Licensee in and to such domain name promptly after the effective date of any termination of this Agreement pursuant to Article XIII.

          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*.

           5.4 EOS Covenant Not to Compete. From the Effective Date of this Agreement until the earlier of (a) termination of this Agreement, or (b) the last to expire of the Core Patents (whichever occurs first), EOS shall not Develop, Manufacture or Commercialize, directly or indirectly, in the Field any technology or product that competes with any Licensed Product or Combination Product in the Field.

           5.5 Retention of Rights; No Implied Rights. Notwithstanding anything to the contrary in this Agreement and subject to the limitations in Section 5.4, EOS retains all right, title and interest in and to the EOS Technology, EOS’s Corporate Name and any Regulatory Documentation Controlled by EOS to Exploit any product outside the Field. For the avoidance of doubt, Licensee and its Affiliates, Sublicensees and Distributors shall have no right, express or implied, with respect to any EOS Technology, any Regulatory Documentation Controlled by EOS, or any of EOS’s Corporate Names or Trademarks, except as expressly provided herein, and EOS and its Affiliates and sublicensees shall have no right, express or implied, with respect to any Licensee Patents, Licensee Know-How, Incorporating Patents, or Next Generation Patents, except as expressly provided herein.

ARTICLE VI
PAYMENTS AND RELATED MATTERS

           6.1 Payments to EOS. In partial consideration of the licenses and other rights granted herein and subject to the terms and conditions set forth in this Agreement, Licensee shall make the following payments to EOS:

                6.1.1 Initial Payment. Licensee shall pay to EOS a non-refundable, non-creditable payment of [*] upon execution of this Agreement.

                6.1.2 Second Payment. Licensee shall pay to EOS a non-refundable, non-creditable payment of [*] within ten (10) Business Days following the earlier of (a) the First Commercial Sale of the Licensed Product, or (b) July 1, 2008. Licensee shall notify EOS promptly of the occurrence of such First Commercial Sale.

           6.2 Royalties. In partial consideration of the licenses and other rights granted herein, Licensee shall pay to EOS royalties based on worldwide aggregate Net Sales of Licensed Products at the rates set forth in Section 6.2.1.

                6.2.1 Rate. The royalty rate applicable to Net Sales of any Licensed Product, whether or not such Licensed Product is a Licensed Product System, shall be determined based on the aggregate number of Licensed Product Systems that have been sold throughout the Territory during such Calendar Year, by or on behalf of Licensee, and its Affiliates and Sublicensees, on or before the date on which such Licensed Product is sold, as set forth in the chart below:

          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*.

                6.2.2 Minimum Royalty Payments. Commencing with the Calendar Year 2008 or, in the event the First Commercial Sale of the Licensed Product in the Territory occurs prior to July 1, 2008, the Calendar Year in which such First Commercial Sale occurs, Licensee shall pay to EOS an amount equal to the positive difference, if any, between the Minimum Royalty Payment for such Calendar Year and the amounts paid by Licensee pursuant to Section 6.2.1 for such Calendar Year. Such payment shall be due as of the date on which the royalty payment for the last Calendar Quarter of such Calendar Year is due pursuant to Section 6.5. The Minimum Royalty Payment shall be equal to [*] per Calendar Year; provided, however, that the Minimum Royalty Payment shall be pro-rated with respect to the Calendar Year in which the First Commercial Sale occurs. In the event that Licensee pays any amount pursuant to this Section 6.2.2 with respect to a Calendar Year, such amount paid shall be creditable against royalties due pursuant to Section 6.2.1 with respect to any of the three (3) Calendar Years immediately following such Calendar Year.

           6.3 Royalty Term; Royalty Reduction. Licensee’s obligations to pay royalties under this Article VI shall terminate, on a country-by-country basis, with respect to each Licensed Product, on the later to occur of (a) the tenth (10th) anniversary of the First Commercial Sale of such Licensed Product in such country, and (b) the expiration date in such country of the last to expire of the EOS Patent(s), if any, that includes at least one Valid Claim covering the Manufacture, use or sale of such Licensed Product in such country, whereupon Licensee shall own a fully paid-up exclusive license to the Licensed Product in the Field in such country; provided, however, that the applicable royalty rate shall be reduced to one-third of the rate set forth in Section 6.2.1, on a country-by-country basis, upon the expiration in such country of the last to expire of any EOS Patent that includes at least one Valid Claim covering the Manufacture, use or sale of the Licensed Product in such country, which reduced royalty shall be payable through the tenth anniversary of the First Commercial Sale of such Licensed Product in such country. For clarity, in the event that there is no such EOS Patent in a country, then such reduced royalty rate shall apply in such country from the First Commercial Sale of each Licensed Product in such country through the tenth anniversary thereof.

           6.4 Royalty Payments. Running royalties based upon the Net Sales during a Calendar Quarter due pursuant to Section 6.2 or 6.4 shall be payable by Licensee on a Calendar-Quarter basis, within thirty (30) days after the end of such Calendar Quarter. Royalties shall be calculated in accordance with United States generally accepted accounting principles and the terms of this Article VI. Only one royalty payment shall be due hereunder on Net Sales, even though the Manufacture, sale or use of the Licensed Product may be covered by more than one Patent in a country.

           6.5 Royalty Statements. Licensee shall provide to EOS within fifteen (15) days after the end of each Calendar Quarter, a statement showing, at a minimum (a) Net Sales during the relevant Calendar Quarter by country, (b) the currency exchange rates, if any, used in the calculation of such royalty payment, (c) the number of units of Licensed Product Systems sold, and (d) the amount of royalties due on such Net Sales.

           6.6 Mode of Payment. All payments to EOS under this Agreement shall be made by wire transfer of United States Dollars to such bank account as EOS may from time to time designate by notice to Licensee. With respect to sales outside the United States, payments shall be calculated based on currency exchange rates for the relevant Calendar

Quarter, as follows. For each Calendar Quarter and each currency, such exchange rate shall equal the arithmetic average of the daily exchange rates for each Business Day in such Calendar Quarter as set forth in The Wall Street Journal , Eastern Edition or, if not available, as otherwise agreed by the Parties.

           6.7 Taxes . The royalties and other amounts payable by Licensee to EOS pursuant to this Article VI (“ Payments ”) shall not be reduced on account of any taxes unless required by Applicable Law. Licensee shall deduct or withhold from the Payments any taxes that it is required by Applicable Law to deduct or withhold. Notwithstanding the foregoing, if EOS is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, applicable withholding tax, it may deliver to Licensee or the appropriate governmental authority (with the assistance of Licensee to the extent that this is reasonably necessary) the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Licensee of its obligation to withhold tax, and Licensee shall apply the reduced rate of withholding, or dispense with withholding, as the case may be, provided that Licensee has received evidence, in a form reasonably satisfactory to Licensee, of EOS’s delivery of all applicable forms (and, if necessary, its receipt of appropriate governmental authorization) at least fifteen (15) days prior to the time that the Payments are due. If, in accordance with the foregoing, Licensee withholds any amount, it shall pay to EOS the balance when due, make timely payment to the proper taxing authority of the withheld amount and send to EOS proof of such payment within sixty (60) days following that payment.

           6.8 Interest on Late Payment. If any payment due to either Party under this Agreement is overdue then the delinquent Party shall pay interest thereon (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of three hundred basis points above the prime