EXHIBIT 10.1
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CONFIDENTIAL
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is effective as of May 25, 2007 (the
"Effective Date"), by and between Network-1 Security Solutions, Inc., a Delaware
corporation having its principal place of business at 000 Xxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx, X.X.X. ("Network-1"), and D-Link Corp., a Taiwan
company with headquarters at Xx. 000, Xxxxx 0xx Xx., Xxxxx Xxxxxxxx, Xxxxxx Xxxx
114, Taiwan ("D-Link Corp."), and D-Link Systems, Inc., a California corporation
with headquarters at 00000 Xx. Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxxx
00000 ("D-Link Systems").
RECITALS
A. Network-1 and D-Link Corp. and D-Link Systems are currently parties to
a civil action pending in the United States District Court for the Eastern
District Court of Texas, entitled NETWORK-1 SECURITY SOLUTIONS, INC. V. D-LINK
CORPORATION AND D-LINK SYSTEMS. INC., Civil Action No. 6:05-CV291 (the "Pending
Lawsuit") and
B. The parties to this Agreement, without admitting any liability, have
concluded that their interests would be best served by fully settling, and
thereby terminating and concluding, any and all claims, controversies and
demands relating in any way to the Pending Lawsuit which either party may have
against the other, on the terms and conditions set forth herein.
NOW, THEREFORE, the undersigned parties to this Agreement herewith mutually
agree and contract with each other, for good and valuable consideration given
and received, as follows:
(1) Definitions.
(a) "Action" means any suit, action, dispute, claim, counterclaim,
arbitration or legal, administrative or other proceeding or governmental
investigation, including without limitation any reexamination or request
for reexamination.
(b) "Agreement Related to Settlement and Dismissal" means the
Agreement Related to Settlement and Dismissal, in the form attached hereto
as Exhibit A, which, upon execution of this Agreement, will be executed by
Network-1, D-Link Corp. and D- Link Systems and filed (together with a
joint motion for entry thereof) with the United States District Court for
the Eastern District of Texas, Tyler Division, for entry by the Court as a
final judgment in the Pending Lawsuit.
(c) "D-Link Party' "D-Link Parties" or "D-Link" means D-Link Corp. and
D-Link Systems, each and/or collectively.
(d) "D-Link Branded" means products sold by D-Link bearing the
trademarks, trade names, or other commercial identities of D-Link, but not
co-branded products or products made on an OEM or similar basis.
(e) "D-Link Covenanted Party" means each of the D-Link Parties and
their successors.
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(f) "Expiration Date" means the date on which the '930 Patent (as
defined in Section 1(q)) shall expire.
(g) "Have Made" means the right to purchase a Licensed Product from a
third party (e.g., Subsidiaries, suppliers and vendors) and/or have a third
party make a Licensed Product for the use by and/or sale or transfer by
D-Link, said third party operating under the license grant to D-Link for
the provision of Licensed Products to D-Link and for no other purpose.
(h) "IEEE XxX Standards" -- shall mean the Power over Ethernet (XxX)
IEEE Standard 802.3.af-2003 and 802.3.at-2003.
(i) "Licensed Product" shall mean all D-Link Branded XxX enabled PSE
and PD products (including XxX Adapters) sold or otherwise transferred by
D-Link, as identified in Exhibit B, as amended from time to time, which:
(i) comply with IEEE XxX Standards, except PSEs that exclusively
use Spare Pairs for the transmission of operating power; and/or
(ii)are proprietary XxX products, except those that exclusively
use Spare Pairs for the transmission of or receipt of operating power.
(j) "Net Sales" means with respect to any Licensed Product sold in the
United States the greater of either (a) the selling price which D-Link
would realize from an unaffilliated buyer in an arms-length sale of an
identical product in the same quantity and at the same time and place as
such sale, or (b) the selling price actually invoiced for such product to
such an unaffiliated customer by D-Link, which greater amount shall then be
reduced by Accepted Returns and further reduced by refunds, rebates,
adjustment credits, price protection credits, and trade discounts
("Adjustments") on specific, previously invoiced Licensed Products on an
item-by-item basis (and such Adjustments accounted for on an item-by-item
basis in each royalty report) actually provided to customers previously
invoiced for such Licensed Products, provided said Adjustments are not
passed through to D-Link's suppliers or otherwise recovered by D-Link. For
the avoidance of doubt, the costs of marketing campaigns, advertising,
business development, or other similar expenses shall not be used in any
manner as a credit, adjustment, or discount to reduce the Net Sales amount.
(k) "Accepted Returns" shall mean Licensed Products previously
invoiced by D-Link and subject to the royalty set forth in Section 5 of
this Agreement and returned to D-Link, but only to the extent D-Link issues
a credit or refund to the customer returning such Licensed Product in an
amount for each returned Licensed Product no greater than that originally
invoiced.
(l) "Pending Lawsuit" has the meaning set forth in paragraph A of the
Recitals to this Agreement.
(m) "Person" or "person" means an individual, corporation,
partnership, limited partnership, limited liability company, syndicate,
person (including, without limitation, a
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"person" as defined in Section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government.
(n) "Power Over Ethernet" or "XxX" means the technology used to
deliver electrical power over Ethernet network cabling for the purpose of
supplying operating power to devices connected to said Ethernet network.
(o) "XxX Adapter" - means a device that enables non-XxX Ethernet
devices (i.e. lacking circuitry to accept power from the Ethernet network)
to operate using power provided by XxX Power Sourcing Equipment (PSE) via
an Ethernet cable.
(p) "Power Sourcing Equipment" or "PSE" means any apparatus, device,
equipment or product that supplies power to other devices in a XxX
implementation.
(q) "Powered Devices" or "PD" means any apparatus, device, equipment
or product that receives or is capable of receiving power from PSEs in a
XxX implementation.
(r) The "930 Patent" means United States Patent Number 6,218,930, and
any reissues and reexaminations thereof.
(s) "RAND Licensing Program" -- means Network-1's licensing of the
'930 Patent.
(t) "RAND Royalty Rate" means the running royalty rate that becomes
effective when a licensee agrees to pay a running royalty rate based on a
royalty base of sales under a license agreement with Network-1 under the
RAND Licensing Program, such running royalty rate taking into account
factors, including, but not limited to, conditions on volumes and types of
products licensed in such a license agreement.
(u) "Spare Pairs" -- means the set of wires in a twisted pair cable
not used for the transport of data in a 10/100 Ethernet network segment.
(v) "Subsidiary" means a Person (as defined in Section 1(m)) which,
directly or indirectly, is controlled by or is under common control with a
Party hereto. As used herein, "control" (including the terms "controlled
by" and "under common control with") means the possession, directly or
indirectly, or as trustee or executor, of the power to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, as trustee or executor, by contract or
credit arrangement or otherwise.
(2) Agreement Related to Settlement and Dismissal. Upon execution of this
Agreement, Network-1 and D-Link Parties will execute the Agreement Related to
Settlement and Dismissal, in the form attached hereto as Exhibit A, and file
such Agreement Related to Settlement and Dismissal, with a joint motion for
entry thereof, with the United States District Court for the Eastern District of
Texas for entry by the Court as a final judgment in the Pending Lawsuit, The
covenants and agreements contained in this Agreement, with the exception of this
Section, shall not be effective until the date on which the Court enters such
Agreement Related to Settlement and Dismissal.
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(3) License Grant
(a) Network-1 hereby grants to the D-Link Parties a personal,
non-exclusive, non-transferable, royalty bearing license under the '930
Patent (i) to make, use, lease, sell, offer for sale, import design, Have
Made and otherwise transfer Licensed Products, including the right to
procure or produce components therefore, (ii) to practice a method or
process involved in the manufacture thereof, and (iii) practice any method
or process involved in the use thereof. To the extent that the Licensed
Products are sold or otherwise transferred by D-Link Parties to
distributors, channel partners, retailers, customers and other non-OEM
"arm's length" customers and/or end users, the license granted under this
Section shall encompass such parties for such Licensed Products. To the
extent that a third party is operating under the Have Made rights granted
herein, the license granted under this Section shall encompass said third
party, but only as to such third party's sales of Licensed Products to
D-Link and other licensed conduct for D-Link contemplated herein, and not
for sales to other parties.
(4) D-Link Covenants.
The D-Link Parties and their successors hereby covenant from and after
the Effective Date not to initiate any Action to challenge, directly or
indirectly through their acting officers, directors, employees,
representatives, or agents acting at D-Link's direction, the infringement
or validity of the '930 Patent, and not to assist or cooperate in any
Action, related to the non-infringement or invalidity of the '930 Patent or
any declaratory judgment action under the Patent Act of the Xxxxxx Xxxxxx,
xxxxx 00, Xxxxxx Xxxxxx Code, the Declaratory Judgment Act, title 28,
United States Code, or otherwise; unless the D-Link Parties are required to
do so pursuant to any applicable law, regulation, judicial or
administrative order or decree, or request by other regulatory organization
having authority pursuant to the law; PROVIDED; HOWEVER, that in such case
the applicable D-Link Party gives Network-1 reasonable advance notice of
the same (so as to afford Network-1 a reasonable opportunity to appear,
object and obtain appropriate relief regarding such requirement). The
covenant in this Section 4 shall not apply if Network-1, any of its
Subsidiaries, successors, assigns, or any third party asserts the '930
Patent, or otherwise institutes any claim, action or proceeding relating to
the '930 Patent, other than as a result of a breach of this Agreement,
against any D-Link Party or against D-Link's customers or suppliers based
on the making, using, selling and/or offering for sale of products sold or
transferred to them by D-Link, in which case, for the avoidance of doubt,
such D-Link Party shall not be barred from asserting any noninfringement
and/or invalidity counterclaims and/or defenses (or any other counterclaims
and/or defenses) related to the action or proceeding relating to the '930
Patent.
(5) Payments/Payment Terms.
(a) Within five (5) business days of execution of this Agreement,
D-Link will pay Network-1 an upfront payment of $100,000.
(b) In further consideration for the license granted herein and except
as otherwise stated herein, commencing on the Effective Date and provided
that the registration of '930 Patent with the U.S. Patent Office is duly
maintained by Network-1, with respect to
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Licensed Products, D-Link will pay to Network-1 a running royalty of 3.25%
(the "Royalty Rate") of D-Link's Net Sales for the sale of Licensed
Products (except XxX Adapters), and 5% of D-Link's Net Sales from the sale
of XxX Adapters (the "Adapter Royalty Rate"), for all sales that occur on
or after the Effective Date. Royalties shall be paid monthly no later than
twenty (20) days after the first day of each month, based on the preceding
month's Net Sales. Royalties shall be submitted with a Monthly Royalty
Report, in the form of Exhibit C, showing all Licensed Products sold by
D-Link in the immediately preceding month. The Royalty Report will also
list any additional products that fall within the scope of Licensed
Products and that are to be added to Exhibit B.
(c) Beginning March 31, 2008, D-Link shall be entitled to pay the
lower of the Royalty Rate/Adapter Royalty Rate (hereinafter collectively
referred to as "Rate") in 5(b) and the royalty rate that may be Network-1's
RAND Royalty Rate in effect at that time. If D-Link chooses to accept such
RAND Royalty Rate, its royalty payments under this Section 5(d) shall be
calculated using the same methodology as the royalty payments in the
license agreement that triggered the adjustment described herein and shall
apply to all Licensed Products. The Rate can be reduced quarterly
throughout the term of this Agreement to reflect the then current RAND
Royalty Rate. Network-1 agrees that as of the Effective Date, the Royalty
Rate set forth herein is Network-1's initial RAND Royalty Rate. If there is
any change to the RAND Royalty Rate after the Effective Date, Network-1
shall provide such changes to D-Link in writing on a quarterly basis. It is
understood and agreed that the RAND Royalty Rate may include rates that
vary according to units of licensed products shipped and any adjustments to
the Rate will be at a rate consistent with similarly situated companies and
volumes (units of licensed products sold) under the Network-1 RAND
Licensing Program.
(d) D-Link shall submit to Network-I a semi-annual royalty report
("Royalty Report") within thirty (30) days after the end of every six month
anniversary of the Effective Date of the Agreement. The Royalty Report
shall be certified by an appropriate responsible employee of D-Link setting
forth the amount of the royalties and calculation thereof for the reported
period regardless of whether or not any payment is due. The Royalty Report
will also list any additional products that fall within the scope of
Licensed Products and that are to be added to Exhibit B.
(e) If the '930 Patent is found to be invalid by (i) a court of
competent jurisdiction, (ii) a final decision of the U.S. Patent and
Trademark Office after a re-examination, or (iii) the International Trade
Commission, then D-Link shall be entitled to cease making royalty payments;
provided, however, that in the event such finding is overturned by the U.S.
Court of Appeals for the Federal Circuit or other higher court of competent
jurisdiction, D-Link shall be responsible for back royalties plus interest
at the Prime Rate as reflected in the Wall Street Journal as of the date of
the ruling of' invalidity. Network-1 will provide D-Link with written
notice of such a finding of invalidity (or any decision overturning such a
finding) within twenty (20) days of the date of such decision.
(f) In the event a third party's XxX products that comply with the
IEEE XxX Standards are found not to infringe the '930 Patent by a court of
competent jurisdiction (expressly including the International Trade
Commission), D-Link may provide notice to
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Network-1 that such finding could result in the termination of D-Link's
obligation to pay royalties under the Agreement, and D-Link may provide
notice to Network-1 that it intends to cease making royalty payments for
Licensed Products of comparable form and function as the XxX products found
not to infringe the '930 Patent. Network-1 shall provide D-Link with
written notice of such a finding of non-infringement as soon as reasonably
practicable. If the parties disagree with the effect the court's ruling has
on D-Link's obligation to pay royalties under this Agreement, the parties
may submit the issue whether the non-infringement finding would be
applicable to the Licensed Products to a mutually agreed upon mediator
followed, if necessary, by binding arbitration pursuant to the rules of the
American Arbitration Association. In the event that the Arbitration Panel
makes an award that said non-infringement finding applies to D-Link or the
Licensed Products, then D-Link may cease further royalty payments for sales
of the Licensed Product; provided, however, in the event such non
infringement ruling is overturned by the U.S. Court of Appeals for the
Federal Circuit or other higher court of competent jurisdiction, the
obligations to pay royalties will be reinstated, with interest at the Prime
Rate as reflected in the WALL STREET JOURNAL as of the date of such ruling
of non-infringement, and this Agreement will remain in full force and
effect irrespective of any prior arbitration ruling to the contrary.
Network-1 will provide D-Link with written notice of such ruling within
twenty (20) days of its issuance.
(g) Irrespective of any ruling of a court, administrative body or
arbitral tribunal, no royalties paid by D-Link shall be subject to refund
except (1) overpayments made in error and identified by D-Link within
twelve (12) months of actual or constructive notice of erroneous payment,
whichever is later, (2) if D-Link is not given timely notice of a finding
of non-infringement or invalidity and the parties do not take the dispute
to mediation and binding arbitration, pursuant to Section 5(f), then D-Link
may claim a refund payment for the delay period from the date of required
notice until D-Link became aware of such non-infringement or invalidity
decision, (3) in the event that mediation or arbitration requested under
Section 5(f) is not completed (e.g., the arbitration award is not issued)
within 120 days of a notice of intention to cease royalty payments by
D-Link, then D-Link shall be entitled to a refund of all royalties paid
after said 120-day period but only in the event a determination is made at
mediation or arbitration that the third party ruling relieves D-Link of its
obligation to pay further royalties. Any refund that D-Link may be entitled
to pursuant to Sections 5(g)(l)(2) or (3) above, shall be taken as a credit
in a subsequent Monthly Royalty Report; provided, however that if no
further royalties are due under this agreement D-Link shall receive a
refund instead of a credit.
(h) Payments when provided for in this Agreement shall, when overdue,
bear interest compounded monthly (prorated for periods of time less than
one month) at an annualized rate of three percent (3%) over the prime rate
quoted by the Wall Street Journal, in New York, on the date that the
payment is due, for each month during the delinquency. If the amount of
such charge exceeds the maximum permitted by law, such charge shall be
reduced to such maximum.
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(6) Representations and Warranties.
(a). Network-1 represents and warrants that it is a corporation in
good standing under the laws of the State of Delaware; that it has the
authority to enter into this Agreement and to grant the rights and to incur
the obligations set forth herein; and that this Agreement is valid and
binding and enforceable in accordance with its terms. Network-1 further
represents and warrants that it has all right, title and interest in the
'930 Patent and will maintain the valid registration of '930 Patent during
the term of this Agreement.
(b). D-Link Corp represents and warrants that it is a corporation in
good standing under the laws of Taiwan ; that it has the authority to enter
into this Agreement and to grant the rights and to incur the obligations
set forth herein; and that this Agreement is valid and binding and
enforceable in accordance with its terms.
(c). D-Link Systems represents and warrants that it is a corporation
in good standing under the laws of California; that it has the authority to
enter into this Agreement and to grant the rights and to incur the
obligations set forth herein; and that this Agreement is valid and binding
and enforceable in accordance with its terms.
(d). Each party to this Agreement warrants and represents that it has
not heretofore assigned, transferred, hypothecated, or purported to assign,
transfer, or hypothecate to any Person not a party hereto, the whole or any
part or portion of its claims or rights which constitute matters released
or discharged pursuant to this Agreement.
(7) Confidentiality. The fact that the parties have settled is itself not
confidential, but the terms of this Agreement (and the monthly and semi-annual
royalty reports of Paragraphs 5(b), 5(d) and Exhibit C and data contained
therein, as well as any audit data provided per Paragraph 11(c)) are
confidential except (i) if such information is generally available to the public
through no action of Network-1, (ii) to the extent necessary to comply with any
Court order, law, rule or regulation of any federal or state agency or
administrative body (including the Securities and Exchange Commission and the
U.S. securities laws) or contractual obligation of any party's insurance
carrier. If necessary, Network-1 may utilize this confidential information in
litigation against D-Link relating to royalty payments under this agreement;
however, the information must remain confidential (e.g., under the provisions of
a suitable protective order and/or filing under seal).
(8) SEC Filings and Press Releases. D-Link understands that following the
Effective Date, Network-1 will be required to file a Form 8-K with the SEC that
will include as an exhibit this Agreement (with exhibits) as well as a press
release. D-Link further understands that Network-l will be required to disclose
in certain of its SEC filings and press releases the amount of royalty revenue
received from D-Link pursuant to this Agreement and unless otherwise required by
the U.S. securities laws Network-1 will not disclose in its SEC filings or press
releases any other data contained in the monthly or semi-annual reports or audit
data referenced in paragraph 7 above. Network-1 agrees that any subsequent
license agreement of '930 Patent with a third party shall be filed with SEC, in
compliance with the SEC's rules and regulations regarding the filing of material
agreements.
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(9) Term and Termination.
(a). This Agreement will commence on the Effective Date and will
remain in force and effect until the Expiration Date unless earlier
terminated. Other than as provided for in Section 9(b), the parties hereto
may terminate this Agreement only by mutual written agreement.
(b). In the event any party to this Agreement breaches any provision
hereof and fails to cure such breach within ten (10) days of receipt of
written notice thereof, any other party hereto may terminate the Agreement
upon written notice to the other parties hereto.
(c). Termination of this Agreement by mutual written agreement of the
parties hereto shall not, unless otherwise agreed by the parties, have the
effect of terminating, revoking or withdrawing rights and obligations set
forth herein with respect to matters after the Effective Date and up
through and including the effective date of termination hereunder.
(d). The parties agree that, in the event of a dispute relating to a
breach of this Agreement as found by United States District Court for the
Eastern District of Texas, Tyler Division, the prevailing party shall be
entitled to reasonable attorney's fees.
(10) Release
(a.) Network-1 on behalf of itself and its respective Subsidiaries,
successors and assigns as of the Effective Date of this Agreement, hereby
irrevocably releases except for failure to remit payments required under
Section 5, D-Link Corp. and D-Link Systems, Inc., and their Subsidiaries
(but only as to sales of Licensed Products to or on behalf of D-Link)
officers, directors, employees, representatives, agents, customers, and
suppliers, including any suppliers and customers in the chain of possession
of Licensed Products, from any and all claims and causes of action, known
or unknown, in any way related to the acts, omissions, transactions, and
occurrences alleged in or arising out of the Pending Lawsuit, including
Network-1's claim of infringement of the '930 Patent, with respect to any
products manufactured, used, leased, sold, offered for sale, imported, or
otherwise transferred by D-Link before the Effective Date of this
Agreement.
(11) Miscellaneous.
(a). If any provision of this Agreement is held to be illegal, invalid
or unenforceable under any present or future law, and if the rights or
obligations of any party hereto under this Agreement will not be materially
and adversely affected thereby, (i) such provision will be fully severable,
(ii) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof and
(iii) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
(b). Network-1, D-Link Corp. and D-Link Systems have had the advice of
legal counsel in entering into this Agreement, and thus do so in accordance
with their own free acts and deeds. The parties to this Agreement have
participated jointly in the negotiating
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and drafting of this Agreement. If an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto, and no presumption or burden of proof shall
arise favoring or disfavoring any party hereto by virtue of the authorship
of any provisions of this Agreement.
(c). D-Link shall keep books and records adequate to accurately
determine the payments under this Agreement, and retain such books and
records for at least three (3) years after the delivery of the Royalty
Report to which they relate. Network-1 shall have the right, no more than
once per calendar year, to have an independent certified public accountant
inspect all relevant books and records of D-Link on thirty (30) days' prior
written notice and during regular business hours to verify the reports and
payments required to be made hereunder. Such independent certified public
accountant shall be selected by Network-1 and approved by D-Link. D-Link
shall respond to Network-1's selection of auditor within ten (10) days and
its approval shall not be unreasonably withheld. The auditor shall enter
into an appropriate nondisclosure agreement with D-Link, and shall disclose
no more information than is reasonably necessary to determine the payments
owed hereunder. Should an underpayment in excess of ten percent (10%) be
discovered, D-Link shall reimburse Network-1 for the cost of the audit. In
any event, D-Link shall promptly pay any underpayment together with
interest at the compounded annual rate quoted by Citibank N.A. in New York
City or its reference rate on the last day of each month during the period
of the delinquency.
(d) Any and all notices, consents, or demands permitted or required to
be made or given under this Agreement shall be in writing, signed by the
individual giving such notice, consent, or demand and shall be delivered
personally or sent by registered or certified mail, return receipt
requested, to the other parties hereto at their addresses set forth below:
To Network-1: Network-1 Security Solutions, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Chairman and CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to: Blank Rome LLP
000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx. XX 00000
Attention: H. Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
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Xxxxxxxx Chance US LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To any D-Link Party: D-Link Systems, Inc.
Attention: Legal Department
00000 Xx. Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to: Attention: X.X. Xxxxxxxxx Xxxx
THE LAW OFFICES OF X.X. XXXXXXXXX XXXX
00000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
Facsimile: (000) 000-0000
(e). This Agreement may not be assigned by any party hereto without
the express prior written consent of the other parties, which will not be
unreasonably withheld, except in connection with a sale or assignment of
the '930 Patent, merger, acquisition, reorganization or sale of all or
substantially all of such party's assets or equity; provided, however, that
in the event the Agreement is assigned to or assumed by a competitor of
D-Link, the parties shall promptly meet and confer to agree upon an
appropriate mechanism for protecting the confidentiality of D-Link's sales
data and other confidential information. In the event of such merger or
acquisition, the license granted herein shall be limited to Licensed
Products that are being offered for sale at the time of the merger or
acquisition, although the surviving entity may thereafter brand such
products using its own trademark, logos and/or other commercial identities
of D-Link. This Agreement is binding upon and inures to the benefit of the
parties hereto, and their permitted assigns. Any transfer, sale, license or
assignment of the '930 Patent shall be made subject to the rights granted
hereunder.
(f). This Agreement constitutes the entire agreement between the
parties to this Agreement with respect to the subject matter hereof and
supersedes all previous and contemporaneous negotiations, commitments and
agreements, both written and oral, between the parties with respect to such
subject matter including the Settlement Agreement and attached Term Sheet
for Licensing Agreement entered into on April 25, 2007, between the
Parties. Except for the provisions of Sections 3 through 6 and 10, nothing
expressed or implied in this Agreement is intended or shall be construed to
confer upon or give to any Person, other than the parties to this Agreement
and their respective successors and permitted assigns, any rights or
remedies under or by reason of this Agreement.
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(g). This Agreement may be executed in separate counterparts, each of
which shall be considered an original but all of which will constitute one
agreement.
(h) Each party agrees that this Agreement does not constitute evidence
of, or any admission of, any liability, omission or wrongdoing of any kind,
and it shall not be offered or received into evidence or otherwise filed or
lodged in any proceeding against any party except as may be necessary to
prove and enforce its terms. It is expressly understood and agreed that
neither this Agreement nor any consideration provided pursuant to this
Agreement are to be construed as an admission of liability on the part of
the D-Link Parties or regarding any and all claims that were asserted in
the Pending Lawsuit. To the contrary, the D-Link Parties have specifically
denied any liability for all claims made by Network-1. This Agreement
represents a settlement and compromise.
(i) THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS. EXCEPT AS PROVIDED FOR IN SECTION
5(F), THE D-LINK PARTIES AND NETWORK-1 HEREBY IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF TEXAS, TYLER DIVISION, IN RESPECT OF ANY ACTION, SUIT OR
PROCEEDING BROUGHT BY A D-LINK PARTY(IES) AND/OR NETWORK-1 TO ENFORCE THIS
AGREEMENT, AND THE D-LINK PARTIES AND NETWORK-1 AGREE THAT ANY SUCH ACTION,
SUIT OR PROCEEDING BROUGHT BY SUCH PARTY TO THIS AGREEMENT SHALL BE BROUGHT
ONLY IN SUCH COURT (AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS
OR ANY OTHER OBJECTION TO VENUE THEREIN); PROVIDED, HOWEVER, THAT SUCH
CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS
SECTION 11(I) AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE
JURISDICTION OF SAID COURTS OR IN THE STATE OF TEXAS OTHER THAN FOR SUCH
PURPOSE AND SHALL NOT APPLY WITH RESPECT TO, OR BE DEEMED TO INDICATE THE
INTENT OF ANY PARTY HERETO WITH RESPECT TO, ANY ACTION BROUGHT BY OR
AGAINST ANY PERSON(S) WHO IS NOT A PARTY TO THIS AGREEMENT. Any and all
process may be served in any action, suit or proceeding arising in
connection with this Agreement by complying with the provisions of Section
11(d). Such service of process shall have the same effect as if the party
being served were a resident in the State of Texas and had been lawfully
served with such process in such jurisdiction. The parties hereby waive all
claims of error by reason of such service. Nothing herein shall affect the
right of any party to service of process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against the other
in any other jurisdiction to enforce judgments or rulings of the
aforementioned courts.
11
CONFIDENTIAL
IN WITNESS WHEREOF, each of the parties has caused two original copies of
this Agreement to be executed on its behalf by its duly authorized officer as of
the Effective Date.
NETWORK-1 SECURITY SOLUTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
D-LINK CORPORATION
By: /s/ Ah Jee Wang
------------------------------------
Ah Jee Wang
Chief Technology Officer
D-LINK SYSTEMS, INC.
By: /s/ Ah Jee Wang
------------------------------------
Ah Jee Wang
Chief Technology Officer
12
EXHIBIT 10.1 CONFIDENTIAL
------------
EXHIBIT A
---------
AGREEMENT RELATED TO SETTLEMENT
AND DISMISSAL
1
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
)
NETWORK-1 SECURITY SOLUTIONS, )
INC., )
)
Plaintiff, )
V ) Case No. 6:05-CV-291
)
D-LINK CORPORATION AND D-LINK )
SYSTEMS, INC., )
)
Defendants. )
AGREEMENT RELATED TO SETTLEMENT AND DISMISSAL
---------------------------------------------
This cause coming before the Court on the Joint Motion for Entry of
Agreement Related to Settlement and Dismissal of the plaintiff, Network-1
Security Solutions, Inc. ("Network-1"), and the defendants D-Link Corporation
and D-Link Systems, Inc., ("D-Link Parties"), final judgment is entered as
follows:
IT IS HEREBY ADJUDGED AND DECREED:
1. This Court has jurisdiction over the parties and the subject matter
pursuant to 35 U.S.C. ss.1338;
2. The action is dismissed with prejudice, PROVIDED, HOWEVER, that D-Link
Parties expressly reserves their right, in any future litigation regarding U.S.
Patent No. 6,218,930 in which D-Link Parties arc defendants or have been joined
as a party (in either case, other than through D-Link Parties' own voluntary
actions to become such parties), to assert any non-infringement and/or
invalidity counterclaims and/or any other counterclaims or defenses related to
such action;
3. The parties shall bear their own attorneys' fees and costs of this
action, and all rights of appeal are waived; and
4. All relief not expressly granted herein is denied,
Signed this _______ day of ______________, 2007.
_________________________________________
United States District Judge
2
The parties hereby agree to entry of the foregoing Agreement Related to
Settlement and Dismissal as a final judgment in this action.
Network-1 Security Solutions, Inc. D-Link Parties,
By its attorneys, By their attorneys,
_______________________________ _______________________________
H. Xxxxx Xxxxxxxxx (KS-1763) Xxxx X. Xxxxxx
Blank Rome LLP Xxxx Xxxxx LLP
600 New Hampshire Avenue, N.W., Suite 0000 Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Tel: (000) 000-0000 Tel: 000-000-0000
Dated:_______________, 2007
3
EXHIBIT B
---------
LICENSED PRODUCTS
Switches
--------
DES-1316
DES-1526 (eol)
DES-3010PA
DES-3828P
DXS-3227P
XXX-0000X
XXX-0000XX
DES-1228P
DES-3028P (shipping in August 2007)
DES-3052P (shipping in August 2007)
DGS-3100-48P (not yet shipping)
DGS-3100-24P (not yet shipping)
Cameras
-------
DCS-1110
Access Points
-------------
XXX-0000XX
XXX-0000XX (eol)
DWL-2230AP
XXX-0000XX
XXX-0000XX
DWL-7200AP
XXX-0000XX
XXX-0000XX
XXX-0000XX
XXX-0000XX
Adapters
--------
DWL-P50
EXHIBIT C
---------
ROYALTY REPORT
The undersigned official of D-Link is providing the following information to Network-1 pursuant to that License Agreement dated
May 25, 2007 entered into between Network-1 and D-Link Corp. and D-Link Systems, Inc. All capitalized terms used in this Report
have the definitions ascribed to them in the Agreement. Their Report reflects the Royalties payable by D-Link for the month
[semi-annual] period ending ___________________.
----------------- ------ -------------- ------- ------- ------- ---------- ---------- --------- -------------------------------
SELLING PRICE
LICENSED PRODUCT CHARGED TO PRICE CALCULATION
MODEL NO., NAME & UNITS UNAFFILIATED ADJUSTMENT PROTECTION TRADE OF
DESCRIPTION SOLD BUYER RETURNS REFUNDS REBATES CREDITS CREDITS DISCOUNTS ROYALTIES
----------------- ------ -------------- ------- ------- ------- ---------- ---------- --------- ----------- --------- -------
Net Selling Royalty % Amount
Price of
Royalty
----------- --------- -------
----------------- ------ -------------- ------- ------- ------- ---------- ---------- --------- -------------------------------
Due & Total Royalties
Payable $_________________
The undersigned hereby certifies the foregoing an accurate and complete record of all royalties due and payable by D-Link for
the period ___________.
Signature:________________________ Date:_______________________
Name:_____________________________
Title:____________________________
