Exhibit 10.1
Distribution Agreement
Between
Decatur Electronics, Inc.
An
Illinois Corporation
And
CDEX, Inc.
A Nevada Corporation
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TABLE
OF CONTENTS
PAGE
----
1.0 THE
AGREEMENT
3
2.0 THE
APPOINTMENT
3
3.0 AGREEMENTS FOR SUPPLYING
PRODUCT
3
4.0 SALES POLICIES, PRICING AND TERMS
OF
PURCHASE
5
5.0 INTELLECTUAL PROPERTY AND
MARKETING
6
6.0 NON-DISCLOSURE
AGREEMENT
7
7.0 SUB-DISTRIBUTORS AND MARKET
SEGMENTS
7
8.0 DEMO UNIT
SUPPORT
8
9.0 TERMS AND
TERMINATION
8
10.0
MISCELLANEOUS
9
11.0
NOTICES
10
12.0 WARRANTY OF
AUTHORITY
11
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SECTION I - THE AGREEMENT
-------------------------
1.1 THIS AGREEMENT (the "Agreement")
is made and entered into on February
16, 2009 (the
"Effective Date") by and between CDEX , Inc. with offices
at 4555 S. Palo
Verde, Suite 125, Tucson, Arizona 85714, referred to in
this document as
the ("Manufacturer"), and Decatur Electronics, Inc.,
with offices at
715 Bright Street, Decatur, Illinois 62522, referred to
in this document
as the ("Distributor" or "Decatur"). Collectively they
will be referred
to as the Parties.
1.2 The Manufacturer is the owner and
Manufacturer of illicit drug
detection products
(the "Products") and has the right to exclusively
market the
Products.
1.3 A description of the Products
which are the subject of this Agreement
are listed on
Schedule B attached to this Agreement and may be amended
from time to time
as necessary, in a writing signed by both Parties.
1.4 The Parties hereto are desirous
of entering into this Agreement whereby
the Distributor
shall be a "Master Distributor" (as defined below) of
the Products.
1.5 Definitions
1.5(a). "Master
Distributor" shall mean that the Distributor shall have
exclusive rights in the United States and Canada, subject to any
existing U.S.
distribution agreements (as described in Section 7.3 below), which
shall not be
renewed by Manufacturer, and non-exclusive rights in all other
countries to
distribute the products in their Market Segments (as defined
below).
1.5(b). "Market
Segments" shall mean law enforcement, military/
Department of
Defense, homeland security, jail and prison market
segments. The law
enforcement segment includes law enforcement agencies
and police forces
at the national, state/provincial, and local levels,
including school
police.
SECTION II - THE APPOINTMENT
----------------------------
2.1 Subject to the terms and
conditions in this Agreement, Manufacturer
appoints the
Distributor the rights to distribute the Products
worldwide.
2.2 A press release and market
announcement announcing the distribution
relationship
between the Parties shall be released no later than
February 20, 2009.
Such press release and market announcement shall be
issued only upon
mutual agreement of the Parties.
SECTION III - AGREEMENTS FOR SUPPLYING PRODUCT
----------------------------------------------
3.1 Manufacturer agrees to:
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3.1(a). Advise the
Distributor on a monthly basis with regard to
Product information, specifications, performance, delivery,
Products and service
information and notify the Distributor of updates for the Products
or inform
Distributor of all new Products.
3.1(b). Keep
confidential any pricing terms or arrangements with the
Distributor and shall not reveal such terms or arrangements to any
retailers or
distributors of the Distributor.
3.1(c). Provide
operational specifications and instructions with
respect to the Products and their use.
3.1(d). Supply a
certificate of conformance to specifications for each
Product shipped to Distributor.
3.1(e). Provide a
twelve (12) month Limited Warranty on the ID2 Meth
Scanner Product as stated in Schedule A attached to this Agreement.
Warranty
terms on future products that are distributed under the terms of
this Agreement
shall be discussed by the Parties and negotiated in good faith.
3.1(f). Provide a
renewable Extended Warranty on the ID2 Meth Scanner
for one (1) year at $ ____. The Extended Warranty will be offered
for as long as
the Product is commercially available.
3.1(g). Fulfill
its Warranty (See Schedule A) obligations by carrying
out, in a reasonable manner and at its option, the repair or
replacement of any
defective parts of the Product, provided that the Product is used
in conformity
with Manufacturer's instructions. All customer service issues that
are passed
through to Manufacturer during the life of the Warranty (and the
Extended
Warranty, if applicable) of the serialized Product will be
coordinated with
Distributor's customer service department and reports provided to
Distributor
regarding solutions and product enhancements/fixes.
3.1(h). Ensure
technical support is available to the Distributor in the
form of an individual or individuals who is/are accessible during
normal
business hours to answer the Distributor's questions and is capable
of assisting
the Distributor.
3.1(i). Provide
customer service training to Distributor's customer
service department at a mutually agreed upon time and place for
initial and
minimum customer service issues that customers may have regarding
the Products.
3.1(j). Have
training material available to the Distributor in order
for technicians and salesmen of the Distributor to explain critical
details of
the Product.
3.1(k). Provide
training to the Distributor's sales team under mutually
agreed terms and conditions.
3.1(l). Share all
new performance data and suggestions for sales
literature as developed.
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3.2 Distributor agrees to:
3.2(a). Market the
Product(s) in good faith, utilizing all of its
marketing, sales and customer services resources, in a manner
equivalent to the
Distributor's existing core products, including direct sales, the
use of
sub-distributors, catalogs, promotions, trade shows, web marketing,
advertising,
public relations, and any other means of marketing.
3.2(b). Provide
sales forecasts beginning ninety (90) days after the
Effective Date and every ninety (90) days going forward.
3.2(c). Follow up
in a diligent and timely manner any sales leads
generated by the Manufacturer and forwarded to the Distributor.
3.2(d). Develop
marketing materials based on the Manufacturer's
marketing and technical data with the Manufacturer reviewing and
approving all
Decatur materials for technical accuracy prior to release.
SECTION IV - SALES POLICIES, PRICING AND TERMS OF PURCHASE
----------------------------------------------------------
4.1 All prices and payments shall be in United States of
America funds net
thirty (30) days from invoice date, which
is shipping date, F.O.B. factory
to Distributor unless otherwise agreed
upon by Manufacturer.
4.2 Manufacturer shall sell to the Distributor and the
Distributor shall
purchase Manufacturer's Products under the
following conditions:
i. First _____ ID2 Meth
Scanners: $_______ each
ii. Second ____ ID2 Meth
Scanners: $_______ each
iii. Third ____ ID2 Meth
Scanners: $_______ each
iv. The Parties shall negotiate a price in
good faith if
Distributor
purchases more than ____ ID2 Meth Scanners over
the course of the Agreement.
4.3 Any additional Products included under this Agreement
shall have the
pricing terms set forth in a subsequent
writing signed by both Parties.
4.4 Upon receipt of a purchase order, Manufacturer shall pay
to ship the order
to Distributor by the most economical
means for re-packaging. Decatur shall
pay to ship the product to customer.
4.5 Manufacturer shall ship the ID2 Meth Scanner in the
Serpac 520 "pelican"
case or a case of substantially similar
quality.
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4.6 Distributor may repackage and ship products in any manner of
their choosing,
including the use of Decatur packaging. Any damage done during
shipment to
customers shall be the responsibility of Decatur and its
shipper.
4.7 All Products will be serialized and documented for tracking by
Manufacturer
and Decatur.
4.8 Manufacturer and Decatur agree to a co-branding strategy for
the ID2 Meth
Scanner and all future Products covered by this Agreement.
4.9 The Extended One (1) Year Warranty that Manufacturer will
provide for the
ID2 Meth Scanner must be purchased by the customer prior to the
expiration of
the standard twelve month Warranty. Decatur will receive ten
percent (10%)
commission for an Extended One (1) Warranty.
4.10 Customer will pay for the shipping to Manufacturer for service
under the
Warranty. Manufacturer will pay for the return shipping back to the
customer
within the continental U.S.A., after service work is completed.
4.11 Manufacturer will provide a five working day turn-around for
standard
warranty work.
4.12 Non-warranty work will be billed to the customer at $____ per
hour plus
parts at cost plus ______ percent. $____
per hour of labor billed to the
customer will be paid to Decatur. The
customer will pay shipping both ways
on non-warranty work.
SECTION V - INTELLECTUAL PROPERTY
---------------------------------
5.1 The Distributor shall use Manufacturer's Trademarks only
in connection with
Manufacturer's Products and shall not
obtain or register any corporate or
business name, which includes any
Trademarks or Patents of Manufacturer.
The Distributor shall not adopt or use any
mark similar to the Trademarks
of Manufacturer.
5.2 The Distributor shall not assert nor acquire, nor attempt
to acquire, any
rights or interest in or to any of
Manufacturer's Patents, Trademarks or
Copyrights in any country, unless given
permission in writing by
Manufacturer.
5.3 Upon termination of this Agreement, the Distributor shall
immediately cease
all use of the Trademarks and
Manufacturer's copyrights.
5.4 Decatur and Manufacturer will work jointly to procure
legal and
governmental approvals where appropriate.
Decatur will assure development
of positive case law and court acceptance
of the Product's capabilities
with support from Manufacturer on the
issues of science.
5.5 Manufacturer has conducted extensive testing on the ID2
Meth Scanner, both
internally and in the field with real drug
samples. Manufacturer will
cooperate with Decatur and customers to
conduct additional tests as needed.
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Decatur will refer all requests for new
tests to Manufacturer for approval
and design of protocols. Manufacturer
and/or Decatur will supervise all
testing and formal reports will be written
and disseminated only with joint
approval of Manufacturer and
Distributor.
SECTION VI - NON-DISCLOSURE AGREEMENT
-------------------------------------
6.1 Any and all knowledge and
information of a confidential or proprietary
nature related to Manufacturer, its
equipment designs, manufacturing
techniques and formulas, product
development know-how, sales and
distribution confidential data or its
operations in general which the
Distributor may acquire from Manufacturer
or may develop through, or as a
result of, discussions with Manufacturer,
its employees, consultants or
representatives, are deemed to be trade
secrets and shall not be disclosed
by the Distributor its employees and
agents, to any individual, firm,
government entity, or corporation of any
nature or for any reason, without
the express written consent of
Manufacturer for a period of three (3) years
after termination of the Agreement.
6.2 For the purpose of this
section all information not publicly known
shall be considered to be
confidential.
SECTION VII - SUB-DISTRIBUTORS AND MARKET SEGMENTS
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7.1
