Exhibit 10.26
License and Client Software Support Agreement
This agreement ("Agreement"} is entered into this 6th day of April, 2007 by and
between Magnitude Information Systems Inc. and its subsidiary Magnitude Inc.
("Magnitude") with an address at 1250 Route 28, Suite 309, Branchburg, NJ 08876
and Imminent Technologies LLC ("IMT"), with an address at 1711 RT 10 East Suite
10, Morris Plains, NJ 07950.
B A C K G R O U N D:
WHEREAS, Magnitude desires to appoint IMT as non-exclusive reseller for the
licensing to end-users, of Magnitude's product line of certain specialized
proprietary software commonly marketed by Magnitude under the ErgoManager label
and derivative software products addressing ergonomic applications (the
"Software"); and
WHEREAS, Magnitude desires to also appoint IMT as the exclusive "Official
Support Services Provider" for Magnitude's ergonomic software product line, to
service current Magnitude customers under service contracts with Magnitude; and
WHEREAS, IMT represents that is has the necessary professional expertise and
knowledge about Magnitude's software products and its clients, and is willing to
accept such appointments.
NOW, THEREFORE, the parties hereto agree on the following:
1. License
a. Grant of License.
(i) Subject to the terms and conditions of this Agreement;
Magnitude hereby grants to IMT and IMT hereby accepts, a
nonexclusive, nontransferable worldwide license (the
"License") to market, sell and sublicense for the use of
Magnitude's ergonomic software products, including "Ergo-Fun",
"Ergo-Coach", "Ergo-Enterprise" and all current
versions/derivations of "Ergo-Enterprise" (collectively, the
"Product"), at end-user prices, which prices shall be
determined exclusively by IMT.
(ii) The License granted pursuant to this Agreement includes (a) a
license to the Product source code for the sole purpose of
developing programmatic fixes and enhancements to the Product
and (b) any and all attributes of the Magnitude patent, No.
6,065,138, and all intellectual property associated therewith.
(iii) Magnitude and IMT acknowledge and agree that:
o This Agreement grants IMT no title or right of ownership
in or to the Product or any related proprietary
materials and information, or covering Magnitude's
patents or trademarks.
o IMT shall not, at any time, take or cause any action
which would be inconsistent with or tend to impair the
rights of Magnitude in the Software or any related
proprietary materials and information, including
Magnitude's patents or trademarks.
o Magnitude hereby grants to IMT the right to develop
ergonomic products based on and around the Products.
2. License Fee and Royalty
In consideration for the license granted by Magnitude under this Agreement, IMT
shall pay Magnitude a license fee of $1.00 which Magnitude confirms as having
received, which payment constitutes payment in full for the License. In further
consideration for Magnitude granting it the License described herein, and for
each 12-month period of this Agreement, during which IMT has earned a minimum of
$200,000 in revenues derived from the sale of the Products, IMT agrees to pay to
Magnitude a royalty payment in an amount equal to ten (10%) percent of all gross
revenues earned from the sale of the Products above the aforementioned $200,000.
So that if during the first 12-month period of this Agreement, IMT only earns
$250,000 it shall owe a royalty payment to Magnitude in the amount of $5,000.
Magnitude will have no right to any license fees or royalty payments resulting
from revenues generated by IMT through IMT Products as described in paragraph 5
of this agreement. In the event Magnitude should declare bankruptcy or otherwise
dissolve in the future, IMT's license and right to utilize Magnitude's patent,
as described in paragraph 1 above, shall continue in perpetuity, however IMT's
obligation to pay royalties will cease.
3. Support Services
Magnitude hereby appoints IMT its exclusive "Official Support Services Provider"
for Magnitude's ergonomic Products; which support services shall include,
providing support services to all Magnitude customers which have support and or
maintenance agreements, subject to the following terms and conditions:
- IMT agrees to assume all support services and related expense for
Magnitude customers listed in Exhibit A commencing retroactively on
September 1, 2006.
- IMT shall be entitled to receive directly or, if received by
Magnitude, from Magnitude, all support and maintenance
payments/revenues arising out of support and or maintenance
agreements for services rendered and payments received after January
1, 2007;
- IMT shall have the exclusive right to accept or reject any and all
customer support and or maintenance agreements as they come up for
renewal;
- IMT shall have the right to hire or employ prior employees of
Magnitude; this right will supersede any prior no-compete or
non-solicit provisions found within prior Magnitude employment
agreements;
- IMT shall maintain adequate records for all support and maintenance
activities performed for Magnitude's customers which shall be
available to Magnitude in electronic format;
- IMT shall have the use of the Magnitude voicemail and phone system
for as long as necessary without interfering with Magnitude's
business operations;
- IMT shall have the right to use the Magnitude website to publish
support and product information until such time as Magnitude
develops a different website for its new and future business;
- In the event Magnitude applies an "End of Life" procedure to any
Magnitude customer relationship, IMT shall have, in its sole and
absolute discretion, the right to provide such customer with its own
support and maintenance contract; similarly, in the event Magnitude
decides to apply an "End of Life" protocol to any Magnitude Product,
it shall only do so in coordination with IMT to achieve clear
disclosures to the public and to avoid any material disruptions with
customer services.
- Magnitude shall have no further obligation to support any Magnitude
customer except where expressly required nor shall Magnitude have
any obligations to pay for any support or maintenance services for
any Magnitude customer except as expressly set forth in this
Agreement
- Magnitude represents that it has provided to IMT a list of all of
its customers who have support and maintenance service agreements
with Magnitude.
- Magnitude shall transfer the assets of its testing lab consisting of
personal computers (Lab PCs) to IMT at no cost to IMT in order to
assist IMT in providing the customer support to the Magnitude client
base required under the terms of this Agreement.
4. Support Services Fees
For support services provided by IMT previously rendered and commencing on
September 1, 2006, and for support agreements IMT agrees to assume (See EXHIBIT
A), and as compensation related to Section 3 above, Magnitude shall (a) pay IMT
the sum of $20,000.00 , payable as follows: (i) $5,000.00 at the time this
Agreement is executed, (ii) $15,000.00 within 90 days from the date of this
Agreement; and (b), issue 150,000 restricted shares of the common stock of
Magnitude Information Systems, Inc., with stock certificates issued in
accordance with the instructions of IMT, deliverable within 60 days from the
date of this Agreement.
5. Ownership
IMT and Magnitude agree that Magnitude owns all proprietary rights, including
without limitation, copyright, trade secret and trademark rights, in and to the
Products and other related proprietary materials and information and all
corrections, enhancements, updates and other modifications to the Products. Not
withstanding anything set forth herein to the contrary, providing IMT does not
include Magnitude Product Source code, IMT shall have the right to develop its
own line of ergonomic products, known herein as IMT Products.
6. Confidential Information
IMT acknowledges that the Products and related proprietary materials and
information relating thereto is the exclusive property of Magnitude (the
"Confidential Information"). During the period this Agreement is in effect and
at all times after its termination, IMT shall be permitted to disclose the
Confidential Information only to its employees and agents ("Employees") having a
need to know such information in connection with the performance of this
Agreement. IMT shall instruct all of its Employees as to their acknowledgement
and agreement to be bound by the terms and conditions of this Agreement prior to
their being given access to the Confidential Information. IMT shall be
responsible for its Employees' compliance with the terms of this agreement. If
disclosure is required by law, however, IMT shall notify Magnitude in writing in
advance of such disclosure, and provide Magnitude with copies of any related
information so that it may take appropriate action to protect the Confidential
Information.
Notwithstanding the foregoing, Confidential Information shall not include
information, data or materials that:
(i) is or becomes generally known to the public not as a result of a
disclosure by IMT,
(ii) is rightfully in the possession of IMT, or
(iii) is received by IMT in good faith and without restriction from a
third Party, not under a confidentiality obligation to Magnitude,
and having the right to make such disclosure. IMT acknowledges that
the disclosure of Confidential Information may cause irreparable
injury to Magnitude and damages which may be difficult to ascertain.
Therefore, Magnitude shall, upon a disclosure or threatened
disclosure of any Confidential Information be entitled to seek
injunctive relief, including, but not limited to, a preliminary
injunction upon an ex parte application to protect and recover the
Confidential Information, in which event, IMT shall not object to
the entry of an injunction or other equitable relief against it on
the basis of an adequate remedy at law, lack of irreparable harm or
any other reason.
7. Warranty
b. Magnitude warrants that:
(i) It has the right and authority to enter into this Agreement and to
grant the license granted hereunder;
(ii) The Product does not infringe the trade secret or copyrights of any
third party, or, to the best of its knowledge and belief of
Magnitude, any third party patent.
(iii) When delivered, the media upon which the Products are provided to
IMT shall be free from defects in material and workmanship. IMT's
sole remedy for breach of this warranty shall be replacement of the
defective media.
c. THE FOREGOING ARE THE ONLY WARRANTIES CONCERNING THE PRODUCTS AND ARE
BEING MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO , ANY IMPLIED WARRANTIES
OF NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY.
8. Indemnification
a. Magnitude shall indemnify and hold harmless IMT from and against any
claims, including reasonable legal fees and expenses, based upon
infringement by the Products of any United States copyright or
patent. IMT agrees to notify Magnitude of any such claim promptly in
writing and to allow Magnitude to control the proceedings. IMT
agrees to cooperate fully with Magnitude during such proceedings.
Magnitude shall defend and settle at its sole expense all
proceedings arising out of the foregoing. In the event of such
infringement, Magnitude may replace, in whole or in part, the
Software with a substantially compatible and functionally equivalent
system or modify the Software to avoid the infringement.
b. IMT shall indemnify and hold harmless Magnitude from and against any
and all liability, damage, loss or expense which they, or any of
them, may sustain or incur in any action brought or claim made by
any person, organization or governmental entity or agency,
irrespective of the legal theory on which such action or claim may
be based, to the extent such liability relates to or such action or
claim is based on any acts or omissions of IMT, including, without
limitation, breach by IMT of any of its obligations hereunder.
9. No Consequential Damages
Magnitude shall not be liable to IMT for indirect, special, incidental,
exemplary or consequential damages (including, without limitation, lost profits)
related to this Agreement or resulting from IMT's use or inability to use the
Product, arising from any cause of action whatsoever, including contract,
warranty, strict liability, or negligence, even if Magnitude has been notified
of the possibility of such damages.
10. Limitation on Recovery
Under no circumstances shall the liability of Magnitude to IMT exceed the amount
paid by IMT to Magnitude under this Agreement.
11. Term and Termination
a. Effective Date. This Agreement and the license granted hereunder
shall take effect on the date first written above and shall be
effective for one (1) calendar year from such date unless terminated
as provided in this Agreement. This Agreement shall automatically
renew by subsequent one year periods unless either party notifies
the other party in writing no later than 60 days before the
expiration of the initial or any renewal term of its decision to not
renew the Agreement.
b. Termination. Each party shall have the right to terminate this
Agreement and the license granted herein in the event the other
party violates any material provision of this Agreement (an "Event
of Default").
c. Notice and Opportunity to Quit. Upon the occurrence of an Event of
Default in either party's obligations hereunder, the other party
shall deliver to the defaulting party a notice of intent to
terminate that identifies in detail the Event of Default. If the
Event of Default remains uncured for thirty (30) days, the notifying
party may terminate this Agreement and the license granted herein by
delivering to the defaulting party a notice of termination that
identifies the effective date of the termination, which date shall
not be less than thirty (30) days after the date of delivery of such
notice. Upon termination of this Agreement, IMT shall immediately
cease all use of the Software protocol and return all copies,
partial and whole, of the Software documentation, including, without
limitation, all corrections, enhancements and updates to the
Software documentation and all other materials received, created or
held under this Agreement, and any and all parts of the Software
documentation stored by IMT in computer-accessible media or form
shall be destroyed or rendered inaccessible to users.
12. Notice
Any notice by one party to the other under this Agreement shall be deemed
delivered upon receipt by the party to whom such notice is sent, or, if later,
three days after such notice has been sent by first class mail, courier or
telecopy with confirmed receipt to the following person and address or such
other person or address as may be notified to the other party in accordance with
this section:
To Magnitude: Magnitude Information Systems, Inc.
1250 Route 28, Suite 309
Branchburg, NJ 08876
Telecopy: (908) 927-0008
To IMT: Imminent Technologies LLC.
1711 RT 10 East Suite 10
Morris Plains, NJ 07950
Telecopy: 973-215-2094
13. Assignment
IMT shall not assign or otherwise transfer this Agreement to anyone, including
any parent, subsidiaries, affiliated entities or third parties, or as part of
the sale of any portion of its business, or pursuant to any merger,
consolidation or reorganization, without Magnitude's prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed. IMT
agrees that any assignment in violation of this Agreement shall be void.
14. Limitations Period
No arbitration or other action under this Agreement may be brought by either
party against the other more than one (1) year after the cause of the action
arises.
15. Governing Law
This Agreement and performance hereunder shall be governed by the laws of the
State of New Jersey, without reference to principals of conflicts of law.
16. General Provisions
a. Complete Agreement. The parties agree that this Agreement is the
complete and exclusive statement of the agreement between the
parties, which supersedes and merges all prior proposals,
understandings and all other agreements, oral or written, between
the parties relating to this Agreement.
b. Amendment. This Agreement may not be modified, altered or amended
except by written instrument duly executed by both parties.
c. Waiver. The waiver or failure of either party to exercise in any
respect any right provided for in this Agreement shall not be deemed
a waiver of any further right under this Agreement.
d. Severability. If any clause or provision of this Agreement is or
becomes illegal, invalid, or unenforceable, the remaining provisions
of this Agreement shall be unimpaired, and the Agreement shall
thereafter be construed as if the invalid provision had not been
included in the Agreement, unless the elimination of such provision
destroys the underlying business purpose of this Agreement.
e. Terms Bargained For. IMT acknowledges that the terms of this
Agreement were bargained for, and the fees reflect, and are based
upon IMT's acceptance of, all of the terms of this Agreement.
Magnitude is willing to undertake greater potential liabilities in
exchange for increased fees and prices reflecting that exposure. IMT
has opted to accept limitations on Magnitude's liabilities as set
forth herein in return for the fees set forth herein.
f. Read and Understood. Each party acknowledges that it has read and
understands this Agreement and agrees to be bound by its terms.
Magnitude Information Systems, Inc. Imminent Technologies LLC.
/s/ Edward L. Marney /s/ Marc Frega
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Signature Signature
Edward L. Marney Marc Frega
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(Printed) Name (Printed) Name
CEO & President CEO
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Title Title
4/10/07 4/06-07
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Date Date
EXHIBIT A
Magnitude Support Clients
Vistakon, a subsidiary of Johnson & Johnson
Alliant Energy Corporation
Hamilton Sundstrand Space Systems
State Compensation Insurance Fund
Aon Corporation
Georgia Pacific
Lockheed Martin
Bechtel SAIC
Earth Tech
United Space Alliance
BASF Corporation
Koch Industries