PHONE:   (202) 772-5932
FAX:     (202) 572-8437
EMAIL:   SABHARWAL@BLANKROME.COM




                                                                 August 9, 2005


VIA FACSIMILE AND VIA PDF

Corey Horowitz
Chairman & CEO
Network-1 Security Solutions, Inc.
445 Park Avenue, Suite 1028
New York, N.Y. 10022

            Re: Engagement Letter

Dear Corey:

     We look forward to representing Network-1 Security Solutions, Inc.
("Network-1") in connection with litigation involving the enforcement of United
States Patent No. 6,218,930 (the "930 Patent"). We are pleased that you have
selected us.

     1. The terms of this engagement letter and the attached Addendum
(collectively, the "Agreement") will govern our representation of Network-1.
Although Network-1 at this time has not made any decision to commence litigation
against any other party other than D-Link Corporation and affiliated entities,
in the event Network-1 elects to do so, the terms and provisions of this
Agreement shall govern any such litigation. Upon the completion of our services
with respect to the matters set forth herein, we hope that you will choose to
engage our firm to perform additional services for Network-1. Absent an express
written agreement to the contrary, the terms of our engagement set forth in this
Agreement will apply to this matter and to other matters which we agree to
undertake on your behalf. The terms of this engagement as provided in this
Agreement may only be modified in writing signed by a partner of our firm and
Network-1.

     2. Blank Rome LLP will represent Network-1 in accordance with this
Agreement throughout the entirety of each litigation matter pertaining to the
`930 Patent through judgment and appeal (including any declaratory judgment
action initiated against Network-1 by a third party) as well as negotiation and
preparation of license or other agreements with licensees pertaining to the `930
Patent. Blank Rome LLP's representation of Network-1 as provided

<PAGE>

Corey Horowitz
August 9, 2005
Page 2

herein shall include defending the declaratory judgment action (including
asserting counter-claims) commenced against Network-1 by PowerDsine which is
pending in the United States District Court, Southern District of New York and
work related to Network-1's Power Up Program including license agreements and
other similar agreements with potential licensees. Our representation of
Network-1 does not include any work before any agency, for example, the United
States Patent and Trademark Office, or any related or unrelated corporate, tax,
securities, contracting, transaction, or other services. Blank Rome LLP agrees
to represent Network-1 with respect to litigation against any one or more of the
Designated Parties (as defined below) pertaining to the `930 Patent upon
completion of its analysis that the Designated Party (ies) infringes the `930
Patent. The parties hereto shall use good faith efforts to mutually agree on the
timing and sequence of litigation against any of the Designated Parties. Blank
Rome LLP has cleared conflicts with respect to D-Link Corporation (including its
affiliates) and PowerDsine and shall clear conflicts with respect to all
Designated Parties to be mutually agreed to by Blank Rome LLP and Network-1 as
referenced below. Blank Rome LLP will provide services to Network-1 in
accordance with this Agreement on a full contingency-fee basis (except for
expenses as noted below) and, accordingly, will not bill Network-1 on an hourly
basis for its services except for services for any potential ITC proceeding as
referenced in paragraph 5 hereof. As compensation for the services Blank Rome
LLP provides to Network-1 on a full contingency-fee basis (except as noted
herein) in accordance with the terms of this Agreement, Blank Rome LLP will
receive a percentage of all consideration, after deducting all expenses and
disbursements paid by Network-1 as provided herein, actually received by
Network-1 (including any party that Network-1 directs payment of its
consideration to) from D-Link Corporation (including affiliated entities) and
certain potential licensees to be mutually agreed in writing by Network-1 and
Blank Rome LLP (collectively, the "Designated Parties" or a "Designated Party"),
as the result of any licensing of the `930 Patent, or any monetary or
non-monetary settlement, award or judgment in any proceeding (including a
declaratory judgment action instituted by any Designated Party) involving the
`930 Patent (the "Net Consideration"), as follows:

          (a) If a Designated Party enters into an agreement with Network-1
     prior to the commencement of litigation (i.e., filing a complaint) by Blank
     Rome LLP, on behalf of Network-1, against or by such Designated Party with
     respect to the 930 Patent, then Network-1 shall pay Blank Rome LLP 10% of
     all Net Consideration resulting from that agreement or license. No payments
     shall be made with respect to any Designated Party which Blank Rome LLP has
     a current, non-waivable conflict and consequently against which Blank Rome
     LLP cannot initiate litigation; and

          (b) With respect to Blank Rome LLP's representation of Network-1 in
     litigation against any Designated Party (either as plaintiff or as
     defendant in a declaratory action exclusive of an ITC action in accordance
     with paragraph 5 hereof) on a full contingency basis pursuant to the terms
     of this Agreement, Network-1 shall pay Blank

<PAGE>

Corey Horowitz
August 9, 2005
Page 3

     Rome LLP the following percentages of all Net Consideration received in
     connection with such litigation matter:

               (i) 12.5% if settlement is reached after the filing of a
          complaint but prior to the service or receipt of written discovery;

               (ii) 15% if settlement is reached after the service or receipt of
          written discovery but prior to taking or defending a deposition;

               (iii) 20% if settlement is reached after taking or defending a
          deposition but prior to commencement of a Markman hearing or drafting
          of summary judgment briefing;

               (iv) 25% if settlement is reached after the commencement of a
          Markman hearing or drafting of summary judgment briefing but prior to
          the conclusion of trial; and

               (v) 35% if settlement or judgment is reached after conclusion of
          trial.

     3. With respect to any party who is neither a plaintiff or defendant in an
action commenced by or against Network-1 in which Blank Rome represents
Network-1 nor a Designated Party, Blank Rome LLP shall receive, during the
period of the Network-1's Power Up Licensing Program, 5% of any Net
Consideration, after deducting all expenses and disbursements paid by Network-1
(to the extent that such expenses and/or disbursements have not been previously
deducted) actually received by Network-1 from such a party who takes a license
from Network-1 as part of its Power Up Licensing Program.

     4. Network-1 will promptly reimburse Blank Rome LLP on a current monthly
basis for all expenses and disbursements it incurs in its representation
hereunder including, but not limited to, filing fees; court reporters; expert
witness(es) fees and expenses; local counsel; on-line services; travel expenses;
and telephone, copying and word-processing expenses, as noted in the attached
Addendum to this Letter ("Expenses and Disbursements"). Blank Rome LLP will
confer with Network-1 before incurring any single expense in excess of $1000.
Blank Rome LLP has provided Network-1 with an estimate from Potter Minton, P.C.,
local counsel, of the legal fees to be charged by local counsel at various
stages of litigation. Network-1 will be required to pay local counsel directly.
All worked to be performed by Potter Minton, P.C. will be authorized by Blank
Rome LLP. Prior to allocating work to Potter Minton, P.C., Blank Rome LLP will
advise Network-1 and Blank Rome LLP will only allocate work to Potter Minton,
P.C. on an as-needed basis and will take reasonable steps to minimize the
expenses of local counsel. Expenses and Disbursements will be billed monthly and
are payable upon presentation. We request that you pay all statements promptly
after receipt, but in any event, no later than thirty (30) days after the date
of the issuance reflected on our statements. We are entitled to interest of

<PAGE>

Corey Horowitz
August 9, 2005
Page 4

1% per month on the total amounts of invoices that are not paid within thirty
days (or at a lower interest rate, if such is required by applicable law). If
any balance of the advance payment is remaining after our final statement, we
will refund the balance to you.

     5. In the event that Network-1 decides to institute an investigation
against no more than two of the Designated Parties at the International Trade
Commission ("ITC"), it shall do so only after consultation with Blank Rome LLP.
If Network-1 is able to engage another law firm upon better terms than provided
by Blank Rome as provided below, it shall offer Blank Rome a right of first
refusal to represent Network-1 with respect to such action upon the same terms
as the other law firm would undertake such work. The terms upon which Blank Rome
LLP agrees to represent Network-1 at the ITC are as follows: Network-1 will be
responsible for all fees to be billed monthly on an hourly basis based upon the
Blank Rome LLP then current hourly rates and expenses of such ITC action in an
amount not to exceed $1.0 million, payable in monthly installments not to exceed
$75,000 with a retainer in advance of filing to be mutually agreed upon by the
parties. In addition to the aforementioned hourly fees and expenses, Blank Rome
LLP shall be paid the percentages of Net Consideration with respect to any
settlement achieved with respect to Designated Parties which are part of the ITC
proceeding in accordance with paragraph 2(b) hereof with a credit to Network-1
for all fees paid by Network-1 to Blank Rome LLP based on hourly rates and
expenses up to $1.0 million as provided in this paragraph 5. Nothing under this
paragraph 5 shall affect Blank Rome's right to receive during the term of this
Agreement the percentages of Net Consideration or Sale Proceeds, as the case may
be, in accordance with paragraphs 2(a), 2(b), 3 and 6 hereof.

     6. In the event that during the term of this Agreement Network- 1 elects to
assign, transfer or sell all of its right, title and interest in the `930 patent
(the "Patent Sale"), Blank Rome LLP will receive a percentage of all such sales
proceeds (the "Sale Proceeds") up to a maximum payment of $12.5 million to Blank
Rome LLP pursuant to this Section 6, after deducting all Expenses and
Disbursements paid by Network-1 (to the extent that such Expenses and
Disbursements have not been paid out previously), as provided herein, actually
received by Network-1 from the Patent Sale, as follows:

          (a) If the Patent Sale is consummated with a Designated Party who is
     then litigating (either as a plaintiff or defendant in an action in which
     Blank Rome LLP represents Network-1) the `930 patent against Network-1
     prior to the closing of the Patent Sale, Blank Rome LLP shall receive the
     consideration set forth in paragraph 2(b) hereof;

          (b) If the Patent Sale is consummated with a Designated Party who is
     not then litigating (either as a plaintiff or defendant in an action in
     which Blank Rome LLP represents Network-1) the `930 patent against
     Network-1 prior to the closing of the Patent Sale, Blank Rome LLP shall
     receive the greater of: (i) 5% of the Sale Proceeds, or (ii) 2 times Blank
     Rome LLP's fees based on its standard hourly rates incurred as of the

<PAGE>

Corey Horowitz
August 9, 2005
Page 5

     closing of the Patent Sale in any then existing litigation(s) with respect
     to the `930 patent; and

          (c) If the Patent Sale is consummated with a party who is neither a
     plaintiff or defendant in an action commenced by Blank Rome LLP on behalf
     of Network-1, nor a Designated Party, Blank Rome shall receive the greater
     of: (i) 1.5% of the Sales Proceeds; or (ii) 2 times Blank Rome LLP's hourly
     fees incurred as of the closing of the Patent Sale in any then-existing
     litigation(s) with a Designated Party with respect to the `930 patent.

     7. Blank Rome LLP shall receive its percentage of Net Consideration in
accordance with paragraph 2(a), 2(b), 3 and 6 hereof at the same time and in the
same manner as such Net Consideration or Sale Proceeds, as the case may be, is
actually received by Network-1 (or any party it directs payment to). In the
event that Network-1 receives non-monetary Net Consideration or Sale Proceeds
which is otherwise subject to paragraphs 2(a), 2(b), 3, or 6, the determination
of the value of such non-monetary Net Consideration shall be based on the fair
market value of such non-monetary Net Consideration actually received by
Network-1 (or any party that Network-1 directs payment to). If Blank Rome LLP
and Network-1 are unable to agree on the fair market value of such non-monetary
Net Consideration, the procedures provided in paragraph 8 hereof shall apply to
the resolution of the fair market value of such non-monetary Net Consideration.

     8. With respect to any dispute arising solely and exclusively under
paragraph 7 of this Agreement, the parties shall resolve any such dispute before
a panel of three arbitrators in accordance with the Arbitration Rules of the
American Arbitration Association ("AAA"), in New York, NY. Upon receipt of
notice of a dispute, the parties shall have 30 days to attempt to negotiate a
resolution. Failing that, the party providing the notice of dispute shall,
within 15 days after the end of such 30 day period, file a notice of
arbitration. Each party shall be entitled to reasonable discovery and an
opportunity to put on evidence before the panel. The panel shall issue an award
within 30 days after close of the arbitration hearing and shall be authorized to
award compensatory damages and costs and expenses to the prevailing party. There
shall be no award of punitive damages. The award issued shall be enforceable in
any court of competent jurisdiction in the State of New York, County of New
York.

     9. We request that you pay all statements promptly after receipt, but in
any event, no later than thirty (30) days after the date of the issuance
reflected on our statements. We are entitled to interest of 1% per month on the
total amounts of invoices that are not paid within thirty days (or at a lower
interest rate, if such is required by applicable law). If any balance is
remaining after our final statement, we will refund the balance to you.

     10. This Agreement may be terminated by either party upon thirty days prior
written notice; provided, that, such termination by Blank Rome LLP and
withdrawal of its representation

<PAGE>

Corey Horowitz
August 9, 2005
Page 6

of Network-1 shall be only as permitted by the Addendum to this Letter, and if
permitted by law and the Code of Professional Responsibility. If at the time of
such termination and withdrawal, Blank Rome LLP is counsel of record for
Network-1 in any litigation, such termination is only effective if Blank Rome
LLP is permitted to withdraw by the Court, but you agree to promptly find
replacement counsel and to sign any petitions or other documents to permit Blank
Rome LLP to withdraw. If Network-1 elects to terminate this Agreement, Network-1
will compensate Blank Rome LLP under paragraph 2(a) at a reduced percentage of
5% of Net Consideration actually received from parties with whom Blank Rome LLP
has not commenced litigation against (or defended) on behalf of Network-1,
provided, that such parties are limited to those with whom Network-1, or any
party acting through or on behalf of Network-1, had substantive licensing or
settlement discussions related to the 930 Patent during the course of this
Agreement and entered into a license agreement, settlement agreement or similar
agreement providing for Net Consideration within the 12 month period following
such termination (except as to those Designated Parties with which Blank Rome
LLP has a non-waivable conflict and consequently against whom Blank Rome LLP
could not have initiated litigation). In addition if Net Consideration is
actually received by Network-1 (or any entity to which Network-1 directs payment
of its consideration to) following litigation against a Designated Party in
which Blank Rome LLP represented Network-1 at the time of termination and was
substituted as counsel, Blank Rome LLP shall be entitled to, as compensation,
the pro rata share of the Net Consideration based on the hourly time charges
provided by Blank Rome LLP and the hourly time charges provided by substitute
counsel, as first payment out of any Net Consideration received by Network-1.

     Subject to the foregoing, Network-1 may terminate this contingency
agreement following resolution of the initial litigation against any of the
Designated Parties and elect, at its sole discretion, to pay Blank Rome LLP on
an hourly basis based upon its standard hourly rates with respect to a
subsequent action against any of the Designated Parties. Network-1 understands
and agrees that its decision to convert from a contingency arrangement to an
hourly arrangement with respect to any Designated Party must occur prior to
institution of such an action against that Designated Party, and does not affect
in any way Blank Rome LLP's ability to recoup any Net Consideration from any
Designated Party in accordance with paragraph 2(a) hereof.

     If you wish to engage us in this representation, please indicate your
consent to the foregoing by signing and dating this letter where indicated below
and returning it to us promptly for our respective files.

<PAGE>

Corey Horowitz
August 9, 2005
Page 7

     On behalf of Blank Rome LLP, I thank you for the privilege of representing
Network-1 and look forward to serving your interests.


                                                      Very truly yours,

                                                      /s/ H. Keeto Sabharwal
                                                      -------------------------
                                                      H. Keeto Sabharwal


Accepted and Agreed
-------------------

Network-1 Security Solutions, Inc.



By: /s/ Corey M. Horowitz
    ------------------------------
    Corey M. Horowitz, Chairman and CEO





<PAGE>

                          ADDENDUM TO ENGAGEMENT LETTER
                          -----------------------------

The policies and practices set forth below apply to our engagement as your
counsel:

1. Scope of Representation.

Unless otherwise agreed to in writing or we specifically undertake such
additional representation at your request, we represent only the client named in
the engagement letter. If our engagement is limited to a specific matter or
transaction, and we are not engaged to represent you in other matters, our
attorney-client relationship will terminate upon the completion of our services
with respect to such matter or transaction whether or not we send you a letter
to confirm the termination of our representation.

2. Disbursements and Other Charges.

In accordance with the terms of our engagement letter, we will be entitled to
payment or reimbursement for disbursements and other charges incurred in
performing services such as photocopying, messenger and delivery, overnight
delivery and air freight, computerized research, videotape recording, travel
(including mileage, parking, air fare, lodging, meals, and ground
transportation), long distance telephone, telecopying, word processing in
special circumstances, court costs, and filing fees. To the extent we directly
provide any of these services, we reserve the right to adjust the amount we
charge at any time or from time to time, and the charge will approximate our
cost. Unless special arrangements are made, fees and expenses of consultants and
professionals (such as experts, investigators, witnesses, and court reporters)
and other large disbursements will not be paid by our firm and will be the
responsibility of, and billed directly to, you or you will be asked to advance
to us an estimate of those costs.

3. Conflicts of Interest.

It is unavoidable that from time to time conflicts of interest develop between
or among our clients, or between clients, or former clients, and prospective
clients we wish to represent. In these situations, we are required, if we are
authorized to do so, to disclose the conflicts to our clients, former clients
and prospective clients and consult with them and to obtain the clients' or
former clients' consents before we may proceed. We wish to confirm that you
agree that you will promptly and in good faith consider our requests for a
consent.

4. Termination

Blank Rome LLP reserves the right upon thirty days notice to cease performing
work and to withdraw from the representation (a) with your consent, (b) for good
cause, or (c) for any other reason permitted by law. Good cause may include your
failure to honor the terms of the engagement letter, your failure to pay amounts
billed in a timely manner, your failure to furnish deposits for fees and costs
or to otherwise provide a requested advance for fees and costs, or any fact or
circumstance that would, in our view, impair an effective attorney-client
relationship or

<PAGE>

would render our continuing representation unlawful, unethical or unreasonably
burdensome. If we elect to do so, you must take all steps necessary to free us
of any obligation to perform further, including the execution of any documents
(including forms for substitution of counsel) necessary to complete our
withdrawal, and we will be entitled to be paid in accordance with terms and
provisions of our written engagement letter for our services rendered and
disbursements and other charges made or incurred on your behalf prior to the
date of withdrawal.

5. Record Retention.

At the conclusion of a matter we often undertake to review the file and discard
extra copies of documents and send the balance of the file on that matter to an
offsite facility for storage at our expense, unless a client requests us to
deliver the files to it. To minimize the file storage expense, we reserve the
right, subject to your contrary direction, to retain files for only five years
and to destroy all older files to the extent practicable; provided that estate
planning files and trademark and patent files are retained, and we use our
reasonable efforts to review old files and retain original legal instruments
such as notes, leases, mortgages, deeds, stock certificates, marital equitable
distribution agreements and other items of obvious value. If you wish to handle
the disposition of files in a different manner, please let us know. Otherwise,
we will proceed as set forth above.

6. Electronic Mail and Other Communications.

In the course of our representation of you, we have a duty to preserve the
confidentiality of our communications with you and other information relating to
the representation. However, you and we need to recognize that all means of
communication are, to some degree, susceptible to misdirection, delay or
interception. E-mail and cellular telephone communications present special risks
of inadvertent disclosure. However, because of the countervailing speed,
efficiency, and convenience of these methods of communication, we have adopted
them as part of the normal course of our operations. Unless you instruct us to
the contrary, we will assume that you consent to our use of e-mail and cell
phone communications in representing you.

7. Insurance.

You agree to determine whether any insurance coverage is or may be available
with respect to the subject matter of the engagement and to provide notice to
any insurer that may provide coverage. If an insurer pays any portion of our
charges, you agree that you will remain responsible for payment of any amounts
billed by us but not paid by the insurer, unless we have agreed otherwise in
writing.

8. Written Advices Regarding Federal Tax Issues

Whenever we provide you with written advice concerning the Federal tax treatment
of an item of income, gain, loss, deduction or credit, the existence or absence
of a taxable transfer of property, or the value of property for Federal tax
purposes, we are subject to stringent requirements imposed by the United States
Treasury Department on all tax practitioners, including attorneys.

<PAGE>

These rules cover much more than formal legal opinions and may apply to any
writing relating to any Internal Revenue Code matter, including communications
via e-mail and fax. IF WE FAIL TO COMPLY WITH THESE RULES, WE MAY (UNDER CERTAIN
CIRCUMSTANCES) BE SUSPENDED OR DISBARRED FROM PRACTICE BEFORE THE INTERNAL
REVENUE SERVICE, BE PUBLICLY CENSURED OR FINED (TO THE EXTENT THAT THE SECRETARY
OF TREASURY PROMULGATES REGULATIONS REQUIRING ANY SUCH FINES OR PENALTIES).
Therefore, if during the course of this engagement, we provide written advice
regarding any arrangement the principal purpose of which is the avoidance or
evasion of any tax imposed by the Internal Revenue Code, such writing must
comply with the rigorous standards of review and disclosure (including enhanced
factual and legal due diligence) which are now required by the Treasury
Department. If tax avoidance is not the principal purpose of an arrangement but
is a significant purpose, our written advice must also adhere to the same rules,
unless we include a prominent disclosure stating that the writing was not
intended or written by us to be used, and it cannot be used by you or anyone
else for the purpose of avoiding taxpayer penalties. It is for this reason that
certain written communications to you, including emails and faxes, will contain
the following disclosure statement: "ANY FEDERAL TAX ADVICE CONTAINED HEREIN IS
NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY YOU OR ANY OTHER
PERSON, FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED BY THE
INTERNAL REVENUE CODE. THIS DISCLOSURE IS MADE IN ACCORDANCE WITH THE RULES OF
TREASURY DEPARTMENT CIRCULAR 230 GOVERNING STANDARDS OF PRACTICE BEFORE THE
INTERNAL REVENUE SERVICE. ANY WRITTEN STATEMENT CONTAINED HEREIN RELATING TO ANY
FEDERAL TAX TRANSACTION OR MATTER MAY NOT BE USED BY ANY PERSON WITHOUT OUR
EXPRESS PRIOR WRITTEN PERMISSION TO SUPPORT THE PROMOTION OR MARKETING OF OR TO
RECOMMEND ANY FEDERAL TAX TRANSACTION(S) OR MATTER(S) ADDRESSED HEREIN. NO
ADVICE CONTAINED HEREIN MAY BE RELIED UPON OR UTILIZED BY ANY PERSON FOR ANY
PURPOSE EXCEPT AS EXPRESSLY AND AFFIRMATIVELY STATED HEREIN WITHOUT THE PRIOR
WRITTEN CONSENT IN EACH INSTANCE OF A PARTNER OF THIS FIRM."