HMNY Helios and Matheson Analytics Inc (CE)

Item 1.01     Entry into a Material Definitive Agreement.

On May 18, 2017, Helios and Matheson Analytics Inc. (the “Company”) entered into an Amended and Restated License Agreement (the “Agreement”) with Is It You Ltd., an Israeli company (“Licensor”), which is engaged in developing and marketing software that enables face recognition authentication and verification of users on mobile smartphones. Pursuant to the Agreement, the Company was granted a perpetual, non-transferable, non-sublicensable, non-exclusive right and license (a) to integrate the licensed software with the Company’s RedZone Map™ family of products, applications, and services (the “RedZone Apps”) to create integrated service offerings that integrate and/or incorporate the licensed software with the RedZone Apps (the “Integrated Offerings”); (b) to commercialize, distribute, and sell the Integrated Offerings to customers worldwide; (c) to use the licensed software internally to create a non-commercial lab/testing environment; and (d) to use the licensed software to provide maintenance and support services to customers of the Integrated Offerings.

Pursuant to the Agreement, Licensor agreed to not license, sell or transfer the licensed software to any third party that wishes to integrate the licensed software with applications that compete with the Company’s Integrated Offerings relating to crime and terrorism mapping applications.

In consideration of the license, the Company shall pay Licensor a one-time license fee in the amount of $** (the “License Fee”) for up to 1.6 million end-user licenses (the “License Fee”). In addition, (i) in the event that the Company exceeds 1.6 million users of the Integrated Offerings, it shall pay Licensor an additional one-time license fee of $** for up to an aggregate of 20 million end-user licenses; (ii) in the event that the Company exceeds 20 million users of the Integrated Offerings, it shall pay Licensor an additional one-time license fee of $** for up to an aggregate of 100 million end-user licenses; and (iii) in the event the Company exceeds 100 million users of the Integrated Offerings, it will negotiate with Licensor the additional compensation to be paid to Licensor.

Under the Agreement, at no additional charge, Licensor will provide professional services for a 30-day period in connection with the installation, testing and integration of the licensed software. Licensor will also provide maintenance and support services for the licensed software, including providing updates and enhancements and assisting with identifying and correcting errors. The License Fee includes maintenance and support during the first year of the Agreement. Beginning with the first anniversary of delivery of the licensed software, the Company will pay Licensor an annual maintenance fee which shall be **.

The Agreement has an initial term of 5 years and shall be automatically renewed for additional one-year terms unless either party gives the other party 60 days advanced notice of termination prior to the expiration of the then-current term. Except for termination of the Agreement by Licensor for breach by the Company, notwithstanding any termination or expiration of the Agreement, (i) the perpetual license shall remain in effect; and (ii) the Company shall have the right to order and Licensor shall have the obligation to provide annual support services at the price set forth in the Agreement for up to 5 years from the effective date of termination. The Agreement may be terminated at any time by either party (i) if the other party materially breaches the Agreement and continues in such breach for 30 days after receiving notice from the non-breaching party; or (ii) for a period of 90 consecutive days, the other party is declared to be insolvent or is the subject of bankruptcy or liquidation proceedings, or has a receiver, judicial administrator or similar officer appointed over all or any material part of its assets, or any security holder or encumbrance lawfully takes possession of any property of or in possession of the other party, or if the other party ceases to carry on its business.

The Agreement also includes certain customary representations and warranties and indemnification obligations of each party.

The description of the Agreement herein is not complete and is qualified by the full text of such Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

** Information omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission.