EXHIBIT 10.27

 

AGREEMENT

 

This sets forth the agreement made this 11th day of January, 2005, by and among
Forgent Networks, Inc. and its wholly owned subsidiary Compression Labs, Inc.
(“Forgent” or the “Client”), and Godwin Gruber, LLP (“Godwin Gruber” or the “Law
Firm”). The Law Firm 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 litigation and licensing activities with respect to U.S.
Patent No. 4,698,672 (the “ ‘672 Patent”), together with any continuations,
continuations-in-part, divisions and/or foreign counterparts of the ‘672 Patent.
The Client is executing this Agreement for the purpose of retaining the Law Firm
to represent it in connection with investigating and asserting claims, including
the filing and prosecution of lawsuits, against any other person who may be
infringing the ‘672 Patent, including the enforcement of the ‘672 Patent in the
civil actions identified in Exhibit A. Any such claim as to which litigation is
filed is referred to herein as a “Lawsuit.” The Client is also executing this
Agreement for the purpose of retaining the Law Firm to represent it in
connection with negotiating with infringers who are not parties to any lawsuit
relating to the enforcement of the ‘672 Patent to obtain and secure licensing or
sublicensing agreements between the Client and infringers. Any such licensing or
sublicensing agreements negotiated by the Law Firm will be referred to herein as
a “License Agreement,” and any negotiations for such License Agreements will be
referred to herein as the “License Negotiations.” The Client is not engaging the
Law Firm 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 Firm on other matters.

 

SPECIAL DISCLOSURE. THE CLIENT ACKNOWLEDGES THAT IT WAS ADVISED TO RETAIN
INDEPENDENT LEGAL COUNSEL TO REPRESENT THE CLIENT IN CONNECTION WITH THE
NEGOTIATION AND EXECUTION OF THIS AGREEMENT. THE CLIENT FURTHER ACKNOWLEDGES
THAT IT WAS ADVISED THAT THE LAW FIRM HAS A CONFLICT OF INTEREST THAT PREVENTS
IT FROM REPRESENTING THE CLIENT IN ANY WAY WITH RESPECT TO THE NEGOTIATION AND
EXECUTION OF THIS AGREEMENT AND THAT THE LAW FIRM HAS NOT DONE SO.

 

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
commercially reasonable efforts to provide the Law Firm with all information and
documents in the possession of the Client or any entities affiliated with the
Client reasonably required in connection with performing its 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 ‘672 Patent, including, without
limitation, the exclusive right to bring actions against others for infringement
of the ‘672 Patent, to license and sublicense the ‘672 Patent, 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 ‘672 Patent. The
Client agrees to timely pay all maintenance fees due on the ‘672 Patent.

 

3. Contingent Fee Compensation to Law Firm.

 

3(a) For services rendered pursuant hereto, the Client hereby agrees to pay the
Law Firm a contingent fee based on: (1) 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 (such amount is hereinafter referred to as the “License
Proceeds”), and (2) 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) (such amount of recovery is
hereinafter referred to as the

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“Litigation Proceeds”) after the effective date of this Agreement in an amount
as follows:

 

3(a)1.A Sixteen percent (16%) of all “License Proceeds.” The Parties agree that
the term License Proceeds includes the value of any amount of money that is to
be paid to the Client over any period of time as a proximate result of any
License Agreement and/or License Negotiations. The Law Firm will receive its
percentage interest in those amounts 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 the 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 the License Proceeds shall include the full fair market
value of any non-monetary proceeds. License Proceeds shall not be reduced by any
cross-license, cross-action, setoff or other payment by Client, which shall be
the sole responsibility of Client.

 

3(a)1.B Twenty-one percent (21%) of all “Litigation Proceeds.” The Parties agree
that the term Litigation Proceeds includes any amount of money that is to be
paid out to the Client over any period of time as a proximate result of any
Lawsuit. The Law Firm will receive its percentage interest in those amounts 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 the 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 the Lawsuit
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 Firm’s contingent fees based on License Proceeds and Litigation Proceeds
shall collectively be referred to herein as the “Contingent Attorneys’ Fees.”

 

3(b) The Client shall pay the Contingent Attorneys’ Fees to the Law Firm
quarterly, on or before the 10th day of each succeeding calendar quarter. With
each such lump sum payment, the Client shall provide the Law Firm with a (i)
detailed accounting of all License Proceeds and Litigation Proceeds received by
the Client during the immediately preceding calendar quarter, and (ii) a
calculation of the quarterly lump sum amount being tendered to the Law Firm. The
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 the 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 the Law Firm and shall be final.

 

3(c) Anything herein to the contrary notwithstanding, the Law Firm shall not be
entitled to receive, and the Client shall not be required to pay the Law Firm,
any Contingent Attorneys’ Fees under paragraph 3(a) above or otherwise out of or
with respect to the first $6 million of “Gross Recoveries” received by the
Client on or after October 27, 2004, in recognition of Client’s existing
obligations under that certain Resolution Agreement, dated December 22, 2004
(the date on which the Law Firm first becomes entitled to receive any Contingent
Attorneys’ Fees in accordance with this paragraph 3(c), whether or not the Law
Firm actually receives any Contingent Attorneys’ Fees on such date, shall
hereinafter be referred to as the “Contingent Fee Start Date”).

 

4 Additional Hourly Rate Compensation the Law Firm. In addition to the
Contingent Attorneys’ Fees, the Client shall also compensate the Law Firm for
services rendered hereunder by paying the Law Firm fifty-percent (50%) of the
firm’s reasonable attorneys’ fees based upon its standard hourly rates
applicable at the time incurred. The Law Firm will provide the Client with a
statement for such reasonable attorneys’ fees each month reflecting the time
spent by the Law Firm pursuant hereto. The Client shall pay the Law Firm’s
statement for such reasonable attorneys’ fees within 30 days of receipt of the
statement.

 

5 Client Payment of Enforcement Expenses. For purposes hereof, “Enforcement
Expenses” shall mean those third-party expenses reasonably incurred by Law Firm
on the Client’s behalf 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.

 

So long as the Law Firm is not entitled to receive any Contingent Attorneys’
Fees under Paragraph 3(c) above, the Client shall pay when due all Enforcement
Expenses. Once the Law Firm becomes entitled to receive Contingent

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Attorneys’ Fees in accordance with Paragraph 3(c) above, Enforcement 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 Licensing
Negotiation or any Lawsuit from any person, then up to 20% of such total
proceeds will be paid to the Client as reimbursement for Enforcement Expenses
incurred, and the remainder of the License Proceeds or Litigation Proceeds will
be distributed to the Law Firm and the Client in accordance with the provisions
of Paragraph 3(a) above. In the event that the total amount of License Proceeds
or Litigation Proceeds recovered with respect to a particular Licensing
Negotiation or Lawsuit are insufficient to reimburse the Client fully for
Reimbursable Enforcement Expenses, the Client agrees that the Client shall bear
the unreimbursed portion of the Enforcement Expenses and that the Law Firm shall
not be liable for any Enforcement Expenses not reimbursed.

 

6 Monthly Budget. On or before the 5th day of each calendar month during the
term hereof, the Law Firm shall prepare and provide to the Client a written
budget for that month for the Law Firm’s legal fees under Paragraph 4 and
Enforcement Expenses under Paragraph 5.

 

7 Court Award of Attorneys Fees or Costs. Where reasonably appropriate under the
circumstances in any Lawsuit, the Law Firm 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.

 

8 Defense of Counterclaims and Declaratory Judgment Actions. The Law Firm shall
defend any action or counterclaim relating to the `672 patent 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 ‘672 Patent, or for violation of the state
or federal antitrust laws relating to the ‘672 Patent (including the Client’s
current proceeding before the FTC), or for any other claim that is substantively
related to the ‘672 Patent or Client’s rights therein, on the basis specified in
Paragraphs 3 and 4 above. To the extent that a any action, claim or counterclaim
is asserted against the Client that is unrelated to the subject matter of the
`672 Patent, and the Client desires the Law Firm to defend the Client against
such cause of action, the Law Firm and the Client may agree to such
representation on such terms as are mutually acceptable.

 

9 Law Firm Association of other Lawyers or Assignment. The Law Firm agrees to
perform faithfully the duties imposed upon the Law Firm as attorneys for the
Client in accordance herewith. The Law Firm may, at the discretion and expense
of the Law Firm, associate any other attorney, law firm or other entity, as
allowed by law, in pursuing its duties and obligations hereunder, and may assign
all or any part of its interest in the Licensing Proceeds or Litigation Proceeds
to any other such entity, as allowed by law, provided that such assignment shall
not relieve the Law Firm from its responsibility as legal counsel for the Client
without Client’s prior written consent, nor shall such assignment increase the
cost to the Client of any Lawsuit or reduce the interest of the Client in the
Licensing Proceeds or Litigation Proceeds.

 

10 Assignment of ‘672 Patent or Any Rights Therein. The Law Firm and the Client
acknowledge and agree that the Client’s agreement to pay the Law Firm the
Contingent Attorneys’ Fees hereunder is in no way a conveyance or assignment of
any interest or rights to the ‘672 Patent. The Client retains the right to use
the technology in the ‘672 Patent 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 ‘672 Patent, for the customers of the Client.

 

11 Termination of Engagement.

 

11(a) By the Law Firm. The Law Firm may at any time, at its option (and with
Court approval in the case of any Lawsuit), with or without cause, terminate its
representation of the Client hereunder by providing not less than 90 days’ prior
written notice to the Client.

 

11(b) 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.

 

11(c) Effect of Termination. Upon the termination of the Law Firm’s
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

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thereafter be liable to the other hereunder except as expressly provided herein.
Notwithstanding the termination hereof, the Client shall compensate the Law Firm
hereunder as follows:

 

11(c)1.A Client shall pay the Law Firm all hourly rate compensation due under
Paragraph 4 and all Enforcement Expenses due under Paragraph 5 through the
effective date of termination (the “Termination Date”). Such amounts shall be
paid in full within 30 days of Client’s receipt of final invoice.

 

11(c)1.B With respect to any Contingent Attorneys’ Fees due as of or subsequent
to the Termination Date with respect to Lawsuits or License Negotiations
completed prior to the Termination Date, the Client shall continue to pay the
Law Firm such fees in accordance with the payment procedures prescribed in
Paragraph 3(b) above.

 

11(c)1.C 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 Firm its pro rata share of such proceeds. For purposes
hereof, the Law Firm’s “pro rata share” shall be (A) the total amount of the
proceeds that otherwise would have been due and payable to the Law Firm
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 Law Firm’s total billings (exclusive of Enforcement Expenses) for
legal services rendered (at its standard hourly rates applicable at the time)
relative to such Lawsuit or License Negotiation during the period beginning on
the Contingent Fee Start Date (as defined in paragraph 3(c) above) and ending on
the Termination Date, and the denominator of which is equal to the total
billings (exclusive of Enforcement Expenses) by all law firms (including the
billings by the Law Firm) for legal services rendered relative to such Lawsuit
or License Negotiation during the period beginning on October 27, 2004 (or such
later date as legal services relative to such Lawsuit or License Negotiation
were commenced) and ending on the date such Law Suit or Licensing Negotiation is
completed.

 

12 Audit. As long as the Law Firm is entitled to receive payments resulting from
any License Proceeds or Litigation Proceeds, the Law Firm shall have the right
to audit all financial records of the Client related to the receipt of any such
proceeds.

 

13 Law Firm Authority to Act for Client. The Client authorizes the Law Firm 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 Firm, and the
Law Firm agrees not to enter into any License Agreement or settle any Lawsuit
without the written consent of the Client.

 

14 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.

 

15 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.

 

16 Client Option for Hourly Fees. The Client acknowledges that prior to signing
this Agreement, the Client was given the option of retaining the Law Firm to
prosecute any Lawsuit on exclusively a normal hourly rate (plus costs and
expenses incurred) basis but elected instead to retain the Law Firm to prosecute
any Lawsuit pursuant to the terms and conditions of this Agreement.

 

17 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 Firm may be entitled under Paragraph 3 herein is not “special, indirect, or
consequential damages, including lost profits.”

 

18 Successors and Assigns. This Agreement is and shall be binding and inure to
the benefit of the Parties, legal representatives, successors and assigns.

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19 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.

 

20 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.

 

21 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, including specifically that certain engagement letter between Forgent
and Godwin Gruber dated 9-30-04, which engagement letter is terminated as of the
date hereof. 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.

 

22 Counterparts. This Agreement may be executed in multiple counterparts, each
one of which will be considered to be an original.

 

23 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.

 

Godwin Gruber, LLP

 

By:

 

/s/ G. Michael Gruber

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Its:

 

Vice-President and Chief Executive Officer

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Forgent Networks, Inc.

By:

 

/s/ Richard N. Snyder

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Its:

 

Chief Executive Officer

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Compression Labs, Inc.

By:

 

/s/ Richard N. Snyder

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Its:

 

Chief Executive Officer

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