Exhibit 10.38

Magnitude Information Systems, Inc.
330 West 38th nStreet
New York, New York 10018

June 1, 2009

Andre S. Scholz
Heinrich-Längerer-Strasse 10
71229 Leonberg
Germany

Dear Mr. Scholz:

This letter shall serve as a Consulting Agreement (the “Agreement”) pursuant to
which Magnitude Information Systems, Inc. (“Magnitude”) and its wholly owned
subsidiary, Kiwibox Media, Inc. (“Kiwibox”) (sometimes Kiwibox and Magnitude are
collectively referred to as the "Company", “we” or “us”) engages you
(''Consultant") to render specified professional management and technology
development services.

1. Appointment: The Company hereby appoints Consultant, and Consultant agrees to
such appointment, to render services as the Chief Technology Officer of
Magnitude and to serve as the President and Chief Executive Officer of Kiwibox.
Consultant shall render such services diligently and to the best of his ability,
under the direction and supervision of the President and Chief Executive Officer
of Magnitude and shall use his best efforts to promote the interests and
goodwill of the Company. Consultant shall render such services during the Term
at the Company’s principal place of business or at such other place of business
as may be determined by the mutual agreement between the Consultant and the
Company. Consultant shall have those duties and powers as generally pertain to
each of the offices of which he holds, as the case may be, subject to the
control of the Company, and to report directly to the President/CEO of Magnitude
and to the respective Boards of Directors of Magnitude and Kiwibox.

2. Term: The “Term” of this Agreement shall commence as of May 14, 2009 and
shall continue through the next twelve (12) months, unless further extended by
mutual agreement of the parties (the "Term").  The Company can terminate this
Agreement, under certain circumstances for “Cause”, with written notice to
you.  Termination for "Cause" shall mean termination of this Agreement because
Consultant is subject to (a) a conviction of or plea of guilty or nolo
contendere by Employee to a felony, or any crime involving fraud, securities
laws violations, embezzlement or moral turpitude; (b) the refusal by Consultant
to perform his material duties and obligations hereunder or to follow the proper
instructions of the Company; (c) Consultant's willful or intentional misconduct
in the performance of his/her duties and obligations; (d) if Consultant or any
member of his/her family makes any personal profit arising out of or in
connection with a transaction to which the Company is a party or with which it
is associated without making disclosure to and obtaining the prior written
consent of the independent members of the Board; or (e) the entry by the
Securities and Exchange Commission or a self-regulatory organization of a
consent decree relating to a securities law violation by Consultant. The written
notice given hereunder by the Company to Consultant shall specify in reasonable
detail the cause for termination. For purposes of this/her Agreement, "family"
shall mean "immediate family" as defined in the rules of the Securities and
Exchange Commission

3. Compensation: In consideration of the Consultant’s agreement to render the
services set forth herein and his commitment to provide such services, the
Consultant will receive (1) 500,000 restricted common shares of Magnitude, and
(2) 100,000 restricted common shares of Magnitude for each month of service, and
(3) a monthly consulting fee of $20,000 (in this amount all cash expenses for
traveling, accommodations etc. are included).

 
 

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4. Assignment: Consultant may not assign any of its rights, duties or
obligations under this Agreement without the prior written consent of the
Company.

5. Consultant Representations: Consultant agrees and represents: (a) that he is
an independent contractor and not an employee or agent of the Company and that
in acting pursuant to this engagement it will not legally bind or obligate the
Company in any manner whatsoever; and (b) that the execution and delivery of his
performance under this Agreement shall not violate or breech any agreement,
contract or obligation currently in existence between the Consultant and any
third party.

6. Confidential Information.

6.1 Consultant shall not, in any manner, for any reasons, either directly or
indirectly, divulge or communicate to any person, firm or corporation, any
confidential information concerning any matters not generally known in the
software/hardware, marketing and development of website business (the "Website
Business") or otherwise made public by Company which affects or relates to
Company's business, finances, marketing and/or operations, research,
development, inventions, products, designs, plans, procedures, or other data
(collectively, "Confidential Information") except in the ordinary course of
business or as required by applicable law. Without regard to whether any item of
Confidential Information is deemed or considered confidential, material, or
important, the parties hereto stipulate that as between them, to the extent such
item is not generally known in the Website Business, such item is important,
material, and confidential and affects the successful conduct of Company's
business and goodwill, and that any breach of the terms of this Section 7.1
shall be a material and incurable breach of this Agreement. Confidential
Information shall not include: information in the public domain other than
because of a breach of this/her Agreement.

Documents

6.2 Consultant further agrees that all documents and materials furnished to
Consultant by Company and relating to Company's business or prospective business
are and shall remain the exclusive property of Company. Consultant shall deliver
all such documents and materials, and all copies thereof and extracts therefrom,
to Company upon demand therefor and in any event upon expiration or earlier
termination of this Agreement.

Inventions and Intellectual Property

6.3 All ideas, inventions, and other developments or improvements conceived or
reduced to practice by Consultant, alone or with others, during the Term of this
Agreement, whether or not during working hours, that are within the scope of the
business of Company or that relate to or result from any of Company's work or
projects or the services provided by Consultant to Company pursuant to this
Agreement, shall be the exclusive property of Company. Consultant agrees to
assist Company, at Company's expense, to obtain patents and copyrights on any
such ideas, inventions, writings, and other developments, and agrees to execute
all documents necessary to obtain such patents and copyrights in the name of
Company.
 
 
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Disclosure

6.4 During the Term, Consultant will promptly disclose to the Company full
information concerning any interest, direct or indirect, of Consultant (as
owner, shareholder, partner, lender or other investor, director, officer,
Consultant, consultant or otherwise) or any member of his immediate family in
any business that is reasonably known to Consultant to purchase or otherwise
obtain services or products from, or to sell or otherwise provide services or
products to, the Company or any of their suppliers or customers.

7. Covenant Not to Compete.

7.1 No Competitive Activities. During the Term, Consultant shall not engage in
any activates that are competitive with the actual or prospective business of
the Company, including without limitation: (a) engaging directly or indirectly
in any business substantially similar to any business or activity engaged in (or
proposed to be engaged in) by Company, including and not limited to business
that relates to the Website Business; (b) engaging directly or indirectly in any
business or activity competitive with any business or activity engaged in (or
proposed to be engaged in) by Company; (c) soliciting or taking away any
Consultant, Consultant, agent, representative, contractor, supplier, vendor,
customer, franchisee, lender or investor of Company, or attempting to so solicit
or take away; (d) interfering with any contractual or other relationship between
Company and any Consultant, Consultant, agent, representative, contractor,
supplier, vendor, customer, franchisee, lender or investor; or (e) using, for
the benefit of any person or entity other than Company any Confidential
Information of Company.

7.2 The foregoing covenant prohibiting competitive activities shall survive the
termination of this Agreement, and shall extend, and shall remain enforceable
against Consultant, for the period of two (2) years following the date thisr
Agreement is terminated. In addition, during the two-year period following such
expiration or earlier termination, neither Consultant nor Company shall make or
permit the making of any negative statement of any kind concerning Company or
their affiliates, or their directors, officers or agents or Consultant.

8. Survival. Except as otherwise provided, Consultant agrees that the provisions
of Articles 6, 7 and 9 shall survive expiration or earlier termination of this
Agreement for any reasons whether voluntary or involuntary, and shall remain in
full force and effect thereafter.

9. Injunctive Relief. Consultant acknowledges and agrees that the covenants and
obligations of Consultant set forth in Articles 6 and 7 with respect to
non-competition, non-solicitation, confidentiality and the Company's property
relate to special, unique and extraordinary matters and that a violation of any
of the terms of such covenants and obligations will cause the Company
irreparable injury for which adequate remedies are not available at law.
Therefore, Consultant agrees that if Consultant breaches this Agreement than the
Company shall be entitled to apply for an injunction, restraining order or such
other equitable relief as a court of competent jurisdiction as limited by
Section 11 may deem necessary or appropriate to restrain Consultant from
committing any violation of the covenants and obligations referred to in this
Article 10. Consultant shall have the right to appeal from such injunction or
order and to seek reconsideration. These injunctive remedies are cumulative and
in addition to any other rights and remedies the Company may have at law or in
equity.

10. Submission to Jurisdiction; Consent to Service of Process. This Agreement
shall be governed in all respects, by the laws of the State of New Jersey,
including validity, interpretation and effect, without regard to principles of
conflicts of law. The parties hereto irrevocably and unconditionally consent to
submit to the exclusive jurisdiction of the state and federal courts in the
State of New Jersey for any lawsuits, actions or other proceedings arising out
of or related to this/her Agreement and agree not to commence any lawsuit,
action or other proceeding except in such courts. The parties hereto further
agree that service of process, summons, notice or document by mail to their
addresses set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought against them in any such court. The parties
hereto irrevocably and unconditionally waive any objection to the laying of
venue of any lawsuit, action or other proceeding arising out of or related to
this Agreement in such courts, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such lawsuit, action or proceeding brought in any such court has been brought in
an inconvenient forum.
 
 
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11. Corporate Governance and Insider Knowledge. In addition to his promises set
forth in this Agreement, Consultant acknowledges that during the Term of this
Agreement, Consultant shall obtain information about the Company and its
operations that shall be considered “material” information, whether positive or
negative about Company’s plans, financial condition, business status,
developments or facts; that, without the express written consent of the
President/CEO of Magnitude or its counsel, Consultant shall not, under any
circumstances, disclose to any person except to the executive officers and
members of the Board of Directors of the Company. Consultant understands that
his obligation to maintain the confidentiality of all such material information
about the Company is a standard requirement of applicable U.S. securities laws.
In addition, Consultant further acknowledges that he shall not purchase or sell,
or participate with others in the purchase or sale, of any securities of the
Company during the Term of this Agreement without the express written approval
of the Company.

12. Agreement: This Agreement may not be amended or modified except in writing
and shall be deemed to have been made and delivered in the State of New Jersey,
and this letter and the transactions contemplated hereby shall be governed as to
validity, interpretation, construction, effect, and in all other respects by the
internal laws of the State of New Jersey.

13. Complete Agreement: This Agreement supercedes and replaces any and all prior
consulting agreements, oral or written, between the parties.

14. Indemnification. The Consultant and the Company hereby agree to defend one
another and to indemnify each other from and against any liability of any nature
whatsoever that may arise out of or as a result of any material
misrepresentations or omissions made in connection with the services rendered
under the terms of this Agreement made by either the Consultant or the Company,
as the case may be (the “Indemnifying Party”). By this indemnification, the
Indemnifying Party shall pay, on demand, to the other party (the “Indemnified
Party”) any and all costs, expenses, judgments, fines, including reasonable
attorney’s fees, incurred during any administrative proceeding or legal process
instituted against either the Company or the Consultant whose material
allegations include a claim or claims that the Indemnifying Party made a
material misrepresentation or omission in connection with the conduct of the
services rendered under this Agreement.

If the foregoing correctly sets forth the understanding and agreements between
the Company and Consultant, Consultant shall indicate so by signing in the space
provided for that purpose below, whereupon this letter shall constitute a
binding agreement as of the date first above written. This agreement is subject
to approval by the Company's Board of Directors.

 
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Magnitude Information Systems, Inc.

By:
/s/ Rudolf Hauke
   
Rudolf Hauke
   
President and CEO
 

 
Kiwibox Media, Inc.

 
By:
/s/ Rudolf Hauke
   
Rudolf Hauke
   
President and CEO (de facto)
 

 
Agreed to:
   
Consultant:
   
Andre S. Scholz
   
Andre S. Scholz
 

 
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