SOFTWARE DEVELOPMENT AGREEMENT

EXHIBIT 10.20

SOFTWARE DEVELOPMENT AGREEMENT

This Development Agreement ("Agreement") is made and entered into by the undersigned parties: mPhase Technologies Inc., 150 Clove Road, a New Jersey corporation (hereinafter "COMPANY"), and Magpie Telecom Insiders, Inc, 12050 N. Pecos, Suite 210, Denver, Colorado, 80234, a Colorado corporation, (hereinafter "Contractor").

WHEREAS, COMPANY is engaged in the business of designing, manufacturing and marketing products for the telecommunications industry and desires to retain the Development services of Contractor;

WHEREAS, Contractor possesses unique skills, knowledge, and expertise, which would assist COMPANY in meeting, a unique, temporary business need and Contractor desires to provide development services that meet COMPANY's need to develop software that will be integrated into COMPANY's product or service.

NOW THEREFORE, in consideration for the promises, rights and obligations set forth below, the parties hereby agree as follows:

1. Term of Development Agreement. The term of this Agreement shall begin on TODAY, and continue for a period of three (3) years, unless terminated earlier as set forth in this agreement.
    
2. Designation of Qualified Staff, Representations and Warranties.

a. Contractor represents that it engages individuals (hereinafter referred to as "workers"), who possess the qualifications, knowledge, skill and expertise necessary to develop the product that COMPANY is seeking by this Agreement. By assigning a worker to COMPANY under this Agreement, Contractor warrants that it has verified the worker's credentials and in good faith believes the worker is suited to the development project. Contractor further warrants that it has the unrestricted legal right to render the services contemplated by this Agreement to COMPANY without violating any other contracts, service agreements, confidentiality provisions, or other restrictions by which Contractor is or may be bound.

b. By this Agreement, Contractor affirms that it has the sole discretion to hire and assign qualified workers to complete the product development contemplated by this Agreement. Any employment activities related to the hiring, disciplining, appraising, compensating or otherwise retaining such workers shall be under Contractor's exclusive control and conducted at Contractor's sole expense. Contractor is not authorized to perform any employment activities on COMPANY property except as may be necessary from time to time for Contractor to evaluate or manage Contractor's workers.

3. COMPANY's Agreement to Pay Contractor. COMPANY agrees to pay Contractor in accordance with the compensation method identified on the Work Order (Exhibit A) which is part of this Agreement. Contractor shall submit invoices for deliverables completed on a timely basis which COMPANY agrees to pay within a reasonable period of time. For example, invoices payable within 30 days of receipt are acceptable to COMPANY.
    

4. Contractor's Responsibility for Expenses. All travel and incidental expenses incurred by any worker in the performance of services under this Agreement are the sole responsibility of Contractor, unless COMPANY expressly approves and agrees in writing to a different arrangement regarding payment of expenses.
    

5. Contractor's Responsibility to its Workers. Contractor's workers are not COMPANY employees. Contractor is solely responsible for compensating its workers and complying with

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applicable state and federal laws including but not limited to: administering payroll; maintaining workers compensation insurance as may be required by statute; and providing such other benefits as Contractor may be required by law to provide to its workers. Contractor acknowledges that the workers assigned to COMPANY under this Agreement are not COMPANY employees and are not eligible to participate in any COMPANY benefit plans, including welfare or pension benefits, retirement plans, global employee stock purchase plans, incentive plans or any other COMPANY benefit available to COMPANY employees.

6. Contractor's Obligation to Obtain Insurance for the Benefit of COMPANY and Waiver of Subrogation. Contractor agrees to maintain insurance coverage as specifically identified on Exhibit C. Contractor shall provide evidence of such insurance by giving COMPANY a copy of Contractor's Certificates of Insurance which shall name COMPANY as an Additional Insured and/or Loss Payee and which shall give COMPANY the right to receive written notice from the insurance carrier of any change in policy coverage, endorsements or limits at least thirty (30) days before such change takes effect. By this Agreement, Contractor waives any right of subrogation in favor of Contractor against COMPANY. If the insurance coverage referenced in this paragraph is subject to renewal during the term of this Agreement, Contractor's obligation to continue the coverage referenced herein continues, and copies of the renewal certificates shall be provided to COMPANY.
    

7. Contractor's Obligations Concerning COMPANY Confidential Information.

a. "COMPANY Confidential Information" shall mean all information disclosed by COMPANY to Contractor, or individuals performing services on behalf of contractor, (whether orally, in writing, or in other tangible form) which relates to the manufacture, use, sale or marketing of COMPANY's products or components of such products, including, but not limited to: information relating to matters which are the subject of this Agreement; any analyses, compilations, studies, summaries, extracts, 3 ^rd party documentation or information received under NDA by Company to perform assignment and shared with Contractor or other documentation developed by Contractor as a result of work in connection with this Agreement; and all other information regarding COMPANY products, processes, equipment, machinery, apparatus, business operations, technical information, drawings, specifications, material, all information or data used by or stored on COMPANY's computer system and the like; except that "Confidential Information" shall not include information which:

(1) is at the time of disclosure, or thereafter becomes, a part of the public domain through no act or omission of Contractor, or individual(s) performing services on behalf of Contractor, recognizing that the act of copyrighting in itself does not cause the copyrighted material to be in the public domain;

(2) is lawfully in Contractor's possession prior to disclosure by COMPANY as shown by written records; or

(3) is lawfully disclosed to Contractor by a third party, which did not acquire the same under an obligation of confidentiality from or through COMPANY.

Before relying on any of the foregoing exceptions and disclosing or using information disclosed under this Agreement on the basis of such exceptions, Contractor shall notify COMPANY in writing of Contractor's intent to do so, provide a written basis for the reliance on the exception to COMPANY and give COMPANY a period of 30 days to object or take other action to protect its rights in the information.

b. Contractor and the individual(s) performing services on behalf of Contractor, shall hold all COMPANY Confidential Information in confidence and shall not disclose the same, without the written consent of COMPANY, to anyone for any reason at any time other than to Contractor's employees or subcontractors as required for performance of their duties in connection with Contractor's performance for COMPANY. Contractor agrees to maintain adequate procedures to prevent loss or unauthorized disclosure of any Confidential

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Information and, in the event of any such loss or unauthorized disclosure of any Confidential Information, shall notify COMPANY immediately.

c. Contractor shall not use any COMPANY Confidential Information for any purpose except that requested by COMPANY, without written consent of COMPANY.

d. Contractor acknowledges that COMPANY Confidential Information includes valuable trade secret information, and that breach by Contractor of the terms hereof would result in substantial harm and irreparable injury to COMPANY. Therefore, Contractor hereby consents to the entry of an injunction against Contractor in the event of Contractor's actual or threatened breach of obligations hereunder, and acknowledges that such relief shall be additional to such other and further relief as may be available to COMPANY at law or in equity.

e. Contractor agrees not to disclose to COMPANY any information which Contractor desires to maintain in confidence. COMPANY will not have any obligation of confidentiality with respect to any information disclosed by Contractor.

8. Contractor's Obligations Concerning COMPANY Property.

a. "COMPANY Property" shall be understood to mean all tangible property provided to Contractor by COMPANY or developed by Contractor in connection with this Agreement, including, but not limited to:

(1) all samples;

(2) all COMPANY Confidential Information;

(3) all records relating to COMPANY products, operations and business;

(4) all reports, Intellectual Property as defined in this Agreement, correspondence and other communications developed by Contractor; and

(5) all copies of the foregoing, regardless of copying medium.

(6) all COMPANY Source Code.

b. Contractor agrees to return or surrender any COMPANY Property, except samples destroyed by testing, at any time upon request by COMPANY and upon termination or expiration of this Agreement, unless otherwise agreed to in writing by COMPANY. Contractor may also retain a sample of product(s) developed for COMPANY hereunder, and copies of correspondence and other communications between Contractor and COMPANY in connection with this Agreement, for purposes of Contractor's own confidential records, but may not disclose such sample without prior written authorization by COMPANY.

c. Contractor agrees to abide by all COMPANY rules and regulations while visiting COMPANY premises and agree to respect and keep in good condition all COMPANY Property to which Contractor has access. In the event an COMPANY name badge is issued to Contractor or the individual(s) performing services on behalf of Contractor, such badge shall be used solely for the intended purpose, shall not be used to allow unauthorized personnel onto COMPANY's premises, and any loss or theft of such badge shall be immediately reported by Contractor to COMPANY. Contractor shall return all such badges upon request of COMPANY, at the termination or expiration of this Agreement, or at the expiration of each work order.

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9. Contractor's Obligation Concerning COMPANY Source Code

a. Contractor acknowledges and agrees that the COMPANY Source Code represents valuable trade secret(s) to and is the proprietary information of COMPANY. Contractor covenants and agrees not to encumber the COMPANY Source Code in any manner, nor market, sell, assign, lease, transfer, license, or sub-license the COMPANY Source Code, or any part or parts thereof including any compiled object code.

b. Contractor shall protect the confidentiality of the COMPANY Source Code, all associated documentation, and all trade secrets and proprietary or other confidential information contained therein to at least the same degree Contractor protects Contractor's own proprietary and confidential materials. Notwithstanding the preceding sentence, the protection required by Contractor under this paragraph shall not be less than commercially reasonable standards of protection for proprietary source code that is entrusted to third-parties for limited times and purposes. Contractor shall not allow or facilitate any attempt to recreate, or generate any portion of the COMPANY Source Code by any person, nor shall Contractor aid or permit others to do so.

c. Contractor acknowledges and agrees that any disclosure of the COMPANY Source Code or other propriety and confidential information of COMPANY, or use of the COMPANY Source Code in any manner that breaches the terms and conditions of this Agreement is likely to cause COMPANY