WWW.EXFILE.COM, INC. -- 888-775-4789 -- NETWORK ONE SECURITY SOLUTIONS, INC. -- EXHIBIT 10.1 TO FORM 8-K


    EXHIBIT 10.1

    
 

    Network-1
Security Solutions, Inc.

    445
Park Avenue, Suite 1028

    New
York, N.Y. 10022

    


    


    


    


    


    


    


    December
18, 2008

    


    


    


    Mr. David
Kahn

    380
Hempstead Avenue, Suite 5

    West
Hempstead, New York  10017

    


    Dear
David:

    


    On behalf of Network-1 Security
Solutions, Inc. (the “Company”), this letter summarizes the terms upon which the
Company will continue to retain your services as Chief Financial Officer of the
Company.

     

    The Company has agreed to use your
services through the year ending December 31, 2010.  In consideration
thereof, you shall receive the following compensation (the
“Compensation”):

     

    
      	
              
              

            	
              (i)  

            	
              $7292
      per month from January 1, 2009 through December 31, 2009;
      and

            


    

     

    
      	
              
              

            	
              (ii)  

            	
              $7657
      per month from January 1, 2010 through December 31,
      2010.

            


    

     

    Subject
to your execution of this letter agreement, the Company’s Board of Directors has
approved the issuance to you of options (the “Option”) to purchase 100,000
shares of common stock, at an exercise price equal to the closing price of the
Company’s common stock on the date hereof.  The Option shall vest as
follows:  40,000 shares underlying the Option shall vest immediately
on grant and the balance of 60,000 shares shall vest on a quarterly basis in
equal amounts of 7,500 shares beginning March 31, 2009 through
December 31, 2010.  Notwithstanding the foregoing, upon a Change
in Control of the Company (as defined below) all of the unvested shares
underlying the Option shall become immediately exercisable and shall become
one-hundred percent (100%) vested.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For
purposes of this letter agreement, a “Change in Control” shall mean, with
respect to the Company, the occurrence of any of the following
events:

     

    (i)  the
shareholders of the Company approve  a merger or consolidation of the
Company with any other entity, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent more than fifty pecent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, (ii) the
shareholders of the Company approve a plan of complete liquidation of the
Company, (iii) the Company consummates the sale or disposition of all or
substantially all of its assets (other than to a subsidiary or subsidiaries) or
(iv) any other event deemed to constitute a “Change of Control” by the Board of
Directors of the Company.

     

    As Chief
Financial Officer of the Company you will continue to be responsible, among
other things, for the maintenance of the books and records of the Company, the
preparation of tax returns and financial statements for the Board of Directors
of the Company and for required financial filings with the Securities and
Exchange Commission including certifications required to be signed by you as
Chief Financial Officer.

     

    You
understand that your relationship with the Company will continue to be as an
independent contractor and not as an employee.  The Company may
terminate this letter agreement and your services at any time for any
reason.  However, in the event your services are terminated without
“Good Cause” (as defined below), you shall be entitled to receive the
accelerated vesting of all remaining unvested shares underlying the Option and
the lesser of (i) six months Compensation or (ii) the remaining balance of the
Compensation payable to you through December 31, 2010.  A termination
for “Good Cause” shall be defined as follows:  (i) commission of an
act constituting a felony or involving fraud, moral terpitude, theft or
dishonesty which is not a felony and which materially adversely affects the
Company or could reasonably be expected to materially adversely affect the
Company, (ii) failure to perform your duties as Chief Financial Officer which,
if curable, shall not have been cured with 10 days written notice from the
Company, (iii) failure to follow the lawful directions of the Board of Directors
of the Company, which, if curable, shall not have been cured within 10 days
written notice from the Company, or (iv) your material breach of the terms of
this letter agreement.

     

    
      
         

      

      
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    It is a
great pleasure to have you continue to serve Network-1 Security Solutions,
Inc.  I fully expect that you will continue to make a major
contribution to the Company’s success.  Kindly execute below to
confirm your agreement to the terms set forth herein.

     

    
      
        	 	 	 
	 	 	      
                Sincerely, 

              	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                 

              	/s/ Corey
      M. Horowitz	 
	 	 	      
                Corey
      M. Horowitz,

              	 
	 	 	      
                Chairman
      and CEO

              	 
	 	 	 	 


      

    

     

    


    Agreed
and Accepted:

     

     /s/ David C.
Kahn_______________

     

    David C.
Kahn, CPA

     

    


    
      
         

      

      
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