Summary of SECTOR 10 INC - Yahoo! Finance

Entry into a Material Definitive Agreement, Termination of a Material Definitive Ag

Item 1.01 Entry into a Material Definitive Agreement.

Item 1.01(a): Moody Capital, LLC

The date on which the agreement was entered into or amended, the identity of the parties to the agreement or amendment and a brief description of any material relationship between the registrant or its affiliates and any of the parties, other than in respect of the material definitive agreement or amendment; and

Date of Agreement: September 8, 2009

A brief description of the terms and conditions of the agreement or amendment that are material to the registrant.

Moody Capital, LLC was engaged to perform Investment Banking services to assist the Company in raising capital. The initial terms of the engagement shall be for 120 days on a nonexclusive basis from the date of this agreement. The engagement may be extended at the sole discretion of the Company. In its role as investment banker, Moody shall provide the following services:

Evaluate the Company's capital requirements for funding current growth,

Assist in the structure of the securities to be used to complete the funding; and

Use our best efforts to secure up to $7,700,000 in financing through either equity, debt, combination of both equity and debt, royalty agreement or combination of either equity and debt or both with the royalty agreement.

Use our best efforts to secure additional funding for acquisitions as determined under engagement review. The fee structure will be adjusted to reflect adjustments at certain funding levels as agreed by the parties.

In connection with the services to be provided, as outlined above, the Company shall pay to Moody fees in the following manner:

For its role as investment banker Moody Capital shall receive a fee equal to $18,750 payable in four installments. The first two installments of $3,125 with the first due upon execution of the agreement and the second due thirty days thereafter. The final two installments of $6,250 will be due 60 and 90 days after the execution of this agreement. The Company has the right to pay all or a portion of the fee in cash or in free trading common shares based on the closing price on the last trading day prior to the fee due date. If elected, the request for the transfer of free trading shares will be submitted to the Transfer Agent within 2 business days of acceptance of this agreement. If funding in excess of $500,000 is received during the payment period, then the Company will use excess funds to pay any remaining unpaid fee.

For the placement of common or preferred stock and any convertible/redeemable debt Moody shall receive 10% of the principal amount raised at each closing. This fee shall include all other fees and expenses that may be charged or assessed by other brokers, agents or parties involved in any funding transaction

Additionally Moody shall receive 10% warrant coverage for any equity or sub-debt placed. The warrants shall be for two and a half (2 ½) years and shall be exercisable at the greater of $.50 per share or 10% above the offering price or conversion price and have piggyback registration rights. Once computed, the warrant offering price or conversion price and term will be fixed with no subsequent changes permitted. All warrants shall be covered in a separate warrant agreement.

Item 1.01(b): Desert Capital Consulting, LLC

Date of Agreement: September 29, 2009

A brief description of the terms and conditions of the agreement or amendment that are material to the registrant.

Desert Capital was engaged to provide consulting services and to assist in raising bridge funds of $200,000 to $500,000. The term of this Agreement shall begin on the date first indicated above and shall continue (30) days thereafter, renewable by mutual agreement between Client and Consultant. Consultant shall also provide, either by Consultant directly or by qualified subcontractors, the following services:

Managerial Assistance

Strategic Planning

Assistance in Identifying and Negotiating with competent Investor Relations entities designed to increase awareness of Client's advances in its core sector

Assistance in acquiring necessary funding for operations and growth (see initial project described in Section 4)

Advice as to the Clients' communication with Shareholders of Record

Guidance and consultation regarding compliance with the regulatory agencies which oversee publicly traded and fully reporting companies.

The Consultant commits to providing 20 hours of service per month under this agreement.

Client shall pay Consultant, in consideration for Consulting Services, $3,000 monthly in cash (for consideration). The first payment is due upon execution of the agreement. If Consultant provides more than 20 hours of services under this agreement, Consultant shall be paid at a rate of $150 per hour for each hour in excess of the 20 hours. Such payment is contingent on the fact that such excess hours have been authorized and approved by the Client CFO or his designate. Properly authorized excess hours shall be billed by Consultant on a monthly basis at the end of the month in which the hours were incurred.

The initial 20 hours of the agreement shall be for the purpose of attaining Client's immediate cash needs of $200K-$500K. DCC will request, research and review all Due Diligence items (including but not limited to assets, liabilities, revenues, other cash flows, and potential collateral offerings), and based on its conclusions will approach its' most viable funding sources on a preliminary basis to determine the probability of success in gaining the requested funding. Should DCC, at the conclusion of this review, determine that it would be able to provide access to funding suitable to the needs of Sector 10, DCC shall draft applicable proposal(s) for review and final decision by Sector 10. At that time DCC will negotiate a Fee Agreement with Sector 10 based on successful closing of the funding proposal. Additionally DCC would review any existing documents reflecting funding scenarios or offerings that are already proposed through non-DCC sources.

Item 1.02 Termination of a Material Definitive Agreement.

Dutro Company and the Master Product Manufacturing and Purchase Agreement

The date of the termination of the material definitive agreement, the identity of the parties to the agreement and a brief description of any material relationship between the registrant or its affiliates and any of the parties other than in respect of the material definitive agreement;

The Company entered into an exclusive Master Product Manufacturing and Purchase Agreement dated October 1, 2007, between Dutro Company and Sector 10, (the "Confidentiality and Manufacturing Agreement"). The agreement was for a 2 year period expiring on September 30, 2009.

The Company issued a Cease and Desist letter on August 25, 2009 to the manufacturer regarding the production, sale and distribution of products similar to Sector 10 products. In addition, the Company notified the Manufacturer of its breach of the contract on September 14, 2009 for failure to provide information allowed under the agreement. The Company will not renew the Agreement and is pursuing other outside manufacturers.

A brief description of the terms and conditions of the agreement that are material to the registrant;

The agreement set forth terms and conditions for the exclusive manufacturing rights to Sector 10 product production during the term including production, pricing, research and development among others. The Agreement also contains confidentiality provisions which prohibit the parties from using confidential information outside the terms of the agreement.

A brief description of the material circumstances surrounding the termination; and

During the term, the Company became aware of the Manufacturer production of products similar to Sector 10 MRU product. The Company has reviewed the situation and noted that there were a number of sales to outside parties with no benefit to Sector 10. The Company issued a cease and desist letter to the Manufacturer and other parties on August 25, 2009. The letter requested that the Manufacturer and other parties discontinue the production, sales and distribution of the product that is similar to the Sector 10 products. The Company will continue to monitor the situation to determine the status of our request. No legal action has been initiated as of this date.

On August 6, 2009, Sector 10, Inc. agreed to provide consideration of $250,000 to Dutro Company for all obligations owed to Dutro Company by Sector 10, Inc. or its affiliates prior to the date of agreement. According to the agreement, the consideration included the following items:

Full reimbursement for all R&D expenditures incurred on or before the effective date of this Agreement. This includes any invoiced and un-invoiced R&D expenditures.

All future R&D will be paid only under a mutually signed agreement before the either party incurs any expense. If no such agreement is completed, no R&D will be reimbursed or completed.

On September 2, 2009, the Company forwarded a request for information from Dutro Company regarding details concerning the research and development costs reimbursed in the August 6 agreement. The letter stated that in accordance with
Section 15(a) of the Master Product Manufacturing and Purchase Agreement ("Manufacturing Agreement") dated October 1, 2007, Sector 10, Inc. requests the following information for all Sector 10 products that have been produced "as built" or "in process" including all versions of MRU, SRU, SRU-Media, Drones, MRU-Specialty units and any other products:

(1)

Detailed specs for all base units

(2)

Detailed specs for all enhancements to base units (special add ons etc)

(3)

Engineer drawings and notes regarding research and development or other enhancements.

(4)

Pricing breakdown by product and add on

(5)

Listing of all suppliers used in production and related detailed costs associated with each supplier.

On September 10, 2009, Dutro Company stated that they were under no obligation to provide the requested information and therefore refused our request. The Company disagrees with Dutro Company and has issued a notice on September 14, 2009 to formally inform Dutro Company that they are in breach of the Manufacturers Agreement. No legal action has been initiated as of this date.

Any material early termination penalties incurred by the registrant.

None

ABOUT SECTOR 10

Sector 10, Inc. is focused on changing the emergency response paradigm from centralized equipment staging to onsite pre-deployed resources. Sector 10 is the only emergency response systems company so strongly emphasizing pre-deployed resources as the way to save lives, avert injuries, reduce liability and to "Bridge the Survival Gap".

Sector 10 seeks to become a leading provider of pre-deployed emergency life response equipment across a number of major metropolitan areas located in the United States. The core focus of Sector 10 is on developing and marketing first response solutions, utilizing two lines of patented products, Mobile Response Units ("MRU") and Stationary Response Units ("SRU"). Sector 10 intends to position its product offerings to market and address the city-centric emergency needs of larger metropolitan areas with the Pericles LogiX 3D System. The Pericles LogiX 3D System is a structured and integrated emergency solution designed to pre-deploy emergency and disaster response equipment in multi-story residential and commercial buildings. Sector 10 is the exclusive provider of the Pericles LogiX 3D System in the United States. Sector 10 also offers the SRU and MRU product lines, which are designed to provide emergency safety services in large metropolitan areas. Sector 10 has begun sales and distribution of the SRU and MRU products within the United States

SECTOR 10 PRODUCTS/SERVICES

Sector 10's core focus is on first response solutions, utilizing its MRU and SRU products. Sector 10 believes both product lines represent significant advances in emergency response systems and evacuation aids. In addition to marketing and sale of the MRU and SRU products, Sector 10 intends to provide replenishment & maintenance, services customer service and education and training services to purchasers of the MRU and SRU products. In an effort to expand its marketing and sales efforts, Sector 10 proposes to increase product sales by facilitating financial arrangements through private or municipal financing sources.

Major markets identified by Sector 10 include Multi-Story Buildings, Construction/Industrial Sites, Schools, Hospitals, Airports, Convention Centers and Stadiums.

The multi-story building market is the initial target market for Sector 10. . . .