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Market Leader pays Imprev $1.45M in early termination fees

Market Leader and Imprev

According to a new filing with the U.S. Securities and Exchange Commission (SEC), on December 30, 2011 Market Leader, Inc. and Imprev, Inc. (“Imprev”) entered into an agreement to terminate a Master Services Agreement and a related Statement of Work that had allowed for integration of Imprev’s marketing design software solution with the Company’s marketing and business platform delivered as a software-as-a-service (“SaaS”) solution to Keller Williams real estate professionals. The termination was effective December 31, 2011.

The SEC notes that as a result, Imprev has released Market Leader from future minimum contractual liabilities totaling $2.6 million, as well as any and all future revenue sharing payments related to the revenue generated from the premium SaaS solutions being provided to Keller Williams professionals. Market Leader will pay Imprev early termination fees totaling $1.45 million, which the Company expects to record as contract termination costs in the fourth quarter of 2011.

Concurrently, both parties entered into a transitional services agreement for the period January 1, 2012 through June 30, 2012 for which the Company will pay Imprev $600,000.

Market Leader’s fall acquisition

In the first quarter of 2012, Market Leader will begin offering its own marketing, design and printing capabilities integrated into their SaaS platform based on their fall acquisition of SharperAgent which offers a marketing suite including a marketing campaign management system for multi-channel distribution. The early termination appears to be the result of swapping out Imprev for SharperAgent as Market Leader moves to provide their own marketing offering to their real estate customers.

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Regarding the acquisition in August, Market Leader CEO, Ian Morris said, “We are responding to a clear and growing demand from leading brokerage firms and franchises for a single integrated, best-in-class solution that meets all of their technology and marketing needs. SharperAgent is recognized as the leader in providing world-class customized marketing solutions, and we are eager to combine the strengths of our two companies to better serve our collective customers and the entire real estate professional community.”

UPDATE: Imprev CEO responds to the contract termination.

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