LEGAL SERVICES FEE AGREEMENT
EXHIBIT
10.33
This
Legal Services Fee Agreement (as amended from time to time, this "Agreement")
is
made and entered into this 14th
day of
April, 2006, by and between Forgent Networks, Inc. (the "Client") and Xxxxxx,
Xxxx & Xxxxxxx, P.C. and Xxxxxxxxx & Xxxxxxxx, L.L.P.(each individually
a “Law Firm” and collectively the "Law Firms"). The Law Firms and the Client are
sometimes collectively hereinafter referred to as the "Parties." Any one of
the
Parties may be sometimes hereinafter referred to as a "Party."
This
Agreement concerns U.S. Patent Nos. 6,181,784, 6,285,746, 6,480,584, and
6,674,960, together with any continuations, continuations-in-part, divisions
and/or foreign counterparts thereof (collectively, the "Patents"). The Client
is
executing this Agreement for the purpose of retaining the Law Firms to represent
it in connection with (i) investigating and asserting claims, including the
filing and prosecution of lawsuits, against any other person who may be
infringing the Patents (any such claim as to which litigation is filed being
hereinafter referred to as a "Lawsuit"), and (ii) negotiating with infringers
to
obtain and secure licensing or sublicensing agreements between the Client and
the infringers (any such licensing or sublicensing agreements negotiated by
the
Law Firms referred to herein as a "License Agreement," and any negotiations
for
such License Agreements referred to herein as the "License Negotiations").
The
Client is not engaging the Law Firms to market or commercialize its technologies
to non-infringers. The Client understands and acknowledges that patent
infringement litigation often presents novel and difficult questions of both
law
and fact, and the acceptance of the engagement by the Law Firm in this matter
may preclude engagements by the Law Firms on other matters.
NOW,
THEREFORE, for and in consideration of the mutual agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed by each Party, the
Parties agree as follows:
1. Patents
and Information Provided by Client.
The
Client agrees to use reasonable efforts to provide the Law Firms with all
information and documents in the possession of the Client or any entities
affiliated with the Client reasonably required in connection with performing
Law
Firm's duties and obligations hereunder.
2. Client's
Patent Rights.
The
Client represents and warrants that, to the best of its knowledge after
reasonable investigation, it owns the exclusive right to enforce all rights
with
respect to the Patents, including, without limitation, the exclusive right
to
bring actions against others for infringement of the Patents, to license and
sublicense the Patents, and to collect all royalties, license fees, profits
or
other revenue or valuable consideration to be paid or exchanged by anyone else
for the right to use the Patents. The Client agrees to timely pay all
maintenance fees due on the Patents.
3. Contingent
Fee Compensation to Law Firm.
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(a)
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For
services rendered pursuant hereto, the Client hereby agrees to pay
the Law
Firms a contingent fee equal to 30% (15% to each Law Firm) of all
License
Proceeds and Litigation Proceeds. For purposes hereof, (i) "License
Proceeds" shall mean any revenues, including but not limited to,
royalties
or license fees, money or other valuable consideration received by
the
Client through, under or as a result of any License Agreement and/or
any
License Negotiations initiated after the effective date of this Agreement,
and (ii) "Litigation Proceeds" shall mean any recovery realized out
of or
collected from or in connection with any Lawsuit, either through
settlement, compromise or judgment, including, but not limited to,
compensatory damages, exemplary damages, attorneys' fees, prejudgment
interest, and post judgment interest (whether through trial or settlement
of any Lawsuit), initiated after the effective date of this
Agreement.
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(b)
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The
Law Firms will receive their respective percentage interest in the
License
Proceeds and Litigation Proceeds as they are paid to the Client or,
at the
election of the Client, based upon the present value of the amount
of
money that is to be paid to the Client over time. If the Client chooses
to
waive any such future payments, it will pay each Law Firm an amount
equal
to the Law Firm's interest in those payments as they otherwise would
have
been made to the Client. The Parties agree that (x) the License Proceeds
shall include the full fair market value of any non-monetary proceeds
and
shall not be reduced by any cross-license, cross-action, setoff or
other
payment by Client, which shall be the sole responsibility of Client,
and
(y) the Litigation Proceeds shall include the full fair market value
of
any non-monetary relief obtained or received directly by the Client
or any
related entity as a proximate result of any Lawsuit, such as injunctive
relief. The Law Firms’ contingent fees based on License Proceeds and
Litigation Proceeds shall collectively be referred to herein as the
"Contingent Attorneys' Fees."
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(c)
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The
Client shall pay the Contingent Attorneys' Fees to the Law Firms
quarterly, on or before the 10th
day of each succeeding fiscal quarter. With each such lump sum payment,
the Client shall provide the Law Firms with a (i) detailed accounting
of
all License Proceeds and Litigation Proceeds received by the Client
during
the immediately preceding fiscal quarter, and (ii) a calculation
of the
quarterly lump sum amount being tendered to the Law Firms. Each Law
Firm
shall have 30 days following its receipt of each quarterly payment
and the
accompanying detail within which to verify and/or object to the Client's
calculation of the quarterly payment amount. If a Law Firm fails
to object
to any quarterly calculation within such 30 day period, the calculation
and the payment received shall, absent fraud by the Client, be deemed
to
have been accepted by such Law Firm and shall be
final.
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4. Client
Payment of Related Expenses.
During
the term hereof, the Client shall be liable for and shall pay all Related
Expenses. For purposes hereof, "Related Expenses" shall mean any reasonable
expenses incurred by the Client or by the Law Firms on the Client's behalf
in
connection with each Law Firm's performance of its duties and responsibilities
hereunder, including but not limited to, travel expenses, long distance calls,
investigation fees, consultant fees, expert and witness fees, charts,
photographs, deposition fees and costs, court costs, photocopying and other
document reproduction costs, postage charges, fax charges, on-line computer
research. The Parties shall advise each other in advance of incurring Related
Expenses that will exceed $5,000, and will provide each other with an updated
list of Related Expenses incurred, received or paid by such Party on a monthly
basis. It is anticipated that some Related Expenses will be paid by Law Firms
and then billed to Client while other Related Expenses will be forwarded to
Client for payment directly to the third party. Notwithstanding the foregoing,
the Related Expenses shall be reimbursed to the Client out of any License
Proceeds or Litigation Proceeds up to, but not to exceed, 20% of any such
License Proceeds or Litigation Proceeds recovered from any person(s) at any
one
time. For example, if License Proceeds or Litigation Proceeds are recovered
from
a License Negotiation or any Lawsuit from any person, then up to 20% of such
total proceeds will be paid to the Client as reimbursement for the Related
Expenses incurred, and the remainder of the License Proceeds or Litigation
Proceeds will be distributed to the Law Firms and the Client in accordance
with
the provisions of Paragraph 3(a) above. In the event that the total amount
of
the License Proceeds or Litigation Proceeds recovered with respect to a
particular License Negotiation or Lawsuit are insufficient to reimburse the
Client fully for the Related Expenses, the Client agrees that the Client shall
bear the unreimbursed portion of the Related Expenses and that the Law Firms
shall not be liable for any of the Related Expenses not reimbursed.
5. Court
Award of Attorneys Fees or Costs.
Where
reasonably appropriate under the circumstances in any Lawsuit, the Law Firms
shall apply to the Court for such amount of compensation, costs, and litigation
expenses, if any, as may reasonably be allowed to the Client by law ("Attorneys
Fees and Costs"). Any Attorneys Fees and Costs recovered under this paragraph
shall be treated as Litigation Proceeds under this Agreement.
6. Defense
of Counterclaims and Declaratory Judgment Actions.
The Law
Firms shall defend any action or counterclaim relating to the Patents filed
against the Client by a defendant in a Lawsuit or by any person with whom the
Client has been engaged in License Negotiations, including but not limited
to,
any action or counterclaim for declaratory judgment of patent invalidity,
unenforceability or non-infringement relating to the Patents, or for violation
of the state or federal antitrust laws relating to the Patents, or for any
other
claim that is substantively related to the Patents or Client's rights therein,
on the basis specified in Paragraphs 3 and 4 above. To the extent that any
action, claim or counterclaim is asserted against the Client that is unrelated
to the subject matter of the Patents and the Client desires the Law Firms to
defend the Client against such cause of action, the Law Firms and the Client
may
agree to such representation on such terms as are mutually
acceptable.
7. Lead
Counsel; Law Firm Association of other Lawyers or
Assignment.
Client
and Law Firms agree that Xxxxxx, Xxxx & Xxxxxxx shall be lead counsel in
connection a Lawsuit. The Law Firms agree to perform faithfully the duties
imposed upon the Law Firms as attorneys for the Client in accordance herewith.
The Law Firms may, with Client's prior written consent, associate any other
attorney, law firm or other entity ("Other Counsel"), as allowed by law, in
pursuing their duties and obligations hereunder. If such Other Counsel is
located and/or has a permanent presence in the jurisdiction where the Lawsuit
is
pending (such Other Counsel being "Local Counsel" for purposes hereof), Client
shall bear all related Local Counsel Fees due and payable to such Local Counsel.
If such Other Counsel does not qualify as "Local Counsel" as defined herein,
the
Law Firms shall bear all fees and expenses due and payable to such Other
Counsel. In either event, the engagement of Other Counsel in accordance herewith
shall not (i) relieve the Law Firms from their responsibility as legal counsel
for the Client without Client's prior written consent, or (ii) except as
expressly noted herein relative to the payment of Local Counsel Fees by Client,
increase the cost to Client of any Lawsuits or reduce the interest of the Client
in the License Proceeds or Litigation Proceeds. To the extent it is necessary
to
hire Other Counsel in connection with any Lawsuit, Client and Law Firms shall
cooperate in the selection of such local counsel.
8. Assignment
of Patents or Any Rights Therein.
The Law
Firms and the Client acknowledge and agree that the Client's agreement to pay
the Law Firms the Contingent Attorneys' Fees hereunder is in no way a conveyance
or assignment of any interest or rights to the Patents. The Client retains
the
right to use the technology in the Patents and to make, have made, import,
use,
sell or offer for sale any equipment, device or apparatus and to practice any
method covered by any claim of any of the Patents, for the customers of the
Client.
9. Termination
of Engagement.
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(a)
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By
the Law Firms.
The Law Firms may at any time, at their option (and with Court approval
in
the case of any Lawsuit), with or without cause, terminate their
representation of the Client hereunder by providing not less than
90 days'
prior written notice to the Client.
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(b)
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By
the Client.
The Client may at any time, with or without cause, terminate the
Law
Firm's representation of the Client hereunder by providing not less
than
90 days' prior written notice to the Law
Firm.
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(c)
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Effect
of Termination.
Upon the termination of the Law Firms’ representation of the Client
hereunder by either Party, this Agreement shall be terminated and
shall no
longer be of any force or effect, and neither Party shall thereafter
be
liable to the other hereunder except as expressly provided herein.
Notwithstanding the termination hereof, the Client shall compensate
the
Law Firms hereunder as follows:
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(1)
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With
respect to any Contingent Attorneys' Fees due as of or subsequent
to the
Termination Date with respect to any Lawsuits or License Negotiations
completed prior to the Termination Date, the Client shall pay the
Law
Firms such fees as prescribed in Paragraph 3
above.
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(2)
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With
respect to any Lawsuit or License Negotiation hereunder that is not
completed prior to the Termination Date, but that is thereafter completed
by the Client with or without the assistance of replacement legal
counsel,
upon receipt of any License Proceeds or Litigation Proceeds with
respect
thereto, the Client shall pay the Law Firms their pro rata share
of such
proceeds. For purposes hereof, the Law Firms’ "pro rata share" shall be
(A) the total amount of the proceeds that otherwise would have been
due and payable to the Law Firms hereunder relative to such Lawsuit
or
License Negotiation if this Agreement had remained in effect through
the
date of Client's receipt of the License Proceeds or Litigation Proceeds,
multiplied by (B) a fraction, the numerator of which is equal to
the
amount that would represent the Law Firms’ total xxxxxxxx (exclusive of
Enforcement Expenses) for legal services rendered (assuming solely
for
purposes hereof that the Law Firms were in fact billing the Client
at
their then standard hourly rates (the "assumed xxxxxxxx") rather
than
billing the Client in accordance with Paragraph 3 above) relative
to such
Lawsuit or License Negotiation during the period beginning on the
effective date of this Agreement and ending on the Termination Date,
and
the denominator of which is equal to the total xxxxxxxx (exclusive
of
Enforcement Expenses) by all law firms (including the assumed xxxxxxxx
by
the Law Firms) for legal services rendered relative to such Lawsuit
or
License Negotiation prior to the date such Lawsuit or License Negotiation
is completed. Also for purposes hereof, the total xxxxxxxx of the
Law
Firms that comprise the numerator, and the total xxxxxxxx of the
additional law firms that comprise part of the denominator, must
be
reasonable as to both time and billing
rates.
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10. Audit.
As long
as the Law Firms are entitled to receive payments resulting from any License
Proceeds or Litigation Proceeds, the Law Firms shall have the right to audit
all
financial records of the Client related to the receipt of any such
proceeds.
11. Law
Firm Authority to Act for Client.
Subject
to the Client's right to pre-approve Related Expenses in accordance with
Paragraph 4 above, the Client authorizes the Law Firms to try, negotiate,
compromise, settle and receive for and in Client's name, all compensation,
damages or property to which Client may become entitled by reason of any License
Agreement or Lawsuit. Client agrees not to enter into any License Agreement
or
settle any Lawsuit without consultation with the Law Firms, and the Law Firms
agree not to enter into any License Agreement or settle any Lawsuit without
the
written consent of the Client.
12. No
Representation or Warranty by Law Firm.
Each
Party specifically recognizes that the other Party has made no representation
or
warranty whatsoever regarding the probable outcome of any Lawsuit and has in
no
way guaranteed the result or outcome of nor any recovery from the settlement
or
trail of any Lawsuit.
13. Other
Documents.
The
Parties agree to execute such other documents as might be reasonably necessary
or appropriate to consummate and implement the terms of this
Agreement.
14. Bankruptcy.
Client
represents to Law Firms that Client is not presently filing, nor contemplating
filing, for protection under the United States Bankruptcy Code or similar laws
of any other country. Client agrees that in the event Client files for
bankruptcy or ends up in bankruptcy under United States laws or similar laws
of
any other country, Law Firms will be promptly notified of any such event and
that the lawsuits and cause(s) of action covered by this Agreement will be
promptly scheduled as an asset by the Client in accordance with the Bankruptcy
Code and its rules of procedure. Because a bankruptcy or similar proceeding
by
Client could require Law Firms to engage special counsel or to otherwise perform
legal services in addition to those services for which Law Firms were retained
under this Agreement (e.g. special retentions by Client or Trustee; issues
relating to waiver of privilege and assumption of executory contracts;
application and payment of attorney’s fees and approval of settlements; etc.),
Client agrees that Law Firms shall be fully reimbursed by Client, or reimbursed
out of Client’s share of Litigation Proceeds and License Proceeds, for the time
spent and costs incurred for these extra services. Client expressly consents
to
the retention by Law Firms of such other special counsel and/or incurring such
costs and time as reasonably necessary to address additional matters in
bankruptcy as raised herein, and for the Law Firms to be reimbursed as set
forth
above.
15. Remedies
for Breach.
In the
event that any Party hereto shall breach any of the obligations imposed by
this
Agreement, then a non-breaching Party shall be entitled to pursue a claim for
monetary damages as a result of such breach. No Party, however, shall be
entitled to recover special, indirect, or consequential damages, including
lost
profits, from any other Party. For purposes of this paragraph, if the Client
breaches the Agreement, the compensation to which the Law Firms may be entitled
under Paragraph 3 herein is not "special, indirect, or consequential damages,
including lost profits."
16. Successors
and Assigns.
This
Agreement is and shall be binding and inure to the benefit of the Parties,
legal
representatives, successors and assigns.
17. Governing
Law.
It is
expressly understood and agreed that this Agreement shall be governed by,
construed, interpreted, and enforced in accordance with the laws of the State
of
Texas without regard to conflicts of law rules or principles.
18. Tax
Matters.
Client’s representation by Law Firms does not include matters pertaining to
taxation or the tax consequences of any settlement of Client’s claims, any
Litigation Proceeds received by Client or any revenues or other benefits
received by Client from License Negotiations or any other source.
19. Legal
Construction.
In case
any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provisions thereof, and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained
herein.
20. Waiver
and Integration Clause.
This
Agreement constitutes the entire agreement among the Parties and supersedes
any
prior understandings or written or oral agreement between the Parties respecting
the subject matter of this Agreement. This Agreement may not be modified or
amended except by a subsequent agreement in writing signed by the Parties.
The
Parties may waive any of the conditions contained herein or any of the
obligations of any other party. Any such waiver shall be effective only if
in
writing and signed by the Party waiving such condition or
obligation.
21. Counterparts.
This
Agreement may be executed in multiple counterparts, each one of which will
be
considered to be an original.
22. State
Bar Notice.
The
Texas State Bar Act requires that Texas attorneys give notice to their clients
that the State Bar of Texas investigates and prosecutes professional misconduct
committed by Texas attorneys. Although not every complaint against or dispute
with a lawyer involves professional misconduct, the State Bar's Office of the
General Counsel will provide information about how to file a complaint by
calling 1-800-932-1900 toll free.
| FORGENT NETWORKS, INC. | ||
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| By: | /s/ Xxxxxxx X. Xxxxxx | |
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Xxxxxxx
X. Xxxxxx
Chief
Executive Officer
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XXXXXX,
XXXX & XXXXXXX, P.C.
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| By: | /s/ Xxxx Xxxxxx | |
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Name:
Xxxx
Xxxxx
Title:
_______________________
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XXXXXXXXX
& XXXXXXXX, L.L.P.
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| By: | /s/ Xxxxxxx X. Xxxxxx | |
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Name:
X.X.
XxXxxxx
Title:
Partner
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