Geospatial Holdings, Inc. (Geospatial) and Reduct NV (Reduct) have formed a strategic alliance to expedite the deployment of Reduct’s DuctRunner/Smart Probe Pipeline Mapping Technologies and Geospatial’s GeoUnderground™ Web-based GIS Portal into the global marketplace. Highlights of the alliance include :
- A new ten year license and distribution agreement (License Agreement) between Geospatial and Reduct for Geospatial’s current market territory of North America, South America and Australia. The License Agreement also provides for a gateway to Russia, Oman, Jordan, Abu Dhabi and Qatar.
- The License Agreement provides Geospatial non-exclusive rights for its current market position, along with the provision for exclusive rights in the United States and other territories upon the achievement of specified sales benchmarks.
- As part of the License Agreement, Peter Magnus (CEO of Reduct’s parent company, Delta Networks, SA) has agreed to join the Geospatial Board of Directors.
- The License Agreement, which was executed on April 11, 2011, will be in full force and effect upon Geospatial’s completion of a stipulated capital raise. Reduct will rescind its notice of termination of the predecessor license and distribution agreement and relinquish any associated claims when the new agreement becomes effective.
- Under the License Agreement, Reduct will earn a 5% royalty on all of Geospatial’s revenue and Geospatial will earn a 5% commission on global sales of Reduct probes, outside Geospatial’s current market territory, that utilize Geospatial’s proprietary GeoUnderground™ GIS software.
- As consideration for entering into the new agreement and forgiveness of $3 million in outstanding license fees payable to Reduct, Delta Networks will be issued Geospatial common stock equivalent to 18% of the Geospatial’s common stock outstanding at the effective date of the agreement and for a period of eight years thereafter.
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