** **

**EXHIBIT 10.1**

** **

**PENTAX EUROPE DISTRIBUTOR AGREEMENT**

 

 

THIS PENTAX EUROPE DISTRIBUTOR AGREEMENT(this “Agreement”), effective this 15th day of June 2012 (the “Effective Date”), by and between

 

SpectraScience, Inc., a Minnesota corporationwith offices at 11568-11 Sorrento Valley Road, San Diego, California USA 92121 (“SpectraScience”),

 

and

 

PENTAX Europe GmbH organized under thelaws of Germany, with offices at 104 Julius-Vosseler Strasse, Hamburg, Germany 22527 (“DISTRIBUTOR”).

 

**RECITALS:**

 

WHEREAS, SpectraSciencedesigns, develops and manufactures proprietary optical biopsy systems capable of determining whether tissue is normal, pre-cancerousor cancerous without physically removing the tissue from the body;

 

WHEREAS, DISTRIBUTORdesires to act as SpectraScience’s distributor in a specific territory for certain of SpectraScience’s products; and

 

WHEREAS, SpectraScienceis willing to grant certain rights to DISTRIBUTOR for the marketing and distribution of such products in such territory, on theterms and conditions set forth herein.

 

Therefore, in considerationof entry into this Agreement and the mutual covenants contained herein, and other good and valuable consideration, the partiesagree as follows:

 

**SECTION 1. DEFINITIONS**

 

**1.1	Product(s).**“Product(s)” means and includes the products set forth in Exhibit A attached hereto and amended from time to time,including without limitation replacement parts for such products and the printed materials that may accompany such products.

 

**1.2 	Territory.** “Territory” shall mean those nations described in Schedule 1. Noncontiguous states, provinces, colonies, territories,and other dependencies of a nation are not included in the Territory unless specifically set forth in Schedule 1 hereof.

 

**SECTION 2. GRANT OF RIGHTS**

 

**2.1 	License.** SpectraScience designates DISTRIBUTOR as its exclusive distributor, and grants DISTRIBUTOR the right to market and distributethe Products in the Territory, subject to the limitations set forth herein. SpectraScience retains all other rights not expresslygranted herein with regard to the Products.

 

**2.2 	No OtherDistributor.** Except as otherwise specifically provided below SpectraScience shall not appoint any other distributor for theProducts in the countries listed under “Territory” during the term of this Agreement, provided DISTRIBUTOR meets orexceeds its performance quotas annually, as described in Exhibit B on per country basis. In case of failure to meet quota in certaincountry compensation in other countries accumulated quotas will be accepted or a recovery plan will have to be agreed. In casethe recovery plan fails SpectraScience can review the distribution rights.

 

**SECTION 3. DISTRIBUTOR’S OBLIGATIONS**

 

**3.1 	Best Efforts.**DISTRIBUTOR shall use its best efforts to promote, market, and sell the Products in the Territory. DISTRIBUTOR shall conduct itsbusiness in a professional manner that will reflect positively upon SpectraScience and the Products.

 

**3.2 	ProductPromotion.**

 

3.2.1	DISTRIBUTORshall exhibit and demonstrate the Products at such trade shows in the Territory as DISTRIBUTOR determines in good faith are necessaryor useful in marketing and promoting the Products. DISTRIBUTOR shall give SpectraScience reasonable prior notice of all such tradeshows such that SpectraScience can attend if it so desires. DISTRIBUTOR shall otherwise meet all reasonable business standardsfor displaying, demonstrating, and explaining the operation and use of the Products to customers and potential customers.

 

 

**3.3	Packaging& labeling.** Unless DISTRIBUTOR requests otherwise and agreed to by SpectraScience, all Products ordered by DISTRIBUTORshall be packaged for shipment and storage in accordance with SpectraScience’s standard commercial practices.

 

DISTRIBUTOR shall initiate and completetranslating of all advertising and marketing information provided by SpectraScience when required. Translations of all informationshall be done in accordance with SpectraScience’s Translation Standard Operating Procedure. Translation of all such materialsshall be approved by SPECTRASCIENCE prior to use. Any translations in SpectraScience’s possession as of the Effective Dateshall be offered to DISTRIBUTOR free of charge. Any further translations required to distribute the Products in the Territory shallbe obtained at DISTRIBUTOR’S expense. DISTRIBUTOR shall own all such translations but SPECTRASCIENCE shall have a non-exclusiveright to use such translations.

 

**3.4 	License.**DISTRIBUTOR is required to maintain in good standing its license to sell Medical Devices in its territory and to inform SPECTRASCIENCEin case of change in status of such license(s).

 

**3.5	Performance Quotas.**

 

3.5.1DISTRIBUTOR acknowledges that, in the event that product purchase minimums as described in Schedule I are not achieved, thisDistribution Agreement will be subject to termination as specified in Section 13 below. 

 

3.5.2	DISTRIBUTORshall not sell any Products beyond their stated expiration date. DISTRIBUTOR may, at its expense, and with the approval of SpectraScience,return expired Products in exchange for like Products with a later expiration, but shall not be entitled to a refund for any expiredProduct. It is the DISTRIBUTOR’S responsibility to control his purchasing and stock policy in order to avoid return of expiredproduct(s).

 

**3.6 	CustomerSupport.**

 

3.6.1	DISTRIBUTORshall respond to and handle all customer inquiries and complaints relating to the Products. DISTRIBUTOR’s responsibilitiesshall include, all support, training, and maintenance issues relating to the Products. DISTRIBUTOR shall perform such responsibilitiesat its own expense, provided, however, that SpectraScience shall use its commercially reasonable efforts to repair or replace anydefective Product to the extent of its warranty obligations hereunder. DISTRIBUTOR shall promptly report to SpectraScience allsuspected Product defects, errors, technical difficulties, or other problems, including potential Vigilance reports, relating tothe use or operation of the Products (collectively, “Problems”) and shall keep SpectraScience informed of customercomplaints concerning same. Without limiting the foregoing, upon becoming aware of any Problem, DISTRIBUTOR shall report the Problemto SpectraScience in writing in accordance with the following: (i) if the Problem involves patient injuries, within twenty-four(24) hours after becoming aware of; and (ii) for any other Problem, within forty-eight (48) hours. SpectraScience shall provideDISTRIBUTOR required assistance in this respect, in particular with product liability issues.

 

**3.7 	RestrictingActivity to the Territory.**

 

DISTRIBUTOR shall not make active saleswith regard to the Products into the exclusive territories or to the exclusive customer groups reserved to SpectraScience or itsconnected undertakings or allocated by it to another sales organization; sales on part of DISTRIBUTOR’s customers are notrestricted thereby. The prohibition in sentence 1 shall only apply if and to the extent SPECTRASCIENCE has informed DISTRIBUTORwith regard to the European Union and the European Economic Area about the respective territories and customer groups. At presentthe territories and customer groups with regard to the European Union and the European Economic Area listed in Schedule 2 are allocatedexclusively to other sales organizations; the territories and customer groups with regard to the European Union and the EuropeanEconomic Area listed in Schedule 3 are reserved exclusively to SPECTRASCIENCE itself or to any of its Affiliates. SPECTRASCIENCEshall immediately inform DISTRIBUTOR of any changes regarding the Schedule 2 and Schedule 3, i.e. about the new allocation of exclusiveterritories and customer groups or if such allocation is revoked. In the event of sales to customers outside of the European Unionand the European Economic Area DISTRIBUTOR must inquire with SpectraScience whether the respective country or the respective customergroup is exclusively allocated or reserved as defined in sentence 1.

 

**3.8 	Indemnification.**

 

3.8.1	DISTRIBUTORshall defend, indemnify, and hold SpectraScience harmless from and against any and all costs, losses, claims, liabilities, fines,penalties, damages and expenses, court costs, and reasonable fees and disbursements of counsel, consultants, and expert witnesses(collectively, “Damages”) based upon, arising out of, or relating to (i) DISTRIBUTOR’S breach of this Agreement,negligence, willful misconduct, or violation of any applicable law, rule, regulation, or order, (ii) any act or omission by DISTRIBUTOR,or (iii) any unfair business practice of DISTRIBUTOR.

 

3.8.2	Notwithstandinganything to the contrary in this Agreement, SpectraScience shall assume product liability with respect to the Products suppliedhereunder, in accordance with the applicable laws and regulations in the Territory. SpectraScience shall defend, indemnify andhold DISTRIBUTOR harmless from and against any and all losses, liabilities, claims, actions, damages, costs and expenses (includingreasonable legal fees), arising out of any third party claims caused by any latent or inherent defect in the Product and/or failureof the Product to conform to the Product’s specifications or any other kind of damage associated with the gross negligenceof SpectraScience or its agents.

 

 

**3.9 	ClinicalTrials and Evaluations.**

 

Products provided to customers for evaluationor trial within the territory will be at the discretion and expense of the DISTRIBUTOR. Locations, number of trial sites and scopewill be discussed and agreed mutually as beneficial to SpectraScience and DISTRIBUTOR.

 

**SECTION 4. REPORTING, PRODUCT ANALYSIS,VIGILANCE, REMEDIAL ACTIONS**

 

**4.1.	CustomerComplaints; Inquiries.**

 

DISTRIBUTOR will transmit to SpectraScienceall oral or written complaints referring to the Product at the time the complaints are entered into DISTRIBUTOR’s system.

 

Customer Complaints; Inquiries. DISTRIBUTORhereby covenants that it shall be responsible as the first point of contact for technical support with the customer and/or end-users.DISTRIBUTOR will provide a line of communications to SpectraScience directly in matters of vigilance and post-market surveillance(early warning) in accordance with the European Commission Guidelines On A Medical Devices Vigilance System:

 

http://ec.europa.eu/enterprise/medical_devices/meddev/2_12_1-rev_5-2007-fin2.pdf

 

DISTRIBUTOR will further provide this technicalsupport on the usage of products to the customers based on information supplied by SpectraScience. Customer feedback, the occurrenceof incidents and near-incidents will be reported by the DISTRIBUTOR within three (3) business days directly to SpectraScience andSpectraScience’s Authorized European Representative (see below for contact details). DISTRIBUTOR reporting should followthe European Commission Guidelines On A Medical Devices Vigilance System.

 

Contact Details:

Authorized Representative in Europe

(Regulatory affairs only)

Emergo Europe

Molenstraat 15

2513 BH The Hague

The Netherlands

Tel: (31) (0) 70 345-8570

Fax: (31) (0) 70 346-7299

 

**4.2	Safety Notification**

 

In case a Product is potentially deviatingfrom the Product Specification, or under any other circumstance where such Product might cause, or already has caused, harm toa patient, user or other person, each Party shall notify the other Party in writing (“Safety Notification”), irrespectiveof the time or location of detection of the potentially faulty Product, as soon as the respective Party gains knowledge of such.

 

It is SpectraScience’s sole responsibilityto file Medical Device Reports or Vigilance Reports to any legal authority for the Products in order to comply with the applicablelaws and regulations in the Territory. Should DISTRIBUTOR by any applicable law or regulation be obliged to report medical deviceincidents, this Agreement shall not prevent DISTRIBUTOR from doing so.

 

Safety Notifications and any other complaintson the Products are to be sent to the following address:

 

SpectraScience, Inc.

11568 Sorrento Valley Rd.

Suite 11

San Diego, CA 92121 - USA

Phone: +1 858-847-0200

Fax: +1 858-847-0880

 

**4.3	Product Analysis**

 

SpectraScience is obliged to analyze freeof charge any Product returned from the field or found otherwise which

 

 ̈	is potentially non-conforming withthe Product Specifications,

 

 ̈ 	is malfunctioning or defective,or

 

 ̈ 	might cause or already has causedharm to a patient, a user or another person

 

 

and to report to DISTRIBUTOR

 

 ̈ 	findings,

 

 ̈ 	failures, as well as

 

 ̈ 	actual or probable root causes

 

immediately when it becomes known to SpectraScience.

 

	**4.4	No statement**

 

In the event of a (alleged) malfunctionor defect of a Product, DISTRIBUTOR or its representatives or agents will not make any statement as to the cause, without havingbeen informed by SpectraScience and having received SpectraScience’s written analysis of the malfunction or defect.

 

	**4.5	Sales and Service records**

 

DISTRIBUTOR will maintain complete andaccurate lists and records reflecting all Product sales, Service and related transactions as may be required by law and to complywith the EU regulations, regulations of the EC-Council Directive concerning medical devices or other legal requirements applicablefor a country of the Territory to secure traceability of each Product

 

	**4.6	Product Recall**

 

If either Party believes that a recallof any Products in the Territory is desirable or required by law in the Territory or elsewhere, it shall immediately notify theother Party. The Parties shall then discuss reasonably and in good faith whether such recall is appropriate or required and themanner in which any mutually agreed recall should be handled.

 

	**4.7	Remedial Actions**

 

It is SpectraScience’s exclusiveright and obligation to issue recalls, safety alerts, advisory notices or similar remedial actions on the Products. In such caseDISTRIBUTOR will support and fully co-operate with SpectraScience to comply with the applicable laws and regulations. Furthermore,in such case DISTRIBUTOR will notify its customers and, upon SpectraScience’s request retrieve identified Products. SpectraScienceshall bear all direct costs and expenses of any recall, including, without limitation, expenses or obligations to third parties,the costs of notifying customers and costs associated with the shipment of recalled Product from customer to DISTRIBUTOR or SpectraScience,and replacement of such Products, except to the extent attributable to DISTRIBUTOR’s failure to handle, ship, or store Productsproperly or DISTRIBUTOR’s breach of this Agreement, or its negligence or willful misconduct. Should DISTRIBUTOR by any applicablelaw or regulation be obliged to issue remedial actions in the sense of sentence 1, this Agreement shall not prevent DISTRIBUTORfrom doing so.

 

	**4.8 	Survival**

 

The provisions of this Article 4 (Reporting,Product Analysis, Vigilance, and Remedial Action) shall survive the termination of the Agreement.

 

**SECTION 5. SPECTRASCIENCE’SOBLIGATIONS**

 

**5.1 	Products.**

 

SpectraScience shalluse its commercially reasonable efforts to ship the quantity of Products in accordance by the requested date in each purchase ordersubmitted by DISTRIBUTOR. SpectraScience shall notify DISTRIBUTOR of any delay or failure to ship the Products promptly upon learningof any such delay or failure. The Products shall be shipped to DISTRIBUTOR by SpectraScience or on SpectraScience’s behalf,freight costs to be included in the invoice with risk of loss to pass to DISTRIBUTOR upon delivery of the Products by SpectraScienceto a common carrier.

 

**SECTION 6. EXPENSES**

 

Except as otherwiseexpressly provided in this Agreement, SpectraScience and DISTRIBUTOR shall each bear their respective costs and expenses as incurredby each party in its performance hereunder, including without limitation all rents, salaries, commissions, and advertising, demonstration,promotional, travel, and accommodation expenses. SpectraScience will provide product manuals (IFU) as required for the territoriesor bear the related expenses.

 

**SECTION 7. PRICES AND PAYMENTS**

 

**7.1 	Prices andPayments.**

 

 

7.1.1	DISTRIBUTORshall pay SpectraScience the amount(s) set forth in SpectraScience’s then current price list at time of order for each Productshipped to DISTRIBUTOR. The price list in effective as of the date of this Agreement is set forth in Exhibit A. All prices areset forth in United States dollars.

 

7.1.2	All paymentsto be made by DISTRIBUTOR to SpectraScience pursuant to this Agreement represent net amounts SpectraScience is entitled to receiveand shall not be subject to any deductions for any reason whatsoever, including without limitation, local duties, assessments,taxes, or bank charges.

 

7.1.3	Payment termsare net 30 days.

 

**SECTION 8. LIMITATIONS OF WARRANTYAND DAMAGES**

 

**8.1 	LimitedWarranty.** SpectraScience warrants, solely for the benefit of DISTRIBUTOR, that for a period of one year after shipment by theDISTRIBUTOR or a maximum of 18 months from shipment by SpectraScience, whichever comes first, that each Product (Except Disposableproducts which bear a shelf-life) shall substantially conform to the specifications set forth in the materials accompanying theProduct and shall be free from defects in materials and workmanship; provided, however, that the foregoing warranties are expresslycontingent (and shall otherwise be void) upon use of the Product strictly in accordance with such specifications and without misuse,damage, alteration, or modification thereto. As DISTRIBUTOR’s exclusive remedy for any defective Product, SpectraScienceshall repair or replace the Product, or, at SpectraScience’s sole discretion, repay or credit the actual price paid by DISTRIBUTORtherefore. SpectraScience must receive warranty claims within thirty (30) days after the claim arises, but no later than the statedexpiration date of the applicable warranty period, and must be made in writing in sufficient detail to allow SpectraScience toreproduce the defect. DISTRIBUTOR shall have in addition all remedies, the law of the State Minnesota provides.

 

**8.2 	Limitationof Warranty.**Except as provided in Section 8.1, SpectraScience makes not warranties or representations as to the performanceof the products to DISTRIBUTOR or to any other person or entity.

 

**SECTION 9. CONFIDENTIAL INFORMATION**

 

**9.1 	Confidentiality.**During the Term and for a period of three (3) years following the effective date of termination or expiration of this Agreement,each party agrees not to disclose to any third party or to use any information regarding the terms of this Agreement or informationobtained from the other party concerning operations, technical information, or financial information without advance written approvalof the other party, except (i) information generally available to the public without breach of this Agreement, (ii) informationprovably developed independently by the receiving party, (iii) information obtained from a third party not under any obligationof nondisclosure; and (iv) information required to be disclosed by law or governmental regulation; provided, however, that beforemaking any use or disclosure in reliance on any of such exceptions (i) through (iv) the party that intends to use or disclose suchinformation shall give at least fifteen (15) business days’ prior written notice to the other party specifying the applicableexception(s) and circumstances giving rise thereto.

 

**9.2 	InjunctiveRelief.**The parties agree that any breach of this Section 9 would constitute irreparable harm, and that either party shallbe entitled to seek specific performance or injunctive relief to enforce this Section 9 in addition to whatever remedies such partymay otherwise be entitled to at law or in equity.

 

**SECTION 10. COMPLIANCE WITH LAWS**

 

**10.1 	General.**DISTRIBUTOR shall promote the Products and shall conduct its business in a highly ethical manner and in accordance with allapplicable statues, laws and regulations in the Territories.

 

**SECTION 11. COMPETING PRODUCTS**

 

DISTRIBUTOR representsand warrants that it does not currently market optical biopsy systems and that it shall not, directly or indirectly market or sellother products competitive with the Products. To the extent permitted by law, during the Term of this Agreement, DISTRIBUTOR shallnot develop any products competitive with the Products, acquire the right to market, distribute, or license any such competitiveproducts within the Territory, or take any action that is adverse to SpectraScience’s interests, Products, market, goodwill,or reputation.

 

**SECTION 12. TERM AND TERMINATION**

 

**12.1 	Term.**ThisAgreement shall have an initial term as set forth in Schedule 1 hereof, subject to early termination as provided in Section13.

 

**12.2 	Renewal.**After the initial term has elapsed, this Agreement shall automatically be extended (renewed) for subsequent one (1) year incrementsprovided the DISTRIBUTOR has met its minimum purchase requirements. After the 5th year, this Agreement shall be terminated automatically.The parties will negotiate about a prolongation at due time.

 

**SECTION 13. TERMINATION**

 

 

**13.1 	Terminationfor Just Cause.**This Agreement may be terminated prior to expiration as follows:

 

13.1.1	This Agreementshall terminate thirty (30) days after notice of termination by one party to the other for the material breach of any other provision,covenant, or obligation of this Agreement unless such breach is corrected to the non breaching party’s reasonable satisfactionwithin such thirty (30) day notice period.

 

13.1.2	In the eventof Termination, SpectraScience will undertake to continue the supply of Products until such time as the DISTRIBUTOR fulfills allhospital tenders and contractual commitments undertaken by DISTRIBUTOR on behalf of SpectraScience, prior to the termination orexpiration of this Agreement.

 

A breach of this Agreement will cause irreparableand continuing damage to either party for which money damages are insufficient and either party shall be entitled to injunctiverelief and/or a decree for specific performance without posting a bond or other security, and such other relief as may be proper(including money damages if appropriate).

 

**SECTION 14. GENERAL**

 

**14.1 	GoverningLaw.**This Agreement, including the validity hereof and the rights and obligations of the parties hereof, shall be exclusivelyconstrued in accordance with and governed by the laws of the State of Minnesota without regard to its conflicts of laws principles,and, as applicable, European Union law. The parties expressly reject the applicability to this Agreement of the United NationsConvention on Contracts for the International Sale of Goods. Exclusive place of venue for all disputes arising from this Agreementshall be the courts in Hamburg, Germany. However, the Plaintiff is also entitled alternatively to bring a claim before the Courtof Arbitration of the International Chamber of Commerce. In this case, place of arbitration shall be Hamburg, Germany.

 

**14.2 	EntireAgreement.**This Agreement, including the schedules and exhibits, constitutes the entire understanding of the parties relatingto the subject matter hereof, and merges all prior agreements, understandings, and communications. No modification of this Agreementother than pricing for products contained in Exhibit A will be effective unless made in writing signed by both parties by theirduly authorized representatives.

 

**14.3 	Translations.**The official language of this Agreement and to the extent permitted by law all future communications with respect to, and contractsexecuted pursuant to this Agreement shall be in English.

 

**14.4 	Publicity.**Either party may announce the existence of an agreement for DISTRIBUTOR’s distribution of the Products. The specificterms of this Agreement are deemed confidential by the parties pursuant to Section 9 hereof.

 

**14.5 	Assignment.**This Agreement may not be assigned without the written approval of both parties. In the event of a change of control transactioninvolving either SpectraScience or DISTRIBUTOR, such written approval is not required and assignment shall inure to Successor Company.

 

 

IN WITNESS WHEREOF, the parties have eachcaused this Agreement to be executed by its duly authorized representative as of the date first written above.