Document:

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 corporation
with offices at 11568-11 Sorrento Valley Road, San Diego, California USA 92121 (“SpectraScience”),

 

and

 

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

 

RECITALS:

 

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

 

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

 

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

 

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

 

SECTION 1. DEFINITIONS

 

1.1Product(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 distribute
the Products in the Territory, subject to the limitations set forth herein. SpectraScience retains all other rights not expressly
granted herein with regard to the Products.

 

2.2 No Other
Distributor. Except as otherwise specifically provided below SpectraScience shall not appoint any other distributor for the
Products in the countries listed under “Territory” during the term of this Agreement, provided DISTRIBUTOR meets or
exceeds its performance quotas annually, as described in Exhibit B on per country basis. In case of failure to meet quota in certain
country compensation in other countries accumulated quotas will be accepted or a recovery plan will have to be agreed. In case
the 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 its
business in a professional manner that will reflect positively upon SpectraScience and the Products.

 

3.2 Product
Promotion.

 

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

 

    	 

    	 	

    
 

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

 

DISTRIBUTOR shall initiate and complete
translating of all advertising and marketing information provided by SpectraScience when required. Translations of all information
shall be done in accordance with SpectraScience’s Translation Standard Operating Procedure. Translation of all such materials
shall be approved by SPECTRASCIENCE prior to use. Any translations in SpectraScience’s possession as of the Effective Date
shall be offered to DISTRIBUTOR free of charge. Any further translations required to distribute the Products in the Territory shall
be obtained at DISTRIBUTOR’S expense. DISTRIBUTOR shall own all such translations but SPECTRASCIENCE shall have a non-exclusive
right 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 SPECTRASCIENCE
in case of change in status of such license(s).

 

3.5
Performance Quotas.

 

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

 

3.5.2DISTRIBUTOR
shall 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 expired
Product. It is the DISTRIBUTOR’S responsibility to control his purchasing and stock policy in order to avoid return of expired
product(s).

 

3.6 Customer
Support.

 

3.6.1DISTRIBUTOR
shall respond to and handle all customer inquiries and complaints relating to the Products. DISTRIBUTOR’s responsibilities
shall include, all support, training, and maintenance issues relating to the Products. DISTRIBUTOR shall perform such responsibilities
at its own expense, provided, however, that SpectraScience shall use its commercially reasonable efforts to repair or replace any
defective Product to the extent of its warranty obligations hereunder. DISTRIBUTOR shall promptly report to SpectraScience all
suspected Product defects, errors, technical difficulties, or other problems, including potential Vigilance reports, relating to
the use or operation of the Products (collectively, “Problems”) and shall keep SpectraScience informed of customer
complaints concerning same. Without limiting the foregoing, upon becoming aware of any Problem, DISTRIBUTOR shall report the Problem
to 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 provide
DISTRIBUTOR required assistance in this respect, in particular with product liability issues.

 

3.7 Restricting
Activity to the Territory.

 

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

 

3.8 Indemnification.

 

3.8.1DISTRIBUTOR
shall 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.

 

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

 

    	 

    	 	

    
 

3.9 Clinical
Trials and Evaluations.

 

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

 

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

 

4.1.Customer
Complaints; Inquiries.

 

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

 

Customer Complaints; Inquiries. DISTRIBUTOR
hereby 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 technical
support on the usage of products to the customers based on information supplied by SpectraScience. Customer feedback, the occurrence
of incidents and near-incidents will be reported by the DISTRIBUTOR within three (3) business days directly to SpectraScience and
SpectraScience’s Authorized European Representative (see below for contact details). DISTRIBUTOR reporting should follow
the 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

 

4.2Safety Notification

 

In case a Product is potentially deviating
from the Product Specification, or under any other circumstance where such Product might cause, or already has caused, harm to
a patient, user or other person, each Party shall notify the other Party in writing (“Safety Notification”), irrespective
of 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 responsibility
to file Medical Device Reports or Vigilance Reports to any legal authority for the Products in order to comply with the applicable
laws and regulations in the Territory. Should DISTRIBUTOR by any applicable law or regulation be obliged to report medical device
incidents, this Agreement shall not prevent DISTRIBUTOR from doing so.

 

Safety Notifications and any other complaints
on 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

 

4.3Product Analysis

 

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

 

 ̈is potentially non-conforming with
the Product Specifications,

 

 ̈ is malfunctioning or defective,
or

 

 ̈ might cause or already has caused
harm 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.

 

4.4No statement

 

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

 

4.5Sales and Service records

 

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

 

4.6Product Recall

 

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

 

4.7Remedial Actions

 

It is SpectraScience’s exclusive
right and obligation to issue recalls, safety alerts, advisory notices or similar remedial actions on the Products. In such case
DISTRIBUTOR 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. SpectraScience
shall 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 Products
properly or DISTRIBUTOR’s breach of this Agreement, or its negligence or willful misconduct. Should DISTRIBUTOR by any applicable
law or regulation be obliged to issue remedial actions in the sense of sentence 1, this Agreement shall not prevent DISTRIBUTOR
from 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’S
OBLIGATIONS

 

5.1 Products.

 

SpectraScience shall
use its commercially reasonable efforts to ship the quantity of Products in accordance by the requested date in each purchase order
submitted by DISTRIBUTOR. SpectraScience shall notify DISTRIBUTOR of any delay or failure to ship the Products promptly upon learning
of 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 SpectraScience
to a common carrier.

 

SECTION 6. EXPENSES

 

Except as otherwise
expressly provided in this Agreement, SpectraScience and DISTRIBUTOR shall each bear their respective costs and expenses as incurred
by 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 territories
or bear the related expenses.

 

SECTION 7. PRICES AND PAYMENTS

 

7.1 Prices and
Payments.

 

    	 

    	 	

    
 

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

 

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

 

7.1.3Payment terms
are net 30 days.

 

SECTION 8. LIMITATIONS OF WARRANTY
AND DAMAGES

 

8.1 Limited
Warranty. SpectraScience warrants, solely for the benefit of DISTRIBUTOR, that for a period of one year after shipment by the
DISTRIBUTOR or a maximum of 18 months from shipment by SpectraScience, whichever comes first, that each Product (Except Disposable
products which bear a shelf-life) shall substantially conform to the specifications set forth in the materials accompanying the
Product and shall be free from defects in materials and workmanship; provided, however, that the foregoing warranties are expressly
contingent (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, SpectraScience
shall repair or replace the Product, or, at SpectraScience’s sole discretion, repay or credit the actual price paid by DISTRIBUTOR
therefore. SpectraScience must receive warranty claims within thirty (30) days after the claim arises, but no later than the stated
expiration date of the applicable warranty period, and must be made in writing in sufficient detail to allow SpectraScience to
reproduce the defect. DISTRIBUTOR shall have in addition all remedies, the law of the State Minnesota provides.

 

8.2 Limitation
of Warranty. Except as provided in Section 8.1, SpectraScience makes not warranties or representations as to the performance
of 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 information
obtained from the other party concerning operations, technical information, or financial information without advance written approval
of the other party, except (i) information generally available to the public without breach of this Agreement, (ii) information
provably developed independently by the receiving party, (iii) information obtained from a third party not under any obligation
of nondisclosure; and (iv) information required to be disclosed by law or governmental regulation; provided, however, that before
making any use or disclosure in reliance on any of such exceptions (i) through (iv) the party that intends to use or disclose such
information shall give at least fifteen (15) business days’ prior written notice to the other party specifying the applicable
exception(s) and circumstances giving rise thereto.

 

9.2 Injunctive
Relief. The parties agree that any breach of this Section 9 would constitute irreparable harm, and that either party shall
be entitled to seek specific performance or injunctive relief to enforce this Section 9 in addition to whatever remedies such party
may 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 all
applicable statues, laws and regulations in the Territories.

 

SECTION 11. COMPETING PRODUCTS

 

DISTRIBUTOR represents
and warrants that it does not currently market optical biopsy systems and that it shall not, directly or indirectly market or sell
other products competitive with the Products. To the extent permitted by law, during the Term of this Agreement, DISTRIBUTOR shall
not develop any products competitive with the Products, acquire the right to market, distribute, or license any such competitive
products 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. This
Agreement shall have an initial term as set forth in Schedule 1 hereof, subject to early termination as provided in Section
13.

 

12.2 Renewal.
After the initial term has elapsed, this Agreement shall automatically be extended (renewed) for subsequent one (1) year increments
provided 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 Termination
for Just Cause. This Agreement may be terminated prior to expiration as follows:

 

13.1.1This Agreement
shall 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 satisfaction
within such thirty (30) day notice period.

 

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

 

A breach of this Agreement will cause irreparable
and continuing damage to either party for which money damages are insufficient and either party shall be entitled to injunctive
relief 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 Governing
Law. This Agreement, including the validity hereof and the rights and obligations of the parties hereof, shall be exclusively
construed 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 Nations
Convention on Contracts for the International Sale of Goods. Exclusive place of venue for all disputes arising from this Agreement
shall be the courts in Hamburg, Germany. However, the Plaintiff is also entitled alternatively to bring a claim before the Court
of Arbitration of the International Chamber of Commerce. In this case, place of arbitration shall be Hamburg, Germany.

 

14.2 Entire
Agreement. This Agreement, including the schedules and exhibits, constitutes the entire understanding of the parties relating
to the subject matter hereof, and merges all prior agreements, understandings, and communications. No modification of this Agreement
other than pricing for products contained in Exhibit A will be effective unless made in writing signed by both parties by their
duly 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 contracts
executed 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 specific
terms 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 transaction
involving either SpectraScience or DISTRIBUTOR, such written approval is not required and assignment shall inure to Successor Company.

 

    	 

    	 	

    
 

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

 

 

 

	
        SpectraScience, Inc.

         

        By: /s/ Michael Oliver

         

        Name: Michael Oliver

         

        Title: President & CEO

         

        Date: June 13, 2012
	
        PENTAX Europe, GmbH

         

        By: /s/ Girts Cimermans

         

        Name: Girts Cimermans

         

        Title: President EMEA

         

        Date: June 16, 2012Exhibit 10.7

 

COMMUNITY NATIONAL BANK

 

August 10, 2012

 

Mr. James N. Janello

Chief executive Officer

The Janel Group of new York,
Inc.

 

Dear Jim,

 

This is to confirm that Community
National Bank (CNB) is willing to extend the maturity of its Line of Credit (LOC) to The Janel Group of New York, Inc. (Janel)
from July 31, 2012 to September 30, 2012 pursuant to the Terms outlined in your letter of August 3, 2012, which Terms are summarized
as follows:

  

		1.	The LOC is reduced from $3,500,000 to $2,500,000 with Borrowings continuing to be limited to the
Borrowing Base.

 

		2.	You have agreed to reinstate your Personal Guaranty on the Terms contained in the original Personal
Guaranty you provided dated July 29, 2010, a copy of which was attached to your letter of August 3, 2012.

 

All other
Terms to remain unchanged from the Terms in effect at July 31, 2012.

 

If you are
in agreement, please so indicate by signing below and returning a copy to the undersigned.

 

	Sincerely,	 	Agreed and accepted:
	 	 	 
	  /S/	 	  /S/
	JoAnn Bello	 	James N. Jannello
	First Vice President	 	Personally and on behalf of
	 	 	The Janel Group of New York, Inc.

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