Defenx enters into new agreements with majority shareholder BV Tech
Cybersecurity software group Defenx has entered into a software distribution agreement and a software services agreement with its majority shareholder BV Tech, it announced on Tuesday.
The AIM-traded firm said its wholly-owned subsidiary Defenx Italia had entered into the software distribution agreement, which amended the previous agreement with BV Tech, which was originally announced in June 2017.
Under the agreement, BV Tech would have the sole rights to sell Defenx products to certain bodies within the Italian defence, space, national security and critical infrastructures sectors through to the end of December 2023, for which BV would pay Defenx a total consideration of €1m, to be invoiced in three instalments before the end of the first half of 2019.
In addition, Defenx would receive a royalty fee equal to 50% of any revenues from the sale of its products during the period to the end of 2023.
BV Tech had also committed to purchase Defenx's products with a minimal value of €1.2m over a two year period, effective from 1 January this year.
As a result, Defenx would receive a minimum of €1.2m in a number of instalments over the two-year period from BV Tech for such products.
“The previous restrictions regarding the distribution of Defenx's products have also been removed, such that BV Tech is now able to distribute, on a non-exclusive basis, all of Defenx's products, other than those covered above, through any direct and indirect channel of distribution or sales through to 31 December 2021,” the Defenx board said in its statement.
The value of any Defenx products sold by BV Tech under the distribution agreement would - unless agreed otherwise by the parties - be based on the prices set out in the 2017 distribution agreement.
“All other terms of the previous 2017 distribution agreement remain the same,” the board added.
The company, also via Defenx Italia, had also entered into a software services agreement, under which BV Tech would undertake to provide services to Defenx in respect of its range of new and existing products over the course of 2019.
“The aggregate fee payable by the company to BV Tech for the services under the services agreement is calculated and payable monthly on a 'time spent' basis, capped at €1.2m,” Defenx said.
The services agreement contained warranties in favour of Defenx Italia in respect of the intellectual property created for the services.
BV Tech had the right of first refusal to extend the services agreement for a further year on the same terms, subject to its fees or timing for delivery of its services at least matching terms proposed by third-party suppliers, all other criteria being at least equal, the Defenx board explained.
“The services agreement contains a number of termination rights of each party, for cause, rather than for convenience.”
Defenx noted that the services agreement did not form part of the master services agreement previously entered into with BV Tech, which was announced in September 2017.
Following entering into the service agreement, Defenx said it would focus on completing work on its product portfolio, and now expected to be in a position to launch new products in the second quarter of 2019.