TSX Venture Exchange: VSI
VANCOUVER, Oct. 31, 2013 /CNW/ - VendTek Systems Inc. (TSXV: VSI) ("VendTek" or the "Company"), a global transaction processing company, is pleased to announce that it has reached an agreement to restructure its business relationship with its partner in the Middle East, Privinvest Holding SAL ("Privinvest"), by, among other things, amending the terms of its exclusive territory rights license agreement with Privinvest (the "Territory Agreement").
Pursuant to the Territory Agreement, Privinvest has an exclusive, unlimited, irrevocable licence to use VendTek's e-Fresh™ software in eleven countries in the Middle East. The Territory Agreement provided for a total of USD$2.5 Million in cash payments from Privinvest to VendTek spread over the initial term of 49 months. The parties have amended the Territory Agreement to, among other changes, remove the license from one Middle East country and add it for three African countries.
In addition to amending the Territory Agreement, VendTek entered into two additional non-exclusive software license agreements with a company affiliated with Privinvest, to license its e-Fresh™ software for use in two African countries for a per transaction royalty fee.
As part of the restructuring, Privinvest and companies affiliated with it assigned their rights under the Territory Agreement and the new software license agreements to Logistics International SAL (Offshore) ("Logistics"), another company affiliated with Privinvest.
Logistics has agreed to prepay the remainder of the amounts that are payable to VendTek under the Territory Agreement by way of payment of USD$300,000 in cash and returning to VendTek CDN$750,000 of VendTek debt issued on August 25, 2011 and due on January 25, 2014 held by Logistics for cancellation.
This transaction is considered to be a related party transaction under Canadian securities law because Privinvest and companies affiliated with it hold in excess of 20% of VendTek's issued and outstanding shares. However, the transaction is exempt from the special approval and evaluation requirements under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions ("MI 61-101"), as it is considered to be an ordinary course of business transaction for the Company. Also, pursuant to MI 61-101, VendTek advises that because the transaction has closed within 21 days of the date of this press release, the material change report in relation to this transaction will be filed less than 21 days before the closing. VendTek believes this shorter period is reasonable and necessary in the circumstances as VendTek wished to complete the transaction in a timely manner and expedite the receipt of the consideration from Privinvest.
For more information please contact Samantha White at 604-805-4653 or 1-800-806-4958 or [email protected].
VendTek is headquartered in Vancouver, British Columbia, Canada, and develops and licenses automated transaction system software and supporting technologies that improve the efficiency of product delivery, reduce costs to clients and offer superior safety measures. VendTek's customers, its division, Now Prepay and its subsidiaries are using e-Fresh™ software to build electronic, prepaid services networks, which enable consumers to purchase prepaid services via point-of-sale terminals (POS) and self-serve terminals connected to a central e-Fresh™ server. This system creates significant value through improved efficiencies compared to the traditional distribution paradigm. e-Fresh™ reduces shrinkage and inventory requirements while improving consumer access to prepaid services by completely eliminating physical cards and vouchers. For further information please visit the Company's websites www.vendteksystems.com and www.nowprepay.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: VendTek Systems Inc.
For further information:
contact Samantha White at 604-805-4653 or 1-800-806-4958 or [email protected].